DarioHealth Corp.

NOTE 1:- GENERAL

DarioHealth is a global digital therapeutics (DTx) company delivering personalized evidence-based interventions that are driven by precision data analytics, software, and personalized coaching, DarioHealth has developed an approach with the intent to empower individuals to adjust their lifestyle in holistic way.

DarioHealth’s cross-functional team operates at the intersection of life sciences, behavioral science, and software technology to deliver seamlessly integrated and highly engaging digital therapeutics interventions. Our platform and suite of solutions deliver personalized and dynamic interventions driven by data analytics and one-on-one coaching for diabetes, hypertension, weight management, musculoskeletal pain, and behavioral health.

DarioHealth’s digital therapeutic platform has been designed with a ‘user-first’ strategy, focusing on the user’s needs first and foremost, and user experience and satisfaction. User satisfaction is constantly measured and drives, all company processes, including our technology design.

The Company hasone reporting unit andone operating segment.

NOTE 1:- GENERAL (Cont.)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements are prepared according to United States generally accepted accounting principles (“U.S. GAAP”).

The preparation of the consolidated financial statements and related disclosures in conformity with U.S. GAAP requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates, and such differences may be material.

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 including other accounts receivable and prepaid expenses and other accounts payable and accrued expenses, and the reported amounts of revenue, cost of revenues and operational expenses during the reporting period. Actual results could differ from those estimates.

The functional currency of the Company and its subsidiaries is the U.S dollar.

The Company’s revenues and financing activities are incurred in U.S. dollars. Although a portion of the Company’s expenses is denominated in New Israeli Shekels (“NIS”), a substantial portion of its expenses is denominated in dollars. Accordingly, the Company’s management believes that the currency of the primary economic environment in which the Company and its subsidiaries operate is the dollar; thus, the dollar is the functional currency of the Company. Transactions and balances denominated in dollars are presented at their original amounts. Monetary accounts denominated in currencies other than the dollar are re-measured into dollars in accordance with Accounting Standards Codification (“ASC”) 830, “Foreign Currency Matters”.

All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the consolidated statements of comprehensive loss as financial income or expenses, as appropriate.

The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions have been eliminated upon consolidation.

Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company identified its Chief Executive Officer as the Chief Operating Decision Maker (CODM). The Company’s Chief Executive Officer reviews the financial information presented on consolidated basis for purposes of allocating resources and evaluating its financial performance.

The Company considers all highly liquid investments, which are readily convertible to cash with a maturity of three months or less at the date of acquisition, to be cash equivalents.

Short-term bank deposits are non-tradable deposits with maturities of more than three months but less than one year. Non-tradable deposits are presented at their cost, including accrued interest.

Short-term restricted bank deposits are restricted deposits with maturities of up to one year and are pledged in favor of the bank as a security for the bank guarantees issued to the landlords of the Company’s offices and credit card payments. The short-term restricted bank deposits are denominated in NIS and Indian Rupee and bear interest at an average rate of 2.49% and 4.56% as of December 31, 2025 and 2024, respectively. The short-term restricted bank deposits are presented at their cost, including accrued interest.

As of December 31, 2025, and 2024, the Company had a short-term restricted bank deposit which is used as collateral for rent in the amount of $229 and $175, respectively.

The Company records trade receivables when an enforceable right to payment exists, net of allowance for credit losses. The Company’s expected credit loss allowance methodology for trade receivables is based upon its assessment of various factors, including historical experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The estimated credit loss allowance is recorded as general and administrative expenses on the Company's Consolidated Statements of Comprehensive Loss. As of December 31, 2025, and 2024, the credit loss allowance was $158 and $169, respectively.

Inventories are stated at the lower of cost or net realized value. Cost is determined on a first in first out (“FIFO”) basis. Inventory write-downs are provided to cover technological obsolescence, excess inventories and discontinued products. Inventory write-downs represent the difference between the cost of the inventory and net realizable value. Inventory write-downs are charged to the cost of revenues when a new lower cost basis is established. Subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Work-in-process is immaterial, given the typically short manufacturing cycle, and therefore is disclosed in conjunction with raw materials.

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates:

The Company's long-lived assets are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset (or asset group) to the future undiscounted cash flows expected to be generated by the assets. If such assets (or asset group) are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets (or asset group). For the years ended December 31, 2025, and 2024, the Company recorded an impairment loss of $0 and $860, respectively.

The Company recognizes revenue in accordance with ASC 606, when (or as) it satisfies performance obligations by transferring promised hardware or services to its customers in an amount that reflects the consideration the Company expects to receive. The Company applies the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative standalone selling price (“SSP”) for each performance obligation. The Company uses judgment in determining the SSP for its performance obligations.

Todetermine SSP, the Company maximizes the use of observable standalone sales and observable data, where available. In instances where performance obligations do not have observable standalone sales, the Company may use alternative methods to estimate the standalone selling price, such as cost plus margin approach.

The Company’s payment terms are generally 45 days or less. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company determines its contracts generally do not include a significant financing component since the Company's selling prices are not subject to billing terms nor is the Company’s purpose to receive financing from its customers or to provide customers with financing. In addition, the Company elected to apply the practical expedient not to adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at the inception of a contract, that the period between when the Company will transfer a promised good or service to a customer and when the customer will pay for that good or service will be one year or less. Revenue is recognized net of any taxes collected from customers which are subsequently remitted to governmental entities. The Company elected to account for shipping and handling activities as fulfillment activities. Shipping and handling activities are classified as part of cost of revenues.

Consumers revenue

The Company considers customer and distributor purchase orders to be contracts with customers. For each contract, the Company considers the promise to transfer tangible hardware and/or services, each of which are distinct, and accounted for as separate performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to rebates and adjustments to determine the net consideration to which the Company expects to receive. Revenue from tangible hardware is recognized when control of the hardware is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment. The revenues from fixed-price service arrangements are recognized over time based on the pattern of transfer of services to the customer.

Commercial revenue – B2B2C

The Company provides a mobile and web-based digital therapeutics health management programs to employers and health plans for their employees or covered individuals. Such programs include live clinical coaching, content, automated journeys, hardware, and lifestyle coaching, currently supporting diabetes, prediabetes and obesity, hypertension, behavioral health (BH) and musculoskeletal health (MSK). At contract inception, the Company assesses the type of services being provided and assesses the performance obligations in the contract , as well as ​the relevant contractual terms in contracts. These solutions integrate access to the Company’s web-based platform, and clinical and data services to provide an overall health management solution. The promises to transfer these goods and services are not separately identifiable and are considered a single continuous service comprised of a series of distinct services recognized over time that are substantially the same and have the same pattern of transfer (i.e., distinct days of service). Revenues related to the Twill platform are recognized over time, since the customer simultaneously receives and consumes the benefits provided by the Company’s performance. Revenues related to health management programs and to the Twill platform are recognized using a time-elapsed measure of progress, since those services have a consistent continuous pattern of transfer to the customer.

To the extent the transaction price includes variable consideration, revenue is recognized using the variable consideration allocation exception, or, if the allocation exception is not met, the Company recognizes revenue ratably based on estimates of the variable consideration to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. When the variable consideration allocation exception is met, the Company recognizes revenue each month using either on a per engaged member per month (PEMPM) or a per member per month (PMPM) basis.

The Company generally recognizes revenues for professional services using an input method, based on labor hours consumed, which the Company believes best depicts the transfer of the services to the customer.

Certain of the Company’s contracts include client performance guarantees and a portion of the fees in those contracts are subject to performance-based metrics such as clinical outcomes or minimum member utilization rates. The Company includes in the transaction price some or all of an amount of variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Refunds to a customer that result from performance levels that were not met by the end of the measurement period are adjusted to the transaction price, and therefore estimated at the outset of the arrangement.

The Company follows the guidance provided in ASC 606 for determining whether it is a principal (i.e., report revenues on a gross basis) or an agent (i.e., report revenues on a net basis) in arrangements with customers that involve another party that contributes to providing specified services to a customer, based on whether the Company controls the specified good or service.

Commercial revenue - Strategic partnerships

We have also entered into contracts with a preferred partner and a health plan provider in which we provide data license, development and implementation services.

Cost of revenues is comprised of the cost of production, data center costs, shipping and handling inventory, hosting services, personnel and related overhead costs, depreciation of production line and related equipment costs, amortization of costs to fulfill a contract and inventory write-downs.

Financial instruments that potentially subject the Company to credit risk primarily consist of cash and cash equivalents, short-term deposits, restricted deposits, and trade receivables. For cash and cash equivalents, the Company is exposed to credit risks in the event of default by the financial institutions to the extent that amounts recorded on the accompanying consolidated balance sheets exceed federally insured limits. The Company places its cash and cash equivalents and short-term deposits with financial institutions with high-quality credit ratings and has not experienced any losses in such accounts.

For trade receivables, the Company is exposed to credit risk in the event of non-payment by customers to the extent of the amounts recorded on the accompanying consolidated balance sheets.

The Company has no off-balance-sheet concentration of credit risk.

As of December 31, 2025, and December 31, 2024, the Company's major customers accounted for 30.5% and 41.6%, respectively, of the Company's accounts receivable balance. For the year ended December 31, 2025, the Company had no major customer, of the Company's revenue in the period. For the year ended December 31, 2024, the Company's major customers accounted for 24.6%, of the Company's revenue in the period.

The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”). This guidance prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to amounts that are more likely than not to be realized.

ASC 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. As of December 31, 2025, and 2024, no liability for unrecognized tax benefits was recorded.

Research and development costs are charged to the consolidated statements of comprehensive loss, as incurred.

The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation” (“ASC 718”), which requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statement of comprehensive loss.

The Company recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option-pricing model. The option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term. Expected volatility was calculated based upon historical volatility of the Company. The expected option term represents the period that the Company’s stock options are expected to be outstanding and is determined based on the simplified method until sufficient historical exercise data will support using expected life assumptions. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has historically not paid dividends and has no foreseeable plans to pay dividends.

The Company applies ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). Under this standard, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent from the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The hierarchy is broken down into three levels based on the inputs as follows:

The availability of observable inputs can vary from instrument to instrument and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are unobservable in the market, the determination of fair value requires more judgment, and the fair value are categorized as Level 3.

The carrying amounts of cash and cash equivalents, short-term restricted bank deposits, trade receivables, other accounts receivable and prepaid expenses, trade payables and other accounts payable and accrued expenses approximate their fair value due to the short-term maturity of such instruments. The Company's Avenue Loan Facility, and warrants liability were measured at fair value using Level 3 unobservable inputs (see note 8). The Callodine Loan Facility was initially measured at fair value using Level 3 unobservable inputs and has been subsequently measured at amortized cost (see note 7).

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance. The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability under ASC 480, and meet all of the requirements for equity classification, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding. Warrants that meet all the criteria for equity classification, are required to be recorded as a component of additional paid-in capital.

Warrants that do not meet all the criteria for equity classification, are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter. The liability-classified warrants are recorded under current and non-current liabilities. Changes in the estimated fair value of the warrants are recognized in “Other financial expenses (income), net” in the consolidated statements of comprehensive loss.

The Company computes net loss per share using the two-class method required for participating securities. The two-class method requires income available to common stockholders for the period to be allocated between shares of Common Stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

The Company’s basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of shares, pre-funded warrants and vested restricted stock without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of Common Stock are anti-dilutive.

Since inception date, all Ltd. employees who are entitled to receive severance pay in accordance with the applicable law in Israel, have been included under section 14 of the Israeli Severance Compensation Law (“Section 14”). Under this section, they are entitled only to monthly deposits, at a rate of 8.33% of their monthly salary, made by the employer on their behalf with insurance companies. Payments in accordance with Section 14 release Ltd. from any future severance payments in respect of those employees. Payments under Section 14 are not recorded as an asset in the Company’s balance sheet.

Severance pay expense for the year ended December 31, 2025 and 2024 amounted to $780 and $935, respectively.

The Company has a 401(k) defined contribution plan covering certain employees in the U.S. All eligible employees may elect to contribute up to $23.50 per year (for certain employees over 50 years of age the maximum contribution is $31.00 per year), of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits.

The Company accounts for its contingent liabilities in accordance with ASC 450 “Contingencies”. A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. As of December 31, 2025, and 2024, the Company is not a party to any litigation that could have a material adverse effect on the Company’s business, financial position, results of operations or cash flows. Legal costs incurred in connection with loss contingencies are expensed as incurred.

Lessee accounting:

The Company determines if an arrangement is a lease and the classification of that lease at inception based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefits from the use of the asset throughout the period, and (3) whether the Company has a right to direct the use of the asset. The Company elected not to recognize a lease liability or right-of-use (“ROU”) asset for leases with a term of twelve months or less. The Company also elected the practical expedient not to separate lease and non-lease components for its leases.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets are initially measured at amounts, which represents the discounted present value of the lease payments over the lease, plus any initial direct costs incurred. The ROU assets are reviewed for impairment. The lease liability is initially measured at lease commencement date based on the discounted present value of the lease payments over the lease term. The implicit rate within the operating leases is generally not determinable; therefore, the Company uses the Incremental Borrowing Rate (“IBR”) based on the information available at commencement date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate on similar terms and payments and in economic environments where the leased asset is located.

Certain leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option. See also Note 9.

The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets.

Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred.

The Company accounts for a transaction as an asset acquisition when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, or otherwise does not meet the definition of a business. Asset acquisition-related direct costs are capitalized as part of the asset or assets acquired.

Acquired identifiable finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. The basis of amortization approximates the pattern in which the assets are utilized, over their estimated useful lives. The Company routinely reviews the remaining estimated useful lives of finite-lived intangible assets. In case the Company reduces the estimated useful life for any asset, the remaining unamortized balance is amortized over the revised estimated useful life (see Note 11).

Goodwill represents the excess of the purchase price in a business combination over the fair value of the net identifiable tangible and intangible asset acquired. Under ASC 350, "Intangible - Goodwill and Other" ("ASC 350"), goodwill is not amortized, but rather is subject to an annual impairment test.

ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If the Company elects not to use this option, or if the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company prepares a quantitative analysis to determine whether the carrying value of a reporting unit exceeds its estimated fair value. If the carrying value of a reporting unit would exceed its estimated fair value, the Company would have recognized an impairment of goodwill for the amount of this excess.

On December 31, 2025, the Company performed a quantitative assessment for goodwill impairment. The assessment utilizes the Company’s market capitalization plus an appropriate control premium.

There wasno impairment of goodwill recorded for the years ended December 31, 2025 and 2024 as the fair value exceeded the carrying amount of the reporting unit for each of these years.

aa. CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), enacted in March 2020 in response to the COVID-19 pandemic, provided refundable employee retention credits, which could be used to offset payroll tax liabilities. In March 2021, the American Rescue Plan Act (“ARPA”) was enacted. ARPA includes several provisions, such as measures that extend and expand the employee retention credit, previously enacted under the CARES Act, through September 30, 2021.

Measures not related to income-based taxes within the CARES Act include (1) allowing an employer to defer payment of its share of Social Security payroll taxes that would otherwise be due from the date of enactment through December 31, 2020 over the following two years and (2) allowing eligible employers subject to a significant decline in gross receipts due to the COVID-19 pandemic to receive a credit on qualified wages against their employment taxes each quarter, with any excess credits eligible for refunds.

The Company’s subsidiary, Twill qualified for the employee retention credit based on a significant decline in gross receipts of approximately 62% in the third quarter of 2020 as compared to the third quarter of 2019, which occurred prior to the Company’s acquisition of Twill, and eligibility continued through the fourth quarter of 2020. Twill also qualified for the third quarter of 2021 based on a significant decline in gross receipts compared to the corresponding 2019 period. During 2025, the Company received approximately $334 of employee retention credit refunds from the Internal Revenue Service related to the third and fourth quarters of 2020. In addition, the Company has filed for an additional employee retention credit refund related to the third quarter of 2021, which remains subject to the United States Internal Revenue Service review and approval.

The employee retention credit received was recorded as a reduction of research and development expenses, sales and marketing expenses and general and administrative expenses in the manner in which the qualified wages and related costs were classified.

NOTE 3:- OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES

NOTE 4:-** ACQUISITIONS**

Acquisition of Twill

On February 15, 2024, the Company completed the merger and the associated acquisition of all issued and outstanding shares of Twill for an aggregate consideration of (A) $10.0 million in cash, and (B) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 500,020 shares of the Company’s Common Stock. In addition, the Company issued stock options to purchase up to 148,173 shares of Common Stock and a combination of warrants and restricted stock units (“RSUs”) to acquire up to 88,326 shares of Common Stock to certain employees and officers of Twill. of which 17,500 shares were exercised into shares of Common Stock in May 2025.

The acquisition of Twill advances the Company’s strategy to evolve from a point solution to a comprehensive multi condition platform. With the integration of Twill, the Company believes it can achieve multiple advantages as well as synergies in multiple fronts like its product offering, commercial channels, improved clients and member experience.

Purchase price allocation:

Pursuant to ASC 805, the total purchase price was allocated to Twill’s net tangible and intangible assets based on their estimated fair values as set forth below. The excess of the purchase price over the net tangible and identifiable intangible assets was recorded as goodwill. A portion of the acquisition price was recorded as goodwill due to the synergies with Twill and is not expected to be deductible for tax purposes.

NOTE 4:-** ACQUISITIONS (Cont.)**

The allocation of the purchase price to the assets acquired and liabilities assumed based on management’s estimate of fair values at the date of acquisition as follows:

(1)The technology has been calculated through the Income Approach, in particular the Relief from Royalty method.

(2)The fair value of Twill’s customer relationships has been calculated using the Multi-Period excess earnings method (“MPEEM method”).

NOTE 4:-** ACQUISITIONS (Cont.)**

The consolidated statement of comprehensive loss includes the following revenue and net loss attributable to Twill in 2024:

In 2024, the Company recognized $2,001 of a deferred tax liability which relates to the purchase price allocation fair value adjustments, other than goodwill. The Company filing a consolidated tax return in the U.S. together with Twill and utilize the benefit of the Company's loss carryforwards against the future taxable income of Twill and consequently decreased its valuation allowance in an amount equal to the deferred tax liability recognized in the business combination.

Supplemental Unaudited Pro Forma Information

The following table sets forth a summary of the unaudited pro forma results of the Company as if the acquisition of Twill, which closed in February 2024, had taken place had Twill been acquired as of January 1, 2023.

The unaudited pro forma financial information presented is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the Twill acquisition was completed at the beginning of 2024 and are not indicative of the future operating results of the combined company. The pro forma results include adjustments related primarily to purchase accounting, and amortization of acquisition-related intangible assets. The pro forma results also include income from revaluation of the pre-funded warrants issued as part of the consideration for the acquisition of Twill, as these warrants are classified as a liability under U.S. GAAP.

NOTE 5:- INVENTORIES

Inventory consists of the following:

Total write-downs during the years ended December 31, 2025, and 2024 amounted to $320 and $301, respectively.

NOTE 6:- REVENUE

The Company is operating a multi-condition healthcare business, empowering individuals to manage their chronic conditions and take steps to improve their overall health. The Company generates revenues from contracts with enterprise business market groups to provide digital therapeutics solutions for individuals to receive access to services through the Company’s commercial arrangements Business-to-Business-to-Consumer (“B2B2C”). The Company also generates revenue directly from individuals through a la carte offering and membership plans.

Revenue Source:

The following table represent the Company total revenues for the year ended December 31, 2025 and 2024 disaggregated by revenue source:

Deferred Revenue

The Company recognizes contract liabilities, or deferred revenues, when it receives advance payments from customers prior to the satisfaction of the Company's performance obligations. The balance of deferred revenues approximates the aggregate amount of the transaction price allocated to the unsatisfied performance obligations at the end of the reporting period. The Company expects to recognize approximately $714 over the next 12 months and theremainder thereafter.

The Company elected to not disclose information about remaining performance obligations for which the variable consideration is allocated to a wholly unsatisfied promise to transfer a distinct good or service that is subject to the variable consideration allocation exception.

The following table presents the significant changes in the deferred revenue balance during the year ended December 31, 2025:

Costs to fulfill a contract

The Company defers costs incurred to fulfill contracts that: (1) relate directly to the contract; (2) are expected to generate resources that will be used to satisfy the Company’s performance obligations under the contract; and (3) are expected to be recovered through revenue generated under the contract. Contract fulfillment costs are expensed as the Company satisfies its performance obligations and recorded into cost of revenue.

Costs to fulfill a contract are recorded in other accounts receivable and prepaid expenses and long-term assets.

NOTE 6:- REVENUE (Cont.)

Costs to fulfill a contract consist of (1) deferred consumer hardware costs incurred in connection with the delivery of services that are deferred, and (2) deferred costs incurred, related to future performance obligations which are capitalized.

Costs to fulfill a contract as of December 31, 2025, and December 2024, consisted of the following:

Costs to fulfill a contract were as follows:

NOTE 7:- DEBT

Loan Facility

On April 30, 2025, the Company refinanced its existing $30,000 credit facility with a new $32,500 credit agreement (the “Credit Agreement”), by and among the Company as borrower, the financial institutions party thereto from time to time as lenders, and Callodine Commercial Finance, LLC (in its capacity as agent for all lenders, “Agent”, and collectively with other lenders, “Lenders” and each a “Lender”) (the “Callodine Loan Facility”). Under the terms of the Credit Agreement, each Lender agreed to make a multi-draw term loan (each a “Term Loan”) in which the Company borrowed $32,500 at the time of closing on April 30, 2025. In addition, the Company may at its option draw an aggregate of up to an additional $17,500. $2,500 of such additional Term Loan is subject to the achievement of certain revenue and gross margin thresholds and the sole discretion of the Agent and the Lenders. $15,000 of such additional Term Loan is subject to the discretion of the Agent and the Lenders. The Credit Agreement has afive-year term that matures in April 2030. Principal repayments on the Term Loan are not due until May 2028, at which point the Company is required to make equal quarterly principal installments in the amount of $1,367, with all remaining outstanding principal due on the Term Loan Maturity Date of April 30, 2030.

The outstanding principal balance under the loan shall bear interest at a per annum rate of interest equal to (i) the Secured Overnight Financing Rate (“SOFR”), (as defined in the Credit Agreement) plus (ii) seven and three-quarters of one percent (7.75%). Upon maturity and/or upon an event of default (or upon any acceleration), interest shall automatically accrue without notice to the Company at a rate per annum equal to the lesser or (i) three percent (3%) over the Contract Rate (as defined in the Credit Agreement), or (ii) the maximum rate of interest permitted to be charged by applicable laws or regulations until paid. The Company paid certain fees with respect to the Term Loan, including a closing fee and an agent fee. Voluntary prepayments of the Term Loan prior to the third anniversary of the closing are also subject to certain pre-payment penalties.

In connection with the funding of the closing amount, the Company agreed to issue the Lenders a warrant to purchase an aggregate of 105,707 shares of our Common Stock, with an exercise price of $16.56, which shall have a term ofseven years from the issuance date. In addition, up to $2,500 of the loaned amount can be converted into shares of our Common Stock at a price of $19.87 per share.

The Company concluded that the Callodine Loan Facility and the Warrant are freestanding financial instruments since these instruments are legally detachable and separately exercisable. The Company has concluded that the Warrant meets all the conditions to be classified as equity pursuant to ASC 480 and ASC 815-40. In addition, the Callodine Loan Facility is measured at amortized cost.

With respect to the Initial Commitment Amount only, the fair value of the Callodine Loan Facility is recognized in connection with the Company’s Credit Agreement. The fair value of the Callodine Loan Facility was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the Callodine Loan Facility, which is reported within non-current liabilities (Maturity Date - April 30, 2030) on the consolidated balance sheets, was estimated by the Company as of April 30, 2025 such that the value of the instruments granted by the Company under the Callodine Loan Facility equals the net principal amount (net of origination fees).

The Callodine Loan Facility incorporates comparisons to instruments with similar covenants, collateral, and risk profiles and was obtained using a discounted cash flow technique. On the date of Callodine Loan Facility origination, or April 30, 2025, the discount rate was arrived at by calibrating the loan amount of $32,500 with the fair value of the warrants of $1,234 and the loan terms interest rate equal to the greater of (i) The SOFR, and(ii)4.0% plus a margin of 7.75%. The implied internal rate of return of the loan resulted with B rating U.S. dollar zero coupon discount curve plus a 11.473% credit curve. Interest expense related to the Callodine Loan Facility that measured at amortized cost were recorded within “Interest expense” in the consolidated statements of comprehensive loss.

NOTE 7:- DEBT (Cont.)

On August 15, 2025, the Company did not meet one of the financial covenants under the Credit Agreement. Upon an Event of Default (as defined in the Credit Agreement) under the Credit Agreement, interest shall accrue to at a rate per annum equal to the lesser of (i) three percent (3%) over the Contract Rate (as defined in the Credit Agreement), or (ii) the maximum rate of interest permitted to be charged by applicable laws or regulations, until paid. The Company notified Callodine of its intention to utilize an Equity Cure (as defined in the Credit Agreement) to address the event of default.

On November 5, 2025, the Company entered into an Amendment to the Credit Agreement with the Lenders. Among other things, the amendment (i) resets financial covenants and waives financial-covenant testing for the second and third quarters of 2025; (ii) replaces the minimum cash covenant with a $10,000 minimum consolidated unencumbered liquid assets covenant; (iii) adds monthly 13-week cash-flow reporting when liquidity is below certain amount (subject to an EBITDA exception); (iv) clarifies that Tranche B is uncommitted and at lender discretion; and (v) increases the exit fee by $150 (waived if a change-of-control prepayment fee is triggered). In connection therewith, the Company repriced the Warrant to purchase up to 105,707 shares of Common Stock issued to the lenders on April 30, 2025, at an exercise price $16.56 per share, to permit an amendment to the exercise price of such Warrants to $15.35. In addition, conversion right of the lender in the amount of $2,500 was amended to a conversion price of $15.35 per share.

During the year ended December 31, 2025, the Company recorded interest expenses related to the Callodine Loan Facility in the amount of $3,020.

Avenue Loan Facility (Repaid)

On April 30, 2025, the Company Extinguished and repaid in full its $30,000 Avenue Loan Facility, which was originally entered into on May 1, 2023, in connection with the closing of the new Callodine Loan Facility. The Avenue Loan Facility was afour-year secured credit facility by and between the Company and its subsidiary PsyInnovations Inc., collectively as the borrowers, and Avenue Venture Opportunities Fund II, L.P. and Avenue Venture Opportunities Fund, L.P., collectively as the lenders (the "Avenue Lenders").

The Company concluded that Avenue Loan Facility and the Warrant are freestanding financial instruments since these instruments are legally detachable and separately exercisable. The Company has concluded that the Warrant meets all the conditions to be classified as equity pursuant to ASC 480 and ASC 815-40. In addition, the Company elected to account for the Avenue Loan Facility under the fair value option in accordance with ASC 825, “Financial Instruments.” Under the fair value option, changes in fair value are recorded in earnings except for fair value adjustments related to instrument specific credit risk, which are recorded as other comprehensive income or loss. As such, the proceeds were first allocated to the Avenue Loan Facility at fair value in the amount of $28,215 and the remaining amount of $1,389 was allocated to the Warrant.

The Company remeasurement expenses related to the Avenue Loan for the year ended December 31, 2025 were $1,077, compared to $378 of remeasurement income for the year ended December 31, 2024, which were included as part of the Other financial expenses (income), net in the Company's statements comprehensive loss. During the years ended December 31, 2025, and December 31, 2024, the Company did not recognize any instrument specific credit risk fair value adjustment.

NOTE 7: - DEBT (Cont.)

Orbimed Warrants

On June 9, 2022 the Company entered into a Credit Agreement, with OrbiMed Royalty and Credit Opportunities III, LP (“Orbimed”), as the lender for afive-year senior secured credit facility in an aggregate principal amount of up to$50 million, of which$25 million was made available on the closing date and up to$25 million was to be made available on or prior to June 30, 2023, subject to certain revenue requirements (the “Orbimed Loan”).

On June 9, 2022 (the closing date of the Orbimed Loan, which was repaid in May 2023), the Company agreed to issue Orbimed a warrant (the “Orbimed Warrant”) to purchase up to 11,330 shares of the Company’s Common Stock, at an exercise price of$132.40 per share, which shall have a term of 7 years from the issuance date. The Orbimed Warrant contains customary share adjustment provisions, as well as weighted average price protection in certain circumstances but in no event will the exercise price of the Warrant be adjusted to a price less than$80.00 per share. Following the issuance and sale of the Company’s Series C Preferred Stock in February 2024, and as a result of a certain price protection provision in the Orbimed Warrant, the exercise price of the Orbimed Warrant was adjusted to a price per share of$80.00.

The Company has concluded that the Orbimed Warrant is not indexed to the Company's own stock and should be recorded as a liability measured at fair value with changes in fair value recognized in earnings. The Company remeasurement income related to the Orbimed Warrant for the year ended December 31, 2025, were$29, compared to$168 for the year ended December 31, 2024.

Pre-funded warrants

On February 15, 2024, as part of the acquisition of Twill (See note 4) the Company issued Pre-Funded Warrants to purchase up to 500,020 shares of Company Common Stock, issuable to a trust (the “Trust”) formed for the benefit of certain equity and debt holders of Twill.

The Company has classified the Pre-Funded Warrants as liability pursuant to ASC 815-40 since the Pre-Funded Warrants do not meet all the equity classification conditions. Accordingly, the Company measured the Pre-Funded Warrants at their fair value. The warrants liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of comprehensive loss.

In November 2024, a total of 125,005 Pre-Funded Warrants were cashlessly exercised into 124,991 shares of Common Stock.

In February 2025, a total of 125,005 Pre-Funded Warrants were cashlessly exercised into 124,985 shares of Common Stock.

In August 2025, a total of 125,005 Pre-Funded Warrants were cashlessly exercised into 124,981 shares of Common Stock.

During the year ended December 31, 2025 and December 31, 2024, the Company recognized $1,652 and $16,336, respectively, of remeasurement income related to the Pre-Funded Warrants. The estimated fair value of the Pre-Funded Warrants liabilities is determined using observable market inputs, primarily the quoted market price of the Company’s common stock, and is classified within Level 2.

NOTE 8:- FAIR VALUE MEASUREMENTS

Under U.S. GAAP, fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants and requires that assets and liabilities carried at fair value are classified and disclosed in the following three categories:

The availability of observable inputs can vary from instrument to instrument and is affected by a wide variety of factors, including, for example, the type of investment, the liquidity of markets and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment, and the investments are categorized as Level 3.

The carrying amounts of cash and cash equivalents, short-term restricted bank deposits, trade receivables, other accounts receivable and prepaid expenses, trade payables and other accounts payable and accrued expenses approximate their fair value due to the short-term maturity of such instruments. In addition, the Callodine Loan Facility approximates its fair value. The Orbimed Warrant liability was measured at fair value using Level 3 unobservable inputs. On May 1, 2023, the Company refinanced its former$25,000 credit facility with a new$30,000 credit facility (the “Avenue Loan Facility”) by and between the Company and its subsidiary PsyInnovations Inc., collectively as the borrowers and Avenue Venture Opportunities Fund II, L.P. and Avenue Venture Opportunities Fund, L.P., collectively as the lenders (the “Avenue Lenders”). The Avenue Loan Facility was also measured at fair value using level 3 inputs unobservable inputs until the payoff date of April 30, 2025.

NOTE 8:- FAIR VALUE MEASUREMENTS (Cont.)

The following tables present information about the Company’s financial liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values:

Orbimed Warrant Liability

The fair value of the Orbimed Warrant liability was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The fair value of the Orbimed Warrant liability is estimated by the Company based on the Monte-Carlo simulation valuation technique, in order to predict the probability of different outcomes that rely on repeated random variables.

NOTE 8:- FAIR VALUE MEASUREMENTS (Cont.)

The following inputs were used to estimate the fair value of the Orbimed Warrant liability:

*Loan Facilities -*Avenue Loan Facility

The fair value of the Avenue Loan Facility was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Avenue Loan Facility fair value estimate incorporates comparisons to instruments with similar covenants, collateral, and risk profiles and was obtained using a discounted cash flow technique. The fair value of the Avenue Loan Facility, as of April 30, 2025, was estimated using a discount rate of 19% which reflects the internal rate of return of the Avenue Loan Facility at closing, as of May 1, 2023. For the years ended December 31, 2025 and, 2024, the change in the fair value of the loan was recorded in earnings since the Company concluded that the change in fair value was not related to instrument-specific credit risk. On April 30, 2025, the Company refinanced the Avenue Loan Facility with a new credit agreement, and the Avenue Loan Facility was repaid in full (see Note 7).

The following tables present the summary of the changes in the fair value of our financial instruments:

NOTE 9:- LEASES

The Company has entered into various non-cancelable operating lease agreements for certain of its offices and car leases. The Company's leases have original lease periods expiring between 2025 and 2028. Many leases include one or more options to renew. The Company does not assume renewals in determination of the lease term unless the renewals are deemed to be reasonably certain at lease commencement. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of lease costs, lease term and discount rate are as follows:

The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2025:

Supplemental cash flow information related to leases are as follows:

NOTE 10:- PROPERTY AND EQUIPMENT, NET

Composition of assets, grouped by major classification, is as follows:

Depreciation expenses for the year ended December 31, 2025, and 2024 amounted to $307 and $466, respectively.

NOTE 11:- OTHER INTANGIBLE ASSETS**,** NET

NOTE 11:- OTHER INTANGIBLE ASSETS**,** NET (Cont.)

c. Amortization expenses for the years ended December 31, 2025 and December 31, 2024 amounted to $2,831 and $6,100, respectively.

NOTE 12:-GOODWILL

The following table set forth the changes in the carrying amount of the Company’s goodwill during the year ended December 31, 2025 and the year ended December 31, 2024 (in thousands):

NOTE 13:- OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES

NOTE 14:- COMMITMENTS AND CONTINGENT LIABILITIES

From time to time, the Company is involved in claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss.

Royalties

The Company has a liability to pay future royalties to the Israeli Innovation Authority (the “IIA”) for participation in programs sponsored by the Israeli government for the support of research and development activities. The Company is obligated to pay royalties to the IIA, amounting to 3% of the sales of the products and other related revenues (based on the U.S. dollar) generated from such projects, up to 100% of the grants received. Royalty payment obligations also bear interest at the LIBOR rate. The obligation to pay these royalties is contingent on actual sales of the products and in the absence of such sales, no payment is required.

In connection with specific research and development activities, Physimax Technology (“Physimax”), prior to its acquisition by the Company, received $1,012 of participation payments from the IIA. The Company’s total commitment for royalties payable with respect to future sales, based on IIA participations received, net of royalties accrued or paid, totaled $976 as of December 31, 2025.

During the year ended December 31,2025 and the year ended December 31, 2024 the company recorded IIA royalties related to the acquisition of Physimax Technology in amount of $1 and $2, respectively.

NOTE 15:- TAXES ON INCOME

The Company and its subsidiaries are separately taxed under the domestic tax laws of the country of incorporation of each entity.

Tax rates applicable to Labstyle:

The Corporate tax rate in Israel in 2025 and 2024 was 23%.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the United States. The Act contains certain provisions related to the extent of deductibility for U.S. federal tax purposes of interest expense, R&D costs and other depreciable property, as well as changes to U.S. taxation of foreign subsidiaries’ earnings, and other U.S. corporate tax law changes. Pursuant to ASC 740, changes in tax rates and tax law are required to be recognized in the period in which the legislation is enacted. Dario** **evaluated the impact of this Act on its annual consolidated financial statements and related disclosures and concluded the Act does not have a material impact on its 2025 consolidated financial statements.

Net operating loss carryforward:

Labstyle has accumulated net operating losses for Israeli income tax purposes as of December 31, 2025, in the amount of approximately $273,548. The net operating losses may be carried forward and offset against taxable income from business in the future for an indefinite period.

As of December 31, 2025, the Company, WayForward and Twill had respective U.S. federal net operating loss carryforwards of approximately $47,055, $5,803, and $156,686 of which $7,120, $371 and $18,832 were generated from tax years 2011-2017. The 2011-2017 losses can be carried forward and used to fully offset taxable income, and expire during the years 2031 to 2037. However, under IRC_Sections 382 and 383, utilization of the U.S. loss carryforward may be subject to substantial annual limitation due to the “change in ownership” provisions of the Code and similar state provisions. The annual limitations may result in the expiration of losses before utilization. A "change in ownership" occurred during 2024 when Twill was acquired by Dario, resulting in a limitation of $2,316 per year.

The remaining NOLs of the Company, WayForward and Twill are approximately $39,935, $5,432 and $137,854, and were generated in years 2018-2025. Such losses can only be used to offset 80% of taxable income, but are carried forward indefinitely (i.e., they should not expire). Utilization of the federal and state net operating losses and credits may be subject to a substantial annual limitation due to any additional ownership change.

The annual limitation may result in the expiration of certain net operating losses and credits before utilization. In the event the Company has an additional change of ownership, utilization of the carryforwards could be further restricted.

Deferred income taxes:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:

The deferred tax balances included in the consolidated financial statements as of December 31, 2025, and December 31, 2024, are calculated according to the tax rates that were in effect as of the reporting date and do not take into account the potential effects of the changes in the tax rate.

The net change in the total valuation allowance for the year ended December 31, 2025, and December 31, 2024, was an increase of $19,154 and $18,886, respectively and is mainly relates to increase in deferred taxes on net operating loss for which a full valuation allowance was recorded. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences and tax loss carryforward are deductible. Management considers the projected taxable income and tax-planning strategies in making this assessment. In consideration of the Company’s accumulated losses and the uncertainty of its ability to utilize its deferred tax assets in the future, management currently believes that it is more likely than not that the Company will not realize all of its deferred tax assets and accordingly recorded a valuation allowance to offset the deferred tax assets.

Loss before taxes on income consists of the following:

Income tax expense (benefit) was as follows:

For the year 2024, the main reconciling item between the statutory tax rate of the Company and the effective tax rate is the recognition of valuation allowance in respect of deferred taxes relating to accumulated net operating losses carried forward due to the uncertainty of the realization of such deferred taxes.

NOTE 16:- STOCKHOLDERS’ EQUITY

The holders of Common Stock have the right to one vote for each share of Common Stock held of record by such holder with respect to all matters on which holders of Common Stock are entitled to vote, to receive dividends as they may be declared at the discretion of the Company’s Board of Directors and to participate in the balance of the Company’s assets remaining after liquidation, dissolution or winding up, ratably in proportion to the number of shares of Common Stock held by them after giving effect to any rights of holders of preferred stock. Except for contractual rights of certain investors, the holders of Common Stock have no pre-emptive or similar rights and are not subject to redemption rights and carry no subscription or conversion rights.

On July 23, 2025, the Company’s stockholders voted to approve an amendment to the Certificate of Incorporation of the Company to increase the number of authorized Common Stock from one hundred sixty million (160,000,000) shares, $0.0001 par value per share, to four hundred million (400,000,000) shares, $0.0001 par value per share.

On September 22, 2025, the Company entered into securities purchase agreements with accredited investors relating to an offering and the sale of an aggregate of 1,154,420 shares of Common Stock and pre-funded warrants to purchase up to 1,558,760 shares of Common Stock, at a purchase price of $6.45 per share and $6.45 per pre-funded warrant. As a result of the purchase agreements, the aggregate gross proceeds to the Company are approximately $17,500. The closing of the offering was completed on September 23, 2025. The pre-funded warrants are exercisable immediately upon issuance and remain exercisable until exercised in full. The pre-funded warrants were indexed to the Company’s own stock and are classified as equity instruments upon issuance.

Pre-Funded Warrant Exercises

During fiscal year 2025, a total of 49,781 pre-funded warrants were exercised on a cashless basis into 49,714 shares of Common Stock. During fiscal year 2024, a total of 34,365 pre-funded warrants, originally issued in July 2020, were exercised on a cashless basis into 34,363 shares of Common Stock.

Preferred Stock

Series A and B Preferred Stock

On June 25, 2024, following the approval of the necessary preferred holders, the Company modified the terms of the Series B and B-1 preferred stock to (i) extend the mandatory conversion period from fifteen (15) to eighteen

(18) months from the original issue date and (ii) increase the percentage of dividends the holders of the preferred stock will be entitled to receive by including a dividend of ten percent (10%) for the fifth full quarter from the closing date and a dividend of twenty five percent (25%) for the sixth quarter from the closing date.

On September 11, 2024, following the approval of the necessary preferred holders, the Company modified the terms of the Series B-3 preferred stock to (i) extend the mandatory conversion period from fifteen (15) to eighteen (18) months from the original issue date and (ii) increase the percentage of dividends the holders of the preferred stock will be entitled to receive by including a dividend of ten percent (10%) for the fifth full quarter from the closing date and a dividend of twenty five percent (25%) for the sixth quarter from the closing date.

The Company concluded that the Series B, B-1 and B-3 preferred shares modification should be accounted for as an extinguishment transaction. As such, the Company recorded the modified preferred shares at their fair value and derecognized the carrying amount of the previous unmodified shares, resulting in a deemed contribution of $12,194.

In November, on the 18-month anniversary of the Series B, B-1 and B-3 Effective Date,5,950 Series B,3,000 B-1 and 406 B-3 Preferred Stock converted into 138,311,69,737 and 9,277 shares of Common Stock.

During the year ended December 31, 2024, the Company accounted for the dividend shares of common stock upon the deferred conversion of the Series B, B-1, B-2, and B-3 Convertible Preferred Stock as a deemed dividend in a total amount of $2,953.

In April and June 2024, a total of 700 and 250 of certain Series B Convertible Preferred Stock were converted into 11,867 and 4,500 shares of Common Stock, respectively, including the issuance of dividend shares. In addition, during the year ended December 31, 2024, the Company recorded deemed dividend in the amount of $616 with respect to the Series B convertible Preferred Stock.

In August 2024,150 Series B-2 Preferred Stock automatically converted into 2,894 shares of Common Stock after the completion of the fifteen (15)-month anniversary of the Series B-2 Preferred Stock. The conversion included accumulative dividends payable upon conversion of Series B-2 Preferred Stock.

On May 20, 2025, the Company, upon obtaining the vote of a majority of the holders of the relevant classes of preferred stock, filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series A-1 Preferred Stock (the “Series A-1 Certificate of Designation”) and a Third Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series B-1 Preferred Stock (the “Series B-1 Certificate of Designation”, collectively, with the Series A-1 Certificate of Designation, the “Certificates of Designation”), all with the Secretary of State of the State of Delaware. The Series A-1 Certificate of Designation and Series B-1 Certificate of Designation were amended to provide the holders of such shares of preferred stock to request certain dividends and distributions to be made in the form of pre-funded Common Stock purchase warrants rather than shares of the Company’s Common Stock.

In March 2025, a total of 1,675 shares of certain Series A-1 Convertible Preferred Stock were converted into 38,980 shares of Common Stock.

On September 18, 2025, the Company upon obtaining the vote of a majority of the holders of the relevant classes of preferred stock and the approval of the Company’s Board of Directors, filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series A-1 Preferred Stock with the Secretary of State of the State of Delaware. The Series A-1 Certificate of Designation was amended to provide holders with the option to receive pre-funded warrants in lieu of Common Stock.

In September 2025, all outstanding shares of Series A-1 Preferred Stock and B-1 Preferred Stock, totaling 1,882 and 4,946 shares, were converted into 43,803 and 114,974 shares of Common Stock, respectively, and as of September 30, 2025, no Series A-1 Preferred Stock and B-1 Preferred Stock remains outstanding.

Series C, C-1 and C-2 Preferred Stock

In February 2024, the Company issued 17,307,4,000 and 1,115 Series C, C-1 and C-2 preferred shares, respectively, at a purchase price of $1,000 per preferred share. The Series C and C-1 Preferred Stock are convertible into Common Stock at $40.40 per Common Stock. The Series C-2 Preferred Stock is convertible into Common Stock at $42.80 per Common Stock. As a result of the issuance of the preferred stock, the aggregate gross proceeds to the Company from the offering were approximately $22,422.

On May 20, 2025, the Company, upon obtaining the vote of a majority of the holders of the relevant classes of preferred stock, filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series C Preferred Stock (the “Series C Certificate of Designation”), an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series C-1 Preferred Stock (the “Series C-1 Certificate of Designation”), and an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series C-2 Preferred Stock (the “Series C-2 Certificate of Designation”, collectively with the Series C Certificate of Designation and the Series C-1 Certificate of Designation, the “Series C Certificates of Designation”), all with the Secretary of State of the State of Delaware.

The Series C Certificates of Designation were amended to extend the mandatory conversion period from fifteen (15) to twenty-four (24) months from the original issue date. The Company will issue a dividend equal to fifteen percent (15%) of the number of shares of Common Stock issuable upon conversion of the Series C Preferred Stock, Series C-1 Preferred Stock and/or Series C-2 Preferred Stock then held by such holder for each full quarter anniversary of holding following the filing of the Series C Certificates of Designation with the Secretary of State of the State of Delaware.

The Company concluded that the Series C, C-1 and C-2 preferred shares modification should be accounted for as a modification transaction. For the year ended December 31, 2025, the Company recorded the increase in fair value as a deemed dividend in the amounts of $734 respectively.

On September 18, 2025, the Company upon obtaining the vote of a majority of the holders of the relevant classes of preferred stock and the approval of the Company’s Board of Directors, filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series C Preferred Stock, an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series C-2 Preferred Stock, an Amended and Restated Certificate of Designation of Preferences, all with the Secretary of State of the State of Delaware.

The Series C Certificates of Designation were amended to accelerate the mandatory conversion period of all outstanding shares of each such series into shares of the Company’s Common Stock, or at each holder’s election in pre-funded warrants, effective as of September 18, 2025. On September 25, 2025, the Company, upon obtaining the vote of a majority of the holders of the relevant classes of preferred stock and the approval of the Company’s Board of Directors, filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series C-1 Preferred Stock with the Secretary of State of the State of Delaware. The Series C-1 Certificate of Designation was amended to accelerate the mandatory conversion period of all outstanding shares of such series into shares of the Company’s Common Stock, or at each holder’s election in pre-funded warrants, effective as of September 25, 2025.

In connection with such mandatory conversion, each holder of preferred stock will also receive all accrued and unpaid dividends, including any dividend shares or payment-in-kind shares, in addition to the conversion shares issuable upon conversion, subject to certain beneficial ownership blockers. The filings the certificates of designations were intended to amend and restate the terms mentioned above, and no additional securities were issued or sold as a result.

Conversion activity:

In May, September and November 2024, a total of 100,25 and 20 shares of certain Series C Convertible Preferred Stock were converted into 2,475,711 and 606 shares of Common Stock, respectively.

In February, April, May and June 2025, a total of 1,270 shares of certain Series C Convertible Preferred Stock were converted into 44,422, shares of Common Stock, respectively.

In September 2025, all outstanding shares of Series C, C-1 and C-2 Preferred Stock, totaling 20,957 shares, were converted into 982,845 shares of Common Stock, and as of September 30, 2025, no Series C, C-1 and C-2 Preferred Stock remains outstanding.

During the year ended December 31, 2025, the Company accounted for the dividend shares of Common Stock upon the dividend shares earned by Series C, C-1 and C-2 Preferred Stock as a deemed dividend in a total amount of $6,001. For the year ended December 31, 2024, the Company accounted for the dividend shares as a deemed dividend in a total amount of $6,542, respectively.

Series D, D-1, D-2 and D-3 Preferred Stock

In December 2024, the Company issued 7,055 and 11,750 Series D and D-1 preferred shares, respectively, at a purchase price of $1,000 per preferred share. The Series D and D-1 Preferred Stock were convertible into Common Stock at $14.60 per Common Stock. As a result of the sale of the preferred stock, the aggregate gross proceeds to the Company from the offering were approximately $18,805.

According to the original certificates of designation, the preferred stock will automatically convert into shares of Common Stock, subject to certain beneficial ownership limitations, including a non-waivable 19.99% ownership blocker, on the 12-month anniversary of the issuance date. The holders of preferred stock will also be entitled to dividends equal to a number of shares of Common Stock equal to ten percent (10%) of the number of shares of Common Stock issuable upon conversion of the preferred stock then held by such holder for each full quarter anniversary of holding for a total of four (4) quarters from the Closing Date, all issuable upon conversion of the preferred stock.

On January 7, 2025, the Company entered into securities purchase agreements (each, a “Series D Purchase Agreement”) with accredited investors relating to an offering (the “Series D Offering”) and the sale of an aggregate of (i)4,950 shares of newly designated Series D-2 Preferred Stock (the “Series D-2 Preferred Stock”), and (ii)1,850 shares of Series D-3 Preferred Stock (the “Series D-3 Preferred Stock”), at a purchase price of $1,000 for each share of preferred stock. As a result of the sale of the preferred stock, the aggregate gross proceeds to the Company from the Series D Offering were approximately $6,800. The closing of the Series D-2 Preferred Stock, and Series D-3 Preferred Stock occurred on January 14, 2025.

The conversion of the preferred stock was subject to stockholder approval. In addition, according to the original certificates of designation, the preferred stock will automatically convert into shares of Common Stock, subject to certain beneficial ownership limitations, on the 12-month anniversary of the issuance date. The holders of preferred stock will also be entitled to dividends equal to a number of shares of Common Stock equal to ten percent (10%) of the number of shares of Common Stock issuable upon conversion of the preferred stock then held by such holder for each full quarter anniversary of holding for a total offour quarters from the Closing Date, all issuable upon conversion of the preferred stock.

On April 28, 2025, the Company held a special meeting of stockholders in which the stockholders approved the (A) the issuance of shares of Common Stock, in excess of 20% of the issued and outstanding shares of Common Stock, upon: (i) the conversion of 25,605 shares of our Series D, D-1, D-2 and D-3 Preferred Stock into an aggregate of 1,697,677 shares of Common Stock, which were issued pursuant to private placement transactions that closed on December 18, 2024 and January 14, 2025, (ii) the issuance of up to 679,085 shares of Common Stock issuable as dividends to the Series D, D-1, D-2 and D-3 Preferred Stock; and (iii) the issuance of up to 208,754 shares of Common Stock issuable as share consideration provided under the Lock Up Agreements; and (B) (i) reduce the exercise price of certain warrants to purchase 29,246 shares of Common Stock issued to the Avenue Lenders to $14.42 per share, and (ii) to permit the conversion of up totwo million dollars of the principal amount of the loan issued by the Avenue Lenders to us at a conversion price of $17.30 per share. The Avenue loan facility was repaid in full (see Note 7).

On September 18, 2025, the Company upon obtaining the vote of a majority of the holders of the relevant classes of preferred stock and the approval of the Company’s Board of Directors, filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series D Preferred Stock, Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series D-1 Preferred Stock, an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series D-2 Preferred Stock, and an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Company’s Series D-3 Preferred Stock, all with the Secretary of State of the State of Delaware. The Series D Certificates of Designation were amended to accelerate the mandatory conversion period of all outstanding shares of each such series into shares of the Company’s Common Stock, or at each holder’s election in pre-funded warrants, effective as of September 18, 2025.

In September 2025, all outstanding shares of Series D, D-1, D-2 and D-3 Preferred Stock, totaling 25,605 shares, were converted into 1,600,043 and 776,719 shares of Common Stock and pre-funded warrants, respectively, and as of September 30, 2025, no shares of Series D, D-1, D-2 and D-3 Preferred Stock remains outstanding.

During the year ended December 31, 2025, the Company accounted for the dividend shares of Common Stock upon the dividend shares earned by Series D and D-1 Preferred Stock as a deemed dividend for an amount of $10,154.

During the year ended December 31, 2024, the Company accounted for the dividend shares of Common Stock upon the dividend shares earned by Series D and D-1 Preferred Stock as a deemed dividend in a total amount of $318.

During the year ended December 31, 2025, the Company accounted for the dividend shares of Common Stock upon the dividend shares earned by Series D-2 and D-3 Preferred Stock as a deemed dividend for an amount of $2,261.

In December 2024, the Company and certain purchasers in the offering that are holders of the Company's Series B and C Preferred Stock executed lock up agreements (the “Lock Up Agreement”), pursuant to which the Company agreed to issue, subject to stockholder approval, up to forty percent (40%)of the shares of Common Stock conversion shares of the preferred stock held by such purchaser, including dividend shares of Common Stock due upon conversion of these shares into shares of Common Stock, over the course of twelve (12)months (the “Additional Shares”). Each holder shall be entitled to receive 10% of the Additional Shares for each three (3)month period each holder agrees not to transfer or otherwise sell (subject to certain limitations) the shares of Common Stock issuable upon conversion of the Series B Preferred Stock and Series C Preferred Stock and the dividend shares of Common Stock due upon conversion.

Between May 23, 2025 and May 28, 2025, the Company and holders that previously entered into the Lock-Up Agreement, entered into an Amended and Restated Lock-Up Agreement (the “A&R Lock-Up Agreement”) pursuant to which the holders agreed to extend the restrictive period previously provided in the Lock-Up Agreements until February 21, 2026 (the “Lock-Up Period”) for the right to receive an additional 10% of the Common Stock underlying the Series B Preferred Stock and the Series C Preferred Stock held by the holders.

The Company concluded that the A&R Lock-Up Agreement modification should be accounted for as a modification transaction. For the year ended December 31, 2025, the Company recorded the increase in fair value as a deemed dividend in the amount of $870 respectively.

On October 20, 2025, the Company and holders that previously entered into the Lock-Up Agreement entered into a Second Amended and Restated Lock-Up Agreement (the “Second A&R Lock-Up Agreement”) pursuant to which the Lock-Up Period shall automatically terminate, and all share consideration shall be accelerated and immediately be issued by the Company in full (to the extent not already issued) upon (A) any merger or consolidation of the Company with or into another individual, entity, corporation, partnership, association, limited liability company, limited liability partnership, joint-stock company, trust or unincorporated organization, (B) any sale of all or substantially all of the Company’s assets in one transaction or a series of related transactions, or (C) any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property.

On October 14, 2020, the Company’s stockholders approved the 2020 Plan. Under the 2020 Plan, options to purchase shares of Common Stock may be granted to employees and non-employees of the Company or any affiliate, each option granted can be exercised toone share of Common Stock.

In January 2024, pursuant to the terms of the 2020 Plan as approved by the Company's stockholders, the Company increased the number of shares authorized for issuance under the 2020 Plan by 124,688 shares, from 293,143 to 417,831.

In June 2024, pursuant to the terms of the 2020 Plan as approved by the Company's stockholders, the Company increased the number of shares authorized for issuance under the 2020 Plan by 150,000 shares, from 417,831 to 567,831.

In January 2025, pursuant to the terms of the 2020 Plan as approved by the Company’s stockholders, the Company increased the number of shares authorized for issuance under the 2020 Plan by 327,052 shares, from 567,832 to 894,883.

On July 23, 2025, the Company’s stockholders resolved to amend and restate the Company’s 2020 Plan, to (i) provide that for each of the calendar years ending on December 31, 2026, December 31, 2027, December 31, 2028, December 31, 2029 and December 31, 2030, the number of shares available under the 2020 Plan shall be increased by an additional number of shares of the Company’s Common Stock, equal to six percent (6%) of the number of shares of Common Stock issued and outstanding on a fully diluted basis on the immediately preceding December 31; and (ii) authorize the grant of restricted stock units as a permissible form of award under the 2020 Plan.

2025 Grants

Employees, Directors & Officers, and Consultants: During 2025, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) approved grants of an aggregate of 364,951 restricted shares of Common Stock (including 4,000 performance-based restricted shares) to employees, consultants, officers and directors of the Company, and approved grants of options to purchase an aggregate of 86,224 shares of Common Stock (including 8,750 performance-based options) to employees and consultants of the Company, at exercise prices ranging from $9.31 to $15.69 per share. The time-vesting restricted shares and stock options vest over various periods ranging fromtwo tothree years commencing on the respective grant dates, and the options have aten-year contractual term. All such restricted shares and options were issued pursuant to the Company’s Amended and Restated 2020 Equity Incentive Plan, as amended (the “2020 Plan”). In addition, during 2025, the Compensation Committee approved an amendment to certain previously issued restricted stock awards to accelerate the vesting of 1,750 previously unvested restricted shares.

Service Providers: During 2025, the Compensation Committee approved grants of an aggregate of 291,500 restricted shares of Common Stock to certain service providers. Such restricted shares vest over various periods, including up tosix months.

2024 Grants

Employees, Officers, Consultants & Directors: During 2024, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) approved grants of an aggregate of 155,344 restricted shares of Common Stock subject to time-based vesting to employees, officers and directors of the Company, and approved grants of options to purchase an aggregate of 235,431 shares of Common Stock (including 31,000 performance-based options) to employees, officers and consultants of the Company, at exercise prices ranging from $16.00 to $42.80 per share. The time-vesting restricted shares and stock options vest over various periods ranging fromone tothree years commencing on the respective grant dates, and the options have aten-year contractual term. All such restricted shares and options were issued pursuant to the Company’s Amended and Restated 2020 Equity Incentive Plan, as amended (the “2020 Plan”).

In May 2024, the Compensation Committee approved the grant of a non-qualified stock option to purchase up to 112,500 shares of Common Stock as an inducement grant to the new Chief Commercial Officer. Out of the 112,500 shares of Common Stock,25,000 shares will vest over three years, withone third of such shares vesting on June 1, 2025, and the remaining shares vesting in equal quarterly amounts during the followingtwo years.87,500 of the options are performance-based and will commence vesting upon reaching certain performance goals during the fiscal years between 2024 and 2027. Each performance option will vest over athree-year period commencing on the first day of the following fiscal year to which such option relates, ineight equal quarterly instalments. As of December 31, 2025, performance conditions related to 42,500 of the performance-based options had not been achieved and, accordingly, such options had not vested. No stock-based compensation expense had been recognized for the performance-based options, as management concluded that the applicable performance conditions were not considered probable as of that date.

2025 Warrant Activity

In February 2025, the Compensation Committee approved the grant of warrants to purchase up to 52,500 shares of Common Stock, with exercise prices of $12.80 per share, to certain consultants. The warrants are exercisable into shares of Common Stock on or before February 10, 2028.

In April 2025, the Compensation Committee approved a reduction in the exercise price of warrants to purchase up to 17,813 shares of Common Stock issued to certain consultants in the past at exercise prices between $28.60 to $40.00 per share, to an exercise price of $15.60 per share. The warrants are exercisable into shares of Common Stock on or before February 12, 2026 and December 31, 2027.

On April 28, 2025, prior to the repayment of the Avenue Loan Facility, the Company's stockholders approved a reduction to the exercise price of warrants to purchase 29,246 shares of Common Stock issued to the Avenue Lenders from $40.40 to $14.42 per share. The Company recognized the incremental fair value resulting from the modification in the amount of $102. The Avenue loan facility was repaid in full (see Note 7).

In June 2025, the Compensation Committee approved the grant of warrants to purchase up to 22,500 shares of Common Stock, with exercise prices of $13.40 per share, to certain consultants. The warrants are exercisable into shares of Common Stock on or before June 1, 2028.

2024 Warrant Activity

In April 2024, the Compensation Committee approved the grant of warrants to purchase up to 73,563 shares of Common Stock, with exercise prices between $28.60 to $40.00 per share, to certain consultants. The warrants are exercisable into shares of Common Stock on or before December 31, 2026. In addition, the Compensation Committee approved a reduction in the exercise price of warrants to purchase up to 35,000 shares of Common Stock issued to certain consultants in the past at exercise prices between $104.00 to $129.00 per share, to an exercise price of $32.00 per share. During the year ended December 31, 2024, the Company recorded stock-based compensation expenses related to those repriced warrants at the amount of $332.

In August 2024, the Compensation Committee approved the grant of warrants to purchase up to 30,000 shares of Common Stock subject to time vesting ofone totwo years, with exercise prices of $18.60 per share to certain consultants. Out of the warrants to purchase 30,000 shares of Common Stock,5,000 shares are exercisable into Common Stock on or before December 31, 2027, and 25,000 shares are exercisable into Common Stock on or before August 31, 2029. In addition, the Compensation Committee approved the grant of performance-based warrants to purchase up to 40,000 shares of Common Stock, with exercise prices of $18.60 per share to a certain consultant. The warrants are exercisable into Common Stock on or before August 31, 2029. Management's assumption is that it is not probable that the condition will be met. During the year ended December 31, 2024, the Company recorded stock-based compensation expenses related to the warrants at the amount of $67.

In November 2024, the Compensation Committee approved the grant of warrants to purchase up to 23,483 shares of Common Stock, with an exercise price of $18.95 per share to a certain consultant. The warrants are exercisable into Common Stock on or before thefive years anniversary of the grant date. During the year ended December 31, 2024, the Company recorded stock-based compensation expenses related to the warrants at the amount of $46.

In December 2024, the Compensation Committee approved a reduction in the exercise price of warrants to purchase up to 44,063 shares of Common Stock issued to certain consultants in the past at exercise prices between $32.00 to $240.00 per share, to an exercise price of $14.00 per share. During the year ended December 31, 2024, the Company recorded stock-based compensation expenses related to those repriced warrants at the amount of $164.

On February 15, 2024, the Company executed a consulting agreement with a former officer of Twill. Pursuant to the terms of the consulting agreement, the Company agreed to issue to the former officer of Twill 17,500 fully vested RSUs.

On June 25, 2024, the stockholders of the Company approved the issuance of certain restricted shares of Common Stock and warrants of the Company, under certain consulting agreements with former officers and directors of Twill. Pursuant to the terms of the consulting agreements, the Company agreed to issue to those former officers of Twill warrants to purchase up to 51,648 shares of the Company’s Common Stock, of which 35,898 are subject to time vesting and 15,750 are subject to certain performance-based metrics, with an exercise price of $51 and 19,179 fully vested RSUs. The 15,750 performance-based warrants expired upon conclusion of the Consulting Agreement.

During the years ended December 31, 2025 and 2024, the Company recorded share-based compensation expense related to these service providers in the amounts of $53 and $3,196, respectively. For the years ended December 31, 2025 and 2024, no share-based compensation expense was recorded related to the performance-based warrants.

On November 4, 2024, the Compensation Committee approved amendments to certain previously issued awards of restricted Common Stock in the aggregate amount of 3,438 and 12,500, respectively, granted to Mr. Erez Raphael, our Chief Executive Officer, and Mr. Zvi Ben David, our former Chief Financial Officer, in the aggregate amount of 1,188 and 6,250, respectively, on May 18, 2022 and March 6, 2024 (collectively, the "Prior Awards") to permit an immediate acceleration of the unvested portion of the Prior Awards in the event of change in control of the Company.

In December 2024, the Compensation Committee approved amendments to certain previously issued awards of restricted Common Stock in the aggregate amount of 8,800, granted to certain employees, to permit an immediate acceleration of the unvested portion of the Prior Awards.7,600 of the accelerated shares will be subject to a lockup until December 31, 2025. During the year ended December 31, 2024, the Company recorded stock-based compensation expenses related to the acceleration of the unvested portion of the Prior Awards at the amount of $75.

The table below summarizes the outstanding warrants as of December 31, 2025:

The fair value of the warrants is calculated using the black-Sholes model with the same assumptions applied to the stock options, as reflected in the stock option activity table below.

Transactions related to the grant of options to employees, directors and non-employees under the above plans and non-plan options during the year ended December 31, 2025 were as follows:

Weighted average grant date fair value of options granted during the year ended December 31, 2025, and 2024 is $8.83 and $15.11, respectively.

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price on the last day of fiscal 2025 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2025. This amount is impacted by the changes in the fair market value of the Common Stock. The average intrinsic value of the options exercised in 2025 and 2024 were $0 and $24, respectively.

The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model.

The assumptions used are determined as follows:

Volatility. The expected volatility was derived from the historical volatilities of the Company’s stock price over a period equivalent to the expected term of the stock option grants.

Expected Term. The expected term represents the period that the stock-based awards are expected to be outstanding. When establishing the expected term assumption, the Company utilizes the simplified method.

Risk-Free Interest Rate. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with terms similar to the expected term on the options.

Dividend Yield. The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and therefore, it used an expected dividend yield of zero.

The following table presents the assumptions used to estimate the fair values of the options granted to employees, non-employees and directors in the period presented:

As of December 31, 2025, the total unrecognized estimated compensation cost related to non-vested stock options and restricted shares granted prior to that date was $5,471, which is expected to be recognized over a weighted average period of approximately 1.10 years.

Transactions related to the movement of restricted shares of Common Stock to employees, directors, and non-employees under the above plans during the year ended December 31, 2025 were as follows:

(***) Including vested restricted shares.

Number of restricted shares vested during 2025 amounts to 58,158.

The fair value of the restricted shares granted during 2025 amounts to $3,177.

The total compensation cost related to all the Company’s equity-based awards, recognized during year ended December 31, 2025 and 2024 were comprised as follows:

NOTE 17:- SELECTED STATEMENTS OF OPERATIONS DATA

Other Financial expenses (income), net:

**NOTE 18:-**SEGMENT REPORTING

The Company identifies operating segments in accordance with ASC Topic 280, “Segment Reporting,” as components of an entity for which discrete financial information is available and is regularly reviewed by the chief operating decision maker, or decision-making group, in making decisions regarding resource allocation and evaluating financial performance.

The Company operates asone operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the CODM, which is the Company’s chief executive officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis. There is no expense or asset information that are supplemental to those disclosed in these consolidated financial statements, that are regularly provided to the CODM. The allocation of resources and assessment of performance of the operating segment is based on consolidated net loss as shown in our consolidated statement of comprehensive loss. The CODM considers net loss in the annual forecasting process and reviews actual results when making decisions about allocating resources. Since the Company operates asone operating segment, financial segment information, including profit or loss and asset information, can be found in the consolidated financial statements.

Geographic Information

•As of December 31, 2025, the majority of the Company’s long live assets are located in Israel and India, in the amounts of $1,066 and $171, respectively.

•As of December 31, 2025, the majority of the Company's revenue is generated in the U.S.

NOTE 19**: - BASIC AND DILUTED NET LOSS PER COMMON STOCK**

The Company computes net loss per share of common and preferred stock using the two-class method. Basic and diluted net earnings or loss per share is computed using the weighted-average number of shares outstanding during the period. This calculation includes the total weighted average number of the Common Stock, which includes prefunded warrants.

The total number of potential common shares related to the outstanding options, warrant and preferred shares excluded from the calculations of diluted net loss per share due to their anti-dilutive effect was 3,089,371 for the year ended December 31, 2025, and for the year ended December 31, 2024, was 1,783,543.

The following table sets forth the computation of the Company’s basic net earnings (loss) per common stock:

** **NOTE 20: - RELATED PARTIES TRANSACTIONS

In February 2025, the Company appointed a new non-executive director to its Board. The director is a member of a consulting firm that has provided investment and business consulting services to the Company since 2021 under a consulting agreement. Pursuant to the consulting agreement, the Company agreed to pay the consultant a monthly cash retainer upon the successful completion of certain milestones. In addition, the Company agreed to issue 7,500 restricted shares of** **Common Stock to the consulting firm, vesting quarterly over afour-year period. As of December 31, 2025, the consulting firm received approximately 12,900 shares of Common Stock and warrants to purchase up to 5,000 shares of Common Stock. In addition, in February 2025, the Company entered into a second amendment to the consulting agreement, pursuant to which it agreed to pay the consulting firm a fixed monthly cash retainer of $10. During the year ended December 31, 2025, the Company recorded share-based compensation expenses related to this service provider in the amounts of $168.

In September 2025, the Compensation Committee approved the grant of 20,000 restricted shares subject to time vesting to the director. The time-vesting restricted shares shall vest on the last day of the second-year anniversary commencing on the respective grant date. The restricted shares were issued under Amended and Restated 2020 Equity Incentive Plan, as amended (the “2020 Plan”).

NOTE 21:- SUBSEQUENT EVENTS