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What changed in Rail Vision Ltd.'s 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of Rail Vision Ltd.'s 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+524 added−455 removedSource: 20-F (2025-03-31) vs 20-F (2024-03-28)

Top changes in Rail Vision Ltd.'s 2024 20-F

524 paragraphs added · 455 removed · 321 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

92 edited+49 added−45 removed188 unchanged
Biggest changeGenerally, we will be treated as a PFIC for U.S. federal income tax purposes in any taxable year in which either (1) at least 75% of our gross income is “passive income” or (2) on quarterly average at least 50% of our assets by value produce passive income or are held for the production of passive income.
Biggest changeWe would be classified as a passive foreign investment company, or PFIC, for any taxable year if, after the application of certain look-through rules, either: (i) 75% or more of our gross income for such year is “passive income” (as defined in the relevant provisions of the Internal Revenue Code of 1986, as amended, or the Code), or (ii) 50% or more of the value of our assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income.
Any potential acquisition or strategic partnership may entail numerous risks, including: ● increased operating expenses and cash requirements; ● the assumption of additional indebtedness or contingent liabilities; ● the issuance of our equity securities; ● assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; ● the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition; ● retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; ● risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and ● our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs. 25
Any potential acquisition or strategic partnership may entail numerous risks, including: ● increased operating expenses and cash requirements; ● the assumption of additional indebtedness or contingent liabilities; ● the issuance of our equity securities; 25 ● assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; ● the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition; ● retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; ● risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and ● our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
Fluctuations in our operating results and financial condition may be due to a number of factors, including those listed below: ● the degree of market acceptance of our products and services; ● the mix of products and services that we sell during any period; ● long sale cycles; ● changes in the amount that we spend to develop, acquire or license new products, technologies or businesses; ● changes in the amounts that we spend to promote our products and services; ● changes in the cost of satisfying our warranty obligations and servicing our installed base of systems; ● delays between our expenditures to develop and market new or enhanced systems and the generation of sales from those products; ● development of new competitive products and services by others; ● difficulty in predicting sales patterns and reorder rates; ● litigation or threats of litigation, including intellectual property claims by third parties; ● changes in accounting rules and tax laws; ● changes in regulations and standards; ● the geographic distribution of our sales; ● our responses to price competition; ● general economic and industry conditions that affect end-user demand and end-user levels of product design and manufacturing; ● changes in interest rates that affect returns on our cash balances and short-term investments; ● changes in dollar-NIS exchange rates that affect the value of our net assets, future revenues and expenditures from and/or relating to our activities carried out in those currencies; ● the level of research and development activities by our company; and ● changes in end-use/end-user governmental regulation policy.
Fluctuations in our operating results and financial condition may be due to a number of factors, including those listed below: ● the degree of market acceptance of our products and services; ● the mix of products and services that we sell during any period; ● long sale cycles; ● changes in the amount that we spend to develop, acquire or license new products, technologies or businesses; ● changes in the amounts that we spend to promote our products and services; ● changes in the cost of satisfying our warranty obligations and servicing our installed base of systems; ● delays between our expenditures to develop and market new or enhanced systems and the generation of sales from those products; ● development of new competitive products and services by others; ● difficulty in predicting sales patterns and reorder rates; ● litigation or threats of litigation, including intellectual property claims by third parties; ● changes in accounting rules and tax laws; ● changes in regulations and standards; ● the geographic distribution of our sales; ● our responses to price competition; ● general economic and industry conditions that affect end-user demand and end-user levels of product design and manufacturing; 7 ● changes in interest rates that affect returns on our cash balances and short-term investments; ● changes in dollar-NIS exchange rates that affect the value of our net assets, future revenues and expenditures from and/or relating to our activities carried out in those currencies; ● the level of research and development activities by our company; and ● changes in end-use/end-user governmental regulation policy.
Defects in products could give rise to product returns or product liability, warranty or other claims that could result in material expenses, diversion of management time and attention, and damage to our reputation. ● Our business may be adversely affected by changes in railway safety regulations. ● Under applicable employment laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees. ● The markets in which we participate are competitive and our failure to compete successfully could cause any future revenues and the demand for our products not to materialize or to decline over time. ● If our relationships with suppliers for our products and services, especially with single source suppliers of components of our products, were to terminate or our manufacturing arrangements were to be disrupted, our business could be interrupted. ● Our planned international operations will expose us to additional market and operational risks, and failure to manage these risks may adversely affect our business and operating results. ● Significant disruptions of our information technology systems or breaches of our data security could adversely affect our business.
Defects in products could give rise to product returns or product liability, warranty or other claims that could result in material expenses, diversion of management time and attention, and damage to our reputation. ● Our business may be adversely affected by changes in railway safety regulations. ● Under applicable employment laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees. ● The markets in which we participate are competitive and our failure to compete successfully could cause any future revenues and the demand for our products not to materialize or to decline over time. ● If our relationships with suppliers for our products and services, especially with single source suppliers of components of our products, were to terminate or our manufacturing arrangements were to be disrupted, our business could be interrupted. ● Our planned international operations will expose us to additional market and operational risks, and failure to manage these risks may adversely affect our business and operating results. 2 ● Significant disruptions of our information technology systems or breaches of our data security could adversely affect our business.
Accordingly, we will face significant operational risks from doing business internationally, including: ● having to ship and/or manufacture overseas; ● cultural barriers sustained by conducting business activity in foreign countries; ● fluctuations in foreign currency exchange rates; ● potentially longer sales and payment cycles; ● potentially greater difficulties in collecting accounts receivable; ● potentially adverse tax consequences; ● reduced protection of intellectual property rights in certain countries, particularly in Asia and South America; ● difficulties in staffing and managing foreign operations; ● laws and business practices favoring local competition; ● costs and difficulties of customizing products for foreign countries; ● compliance with a wide variety of complex foreign laws, treaties and regulations; ● tariffs, trade barriers and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets; and ● being subject to the laws, regulations and the court systems of many jurisdictions.
Accordingly, we will face significant operational risks from doing business internationally, including: ● having to ship and/or manufacture overseas; ● cultural barriers sustained by conducting business activity in foreign countries; ● fluctuations in foreign currency exchange rates; ● potentially longer sales and payment cycles; ● potentially greater difficulties in collecting accounts receivable; ● potentially adverse tax consequences; ● reduced protection of intellectual property rights in certain countries, particularly in Asia and South America; ● difficulties in staffing and managing foreign operations; ● laws and business practices favoring local competition; ● costs and difficulties of customizing products for foreign countries; ● compliance with a wide variety of complex foreign laws, treaties and regulations; 9 ● tariffs, trade barriers and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets; and ● being subject to the laws, regulations and the court systems of many jurisdictions.
Our share price could be subject to wide fluctuations in response to a variety of factors, which include: ● whether we achieve our anticipated corporate objectives; ● actual or anticipated fluctuations in our quarterly or annual operating results; ● changes in our financial or operational estimates or projections; ● our ability to implement our operational plans; ● termination of the lock-up agreement or other restrictions on the ability of our shareholders to sell shares after the initial public offering; ● changes in the economic performance or market valuations of companies similar to ours; and ● general economic or political conditions in the United States or elsewhere.
Our share price could be subject to wide fluctuations in response to a variety of factors, which include: ● whether we achieve our anticipated corporate objectives; ● actual or anticipated fluctuations in our quarterly or annual operating results; 19 ● changes in our financial or operational estimates or projections; ● our ability to implement our operational plans; ● termination of the lock-up agreement or other restrictions on the ability of our shareholders to sell shares after the initial public offering; ● changes in the economic performance or market valuations of companies similar to ours; and ● general economic or political conditions in the United States or elsewhere.
Our future capital requirements will depend on many factors, including but not limited to: ● the scope, rate of progress, results and cost of product development, testing and other related activities; ● the cost of establishing commercial supplies of our products; ● the cost and timing of establishing sales, marketing, and distribution capabilities; and ● the terms and timing of any collaborative, licensing, and other arrangements that we may establish.
Our future capital requirements will depend on many factors, including but not limited to: ● the scope, rate of progress, results and cost of product development, testing and other related activities; ● the cost of establishing commercial supplies of our products; ● the cost and timing of establishing sales, marketing, production and distribution capabilities; and ● the terms and timing of any collaborative, licensing, and other arrangements that we may establish.
Costs or payments made in connection with warranty and product liability claims and product recalls or other claims could materially affect our financial condition and results of operations. Our business may be adversely affected by changes in railway safety regulations . As the autonomous train industry continues to develop, regulators, including the U.S.
Costs or payments made in connection with warranty and product liability claims and product recalls or other claims could materially affect our financial condition and results of operations. 6 Our business may be adversely affected by changes in railway safety regulations . As the autonomous train industry continues to develop, regulators, including the U.S.
If we were unable to find a suitable supplier for a particular component or compound, we could be required to modify our existing products or the end-parts that we offer to accommodate substitute components or compounds. Furthermore, in some of our agreements, customers require the ability to maintain systems for a period of at least ten years.
If we were unable to find a suitable supplier for a particular component or compound, we could be required to modify our existing products or the end-parts that we offer to accommodate substitute components or compounds. 8 Furthermore, in some of our agreements, customers require the ability to maintain systems for a period of at least ten years.
Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business. 15 Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents.
Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business. Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents.
ITEM 3. KEY INFORMATION A. [Reserved] B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors You should carefully consider the risks described below, together with all of the other information in this Annual Report on Form 20-F.
ITEM 3. KEY INFORMATION A. [Reserved] B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. 1 D. Risk Factors You should carefully consider the risks described below, together with all of the other information in this Annual Report on Form 20-F.
Furthermore, the shareholders, including those who indicated their acceptance of the tender offer, may, at any time within six months following the completion of the tender offer, claim that the consideration for the acquisition of the shares does not reflect their fair market value, and petition an Israeli court to alter the consideration for the acquisition accordingly, unless the acquirer stipulated in its tender offer that a shareholder that accepts the offer may not seek such appraisal rights, and the acquirer or the company published all required information with respect to the tender offer prior to the tender offer’s response date. 23 Israeli tax considerations also may make potential transactions unappealing to us or to our shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax.
Furthermore, the shareholders, including those who indicated their acceptance of the tender offer, may, at any time within six months following the completion of the tender offer, claim that the consideration for the acquisition of the shares does not reflect their fair market value, and petition an Israeli court to alter the consideration for the acquisition accordingly, unless the acquirer stipulated in its tender offer that a shareholder that accepts the offer may not seek such appraisal rights, and the acquirer or the company published all required information with respect to the tender offer prior to the tender offer’s response date. 22 Israeli tax considerations also may make potential transactions unappealing to us or to our shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax.
As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a U.S. or foreign court. Our operations may be disrupted as a result of the obligation of management or key personnel to perform military service .
As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a U.S. or foreign court. 23 Our operations may be disrupted as a result of the obligation of management or key personnel to perform military service .
Due to all of the foregoing factors, and the other risks discussed herein, you should not rely on quarter to quarter and year to year comparisons of our operating results as an indicator of our future performance. 7 The markets in which we participate are competitive.
Due to all of the foregoing factors, and the other risks discussed herein, you should not rely on quarter to quarter and year to year comparisons of our operating results as an indicator of our future performance. The markets in which we participate are competitive.
Our failure to manage the market and operational risks associated with our international operations effectively could limit the future growth of our business and adversely affect our operating results. 9 Our business and operations might be adversely affected by security breaches, including any cybersecurity incidents.
Our failure to manage the market and operational risks associated with our international operations effectively could limit the future growth of our business and adversely affect our operating results. Our business and operations might be adversely affected by security breaches, including any cybersecurity incidents.
If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our ordinary shares. 16 We may be subject to claims challenging the inventorship of our intellectual property.
If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our ordinary shares. We may be subject to claims challenging the inventorship of our intellectual property.
Following our home country corporate governance practices as opposed to the requirements that would otherwise apply to a U.S. company listed on the Nasdaq may provide less protection to investors than what would otherwise be accorded to investors under the listing rules of the Nasdaq applicable to domestic U.S. issuers. 21 Risks Related to Israeli Law and Our Incorporation, Location and Operations in Israel Our headquarters, research and development and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel.
Following our home country corporate governance practices as opposed to the requirements that would otherwise apply to a U.S. company listed on the Nasdaq may provide less protection to investors than what would otherwise be accorded to investors under the listing rules of the Nasdaq applicable to domestic U.S. issuers. 20 Risks Related to Israeli Law and Our Incorporation, Location and Operations in Israel Our headquarters, research and development and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel.
If we cannot obtain and maintain effective patent rights for our products, we may not be able to compete effectively, and our business and results of operations would be harmed. 14 If we are unable to maintain effective proprietary rights for our products, we may not be able to compete effectively in our markets.
If we cannot obtain and maintain effective patent rights for our products, we may not be able to compete effectively, and our business and results of operations would be harmed. If we are unable to maintain effective proprietary rights for our products, we may not be able to compete effectively in our markets.
These risks include, among others, the following: Risks Related to Our Financial Condition and Capital Requirements ● We are a development-stage company and have a limited operating history on which to assess the prospects for our business, have incurred significant losses since the date of our inception, and anticipate that we will continue to incur significant losses until we are able to successfully commercialize our products. ● We have not generated significant revenue from the sale of our current products and may never be profitable. ● We expect that we will need to invest significant time and raise substantial additional capital before we can expect to become profitable from sales of our products.
These risks include, among others, the following: Risks Related to Our Financial Condition and Capital Requirements ● We are an early commercialization stage company and have a limited operating history on which to assess the prospects for our business, have incurred significant losses since the date of our inception, and anticipate that we will continue to incur significant losses until we are able to successfully commercialize our products. ● We have not generated significant revenue from the sale of our current products and may never be profitable. ● We expect that we will need to invest significant time and raise substantial additional capital before we can expect to become profitable from sales of our products.
An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation.
An individual that is a United States shareholder with respect to a CFC generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation.
The JOBS Act will allow us to postpone the date by which we must comply with some of the laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC, which could undermine investor confidence in our company and adversely affect the market price of our ordinary shares.
Risks Related to the Ownership of Our Securities The JOBS Act will allow us to postpone the date by which we must comply with some of the laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC, which could undermine investor confidence in our company and adversely affect the market price of our ordinary shares.
In a process to reduce our operational costs, in December 2023, we took steps to lower our expenses through a targeted reduction in headcount of our employee base by 12 employees representing approximately 20% of our workforce.
In a process to reduce our operational costs, in December 2023, we took steps to lower our expenses through a targeted reduction in headcount of our employee base by 12 employees representing approximately 20% of our workforce as of such date.
Additionally, increases in inflation, along with the uncertainties surrounding any resurgence of COVID-19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing.
Additionally, increases in inflation, along with the uncertainties surrounding geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing.
If we were to initiate legal proceedings against a third party to enforce a patent covering one of our products, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
Competitors may infringe our intellectual property. If we were to initiate legal proceedings against a third party to enforce a patent covering one of our products, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our ordinary shares, such person may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our group (if any).
If a United States person is treated as owning (directly, indirectly, or constructively) at least 10% of the value or voting power of our ordinary shares, such person may be treated as a “United States shareholder” with respect to each controlled foreign corporation, or CFC, in our group (if any).
A material portion of our operating expenses is incurred outside the United States, mainly in NIS, and is subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in NIS. Our foreign currency-denominated expenses consist primarily of personnel, rent and other overhead costs.
Our functional and reporting currency is the U.S. dollar. A material portion of our operating expenses is incurred outside the United States, mainly in NIS, and is subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in NIS. Our foreign currency-denominated expenses consist primarily of personnel, rent and other overhead costs.
Our ability to generate future revenue from product sales depends heavily on our success in many areas, including but not limited to: ● completing development and testing of our products; ● establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products to support market demand for our products; ● launching and commercializing products, either directly or with a collaborator or distributor; ● addressing any competing technological and market developments; ● identifying, assessing, acquiring and/or developing new products; ● negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; ● maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and ● attracting, hiring and retaining qualified personnel. 4 We expect that we will need to invest significant time and raise substantial additional capital before we can expect to become profitable from sales of our products.
Our ability to generate future revenue from product sales depends heavily on our success in many areas, including but not limited to: ● completing development and testing of our products; ● establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products to support market demand for our products; ● launching and commercializing products, either directly or with a collaborator or distributor; ● addressing any competing technological and market developments; ● identifying, assessing, acquiring and/or developing new products; ● negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; ● maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and ● attracting, hiring and retaining qualified personnel.
There can be no assurance that our effective tax rates, tax payments, tax credits, or incentives will not be adversely affected by changes in tax laws in various jurisdictions. We may not be able to successfully manage our planned growth and expansion. We expect to continue to make investments in our products in development.
There can be no assurance that our effective tax rates, tax payments, tax credits, or incentives will not be adversely affected by changes in tax laws in various jurisdictions. We may not be able to successfully manage our planned growth and expansion.
We currently maintain a limited coverage of product liability insurance, which could materially affect our financial condition in the event we have a product liability claim. Currently, we maintain a limited coverage of product liability insurance in the amount of $3 million, which will be necessary prior to the commercialization of our products.
We currently maintain a limited coverage of product liability insurance, which could materially affect our financial condition in the event we have a product liability claim. Currently, we maintain limited coverage of product liability insurance in the amounts of $2 million to $3 million, depending on the territory, which will be necessary prior to the commercialization of our products.
We expect that our annual operating expenses will continue to increase as we invest in business development, marketing, research and development, manufacturing and production infrastructure, and develop customer service and support resources for future customers.
We expect to continue to make investments in our products in development and that we have begun to commercialize. We expect that our annual operating expenses will continue to increase as we invest in business development, marketing, research and development, manufacturing and production infrastructure, and develop customer service and support resources for future customers.
A failure to comply with these reporting obligations may subject you to significant monetary penalties and may prevent the statute of limitations with respect to your U.S. federal income tax return for the year for which reporting was due from starting.
Failure to comply with these reporting obligations may subject a United States shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such shareholder’s U.S. federal income tax return for the year for which reporting was due from starting.
We anticipate that our expenses will increase substantially if and as we: ● continue the development and testing of our products; ● establish a sales, marketing, and distribution infrastructure to commercialize our products; ● seek to identify, assess, acquire, license, and/or develop other products and subsequent generations of our current products; ● seek to maintain, protect, and expand our intellectual property portfolio; ● seek to attract and retain skilled personnel; and ● create additional infrastructure to support our operations as a public company and our product development and planned future commercialization efforts.
We anticipate that our expenses will increase substantially if and as we: ● continue the development and testing of our products; ● establish a sales, marketing, production and distribution infrastructure to commercialize our products; ● seek to identify, assess, acquire, license, and/or develop other products and subsequent generations of our current products; ● seek to maintain, protect, and expand our intellectual property portfolio; ● seek to attract and retain skilled personnel; and ● create additional infrastructure to support our operations as a public company and our product development and planned future commercialization efforts. 4 We have not generated significant revenues from the sale of our current products and may never be profitable.
This additional capital may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations. We expect that we will need to invest significant time and require substantial additional capital to commercialize our products.
Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations. We expect that we will need to invest significant time and require substantial additional capital to commercialize our products.
We intend to take advantage of these exemptions until we are no longer an “emerging growth company.” We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement under the Securities Act, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. 18 We cannot predict if investors will find our ordinary shares less attractive because we may rely on these exemptions.
As a result of this adoption, our financial statements may not be comparable to companies that comply with the public company effective date. 17 We intend to take advantage of these exemptions until we are no longer an “emerging growth company.” We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement under the Securities Act, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Federal Income Tax Considerations — Passive Foreign Investment Companies” for additional information. 19 If a United States person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.
Federal Income Tax Considerations—Passive Foreign Investment Companies.” 18 If a United States person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.
We expect that the resource adjustment to result in a significant reduction in fixed costs, including salaries and professional services and we will continue to evaluate our needed resources on an ongoing basis. Our future success depends in part on our ability to retain our executive officers and to attract, retain and motivate other qualified personnel.
This resource adjustment resulted a significant reduction in fixed costs, including salaries and professional services and we evaluate our needed resources on an ongoing basis. 11 Our future success depends in part on our ability to retain our executive officers and to attract, retain and motivate other qualified personnel.
We cannot provide any assurances that our trade secrets and other confidential proprietary information will not be disclosed in violation of our confidentiality agreements or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
In addition, our trade secrets and intellectual property may otherwise become known or be independently discovered by competitors. 14 We cannot provide any assurances that our trade secrets and other confidential proprietary information will not be disclosed in violation of our confidentiality agreements or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
We have invested almost all of our efforts and financial resources in the research, development and testing of our products in development. As a result, our business is entirely dependent on our ability to complete the development of, and to successfully commercialize, our product candidates. The process of development and commercialization is long, complex, costly and uncertain of outcome.
Until recently, we have invested almost all of our efforts and financial resources in the research, development and testing of our products in development. As a result, our business is entirely dependent on our ability to complete the development of, and to successfully commercialize, our product candidates.
Risks Related to Israeli Law and Our Incorporation, Location and Operations in Israel ● Our headquarters, research and development and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel. ● Provisions of Israeli law and our articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, even when the terms of such a transaction are favorable to us and our shareholders. ● Your rights and responsibilities as a holder of our securities are governed by Israeli law, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies. ● It may be difficult to enforce a judgment of a U.S. court against us and our officers and directors and the Israeli experts named in this Annual Report in Israel or the United States, to assert U.S. securities laws claims in Israel or to serve process on our officers and directors and these experts. ● Our operations may be disrupted as a result of the obligation of management or key personnel to perform military service. 3 Risks Related to Our Financial Condition and Capital Requirements We are a development-stage company and have a limited operating history on which to assess the prospects for our business, have incurred significant losses since the date of our inception, and anticipate that we will continue to incur significant losses until we are able to successfully commercialize our products.
Risks Related to Israeli Law and Our Incorporation, Location and Operations in Israel ● Our headquarters, research and development and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel. ● Provisions of Israeli law and our articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, even when the terms of such a transaction are favorable to us and our shareholders. ● Your rights and responsibilities as a holder of our securities are governed by Israeli law, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies. 3 ● It may be difficult to enforce a judgment of a U.S. court against us and our officers and directors and the Israeli experts named in this Annual Report in Israel or the United States, to assert U.S. securities laws claims in Israel or to serve process on our officers and directors and these experts. ● Our operations may be disrupted as a result of the obligation of management or key personnel to perform military service.
There generally would be negative tax consequences for U.S. taxpayers that are holders of our ordinary shares if we are or were to become a PFIC. ● We may be subject to securities litigation, which is expensive and could divert management attention.
There generally would be negative tax consequences for U.S. taxpayers that are holders of our ordinary shares if we are or were to become a PFIC. ● We may be subject to securities litigation, which is expensive and could divert management attention. ● The market price of our securities may be highly volatile, and you could lose all or part of your investment.
We have a growing portfolio of seven patents registered in the USA; four patent registered in China; one patent registered from the European Patent Office (EPO) and being validated in Germany, Switzerland, Hungary, Austria, Denmark, France and Great Britain; two patent issued in Japan; 17 pending patent applications, of which two are US provisional patent applications and 14 are national phase patent applications filed in the USA, EPO, China, Japan and India under the provisions of the Patent Cooperation Treaty (PCT) through World Intellectual Property Organization (WIPO); and one of which is a patent application in Hong Kong and requested based on the Chinese national phase patent application.
We have a growing portfolio of 11 patents registered in the USA; 4 patents registered in China; 2 patent registered from the European Patent Office (EPO) and validated in Germany, Switzerland, Hungary, Austria, Denmark, France and Great Britain; 6 patents issued in Japan; 3 patents issued in India; 11 pending patent applications, of which 11 are national phase patent applications filed in the USA, EPO, China, Japan and India under the provisions of the Patent Cooperation Treaty (PCT) through World Intellectual Property Organization (WIPO); and 1 of which is a patent application in Hong Kong and requested based on the European national phase patent application.
If we are unable to protect the confidentiality of our trade secrets or know-how, such proprietary information may be used by others to compete against us, affecting our ability to compete. ● We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful and we may be subject to claims challenging the inventorship of our intellectual property, and we may not be able to protect our intellectual property rights throughout the world. 2 Risks Related to the Ownership of Our Securities ● Our principal shareholders, officers and directors beneficially own approximately 13.8% of our ordinary shares.
If we are unable to protect the confidentiality of our trade secrets or know-how, such proprietary information may be used by others to compete against us, affecting our ability to compete. ● We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful and we may be subject to claims challenging the inventorship of our intellectual property, and we may not be able to protect our intellectual property rights throughout the world.
Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until the date we are no longer an emerging growth company and reach accelerated filer status.
Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until the date we are no longer an emerging growth company and reach accelerated filer status. 12 Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud.
Additionally, we are subject to data ownership and privacy regulations which may expose us to lawsuits and sanctions for violations. ● We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations. ● Any resurgence of the COVID-19 pandemic could adversely affect our business, financial condition and results of operations. ● Certain events, developments, or social media posts and interactions may impact our reputation. ● Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk. ● Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.
Additionally, we are subject to data ownership and privacy regulations which may expose us to lawsuits and sanctions for violations. ● We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations. ● Certain events, developments, or social media posts and interactions may impact our reputation. ● Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk. ● Scrutiny of sustainability and environmental, social, and governance\ initiatives could increase our costs or otherwise adversely impact our business.
This volatility may prevent you from being able to sell your ordinary shares or warrants at or above the price you paid for your securities.
The market price of our ordinary shares and warrants is likely to be volatile. This volatility may prevent you from being able to sell your ordinary shares or warrants at or above the price you paid for your securities.
This additional capital may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.
This additional capital may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations. Raising additional capital would cause dilution to our existing shareholders, and may affect the rights of existing shareholders.
While we have several ongoing tests with train operators through which we hope to demonstrate our technology, we cannot assure you that any of these programs will result in subsequent sales of our products.
The process of development and commercialization is long, complex, costly and uncertain of outcome. While we have several ongoing tests with train operators through which we hope to demonstrate our technology, we cannot assure you that any of these programs will result in subsequent sales of our products.
We cannot provide any assurances that we will assist any shareholder in determining whether such shareholder is treated as a United States shareholder with respect to any “controlled foreign corporation” in our group (if any) or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations.
We cannot provide any assurances that we will assist investors in determining whether we are or any of our non-U.S. subsidiaries is treated as CFC or whether any investor is treated as a United States shareholder with respect to any such CFC or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations.
If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares, and our market prices may be more volatile and may decline.
We cannot predict if investors will find our ordinary shares less attractive because we may rely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares, and our market prices may be more volatile and may decline.
A United States shareholder of a controlled foreign corporation may be required to annually report and include in its U.S. taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income” and investments in U.S. property by controlled foreign corporations, whether or not we make any distributions, and may be subject to tax reporting obligations.
A United States shareholder of a CFC may be required to report annually and include in its U.S. taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income,” and investments in U.S. property by CFCs, regardless of whether we make any distributions.
In addition, under the Israeli Patent Law, 5727-1967, or the Patent Law, inventions conceived by an employee in the course and as a result of or arising from his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent a specific agreement between the employee and employer giving the employee service invention rights.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. 16 In addition, under the Israeli Patent Law, 5727-1967, or the Patent Law, inventions conceived by an employee in the course and as a result of or arising from his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent a specific agreement between the employee and employer giving the employee service invention rights.
In general, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents, all of which could have a material adverse effect on our business and financial condition.
In general, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents, all of which could have a material adverse effect on our business and financial condition. 15 We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful.
In the past, companies that have experienced volatility in the market price of their shares have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business.
We may be subject to securities litigation, which is expensive and could divert management attention. In the past, companies that have experienced volatility in the market price of their shares have been subject to securities class action litigation. We may be the target of this type of litigation in the future.
If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of our products or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.
Even if we believe that we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations. 5 If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of our products or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.
Holder makes a “mark to market” election or an election to treat us as a qualified electing fund, or QEF. These elections would result in an alternative treatment (such as mark-to-market treatment) of our ordinary shares. It is not expected that a U.S. Holder will be able to make a QEF election because we do not intend to provide U.S.
Certain adverse consequences of PFIC status may be alleviated if a U.S. Holder (as defined below) makes a “mark to market” election or an election to treat us as a qualified electing fund, or QEF. These elections would result in an alternative treatment (such as mark-to-market treatment) of our ordinary shares. It is not expected that a U.S.
Reputation loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations and an impediment to our overall ability to advance our business strategy and realize on our growth prospects. We previously identified material weaknesses in our internal control over financial reporting, which have been remediated.
Reputation loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations and an impediment to our overall ability to advance our business strategy and realize on our growth prospects.
However, the intensity and duration of Israel’s current war against Hamas is difficult to predict at this stage, as are such war’s economic implications on our business and operations and on Israel’s economy in general, and we continue to monitor the situation closely and examine the potential disruptions that could adversely affect our operations. 22 Our insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East or for any resulting disruption in our operations.
However, the intensity and duration of Israel’s current war against Hamas is difficult to predict at this stage, as are such war’s economic implications on our business and operations and on Israel’s economy in general, and we continue to monitor the situation closely and examine the potential disruptions that could adversely affect our operations.
During such a long period, there is a risk that some of the system components of our products will become obsolete and will not be available from our suppliers.
During such a long period, there is a risk that some of the system components of our products will become obsolete and will not be available from our suppliers. Therefore, there is a risk that we will be obliged to hold an inventory of components that may become obsolete, or be forced to locate or develop alternatives to such components.
To the extent that we raise additional capital through the issuance of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a holder of our ordinary shares. 5 Risks Related to Our Business and Industry We depend entirely on the success of our current products in development, and we may not be able to successfully introduce these products and commercialize them.
To the extent that we raise additional capital through the issuance of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a holder of our ordinary shares.
Broad market and industry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance, and we have little or no control over these factors. 20 If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or the ordinary shares, our share price and trading volume could decline.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or the ordinary shares, our share price and trading volume could decline.
This means that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to delay such adoption of new or revised accounting standards. As a result of this adoption, our financial statements may not be comparable to companies that comply with the public company effective date.
This means that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to delay such adoption of new or revised accounting standards.
We have not generated significant revenue from the sale of our current products and may never be profitable. We have not yet generated significant revenues since the date of our inception. Our first revenues were recorded in our unaudited interim condensed financial statements for the period ended June 30, 2021.
While we have commenced commercialization efforts of our product, we have not yet generated significant revenues since the date of our inception. Our first revenues were recorded in our unaudited interim condensed financial statements for the period ended June 30, 2021.
Raising additional capital would cause dilution to our existing shareholders, and may affect the rights of existing shareholders. 1 Risks Related to Our Business and Industry ● We depend entirely on the success of our current products in development, we may not be able to successfully introduce these products and commercialize them, and we may not be able to successfully manage our planned growth, and our operating results and financial condition may fluctuate.
Risks Related to Our Business and Industry ● We depend entirely on the success of our current products that we have started to commercialize and that we may further develop, we may not be able to successfully introduce these products and commercialize them, and we may not be able to successfully manage our planned growth, and our operating results and financial condition may fluctuate.
The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on our board committees, if any, or as senior management.
The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on our board committees, if any, or as senior management. 24 Sales of a substantial number of our ordinary shares in the public market by our existing shareholders could cause our share price to fall.
Any adverse determination in litigation could also subject us to significant liabilities. The market price of our securities may be highly volatile, and you could lose all or part of your investment. The market price of our ordinary shares and warrants is likely to be volatile.
Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities. The market price of our securities may be highly volatile, and you could lose all or part of your investment.
To date, these initiatives have been substantially put on hold. Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations and growth prospects.
Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations and growth prospects. We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations.
In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance, and we have little or no control over these factors.
They will therefore be able to exert significant control over matters submitted to our shareholders for approval, which could limit your ability to influence the outcome of key transactions, including a change of control, and which may result in conflicts with us or you in the future. ● Certain of our directors have relationships with our principal shareholders, which may cause conflicts of interest with respect to our business. ● As a “foreign private issuer” we are permitted, and intend, to follow certain home country corporate governance practices instead of otherwise applicable SEC and Nasdaq requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers. ● We may be a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes in the current taxable year or may be one in any subsequent taxable year.
Risks Related to the Ownership of Our Securities ● As a “foreign private issuer” we are permitted, and intend, to follow certain home country corporate governance practices instead of otherwise applicable SEC and Nasdaq requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers. ● We may be a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes in the current taxable year or may be one in any subsequent taxable year.
As of the date of this annual report, six (6) of our employees who were initially called up for reserve service have since been released from such service. Military service call ups that result in absences of personnel from us for an extended period of time may materially and adversely affect our business, prospects, financial condition and results of operations.
Military service call ups that result in absences of personnel from us for an extended period of time may materially and adversely affect our business, prospects, financial condition and results of operations.
If we are not able to predict market trends accurately, we may not benefit from such research and development activities, and our results of operations may suffer.
If we are not able to predict market trends accurately, we may not benefit from such research and development activities, and our results of operations may suffer. As our future development and commercialization plans and strategies develop, we expect to need additional managerial, operational, sales, marketing, financial and legal personnel.
Should restrictive regulations apply, they could delay the introduction of autonomous train technology, cause us to redesign aspects of our products, impose additional costs and adversely affect our results of operations.
Should restrictive regulations apply, they could delay the introduction of autonomous train technology, cause us to redesign aspects of our products, impose additional costs and adversely affect our results of operations. We cannot assure you that we have been or will be at all times in complete compliance with such laws, regulations and permits.
Additionally, the absence of a significant number of the employees of our Israeli suppliers and contractors related to military service or the absence for extended periods of one or more of their key employees for military service may disrupt their operations. 24 General Risk Factors We incur significant additional costs as a result of being a public company subject to SEC reporting requirements in the United States, and our management is required to devote substantial additional time to new compliance initiatives as well as to compliance with ongoing United States reporting requirements.
We incur significant additional costs as a result of being a public company subject to SEC reporting requirements in the United States, and our management is required to devote substantial additional time to new compliance initiatives as well as to compliance with ongoing United States reporting requirements.
If we cannot demonstrate that such interests will be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be diminished. 11 Any resurgence of the COVID-19 pandemic could adversely affect our business, financial condition and results of operations.
If we cannot demonstrate that such interests will be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be diminished. Certain events, developments, or social media posts and interactions may impact our reputation.
We are a development-stage company with a limited operating history. We have incurred net losses since our inception in 2016, including net losses of approximately $11.1 million for the year ended December 31, 2023. As of December 31, 2023, we had an accumulated deficit of approximately $66.0 million.
We are an early commercialization stage company with a limited operating history and have not yet generated significant revenues from our sales and operations. We have incurred net losses since our inception in 2016, including net losses of approximately $29 million for the year ended December 31, 2024.
In addition, since the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and southern border (with the Houthi movement in Yemen).
Since the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and on other fronts from various extremist groups in the region, such as the Houthis in Yemen and various rebel militia groups in Syria and Iraq.
In addition, Iran has threatened to attack Israel and is widely believed to be developing nuclear weapons. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthi movement in Yemen and various rebel militia groups in Syria and Iraq.
Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthis in Yemen and various rebel militia groups in Syria and Iraq. These situations may potentially escalate in the future to more violent events which may affect Israel and us.
We plan to assemble and test the systems that we sell at single facilities in various locations that are specifically dedicated to separate categories of systems. Because of our reliance on all of these production facilities, a disruption at any of those facilities could materially damage our ability to supply our products to the marketplace in a timely manner.
Because of our reliance on all of these production facilities, a disruption at any of those facilities could materially damage our ability to supply our products to the marketplace in a timely manner. Depending on the cause of the disruption, we could also incur significant costs to remedy the disruption and resume product shipments.
Operating Results— Financing Activities— Execution of Credit Facility Agreement and Issuance of Warrant (January 2024)” for additional information. The amount of our future net losses will depend, in part, on completing the development of our products, the rate of our future expenditures and our ability to obtain funding through the issuance of our securities, strategic collaborations or grants.
The amount of our future net losses will depend, in part, on completing the development of our products, the rate of our future expenditures and our ability to obtain funding through the issuance of our securities, strategic collaborations or grants. We expect to continue to incur significant losses until we are able to successfully commercialize our products.
Based on the projected composition of our income and valuation of our assets, we may have been a PFIC during 2023, and although we have not determined whether we will be a PFIC in 2024, or in any subsequent year, our operating results for any such years may cause us to be a PFIC.
Based on our market capitalization and the composition of our income, assets and operations, there can be no assurance that we were not a PFIC for the year ended December 31, 2024, and although we have not determined whether we will be a PFIC for United States federal income tax purposes for the year ending December 31, 2025, or in any subsequent year, there can be no assurance that our market capitalization and the composition of our income, assets and operations for any such years will not cause us to be a PFIC.
We have devoted substantially all of our financial resources to develop our solutions. We have financed our operations primarily through the issuance of equity securities and credit facility that we entered into in January 2024. See “Item 5. Operating and Financial Review and Prospects— B.
We have financed our operations primarily through the issuance of equity securities. See “Item 5. Operating and Financial Review and Prospects— B. Operating Results— Financing Activities— Execution of Credit Facility Agreement and Issuance of Warrant (January 2024)” “Item 5. Operating and Financial Review and Prospects— B. Operating Results— Financing Activities—Standby Equity Purchase Agreement (October 2024)” and for additional information.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeUnder the terms of the agreement, we undertook to fulfill certain functions for the development, marketing, distribution and sale of the system, and Israel Railways undertook to provide us with services and the means to perform tests and experiments, mainly in logistics and manpower, and to provide us with information on certain data that will be given at the discretion of Israel Railways. 37 Pursuant to the agreement, we agreed to pay Israel Railways the following payments: (i) during the period from August 3, 2016 and until the earliest of (a) a period of 5 years from the date of our first commercial sale or (b) our initial public offering on April 4, 2022 or (c) a change of control (as defined in the agreement), Israel Railways will be entitled to a payment of royalties in the amount of 2.75% of our net sales, and (ii) during the period from August 3, 2016 until the earliest of: (a) our initial public offering on April 4, 2022 or (b) a change of control (as defined in the agreement) Israel Railways will be entitled to 1.5% of the total proceeds from an IPO or consideration, received by us or our shareholders, as a result of a change of control.
Biggest changeUnder the terms of the agreement, we undertook to fulfill certain functions for the development, marketing, distribution and sale of the system, and Israel Railways undertook to provide us with services and the means to perform tests and experiments, mainly in logistics and manpower, and to provide us with information on certain data that will be given at the discretion of Israel Railways.
However, interfacing with the brakes or other systems in the locomotive requires compliance with a stricter Safety Integrity Level (SIL) than the levels for which we have currently have obtained certification (SIL 0). Rail Vision has completed a homologation process of a drive assist system on trains in a use-case of Switch Yard (SIL-0 according to EN50126).
However, interfacing with the brakes or other systems in the locomotive requires compliance with a stricter Safety Integrity Level (SIL) than the levels for which we have currently obtained certification (SIL 0). Rail Vision has completed a homologation process of a drive assist system on trains in a use-case of Switch Yard (SIL-0 according to EN50126).
Our railway detection system actively classifies objects by severity to determine if an alarm should be signaled to the train driver. These data collection and classification capabilities can be extended to further use-cases such as predictive maintenance and big-data analyses. 27 We believe that our technology demonstrates capabilities and results that are better than existing solutions.
Our railway detection system actively classifies objects by severity to determine if an alarm should be signaled to the train driver. These data collection and classification capabilities can be extended to further use-cases such as predictive maintenance and big-data analyses. We believe that our technology demonstrates capabilities and results that are better than existing solutions.
Because global laws and regulations have continued to develop and evolve rapidly, it is possible that we may not be, or may not have been, compliant with each such applicable law or regulation. 42 Intellectual Property We seek patent protection as well as other effective intellectual property rights for our products and technologies in the United States and internationally.
Because global laws and regulations have continued to develop and evolve rapidly, it is possible that we may not be, or may not have been, compliant with each such applicable law or regulation. Intellectual Property We seek patent protection as well as other effective intellectual property rights for our products and technologies in the United States and internationally.
An advanced prototype of the Main Line System was completed and finalized its first field test phase with Israel Railways in March 2022. Following a long-term pilot with Israel Railways that was concluded in August 2022, in January 2023, we signed an agreement with Israel Railways for the purchase of 10 Rail Vision Main Line Systems.
An advanced prototype of the Main Line System was completed and finalized its first field test phase with Israel Railways in March 2022. 35 Following a long-term pilot with Israel Railways that was concluded in August 2022, in January 2023, we signed an agreement with Israel Railways for the purchase of 10 Rail Vision Main Line Systems.
All of our employment and consulting agreements include employees’ and consultants’ undertakings with respect to non-competition and assignment to us of intellectual property rights developed in the course of employment and confidentiality. The enforceability of such provisions is subject to Israeli law. 43 C. Organizational Structure We currently have no subsidiaries. D.
All of our employment and consulting agreements include employees’ and consultants’ undertakings with respect to non-competition and assignment to us of intellectual property rights developed in the course of employment and confidentiality. The enforceability of such provisions is subject to Israeli law. C. Organizational Structure We currently have no subsidiaries. D.
Thus, by our estimate, the railway detection systems offered by competitors for mainline trains have relatively limited capabilities compared to the capabilities of our RV2000 system. From our own analysis, we believe that our competitors offer a shorter range-detection distance and provide a lower detection probability of obstacles than the railway detection systems we have developed.
Thus, by our estimate, the railway detection systems offered by competitors for mainline trains have relatively limited capabilities compared to the capabilities of our MainLine system. From our own analysis, we believe that our competitors offer a shorter range-detection distance and provide a lower detection probability of obstacles than the railway detection systems we have developed.
These technologies aid in improving the overall operational efficiency and maintaining freight operations and systems. Autonomous trains, also known as driverless trains, are operated automatically without any human intervention, and are monitored from the control station when communication is available.
These technologies aid in improving the overall operational efficiency and maintaining freight operations and systems. 27 Autonomous trains, also known as driverless trains, are operated automatically without any human intervention, and are monitored from the control station when communication is available.
Our railway detection system monitors the short and long-distance region of interest in front of the train, at an operational range of up to 2,000 meters (1.2 miles), which is longer than the braking distance of most trains.
Our railway detection system monitors the short and long-distance region of interest in front of the train, at an operational range of up to 2,000 meters (1.3 miles), which is longer than the braking distance of most trains.
These warnings are shown to the driver with some recommendations to stop or slow down. The system also has the technical ability to interface with the locomotive’s control systems, such as the train’s brakes. This is done by setting up a communication interface with existing systems in the train and doing so in accordance with the customer’s requirements.
These real time warnings are shown to the driver with some recommendations to stop or slow down. The system also has the technical ability to interface with the locomotive’s control systems, such as the train’s brakes. This is done by setting up a communication interface with existing systems in the train and doing so in accordance with the customer’s requirements.
Disadvantages: To the best of the Company’s knowledge, the demo has been shown to a customer for a specific use. We are not aware of a standardization process that this competitor has initiated. ELTA Systems Ltd Main Line The system is based on an array of day cameras with integrated AI. Advantages: 1.
Disadvantages: To the best of the Company’s knowledge, the demo has been shown to a customer for a specific use. We are not aware of a standardization process that this competitor has initiated. Advantages: NIART (Formally)\ ELTA Systems Ltd Main Line The system is based on an array of day cameras with integrated AI. 1.
US-based rail and leasing services company In January 2024, we signed a supply contract with a leading US-based rail and leasing services company valued at up to $5,000,000 (USD) for the purchase our AI-based Switch Yard Systems. The first phase of the contract is valued at $1,000,000 (USD).
US-based rail and leasing services company In January 2024, we signed a supply contract with a leading US-based rail and leasing services company valued at up to $5,000,000 (USD) for the purchase our AI-based Switch Yard Systems. The first phase of the contract was valued at $1,000,000 (USD).
The braking distance of the train may differ as a result of various factors, including weather conditions and the total weight of the train. Our railway detection system can technically interface with the train’s control and monitoring systems, such as the brake system.
The braking distance of the train may differ as a result of various factors, including weather conditions and the total weight of the train. As described previously, our railway detection system can technically interface with the train’s control and monitoring systems, such as the brake system.
ALSTOM Holdings Shunting Yard The system is based on an array of day cameras with integrated AI. Advantages: 1. Alstom is a major player within the railways industry with high technological and financial capabilities 2. Partnering with ELTA (major player in Radar’s) Disadvantages: 1. NA We are not aware of a standardization process that this competitor has initiated.
Alstom is a major player within the railways industry with high technological and financial capabilities We are not aware of a standardization process that this competitor has initiated. 2. Partnering with ELTA (major player in Radar’s) Disadvantages: 1. NA Advantages: Siasun ixdrive Shunting Yard The system is based on an array of day cameras with integrated AI. 1.
The on-board computer system receives data from the external sensor unit and uses artificial intelligence to perform algorithmic calculations in real time to identify potential hazards for the train operator. 30 Our railway detection system is designed to discover and warn the train operator about hazards of up to 2,000 meters (1.2 miles) ahead of the train.
The on-board computer system receives data from the external sensor unit and uses artificial intelligence to perform algorithmic calculations in real time to identify potential hazards and alert the train operator in real time. Our railway detection system is designed to discover and warn the train operator about hazards of up to 2,000 meters (1.2 miles) ahead of the train.
Big Data : this application of our system will be based on long-term collection of data from Company’s sensors installed on trains to provide relevant data on infrastructure, train traffic and the surroundings.
Data Services : this application of our system will be based on long-term collection of data from Company’s sensors installed on trains to provide relevant data on infrastructure, train traffic and the surroundings.
In January 2024, we signed a supply contract with this customer valued at up to $5,000,000 (USD) for the purchase our AI-based Switch Yard Systems. The first phase of the contract is valued at $1,000,000 (USD). Follow-on orders for additional Switch Yard Systems, valued at up to $4,000,000, are subject to customer approval.
In January 2024, we signed a supply contract with this customer valued at up to $5,000,000 for the purchase our AI-based Switch Yard Systems. The first phase of the contract was valued at $1,000,000. Follow-on orders for additional Switch Yard Systems, valued at up to $4,000,000, are subject to customer approval.
In February 2023, a leading US-based rail and leasing services company purchased a Switch Yard System and evaluated its performance during a six-month trial that was completed in September 2023, for a total amount of $140,000 including technical support services, during the six-month trial.
Market traction of the Shunting Yard system In February 2023, a leading US-based rail and leasing services company purchased a Switch Yard System and evaluated its performance during a six-month trial that was completed in September 2023, for a total amount of $140,000 including technical support services, during the six-month trial.
The term of the agreement will expire three years after the date of the agreement, or August 19, 2024. Collaboration Agreement with Israel Railways On August 3, 2016, we entered into a Cooperation Agreement with Israel Railways Ltd. (a governmental company fully owned by the State of Israel), which was further amended on January 19, 2020.
The term of the agreement expired three years after the date of the agreement, or August 19, 2024. Collaboration Agreement with Israel Railways On August 3, 2016, we entered into a Cooperation Agreement with Israel Railways Ltd. (a governmental company fully owned by the State of Israel), which was further amended on January 19, 2020.
Following a long-term pilot with Israel Railways that was concluded in August 2022, in January 2023, we signed an agreement with Israel Railways for the purchase of 10 Rail Vision Main Line Systems, which installation started in February 2024.
Summary of Market Traction Following a long-term pilot with Israel Railways that was concluded in August 2022, in January 2023, we signed an agreement with Israel Railways for the purchase of 10 Rail Vision Main Line Systems, which installation started in February 2024.
In April 2021, we entered into an equipment, personnel and services supply agreement with Hitachi Rail STS Australia Pty Ltd., or STS, which enables STS, as the principal supplier, to supply Rio Tinto Railway Network with our RV2000 system for demonstrations and to examine the RV2000’s operational performance. The long-term pilot was concluded in August 2022.
In April 2021, we entered into an equipment, personnel and services supply agreement with Hitachi Rail STS Australia Pty Ltd., or STS, which enables STS, as the principal supplier, to supply Rio Tinto Railway Network with our MainLine system for demonstrations and to examine the MainLine system’s operational performance. The long-term pilot was concluded in August 2022.
Additionally, in terms of the ability to identify hazards at far longer distances, our railway detection system functions can not only discover obstacles on the tracks but also identify these obstacles. We believe that our railway detection system’s contribution to train safety will be greater than that of existing railway detection systems by our competitors.
Additionally, in terms of the ability to identify hazards at far longer distances under harsh weather conditions, our railway detection system functions can not only discover obstacles on the tracks but also identify these obstacles. We believe that our railway detection system’s contribution to train safety will be greater than that of existing railway detection systems by our competitors.
The agreement further provides that Israel Railways will be entitled to purchase our products and services at a price equal to half the lowest price charged by us for those products and services to an unrelated third party.
The agreement further provides that Israel Railways was entitled to purchase our products and services at a price equal to half the lowest price charged by us for those products and services to an unrelated third party.
Another advantage of our railway detection system is the option, currently in development, to use the system as an aid to predictive maintenance of railway infrastructure due to the system’s continuous monitoring of the railway tracks on which it travels.
Another advantage of our railway detection system is the option, to use the system as an aid to predictive maintenance of railway infrastructure due to the system’s continuous monitoring of the railway tracks on which it travels.
Increasing our sales and marketing efforts will enable us to initiate and create additional opportunities while the sales and marketing personnel focus on and specialize in the territories that our strategy defines as most relevant. ● We are focused on the following markets: North America, Europe and Australia.
Increasing our sales and marketing efforts will enable us to initiate and create additional opportunities while the sales and marketing personnel focus on and specialize in the territories that our strategy defines as most relevant. ● We are focused on the following markets: North America, Latin America and Israel.
Knorr-Bremse is a 110 year old multi-billion dollar market cap company traded on the Frankfurt Stock Exchange. With more than 30,000 employees at over 100 locations in more than 30 countries around the globe Knorr-Bremse is a world leader in braking & peripheral systems generating total of sales of EUR 7.1 billion in 2022.
Knorr-Bremse is a 110 year old multi-billion dollar market cap company traded on the Frankfurt Stock Exchange. With more than 30,000 employees at over 100 locations in more than 30 countries around the globe Knorr-Bremse is a world leader in braking & peripheral systems generating total of sales of $8.7 billion in 2024.
While a full transition to autonomous trains will require the development of additional technologies beyond those currently available, we believe that our obstacle detection technology has the potential to advance GoA 3 and GoA 4.
We believe that railway companies will gradually implement autonomous trains. While a full transition to autonomous trains will require the development of additional technologies beyond those currently available, we believe that our obstacle detection technology has the potential to advance GoA 3 and GoA 4.
We focus on the following three main segments of the market as described above: Locomotives for shunting yards – We have focused on selling the RV200 system to shunting yard operators.
We focus on the following three main segments of the market as described above: 1. Locomotives for shunting yards – We have focused on selling the ShuntingYard system to shunting yard operators.
Our policy is to pursue, maintain and defend intellectual property rights developed internally and to protect the technology, inventions and improvements that are commercially important to the development of our business. We have 15 registered patents and 17 pending patent applications.
Our policy is to pursue, maintain and defend intellectual property rights developed internally and to protect the technology, inventions and improvements that are commercially important to the development of our business. We have 26 registered patents and 11 pending patent applications.
Industry Overview and Market Opportunity The railway is an essential form of transportation. Efficient and safe railway infrastructure plays a central role in the global economy. The process of expanding and upgrading railways is taking place worldwide, driving the importance to produce safe and reliable railway infrastructure.
The railway is an essential form of transportation. Efficient and safe railway infrastructure plays a central role in the global economy. The process of expanding and upgrading railways is taking place worldwide, driving the importance to produce safe and reliable railway infrastructure.
Some of our competitors offer a shorter range-detection distance and provide a lower detection probability of obstacles. Our systems consist of electro-optic sensors using artificial intelligence for automatic identification, classification of obstacles along the tracks at distances which, to the best of our knowledge, are longer than those of the competition.
Some of our competitors offer a shorter range-detection distance and provide a lower detection probability of obstacles using technologies such as Lidar or Radar. Our systems consist of electro-optic sensors using artificial intelligence for automatic identification, classification of obstacles along the tracks at distances which, to the best of our knowledge, are longer than those of the competition.
In addition, after a successful six-month long-term pilot with a US-based rail and leasing services company, in January 2024, we signed a supply contract with this customer valued at up to $5,000,000 (USD) for the purchase our AI-based Switch Yard Systems. The first phase of the contract is valued at $1,000,000 (USD).
After a successful six-month long-term pilot with a US-based rail and leasing services company, in January 2024, we signed a supply contract with this customer valued at up to $5,000,000 (USD) for the purchase our AI-based Switch Yard Systems.
However, interfacing with the brake system or other systems of a train will require compliance with a more stringent level of train safety (SIL) than the current safety levels we are certified for, as of the date of this Annual Report.
However, interfacing with the brake system or other systems of a train may require, in specific regions, compliance with a more stringent level of train safety (SIL) than the current safety levels we are certified for, as of the date of this Annual Report.
To provide our customers with additional added value, we are developing maintenance, predictive maintenance, Big Data and GIS services, which may be added on top of our existing system components to make our railway detection system more attractive to the customer. Because our railway detection system regularly monitors railway infrastructures and tracks, the system can record and store visual information.
To provide our customers with additional added value, we are aiming at increasing our product offering with maintenance, predictive maintenance, data and GIS services, which may be added on top of our existing system components to make our railway detection system more attractive to the customer. 47 Because our railway detection system regularly monitors railway infrastructures and tracks, the system can record and store visual information.
For more information, please see “Item 3.D–Risk Factors—Risks Related to our Intellectual Property.” In addition, we may be exposed to claims and/or suits regarding the use of proprietary rights of third parties who received approval for the registration of a patent in respect of an application which had already been filed when we made use of such rights.
For more information, please see “Item 3.D–Risk Factors—Risks Related to our Intellectual Property.” In addition, we may be exposed to claims and/or suits regarding the use of proprietary rights of third parties who received approval for the registration of a patent in respect of an application which had already been filed when we made use of such rights. 48 Legal proceedings We are not currently party to any pending material legal proceedings.
We will be an emerging growth company until the earliest of: (i) the last day of the fiscal year during which we had total annual gross revenues of $1.07 billion or more, (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of the ordinary shares pursuant to an effective registration statement (i.e., December 31, 2027), (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt, or (iv) the date on which we are deemed a “large accelerated filer” as defined in Regulation S-K under the Securities Act, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30th.
We will be an emerging growth company until the earliest of: (i) the last day of the fiscal year during which we had total annual gross revenues of $1.07 billion or more, (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of the ordinary shares pursuant to an effective registration statement (i.e., December 31, 2027), (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt, or (iv) the date on which we are deemed a “large accelerated filer” as defined in Regulation S-K under the Securities Act, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30th. 26 As a foreign private issuer, we are exempt from certain rules and regulations under the Exchange Act that are applicable to other public companies that are not foreign private issuers.
In our estimation, the advantages of our technology over the competition are: ● Our railway detection system is based on passive technology that uses video images or thermal images, unlike other railway detection systems that are based on obstacle discovery using radar or lasers (which emit radiation along the railway track) in train stations, and already exist in the market for LRV and in level crossing – we do not know of any other system that reaches 2 kilometers classification. ● In several field trials, our railway detection systems have shown an ability to identify objects at distances of up to 2,000 meters.
In our estimation, the advantages of our technology over the competition are: ● Our railway detection system is based on passive technology that uses video images or thermal images, unlike other railway detection systems that are based on obstacle discovery using radar or lasers, which emit radiation along the railway track and are prone for higher false rates– we do not know of any other system that reaches 2 kilometers classification. ● In several field trials, our railway detection systems have shown an ability to identify objects at distances of up to 2,000 meters.
Our railway detection systems also have a greater degree of accuracy and higher probability to detect obstacles, which, to the best of our knowledge, results in fewer false alerts compared to competing products.
Our railway detection systems also have a greater degree of accuracy and higher probability to detect obstacles, which, to the best of our knowledge, results in fewer false alerts compared to competing products. To the best of our knowledge, several competing companies are developing systems to help drivers.
In particular, we operate in a market where most of our competitors are giant corporations such as Bosch Engineering GmbH, ALSTOM Holdings, Siemens Mobility GmbH and Toshiba Infrastructure Systems & Solutions Corporation with others such as 4Tel Pty Ltd and Cognitive Pilot LLC.
In particular, we operate in a market where most of our competitors are either large corporations such as Bosch Engineering GmbH, ALSTOM Holdings, Siemens Mobility GmbH and Toshiba Infrastructure Systems & Solutions Corporation with others such as 4AI systems and Cognitive Pilot LLC.
Legal proceedings We are not currently party to any pending material legal proceedings. From time to time, we may become a party to litigation incident to the ordinary course of our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
From time to time, we may become a party to litigation incident to the ordinary course of our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
We see big data services as one of its most important growth engines in the next 3-5 years. 35 New Products and Applications We are currently exploring a number of additional railway detection system applications that are in various stages of research and development, as follows: Maintenance and predictive maintenance: customers who have installed Rail Vision Main line and Shunting yard systems for real time identification of objects, will have the option of receiving predictive track maintenance services, such as identification of vegetation invading the tracks, damage to infrastructures, sunk pylons, etc.
New Products and Applications We are currently exploring a number of additional railway detection system applications that are in various stages of research and development, as follows: Maintenance and predictive maintenance: customers who have installed Rail Vision Main line and Shunting yard systems for real time identification of objects, will have the option of receiving predictive track maintenance services, such as identification of vegetation invading the tracks, damage to infrastructures, sunk pylons, etc.
ELTA is world leader in Radar technology with years of experience within Radar and EO systems. Won the RDSO tender in India Disadvantages: 1. To the best of our knowledge, the system is still under development We are not aware of a standardization process that this competitor has initiated.
ELTA is world leader in Radar technology with years of experience within Radar and EO systems. Won the RDSO tender in India We are not aware of a standardization process that this competitor has initiated. 1.
Huge amounts of data are built up (Big Data) which, subject to contractual and legal restrictions, could be available to customers for purposes such as identifying possible gaps and faults in tracks and other infrastructure, and updating maps. This capability is an added value to the existing system.
Huge amounts of data are built up (Big Data) which, subject to contractual and legal restrictions, could be available to customers for purposes such as identifying possible gaps and faults in tracks and other infrastructure, and updating maps.
Our Solutions We develop solutions for a number of verticals in the railway market: 1. The Main Line System The Main Line System is an application of our railway detection system for passengers and freight trains that travels in main line. The system includes an external sensor unit installed on the train along with an on-board computer system (see below).
The Main Line System The Main Line System is an application of our railway detection system for passengers and freight trains that travels on main line. The system includes an external sensor unit installed on the train along with an on-board computer system (see below).
Upon the completion of our initial public offering, the Israel Railways became entitled to a consideration of 1.5% of the actual proceeds from our initial public offering, which was approximately $213,000, and accordingly their right to royalties has expired.
Pursuant to the agreement, upon the completion of our initial public offering in April 2022, Israel Railways became entitled to consideration of 1.5% of the actual proceeds from our initial public offering, which was approximately $213,000, and accordingly their right to payment of royalties has expired, according to the agreement provisions.
We believe that the first order for such system by a commercial operator will have an impact on the market. The total amount is approximately $1.40 million USD.
We expect that the remainder of the systems will be delivered by mid 2025. We believe that the first order for such system by a commercial operator will have an impact on the market. The total amount is approximately $1.40 million USD.
Property, Plant and Equipment Our corporate headquarters, which includes our offices and research and development facility, is located at 15 Ha’Tidhar St., Ra’anana 4366517, Israel, where we currently occupy approximately 16,900 square feet. We lease our facilities and our lease ends in September 2026.
Property, Plant and Equipment Our corporate headquarters, which includes our offices and research and development facility, is located at 15 Ha’Tidhar St., Ra’anana 4366517, Israel, where we currently occupy approximately 16,900 square feet. We lease our facilities for a monthly rent of approximately NIS 83,000 (approximately $26,000) and our current lease period ends in September 2026.
Latin American mining company In October 2023, we received a $500,000 purchase order for a single Main Line system and related services from a leading Latin American mining company, which was delivered to the new customer in December 2023.
Latin American mining company In October 2023, we received a $500,000 purchase order for a single Main Line system and related services from a leading Latin American mining company, which was delivered to the new customer in December 2023. The customer began long-term pilot soon after installation was completed in July 2024.
The shunting yard application of the railway detection system consists of two external sensor units installed on either side of the locomotive that are linked to the central processing unit inside the train, and uses algorithms, artificial intelligence/deep learning neural nets, to classify these obstacles in real time, at a range of up to 200 meters on and beside the track, under severe weather and poor visibility conditions.
The Shunting Yard System The Shunting Yard System used at the shunting yard is meant to streamline work in the operational areas of railways (shunting yards) which are used for the assembly, disassembly loading and unloading of freight trains. 36 The shunting yard application of the railway detection system consists of two external sensor units installed on either side of the locomotive that are linked to the central processing unit inside the train, and uses algorithms, artificial intelligence/deep learning neural nets, to classify these obstacles in real time, at a range of up to 200 meters on and beside the track, under severe weather and poor visibility conditions.
Employees As of March 28, 2024, we have five senior management positions, all of whom are engaged on a full-time basis. In addition to our senior management, we have 44 employees in full or part-time capacities. All our employees are located in Israel.
Employees As of March 30, 2025, we have five (5) senior management positions, all of whom are engaged on a full-time basis. In addition to our senior management, we have forty seven (47) employees in full or part-time capacities. All our employees are located in Israel.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company We are a development stage technology company that is seeking to revolutionize railway safety and the data-related market. We believe we have developed cutting edge, AI based, industry-leading detection technology specifically designed for railways, with investments from Knorr-Bremse, a world-class rail system manufacturer.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company We are an early commercialization stage technology company that is seeking to revolutionize railway safety and the data-related market. We believe we have developed cutting edge, AI based, industry-leading detection technology specifically designed for railways.
The demonstration was successful, and we were asked to give an additional demonstration for the customer’s executives. 34 Locomotives for passenger and freight trains – Our strategic focus on this market segment derives from the fact that it includes the largest number of trains, and that the trains operating in this market segment are exposed to serious risks and the realistic probability for potentially fatal accidents.
Locomotives for passenger and freight trains – Our strategic focus on this market segment derives from the fact that it includes the largest number of trains, and that the trains operating in this market segment are exposed to serious risks and the realistic probability for potentially fatal accidents.
To the best of the Company’s knowledge, the Bosch system is sold at a competitive price at the LRV market 3. Bosch is a global company with high technological and financial capabilities compared to the Company. 4. The system also includes short-range radar. Disadvantages: 1.
Bosch is a global company with high technological and financial capabilities compared to the Company. 4. The system also includes short-range radar. Disadvantages: 1. To the best of the Company’s knowledge Bosch system is designed to the LRV market, not for shunting. 2.
On October 17, 2023, we received a $500,000 purchase order for a single Main Line System and related services from a leading Latin American mining company, which was delivered to the customer during December 2023. 32 2.
On October 17, 2023, we received a $500,000 purchase order for a single Main Line System and related services from a leading Latin American mining company, which was delivered to the customer during December 2023. The customer began long-term pilot soon after installation was completed in July 2024.
ATO covers five Grades of Automation (GoA): - GoA 0 refers to a train with a human driver who exercises full control of the train – starting, stopping, opening and closing doors, and operation in emergencies. - GoA 1 refers to operation where the driver controls starting and stopping the train, operation of doors, emergencies and sudden deviations, with the assistance of ATP systems. - GoA 2 refers to semi-automatic operation, where stopping is automatic, but the driver starts the train, operates the doors, and drives the train in emergencies. - GoA 3 refers to operation without a driver, where starting and stopping is automatic, but the controller operates the doors and drives the train in emergencies. - GoA 4 refers to train operation without supervision; starting, stopping, door operation and operation in emergencies is all automatic with no staff on the train. 29 We believe that railway companies will gradually implement autonomous trains.
The Light Railway in eastern London is even more advanced, and the driver’s cabin has been replaced by a controller. 32 ATO covers five Grades of Automation (GoA): - GoA 0 refers to a train with a human driver who exercises full control of the train – starting, stopping, opening and closing doors, and operation in emergencies. - GoA 1 refers to operation where the driver controls starting and stopping the train, operation of doors, emergencies and sudden deviations, with the assistance of ATP systems. - GoA 2 refers to semi-automatic operation, where stopping is automatic, but the driver starts the train, operates the doors, and drives the train in emergencies. - GoA 3 refers to operation without a driver, where starting and stopping is automatic, but the controller operates the doors and drives the train in emergencies. - GoA 4 refers to train operation without supervision; starting, stopping, door operation and operation in emergencies is all automatic with no staff on the train.
Follow-on orders for additional Switch Yard Systems, valued at up to $4,000,000, are subject to customer approval. The contract also includes specific purchase quotas that, if met, provide the customer with exclusivity in the North American industrial railyards switching segment. 36 Knorr-Bremse We have entered into a series of strategic and investment agreements with Knorr-Bremse or affiliates of Knorr-Bremse.
Follow-on orders for additional Switch Yard Systems, valued at up to $4,000,000, are subject to customer approval. The contract also includes specific purchase quotas that, if met, provide the customer with exclusivity in the North American industrial railyards switching segment.
Thales Group (RailBot) Main Line Based on a daylight camera with AI capabilities Advantages: 1. Thales is a major player within the railways industry with high technological and financial capabilities. Disadvantages: 1. To the best of the Company’s knowledge, the ranges are lower than our system.
Disadvantages: To the best of our knowledge, the system is still under development Thales Group (RailBot) Main Line Based on a daylight camera with AI capabilities 1. Advantages: Thales is a major player within the railways industry with high technological and financial capabilities. We are not aware of a standardization process that this competitor has initiated. 1.
These technologies are generally based on LIDAR technology and/or radar scans with cameras, and as far as we know, have not yet been shown to be suitable for the railway environment, in terms of discovery ranges and required performance.
These technologies are generally based on LIDAR technology and/or radar scans with cameras, and as far as we know, have not yet been shown to be suitable for the railway environment, in terms of discovery ranges and required performance We differentiate our systems by focusing on their unique ability to use AI algorithms in real time to provide alerts to the driver throughout the entire drive.
Currently, this application is only at the start of the research and development stages and is also conditioned on the installation and operation of about one hundred railway detection systems in order to obtain sufficient data for its operation, assuming the successful completion of its development.
Currently, this application is only at the start of the research and development stages and is also conditioned on the installation and operation of about one hundred railway detection systems in order to obtain sufficient data for its operation, assuming the successful completion of its development. 41 We intend to offer the data services as an added value to our system to be installed at the customer and not as a separate product.
To detect hazards up to this distance, our railway detection system is dependent on a continuous line of sight that is not obscured by buildings, curves in the track, or dense fog which can limit the detection range.
To detect hazards up to this distance, our railway detection system is dependent on a continuous line of sight that is not obscured by buildings, curves in the track, or dense fog which can limit the detection range. 34 The braking distance of a train traveling at high speeds of about 160 KPH / 100 MPH is approximately 800 meters (0.5 miles).
These companies adapt technologies from the vehicle industry for use with trains, for long distance identification of hazards, particularly in the LRV segment.
Some derive from the world of trains, others from the wheeled vehicle industry. These companies adapt technologies from the vehicle industry for use with trains, for long distance identification of hazards.
Our senior management, directors, and principal shareholders will be exempt from the requirements to report transactions in our equity securities and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act.
Our senior management, directors, and principal shareholders will be exempt from the requirements to report transactions in our equity securities and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private issuer, we will also not be subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. B.
While there are various levels of implementation of ATO, the most common use of ATO is on underground railways. For example, the London Underground uses semi-automatic train operation on certain lines. The Light Railway in eastern London is even more advanced, and the driver’s cabin has been replaced by a controller.
While there are various levels of implementation of ATO, the most common use of ATO is on underground railways. For example, the London Underground uses semi-automatic train operation on certain lines.
In addition, we believe that our technology has the potential to advance the revolutionary concept of autonomous trains into a practical reality. The increasing electrification and automation of railways and trains are two key factors that are driving growth in the transportation market.
In addition, we believe that our technology has the potential to advance the revolutionary concept of autonomous trains into a practical reality.
Generally, such railway detection systems fall into two main categories – those which are installed on the train (such as our railway detection system), and those that are fixed signaling systems installed as part of the stationary infrastructure. 28 We believe that the market potential for our railway detection systems that are installed on the train is large and ever growing, as every single railway train or drivers’ cabin worldwide is a potential customer.
Generally, such railway detection systems fall into two main categories – those which are installed on the train (such as our railway detection system), and those that are fixed signaling systems installed as part of the stationary infrastructure.
The first deliveries of the systems was completed in the first quarter of 2024. The potential sales opportunity with Israel Railways for our Main Line System is for installations on up to 200 trains, and assuming we can negotiate bidirectional installation, the potential sale opportunity could be doubled to install up to 400 RV2000 systems on up to 200 trains.
We foresee that the remainder of the system will be installed by Mid 2025 The potential sales opportunity with Israel Railways for our Main Line System is for installations on up to 300 trains, and assuming we can negotiate bidirectional installation, the potential sale opportunity could be doubled to install up to 600 MainLine systems.
In addition, we are engaged in the process of licensing systems that are intended for this market segment on the assumption that obtaining a permit in one country may significantly facilitate the licensing process in another country. The Company has signed a contract with Israel Railways to supply 10 systems. The delivery is expected to start during Q4 2023.
In addition, we are engaged in the process of licensing systems that are intended for this market segment on the assumption that obtaining a permit in one country may significantly facilitate the licensing process in another country. 3.
The parameters examined by us included, among other things, the total length of the railway tracks in the country examined, the number of passengers per kilometer/ mile of track traveled, the number of tons of goods per kilometer/ mile of track transported, the total number of trains in the country, the level of innovation in the country, and the openness to integrate new technologies. ● We are investing in efforts to create and develop collaborations with leading train manufacturers.
The parameters examined by us included, among other things, the total length of the railway tracks in the country examined, the number of passengers per kilometer/ mile of track traveled, the number of tons of goods per kilometer/ mile of track transported, the total number of trains in the country, the level of innovation in the country, and the openness to integrate new technologies. ● We have entered the Indian market through a Memorandum of Understanding (MOU) with Sujan Ventures, a division of the Sujan Group, a key supplier to Indian Railways.
The interface with an ATO concept of operation can be done at a later time, since our railway detection system, once engaged, can be used regardless of the integration with other autonomous technologies. GoA 4 freight trains already operate in certain parts of the world (such as Rio Tinto Australia, and Iron Ore Canada).
The interface with an ATO concept of operation can be done at a later time, since our railway detection system, once engaged, can be used regardless of the integration with other autonomous technologies.
Railway accidents are generally attributed to several factors, such as the human factor, which include the driver’s failure to notice and respond to obstacles on the track, the driver’s ability to react to potential dangers, and the driver’s field of view, which is made worse in poor lighting or severe weather conditions.
Additionally, Rail Vision’s strategic collaborations with leading rail operators and technology partners, such as Knorr-Bremse, reflect the increasing importance of partnerships in accelerating innovation and integration into existing rail infrastructures. 31 Railway accidents are generally attributed to several factors, such as the human factor, which include the driver’s failure to notice and respond to obstacles on the track, the driver’s ability to react to potential dangers, and the driver’s field of view, which gets worse in poor lighting or severe weather conditions.
Advantages: 1. EU based company 2. Mobile system Disadvantages: 1. To the best of the Company’s knowledge, the ranges are lower than our system. 2. Depends on 4G/5G – might be a problem when there is no cellular connectivity. We are not aware of a standardization process that this competitor has initiated.
Mobile system Disadvantages: 1. To the best of the Company’s knowledge, the ranges are lower than our system. 2. Depends on 4G/5G – might be a problem when there is no cellular connectivity. Advantages: ALSTOM Holdings Shunting Yard The system is based on an array of day cameras with integrated AI. 1.
It is important to detect the position of the switch because the switch selects the train’s continued direction from the main track line on which the train is currently riding to another rail. 31 We have completed a homologation process of a driver assistance system on trains in a use-case of Main line (SIL-0 according to EN50126).
It is important to detect the position of the switch because the switch selects the train’s continued direction from the main track line on which the train is currently riding to another rail.
We are not aware of a standardization process that this competitor has initiated. 41 Our competitive approach is in developing a unique know-how, achieving an advantage and differentiating our railway detection system technology by incorporating advanced technological solutions.
Disadvantages: To the best of the Company’s knowledge, the ranges are lower than our system. Our competitive approach is in developing a unique know-how, achieving an advantage and differentiating our railway detection system technology by incorporating advanced technological solutions.
In addition, as part of the agreement and in consideration for services provided to us by Israel Railways, we granted Israel Railways warrants to purchase 195,448 of our ordinary shares with a nominal exercise price. The warrants were initially exercisable upon the earlier of an IPO or a change of control.
In addition, as part of the agreement and in consideration for services provided to us by Israel Railways, we granted Israel Railways warrants to purchase 24,431 of our ordinary shares with a nominal exercise price. On January 25, 2023, Israel Railways provided notice of its exercise of the warrants, pursuant to which we issued 24,431 ordinary shares to Israel Railways.
We believe that the railway detection systems we develop will be an integral part of future trains, and therefore it is important to invest marketing efforts as early as possible to promote partnerships with train manufacturers and increase market adoption of our railway detection systems. ● Leverage and develop our strategic partnership with Knorr-Bremse to serve as a non-exclusive distributor and be a local partner engaged in marketing, sales and the implementation of projects, including integration, installation and services regarding our products in the relevant markets in which Knorr-Bremse operates worldwide.
We believe that the railway detection systems we develop will be an integral part of future trains, and therefore it is important to invest marketing efforts as early as possible to promote partnerships with train manufacturers and increase market adoption of our railway detection systems. ● Develop our relations with Knorr-Bremse to serve as a a local partner engaged in marketing, sales and the implementation of projects, including integration, installation and services regarding our products in the relevant markets in which Knorr-Bremse operates worldwide. ● We intend to invest in advertising in traditional industry channels, social media networks and digital channels to better advertise and market our railway detection systems to potential customers in the railway industry. ● We strive to increase collaborations with other companies operating in the railway industry, such as companies that are engaged in complementary technologies, as we believe that collaborations with these companies may provide added value to our customers. ● Data services – Following the dissemination of our technology and products among many customers, we already deployed our MainLine and ShuntingYard systems customers with our D.A.S.H.
Follow-on orders for additional Switch Yard Systems, valued at up to $4,000,000, are subject to customer approval. Also, in October 2023, we received a $500,000 purchase order for a single Main Line System and related services from a leading Latin American mining company, which was delivered to the customer in December 2023.
In October 2023, we received a $500,000 purchase order for a single Main Line System and related services from a leading Latin American mining company, which was delivered to the customer in December 2023. The customer began a long-term pilot soon after installation was completed in July 2024.
Bosch Engineering GmbH Shunting Yard Tram forward collision warning (TFCW), Based on a solution from the wheeled vehicle industry, on the market since 2017. Approved for use with LRV under a European standard. Advantages: 1. According to public announcements, the system has been sold to LRV customers. Bosch’s past experience is an advantage. 2.
Approved for use with LRV under a European standard. 1. According to public announcements, the system has been sold to LRV customers. Bosch’s past experience is an advantage.
The contract also includes specific purchase quotas that, if met, provide the customer with exclusivity in the North American industrial railyards switching segment. 33 In March 2024 we received an order for our Switch Yard System from a Class 1 freight rail company in the United States.
The contract also includes specific purchase quotas that, if met, provide the customer with exclusivity in the North American industrial railyards switching segment. In April 2024, the Company received an initial purchase order for the Company’s Shunting Yard systems amounting to approximately $1,000,000, as part of this contract.
We believe we have developed cutting edge, AI based, industry-leading detection technology specifically designed for railways, with investments from Knorr-Bremse, a world-class rail system manufacturer. We have developed our railway detection and systems to save lives, increase efficiency, and dramatically reduce expenses for the railway operator.
Business Overview Overview We are an early commercialization stage technology company that is seeking to revolutionize railway safety and the data-related market. We believe we have developed cutting edge, AI based, industry-leading detection technology specifically designed for railways. We have developed our railway detection and systems to save lives, increase efficiency, and dramatically reduce expenses for the railway operator.
The freight rail company, which is one of the largest in North America, will install and use the system on its locomotive for evaluation and testing different scenarios related to safety. Business and Marketing Strategy Our vision is to become a global leading developer and supplier of innovative railway detection technologies to the railway industry.
In March 2024 we received an order for our Switch Yard System from a Class 1 freight rail company in the United States. The freight rail company, which is one of the largest in North America, will install and use the system on its locomotive for evaluation and testing different scenarios related to safety.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

31 edited+26 added−19 removed27 unchanged
Biggest changeThe following table discloses the breakdown of general and administrative expenses: Year ended December 31, Year ended December 31, (in thousands of USD) 2023 2022 Payroll and related expenses 1,815 1,845 Share-based payment 212 323 Professional services 1,635 1,451 Travel expenses 61 115 Rent and office maintenance 139 118 Depreciation 20 20 Marketing and other 457 393 Total 4,339 4,265 45 Comparison of the Year Ended December 31, 2023, to the Year Ended December 31, 2022 Results of Operations December 31 December 31, (in thousands of USD) 2023 2022 Revenues 142 421 Cost of revenues (61 ) (661 ) Gross profit 81 (240 ) Research and development expenses (7,145 ) (6,230 ) General and administrative expenses (4,339 ) (4,265 ) Operating loss (11,403 ) (10,735 ) Financial income, net 255 260 Net Loss (11,148 ) (10,475 ) Revenues Our revenues for the year ended December 31, 2023, amounted to $142,000 representing a decrease of $279,000 or 66% compared to $421,000 for the year ended December 31, 2022.
Biggest changeThe following table discloses the breakdown of general and administrative expenses: Year ended December 31, Year ended December 31, (in thousands of USD) 2024 2023 Payroll and related expenses 1,733 1,815 Share-based payment 126 212 Professional services 1,593 1,635 Travel expenses 84 61 Rent and office maintenance 138 139 Depreciation 13 20 Marketing and other 488 457 Total 4,175 4,339 Comparison of the Year Ended December 31, 2024, to the Year Ended December 31, 2023 Results of Operations December 31 December 31, (in thousands of USD) 2024 2023 Revenues 1,300 142 Cost of revenues (850 ) (61 ) Gross profit 450 81 Research and development expenses (5,279 ) (7,145 ) General and administrative expenses (4,175 ) (4,339 ) Operating loss (9,004 ) (11,403 ) Financial (expenses) income: Revaluation of derivatives and warrants liabilities (20,181 ) - Other financing income (expenses), net (1,523 ) 255 Net Loss (30,708 ) (11,148 ) Revenues Our revenues for the year ended December 31, 2024, amounted to $1,300,000 representing an increase of $1,158,000 or 815% compared to $142,000 for the year ended December 31, 2023.
Financing Activities Net cash provided by financing activities in the year ended December 31, 2023, consisted of $5,397,000 in proceeds from the issuance of ordinary shares and warrants, net of issuance expenses, from a series of transactions we executed in May 2023 as detailed below.
Net cash provided by financing activities in the year ended December 31, 2023, consisted of $5,397,000 in proceeds from the issuance of ordinary shares and warrants, net of issuance expenses, from a series of transactions we executed in May 2023 as detailed below.
In addition, we believe that our technology has the potential to advance the revolutionary concept of autonomous trains into a practical reality. 44 A. Operating Results Operating Expenses Our current operating expenses consist of two components — research and development expenses, and general and administrative expenses. To date, we have not generated significant revenues.
In addition, we believe that our technology has the potential to advance the revolutionary concept of autonomous trains into a practical reality. A. Operating Results Operating Expenses Our current operating expenses consist of two components — research and development expenses, and general and administrative expenses. To date, we have not generated significant revenues.
Operating and Financial Review and Prospectus—Operating Results” and elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2023 to December 31, 2023 that are reasonably likely to have a material effect on our total revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
Operating and Financial Review and Prospectus—Operating Results” and elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2024 to December 31, 2024 that are reasonably likely to have a material effect on our total revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
Operating Results— Comparison of the year ended December 31, 2023 to the year ended December 31, 2022— Research and Development Expenses.” 50 D. Trend Information Other than as disclosed in “Item 5.
Operating Results— Comparison of the year ended December 31, 2024 to the year ended December 31, 2023— Research and Development Expenses.” D. Trend Information Other than as disclosed in “Item 5.
The following discussion of the financial condition and results of operations is for the years ended December 31, 2023 and 2022.
The following discussion of the financial condition and results of operations is for the years ended December 31, 2024 and 2023.
Until we close one or more equity financing transactions in an aggregate amount of at least $5 million (including the conversion of the Credit Facility), we had the right to convert into ordinary share up to $1.5 million, including accrued interest, of a loan extended or to be extended to us by the Lender, or the January 2024 Conversion Loan Amount, in connection with and in the framework of a financing transaction of ours on the date that follows the date upon which we notified the Lender of such financing transaction, which conversion will occur upon the same terms.
As a result, the Lender’s financing obligations have terminated pursuant to the terms of the Facility Agreement. 54 Until we close one or more equity financing transactions in an aggregate amount of at least $5 million (including the conversion of the Credit Facility), we had the right to convert into ordinary share up to $1.5 million, including accrued interest, of a loan extended or to be extended to us by the Lender, or the January 2024 Conversion Loan Amount, in connection with and in the framework of a financing transaction of ours on the date that follows the date upon which we notified the Lender of such financing transaction, which conversion will occur upon the same terms.
In a concurrent private placement, or the Private Placement, we also agreed to issue to the same investors a total of warrants to purchase an aggregate of 493,424 ordinary shares, or the Concurrent Warrants, at an exercise price of $6.72 per ordinary share.
In a concurrent private placement, or the Private Placement, we also agreed to issue to the same investors a total of warrants to purchase an aggregate of 493,424 ordinary shares, or the Concurrent Warrants, at an exercise price of $6.72 per ordinary share. The transactions closed on May 11, 2023.
E. Critical Accounting Estimates We describe our significant accounting policies more fully in Note 2 to our financial statements for the year ended December 31, 2023. We believe that the accounting policies below are critical in order to fully understand and evaluate our financial condition and results of operations.
E. Critical Accounting Estimates We describe our significant accounting policies more fully in Note 2 to our financial statements for the year ended December 31, 2024. We believe that the accounting policies below are critical in order to fully understand and evaluate our financial condition and results of operations. We prepare our financial statements in accordance with U.S. GAAP.
The remaining amount of $3,087,000 was used, for professional services, travel, rent and other miscellaneous expenses. Investing Activities Net cash used in investing activities of $152,000 during 2023 and $29,000 during 2022, primarily reflected the purchase of fixed assets in both periods.
The remaining amount of approximately $3,032,000 was used for professional services, marketing, travel, rent and other miscellaneous expenses. Investing Activities Net cash used in investing activities of $30,000 during 2024 and $152,000 during 2023, primarily reflected the purchase of fixed assets in both periods.
Contractual Obligations The following table summarizes our contractual obligations at December 31, 2023: Total Less than 1 year 1-3 years 3-5 years More than 5 years (in thousands of U.S. dollars) Operating leases $ 849 $ 313 $ 536 $ - $ -- C. Research and development, patents and licenses, etc.
Contractual Obligations The following table summarizes our contractual obligations at December 31, 2024: Total Less than 1 year 1-3 years 3-5 years More than 5 years (in thousands of U.S. dollars) Operating leases $ 541 $ 320 $ 221 $ - $ — 56 C. Research and development, patents and licenses, etc.
Since inception, we have not generated significant revenues from the sale of products, and we do not expect to generate significant revenues from the sale of our products in the near future. 49 As of December 31, 2023, our cash and cash equivalents were $3.1 million.
Since inception, we have not generated significant revenues from the sale of products, and we do not expect to generate significant revenues from the sale of our products in the near future. 55 As of December 31, 2024, our cash and cash equivalents were $17.2 million.
Liquidity and Capital Resources Overview Since our inception through December 31, 2023, we have funded our operations principally with approximately $68.7 (net of issuance expenses) from the issuance of ordinary shares, preferred shares, and warrants in public and private offerings. As of December 31, 2023, we had approximately $3.1 in cash and cash equivalents.
Liquidity and Capital Resources Overview Since our inception through December 31, 2024, we have funded our operations principally with approximately $86 million (net of issuance expenses) from the issuance of ordinary shares, preferred shares, and warrants in public and private offerings. As of December 31, 2024, we had approximately $17.5 in cash and cash equivalents.
Net Loss As a result of the foregoing, our net loss for the year ended December 31, 2023, was $11,148,000 compared to $10,475,000 for the year ended December 31, 2022, an increase of $673,000 or 6%. 46 B.
Net Loss As a result of the foregoing, our net loss for the year ended December 31, 2024, was $29,000,000 compared to $11,148,000 for the year ended December 31, 2023, an increase of $18,552,000 or 60%. B.
The following table discloses the breakdown of research and development expenses: Year ended December 31, Year ended December 31, (in thousands of USD) 2023 2022 Depreciation 151 130 Share-based payment 62 174 Payroll and related expenses 5,671 5,049 Subcontracted work and consulting 4 15 R&D consumables 696 160 Rent and office maintenance 416 355 Travel and other expenses 145 347 Total 7,145 6,230 General and Administrative Expenses General and administrative expenses consist primarily of salaries and related expenses, share-based payment, professional service fees for accounting, legal and bookkeeping, facilities, travel expenses and other general and administrative expenses.
Research and Development Expenses, net Our research and development expenses consist primarily of salaries and related personnel expenses (including share-based payment), subcontractor’s expenses and other related research and development expenses. 50 The following table discloses the breakdown of research and development expenses: Year ended December 31, Year ended December 31, (in thousands of USD) 2024 2023 Depreciation 134 151 Share-based payment 120 61 Payroll and related expenses 4,216 5,671 Subcontracted work and consulting - 5 R&D consumables 291 696 Rent and office maintenance 413 416 Travel and other expenses 105 145 Total 5,279 7,145 General and Administrative Expenses General and administrative expenses consist primarily of salaries and related expenses, share-based payment, professional service fees for accounting, legal and bookkeeping, facilities, travel expenses and other general and administrative expenses.
The remaining amount of approximately $2,962,000 was used for professional services, travel, rent and other miscellaneous expenses. Net cash used in operating activities of $9,981,000 during the year ended December 31, 2022, was primarily used for payment of an aggregate of approximately $6,894,000 in salaries and related personnel expenses.
The remaining amount of approximately $3,733 was used for professional services, marketing, travel, rent and other miscellaneous expenses. 52 Net cash used in operating activities of $10,518,000 during the year ended December 31, 2023, was primarily used for payment of an aggregate of approximately $7,486,000 in salaries and related personnel expenses.
The table below presents our cash flows for the periods indicated: December 31, December 31, (in thousands of USD) 2023 2022 Operating activities $ (10,448 ) $ (9,981 ) Investing activities $ (152 ) $ (29 ) Financing activities $ 5,397 $ 16,653 Net increase (increase) in cash and cash equivalents $ (5,203 ) $ 6,643 Operating Activities Net cash used in operating activities of $10,448,000 during the year ended December 31, 2023, was primarily used for payment of an aggregate of approximately $7,487,000 in salaries and related personnel expenses.
The table below presents our cash flows for the periods indicated: December 31, December 31, (in thousands of USD) 2024 2023 Operating activities $ (9,682 ) $ (10,518 ) Investing activities $ (30 ) $ (152 ) Financing activities $ 23,918 $ 5,397 Effect of exchange rate changes on cash and cash equivalents (27 ) 70 Net increase (decrease) in cash and cash equivalents $ 14,179 $ (5,203 ) Operating Activities Net cash used in operating activities of $9,682,000 during the year ended December 31, 2024, was primarily used for payment of an aggregate of approximately $5,949,000 in salaries and related personnel expenses.
General and administrative expenses Our general and administrative expenses totaled $4,339,000 for the year ended December 31, 2023, representing an increase of $74,000 or 2% compared to $4,265,000 for the year ended December 31, 2022.
General and administrative expenses Our general and administrative expenses totaled $4,175,000 for the year ended December 31, 2024, representing a decrease of $164,000 or 3.8% compared to $4,339,000 for the year ended December 31, 2023.
Discussion regarding our financial condition and results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021 is included in Item 5 of our Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 23, 2023.
Discussion regarding our financial condition and results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022 is included in Item 5 of our Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 28, 2024. 49 Overview We are an early commercialization stage technology company that is seeking to revolutionize railway safety and the data-related market.
The January 2024 PIPE Ordinary Share Warrants are exercisable upon issuance at an exercise price of $0.98475 per ordinary share, subject to certain adjustments and certain anti-dilution protection set forth therein, and have a 5.5-year term from the issuance date. 47 In connection with the closing of the January 2024 PIPE, we exercised our conversion right, or the Conversion Right, pursuant to the Facility Agreement (as defined below) to convert $500,000 of the Credit Facility (as defined below) as a portion of the January 2024 Conversion Loan Amount (as defined below).
The January 2024 PIPE Ordinary Share Warrants are exercisable upon issuance at an exercise price of $0.98475 per ordinary share, subject to certain adjustments and certain anti-dilution protection set forth therein, and have a 5.5-year term from the issuance date.
As of the date of this Annual Report, 1,394,999 January 2024 PIPE Pre-Funded Warrants, 507,743 Facility Conversion Pre-Funded Warrant, 761,615 Facility Conversion Common Warrant and 4,269,688 January 2024 PIPE Warrants have been exercised resulting in gross proceeds of approximately $5.0 million to the Company Execution of Credit Facility Agreement and Issuance of Warrant (January 2024) On January 9, 2024, we entered into a facility agreement, or the Facility Agreement, for a $6 million credit facility, or the Credit Facility, and an additional amount up to $3 million, subject to certain conditions, or the Additional Loans, with a global investment firm, or the Lender, who was also an Investor in the January 2024 PIPE.
Execution of Credit Facility Agreement and Issuance of Warrant (January 2024) On January 9, 2024, we entered into a facility agreement, or the Facility Agreement, for a $6 million credit facility, or the Credit Facility, and an additional amount up to $3 million, subject to certain conditions, or the Additional Loans, with a global investment firm, or the Lender, who was also an Investor in the January 2024 PIPE.
Research and Development Expenses Our research and development expenses for the year ended December 31, 2023, amounted to $7,145,000 representing an increase of $915,000 or 15% as compared to $6,230,000 for the year ended December 31, 2022.
Research and Development Expenses Our research and development expenses for the year ended December 31, 2024, amounted to $5,279,000 representing a decrease of $1,866,00 or 26.1 % as compared to $7,145,000 for the year ended December 31, 2023.
Without derogating from the foregoing estimate regarding our existing capital resources and cash flows from operations, we may decide to raise additional funds in 2024. We believe that, if required, we will be able to raise additional capital or reduce discretionary spending to provide the required liquidity beyond the next twelve months.
We believe that, if required, we will be able to raise additional capital or reduce discretionary spending to provide the required liquidity beyond the next twelve months.
As of the date of this Annual Report, 920,000 January 2024 Facility Warrants have been exercised resulting in gross proceeds of approximately $0.375 million to the Company.
As of the date of this Annual Report, 17,170,000 January 2024 Facility Warrants have been exercised resulting in gross proceeds of approximately $7.0 million to the Company. See “Item 7.B.—Major Shareholders and Related Party Transactions—Related Party Transactions—Pure Capital—Execution of Credit Facility Agreement and Issuance of Warrant (January 2024)” for additional information.
As a result of the cashless exercise, we issued 181,002 ordinary shares to such investors.
Cashless Exercise of Warrants (January 2024) In January 2024, investors from our Private Placement (as defined below) from May 2023 exercised 493,424 Concurrent Warrants on a cashless basis. As a result of the cashless exercise, we issued 181,002 ordinary shares to such investors.
The KB Warrants are exercisable at $6.72 per ordinary share. The KB Private Placement closed on June 21, 2023, following approval of such transaction by our shareholders. See “Item 7.B.—Major Shareholders and Related Party Transactions—Related Party Transactions—Knorr-Bremse” for additional information.
The KB Warrants are exercisable at $6.72 per ordinary share. The KB Private Placement closed on June 21, 2023, following approval of such transaction by our shareholders. Current Outlook We have financed our operations to date primarily through proceeds from sales of our equity securities in public and private offerings, as well as a loan from a related party.
The Concurrent Warrants will be exercisable upon issuance and will have a 5-year term from the initial issuance date. The transactions closed on May 11, 2023.
The Concurrent Warrants were exercisable upon issuance and had a 5-year term from the initial issuance date and all of them have been exercised on a cashless basis as detailed above.
In addition, to date, we have received approximately $5.0 million as a result of the exercise of warrants issued in the January 2024 PIPE. We expect that our cash and cash equivalents as of the issuance date of this annual report and the future expected cash flow from sales will be sufficient for 12 months of operations.
We expect that our cash and cash equivalents as of the issuance date of this annual report and the future expected cash flow from sales will be sufficient for at least 27 months of operations. Without derogating from the foregoing estimate regarding our existing capital resources and cash flows from operations, we may decide to raise additional funds in 2025.
The customer is expected to start a long-term pilot soon after completing the installation. In addition, our railway detection system is currently in a pilot phase with several industry leading railway operators as we seek to move to the next stage of receiving commercial orders.
We are currently engaged on a number of projects where we are equipping certain customers with up to 10 systems each and in a pilot phase with several industry leading railway operators as we seek to move to the next stage of receiving commercial roll out orders as we continue our transition of an early commercialization stage company.
Operating loss As a result of the foregoing, our operating loss for the year ended December 31, 2023 was $11,403,000 compared an operating loss of $10,735,000 for the year ended December 31, 2022, an increase of $668,000 or 6%.
This decrease was primarily attributable to a decrease in salaries as part of the process of reducing costs as mentioned above and a decrease in share-based payment expenses of grants which were fully vested or forfeited in 2024. 51 Operating loss As a result of the foregoing, our operating loss for the year ended December 31, 2024, was $9,004,000 compared to an operating loss of $11,403,000 for the year ended December 31, 2023, a decrease of $2,399,000 or 21%.
Overview We are a development stage technology company that is seeking to revolutionize railway safety and the data-related market. We believe we have developed cutting edge, AI based, industry-leading detection technology specifically designed for railways, with investments from Knorr-Bremse, a world-class rail system manufacturer.
We have developed cutting edge, AI based, industry-leading detection technology specifically designed for railways. We have developed our railway detection and systems to save lives, increase efficiency, and dramatically reduce expenses for the railway operator.
Removed
We have developed our railway detection and systems to save lives, increase efficiency, and dramatically reduce expenses for the railway operator. Following a long-term pilot with Israel Railways that was concluded in August 2022, in January 2023, we signed an agreement with Israel Railways for the purchase of 10 Rail Vision Main Line Systems, which installation started in February 2024.
Added
The revenues for the year ended December 31, 2024, were generated primarily from the LATAM mining company that purchased a Rail Vision Main Line System, the first installation of Rail Vision’s Main Line Systems for Israel Railways and the successful delivery and installation of Rail Vision’s Shunting Yard systems to Loram and a Class 1 US Railroad company.
Removed
In addition, after a successful six-month long-term pilot with a US-based rail and leasing services company, in January 2024, we signed a supply contract with this customer valued at up to $5,000,000 (USD) for the purchase our AI-based Switch Yard Systems. The first phase of the contract is valued at $1,000,000 (USD).
Added
This decrease was primarily attributable to a decrease of $1,455,000 in salaries and related personnel expenses due to a reduction in workforce, including a reduction in our employee base by 12 R&D employees, and a decrease of $405,000 in R&D equipment purchases.
Removed
Follow-on orders for additional Switch Yard Systems, valued at up to $4,000,000, are subject to customer approval. Also, in October 2023, we received a $500,000 purchase order for a single Main Line System and related services from a leading Latin American mining company, which was delivered to the customer during December 2023.
Added
Financial expense and income: Revaluation of derivatives and warrants liabilities expenses For the year ended December 31, 2024, we recorded expenses in amount of $20,181,000 due to the revaluation of derivatives and warrants liabilities, mainly in connection with warrants issued in a private placement and a convertible loan credit facility that we entered into in January 2024.
Removed
Research and Development Expenses, net Our research and development expenses consist primarily of salaries and related personnel expenses (including share-based payment), subcontractor’s expenses and other related research and development expenses.
Added
For the year ended December 31, 2023, we did not incur any expenses related to revaluation of derivatives and warrants liabilities. Other financial expenses and income Our other financial expenses amounted to $1,523,00 for the year ended December 31, 2024, a decrease of $1,778,000, or 697%, compared to $255,000 other financial income for the year ended December 31 , 2023.
Removed
This increase was primarily attributable to the allocation of salary expenses from R&D expenses to cost of sales in 2022 and an increase in R&D equipment purchases in 2023.
Added
The decrease was primarily attributable to the full amortization of discount related to a convertible loan credit facility that we entered into in January 2024 and the SEPA set up fees.
Removed
This increase was primarily attributable to increase in professional services related to operating as a public company offset by share-based payment expenses of grants which were fully vested in 2022.
Added
Financing Activities Net cash provided by financing activities in the year ended December 31, 2024, consisted of $23,918,000 primarily in proceeds from the issuance of ordinary shares and warrants, net of issuance expenses (including in relation to the SEPA (as defined below) and the January 2024 PIPE) and proceeds from exercise of warrants that were issued in connection with the January 2024 PIPE and January 2024 Facility Warrants.
Removed
Financial expense and income Financial expense and income consist of interest on deposits, bank fees and other transactional costs and exchange rate differences. We recognized net financial income of $255,000 for the year ended December 31, 2023, compared to net financial income of $260,000 for the year ended December 31, 2022.
Added
See “Registered Direct Offering and Concurrent Private Placement of Warrants (May 2023)” and “Private Placement of Ordinary Shares and Warrants (May 2023)”. Standby Equity Purchase Agreement (October 2024) On October 7, 2024, we entered into a Standby Equity Purchase Agreement, or SEPA , with YA II PN, LTD., a Cayman Islands exempt limited partnership, or Yorkville.
Removed
See “Registered Direct Offering and Concurrent Private Placement of Warrants (May 2023)” and “Private Placement of Ordinary Shares and Warrants (May 2023)”. Net cash provided by financing activities in the year ended December 31, 2022, consisted of $13,643,000 of net proceeds from our IPO in April 2022 and approximately $3,000,000 of pre-IPO Investment.
Added
Pursuant to the Purchase Agreement, we have the right, but not the obligation, to sell to Yorkville from time to time, or Advance, up to $20.0 million, or the Initial Commitment Amount, of our ordinary shares during the 36 months following the execution of the SEPA, subject to the restrictions and satisfaction of the conditions in SEPA.
Removed
As a result, the Lender’s financing obligations have terminated pursuant to the terms of the Facility Agreement.
Added
On February 26, 2025, we and Yorkville entered into an amendment to the SEPA to increase the Initial Commitment Amount to $30.0 million of our ordinary shares, or the Commitment Amount.
Removed
See “Item 7.B.—Major Shareholders and Related Party Transactions—Related Party Transactions—Pure Capital—Execution of Credit Facility Agreement and Issuance of Warrant (January 2024)” for additional information. 48 Cashless Exercise of Warrants (January 2024) As of March 28, 2024, investors from our Private Placement (as defined below) from May 2023 exercised 493,424 Concurrent Warrants on a cashless basis.
Added
At our option, the ordinary shares would be purchased by Yorkville from time to time at a price equal to 97% of the lowest of the three daily VWAPs (as hereinafter defined) during a three consecutive trading day period commencing on the date that the Company, subject to certain limitations, deliver a notice to Yorkville that we are committing Yorkville to purchase such ordinary shares, or Advance Shares.
Removed
Initial Public Offering (April 2022) On April 4, 2022, we completed our initial public offering on the Nasdaq, or the IPO, in which we issued 473,405 units. Each unit includes one ordinary share and one warrant to purchase one ordinary share at an exercise price of $33.04.
Added
The Company may also specify a certain minimum acceptable price per share in each Advance. For the purposes of the SEPA, “VWAP” means, for any trading day, the daily volume weighted average price of the Company’s Ordinary Shares for such trading day on the Nasdaq Stock Market during regular trading hours as reported by Bloomberg L.P.
Removed
The warrants are exercisable at any time up to five years after the IPO. Gross proceeds for the offering were approximately $15.6 million (including exercise of over-allotment options as described below) and net proceeds of approximately $13.6 million after deducting underwriting discounts and commissions and offering expenses.
Added
As consideration for Yorkville’s irrevocable commitment to purchase our ordinary shares up to the Commitment Amount, we issued 288,684 ordinary shares, or the Commitment Shares, to Yorkville and also paid a $10,000 structuring fee to an affiliate of Yorkville.
Removed
We granted Aegis Capital Corp, or Aegis, the underwriter, a 45-day over-allotment option to purchase additional ordinary shares and/or warrants to purchase additional ordinary shares up to 15% of the number of ordinary shares and warrants, respectively, sold in the IPO solely to cover over-allotments, if any.
Added
Pursuant to the SEPA, Yorkville shall not be obligated to purchase or acquire any ordinary shares under the SEPA which, when aggregated with all other ordinary shares beneficially owned by Yorkville and its affiliates, would result in the beneficial ownership of Yorkville and its affiliates (on an aggregated basis) to exceed 4.99% of the then outstanding voting power or number of our ordinary shares.
Removed
On April 4, 2022, Aegis partially exercised its over-allotment option with respect to 71,011 warrants to purchase ordinary shares. Current Outlook We have financed our operations to date primarily through proceeds from sales of our equity securities in public and private offerings, as well as a loan from a related party.
Added
Subject to the mutual agreement of us and Yorkville, Yorkville may advance us up to an aggregate of $3.0 million of the Commitment Amount, which will be evidenced in the form of a promissory note in one or more tranches and in the amounts that the Company sets forth in such request.
Removed
An appreciation of our critical accounting policies is necessary to understand our financial results. The accounting policies outlined below are considered to be critical because they can materially affect our operating results and financial condition, as these policies may require us to make difficult and subjective judgments regarding uncertainties.
Added
Each promissory note will mature on the twelve-month anniversary from the issuance date. Each promissory note accrues interest at a rate of 5%, will be issued with a 5% original issue discount, and will be repaid in 10 equal monthly installments beginning on the 60th day following the date of such promissory note’s date of issuance.
Removed
The accuracy of these estimates and the likelihood of future changes depend on a range of possible outcomes and a number of underlying variables, many of which are beyond our control, and there can be no assurance that our estimates are accurate.
Added
Each promissory note may be repaid with the proceeds of an Advance or series of Advances under the SEPA or repaid in cash. 53 As of the date of this Annual Report, we have issued an aggregate of 22,210,892 ordinary shares to Yorkville as Advance Shares (not including the Commitment Shares) for aggregate gross proceeds of approximately $18.3 million.
Removed
The Company’s critical accounting estimate affecting the financial statements is its stock-based compensation: Stock-based compensation From time to time, the Company may grant options to its employees, directors and non-employees. The Company recognizes this compensation expense at its fair value.
Added
In connection with the closing of the January 2024 PIPE, we exercised our conversion right, or the Conversion Right, pursuant to the Facility Agreement (as defined below) to convert $500,000 of the Credit Facility (as defined below) as a portion of the January 2024 Conversion Loan Amount (as defined below).
Removed
Changes in the Company’s assumptions can materially affect the estimate of the fair value of stock-based compensation and, consequently, the related expense recognized. The assumptions used in the calculations of the fair value of stock-based payment awards is represented by best estimates which involve inherent uncertainties and the application of judgment when considering inherent uncertainties.
Added
As of the date of this Annual Report, all of the warrants and pre-funded warrants that were issued in connection with the January 2024 PIPE have been exercised in full consisting of 1,394,999 January 2024 PIPE Pre-Funded Warrants, 507,743 Facility Conversion Pre-Funded Warrants, 761,615 Facility Conversion Common Warrants and 4,569,688 January 2024 PIPE Warrants have been exercised resulting in gross proceeds of approximately $5.25 million to the Company.
Removed
As a result, if the Company’s assumptions change and different assumptions are used, the expense of a stock-based compensation award could be materially different in the future than what was originally planned for. 51
Added
In addition, to date, we have received approximately $12.3 million (gross) as a result of the exercise of warrants issued in the January 2024 PIPE and the Credit Facility in January 2024 and approximately $18.3 million as a result of sales of 22,210,892 of our ordinary shares (not including the Commitment Shares) to Yorkville pursuant to the SEPA.
Added
At the time of the preparation of the financial statements, our management is required to use estimates, evaluations, and assumptions which affect the application of the accounting policy and the amounts reported for assets, obligations, income, and expenses. Any estimates and assumptions are continually reviewed.
Added
The changes to the accounting estimates are credited during the period in which the change to the estimate is made. Use of estimates in the preparation of financial statements: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
Added
Our management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgment and assumptions can affect reported amounts and disclosures made.
Added
Actual results could differ from those estimates. 57 Derivatives and warrants liabilities The Company evaluated the warrants in accordance with ASC 815 “Derivatives and Hedging - Contracts in Entity’s Own Equity” (“ASC 815”) to determine whether warrants should be classified as liabilities or shareholders’ equity.
Added
In case that a provision in the warrant agreement related to certain tender or exchange offers precludes the warrants from being accounted for as components of equity, the Company will be classify as liability.
Added
This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent period end date while the warrants are outstanding.
Added
As the warrants meet the definition of a derivative as contemplated in ASC 815, the warrants are recorded as derivative liabilities on the balance sheet and measured at fair value at inception and at each reporting date thereafter in accordance with ASC 820 “Fair Value Measurement”, with changes in fair value recognized in the condensed statements of comprehensive loss in the period of change Under ASC 815-40, contracts that are not indexed to the Company’s own equity are classified as liabilities recorded at fair value, As such, the Company classifies the SEPA Agreement entered into as a derivative instrument measured at fair value at each reporting period, as settlement provisions under this agreement are not indexed to the Company’s own equity.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

77 edited+45 added−24 removed108 unchanged
Biggest changeFurthermore, pursuant to these regulations, such company may reappoint a person as an independent director for additional terms, beyond nine years, which do not exceed three years each, if each of the audit committee and the board of directors determine, in that order, that in light of the independent director’s expertise and special contribution to the board of directors and its committees, the reappointment for an additional term is in the company’s best interest. 61 Alternate Directors Our amended and restated articles of association provide, as allowed by the Companies Law, that any director may, subject to the conditions set thereto, appoint a person as an alternate to act in his place, to remove the alternate and appoint another in his place and to appoint an alternate in place of an alternate whose office is vacated for any reason whatsoever.
Biggest changeFor these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service. 68 Furthermore, pursuant to these regulations, such company may reappoint a person as an independent director for additional terms, beyond nine years, which do not exceed three years each, if each of the audit committee and the board of directors determine, in that order, that in light of the independent director’s expertise and special contribution to the board of directors and its committees, the reappointment for an additional term is in the company’s best interest.
Unless otherwise expressly provided by the board of directors, the committees shall not be empowered to further delegate such powers. The composition and duties of our audit committee and compensation committee are described below.
Unless otherwise expressly provided by the board of directors, the committees shall not be empowered to further delegate such powers. The composition and duties of our audit and compensation committee are described below.
The compensation policy must also include the following principles: ● the link between variable compensation and long-term performance and measurable criteria; ● the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation at the time of its grant; ● the conditions under which a director or executive would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements; ● the minimum holding or vesting period for variable, equity-based compensation; and ● maximum limits for severance compensation.
The compensation policy must also include the following principles: ● the link between variable compensation and long-term performance and measurable criteria; ● the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation at the time of its grant; ● the conditions under which a director or executive would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements; 71 ● the minimum holding or vesting period for variable, equity-based compensation; and ● maximum limits for severance compensation.
Under the Companies Law, our audit committee is responsible for: ● determining whether there are deficiencies in the business management practices of our company, and making recommendations to the board of directors to improve such practices; ● determining whether to approve certain related party transactions (including transactions in which an office holder has a personal interest and whether such transaction is extraordinary or material under Companies Law) (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”); ● determining the approval process for transactions that are ‘non-negligible’ (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee; ● examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; ● where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto; 62 ● examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; and ● establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees.
Under the Companies Law, our audit committee is responsible for: ● determining whether there are deficiencies in the business management practices of our company, and making recommendations to the board of directors to improve such practices; ● determining whether to approve certain related party transactions (including transactions in which an office holder has a personal interest and whether such transaction is extraordinary or material under Companies Law) (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”); ● determining the approval process for transactions that are ‘non-negligible’ (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee; 69 ● examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; ● where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto; ● examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; and ● establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees.
However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned foreseen events and amount or criteria; 66 ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder (a) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment (as defined in the Companies Law) was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability as a substitute for the criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding, or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (b) in connection with a monetary sanction; ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder or imposed on him or her by a court: (1) in proceedings that the company institutes, or that another person institutes on the company’s behalf, against him or her; (2) in a criminal proceedings of which he or she was acquitted; or (3) as a result of a conviction for a crime that does not require proof of criminal intent; and ● expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees.
However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned foreseen events and amount or criteria; 73 ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder (a) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment (as defined in the Companies Law) was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability as a substitute for the criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding, or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (b) in connection with a monetary sanction; ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder or imposed on him or her by a court: (1) in proceedings that the company institutes, or that another person institutes on the company’s behalf, against him or her; (2) in a criminal proceedings of which he or she was acquitted; or (3) as a result of a conviction for a crime that does not require proof of criminal intent; and ● expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees.
All of the elected directors, other than external directors, may be re-elected for an unlimited number of terms upon completion of their then-current term of office. There are no other arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were selected.
All of the directors, other than external directors (if any were elected), may be re-elected for an unlimited number of terms upon completion of their then-current term of office. There are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were selected.
If the compensation of our directors is inconsistent with our stated compensation policy, then, provided that those provisions that must be included in the compensation policy according to the Companies Law have been considered by the compensation committee and board of directors, shareholder approval by a special majority will be required. Executive officers other than the chief executive officer.
If the compensation of our directors is inconsistent with our stated compensation policy, then, provided that those provisions that must be included in the compensation policy according to the Companies Law have been considered by the compensation committee and board of directors, shareholders approval by a special majority will be required. Executive officers other than the chief executive officer.
Kiron-Revach hold an LL.B. from the Netanya Academic College and is a licensed attorney in Israel. Yossi Daskal, Director Mr. Daskal has served on our board of directors since March 2022. Mr. Daskal serves as the President of Israel-Canada Chamber of Commerce since 2013. From 2003 to 2019, Mr.
Kiron-Revach hold an LL.B. from the Netanya Academic College and is a licensed attorney in Israel. Yossi Daskal, Class III Director Mr. Daskal has served on our board of directors since March 2022. Mr. Daskal serves as the President of Israel-Canada Chamber of Commerce since 2013. From 2003 to 2019, Mr.
Yossi Daskal and Mr. Oz Adler, who will serve as external directors, and Ms. Hila Kiron-Revach, who will serve as an independent director, each of whom is “independent,” as such term is defined in under Nasdaq Listing Rules. The members of our audit committee meet the requirements for financial literacy under the Nasdaq Listing Rules.
Yossi Daskal and Mr. Oz Adler, and Ms. Hila Kiron-Revach, who will serve as an independent directors, each of whom is “independent,” as such term is defined in under Nasdaq Listing Rules. The members of our audit committee meet the requirements for financial literacy under the Nasdaq Listing Rules.
See “Item 7.B.—Major Shareholders and Related Party Transactions—Related Party Transactions” for additional information. B. Compensation The following table presents in the aggregate all compensation we paid to all of our directors and senior management as a group for the year ended December 31, 2023.
See “Item 7.B.—Major Shareholders and Related Party Transactions—Related Party Transactions” for additional information. B. Compensation The following table presents in the aggregate all compensation we paid to all of our directors and senior management as a group for the year ended December 31, 2024.
External directors are entitled to remuneration (including reimbursement of expenses) subject to the provisions and limitations set forth in the regulations promulgated under the Companies Law. Where the director is also a controlling shareholder, the requirements for approval of transactions with controlling shareholders apply.
External directors (if required) are entitled to remuneration (including reimbursement of expenses) subject to the provisions and limitations set forth in the regulations promulgated under the Companies Law. Where the director is also a controlling shareholder, the requirements for approval of transactions with controlling shareholders apply.
If a majority of the board of directors has a personal interest, then shareholder approval is generally also required. Disclosure of Personal Interests of a Controlling Shareholder Under the Companies Law, the disclosure requirements that apply to an office holder also apply to a controlling shareholder of a public company.
If a majority of the board of directors has a personal interest, then shareholders approval is generally also required. 75 Disclosure of Personal Interests of a Controlling Shareholder Under the Companies Law, the disclosure requirements that apply to an office holder also apply to a controlling shareholder of a public company.
The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period. All amounts reported in the table below reflect the cost to us in thousands of U.S. dollars, for the year ended December 31, 2023.
The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period. 61 All amounts reported in the table below reflect the cost to us in thousands of U.S. dollars, for the year ended December 31, 2024.
On March 28, 2024 the Compensation Committee of our Board of Directors resolved to approve the renewal of the Company’s directors’ and officers’ insurance policy, for a period of 18 months as of March 31, 2023, of a $7.5 million coverage, and an annual premium not to exceed $246,400 ($369,600 for the 18 months period), pursuant to the applicable regulations under Companies Law.
On March 28, 2024 the Compensation Committee of our Board of Directors resolved to approve the renewal of the Company’s directors’ and officers’ insurance policy, for a period of 18 months as of April 1, 2024, of a $7.5 million coverage, and an annual premium not to exceed $246,400 ($369,600 for the 18 months period), pursuant to the applicable regulations under Companies Law.
Naveh has served as an external director of Upsellon Brands Holdings Ltd (TASE: UPSL). Mr. Naveh holds a B.A. in Accounting and Business from the College of Management Academic Studies, Israel and a M.A. in Law from Bar-Ilan University, Israel. Mr. Naveh is a Certified Public Accountant in Israel. Zachi Bar-Yehoshua, Chief Operating Officer Mr.
Naveh has served as an external director of Upsellon Brands Holdings Ltd (TASE: UPSL). Mr. Naveh holds a B.A. in Accounting and Business from the College of Management Academic Studies, Israel and a M.A. in Law from Bar-Ilan University, Israel. Mr. Naveh is a Certified Public Accountant in Israel. Noam Shloper, Chief Operating Officer Mr.
Our audit committee may not conduct any discussions or approve any actions requiring its approval (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”), unless at the time of the approval a majority of the committee’s members are present, which majority consists of independent directors under the Companies Law, including at least one external director.
Our audit committee may not conduct any discussions or approve any actions requiring its approval (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”), unless at the time of the approval a majority of the committee’s members are present, which majority consists of independent directors under the Companies Law, including at least one external director (to the extent external director is required under the Companies Law and its regulations).
The compensation policy must also consider appropriate incentives from a long-term perspective. 64 The compensation committee is also responsible for: ● recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years); ● recommending to the board of directors periodic updates to the compensation policy; ● assessing implementation of the compensation policy; ● determining whether the terms of compensation of certain office holders of the company need not be brought to approval of the shareholders; and ● determining whether to approve the terms of compensation of office holders that require the committee’s approval.
The compensation committee is also responsible for: ● recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years); ● recommending to the board of directors periodic updates to the compensation policy; ● assessing implementation of the compensation policy; ● determining whether the terms of compensation of certain office holders of the company need not be brought to approval of the shareholders; and ● determining whether to approve the terms of compensation of office holders that require the committee’s approval.
Amounts paid in NIS are translated into U.S. dollars at the rate of NIS 3.69 = $1.00, based on the average representative rate of exchange between the NIS and the U.S. dollar as reported by the Bank of Israel in the year ended December 31, 2023.
Amounts paid in NIS are translated into U.S. dollars at the rate of NIS 3.70 = $1.00, based on the average representative rate of exchange between the NIS and the U.S. dollar as reported by the Bank of Israel in the year ended December 31, 2024.
The table below reflects the compensation granted during or with respect to the year ended December 31, 2023.
The table below reflects the compensation granted during or with respect to the year ended December 31, 2024.
For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service. Ms. Hila Kiron-Revach has agreed to serve as our independent director.
For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service. Ms. Hila Kiron-Revach, Oz Adler and Yossi Daskal has agreed to serve as our independent director.
Board members may waive there right to receive the above fees or options or any part thereof, and director nominees may assign their right to remunerations to the shareholder that appointed them. C.
Members of our board of directors may waive there right to receive the above fees or options or any part thereof, and director nominees may assign their right to remunerations to the shareholder that appointed them.
(2) Cash compensation amounts denominated in NIS were converted into U.S. dollars at the average conversion rate for the year ended December 31, 2023. (3) Includes a one-time bonus to our Chief Executive Officer in the amount of NIS 84,000 (approximately $23,000).
(2) Cash compensation amounts denominated in NIS were converted into U.S. dollars at the average conversion rate for the year ended December 31, 2024. (3) Includes a one-time bonus to our Chief Executive Officer in the amount of NIS 56,000 (approximately $15,000).
In addition, under certain circumstances, our amended and restated articles of association allow our board of directors to appoint directors to fill vacancies on our board of directors or in addition to the acting directors (subject to the limitation on the number of directors), until the next annual general meeting.
In addition, under certain circumstances, our amended and restated articles of association allow our board of directors to appoint directors to fill vacancies on our board of directors or in addition to the acting directors (subject to the limitation on the number of directors).
Salary and Related Benefits Pension, Retirement and Other Similar Benefits Share Based Compensation All directors and senior management as a group, consisting of 12* persons (as of December 31, 2023). $ 1,273,362 -- $ 162,557 * On January 9, 2024, we announced that each of Mr. Shmuel Donnerstein, Ms. Inbal Kreiss and Ms.
Salary and Related Benefits Pension, Retirement and Other Similar Benefits Share Based Compensation All directors and senior management as a group, consisting of 18* persons (as of December 31, 2024). $ 1,319 — $ 177 * On January 9, 2024, we announced that each of Mr. Shmuel Donnerstein, Ms. Inbal Kreiss and Ms.
Our compensation committee follows home country practice as opposed to complying with the compensation committee membership and charter requirements prescribed under the Nasdaq Listing Rules. Our board of directors has adopted a compensation committee charter.
Our compensation committee follows home country practice as opposed to complying with the compensation committee membership and charter requirements prescribed under the Nasdaq Listing Rules.
From 2011 to 2013, Mr. Dor served as the Team Leader of the Aerospace division at Elbit Systems. From 2014 to 2015, he served as Business Unit Director at Galooli Fleet & Energy, a subsidiary of the Galooli Group that specializes in IoT solutions for vehicles. Transitioning to the autonomous vehicle industry, Mr.
Dor is a seasoned entrepreneur and leader in the fields of engineering and business. From 2011 to 2013, Mr. Dor served as the Team Leader of the Aerospace division at Elbit Systems. From 2014 to 2015, he served as Business Unit Director at Galooli Fleet& Energy, a subsidiary of the Galooli Group that specializes in IoT solutions for vehicles.
Daskal has a Bachelors of Arts in Mediterranean and Arabic History Science and a Masters of Arts in Political Science, and is completing a PhD in Decision-Making from Haifa University. Oz Adler, Director Mr. Adler , CPA, has served on our board of directors since June 2022. Mr.
Daskal has a Bachelors of Arts in Mediterranean and Arabic History Science and a Masters of Arts in Political Science, and is completing a PhD in Decision-Making from Haifa University. Oz Adler, Class II Director Mr. Adler has served on our board of directors since June 2022. Mr. Adler has served as the chief financial officer of SciSparc Ltd.
Klir has more than 25 years of experience in development and leadership of video and audio applications. Prior to joining us, Mr. Klir worked as the Head of Engineering at Continuse Biometrics Ltd., an innovative medical company, between May 2015 and March 2021. Mr. Klir holds a B.Sc. degree in Electric Engineering and Computers from the Ben Gurion University, Israel.
Klir has more than 25 years of experience in development and leadership of video and audio applications. Prior to joining us, Mr. Klir worked as the Head of Engineering at Continuse Biometrics Ltd., an innovative medical company, between May 2015 and March 2021. Mr.
Such policy must be adopted by the company’s board of directors, after considering the recommendations of the compensation committee. The compensation policy is then brought for approval by our shareholders, which requires a special majority (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”).
The compensation policy is then brought for approval by our shareholders, which requires a special majority (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”).
Our board may, at any time during the term of the Option Plan increase the number of shares available for grant under the Option Plan subject to any required approval of the our shareholders of such increase if so required under applicable laws and/or our incorporation documents and/or any shareholders agreement, as shall be in effect from time to time.
Our board may, at any time during the term of the Option Plan increase the number of shares available for grant under the Option Plan subject to any required approval of our shareholders of such increase if so required under applicable laws and/or our incorporation documents and/or any shareholders agreement, as shall be in effect from time to time. 77 Our Option Plan was adopted by our board of directors on January 31, 2017, and awards may be granted under the Option Plan until January 31, 2027.
Ofer Naveh has served as our Chief Financial Officer since June 2017. Mr. Naveh brings more than 15 years of experience in accounting and financial management, at KPMG’s audit practice from December 1999 to November 2005, and in numerous financial and accounting roles at public companies traded in Israel and the United States. Mr.
Ofer Naveh has served as our Chief Financial Officer since June 2017. Mr. Naveh brings more than 20 years of experience in accounting and financial management in numerous financial roles at public companies traded in Israel and the United States. Mr.
Dor served as the Co-CEO of Foresight Autonomous Holdings from 2016 to 2019. In 2019, Mr. Dor founded Upsellon Brands Holdings and has served as its CEO since that time. Upsellon Brands is an innovative e-commerce dedicated to revolutionizing the landscape of Amazon FBA aggregation. Mr. Dor holds a B.Sc. in Electrical Engineering from the Tel Aviv University.
Transitioning to the autonomous vehicle industry, Mr. Dor served as the Co-CEO of Foresight Autonomous Holdings from 2016 to 2019. In 2019, Mr. Dor founded Upsellon Brands Holdings and has served as its CEO since that time. Upsellon Brands is an innovative e-commerce dedicated to revolutionizing the landscape of Amazon FBA aggregation. Mr.
Kiron-Revach served as a professional advisor to the chairman of the board of directors and acting secretary of Eilat Ashkelon Pipeline Company. From 2015 until 2021, Ms. Kiron-Revach served as a senior professional advisor to ministers in the Israeli government, including the minister of foreign affairs and minister of transportation. From 2012 until 2015, Ms.
From 2015 until 2021, Ms. Kiron-Revach served as a senior professional advisor to ministers in the Israeli government, including the minister of foreign affairs and minister of transportation. From 2012 until 2015, Ms.
The duty of care of an office holder includes a duty to use reasonable means to obtain: ● information on the advisability of a given action brought for his approval or performed by him by virtue of his position; and ● all other important information pertaining to these actions. 65 The duty of loyalty of an office holder requires an office holder to act in good faith and for the benefit of the company, and includes a duty to: ● refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs; ● refrain from any action that is competitive with the company’s business; ● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and ● disclose to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder.
The duty of loyalty of an office holder requires an office holder to act in good faith and for the benefit of the company, and includes a duty to: ● refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs; ● refrain from any action that is competitive with the company’s business; ● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and ● disclose to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder.
Oz Adler have agreed to serve as our external directors. 58 According to regulations promulgated under the Companies law, at least one of the external directors is required to have “financial and accounting expertise,” unless another member of the audit committee, who is an independent director under the Nasdaq Listing Rules, has “financial and accounting expertise,” and the other external director or directors are required to have “professional expertise.” An external director may not be appointed to an additional term unless: (1) such director has “accounting and financial expertise;” or (2) he or she has “professional expertise,” and on the date of appointment for another term there is another external director who has “accounting and financial expertise” and the number of “accounting and financial experts” on the board of directors is at least equal to the minimum number determined appropriate by the board of directors.
As of the date of this annual report, the Company has been afforded such relief because a majority of the Company’s directors are independent and there is no controlling shareholder in the Company and therefore the Company is currently not required to appoint external directors. 65 According to regulations promulgated under the Companies law, at least one of the external directors is required to have “financial and accounting expertise,” unless another member of the audit committee, who is an independent director under the Nasdaq Listing Rules, has “financial and accounting expertise,” and the other external director or directors are required to have “professional expertise.” An external director may not be appointed to an additional term unless: (1) such director has “accounting and financial expertise;” or (2) he or she has “professional expertise,” and on the date of appointment for another term there is another external director who has “accounting and financial expertise” and the number of “accounting and financial experts” on the board of directors is at least equal to the minimum number determined appropriate by the board of directors.
Additionally, the nominee must provide details of such skills, and demonstrate an absence of any limitation under the Companies Law that may prevent his or her election, and affirm that all of the required election-information is provided to us, pursuant to the Companies Law.
Additionally, the nominee must provide details of such skills, and demonstrate an absence of any limitation under the Companies Law that may prevent his or her election, and affirm that all of the required election-information is provided to us, pursuant to the Companies Law. 64 Under the Companies Law, our board of directors must determine the minimum number of directors who are required to have accounting and financial expertise.
Such exemptions include an exemption from the requirement to appoint external directors and the requirement that an external director be a member of certain committees, as well as the exemption from limitations on directors’ compensation. We may use these exemptions in the future as of the date of this Annual Report we do not have a controlling shareholder.
Such exemptions include an exemption from the requirement to appoint external directors and the requirement that an external director be a member of certain committees, as well as the exemption from limitations on directors’ compensation. We were afforded these exemptions on August 6, 2024, as we do not have a controlling shareholder.
Our compensation committee reviews and recommends to our board of directors, with respect to our executive officers’ and directors’: (1) annual base compensation; (2) annual incentive bonus, including the specific goals and amount; (3) equity compensation; (4) employment agreements, severance arrangements, and change in control agreements and provisions; (5) retirement grants and/or retirement bonuses; and (6) any other benefits, compensation, compensation policies or arrangements. 63 The duties of the compensation committee include the recommendation to the company’s board of directors of a policy regarding the terms of engagement of office holders, to which we refer as a compensation policy.
Our board of directors has adopted a compensation committee charter. 70 Our compensation committee reviews and recommends to our board of directors, with respect to our executive officers’ and directors’: (1) annual base compensation; (2) annual incentive bonus, including the specific goals and amount; (3) equity compensation; (4) employment agreements, severance arrangements, and change in control agreements and provisions; (5) retirement grants and/or retirement bonuses; and (6) any other benefits, compensation, compensation policies or arrangements.
External directors may be removed only by a special general meeting of shareholders called by the board of directors after the board has determined that circumstances allow such dismissal, at the same special majority of shareholders required for their election or by a court, and in both cases only if the external directors cease to meet the statutory qualifications for their appointment or if they violate their duty of loyalty to our company.
Prior to the approval of the reelection of the external director at a general shareholders meeting, the company’s shareholders must be informed of the term previously served by him or her and of the reasons why the board of directors and audit committee recommended the extension of his or her term. 66 External directors may be removed only by a special general meeting of shareholders called by the board of directors after the board has determined that circumstances allow such dismissal, at the same special majority of shareholders required for their election or by a court, and in both cases only if the external directors cease to meet the statutory qualifications for their appointment or if they violate their duty of loyalty to our company.
(2) Member of the compensation committee. (3) Independent director (as defined under Nasdaq Stock Market Listing Rules) (4) External director (as defined under the Companies Law) Senior Management Shahar Hania, Chief Executive Officer Mr. Shahar Hania has served as our Chief Executive Officer since November 2020. Previously, Mr.
(2) Independent director (as defined under Nasdaq Stock Market Listing Rules) 58 Senior Management Shahar Hania, Chief Executive Officer Mr. Shahar Hania has served as our Chief Executive Officer since November 2020. Previously, Mr.
Mr. Yoresh holds a B.A. in Business Administration from the College of Management, Israel and an M.A. in Law from Bar-Ilan University, Israel. Mr. Yoresh is a Certified Public Accountant in Israel. Mark Cleobury, Director Mr. Mark Cleobury has served on our board of directors since December 1, 2022 and served as the Chairman from January 2023 to January 2024.
Yoresh holds a B.A. in Business Administration from the College of Management, Israel and an M.A. in Law from Bar-Ilan University, Israel. Mr. Yoresh is a Certified Public Accountant in Israel. Ariel Dor, Class I Director Mr. Ariel Dor has served on our board of directors since March 2024. Mr.
Keren Aslan tendered their resignations from the our board of directors, and the board of directors had appointed Mr. Amitay Weiss and Ms. Hila Kiron-Revach to the board of directors, to serve until the Company’s next annual general meeting of shareholders. On March 12, 2024, Mr. Weiss resigned from our board of directors and that Mr.
Keren Aslan tendered their resignations from our board of directors, and the board of directors had appointed Mr. Amitay Weiss and Ms. Hila Kiron-Revach to the board of directors. On March 12, 2024, Mr. Weiss resigned from our board of directors and that Mr. Ariel Dor was appointed to our board of directors. Mr. Donnerstein, Ms. Kreiss, Ms.
Our board has adopted a compensation policy which was approved by our shareholders on March 27, 2022. The compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of executive officers and directors, including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement.
The compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of executive officers and directors, including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement.
Directors and Senior Management The following table sets forth information regarding our executive officers, and directors as of March 28, 2024: Name Age Position Executive Officers Shahar Hania 51 Chief Executive Officer Ofer Naveh 52 Chief Financial Officer Zachi Bar-Yehoshua 49 Chief Operating Officer Ofer Grisaro 47 Vice President of Marketing and Sales Amit Klir 54 Vice President of Research and Development Non-Employee Directors Eli Yoresh 53 Chairman of the Board of Directors Mark Cleobury 64 Director Ariel Dor 43 Director Hila Kiron-Revach (1)(2)(3) 52 Director Yossi Daskal (1)(2)(3)(4) 70 Director Oz Adler (1)(2)(3)(4) 37 Director (1) Member of the audit committee.
Directors and Senior Management The following table sets forth information regarding our executive officers, and directors as of March 28, 2024: Name Age Position Executive Officers Shahar Hania 52 Chief Executive Officer Ofer Naveh 53 Chief Financial Officer Noam Shloper 51 Chief Operating Officer Doron Cohadier 51 Vice President of Business Development and Marketing Amit Klir 55 Vice President of Research and Development Non-Employee Directors Eli Yoresh (2) 54 Chairman of the Board of Directors, Class III Director Ariel Dor (2) 44 Class I Director Hila Kiron-Revach (1)(2) 53 Class I Director Yossi Daskal (1)(2) 71 Class III Director Oz Adler (1)(2) 38 Class II Director (1) Member of the audit and compensation committee.
A person may furthermore not continue to serve as an external director if he or she received direct or indirect compensation from the company including amounts paid pursuant to indemnification or exculpation contracts or commitments and insurance coverage, other than for his or her service as an external director as permitted by the Companies Law and the regulations promulgated thereunder. 60 Following the termination of an external director’s service on a board of directors, such former external director and his or her spouse and children may not be provided a direct or indirect benefit by the company, its controlling shareholder or any entity under its controlling shareholder’s control.
A person may furthermore not continue to serve as an external director if he or she received direct or indirect compensation from the company including amounts paid pursuant to indemnification or exculpation contracts or commitments and insurance coverage, other than for his or her service as an external director as permitted by the Companies Law and the regulations promulgated thereunder.
There are no service contracts between us, on the one hand, and our directors in their capacity as directors, on the other hand, providing for benefits upon termination of service. Fiduciary Duties of Office Holders The Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company.
There are no service contracts between us, on the one hand, and our directors in their capacity as directors, on the other hand, providing for benefits upon termination of service.
The duty of care requires an office holder to act with the level of care with which a reasonable office holder in the same position would have acted under the same circumstances.
Fiduciary Duties of Office Holders The Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company. 72 The duty of care requires an office holder to act with the level of care with which a reasonable office holder in the same position would have acted under the same circumstances.
Unless the appointing director limits the time or scope of the appointment, the appointment is effective for all purposes until the appointing director ceases to be a director or terminates the appointment.
Unless the appointing director limits the time or scope of the appointment, the appointment is effective for all purposes until the appointing director ceases to be a director or terminates the appointment. Committees of the Board of Directors Audit Committee Our audit committee is comprised of at least three independent directors.
In the event of a vacancy created by an external director which causes the company to have fewer than two external directors, the board of directors is required under the Companies Law to call a shareholders meeting as soon as possible to appoint such number of new external directors in order that the company thereafter has two external directors. 59 Each committee of the board of directors that exercises the powers of the board of directors must include at least one external director, except that the audit committee and the compensation committee must include all external directors then serving on the board of directors and an external director must serve as the chair thereof.
In the event of a vacancy created by an external director which causes the company to have fewer than two external directors, the board of directors is required under the Companies Law to call a shareholders meeting as soon as possible to appoint such number of new external directors in order that the company thereafter has two external directors.
Under the Companies Law, our board of directors must determine the minimum number of directors who are required to have accounting and financial expertise. In determining the number of directors required to have such expertise, our board of directors must consider, among other things, the type and size of the company and the scope and complexity of its operations.
In determining the number of directors required to have such expertise, our board of directors must consider, among other things, the type and size of the company and the scope and complexity of its operations. Our board of directors has determined that we must have at least one director with accounting and financial expertise.
In addition, no person may serve as an external director if that person’s position or professional or other activities create, or may create, a conflict of interest with that person’s responsibilities as a director or otherwise interfere with that person’s ability to serve as an external director or if the person is an employee of the Israel Securities Authority or of an Israeli stock exchange.
The term “office holder” is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these positions regardless of that person’s title, a director and any other manager directly subordinate to the general manager. 67 In addition, no person may serve as an external director if that person’s position or professional or other activities create, or may create, a conflict of interest with that person’s responsibilities as a director or otherwise interfere with that person’s ability to serve as an external director or if the person is an employee of the Israel Securities Authority or of an Israeli stock exchange.
Compensation Committee Under the Companies Law, the board of directors of any public company must establish a compensation committee. The compensation committee must be comprised of at least three directors, including all of the external directors, who must constitute a majority of the members of the compensation committee.
The compensation committee must be comprised of at least three directors, including all of the external directors, who must constitute a majority of the members of the compensation committee (to the extent external director is required under the Companies Law and its regulations).
Executive Officer - Name and Principal Position (1) (2) (in thousands, US dollars) Salary and Related Benefits Share Based Compensation Total Shahar Hania, CEO $ 302 (3) $ 51 $ 353 Ofer Naveh, CFO $ 229 $ 22 $ 251 Amit Klir, VP R&D $ 229 (4) $ 7 $ 236 Ofer Grisaro, VP Sales and Marketing $ 191 (5) $ 7 $ 198 Zachi Bar- Yehoshua, COO $ 180 $ 1 $ 181 (1) All amounts reported in the table are in terms of cost to us, as recorded in our financial statements.
Executive Officer - Name and Principal Position (1) (2) (in thousands, US dollars) Salary and Related Benefits Share Based Compensation Total Shahar Hania, CEO $ 299 (3) $ 50 $ 349 Ofer Naveh, CFO $ 259 (4) $ 40 $ 299 Amit Klir, VP R&D $ 210 $ 16 $ 226 Zachi Bar-Yehoshua, former COO (5) $ 177 (5) $ 1 $ 178 Noam Shloper, COO $ 157 $ 8 $ 165 (1) All amounts reported in the table are in terms of cost to us, as recorded in our financial statements.
In addition, the compensation committee may exempt the engagement terms of a candidate to serve as the chief executive officer from shareholders’ approval, if the compensation committee determines that the compensation arrangement is consistent with the company’s stated compensation policy, that the chief executive officer did not have a prior business relationship with the company or a controlling shareholder of the company, and that subjecting the approval to a shareholder vote would impede the company’s ability to attain the candidate to serve as the company’s chief executive officer (and provide detailed reasons for the latter).
In addition, the compensation committee may exempt the engagement terms of a candidate to serve as the chief executive officer from shareholders’ approval, if the compensation committee determines that the compensation arrangement is consistent with the company’s stated compensation policy, that the chief executive officer did not have a prior business relationship with the company or a controlling shareholder of the company, and that subjecting the approval to a shareholders vote would impede the company’s ability to attain the candidate to serve as the company’s chief executive officer (and provide detailed reasons for the latter). 76 The approval of each of the compensation committee and the board of directors, with regard to the office holders and directors above, must be in accordance with the company’s stated compensation policy; however, under special circumstances, the compensation committee and the board of directors may approve compensation terms of a chief executive officer that are inconsistent with the company’s compensation policy provided that they have considered those provisions that must be included in the compensation policy according to the Companies Law and that shareholder approval was obtained by a special majority requirement.
The approval of each of the compensation committee and the board of directors, with regard to the office holders and directors above, must be in accordance with the company’s stated compensation policy; however, under special circumstances, the compensation committee and the board of directors may approve compensation terms of a chief executive officer that are inconsistent with the company’s compensation policy provided that they have considered those provisions that must be included in the compensation policy according to the Companies Law and that shareholder approval was obtained by a special majority requirement. 69 Duties of Shareholders Under the Companies Law, a shareholder has a duty to refrain from abusing its power in the company and to act in good faith and in an acceptable manner in exercising its rights and performing its obligations toward the company and other shareholders, including, among other things, in voting at general meetings of shareholders (and at shareholder class meetings) on the following matters: ● amendment of the articles of association; ● increase in the company’s authorized share capital; ● merger; and ● the approval of related party transactions and acts of office holders that require shareholder approval.
Duties of Shareholders Under the Companies Law, a shareholder has a duty to refrain from abusing its power in the company and to act in good faith and in an acceptable manner in exercising its rights and performing its obligations toward the company and other shareholders, including, among other things, in voting at general meetings of shareholders (and at shareholder class meetings) on the following matters: ● amendment of the articles of association; ● increase in the company’s authorized share capital; ● merger; and ● the approval of related party transactions and acts of office holders that require shareholder approval.
Our board of directors has determined that we must have at least one director with accounting and financial expertise. 57 The board of directors may elect one director to serve as the chairman of the board of directors to preside at the meetings of the board of directors, and may also remove that director as chairman.
The board of directors may elect one director to serve as the chairman of the board of directors to preside at the meetings of the board of directors, and may also remove that director as chairman.
Adler currently serves as the chief executive officer and chief financial officer of SciSparc Ltd. Mr. Adler has served as SciSparc’s chief financial officer since April 2018 and as its chief executive officer since January 2022. Prior to that, from September 2017 until March 2018, he served as the VP Finance of SciSparc. From December 2020 to April 2021, Mr.
(Nasdaq: SPRC) since April 2018 and as its chief executive officer since January 2022. Prior to that, from September 2017 until March 2018, he served as the VP Finance of SciSparc. Additionally, Mr. Adler has experience in a wide variety of managerial, financial, tax and accounting roles.
Our employees, directors, officers, and services providers, including those who are our controlling shareholders (if any), as well as those of our affiliated companies, are eligible to participate in this Option Plan. 70 Our Option Plan is administered by our board of directors, regarding the granting of options and the terms of option grants, including exercise price, method of payment, vesting schedule, acceleration of vesting and the other matters necessary in the administration of this Option Plan.
Our Option Plan is administered by our board of directors, regarding the granting of options and the terms of option grants, including exercise price, method of payment, vesting schedule, acceleration of vesting and the other matters necessary in the administration of this Option Plan.
Ariel Dor was appointed to our board of directors. Mr. Donnerstein, Ms. Kreiss and Ms. Aslan served on our board of directors as of December 31, 2023. On March 25, 2024, Mr. Maximilian Eichhorn’s term as a member of our board of directors expired pursuant to our amended and restated articles of association, and on March 28, 2024, Mr.
Aslan and Mr. Weiss served on our board of directors during the year ended December 31, 2024. On March 25, 2024, Mr. Maximilian Eichhorn’s term as a member of our board of directors expired pursuant to Section 42(b) of our amended and restated articles of association, and March 28, 2024, at a meeting of our board of directors, Mr.
In addition, the shareholder approval must fulfill one of the following requirements: ● at least a majority of the shares held by shareholders who have no personal interest in the transaction and are voting at the meeting must be voted in favor of approving the transaction, excluding abstentions; or ● the shares voted by shareholders who have no personal interest in the transaction who vote against the transaction represent no more than 2% of the voting rights in the company. 68 In addition, any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest with a term of more than three years requires the abovementioned approval every three years; however, such transactions not involving the receipt of services or compensation can be approved for a longer term, provided that the audit committee determines that such longer term is reasonable under the circumstances.
In addition, any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest with a term of more than three years requires the abovementioned approval every three years; however, such transactions not involving the receipt of services or compensation can be approved for a longer term, provided that the audit committee determines that such longer term is reasonable under the circumstances.
Hila Kiron-Revach, Director Ms. Hila Kiron-Revach has served on our board of directors since January 2024. Ms. Kiron-Revach has served as a member of the board of directors of Geffen Biomed Ltd. since 2014 and has been a member of the board of directors of Zmiha Investment House Ltd. since 2021. In 2021, Ms.
Kiron-Revach has served as a member of the board of directors of Geffen Biomed Ltd. since 2014 and has been a member of the board of directors of Zmiha Investment House Ltd. since 2021. In 2021, Ms. Kiron-Revach served as a professional advisor to the chairman of the board of directors and acting secretary of Eilat Ashkelon Pipeline Company.
As of December 31, 2023, options to purchase 47,488 ordinary shares granted to our directors and executive officers were outstanding under our Option Plan at a weighted average exercise price of $14.8 per share. 55 In accordance with the Companies Law, we are required to disclose the compensation granted to our five most highly compensated officers.
As of December 31, 2024, options to purchase 116,926 ordinary shares granted to our directors and executive officers were outstanding under our Option Plan at a weighted average exercise price of $14.8 per share.
As of March 28, 2024, the number of ordinary shares reserved for issuance under the Option Plan was 288,745. As of March 28, 2024, 206,539 options to purchase 206,539 ordinary shares were issued and outstanding, of which 108,498 options were vested as of that date, with an exercise price approximately $14.80-49.11 per share.
As of March 30, 2025, the number of ordinary shares reserved for issuance under the Option Plan was 4,061,098. As of March 30, 2025, 179,638 options to purchase 179,638 ordinary shares were issued and outstanding, of which 138,484 options were vested as of that date, with exercise prices ranging from $14.8 to $49.11 per share.
Approval of Related Party Transactions under Israeli Law General Under the Companies Law, we may approve an action by an office holder from which the office holder would otherwise have to refrain, as described above, if: ● the office holder acts in good faith and the act or its approval does not cause harm to the company; and ● the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company’s approval of such matter. 67 Disclosure of Personal Interests of an Office Holder The Companies Law requires that an office holder disclose to the company, promptly, and, in any event, not later than the board meeting at which the transaction is first discussed, any direct or indirect personal interest that he or she may have and all related material information known to him or her relating to any existing or proposed transaction by the company.
Disclosure of Personal Interests of an Office Holder The Companies Law requires that an office holder disclose to the company, promptly, and, in any event, not later than the board meeting at which the transaction is first discussed, any direct or indirect personal interest that he or she may have and all related material information known to him or her relating to any existing or proposed transaction by the company.
In addition, our amended and restated articles allow our board of directors to appoint directors to fill vacancies and/or as an addition to the board of directors (subject to the maximum number of directors) to serve until the next annual general meeting.
According to the above reliefs, the Company is currently not obligated to appoint External Directors. In addition, our amended and restated articles of association allow our board of directors to appoint directors to fill vacancies and as an addition to the board of directors (subject to the maximum number of directors).
(4) Includes a one-time bonus to our VP R&D in the amount of NIS 52,000 (approximately $14,000) (5) Includes sales bonuses to our VP Sales and Marketing in a total amount of NIS 62,375 (approximately $17,000) Employment Agreements and Service Agreements with Executive Officers We have entered into written employment agreements and/or service agreements with each of our executive officers.
(4) Includes a one-time bonus to our Chief Financial Officer in the amount of NIS 96,000 (approximately $26,000) (5) Mr. Bar-Yehoshua resigned from the Company in November, 30, 2024. Employment Agreements and Service Agreements with Executive Officers We have entered into written employment agreements and/or service agreements with each of our executive officers.
Grisaro holds B.A. degree in Management and an M.B.A. in International Marketing Pricing, both from the Ben Gurion University, Israel. Amit Klir, Vice President of Research and Development Mr. Amit Klir has served as our Vice President of Technology, Research and Development since March 2021. Mr.
Cohadier holds a B.Sc. in Industrial Engineering from Brunel University, London, and an Executive M.B.A. from the Recanati School of Business Administration of the Tel Aviv University. Amit Klir, Vice President of Research and Development Mr. Amit Klir has served as our Vice President of Technology, Research and Development since March 2021. Mr.
We have entered into agreements with each of our directors and executive officers exculpating them from liability to us for damages caused to us as a result of a breach of duty of care and undertaking to indemnify them, in each case, to the fullest extent permitted by our amended and restated articles of association and the Companies Law, to the extent that these liabilities are not covered by insurance.
We have entered into agreements with each of our directors and executive officers exculpating them from liability to us for damages caused to us as a result of a breach of duty of care and undertaking to indemnify them, in each case, to the fullest extent permitted by our amended and restated articles of association and the Companies Law, to the extent that these liabilities are not covered by insurance. 74 Approval of Related Party Transactions under Israeli Law General Under the Companies Law, we may approve an action by an office holder from which the office holder would otherwise have to refrain, as described above, if: ● the office holder acts in good faith and the act or its approval does not cause harm to the company; and ● the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company’s approval of such matter.
Such options will vest one-third following 12 months from the completion date of our initial public offering and the balance on quarterly basis during the following 24 months. 56 Directors’ Service Contracts We do not have written agreements with any director providing for benefits upon the termination of his engagement with our company.
Directors’ Service Contracts We do not have written agreements with any director providing for benefits upon the termination of his engagement with our company.
Non-Employee Directors Eli Yoresh, Director Mr. Eli Yoresh has served on our board of directors since August 2017 and was appointed as the Chairman in January 2024. Mr. Yoresh is a seasoned executive with over 15 years of executive and financial management experience, mainly with companies in the financial, technology and industrial sectors. Mr.
Yoresh is a seasoned executive with over 15 years of executive and financial management experience, mainly with companies in the financial, technology and industrial sectors. Mr. Yoresh has served as chief financial officer since March 2010, and as a director since October 2010 till 2019, at Foresight Autonomous Holdings Ltd. (Nasdaq and TASE: FRSX). Mr.
Eichhorn was appointed to continue as an observer of the board of directors. As a result, compensation paid to Mr. Donnerstein, Ms. Kreiss, Ms. Aslan and Mr. Eichhorn as of December 31, 2023 is included in the above table, but does not include any compensation paid to Mr. Weiss (for his service from January 2024 to March 2024), Ms.
As a result, compensation paid to (or waived by) Mr. Donnerstein, Ms. Kreiss, Ms. Aslan, Mr. Weiss, Mr. Eichhorn, Mr. Grisaro, Mr. Bar-Yehoshua and Mr. Cleobury as of December 31, 2024, is included in the above table.
Diversity of the Board of Directors Board Diversity Matrix (As of March 28, 2024) Country of Principal Executive Offices Israel Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 6 Part I: Gender Identity Female Male Non-Binary Did Not Disclose Gender Directors 1 5 - - Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction - LGBTQ+ - Did Not Disclose Demographic Background - External Directors Under the Companies Law, an Israeli company whose shares have been offered to the public or whose shares are listed for trading on a stock exchange in or outside of Israel is required to appoint at least two external directors to serve on its board of directors.
External Directors Under the Companies Law, an Israeli company whose shares have been offered to the public or whose shares are listed for trading on a stock exchange in or outside of Israel is required to appoint at least two external directors to serve on its board of directors. External directors must meet stringent standards of independence.
Committees of the Board of Directors Audit Committee Our audit committee is comprised of at least three directors, including all of the external directors (one of whom must serve as chair of the committee).
Each committee of the board of directors that exercises the powers of the board of directors must include at least one external director, except that the audit committee and the compensation committee must include all external directors then serving on the board of directors and an external director must serve as the chair thereof.
Zachi Bar-Yehoshua has served as our Vice president of Operations since June 2017. Mr. Bar-Yehoshua has combined managerial experience of more than 20 years, both in the high-tech sector and traditional industries in several service and operation roles. Mr.
Doron Cohadier, Vice President of Business Development and Marketing Mr. Doron Cohadier has served as our Vice President of Business Development and marketing since September 2024. Mr. Cohadier has more than 20 years of managerial experience, mainly in the field of business development. Prior to joining us, from 2017 to 2024, Mr.
(TASE: EMITF), Clearmind Medicine Inc. (CSE: CMND) (OTC: CMNDF) (FSE:CWY), Jeffs’ Brands Ltd., Polyrizon Ltd. and Charging Robotics Ltd. Mr. Adler is a certified public accountant in Israel and holds a B.A. degree in Accounting and Business Management from The College of Management, Israel.
Adler is a certified public accountant in Israel and holds a B.A. degree in Accounting and Business Management from The College of Management, Israel. 60 Family Relationships There are currently no family relationships between any members of our executive management and our directors.
Additional board members are elected at our shareholder’s annual meetings and in such case they shall serve on the board of directors until the next annual general meeting (except for external directors which will serve for up to three terms, each term of three years’ period).
External Directors (to the extent External Directors are required to be elected and to serve on the Board of Directors pursuant to the requirements of the Companies Law) will serve for up to three terms, each term of three years’ period and the election, qualification, removal or dismissal of External Directors, if elected, shall be only in accordance with the applicable provisions set forth in the Companies Law.
Our board members are each entitled to an annual fee and a per meeting fee of the fixed amounts set under the Companies Law in accordance with our then-effective grade, so that as of January 1, 2024 and according to the our equity as of December 31, 2023, all members of our board of directors, who are not otherwise employed by us, shall be entitled to an annual fee of NIS 32,515 and a per meeting fee of NIS 1,040.
Effective as of July 1, 2024, all members of the board of directors, who are not otherwise engaged by the Company, shall be entitled to the payment of a fixed annual fee in the amount of NIS 48,000 (plus VAT), which shall be paid in four quarterly installments of NIS 12,000, each; and member of the board of directors who also serves as members of the Company’s Audit and Compensation Committee shall be entitled to the payment of a fixed annual fee in the amount of NIS 56,000 (plus VAT), which shall be paid in four quarterly installments of NIS 14,000, each.
Removed
Bar-Yehoshua served as operation and customer manager at Zoko Enterprises Ltd., an infrastructure and transportation company, from June 2015 through June 2017 and as vice president of technologies services at Team-Netcom Ltd. (Malam Group), a hardware development company, from March 2011 through May 2015. Mr.
Added
Noam Shloper has served as our Chief Operating Officer since November 2024 and served as our Head of QA, Homologation and Project Management since July 2019. Mr.
Removed
Bar-Yehoshua holds a B.A. in Management and M.B.A in Business Administration from the Open University of Israel. 52 Ofer Grisaro, Vice President of Marketing and Sales Mr. Ofer Grisaro has served as our Vice President of Marketing and Sales since February 1, 2021. Mr. Grisaro has more than 15 years of experience in sales, marketing and business development.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

24 edited+11 added−11 removed18 unchanged
Biggest changeOrdinary shares issuable under share options or warrants that are exercisable within 60 days after March 28, 2024 are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options or warrants but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. 71 Except as indicated in the footnotes to this table, we believe that the shareholders named in this table have sole voting and investment power with respect to all shares shown to be beneficially owned by them, based on information provided to us by such shareholders.
Biggest changeExcept as indicated in the footnotes to this table, we believe that the shareholders named in this table have sole voting and investment power with respect to all shares shown to be beneficially owned by them, based on information provided to us by such shareholders.
As detailed below, the Facility Agreement terminated on March 1, 2024. Pursuant to the Facility Agreement, the Lender’s financing obligations terminated in the event we drew down $7.5 million or more pursuant to an alternate credit facility or closes one or more equity financing transaction in an aggregate amount of at least $5 million.
As detailed below, the Facility Agreement terminated on March 1, 2024. 81 Pursuant to the Facility Agreement, the Lender’s financing obligations terminated in the event we drew down $7.5 million or more pursuant to an alternate credit facility or closes one or more equity financing transaction in an aggregate amount of at least $5 million.
The purchase price per Unit is $0.98475. The January 2024 PIPE Pre-Funded Warrants are immediately exercisable at an exercise price of $0.0001 per ordinary share, subject to certain adjustments and certain anti-dilution protection set forth therein, and will not expire until exercised in full.
The January 2024 PIPE Pre-Funded Warrants are immediately exercisable at an exercise price of $0.0001 per ordinary share, subject to certain adjustments and certain anti-dilution protection set forth therein, and will not expire until exercised in full.
The number of record holders is not representative of the number of beneficial holders of our ordinary shares, as 88.802% of our outstanding ordinary shares are recorded in the name of Cede & Co. as nominee for the Depository Trust Company, in whose name all shares held in “street name” are held in the United States.
The number of record holders is not representative of the number of beneficial holders of our ordinary shares, as 97.4% of our outstanding ordinary shares are recorded in the name of Cede & Co. as nominee for the Depository Trust Company, in whose name all shares held in “street name” are held in the United States.
Options Since our inception, we have granted options to purchase our ordinary shares to certain of our officers and directors. Such option agreements may contain acceleration provisions upon certain merger, acquisition, or change of control transactions.
Options and Restricted Share Units Since our inception, we have granted options to purchase our ordinary shares and RSUs to certain of our officers and directors. Such option agreements may contain acceleration provisions upon certain merger, acquisition, or change of control transactions.
Does not include options to purchase 5,229 ordinary shares exercisable at $14.80 per share and expiring in May 2032, that vest in more than 60 days from the date hereof. (4) Consists of 4,650 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in January 2028, January 2030 and September 2032.
Does not include (i) options to purchase 84 ordinary shares exercisable at $14.80 per share and expiring in September 2032, that vest in more than 60 days from the date hereof and (ii) 85,834 RSUs that vest in more than 60 days from the date hereof (4) Consists of (i) 15,916 ordinary shares, (ii) 7,099 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in January 2028 and May 2032 and (iii) 15,916 RSUs vested within 60 days.
(2) Consists of (i) 50,820 ordinary shares, and (ii) 25,320 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in January 2028, October 2030, May 2032 and October 2033.
(1) Consists of (i) 78,820 ordinary shares, (ii) 40,847 options vested within 60 days exercisable at an exercise price of $14.80 and expiring in January 2028, October 2030, May 2032 and October 2033 and (iii) 28,000 RSUs vested within 60 days.
The January 2024 PIPE closed on January 31, 2024 following the execution of definitive documentation between us and the Investors. 73 In the January 2024 PIPE, the Investors purchased $3.0 million of Units consisting of (A) (i) 1,651,458 of ordinary shares and/or (ii) January 2024 PIPE Pre-Funded Warrants to purchase up to 1,394,999 ordinary shares and (B) January 2024 PIPE Ordinary Share Warrants to purchase up to 4,569,688 ordinary shares.
In the January 2024 PIPE, the Investors purchased $3.0 million of Units consisting of (A) (i) 1,651,458 of ordinary shares and/or (ii) January 2024 PIPE Pre-Funded Warrants to purchase up to 1,394,999 ordinary shares and (B) January 2024 PIPE Ordinary Share Warrants to purchase up to 4,569,688 ordinary shares. The purchase price per Unit is $0.98475.
Major Shareholders The following table sets forth information regarding beneficial ownership of our ordinary shares as of March 28, 2024 by: ● each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding ordinary shares; ● each of our directors and executive officers; and ● all of our directors and executive officers as a group.
Major Shareholders The following table sets forth information regarding beneficial ownership of our ordinary shares as of March 30, 2025 by: ● each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding ordinary shares; ● each of our directors and executive officers; and ● all of our directors and executive officers as a group. 78 Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting or investment power with respect to ordinary shares.
Does not include options to purchase 251 ordinary shares exercisable at $14.80 per share and expiring in September 2032, that vest in more than 60 days from the date hereof. (5) Consists of 3,771 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in January 2028 and May 2032.
Does not include (i) options to purchase 1,041 ordinary shares exercisable at $14.80 per share and expiring in September 2032, that vest in more than 60 days from the date hereof and (ii) 105,834 RSUs that vest in more than 60 days from the date hereof. 79 (7) Consists of (i) 4,166 ordinary shares, (ii) 5,264 options vested within 60 days, exercisable at an exercise price of $49.11, and expiring in January 2028 and (iii) 4,166 RSUs vested within 60 days.
Does not include options to purchase 3,328 ordinary shares exercisable at $14.80 per share and expiring in May 2032, that vest in more than 60 days from the date hereof. (9) Consists of 1,664 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in June 2032.
Does not include (i) options to purchase 1,664 ordinary shares exercisable at $14.80 per share and expiring in June 2032, that vest in more than 60 days from the date hereof and (ii) 41,668 RSUs that vest in more than 60 days from the date hereof.
Does not include options to purchase 3,646 ordinary shares exercisable at $14.80 per share and expiring in September 2032, that vest in more than 60 days from the date hereof. (8) Consists of 1,664 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in May 2032.
Does not include 41,668 RSUs that vest in more than 60 days from the date hereof. (8) Consists of (i) 4,166 ordinary shares, (ii) 4,992 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in May 2032 and (iii) 4,166 RSUs vested within 60 days.
Employment Agreements We have entered into written employment or services agreements with each of our executive officers. All of these agreements contain customary provisions regarding noncompetition, confidentiality of information and assignment of inventions. However, the enforceability of the noncompetition provisions may be limited under applicable law.
All of these agreements contain customary provisions regarding noncompetition, confidentiality of information and assignment of inventions. However, the enforceability of the noncompetition provisions may be limited under applicable law.
Does not include options to purchase 45,801, ordinary shares exercisable at $14.80 per share and expiring in May 2032 and October 2033, that vest in more than 60 days from the date hereof. (3) Consists of 17,293 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in January 2028, January 2030 and May 2032.
Does not include 211,668 RSUs that vest in more than 60 days from the date hereof (3) Consists of (i) 8,583 ordinary shares, (ii) 3,716 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in January 2028, January 2030 and September 2032 and (iii) 8,583 RSUs vested within 60 days.
Certain Relationships From time to time, we do business with other companies affiliated with our principal shareholders, as described above. We believe that all such arrangements have been entered into in the ordinary course of business. C. Interests of Experts and Counsel Not applicable.
We believe that all such arrangements have been entered into in the ordinary course of business. C. Interests of Experts and Counsel Not applicable.
Does not include options to purchase 3,328 ordinary shares exercisable at $14.80 per share and expiring in May 2032, that vest in more than 60 days from the date hereof. (6) Consists of 2,604 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in September 2032.
Does not include (i) options to purchase 24,798 ordinary shares exercisable at $14.80 per share and expiring in May 2032 and October 2033, that vest in more than 60 days from the date hereof and (ii) 280,000 RSUs that vest in more than 60 days from the date hereof.
On March 12, 2024, Mr. Weiss resigned from our board of directors. Mr. Weiss’s resignation was not due to any disagreement with us or management. Also on March 12, 2024, our board of directors appointed Mr. Ariel Dor to our board of directors to serve until our next annual general meeting of shareholders.
Weiss’s resignation was not due to any disagreement with us or management. Also on March 12, 2024, our board of directors appointed Mr. Ariel Dor to our board of directors. Certain Relationships From time to time, we do business with other companies affiliated with our principal shareholders, as described above.
As of the date of this Annual Report, 1,394,999 January 2024 PIPE Pre-Funded Warrants, 507,743 Facility Conversion Pre-Funded Warrant, 761,615 Facility Conversion Common Warrant and 4,269,688 January 2024 PIPE Warrants have been exercised resulting in gross proceeds of approximately $5.0 million to the Company Execution of Credit Facility Agreement and Issuance of Warrant (January 2024) On January 9, 2024, we entered into the Facility Agreement for a $6 million the Credit Facility and an additional amount up to $3 million, subject to certain conditions, of Additional Loans, with the Lender, who was also an Investor in the January 2024 PIPE.
Execution of Credit Facility Agreement and Issuance of Warrant (January 2024) On January 9, 2024, we entered into the Facility Agreement for a $6 million the Credit Facility and an additional amount up to $3 million, subject to certain conditions, of Additional Loans, with the Lender, who was also an Investor in the January 2024 PIPE.
There are no arrangements known to us which would result in a change in control of our company at a subsequent date. B. Related Party Transactions The following is a description of the material terms of those transactions with related parties to which we are party since January 1, 2023.
There are no arrangements known to us which would result in a change in control of our company at a subsequent date. B.
The major shareholders listed above do not have voting rights with respect to their ordinary shares that are different from the voting rights of other holders of our ordinary shares.
Our major shareholders do not have voting rights with respect to their ordinary shares that are different from the voting rights of other holders of our ordinary shares. Record Holders As of March 31, 2025, there were 72 holders of record of our ordinary shares, out of which 24 holders of record had a registered address in the United States.
As of the date of this Annual Report, 920,000 January 2024 Facility Warrants have been exercised resulting in gross proceeds of approximately $0.375 million to the Company. 74 In connection with and as a condition to the Credit Facility, each of Shmuel Donnerstein, Inbal Kreiss and Keren Aslan tendered their resignations from our board of directors, and our board of directors appointed Amitay Weiss and Hila Kiron-Revach to our board of directors, to serve until our next annual general meeting of shareholders.
In connection with and as a condition to the Credit Facility, each of Shmuel Donnerstein, Inbal Kreiss and Keren Aslan tendered their resignations from our board of directors, and our board of directors appointed Amitay Weiss and Hila Kiron-Revach to our board of directors. On March 12, 2024, Mr. Weiss resigned from our board of directors. Mr.
No. of Shares Beneficially Owned Percentage Owned Holders of more than 5% of our voting securities: Knorr-Bremse (1) 1,718,539 12.97 % Directors and senior management who are not 5% holders: Shahar Hania (2) 76,140 ** Ofer Naveh(3) 17,293 ** Zachi Bar-Yehoshua (4) 4,650 ** Eli Yoresh* (5) 3,771 ** Ofer Grisaro (6) 2,604 ** Amit Klir (7) 2,604 ** Ariel Dor* - - Yossi Daskal* (8) 1,664 ** Hila Kiron Revach* - - Oz Adler* (9) 1,664 ** Mark Cleobury* - - All directors and senior management as a group (11 persons) 59,570 0.87 % * Indicates director of the Company. ** Indicates beneficial ownership of less than 1% of the total ordinary shares outstanding.
No. of Shares Beneficially Owned Percentage Owned 5% or Greater Shareholders None Directors and senior management: Shahar Hania (1) 147,667 ** Ofer Naveh (2) 64,848 ** Noam Shloper (3) 20,882 ** Eli Yoresh* (4) 37,683 ** Doron Cohadier (5) 14,166 ** Amit Klir (6) 26,375 ** Ariel Dor*(7) 13,596 ** Yossi Daskal* (8) 12,076 ** Hila Kiron Revach*(9) 8,332 ** Oz Adler* (10) 12,076 ** All directors and senior management as a group (10 persons) 0.67 % * Indicates director of the Company. ** Indicates beneficial ownership of less than 1% of the total ordinary shares outstanding.
Does not include options to purchase 3,646 ordinary shares exercisable at $14.80 per share and expiring in September 2032, that vest in more than 60 days from the date hereof. (7) Consists of 2,604 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in September 2032.
Does not include 159,168 RSUs that vest in more than 60 days from the date hereof. (5) Consists of (i) 7,083 ordinary shares, and (ii) 7,083 RSUs vested within 60 days. Does not include 70,834 RSUs that vest in more than 60 days from the date hereof.
Does not include options to purchase 3,328 ordinary shares exercisable at $14.80 per share and expiring in June 2032, that vest in more than 60 days from the date hereof. 72 Changes in Ownership of Major Shareholders To our knowledge, other than as disclosed in the table above, our other filings with the SEC and this Annual Report, there has been no significant change in the percentage ownership held by any major shareholder since January 1, 2021.
To our knowledge, other than as disclosed in the table above, other filings with the SEC and this Annual Report, during the last three years, there were no significant changes in the percentage ownership of our major shareholders.
Removed
Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting or investment power with respect to ordinary shares.
Added
Ordinary shares issuable under RSUs, share options or warrants that are exercisable within 60 days after March 30, 2025 are deemed outstanding for the purpose of computing the percentage ownership of the person holding the RSUs, options or warrants but are not deemed outstanding for the purpose of computing the percentage ownership of any other person.
Removed
(1) Consists of (i) 1,149,474 ordinary shares and (ii) 569,065 warrants to purchase 569,065 ordinary shares. The shareholder is Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, which is a 100% subsidiary of Knorr-Bremse AG which is a German company publicly traded on the Frankfurt Stock Exchange. As of January 1, 2023, Marc Llistosella is the chief executive officer of Knorr-Bremse AG.
Added
(2) Consists of (i) 21,166 ordinary shares, (ii) 22,516 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in January 2028, January 2030 and May 2032 and (iii) 21,166 RSUs vested within 60 days.
Removed
Record Holders As of March 21, 2024, there were 75 holders of record of our ordinary shares, out of which 24 holders of record had a registered address in the United States.
Added
(6) Consists of (i) 10,583 ordinary shares, (ii) 5,209 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in September 2032 and (iii) 10,583 RSUs vested within 60 days.
Removed
Knorr-Bremse On March 6, 2022, we issued to Knorr-Bremse, a total of 10,256 Preferred A shares at a price of $195 per share, after we called an amount of $2,000,000 out of the option amount.
Added
Does not include 41,668 RSUs that vest in more than 60 days from the date hereof. (9) Consists of (i) 4,166 ordinary shares, and (ii) 4,166 RSUs vested within 60 days. Does not include 41,668 RSUs that vest in more than 60 days from the date hereof.
Removed
Immediately prior to the completion of the IPO on April 4, 2022, 61,538 Preferred A shares were automatically converted into 2,707,672 ordinary shares (after giving effect to the issuance of 10,256 Preferred A shares described above). In June 2021, we reached a co-operation and business development agreement with Knorr-Bremse India Pvt. Ltd., in which Knorr-Bremse India Pvt.
Added
(10) Consists of (i) 4,166 ordinary shares, (ii) 3,328 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in June 2032 and (iii) 4,166 RSUs vested within 60 days.
Removed
Ltd. provided a joint proposal to a tender published by the Ministry of Railways of the Government of India for obstacle detection systems for trains in the RV2000 system market segment. As part of the joint bid Knorr-Bremse India Pvt. Ltd. provided a guarantee of $27,000 to secure our proposal.
Added
Changes in Ownership of Major Shareholders As reported on their Schedule 13D, as of June 21, 2023, Knorr-Bremse Systeme für Schienenfahrzeuge GmbH reported beneficial ownership of 48.1% of our ordinary shares. According to our records, Knorr-Bremse’s current beneficial ownership is 3.35% of our ordinary shares.
Removed
On January 10, 2022, Knorr-Bremse informed us they did not receive the tender. However, the parties intend to collaborate on future projects. See “Business – Commercial Agreements” for additional commercial agreements.
Added
In addition, according to our records, Foresight Autonomous Holdings Ltd. held a beneficial ownership of 11.1% of our ordinary shares on December 31, 2023 and currently holds 0% of our ordinary shares.
Removed
In the KB Private Placement, we entered into a definitive securities purchase agreement for the purchase and sale of an aggregate of 493,421 ordinary shares and the KB Warrants, 5-year term common warrants to purchase an aggregate of 493,421 ordinary shares, at a purchase price of $6.08 per unit, to Knorr-Bremse.
Added
Related Party Transactions The following is a description of the material terms of those transactions with related parties to which we are party since January 1, 2024. 80 Employment Agreements We have entered into written employment or services agreements with each of our executive officers.
Removed
The KB Warrants are exercisable at $6.72 per ordinary share. The KB Private Placement closed on June 21, 2023, following approval of such transaction by our shareholders.
Added
The January 2024 PIPE closed on January 31, 2024 following the execution of definitive documentation between us and the Investors.
Removed
SAFE In January 2022, we entered into a SAFE with two of our current shareholders providing for financing in the aggregate amount of $1,000,000 (Knorr-Bremse in the amount of $714,286 and Foresight in the amount of $285,714) which was subsequently amended in March 2022.
Added
As of the date of this Annual Report, all of the warrants and pre-funded warrants that were issued in connection with the January 2024 PIPE have been exercised in full, consisting of 1,394,999 January 2024 PIPE Pre-Funded Warrants, 507,743 Facility Conversion Pre-Funded Warrants, 761,615 Facility Conversion Common Warrants and 4,569,688 January 2024 PIPE Warrants have been exercised resulting in gross proceeds of approximately $5.25 million to the Company.
Removed
Upon our initial public offering on April 4, 2022, the SAFE converted into an aggregate of 242,131 ordinary shares and warrants to purchase 242,131 ordinary shares. The warrants issued have the same terms as the warrants issued in our initial public offering except that such warrants shall be unregistered and shall not be tradeable.
Added
As of the date of this Annual Report, 17,170,000 January 2024 Facility Warrants have been exercised resulting in gross proceeds of approximately $7.0 million to the Company.

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