| SIGNIFICANT TRANSACTIONS | NOTE
3 - SIGNIFICANT TRANSACTIONS
A. Exercise
of pre-funded warrants
On
January 3, 2024, a number of 395,294
B. Exchange
Agreement
On
February 13, 2024, the Company entered into an Exchange Agreement with certain warrant holders (the “Holders”), pursuant
to which the Company and the Holders agreed to exchange (the “Exchange”) warrants with down round protection feature
exercisable to common shares (the “Warrants”) owned by the Holders for shares of Common Stock to be issued by the Company.
On
February 13, 2024, the Company closed the Exchange and issued to the Holders on February 15, 2024 an aggregate of 718,641 876,391
It
was also agreed that the Holders will not, during the period (“Lock-Up Period”)
(i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any
Shares, (ii) enter into any swap or other agreement that transfers, in whole or in part,
any of the economic consequences of ownership of the Shares of, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Shares or such other
securities, in cash or otherwise, (iii) make any demand for or exercise any right with respect
to, the registration of any Shares or any security convertible into or exercisable or exchangeable
for shares of common stock, or (iv) publicly announce an intention to effect any transaction
specific in clause (i), (ii) or (iii) above, provided however that the Holder, during the
Lock-Up Period, may (a) sell or contract to sell Shares at a price higher than $0.50 per
Share on any trading day up to 10% of the daily volume of Shares or (b) sell or contract
to sell Shares at a price higher than $0.80 per Share on any trading day with no limitation
on volume. The
Lock-Up Period shall expire at the earliest of (i) 365 days after the date hereof or (ii) until the Shares traded above $ 1.00 The
Company accounted for the Exchange of the aforesaid warrants with shares as deemed dividend which was calculated at the closing date
by the management using the assistance of external appraiser as the excess of fair value of the share to be issued after taking into
consideration a discount for lack of marketability at a rate of 16.81% over the Lock-Up Period over the fair value of the original
equity instrument (i.e. warrants which included down round protection feature). However, since the fair value of the new equity instrument
was estimated as lesser than the fair value of the replaced equity instrument, deemed dividend was not recorded.
C. Lease
Agreement
On
February 19, 2024, the Company entered into Lease Agreement (the “Agreement”) with Tapsak Enterprises LLC dba Virginia
Analytical (the “Landlord”) under which it was agreed that the Company will lease from the Landlord a premises located
in Front Royal, Virginia area for a monthly rental fee of $ 2.5 3 2.5
In
addition, the Company has an option to renew the Initial Lease Period for another two additional periods of 3-years each following
the Initial Lease Period (the “Option Term”), following advanced notice as defined in the Agreement. The monthly rental
fee over the Option Term shall be the fair market rate determined as what is a comparable cost for similar property in Front Royal,
Virginia area. GLUCOTRACK
INC. NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.) (in
thousands of US Dollars) NOTE
3 - SIGNIFICANT TRANSACTIONS (CONT.)
C. Lease
Agreement (Cont.)
In
accordance with the provision of ASC 842, Leases, at the commencement date of the Agreement,
the Company recognized the right to usage asset equals to lease liability in total amount
of $ 79 As
part of the leasing period, the Company considered only the Initial Lease Period as the realization of the option to extend the period
was not considered as reasonably certain. Operating
lease: SCHEDULE
OF OPERATING
LEASE
June
30,
Operating
right of use asset $ 71
Current
operating lease liability $ 25
Non-Current
operating lease liability $ 46 Maturity
analysis of the Company’s lease liability: SCHEDULE
OF MATURITY
ANALYSIS OF LEASE LIABILITY
June
30,
Less than one
year $ 30
Between 1-2 years 30
More
than 2 years 20
Total
operating lease payments $ 80
Less:
imputed interest $ (9 )
Present value of lease
liabilities $ 71 Additional
information on lease The
following is a summary of weighted average remaining lease terms and discount rate for Company’s leases: SCHEDULE
OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATE
June 30,
Lease term (years) 2.92
Weighted average discount rate 9.03 %
D. Private
Placement Agreement
On
April 22, 2024, the Company entered into a private placement agreement under which the Company
issued 79,366 6.3 500 GLUCOTRACK
INC. NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.) (in
thousands of US Dollars) NOTE
3 - SIGNIFICANT TRANSACTIONS (CONT.)
E. Adoption
of 2024 Equity Incentive Plan and Reverse Share Split
On
April 26, 2024, the Company held its Annual Meeting of Shareholders (the “Annual Meeting”)
under which the Company’s stockholders approved, inter alia, the following proposals:
(i) adoption of the Company’s 2024 Equity Incentive Plan and (ii) an amendment to Article
IV of the Company’s Certificate of Incorporation, to effect a reverse stock split of
the Company’s Common Stock at a ratio of between one-for-five and one-for-thirty, with
such ratio to be determined at the sole discretion of the Board of Directors. Following the
Annual Meeting, on April 30, 2024, the Company’s Board of Directors approved a one-for-five For
accounting purposes, all shares, options and warrants to purchase shares of common stock and loss per share amounts have been adjusted
to give retroactive effect to the Reverse Share Split for all periods presented in these interim consolidated financial statements.
Any fractional shares resulting from the Reverse Share Split were rounded up to the nearest whole share.
F. Note
and Warrant Purchase Agreements
On
June 27, 2024, the Board of Directors approved the Company to enter into note and warrant
purchase agreements with certain officers, directors and existing investors, providing
for the private placement of unsecured promissory notes in the aggregate principal amount
of $ 100 300,000 The
Notes bear simple interest at the rate of 3% per annum and are due and payable in cash on the earlier of: (i) twelve months from
the date of the Note; or (ii) the date the Company raises third-party equity capital in an amount equal to or in excess of $1,000
(the “Maturity Date”). The Company may prepay the Notes at any time prior to the Maturity Date without penalty. If an
event of default occurs, the then-outstanding principal amount of the Notes plus any unpaid accrued interest will accelerate and
become immediately payable in cash. Each
Warrant has an exercise price of $ 4.95 five-year At
the initial date, the total proceeds received of $ 80 SCHEDULE
OF FAIR VALUE
OF THE IDENTIFIED COMPONENTS
Fair
value at Closing Date
Notes (1) $ 12
Warrants
(2) 68
Fair
value at Closing Date $ 80
(1) The
fair value of the Notes was determined based on rating model using a discount rate of 12 %
which represented the Company’s applicable rate of risk, as determined by management.
(2) The
fair value of the Warrants determined by management based on Black-Scholes pricing model taking into account expected stock price
volatility of 245 4.52 The
Note is accounted for as a financial liability measured at amortized cost. At subsequent dates, the Company recognized a discount expense
over the economic life of the Notes based on the effective interest rate method. However, during the period of six month, discount expense
were de minimis. GLUCOTRACK
INC. NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(CONT.) (in
thousands of US Dollars) |
