NOTE 6 - SIGNIFICANT EVENTS DURING AND AFTER THE PERIOD

On January 27, 2026, the Company received gross proceeds of $750,000 from four qualified investors in consideration for the issuance, in the aggregate, of 34,090,910 shares of the Company’s common stock. Net proceeds received by the Company, after deduction of offering and placement agent fees, amounted to $ 697,500.

One of the abovementioned investors, has invested $450,000 and received warrants to purchase 20,454,545 additional shares of common stock, exercisable for a period of three years at an exercise price of $0.026 per share. The investor was granted anti-dilution protection rights. Pursuant to the terms of the agreement, the investor is entitled to anti-dilution protection rights designed to maintain its ownership interest of approximately 1.4% of the Company on a fully diluted basis in connection with future capital raises of up to $7 million.

Derivative liability – Anti-dilution rights

(i) These rights entitle the holders to receive additional shares of the Company’s common stock upon future capital raises (up to specified thresholds), in order to maintain their relative ownership. As the number of shares to be issued is variable, these rights are not considered indexed to the Company’s own stock. Accordingly, under ASC 815-40, such rights are classified as derivative liabilities.

(ii) The derivative liabilities are measured at fair value, with changes in fair value recognized in the statement of operations under “change in fair value of derivative liabilities.”

The liabilities are presented within current or non-current liabilities in the balance sheet, based on the expected timing of settlement.

(iii) The anti-dilution protection is triggered upon future equity financings up to $7 million.

a. Valuation methodology

(i) The fair value of the anti-dilution feature was determined using a scenario-based approach that considers potential future financing outcomes.

(ii) For each scenario, the Company estimated (i) the value of the shares assuming the anti-dilution protection is in place and (ii) the value assuming no such protection exists. The incremental value attributable to the anti-dilution feature represents the difference between these two outcomes.

(iii) The expected value across scenarios was probability-weighted and subsequently discounted to present value using an appropriate weighted average cost of capital.

(iv) Key assumptions include expected future Company valuations, dilution rates in potential capital raises, timing of potential financing events, and the probability assigned to each scenario.

b. Anti-dilution liability valuation

(i) The valuation reflects scenario analysis of potential future financing events. Two representative scenarios were considered: (i) a financing event at a Company valuation of approximately $50 million, assuming a 15% new share issuance, and (ii) a financing event at a Company valuation of approximately $100 million, assuming an 10% new share issuance. These scenarios were assigned probabilities of 80% and 20%, respectively.

(ii) The resulting fair value reflects the probability-weighted outcomes of these scenarios, consistent with the valuation methodology described above. The valuation involves significant unobservable inputs and is classified within Level 3 of the fair value hierarchy.

(iii) Changes in key assumptions, including expected Company valuation and dilution rates, could result in a material change in the fair value of the derivative liability.

(ii) Settlement with former CEO

In January 2026, the Company entered into a settlement and release agreement with its former Chief Executive Officer, Mr. Adi Shamer.

Pursuant to the agreement, Mr. Shamer agreed to fully release and discharge the Company from any and all claims. In connection with the settlement, Mr. Shamer returned to the Company 28,864,131 vested but unexercised stock options previously granted to him.

In consideration for the foregoing, the Company paid Mr. Shamer NIS 150,000 (approximately $47,318).

Following the execution of the agreement, Mr. Shamer holds 3,008,288 shares of the Company’s common stock.

(iii) In connection with the consulting agreement entered into with the Company’s Chief Financial Officer (“CFO”), the Company agreed to grant an aggregate of 15,000,000 stock options, vesting in two equal tranches: the first tranche vested on March 31, 2026, and the second tranche shall vest on June 30, 2026. The aggregate grant date fair value of the options was approximately $156,000.