NOTE 7 – STOCKHOLDERS EQUITY

Reverse Stock Split

On October 16, 2025, the Company’s stockholders approved a reverse stock split at a ratio within a range of 1-for-5 and 1-for-20 at such time as the Board of Directors shall determine, in its sole discretion, at any time before October 16, 2026. On November 13, 2025, the Board of Directors approved a 1-for-19 Reverse Stock Split of the Company’s shares of Common Stock.

The 2025 Reverse Stock Split did not change the par value of the Common Stock nor the authorized number of shares of Common Stock, preferred stock or any series of preferred stock.

Unless otherwise indicated, all amounts of issued and outstanding stock contained in the accompanying consolidated financial statements have been adjusted to reflect the 1-for-19 2025 Reverse Stock Split for all prior periods presented. Proportional adjustments were also made to shares underlying outstanding equity awards, warrants and Redeemable Convertible Preferred Shares, and to the number of shares issued and issuable under the Company’s stock incentive plans and certain existing agreements.

Preferred Stock:

The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, rights and preferences as may be determined from time to time by the Company’s Board of Directors.

On March 15, 2024, the Company issued 40,470 and 216,417 Redeemable Convertible Preferred Shares, par value $0.0001 per share, as part of the Acquisition and the March 2024 PIPE, respectively.. During the years ended December 31, 2025 and 2024, 223 and 109,152 Redeemable Convertible Preferred Shares were converted into 1,174 and 574,484 shares of the Company’s Common Stock, respectively.

On January 13, 2026, the Company issued 3,300 shares of Series Y Convertible Preferred Stock to investors gross proceeds of $3.0 million. Between March 10 to March 17, 2026 all 3,300 Series Y shares converted in four tranches into 1,650,000 shares of Common Stock (see below)

January 2026 private placement:

On December 26, 2025, the Company entered into a Securities Purchase Agreement (the “2026 Private Placement “) with an investor (the “Investor”) pursuant to which the Company agreed to issue and sell, in a private placement transaction, an aggregate of 3,300 shares of the Company’s newly created Series Y Convertible Preferred Stock, par value $0.0001 per share (the “Series Y Preferred Stock”), convertible into up to 1,650,000 Common Stock shares, with an aggregate stated value of $3,300, together with warrants to purchase shares of the Company’s Common Stock, par value $0.0001 per share (the “Securities Purchase Agreement Warrants”), in exchange for aggregate gross proceeds to the Company of $3,000, before deducting placement agent fees and other offering expenses, subject to customary closing conditions. On January 13, 2026, following the satisfaction of the closing conditions, the Company consummated the private placement and received gross proceeds of $3,000 from the investor, and issued the Series Y Preferred Stock and Securities Purchase Agreement Warrants in accordance with the terms of the Securities Purchase Agreement.

Each share of Series Y Preferred Stock has a stated value of $1,000 and is convertible into shares of Common Stock. The initial conversion price was $2.00 per share of Common Stock, subject to customary adjustments for stock splits, stock dividends, stock combinations, recapitalizations and similar transactions. In addition, following receipt of stockholder approval as required under the applicable rules of NYSE American, the conversion price was reduced to equal the lower of (i) the conversion price, as defined in the Certificate of Designations, then in effect, and (ii) the closing sale price of the Common Stock on the trading day immediately prior to the date such stockholder approval is obtained.

Holders of Series Y Preferred Stock are entitled to receive dividends on the stated value of the Series Y Preferred Stock at a rate of 15% per annum, payable quarterly, at the Investor’s sole election, either in cash or shares of Common Stock, subject to adjustment as set forth in the Certificate of Designations. Except as otherwise required by law or as expressly provided in the Certificate of Designations, the Series Y Preferred Stock does not have voting rights. Each share of Series Y Preferred Stock will have a maturity of one year from the closing date.

Conversion is subject to beneficial ownership limitations of 19.99% of the Company’s outstanding Common Stock. The Series Y Convertible Preferred Stock accrues cumulative dividends on its stated value, compounded quarterly. Dividends are payable, at the Company’s election, either in cash or in shares of common stock through inclusion in the conversion amount upon conversion. Upon the occurrence and during the continuance of a triggering event, dividends accrue at an increased default rate of 24% per annum. All accrued and unpaid dividends are payable upon redemption or at maturity. The Company may be required to redeem the Series Y Preferred Stock at an amount equal to the conversion amount multiplied by the applicable redemption premium, plus any accrued and unpaid dividends and charges.

The Securities Purchase Agreement Warrants entitle the holder to purchase up to an aggregate of 3,300,000 shares of the Company’s Common Stock, representing 200% of the 1,650,000 of shares of Common Stock issuable upon conversion of the Series Y Preferred Stock. The Securities Purchase Agreement Warrants are exercisable immediately upon issuance, subject to beneficial ownership limitations, and will expire five years from the date of issuance. The exercise price of the Securities Purchase Agreement Warrants is $2.00 per share, subject to customary anti-dilution adjustments.

As part of this financing, the Company issued 99,000 warrants to HC Wainwright & Co., LLC, as placement agent fees. These placement agent warrants have an exercise price of $2.50 per share and a five-year term from the date of issuance.

On March 13, 2026, the Company and the Investor entered into an amendment to the Warrant (the “Warrant Amendment”), pursuant to which, the Investor and the Company agreed to (i) amend the term of the Warrant, such that the Warrant will expire on December 31, 2026, (ii) reduce the exercise price of the Warrant from $2.00 to $1.00 per share, and (iii) revise the method of determining the number of shares of Common Stock issuable upon a cashless exercise of the Warrant such that the number of shares of Common Stock issuable upon cashless exercise will be determined by reference, where applicable, to the lowest VWAP on the five (5) trading days immediately preceding the date on which the notice of exercise is submitted to the Company, rather than the VWAP on the day immediately preceding the date on which the notice of exercise is submitted. No proportional adjustment to the number of shares of Common Stock issuable upon exercise of the Warrants was made as a result of the Warrant Amendment. The value of the change in terms of warrant liability was calculated by the Company as income of $1,219 and was recorded to unaudited condensed consolidated financial statements of comprehensive loss.

Between March 11, 2026 and March 17, 2026, the Investor converted all 3,300 outstanding shares of Series Y Preferred Stock into 1,650,000 shares of Common Stock in accordance with the certificate of designation governing the Series Y Preferred Stock. Following such conversions, no shares of Series Y Preferred Stock remain outstanding.

On March 19, 2026, the Warrants were exercised in full at the amended exercise price of $1.00 per share, resulting in the issuance of 3,300,000 shares of Common Stock and aggregate gross proceeds to the Company of $3,300. Following such exercise, no Series Y Preferred Stock Warrants remained outstanding. As of March 31, 2026 the gross proceeds amounting to $3,300 have not yet been received and were used to fund the acquisition of 60% of DFSL on April 13, 2026 (see Note 11 below).

The Company accounts for the investor warrants as liabilities because certain provisions in the warrants, including Fundamental Transaction-related provisions, preclude equity classification under ASC 815-40. Accordingly, the warrants were initially recorded at fair value on the issuance date and are remeasured to fair value at each reporting date, with changes in fair value recognized in earnings.

In March 2026, in connection with the amendment of certain warrant terms, the Company remeasured the fair value of the warrant liabilities immediately before and immediately after the modification and recognized the resulting incremental fair value in unaudited condensed consolidated statements of comprehensive loss. In addition, immediately prior to the exercise of warrants in March 2026, the Company remeasured the related warrant liabilities to fair value and, upon exercise, reclassified the then-current fair value of the exercised warrants to additional paid-in capital.

The Company accounts for the Placement Agent Warrants as equity-classified awards. The Placement Agent Warrants were issued to the placement agent in connection with the January 2026 private placement as compensation for placement agent services. The Company measured the warrants at fair value on the grant date and recorded the corresponding amount in additional paid-in capital in accordance with ASC 718 “Compensation - Stock Compensation”.

The Company accounts for the Series Y Convertible Preferred Stock as temporary equity. The Series Y Preferred Stock contains redemption features, including a contractual maturity date and redemption rights that are not solely within the Company’s control. However, the Company determined that the holder’s conversion feature was substantive at issuance. As a result, the Series Y Preferred Stock is presented outside of permanent equity as temporary equity. The carrying amount is subsequently accreted to the redemption amount, with such accretion recognized as a deemed dividend. The Series Y Preferred Stock bears dividends at 15% per annum.

The Company also determined that the embedded conversion feature bifurcated from the host instrument. The embedded conversion derivative was initially recognized at fair value and is remeasured to fair value at each reporting date, with changes in fair value recognized in the condensed consolidated statements of comprehensive loss.

The fair value of the embedded conversion derivative was calculated using the Binomial Option Pricing Model. The assumptions used to perform the calculations for the issuance date and exercise date, are volatility of 113% and 166%, risk free rate of 4% and 4%, time to maturity of 1 year and 10 months, respectively.

The fair value of the embedded conversion derivative at issuance date was calculated at $1,886 and was recorded in the condensed consolidated statements of comprehensive loss as Day 1 loss.

In March 2026, immediately prior to the conversion of the Series Y Convertible Preferred Stock into common stock, the Company remeasured the embedded conversion derivative to fair value of $7,818 and changes in fair value were record in the condensed consolidated statements of comprehensive loss. Upon conversion, the carrying amount of the Series Y Convertible Preferred Stock and the fair value of the embedded conversion derivative were reclassified to stockholders’ equity.

The Company allocated the gross proceeds from the January 2026 private placement to the liability-classified investor warrants and to the embedded conversion derivative associated with the Series Y Convertible Preferred Stock, in each case based on their initial fair values, with no proceeds allocated to the Series Y Convertible Preferred Stock.

Issuance costs were recognized immediately in the condensed consolidated statements of comprehensive loss.

Warrants:

As of March 31, 2026, the Company had the following outstanding warrants to purchase Common Stock issued to stockholders:

The Company accounted for the Agents Warrants under the scope of ASC 718-10 “Stock-Based Payment”, (“ASC 718-10”), and treated them as issuance costs of the March 2024 PIPE as the Company considers these Warrants as consideration for receipt of Private Placement Services.

A summary of options granted to purchase the Company’s Common Stock under the Company’s share option plans is as follows:

Warrants:

As of March 31, 2026, the Company had the following outstanding compensation related warrants to purchase Common Stock:

The following table sets forth the total stock-based payment expenses resulting from options, RSUs and warrants granted, included in the consolidated statements of operations:

Following the insolvency proceedings of BiomX Israel significantly all Company’s prior employees were dismissed and their unvested options forfeited. As of March 31, 2026, the Company recorded credit to its share based compensation expenses and debit to additional paid for such portion of the non-vested options.