Techlott Inc 10-Q for FY2024 Q2
Techlott Inc. (LOTT)
About this 10-Q
Techlott Inc filed this 10-Q on August 12, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).
Headline figures
Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2000
- Net income
- $181K
- compared with a net loss of $342K a year earlier
- Diluted EPS
- $0.00
- compared with $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
MARK ONE
for
the Quarterly Period ended
for the transition period from ________ to ________
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
| (Address of principal executive offices) | Zip Code |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☐ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 12, 2024, there were outstanding shares of the registrant’s common stock, par value $ per share.
APPYEA, INC.
Form 10-Q
June 30, 2024
| 2 |
APPYEA INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2024
| 3 |
APPYEA INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2024
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 4 |
APPYEA INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Unaudited | Audited | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | ||||||||
| Other accounts receivables | ||||||||
| Government institutions | ||||||||
| Inventory | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Total non-current assets | ||||||||
| Total assets | ||||||||
LIABILITIES AND DEFICIENCY | ||||||||
| Current liabilities | ||||||||
| Trade payables | ||||||||
| Other accounts payable | ||||||||
| Short-term loans from related party | ||||||||
| Convertible loans at amortized cost | ||||||||
| Convertible loans – At fair value | ||||||||
| Financial liability at fair value | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
DEFICIENCY | ||||||||
| AppYea Inc. Stockholders’ Deficiency: | ||||||||
| Convertible preferred stock, $ par value | ||||||||
| Common stock, $ par value | ||||||||
| Shares to be issued | ||||||||
| Additional Paid in Capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total AppYea Inc. stockholders’ deficiency | ( | ) | ( | ) | ||||
| Non-controlling interests | ( | ) | ( | ) | ||||
| Total Deficiency | ( | ) | ( | ) | ||||
| Total liabilities and deficiency | ||||||||
The accompanying notes are an integral part of the financial statements.
| 5 |
APPYEA INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands)
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
For
the period of three months | For
the period of six months | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Unaudited | Unaudited | |||||||||||||||
| Revenues | ||||||||||||||||
| Cost of sales | ||||||||||||||||
| Gross profit (loss) | ( | ) | ||||||||||||||
| Research and development expenses | ||||||||||||||||
| Sales and marketing expenses | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Change in fair value of convertible loans and warrant liability | ( | ) | ||||||||||||||
| Financial (expenses) income, net | ( | ) | ( | ) | ( | ) | ||||||||||
| Net profit (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Net profit (loss) attributable to AppYea Inc. | ( | ) | ( | ) | ( | ) | ||||||||||
Profit (loss) per Common Share | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
Weighted Average number of Common Shares Outstanding basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of the financial statements.
| 6 |
APPYEA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIENCY
(U.S. dollars in thousands except share data)
| Number | Amount | Number | Amount | issued | Paid in Capital | Deficit | Total | interests | Deficiency | |||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Shares to be | Additional | Accumulated | Non-controlling | Total | ||||||||||||||||||||||||||||||||||
| Number | Amount | Number | Amount | issued | Paid in Capital | Deficit | Total | interests | Deficiency | |||||||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2024 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of Shares | - | ( | ) | |||||||||||||||||||||||||||||||||||||
| Shares to be issued to service providers | - | - | ||||||||||||||||||||||||||||||||||||||
| Shares to be issued to investors | - | - | ||||||||||||||||||||||||||||||||||||||
| Share issuance upon conversion of Preferred stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Share issuance upon conversion of Convertible notes | ||||||||||||||||||||||||||||||||||||||||
| Share issuance upon conversion of Convertible notes, shares | ||||||||||||||||||||||||||||||||||||||||
| Shares to be issued upon warrant exercise | - | - | ||||||||||||||||||||||||||||||||||||||
| Share issuance from of stock payable | - | ( | ) | |||||||||||||||||||||||||||||||||||||
| Shares to be issued | - | - | ||||||||||||||||||||||||||||||||||||||
| Options exercise | ( | ) | ||||||||||||||||||||||||||||||||||||||
| option Issuance upon conversion of debt to related party | ||||||||||||||||||||||||||||||||||||||||
| Share based compensation to investors | - | - | ||||||||||||||||||||||||||||||||||||||
| Share based compensation | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Shares to be | Additional | Accumulated | Non-controlling | Total | ||||||||||||||||||||||||||||||||||
| Number | Amount | Number | Amount | issued | Paid in Capital | Deficit | Total | interests | Deficiency | |||||||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2023 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Share issuance upon conversion of Convertible notes | - | |||||||||||||||||||||||||||||||||||||||
| Shares to be issued | - | - | ||||||||||||||||||||||||||||||||||||||
| Share based compensation | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance as of June 30, 2023 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| 7 |
APPYEA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIENCY
(U.S. dollars in thousands except share data)
| Preferred Stock | Common Stock | Shares to be | Additional | Accumulated | Non-controlling | Total | ||||||||||||||||||||||||||||||||||
| Number | Amount | Number | Amount | issued | Paid in Capital | Deficit | Total | interests | Deficiency | |||||||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||||||||||||||||
| Balance as of April 1, 2024 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of Shares | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Options exercise | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Shares to be issued | - | - | ||||||||||||||||||||||||||||||||||||||
| Shares to be issued upon warrant exercise | ||||||||||||||||||||||||||||||||||||||||
| Share based compensation to investors | ||||||||||||||||||||||||||||||||||||||||
| Share issuance from of stock payable | ( | ) | ||||||||||||||||||||||||||||||||||||||
| Share based compensation | ||||||||||||||||||||||||||||||||||||||||
| option Issuance upon conversion of debt to related party | ||||||||||||||||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Shares to be | Additional | Accumulated | Non-controlling | Total | ||||||||||||||||||||||||||||||||||
| Number | Amount | Number | Amount | issued | Paid in Capital | Deficit | Total | interests | Deficiency | |||||||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||||||||||||||||
| Balance as of April 1, 2023 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Share issuance upon conversion of Convertible notes | - | |||||||||||||||||||||||||||||||||||||||
| Shares to be issued | - | - | ||||||||||||||||||||||||||||||||||||||
| Share based compensation | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Net income (loss) | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance as of June 30, 2023 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of the financial statements.
| 8 |
APPYEA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
| 2024 | 2023 | |||||||
| For The six Months Ended | ||||||||
| June 30, | ||||||||
| 2024 | 2023 | |||||||
| Unaudited | ||||||||
| Cash flows from operating activities: | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Share based compensation | ||||||||
| Change in fair value of convertible loans and warrant liability and financial expenses, net | ( | ) | ||||||
| Financial expenses, net | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Other accounts recivables | ( | ) | ||||||
| Inventory | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accounts payables – related party | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Research and development expenses capitalization | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of
Common Stock | ||||||||
| Proceeds on account of
Shares to be issued | ||||||||
| Proceeds
from convertible Note received, net of issuance expenses | ||||||||
| Net cash provided by financing activities | ||||||||
| Foreign exchange on Cash and cash equivalents | ||||||||
Change in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | ||||||||
| Non-cash investing and financing activities | ||||||||
| Related partied debt conversion to option for common stock | ||||||||
The accompanying notes are an integral part of the financial statements.
| 9 |
APPYEA INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 - GENERAL
AppYea, Inc. (“AppYea”, “the Company”, “we” or “us”) was incorporated in the State of South Dakota on November 26, 2012 to engage in the acquisition, purchase, maintenance and creation of mobile software applications. The Company is in the development stage with no significant revenues and no significant operating history. On November 1, 2021 the Company was redomiciled in the State of Nevada.
The Company’s common stock is traded on the OTC Markets, OTCQB tier, under the symbol “APYP”.
SleepX LTD is a company formed under the laws of the State of Israel and a wholly owned subsidiary of the Company (“SleepX”). SleepX is a research and development company that has developed a proprietary product for monitoring and treating sleep apnea and snoring. The technology is protected by several international patents and the Company started serial production in 2023. Subject to raising working capital, of which no assurance can be provided, the Company intends to focus on further development and commercialization of its products.
SleepX
has incorporated, together with an unrelated third party, a privately held company under the laws of the State of Israel named Ta-nooma
Ltd. (“Ta-nooma”). Ta-nooma has developed sleeping monitoring technology for which patent applications were filed and has
no revenue from operations. Since its incorporation and as of the financial statements date, Sleepx holds
Strategic Development
The company flagship product is AppySleep – A Biofeedback snoring treatment wristband, combined with the AppySleep App (“AppySleep”).
The AppySleep product is currently in serial manufacturing and commercial stage. The new AppySleep IOS and Android versions were launched during the third quarter of 2024. During the first 6 months of 2024 the company didn’t invest substantial capital in marketing AppySleep in order to invest it once the IOS version will be available for download, since the company saw significant demand in the US market for the AppySleep IOS version.
Financial position
The
financial statements are presented on a going-concern basis. To date, the Company has not generated any significant revenues, suffered
recurring losses from operations, incurred negative cash flows from operating activities, and is dependent upon external sources for
financing its operations. As of June 30, 2024, the Company had an accumulated deficit of $
The financial statements do not include any adjustments for the values of assets and liabilities and their classification that may be necessary in the event that the Company is no longer able to continue its operations as a “going concern”.
| 10 |
APPYEA INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The interim financial statements do not include a full disclosure as required in annual financial statements and should be read with the annual financial statements of the Company as of December 31, 2023 from which the accompanying condensed consolidated balance sheet dated December 31, 2023, was derived. The accounting policies implemented in the interim financial statements are consistent with the accounting policies implemented in the annual financial statements as of December 31, 2023, except of the following accounting pronouncement adopted by the Company.
Recently Issued Accounting Pronouncements
Effective January 1, 2024, the Company adopted ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)” (“ASU 2020-06”), which is intended to address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. For convertible instruments, ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stocks, and enhances information transparency by making targeted improvements to the disclosures for convertible instruments and earnings-per-share guidance on the basis of feedback from financial statement users. The adoption of this new accounting guidance did not have an effect on the consolidated financial statements.
Effective January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326),” referred to herein as ASU 2016-13, which significantly changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 replaced the existing incurred loss model with an expected credit loss model that requires entities to estimate an expected lifetime credit loss on most financial assets and certain other instruments. Under ASU 2016-13 credit impairment is recognized as an allowance for credit losses, rather than as a direct write-down of the amortized cost basis of a financial asset. The impairment allowance is a valuation account deducted from the amortized cost basis of financial assets to present the net amount expected to be collected on the financial asset. Once the new pronouncement is adopted by the Company, the allowance for credit losses must be adjusted for management’s current estimate at each reporting date. The new guidance provides no threshold for recognition of impairment allowance. Therefore, entities must also measure expected credit losses on assets that have a low risk of loss. For instance, trade receivables that are either current or not yet due may not require an allowance reserve under current generally accepted accounting principles, but under the new standard, the Company will have to estimate an allowance for expected credit losses on trade receivables under ASU 2016-13. The Company determined the adoption of this new accounting guidance and the effect on its financial statements throughout the period until implementation, and have no impact on the financial statements.
| 11 |
APPYEA INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” related to improvements to income tax disclosures. The amendments in this update require enhanced jurisdictional and other disaggregated disclosures for the effective tax rate reconciliation and income taxes paid. The amendments in this update are effective for fiscal years beginning after December 15, 2024. The adoption of this pronouncement is not expected to have a material impact on the Company’s financial statements.
Use of Estimates in Preparation of Financial Statements
The preparation of consolidated financial statements in conformity with U.S. GAAP accounting principles requires management to make estimates and assumptions. The Company’s management believes that the estimates, judgments, and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue under ASC 606, Revenue Recognition at the amount to which it expects to be entitled when control of the products or services is transferred to its customers.
We determine revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, a performance obligation is satisfied.
Our contracts are typically governed by a customer purchase order. The contract generally specifies the delivery of what constitutes a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine the separate units of accounting, whether the items have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers.
As discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration, we expect to receive in exchange for transferring goods or providing services. We do not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue.
A contract liability is recognized as deferred revenue when we invoice customers, or receive customer cash payments, in advance of satisfying the related performance obligation(s) under the terms of a contract. Deferred revenue is recognized as revenue when we have satisfied the related performance obligation.
We have one main revenue stream: wristband sales, with the AppySleep App. For this revenue stream, our performance obligations are satisfied at a point in time, and therefore, revenue is recognized at point in time when a customer takes control of the good or asset created by the service. Factors that may indicate transfer of control are when we have the right to receive payment for the good or service, when the legal title of the asset has been transferred, physical possession of the asset has been transferred, the customer obtains the
| 12 |
APPYEA INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
significant risks and rewards of ownership of the asset, and the customer accepts the asset. For customers, control is transferred upon delivery.
We leverage drop-ship shipments with our partners and suppliers to deliver wristbands to our customers without having to physically hold the inventory at our warehouses, thereby increasing efficiency and reducing costs. We recognize revenue for drop-ship arrangements on a gross basis as the principal in the transaction when the product is received by the customer because we control the product prior to transfer to the customer. We also assume primary responsibility for the fulfillment in the arrangement, we assume inventory risk if something were to happen to the hardware during shipping, we set the price of the product charged to the customer.
The Company intend to recognize records reductions to Products net sales related to future product returns, price protection and other customer incentive programs based on the Company’s expectations and historical experience. Currently, the returns are reduced from sales.
NOTE 3 - RELATED PARTY BALANCES AND TRANSACTIONS
A. Short-term loans from related parties
During
2021, SleepX borrowed from Nexense Technologies USA. Inc., a Delaware corporation which is majority owned by Boris Molchadsky, the Company’s
Chairman. an aggregate amount of $
During
2020, the minority shareholder of Ta-nooma advanced a loan to Ta-nooma in the amount of NIS
B. Balances with related parties
SCHEDULE OF BALANCE WITH RELATED PARTIES
June 30, 2024 | December 31, 2023 | |||||||
| In U.S. dollars in thousands | ||||||||
| Liabilities: | ||||||||
| Employees and payroll accruals | ||||||||
| Related party payables | ||||||||
| Short term loans | ||||||||
| 13 |
APPYEA INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 3 - RELATED PARTY BALANCES AND TRANSACTIONS (continued):
C. Transactions with related parties
SCHEDULE OF TRANSACTION WITH RELATED PARTIES
| 2024 | 2023 | |||||||
For the six months ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| In U.S. dollars in thousands | ||||||||
| Expenses: | ||||||||
| Salaries and related cost (including stock-based compensation in the amount of $ and $, respectively) | ||||||||
| Management fees | ||||||||
Both the Chairman and the chief financial officer are directors in the Company and do not receive compensation for their directorship roles. Company’s Bylaws provide that a director or officer shall be indemnified and held harmless by the Corporation, to the fullest extent permitted by the laws of the State of Nevada.
NOTE 4 - CONVERTIBLE LOANS AND WARRANTS
The following table summarizes fair value measurements by level as of June 30, 2024 and December 31, 2023 measured at fair value on a recurring basis:
SCHEDULE OF FAIR VALUE RECURRING BASIS
| December 31, 2023 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| U.S. dollars in thousands | ||||||||||||||||
| Assets | ||||||||||||||||
| None | ||||||||||||||||
| Liabilities | ||||||||||||||||
| Convertible Loans At fair value | ||||||||||||||||
| Financial liability | ||||||||||||||||
| June 30, 2024 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| U.S. dollars in thousands | ||||||||||||||||
| Assets | ||||||||||||||||
| None | ||||||||||||||||
| Liabilities | ||||||||||||||||
| Convertible Loans At fair value | ||||||||||||||||
| 14 |
APPYEA INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4 - CONVERTIBLE LOANS AND WARRANTS (cont.)
The Convertible Loans changes consist of the following as of June 30, 2024 and December 31, 2023:
SCHEDULE OF CONVERTIBLE LOANS AT FAIR VALUE
| June 30, 2024 | December 31, 2023 | |||||||
| Convertible Loans at Fair Value | ||||||||
| June 30, 2024 | December 31, 2023 | |||||||
| U.S. dollars in thousands | ||||||||
| Opening Balance, (including short term loans from related party which is also convertible) | ||||||||
| Additional convertible loans (a) | ||||||||
| Conversion of convertible loan (b) | ( | ) | ||||||
| Decrease of notes purchased | ( | ) | ||||||
| Change in fair value of convertible loans liability | ( | ) | ||||||
| Closing balance | ||||||||
| (a) |
| (b) |
The estimated fair values of the Convertible loans were measured according to the Monte Carlo Model using the following assumptions
SCHEDULE OF FAIR VALUES OF WARRANTS AND CONVERTIBLE LOAN ASSUMPTION USED
| As of June 30, | As of December 31, | |||||||
| 2024 | 2023 | |||||||
| Expected term (in years) | ||||||||
| Expected average (Monte Carlo) volatility | % | % | ||||||
| Expected dividend yield | ||||||||
| Risk-free interest rate | % | % | ||||||
| WACC | % | % | ||||||
* During the quarter the company came to an agreement with the holder of certain loans to extend the maturity date of the loans and the standstill conversion period to June 30, 2025. In exchange for the extension, the lender was granted a two-year option to purchase shares, at an exercise price of $. The company recorded $ in expenses for the option grant.
| 15 |
APPYEA INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 4 - CONVERTIBLE LOANS AND WARRANTS (cont.)
The following table summarizes information relating to outstanding and exercisable warrants as of December 31, 2023:
SUMMARIZES RELATING TO OUTSTANDING AND EXERCISABLE WARRANTS
| Warrants Outstanding and Exercisable | ||||||||||||||
| Number of | Weighted Average Remaining | Weighted Average | Valuation as of | |||||||||||
| Warrants | Contractual life (in years) | Exercise Price | December 31, 2023 | |||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
The following table summarizes information relating to outstanding warrants as of June 30, 2024:
| Warrants Outstanding | ||||||||||||||
| Number of | Weighted Average Remaining | Weighted Average | Valuation as of | |||||||||||
| Warrants | Contractual life (in years) | Exercise Price | June 30, 2024 | |||||||||||
| $ | ||||||||||||||
| $ | ||||||||||||||
At
the end of the second quarter the
The Convertible Loans at amortized cost changes consist of the following as of June 30, 2024 and December 31, 2023:
SCHEDULE OF CONVERTIBLE LOANS AMORTIZED COST
| June 30, 2024 | December 31, 2023 | |||||||
| U.S. dollars in thousands | ||||||||
| Opening balance | ||||||||
| Transition from convertible loans measured at fair value to measurement at amortized cost | ||||||||
| Beneficial conversion feature | ( | ) | ||||||
| Financial expenses related to transition from fair value measurement to amortized cost | ||||||||
| Accrued interest through profit or loss | ||||||||
| Closing balance | ||||||||
| 16 |
APPYEA INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 5 - STOCK BASED COMPENSATION
| A. | The table below depicts the number of options granted to employees and service providers: |
| Six months ended June 30, 2024 | ||||||||
| Weighted average exercise price | ||||||||
| Number of options | in USD | |||||||
| Options outstanding at January 1, 2024 | $ | |||||||
| Options granted during the period | $ | |||||||
| Options purchased during the period (Note 6B) | $ | |||||||
| Options exercised during the period* | ( | ) | $ | |||||
| Options outstanding at the end of period | $ | |||||||
| Options exercisable at the end of period | $ | |||||||
| * |
For the three months ended June 30, 2024 and 2023 the company recognized expenses, to such options, in the amount of $ and $, respectively. The expense is non-cash stock-based compensation expense resulting from options awards to the Chief Executive Officer, Chief Financial Officer and advisors The expense represents the aggregate grant date fair value for the option awards granted and vested during the fiscal years presented, determined in accordance with FASB ASC Topic 718.
| 17 |
APPYEA INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 6 - SIGNIFICANT EVENTS DURING THE PERIOD
| A. | On
May 13, 2024, Mr. Neil Kline announced his resignation from the board of directors of the Company. Contemporaneously, Mr. Kline
signed an advisor agreement with the company to serve as an advisor of the Board, and provide services related to the development of
company future products, creating marketing tools for company needs, and assist with filings and projects of the company. As
consideration for his Services, the company will issue to Consultant three million ()
shares of Company common stock par value $
per share, which shall vest as follows, subject to the continued provision of services by the Consultant: . The Company recognized during the
quarter an expense of $ |
| B. | On
May 14, 2024, the Board of the Company (the “Board”) approved the conversion of outstanding amounts owed to its officers
and directors for unpaid compensation for options of the Company’s common stock, as follows: Boris Molchadsky, the Company
chairman, and Asaf Porat, the Company CFO, agreed to convert a portion of their unpaid compensation into options for shares of the
Company’s common stock at a per share conversion rate of $ |
| C. | In
addition, the Board approved the issuance of stock option to purchase shares of
the Company’s common stock, at a per share exercise price of $, to Adi Shemer,
the Company CEO. Under his terms of his employment agreement, Mr. Shemer is entitled to these
options following the issuance by the Company of at least million shares of common stock
in respect of third-party investments in the Company, which was satisfied in February 2024.
The options will vest in full on July 1, 2024. For the six-month ended June 30, 2024 the
Company recorded an expense related to the issuance of $ |
| D. | On August 11, 2022, a lawsuit was filed in the Tel Aviv Magistrate’s Court against our Chairman and majority shareholder, Boris Molchadsky, G.P.I.S Ltd., an entity controlled by Mr. Molchadsky, Nexsense, Inc. (the former shareholder of SleepX Ltd.) and SleepX, Ltd., our subsidiary (collectively, the “Defendants”) [Civil lawsuit number 25441-08-22]. The suit was filed by a fund operating out of Israel. A copy of the claim was served to the defendants only six months after it was submitted to court, on February 21, 2023. The lawsuit is based on the alleged breach of partnership and loan agreements as well as other related allegations, including violation of agreements reached in a mediation proceeding that took place in 2015. On July 24, 2023, the Defendants (except for Nexsense, Inc.) filed a statement of defense, denying the allegations and argued that the claim should be dismissed, due to the statute of limitations, lack of cause of action, lack of jurisdiction, delay in filing the claim, and respecting SleepX, also due to the lack of legal rivalry between SleepX and the plaintiff. |
Recently, the Magistrate’s Court in Tel Aviv accepted the request regarding lack of material jurisdiction, and the claim was then transferred to the economic department of the District Court in Tel Aviv.
A preliminary hearing was held on February 14, 2024. The presiding judge did not rule on the preliminary pleadings and urged the parties to attempt mediation before the ruling. The parties are considering different mediators (which must be mutually agreed to) and following the selection of a mediator, the parties will schedule a date for the mediation.
| 18 |
APPYEA INC.
NOTES TO THE FINANCIAL STATEMENTS
NOTE 6 - SIGNIFICANT EVENTS DURING THE PERIOD (continued):
The Company cannot, at this stage, know the effects, if any, of these actions on its subsidiary SleepX and / or the Company, and accordingly, no provision was recorded.
NOTE 7 - SUBSEQUENT EVENTS
| A. | During July 2024 the Company uploaded its newly developed cloud-based app to Google Play and Apple Store. |
| B. | In July 2024, the Company agreed to change the employment terms of its CFO to part-time and decrease the salary and future options he’s entitled to. The CFO exercised vested options into shares in a cashless mechanism. |
| C. | On
August 4, 2024, the Company engaged with a shareholder of the company in a consulting agreement
with a monthly cash payment of NIS |
On August 7, 2024, the Board approved the issuance of a stock option to purchase shares of the Company’s common stock, at a per share exercise price of $, to Adi Shemer, the Company Chief Executive Officer. The options will vest in full on June 30, 2025. In addition, on August 7, 2024, the Board also approved the issuance of options for an additional million shares to Mr. Shemer, as a bonus for his contribution to the business. The options are exercisable at a per share purchase price of $.
In addition, the Board approved the issuance of a stock option to purchase shares of the Company’s common stock, at a per share exercise price of $, to Mr. Ron Mekler, the company independent board member, and issuance at the same terms of issuance of a stock option to purchase of the Company’s common stock to Mr. Tal Weitzman, the company software solutions service provider.
The Board also confirmed the issuance of shares to Plutus (Note 4).
The Board confirmed changing the exercise price of the stock options issued to Mr. Neil Kline and Mr. Ron Mekler in August 2023 from $ to $.
| 19 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Forward-looking Statements
This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws, and is subject to the safe-harbor created by such Act and laws. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms, or other variations thereon or comparable terminology. The statements herein and their implications are merely predictions and therefore inherently subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, performance levels of activity, or our achievements, or industry results to be materially different from those contemplated by the forward-looking statements. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Further information on potential factors that could affect our business is described under the heading “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission, or the SEC, on April 1, 2024, as subsequently amended. As used in this quarterly report, the terms “we”, “us”, “our”, the “Company” and “AppYea” mean AppYea, Inc. and our wholly-owned subsidiaries Sleepx LTD and Ta-Nooma LTD unless otherwise indicated or as otherwise required by the context.
Overview
AppYea, Inc. is a digital health company, focused on the development of accurate wearable monitoring solutions to monitor and treat sleep apnea and snoring and fundamentally improve quality of life.
Our solutions are based on our proprietary intellectual property portfolio comprised of Artificial Intelligence (AI) and sensing technologies for the tracking, analysis, and diagnosis of vital signs and other physical parameters during sleep time, offering extreme accuracy at affordable cost.
AI is a broad term generally used to describe conditions where a machine mimics “cognitive” functions associated with human intelligence, such as “learning” and “problem solving. Basic AI includes machine learning, where a machine uses algorithms to parse data, learn from it, and then make a determination or prediction about a given phenomenon. The machine is “trained” using large amounts of data that provide it with the ability to learn how to perform the task.
General Background
Snoring is a general disorder caused due to repetitive collapsing and narrowing of the upper airway. Individuals with snoring problems are at increased risk of accidental injury, depression and anxiety, heart disease and stroke. Currently available treatments include surgical and non-surgical devices.
According to Fior Markets, a market intelligence company, the Global Anti-Snoring Treatment Market is expected to grow from USD 4.3 billion in 2020 to USD 8.6 billion by 2028, with a 9.07% CAGR between 2021 and 2028. While North America had the largest market share of 28.12% in 2020, Asia-Pacific region is witnessing significant growth due to the increasing prevalence of obesity and sedentary lifestyles in emerging economies.
Currently available anti-snoring devices consist mainly of oral appliances that are recommended for use by patients suffering from snoring or obstructive sleep apnea. These appliances are put before sleep and have a simple function of pushing either the lower jaw or the tongue forward. This keeps the epiglottis parted from the uvula and prevents the snoring sound created by the vibration of soft tissues of palate.
Sleep apnea is a severe sleep condition in which individuals frequently stop breathing in their sleeping, this leads to insufficient oxygen supply to the brain and the rest of the body which, in turn may lead to critical problems. There are three main types of apnea: (i) Obstructive Sleep Apnea (“OSA”), the most common form caused by the throat muscles relaxing during sleep; (ii) Central sleep apnea, which occurs when the brain doesn’t send the proper signals to the muscles that control the breathing; and (iii) complex sleep apnea syndrome, which occurs when an individual suffers from both OSA and central sleep apnea. While OSA is a common disorder in the elderly population, affecting approximately 13 to 32% of people aged over 65, sleep apnea can occur at any age and affects approximately 25% of men and nearly 10% of women.
In 2020, North America dominated the sleep apnea device market, as it accounted for 49% of the revenue, the global market size was valued at USD 3.7 billion and is expected to expand by 6.2% CAGR, according to a report by Grand View Research Inc., reaching USD 6.1 billion by 2028.
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The global sleep apnea and snoring market is driven in large part by solutions that can be applied in at home-settings or healthcare settings, as these tools will drive decisions regarding specific treatments and the associated outlays. However, despite advances in medical imaging and other diagnostic tools, misdiagnosis remains a common occurrence. We believe that improved diagnoses and outcomes are achievable through the adoption of AI-based decision support tools.
Our Products and Product Candidates
Our initial focus is on the development of supporting solutions utilizing our proprietary platform. Our current business plan focuses on two principal devices and an App currently in development:
AppySleep – Biofeedback snoring treatment wristband, combined with the AppySleep App.
The AppySleep app uses unique algorithms developed by SleepX combined with sensors to monitor physiological parameters during sleep. Based on real-time reactions, the wristband will vibrate, when necessary, in order to decrease the snoring and regulate breathing by gently bringing the user to change his sleep position and thus ceasing the snoring event.
The AppySleep product is currently in serial manufacturing stage and sales. The new AppySleep IOS and Android versions were launched during the third quarter of 2024.
AppySleep LAB – Is a medical application, intended for downloading on a smartphone, and used to monitor breathing patterns in the sleep and identify sleep apnea episodes without direct contact to the user.
The AppySleep LAB product is to begin final calibration, following which we will file for 510(k) FDA approval.
AppySleep PRO – is a wristband for the treatment of sleep apnea using biofeedback in combination with AppySleep LAB app. The unique algorithms of AppySleep LAB, combined with the wristband sensors, monitor sleep apnea events and additional physiological parameters during sleep, and when necessary, the wristband vibrates according to real time events, in order to decrease and cease sleep apnea events.
The AppySleep PRO and AppySleep LAB are currently in development stages, following which it would be ready to begin the testing stage in preparation for filing for FDA approval.
Our Strategy
We started marketing of the AppySleep app and wristband in the first quarter of 2024. Concurrently, we plan to file a 510(k) FDA submission for the AppySleep LAB app for the non-contact diagnosis of sleep apnea during 2025, and an FDA process for AppySleep PRO for the treatment of sleep apnea during 2026.
Our goal over the next five years is to establish our technology and related products as the gold standard for the targeted sectors. The key elements of our strategy are as follows:
Develop and expand a balanced and diverse pipeline of products and product candidates. Our core platform technologies will include innovative anti-snoring and sleep apnea related devices and product candidates in various development and clinical stages. We plan to add products and product candidates to our pipeline by expanding our technologies being developed to additional indications and through investing in new technologies, products and product candidates. By maintaining this multi-product approach, we aim to provide a broad and comprehensive product offering, which we believe will result in multiple value inflection events, reduced risks to our potentially business associated with a particular product or product candidate and increased return on investment. Furthermore, product candidates that we develop may create attractive collaboration opportunities with diagnostics, medical devices and medical supplies companies.
Maintain a global, diverse network of specialists to accelerate knowledge synergies and innovation. We will utilize a global network of specialists to identify large and growing patient populations with significant unmet needs, evaluate and prioritize potential technologies, assist in designing development plans and diagnostic protocols and determine potential indications of our platform technologies to our target patient populations in various territories. We believe that maintaining this diverse network of specialists and industry specialists will allow us to continue to maximize knowledge and cost synergies, utilize shared commercial infrastructure across products, reduce risks of development and commercialization delays to our overall business and leverage our current and future platform technologies and technologies for additional products and product candidates.
Establish distribution channels to maximize the commercial potential of our products. We plan to seek out collaborative arrangements with major healthcare providers and consumer specialists to facilitate market adoption of our product candidates. We believe that such institutions are well positioned to directly benefit from improvements in accurate diagnosis and reduction of cost of care associated with the use of our product candidates. We also believe that the marginal cost of our product candidates compared to potential savings will make it economical for healthcare institutions to adopt our products regardless of whether or not additional costs of purchase of these products will be covered by third-party payors, such as government health care programs and commercial insurance companies.
| 21 |
Through cooperation with healthcare providers, we aim to develop and prove an economic model beneficial to them. In parallel, we intend selling directly, through our website and other online webstores worldwide. Thereafter, we plan to engage with private insurance plans to develop reimbursement programs encouraging the use of our product candidates. We expect that adoption rates of our product candidates will increase if hospitals and other medical institutions are compensated, in full or in part, for additional costs incurred when purchasing our products.
We established a logistical distribution facility in the US.
The License Agreement
Our business derives from a licensing agreement entered into as of March 15, 2020, as subsequently amended (the “License Agreement”), by SleepX Ltd., our Israeli subsidiary, B.G. Negev Technologies and Applications Ltd., a company formed under the laws of the State of Israel (“BGN”) and Mor Research Application Ltd. a company formed under the laws of Israel (“Mor”; together with BGN, the Licensors”). BGN is a company wholly owned by Ben Gurion University of the Negev in Israel and Mor, is the technology transfer arm of the Clalit Health Services, an Israeli non-profit healthcare insurance and service provider. Under the License Agreement, our Israeli subsidiary was granted a worldwide royalty bearing and exclusive license exclusive worldwide license with the right to grant sub-licenses and with a term of 15 years, to certain intellectual property to research, develop, manufacture use, market, distribute, offer for sale and sell sensor and software solutions for monitoring snoring and sleep apnea.
On May 1, 2022, our Israeli subsidiary and the Licensors entered into an amendment to the License Agreement (the “Amended License Agreement”) to include under the license certain sleep apnea treatment solutions that by combining speech descriptors from three separate and distinct speech signal domains, these speech descriptors may provide the ability to estimate the severity of sleep apnea using statistical learning and speech analysis approaches.
As consideration for the licenses above, our Israeli subsidiary has agreed to pay the following to the Licensors:
| (i) | A royalty of 3.0% of net sales received from the licensed products for a period of up to 15 years from initiation of sales in each state using licensed intellectual property; | |
| (ii) | 25% of sublicense fees received prior to attainment of all regulatory approval for marketing and sale of the licensed products in the first jurisdiction where the licensed products are intended to be sold; thereafter, 15% of sublicense fees received after the date regulatory approval, but prior to the first commercial sale of the licensed products; and 10% of sublicense fees received after the first commercial sale; | |
| (iii) | An annual license fee, commencing on fifth anniversary of the License Agreement (i.e., March 2025) of $20,000, and thereafter on each anniversary date as follows |
| Year | Amount ($) | |||
| 6 | $ | 40,000 | ||
| 7 | $ | 60,000 | ||
| 8 | $ | 80,000 | ||
| 9-15 | $ | 100,000 | ||
The Annual Fee is non-refundable, but it shall be credited each year due, against the royalty noted above, to the extent that such are payable, during that year.
| (iv) | Milestone payment of $60,000 upon the attainment of regulatory approval from applicable authority in USA or Europe to market and sell the licensed products |
As of the date of these financials, we have not achieved any of these milestones.
Under the License Agreement, the Licensors are entitled to terminate the License Agreement under certain conditions relating to a material change in the business of our Israeli subsidiary or a breach of any material obligation thereunder or to a bankruptcy event of our Israeli subsidiary. Under certain conditions, our Israeli subsidiary may terminate the License Agreement and return the licensed information to the Licensors.
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In the event of an acquisition of all of the issued and outstanding share capital of the Israeli Subsidiary or of the Company and/or consolidation of the Israeli Subsidiary or the Company into or with another corporation (“Non IPO Exit”) or a listing of our common stock on a national exchange such as Nasdaq (the IPO Exit”), then the Licensors shall be entitled to an exit fee equal to 5% of the valuation of our company at the time of such exit and with respect to an IPO Exit, shares of common stock which will reflect in the aggregate 5% of then outstanding common stock of the Company.
Key Financial Terms and Metrics
The following discussion summarizes the key factors our management believes are necessary for an understanding of our consolidated financial statements.
Revenues
We have generated $15,000 in revenues from product sales as of June 30, 2024.
Research and Development Expenses
The process of researching and developing our product candidates is lengthy, unpredictable, and subject to many risks. We expect to continue incurring substantial expenses for the next several years as we continue to develop our product candidates. We are unable, with any certainty, to estimate either the costs or the timelines in which those expenses will be incurred. The design and development of our devices will consume a large proportion of our current, as well as projected, resources.
Our research and development costs include costs are comprised of:
● internal recurring costs, such as personnel-related costs (salaries, employee benefits, equity compensation and other costs), materials and supplies, facilities and maintenance costs attributable to research and development functions; and
● fees paid to external parties who provide us with contract services, such as programing, preclinical testing, manufacturing and related testing and clinical trial activities.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries, employee benefits, equity compensation, and other personnel-related costs associated with executive, administrative and other support staff. Other significant general and administrative expenses include the costs associated with professional fees for accounting, auditing, insurance costs, consulting and legal services, along with facility and maintenance costs attributable to general and administrative functions.
Financial Expenses
Financial expenses consist primarily impact of exchange rate derived from re-measurement of monetary balance sheet items denominated in non-dollar currencies. Other financial expenses include bank’s fees and interest on long term loans. Financial income derives mainly from change in derivative value of convertible loans.
Results of Operations
Comparison of the Three and Six Months Ended June 30, 2024 to the Three and Six Months Ended June 30, 2023
| For
the three- months period ended June 30 | For
the Six- months period ended June 30 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| U.S dollars | ||||||||||||||||
| Revenues | 2,000 | - | 15,000 | - | ||||||||||||
| Cost of sales | 3,000 | - | 6,000 | - | ||||||||||||
| Gross profit (loss) | (1,000 | ) | - | 9,000 | - | |||||||||||
| Research and development expenses | 96,000 | 7,000 | 156,000 | 16,000 | ||||||||||||
| Sales and marketing | 103,000 | 2,000 | 157,000 | 2,000 | ||||||||||||
| General and administrative expenses | 205,000 | 440,000 | 499,000 | 867,000 | ||||||||||||
| Operating loss | (405,000 | ) | (449,000 | ) | (803,000 | ) | (885,000 | ) | ||||||||
| Financial income (expenses), net | 586,000 | 107,000 | (260,000 | ) | 254,000 | |||||||||||
| Profit for the period (loss) | 181,000 | (342,000 | ) | (1,063,000 | ) | (631,000 | ) | |||||||||
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Revenues. We recorded revenues of $2,000 and $15,000 for the three and six months ended June 30, 2024 compared to nil each of the corresponding period in 2024. All revenues were from sales of our AppySleep wristband.
Research and Development Expenses, Research and development expenses increased from $7,000 and $16,000 during the three and six months ended June 30, 2023 to $96,000 and $156,000, respectively, for the corresponding periods in 2024. The increase in each of the three and six month periods is primarily attributable to increased investment in intellectual property and development of our products.
Sales and Marketing. Sales and marketing expenses increased from $2,000 during each of the three and six months ended June 30, 2023 to $103,000 and $157,000, respectively, for the corresponding periods in 2024. The increase in each of the three and six month periods is primarily attributable to increased marketing efforts we undertook with respect to advance sales of our AppySleep wristband through Amazon and through our website.
General and Administrative Expenses. General and administrative expenses decreased from $440,000 and $867,000 for the three and six months ended June 30, 2023, to $205,000 and $499,000, respectively, for the corresponding periods in 2024. The decrease is primarily attributable to reallocation of cash and non-cash management expenses to research and development and sales and marketing expenses.
Profit (loss). Profit (loss) for the three months and six months ended June 30, 2024 was $181,000 and $(1,063,000), respectively, and is primarily attributable to non-cash stock based compensation expenses referred to above and change in fair value of convertible loans and warrant liability.
Liquidity and Capital Resources
From inception, we have funded our operations from a combination of loans and sales of equity instruments.
As of June 30, 2024, we had a total of $158,000 in cash resources and approximately $2,615,000 of liabilities, all of which are current liabilities from financing.
AppYea has experienced operating losses since its inception and had a total accumulated deficit of $7,389,000 as of June 30, 2024. We expect to incur additional costs and require additional capital. We have incurred losses in nearly every year since inception. These losses have resulted in significant cash used in operations. During the six months ended June 30, 2024 and 2023, our cash used in operations was approximately $442,000 and $192,000, respectively. We need to continue and amplify our research and development efforts for our product candidates (which are in various stages of development), strengthen our patent portfolio, establish operations processes and pursue FDA clearance and international regulatory approvals as we continue to conduct these activities, we expect the cash needed to fund operations to increase significantly over the next several years.
The following table provides a summary of operating, investing, and financing cash flows for the period ended June 30, 2024 and 2023 respectively:
| For the six months ended | ||||||||
| June 30, 2024 | June 30, 2023 | |||||||
| US Dollars | ||||||||
| Net cash used in operating activities | $ | 442,000 | 192,000 | |||||
| Net cash used in investment activities | 78,000 | - | ||||||
| Net cash provided by Financing Activities (income) | $ | (456,000 | ) | (181,000 | ) | |||
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Between June 2023 and June 2024, we raised an aggregate of $955,330 from private placement of shares of our common stock at a per share price of $0.01 and the issuance of warrants, exercisable for a two-year period from the date of issuance for an identical number of shares at a per share exercise price of $0.04, and additional $225,000 from public capital raised through the company effective prospectus. In respect of the raise the investors are entitled to an aggregate 118,032,953 shares of our common stock and identical number of warrants, of which 110,532,953 have already been issued. The subscription proceeds are being used to upgrade the IOS design and development of our biofeedback snoring treatment wristband (AppySleep product) as well as general corporate matters.
Management believes that funds on hand, will enable us to fund our operations and capital expenditure requirements through October 2024. We need to raise additional operating capital in order to maintain operations as presently conducted and to realize our business plan.
Our accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these consolidated financial statements. However, the Company has incurred substantial losses. Our current liabilities exceed our current assets and available cash is not sufficient to fund the expected future operations. The Company is raising additional capital through debt and equity securities in order to continue the funding of its operations. However, there is no assurance that the Company can raise enough funds or generate sufficient revenues to pay its obligations as they become due, which raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying value of assets or liabilities as a result of this uncertainty.
We cannot be sure that future funding will be available to us on acceptable terms, or at all. Due to often volatile nature of the financial markets, equity and debt financing may be difficult to obtain.
We may seek to raise any necessary additional capital through a combination of private or public equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. To the extent that we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights, future revenue streams, or product candidates or to grant licenses on terms that may not be favorable to us. If we raise additional capital through private or public equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Going Concern
Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We have a stockholders’ deficit of $2,142,000 and a working capital deficit of $2,418,000 at June 30, 2024 as well as negative operating cash flows. Our report from our independent registered public accounting firm for the quarter ended June 30, 2024 includes an explanatory paragraph stating the Company has recurring losses and limited operations which raise substantial doubt about its ability to continue as a going concern. If the Company is unable to obtain adequate capital, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Not Applicable.
| 25 |
| ITEM 4. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported as specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Interim Chief Executive Officer, to allow timely decisions regarding required disclosure. Management, with the participation of our Interim Chief Executive Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2024. Based on that evaluation, our management, including our Chief Executive Officer, concluded that our disclosure controls and procedures were not effective as of June 30, 2024.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. As disclosed in Item 9A of our Annual Report on Form 10-K/A for the year ended December 31, 2023 filed with the Securities and Exchange Commission on May 17, 2024, our management concluded that our internal control over financial reporting was not effective at December 31, 2023. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
As a result of our evaluation, we identified a material weakness in our controls related to segregation of duties and other immaterial weaknesses in several areas of data management and documentation. Our management is composed of a small number of professionals resulting in a situation where limitations on segregation of duties exist. Accordingly, and as a result of the material weakness identified above, we have concluded that the control deficiencies result in a reasonable possibility that a material misstatement of the annual or interim financial statements may not be prevented on a timely basis by the Company’s internal controls. We continue to employ and refine a structure in which critical accounting policies, issues and estimates are identified, and together with other complex areas, are subject to multiple reviews by executives. We expect to be materially dependent upon third parties to provide us with accounting consulting services for the foreseeable future which we believe will mitigate the impact of the material weaknesses discussed above.
Changes in Internal Control Over Financial Reporting
Except for the material weakness noted above, during the quarter ended June 30, 2024, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
| ITEM 1. | LEGAL PROCEEDINGS |
In August 11, 2022, a lawsuit was filed in the Tel Aviv Magistrate’s Court against our Chairman and majority shareholder, Boris Molchadsky, G.P.I.S Ltd., an entity controlled by Mr. Molchadsky, Nexsense, Inc. (the former shareholder of SleepX Ltd.) and SleepX, Ltd., our subsidiary (collectively, the “Defendants”) [Civil lawsuit number 25441-08-22]. The suit was filed by a fund operating out of Israel. A copy of the claim was served to the defendants only six months after it was submitted to court, on February 21, 2023.
The lawsuit is based on the alleged breach of partnership and loan agreements as well as other related allegations, including violation of agreements reached in a mediation proceeding that took place in 2015.
The suit alleges that the Defendants, amongst other things, did not disclose to the plaintiff certain transactions to which the Plaintiff was presumably entitled to compensation and hence the plaintiff demanded an accounting of the transactions and refund of amounts invested. With respect to SleepX. the plaintiff alleged that it made a deal with Nexsense, Inc. which wasn’t disclosed to the plaintiff, while allegedly the technology and patents of Nexsense, Inc. were transferred to SleepX (which was established shortly before the reverse merger between AppYea and SleepX), thus allegedly aimed to the concealment of assets from the plaintiff.
On July 24, 2023, the Defendants (except for Nexsense, Inc.) filed a statement of defense, denying the allegations and argued that the claim should be dismissed, due to the statute of limitations, lack of cause of action, lack of jurisdiction, delay in filing the claim, and respecting SleepX, also due to the lack of legal rivalry between SleepX and the plaintiff.
In addition, the Defendants submitted several preliminary requests to dismiss the claim outright, including a plea to dismiss the claim on the grounds it was submitted to the magistrate court, which is not the competent court according to law, due to the economic nature of the claim. Nexsense, Inc. submitted a request to dismiss the claim against it because it was not properly served under the law (given the different service rules for defendants whose domicile is outside of Israel).
Recently, the Magistrate’s Court in Tel Aviv accepted the request regarding lack of material jurisdiction, and the claim was then transferred to the economic department of the District Court in Tel Aviv.
A preliminary hearing was held on February 14, 2024. The presiding judge did not rule on the preliminary pleadings and urged the parties to attempt mediation before the ruling. The parties are considering different mediators (which must be mutually agreed to) and following the selection of a mediator, the parties will schedule a date for the mediation.
We cannot, at this stage, know the effects, if any, of these actions on our subsidiary SleepX and / or the Company. However, SleepX together with the other Defendants, intend to vigorously defend against the lawsuit.
Aside from the disclosure above, From time to time we may become involved in various legal proceedings that arise in the ordinary course of business, including actions related to our intellectual property. Although the outcomes of these legal proceedings cannot be predicted with certainty, we are currently not aware of any such legal proceedings that arise in the ordinary course of business, including actions related to our intellectual property. Although the outcomes of these legal proceedings cannot be predicted with certainty, we are currently not aware of any such legal proceedings or claims that we believe, either individually or in the aggregate, will have a material adverse effect on our business, financial condition, or results of operations.
| ITEM 1A. | RISK FACTORS |
An investment in the Company’s Common Stock involves a number of very significant risks. You should carefully consider the risk factors included in the “Risk Factors” section of our annual report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on April 1, 2024, as amended on May 17, 2024 in addition to other information contained in our reports and in this quarterly report in evaluating the Company and its business before purchasing shares of our Common Stock. There have been no material changes to our risk factors contained in such registration statement.
| ITEM 2. | UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS |
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
None
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| ITEM 4. | SAFETY DISCLOSURES |
None.
| ITEM 5. | OTHER INFORMATION: |
(i)
During the fiscal quarter ended June 30, 2024, none of our directors or executive officers
(ii) on August 7, 2024, the Company subsidiary SleepX Ltd. and its chief Financial Officer, Asaf Porat, entered into an amended and restated employment agreement, with an effective date retroactive to July 1, 2024, pursuant to which Mr. Porat’s salary was adjusted to the New Israeli Shekel equivalent of approximately $34,100 per annum, payable on monthly basis. Mr. Porat’s social benefits under Israeli law were adjusted commensurate with his new salary. In addition, Mr. Porat waived any rights to the options for 10,079,247 shares of common stock that were previously granted to him and scheduled to vest after July 1, 2024.
(iii) On August 7, 2024, the Board approved the issuance of stock option to purchase 6,000,000 shares of the Company’s common stock, at a per share exercise price of $0.0001, to Adi Shemer, the Company Chief Executive Officer. The options vested in full on August 7, 2024. In addition, on August 7, 2024, the Board also approved the issuance of options for an additional 10 million shares to Mr. Shemer, as a bonus for his contribution to the business. The option are exercisable at a per share purchase price of $0.0001.
(iv) On August 7, 2024, the Board approved the issuance of a stock option to purchase 1,000,000 shares of the Company’s common stock, at a per share exercise price of $0.0001, to Mr. Ron Mekler, the Company’s Director.
(v) On August 7, 2024, the Board confirmed changing the exercise price of the 500,000 stock options issued to Mr. Ron Mekler, a director, in August 2023 from $0.01 to $0.0001
| ITEM 6. | EXHIBITS |
Exhibit Index:
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Incorporated by reference from the Current Report on Form 8-K filed on May 17, 2024
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| AppYea, Inc. | ||||
| (Registrant) | ||||
| By: | /s/ Adi Shemer | By: | Asaf Porat | |
| Adi Shemer | Asaf Porat | |||
| Chief Executive Officer | Chief Financial Officer | |||
| (Principal Executive Officer) | (Principal Financial and Accounting Officer) | |||
| Date: August 12, 2024 | Date: August 12, 2024 | |||
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Exhibit 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this “Amended and Employment Agreement”) is dated as of July 1, 2024, by and between SleepX Ltd, a company organized under the laws of the State of Israel with registration number 516045705, having its principal place of business at 17 Alon, Gvaot bar (the “Company”), and Asaf Porat, ID #032760084 (the “Executive”).
| WHEREAS: | The Company and Executive entered into an employment agreement dated as of July 1, 2021 (the “Original Employment Agreement”) pursuant to which Execuive has been employed as the CFO of the Company and AppYea, Inc. a Nevada corporation and parent company of the Company (the “Parent Company”): and |
| WHEREAS: | The Company and Executive desire to amend the Original Employment Agreement as herein provided and following such amendment and restatement of the Original Employment Agreement, the rights and obligation of the parties going forward shall be governed solely by the Amendment and Restated Employment Agreement; and |
| WHEREAS | the Executive represents that he has the required skill and knowledge to serve as CFO of the Company and he desires to engage in such employment, according to the terms and conditions hereinafter set forth. |
NOW, THEREFORE, in consideration of the respective agreements of the parties contained herein, the parties agree as follows:
| 1. | Employment |
| A. | The Company agrees to continue employing the Executive and the Executive agrees to be employed by the Company on the terms and conditions set out in this Agreement. |
| B. | The Executive agrees that henceforth the Original Employment Agreement shall be deemed terminated and null and void and Executive agrees to waive any all rights and privileges without exception under the Original Employment Agreement, except for those rights included in the letter agreement entered into on or about April 2024 between the Company and Executive relating to amounts owed to Executive. Going forward, Executive’s rights and obligation with respect to his employment shall be governed solely by this Amended and Restated Employment Agreement and Executive acknowledges that the new terms of employment under this Amended and Restated Employment Agreement, including reduction in salary and hours, are acceptable to him. Subject to compliance with the terms of this Amended and Restated Employment Agreement, Executive agrees that he irrevocably waives any claim or allegation as to any rights under the Original Employment Agreement and the manner in which the new Amended and Restated Employment Agreement was entered into. |
| C. | The Executive shall be employed as the CFO of the Company and Parent Company and shall be responsible for performing the Executive Tasks specified in Exhibit A. |
| D. | The Executive shall perform the duties, and responsibilities as specified and approved, by the board of directors, according to the company strategy plan and related goals, in a loyal, diligent and dedicated manner and to the best of his skills and expertise. The Executive will report to the Company’s Chief Executive Officer and to the Board. |
| E. | The Executive’s position, duties and responsibilities hereunder shall be in the nature of management duties that demand a special degree of personal care and loyalty and therefore the directives of the Work Hours and Rest Law, 5711 – 1951 (the “Work Hours and Rest Law”), or any law to be enacted in its place, shall not be applicable regarding to the Executive or to the activities the Executive will perform for the Company. Accordingly, the statutory limitations of this law or any employment law or regulation shall not apply to this Agreement. The Executive further acknowledge and agree that the Salary and benefits provided for in this Agreement include a proper and just reward for the requirements of his position and status and his obligation to work additional and irregular hours. Accordingly, The Executive acknowledge that he will not be entitled to any further remuneration or payment whatsoever other than the Compensation and benefits set out in this Agreement. As per the requirements under applicable law, executive shall cooperate with the Company in maintaining a record of the number of hours of work performed, in accordance with the Company’s policy and instructions. |
| 2. | Compensation |
| A. | The Executive will be entitled to compensation as defined in Exhibit A to this Agreement (the “Compensation”), subject to normal pay review increases from time to time at the discretion of the Board. |
| B. | It is explicitly declared and agreed that the Compensation is the sole and complete compensation the Executive is entitled to in exchange for the services he will execute according to this Agreement. |
| C. | Compensation, of any kind, will be paid only as long as employee is actually employed by the Company and this agreement is in term. |
| 3. | Termination |
| A. | This Agreement shall be effective as of the Effective Date shall continue until terminated as herein provided, |
| B. | It is generally agreed that all the rules and regulations regarding hiring, a hearing before termination, a prior notice period, etc., will apply on the relationship between the parties. |
| C. | Notwithstanding the above, the Company may terminate this Agreement subject to the duty of hearing and any other legal duty applicable to it. The Executive may terminate this Agreement for any reason. It is hereby agreed that the mutual prior notice period before termination will be as set forth in Exhibit A (the “Notice Period”), but in no event less than the minimum required by law. |
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| D. | The Company may terminate Executive’s employment for a proven Cause (as defined herein below), in which event there shall be no Notice Period; provided however, that the Company has specified the basis for the termination in the written notice delivered to the Executive, and allowed her to defend herself against it, subject to any law, including the rules of the hearing. For the purposes hereof, “Cause” shall mean: (i) conviction of Executive of any felony; (ii) fraud, embezzlement of funds of the Company by the Executive; or (iii) activity by Executive constituting direct competition with the Company. (c) falsification of records or reports; (d) any breach of his fiduciary duties or duties of care, trust or loyalty to the Company or any affiliate of the Company (except for conduct taken in good faith) or breach of this Agreement, which, to the extent such breach is curable, has not been cured by her within 15 days after its receipt of notice thereof from Company containing a description of the breach or breaches alleged to have occurred; (e) any breach of confidentiality or non-competition obligations towards the Company; and (f) any other act or omission that constitutes “cause” under Sections 16 and 17 of the Severance Pay Law, 5713 – 1953 (the “Severance Law”).] |
| E. | Immediately upon termination, the Executive shall transfer his position to his replacement in an orderly and complete manner and shall return to the Company all documents, professional literature and equipment belonging to the Company, which may be in her possession at such time. Notwithstanding the foregoing, the Company may elect to immediately cease Executive’s employment under this Agreement, provided that the Company continues to pay the Compensation for the duration of the Notice Period. |
| F. | In the event of any termination of employment, whether or not for Cause, and at any time upon the Company’s request, Executive will promptly deliver to the Company, or destroy, in accordance with the Company’s request, all (i) documents, data, records and other information pertaining to his employment, the Confidential Information and/or the Company’s Technology), and (ii) any other equipment belonging to the Company in his possession, and Executive hereby waive any right for a possessory lien with respect to, any documents or data, or any copy or reproduction or excerpt of any documents or data, containing or pertaining any Confidential Information and/or the Company Technology. Upon the Company’s request, Executive agree to promptly provide written certification of the return or destruction of the above, as applicable. |
| G. | At the end of the Notice Period, pursuant to Section 14 of the Severance Pay Law 5727-1963 (the “Severance Law”), the Company shall automatically transfer to the Executive ownership over his Manager’s Insurance Policy The Company and Executive agree and acknowledge that in the event the Company transfers ownership of the Executive’s Manager’s Insurance Policy to the Executive, the severance portion thereof shall constitute the full payment towards any severance pay the Company may be required to pay to the Executive pursuant to the Severance Law, and the general permit pursuant to Section 14 of the Severance Law, as long as the Manager’s Insurance Policy contains all payments due by law. |
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| 4. | Competitive Activity |
During the term of this Agreement, the Executive, unless received written permission from the Company will not directly or indirectly:
| A. | Carry on or hold an interest in any company, venture, entity or other business (other than an interest of less than 10% in a publicly traded company) which directly competes with the Technology; |
| B. | Act as a consultant or executive or officer or in any managerial capacity in a business directly competing with the Technology; |
| C. | Solicit, canvass or approach or endeavor to solicit, canvass or approach any person who, to her knowledge, was provided with services by the Company or its subsidiaries at any time during the twelve (12) months immediately prior to the termination date, for the purpose of offering services or products which directly compete with the Technology; or |
| D. | Employ, solicit or entice away or endeavor to solicit or entice away from the Company or its subsidiaries any person employed by the Company or its subsidiaries any time during the twelve (12) months immediately prior to the termination date with a view to inducing that person to leave such employment and to act for another employer in the same or a similar capacity. |
| 5. | Ownership and Protection of Intellectual Property and Confidential Information: |
The Executive shall execute the Employee Proprietary Information, Non-Competition and Inventions Agreement in the form attached hereto as Exhibit B.
| 6. | Company Policies |
| A. | Executive agrees to adhere and comply with the rules and policies of the Company as may be published by the Company from time to time. |
| B. | Sexual Harassment. The Company sees violations of the Law for Prevention of Sexual Harassment (the “Sexual Harassment Law”) in a severe light. Executive hereby acknowledges that he has been informed of the Company’s policy regarding sexual harassment, including the existence of Company guidelines for the prevention of sexual harassment that may be received at any time from the employee in charge of enforcing the Sexual Harassment Law in the Company, and that violating the Sexual Harassment Law Sexual, or said Company guidelines constitutes, among other things, a severe disciplinary offence and a Cause. |
| C. | Executive hereby grant consent to the Company and its affiliates, and its/their employees, wherever they may be located, to utilize and process his personal information, including data collected by the Company for purposes related to her employment. This may include transfer of Executive’s personnel records outside of Israel and further transfers thereafter. All personnel records are considered confidential and access will be limited and restricted to individuals with need to know or process that information for purposes relating to Executive’s employment only, such as management teams and human resource personnel. The Company may share personnel records as needed solely for such purposes with third parties assisting human resources administration |
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| 7. | Notice |
| A. | For this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by registered mail, postage prepaid, addressed to the respective addresses set forth below or last given by each party to the other, except that notice of change of address shall be effective only upon receipt. |
| B. | The initial addresses of the parties for purposes of this Agreement shall be as set forth in the preamble hereto. |
| 8. | Miscellaneous |
| A. | No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. |
| B. | This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Israel and sole jurisdiction shall be granted to the competent courts in the Tel-Aviv district. |
| C. | The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. |
| D. | This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof. No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made either party which is not expressly set forth in this Agreement. |
| E. | This Agreement shall be binding upon and shall inure to the benefit of the Company, its Successors and Assigns, and the Company shall require such successor or assign to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. The term “Successors and Assigns” as used herein shall mean a corporation or other entity acquiring all or substantially all the assets and business of the Company (including this Agreement), whether by operation of law or otherwise. |
| F. | Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, her beneficiaries or legal representatives, except by will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal personal representative. |
| G. | The provisions of Sections 5 and 6 of this Agreement shall survive the rescission or termination, for any reason, of this Agreement, and shall survive the termination of the Executive’s employment with the Company. |
| H. | The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. |
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
| SleepX Ltd | ||
| By: | Boris Molchadski | |
| Title: | Chairman | |
| Signature: | /s/ Boris Molchadski | |
Executive
Asaf Porat
| Signature: | /s/ Asaf Porat |
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Exhibit A
Compensation
| 1. | Salary |
| a. | In consideration for the Executive’s services, the Company will pay the Executive a monthly gross salary of NIS 11,800 (the “Salary”), which shall be paid each month with respect to the preceding month, in accordance with the Company’s payroll practices, the total monthly cost to the Company of Salary and all benefits thereunder, including Company contribution amounts, shall not exceed 15,000 NIS. |
Notwithstanding the foregoing, with respect to the months July and August 2024, Executive shall be paid an additional 7,500 NIS for accrued and unused vacation days under the Original Employment Agreement.
| b. | An amount equal to 8.33% of the Salary shall be deducted from Salary and which shall be allocated to a fund for severance pay, and an additional amount equal to 6.5% deducted from the Salary which shall be allocated to a provident fund including disability insurance and life/survivors insurance. |
| c. | In addition, the Company will deduct from the Salary an amount equal to 6% of the Salary, which shall constitute Employee’s contribution to the provident fund (the “Employee Participation”). |
| d. | Subject to the total monthly cost of Executive’s employment to the Company not exceeding 15,000 NIS, the Company will contribute to a recognized educational fund an amount equal to 7.5% of the Salary and will deduct from each monthly payment and contribute to such education fund an additional amount equal to 2.5% of the Salary. |
| e. | Executive acknowledges that he shall not be entitled to any further remuneration or payment whatsoever other than the Salary and benefits set forth in this Exhibit A, unless expressly specified in the Agreement. |
| f. | In addition, the Company shall deduct from the Salary, and Executive hereby consents to all relevant employee only deductions, such as all national insurance fees, health insurance fees, income tax and any other amounts required by law, and shall provide Executive with requisite documentation regarding such deductions. |
| g. | Executive agrees that the Company shall be entitled to set off from any payment due to him, any sums which he may from time to time owe the Company with respect to the Agreement after giving a notice. |
| 2. | Options |
Executive agrees that the rights to options for shares of common stock of Parent Company previously granted to Executive for 13,079,247 shares of Parent Company common stock shall be reduced to 3,000,000 shares of Parent Company common stock and by his signature hereto he waives all claims and rights with respect to options for 10,079,247 shares of Parent Company’s common stock.
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| 3. | Bonuses. Upon an equity capital raise by the Company from new investors (i.e., not existing shareholders or investors who have invested previously in the Company or their affiliates ) that Executive initially approached, and in which the Executive is involved in closing, the Executive will be entitled to a bonus comprised of 5% of the cash received (less any commission paid or payable in respect thereof ) and 5% of the cash raised payable in options for common stock of the Parent Company based on the per share price paid by the investor and at a per share exercise price equal to the per share purchase price paid by the investor. Any investment from new investors introduced to the Company by current investors or their affiliates which Executive initially approached shall entitle Executive to a bonus comprised of 2.5% of the cash received (less any commission paid or payable) and 5% of the cash raised in options for common stock of the Parent Company based on the per share price paid by investor and at a per share exercise price equal to the per share purchase price paid by the investor. Notwithstanding the foregoing, the Company shall not be required to pay out total fees for any such raise, including the bonius, in an amount exceeding 10% of net proceeds of such raise and, accordingly, to the extent that the Company is required to pay to a third party commission or other fees based on the raise, the Bonus to the Executive shall be proportionally reduced. By way of illustration, if the Company is required to pay to a third party a commission of 9% in respect of such raise, then the cash portion of the bonus to the Executive shall be reduced to 1%. |
The bonus will be paid within 7 business days of the date on which the capital raise proceeds are received.
5. Benefits
5.1 Social Benefits as required by law shall be paid to the Executive
5.2 Vacation days. Executive shall be entitled to twelve (12) vacation days per year (excluding holidays and official non-working days). Executive shall take one vacation day each month, beginning July 2024. Executive shall not accumulate any vacation days.
6. Notice Period: The Notice Period shall be 30 days.
7. Executive tasks:
| SleepX Ltd | Executive | |
| By: | Asaf Porat (ID: ____________) | |
| Title: | ||
| Signature: ___________________ | Signature: _________________ |
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Exhibit B
EMPLOYEE PROPRIETARY INFORMATION, NON-COMPETITION
AND INVENTIONS AGREEMENT
I, the undersigned, Asaf Porat, ID # 032760084 (the “Employee”) acknowledge that as a result of my employment, I have in the past and/or may continue to develop, receive, or otherwise have access to confidential or proprietary information, which is of value to SleepX Ltd. (together with any affiliate, parent company or subsidiary, the “Company”). I therefore agree, as of the commencement of engagement between me and the Company, regardless of the date of execution of the Agreement, as a condition of my employment, as follows:
1. Definitions.
1.1 The term “Proprietary Information” means any and all knowledge, data or information of the Company and relating thereto that has come to my knowledge as a result of my work for the Company during my engagement. By way of illustration but not limitation, “Proprietary Information” includes (a) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques (collectively referred to as “Inventions”); and (b) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; and (c) information regarding the skills and compensation of other employees of the Company. It is clarified that the term will not include information that is or has become public domain not by breach of my obligations.
1.2 The term “Proprietary Rights” shall mean all trade secrets, patents, copyrights, mask work and any other intellectual property rights throughout the world.
1.3 The term “Company Inventions” means any Inventions that are made or conceived or first reduced to practice or created by me, whether alone or jointly with others, during the period of my engagement with the Company, and which are: (i) developed using equipment, supplies, facilities or Proprietary Information of the Company, (ii) result from work performed by me for the Company, or (iii) related to the field of business of the Company, or to current or anticipated research and development.
1.4 The term “Company Proprietary Rights” means any Proprietary Rights in the Company Inventions.
2. Nondisclosure.
2.1 Recognition of Company’s Rights; Nondisclosure. At all times during my employment and thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon or publish any of the Company’s Proprietary rights, except as such disclosure, use or publication may be required in connection with my work for the Company and in the best interest of the Company, or unless the Company expressly authorizes such in writing. I hereby assign to the Company, without any further royalty or payment, any rights I may have or acquire in such Proprietary Information and recognize that all Proprietary Information shall be the sole property of the Company and its assigns. Notwithstanding the foregoing, it is understood that, at all such times, I am free to use information which is generally known in the trade or industry, which is not gained as result of a breach of this Agreement or other conditions of my engagement with the Company, to whatever extent and in whichever way I wish.
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2.2 Third Party Information. I understand, in addition, that the Company has received and in the future will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the term of my employment and thereafter, I will hold Third Party Information that has come to my knowledge from the Company during my employment period in the strictest confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for the Company),and I will not use, except in connection with my work for the Company and in the best interest of the Company, Third Party Information unless previously expressly authorized by the Company in writing.
2.3 No Improper Use of Information of Prior Employers and Others. During my employment by the Company, I will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom I have an obligation of confidentiality, and I will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom I have an obligation of confidentiality unless consented to in writing by that former employer or person.
3. Acknowledgement of Ownership; Assignment.
3.1 Prior Inventions. Section 3.3 below will not apply with respect to Inventions, if any, patented or unpatented, which I made prior to the commencement of my engagement with the Company. I have attached hereto, as Annex 1, a complete list of: (i) all Inventions to which I claim ownership and desire to remove from the scope of this Agreement, and acknowledge that such list is complete (the “Prior Inventions”), and (ii) any invention, improvement, development, concept, discovery or other proprietary information owned by me or in which I have an interest (“Employee Proprietary Information”). If no such list is attached to this Agreement, I hereby represent that I have no such Prior Inventions or Employee Proprietary Information at the time of this Agreement. I agree that I will not incorporate, or permit to be incorporated, any Prior Invention or Employee Proprietary Information in any Company product, process, machine or service without the Company’s prior written consent. If, in the course of my employment with the Company, I incorporate any Prior Invention or Employee Proprietary Information into any Company product, process, machine or service, then the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, import, export, modify, reproduce, display, publish, distribute, make available, use and sell such Prior Invention or Service Provider Proprietary Information (including through third parties on behalf of the Company), in any manner and in any media, unless otherwise agreed in writing between me and the Company.. I hereby represent and undertake that none of my previous employers or any entity with whom I was engaged, has any rights in any such Prior Inventions or Employee Proprietary Information and I am not subject to any limitations with respect to being engaged in the proposed business of the Company and/or my employment with the Company and such employment with the Company will not cause a breach of any of my agreements with the prior employers or entities or grant any of them any right in the results of my work.
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3.2 Disclosure of Inventions. I will promptly disclose in writing in confidence to the Company all Inventions deemed as Company Inventions. I will also disclose to the Company all such Inventions made, discovered, conceived, reduced to practice, or developed by me within six (6) months after the termination of my employment with the Company. Such disclosures shall be received by the Company in strict confidence (to the extent such Inventions are not assigned to the Company pursuant to this Agreement).
3.3 Assignment of Inventions. I hereby assign and agree to assign in the future to the Company all my right, title and interest in and to any and all Company Inventions and all Company Proprietary Rights whether or not patentable or registrable under copyright or similar statutes that do not otherwise automatically vest in the Company.
3.4 Non-assignable Inventions or Proprietary Rights. This Agreement will not be deemed to require assignment of any Prior Inventions or Employee Proprietary Information.
3.5 Government or Third Party. I also agree to assign all such rights, title and interests in and to any particular Company Invention to any third party, including without limitation government agency, as directed by the Company.
3.6 Works Made for Hire. I acknowledge that all original works of which are made by me (solely or jointly with others) within the scope of my employment the Company are and shall remain at all times the sole property of the Company pursuant to applicable copyright law.
3.7 Assignment or Waiver of Moral Rights. Any assignment of copyright hereunder (and any ownership of a copyright as a work made for hire) includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as “moral rights” and including (but not limited to) any rights to file claims or obtain any remedy in connection therewith (collectively “Moral Rights”). To the extent such Moral Rights cannot be assigned under applicable law and to the extent the following is allowed by the laws in the various countries where Moral Rights exist, I hereby irrevocably waive such Moral Rights and consent to any action of the Company that would violate such Moral Rights in the absence of such consent.
3.8 Enforcement of Proprietary Rights. I will assist the Company in every proper way to obtain, and from time to time enforce, any Company Proprietary Rights and Company Inventions in any and all countries. To that end I will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such rights and the assignment thereof. In addition, I will execute, verify and deliver assignments of such rights to the Company or its designee. My obligation to assist the Company with respect to Company Proprietary Rights and Company Inventions in any and all countries shall continue beyond the termination of my employment, but the Company shall bear all related expenses and compensate me at a reasonable rate after my termination for the time actually spent by me at the Company’s request on such assistance.
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Service Inventions. For the removal of any doubt, it is hereby clarified that the provisions contained in this Sections 3 will apply also to any “Service Inventions” as defined in the Israeli Patent Law, 57-27-1967 (the “Patent Law”). In no event will such Service Invention become my property and the provisions contained in Section 132(b) of the Patent Law shall not apply unless the Company provides in writing otherwise.
I acknowledge and agree that the salary and other benefits which I am entitled to receive from the Company by virtue of my employment or engagement with the Company constitute the sole and exclusive consideration to which I am entitled, by virtue of any contract or law (including, but not limited to, the Patent Law), in respect of any and all Company Inventions and Company Proprietary Rights (and the assignment of the foregoing to the Company hereunder), and I hereby waive all past, present and future demands, contentions, allegations or other claims, of any kind, in respect thereof, including the right to receive any additional royalties, consideration or other payments. Without derogating from the aforesaid, it is hereby clarified that the level of my compensation and consideration has been established based upon the aforementioned waiver of rights to receive any such additional royalties, consideration or other payment. This agreement is expressly intended to be an agreement with regard to the terms and conditions of consideration for Service Inventions in accordance with Section 134 of the Patent Law.
4. Records. I agree to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that may be required by the Company) of all Proprietary Information developed by me and all Inventions made by me, which records shall be available to and remain the sole property of the Company at all times.
5. Competitive Activities. In consideration for my terms of employment hereunder, which include special compensation for my undertakings under this Section 5, and in order to enable the Company to effectively protect its Proprietary Information, I agree and undertake that I will not, so long as the Agreement is in effect, for any reason whatsoever, directly or indirectly, in any capacity whatsoever, engage in, become financially interested in, be employed by any business or venture that is engaged in any activities competing with the activities of the Company at such time or, to my knowledge as planned at the time of termination. I agree and undertake that during the employment relationship and for a period of twelve (12) months following termination of this engagement for whatever reason, I will not, directly or indirectly, including personally or in any business in which I may be an officer, direCEOr or shareholder, solicit for employment any person who is employed by the Company, or any person retained by the Company as a consultant, advisor or the like (for purposes hereof, a “Consultant”), or was retained as an employee or a Consultant during the twelve (12) months preceding termination of my employment with the Company.
6. No Conflicting Obligation. I represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict herewith.
7. Return of Company Documents. When I leave the employ of the Company, I will promptly deliver to the Company any and all drawings, notes, memoranda, specifications, devices, formulas, and documents, together with all copies thereof, and any other material containing or disclosing any Company Inventions, Third Party Information or Proprietary Information of the Company.
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8. Notification of New Employer. In the event that I leave the employ of the Company, I hereby consent to the notification of my new employer of my rights and obligations under this Agreement.
9. General Provisions.
9.1 Severability. In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to sums, duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.
9.2 Successors and Assigns. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.
9.3 Survival. The provisions of this Agreement shall survive the termination of my employment and the assignment of this Agreement by the Company to any successor in interest or other assignee.
9.4 Waiver. No waiver by a party of any breach of this Agreement shall be a waiver of any preceding or succeeding breach. No waiver by a party of any right under this Agreement shall be construed as a waiver of any other right. No party shall be required to give notice to enforce strict adherence to all terms of this Agreement.
9.5 Entire Agreement. The obligations pursuant to this Agreement shall apply to any time during which I was previously employed, or am in the future employed, by the Company as a consultant if no other agreement governs nondisclosure and assignment of inventions during such period. This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions or agreements between us with respect to the subject matter hereof. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by both parties hereto. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.
9.6 Governing Law. This Agreement shall be governed by, and construed in accordance with the laws of the State of Israel, without giving effect to the rules respecting conflict-of-law, and the competent courts of Tel-Aviv-Jaffa shall have exclusive jurisdiction over all matters or disputes between arising out of or in connection with this Agreement.
9.7 Injunction. Any breach of this Agreement will cause irreparable harm to the Company, for which damages would not be a sufficient and adequate remedy, and therefore, the Company will be entitled as a matter of right to injunctive relief (on an ex-parte basis or otherwise) issued by any court of competent jurisdiction, restraining any violation, threatened violation or further violation of this Agreement by me or others acting on my behalf. The Company’s right to injunctive relief shall be cumulative and in addition to any other remedies provided by law or equity and without any requirement to post bond.
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I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.
ACCEPTED AND AGREED TO:
| Company: | Employee: | |||
| SleepX Ltd. | Asaf Porat | |||
| By: | ||||
| Title: | ||||
| Signature | ||||
| Signature | ||||
| Date | ||||
| Date | ||||
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Exhibit C
GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND AND INSURANCE FUND IN LIEU OF SEVERANCE PAYUNDER THE SEVERANCE PAY LAW, 5723-1963
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EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
OF REGISTRANT PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
(RULE 13a-14(a) or 15d-14(a) OF THE EXCHANGE ACT)
I, Adi Shemer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of AppYea, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| By: | /s/ Adi Shemer | |
Adi Shemer, Chief Executive Officer |
||
| (Principal Executive Officer) |
Date: August 12, 2024
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
OF REGISTRANT PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
(RULE 13a-14(a) or 15d-14(a) OF THE EXCHANGE ACT)
I, Asaf Porat, certify that:
1. I have reviewed this quarterly report on Form 10-Q of AppYea, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| By: | /s/ Asaf Porat | |
Asaf Porat, Chief Financial Officer |
||
| (Principal Financial and Accounting Officer) |
Date: August 12, 2024
EXHIBIT 32.1
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Principal Executive Officer of AppYea, Inc. (the “Company”) hereby certifies to such officer’s knowledge that:
(i) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Adi Shemer | |
Adi Shemer, Chief Executive Officer |
|
| (Principal Executive Officer) |
Dated: August 12, 2024
EXHIBIT 32.2
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Principal Executive Officer of AppYea, Inc. (the “Company”) hereby certifies to such officer’s knowledge that:
(i) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Asaf Porat | |
Asaf Porat, Chief Financial Officer |
|
| (Principal Financial and Accounting Officer) | |
| Dated: August 12, 2024 |