| RELATED PARTIES |
NOTE 13 — RELATED PARTIES Until July 31, 2025, Pure Capital and Xylo were considered related parties due to a family relationship between the former CEO and Pure Capital. Following the former CEO’s resignation in July 2025, Pure Capital and Xylo are no longer considered related parties. Accordingly, the related party transactions with Pure Capital and Xylo presented for the six months ended June 30, 2025 reflect the terms in effect during that period, and no related party balances with Pure Capital or Xylo were outstanding as of June 30, 2026 or December 31, 2025. | | a. | Transactions with interested and related parties: | | | | Six months ended
June 30, | | | | | 2026 | | | 2025 | | | Cost of sales: | | | | | | | | Inventory storage (c1) | | | - | | | | 55 | | | Purchased goods | | | - | | | | 20 | | | | | | - | | | | 75 | | | General and administrative: | | | | | | | | | | Consulting fees (c1), (c2), (c4) | | | 15 | | | | 602 | | | Share-based payment (c4),(c6) | | | 20 | | | | 173 | | | Revenue sharing payment | | | - | | | | 24 | | | | | | 35 | | | | 799 | | | Other income: | | | | | | | | | | Consulting Agreement (c3) | | | (60 | ) | | | (60 | ) | | | | | | | | | | | | Financial expenses (income), net: | | | | | | | | | | Interest expense on Deferred Payment (c5) | | | - | | | | 9 | | | | b. | Balances with interested and related parties: | | | | Period ended | | | | | June 30,
2026 | | | December 31,
2025 | | | Assets: | | | | | | | | Other receivables – non-current (c3) | | | 292 | | | | 232 | | | | | | 292 | | | | 232 | | | | c. | Additional information: | | | (*) | Pure Capital Ltd. (Pure Capital) holds 100% of Xylo Technologies Ltd. (formerly Medigus Ltd.) (“Xylo”). Until July 31, 2025, Pure Capital and Xylo were considered related parties due to a family relationship between the Company’s former CEO and Pure Capital. Following the former CEO’s resignation in July 2025, Pure Capital and Xylo are no longer considered related parties. Accordingly, the no related party transactions with Pure Capital and Xylo for the Six months ended June 30, 2026 and no related party transactions balances with Pure Capital or Xylo were outstanding as of June 30, 2026. | | | 1. | On October 26, 2022, the Company and Pure Capital entered into a consulting agreement (the “Pure Capital Consulting Agreement”), pursuant to which Pure Capital agreed to provide consulting services to the Company for a monthly fee of NIS 57.75 thousand (approximately $16). Pursuant to the Pure Capital Consulting Agreement, Pure Capital is also entitled during the term of the consulting agreement to the following payments: (i) an amount equal to 7% of the gross proceeds paid to the Company in connection with any exercise of warrants, including warrants then outstanding or issued thereafter, and (ii) 8% of the total consideration paid in connection with any purchase of a new brand, business, or similar event initiated or assisted by Pure Capital. Additionally, on October 26, 2022, the Company and Pure Logistics, a company previously wholly-owned by Pure Capital and a former director of the Company, entered into a warehouse storage agreement located in New Jersey. On March 18, 2025, the Company acquired all of the issued and outstanding equity interests of Pure Logistics (which was accounted for as a related-party transaction prior to the acquisition). | On April 7, 2025, the Company and Pure Capital entered into an amendment to the Pure Capital Consulting Agreement, to be effective as of January 1, 2024. Pursuant to the amendment, Pure Capital is entitled to a special bonus upon the consummation of an offering of securities of the Company, including proceeds received from the exercise of warrants, based on the following distribution of gross proceeds: (i) up to $2,500, Pure Capital will be entitled to a bonus payment of $175; (ii) between $2,500 and $5,000, Pure Capital will be entitled to a bonus payment of between $175 to $300; (iii) between $5,000 and $10,000, Pure Capital will be entitled to a bonus payment of between $300 to $700; and (iv) above $10,000, Pure Capital will be entitled to a bonus payment of between $700 to $1,300. In addition, in lieu of a bonus payment of $124 that Pure Capital was entitled to pursuant to the amendment, the Company issued to Pure Capital 543 ordinary shares. On August 1, 2025, the Company and Pure Capital entered into a second amendment to the Pure Capital Consulting Agreement, pursuant to which Pure Capital is no longer entitled to receive a monthly consulting fee and is entitled to receive reimbursement of expenses for up to $5. | | 2. | On April 30, 2024, the Company entered into a consulting agreement (the “Xylo Consulting Agreement”) with Xylo Technologies Ltd. (formerly Medigus Ltd.) (“Xylo”), pursuant to which Xylo agreed to provide consulting services to the Company for a monthly fee of $20. The Xylo Consulting Agreement is for a 36-month term beginning in January 2024 and may be terminated for cause upon 30 days’ prior notice. Consulting fees under the Xylo Consulting Agreement are included in other expenses. On April 7, 2025, the Company and Xylo entered into an amendment to the Xylo Consulting Agreement pursuant to which the monthly fee payable to Xylo was reduced to $10, effective as of January 1, 2025. | | | 3. | On March 22, 2023, the Company entered into a consulting agreement with SciSparc U.S. (the “SciSparc Consulting Agreement”), pursuant to which the Company agreed to provide management services to SciSparc U.S. for the Wellution brand for a monthly fee of $20 and the Company received a one-time signing bonus of $51. The SciSparc Consulting Agreement has no defined term and may be terminated by either party with 30 days’ prior notice. In November 2023, the monthly fee was reduced to $10. Consulting fees received under the SciSparc Consulting Agreement are included in other income in the condensed consolidated statements of operations. On July 28, 2025, the Company and SciSparc U.S. entered into a side letter to the SciSparc Consulting Agreement, pursuant to which, as of July 28, 2025, all consulting fees that were outstanding or that would accrue for services rendered after such date, shall be payable only (i) out of the Company’s positive cash flow and (ii) not earlier than October 30, 2026. | | | 4. | In January 2026, KeepZone entered into a consulting agreement with a member of the Company’s Board of Directors for the provision of business development services for a monthly fees of $2.5. In connection with the engagement, the Company granted the director RSUs in January 2026 (see Note 3(a)). | | | 5. | The Deferred Payment represents the deferred consideration for the acquisition of Pure Logistics (see (c)(1) above). Interest expense on the Deferred Payment is recognized within financial expenses (income), net. | | | 6. | On April 9, 2025, the Company granted Pure Capital and Xylo ordinary shares. |
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