PRF Technologies Ltd 20-F for FY2023

PRF Technologies Ltd. (PRFX)

20-F 2024-02-29 For: 2023-12-31

Added on April 10, 2026

About this 20-F

PRF Technologies Ltd filed this 20-F on February 29, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $9.34M; compared with a net loss of $8.79M a year earlier
Diluted EPS: -$7.14; compared with -$8.13 a year earlier

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Israel		65 Yigal Alon St., Tel Aviv 6744316, Israel Tel: +972 3 7177050
(Jurisdiction of incorporation or organization)		(Address of principal executive offices)

Title of each class to be registered		Trading Symbol(s)		Name of each exchange on which each class is to be registered
Ordinary shares, par value NIS 0.3 per share		PRFX		The Nasdaq Stock Market LLC

	Large accelerated filer ☐		Accelerated filer ☐		Non-accelerated filer ☒
					Emerging Growth Company ☒

		Page
INTRODUCTION		1
EMERGING GROWTH COMPANY STATUS		1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		2
MARKET, INDUSTRY, AND OTHER DATA		3

PART I		3

ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	3
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	3
ITEM 3.	KEY INFORMATION	3
A.	[RESERVED]	3
B.	Capitalization and Indebtedness	3
C.	Reasons for the Offer and Use of Proceeds	3
D.	Risk Factors	3
ITEM 4.	INFORMATION ON THE COMPANY	32
A.	History and Development of the Company	32
B.	Business Overview	33
C.	Organizational Structure	48
D.	Property, Plants and Equipment	48
ITEM 4A.	UNRESOLVED STAFF COMMENTS	50
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	50
A.	Operating Results	52
B.	Liquidity and Capital Resources	54
C.	Research and Development, Patents and Licenses	58
D.	Trend Information	58
E.	Critical Accounting Estimates	59
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	60
A.	Directors and Senior Management	60
B.	Compensation	62
C.	Board Practices	64
D.	Employees	76
E.	Share Ownership	76
F	Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation	77
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	77
A.	Major Shareholders	77
B.	Related Party Transactions	79
C.	Interests of Experts and Counsel	80
ITEM 8.	FINANCIAL INFORMATION	80
A.	Consolidated Statements and Other Financial Information	80
B.	Significant Changes	81
ITEM 9.	THE OFFER AND LISTING	81
A.	Offer and Listing Details	81
B.	Plan of Distribution	81
C.	Markets	81
D.	Selling Shareholders	81
E.	Dilution	81
F.	Expenses of the Issue	81

ITEM 10.	ADDITIONAL INFORMATION	81
A.	Share Capital	81
B.	Articles of Association	81
C.	Material Contracts	81
D.	Exchange Controls	82
E.	Taxation	82
F.	Dividends and Paying Agents	91
G.	Statement by Experts	91
H.	Documents on Display	91
I.	Subsidiary Information	91
J.	Annual Report to Security Holders.	91
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	92
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	92
A.	Debt Securities	92
B.	Warrants and rights	92
C.	Other Securities	92
D.	American Depositary Shares	92

PART II		92

ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	92
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	92
ITEM 15.	CONTROLS AND PROCEDURES	92
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	93
ITEM 16B.	CODE OF ETHICS	93
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	93
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	94
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	94
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	94
ITEM 16G.	CORPORATE GOVERNANCE	95
ITEM 16H.	MINE SAFETY DISCLOSURE	96
ITEM 16I	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	96
ITEM 16J	INSIDER TRADING POLICIES	96
ITEM 16K	CYBERSECURITY	96

PART III		97

ITEM 17.	FINANCIAL STATEMENTS	97
ITEM 18.	FINANCIAL STATEMENTS	97
ITEM 19.	EXHIBITS	97
SIGNATURES		99

	●	our ability to continue as a going concern;
	●	our history of losses and need for additional capital to fund our operations, and our ability to obtain additional capital on acceptable terms, or at all;

	●	TLC590, from the Taiwan Liposome Company, is a liposomal formulation of ropivacaine that completed Phase II trials in patients following hernia surgery.
	●	Cali Biosciences developing an injectable ropivacaine formulation CPL-01 which is currently in phase III for bunion and hernia; and

	●	Vertex pharmaceuticals, which completed phase III clinical studies in abdominoplasty and bunionectomy with VX-548, a selective NaV1.8 inhibitor.

Phase 1:	The drug is initially introduced into healthy human subjects or, in certain indications such as cancer, patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.
Phase 2:	The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.
Phase 3:	The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.
Phase 4:	Post-approval studies, which are conducted following initial approval, are typically conducted to gain additional experience and data from treatment of patients in the intended therapeutic indication.

	Year ended December 31,
	2023			2022			2021
Statements of comprehensive loss data:	(US$ thousands)
Research and development		6,035			4,422			2,860
General and administrative		3,549			4,447			4,348
Total operating loss		9,584			8,869			7,208
financial (income) expenses, net		(248	)		(86	)		32
Loss before taxes		9,336			8,783			7,240
Income tax expense		8			9			6
Net loss		9,344			8,792			7,246

	Payments due by period
	(US$ thousands)
	Less than 1 year		1-3 Years		3-5 Years		More than 5 years		Total
Obligations under master clinical research organization agreement⁽¹⁾		2,192		—		—		—		2,192
Obligations under master clinical trial agreement⁽²⁾		6,991		—		—		—		6,991
Total	$	9,183		—		—		—	$	9,183

	Years ended December 31,
	(US$ thousands)
	2023			2022			2021
Net cash used in operating activities		(6,679	)		(6,459	)		(6,553	)
Net cash provided by (used in) investing activities		5,991			(6,006	)		(50	)
Net cash provided by financing activities		4,616			—			7,484
Effect of Exchange rate changes on cash, cash equivalents and restricted cash		2			—			—
(Decrease) Increase in cash and cash equivalents and restricted cash		3,930			(12,465	)		881
Cash and cash equivalents and restricted cash, at the beginning of the year		4,106			16,571			15,690
Cash and cash equivalents and restricted cash, at the end of the year		8,036			4,106			16,571

Name	Age	Position
Senior Management
Ilan Hadar	54	Chief Executive Officer and Chief Financial Officer
Prof. Eli Hazum	76	Chief Technology Officer and Director
Dr. Sigal Aviel	60	Chief Operating Officer
Rita Keynan	55	Vice President of Pharmaceutical Operations

Non-Employee Director
Dr. Ehud Geller	77	Chairman of the Board and Director
Efi Cohen-Arazi^{(1) (2) (3) (4)}	69	Director
Dr. Ellen S. Baron^{(1) (2) (3)(4)}	71	External Director
Augustine Lawlor^{(1) (2) (3)(4)}	68	External Director

(1)	Member of the Compensation Committee
(2)	Member of the Audit Committee
(3)	Independent Director under Israeli Law
(4)	Independent Director under the Nasdaq Listing Rules

Name and Position⁽¹⁾	Salary		Social Benefits⁽²⁾		Bonuses		Value of Options Granted ⁽³⁾		All Other Compensation⁽⁴⁾		Total
	(in thousands of U.S. dollars)
Ehud Geller, Chairman		-		-		-		126		150		276
Ilan Hadar, Chief Executive Officer		287		55		62		159		-		562
Eli Hazum Chief Technology Officer		-		-		-		126		144		270
Rita Keynan Vice President of Pharmaceutical Operations		200		57		45		51		-		353
Sigal Aviel Chief Operating Officer		245		48		52		6		-		352

(1)	All executive officers listed in the table were employed on a full-time basis during 2023.
(2)	“Social Benefits” include payments to the National Insurance Institute, advanced education funds, managers’ insurance and pension funds, vacation pay and recuperation pay as mandated by Israeli law.
(3)	Consists of amounts recognized as share-based compensation expense for the year ended December 31, 2023. Assumptions and key variables used in the calculation of such amounts are discussed in Note 10 of our financial statements.
(4)	“All Other Compensation” includes chairman of the board of directors' annual fee and directors’ consulting related fees.

	Ordinary Shares Beneficially Owned			Percentage Owned**
Senior Management and Directors
Ilan Hadar⁽¹⁾		38,300			2.2	%
Dr. Ehud Geller⁽²⁾		347,228			19.9	%
Dr. Sigal Aviel⁽³⁾		15,273			*
Rita Keynan⁽⁴⁾		19,414			1.1	%
Prof. Eli Hazum⁽⁵⁾		33,388			1.9	%
Ellen S. Baron⁽⁶⁾		6,000			*	%
Augustine Lawlor⁽⁷⁾		6,000			*	%
Efi Cohen-Arazi⁽⁸⁾		18,000			*	%
All senior management and directors as a group (8 persons)		483,603			25.7	%
More than 5% Shareholders
Armistice Capital, LLC ⁽⁹⁾		172,957	⁽¹⁰⁾		9.99	%⁽⁹⁾
XT Hi-Tech Investments (1992) Ltd. ⁽¹¹⁾		106,588			6.2	%
Medica III Investment group ⁽²⁾		347,228			19.9	%

*	Less than 1%

**	Based on 1,728,347 ordinary shares outstanding.

Exhibit No.		Exhibit Description

1.1*		Amended and Restated Articles of Association of the Company, as currently in effect.

2.1		Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (included as Exhibit 2.1 to our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 18, 2021, and incorporated herein by reference)

2.2		Specimen Share Certificate (included as Exhibit 4.1 to the Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on August 5, 2020, as amended, and incorporated herein by reference).

4.1#		2019 Option Plan (included as Exhibit 10.1 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on June 30, 2020, and incorporated herein by reference)

4.2#		Compensation Policy (included as Exhibit 4.2 to our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 16, 2022, and incorporated herein by reference)

4.3		Form of Indemnification Agreement (included as Exhibit 10.2 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on August 24, 2020, and incorporated herein by reference)

4.4#		Form of Option Award (included as Exhibit 10.7 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on June 30, 2020, and incorporated herein by reference)

4.5		Amended and Restated Investors’ Rights Agreement dated November 26, 2008 (included as Exhibit 10.8 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on June 30, 2020, and incorporated herein by reference)

4.6		Form of Representative Warrant (included as Exhibit 10.5 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on June 30, 2020, and incorporated herein by reference)

4.7		Form of Warrant Agency Agreement including Form of Unit Warrant (included as Exhibit 10.6 to our Registration Statement on Form F-1 as filed with the Securities and Exchange Commission on June 30, 2020, and incorporated herein by reference)

4.8		Securities Purchase Agreement dated as of March 8, 2021 by and between PainReform Ltd. and the purchasers identified on the signature pages thereto (included as Exhibit 10.1 to our Form 6-K filed with the Securities and Exchange Commission on March 9, 2021, and incorporated herein by reference)

4.9		Form of Warrant issued to certain institutional investors on March 10, 2021 (included as Exhibit 10.2 to our Form 6-K filed with the Securities and Exchange Commission on March 9, 2021, and incorporated herein by reference)


4.10		Registration Rights Agreement dated as of March 8, 2021 by and between PainReform and the purchasers signatory thereto (included as Exhibit 10.3 to our Form 6-K filed with the Securities and Exchange Commission on March 9, 2021, and incorporated herein by reference)

4.11		Form of Securities Purchase Agreement, dated as of July 12, 2023, between the Company and the purchasers identified on the signature pages thereto (included as Exhibit 10.1 to our Form 6-K filed with the Securities and Exchange Commission on July 14, 2023, and incorporated herein by reference).

4.12		Form of Placement Agency Agreement, dated as of July 12, 2023, by and between the Company and Maxim Group LLC (included as Exhibit 10.2 to our Form 6-K filed with the Securities and Exchange Commission on July 14, 2023, and incorporated herein by reference).

4.13		Form of Pre-Funded Ordinary Share Purchase Warrant (included as Exhibit 10.3 to our Form 6-K filed with the Securities and Exchange Commission on July 14, 2023, and incorporated herein by reference).

4.14		Form of Ordinary Share Purchase Warrant (included as Exhibit 10.4 to our Form 6-K filed with the Securities and Exchange Commission on July 14, 2023, and incorporated herein by reference).

4.15		Form of Securities Purchase Agreement, dated as of July 14, 2023, between the Company and the purchasers identified on the signature pages thereto (included as Exhibit 10.1 to our Form 6-K filed with the Securities and Exchange Commission on July 18, 2023, and incorporated herein by reference).

4.16		Form of Placement Agency Agreement, dated as of July 14, 2023, by and between the Company and Maxim Group LLC (included as Exhibit 10.2 to our Form 6-K filed with the Securities and Exchange Commission on July 18, 2023, and incorporated herein by reference).

4.17		Form of Pre-Funded Ordinary Share Purchase Warrant (included as Exhibit 10.3 to our Form 6-K filed with the Securities and Exchange Commission on July 18, 2023, and incorporated herein by reference).

4.18		Form of Ordinary Share Purchase Warrant (included as Exhibit 10.4 to our Form 6-K filed with the Securities and Exchange Commission on July 18, 2023, and incorporated herein by reference).

4.19		Form of Inducement Letter (included as Exhibit 10.1 to our Form 6-K filed with the Securities and Exchange Commission on December 27, 2023, and incorporated herein by reference).

4.20		Form of New Warrant (included as Exhibit 10.2 to our Form 6-K filed with the Securities and Exchange Commission on December 27, 2023, and incorporated herein by reference).

4.21		Form of Placement Agent Warrant (included as Exhibit 10.1 to our Form 6-K filed with the Securities and Exchange Commission on December 27, 2023, and incorporated herein by reference).

12.1*		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to rule 13a-14(a) of the Securities Exchange Act of 1934

13.1*		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350

15.1*		Consent of Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited, Independent Registered Public Accounting Firm.

97.1#*		Clawback Policy

101		The following financial information from PainReform Ltd.’s Annual Report on Form 20-F for the year ended December 31, 2023, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Statement of Financial Position, (ii) Statements of Comprehensive Loss, (iii) Statements of Changes in Equity, (iv) Statements of Cash Flows and (iv) Notes to Financial Statements.*

	PAINREFORM LTD.

Date: February 29, 2024	By:	/s/ Ilan Hadar
		Ilan Hadar
		Chief Executive Officer

		Page

Report of Independent Registered Public Accounting Firm		F-2
(Firm Name: Kesselman & Kesselman / PCAOB ID No. 1309)

Balance Sheets		F-3

Statements of Comprehensive Loss		F-4

Statements of Changes in Shareholders’ Equity		F-5

Statements of Cash Flows		F-6 - F-7

Notes to Financial Statements		F-8 - F-27

		As of December 31,
	Note	2023			2022
Assets
Current assets:
Cash and cash equivalents		$	8,026		$	4,096
Short term deposit			-			6,085
Restricted cash	2f		10			10
Prepaid clinical trial expenses and deferred clinical trial costs	6b		1,514			1,728
Prepaid expenses and other current assets	3		249			365
Total current assets			9,799			12,284
Non-current assets
Operating lease right of use asset	6a		93
Property and equipment, net			38			44
Total long-term assets			131			44
Total assets		$	9,930		$	12,328

Liabilities and shareholders’ equity

Trade payables		$	221		$	209
Employees and related liabilities			465			499
Operating lease liability			56
Accrued expenses	4		1,668			356

Total current liabilities		$	2,410		$	1,064

Non-current liabilities:
Operating lease liability			30
Provision for unrecognized tax positions	5f		251			243

Total non-current liabilities			281			243

Total liabilities		$	2,691		$	1,307

Commitments	6

Shareholders’ Equity:	7
Ordinary shares, NIS 0.3 par value; Authorized: 5,000,000 and 2,666,667 shares as of December 31, 2023, and 2022, respectively; Issued and outstanding: 1,728,347 and 1,081,755 shares as of December 31, 2023, and 2022, respectively (*)		$	147		$	94
Additional paid-in capital			48,955			43,446
Accumulated deficit			(41,863	)		(32,519	)

Total shareholders’ equity			7,239			11,021

Total liabilities and shareholders’ equity		$	9,930		$	12,328

		For the Year Ended December 31,
	Note	2023			2022			2021

Operating expenses:
Research and development expenses	8a	$	(6,035	)	$	(4,422	)	$	(2,860	)
General and administrative expenses	8b		(3,549	)		(4,447	)		(4,348	)

Operating loss			(9,584	)		(8,869	)		(7,208	)

Financial income (expenses), net	8c		248			86			(32	)

Loss before taxes			(9,336	)		(8,783	)		(7,240	)

Income tax expenses			(8	)		(9	)		(6	)

Net loss and comprehensive loss		$	(9,344	)	$	(8,792	)	$	(7,246	)

Basic and diluted net loss per share	2o	$	(7.14	)	$	(8.13	)	$	(7.25	)

Weighted average number of Ordinary Share used in computing basic and diluted net loss per share (*)			1,308,920			1,081,755			999,562

	Ordinary shares(**)				Additional paid-in		Accumulated			Total shareholders’
	Number		Amount		capital		Deficit			equity

Balance as of January 1, 2021		894,142	$	78	$	33,023	$	(16,481	)	$	16,620

Share-based compensation to employees and directors		-		-		812		-			812

Share-based compensation to service providers		-		-		412		-			412

Shares and warrants issuance - Private Investment in Public Equity (“PIPE”), net		130,435		12		5,542		-			5,554

Exercise of warrants		41,967		4		1,926		-			1,930

Net loss and comprehensive loss		-		-		-		(7,246	)		(7,246	)

Balance as of December 31, 2021		1,066,544	$	94	$	41,715	$	(23,727	)	$	18,082

Share-based compensation to employees and directors		-		-		1,389		-			1,389

Share-based compensation to service providers		-		-		342		-			342

Share issuance to service providers		15,211		-		-		-			-

Net loss and comprehensive loss		-		-		-		(8,792	)		(8,792	)

Balance as of December 31, 2022		1,081,755	$	94	$	43,446	$	(32,519	)	$	11,021

Share-based compensation to employees and directors		-		-		804		-			804

Share issuance to service providers		8,697		*		-		-			*

Issuance of common stock and pre-funded warrants upon private placement, net of underwriting commissions and other offering costs. (***)		467,895		39		1,411		-			1,450
Issuance and exercise of common stock warrants upon private placement, net of underwriting commissions and other offering costs. (Note 7c)		170,000		14		3,294					3,308

Net loss and comprehensive loss		-		-		-		(9,344	)		(9,344	)

Balance as of December 31, 2023		1,728,347	$	147	$	48,955	$	(41,863	)	$	7,239

	December 31,
	2023		2022		2021

Cash and cash equivalents	$	8,026	$	4,096	$	16,537

Restricted cash		10		10		34

Total cash, cash equivalents, and restricted cash	$	8,036	$	4,106	$	16,571

Supplemental cash flow information:
Acquisition of right-of-use assets by means of lease liabilities	$	113	$	-	$	-

	%

Computers, software and electronic equipment		33
Furniture and office equipment		7

	Year ended December 31,
	2023			2022			2021

Numerator:
Net loss applicable to shareholders of ordinary shares	$	(9,344	)	$	(8,792	)	$	(7,246	)

Denominator:
Shares of Ordinary Share and restricted shares used in computing basic and diluted net loss per share (*)		1,308,920			1,081,755			999,562
Net loss per share of ordinary share, basic and diluted	$	(7.14	)	$	(8.13	)	$	(7.25	)

	b.	Share activity:

		On March 11, 2021, the Company issued to certain institutional investors (the “Purchasers”) 130,345 Ordinary Shares and warrants to purchase up to an aggregate of 65,217 ordinary shares at a combined purchase price of $46.0 per Ordinary Share and accompanying warrant in a Private Investment in Public Equity (“Private placement”) pursuant to a securities purchase agreement. The private placement resulted in gross proceeds of approximately $6,000. The Company received net amount of $5,554 less issuance costs. On July 22, 2021, as a result of an exercise of warrants to purchase 41,967 shares held by one of the Purchasers, the Company received gross proceeds of $1,930. In connection with the private placement, the Company also entered into a Registration Rights Agreement, dated as of March 8, 2021, with the Purchasers (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company filed a registration statement (the “Registration Statement”), with the SEC to register the resale of the ordinary shares and the Ordinary Shares issuable upon exercise of the warrants. The Registration Statement was declared effective on April 9, 2021. The Company paid the placement agents of the private placement a cash placement fee equal to $390 and an expense reimbursement of $40. The Company also issued to the placement agents warrants to purchase 5,217 Ordinary Shares, at an exercise price of $50.6 per ordinary share and a term expiring on March 10, 2026. The Company paid a total of approximately $500 in placement agent fees and other expenses.

	c.	Warrants and warrants units:

		The following table summarizes the warrants and warrants units outstanding as of December 31, 2023:

Type	Issuance Date	Number of warrants	Exercise price(**)	Exercisable through
August 2019 warrants	August 22, 2019	205,268	$67.2(*)	August 22, 2024
December 2019 warrants	December 9, 2019	148,106	$67.2(*)	December 8, 2024
Warrants to underwriters	September 3, 2020	125,000	$100.00	September 1, 2025
Warrants to underwriters	October 5, 2020	375,000	$88.0	September 3, 2025
IPO warrants	September 3, 2020	2,812,170	$88.0	September 3, 2025
PIPE warrants	March 11, 2021	232,500	$46.0	September 10, 2026
Warrants to PIPE placement agent	March 11,2021	52,173	$50.6	March 8, 2026
December 2023 warrants	December 28,2023	935,792	$2.85	December 28,2028
December 2023 warrants	December 28,2023	32,753	$3.56	December 28,2028

TOTAL		4,918,762


		Modification of share-based compensation On November 23, 2022 (“the commencement date”), the Company’s board of directors approved: (1) the cancellation of certain outstanding options granted to employees in September 2019 (which were fully vested), November 2020, January 2021, May 2021 and April 2022, and the grant of a greater number of replacement options thereof under the new terms with a lower exercise price of US $5.70 and a shorter vesting period (except for September 2019's grant). (2) The grant of 2,127 options to a new employee on the same terms of the replacement options granted to the rest of the Company's employees, as described (the "Modification"). The New Options vest and become exercisable under the following schedule: 50% of the shares covered by the options are immediately vesting on the commencement date determined by the administrator (and in the absence of such determination, the date on which such options were granted), and 6.25% of the shares covered by the options at the end of each subsequent three-month period thereafter over the course of the following three years. The Modification was considered as a Type I modification. The total incremental fair value of these options amounted to $165. An amount of 50% of the incremental fair value were vested immediately at the commencement date and an amount of $83 was recognized immediately, and the remaining incremental fair value will be recognized over the remaining vesting period through December 31, 2024. In addition, the unrecognized compensation cost as of the date of the Modification was recognized over the vesting period of the new options. As a result, an amount of 50% of the unrecognized compensation cost of the cancelled options were vested immediately in the amount of $454, and the remaining unrecognized compensation cost are recognized over the remaining vesting period and until December 31, 2024. As a result of the Modification, (A) 66,764 options were cancelled, comprised of (i) 5,117 options that had been granted in September 2019, at an exercise price of $33.4, (ii) 26,730 options that had been granted in November 2020, at an exercise price of $57.4, (iii) 13,365 options granted in January 2021, at an exercise price of $57.4, and (iv) 5,107 options granted in May 2021, at an exercise price of $30.1, and (ii) 16,446 options that had been granted in April 2022 at an exercise price of $10.6 (the “Cancelled Options”), and (B) 98,877 new options had been granted (including 2,127 option granted to a new employee) (the “New Options”). The intrinsic value of share options outstanding and exercisable as of December 31, 2023 was $2. On June 8, 2023, the Company’s shareholders approved the grant of options to purchase an aggregate of 54,000 shares to two current board members, and to the chairman of the board of directors. Each recipient received a grant of options to purchase 18,000 ordinary shares of the Company, at an exercise price of $5.89 per share. Fifty percent of the options vested upon grant, with the remaining shares vesting on a quarterly basis over three years so that 7,500 Options shall vest on the expiry of each quarter thereafter, provided that on such date each of the serving directors, shall serve in such capacity. The options expire after ten years from their grant date. The Company determined the valuation of the options with these assumptions: average expected term 5.36 years, average risk-free interest rate of 3.85%, volatility of 90.43%, zero dividend yield is expected. The grant-date fair value was $3.20 for each option. The valuation of the option on the grant date was $174.

	Number of options		Weighted average exercise price		Weighted average remaining contractual life
			USD
Options outstanding at beginning of year		15,388	$	2.40		1.25
Changes during the year:
Options granted		-		-		-
Options exercised		-		-		-
Options forfeited		-		-		-
Options outstanding at end of year		15,388	$	2.40		0.25
Options exercisable at end of year		15,388	$	2.40		0.25

	2023				2022*			2021*
Expected term (years)		5.00-6.41			5.28-6.07			5.86-6.11
Risk-free interest rates		3.82%-3.87	%		2.69%-3.88	%		0.52%-1.13	%
Volatility		90.43	%		79.3%-82.6	%		69.67%-78.99	%
Dividend yield		-			-			-
Exercise price	$	5.89		$	5.70-10.60		$	30.13-57.38