Company: DRTSW
Filing Date: 2025-03-12
Form Type: 20-F
Source: 0001213900-25-023187
Chunk: 300

Company: Alpha Tau Medical Ltd.
Filing Date: 2025-03-12
Form: 20-F
Item: Item 19
Chunk 300
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 SUBSIDIARIES

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

U. S. dollars
in thousands (except share and per share data)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

  Convertible Preferred shares and Convertible Preferred shares warrant liability:  

The Company’s
Preferred shares were considered a “freestanding financial instrument” pursuant to ASC 480 “ Distinguishing Liabilities
from Equity” and were redeemable in a deemed liquidation event, which is not under the control of the Company; thus, the Company
classified the shares outside permanent equity pursuant to ASC 480-10-S99.

The Company’s
Warrants to purchase the Company’s Convertible Preferred shares were considered a “freestanding financial instrument”
pursuant to ASC 480. The Warrants were classified as a liability on the balance sheet, initially and subsequently measured at fair value
through earnings, as the underlying shares are contingently redeemable (upon a deemed liquidation event, which is not under the Company’s
control) and, therefore, embody an obligation that is indexed to an obligation to repurchase the Company’s shares by transferring
assets. The change in fair value of the Warrants was recognized as a component of financial expenses, net, in the statements of operation
(see note 9).

On the Closing Date,
all Convertible Preferred shares were converted into Ordinary shares of the Company, and all Warrants to purchase Convertible Preferred
shares were converted into Warrants to purchase Ordinary shares of the Company.

  Ordinary share warrants classification and measurement:  
 ───────────────────────────────────────────────────────────

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, are indexed to the Company’s own stock and whether the Warrants are eligible for equity
classification under ASC 815-40. This assessment 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