| SHARE CAPITAL |
NOTE 8 - SHARE CAPITAL
| |
1) |
Rights of the Company’s ordinary shares |
Each ordinary share is entitled to one vote. The holder of
the ordinary shares is also entitled to receive dividends whenever funds are legally available, when and if declared by the Board of Directors.
Since its inception, the Company has not declared any dividends.
| |
2) |
Changes in share capital: |
In 2022, three U.S investors exercised 425,000
warrants into 425,000 ordinary shares in return of $1,700.
In 2023, Mr. Sagy exercised 186,000 warrants into 186,000 ordinary
shares in return of $744.
| B. |
Share-based compensation: |
| | 1) | Option plan Under the Company’s Share Ownership and Option Plan (2010), or the 2010 Plan, employees, directors and consultants of the Company may be granted options, each exercisable into one ordinary share of the Company of NIS 1.50 par value. On April 3, 2024, the board of directors approved the adoption of a share award plan (the “2024 Plan”). The 2024 Plan allows the Company to grant its employees, directors and consultants with several equity-based awards, including options, shares, restricted shares, restricted share units, stock appreciation rights, performance units, performance shares and other stock or cash awards. The 2024 Plan shall be in effect for a term of ten (10) years from the date of adoption, i.e., until April 2034, unless earlier terminated by its administrator.
|
| |
a. |
Option granted to employees, directors and consultants |
In the years ended December 31, 2024,
2023 and 2022, the Company granted options as follows (amounts presented reflect the number of shares underlying options):
| | | Year ended December 31, 2024 | |
| | | Award
amount | | | Exercise
price range | | | Vesting
period | | Expiration | |
| Employees | | | 50,500 | | | $ | 4.26-5.76 | | | 4 years | | 10 years | |
| Consultants | | | 25,000 | | | | $ 5.26 | | | 4 years | | 10 years | |
| | | Year ended December 31, 2023 | |
| | | Award
amount | | | Exercise
price range | | | Vesting
period | | Expiration | |
| Employees | | | 158,000 | | | $ | 5.65-7.5 | | | 4 years | | 10 years | |
|
| | Year ended December 31, 2022 | |
| | | Award
amount | | | Exercise
price range | | | Vesting
period | | Expiration | |
| Employees | | | 529,000 | | | $ | 5.33-9.22 | | | 4 years | | 10 years | |
| Directors | | | 217,000 | | | $ | 9.22 | | | 4 years | | 10 years | |
The fair value of options granted on
the date of grant was computed using the Black-Scholes model. The underlying data used for computing the fair value of the options are
as follows:
| |
|
Year ended December 31, |
|
| |
|
2024 |
|
|
2023 |
|
|
2022 |
|
| Value of one ordinary share |
|
$ |
4.27-5.46 |
|
|
$ |
5.73-7.5 |
|
|
$ |
5.03-9.22 |
|
| Dividend yield |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
| Expected volatility |
|
|
70.91-71.14 |
% |
|
|
70.27-74.1 |
% |
|
|
67.95-72.27 |
% |
| Risk-free interest rate |
|
|
4.21-4.46 |
% |
|
|
3.62-4.33 |
% |
|
|
0.39-3.03 |
% |
| Expected term |
|
|
6.11 years |
|
|
|
6.11 years |
|
|
|
6.11 years |
|
A summary of
options data for the years ended December 31, 2024, 2023 and 2022, is as follows:
| |
|
Year ended December 31, |
|
| |
|
2024 |
|
|
2023 |
|
|
2022 |
|
| Total fair value of options granted |
|
$ |
252 |
|
|
$ |
747 |
|
|
$ |
3,970 |
|
| Weighted-average grant date fair value of options granted, per option |
|
$ |
3.33 |
|
|
$ |
4.73 |
|
|
$ |
5.32 |
|
| Total intrinsic value of the options exercised |
|
$ |
* |
|
|
$ |
271 |
|
|
$ |
221 |
|
| Total fair value of options vested |
|
$ |
1,549 |
|
|
$ |
4,380 |
|
|
$ |
2,802 |
|
The
following table summarizes the activity in options granted to employees and directors for the year ended December 31, 2024:
| |
| 2024 |
|
| |
| Number of options |
|
| Weighted average exercise price* |
|
| weighted average remaining contractual term
(in years) |
|
| aggregate intrinsic value* |
|
| Options outstanding at the beginning of the year |
| |
1,745,880 |
|
| $ |
5.80 |
|
| |
5.91 |
|
| $ |
1,165 |
|
| Granted |
| |
50,500 |
|
| |
5.15 |
|
| |
8.57 |
|
| |
- |
|
| Exercised |
| |
(1,840 |
) |
| |
5.07 |
|
| |
- |
|
| |
- |
|
| Expired |
| |
(29,313 |
) |
| |
6.99 |
|
| |
- |
|
| |
- |
|
| Forfeited |
| |
(37,472 |
) |
| |
6.22 |
|
| |
- |
|
| |
- |
|
| Options outstanding at the end of the year |
| |
1,727,755 |
|
| $ |
5.75 |
|
| |
4.99 |
|
| $ |
- |
|
| Options exercisable at the end of the year |
| |
1,383,902 |
|
| $ |
5.64 |
|
| |
4.27 |
|
| $ |
- |
|
| * |
After
repricing- see Note 8(B)(2)(a). |
The following table summarizes the activity in options
granted to consultants for the year ended December 31, 2024:
| |
| 2024 |
|
| |
| Number of
options |
|
| Weighted
average
exercise
price |
|
| weighted average remaining contractual term (in years) |
|
| aggregate intrinsic value |
|
| Options outstanding at the beginning of the year |
| |
11,666 |
|
| $ |
16.78 |
|
| |
1.36 |
|
| $ |
2 |
|
| Granted |
| |
25,000 |
|
| |
4.46 |
|
| |
9.78 |
|
| |
- |
|
| Options outstanding at the end of the year |
| |
36,666 |
|
| $ |
8.35 |
|
| |
6.78 |
|
| $ |
- |
|
| Options exercisable at the end of the year |
| |
6,329 |
|
| $ |
9.95 |
|
| |
0.34 |
|
| $ |
- |
|
Modification of share-based compensation
|
1. |
On April 3, 2024, the board of directors (following the approval
of the compensation committee with respect to the Company’s directors and officers) approved to extend the expiry date of 337,464 options
exercisable into 337,464 ordinary shares that were previously granted to some of the Company’s employees and directors, from an
expiry date ranging between December 2024 and July 2025, by an additional three years, such that the expiry dates will range between
December 2027 and July 2028. Out of the said options, 126,800 options exercisable into 126,800 ordinary shares are held by some of the
Company’s directors and its CEO (who also serves as a director on the board of directors), and as such, the extension of the expiry dates
of these options is subject to the approval of the general meeting of the shareholders, which approval was obtained on September 25,
2024. |
The total incremental fair value of
these options granted to the Company’s employees and directors amounted to $314 and was determined based on the Black-Scholes pricing
options model using the following assumptions: risk free interest rate of 3.53%-4.68%, expected volatility of 53.4% - 71.62%, expected
term of 1.65-2.16 years and dividend yield of 0%. For the year ended December 31, 2024, the Company recorded the total expenses from these
extended options in amount of $314.
|
2. |
On August 23, 2023, the Company’s board of directors approved the repricing of the exercise price of
outstanding options to purchase 969,886 ordinary shares, previously granted to employees and directors, to a price of $6.39 per share,
out of which the repricing of 583,979 options granted to the Company’s directors and the Chief Executive Officer, were subject to
the approval of the general meeting of the shareholders, which approval was obtained on October 10, 2023. There was no change in the number
of shares subject to each option, vesting or other terms of the options.
|
The total incremental fair value of these
options amounted to $579 and was determined based on the Black-Scholes pricing options model using the following assumptions: risk free
interest rate of 4.33%-4.74%, expected volatility of 72.1% - 77%, expected term of 3.4-4.71 years and dividend yield of 0%.
For the year ended December 31, 2024 and 2023, the Company recorded expenses totaling $35 and $523 associated with the repricing. The
remaining incremental fair value will be recognized over the remaining vesting period and until May 2026.
The
following tables summarize information concerning outstanding and exercisable options as of December 31, 2024:
| December 31, 2024 |
|
| Options outstanding |
|
| Options exercisable |
|
| Exercise prices * |
|
| Number of
options
outstanding
at end of year |
|
| Weighted
average
remaining
contractual Life |
|
| Number of
options
exercisable
at end of year |
|
| Weighted
average
remaining
contractual life |
|
| $ |
24.68 |
|
| |
6,666 |
|
| |
0.38 |
|
| |
1,329 |
|
| |
0.38 |
|
| |
7.50 |
|
| |
98,562 |
|
| |
8.24 |
|
| |
43,436 |
|
| |
8.24 |
|
| |
6.50 |
|
| |
15,500 |
|
| |
8.65 |
|
| |
5,531 |
|
| |
8.65 |
|
| |
6.39 |
|
| |
948,572 |
|
| |
6.33 |
|
| |
780,313 |
|
| |
6.13 |
|
| |
6.03 |
|
| |
5,000 |
|
| |
0.33 |
|
| |
5,000 |
|
| |
0.33 |
|
| |
5.76 |
|
| |
5,000 |
|
| |
9.44 |
|
| |
- |
|
| |
- |
|
| |
5.65 |
|
| |
17,000 |
|
| |
8.92 |
|
| |
4,250 |
|
| |
8.92 |
|
| |
5.33 |
|
| |
104,157 |
|
| |
7.92 |
|
| |
52,408 |
|
| |
7.92 |
|
| |
5.26 |
|
| |
37,000 |
|
| |
9.26 |
|
| |
- |
|
| |
- |
|
| |
5.07 |
|
| |
145,500 |
|
| |
1.08 |
|
| |
145,500 |
|
| |
1.08 |
|
| $ |
4.26 |
|
| |
29,000 |
|
| |
9.91 |
|
| |
- |
|
| |
- |
|
| |
4.02 |
|
| |
352,464 |
|
| |
0.29 |
|
| |
352,464 |
|
| |
0.29 |
|
| |
|
|
| |
1,764,421 |
|
| |
|
|
| |
1,390,231 |
|
| |
|
|
| * | In U.S. dollars per Ordinary Share. |
In the year ended December 31, 2024,
the Company granted restricted share units, or RSU, as follows:
| |
|
Year ended
December 31, 2024 |
|
| |
|
Number of RSU granted |
|
|
Weighted Average
Grant Date
Fair Value |
|
| Employees |
|
|
341,000 |
|
|
$ |
5.05 |
|
| Directors |
|
|
100,000 |
|
|
$ |
4.78 |
|
The following table summarizes the activity
in RSU granted to employees and directors under the 2024 Plan for the year ended December 31, 2024:
| |
|
Number of options |
|
|
Weighed Average Grant Date Fair Value |
|
| Unvested at the beginning of the period |
|
|
- |
|
|
$ |
- |
|
| Granted |
|
|
441,000 |
|
|
|
4.99 |
|
| Unvested at the end of the period |
|
|
441,000 |
|
|
$ |
4.99 |
|
| | c. | The following table illustrates the effect of share-based compensation on the statements of operations: |
| |
|
Year ended December 31 |
|
| |
|
2024 |
|
|
2023 |
|
|
2022 |
|
| Cost of revenues |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
22 |
|
| Research and development expenses |
|
|
783 |
|
|
|
714 |
|
|
|
565 |
|
| General, administrative and marketing expenses |
|
|
936 |
|
|
|
1,223 |
|
|
|
1,587 |
|
| |
|
$ |
1,719 |
|
|
$ |
1,937 |
|
|
$ |
2,174 |
|
As of December 31, 2024, there was $2,165 of
unrecognized compensation expense related to unvested RSUs and options. This amount is expected to be recognized over a weighted-average
period of 1.82 years.
|