NOTE 4 – STOCKHOLDERS’ DEFICIT

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”.

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 “August 9, 2021 ATM 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 August 9, 2021 ATM 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 twelve months ended December 31, 2025, the Company sold 2,571,714 shares of Common Stock for gross proceeds of approximately $4,472 under the August 9, 2021 ATM. The issuance costs for the ATM are approximately $134 and the net proceeds are $4,347. 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 “July 2023 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 $7.5 million, 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 July 2023 Common Warrants are immediately exercisable, expire five years following the date of issuance and have an exercise price of $30.00 per share.

NOTE 4 – STOCKHOLDERS’ DEFICIT (Cont.):

Securities Purchase Agreement (Cont.):

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 “June 2024 Pre-Funded Warrants”) to purchase up to 212,823 shares of Common Stock and (iii) unregistered warrants (the “June 2024 Common Warrants”) to purchase up to 1,111,111 shares of Common Stock, at a purchase price of $5.40 per share of Common Stock and accompanying June 2024 Common Warrant, or $5.399 per June 2024 Pre-Funded Warrant and accompanying June 2024 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 are approximately $356 and the net proceeds are $3,644. The offering closed on June 28, 2024. The June 2024 Common 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 June 2024 Pre-Funded Warrant is immediately exercisable for one share of Common Stock (the “June 2024 Pre-Funded Warrant Shares”) at an exercise price of $0.00005 per share and will remain exercisable until the June 2024 Pre-Funded Warrants are exercised in full.

In February 2026, the Company entered into two separate Securities Purchase Agreements (the “February 2026 Purchase Agreements”) for the issuance of securities in private placement transactions, seeking to raise aggregate gross proceeds of up to $2,000,000. Under the terms of both February 2026 Purchase Agreements, investors are purchasing units consisting of Common Stock at a purchase price of $0.60 per share, or February 2026 Pre-Funded Warrants at a purchase price of $0.59995 per warrant (with an exercise price of $0.00005 per share) to comply with beneficial ownership limitations. In connection with these placements, the Company also issued February 2026 Common Warrants exercisable for a number of shares equal to 120% of the purchased units at an exercise price of $1.00 per share, subject to standard anti-dilution adjustments.

On May 11, 2026, we entered into the May 11, 2026 Securities Purchase Agreements with two accredited investors, pursuant to which we sold, in a private placement, (i) shares of Common Stock, or, in lieu of shares as elected by the investor, pre-funded warrants to purchase Common Stock Pre-Funded Warrants, and (ii) Common Stock Purchase Warrants. The purchase is $0.95 per share of Common Stock, or Pre-Funded Warrants in lieu thereof, and Common Stock Purchase Warrant to purchase 1.2 shares of Common Stock, with an exercise price of $1.45 per share, subject to adjustment. The aggregate subscription amount was $200,000. The May 11, 2026 Offerings closed on May 11, 2026.

On May 19, 2026, we entered into the May 19, 2026 Securities Purchase Agreement with an accredited investor, pursuant to which we sold, in a private placement, (i) shares of Common Stock, or, in lieu of shares as elected by the investor, pre-funded warrants to purchase Common Stock Pre-Funded Warrants, and (ii) Common Stock Purchase Warrants. The purchase is $0.95 per share of Common Stock, or Pre-Funded Warrants in lieu thereof, and Common Stock Purchase Warrant to purchase 1.2 shares of Common Stock, with an exercise price of $1.45 per share, subject to adjustment. The subscription amount was $200,000. The May 19, 2026 Offering closed on May 19, 2026.

Capital Raised Since Inception:

Since its inception and as of June 30, 2026, the Company has raised approximately $188 million, 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.

NOTE 4 – STOCKHOLDERS’ DEFICIT (Cont.):

Stock Plans:

During the six months ended June 30, 2026, the Company has outstanding awards for stock options under four stockholder approved plans: (i) the 2004 Global Stock Option Plan and the Israeli Appendix thereto (the “2004 Global Plan”) (ii) the 2005 U.S. Stock Option and Incentive Plan (the “2005 U.S. Plan,” and together with the 2004 Global Plan, the “Prior Plans”); (iii) the 2014 Global Share Option Plan and the Israeli Appendix thereto (which applies solely to participants who are residents of Israel) (the “2014 Global Plan”); and (iv) the 2014 Stock Incentive Plan (the “2014 U.S. Plan” and together with the 2014 Global Plan, the “2014 Plans”).

The 2004 Global Plan and 2005 U.S. Plan expired on November 25, 2014 and March 28, 2015, respectively. Grants that were made under the Prior Plans remain outstanding pursuant to their terms. The 2014 Plans were approved by the stockholders on August 14, 2014 (at which time the Company ceased to issue awards under each of the 2005 U.S. Plan and 2004 Global Plan) and amended on June 21, 2016 and November 29, 2018. Unless otherwise stated, option grants prior to August 14, 2014 were made pursuant to the Company’s Prior Plans, and grants issued on or after August 14, 2014 were made pursuant to the Company’s 2014 Plans, and expire on the tenth anniversary of the grant date.

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 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, 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.

On May 21, 2026, the Company registered an additional 5,500,000 shares of common stock, par value $0.00005 per share, reserved for issuance under the Company’s 2014 Stock Incentive Plan and 2014 Global Share Option Plan (as amended through February 26, 2026, collectively, the “2014 Plans”). This registration covers additional securities of the same class and under the same plans as previously registered on Form S-8.

The 2014 Plans now have a shared pool of 8,406,666 shares of Common Stock available for issuance. As of June 30, 2026, 3,238,933 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.

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.

NOTE 4 – STOCKHOLDERS’ DEFICIT (Cont.):

Stock options:

The Company granted 1,512,500 stock options during the six months ended June 30, 2026. The stock options awarded may contain conditions and restrictions. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with the Company through a specified period. Stock options awarded are valued based upon the Black-Scholes option pricing model and the Company recognizes this value as stock compensation expense over the periods in which the options vest. Use of the Black Scholes option-pricing model requires that the Company make certain assumptions, including expected volatility, risk-free interest rate, expected dividend yield, and the expected life of the options.

A summary of the Company’s option activity related to options to employees and directors, and related information as of June 30, 2026, 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, 2026, 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, 2026, there was $106 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 0.28 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, 2026 and 2025 amounted to $591 and $22, respectively.

NOTE 4 – STOCKHOLDERS’ DEFICIT (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, 2026 and June 30, 2025 amounted to $1,786 and $1,197, respectively.

As of June 30, 2026, there was $352 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 0.18 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, 2026, the Company repurchased 1,667 shares of its common stock for $116 thousand.