| EQUITY |
| | a. | Composition of share capital: |
| | | December 31, 2025 | | | December 31, 2024 | | | | | Authorized | | | Issued and outstanding | | | Authorized | | | Issued and outstanding | | | | | Number of shares in thousands | | | Ordinary shares with no par value | | | 66,667 | | | | 2 | | | | 6,667 | | | | 0.23 | |
Effective
March 28, 2025, the Company’s shares were reverse split in a ratio of 1:10. Effective January 14, 2026, the Company’s shares
were reverse split in a ratio of 1:15. Effective March 31, 2026, the Company’s shares were reverse split in a ratio of 1:50. Effective
June 5, 2026, the Company’s shares were reverse split in a ratio of 1:20. As a result, all ordinary shares, options for shares,
warrants to purchase ordinary shares, exercise price and net loss per share amounts were adjusted retroactively for all periods presented
in these consolidated financial statements as if the stock split had been in effect as of the date of these consolidated financial statements.
| |
b. |
Movement in share capital: |
| | i. | Issued and outstanding share capital: |
| | |
Number of shares of no par value | |
| | |
in thousands | |
| | |
| |
| Balance as of January 1, 2025 | |
| 0.23 | |
| Issuance of shares | |
| 1.77 | |
| Exercise of options and warrants | |
| - | |
| | |
| | |
| Balance as of December 31, 2025 | |
| 2 | |
| | 1. | AGP During January and February 2025, AGP converted an aggregated amount of $500 thousand into 6 ordinary shares pursuant to the terms of the Amended Note described in Note 3(1). |
| | 2. | 2023-2024 Accredited Investor | | | | | | | | During March 2025, certain Accredit Investors converted an aggregated
amount of $550 thousand into 3 ordinary shares, pursuant to the Accredit Investor Notes described in Note 3(2). In February 2025, the
2023–2024 accredited investor group received a benefit consisting of 17 warrants and 8 ordinary shares as a result of early conversions
of their convertible loans. |
During
February 2025, Lind exercised Lind Warrants using the cashless exercise formula to purchase 24 ordinary shares at an exercise price of
$60,000, pursuant to the Lind SPA described in Note 3(b).
During 2025, Claymore investors converted
an aggregated amount of $10,524 thousand into 273 ordinary shares.
Pursuant to a settlement agreement
between the Company and two of its creditors, pursuant to which Claymore undertook to settle outstanding debt on behalf of the Company,
Claymore converted an aggregate amount of $13,414 thousand into 288 ordinary shares and converted prefunded warrants into 7 ordinary
shares.
| |
5. |
Creditor Settlement Agreement |
Pursuant
to a debt settlement agreement with one of BlackSwan’s investors and creditors, a convertible loan in the principal amount of $1.54
million and 41 warrants were converted and exercised, respectively into 61 ordinary shares of the Company.
| | 6. | Consulting Agreement During 2025, consultants were issued an aggregate of 170 ordinary shares,
pursuant to consulting agreements. Expenses in the aggregate amount of $2,877 thousand were recorded under sales and marketing expenses. |
| | 7. | Prefunded Warrants As part of the Company’s debt settlements
with two of its creditors, in which Claymore participated, and in connection with both convertible and non-convertible loans provided
by Claymore during the first half of 2025, Claymore received 234 prefunded warrants, out of which 176 were exercised for ordinary shares. During 2025, the March-November 2024 Investor converted 63 prefunded
warrants into 63 ordinary shares. |
| | 8. | March-November 2024 Investor and Seven Knots During 2025, the March-November 2024 Investor converted $1,500 thousand of convertible loan principal into 33 shares. |
| | 9. | Exchange note During 2025, the exchange note investors converted $6,662 thousand
of convertible loan principal into 361 shares. |
| | 10. | August 2025 SPA During 2025, the August 2025 SPA investors converted $1,500 thousand of convertible loan principal into 100 shares. | | | 11. | Share-based compensation to key management During 2025, members of the Company’s key management received
an aggregate of 33 ordinary shares, as part of their compensation. Expenses in the amount of $2,953 thousand were recorded under general
and administrative and research and development expenses. | | | | | | | 12. | Conversion
of loans | | | | | | | | During
2025, investor loans in the amount of $275 thousand was converted into ordinary shares. | | | | | | | 13. | Oozi
Cats Subscription Agreement | | | | | | | | During
2025, Oozi Cats received 33 ordinary shares at a purchase price of $45,000 per share for a total consideration of $1,500 thousand, pursuant
to the terms of the subscription agreement. | | | | | | | 14. | ELOC | | | | | | | | As
of December 31, 2025, an amount of $1,600,000 under the ELOC loan was converted into 107 shares. | | | | | | | 15. | JJ
Astor | | | | | | | | As of December 31, 2025, JJ Astor converted a principal amount of $2,165,497 under the December 2024 convertible note into 98 ordinary shares. |
| | 16. | Reclassification of warrants from liability to equity | | | | | | | | In February 2025, the terms of the warrants previously issued to the
March-November 2024 Investor in connection with four investment tranches completed during 2024 were amended. Pursuant to the amendment,
the exercise price of all such warrants, which are exercisable for an aggregate of 86 ordinary shares, was modified to a unified exercise
price of NIS 266,550 per share, and the cashless exercise feature was removed. As a result of the amendment, the warrants were reclassified
from liabilities to equity. As of the date of reclassification, the fair value of the warrants was $10,529 thousand. For additional information,
see Note 3. |
| |
c. |
Treasury shares - Company
shares held by the Company: |
The
interests of the Company in the Company’s shares are as follows:
| | |
December 31, | |
| | |
2025 | | |
2024 | |
| | |
% | |
| | |
| | | |
| | |
| % of issued and outstanding share capital | |
| 0.05 | | |
| 0.24 | |
| |
d. |
Capital management in the
Company: |
The
Company’s capital management objectives are:
| |
1. |
To preserve the Group’s
ability to ensure business continuity thereby creating a return for the shareholders, investors and other interested parties. |
| |
2. |
To ensure adequate return
for the shareholders by pricing of products and services that is adjusted to the level of risk in the Group’s business activity. |
The
Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and risk characteristics
of its activity and its current and future liquidity constraints. To maintain or adjust the required capital structure, the Company may
apply various measures such as adjust the dividend payment to shareholders, raise capital by way of issue of shares, capital purchases
from shareholders and disposal of assets to reduce its debts.
|