| EQUITY |
NOTE
5 – EQUITY:
| |
a. |
Private
and Public Placements |
| |
|
|
| |
1. |
On
March 29, 2021, the Company issued to certain investors, including Moshe (Mori) Arkin, a
major stockholder and director of the Company, an aggregate of 2,469,156 units in exchange
for an aggregate purchase price of $20 million. Each such unit consisted of (i) one share
of the Company’s common stock and (ii) one warrant to purchase one share of the Company’s
common stock with an exercise price of $10.35 per share. Each such warrant was exercisable
until March 31, 2026 and subject to customary adjustments. Pursuant to the terms of the foregoing
warrants, following April 1, 2024, if the closing price of the Company’s common stock
equaled or exceeded 135% of the aforementioned exercise price (subject to appropriate adjustments
for stock splits, stock dividends, stock combinations and other similar transactions after
the issue date of the warrants) for any thirty (30) consecutive trading days, the Company
could force the exercise of the warrants, in whole or in part, by delivering to these investors
a notice of forced exercise.
On
March 31, 2026 all warrants expired. |
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|
|
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2. |
On
March 16, 2023, the Company entered into stock purchase agreements for a private placement
with (i) Moshe (Mori) Arkin and (ii) The Phoenix Insurance Company Ltd. (“Phoenix Insurance”)
and Shotfut Menayot Israel – Phoenix Amitim (“Phoenix Amitim”), in connection
with the sale and issuance of an aggregate of 3,294,117 units, at a purchase price of $4.25
per unit, and for an aggregate purchase price of $14 million. Each unit consisted of: (i)
one share of the Company’s common stock and (ii) one warrant to purchase one share
of the Company’s common stock. The warrants are immediately exercisable, expire three
years from the date of issuance and are subject to customary adjustments.
During
March 2026, all warrants were exercised on a cashless basis, and 407,497 shares were issued accordingly. |
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|
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3. |
On
February 12, 2025, the Company completed a U.S. underwritten public offering issuing 3,307,692 shares of the Company’s common
stock at a price of $6.50 per share. The Company also granted the underwriters a 30-day over-allotment option to purchase up to an
additional 496,153 shares at a purchase price of $6.50 per share. On February 14, 2025, the Company sold an additional 345,432 shares
of common stock as a result of a partial exercise of the over-allotment option at the public offering price of $6.50 per share. Following
the exercise of the over-allotment option, the Company sold a total of 3,653,124 shares of common stock, generating gross proceeds
of approximately $23.7 million, prior to the deduction of underwriting discounts, commissions and estimated offering expenses. After
deducting issuance costs, the Company received proceeds of approximately $20.9 million. |
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ODYSIGHT.AI
INC.
NOTES
TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
5 – EQUITY (continued):
b.
Stock-based compensation for employees, directors and service providers:
In
February 2020, the Company’s Board of Directors approved the 2020 Share Incentive Plan (the “2020 Plan”).
The
2020 Plan initially included a pool of 580,890 shares of common stock for grant to Company employees, consultants, directors and other
service providers. On March 15, 2020, the Company’s Board of Directors approved an increase to the Company’s option pool
pursuant to the 2020 Plan by an additional 64,099 shares of common stock. On June 22, 2020, the Company’s Board of Directors approved
an increase to the Company’s option pool pursuant to the 2020 Plan by an additional 401,950 shares of common stock. During the
second quarter of 2021, the Company’s Board of Directors approved an increase to the Company’s option pool pursuant to the
2020 Plan by an additional 777,778 shares of common stock. During the first quarter of 2023, the Company’s Board of Directors approved
an increase to the option pool pursuant to the 2020 Plan by an additional 1,000,000 shares of common stock.
In
June 2024, the Company’s Board of Directors approved the 2024 Share Incentive Plan (the “2024 Plan”). With adoption
of the 2024 Plan, the Company ceased making new awards under the 2020 Plan.
The
2024 Plan initially included a pool of 234,484 shares of common stock, representing the number of shares remaining available for grant
under the 2020 Plan. These shares are available for future grant to Company employees, consultants, directors and other service providers.
Shares that were subject to awards granted under either the 2020 Plan or the 2024 Plan that have expired or were cancelled or become
un-exercisable for any reason without having been exercised in full shall become available for future grant under the 2024 Plan.
In
July 2024, the Company’s Board of Directors approved an increase to the 2024 Plan’s option pool by an additional 850,000
shares of common stock. Also in July 2024, the Company’s stockholders approved the 2024 Plan. In December 2025, the Company’s
Board of Directors approved an increase to the 2024 Plan’s option pool by an additional 777,000 shares of common stock.
The
2020 Plan and 2024 Plan each provide for the grant of stock options (including incentive stock options and nonqualified stock options),
shares of common stock, restricted shares, restricted share units, and other share-based awards.
Stock
option activity
The
following table summarizes stock option activity for the six months ended June 30, 2026 and June 30, 2025:
SCHEDULE
OF STOCK OPTION ACTIVITY
| | |
For the Six months ended
June 30,
|
|
| | |
2026 |
|
| 2025 |
|
| | |
Amount of
options | | |
Weighted average
exercise price
($) |
|
| Amount of
options |
|
|
Weighted average
exercise price
($) |
|
| Outstanding at beginning of period | |
| 3,340,514 | | |
| 3.95 |
|
| |
3,227,234 |
|
|
|
3.78 |
|
| Granted | |
| 324,000 | | |
| 4.99 |
|
| |
181,000 |
|
|
|
6.50 |
|
| Exercised | |
| (37,914 | ) | |
| 3.49 |
|
| |
(58,101 |
) |
|
|
3.70 |
|
| Forfeited | |
| (147,913 | ) | |
| 3.89 |
|
| |
(28,336 |
) |
|
|
4.09 |
|
| Outstanding at end of period | |
| 3,478,687 | | |
| 4.05 |
|
| |
3,321,797 |
|
|
|
3.94 |
|
| | |
| | | |
| |
|
| |
|
|
|
|
|
|
| Vested at end of period | |
| 2,754,023 | | |
| 3.78 |
|
| |
2,035,607 |
|
|
|
3.52 |
|
The
Company estimates the fair value of stock option awards on the grant date using the Black-Scholes option pricing model. The weighted-average
grant date fair value per option granted during the six months ended June 30, 2026, was $3.93. The fair value of each award is estimated
using Black-Scholes option-pricing model based on the following assumptions: underlying value of shares of $4.64-$5.14, exercise price
of $4.70-$5.14, expected volatility of 80.21%-86.88%, term of the options of 4.375-10 years and risk-free interest rate of 3.74%-4.67%.
On
February 19, 2026, the Company’s Board of Directors approved a three-year extension of the term of 407,034 options that were originally
set to expire in 2027 (the “Designated Options”). As a result of this extension, the Company estimated the fair value of
the Designated Options both before and after the modification and recognized approximately $400 thousand in stock-based payment expenses.
The fair value of the Designated Options was estimated using the Black-Scholes option-pricing model, based on the following assumptions:
underlying value of shares of $5.14, exercise price of $2.61, expected volatility of 84.89%-90.02%, term of the options of 0.98-4.34
years and risk-free interest rate of 3.49-3.575%.
ODYSIGHT.AI
INC.
NOTES
TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
5 – EQUITY (continued):
Restricted
stock unit (“RSU”) activity
Each
RSU vests based on continued service to the Company, generally over three years. The grant date fair value of the award is recognized
as stock-based compensation expense over the requisite service period. The fair value of restricted stock units was estimated on the
date of grant based on the fair value of the Company’s common stock.
The
following table summarizes RSU activity for the six months ended June 30, 2026 and June 30, 2025:
SCHEDULE OF RESTRICTED STOCK UNIT (“RSU”) ACTIVITY
| | |
For the Six months ended |
|
| | |
June 30, |
|
| | |
2026 | |
|
2025 |
|
| | |
Number of | | |
Weighted Average Grant Date Fair Value | |
|
Number of |
|
|
Weighted
Average
Grant Date
Fair Value
|
|
| | |
RSUs | | |
per Share ($) | |
|
RSUs |
|
|
per Share ($) |
|
| Outstanding at beginning of period | |
| 4,167 | | |
| 3.00 | |
|
|
15,419 |
|
|
|
3.56 |
|
| Granted | |
| - | | |
| - | |
|
|
- |
|
|
|
- |
|
| Forfeited | |
| - | | |
| - | |
|
|
- |
|
|
|
- |
|
| Vested | |
| (4,167 | ) | |
| 3.00 | |
|
|
(7,085 |
) |
|
|
4.21 |
|
| Unvested and Outstanding at end of period | |
| - | | |
| - | |
|
|
8,334 |
|
|
|
3.0 |
|
The
following table sets forth the total stock-based payment expenses resulting from options and RSUs granted, included in the statements
of operations and comprehensive income:
SCHEDULE OF STOCK-BASED PAYMENT EXPENSE
| | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| | |
Six months ended June 30, | | |
Three months ended June 30, | |
| | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| | |
Unaudited | |
| | |
USD in thousands | |
| | |
| | |
| | |
| | |
| |
| Cost of revenues | |
| - | | |
| (3 | ) | |
| - | | |
| - | |
| Research and development | |
| 267 | | |
| 466 | | |
| 154 | | |
| 219 | |
| Sales and marketing expenses | |
| 221 | | |
| 202 | | |
| 82 | | |
| 99 | |
| General and administrative | |
| 850 | | |
| 986 | | |
| 216 | | |
| 527 | |
| Total expenses | |
| 1,338 | | |
| 1,651 | | |
| 452 | | |
| 845 | |
ODYSIGHT.AI
INC.
NOTES
TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|