| SHAREHOLDERS’ EQUITY |
Note 8 – Shareholders’ Equity:
| A. | Initial
public offering (the “IPO”) |
| | | On July 31, 2023, the Company closed an initial public offering of its ordinary shares (the “IPO”). The Company issued and sold 1,950,000 ordinary shares pursuant to which it received gross proceeds of approximately $7.8 million. |
| | | On October 30, 2023, the Company raised gross proceeds of approximately $5.1 million in a private investment in public equity transaction (the “PIPE”). The Company issued and sold 1,136,364 ordinary shares and issued 3,500,000 pre-funded warrants, each to purchase one ordinary share, pursuant to which the Company received gross proceeds of approximately $5.1 million. In addition, the Company issued an aggregate of 4,636,364 and 140,373, series A warrants and series B warrants, respectively, to purchase ordinary shares. During 2023, certain warrant holders exercised 2,894,548 pre-funded warrants and 8,257 series B warrants via a cashless exercise mechanism for which investors received 2,876,957 and 8,217 ordinary shares, respectively. During January and February 2024, certain warrant holders exercised 605,452 pre-funded warrants and 132,116 series B warrants on a cashless basis into 601,367 ordinary shares and 131,249 ordinary shares, respectively. During December 2024, certain warrant holders exercised 1,654,546 series A warrants into 1,654,546 ordinary shares accordingly. As a result of such exercise, the Company received approximately $1.8 million. As of December 31, 2024, the pre-funded warrants and series B warrants have been exercised in full. During January 2025, certain warrant holders exercised 1,144,357 series A warrants into 1,144,357 ordinary shares accordingly. As a result of such exercise, the Company received approximately $1.2 million. As of June 30, 2026, there were 1,837,461
series A warrants outstanding. |
| | C. | Form F-3 (the “Form F-3”) | | | | | | | | On August 9, 2024, the Company filed a Shelf Registration Statement on Form F-3 (the “Form F-3”) with the SEC for the registration under the Securities Act of 1933, as amended, of such indeterminate number of ordinary shares, warrants to purchase ordinary shares, and units, in one or more offerings for an aggregate initial offering price of up to $50,000,000 on Form F-3. The Form F-3 was declared effective by the SEC on August 16, 2024. As of the date of these financial statements, the Company has raised an aggregate of $12,799,999.75 in gross proceeds of the Form F-3, as further described in Notes 8C (D-H) below. |
| |
D. |
Registered direct offering - February 13, 2025 |
| | | On February 13, 2025, the Company closed a registered direct offering utilizing the Form F-3. The Company issued and sold 2,518,182 ordinary shares and issued 300,000 pre-funded warrants, each to purchase one ordinary share, pursuant to which the Company received gross proceeds of approximately $3.1 million. The pre-funded warrants were exercised in full during the six months ended June 30, 2025. |
| | E. | Registered direct offering - August 4, 2025 | | | | | | | | On August 4, 2025, the Company closed a registered direct offering utilizing Form F-3. The Company issued and sold 1,700,001 ordinary shares and issued 300,000 pre-funded warrants, each to purchase one ordinary share, pursuant to which the Company received gross proceeds of approximately $2.2 million. The pre-funded warrants were exercised in full during the year ended December 31, 2025. |
| | F. | Registered direct offering - January 5, 2026 | | | | | | | | On January 5, 2026, the Company completed a registered direct offering utilizing the Form F-3. The Company issued and sold 850,000 ordinary shares and 650,000 pre-funded warrants to purchase 650,000 ordinary shares at a price of $1.00 per ordinary share and $0.99999 per pre-funded warrant, which is equal to the offering price per ordinary share sold in the offering minus an exercise price of $0.00001 per pre-funded warrant. The pre-funded warrants are immediately exercisable and may be exercised at any time until exercised in full. Aggregate gross proceeds to the Company were approximately $1.5 million. As of the date of these financial statements, the pre-funded warrants have been exercised in full into 650,000 ordinary shares. |
| | G. | Registered direct offering – January 12, 2026 | | | | | | | | On January 12, 2026, the Company completed a registered direct offering utilizing the Form F-3. The Company issued and sold 1,000,000 ordinary shares and 1,000,000 pre-funded warrants to purchase 1,000,000 ordinary shares at a price of $1.00 per ordinary share and $0.99999 per pre-funded warrant, which is equal to the offering price per ordinary share sold in the offering minus an exercise price of $0.00001 per pre-funded warrant. The pre-funded warrants are immediately exercisable and may be exercised at any time until exercised in full. Aggregate gross proceeds to the Company were approximately $2.0 million. As of the date of these financial statements, the pre-funded warrants have been exercised in full into 1,000,000 ordinary shares. |
| | H. | Registered direct offering – March 24, 2026 | | | | | | | | On March 24, 2026, the Company completed a registered direct offering utilizing the Form F-3. The Company issued and sold 1,208,333 ordinary shares and 4,125,000 pre-funded warrants to purchase 4,125,000 ordinary shares at a price of $0.75 per ordinary share and $0.74999 per pre-funded warrant, which is equal to the offering price per ordinary share sold in the offering minus an exercise price of $0.00001 per pre-funded warrant. The pre-funded warrants are immediately exercisable and may be exercised at any time until exercised in full. Aggregate gross proceeds to the Company were approximately $4.0 million. As of the date of these financial statements, all pre-funded warrants have been exercised into shares on a cashless basis. |
During April 2024, certain consultants
exercised 359,020 warrants via a cashless exercise mechanism for which they received 355,974 ordinary shares.
As of June 30,2026, the remaining outstanding
equity warrants are summarized in the table below:
| Issuance date | | In connection with | | Expiration date | | No. of
warrants
issued | | | Exercise
price per share | | | No. of
Ordinary shares
underlying warrants | | | 2022* | | Delta Drone Warrants (L.I.A. Pure Capital Ltd) | | July 31, 2028 | | | 111,261 | | | $ | 4.00 | | | | 111,261 | | | 2023 | | IPO Underwriter Warrants | | July 31, 2028 | | | 97,500 | | | $ | 5.00 | | | | 97,500 | | | 2023 | | IPO Consultant Warrants | | September 20, 2028 | | | 144,606 | | | $ | 1.275 | | | | 144,606 | | | 2023 | | Series A warrants | | October 30, 2028 | | | 1,837,461 | | | $ | 1 | | | | 1,837,461 | |
| * | issued on February 2, 2022 to a former parent Company |
| F. | Stock-based
Compensation |
The Company’s Global Share Incentive
Plan (2022) (the “Plan”) was adopted by Company’s Board of Directors (the “Board”) on March 28,
2022. The Plan provides for the grant of options to purchase ordinary shares, restricted share units representing ordinary shares and
ordinary shares (collectively, the “Awards”) to the Company’s employees, officers, directors, advisors and consultants
in order to promote a close identity of interests between those individuals and us.
On February 19, 2025, the Company’s
pool of shares under the Plan was increased by 2,500,000 ordinary shares.
On June 1, 2026, the Company’s
pool of shares under the Plan was increased by 2,500,000 ordinary shares.
As of June 30, 2026, the total number
of ordinary shares reserved for issuance under existing awards granted under the Plan was 5,610,156 ordinary shares and 1,429,488 ordinary
shares remain available for future awards under the Plan. Ordinary shares subject to Awards granted under the Plan that expire, are forfeited
or otherwise terminated without having been exercised in full will become available again for future grant under the Plan.
For the six months ended June 30, 2026,
the Board approved the grant of an aggregate of 514,933 options to purchase 514,933 ordinary shares to an employee of the Company. All
options may be exercised within 5 years from the date of their grant and are subject to a four-year vesting schedule with a two-year cliff
such that 50% of the options shall vest at the completion of two years from the approval of the grant by the Board, and afterward, 6.25%
shall vest upon completion of each three-month period of continuous employment or services for the remaining two-year vesting period.
The average exercise price of the options is $1.275 per ordinary share. All the other terms of the grant of the options shall be as set
forth in the Plan. The fair value of this grant was $284,728 calculated using the Black Scholes option pricing model
A summary of the stock option activity
for the six months ended June 30, 2026 is as follows:
| | |
Number of
Options | | |
Weighted
Average
Exercise
Price | |
| Options outstanding as of December 31, 2025 | |
| 575,063 | | |
$ | 1.341 | |
| Granted | |
| 514,933 | | |
$ | 1.275 | |
| Forfeited | |
| (87,004 | ) | |
$ | 1.333 | |
| Options outstanding as of June 30, 2026 | |
| 1,002,992 | | |
$ | 1.308 | |
| Options exercisable as of June 30, 2026 | |
| 114,425 | | |
$ | 1.275 | |
As of June 30, 2026, the Company had 888,567 unvested
options, the weighted-average remaining contractual life of the outstanding options was 3.97 years, and the weighted-average remaining
contractual life of the exercisable options was 2.3 years.
As of June 30, 2026, the unrecognized
compensation cost related to all unvested options is $439,012 and expected to be recognized as an expense on a straight-line basis over
a weighted-average period of 2.9 years.
As of June 30, 2026, the intrinsic value
of the outstanding and exercisable options was 0.
The Company used the Black-Scholes option-pricing
model to determine the fair value of options granted during 2023 - 2026. The following assumptions were applied in determining the options’
fair value on their grant date:
| |
|
2026 |
|
|
2025 |
|
| Risk-free interest rate |
|
3.43% - 4.11 |
% |
|
3.5% - 4.37 |
% |
| Expected option term (years) |
|
3.65 - 3.79 |
|
|
2.6 - 3.79 |
|
| Expected share price volatility |
|
96.3% - 96.7% |
|
|
95.9% - 98.0% |
|
| |
G. |
Restricted Share Units Grant |
On March 1, 2026, the Board approved
the grant of an aggregate of 1,779,693 RSUs to certain officers, directors and consultants, subject to their continued engagement with
the Company. The grant of the RSUs was made under and in accordance with the Plan and within the Company’s Compensation Policy for
the Office Holders (the “Compensation Policy”), with the exception of the grant to the Company’s non-executive directors
and the limitations set by the Compensation Policy. On June 1, 2026, the Company’s shareholders approved the grant of an aggregate
of 631,020 RSUs (which are part of the 1,779,693 RSUs approved on March 1, 2026 by the Board) to the Company’s chief executive officer
and the directors of the Company, subject to their continued engagement with the Company. The Company calculates the fair value
of RSUs based on the fair value on the closing trading price of the underlying shares at the date of grant. Each RSU vests based on continued
service to the Company, between 12 – 36 months. The grant date fair value of the award is recognized as stock-based compensation
expense over the requisite service period.
The fair value of this grant was $1,938,251,
As of June 30, 2026, the unrecognized compensation cost related to all unvested RSUs was $1,484,065
A summary of the RSUs activity for the
six months ended June 30, 2026 is as follows:
| | |
Amount of
RSUs | | |
Weighted
Average
Grant date Fair
|Value per Share | |
| Outstanding as of December 31, 2025 | |
| 586,584 | | |
$ | 1.069 | |
| Granted | |
| 1,779,693 | | |
$ | 1.09 | |
| Forfeited | |
| - | | |
| | |
| Vested | |
| (663,163 | ) | |
$ | 1.125 | |
| Unvested and Outstanding as of June 30, 2026 | |
| 1,703,114 | | |
$ | 1.068 | |
|