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and third tranches follow upon the dates provided above. The Unit Option consists of Units of our securities where each Unit (priced at |
$250.00 each) is comprised of (i) a certain number of shares of Common Stock determined by dividing $250.00 (the price of one Unit) by |
the average of the high and low sale prices of the Company’s publicly traded common stock as reported on the OTCQX on the Unit Purchase |
Date and (ii) Common Stock purchase warrants to purchase an additional five hundred (500) shares of Common Stock at a per share exercise |
price of $0.05. The participant’s Plan account will be credited with the number of shares of the Company’s Common Stock and |
Warrants that are acquired under the Units purchased. Each warrant affords the participant the opportunity to purchase one share of our |
Common Stock at a warrant exercise price of $0.05. The warrant shall have the Company notation of “ZNWAV” under the first |
tranche, “ZNWAW” under the second tranche and “ZNWAX” under the third tranche. The warrants will not be registered |
for trading on the OTCQX or any other stock market or trading market. 42 Plan participants, who enroll into the Unit Program |
with the purchase of at least one Unit and enroll in the separate Automatic Monthly Investments (“AMI”) program at a minimum |
of $50.00 per month, will receive an additional fifty (50) warrants at an exercise price of $0.05 during this Unit Option Program. The |
fifty (50) additional warrants are for enrolling into the AMI program and shall have the Company notation of “ZNWAY.” Existing |
subscribers to the AMI are entitled to the additional fifty (50) warrants, if they purchase at least one (1) Unit during the Unit program. |
Plan participants, who enroll in the AMI at a minimum of $100 per month, will receive one hundred (100) ZNWAY warrants. Plan participants, |
who enroll in the AMI at a minimum of $250 per month, will receive two hundred and fifty (250) ZNWAY warrants. Plan participants, who |
enroll in the AMI at a minimum of $500 per month, will receive five hundred (500) ZNWAY warrants. The AMI program requires 90 days of |
participation to receive the ZNWAY warrants. Existing AMI participants are entitled to participant in this monthly program by increasing |
their monthly amount above the minimum $50.00 per month. The ZNWAV warrants will become exercisable on March |
31, 2023 and continue to be exercisable through June 28, 2023 at a per share exercise price of $0.05. The ZNWAW warrants will become exercisable |
on April 14, 2023 and continue to be exercisable through July 13, 2023 at a per share exercise price of $0.05. The ZNWAX warrants will |
become exercisable on May 2, 2023 and continue to be exercisable through July 31, 2023 at a per share exercise price of $0.05. The ZNWAY |
warrants will become exercisable on June 12, 2023 and continue to be exercisable through September 10, 2023 at a per share exercise price |
of $0.05. During 2022, two participants who participated in that aspect of the |
DSPP called “Request For Waiver” contributed approximately 77% of the cash raised through the DSPP. During 2021, two participants |
who participated in the “Request for Waiver” aspect of the DSPP contributed approximately 67% of the cash raised through the |
DSPP. The company raised approximately |
$738,000 from the period January 1, 2023 through March 23, 2023, under the DSPP program. For the years ended December |
31, 2022, and 2021, approximately $19,129,000, and $26,219,000 were raised under the DSPP program, respectively. The warrants represented by |
the company notation ZNWAA are tradeable on the OTCQX market under the symbol ZNOGW. However, all of the other warrants characterized |
above, in the table below, and throughout this Form 10-K, are not tradeable and are used internally for classification and accounting |
purposes only. 2018 Subscription Rights Offering On April 2, 2018, the Company |
announced an offering (“2018 Subscription Rights Offering”) through American Stock Transfer & Trust Company, LLC (the |
“Subscription Agent”), at no cost to the shareholders, of non-transferable Subscription Rights (each “Right” and |
collectively, the “Rights”) to purchase its securities to persons who owned shares of our Common Stock on April 13, 2018 (“the |
Record Date”). Pursuant to the 2018 Subscription Rights Offering, each holder of shares of common stock on the Record Date received |
non-transferable Subscription Rights, with each Right comprised of one share of the Company Common Stock, par value $0.01 per |
share (the “Common Stock”) and one Common Stock Purchase Warrant to purchase an additional one share of Common Stock. Each |
Right could be exercised or subscribed at a per Right subscription price of $5.00. Each Warrant affords the investor the opportunity |
to purchase one share of the Company Common Stock at a warrant exercise price of $3.00. The warrant is referred to as “ZNWAI.” The warrants became exercisable |
on June 29, 2018 and continued to be exercisable through June 29, 2020 at a per share exercise price of $3.00, after the Company, on December |
4, 2018, extended the termination date of the Warrant by one (1) year from the expiration date of June 29, 2019 to June 29, 2020. On May 29, 2019, the Company |
extended the termination date of the ZNWAI Warrant by one (1) year from the expiration date of June 29, 2020 to June 29, 2021. 43 On September 15, 2020, the |
Company extended the termination date of the ZNWAI Warrant by two (2) years from the expiration date of June 29, 2021 to June 29, 2023. |
Zion considers this warrant as permanent equity per ASC 815-40-35-2. As such, there is no value assigned to this extension. Each shareholder received |
.10 (one tenth) of a Subscription Right (i.e. one Subscription Right for each 10 shares owned) for each share of the Company’s Common |
Stock owned on the Record Date. The 2018 Subscription Rights |
Offering terminated on May 31, 2018. The Company raised net proceeds of approximately $3,038,000, from the subscription of Rights, after |
deducting fees and expenses of $243,000 incurred in connection with the rights offering. Warrants Table The warrant activity and balances |
for the year 2021 are shown in the table below : Warrants Exercise Price Warrant Termination Date Outstanding Balance, 12/31/2020 Warrants Issued Warrants Exercised Warrants Expired Outstanding Balance, 12/31/2021 ZNWAA $ 2.00 01/31/2023 1,498,804 - - - 1,498,804 ZNWAD $ 1.00 05/02/2023 243,853 - - - 243,853 ZNWAE $ 1.00 05/01/2023 2,144,099 - - - 2,144,099 ZNWAF $ 1.00 08/14/2023 359,435 - - - 359,435 ZNWAG $ 1.00 01/08/2023 240,068 - - - 240,068 ZNWAH $ 5.00 04/19/2023 372,400 - - - 372,400 ZNWAI $ 3.00 06/29/2023 640,730 - - - 640,730 ZNWAJ $ 1.00 10/29/2023 545,900 - - - 545,900 ZNWAK $ 0.01 02/25/2023 437,875 - (6,220 ) - 431,655 ZNWAL $ 2.00 08/26/2023 517,875 - - - 517,875 ZNWAM $ 1.00 07/15/2022 - 4,376,000 - - 4,376,000 ZNWAN $ 1.00 07/15/2022 - 267,785 (125 ) - 267,660 ZNWAO $ 0.25 06/12/2023 - 190,480 (15,510 ) - 174,970 ZNWAP $ 0.25 06/02/2022 - 1,639,916 (1,200,000 ) - 439,916 ZNWAR $ 0.25 06/23/2022 - 1,020,000 - - 1,020,000 Outstanding warrants 7,001,039 7,494,181 (1,221,855 ) - 13,273,365 Changes during 2022 t Warrants Exercise Price Warrant Termination Date Outstanding Balance, 12/31/2021 Warrants Issued Warrants Exercised Warrants Expired Outstanding Balance, 12/31/2022 ZNWAA $ 2.00 01/31/2024 1,498,804 - - - 1,498,804 ZNWAD $ 1.00 05/02/2023 243,853 - - - 243,853 ZNWAE $ 1.00 05/01/2023 2,144,099 - - - 2,144,099 ZNWAF $ 1.00 08/14/2023 359,435 - - - 359,435 ZNWAG $ 0.25 01/08/2024 240,068 - - - 240,068 ZNWAH $ 5.00 04/19/2023 372,400 - - - 372,400 ZNWAI $ 3.00 06/29/2023 640,710 - - 640,710 ZNWAJ $ 1.00 10/29/2023 545,900 - - - 545,900 ZNWAK $ 0.01 02/25/2023 431,675 - (7,450 ) - 424,225 ZNWAL $ 2.00 08/26/2023 517,875 - - - 517,875 ZNWAM $ 0.05 07/15/2023 4,376,000 - - - 4,376,000 ZNWAN $ 1.00 05/16/2023 267,660 100 - - 267,760 ZNWAO $ 0.25 06/12/2023 174,970 - (310 ) - 174,660 ZNWAQ $ 0.05 07/06/2023 - 23,428,348 - - 23,428,348 ZNWAP $ 0.25 06/02/2023 439,916 - (439,916 ) - - ZNWAR $ 0.25 06/23/2023 1,020,000 - (1,020,000 ) - - Outstanding warrants 13,273,365 23,428,448 (1,467,676 ) - 35,234,137 44 Tabular Disclosure of Contractual Obligations The following summarizes our |
contractual consolidated financial obligations for continuing operations at December 31, 2022, and the effect such obligations are |
expected to have on our liquidity and cash flow in future periods. Payment due by period (in Thousands of USD) 2023 2024 2025 2026 Thereafter Total Exploration Related Commitments 2.712 - - - - 2.712 Operating Leases 193 16 - - - 209 Employment Agreements 1,870 - - - - 1,870 Total 4,775 16 --- - - 4,791 Off-Balance Sheet Arrangements We do not currently use any |
off-balance sheet arrangements to enhance our liquidity or capital resource position, or for any other purpose. Recently Issued Accounting Pronouncements The Company does not believe |
that the adoption of any recently issued accounting pronouncements in 2022 had a significant impact on our consolidated financial position, |
results of operations, or cash flow, except for ASC Update No. 2016-02—Leases, which requires organizations to recognize lease assets |
and lease liabilities on the balance sheet for leases classified as operating leases under previous GAAP. ASU 2016-02 requires that a |
lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use |
the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 |
(including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. The Company |
adopted ASU 2016-02 in the first quarter of 2019. See Note 10 for more complete details on balances at December 31, 2022, and 2021. 45 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES |
ABOUT MARKET RISK Market risk is a broad term |
for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various |
factors, including interest rates, foreign exchange rates, commodity prices and/or equity prices. In the normal course of doing business, |
we are exposed to the risks associated with foreign currency exchange rates and changes in interest rates. Foreign Currency Exchange |
Rate Risks . A portion of our expenses, primarily labor expenses and certain supplier contracts, are denominated in New Israeli Shekels |
(“NIS”). As a result, we have significant exposure to the risk of fluctuating exchange rates with the U.S. Dollar (“USD”), |
our primary reporting currency. During the period January 1, 2022 through December 31, 2022, the USD has fluctuated by approximately 13.2% |
against the NIS (the USD has strengthened relative to the NIS). By contrast, during the period January 1, 2021 through December 31, 2021, |
the USD has fluctuated by approximately 3.3% against the NIS (the USD has weakened relative to the NIS). Continued strengthening of the |
US dollar against the NIS will result in lower operating costs from NIS denominated expenses. To date, we have not hedged any of our currency |
exchange rate risks, but we may do so in the future. Interest Rate Risk. Our |
exposure to market risk relates to our cash and investments. We maintain an investment portfolio of short-term bank deposits and money |
market funds. The securities in our investment portfolio are not leveraged, and are, due to their very short-term nature, subject to minimal |
interest rate risk. We currently do not hedge interest rate exposure. Because of the short-term maturities of our investments, we do not |
believe that a change in market interest rates would have a significant negative impact on the value of our investment portfolio except |
for reduced income in a low interest rate environment. At December 31, 2022, we had cash, cash equivalents and short-term and long-term |
bank deposits of approximately $3,114,000. The weighted average annual interest rate related to our cash and cash equivalents for the |
year ended December 31, 2022, exclusive of funds at US banks that earn no interest, was approximately 0.6%. The primary objective of our |
investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve |
this objective, we invest our excess cash in short-term bank deposits and money market funds that may invest in high quality debt instruments. ITEM 8. None. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS |
ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 46 ITEM 9A. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. We maintain disclosure controls |
and procedures that are designed to ensure that information required to be disclosed by us in the reports we file or furnish to the SEC |
under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified |
by the SEC’s rules and forms, and that information is accumulated and communicated to management, including our principal executive |
officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. We carried out an |
evaluation required by the Exchange Act, under the supervision and with the participation of our principal executive officer and |
principal financial and accounting officer, of the effectiveness of the design and operation of our disclosure controls and |
procedures, as defined in Rule 13a-15(e) and 15d-15 of the Exchange Act, as of December 31, 2022. Based on this evaluation, our |
principal executive officer and our principal financial and accounting officer concluded that our disclosure controls and procedures |
were effective, as of December 31, 2022, to provide reasonable assurance that information required to be disclosed by us in the |
reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods |
specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and |
communicated to our management, including our principal executive officer and principal financial and accounting officer, as |
appropriate to allow timely decisions regarding required disclosures. In designing and evaluating |
our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, |
can provide only reasonable, and not absolute, assurance that the objectives of the control system will be met. In addition, the design |
of any control system is based in part upon certain assumptions about the likelihood of future events and the application of judgment |
in evaluating the cost-benefit relationship of possible controls and procedures. Because of these and other inherent limitations of control |
systems, there is only reasonable assurance that our controls will succeed in achieving their goals under all future conditions. MANAGEMENT’S ANNUAL REPORT ON INTERNAL |
CONTROL OVER FINANCIAL REPORTING Our management, under the |
supervision of the Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate |
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