6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of September 2023

Commission file number: 001-41760

ParaZero Technologies Ltd.

(Translation of registrant’s name into English)

30 Dov Hoz

Kiryat Ono, 5555626, Israel

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒        Form 40-F ☐

CONTENTS

This Report of Foreign Private Issuer on Form 6-K consists of (i) the Registrant’s Condensed Interim Financial Statements as of June 30, 2023, which is attached hereto as Exhibit 99.1; and (ii) the Registrant’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2023, which is attached hereto as Exhibit 99.2. 

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EXHIBIT INDEX

Exhibit No.
99.1	ParaZero Technologies Ltd.’s Interim Condensed Financial Statements as of June 30, 2023.
99.2	ParaZero Technologies Ltd.’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2023.
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ParaZero Technologies Ltd.
Date: September 21, 2023	By:	/s/ Boaz Shetzer
		Name:	Boaz Shetzer
		Title:	Chief Executive Officer

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EX-99.1

Exhibit 99.1

PARAZERO TECHNOLOGIES LTD.

CONDENSED INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2023

(UNAUDITED)

INDEX

	Page
Condensed Interim Balance Sheets	2–3
Condensed Interim Statements of Comprehensive Loss	4
Condensed Interim Statements of Changes in Shareholders’ Deficit	5
Condensed Interim Statements of Cash Flows	6
Notes to the Condensed Interim Financial Statements	7–12

- - - - - - - - - - - -

PARAZERO TECHNOLOGIES LTD.

CONDENSED INTERIM BALANCE SHEETS (Unaudited)

U.S. dollars

	June 30,		December 31,
	2023		2022
ASSETS
CURRENT ASSETS:
Cash		84,945		89,806
Trade receivables		18,405		184,064
Other accounts receivable		107,052		179,541
Deferred prospective initial public offering cost		407,749		291,133
Inventories		342,289		304,823
TOTAL CURRENT ASSETS		960,440		1,049,367
NON-CURRENT ASSETS:
Right-of use asset		32,511		56,893
Property and equipment, net		31,763		41,311
TOTAL NON-CURRENT ASSETS		64,274		98,204
TOTAL ASSETS		1,024,714		1,147,571

The accompanying notes are an integral part of these condensed interim financial statements.

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PARAZERO TECHNOLOGIES LTD.

CONDENSED INTERIM BALANCE SHEETS (Unaudited)

U.S. dollars

		June 30,			December 31,
	Note	2023			2022
LIABILITIES AND SHAREHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Trade payables			98,780			47,260
Lease liabilities			29,152			45,097
Other accounts payable			624,241			774,647
Loan from related party	7		729,169			-
SAFEs	6		1,514,928			1,514,928
TOTAL CURRENT LIABILITIES			2,996,270			2,381,932
NON-CURRENT LIABILITIES:
Lease liabilities			-			7,775
Loan from related party	7		-			399,794
TOTAL NON-CURRENT LIABILITIES			-			407,569
COMMITMENTS AND CONTINGENCIES	4
SHAREHOLDERS’ DEFICIT
Ordinary shares, NIS 0.02 par value: Authorized 25,000,000 as of June 30, 2023 and December 31, 2022; Issued and outstanding 3,597,442 and 3,597,442 shares as of June 30,2023 and as of December 31, 2022, respectively			21,456			21,456
Additional paid-in capital			13,091,990			12,988,292
Accumulated losses			(15,085,002	)		(14,651,678	)
TOTAL SHAREHOLDERS’ DEFICIT			(1,971,556	)		(1,641,930	)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT			1,024,714			1,147,571

The accompanying notes are an integral part of these condensed interim financial statements.

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PARAZERO TECHNOLOGIES LTD.

CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

U.S. dollars

	Six months ended June 30,		Six months ended June 30,
	2023		2022
	U.S. dollars
Sales		344,819		145,093
Cost of Sales		194,104		128,435
GROSS PROFIT		150,714		16,658
Research and development expenses		216,181		307,396
Selling and marketing expenses		94,339		135,585
General and administrative expenses		101,877		327,415
Prospective initial public offering expenses		106,754		405,777
OPERATING LOSS		368,436		1,159,515
Financing Expenses (Income), net		64,888		(211,139	)
COMPREHENSIVE AND NET LOSS		433,324		948,376
Net loss per ordinary share, basic and diluted		0.12		0.31
Weighted average number of ordinary shares outstanding basic and diluted		3,597,442		3,066,785

The accompanying notes are an integral part of these condensed interim financial statements.

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PARAZERO TECHNOLOGIES LTD.

CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT (Unaudited)

U.S. dollars (except for share numbers)

	Ordinary shares				Additional
	Number of shares		Amount		paid-in capital		Accumulated losses			Total
BALANCE AS OF DECEMBER 31, 2021		359,743		1,945		6,380,403		(12,998,640	)		(6,616,292	)
CHANGES DURING THE SIX MONTHS ENDED JUNE 30, 2022:
Conversion of Former Parent Company’s debt into ordinary shares and warrants		3,237,699		19,511		6,403,797		-			6,423,308
Stock based compensation		-		-		96,916		-			96,916
Comprehensive loss		-		-		-		(948,376	)		(948,376	)
BALANCE AS OF JUNE 30, 2022		3,597,442		21,456		12,881,116		(13,947,016	)		(1,044,444	)
BALANCE AS OF DECEMBER 31, 2022		3,597,442		21,456		12,988,292		(14,651,678	)		(1,641,930	)
CHANGES DURING SIX MONTHS ENDED JUNE 30, 2023:
Stock based compensation		-		-		91,531		-			91,531
Transactions with related party		-		-		12,167		-			12,167
Comprehensive loss		-		-		-		(433,324	)		(433,324	)
BALANCE AS OF JUNE 30, 2023		3,597,442		21,456		13,091,990		(15,085,002	)		(1,971,556	)

The accompanying notes are an integral part of these condensed interim financial statements.

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PARAZERO TECHNOLOGIES LTD.

CONDENSED INTERIM STATEMENTS OF CASH FLOWS (Unaudited)

U.S. dollars

	Six months ended June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		(433,324	)		(948,376	)
Adjustments required to reconcile net loss to net cash used in operating activities -
Depreciation		10,225			8,629
Stock based compensation expenses		47,991			67,424
Interest expenses with respect to funding from Parent Company		96,883			-
Currency exchange differences with respect to amount due to the Former Parent Company		-			(243,948	)
Finance expenses		(3,358	)		-
Changes in operating assets and liabilities items:
Decrease (increase) in trade receivables		165,660			(9,374	)
Decrease (increase) in other accounts receivable		72,489			(97,332	)
Increase in deferred prospective initial public offering cost		(72,756	)		(147,973	)
Increase in inventory		(37,466	)		(87,387	)
Decrease in right-of use asset		24,382			24,516
Increase in trade payables		51,520			28,186
Decrease in lease liabilities		(21,024	)		(30,592	)
Increase (decrease) in other payables		(150,406	)		34,825
Net cash used in operating activities		(249,184	)		(1,401,402	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(677	)		(8,447	)
		(677	)		(8,447	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan from related party		245,000			-
Cost associated with the conversion of the Former Parent Company’s debt		-			(84,780	)
Loans from the Former Parent Company		-			107,994
Proceeds from issuance of SAFEs		-			1,514,928
		245,000			1,538,142
NET INCREASE (DECREASE) IN CASH		(4,861	)		128,293
CASH AT BEGINNING OF PERIOD		89,806			33,024
CASH AT END OF PERIOD		84,945			161,317
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Benefit to the Company by an equity holder with respect to funding transactions		12,167			-
Right-of use asset recognized against lease liability, net		-			97,532
Conversion to equity of the Former Parent Company’s debt		-			6,508,089
Deferred prospective initial public offering cost		43,540			29,491

The accompanying notes are an integral part of these condensed interim financial statements.

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PARAZERO TECHNOLOGIES LTD.

Note 1 - General

1. PARAZERO TECHNOLOGIES LTD. - (the “Company”) was incorporated in Israel on June 30, 2013. The Company’s address is 30 Dov Hoz, Kiriyat Ono, 5555626, Israel. The Company specializes in the design, development, manufacturing, distribution, and sales of safety systems for commercial drones. The Company’s technology enables real-time identification of critical failures of drones, and upon detection of an emergency, a parachute is autonomously deployed in fractions of a second, thus ensuring safe landings at all times.

The Company sells its products internationally.

2. On January 28, 2022, Delta Drone International Limited (ASX: DLTI) (the “Former Parent company”), sold its shares in the Company to a consortium of investors led by Medigus Ltd. (“Medigus”) and facilitated by Israeli venture capital firm L.I.A. Pure Capital Ltd.

3. On July 31, 2023, the Company closed an initial public offering (“IPO”). In connection with the IPO, the Company issued and sold 1,950,000 ordinary shares, NIS 0.02 par value each (“Ordinary Shares”) pursuant to which it received gross proceeds of approximately $7.8 million. The Ordinary Shares were approved for listing on the Nasdaq Capital Market (“Nasdaq”) and commenced trading under the symbol “PRZO” on July 27, 2023. For further information see Note 8B.

4. The Company is in its commercialization stage and has not generated significant revenues at this stage. The Company has incurred recurring losses and negative cash flows from operating activities since inception, such that as of June 30, 2023, the Company had accumulated losses of $15.1 million and a shareholders’ deficit of $2.0 million. The Company’s operations have been funded substantially through funding from the Former Parent Company which was converted into equity in January 2022, upon sale transaction at the shareholders level. During 2022, the Company entered into Simple Agreements for Future Equity (SAFE) for gross proceeds of $1,515 thousand (see Note 6). In addition, on October 30, 2022, the Company entered into an unsecured credit facility agreement (the “Credit Facility Agreement”) with Medigus in an aggregate initial amount of up to $625 thousand. On June 26, 2023, the Company amended the Credit Facility Agreement to increase the amount of the Credit Facility to up to $745 thousand that were received as of June 27, 2023 (see Note 8D). Additionally, as noted above, on July 31, 2023, the Company raised gross proceeds of approximately $7.8 million from its IPO. Management expects that it will require additional financing to fund its operations until it has generated significant revenues. This raises a substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. The condensed interim financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

Note 2 - Basis for preparation

The Company’s accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnote disclosures required by U.S. GAAP for complete financial statements.

The condensed interim financial statements reflect all adjustments considered necessary for a fair presentation of the results of operations and financial position for the interim periods presented. All such adjustments are of a normal recurring nature.

These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2022 and December 31, 2021 and notes thereto that are included in the Company’s final Prospectus dated July 26, 2023 and filed with the SEC on July 27, 2023. The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the six months ended June 30, 2023 are not necessarily indicative of the results to be expected for any other interim period or for the year ending December 31, 2023.

Note 3 - Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards

During the six months ended June 30, 2023, there were no material changes to the Company’s critical accounting policies previously disclosed in our final Prospectus dated July 26, 2023 and filed with the SEC on July 27, 2023.

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PARAZERO TECHNOLOGIES LTD.

Note 4 - Commitments and Contingencies

A. Israel Innovation Authority

The Company has received royalty-bearing grants from the Israel Innovation Authority (“the IIA”), for approved research and development projects. The programs include grants for: wages, materials, subcontractors and miscellaneous. The Company is required to pay royalties at the rate of 3%-3.5% on sales of the products developed with the funds provided by the IIA, up to an amount equal to 100% of the IIA research and development grant received, linked to the dollar including accrued interest at the LIBOR rate.

As of December 31, 2019, IIA program was completed. The total amount of the IIA grant received was $748 thousand.

As of June 30, 2023, the maximum obligation with respect to the grants received from the IIA, including accrued interest, contingent upon entitled future sales, is $781 thousand . When a company develops know-how, technology or products using IIA grants, the terms of these grants and the Research Law restrict the transfer of such know-how, and the transfer of manufacturing or manufacturing rights of such products, technologies or know-how outside of Israel, without the prior approval of the IIA. Therefore, the discretionary approval of an IIA committee would be required for any transfer to third parties inside or outside of Israel of know-how or manufacturing or manufacturing rights related to those aspects of such technologies. We may not receive those approvals.

B. Former Parent Company

On January 28, 2022, the Former Parent Company announced it had entered into a binding agreement with a consortium of investors led by Medigus and facilitated by Israeli venture capital firm L.I.A. Pure Capital Ltd (“Pure Capital”), for the sale of 100% of the share capital of the Company for a total consideration of AUD 6 million in cash (the “Acquisition”), and all outstanding liabilities between the Company and the Former Parent Company were converted into equity immediately prior to the closing of the Acquisition.

On February 2, 2022 (the “Issue Date”), the Company issued to the Former Parent Company a warrant to purchase 111,261 Ordinary Shares. The exercise price of such warrant is (A) if a Trigger Event (defined below) occurs, the price per Company Ordinary Shares in the IPO, or, (B) if a Trigger Event has not occurred, US $2.7797 per each Company Ordinary Shares, reflecting a pre-money valuation of US $10,000,000 on a fully diluted as-converted basis as of the Issue Date. Further, (A) if an IPO of the Company occurs before the fifth anniversary of the Issue Date, then the warrant shall expire after the lapse of 90 days from the earlier of (“Trigger Event”): (i) the fifth anniversary of the Issue Date; or (ii) the price per each Company Ordinary Shares has increased by at least 50% compared to the listing price per Company Ordinary Shares as part of the IPO (to be determined based upon one-calendar-month volume weighted average price); and (B) if no IPO of the Company occurs before the lapse of the fifth anniversary of the Issue Date, then the warrant shall expire after the lapse of 12 months from the fifth anniversary of the Issue Date. As of June 30, 2023, the number of the outstanding warrants is 111,261.

C. Consultant agreements

On March 1, 2022, the Company entered into a consulting services agreement with two consultants, pursuant to which, subject to the completion of a capital raise of at least $5 million, the consultants would be entitled to 179,510 warrants to each one of them, with each whole warrant exercisable for one Ordinary Share, at an exercise price of NIS 0.02 per Ordinary Share, which may be paid via cashless, exercise at any time after the six-month anniversary of the grant date. The warrants will be fully vested upon grant and will be exercisable at any time and from time to time, in whole or in part for a period of five years from the date of their grant. Considering the de-minimis exercise price, the fair values of the warrants were determined, taking into consideration the following assumptions: Company’s Ordinary Share price of $2.32 (considering the implied share price of $2.32 of the January 2022 acquisition (see Note 4B above) and the likelihood of a successful IPO at the expected target price back then) at $194 thousand each to be recognized over the expected term.

Total share-based compensation expenses for the six months period ended June 30, 2023 and June 30, 2022 was $91,531 and $96,915 respectively (see Note 8E).

D. Agreement with underwriter

On February 8, 2022, the Company signed a letter of engagement with Aegis Capital Corp. (“Aegis”), which expired pursuant to written notice from the Company on May 5, 2023, and reengaged on June 26, 2023, pursuant to which Aegis will act as an underwriter on a “firm commitment” basis (“Offering”).

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PARAZERO TECHNOLOGIES LTD.

Note 4 - Commitments and Contingencies (cont.)

D. Agreement with underwriter (cont.)

The underwriting compensation includes the following:

The underwriting discount will be 8.0% for the Offering and a non-accountable expense allowance equal to 1.0% of the Offering. In addition, Company will pay all expenses relating to the Offering, including a payment of $100,000 for fees and expenses that include “road show”, diligence, and reasonable legal fees and disbursements for Aegis’s counsel.

As additional compensation for Aegis’ services, the Company will issue to Aegis or its designees at the closing of the Offering (the “Closing”) warrants (the “Underwriter’s Warrants”) to purchase that number of Ordinary Share equal to 5.0% of the aggregate number of Ordinary Share sold in the Offering (excluding the over-allotment option). The Underwriter’s Warrants will be exercisable at any time and from time to time, in whole or in part, during the five-year period commencing six months from the Closing, at a price per share equal to 125.0% of the public offering price per Ordinary Share of the securities sold in the Offering and the Underwriter’s Warrants will be exercisable on a cash basis, provided that if a registration statement registering the Ordinary Share underlying the Underwriter’s Warrants is not effective, the Underwriter’s Warrants may be exercised on a cashless basis. The Underwriter’s Warrants will provide for registration rights (including a one-time demand registration right and unlimited piggyback rights) and customary anti-dilution provisions (for Ordinary Share dividends and splits and recapitalizations) consistent with Rule 5110 of the Financial Industry Regulatory Authority (FINRA), and further, the number of Ordinary Share underlying the Underwriter’s Warrants will be reduced if necessary to comply with FINRA rules or regulations (see Note 8B).

Note 5 - Significant events during the reporting period

On June 26, 2023, the Company amended the Credit Facility Agreement with Medigus to increase the amount of the Credit Facility to up to $745,000. As of December 31, 2022, the Company received $500,000 from Medigus. As of June 30, 2023, the Company received $745,000 from Medigus. The difference between the cash received and the fair value of the loan based on future cash flows to be repaid discounted at the market rate of interest that would have been paid to an unrelated party was recorded as a capital contribution of $12,167 for the period ended June 30, 2023 (see Note 8D).

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PARAZERO TECHNOLOGIES LTD.

Note 6 - SAFEs

In February, March and May 2022, the company entered into certain equity investment agreements, titled Simple Agreements for Future Equity (“SAFE”), with certain investors including Medigus, officers, and directors, for aggregate proceeds of up to $2,500,000. As of December 31, 2022, the Company had received approximately $1,514,928 under the SAFE agreements. The SAFEs provide for the conversion of the investment amount into the Company’s Ordinary Shares under certain circumstances:

1. Upon the occurrence of an IPO event-immediately prior to the closing of an IPO, the investment amount will automatically convert into such number of Ordinary Shares and warrants, as applicable, issued in the IPO equal to the IPO price discounted by 25% as well as the same warrant coverage, if applicable, as those granted to the investors in the offering. However, in no event will the warrants issued upon the conversion of the SAFEs be tradable warrants nor carry any registration rights.

2. Optional conversion following a written notice made at investor’s sole discretion equal to the purchase amount discounted by 20%.

3. In the event of a liquidity event and dissolution event, as defined in the investment agreements.

4. Mandatory conversion upon drop date - If the investment amount has not been converted prior to July 31, 2023 (the “Drop Date”) (see Note 8A), then on such Drop Date, the SAFE will be automatically converted into such number of the most senior class of equity shares of the Company then outstanding, equal to, the investment amount, divided by the lowest price per share actually paid to the Company for such most senior class of equity shares of the Company then outstanding in an investment transaction by a third party on or after January 1, 2022, discounted by 20%. If such investment transaction shall not have occurred, then the SAFE shall be automatically converted into such number of the most senior class of equity shares of the Company then outstanding, equal to, the Investment Amount, divided by AUD 3.313 (subject to any customary adjustments for share splits and consolidations).

As the conversation rate is not solely indexed to the Company’s share price, the Company accounts for the SAFEs as a liability measured at fair value. The change in fair value amount as of June 30, 2023 and December 31, 2022 respectively, was valued at zero (see Note 8A).

Note 7 - Related party transactions

The Company had outstanding loans to a related party of $745,000 and $500,000 as of June 30, 2023 and December 31, 2022, respectively. See Note 5 for further details.

Additionally, on October 30, 2022, the Company entered into a consulting agreement, with Medigus, pursuant to which Medigus shall serve as the Company’s independent consultant for a monthly fee of $10,000, effective upon the closing of the IPO and terminating on the three-year anniversary of the closing of the company’s IPO. The Company may terminate the consulting agreement anytime after the closing of the IPO upon providing three months advance notice.

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PARAZERO TECHNOLOGIES LTD.

Note 8 - Subsequent Events and Related Party Transactions

A. On July 31, 2023, the Company’s Board of Directors and shareholders, approved an amendment to the terms of the SAFE to extend the automatic conversion date by three months to October 31, 2023. In connection with the IPO, all of the SAFEs representing an aggregate amount of $1,514,928 were converted into 504,976 Ordinary Shares of the Company.

B. On July 31, 2023, the Company issued and sold in connection with the closing of the IPO 1,950,000 Ordinary Shares at a price to the public of $4.00 per share. In addition, the Company granted to the underwriters a 45-day option to purchase up to 292,500 additional ordinary shares at the initial price to the public, less underwriting discounts and commissions, to cover over-allotments.

In connection with the IPO, the Company received gross proceeds of approximately $7.8 million before deducting underwriting discounts and commissions and before offering expenses ($6.0 million net proceeds after deducting approximately $0.8 million of underwriting discounts and commissions and approximately $1.0 million of other offering costs). The Ordinary Shares were approved for listing on the Nasdaq and commenced trading under the symbol “PRZO” on July 27, 2023.

In addition, in connection with the closing of the IPO, the Company issued to the underwriters of the IPO warrants to purchase up to an aggregate of 97,500 Ordinary Shares at an exercise price of $5.00 per share, exercisable during the four-year-and-six-month period commencing on the date that is six months from July 31, 2023.

C. On July 31, 2023, , the Company entered into a service agreement with Maris Tech Ltd., a related party company (“Maris”), pursuant to which, Maris will provide the Company business development services.

In consideration for the Business Development Services, the Company shall pay Maris $10,000 per month plus VAT. In addition, the company shall pay Maris commissions, in accordance with the terms of the agreement.

D. On August 1, 2023, the Company repaid the outstanding Credit Facility to Medigus in a total amount of $745,000, plus one-time payment of an additional $40,000, paid in connection with the closing of the Company’s IPO.

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PARAZERO TECHNOLOGIES LTD.

Note 8 - Subsequent Events and Related Party Transactions (cont.):

E. On August 9, 2023, the Company granted two consultants warrants to purchase up to an aggregate 179,510 Ordinary Shares to each one of them, at an exercise price of NIS 0.02 per Ordinary Share, exercisable for a period of five years from the grant date. The warrants also include a cashless exercise provision.

F. On September 20, 2023, the Company’s Board of Directors granted an aggregate of 366,171 options to purchase Ordinary Shares to certain employees and directors. The exercise price of such options is $1.275 per Ordinary Share, exercisable for a period of 5 years from the grant date. Such options vest over four years, commencing on July 31, 2023 (“Vesting Commencement Date”) where 50% of the amount granted vests at the second anniversary of the Vesting Commencement Date, and the remainder shall vest on a quarterly basis, 6.25% of the number of the options commencing on the second anniversary of the Vesting Commencement Date.

Out of the 366,171 options mentioned above, the grant of 305,647 is subject to the approval of such grant by the Company’s shareholders.

G. On September 20, 2023, the Company’s Board of Directors granted a consultant warrants to purchase up to an aggregate 146,606 Ordinary Shares at an exercise price of $1.275 per Ordinary Share, exercisable for a period of five years from the grant date. The warrants also include a cashless exercise provision.

12

EX-99.2

Exhibit 99.2

PARAZERO TECHNOLOGIES LTD.’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2023

Forward Looking Statements

The following discussion contains “forward-looking statements,” including statements regarding expectations, beliefs, intentions or strategies for the future. These statements may identify important factors which could cause our actual results to differ materially from those indicated by the forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:

● our lack of operating history;

● our current and future capital requirements and our belief that our existing cash will be sufficient to fund our operations for more than one year from the date that the financial statements are issued;

● our ability to obtain necessary regulatory approvals from the U.S. Federal Aviation Administration or other governmental agencies, or limitations put on the use of small unmanned aerial systems (“UASs”) in response to public privacy concerns;

● our ability to manufacture, market and sell our products and to generate revenues;

● our ability to maintain our relationships with key partners and grow relationships with new partners;

● our ability to maintain or protect the validity of our U.S. and other patents and other intellectual property;

● our ability to launch and penetrate markets in new locations and new market segments;

● our ability to retain key executive members and hire additional personnel;

● our ability to maintain and expand intellectual property rights;

● interpretations of current laws and the passages of future laws;

● our ability to achieve greater regulatory compliance needed in existing and new markets;

● the overall demand for drone safety systems;

● our ability to achieve key performance milestones in our planned operational testing;

● our ability to establish adequate sales, marketing and distribution channels;

● acceptance of our business model by investors; and

● other risks and uncertainties, including those listed in the section titled “Risk Factors” in the Company’s final prospectus filed with the SEC on July 27, 2023 (the “Final Prospectus”).

The preceding list is not intended to be an exhaustive list of any forward-looking statements and are based on our beliefs, assumptions and expectations of future performance, taking into account the information available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results to differ materially from the results expressed or implied by the forward-looking statements.

The forward-looking statements contained herein are based upon information available to our management as of the date hereof and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. Except as required by law, we undertake no obligation to update publicly any forward- looking statements after the date hereof to conform these statements to actual results or to changes in our expectations.

Operating Results.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the related notes included in our Final Prospectus, as well as our unaudited condensed financial statements and the related notes thereto for the six months ended June 30, 2023, included elsewhere in this Report on Form 6-K. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties.

The following financial data in this narrative are expressed in U.S. dollars, except as otherwise noted.

Overview

Parazero Technologies Ltd. (the “Company”), is an aerospace company that is focused on drone safety systems and engaged in the business of designing, developing, and providing what we believe are best-in-class autonomous parachute safety systems for commercial drones, also known as UASs. Our company was founded by a group of aviation professionals, together with veteran drone operators, to address the drone industry’s safety challenges. Our goal is to enable the drone industry to realize its greatest potential through increasing safety and mitigating operational risk.

Operating Expenses

Our current operating expenses consist of three components — research and development expenses, sales and marketing expenses, general and administrative expenses and prospectus initial public offering expenses. To date, we have not generated significant revenues.

Comparison of the Six Months Ended June 30, 2023 to the Six Months Ended June 30, 2022

Results of Operations

	Six months ended June 30,
(in USD)	2023		2022
Sales		344,819		145,093
Cost of sales		194,104		128,435
Gross profit		150,714		16,658
Research and development expenses		216,181		307,396
Selling and marketing expenses		94,339		135,585
General and administrative expenses		101,877		327,415
Prospective initial public offering expenses		106,754		405,777
Operating Loss		368,436		1,159,515
Financial expenses (income), net		64,888		(211,139	)
Total Comprehensive and net Loss		433,324		948,376

2

Sales

Sales increased by $199,726, or 137.7%, to $344,819 for the six months ended June 30, 2023, compared to $145,093 for the six months ended June 30, 2022. This increase was mainly attributed to that fact, that we faced higher demand to aftermarket products due to new markets and regulatory advancements and also due to OEM orders from 2022 that materialized during H1 2023 and recognized accordingly.

Cost of sales

Cost of sales increased by $65,669, or 51%, to $194,104 for the six months ended June 30, 2023, compared to $128,435 for the six months ended June 30, 2022. This increase was mainly attributed to the increase in sales.

Research and Development Expenses

Our research and development expenses for the six months ended June 30, 2023, amounted to $216,181 a decrease of $91,125 or 30%, compared to $307,396 for the six months ended June 30, 2022. The decrease was primarily attributable to a decrease of $55,000 in patents renewal costs that were due in the compared period in 2022 and a decrease of $45,000 in subcontractor costs. due to completion of development of new products.

Selling and marketing expenses

Our selling and marketing expenses totaled $94,339 for the six months ended June 30, 2023, a decrease of $41,246 or 30%, compared to $135,585 for the six months ended June 30, 2022. The decrease was primarily attributable to lower subcontractors’ expenses required to manage the available cash of the Company.

General and administrative expenses

Our general and administrative expenses totaled $101,877 for the six months ended June 30, 2023, a decrease of $225,538 or 69%, compared to $327,415 for the six months ended June 30, 2022. The decrease was primarily attributable to a decrease of $77,000 and $66,000 in payroll and related expenses and professional services, respectively, due mainly to adjustment in salary and professional services required to manage the available cash of the Company.

Prospective initial public offering expenses

Our prospective initial public offering expenses totaled $106,754 for the six months ended June 30, 2023 a decrease of $299,023 or 74% compared to $405,777 for the six months ended June 30, 2022. Prospective initial public offering expenses include the portion of IPO (defined below) expenses related to selling shareholders and includes specifically identifiable incremental expenses directly related to the preparation and filing of the registration statement on Form F-1, such as legal, advisors and printing expenses.

Finance expenses (income), net

Finance expenses, net for the six months ended June 30, 2023, was $64,888, out of which $96,883 was interest expenses with respect to funding from related party, that was offset partially by exchange rate differences, compared to finance income, net of $211,139 for the six months ended June 30, 2022 attributable mainly to income from exchange rate differences related to a Parent Company.

Comprehensive and net loss

Comprehensive and net loss decreased by $515,052, or 54%, to $433,324 for the six months ended June 30, 2023, compared to a net loss of $948,376 for the six months ended June 30, 2022. The decrease was mainly the result of increase in Company’s sales and decrease in operating expenses (including a decrease of $299,023 in prospective initial public offering expenses) that was offset partially by an increase in the finance expenses, net.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s). A comprehensive discussion of our critical accounting policies is disclosed in our final Prospectus dated July 26, 2023 and filed with the SEC on July 27, 2023, as well as our unaudited condensed financial statements and the related notes thereto for the six months ended June 30, 2023, included elsewhere in this Report Form 6-K.

3

Liquidity and Capital Resources.

Overview

Since our inception through June 30, 2023, we have funded our operations principally with approximately $12.8 million (net of issuance expenses) from the issuance of our equity securities, funds received pursuant certain Simple Agreements for Future Equity (“SAFEs”) entered between the company and certain investors in an aggregate amount of $1.5 million, a loan received from a related party in a total amount of $0.75 million and $0.8 million with grants from the Israeli Innovative Authority and loans from our shareholders. As of June 30, 2023, we had approximately $84,945 in cash and cash equivalents.

The table below presents our cash flows for the periods indicated:

	Six months ended June 30,
(in USD)	2023			2022
Operating activities		(249,184	)		(1,401,402	)
Investing activities		(677	)		(8,447	)
Financing activities		245,000			1,538,142
Net increase (decrease) in cash and cash equivalents		(4,861	)		128,293

Operating Activities

Net cash used in operating activities of $249,184 during the six months ended June 30, 2023.

Net cash used in operating activities during the six months ended June 30, 2022 was $1,401,402.

The decrease in the negative cash flow is mainly due to a decrease in current losses during the period.

Investing Activities

Net cash used in investing activities decreased by $7,770 to $677 for the six months ended June 30, 2023, compared to $8,447 for six months ended June 30, 2022, which was used to purchase computers and office equipment.

4

Financing Activities

Net cash provided by financing activities of $245,000 during the six months ended June 30, 2023, consisted of a loan received from a related party.

Net cash provided by financing activities of $1,538,142 during the six months ended June 30, 2022, consisted of the entry into certain Simple Agreements for Future Equity (“SAFEs”) in amount of $1,514,928.

Current Outlook

We have financed our operations to date primarily through revenues from sale of our products, proceeds from issuance of our Ordinary Shares and grants from the Israel Innovation Authority . We have incurred losses and generated negative cash flows from operations since inception in June 2013.

As of June 30, 2023, our cash and cash equivalents were $84,945. In addition, On July 31, 2023, we closed an initial public offering (“IPO”) in which we received gross proceeds of approximately $7.8 million before deducting underwriting discounts and commissions and before offering expenses ($6.0 million net proceeds after deducting approximately $0.8 million of underwriting discounts and commissions and approximately $1.0 million of other offering costs).We expect that we will require additional capital to develop our next generation flight computer including algorithm optimization, AI (artificial intelligence) layer development and optical sensors input integration, as well as to commercialize our new product. In addition, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. Our future capital requirements will depend on many factors, including:

● our ability to market and sell our products and to generate revenues;

● the progress and costs of our research and development activities;

● the costs of manufacturing our products;

● the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;

● the potential costs of contracting with third parties to provide marketing and distribution services for us or for building such capacities internally; and

● the magnitude of our general and administrative expenses.

Until we can generate significant recurring revenues and profit, we expect to satisfy our future cash needs through debt or equity financings, through the utilization of our current financial resources and sales of our products. We cannot be certain that additional funding will be available to us when needed, on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for commercialization efforts with respect to our products.

5

XML

Document And Entity Information	6 Months Ended
	Jun. 30, 2023
Document Information Line Items
Entity Registrant Name	ParaZero Technologies Ltd.
Document Type	6-K
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Central Index Key	0001916241
Document Period End Date	Jun. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity File Number	001-41760

XML

Condensed Interim Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash	$ 84,945	$ 89,806
Trade receivables	18,405	184,064
Other accounts receivable	107,052	179,541
Deferred prospective initial public offering cost	407,749	291,133
Inventories	342,289	304,823
TOTAL CURRENT ASSETS	960,440	1,049,367
NON-CURRENT ASSETS:
Right-of use asset	32,511	56,893
Property and equipment, net	31,763	41,311
TOTAL NON-CURRENT ASSETS	64,274	98,204
TOTAL ASSETS	1,024,714	1,147,571
CURRENT LIABILITIES:
Trade payables	98,780	47,260
Lease liabilities	29,152	45,097
Other accounts payable	624,241	774,647
Loan from related party	729,169
SAFEs	1,514,928	1,514,928
TOTAL CURRENT LIABILITIES	2,996,270	2,381,932
NON-CURRENT LIABILITIES:
Lease liabilities		7,775
Loan from related party		399,794
TOTAL NON-CURRENT LIABILITIES		407,569
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ DEFICIT
Ordinary shares, NIS 0.02 par value: Authorized 25,000,000 as of June 30, 2023 and December 31, 2022; Issued and outstanding 3,597,442 and 3,597,442 shares as of June 30,2023 and as of December 31, 2022, respectively	21,456	21,456
Additional paid-in capital	13,091,990	12,988,292
Accumulated losses	(15,085,002)	(14,651,678)
TOTAL SHAREHOLDERS’ DEFICIT	(1,971,556)	(1,641,930)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$ 1,024,714	$ 1,147,571

XML

Condensed Interim Balance Sheets (Unaudited) (Parentheticals) - ₪ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Ordinary Shares, par value (in New Shekels per share)	₪ 0.02	₪ 0.02
Ordinary Shares, Stock Authorized	25,000,000	25,000,000
Ordinary Shares, Stock Issued	3,597,442	3,597,442
Ordinary Shares, Stock Outstanding	3,597,442	3,597,442

XML

Condensed Interim Statements of Comprehensive Loss (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Sales	$ 344,819	$ 145,093
Cost of Sales	194,104	128,435
GROSS PROFIT	150,714	16,658
Research and development expenses	216,181	307,396
Selling and marketing expenses	94,339	135,585
General and administrative expenses	101,877	327,415
Prospective initial public offering expenses	106,754	405,777
OPERATING LOSS	368,436	1,159,515
Financing Expenses (Income), net	64,888	(211,139)
COMPREHENSIVE AND NET LOSS	$ 433,324	$ 948,376
Net loss per ordinary shares, basic (in Dollars per share)	$ 0.12	$ 0.31
Weighted average number of ordinary shares outstanding basic (in Shares)	3,597,442	3,066,785

XML

Condensed Interim Statements of Comprehensive Loss (Unaudited) (Parentheticals) - $ / shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Net loss per ordinary shares, diluted	$ 0.12	$ 0.31
Weighted average number of ordinary shares outstanding diluted	3,597,442	3,066,785

XML

Condensed Interim Statements of Changes in Shareholders’ Deficit (Unaudited) - USD ($)	Ordinary shares	Additional paid-in Capital	Accumulated Losses	Total
Balance at Dec. 31, 2021	$ 1,945	$ 6,380,403	$ (12,998,640)	$ (6,616,292)
Balance (in Shares) at Dec. 31, 2021	359,743
Conversion of Former Parent Company’s debt into ordinary shares and warrants	$ 19,511	6,403,797		6,423,308
Conversion of Former Parent Company’s debt into ordinary shares and warrants (in Shares)	3,237,699
Stock based compensation		96,916		96,916
Comprehensive loss			(948,376)	(948,376)
Balance at Jun. 30, 2022	$ 21,456	12,881,116	(13,947,016)	(1,044,444)
Balance (in Shares) at Jun. 30, 2022	3,597,442
Balance at Dec. 31, 2022	$ 21,456	12,988,292	(14,651,678)	$ (1,641,930)
Balance (in Shares) at Dec. 31, 2022	3,597,442			3,597,442
Stock based compensation		91,531		$ 91,531
Transactions with related party		12,167		12,167
Comprehensive loss			(433,324)	(433,324)
Balance at Jun. 30, 2023	$ 21,456	$ 13,091,990	$ (15,085,002)	$ (1,971,556)
Balance (in Shares) at Jun. 30, 2023	3,597,442			3,597,442

XML

Condensed Interim Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (433,324)	$ (948,376)
Adjustments required to reconcile net loss to net cash used in operating activities -
Depreciation	10,225	8,629
Stock based compensation expenses	47,991	67,424
Interest expenses with respect to funding from Parent Company	96,883
Currency exchange differences with respect to amount due to the Former Parent Company		(243,948)
Finance expenses	(3,358)
Changes in operating assets and liabilities items:
Decrease (increase) in trade receivables	165,660	(9,374)
Decrease (increase) in other accounts receivable	72,489	(97,332)
Increase in deferred prospective initial public offering cost	(72,756)	(147,973)
Increase in inventory	(37,466)	(87,387)
Decrease in right-of use asset	24,382	24,516
Increase in trade payables	51,520	28,186
Decrease in lease liabilities	(21,024)	(30,592)
Increase (decrease) in other payables	(150,406)	34,825
Net cash used in operating activities	(249,184)	(1,401,402)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(677)	(8,447)
Net cash used in investing activities	(677)	(8,447)
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan from related party	245,000
Cost associated with the conversion of the Former Parent Company’s debt		(84,780)
Loans from the Former Parent Company		107,994
Proceeds from issuance of SAFEs		1,514,928
Net cash provided by financing activities	245,000	1,538,142
NET INCREASE (DECREASE) IN CASH	(4,861)	128,293
CASH AT BEGINNING OF PERIOD	89,806	33,024
CASH AT END OF PERIOD	84,945	161,317
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Benefit to the Company by an equity holder with respect to funding transactions	12,167
Right-of use asset recognized against lease liability, net		97,532
Conversion to equity of the Former Parent Company’s debt		6,508,089
Deferred prospective initial public offering cost	$ 43,540	$ 29,491

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General

6 Months Ended

Jun. 30, 2023

General [Abstract]

General

Note 1 - General

1. PARAZERO TECHNOLOGIES LTD. - (the “Company”) was incorporated in Israel on June 30, 2013. The Company’s address is 30 Dov Hoz, Kiriyat Ono, 5555626, Israel. The Company specializes in the design, development, manufacturing, distribution, and sales of safety systems for commercial drones. The Company’s technology enables real-time identification of critical failures of drones, and upon detection of an emergency, a parachute is autonomously deployed in fractions of a second, thus ensuring safe landings at all times.

The Company sells its products internationally.

2. On January 28, 2022, Delta Drone International Limited (ASX: DLTI) (the “Former Parent company”), sold its shares in the Company to a consortium of investors led by Medigus Ltd. (“Medigus”) and facilitated by Israeli venture capital firm L.I.A. Pure Capital Ltd.

3. On July 31, 2023, the Company closed an initial public offering (“IPO”). In connection with the IPO, the Company issued and sold 1,950,000 ordinary shares, NIS 0.02 par value each (“Ordinary Shares”) pursuant to which it received gross proceeds of approximately $7.8 million. The Ordinary Shares were approved for listing on the Nasdaq Capital Market (“Nasdaq”) and commenced trading under the symbol “PRZO” on July 27, 2023. For further information see Note 8B.

4. The Company is in its commercialization stage and has not generated significant revenues at this stage. The Company has incurred recurring losses and negative cash flows from operating activities since inception, such that as of June 30, 2023, the Company had accumulated losses of $15.1 million and a shareholders’ deficit of $2.0 million. The Company’s operations have been funded substantially through funding from the Former Parent Company which was converted into equity in January 2022, upon sale transaction at the shareholders level. During 2022, the Company entered into Simple Agreements for Future Equity (SAFE) for gross proceeds of $1,515 thousand (see Note 6). In addition, on October 30, 2022, the Company entered into an unsecured credit facility agreement (the “Credit Facility Agreement”) with Medigus in an aggregate initial amount of up to $625 thousand. On June 26, 2023, the Company amended the Credit Facility Agreement to increase the amount of the Credit Facility to up to $745 thousand that were received as of June 27, 2023 (see Note 8D). Additionally, as noted above, on July 31, 2023, the Company raised gross proceeds of approximately $7.8 million from its IPO. Management expects that it will require additional financing to fund its operations until it has generated significant revenues. This raises a substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. The condensed interim financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

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Basis for preparation

6 Months Ended

Jun. 30, 2023

Basis for preparation [Abstract]

Basis for preparation

Note 2 - Basis for preparation

The Company’s accompanying unaudited condensed interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnote disclosures required by U.S. GAAP for complete financial statements.

The condensed interim financial statements reflect all adjustments considered necessary for a fair presentation of the results of operations and financial position for the interim periods presented. All such adjustments are of a normal recurring nature.

These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2022 and December 31, 2021 and notes thereto that are included in the Company’s final Prospectus dated July 26, 2023 and filed with the SEC on July 27, 2023. The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the six months ended June 30, 2023 are not necessarily indicative of the results to be expected for any other interim period or for the year ending December 31, 2023.

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Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards

6 Months Ended

Jun. 30, 2023

Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards [Abstract]

Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards

Note 3 - Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards

During the six months ended June 30, 2023, there were no material changes to the Company’s critical accounting policies previously disclosed in our final Prospectus dated July 26, 2023 and filed with the SEC on July 27, 2023.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 4 - Commitments and Contingencies

A. Israel Innovation Authority

The Company has received royalty-bearing grants from the Israel Innovation Authority (“the IIA”), for approved research and development projects. The programs include grants for: wages, materials, subcontractors and miscellaneous. The Company is required to pay royalties at the rate of 3%-3.5% on sales of the products developed with the funds provided by the IIA, up to an amount equal to 100% of the IIA research and development grant received, linked to the dollar including accrued interest at the LIBOR rate.

As of December 31, 2019, IIA program was completed. The total amount of the IIA grant received was $748 thousand.

As of June 30, 2023, the maximum obligation with respect to the grants received from the IIA, including accrued interest, contingent upon entitled future sales, is $781 thousand . When a company develops know-how, technology or products using IIA grants, the terms of these grants and the Research Law restrict the transfer of such know-how, and the transfer of manufacturing or manufacturing rights of such products, technologies or know-how outside of Israel, without the prior approval of the IIA. Therefore, the discretionary approval of an IIA committee would be required for any transfer to third parties inside or outside of Israel of know-how or manufacturing or manufacturing rights related to those aspects of such technologies. We may not receive those approvals.

B. Former Parent Company

On January 28, 2022, the Former Parent Company announced it had entered into a binding agreement with a consortium of investors led by Medigus and facilitated by Israeli venture capital firm L.I.A. Pure Capital Ltd (“Pure Capital”), for the sale of 100% of the share capital of the Company for a total consideration of AUD 6 million in cash (the “Acquisition”), and all outstanding liabilities between the Company and the Former Parent Company were converted into equity immediately prior to the closing of the Acquisition.

On February 2, 2022 (the “Issue Date”), the Company issued to the Former Parent Company a warrant to purchase 111,261 Ordinary Shares. The exercise price of such warrant is (A) if a Trigger Event (defined below) occurs, the price per Company Ordinary Shares in the IPO, or, (B) if a Trigger Event has not occurred, US $2.7797 per each Company Ordinary Shares, reflecting a pre-money valuation of US $10,000,000 on a fully diluted as-converted basis as of the Issue Date. Further, (A) if an IPO of the Company occurs before the fifth anniversary of the Issue Date, then the warrant shall expire after the lapse of 90 days from the earlier of (“Trigger Event”): (i) the fifth anniversary of the Issue Date; or (ii) the price per each Company Ordinary Shares has increased by at least 50% compared to the listing price per Company Ordinary Shares as part of the IPO (to be determined based upon one-calendar-month volume weighted average price); and (B) if no IPO of the Company occurs before the lapse of the fifth anniversary of the Issue Date, then the warrant shall expire after the lapse of 12 months from the fifth anniversary of the Issue Date. As of June 30, 2023, the number of the outstanding warrants is 111,261.

C. Consultant agreements

On March 1, 2022, the Company entered into a consulting services agreement with two consultants, pursuant to which, subject to the completion of a capital raise of at least $5 million, the consultants would be entitled to 179,510 warrants to each one of them, with each whole warrant exercisable for one Ordinary Share, at an exercise price of NIS 0.02 per Ordinary Share, which may be paid via cashless, exercise at any time after the six-month anniversary of the grant date. The warrants will be fully vested upon grant and will be exercisable at any time and from time to time, in whole or in part for a period of five years from the date of their grant. Considering the de-minimis exercise price, the fair values of the warrants were determined, taking into consideration the following assumptions: Company’s Ordinary Share price of $2.32 (considering the implied share price of $2.32 of the January 2022 acquisition (see Note 4B above) and the likelihood of a successful IPO at the expected target price back then) at $194 thousand each to be recognized over the expected term.

Total share-based compensation expenses for the six months period ended June 30, 2023 and June 30, 2022 was $91,531 and $96,915 respectively (see Note 8E).

D. Agreement with underwriter

On February 8, 2022, the Company signed a letter of engagement with Aegis Capital Corp. (“Aegis”), which expired pursuant to written notice from the Company on May 5, 2023, and reengaged on June 26, 2023, pursuant to which Aegis will act as an underwriter on a “firm commitment” basis (“Offering”).

The underwriting compensation includes the following:

The underwriting discount will be 8.0% for the Offering and a non-accountable expense allowance equal to 1.0% of the Offering. In addition, Company will pay all expenses relating to the Offering, including a payment of $100,000 for fees and expenses that include “road show”, diligence, and reasonable legal fees and disbursements for Aegis’s counsel.

As additional compensation for Aegis’ services, the Company will issue to Aegis or its designees at the closing of the Offering (the “Closing”) warrants (the “Underwriter’s Warrants”) to purchase that number of Ordinary Share equal to 5.0% of the aggregate number of Ordinary Share sold in the Offering (excluding the over-allotment option). The Underwriter’s Warrants will be exercisable at any time and from time to time, in whole or in part, during the five-year period commencing six months from the Closing, at a price per share equal to 125.0% of the public offering price per Ordinary Share of the securities sold in the Offering and the Underwriter’s Warrants will be exercisable on a cash basis, provided that if a registration statement registering the Ordinary Share underlying the Underwriter’s Warrants is not effective, the Underwriter’s Warrants may be exercised on a cashless basis. The Underwriter’s Warrants will provide for registration rights (including a one-time demand registration right and unlimited piggyback rights) and customary anti-dilution provisions (for Ordinary Share dividends and splits and recapitalizations) consistent with Rule 5110 of the Financial Industry Regulatory Authority (FINRA), and further, the number of Ordinary Share underlying the Underwriter’s Warrants will be reduced if necessary to comply with FINRA rules or regulations (see Note 8B).

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Significant events during the reporting period

6 Months Ended

Jun. 30, 2023

Significant Events During The Reporting Period [Abstract]

Significant events during the reporting period

Note 5 - Significant events during the reporting period

On June 26, 2023, the Company amended the Credit Facility Agreement with Medigus to increase the amount of the Credit Facility to up to $745,000. As of December 31, 2022, the Company received $500,000 from Medigus. As of June 30, 2023, the Company received $745,000 from Medigus. The difference between the cash received and the fair value of the loan based on future cash flows to be repaid discounted at the market rate of interest that would have been paid to an unrelated party was recorded as a capital contribution of $12,167 for the period ended June 30, 2023 (see Note 8D).

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Safes

6 Months Ended

Jun. 30, 2023

Safes [Abstract]

SAFEs

Note 6 - SAFEs

In February, March and May 2022, the company entered into certain equity investment agreements, titled Simple Agreements for Future Equity (“SAFE”), with certain investors including Medigus, officers, and directors, for aggregate proceeds of up to $2,500,000. As of December 31, 2022, the Company had received approximately $1,514,928 under the SAFE agreements. The SAFEs provide for the conversion of the investment amount into the Company’s Ordinary Shares under certain circumstances:

1. Upon the occurrence of an IPO event-immediately prior to the closing of an IPO, the investment amount will automatically convert into such number of Ordinary Shares and warrants, as applicable, issued in the IPO equal to the IPO price discounted by 25% as well as the same warrant coverage, if applicable, as those granted to the investors in the offering. However, in no event will the warrants issued upon the conversion of the SAFEs be tradable warrants nor carry any registration rights.

2. Optional conversion following a written notice made at investor’s sole discretion equal to the purchase amount discounted by 20%.

3. In the event of a liquidity event and dissolution event, as defined in the investment agreements.

4. Mandatory conversion upon drop date - If the investment amount has not been converted prior to July 31, 2023 (the “Drop Date”) (see Note 8A), then on such Drop Date, the SAFE will be automatically converted into such number of the most senior class of equity shares of the Company then outstanding, equal to, the investment amount, divided by the lowest price per share actually paid to the Company for such most senior class of equity shares of the Company then outstanding in an investment transaction by a third party on or after January 1, 2022, discounted by 20%. If such investment transaction shall not have occurred, then the SAFE shall be automatically converted into such number of the most senior class of equity shares of the Company then outstanding, equal to, the Investment Amount, divided by AUD 3.313 (subject to any customary adjustments for share splits and consolidations).

As the conversation rate is not solely indexed to the Company’s share price, the Company accounts for the SAFEs as a liability measured at fair value. The change in fair value amount as of June 30, 2023 and December 31, 2022 respectively, was valued at zero (see Note 8A).

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Related party transactions

6 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

Related party transactions

Note 7 - Related party transactions

The Company had outstanding loans to a related party of $745,000 and $500,000 as of June 30, 2023 and December 31, 2022, respectively. See Note 5 for further details.

Additionally, on October 30, 2022, the Company entered into a consulting agreement, with Medigus, pursuant to which Medigus shall serve as the Company’s independent consultant for a monthly fee of $10,000, effective upon the closing of the IPO and terminating on the three-year anniversary of the closing of the company’s IPO. The Company may terminate the consulting agreement anytime after the closing of the IPO upon providing three months advance notice.

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Subsequent Events and Related Party Transactions

6 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

Subsequent Events and Related Party Transactions

Note 8 - Subsequent Events and Related Party Transactions

A. On July 31, 2023, the Company’s Board of Directors and shareholders, approved an amendment to the terms of the SAFE to extend the automatic conversion date by three months to October 31, 2023. In connection with the IPO, all of the SAFEs representing an aggregate amount of $1,514,928 were converted into 504,976 Ordinary Shares of the Company.

B. On July 31, 2023, the Company issued and sold in connection with the closing of the IPO 1,950,000 Ordinary Shares at a price to the public of $4.00 per share. In addition, the Company granted to the underwriters a 45-day option to purchase up to 292,500 additional ordinary shares at the initial price to the public, less underwriting discounts and commissions, to cover over-allotments.

In connection with the IPO, the Company received gross proceeds of approximately $7.8 million before deducting underwriting discounts and commissions and before offering expenses ($6.0 million net proceeds after deducting approximately $0.8 million of underwriting discounts and commissions and approximately $1.0 million of other offering costs). The Ordinary Shares were approved for listing on the Nasdaq and commenced trading under the symbol “PRZO” on July 27, 2023.

In addition, in connection with the closing of the IPO, the Company issued to the underwriters of the IPO warrants to purchase up to an aggregate of 97,500 Ordinary Shares at an exercise price of $5.00 per share, exercisable during the four-year-and-six-month period commencing on the date that is six months from July 31, 2023.

C. On July 31, 2023, , the Company entered into a service agreement with Maris Tech Ltd., a related party company (“Maris”), pursuant to which, Maris will provide the Company business development services.

In consideration for the Business Development Services, the Company shall pay Maris $10,000 per month plus VAT. In addition, the company shall pay Maris commissions, in accordance with the terms of the agreement.

D. On August 1, 2023, the Company repaid the outstanding Credit Facility to Medigus in a total amount of $745,000, plus one-time payment of an additional $40,000, paid in connection with the closing of the Company’s IPO.

E. On August 9, 2023, the Company granted two consultants warrants to purchase up to an aggregate 179,510 Ordinary Shares to each one of them, at an exercise price of NIS 0.02 per Ordinary Share, exercisable for a period of five years from the grant date. The warrants also include a cashless exercise provision.

F. On September 20, 2023, the Company’s Board of Directors granted an aggregate of 366,171 options to purchase Ordinary Shares to certain employees and directors. The exercise price of such options is $1.275 per Ordinary Share, exercisable for a period of 5 years from the grant date. Such options vest over four years, commencing on July 31, 2023 (“Vesting Commencement Date”) where 50% of the amount granted vests at the second anniversary of the Vesting Commencement Date, and the remainder shall vest on a quarterly basis, 6.25% of the number of the options commencing on the second anniversary of the Vesting Commencement Date.

Out of the 366,171 options mentioned above, the grant of 305,647 is subject to the approval of such grant by the Company’s shareholders.

G. On September 20, 2023, the Company’s Board of Directors granted a consultant warrants to purchase up to an aggregate 146,606 Ordinary Shares at an exercise price of $1.275 per Ordinary Share, exercisable for a period of five years from the grant date. The warrants also include a cashless exercise provision.

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General (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended		6 Months Ended
	Jun. 27, 2023	Jul. 31, 2023	Oct. 30, 2022	Jun. 30, 2023	Dec. 31, 2022
General (Details) [Line Items]
Accumulated losses				$ (15,100)
Shareholders deficit				2,000
Simple agreements for future equity					$ 1,515
IPO [Member]
General (Details) [Line Items]
Gross proceeds				$ 7,800
Subsequent Event [Member]
General (Details) [Line Items]
Ordinary par value (in Dollars per share)		$ 0.02
Gross proceeds		$ 7,800
Subsequent Event [Member] | IPO [Member]
General (Details) [Line Items]
Sale of ordinary shares (in Shares)		1,950,000
Credit Facility Agreement [Member]
General (Details) [Line Items]
Aggregate initial amount			$ 625
Credit facility	$ 745

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Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards (Details)	6 Months Ended
	Jun. 30, 2023
Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards [Abstract]
Change in accounting policies	there were no material changes to the Company’s critical accounting policies previously disclosed in our final Prospectus dated July 26, 2023 and filed with the SEC on July 27, 2023.

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Commitments and Contingencies (Details)			6 Months Ended		12 Months Ended
	Feb. 02, 2022 USD ($) $ / shares shares	Jan. 28, 2022 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2023 ₪ / shares shares	Dec. 31, 2022 ₪ / shares shares
Commitments and Contingencies [Abstract]
Ordinary shares | shares						3,597,442	3,597,442
Ordinary per shares | ₪ / shares						₪ 0.02	₪ 0.02
Outstanding warrants | shares						111,261
Consultant agreement, description						the Company entered into a consulting services agreement with two consultants, pursuant to which, subject to the completion of a capital raise of at least $5 million, the consultants would be entitled to 179,510 warrants to each one of them, with each whole warrant exercisable for one Ordinary Share, at an exercise price of NIS 0.02 per Ordinary Share, which may be paid via cashless, exercise at any time after the six-month anniversary of the grant date. The warrants will be fully vested upon grant and will be exercisable at any time and from time to time, in whole or in part for a period of five years from the date of their grant. Considering the de-minimis exercise price, the fair values of the warrants were determined, taking into consideration the following assumptions: Company’s Ordinary Share price of $2.32 (considering the implied share price of $2.32 of the January 2022 acquisition (see Note 4B above) and the likelihood of a successful IPO at the expected target price back then) at $194 thousand each to be recognized over the expected term.
Share-based compensation expenses			$ 91,531	$ 96,915
Underwriting compensation description			The underwriting discount will be 8.0% for the Offering and a non-accountable expense allowance equal to 1.0% of the Offering.
Fees and expenses			$ 100,000
Underwriter’s Warrants [Member]
Commitments and Contingencies [Abstract]
Percentage of aggregate number of ordinary share sold			5.00%
Percentage of public offering price per ordinary share			125.00%
Israel Innovation Authority [Member]
Commitments and Contingencies [Abstract]
Research and development grant received			100.00%
Grant received			$ 781,000		$ 748,000
Minimum [Member] | Israel Innovation Authority [Member]
Commitments and Contingencies [Abstract]
Royalties rate			3.00%
Maximum [Member] | Israel Innovation Authority [Member]
Commitments and Contingencies [Abstract]
Royalties rate			3.50%
Parent Company [Member]
Commitments and Contingencies [Abstract]
Percentage of share capital		100.00%
Total consideration		$ 6,000,000
Ordinary shares | shares	111,261
Ordinary per shares | $ / shares	$ 2.7797
Ordinary Shares, pre-money valuation	$ 10,000,000
Ordinary shares percentage	50.00%

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Significant events during the reporting period (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	Jun. 26, 2023
Significant Events During The Reporting Period [Abstract]
Credit facility amount			$ 745,000
Received from credit facility amount	$ 745,000	$ 500,000
Capital contribution	$ 12,167

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Safes (Details)		1 Months Ended			6 Months Ended
	Jan. 01, 2022	May 31, 2022 USD ($)	Mar. 31, 2022 USD ($)	Feb. 28, 2022 USD ($)	Jun. 30, 2023 AUD ($)	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)
Safes [Abstract]
Aggregate proceeds		$ 2,500,000	$ 2,500,000	$ 2,500,000
Investment received							$ 1,514,928
Discount price percentage					25.00%
Purchase amount discounted percentage					20.00%
Discount percentage	20.00%
Investment amount (in Dollars)					$ 3.313
Change in fair value amount						$ 0	$ 0

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Related party transactions (Details) - USD ($)	1 Months Ended
	Oct. 30, 2022	Jun. 30, 2023	Dec. 31, 2022
Related party transactions (Details) [Line Items]
Consultant fee	$ 10,000
Related Party [Member]
Related party transactions (Details) [Line Items]
Loans to related party		$ 745,000	$ 500,000

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Subsequent Events and Related Party Transactions (Details)		1 Months Ended			6 Months Ended
	Aug. 01, 2023 USD ($)	Sep. 20, 2023 $ / shares shares	Aug. 09, 2023 ₪ / shares shares	Jul. 31, 2023 USD ($) $ / shares shares	Jun. 30, 2023 USD ($) shares	Dec. 31, 2022 USD ($) shares
Subsequent Events and Related Party Transactions (Details) [Line Items]
SAFEs aggregate amount (in Dollars) | $					$ 1,514,928	$ 1,514,928
Converted ordinary shares					504,976
Ordinary shares					3,597,442	3,597,442
Underwriting discounts and commissions (in Dollars) | $				$ 800,000
Options vest over year		4 years
Over-Allotment Option [Member]
Subsequent Events and Related Party Transactions (Details) [Line Items]
Ordinary shares				292,500
Subsequent Event [Member]
Subsequent Events and Related Party Transactions (Details) [Line Items]
Public price per share (in Dollars per share) | $ / shares				$ 4
Business development services (in Dollars) | $				$ 10,000
Repayments of credit facility (in Dollars) | $	$ 745,000
Description of credit facility	plus one-time payment of an additional $40,000, paid in connection with the closing of the Company’s IPO.
Subsequent Event [Member] | IPO [Member]
Subsequent Events and Related Party Transactions (Details) [Line Items]
Ordinary shares				1,950,000
Gross proceeds received (in Dollars) | $				$ 7,800,000
Net proceeds (in Dollars) | $				6,000,000
Other offering costs (in Dollars) | $				$ 1,000,000
Aggregate shares				1,950,000
Subsequent Event [Member] | Warrants [Member]
Subsequent Events and Related Party Transactions (Details) [Line Items]
Ordinary shares			179,510	97,500
Exercise price per share | (per share)			₪ 0.02	$ 5
Forecast [Member]
Subsequent Events and Related Party Transactions (Details) [Line Items]
Description of grant date		exercisable for a period of 5 years from the grant date.	exercisable for a period of five years from the grant date.
Aggregate shares		366,171
Options exercise price (in Dollars per share) | $ / shares		$ 1.275
Description of vesting		the remainder shall vest on a quarterly basis, 6.25% of the number of the options commencing on the second anniversary of the Vesting Commencement Date.
Options outstanding		366,171
Grant shares		305,647
Forecast [Member] | Warrants [Member]
Subsequent Events and Related Party Transactions (Details) [Line Items]
Exercise price per share | $ / shares		$ 1.275
Description of grant date		exercisable for a period of five years from the grant date.
Aggregate shares		146,606
Forecast [Member] | Share-Based Payment Arrangement, Tranche One [Member]
Subsequent Events and Related Party Transactions (Details) [Line Items]
Granted vests percentage		50.00%