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Beamr Imaging Ltd.

Beamr Imaging Ltd.BMR決算レポート

Nasdaq

Beamr Imaging Ltd. is a global technology firm specializing in patented advanced video and image compression solutions. It serves media, entertainment, cloud service, and enterprise segments, with products enabling high-quality low-bandwidth media delivery for streaming, broadcast and content distribution across North America, Europe and APAC.

What changed in Beamr Imaging Ltd.'s 20-F — 2022 vs 2023

Top changes in Beamr Imaging Ltd.'s 2023 20-F

469 paragraphs added · 500 removed · 311 edited across 6 sections

Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 ITEM 3. KEY INFORMATION 1 A. Reserved 1 B. Capitalization and Indebtedness 1 C. Reasons for the Offer and Use of Proceeds 1 D. Risk Factors 1 ITEM 4. INFORMATION ON THE COMPANY 43 A. History and Development of the Company 43 B. Business Overview 44 C. Organizational Structure 61 D.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 ITEM 3. KEY INFORMATION 1 A. Reserved 1 B. Capitalization and Indebtedness 1 C. Reasons for the Offer and Use of Proceeds 1 D. Risk Factors 1 ITEM 4. INFORMATION ON THE COMPANY 42 A. History and Development of the Company 42 B. Business Overview 44 C. Organizational Structure 60 D.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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We believe any future revenue growth will depend on a number of factors, including, among other things, our ability to: ● continually enhance and improve our products and services, including the features, integrations and capabilities we offer, and develop or otherwise introduce new products and solutions; ● attract new customers and maintain our relationships with, and increase revenue from, our existing customers; 7 ● provide excellent customer and end user experiences; ● maintain the security and reliability of our products and services; ● introduce and grow adoption of our offerings in new markets outside the United States; ● hire, integrate, train and retain skilled personnel; ● adequately expand our sales and marketing force and distribution channels; ● obtain, maintain, protect and enforce intellectual property protection for our platform and technologies; ● expand into new technologies, industries and use cases; ● expand and maintain our partner ecosystem; ● comply with existing and new applicable laws and regulations, including those related to data privacy and security; ● price our offerings effectively and determine appropriate contract terms; ● determine the most appropriate investments for our limited resources; ● successfully compete against established companies and new market entrants; and ● increase awareness of our brand on a global basis.
We believe any future revenue growth will depend on a number of factors, including, among other things, our ability to: ● continually enhance and improve our products and services, including the features, integrations and capabilities we offer, and develop or otherwise introduce new products and solutions; ● attract new customers and maintain our relationships with, and increase revenue from, our existing customers; ● provide excellent customer and end user experiences; ● maintain the security and reliability of our products and services; ● introduce and grow adoption of our offerings in new markets outside the United States; ● hire, integrate, train and retain skilled personnel; 7 ● adequately expand our sales and marketing force and distribution channels; ● obtain, maintain, protect and enforce intellectual property protection for our platform and technologies; ● expand into new technologies, industries and use cases; ● expand and maintain our partner ecosystem; ● comply with existing and new applicable laws and regulations, including those related to data privacy and security; ● price our offerings effectively and determine appropriate contract terms; ● determine the most appropriate investments for our limited resources; ● successfully compete against established companies and new market entrants; and ● increase awareness of our brand on a global basis.
Our current international operations involve, and future initiatives will also involve, a variety of risks, including: ● unexpected changes in practices, tariffs, export quotas, custom duties, trade disputes, tax laws and treaties, particularly due to economic tensions and trade negotiations or other trade restrictions; ● different labor regulations, especially in the EU, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations; ● exposure to many evolving stringent and potentially inconsistent laws and regulations relating to privacy, data protection, and information security, particularly in the EU; ● changes in a specific country’s or region’s political or economic conditions; ● risks resulting from any resurgence of the COVID-19 pandemic, or any other pandemic, epidemic or outbreak of infectious disease, including uncertainty regarding what measures the U.S. or foreign governments will take in response; ● risks resulting from changes in currency exchange rates; ● challenges inherent to efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits and compliance programs; ● difficulties in maintaining our corporate culture with a dispersed workforce; ● risks relating to the implementation of exchange controls, including restrictions promulgated by the United States Department of the Treasury’s Office of Foreign Assets Control, or OFAC, and other similar trade protection regulations and measures in the United States or in other jurisdictions; ● reduced ability to timely collect amounts owed to us by our customers in countries where our recourse may be more limited; ● slower than anticipated availability and adoption of cloud infrastructures by international businesses, which would increase our on-premise deployments; ● limitations on our ability to reinvest earnings from operations derived from one country to fund the capital needs of our operations in other countries; ● limited or unfavorable—including greater difficulty in enforcing—intellectual property protection; and ● exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
Our current international operations involve, and future initiatives will also involve, a variety of risks, including: ● unexpected changes in practices, tariffs, export quotas, custom duties, trade disputes, tax laws and treaties, particularly due to economic tensions and trade negotiations or other trade restrictions; ● different labor regulations, especially in the EU, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations; ● exposure to many evolving stringent and potentially inconsistent laws and regulations relating to privacy, data protection, and information security, particularly in the EU; ● changes in a specific country’s or region’s political or economic conditions; ● risks resulting from any resurgence of the COVID-19 pandemic, or any other pandemic, epidemic or outbreak of infectious disease, including uncertainty regarding what measures the U.S. or foreign governments will take in response; ● risks resulting from changes in currency exchange rates; ● challenges inherent to efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits and compliance programs; 17 ● difficulties in maintaining our corporate culture with a dispersed workforce; ● risks relating to the implementation of exchange controls, including restrictions promulgated by the United States Department of the Treasury’s Office of Foreign Assets Control, or OFAC, and other similar trade protection regulations and measures in the United States or in other jurisdictions; ● reduced ability to timely collect amounts owed to us by our customers in countries where our recourse may be more limited; ● slower than anticipated availability and adoption of cloud infrastructures by international businesses, which would increase our on-premise deployments; ● limitations on our ability to reinvest earnings from operations derived from one country to fund the capital needs of our operations in other countries; ● limited or unfavorable—including greater difficulty in enforcing—intellectual property protection; and ● exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
The market price of our ordinary shares may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, many of which are beyond our control, including: ● actual or anticipated changes or fluctuations in our results of operations; ● the guidance we may provide to analysts and investors from time to time, and any changes in, or our failure to perform in line with, such guidance; ● announcements by us or our competitors of new offerings or new or terminated contracts, commercial relationships or capital commitments; ● industry or financial analyst or investor reaction to our press releases, other public announcements, and filings with the SEC; ● rumors and market speculation involving us or other companies in our industry; ● future sales or expected future sales of our ordinary shares; ● investor perceptions of us and the industries in which we operate; ● price and volume fluctuations in the overall stock market from time to time; ● changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; ● failure of industry or financial analysts to maintain coverage of us, the issuance of new or updated reports or recommendations by any analysts who follow our company, or our failure to meet the expectations of investors; ● actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; ● litigation involving us, other companies in our industry or both, or investigations by regulators into our operations or those of our competitors; ● developments or disputes concerning our intellectual property or proprietary rights or our solutions, or third-party intellectual or proprietary rights; 35 ● announced or completed acquisitions of businesses or technologies, or other strategic transactions by us or our competitors; ● actual or perceived breaches of, or failures relating to, privacy, data protection or data security; ● new laws or regulations or new interpretations of existing laws or regulations applicable to our business; ● actual or anticipated changes in our management or our board of directors; ● general economic conditions and slow or negative growth of our target markets; and ● other events or factors, including those resulting from war, incidents of terrorism or responses to these events.
The market price of our ordinary shares may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, many of which are beyond our control, including: ● actual or anticipated changes or fluctuations in our results of operations; ● the guidance we may provide to analysts and investors from time to time, and any changes in, or our failure to perform in line with, such guidance; ● announcements by us or our competitors of new offerings or new or terminated contracts, commercial relationships or capital commitments; ● industry or financial analyst or investor reaction to our press releases, other public announcements, and filings with the SEC; ● rumors and market speculation involving us or other companies in our industry; ● future sales or expected future sales of our ordinary shares; ● investor perceptions of us and the industries in which we operate; ● price and volume fluctuations in the overall stock market from time to time; 34 ● changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; ● failure of industry or financial analysts to maintain coverage of us, the issuance of new or updated reports or recommendations by any analysts who follow our company, or our failure to meet the expectations of investors; ● actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; ● litigation involving us, other companies in our industry or both, or investigations by regulators into our operations or those of our competitors; ● developments or disputes concerning our intellectual property or proprietary rights or our solutions, or third-party intellectual or proprietary rights; ● announced or completed acquisitions of businesses or technologies, or other strategic transactions by us or our competitors; ● actual or perceived breaches of, or failures relating to, privacy, data protection or data security; ● new laws or regulations or new interpretations of existing laws or regulations applicable to our business; ● actual or anticipated changes in our management or our board of directors; ● general economic conditions and slow or negative growth of our target markets; and ● other events or factors, including those resulting from war, incidents of terrorism or responses to these events.
Factors that may cause fluctuations in our quarterly financial results include: ● our ability to attract new customers and increase revenue from our existing customers; ● the loss of existing customers; ● customer satisfaction with our products, solutions, platform capabilities and customer support; ● mergers and acquisitions or other factors resulting in the consolidation of our customer base; ● mix of our revenue; ● our ability to gain new partners and retain existing partners; ● fluctuations in share-based compensation expense; ● decisions by potential customers to purchase competing offerings or develop in-house technologies and solutions as alternatives to our offerings; ● changes in the spending patterns of our customers; ● the amount and timing of operating expenses related to the maintenance and expansion of our business and operations, including investments in research and development, sales and marketing, and general and administrative resources; ● network outages; ● developments or disputes concerning our intellectual property or proprietary rights, our products and services, or third-party intellectual property or proprietary rights; ● negative publicity about our company, our offerings or our partners, including as a result of actual or perceived breaches of, or failures relating to, privacy, data protection or data security; ● the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; ● general economic, industry, and market conditions; ● the impact any resurgence of the COVID-19 pandemic, or any other pandemic, epidemic, outbreak of infectious disease or other global health crises on our business, the businesses of our customers and partners and general economic conditions; 10 ● the impact of political uncertainty or unrest; ● changes in our pricing policies or those of our competitors; ● fluctuations in the growth rate of the markets that our offerings address; ● seasonality in the underlying businesses of our customers, including budgeting cycles, purchasing practices and usage patterns; ● the business strengths or weakness of our customers; ● our ability to collect timely on invoices or receivables; ● the cost and potential outcomes of future litigation or other disputes; ● future accounting pronouncements or changes in our accounting policies; ● our overall effective tax rate, including impacts caused by any reorganization in our corporate tax structure and any new legislation or regulatory developments; ● our ability to successfully expand our business in the United States and internationally; ● fluctuations in foreign currency exchange rates; and ● the timing and success of new products and solutions introduced by us or our competitors, or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or partners.
Factors that may cause fluctuations in our quarterly financial results include: ● our ability to attract new customers and increase revenue from our existing customers; ● the loss of existing customers; ● customer satisfaction with our products, solutions, platform capabilities and customer support; ● the commercialization and market acceptance of our current and future products; 9 ● mergers and acquisitions or other factors resulting in the consolidation of our customer base; ● mix of our revenue; ● our ability to gain new partners and retain existing partners; ● fluctuations in share-based compensation expense; ● decisions by potential customers to purchase competing offerings or develop in-house technologies and solutions as alternatives to our offerings; ● changes in the spending patterns of our customers; ● the amount and timing of operating expenses related to the maintenance and expansion of our business and operations, including investments in research and development, sales and marketing, and general and administrative resources; ● network outages; ● developments or disputes concerning our intellectual property or proprietary rights, our products and services, or third-party intellectual property or proprietary rights; ● negative publicity about our company, our offerings or our partners, including as a result of actual or perceived breaches of, or failures relating to, privacy, data protection or data security; ● the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; ● general economic, industry, and market conditions; ● the impact any resurgence of the COVID-19 pandemic, or any other pandemic, epidemic, outbreak of infectious disease or other global health crises on our business, the businesses of our customers and partners and general economic conditions; ● the impact of political uncertainty or unrest; ● changes in our pricing policies or those of our competitors; ● fluctuations in the growth rate of the markets that our offerings address; ● seasonality in the underlying businesses of our customers, including budgeting cycles, purchasing practices and usage patterns; ● the business strengths or weakness of our customers; ● our ability to collect timely on invoices or receivables; ● the cost and potential outcomes of future litigation or other disputes; ● future accounting pronouncements or changes in our accounting policies; ● our overall effective tax rate, including impacts caused by any reorganization in our corporate tax structure and any new legislation or regulatory developments; ● our ability to successfully expand our business in the United States and internationally; 10 ● fluctuations in foreign currency exchange rates; and ● the timing and success of new products and solutions introduced by us or our competitors, or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or partners.
We believe that any disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake.
We believe that any disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. 40 These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake.
Any of the above events may have a material adverse effect on our product development and results of operations. 34 Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject to frequent change, varying interpretations, and inconsistent and selective enforcement.
Any of the above events may have a material adverse effect on our product development and results of operations. Despite certain improvements in the taxation system made by the Russian Government over the past decade, Russian tax legislation is still subject to frequent change, varying interpretations, and inconsistent and selective enforcement.
Accordingly, the forecasts of market growth included in this Annual Report should not be taken as indicative of our future growth. If industry or financial analysts do not publish research or reports about our business, or if they issue inaccurate or unfavorable research regarding our ordinary shares, the market price and trading volume of our ordinary shares could decline.
Accordingly, the forecasts of market growth included in this Annual Report should not be taken as indicative of our future growth. 41 If industry or financial analysts do not publish research or reports about our business, or if they issue inaccurate or unfavorable research regarding our ordinary shares, the market price and trading volume of our ordinary shares could decline.
Any such bugs, defects, security vulnerabilities, errors, or other performance failures in our products and services, including as a result of denial of claims by our insurer or the successful assertion of claims by others against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, results of operations and reputation. 21 If we or our third-party service providers experience a security breach, data loss or other compromise, including if unauthorized parties obtain access to our customers’ data, our reputation may be harmed, demand for our products and services may be reduced, and we may incur significant liabilities.
Any such bugs, defects, security vulnerabilities, errors, or other performance failures in our products and services, including as a result of denial of claims by our insurer or the successful assertion of claims by others against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, results of operations and reputation. 20 If we or our third-party service providers experience a security breach, data loss or other compromise, including if unauthorized parties obtain access to our customers’ data, our reputation may be harmed, demand for our products and services may be reduced, and we may incur significant liabilities.
These differences in prices and locations may impact our costs and margins, and value we bring to our customers. 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.
These differences in prices and locations may impact our costs and margins, and value we bring to our customers. 18 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.
We have chosen not to register any copyrights and rely on trade secret protection in addition to unregistered copyrights to protect our proprietary software. Accordingly, the remedies and damages available to us for unauthorized use of our software may be limited. 23 Further, the steps we take to protect our intellectual property and proprietary rights may be inadequate.
We have chosen not to register any copyrights and rely on trade secret protection in addition to unregistered copyrights to protect our proprietary software. Accordingly, the remedies and damages available to us for unauthorized use of our software may be limited. Further, the steps we take to protect our intellectual property and proprietary rights may be inadequate.
If we are required to make substantial payments or undertake or suffer any of the other actions and consequences noted above as a result of any intellectual property infringement, misappropriation or violation claims against us or any obligation to indemnify our customers for such claims, such payments, actions and consequences could materially and adversely affect our business, financial condition, results of operations and growth prospects. 25 We could incur substantial costs and otherwise suffer harm as a result of patent royalty claims, in particular patents related to the implementation of image and video standards Our products and services decode and encode media files which are compressed using compression methods that are standardized by international standard bodies such as ISO and ITU.
If we are required to make substantial payments or undertake or suffer any of the other actions and consequences noted above as a result of any intellectual property infringement, misappropriation or violation claims against us or any obligation to indemnify our customers for such claims, such payments, actions and consequences could materially and adversely affect our business, financial condition, results of operations and growth prospects. 24 We could incur substantial costs and otherwise suffer harm as a result of patent royalty claims, in particular patents related to the implementation of image and video standards Our products and services decode and encode media files which are compressed using compression methods that are standardized by international standard bodies such as ISO and ITU.
Moreover, if the public cloud data services that utilize NVIDIA GPUs (e.g., Amazon, GCP, Azure) do not adopt, or take significant time to adopt, the Nvidia driver and firmware with our new capabilities, that could adversely affect our market penetration and future revenue growth.
Moreover, if the public cloud data services that utilize NVIDIA GPUs (e.g., Amazon, GCP, Azure, OCI) do not adopt, or take significant time to adopt, the Nvidia driver and firmware with our new capabilities, that could adversely affect our market penetration and future revenue growth.
Any failure by us to provide and maintain high-quality customer support services would have an adverse effect on our business, reputation and results of operations. The sales prices of our offerings may change, which may reduce our revenue and gross profit and adversely affect our financial results.
Any failure by us to provide and maintain high-quality customer support services would have an adverse effect on our business, reputation and results of operations. 16 The sales prices of our offerings may change, which may reduce our revenue and gross profit and adversely affect our financial results.
Any of the foregoing could have a material adverse effect on our business, including our financial condition, results of operations and reputation. Failure to protect our proprietary technology, or to obtain, maintain, protect and enforce sufficiently broad intellectual property rights therein, could substantially harm our business, financial condition and results of operations.
Any of the foregoing could have a material adverse effect on our business, including our financial condition, results of operations and reputation. 22 Failure to protect our proprietary technology, or to obtain, maintain, protect and enforce sufficiently broad intellectual property rights therein, could substantially harm our business, financial condition and results of operations.
Furthermore, new entrants not currently considered to be competitors may enter the market through acquisitions, partnerships, or strategic relationships 13 Additionally, we compete with home-grown, start-up, and open source technologies across the categories described above.
Furthermore, new entrants not currently considered to be competitors may enter the market through acquisitions, partnerships, or strategic relationships. Additionally, we compete with home-grown, start-up, and open source technologies across the categories described above.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, our visibility in the financial markets could decrease, which in turn could cause the market price or trading volume of our ordinary shares to decline. 42
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, our visibility in the financial markets could decrease, which in turn could cause the market price or trading volume of our ordinary shares to decline.
If we are unsuccessful in defending against any such claims, we may be liable for damages or prevented from using certain intellectual property, which in turn could materially adversely affect our business, financial condition or results of operations; even if we are successful in defending against such claims, litigation could result in substantial costs and distract management and other employees. 24 In order to protect our intellectual property and proprietary rights and to monitor for and take action against any infringement, misappropriation or other violations thereof, we may be required to spend significant resources.
If we are unsuccessful in defending against any such claims, we may be liable for damages or prevented from using certain intellectual property, which in turn could materially adversely affect our business, financial condition or results of operations; even if we are successful in defending against such claims, litigation could result in substantial costs and distract management and other employees. 23 In order to protect our intellectual property and proprietary rights and to monitor for and take action against any infringement, misappropriation or other violations thereof, we may be required to spend significant resources.
We cannot assure you that we will be able to maintain our prices and gross profits at levels that will allow us to achieve and maintain profitability. 17 Our international operations and expansion expose us to risk.
We cannot assure you that we will be able to maintain our prices and gross profits at levels that will allow us to achieve and maintain profitability. Our international operations and expansion expose us to risk.
We may face claims demanding remuneration in consideration for assigned inventions, which could require us to pay additional remuneration or royalties to our current and former employees and consultants, or be forced to litigate such claims, which could negatively affect our business. 31 It may be difficult for investors in the United States to enforce any judgments obtained against us or some of our directors or officers.
We may face claims demanding remuneration in consideration for assigned inventions, which could require us to pay additional remuneration or royalties to our current and former employees and consultants, or be forced to litigate such claims, which could negatively affect our business. 30 It may be difficult for investors in the United States to enforce any judgments obtained against us or some of our directors or officers.
In addition, if we were to change our critical accounting estimates, including those related to the recognition of subscription revenue and other revenue sources, our operating results could be significantly affected. 28 Changes in U.S. and foreign tax laws could have a material adverse effect on our business, cash flow, results of operations or financial conditions.
In addition, if we were to change our critical accounting estimates, including those related to the recognition of subscription revenue and other revenue sources, our operating results could be significantly affected. 27 Changes in U.S. and foreign tax laws could have a material adverse effect on our business, cash flow, results of operations or financial conditions.
Any of the foregoing could materially and adversely affect our business, financial condition and results of operations. 26 Risks Related to Other Legal, Regulatory and Tax Matters Changes in laws and regulations related to the internet, changes in the internet infrastructure itself, or increases in the cost of internet connectivity and network access may diminish the demand for our offerings and could harm our business.
Any of the foregoing could materially and adversely affect our business, financial condition and results of operations. 25 Risks Related to Other Legal, Regulatory and Tax Matters Changes in laws and regulations related to the internet, changes in the internet infrastructure itself, or increases in the cost of internet connectivity and network access may diminish the demand for our offerings and could harm our business.
A United States investor should consult its advisors regarding the potential application of these rules to an investment in our ordinary shares. 39 We incur significant increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives.
A United States investor should consult its advisors regarding the potential application of these rules to an investment in our ordinary shares. 38 We incur significant increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives.
Our products and services address the needs of customers and end users around the world, and we see continued international expansion as a significant opportunity. For the years ended December 31, 2022 and 2021, we generated approximately 25% and 21% of our revenue, respectively, from customers outside the United States.
Our products and services address the needs of customers and end users around the world, and we see continued international expansion as a significant opportunity. For the years ended December 31, 2023, 2022 and 2021, we generated approximately 28%, 25% and 21% of our revenue, respectively, from customers outside the United States.
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 share price may be more volatile. 38 We do not anticipate paying dividends on our ordinary shares in the foreseeable future.
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 share price may be more volatile. 37 We do not anticipate paying dividends on our ordinary shares in the foreseeable future.
In addition, attracting new customers to our SaaS offering may involve evaluation processes that prospects may not be willing to cover before experiencing satisfying results with our products and services, while we will continue to accrue cloud platform service costs. We expect our SaaS operation will be based on spreads in which we first pay for computing platforms (e.g.
In addition, attracting new customers to our SaaS offering may involve evaluation processes that prospects may not be willing to cover before experiencing satisfying results with our products and services, while we will continue to accrue cloud platform service costs. Our SaaS operation is initially based on spreads in which we first pay for computing platforms (e.g.
We currently derive a significant portion of our revenue from a limited number of our customers. For the years ended December 31, 2022 and December 31, 2021, our top ten customers in the aggregate accounted for approximately 61% and 62% of our revenues, respectively.
We currently derive a significant portion of our revenue from a limited number of our customers. For the years ended December 31, 2023, 2022 and 2021, our top ten customers in the aggregate accounted for approximately 67%, 61% and 62% of our revenues, respectively.
If we fail to remediate these material weaknesses or fail to otherwise maintain effective internal controls over financial reporting in the future, such failure could result in a material misstatement of our annual or quarterly financial statements that would not be prevented or detected on a timely basis and which could cause investors and other users to lose confidence in our financial statements, limit our ability to raise capital and have a negative effect on the trading price of our ordinary shares.
If we fail to maintain effective internal controls over financial reporting in the future, such failure could result in a material misstatement of our annual or quarterly financial statements that would not be prevented or detected on a timely basis and which could cause investors and other users to lose confidence in our financial statements, limit our ability to raise capital and have a negative effect on the trading price of our ordinary shares.
This change in strategy and these efforts may prove more expensive than we currently anticipate, or may require longer development and deployment times, and we may not succeed in fully developing and implementing our SaaS solution sufficiently, or at all. 5 We may not be successful in establishing and maintaining strategic partnerships, which could adversely affect our ability to develop and commercialize our SaaS solution and other future products.
This change in strategy and these efforts may prove more expensive than we currently anticipate, or may require longer development and deployment times, and we may not succeed in further developing and commercializing our SaaS solution sufficiently, or at all. 5 We may not be successful in establishing and maintaining strategic partnerships, which could adversely affect our ability to commercialize and further develop our SaaS solution and other future products.
This change in our products and services also makes it difficult to evaluate our current business and future prospects and may increase the risk that we will not be successful. 1 ● We may not be successful in establishing and maintaining strategic partnerships, which could adversely affect our ability to develop and commercialize our SaaS solution and other future products. ● Our future growth depends in part upon the successful deployment of the Beamr HW-Accelerated Content Adaptive Encoding solution in the cloud. ● The failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our offerings. ● Our business and operations have experienced growth, and if we do not appropriately manage this growth and any future growth, or if we are unable to improve our systems, processes and controls, our business, financial condition, results of operations and prospects will be adversely affected. ● The markets for our offerings are new and evolving and may develop more slowly or differently than we expect.
This change in our products and services also makes it difficult to evaluate our current business and future prospects and may increase the risk that we will not be successful. ● We may not be successful in establishing and maintaining strategic partnerships, which could adversely affect our ability to commercialize and further develop our SaaS solution and other future products. ● Our future growth depends in part upon the successful deployment of the Beamr Cloud SaaS solution in the cloud. 1 ● The failure to effectively develop and expand our sales and marketing and research and development capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our offerings. ● Our business and operations have experienced growth, and if we do not appropriately manage this growth and any future growth, or if we are unable to improve our systems, processes and controls, our business, financial condition, results of operations and prospects will be adversely affected. ● The markets for our offerings are new and evolving and may develop more slowly or differently than we expect.
The failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our offerings.
The failure to effectively develop and expand our sales and marketing and research and development capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our offerings.
Any hostilities, armed conflicts, terrorist activities involving Israel or the interruption or curtailment of trade between Israel and its trading partners, or any political instability in the region could adversely affect business conditions and our results of operations and could make it more difficult for us to raise capital.
Any hostilities, armed conflicts, terrorist activities involving Israel or the interruption or curtailment of trade between Israel and its trading partners, or any political instability in the region could adversely affect business conditions and our results of operations and could make it more difficult for us to raise capital and could adversely affect the market price of our ordinary share.
The risks in a strategic partnership include the following: ● the strategic partner may not apply the expected financial resources, efforts, or required expertise in developing the physical resources and systems necessary to successfully develop and commercialize a product; ● the strategic partner may not invest in the development of a sales and marketing force and the related infrastructure at levels that ensure that sales of the products reach their full potential; ● we may be required to undertake the expenditure of substantial operational, financial, and management resources; ● we may be required to issue equity securities that would dilute our existing shareholders’ percentage ownership; ● we may be required to assume substantial actual or contingent liabilities; ● strategic partners could decide to withdraw a development program or a collaboration, or move forward with a competing product developed either independently or in collaboration with others, including our competitors; ● disputes may arise between us and a strategic partner that delay the development or commercialization or adversely affect the sales or profitability of the product; or ● the strategic partner may independently develop, or develop with third parties, products that could compete with our products. 6 In addition, a strategic partner for one or more of our products may have the right to terminate the collaboration at its discretion.
The risks in a strategic partnership include the following: ● the strategic partner may not apply the expected financial resources, efforts, or required expertise in developing the physical resources and systems necessary to successfully develop and commercialize a product; ● the strategic partner may not invest in the development of a sales and marketing force and the related infrastructure at levels that ensure that sales of the products reach their full potential; ● we may be required to undertake the expenditure of substantial operational, financial, and management resources; ● we may be required to issue equity securities that would dilute our existing shareholders’ percentage ownership; ● we may be required to assume substantial actual or contingent liabilities; ● strategic partners could decide to withdraw a development program or a collaboration, or move forward with a competing product developed either independently or in collaboration with others, including our competitors; ● disputes may arise between us and a strategic partner that delay the development or commercialization or adversely affect the sales or profitability of the product; or ● the strategic partner may independently develop, or develop with third parties, products that could compete with our products.
Then, we made a strategic decision to focus our resources on the development and commercialization of our next-generation product, the Beamr HW-Accelerated Content Adaptive Encoding solution, a SaaS solution that is designed, based on our own internal testing, to provide up to 10x cost-effective video optimization than existing solutions to an industry agnostic target market.
Then, we made a strategic decision to focus our resources on the development and commercialization of our next-generation product, the Beamr Cloud, a SaaS solution that is designed, based on our own internal testing, to provide up to 10x cost-effective video optimization than existing solutions to an industry agnostic target market.
The principal factors and uncertainties that make investing in our ordinary shares risky, include, among others: Risks Related to Our Business and Industry ● We have a history of losses and may not be able to achieve or maintain profitability. ● We will need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our shareholders’ ownership interests. ● To support our business growth we are expanding our product offering to include the Beamr HW-Accelerated Content Adaptive Encoding solution, a new SaaS solution, the development and commercialization of which may not be successful.
The principal factors and uncertainties that make investing in our ordinary shares risky, include, among others: Risks Related to Our Business and Industry ● We have a history of losses and may not be able to achieve or maintain profitability. ● We will need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our shareholders’ ownership interests. ● To support our business growth we expanded our product offering to include the Beamr Cloud, a new SaaS solution, the development and commercialization of which may not be successful.
Customers of our offerings will need to be able to access our platform at any time, without interruption or degradation of performance. Our Beamr HW-Accelerated Content Adaptive Encoding solution is to be deployed on a public cloud infrastructure with the goal of providing improved stability, reliability, scalability and elasticity for our offerings.
Customers of our offerings will need to be able to access our platform at any time, without interruption or degradation of performance. Our Beamr Cloud SaaS solution is deployed on a public cloud infrastructure with the goal of providing improved stability, reliability, scalability and elasticity for our offerings.
If video products and solutions such as ours do not continue to achieve market acceptance, or there is a reduction in demand caused by decreased customer acceptance, technological challenges, weakening economic conditions, privacy, data protection and data security concerns, governmental regulation, competing technologies and products, or decreases in information technology spending or otherwise, the market for our offerings might not continue to develop or might develop more slowly than we expect, which could adversely affect our business, financial condition, results of operations and growth prospects. 9 Our results of operations are likely to fluctuate from quarter to quarter and year to year, which could adversely affect the trading price of our ordinary shares.
If video products and solutions such as ours do not continue to achieve market acceptance, or there is a reduction in demand caused by decreased customer acceptance, technological challenges, weakening economic conditions, privacy, data protection and data security concerns, governmental regulation, competing technologies and products, or decreases in information technology spending or otherwise, the market for our offerings might not continue to develop or might develop more slowly than we expect, which could adversely affect our business, financial condition, results of operations and growth prospects.
A successful assertion that we should have been or should currently be collecting additional sales, use, value added, digital services or other similar taxes in a particular jurisdiction could, among other things, result in substantial tax payments, create significant administrative burdens for us, discourage potential customers from subscribing to our platform due to the incremental cost of any such sales or other related taxes, or otherwise adversely affect our business.
A successful assertion that we should have been or should currently be collecting additional sales, use, value added, digital services or other similar taxes in a particular jurisdiction could, among other things, result in substantial tax payments, create significant administrative burdens for us, discourage potential customers from subscribing to our platform due to the incremental cost of any such sales or other related taxes, or otherwise adversely affect our business. 28 Risks Related to Our Operations in Israel Political, economic and military conditions in Israel could materially and adversely affect our business.
Risks Related to Ownership of our Ordinary Shares ● The market price for our ordinary shares may be volatile or may decline regardless of our operating performance. ● Our principal shareholders will continue to have significant influence over us. 3 ● Your ownership and voting power may be diluted by the issuance of additional shares of our ordinary shares in connection with financings, acquisitions, investments, our equity incentive plans or otherwise. ● Our management team has limited experience managing a public company, and the requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain qualified board members. ● We incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives. ● We have identified a material weakness in our internal control over financial reporting, and we may not be able to successfully implement remedial measures.
Risks Related to Ownership of our Ordinary Shares ● The market price for our ordinary shares may be volatile or may decline regardless of our operating performance. ● Our principal shareholders will continue to have significant influence over us. ● Your ownership and voting power may be diluted by the issuance of additional shares of our ordinary shares in connection with financings, acquisitions, investments, our equity incentive plans or otherwise. ● Our management team has limited experience managing a public company, and the requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain qualified board members. 3 ● We incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives. ● If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
Our current product line is mainly geared to the high end, high quality media customers and we count among our customers Netflix, ViacomCBS, Snapfish, Wowza and other leading media companies using video and photo solutions. This product line involves high cost and complexity of deploying our existing software solutions and the long sales lead times.
Our current product line has up until recently been mainly geared to the high end, high quality media customers and we count among our customers Netflix, ViacomCBS, Snapfish, Deluxe and other leading media companies using video and photo solutions. This product line involves high cost and complexity of deploying our existing software solutions and the long sales lead times.
We expect to derive a significant portion of our revenue from renewals of subscriptions. Customers have no contractual obligation to renew their subscriptions after the completion of their subscription term. Subscriptions for most of our offerings are offered on either an annual or multi-year basis. Our subscriptions may also generally include committed usage amounts.
Customers have no contractual obligation to renew their subscriptions after the completion of their subscription term. Subscriptions for most of our offerings are offered on either an annual or multi-year basis. Our subscriptions may also generally include committed usage amounts.
We engage third-party vendors and service providers to store and otherwise process some of our and our customers’ data, including personal, confidential, sensitive, and other information about individuals. Our vendors and service providers may also be the targets of cyberattacks, malicious software, phishing schemes, and fraud.
We engage third-party vendors and service providers, such as AWS and Stripe, Inc. that have comprehensive internal policies, to store and otherwise process some of our and our customers’ data, including personal, confidential, sensitive, and other information about individuals. Our vendors and service providers may also be the targets of cyberattacks, malicious software, phishing schemes, and fraud.
As of April 15, 2023, some of the Russian employees and contractors of our wholly owned subsidiary in St. Petersburg, Russia have relocated to other countries and we are continuing to monitor the situation with respect to our business continuity plan. Our operations and presence in Russia is limited.
As of March 1, 2024, some of the Russian employees and contractors of our wholly owned subsidiary in St. Petersburg, Russia have relocated to other countries, including Serbia and Poland, and we are continuing to monitor the situation with respect to our business continuity plan. 32 Our operations and presence in Russia is limited.
We may discover deficiencies in our design, implementation or maintenance of our Beamr HW-Accelerated Content Adaptive Encoding solution that could adversely affect our business, financial condition and results of operations. Furthermore, we cannot yet know the ultimate impact of this or any similar future event on our customer relationships.
Following the launch of our Beamr Cloud in February 2024, we may discover deficiencies in our design, implementation or maintenance that could adversely affect our business, financial condition and results of operations. Furthermore, we cannot yet know the ultimate impact of this or any similar future event on our customer relationships.
Our business will be harmed if our efforts do not generate a correspondingly significant increase in revenue. 8 Our business and operations have experienced growth, and if we do not appropriately manage this growth and any future growth, or if we are unable to improve our systems, processes and controls, our business, financial condition, results of operations and prospects will be adversely affected.
Our business and operations have experienced growth, and if we do not appropriately manage this growth and any future growth, or if we are unable to improve our systems, processes and controls, our business, financial condition, results of operations and prospects will be adversely affected.
The success of any new products or solutions, or enhancements to our existing offerings, will depend on a number of factors including, but not limited to, the timeliness and effectiveness of our research and product development activities and go-to-market strategy, our ability to anticipate customer needs and achieve market acceptance, our ability to manage the risks associated with new product releases, the effective management of development and other spending in connection with the product development process, and the availability of other newly developed products and technologies by our competitors.
The success of any new products or solutions, or enhancements to our existing offerings, will depend on a number of factors including, but not limited to, the timeliness and effectiveness of our research and product development activities and go-to-market strategy, our ability to anticipate customer needs and achieve market acceptance, our ability to manage the risks associated with new product releases, the effective management of development and other spending in connection with the product development process, and the availability of other newly developed products and technologies by our competitors. 11 In addition, in connection with our product development efforts, we may introduce significant changes to our existing products or solutions, or develop or otherwise introduce new and unproven products or solutions, including technologies with which we have little or no prior development or operating experience.
Future sales of a substantial number of shares of our ordinary shares in the public market, particularly sales by our directors, executive officers and significant shareholders, or the perception that these sales could occur, could adversely affect the market price of our ordinary shares and may make it more difficult for you to sell your ordinary shares at a time and price that you deem appropriate. 36 In addition, we intend to register the offer and sale of all ordinary shares that we may issue from time to time under our equity compensation plans.
Future sales of a substantial number of shares of our ordinary shares in the public market, particularly sales by our directors, executive officers and significant shareholders, or the perception that these sales could occur, could adversely affect the market price of our ordinary shares and may make it more difficult for you to sell your ordinary shares at a time and price that you deem appropriate.
Until we can derive revenue, if any, from the Beamr HW-Accelerated Content Adaptive Encoding solution, we expect to continue to derive a significant portion of our revenue from a limited number of customers in the future and, in some cases, the portion of our revenue attributable to individual customers may increase.
Until we can derive revenue from the Beamr Cloud, we expect to continue to derive a significant portion of our revenue from a limited number of customers in the future and, in some cases, the portion of our revenue attributable to individual customers may increase.
Accordingly, our financial results in any one quarter should not be relied upon as indicative of future performance. Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, may be difficult to predict, and may not fully reflect the underlying performance of our business.
Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, may be difficult to predict, and may not fully reflect the underlying performance of our business.
If we do not effectively and efficiently manage our transition into a public company and continue to develop and implement the right processes and tools to manage our changing enterprise and maintain our culture, our ability to compete successfully and achieve our business objectives could be impaired, which could negatively impact our business, financial condition and results of operations.
If we do not effectively and efficiently manage our transition into a public company and continue to develop and implement the right processes and tools to manage our changing enterprise and maintain our culture, our ability to compete successfully and achieve our business objectives could be impaired, which could negatively impact our business, financial condition and results of operations. 36 Additionally, as a public company, we may from time to time be subject to proposals by shareholders urging us to take certain corporate actions.
This concentration of ownership may also affect the prevailing market price of our ordinary shares due to investors’ perceptions that conflicts of interest may exist or arise. As a result, this concentration of ownership may not be in your best interests.
This concentration of ownership may also affect the prevailing market price of our ordinary shares due to investors’ perceptions that conflicts of interest may exist or arise.
We believe the following competitive attributes are necessary for our solutions to successfully compete in the video compression market: ● the performance and reliability of our solutions; ● cost of deployment and return on investment in terms of cost savings; ● sophistication, novel and innovative intellectual property and technology, and functionality of our offerings; ● cross-platform operability; ● security; ● ease of implementation and use of service; ● high quality customer support; and ● price.
For example, the public cloud platforms such as AWS, Azure, OCI, and GCP could in the future develop their own video optimization hardware accelerated solutions. 12 We believe the following competitive attributes are necessary for our solutions to successfully compete in the video compression market: ● the performance and reliability of our solutions; ● cost of deployment and return on investment in terms of cost savings; ● sophistication, novel and innovative intellectual property and technology, and functionality of our offerings; ● cross-platform operability; ● security; ● ease of implementation and use of service; ● high quality customer support; and ● price.
To successfully develop and commercialize our Beamr HW-Accelerated Content Adaptive Encoding solution and other product offerings, we will need substantial financial resources as well as expertise and physical resources and systems.
To successfully commercialize and further develop our SaaS solution and other product offerings, we will need substantial financial resources as well as expertise and physical resources and systems.
We could incur greater operating expenses and our customer acquisition and retention could be negatively impacted if network operators: ● implement usage-based pricing; ● discount pricing for competitive products; ● otherwise materially change their pricing rates or schemes; ● charge us to deliver our traffic at certain levels or at all; 27 ● throttle traffic based on its source or type; ● implement bandwidth caps or other usage restrictions; or ● otherwise try to monetize or control access to their networks.
We could incur greater operating expenses and our customer acquisition and retention could be negatively impacted if network operators: ● implement usage-based pricing; ● discount pricing for competitive products; ● otherwise materially change their pricing rates or schemes; ● charge us to deliver our traffic at certain levels or at all; ● throttle traffic based on its source or type; ● implement bandwidth caps or other usage restrictions; or ● otherwise try to monetize or control access to their networks. 26 In order for our services to be successful, there must be a reasonable price model in place to allow for the continuous distribution of digital media files.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our ordinary shares. 41 Unfavorable conditions in our industry or the global economy or reductions in information technology spending could limit our ability to grow our business and negatively affect our results of operations.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our ordinary shares.
Any increase in the amount of taxes we pay or that are imposed on us could increase our worldwide effective tax rate and adversely affect our business, financial condition and results of operations. 29 We could be required to collect additional sales, use, value added, digital services or other similar taxes or be subject to other liabilities that may increase the costs our customers would have to pay for our offerings and adversely affect our results of operations.
We could be required to collect additional sales, use, value added, digital services or other similar taxes or be subject to other liabilities that may increase the costs our customers would have to pay for our offerings and adversely affect our results of operations.
If we do not compete successfully, our business, financial condition and results of operations could be harmed. ● We depend on our management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could adversely affect our business. ● Our international operations and expansion expose us to risk. ● Currency exchange rate fluctuations affect our results of operations, as reported in our financial statements. ● 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. ● A resurgence of the COVID-19 pandemic could adversely affect our business, financial condition and results of operations. 2 Risks Related to Information Technology, Intellectual Property and Data Security and Privacy ● A real or perceived bug, defect, security vulnerability, error, or other performance failure involving our products and services could cause us to lose revenue, damage our reputation, and expose us to liability. ● If we or our third-party service providers experience a security breach, data loss or other compromise, including if unauthorized parties obtain access to our customers’ data, our reputation may be harmed, demand for our products and services may be reduced, and we may incur significant liabilities. ● Insufficient investment in, or interruptions or performance problems associated with, our technology and infrastructure, including in connection with our Beamr HW-Accelerated Content Adaptive Encoding solution which is to be deployed on a public cloud infrastructure, and our reliance on technologies from third parties, may adversely affect our business operations and financial results. ● Failure to protect our proprietary technology, or to obtain, maintain, protect and enforce sufficiently broad intellectual property rights therein, could substantially harm our business, financial condition and results of operations. ● We could incur substantial costs and otherwise suffer harm as a result of any claim of infringement, misappropriation or other violation of another party’s intellectual property or proprietary rights. ● We could incur substantial costs and otherwise suffer harm as a result of patent royalty claims, in particular patents related to the implementation of image and video standards. ● We rely on software and services licensed from other parties.
Risks Related to Information Technology, Intellectual Property and Data Security and Privacy ● A real or perceived bug, defect, security vulnerability, error, or other performance failure involving our products and services could cause us to lose revenue, damage our reputation, and expose us to liability. ● If we or our third-party service providers experience a security breach, data loss or other compromise, including if unauthorized parties obtain access to our customers’ data, our reputation may be harmed, demand for our products and services may be reduced, and we may incur significant liabilities. 2 ● Insufficient investment in, or interruptions or performance problems associated with, our technology and infrastructure, including in connection with our Beamr Cloud, which is deployed on a public cloud infrastructure, and our reliance on technologies from third parties, may adversely affect our business operations and financial results. ● Failure to protect our proprietary technology, or to obtain, maintain, protect and enforce sufficiently broad intellectual property rights therein, could substantially harm our business, financial condition and results of operations. ● We could incur substantial costs and otherwise suffer harm as a result of any claim of infringement, misappropriation or other violation of another party’s intellectual property or proprietary rights. ● We could incur substantial costs and otherwise suffer harm as a result of patent royalty claims, in particular patents related to the implementation of image and video standards. ● We rely on software and services licensed from other parties.
We plan to make continued investments in the growth and expansion of our business and customer base including in particular substantial investment of resources in the development and commercialization of our next-generation product, the Beamr HW-Accelerated Content Adaptive Encoding solution.
We plan to make continued investments in the growth and expansion of our business and customer base including in particular substantial investment of resources in the commercialization and future development of our next-generation product, the Beamr Cloud SaaS solution, which we launched in February 2024.
If we are unable to increase sales of our products and services to new customers, expand the offerings to which our existing customers subscribe, or expand the value of our existing sales, our future revenue and results of operations will be adversely affected.
Any failure to effectively address these factors could significantly and adversely affect our business, financial condition and results of operations. 13 If we are unable to increase sales of our products and services to new customers, expand the offerings to which our existing customers subscribe, or expand the value of our existing sales, our future revenue and results of operations will be adversely affected.
In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, beginning as early as our second annual report on Form 20-F for the fiscal year ended December 31, 2023.
In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act,.
The functionality and popularity of our products and services may depend, in part, on their ability to integrate with a wide variety of third-party applications and software.
In addition, a significant percentage of our customers may choose to integrate our products and services with certain capabilities of third-party hardware and software providers using APIs. The functionality and popularity of our products and services may depend, in part, on their ability to integrate with a wide variety of third-party applications and software.
Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries, as well as terrorist acts committed within Israel by hostile elements.
Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect our business and operations. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries, as well as terrorist acts committed within Israel by hostile elements.
Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged their former employers’ proprietary or other confidential information or incorporated such information into our products, which could include claims that such former employers therefore own or otherwise have rights to their inventions or other work product developed while employed by us.
Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged their former employers’ proprietary or other confidential information or incorporated such information into our products, which could include claims that such former employers therefore own or otherwise have rights to their inventions or other work product developed while employed by us. 15 In addition, in making employment decisions, particularly in the internet and high-technology industries, job candidates often consider the value of the equity they are to receive in connection with their employment.
Over the last two decades, the Russian economy has experienced or continues to experience at various times: ● significant volatility in its GDP; ● the impact of international sanctions; ● high levels of inflation; ● increases in, or high, interest rates; ● price volatility in oil and other natural resources; ● instability in the local currency market; ● budget deficits; ● the continued operation of loss-making enterprises due to the lack of effective bankruptcy proceedings; ● capital flight; and ● significant increases in poverty rates, unemployment and underemployment.
Over the last two decades, the Russian economy has experienced or continues to experience at various times: ● significant volatility in its GDP; ● the impact of international sanctions; ● high levels of inflation; ● increases in, or high, interest rates; ● price volatility in oil and other natural resources; ● instability in the local currency market; ● budget deficits; ● the continued operation of loss-making enterprises due to the lack of effective bankruptcy proceedings; ● capital flight; and ● significant increases in poverty rates, unemployment and underemployment. 33 The Russian economy has been subject to abrupt downturns in the past, including as a result of the invasion of Ukraine, global financial crisis, and, as an emerging market, remains particularly vulnerable to further external shocks and any future fluctuations in the global markets.
Israeli inflation may also (in the future) outweigh the positive effect of any appreciation of the U.S. dollar relative to the NIS, if, and to the extent that, it outpaces such appreciation or precedes such appreciation. The Israeli rate of inflation did not have a material adverse effect on our financial condition during 2021 or 2022.
Israeli inflation may also (in the future) outweigh the positive effect of any appreciation of the U.S. dollar relative to the NIS, if, and to the extent that, it outpaces such appreciation or precedes such appreciation.
Based on our market capitalization and the composition of our income, assets and operations, we do not expect to be a PFIC for United States federal income tax purposes for the current taxable year or in the foreseeable future. However, this is a factual determination that must be made annually after the close of each taxable year.
Based on our market capitalization and the composition of our income, assets and operations, we believe that we were not a PFIC for the year ended December 31, 2023 and we do not expect to be a PFIC for United States federal income tax purposes for the current taxable year or in the foreseeable future.
The risks associated with these events or potential events could materially and adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition, hiring ability, and results of operations could be materially and adversely affected. 33 Furthermore, high levels of corruption reportedly exist in Russia, including the bribing of officials for the purpose of initiating investigations by government agencies.
The risks associated with these events or potential events could materially and adversely affect the investment environment and overall consumer and entrepreneurial confidence in Russia, and our business, prospects, financial condition, hiring ability, and results of operations could be materially and adversely affected.
An escalation of tensions or violence might result in a significant downturn in the economic or financial condition of Israel, which could have a material adverse effect on our operations in Israel and our business. Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism.
An escalation of tensions or violence might result in a significant downturn in the economic or financial condition of Israel, which could have a material adverse effect on our operations in Israel and our business.
Any failure to increase our revenue as we grow our business could prevent us from achieving profitability at all or on a consistent basis, which would cause our business, financial condition and results of operations to suffer and the market price of our ordinary shares to decline. 4 We will need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our shareholders’ ownership interests.
Any failure to increase our revenue as we grow our business could prevent us from achieving profitability at all or on a consistent basis, which would cause our business, financial condition and results of operations to suffer and the market price of our ordinary shares to decline.
If our customers do not recognize the potential of our offerings, our business would be materially and adversely affected. 14 If our existing customers do not renew their order of products or subscription to services, or if they renew on terms that are less economically beneficial to us, it could have an adverse effect on our business, financial condition and results of operations.
If our existing customers do not renew their order of products or subscription to services, or if they renew on terms that are less economically beneficial to us, it could have an adverse effect on our business, financial condition and results of operations. We expect to derive a significant portion of our revenue from renewals of subscriptions.
If we are unsuccessful in maintaining existing and, if needed, establishing new relationships with third parties, our ability to efficiently operate existing services or develop new services and provide adequate customer support could be impaired, and, as a result, our competitive position or our results of operations could suffer. 15 We depend on our management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could adversely affect our business.
If we are unsuccessful in maintaining existing and, if needed, establishing new relationships with third parties, our ability to efficiently operate existing services or develop new services and provide adequate customer support could be impaired, and, as a result, our competitive position or our results of operations could suffer.
Future sales of substantial amounts of our ordinary shares in the public markets, or the perception that such sales might occur, could reduce the price that our ordinary shares might otherwise attain.
As a result, this concentration of ownership may not be in your best interests. 35 Future sales of substantial amounts of our ordinary shares in the public markets, or the perception that such sales might occur, could reduce the price that our ordinary shares might otherwise attain.
Moreover, the value of our assets for purposes of the PFIC determination may be determined by reference to the public price of our ordinary shares, which could fluctuate significantly.
However, this is a factual determination that must be made annually after the close of each taxable year. Moreover, the value of our assets for purposes of the PFIC determination may be determined by reference to the public price of our ordinary shares, which could fluctuate significantly.
This, in turn, could have an adverse impact on trading prices for our ordinary shares and could adversely affect our ability to access the capital markets. We have identified a material weakness in our internal control over financial reporting, and we may not be able to successfully implement remedial measures.
This, in turn, could have an adverse impact on trading prices for our ordinary shares and could adversely affect our ability to access the capital markets. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
We operate in a highly specialized area that is evolving very quickly with rapid developments. In the future, competitors could develop products or solutions that compete with our video compression solutions. For example, the public cloud platforms such as AWS, Azure, and GCP could in the future develop their own video optimization hardware accelerated solutions.
We operate in a highly specialized area that is evolving very quickly with rapid developments. In the future, competitors could develop products or solutions that compete with our video compression solutions.
If we are unable to respond to changes in a cost-effective manner, our offerings may become less marketable, less competitive, or obsolete, and our business, financial condition and results of operations may be negatively impacted. 12 In addition, a significant percentage of our customers may choose to integrate our products and services with certain capabilities of third-party hardware and software providers using APIs.
If we are unable to respond to changes in a cost-effective manner, our offerings may become less marketable, less competitive, or obsolete, and our business, financial condition and results of operations may be negatively impacted.
Holders should consult their tax advisors about the potential application of the PFIC rules to their investment in our ordinary shares. For further discussion, see “Item 10.E—Additional Information—Taxation—U.S.
Federal Income Tax Considerations”) if we are treated as a PFIC for any taxable year during which such U.S. Holder holds our ordinary shares. U.S. Holders should consult their tax advisors about the potential application of the PFIC rules to their investment in our ordinary shares. For further discussion, see “Item 10.E—Additional Information—Taxation—Certain Material U.S.
Our failure to comply with any applicable rules or regulations could lead to penalties and adversely impact our reputation, access to capital and employee retention. Such ESG matters may also impact our third-party contract manufacturers and other third parties on which we rely, which may augment or cause additional impacts on our business, financial condition, or results of operations.
Such ESG matters may also impact our third-party contract manufacturers and other third parties on which we rely, which may augment or cause additional impacts on our business, financial condition, or results of operations. 19 Any resurgence of the COVID-19 pandemic could adversely affect our business, financial condition and results of operations.
This change in our products and services also makes it difficult to evaluate our current business and future prospects and may increase the risk that we will not be successful.
To support our business growth we expanded our product offering to include the Beamr Cloud, a new SaaS solution, the further development and commercialization of which may not be successful. This change in our products and services also makes it difficult to evaluate our current business and future prospects and may increase the risk that we will not be successful.
If we are unable to efficiently and effectively maintain and upgrade our system safeguards, we may incur unexpected costs and certain of our systems may become more vulnerable to unauthorized access or disruption.
If we are unable to efficiently and effectively maintain and upgrade our system safeguards, we may incur unexpected costs and certain of our systems may become more vulnerable to unauthorized access or disruption. Any of the foregoing could have a material adverse effect on our business, including our financial condition, results of operations and reputation.
We are also subject to the risk that any such customer will experience financial difficulties that prevent them from making payments to us on a timely basis or at all. 11 If we are not able to keep pace with technological and competitive developments and develop or otherwise introduce new products and solutions and enhancements to our existing offerings, our offerings may become less marketable, less competitive or obsolete, and our business, financial condition and results of operations may be adversely affected.
If we are not able to keep pace with technological and competitive developments and develop or otherwise introduce new products and solutions and enhancements to our existing offerings, our offerings may become less marketable, less competitive or obsolete, and our business, financial condition and results of operations may be adversely affected.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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We currently license three core video and image compression products that help our customers use video and images to further their businesses in meaningful ways: (1) a suite of video compression software encoder solutions including the Beamr 4 H.264 encoder, Beamr 4X H.264 content adaptive encoder, Beamr 5 HEVC encoder and the Beamr 5X HEVC content adaptive encoder, (2) Beamr JPEGmini photo optimization software solutions for reducing JPEG file sizes, and (3) Beamr Silicon IP block, a hardware solution for integration into dedicated video encoding ASICs, GPUs, and application processors.
We currently license three core video and image compression products that help our customers use video and images to further their businesses in meaningful ways: (1) a suite of video compression software encoder solutions including the Beamr 4 H.264 encoder, Beamr 4X H.264 content adaptive encoder, Beamr 5 HEVC encoder and the Beamr 5X HEVC content adaptive encoder, (2) Beamr JPEGmini photo optimization software solutions for reducing JPEG file sizes, and (3) Beamr Silicon IP block, a hardware solution for integration into dedicated video encoding ASICs, GPUs, and application processors.
Beamr4 has an extensive API enabling deep control of the encoder configuration to maximize the benefit for each and every application or use case, and our support team is available to help users find the best setup for their specific needs. 54 Beamr 5 HEVC Encoder Beamr5 is our fully standard compliant HEVC (H.265) video encoder.
Beamr4 has an extensive API enabling deep control of the encoder configuration to maximize the benefit for each and every application or use case, and our support team is available to help users find the best setup for their specific needs. Beamr 5 HEVC Encoder Beamr5 is our fully standard compliant HEVC (H.265) video encoder.
Our wholly-owned subsidiary, Beamr, Inc., serves as our agent for service of process in the United States for certain limited matters, and its address is 16185 Los Gatos Blvd, Ste 205, Mailbox 12, Los Gatos, CA 95032. 43 We use our website (https://beamr.com/) as a channel of distribution of Company information.
Our wholly-owned subsidiary, Beamr, Inc., serves as our agent for service of process in the United States for certain limited matters, and its address is 16185 Los Gatos Blvd, Ste 205, Mailbox 12, Los Gatos, CA 95032. We use our website (https://beamr.com/) as a channel of distribution of Company information.
In user testing, under ITU BT.500, an international standard for testing image quality, the correlation of our BQM with subjective (human) results was, in our opinion, very high. Beamr’s CABR technology was integrated as a new rate control mechanism into our software H.264 and HEVC encoders.
In user testing, under ITU BT.500, an international standard for testing image quality, the correlation of our BQM with subjective (human) results was, in our opinion, very high. 49 Beamr’s CABR technology was integrated as a new rate control mechanism into our software H.264 and HEVC encoders.
As a result, open-source development and licensing practices can limit the value of our proprietary software assets. 58 Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or obtain and use our technology to develop products and services with the same functionality as our platform. Policing unauthorized use of our technology is difficult.
As a result, open-source development and licensing practices can limit the value of our proprietary software assets. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or obtain and use our technology to develop products and services with the same functionality as our platform. Policing unauthorized use of our technology is difficult.
We believe that our hardware-accelerated CABR powered video optimization solutions have broad application to a wide array of verticals including UGC, public safety, smart cities, education, enterprise, autonomous vehicles, government and media and entertainment. ● Continue to innovate and develop new products and features.
We believe that our hardware-accelerated CABR powered video optimization solutions have broad application to a wide array of verticals including UGC, public safety, smart cities, education, enterprise, autonomous vehicles, government and media and entertainment. 48 ● Continue to innovate and develop new products and features.
If successful, this process culminates in a customer’s decision to use our solutions in its system, which we refer to as an account win. 56 We focus our marketing efforts on the strength of our product and technology innovation, the value we provide and our domain expertise.
If successful, this process culminates in a customer’s decision to use our solutions in its system, which we refer to as an account win. We focus our marketing efforts on the strength of our product and technology innovation, the value we provide and our domain expertise.
JPEGmini is fully compliant with the JPEG standard, resulting in files that are fully compatible with any browser, photo software or device that support the standard JPEG format. 55 JPEGmini is capable of reducing the file size of standard JPEG photos by up to 50%, while the resulting photos are visually identical to the original photos.
JPEGmini is fully compliant with the JPEG standard, resulting in files that are fully compatible with any browser, photo software or device that support the standard JPEG format. JPEGmini is capable of reducing the file size of standard JPEG photos by up to 50%, while the resulting photos are visually identical to the original photos.
We regularly provide our customers with enhancements to our products. 47 Our Market Opportunity According to Fortune Business Insights, the global cloud video storage market is projected to grow from $7.3 billion in 2021 to $13.5 billion in 2025 and to $20.9 billion by 2028, at a compound annual growth rate, or CAGR, of 16% during the forecast period.
We regularly provide our customers with enhancements to our products. 46 Our Market Opportunity According to Fortune Business Insights, the global cloud video storage market is projected to grow from $7.3 billion in 2021 to $13.5 billion in 2025 and to $20.9 billion by 2028, at a compound annual growth rate, or CAGR, of 16% during the forecast period.
For more information regarding the risks relating to intellectual property, see “Item 3.D Risk Factors—Risks Related to Information Technology, Intellectual Property and Data Security and Privacy.” 59 Regulatory Environment We are subject to a number of U.S. federal and state and foreign laws and regulations that involve matters central to our business.
For more information regarding the risks relating to intellectual property, see “Item 3.D Risk Factors—Risks Related to Information Technology, Intellectual Property and Data Security and Privacy.” 58 Regulatory Environment We are subject to a number of U.S. federal and state and foreign laws and regulations that involve matters central to our business.
We offer industry proven video optimization solutions and are collaborating in product development with industry giants such as NVIDIA and Allegro DVT that provide incremental improvements to existing products without having to reinvent the wheel. ● Core technology is powered by proprietary content-adaptive quality measure.
We offer industry proven video optimization solutions and are collaborating in product development with industry giants such as NVIDIA that provide incremental improvements to existing products without having to reinvent the wheel. ● Core technology is powered by proprietary content-adaptive quality measure.
We believe that a source video and a Beamr-optimized video viewed side-by-side will look exactly the same to the human eye. 51 Beamr has integrated the CABR engine into its AVC software encoder, Beamr 4, and into its HEVC software encoder, Beamr 5.
We believe that a source video and a Beamr-optimized video viewed side-by-side will look exactly the same to the human eye. 50 Beamr has integrated the CABR engine into its AVC software encoder, Beamr 4, and into its HEVC software encoder, Beamr 5.
We primarily market and license directly our existing products to media customers through outbound sales networking and customer and partner referrals. Our direct customers include category leaders such as Netflix, Snapfish, ViacomCBS, Wowza and Encoding.com.
We primarily market and license directly our existing products to media customers through outbound sales networking and customer and partner referrals. Our direct customers include category leaders such as Netflix, Snapfish, ViacomCBS, TAG and Encoding.com.
Since NVIDIA GPUs are widely adopted by cloud platforms, we believe that by making the Beamr HW-Accelerated Content Adaptive Encoding solution on cloud platforms will allow us to potentially access and acquire large numbers of new customers with relatively low sales investment through a self service, online sales process, with low touch pay as you go subscription service to our SaaS solution.
Since NVIDIA GPUs are widely adopted by cloud platforms, we believe that by making the Beamr Cloud SaaS solution on cloud platforms will allow us to potentially access and acquire large numbers of new customers with relatively low sales investment through a self service, online sales process, with low touch pay as you go subscription service to our SaaS solution.
Due to the high cost and complexity of deploying our existing software solutions and the long sales lead times, we have a made a strategic decision to focus our resources on the development and commercialization of our next-generation product, the Beamr HW-Accelerated Content Adaptive Encoding solution, a SaaS solution that is designed, based on our own internal testing, to be up to 10x more cost efficient than our existing software-based solutions, resulting in reduced media storage, processing and delivery costs.
Due to the high cost and complexity of deploying our existing software solutions and the long sales lead times, we have a made a strategic decision to focus our resources on the development and commercialization of our next-generation product, the Beamr Cloud solution, a SaaS solution that is designed, based on our own internal testing, to be up to 10x more cost efficient than our existing software-based solutions, resulting in reduced media storage, processing and delivery costs.
In today’s environment, with deployment of media and entertainment, user generated content, enterprise video, agricultural technology, or AgTech, and industrial solutions, autonomous vehicles, surveillance and smart cities, we believe that the usage of video and its storage on public cloud platforms is expected to increase exponentially and we believe existing solutions are not suitable for large volume storage optimization. 48 Our Growth Strategies We intend to pursue the following growth strategies: ● Complete development and gain broad market acceptance for our SaaS solution .
In today’s environment, with deployment of media and entertainment, user generated content, enterprise video, agricultural technology, or AgTech, and industrial solutions, autonomous vehicles, surveillance and smart cities, we believe that the usage of video and its storage on public cloud platforms is expected to increase exponentially and we believe existing solutions are not suitable for large volume storage optimization. 47 Our Growth Strategies We intend to pursue the following growth strategies: ● Commercialize, further develop and gain broad market acceptance for our SaaS solution .
Upon release of our next generation SaaS solution, the Beamr HW-Accelerated Content Adaptive Encoding, we believe that its performance will be up to 10x more cost efficient than our existing software-based solutions, resulting in even greater reduced, based on our own internal testing, media storage, processing and delivery costs. ● Partnering with leading technology giants to enable the adoption of our video compression solutions .
Upon release of our next generation SaaS solution, the Beamr Cloud, we believe that its performance will be up to 10x more cost efficient than our existing software-based solutions, resulting in even greater reduced, based on our own internal testing, media storage, processing and delivery costs. ● Partnering with leading technology giants to enable the adoption of our video compression solutions .
In addition, since the Beamr HW-Accelerated Content Adaptive Encoding solution is designed to be deployable across all environments, including public cloud, private cloud, on-premise and multi-cloud hybrid environments, we intend to focus our direct sales efforts on particular vertical markets that store large amounts of video including internet of things (IoT), smart cities, surveillance, autonomous cars, AgTech, and medical imaging.
In addition, since the Beamr Cloud is designed to be deployable across all environments, including public cloud, private cloud, on-premise and multi-cloud hybrid environments, we intend to focus our direct sales efforts on particular vertical markets that store large amounts of video including internet of things (IoT), smart cities, surveillance, autonomous cars, AgTech, and medical imaging.
Even after we no longer qualify as an emerging growth company, as long as we continue to qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including: ● the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations with respect to a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial statements and other specified information, and current reports on Form 8-K upon the occurrence of specified significant events.
Even after we no longer qualify as an emerging growth company, as long as we continue to qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including: ● the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations with respect to a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial statements and other specified information, and current reports on Form 8-K upon the occurrence of specified significant events. 43 We are required to file an annual report on Form 20-F within four months of the end of each fiscal year.
We plan to make our next generation SaaS solution available through public cloud services such as AWS, Azure and GCP allowing us to potentially access and acquire large numbers of new customers with relatively low sales investment.
Our Beamr Cloud SaaS solution is currently available through AWS and we plan to make our next generation SaaS solution available through additional public cloud services, such as Azure, GCP and OCI allowing us to potentially access and acquire large numbers of new customers with relatively low sales investment.
Our visionary and experienced management team with best-in-class research and development, or R&D, capabilities and in-depth industry backgrounds and experiences has been leading us since our inception. Members of our senior leadership team have held senior product, business and technology roles at companies such as Scitex, Kodak, Comverse, IBM and Intel.
Our visionary and experienced management team with best-in-class research and development, or R&D, capabilities and in-depth industry backgrounds and experiences has been leading us since our inception. Members of our senior leadership team have held senior product, business and technology roles at companies such as Comverse, Wix and Amdocs.
We have made substantial investments in product and technology development since our inception. Research and development expense totaled $2 million and $2 million in the years ended December 31, 2022 and 2021, respectively.
We have made substantial investments in product and technology development since our inception. Research and development expense totaled $1.8 million, $2.1 million and $2.0 million in the years ended December 31, 2023, 2022 and 2021, respectively.
Our Beamr HW-Accelerated Content Adaptive Encoding solution is highly scalable and designed to be deployable across all environments employing NVIDIA GPUs, including public cloud, private cloud, on-premise and multi-cloud hybrid environments. ● Security . By using public cloud platforms best security practices, we address our customers security concerns. ● Reducing carbon footprint.
Our Beamr Cloud SaaS solution is highly scalable and designed to be deployable across all environments employing NVIDIA GPUs, including public cloud, private cloud, on-premise and multi-cloud hybrid environments. ● Security . By using public cloud platforms best security practices, we address our customers security concerns. ● Reducing carbon footprint.
Beamr, Inc. is our wholly owned subsidiary incorporated in 2012 in the State of Delaware. Beamr, Inc. is engaged in reselling our software and products in the U.S. and Canada. Beamr Imaging RU LLC is our wholly owned subsidiary, a limited Russian partnership formed in 2016. Beamr Imaging RU LLC is engaged in research and development for us.
Beamr, Inc. is engaged in reselling our software and products in the U.S. and Canada. Beamr Imaging RU LLC is our wholly owned subsidiary, a limited Russian partnership formed in 2016. Beamr Imaging RU LLC is engaged in research and development for us.
At the heart of our patented optimization technology is the proprietary Beamr quality measure, or BQM, that is highly correlated with the human visual system. BQM is integrated into our content adaptive bitrate, or CABR, system which together maximizes quality and removes visual redundancies resulting in a smaller file size.
At the heart of our patented optimization technology is the proprietary BQM, that is highly correlated with the human visual system. BQM is integrated into our CABR, system which together maximizes quality and removes visual redundancies resulting in a smaller file size.
Our current product line is mainly geared to the high end, high quality media customers and we count among our enterprise customers Netflix, Snapfish, ViacomCBS, Wowza, Microsoft, VMware, Genesys, Deluxe, Vimeo, Encoding.com, Citrix, Walmart, Photobox, Antix, Dalet, and other leading media companies using video and photo solutions.
Until recently, our current product line was mainly geared to the high end, high quality media customers and we count among our enterprise customers Netflix, Snapfish, ViacomCBS, TAG, VMware, Genesys, Deluxe, Vimeo, Encoding.com, Citrix, Walmart, Photobox, Antix, Dalet, and other leading media companies using video and photo solutions.
Our current product line is mainly geared to the high end, high quality media customers and we count among our enterprise customers Netflix, Snapfish, ViacomCBS, Wowza, Microsoft, VMware, Genesys, Deluxe, Vimeo, Encoding.com, Citrix, Walmart, Photobox, Antix, Dalet, and other leading media companies using video and photo solutions.
Until recently, our current product line was mainly geared to the high end, high quality media customers and we count among our enterprise customers Netflix, Snapfish, ViacomCBS, TAG, VMware, Genesys, Deluxe, Vimeo, Encoding.com, Citrix, Walmart, Photobox, Antix, Dalet, and other leading media companies using video and photo solutions.
Our legal and commercial name is Beamr Imaging Ltd. We were incorporated in Israel on October 1, 2009 under the name I.C.V.T Ltd. On January 11, 2015, we changed our name to Beamr Imaging Ltd. We have two wholly owned subsidiaries: Beamr, Inc. and Beamr Imaging RU LLC.
We were incorporated in Israel on October 1, 2009 under the name I.C.V.T Ltd. On January 11, 2015, we changed our name to Beamr Imaging Ltd. We have two wholly owned subsidiaries: Beamr, Inc. and Beamr Imaging RU LLC. Beamr, Inc. is our wholly owned subsidiary incorporated in 2012 in the State of Delaware.
Sales and Marketing As of April 15, 2023, we have two-full time and part-time sales and marketing employees and consultants, whose focus is to work together to accelerate the adoption of our existing products, to drive awareness and increase brand recognition of our products and technologies, to improve new customer acquisitions and to increase revenue from our existing customers.
Sales and Marketing As of March 1, 2024, we have three-full time and part-time sales and marketing employees and consultants, whose focus is to work together to accelerate the adoption of our existing products, to drive awareness and increase brand recognition of our products and technologies, to improve new customer acquisitions and to increase revenue from our existing customers.
Due to the high cost and complexity of deploying our existing software solutions and the long sales lead times, we have a made a strategic decision to focus our resources on the development and commercialization of our next-generation product, the Beamr HW-Accelerated Content Adaptive Encoding solution, a SaaS solution that is designed, based on our own internal testing, to be up to 10x more cost efficient than our existing software-based solutions, resulting in reduced media storage, processing and delivery costs.
Due to the high cost and complexity of deploying our existing software solutions and the long sales lead times, we have a made a strategic decision to focus our resources on the development and commercialization of our next-generation product, the Beamr Cloud, a SaaS solution that is designed, based on our own internal testing, to be up to 10x more cost efficient than our existing software-based solutions, resulting in reduced media storage, processing and delivery costs. 42 Our legal and commercial name is Beamr Imaging Ltd.
As of April 15, 2023, our exclusively owned patent portfolio includes 53 issued patents (one of which is jointly owned), of which 33 are U.S. patents and 20 are foreign patents, and two U.S. patent applications are pending.
As of March 1, 2024, our exclusively owned patent portfolio includes 53 issued patents (one of which is jointly owned), of which 33 are U.S. patents and 20 are foreign patents, and two U.S. patent applications are pending.
Our Product Offerings Our Next-Generation SaaS Product: Beamr HW-Accelerated Content Adaptive Encoding We are currently collaborating with NVIDIA, a leading developer of GPUs, to develop the world’s first GPU accelerated encoding solution that would allow fast and easy end-user deployment combined with superior video compression rates powered with our CABR rate control and BQM quality measure.
Our Product Offerings Our Next-Generation SaaS Product: The Beamr Cloud We collaborated with NVIDIA, a leading developer of GPUs, to develop the world’s first GPU accelerated encoding solution that allows fast and easy end-user deployment combined with superior video compression rates powered with our CABR rate control and BQM quality measure.
Our main research and development facility is located in central Israel, which we believe is a strategic advantage for us, allowing us to leverage a talented pool of engineers and product experts. As of April 15, 2023, we had 20 full-time and part-time employees dedicated to research and development.
Our main research and development facility is located in central Israel, which we believe is a strategic advantage for us, allowing us to leverage a talented pool of engineers and product experts. As of March 1, 2024, we had 25 full-time and part-time employees and consultants dedicated to research and development.
Our CABR technology, built over our proprietary BQM, achieves maximal compression of the video input while maintaining the input video resolution, format, and visual quality. The CABR powers our existing video compression encoders as well as our next generation Beamr HW-Accelerated Content Adaptive Encoding in development.
Our CABR technology, built over our proprietary BQM, achieves maximal compression of the video input while maintaining the input video resolution, format, and visual quality. The CABR powers our existing video compression encoders as well as our next generation SaaS solution, the Beamr Cloud, in development.
The Beamr HW-Accelerated Content Adaptive Encoding solution will have an intuitive interface that can be easily navigated by even first-time users. Our solution removes the need for video-specific expertise and high-touch user support and troubleshooting. ● Cloud agnostic and scalable .
The Beamr Cloud SaaS solution has an intuitive interface that can be easily navigated by even first-time users. Our solution removes the need for video-specific expertise and high-touch user support and troubleshooting. ● Cloud agnostic and scalable .
Since commencing the collaboration, we have successfully completed the following steps: (i) demonstrated proof of concept; (ii) jointly defined the required frame-level APIs that enable our CABR system to determine the optimal tradeoff between bitrate and quality; (iii) NVIDIA has approved the plan of record; (iv) NVIDIA completed delivery of the first version of the APIs; (v) we verified implementation of the APIs that result in significant reduction of the bitrate of video streams; (vi) in December 2022, we received a pre-final implementation from NVIDIA showing major progress, an indication that the work is close to completion and (vii) on March 23, 2023, the first General Availability (GA) of the API was public release by NVIDIA.
Since commencing the collaboration, we have successfully completed the following steps: (i) demonstrated proof of concept; (ii) jointly defined the required frame-level APIs that enable our CABR system to determine the optimal tradeoff between bitrate and quality; (iii) NVIDIA has approved the plan of record; (iv) NVIDIA completed delivery of the first version of the APIs; (v) we verified implementation of the APIs that result in significant reduction of the bitrate of video streams; (vi) in December 2022, we received a pre-final implementation from NVIDIA showing major progress, an indication that the work is close to completion; (vii) in March 2023, NVIDIA released the first version of the integrated video optimization engine; and (viii) in May 2023, NVIDIA released Video Codec SDK 12.1, which is the newest version of the integrated video optimization engine.
We are collaborating with NVIDIA in the development of our next generation product, the Beamr HW-Accelerated Content Adaptive Encoding. Upon release, we believe it will provide a simple, easily deployable, fast, scalable, low cost and best-in-class video optimization solution resulting in reduced media storage, processing and delivery costs.
We collaborated with NVIDIA in the development of our next generation product, the Beamr Cloud SaaS solution. We believe it will provide a simple, easily deployable, fast, scalable, low cost and best-in-class video optimization solution resulting in reduced media storage, processing and delivery costs.
Our research and development investments seek to drive core technology innovation and bring new products to market. Members of our research and development team specialize in many functional areas including algorithms, machine learning, and electrical engineering as well as computer science.
It is also responsible for operating and scaling our solutions including the underlying infrastructure. Our research and development investments seek to drive core technology innovation and bring new products to market. Members of our research and development team specialize in many functional areas including algorithms, machine learning, and electrical engineering as well as computer science.
We are currently collaborating with NVIDIA, a multinational technology company and a leading developer of GPUs, with an annual revenue of $26.9 billion for the fiscal year 2022, to develop the Beamr HW-Accelerated Content Adaptive Encoding solution, the world’s first GPU accelerated encoding solution powered with our CABR, which will allow fast and easy end-user deployment combined with superior video compression rates.
We collaborated with NVIDIA, a multinational technology company and a leading developer of GPUs, with an annual revenue of $60.9 billion for the fiscal year 2024, to develop the Beamr Cloud SaaS solution, the world’s first GPU accelerated encoding solution powered with our CABR, which allows fast and easy end-user deployment combined with superior video compression rates.
We bill most of our customers annually in advance for the fees associated with the software licenses and related support. Some of our customers are billed on a quarterly basis.
We bill most of our customers annually in advance for the fees associated with the software licenses and related support.
We are also in advanced stages of porting the CABR to run on the GPU, and once completed, we will be able to use the NVENC as the video encoder for CABR, offloading CABR-based video encoding from the CPU to the GPU enabling low-cost, high resolution, real time CABR encoding.
We are also porting the CABR to run on the GPU and when the modified API is made public we will be able to use the NVENC as the video encoder for CABR, offloading CABR-based video encoding from the CPU to the GPU enabling low-cost, high resolution, real time CABR encoding.
Combined with the real-time oriented design of BQM, and the possibility to reuse encoding decisions from the initial encode, the impact on overall performance is quite manageable.
Combined with the real-time oriented design of BQM, and the possibility to reuse encoding decisions from the initial encode, the impact on overall performance is quite manageable. The following is a depiction of the CABR system showing how the BQM interacts with a video encoder.
The Beamr HW-Accelerated Content Adaptive Encoding solution will be deployable in a self-service (one-click) installation process within minutes without any specialized hardware or need to download third-party software, allowing new users to quickly derive value without any specialized training or heavy implementation or customization. ● Easy to use .
The Beamr Cloud SaaS solution is deployable in a self-service no code installation process within minutes without any specialized hardware or need to download third-party software, allowing new users to quickly derive value without any specialized training or heavy implementation or customization. ● Easy to use .
Furthermore, new entrants not currently considered to be competitors may enter the market through acquisitions, partnerships, or strategic relationships. See “Item 3.D Risk Factors—Risks Related to Our Business and Industry—We may not be able to compete successfully against current and future competitors, some of whom have greater financial, technical, and other resources than we do.
See “Item 3.D Risk Factors—Risks Related to Our Business and Industry—We may not be able to compete successfully against current and future competitors, some of whom have greater financial, technical, and other resources than we do.
We initially plan to offer our Beamr HW-Accelerated Content Adaptive Encoding solution as a SaaS offering through public cloud data services that utilize NVIDIA GPUs (e.g., AWS, Microsoft Azure, GCP) allowing us to potentially access and acquire large numbers of new customers with relatively low sales investment. 52 We initiated the collaboration with NVIDIA on developing the Beamr HW-Accelerated Content Adaptive Encoding solution in January 2021.
We initially plan to offer our Beamr Cloud SaaS solution through public cloud data services that utilize NVIDIA GPUs (e.g., AWS, Microsoft Azure, GCP, OCI) allowing us to potentially access and acquire large numbers of new customers with relatively low sales investment.
According to Canalys estimates, these three cloud service providers accounted for 61% of the total cloud spend in the third quarter of 2021. 49 ● Expand business growth through collaborations and partnerships with industry-leading solution providers in new verticals. We are currently collaborating with NVIDIA and plan to expand our collaborations to develop further market-leading products.
According to Synergy Research Group estimates, Amazon, Microsoft and Google accounted for 65% of the total cloud spend in the first quarter of 2023. ● Expand business growth through collaborations and partnerships with industry-leading solution providers in new verticals. We are currently collaborating with NVIDIA and plan to expand our collaborations to develop further market-leading products.
Upon release, we believe the Beamr HW-Accelerated Content Adaptive Encoding solution will provide a simple, easily deployable, fast, scalable, low cost and best-in-class video optimization solution resulting in reduced media storage, processing and delivery costs.
We believe the Beamr Cloud SaaS solution provides a simple, easily deployable, fast, scalable, low cost and best-in-class video optimization solution resulting in reduced media storage, processing and delivery costs.
For example, the public cloud platforms such as AWS, Azure and GCP could in the future develop their own video optimization hardware accelerated solutions. 57 We believe the following competitive attributes are necessary for our solutions to successfully compete in the video compression market: ● the performance and reliability of our solutions; ● cost of deployment and return on investment in terms of cost savings; ● sophistication, novel and innovative intellectual property and technology, and functionality of our offerings; ● cross-platform operability; ● security; ● ease of implementation and use of service; ● high quality customer support; and ● price.
We believe the following competitive attributes are necessary for our solutions to successfully compete in the video compression market: ● the performance and reliability of our solutions; ● cost of deployment and return on investment in terms of cost savings; ● sophistication, novel and innovative intellectual property and technology, and functionality of our offerings; ● cross-platform operability; ● security; ● ease of implementation and use of service; ● high quality customer support; and ● price. 57 We believe that we compare favorably on the basis of the factors listed above.
Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers.
However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers.
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. C. Organizational Structure We have two wholly owned subsidiaries: Beamr, Inc. and Beamr Imaging RU 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. 59 C.
Our customers include tier one OTT, content distributors, video streaming platforms, and Hollywood studios who rely on our suite of products and expertise to reduce the cost and complexity associated with storing, distributing and monetizing video and images across devices. 44 At the heart of our patented optimization technology is the proprietary Beamr quality measure, or BQM, that is highly correlated with the human visual system.
Our customers include tier one OTT, content distributors, video streaming platforms, and Hollywood studios who rely on our suite of products and expertise to reduce the cost and complexity associated with storing, distributing and monetizing video and images across devices.
On March 27, 2023, we announced that our content adaptive technology officially support NVIDIA GPU acceleration, which was a major milestone for us.
To accommodate Beamr’s content-adaptive GPU accelerated encoding solution, NVIDIA is currently modifying the API of the NVENC. On March 27, 2023, we announced that our content adaptive technology officially support NVIDIA GPU acceleration, which was a major milestone for us.
The resulting bitstream has the same perceptual quality as the VBR encode to target bitrate would have, while offering significant bitrate savings for many use cases. Beamr 5X HEVC Content Adaptive Encoder Similarly, Beamr 5x combines Beamr 5 with CABR, enabling HEVC encoding with significant bitrate savings.
The resulting bitstream has the same perceptual quality as the VBR encode to target bitrate would have, while offering significant bitrate savings for many use cases.
Our BQM quality measure software will execute directly on NVIDIA GPU cores and interact with the NVIDIA video accelerator encoder known as NVENC. NVIDIA NVENC is a high-quality, high-performance hardware video encoder that is built into most NVIDIA GPUs.
Our BQM quality measure software executes directly on NVIDIA GPU cores and interacts with the NVIDIA video accelerator encoder known as NVENC. NVIDIA NVENC is a high-quality, high-performance hardware video encoder that is built into most NVIDIA GPUs. NVENC offloads video encoding to hardware, and provides extreme performance for applications such as live video encoding, cloud gaming and cloud storage.
The claims of these owned patents and patent applications are directed toward various aspects of our family of products, method of their manufacturing and research programs.
The claims of these owned patents and patent applications are directed toward various aspects of our family of products, method of their manufacturing and research programs. We pursue the registration of our domain names that we consider material to the marketing of our products, including the beamr.com .
In January 2021 we were recognized with an Emmy® Award for the “Development of Open Perceptual Metrics for Video Encoding Optimization” and in November 2021 we won the Seagate Lyve Innovator of the Year competition.
In January 2021 we were recognized with an Emmy ® Award for the “Development of Open Perceptual Metrics for Video Encoding Optimization” and in November 2021 we won the Seagate Lyve Innovator of the Year competition. We have over 50 patents, and count among our customers leading content distributors including Netflix and ViacomCBS. ● Strong value proposition .
Following that, we plan to commercially launch the first release of our cloud based Beamr HW-Accelerated Content Adaptive Encoding solution in the first quarter of 2024 and expect that following release, end-users of the solution will enjoy significant end-user storage and networking cost savings.
Following that, we commercially launched our cloud based SaaS solution in February 2024 and expect that end-users of the solution will enjoy significant end-user storage and networking cost savings.
We operate in a highly specialized area that is evolving very quickly with rapid developments. In the future, competitors could develop products or solutions that compete with our video compression solutions.
We operate in a highly specialized area that is evolving very quickly with rapid developments. In the future, competitors could develop products or solutions that compete with our video compression solutions. For example, the public cloud platforms such as AWS, Azure, GCP and OCI could in the future develop their own video optimization hardware accelerated solutions.
Research and Development Our research and development team is responsible for the design, development, testing and delivery of new technologies, features and integrations of our solutions, as well as the continued improvement and iteration of our existing products. It is also responsible for operating and scaling our solutions including the underlying infrastructure.
Some of our customers are billed on a quarterly basis. 56 Research and Development Our research and development team is responsible for the design, development, testing and delivery of new technologies, features and integrations of our solutions, as well as the continued improvement and iteration of our existing products.
Beamr, Inc. is our wholly owned subsidiary incorporated in 2012 in the State of Delaware. Beamr, Inc. is engaged in reselling our software and products in the U.S. and Canada. Beamr Imaging RU LLC is our wholly owned subsidiary, a limited Russian partnership formed in 2016. Beamr Imaging RU LLC is engaged in research and development for us.
Organizational Structure We have two wholly owned subsidiaries: Beamr, Inc. and Beamr Imaging RU LLC. Beamr, Inc. is our wholly owned subsidiary incorporated in 2012 in the State of Delaware. Beamr, Inc. is engaged in reselling our software and products in the U.S. and Canada.
The perceptual quality preservation of CABR has been repeatedly verified using large scale crowd-sourcing based testing sessions, as well as by industry leaders and studio “golden eyes”.
The BQM has excellent correlation with subjective results, confirmed in testing under ITU BT.500, an international standard for rigorous testing of image quality. The perceptual quality preservation of CABR has been repeatedly verified using large scale crowd-sourcing based testing sessions, as well as by industry leaders and studio “golden eyes”.
Upon completion, our CABR software will execute directly on NVIDIA GPU cores and interact with the NVIDIA video accelerator encoder known as NVENC. NVIDIA NVENC is a high-quality, high-performance hardware video encoder that is built into most NVIDIA GPUs.
Our CABR software executes directly on NVIDIA GPU cores and interacts with the NVIDIA video accelerator encoder known as NVENC. NVIDIA NVENC is a high-quality, high-performance hardware video encoder that is built into most NVIDIA GPUs. NVENC offloads video encoding to hardware, and provides extreme performance for applications such as live video encoding, cloud gaming and cloud storage.
We believe that we compare favorably on the basis of the factors listed above. However, many of our competitors have substantially greater financial, technical, and marketing resources; relationships with large vendor partners; larger global presence; larger customer bases; longer operating histories; greater brand recognition; and more established relationships in the industry than we do.
However, many of our competitors have substantially greater financial, technical, and marketing resources; relationships with large vendor partners; larger global presence; larger customer bases; longer operating histories; greater brand recognition; and more established relationships in the industry than we do. Furthermore, new entrants not currently considered to be competitors may enter the market through acquisitions, partnerships, or strategic relationships.
In proof of concept tests with both Intel and NVIDIA, we have demonstrated that when our CABR is offloaded from the CPU to the GPU, the cost/performance ratio is up to 10x better than on the CPU. To accommodate Beamr’s content-adaptive GPU accelerated encoding solution, NVIDIA is currently modifying the API of the NVENC.
NVIDIA GPUs with NVENC are available on all major cloud platforms. Our current product line of CABR software encoders run on the CPU. In proof of concept tests with both Intel and NVIDIA, we have demonstrated that when our CABR is offloaded from the CPU to the GPU, the cost/performance ratio is up to 10x better than on the CPU.
We lease all of our facilities and do not own any real property. We intend to procure additional space in the future as we continue to add employees and expand geographically.
Our wholly owned Russian subsidiary operates from a leased office located in St Petersburg, Russia. Our employees in our wholly owned US subsidiary operate primarily from their home offices. We lease all of our facilities and do not own any real property. We intend to procure additional space in the future as we continue to add employees and expand geographically.
The following is a depiction of the CABR system showing how the BQM interacts with a video encoder. 50 In testing, BQM demonstrated higher correlation with subjective results than other quality measures such as PSNR and SSIM.
In testing, BQM demonstrated higher correlation with subjective results than other quality measures such as PSNR and SSIM.
Video Compression Software Encoder Solutions Beamr 4 AVC Encoder Beamr4 is our fully standard compliant AVC (H.264) video encoder. This encoding standard is still the primary format used in video applications across the market.
It provides seamless integration with cloud storage services, starting with AWS S3, and offers extensive customization options for various video processing requirements. 54 Video Compression Software Encoder Solutions Beamr 4 AVC Encoder Beamr4 is our fully standard compliant AVC (H.264) video encoder. This encoding standard is still the primary format used in video applications across the market.
For our next-generation Beamr HW-Accelerated Content Adaptive Encoding solution , we plan to launch our solution on the largest cloud platform, AWS, and after initial deployment on AWS to integrate our solution both with Azure and GCP.
For our next-generation Beamr Cloud SaaS solution , we launched our solution on the largest cloud platform, AWS, in February 2024, and we plan to integrate our solution with Azure, GCP and OCI.
JPEGMini Photo Optimization Solutions JPEGmini is a patented photo recompression technology, which significantly reduces the size of photographs without affecting their perceptual quality.
Beamr 5X HEVC Content Adaptive Encoder Similarly, Beamr 5x combines Beamr 5 with CABR, enabling HEVC encoding with significant bitrate savings. 55 JPEGMini Photo Optimization Solutions JPEGmini is a patented photo recompression technology, which significantly reduces the size of photographs without affecting their perceptual quality.
However, we cannot guarantee that all applicable parties have executed such agreements. Such agreements can also be breached, and we may not have adequate remedies for such breach. Intellectual property laws, procedures, and restrictions provide only limited protection, and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed, misappropriated or otherwise violated.
Intellectual property laws, procedures, and restrictions provide only limited protection, and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed, misappropriated or otherwise violated.
Property, Plant and Equipment Our principle executive offices are located in Herzliya, Israel and consist of approximately 300 square feet of office space. Our wholly owned Russian subsidiary operates from a leased office located in St Petersburg, Russia. Our employees in our wholly owned US subsidiary operate primarily from their home offices.
Beamr Imaging RU LLC is our wholly owned subsidiary, a limited Russian partnership formed in 2016. Beamr Imaging RU LLC is engaged in research and development for us. D. Property, Plant and Equipment Our principle executive offices are located in Herzliya, Israel and consist of approximately 300 square feet of office space.
Using the Beamr HW-Accelerated Content Adaptive Encoding solution will potentially reduce their return on investment for storage optimization to approximately four months, compared to approximately two years with our existing software encoder solutions.
Following that, we commercially launched our Beamr Cloud SaaS solution in February 2024 and expect that end-users of the solution will enjoy significant end-user storage and networking cost savings. Using the Beamr Cloud SaaS solution will potentially reduce their return on investment for storage optimization to approximately four months, compared to approximately two years with our existing software encoder solutions.
NVENC offloads video encoding to hardware, and provides extreme performance for applications such as live video encoding, cloud gaming and cloud storage. NVIDIA GPUs with NVENC are available on all major cloud platforms. As planned, the first version of the integrated video optimization engine was released at the end of the first quarter of 2023.
NVIDIA GPUs with NVENC are available on all major cloud platforms. We plan to further collaborate with NVIDIA on further development of our the Beamr Cloud SaaS solution. 44 The first version of the integrated video optimization engine was ready at the end of the first quarter of 2023.
We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the Nasdaq.
In addition, we intend to publish our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the Nasdaq. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K.
Employees As of April 15, 2023, we had six employees in Israel, 17 employees who are employed by our wholly owned subsidiary in St. Petersburg, Russia and two employees who are employed by our wholly owned subsidiary in California, United States. We are not bound by any collective bargaining agreements. We consider the relationship with our employees to be good.
Employees As of March 1, 2024, we had 9 employees in Israel, 14 employees who are employed by our wholly owned subsidiary in St. Petersburg, Russia, 3 employees who are employed by us who are located in Serbia and two employees who are employed by our wholly owned subsidiary in California, United States.
BQM is integrated into our content adaptive bitrate, or CABR, system which together maximizes quality and removes visual redundancies resulting in a smaller file size. The BQM has excellent correlation with subjective results, confirmed in testing under ITU BT.500, an international standard for rigorous testing of image quality.
At the heart of our patented optimization technology is the proprietary BQM, that is highly correlated with the human visual system. BQM is integrated into our CABR, system which together maximizes quality and removes visual redundancies resulting in a smaller file size.
Using the Beamr HW-Accelerated Content Adaptive Encoding solution will potentially reduce their return on investment for storage optimization to approximately four months, compared to approximately two years with our existing software encoder solutions. 45 Our Business Strengths We believe that the following business strengths differentiate us from our competitors and are key to our success: ● We are a recognized video compression market leader .
Our Business Strengths We believe that the following business strengths differentiate us from our competitors and are key to our success: ● We are a recognized video compression market leader .
Following this, we plan to build out the cloud based SaaS platform and test it with beta customers in the third quarter of 2023.
Following this, we launched the first beta version of the cloud based SaaS platform and began testing it with beta customers in June 2023. After the initial release, we launched the second and third beta versions of the cloud based SaaS platform in September 2023 and October 2023, respectively, as we built up to the commercial launch of the platform.
Below is a depiction of how we expect the end-user dashboard of the Beamr HW-Accelerated Content Adaptive Encoding to look. 53 Following integration into the NVIDIA GPU, we believe the Beamr HW-Accelerated Content Adaptive Encoding solution will provide the following key benefits including: ● Attractive return on investment .
Below is an illustrative expected cost savings calculator of the Beamr Cloud from the Company’s homepage. 52 Following integration into the NVIDIA GPU, we believe the Beamr Cloud SaaS solution provides the following key benefits including: ● Attractive return on investment .
We pursue the registration of our domain names that we consider material to the marketing of our products, including the beamr.com domain name We generally seek to enter into confidentiality agreements and proprietary rights agreements with our employees and consultants and to control access to, and distribution of, our proprietary information.
We generally seek to enter into confidentiality agreements and proprietary rights agreements with our employees and consultants and to control access to, and distribution of, our proprietary information. However, we cannot guarantee that all applicable parties have executed such agreements. Such agreements can also be breached, and we may not have adequate remedies for such breach.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

58 edited+70 added−58 removed39 unchanged
Financing Activities Net cash provided by financing activities of $0.3 million for the year ended December 31, 2022 was related to $0.9 million of proceeds received from a loan granted from a commercial bank (IBI) and $0.1 million of proceeds from loan received from related party, offset by deferred offering costs of $0.1 million and repayment of principal relating to a straight loan received from a commercial bank (SVB) of $0.6 million.
Net cash provided by financing activities of $0.3 million for the year ended December 31, 2022 was related to $0.9 million of proceeds received from a loan granted from a commercial bank (IBI) and $0.1 million of proceeds from loan received from related party, offset by deferred offering costs of $0.1 million and repayment of principal relating to a straight loan received from a commercial bank (SVB) of $0.6 million.
Consequently, most of the transaction price is allocated to the software licenses as management believes the technology and products covered under the software license component are mature and fully functional. 64 Advertising Commencing 2022, revenue in small volume is also derived from the traffic operations in the Google AdSense program, a web advertising platform, that we make available on our websites.
Consequently, most of the transaction price is allocated to the software licenses as management believes the technology and products covered under the software license component are mature and fully functional. Advertising Commencing 2022, revenue in small volume is also derived from the traffic operations in the Google AdSense program, a web advertising platform, that we make available on our websites.
On July 26, 2022, we terminated the 2022 Loan Agreement and the security interest on all our assets was removed. 70 Upon making of the initial Advance, we agreed to issue to SVB a warrant to purchase (i) 4,784 Series C Convertible Preferred Shares, or (ii) ordinary shares in the event that we have listed its securities for trading on Nasdaq, or (iii) upon SVB’s written irrevocable election in its sole discretion, the same class and series, or other designation, of convertible preferred share or other senior equity security sold and issued by us in the next equity financing over a 15-years period commencing the issuance date of such warrant, at an exercise price of $5.12 per share, provided that if the class is the next equity financing securities, then the exercise price shall be the lowest price per share for which next equity financing securities are sold or issued by us.
On July 26, 2022, we terminated the 2022 Loan Agreement and the security interest on all our assets was removed. 68 Upon making of the initial Advance, we agreed to issue to SVB a warrant to purchase (i) 4,784 Series C Convertible Preferred Shares, or (ii) ordinary shares in the event that we have listed its securities for trading on Nasdaq, or (iii) upon SVB’s written irrevocable election in its sole discretion, the same class and series, or other designation, of convertible preferred share or other senior equity security sold and issued by us in the next equity financing over a 15-years period commencing the issuance date of such warrant, at an exercise price of $5.12 per share, provided that if the class is the next equity financing securities, then the exercise price shall be the lowest price per share for which next equity financing securities are sold or issued by us.
Critical Accounting Estimates Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Our management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made.
E. Critical Accounting Estimates Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Our management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made.
If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected. 69 SVB Loans On February 19, 2017, we and Beamr, Inc., our wholly owned subsidiary, entered into a Loan Agreement, or the 2017 Loan Agreement, with SVB under which we had a right to borrow from SVB up to $3 million bearing interest at a floating per annum rate equal to the Wall Street Journal Prime Rate plus 3.5% (upon occurrence of an ‘default event’ as defined in the Loan Agreement, the principal amount shall bear interest at a rate per annum which is 5% above the rate that is otherwise applicable thereto) which shall be payable monthly.
If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected. 67 SVB Loans On February 19, 2017, we and Beamr, Inc., our wholly owned subsidiary, entered into a Loan Agreement, or the 2017 Loan Agreement, with SVB under which we had a right to borrow from SVB up to $3 million bearing interest at a floating per annum rate equal to the Wall Street Journal Prime Rate plus 3.5% (upon occurrence of an ‘default event’ as defined in the Loan Agreement, the principal amount shall bear interest at a rate per annum which is 5% above the rate that is otherwise applicable thereto) which shall be payable monthly.
Upon completion of our initial public offering, the advance investment amounts were converted into an aggregate of 1,142,856 ordinary shares based on a conversion price of $3.20 per ordinary share.
Upon completion of our initial public offering, the advance investment amounts were fully converted into an aggregate of 1,142,856 ordinary shares based on a conversion price of $3.20 per ordinary share.
Net cash used in financing activities of $0.1 million for the year ended December 31, 2021 was related to repayment of a straight loan and facility fees of $0.5 million and deferred offering costs of $0.2 million and offset by proceeds received from a paycheck protection program note of $0.05 million and proceeds received from issuance of convertible advanced investments of $0.6 million.
Net cash used in financing activities of $0.1 million for the year ended December 31, 2021 was related to repayment of a straight loan and facility fees of $0.5 million and deferred offering costs of $0.2 million and offset by proceeds received from a paycheck protection program note of $0.05 million and proceeds received from issuance of convertible advanced investments of $0.6 million. 70 C.
The material weakness related to lack of sufficient internal accounting personnel, segregation of duties, and lack of sufficient internal controls (including IT general controls, entity level controls and transaction level controls).
The material weakness were related to lack of sufficient internal accounting personnel, segregation of duties, and lack of sufficient internal controls (including IT general controls, entity level controls and transaction level controls).
We currently license three core video and image compression products that help our customers use video and images to further their businesses in meaningful ways: (1) a suite of video compression software encoder solutions including the Beamr 4 encoder, Beamr 4X content adaptive encoder, Beamr 5 encoder and the Beamr 5X content adaptive encoder, (2) Beamr JPEGmini photo optimization software solutions for reducing JPEG file sizes, and (3) Beamr Silicon IP block, a hardware solution for integration into dedicated video encoding ASICs, GPUs, and application processors.
We currently license three core video and image compression products that help our customers use video and images to further their businesses in meaningful ways: (1) a suite of video compression software encoder solutions including the Beamr 4 H.264 encoder, Beamr 4X H.264 content adaptive encoder, Beamr 5 HEVC encoder and the Beamr 5X HEVC content adaptive encoder, (2) Beamr JPEGmini photo optimization software solutions for reducing JPEG file sizes, and (3) Beamr Silicon IP block, a hardware solution for integration into dedicated video encoding ASICs, GPUs, and application processors.
Selling and Marketing Expenses Our selling and marketing expenses consist primarily of personnel related costs for our sales and marketing functions, including salaries and other direct personnel-related costs. Additional expenses include marketing program costs, amortization of acquired customer relationships and trade names, intangible assets, and payment processer commissions.
Selling and Marketing Expenses Our selling and marketing expenses consist primarily of personnel related costs for our sales and marketing functions, including salaries and other direct personnel-related costs. Additional expenses include marketing program costs, amortization of acquired customer relationships and trade names and payment processer commissions.
An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, in the assessment of the emerging growth company’s internal control over financial reporting.
An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, in the assessment of the emerging growth company’s internal control over financial reporting. 71 ITEM 6.
Operating and Financial Review and Prospectus—Components of Our Results of Operations ” and elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2022 to December 31, 2022 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. 72 E.
Operating and Financial Review and Prospectus—Components of Our Results of Operations ” 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.
According to the 2022 Loan Agreement, commencing as of August 1, 2022 through December 31, 2022, SVB may, in its sole discretion in each instance, pursuant to our request, finance specific eligible account receivables of ours, as determined in the 2022 Loan Agreement, in a total amount equal to the face amount of the eligible account receivable multiplied by a rate of 80%, subject to reduction by SVB in its discretion, or the Advance, provided that the aggregate amount of all outstanding Advances shall not exceed the lesser of (i) an aggregate principal amount equal to $350,000, or the Revolving Line, or (ii) 80% of all eligible account receivables minus the sum of all outstanding principal amounts of any Advances, subject to reduction by SVB in its discretion.
According to the 2022 Loan Agreement, commencing as of August 1, 2022 through December 31, 2022, SVB may, in its sole discretion in each instance, pursuant to our request, finance specific eligible account receivables of ours, as determined in the 2022 Loan Agreement, in a total amount equal to the face amount of the eligible account receivable multiplied by a rate of 80%, subject to reduction by SVB in its discretion, or the Advance, provided that the aggregate amount of all outstanding Advances shall not exceed the lesser of (i) an aggregate principal amount equal to $0.35 million, or the Revolving Line, or (ii) 80% of all eligible account receivables minus the sum of all outstanding principal amounts of any Advances, subject to reduction by SVB in its discretion.
In connection with the audit of our consolidated financial statements as of December 31, 2022, we identified control deficiencies in our financial reporting process that constitute a material weakness for the three years then ended.
In connection with the audit of our consolidated financial statements for the years ended December 31, 2022 and 2021, we identified control deficiencies in our financial reporting process that constitute a material weakness for the three years then ended.
Due to the high cost and complexity of deploying our existing software solutions and the long sales lead times, we have a made a strategic decision to focus our resources on the development and commercialization of our next-generation product, the Beamr HW-Accelerated Content Adaptive Encoding solution, a SaaS solution that is designed, based on our own internal testing, to be up to 10x more cost efficient than our existing software-based solutions, resulting in reduced media storage, processing and delivery costs.
Due to the high cost and complexity of deploying our existing software solutions and the long sales lead times, we have a made a strategic decision to focus our resources on the development and commercialization of our next-generation product, the Beamr Cloud, a SaaS solution that is designed, based on our own internal testing, to be up to 10x more cost efficient than our existing software-based solutions, resulting in reduced media storage, processing and delivery costs.
The decrease was primarily due to a decrease in the change of fair value of convertible advanced investment, a decrease in exchange rate differences and a decrease in modification of terms relating to straight loan offset by an increase in amortization of discount and accrued interest and discount expense relating to liability to related party.
The decrease was primarily due to a decrease in the change of fair value of convertible advanced investment, a decrease in exchange rate differences and a decrease in modification of terms relating to straight loan offset by an increase in amortization of discount and accrued interest and discount expense relating to liability to controlling shareholder.
Convertible Advance Investment On August 25, 2021 and August 6, 2019, we entered into separate advance investment agreements with several current shareholders under which we raised an amount of $560,000 and $3,097,000, respectively, which was not interest bearing but was eligible for conversion into our ordinary shares based on a variable conversion price depending on the occurrence of certain liquidation events.
Convertible Advance Investment On August 25, 2021 and August 6, 2019, we entered into separate advance investment agreements with several current shareholders under which we raised an amount of $0.56 million and $3.1 million, respectively, which was not interest bearing but was eligible for conversion into our ordinary shares based on a variable conversion price depending on the occurrence of certain liquidation events.
IBI Spikes Loan On July 7, 2022, we entered into a funding agreement with IBI providing for a loan, or the IBI Loan, in the amount of NIS 3.1 million (approximately $900,000), or the IBI Loan Agreement.
IBI Spikes Loan On July 7, 2022, we entered into a funding agreement with IBI providing for a loan, or the IBI Loan, in the amount of NIS 3.1 million (approximately $0.9 million), or the IBI Loan Agreement.
At the heart of our patented optimization technology is the proprietary BQM, that is highly correlated with the human visual system. BQM is integrated into our CABR, system, which maximizes quality and remove visual redundancies resulting in a smaller file size.
At the heart of our patented optimization technology is the proprietary BQM that is highly correlated with the human visual system. BQM is integrated into our content adaptive bitrate, or CABR, system which together maximizes quality and removes visual redundancies resulting in a smaller file size.
Other Income Year Ended December 31, (U.S. dollars in thousands) 2022 2021 Other income $ - $ 129 Other income of $0.01 million for the year ended December 31, 2021, was a onetime occurrence of other income due to forgiveness of loans under paycheck protection program.
Other Income Year Ended December 31, (U.S. dollars in thousands) 2023 2022 2021 Change in fair value of convertible advanced investment $ - $ - $ 129 Other income of $0.01 million for the year ended December 31, 2021, was a onetime occurrence of other income due to forgiveness of loans under paycheck protection program.
In June 2018, we subsequently drew down a cash amount in the aggregate principal amount of $3 million, or the 2017 Loan, payable in 36 equal installments on a monthly basis commencing the following month after draw down. On July 26, 2022, we terminated the 2017 Loan Agreement. The Loan is sometimes referred to herein as a “straight loan” .
In June 2018, we subsequently drew down a cash amount in the aggregate principal amount of $3 million, or the 2017 Loan, payable in 36 equal installments on a monthly basis commencing the following month after drawdown. In June 2022, the loan was fully paid. The Loan is sometimes referred to herein as a “straight loan” .
Liquidity and Capital Resources We have financed our operations through cash generated from operations, the proceeds from private offerings, proceeds from receiving convertible advanced investments from our current shareholders and others and proceeds from our initial public offering on the Nasdaq.
Liquidity and Capital Resources We have financed our operations through cash generated from operations, proceeds received from private offerings, proceeds from convertible advanced investments received from our current shareholders, proceeds from straight loans received from bank institutions and proceeds from our initial public offering on the Nasdaq.
We allocate overhead expenses related to the services agreement and the office agreement expenses under which we receive recurring consulting and related services from our founder Sharon Carmel as Chief Executive Officer and an entity controlled by him, Sharon Carmel Management, Ltd.
We allocate overhead expenses related to the services agreement under which we receive recurring consulting and related services from our founder Sharon Carmel as Chief Executive Officer and an entity controlled by him, Sharon Carmel Management, Ltd. The allocation was done based on the management estimation to reflect the contribution to the related activity.
Completion of our Initial Public Offering On February 27, 2023, we announced the pricing of our initial public offering of 1,950,000 ordinary shares at a public offering price of $4.00 per ordinary share, for aggregate gross proceeds of $7,800,000 prior to deducting underwriting discounts and other offering expenses.
Completion of our Initial Public Offering On March 2, 2023, we closed our initial public offering of 1,950,000 ordinary shares at a public offering price of $4.00 per ordinary share, for aggregate gross proceeds of $7.8 million prior to deducting underwriting discounts and other offering expenses.
For additional information, see “Item 3.D—Risk Factors—Risks Related to Our Operations in Russia—Russia’s invasion of Ukraine and sanctions brought against Russia could disrupt our software development operations in Russia.” Components of Our Results of Operations Revenue Software Licensing Our revenues are mainly comprised of revenue from licensing the rights to use our software for a limited term (mainly for a period of one to three years) or on a perpetual basis for enterprises that incorporate our perpetual license in their own products delivered to end users and for our products sold to thousands of private consumers, as applicable to each contract, and from and provision of related maintenance and technical support services (i.e.
See “ Item 3.D Risk Factors—Risks Related to Our Operations in Israel–Political, economic and military conditions in Israel could materially and adversely affect our business. ” 61 Components of Our Results of Operations Revenue Software Licensing Our revenues are mainly comprised of revenue from licensing the rights to use our software for a limited term (mainly for a period of one to three years) or on a perpetual basis for enterprises that incorporate our perpetual license in their own products delivered to end users and for our products sold to thousands of private consumers, as applicable to each contract, and from and provision of related maintenance and technical support services (i.e.
In consideration for the grant of the IBI Loan, we are required to pay to IBI a non-refundable one-time fee of 1.5% of the IBI Loan amount and we issued a warrant to purchase 65,562 ordinary shares at an exercise price of $3.20 per share.
The IBI Loan Agreement provides for certain customary covenants and accelerates in the event of default. In consideration for the grant of the IBI Loan, we are required to pay to IBI a non-refundable one-time fee of 1.5% of the IBI Loan amount and we issued a warrant to purchase 65,562 ordinary shares at a variable exercise price.
Due to cumulative losses, we maintain a valuation allowance against our deferred tax assets. We consider all available evidence, both positive and negative, in assessing the extent to which a valuation allowance should be applied against our deferred tax assets. Realization of our deferred tax assets depends upon future earnings, the timing and amount of which are uncertain.
Due to cumulative net operating losses, we maintain a full valuation allowance against our deferred tax assets. We consider all available evidence, both positive and negative, in assessing the extent to which a valuation allowance should be applied against our deferred tax assets.
Year Ended December 31, (U.S. dollars in thousands) 2022 2021 2020 Revenues $ 2,863 $ 3,300 $ 3,176 Cost of revenues $ (98 ) $ (90 ) $ (94 ) Gross profit $ 2,765 $ 3,210 $ 3,082 Operating expenses: Research and development $ (2,063 ) $ (2,032 ) $ (2,727 ) Sales and marketing $ (905 ) $ (959 ) $ (1,371 ) General and administrative $ (828 ) $ (773 ) $ (671 ) Other income $ - $ 129 $ 20 Operating loss $ (1,031 ) $ (425 ) $ (1,667 ) Financing expenses, net $ (165 ) $ (475 ) $ (697 ) Tax on income $ (52 ) $ (52 ) $ (95 ) Net loss $ (1,248 ) $ (952 ) $ (2,459 ) Revenues, Cost of Revenues and Gross Profit The following table presents our revenue, cost of revenues and gross profit for the periods indicated: Year Ended December 31, (U.S. dollars in thousands) 2022 2021 2020 Revenues $ 2,863 $ 3,300 $ 3,176 Cost of revenues $ (98 ) $ (90 ) $ (94 ) Gross profit $ 2,765 $ 3,210 $ 3,082 66 Revenues decreased by $0.4 million, or 13%, to $2.9 million for the year ended December 31, 2022, from $3.3 million for the year ended December 31, 2021.
Year Ended December 31, (U.S. dollars in thousands) 2023 2022 2021 Revenues $ 2,909 $ 2,863 $ 3,300 Cost of revenues $ (96 ) $ (98 ) $ (90 ) Gross profit $ 2,813 $ 2,765 $ 3,210 Operating expenses: Research and development $ (1,824 ) $ (2,063 ) $ (2,032 ) Sales and marketing $ (361 ) $ (905 ) $ (959 ) General and administrative $ (1,506 ) $ (828 ) $ (773 ) Other income $ - $ - $ 129 Operating loss $ (878 ) $ (1,031 ) $ (425 ) Financing income (expenses), net $ 222 $ (165 ) $ (475 ) Tax on income $ (39 ) $ (52 ) $ (52 ) Net loss $ (695 ) $ (1,248 ) $ (952 ) 64 Revenues, Cost of Revenues and Gross Profit The following table presents our revenue, cost of revenues and gross profit for the periods indicated: Year Ended December 31, (U.S. dollars in thousands) 2023 2022 2021 Revenues $ 2,909 $ 2,863 $ 3,300 Cost of revenues $ (96 ) $ (98 ) $ (90 ) Gross profit $ 2,813 $ 2,765 $ 3,210 Revenues increased by $0.05 million or 2% to $2.9 million for the year ended December 31, 2023, from $2.86 million for the year ended December 31, 2022.
Operating Expenses Research and Development Our research and development expenses consist primarily of costs incurred for personnel-related expenses for our technical staff, including salaries and other direct personnel-related costs. Additional expenses include consulting, amortization of acquired technology intangible asset and professional fees for third-party development resources.
Operating Expenses Research and Development Our research and development expenses consist primarily of costs incurred for personnel-related expenses for our technical staff, including salaries and other direct personnel-related costs excluding costs associated with creating the internally developed software related to our cloud-based SaaS. Additional expenses include consulting, amortization of acquired technology and professional fees for third-party development resources.
We expect our selling and marketing expenses will increase on an absolute dollar basis for the foreseeable future as we continue to increase investments to support our growth. We also anticipate that selling and marketing expenses will increase as a percentage of revenue in the near and medium-term.
We expect our selling and marketing expenses will increase on an absolute dollar basis for the foreseeable future as we continue to increase investments to support our growth.
We are currently collaborating with NVIDIA, a multinational technology company and a leading developer of GPUs, with an annual revenue of $26.9 billion for the fiscal year 2022, to develop the world’s first GPU accelerated encoding solution that would allow fast and easy end-user deployment combined with superior video compression rates powered with our CABR rate control and BQM quality measure.
We collaborated with NVIDIA, a multinational technology company and a leading developer of GPUs, with an annual revenue of $60.9 billion for the fiscal year 2024, to develop the Beamr Cloud SaaS solution, the world’s first GPU accelerated encoding solution powered with our CABR, which will allow fast and easy end-user deployment combined with superior video compression rates.
For the year ended December 31, 2020, net cash used in operating activities was mainly due to a net loss of $2.4 million, which was offset by $0.6 million of depreciation and amortization, $0.1 million of share-based compensation, $0.02 million of amortization of discount relating to our loan from SVB, $0.4 million of change in the fair value of convertible advanced investments and $0.1 million of change in other working capital items as shown in the consolidated statement of cash flows of the annual financial statements.
For the year ended December 31, 2022, net cash used in operating activities was mainly due to a net loss of $1.2 million, offset by $0.2 million of share-based compensation and change in other working capital items as shown in the consolidated statements of cash flows of the annual financial statements.
The stand-alone selling price of the software licenses (either timely-based or perpetual) is estimated by management based on adjusted market assessment approach which represents management estimation of the price that a customer in the market will be willing to pay for such license on a stand-alone basis (i.e. without any PCS).
The stand-alone selling price of the software licenses (either timely-based or perpetual) is estimated by management based on adjusted market assessment approach which represents management estimation of the price that a customer in the market will be willing to pay for such license on a stand-alone basis (i.e. without any PCS). 62 Due to the fact that these services are usually involved with limited customer support, mainly based on several hours of technical support per contract, the transaction price allocated to the PCS is considered insignificant.
The decrease was primarily due to a decrease in depreciation and amortization of intangible assets. Selling and marketing expenses decreased by $0.4 million, or 30%, to $1 million for the year ended December 31, 2021, from $1.4 million in 2020.
The decrease was primarily due to a decrease in salaries and professional fees. Selling and marketing expenses decreased by $0.05 million, or 6%, to $0.9 million for the year ended December 31, 2022, from $0.95 million in 2021. The decrease was primarily due to a decrease in depreciation and amortization of intangible assets (i.e., customer relationships).
Operating Expenses Research and Development Expenses Year Ended December 31, (U.S. dollars in thousands) 2022 2021 2020 Salary and related expenses $ (1,722 ) $ (1,645 ) $ (1,963 ) Professional fees $ (123 ) $ (99 ) $ (161 ) Depreciation and amortization $ (4 ) $ (107 ) $ (415 ) Travel and overhead expenses $ (214 ) $ (181 ) $ (188 ) Total research and development expenses $ (2,063 ) $ (2,032 ) $ (2,727 ) Research and development expenses did not change materially for the year ended December 31, 2022, compared to 2021.
Operating Expenses Research and Development Expenses Year Ended December 31, (U.S. dollars in thousands) 2023 2022 2021 Salary and related expenses $ (1,411 ) $ (1,722 ) $ (1,645 ) Professional fees $ (229 ) $ (123 ) $ (99 ) Depreciation and amortization $ (4 ) $ (4 ) $ (107 ) Travel and overhead expenses $ (180 ) $ (214 ) $ (181 ) Total research and development expenses $ (1,824 ) $ (2,063 ) $ (2,032 ) Research and development expenses decreased by $0.2 million, or 12%, to $1.8 million for the year ended December 31, 2023, from $2 million for the year ended December 31, 2022.
Selling and Marketing Expenses Year Ended December 31, (U.S. dollars in thousands) 2022 2021 2020 Salary and related expenses $ (564 ) $ (560 ) $ (777 ) Professional fees and platform commissions $ (236 ) $ (241 ) $ (207 ) Depreciation and amortization $ (22 ) $ (81 ) $ (255 ) Marketing conferences and trade shows $ (3 ) $ (1 ) $ (17 ) Travel and overhead expenses $ (80 ) $ (76 ) $ (115 ) Total selling and marketing expenses $ (905 ) $ (959 ) $ (1,371 ) Selling and marketing expenses decreased by $0.05 million, or 6%, to $0.9 million for the year ended December 31, 2022, from $0.95 million in 2021.
There was a slight increase in salaries, professional fees and overhead expenses offset by a decrease in depreciation and amortization expenses related mainly to technology. 65 Selling and Marketing Expenses Year Ended December 31, (U.S. dollars in thousands) 2023 2022 2021 Salary and related expenses $ (176 ) $ (564 ) $ (560 ) Professional fees and platform commissions $ (93 ) $ (236 ) $ (241 ) Depreciation and amortization $ (21 ) $ (22 ) $ (81 ) Marketing conferences and trade shows $ (13 ) $ (3 ) $ (1 ) Travel and overhead expenses $ (58 ) $ (80 ) $ (76 ) Total selling and marketing expenses $ (361 ) $ (905 ) $ (959 ) Selling and marketing expenses decreased by $0.54 million, or 60% to $0.36 million for the year ended December 31, 2023, from $0.9 million in 2022.
Except for additional personnel costs, the cost of systems and the costs of our third-party service providers, we do not expect to incur any material costs related to our remediation plan. 75 The process of designing and implementing an effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligation.
The process of designing and implementing an effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligation.
We believe that our existing capital resources and cash flows from operations together with funds received from the initial public offering will be adequate to satisfy our expected liquidity requirements through the next twelve months. Without derogating from the foregoing estimate regarding our existing capital resources and cash flows from operations, we may decide to raise additional funds in 2023.
We believe that our existing capital resources (including gross proceeds of $13.8 million raised from the public offering completed in February 2024) and cash flows from operations together with funds received from the initial public offering will be adequate to satisfy our expected liquidity requirements through the next twelve months.
Taxes on income decreased by $0.04 million, or 45%, to $0.05 million for the year ended December 31, 2021, from $0.1 million in 2020. The decrease was primarily due to tax provision adjustments related to amortization of intangible assets.
Taxes on Income Year Ended December 31, (U.S. dollars in thousands) 2023 2022 2021 Taxes on income $ (39 ) (52 ) $ (52 ) Taxes on income decreased by $0.01 million, or 26% to 0.04 million for the year ended December 31, 2023, from $0.05 million in 2022. The decrease was primarily due to tax provision adjustments.
With our Emmy®-winning patented technology and award-winning services, we help our customers realize the potential of video encoding and media optimization to address business-critical challenges.
Overview We are a leading innovator of video encoding, transcoding and optimization solutions that enable high quality, performance, and unmatched bitrate efficiency for video and images. With our Emmy ® -winning patented technology and award-winning services, we help our customers realize the potential of video encoding and media optimization to address business-critical challenges.
Financing Expenses, Net Year Ended December 31, (U.S. dollars in thousands) 2022 2021 2020 Change in fair value of convertible advanced investment $ (71 ) $ (288 ) $ (436 ) Amortization of discount and accrued interest on straight loan $ (103 ) $ (59 ) $ (120 ) Modification of terms relating to straight loan $ - $ (90 ) $ - Discount relating to liability to related party (40 ) - - Exchange rate differences and other finance expenses $ (49 ) $ (38 ) $ (141 ) Total financing expenses, net $ (165 ) $ (475 ) $ (697 ) Financing expenses decreased by $0.3 million, or 65%, to $0.17 million for the year ended December 31, 2022, from $0.47 million in 2021.
Financing Income (Expenses), Net Year Ended December 31, (U.S. dollars in thousands) 2023 2022 2021 Change in fair value of convertible advanced investment $ 269 $ (70 ) $ (288 ) Change in fair value of derivative warrant liability $ 66 - - Amortization of discount and accrued interest on straight loan received from commercial banks $ (157 ) $ (102 ) $ (59 ) Modification of terms relating to straight loan $ - $ - $ (90 ) Change in estimation of maturity date of liability to controlling shareholder $ (12 ) (40 ) $ - Amortization of discount relating to liability to controlling shareholder $ (48 ) $ - $ - Interest on bank deposits $ 97 - - Exchange rate differences and other finance expenses $ 7 $ 47 $ (38 ) Total financing expenses, net $ 222 $ (165 ) $ (475 ) Financing expenses, net decreased by $0.4 million, or 230% to $(0.2) million for the year ended December 31, 2023, from $0.17 million in 2022.
General and Administrative Expenses Our general and administrative expenses consist primarily of personnel-related costs for our executive, finance, human resources, professional fees, information technology and legal functions, including salaries and other direct personnel-related costs.
We also anticipate that selling and marketing expenses will increase as a percentage of revenue in the near and medium-term. 63 General and Administrative Expenses Our general and administrative expenses consist primarily of personnel-related costs for our executive, finance, human resources, professional fees, information technology and legal functions, including salaries and other direct personnel-related costs.
Internal Control Over Financial Reporting Prior to our initial public offering, we were a private company with limited accounting and financial reporting personnel and other resources to address our internal controls and procedures.
See Note 2 to the audited consolidated financial statements for the year ended December 31, 2023 for additional information regarding these and our other significant accounting policies. Internal Control Over Financial Reporting Prior to our initial public offering, we were a private company with limited accounting and financial reporting personnel and other resources to address our internal controls and procedures.
Our BQM quality measure software will execute directly on NVIDIA GPU cores and interact with the NVIDIA video accelerator encoder known as NVENC. NVIDIA NVENC is a high-quality, high-performance hardware video encoder that is built into most NVIDIA GPUs.
Our CABR software executes directly on NVIDIA GPU cores and interact swith the NVIDIA video accelerator encoder known as NVENC. NVIDIA NVENC is a high-quality, high-performance hardware video encoder that is built into most NVIDIA GPUs. NVENC offloads video encoding to hardware, and provides extreme performance for applications such as live video encoding, cloud gaming and cloud storage.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, (U.S. dollars in thousands) 2022 2021 2020 Net cash provided by (used in) operating activities $ (645 ) $ 569 $ (1,020 ) Net cash provided by (used in) investing activities $ (2 ) $ (4 ) $ 1 Net cash used in financing activities $ 312 $ (141 ) $ (418 ) Change in cash, cash equivalents $ (335 ) $ 424 $ (1,437 ) Cash, cash equivalents at beginning of period $ 1,028 $ 604 $ 2,041 Cash, cash equivalents at end of period $ 692 $ 1,028 $ 604 71 Net cash used in operating activities For the year ended December 31, 2022, net cash used by operating activities was mainly due to a net loss of $1.2 million, offset by $0.2 million of share-based compensation and change in other working capital items as shown in the consolidated statements of cash flows of the annual financial statements.
On February 13, 2024, the over-allotment option for 257,100 ordinary shares was fully exercised by the underwriter for additional gross proceeds of approximately $1.8 million prior to deducting underwriting discounts and other offering expenses. 69 Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, (U.S. dollars in thousands) 2023 2022 2021 Net cash provided by (used in) operating activities $ (659 ) $ (645 ) $ 569 Net cash used in investing activities $ (193 ) $ (2 ) $ (4 ) Net cash provided by (used in) financing activities $ 6,275 $ 312 $ (141 ) Change in cash, cash equivalents $ 5,423 $ (335 ) $ 424 Cash, cash equivalents at beginning of period $ 693 $ 1,028 $ 604 Cash, cash equivalents at end of period $ 6,116 $ 693 $ 1,028 Net cash used in operating activities For the year ended December 31, 2023, net cash used in operating activities was mainly due to a net loss of $0.7 million, change in the fair value of convertible advanced instruments of $0.27 million and change in other working capital items as shown in the consolidated statements of cash flows of the annual financial statements, offset by $0.36 million of share-based compensation, change in the fair value of derivative warrant liability of $0.1 million.
Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as non-deductible expenses, such as share-based compensation, and changes in our valuation allowance. A. Operating Results The table below provides our results of operations for the years ended December 31, 2022, 2021, and 2020.
Realization of our deferred tax assets depends upon future earnings, the timing and amount of which are uncertain. Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as non-deductible expenses, such as share-based compensation, and changes in our valuation allowance. A.
Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Item 3.D.—Risk Factors” and elsewhere in this Annual Report in Form 20-F. 61 Overview We are a leading innovator of video encoding, transcoding and optimization solutions that enable high quality, performance, and unmatched bitrate efficiency for video and images.
Our actual results could differ materially from those discussed in these forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Item 3.D.—Risk Factors” and elsewhere in this Annual Report in Form 20-F.
Recent Accounting Pronouncements Certain recently issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the consolidated financial statements included in “Item 18. Financial Statements” of this Annual Report. JOBS Act Under the JOBS Act, an “emerging growth company” can take advantage of an extended transition period for complying with new or revised accounting standards.
JOBS Act Under the JOBS Act, an “emerging growth company” can take advantage of an extended transition period for complying with new or revised accounting standards.
See “Item 3.D—Risk Factors—Risks Related to Ownership of our Ordinary Shares— We have identified a material weakness in our internal control over financial reporting, and we may not be able to successfully implement remedial measures.” As a company with less than US $1.235 billion in revenue for our last fiscal year, we are an “emerging growth company” pursuant to the JOBS Act.
As a result, our shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our ordinary shares.” As a company with less than US $1.235 billion in revenue for our last fiscal year, we are an “emerging growth company” pursuant to the JOBS Act.
The decrease was primarily due to (i) a reduction in salary and expenses related to a change in priority of deployment of our resources, (ii) a decrease in depreciation and amortization of intangible assets, and (iii) our focus of our R&D on our new SaaS solution, the Beamr HW-Accelerated Content Adaptive Encoding solution. 67 General and Administrative Year Ended December 31, (U.S. dollars in thousands) 2022 2021 2020 Salary and related expenses $ (346 ) $ (297 ) $ (352 ) Professional fees and consulting $ (504 ) $ (509 ) $ (360 ) Overhead allocated $ 153 $ 140 $ 220 Travel, office and other expenses $ (131 ) $ (107 ) $ (179 ) Total general and administrative expenses $ (828 ) $ (773 ) $ (671 ) General and administrative expenses increased by $0.05 million, or 7%, to $0.83 million for the year ended December 31, 2022, from $0.78 million in 2021.
General and Administrative Year Ended December 31, (U.S. dollars in thousands) 2023 2022 2021 Salary and related expenses $ (377 ) $ (346 ) $ (297 ) Professional fees and consulting $ (1,069 ) $ (504 ) $ (509 ) Overhead allocated $ 137 $ 153 $ 140 Travel, office and other expenses $ (197 ) $ (131 ) $ (107 ) Total general and administrative expenses $ (1,506 ) $ (828 ) $ (773 ) General and administrative expenses increased by $0.7 million, or 82% to $1.5 million for the year ended December 31, 2023, from $0.83 million in 2022.
The decrease was primarily due to a decrease in the change of fair value of convertible advanced investment, a decrease in exchange rate differences, a decrease in amortization of discount and accrued interest on our loan from SVB and offset by one-time expenses incurred as result of modification of terms relating to straight loan. 68 Taxes on Income Year Ended December 31, (U.S. dollars in thousands) 2022 2021 2020 Taxes on income $ (52 ) (52 ) $ (95 ) Taxes on income expenses did not change for the year ended December 31, 2022, compared to 2021.
The decrease was primarily due to income from the change in fair value of convertible advanced investment, decrease in amortization of discount and accrued interest and interest on bank deposits, offset by the change in fair value of derivative warrant liability and change in exchange rate differences. 66 Financing expenses, net decreased by $0.3 million, or 65%, to $0.17 million for the year ended December 31, 2022, from $0.47 million in 2021.
Upon termination of the 2022 Loan Agreement, we have no commitment to issue to SVB the aforesaid warrant. As of March 13, 2023, we held approximately $10,000 at SVB and do not have any additional deposits or securities in accounts at SVB.
Upon termination of the 2022 Loan Agreement, we have no commitment to issue to SVB the aforesaid warrant.
Financing Income (Expenses), Net Financing income (expenses), net consists of amortization of discounts and interest expense on our indebtedness, modification of terms relating to our loan with Silicon Valley Bank, or SVB, and changes in the fair value of warrants and convertible advanced investments. Financial expenses, net also includes foreign exchange gains and losses.
Other Income In 2021, other income consisted primarily of loans forgiveness as it were utilized for qualifying expenses under the Coronavirus Aid, Relief, and Economic Security Act Financing Income (Expenses), Net Financing income (expenses), net consists of amortization of discounts and interest expense on our indebtedness, changes in the fair value of certain warrants and convertible advanced investments, interest income on bank deposits and foreign exchange gains and losses.
Investing Activities For the years ended December 31, 2022, 2021 and 2020, the change in net cash used in investing activities was immaterial.
Investing Activities For the year ended December 31, 2023, net cash used in investing activities was mainly due to capitalization of internal-use software associated with creating the internally developed software related to our cloud-based SaaS solution. For the years ended December 31, 2022 and 2021, the change in net cash used in investing activities was immaterial.
Revenues increased by $0.1 million, or 4%, to $3.3 million for the year ended December 31, 2021, from $3.2 million for the year ended December 31, 2020.
The increase was primarily due to binding transactions with new customers versus other transactions that were terminated. Revenues decreased by $0.4 million, or 13%, to $2.9 million for the year ended December 31, 2022, from $3.3 million for the year ended December 31, 2021.
The increase was primarily due to salaries and related expenses. General and administrative expenses increased by $0.1 million, or 15%, to $0.8 million for the year ended December 31, 2021, from $0.7 million in 2020. The increase was primarily due to IPO related service providers.
The increase was primarily due to professional fees related to legal, accounting, investor relations as well as insurance coverage resulting from the completion of our initial public offering in March 2023. General and administrative expenses increased by $0.05 million, or 7%, to $0.83 million for the year ended December 31, 2022, from $0.78 million in 2021.
Our current product line is mainly geared to the high end, high quality media customers and we count among our enterprise customers Netflix, ViacomCBS, Snapfish, Wowza, Microsoft, VMware, Genesys, Deluxe, Vimeo, Encoding.com, Citrix, Walmart, Photobox, Antix, Dalet, and other leading media companies using video and photo solutions.
We have managed to complete certain features, such as codec modernization and resize transformations, and we plan to offer additional capabilities, such as AI-specific workflows that are optimized for ML and AI, in an effort to position ourselves to be at the forefront of innovation in the video processing landscape for different AI purposes. 60 Until recently, our current product line was mainly geared to the high end, high quality media customers and we count among our enterprise customers Netflix, Snapfish, ViacomCBS, VMware, Genesys, Deluxe, Citrix, Walmart, Photobox, Antix, Dalet, TAG, and other leading media companies using video and photo solutions.
Net cash used in financing activities of $0.4 million for the year ended December 31, 2020 was related to repayment of our loan from SVB of $0.5 million and offset by proceeds received from a paycheck protection program note of $0.07 million and proceeds received from exercise of share options into shares of $0.01 million. C.
Financing Activities Net cash provided by financing activities of $6.3 million for the year ended December 31, 2023 was mainly related to proceeds received upon completion of initial public offering of $6.7 million offset by $0.5 million repayments of principal relating to loans from received from commercial bank and controlling shareholder.
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Our actual results could differ materially from those discussed in these forward looking statements.
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In February 2024, we launched our Beamr Cloud Video SaaS solution, a cloud based HW-Accelerated CABR solution, which we expect will allow end-users to enjoy significant end-user storage and networking cost savings. Our Cloud Video SaaS is currently operating over and integrated with AWS with plans to extend our services to other cloud platforms, and is powered by NVIDIA GPUs.
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We currently derive a significant portion of our revenue from a limited number of our customers. For the years ended December 31, 2022 and December 31, 2021, our top ten customers in the aggregate accounted for approximately 61% and 62% of our revenues.
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NVIDIA GPUs with NVENC are available on all major cloud platforms. We plan to further collaborate with NVIDIA on further development of our the Beamr Cloud SaaS solution. The first version of the integrated video optimization engine was ready at the end of the first quarter of 2023.
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NVENC offloads video encoding to hardware, and provides extreme performance for applications such as live video encoding, cloud gaming and cloud storage. NVIDIA GPUs with NVENC are available on all major cloud platforms.
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Following this, we launched the first beta version of the cloud based SaaS platform and began testing it with beta customers in June 2023. After the initial release, we launched the second and third beta versions of the cloud based SaaS platform in September 2023 and October 2023, respectively, as we build up to the commercial launch of the platform.
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We are in the advanced stages of development and expect to beta release the Beamr HW-Accelerated Content Adaptive Encoding solution during the third quarter of 2023 and expect that following release, end-users of the solution will enjoy significant end-user storage and networking cost savings, potentially reducing their return on investment for storage optimization to approximately four months, compared to approximately two years with our existing software encoder solutions. 62 Impact of COVID-19 For additional information, see “Item 3.D Risk Factors—Risks Related to Our Business and Industry–Any resurgence of the COVID-19 pandemic could adversely affect our business, financial condition and results of operations.” Impact of Invasion of Ukraine In addition to our U.S. and Israel operations, we have operations in Russia through our wholly owned subsidiary, Beamr Imaging RU.
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Following that, we commercially launched the Beamr Cloud SaaS solution in February 2024 and expect that following release, end-users of the solution will enjoy significant end-user storage and networking cost savings.
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Specifically, we undertake some of our software development and design, quality assurance, and support in Russia using personnel located there. While a majority of our developers are located in Russia, our research and development leadership is all located in Israel. On February 24, 2022, Russia invaded Ukraine.
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Using the Beamr Cloud SaaS solution will potentially reduce their return on investment for storage optimization to approximately four months, compared to approximately two years with our existing software encoder solutions. Our Cloud Video SaaS is currently operating over and integrated with AWS with plans to extend our services to other cloud platforms, and is powered by NVIDIA GPUs.
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The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effect on the region. Following Russia’s actions, various countries, including the U.S., Canada, the United Kingdom, Germany and France, as well as the European Union, issued broad-ranging economic sanctions against Russia.
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We have managed to complete certain features, such as codec modernization and resize transformations, and we plan to offer additional capabilities, such as AI-specific workflows that are optimized for ML and AI, in an effort to position ourselves to be at the forefront of innovation in the video processing landscape for different AI purposes.
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Such sanctions included, among other things, a prohibition on doing business with certain Russian companies, officials and citizens; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT) electronic banking network that connects banks globally; and restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions.
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Impact of the War in Israel On October 7, 2023, Hamas terrorists invaded southern Israel and launched thousands of rockets in a widespread terrorist attack on Israel. On the same day, the Israeli government declared that the country was at war and the Israeli military began to call-up reservists for active duty.
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In response to sanctions, the Russian Central Bank raised its interest rates and banned sales of local securities by foreigners. Russia may take additional counter measures or retaliatory actions in the future. The continuation of these hostilities may result in additional economic and other sanctions against Russia.
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Our operations have not been adversely affected by this situation, and we have not experienced disruptions to our business operations. None of our full-time or part-time employees in Israel were called up for reserve service; however, one of our part-time employees in Israel volunteered for military service, but has since returned to employment.
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The potential impact of the conflict and any resulting bans, sanctions and boycotts on companies doing business in Russia is currently uncertain due to the fluid nature of the conflict as it is unfolding and has the potential to result in broadened military actions. The duration of ongoing hostilities and such sanctions and related events cannot be predicted.
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As such, our product and business development activities remain on track. 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.
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Uncertainty as to future relations between Russia and the U.S. and other countries in the west, or between Russia and other eastern European countries, may have a negative impact on our operations.
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If the war extends for a long period of time or expands to other fronts, such as Lebanon, Syria and the West Bank, our operations may be adversely affected. We are closely monitoring the developments of this war.
Removed
We do not operate in any sectors of the Russian economy that have been targeted by U.S. or EU sanctions and have no reason to believe that we would be targeted by any sanctions in the future.
Added
Operating Results The table below provides our results of operations for the years ended December 31, 2023, 2022, and 2021.

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Item 6. [Reserved]

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

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In the event of a merger, consolidation or sale of all, or substantially all, of our assets or shares, any and all outstanding, unexercised options granted under the 2010 Plan, whether vested or unvested shall be cancelled for no consideration, unless determined otherwise by our board of directors in its sole and absolute discretion to cause or effect any actions such as (i) the assumption or exchange of the options for options or shares of a successor company; (ii) the exchange of options for monetary compensation; or (iii) the determination that all unvested options and unexercised vested options shall expire on the date of such transactions. 2015 Share Incentive Plan The 2015 Share Incentive Plan, or the 2015 Plan, was adopted by our board of directors on January 1, 2015.
In the event of a merger, consolidation or sale of all, or substantially all, of our assets or shares, any and all outstanding, unexercised options granted under the 2010 Plan, whether vested or unvested shall be cancelled for no consideration, unless determined otherwise by our board of directors in its sole and absolute discretion to cause or effect any actions such as (i) the assumption or exchange of the options for options or shares of a successor company; (ii) the exchange of options for monetary compensation; or (iii) the determination that all unvested options and unexercised vested options shall expire on the date of such transactions. 91 2015 Share Incentive Plan The 2015 Share Incentive Plan, or the 2015 Plan, was adopted by our board of directors on January 1, 2015.
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 Stock Market 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. 82 The regulations promulgated under the Companies Law define an external director with requisite professional qualifications as a director who satisfies one of the following requirements: (1) the director holds an academic degree in either economics, business administration, accounting, law or public administration, (2) the director either holds an academic degree in any other field or has completed another form of higher education in the company’s primary field of business or in an area which is relevant to his or her office as an external director in the company, or (3) the director has at least five years of experience serving in any one of the following, or at least five years of cumulative experience serving in two or more of the following capacities: (a) a senior business management position in a company with a substantial scope of business, (b) a senior position in the company’s primary field of business or (c) a senior position in public administration.
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 Stock Market 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. 78 The regulations promulgated under the Companies Law define an external director with requisite professional qualifications as a director who satisfies one of the following requirements: (1) the director holds an academic degree in either economics, business administration, accounting, law or public administration, (2) the director either holds an academic degree in any other field or has completed another form of higher education in the company’s primary field of business or in an area which is relevant to his or her office as an external director in the company, or (3) the director has at least five years of experience serving in any one of the following, or at least five years of cumulative experience serving in two or more of the following capacities: (a) a senior business management position in a company with a substantial scope of business, (b) a senior position in the company’s primary field of business or (c) a senior position in public administration.
Our board of directors intends to adopt an audit committee charter to be effective upon the listing of our ordinary shares on the Nasdaq Capital Market setting forth, among others, the responsibilities of the audit committee consistent with the rules of the SEC and Nasdaq Listing Rules (in addition to the requirements for such committee under the Companies Law), including, among others, the following: ● oversight of our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the board of directors in accordance with Israeli law; ● recommending the engagement or termination of the person filling the office of our internal auditor, reviewing the services provided by our internal auditor and reviewing effectiveness of our system of internal control over financial reporting; ● recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors; and ● reviewing and monitoring, if applicable, legal matters with significant impact, finding of regulatory authorities’ findings, receive reports regarding irregularities and legal compliance, acting according to “whistleblower policy” and recommend to our board of directors if so required. 85 Nasdaq Stock Market Requirements for Audit Committee Under the Nasdaq Stock Market rules, we are required to maintain an audit committee consisting of at least three members, all of whom are independent and are financially literate and one of whom has accounting or related financial management expertise.
Our board of directors intends to adopt an audit committee charter to be effective upon the listing of our ordinary shares on the Nasdaq Capital Market setting forth, among others, the responsibilities of the audit committee consistent with the rules of the SEC and Nasdaq Listing Rules (in addition to the requirements for such committee under the Companies Law), including, among others, the following: ● oversight of our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the board of directors in accordance with Israeli law; ● recommending the engagement or termination of the person filling the office of our internal auditor, reviewing the services provided by our internal auditor and reviewing effectiveness of our system of internal control over financial reporting; ● recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors; and ● reviewing and monitoring, if applicable, legal matters with significant impact, finding of regulatory authorities’ findings, receive reports regarding irregularities and legal compliance, acting according to “whistleblower policy” and recommend to our board of directors if so required. 81 Nasdaq Stock Market Requirements for Audit Committee Under the Nasdaq Stock Market rules, we are required to maintain an audit committee consisting of at least three members, all of whom are independent and are financially literate and one of whom has accounting or related financial management expertise.
Our non-employee service providers and controlling shareholders may only be granted options under section 3(i) of the Ordinance, which does not provide for similar tax benefits. 96 Grant . All awards granted pursuant to the 2015 Plan are evidenced by an award agreement, in a form approved, from time to time, by the administrator in its sole discretion.
Our non-employee service providers and controlling shareholders may only be granted options under section 3(i) of the Ordinance, which does not provide for similar tax benefits. Grant . All awards granted pursuant to the 2015 Plan are evidenced by an award agreement, in a form approved, from time to time, by the administrator in its sole discretion.
The compensation committee will be responsible for: (1) recommending the compensation policy to a company’s board of directors for its approval (and subsequent approval by the shareholders); and (2) duties related to the compensation policy and to the compensation of a company’s office holders, including: ● 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. 87 Our compensation policy will be designed to promote our long-term goals, work plan and policy, retain, motivate and incentivize our directors and executive officers, while considering the risks that our activities involve, our size, the nature and scope of our activities and the contribution of an officer to the achievement of our goals and maximization of profits, and align the interests of our directors and executive officers with our long-term performance.
The compensation committee will be responsible for: (1) recommending the compensation policy to a company’s board of directors for its approval (and subsequent approval by the shareholders); and (2) duties related to the compensation policy and to the compensation of a company’s office holders, including: ● 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. 83 Our compensation policy will be designed to promote our long-term goals, work plan and policy, retain, motivate and incentivize our directors and executive officers, while considering the risks that our activities involve, our size, the nature and scope of our activities and the contribution of an officer to the achievement of our goals and maximization of profits, and align the interests of our directors and executive officers with our long-term performance.
However, if the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company’s stated compensation policy, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provide detailed reasons for their decision. 93 Chief executive officer.
However, if the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company’s stated compensation policy, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provide detailed reasons for their decision. Chief executive officer.
In the case of termination of the grantee’s employee, other than for cause, any option that is vested prior to the date of termination may be exercised within such period of time ending on the earlier of 90 days following the termination date, or the option’s expiration date. 95 Transferability .
In the case of termination of the grantee’s employee, other than for cause, any option that is vested prior to the date of termination may be exercised within such period of time ending on the earlier of 90 days following the termination date, or the option’s expiration date. Transferability .
Such determination of a company’s shareholders requires either: (1) the approval of at least a majority of the shares of those shareholders present and voting on the matter (other than controlling shareholders and those having a personal interest in the determination) (shares held by abstaining shareholders shall not be considered); or (2) that the total number of shares opposing such determination does not exceed 2% of the total voting power in the company. 80 The board of directors may, subject to the provisions of the Companies Law, delegate any or all of its powers to committees of the board, and it may, from time to time, revoke such delegation or alter the composition of any such committees, subject to certain limitations.
Such determination of a company’s shareholders requires either: (1) the approval of at least a majority of the shares of those shareholders present and voting on the matter (other than controlling shareholders and those having a personal interest in the determination) (shares held by abstaining shareholders shall not be considered); or (2) that the total number of shares opposing such determination does not exceed 2% of the total voting power in the company. 76 The board of directors may, subject to the provisions of the Companies Law, delegate any or all of its powers to committees of the board, and it may, from time to time, revoke such delegation or alter the composition of any such committees, subject to certain limitations.
If there is no controlling shareholder or any shareholder holding 25% or more of voting rights in the company, a person may not be appointed as an external director if the person has any affiliation to the chairman of the board of directors, the chief executive officer (referred to in the Companies Law as a general manager), any shareholder holding 5% or more of the company’s shares or voting rights or the senior financial officer as of the date of the person’s appointment. 81 The term “controlling shareholder” means a shareholder with the ability to direct the activities of the company, other than by virtue of being an office holder.
If there is no controlling shareholder or any shareholder holding 25% or more of voting rights in the company, a person may not be appointed as an external director if the person has any affiliation to the chairman of the board of directors, the chief executive officer (referred to in the Companies Law as a general manager), any shareholder holding 5% or more of the company’s shares or voting rights or the senior financial officer as of the date of the person’s appointment. 77 The term “controlling shareholder” means a shareholder with the ability to direct the activities of the company, other than by virtue of being an office holder.
If a majority of the board of directors has a personal interest, then shareholder approval is generally also required. 92 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 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.
Our compensation policy will also provide for compensation to the members of our board of directors either: (i) in accordance with the amounts provided in the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director) of 2000, as amended by the Companies Regulations (Relief for Public Companies Traded in Stock Exchange Outside of Israel) of 2000, as such regulations may be amended from time to time; or (ii) in accordance with the amounts determined in our compensation policy. 88 Internal Auditor Under the Companies Law, the board of directors of an Israeli public company must appoint an internal auditor nominated by the audit committee.
Our compensation policy will also provide for compensation to the members of our board of directors either: (i) in accordance with the amounts provided in the Companies Regulations (Rules Regarding the Compensation and Expenses of an External Director) of 2000, as amended by the Companies Regulations (Relief for Public Companies Traded in Stock Exchange Outside of Israel) of 2000, as such regulations may be amended from time to time; or (ii) in accordance with the amounts determined in our compensation policy. 84 Internal Auditor Under the Companies Law, the board of directors of an Israeli public company must appoint an internal auditor nominated by the audit committee.
Notwithstanding any of the foregoing, if a grantee’s employment or services with us or any of our affiliates is terminated for “cause” (as defined in the 2015 Plan), all outstanding awards held by such grantee (whether vested or unvested) will terminate on the date of such termination and the shares covered by such awards shall again be available for issuance under the 2015 Plan.
Notwithstanding any of the foregoing, if a grantee’s employment or services with us or any of our affiliates is terminated for “cause” (as defined in the 2015 Plan), all outstanding awards held by such grantee (whether vested or unvested) will terminate on the date of such termination and the shares covered by such awards shall again be available for issuance under the 2015 Plan. 93 Transactions .
Under the Companies Law, our audit committee is responsible for: (i) 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; (ii) 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) and establishing the approval process for certain transactions with a controlling shareholder or in which a controlling shareholder has a personal interest (see “Item 6.C Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli Law”); (iii) 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; (iv) examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; (v) 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; (vi) establishing procedures for the handling of employees’ complaints as to deficiencies in the management of our business and the protection to be provided to such employees; and (vii) 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.
Our audit committee is comprised of Lluis Pedragosa, Yair Shoham and Osnat Michaeli. 80 Under the Companies Law, our audit committee is responsible for: (i) 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; (ii) 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) and establishing the approval process for certain transactions with a controlling shareholder or in which a controlling shareholder has a personal interest (see “Item 6.C Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli Law”); (iii) 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; (iv) examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; (v) 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; (vi) establishing procedures for the handling of employees’ complaints as to deficiencies in the management of our business and the protection to be provided to such employees; and (vii) 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.
These agreements also contain customary provisions regarding non-competition, non-solicitation, confidentiality of information and assignment of inventions. However, the enforceability of the non-competition provisions may be limited under applicable law. 94 D. Employees. See “Item 4.B. Business Overview—Employees.” E. Share Ownership. See “Item 7.A. Major Shareholders” below.
These agreements also contain customary provisions regarding non-competition, non-solicitation, confidentiality of information and assignment of inventions. However, the enforceability of the non-competition provisions may be limited under applicable law. D. Employees. See “Item 4.B. Business Overview—Employees.” E. Share Ownership. See “Item 7.A.
Share Option Plans 2010 Option Plan In December 22, 2010, our board of directors adopted our 2010 Option Plan, or the 2010 Plan. We are no longer granting options under the 2010 Plan and currently grant options under the 2015 Plan (as defined below).
Major Shareholders” below. 90 Share Option Plans 2010 Option Plan In December 22, 2010, our board of directors adopted our 2010 Option Plan, or the 2010 Plan. We are no longer granting options under the 2010 Plan and currently grant options under the 2015 Plan (as defined below).
There are currently 142,760 ordinary shares resulting from the exercise of certain options granted under the 2010 Plan which are held in trust in favor of the employees who exercised such options. We maintain the 2010 Plan in order to allow our employees to enjoy certain tax benefits under Israeli tax law.
There are currently 20,160 ordinary shares resulting from the exercise of certain options granted under the 2010 Plan which are held in trust in favor of the employees who exercised such options. We maintain the 2010 Plan in order to allow our employees to enjoy certain tax benefits under Israeli tax law.
DIVERSITY OF THE BOARD OF DIRECTORS Board Diversity Matrix (As of April 15, 2023) Country of Principal Executive Offices Israel Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 Part I: Gender Identity Female Male Non- Binary Did Not Disclose Gender Directors 0 3 0 2 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 2 External Directors Under the Companies Law, companies incorporated under the laws of the State of Israel that are publicly traded, including Israeli companies with shares listed on the Nasdaq, are required to appoint at least two external directors who meet the qualification requirements set forth in the Companies Law.
DIVERSITY OF THE BOARD OF DIRECTORS Board Diversity Matrix (As of March 1, 2024) Country of Principal Executive Offices Israel Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 Part I: Gender Identity Female Male Non- Binary Did Not Disclose Gender Directors 1 4 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 External Directors Under the Companies Law, companies incorporated under the laws of the State of Israel that are publicly traded, including Israeli companies with shares listed on the Nasdaq, are required to appoint at least two external directors who meet the qualification requirements set forth in the Companies Law.
Unless otherwise determined by the administrator and stated in the award agreement, and subject to the conditions of the 2015 Plan, awards for new employees vest and become exercisable under the following schedule: 25% of the shares covered by the award, on the first anniversary of the vesting commencement date determined by the administrator (and in the absence of such determination, the date on which such award was granted), and 6.25% of the shares covered by the award at the end of each subsequent three-month period thereafter over the course of the following three years; provided that the grantee remains continuously as an employee or provides services to us throughout such vesting dates.
Unless otherwise determined by the administrator and stated in the award agreement, and subject to the conditions of the 2015 Plan, awards for new employees vest and become exercisable under the following schedule: 25% of the shares covered by the award, on the first anniversary of the vesting commencement date determined by the administrator (and in the absence of such determination, the date on which such award was granted), and 6.25% of the shares covered by the award at the end of each subsequent three-month period thereafter over the course of the following three years; provided that the grantee remains continuously as an employee or provides services to us throughout such vesting dates. 92 Each award granted under the 2015 Plan will expire ten years from the date of the grant thereof, unless such shorter term of expiration is otherwise designated by the administrator.
After such three-month period or expiration of the term of such awards, all such unexercised awards will terminate and the shares covered by such awards shall again be available for issuance under the 2015 Plan. 97 In the event of termination of a grantee’s employment or service with us or any of our affiliates due to such grantee’s death or permanent disability all vested and exercisable awards held by such grantee as of the date of termination may be exercised by the grantee or the grantee’s legal guardian, estate, or by a person who acquired the right to exercise the award by bequest or inheritance, as applicable, within one year after such date of termination, unless otherwise provided by the administrator and in the event of termination due to such grantee’s retirement, within three months of such termination.
In the event of termination of a grantee’s employment or service with us or any of our affiliates due to such grantee’s death or permanent disability all vested and exercisable awards held by such grantee as of the date of termination may be exercised by the grantee or the grantee’s legal guardian, estate, or by a person who acquired the right to exercise the award by bequest or inheritance, as applicable, within one year after such date of termination, unless otherwise provided by the administrator and in the event of termination due to such grantee’s retirement, within three months of such termination.
The audit committee may not include the chairman of the board; a controlling shareholder of the company or a relative of a controlling shareholder; a director employed by or providing services on a regular basis to the company, to a controlling shareholder or to an entity controlled by a controlling shareholder; or a director who derives most of his or her income from a controlling shareholder. 84 Our audit committee is comprised of Lluis Pedragosa, Yair Shoham and Osnat Michaeli.
The audit committee may not include the chairman of the board; a controlling shareholder of the company or a relative of a controlling shareholder; a director employed by or providing services on a regular basis to the company, to a controlling shareholder or to an entity controlled by a controlling shareholder; or a director who derives most of his or her income from a controlling shareholder.
Of the 543,120 outstanding options as of April 15, 2023 under the 2010 Plan, all options were fully vested. Administration . Our board of directors, a duly authorized committee of our board of directors, or the administrator, administer the 2010 Plan.
Of the 294,913 outstanding options as of March 1, 2024 under the 2010 Plan, all options were fully vested. Administration . Our board of directors, a duly authorized committee of our board of directors, or the administrator, administer the 2010 Plan.
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. 89 Insurance Under the Companies Law, a company may obtain insurance for any of its office holders against the following liabilities incurred due to acts he or she performed as an office holder, if and to the extent provided for in the company’s articles of association: ● breach of his or her duty of care to the company or to another person; ● a breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his or her act would not prejudice the company’s interests; and ● a financial liability imposed upon him or her in favor of another person.
Insurance Under the Companies Law, a company may obtain insurance for any of its office holders against the following liabilities incurred due to acts he or she performed as an office holder, if and to the extent provided for in the company’s articles of association: ● breach of his or her duty of care to the company or to another person; 85 ● a breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his or her act would not prejudice the company’s interests; and ● a financial liability imposed upon him or her in favor of another person.
An “Administrative Procedure” is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Securities Law. 90 The Companies Law also permits a company to undertake in advance to indemnify an office holder, provided that if such indemnification relates to financial liability imposed on him or her, as described above, then the undertaking should be limited and shall detail the following foreseen events and amount or criterion: ● to events that in the opinion of the board of directors can be foreseen based on the company’s activities at the time that the undertaking to indemnify is made; and ● in amount or criterion determined by the board of directors, at the time of the giving of such undertaking to indemnify, to be reasonable under the circumstances.
The Companies Law also permits a company to undertake in advance to indemnify an office holder, provided that if such indemnification relates to financial liability imposed on him or her, as described above, then the undertaking should be limited and shall detail the following foreseen events and amount or criterion: ● to events that in the opinion of the board of directors can be foreseen based on the company’s activities at the time that the undertaking to indemnify is made; and ● in amount or criterion determined by the board of directors, at the time of the giving of such undertaking to indemnify, to be reasonable under the circumstances. 86 We intend to enter, into indemnification agreements with all of our directors and with all members of our senior management subject to the listing of our securities on the Nasdaq Capital Market.
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 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). 89 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.
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, 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. 88 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.
As of April 15, 2023, there are 322,279 ordinary shares reserved and available for issuance under the 2015 Plan.
As of March 1, 2024, there are 423,934 ordinary shares reserved and available for issuance under the 2015 Plan.
The term “Related or Competing Shareholder” means a shareholder proposing the reappointment or a shareholder holding 5% or more of the outstanding shares or voting rights of the company, provided, that at the time of the reappointment, such shareholder, the controlling shareholder of such shareholder, or a company controlled by such shareholder, have a business relationship with the company or are competitors of the company; ● the external director proposed his or her own nomination, and such nomination was approved in accordance with the requirements described above; ● his or her service for each such additional term is recommended by the board of directors and is approved at a shareholders meeting by the same majority required for the initial election of an external director (as described above). 83 The term of office for external directors for Israeli companies traded on certain foreign stock exchanges, including the Nasdaq Marketplace Rules, may be extended indefinitely in increments of additional three-year terms, in each case provided that the audit committee and the board of directors of the company confirm that, in light of the external director’s expertise and special contribution to the work of the board of directors and its committees, the reelection for such additional period(s) is beneficial to the company, and provided that the external director is reelected subject to the same shareholder vote requirements as if elected for the first time (as described above).
The term “Related or Competing Shareholder” means a shareholder proposing the reappointment or a shareholder holding 5% or more of the outstanding shares or voting rights of the company, provided, that at the time of the reappointment, such shareholder, the controlling shareholder of such shareholder, or a company controlled by such shareholder, have a business relationship with the company or are competitors of the company; ● the external director proposed his or her own nomination, and such nomination was approved in accordance with the requirements described above; ● his or her service for each such additional term is recommended by the board of directors and is approved at a shareholders meeting by the same majority required for the initial election of an external director (as described above).
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.
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. 87 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.
External directors may be removed from office by a special general meeting of shareholders called by the board of directors, which approves such dismissal by the same shareholder vote percentage required for their election, after receiving the board of directors arguments for such removal, or by a court, in each case, only under limited circumstances, including ceasing to meet the statutory qualifications for appointment, or violating their duty of loyalty to the company.
The term of office for external directors for Israeli companies traded on certain foreign stock exchanges, including the Nasdaq Marketplace Rules, may be extended indefinitely in increments of additional three-year terms, in each case provided that the audit committee and the board of directors of the company confirm that, in light of the external director’s expertise and special contribution to the work of the board of directors and its committees, the reelection for such additional period(s) is beneficial to the company, and provided that the external director is reelected subject to the same shareholder vote requirements as if elected for the first time (as described above). 79 External directors may be removed from office by a special general meeting of shareholders called by the board of directors, which approves such dismissal by the same shareholder vote percentage required for their election, after receiving the board of directors arguments for such removal, or by a court, in each case, only under limited circumstances, including ceasing to meet the statutory qualifications for appointment, or violating their duty of loyalty to the company.
Under the Companies Law, we are required to adopt an office holder compensation policy by November 27, 2023, which is 9 months from the date of our initial public offering. 86 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.
Our current compensation policy was approved at an extraordinary general meeting of our shareholders held in January 2023. 82 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.
We intend to appoint our internal auditor by May 28, 2023, which is 90 days following our initial public offering. The role of the internal auditor is to examine, among other things, whether a company’s actions comply with the law and proper business procedure.
As of July 31, 2023, Sapir Efrati from Deloitte & Co. Israel has been acting as our internal auditor. The role of the internal auditor is to examine, among other things, whether a company’s actions comply with the law and proper business procedure.
Removed
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management The following table sets forth certain information relating to our directors and senior management as of April 15, 2023. Unless otherwise stated, the address for our directors and senior management is at the Company’s registered address c/o 10 HaManofim Street, Herzeliya, 4672561, Israel.
Added
Item 6.E Directors, Senior Management and Employees—Share Ownership—Share Option Plans .” If the relationship between us and an executive officer or a director is terminated, except for cause (as defined in the various Option Plan agreements), options that are vested will generally remain exercisable for three (3) months following the date of such termination if we initiate such termination or two weeks following the date of such termination, if an executive officer or a director initiates such termination. 75 C.
Removed
Name Age Position Sharon Carmel 52 Chief Executive Officer and Chairman Danny Sandler 37 Chief Financial Officer Tamar Shoham 48 Chief Technology Officer Dan Julius 46 V.P. of Research and Development Dani Megrelishvili 47 Chief Product Officer Eliezer Lubitch 61 President, Beamr, Inc.
Added
Under the Companies Law, we are required to adopt an office holder compensation policy.
Removed
Tal Barnoach (1) 59 Director Lluis Pedragosa (1) 44 Director Yair Shoham (1)(2) 69 Director Osnat Michaeli (1)(2) 54 Director (1) Independent director (as defined under Nasdaq Stock Market Listing Rules).
Added
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.
Removed
(2) External director (as defined under the Companies Law) Sharon Carmel, Chief Executive Officer, Director Sharon Carmel, 52, serves as our Chief Executive Officer and as the Chairman of the board of directors since he founded our company in October 2009. Prior to founding Beamr, Mr. Carmel is a serial entrepreneur with a proven track record in the software space.
Added
An “Administrative Procedure” is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Securities Law.
Removed
Prior to founding Beamr, in August 2002, Mr. Carmel co-founded, BeInSync, which developed P2P synchronization and online backup technologies. Prior to that, in January 1994, Mr. Carmel co-founded Emblaze (LON: BLZ), a software company, which developed the Internet’s first vector-based graphics player. Mr.
Added
There are no service contracts between us or our Subsidiary, on the one hand, and our directors in their capacity as directors, on the other hand, providing for benefits upon termination of service.
Removed
Carmel received his training in computer science and software development during his mandatory military service in the IDF. Danny Sandler, Chief Financial Officer Danny Sandler , 37, serves as our Chief Financial Officer since December 2021. Mr. Sandler joined us in May 2020, and prior to his current role, served as our Director of Finance.
Added
After such three-month period or expiration of the term of such awards, all such unexercised awards will terminate and the shares covered by such awards shall again be available for issuance under the 2015 Plan.
Removed
Prior to joining us, between December 2014 and May 2020, Mr. Sandler served in various roles and, most recently as Assurance Manager, in the Hi-Tech and Life Science Practice at EY, a global accounting and consulting firm. Prior to that, between November 2011 and November 2014, Mr.
Removed
Sandler was a finance associate at Seeking Alpha, a crowd-sourced content service for financial markets. Mr. Sandler holds a Bachelor’s degree in Economics and Accounting from Bar-Ilan University. 76 Tamar Shoham, Chief Technology Officer Tamar Shoham , 48, serves as our Chief Technology Officer since November 2021. Mrs.
Removed
Shoham is a leading imaging and video scientist, with over 20 years’ experience in algorithm development and industry-oriented research, primarily in the field of video quality and compression. Mrs. Shoham joined us in August 2009, and prior to her current role, served as our Vice President of Technology where she led our algorithm and intellectual property development.
Removed
Prior to joining us, between 2006 and 2009, Mrs. Shoham was a research fellow at the NEGEV consortium, Signal and Image Processing Lab at the Technion Institute of Technology. Prior to that, between 1997 and 2005, Mrs. Shoham served as a digital signal processing algorithm developer at Comverse Ltd. Mrs.
Removed
Shoham holds a Master’s degree in Electrical Engineering from the Technion Institute of Technology and a Bachelor’s degree in Electrical Engineering from Tel Aviv University. Dan Julius, V.P. of Research and Development Dan Julius , 45, serves as our Vice President of Research and Development. Mr. Julius brings more than two decades of experience in management and software development. Mr.
Removed
Julius joined us in March 2011, and prior to his current role served as a team lead for our system overseeing design, development, and quality control. Prior to joining us, between February 2008 and May 2011, Mr. Julius was the co-founder and served as Chief Technology Officer at Joliper Ltd. Prior to that, between February 2007 and February 2008, Mr.
Removed
Julius served as a software developer and a team leader at BeInSync Ltd., a software platform enabling users to backup, synchronize, share and access their files, documents and other data online. Prior to that, between November 2001 and August 2004, Mr. Julius served as a CAD engineer at Intel. Between February 1999 and August 2001, Mr.
Removed
Julius served as a software developer and a team leader at TeleVend Inc. Mr. Julius holds a Master’s degree in Computer Science from the University of British Columbia and a Bachelor’s degree in Computer Science from Tel Aviv University. Dani Megrelishvili, Chief Product Officer Dani Megrelishvili , 47, serves as our Chief Product Officer since December 2022. Mr.
Removed
Megrelishvili’s previous roles with us were between November 2014 and November 2017, serving as Head of Product (JPEGmini business unit), and between February 2012 and November 2014, serving as Head of User experience. Prior to rejoining us, between January 2022 and November 2022, Mr.
Removed
Megrelishvili served as product manager at Lexense Technologies Ltd., a legal-tech startup offering tools for handling and managing legal disputes. Prior to that, between June 2020 and December 2021, Mr. Megrelishvili served as product manager at Wix.Com Ltd (NASDQ: WIX), a cloud-based web development services company. Prior to that, between August 2018 and June 2020, Mr.
Removed
Megrelishvili served as a consultant to several technology companies, including ZOOZ Mobile Ltd., a payment processing platform (acquired by PayU in 2018) and Augmented Intelligence Inc., a startup that builds an AI Assistant for a variety of use-cases. Eliezer Lubitch, President, Beamr, Inc. Eliezer Lubitch , 61, serves as the President of our subsidiary, Beamr, Inc. since 2011. Mr.
Removed
Lubitch heads our U.S. operations, including sales, business development, new markets, and strategic partnerships. Prior to joining us, between 2008 and 2011, Mr. Lubitch served as Vice President of Business Development and Brand Licensing at Eastman Kodak Company. Prior to that, between 2004 and 2007, Mr.
Removed
Lubitch served as Vice President of Business Development at Kodak Versamark Inc., a wholly owned subsidiary of Kodak. Between 1990 and 2003, Mr. Lubitch served in various roles at Scitex Corporation, Ltd. (NASDAQ: SCIX), including Vice President of Business Development, Director of Business Development, Product Line R&D Manager, and software engineer. Mr.
Removed
Lubitch was a seed investor in Tivella, Inc., a pioneering company of IPTV (acquired by Cisco in 2007). Mr.
Removed
Lubitch holds a Master’s degree in Business Administration from the Technion Institute of Technology, a Master’s degree in Computer Science from Tel Aviv University, and a Bachelor’s degree in Mathematics and Computer Science from Hebrew University. 77 Tal Barnoach, Director Tal Barnoach , 58, serves as a board member in our company since January 2014. Mr.
Removed
Barnoach is a general partner at Disruptive VC, a venture capital fund since July 2014 Disruptive Opportunity Fund since 2018 and Disruptive AI since 2020. Besides his role as a general partner in Disruptive and serving as a board member of Beamr, Mr.
Removed
Barnoach serves as a board member in several other technological companies like Idomoo, Anodot, Tailor Brands, Bit, Lumen, Deep, Replix, Qwilt, Minta and more. Over the last 20 years, Mr. Barnoach has founded and led companies such as S.E.A.
Removed
Multimedia (which went public in 1996), Orca Interactive (acquired by France Telecom in 2008), BeInsync (acquired by Phoenix Technologies in 2008) and Dotomi (acquired by ValueClick in 2011). Mr. Barnoach holds a B.A. degree in economics from Tel Aviv University.
Removed
Lluis Pedragosa, Director Liuis Pedragosa, 43 , serves as a board member in our company since August 2016, and was appointed by our shareholder, Marker LLC. Since May 2018, Mr. Pedragosa is a managing partner and the Chief Financial Officer of Team8, a cybersecurity and fintech company creation platform and a venture capital fund.
Removed
Prior to that, between December 2012 and April 2018, Mr. Pedragosa was a partner and founding team member at Marker LLC, a venture capital firm with over $400 million under management. Besides his role in Team8 and serving as a board member of Beamr, Mr.
Removed
Pedragosa serves as a board member in Screenz, and as a board observer in Overwolf Ltd. Mr. Pedragosa holds a Master’s degree in Business Administration from The Wharton School of the University of Pennsylvania, a Master’s degree in International Studies from the University of Pennsylvania, and a Bachelor’s of science in Business Administration from ESADE Business School.
Removed
Yair Shoham, Director Yair Shoham , 68, serves as a board member in our company since March 2023. Mr. Shoham brings more than two decades of global experience in venture capital and is a serial entrepreneur with a track record in the software and hardware spaces. Prior to joining us, between 2018 and December 2021, Mr.
Removed
Shoham served as Managing Director and Israel Country Manager at Intel Capital, the venture arm of Intel Corporation. Prior to this role, between July 2012 and 2018, he served as Investment Director at Intel Capital. Prior to that, between 1999 and 2012, Mr. Shoham served as General Partner at Genesis Partners, a leading early stage Israel-based venture capital firm.
Removed
During his career, Mr. Shoham has founded and led several companies such as VDOnet Corp. (acquired by Citrix Systems, Inc.), Butterfly VLSI Ltd. (acquired by Texas Instruments Incorporated), and RFWaves Ltd. (acquired by Vishay Intertechnology Inc.). Between 1995 and 2006, Mr. Shoham served as an independent board member at M-Systems Ltd., until the company was acquired by SanDisk Corporation. Mr.
Removed
Shoham holds a Juris Doctor degree from Loyola University School of Law and a Bachelor’s degree in psychology from the University of Haifa. Osnat Michaeli, Director Osnat Michaeli , 53, serves as a board member in our company since March 2023. Ms. Michaeli brings more than two decades of global experience in finance and operations.
Removed
Prior to joining us, between May 2019 and August 2021, Ms. Michaeli served as Chief Financial Officer at Twine Solutions Ltd, a leading digital thread-dyeing technology company. Between March 2017 and May 2019, Ms. Michaeli served as Chief Financial Officer at Cardo Systems Ltd., a leading company for Bluetooth® and Dynamic Mesh Communication, and entertainment systems for motorcycle riders.
Removed
Prior to that, between March 2011 and August 2015, Ms. Michaeli served as Chief Financial Officer at Kornit Digital Ltd., an international manufacturing company, which produces high-speed industrial inkjet printers, pigmented ink, and chemical products, where she held a key role in leading the company to its Initial Public Offering in, 2015 (NASDAQ: KRNT). Ms.
Removed
Michaeli holds a Bachelor’s degree in economics and a Master’s degree in Business Administration, both from Tel Aviv University. 78 B. Compensation The aggregate compensation we paid to our executive officers and directors for the year ended December 31, 2022, was approximately $1,025,749.
Removed
This amount includes approximately $79,701 paid, set aside or accrued to provide pension, severance, retirement or similar benefits or expenses and $96,897 share based compensation expenses, but does not include business travel, professional and business association dues and expenses reimbursed to office holders, and other benefits commonly reimbursed or paid by companies in our industry.
Removed
As of December 31, 2022, options to purchase 826,234 ordinary shares granted to our officers and directors were outstanding under our share option plan at a weighted average exercise price of $1.65 per share.
Removed
In accordance with the Companies Law, the table below reflects the compensation granted to our five most highly compensated officers during or with respect to the year ended December 31, 2022.
Removed
For purposes of the table and the summary below, “compensation” includes base salary, bonuses, equity-based compensation, retirement or termination payments, benefits and perquisites such as car, phone and social benefits and any undertaking to provide such compensation.
Removed
Name and Principal Position Salary (1) Bonus (2) Equity-Based Compensation (3) Other Compensation Total (USD in thousands) Sharon Carmel, CEO 161 - - -- 161 Danny Sandler, CFO 159 - 18 -- 177 Eliezer Lubitch, US President 241 - 26 -- 267 Tamar Shoham, CTO 164 - 19 -- 183 Dan Julius, VP R&D 189 - 21 -- 210 (1) Salary includes the officer’s gross salary plus payment by us of social benefits on behalf of the officer.
Removed
Such benefits may include payments, contributions and/or allocations for savings funds (e.g., Managers’ Life Insurance Policy), pension, severance, risk insurance (e.g., life, or work disability insurance), payments for social security and tax gross-up payments, vacation, medical insurance and benefits, convalescence or recreation pay and other benefits and perquisites consistent with our policies.
Removed
(2) Represents annual bonuses granted to the officer based on formulas set forth in the respective resolutions of our Compensation Committee and Board of Directors with respect to 2022.
Removed
(3) Represents the equity-based compensation expenses recorded in our financial statements for the year ended December 31, 2022, based on the securities’ fair value on the grant date, calculated in accordance with applicable accounting guidance for equity-based compensation.
Removed
For a discussion of the assumptions used in reaching this valuation, see Note 12 to our financial statements included in this Annual Report.

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Item 7. Management's Discussion & Analysis

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

21 edited+2 added−8 removed13 unchanged
A description of any material relationship that our principal shareholders have had with us or any of our predecessors or affiliates within the past three years is included under “Item 7.A Major Shareholders and Related Party Transactions—Certain Relationships and Related Party Transactions.” Unless otherwise noted below, the address of each shareholder, director and executive officer is c/o Beamr Imaging Ltd., 10 HaManofim Street Herzeliya, 43305, Israel.
A description of any material relationship that our principal shareholders have had with us or any of our predecessors or affiliates within the past three years is included under “Item 7.A Major Shareholders and Related Party Transactions—Certain Relationships and Related Party Transactions.” 94 Unless otherwise noted below, the address of each shareholder, director and executive officer is c/o Beamr Imaging Ltd., 10 HaManofim Street Herzeliya, 43305, Israel.
See “Item 6.B Directors, Senior Management and Employees—Compensation.” Options Since our inception we have granted options to purchase our ordinary shares to our officers and to our directors. Such option agreements may contain acceleration provisions upon certain merger, acquisition, or change of control transactions.
See “Item 6.B Directors, Senior Management and Employees—Compensation.” Options Since our inception we have granted options to purchase our ordinary shares to our officers, and since our initial public offering, we have granted options to purchase our ordinary shares to our directors. Such option agreements may contain acceleration provisions upon certain merger, acquisition, or change of control transactions.
Related Party Transactions The following is a description of the material terms of those transactions with related parties to which we, or our subsidiaries, are party since January 1, 2022.
Related Party Transactions The following is a description of the material terms of those transactions with related parties to which we, or our subsidiaries, are party since January 1, 2021.
However, in the event that we shall not have available sufficient funds in any such payment date from and after the Commencement Date to repay the installments of the Current Liability and/or the on-going fee owed to SCM or in the event that we determine that according to the following 12-months period budget that we shall not have available sufficient funds to pay such installments and/or the on-going fee, then SCM hereby agrees to postpone such payments owed to it until we will have such sufficient funds.
However, in the event that we did not have available sufficient funds in any such payment date from and after the Commencement Date to repay the installments of the Current Liability and/or the on-going fee owed to SCM or in the event that we determine that according to the following 12-months period budget that we shall not have available sufficient funds to pay such installments and/or the on-going fee, then SCM agreed to postpone such payments owed to it until we will have such sufficient funds.
For purposes of the table below, we deem ordinary shares issuable pursuant to options that are currently exercisable or exercisable within 60 days from April 15, 2023 to be outstanding and to be beneficially owned by the person holding the options for the purposes of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person.
For purposes of the table below, we deem ordinary shares issuable pursuant to options that are currently exercisable or exercisable within 60 days from March 1, 2024 to be outstanding and to be beneficially owned by the person holding the options for the purposes of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person.
Related party participants in the 2019 AIAs and 2021 AIAs, collectively, the AIAs, that were converted into ordinary shares in our initial public offering included the following: Participant Aggregate Investment Amount Number of Ordinary Shares from Conversion of AIA in our Initial Public Offering* Sharon Carmel $ 1,100,000 343,750 Disruptive Technologies LP $ 100,000 31,250 Marker II LP $ 1,100,000 343,750 Verizon Ventures LLC $ 947,619 296,131 Innovation Endeavors II LP $ 250,000 78,125 * Number of ordinary shares issued upon the automatic conversion of advance investment agreements on February 27, 2023 in our initial public offering based on a conversion price equal to 80% of the initial public offering price of $‌4.00.
The 2021 AIAs provide for the conversion of the investment amount into our ordinary shares under certain circumstances including in particular in the case of an initial public offering such that immediately prior to the closing of our initial public offering the investment amount automatically convert into such number of our ordinary shares equal to the initial public offering price multiplied by 0.8. 96 Related party participants in the 2019 AIAs and 2021 AIAs, collectively, the AIAs, that were converted into ordinary shares in our initial public offering included the following: Participant Aggregate Investment Amount Number of Ordinary Shares from Conversion of AIA in our Initial Public Offering* Sharon Carmel $ 1,100,000 343,750 Disruptive Technologies LP $ 100,000 31,250 Marker II LP $ 1,100,000 343,750 Verizon Ventures LLC $ 947,619 296,131 Innovation Endeavors II LP $ 250,000 78,125 * Number of ordinary shares issued upon the automatic conversion of advance investment agreements on February 27, 2023 in our initial public offering based on a conversion price equal to 80% of the initial public offering price of $‌4.00.
We describe our option plans under “Management—Share Option Plans.” If the relationship between us and an executive officer or a director is terminated, except for cause (as defined in the various Option Plan agreements), options that are vested will generally remain exercisable for three (3) months following the date of such termination if we initiate such termination or two weeks following the date of such termination, if an executive officer or a director initiates such termination.
We describe our option plans under “Management—Share Option Plans.” If the relationship between us and an executive officer or a director is terminated, except for cause (as defined in the various Option Plan agreements), options that are vested will generally remain exercisable for three (3) months following the date of such termination if we initiate such termination or two weeks following the date of such termination, if an executive officer or a director initiates such termination. 97 Indemnification Agreements Our amended and restated articles of association permits us to exculpate, indemnify and insure each of our directors and office holders to the fullest extent permitted by the Israeli Companies Law.
Any unpaid on-going fee payments will be added to the Current Liability. 101 Agreements and Arrangements With, and Compensation of Executive Officers Certain of our executive officers have employment agreements that contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the executive officers.
Agreements and Arrangements With, and Compensation of Executive Officers Certain of our executive officers have employment agreements that contain customary provisions and representations, including confidentiality, non-competition, non-solicitation and inventions assignment undertakings by the executive officers.
Percentage of shares beneficially owned is based on ordinary shares issued and outstanding as of April 15, 2023. As of April 15, 2023 and based on their reported registered office, thirteen of our shareholders were U.S. persons, holding in aggregate approximately 39% of our outstanding ordinary shares.
Percentage of shares beneficially owned is based on ordinary shares issued and outstanding as of March 1, 2024. As of March 1, 2024 and based on their reported registered office, 7 of our holders of record were U.S. persons, holding in aggregate approximately 2% of our outstanding ordinary shares.
(12) Consists of 1,584 options to purchase ordinary shares that are currently exercisable or will be exercisable within 60 days from April 15, 2023.
(3) Consists of 41,250 options to purchase ordinary shares that are currently exercisable or will be exercisable within 60 days from March 1, 2024.
(3) Consists of (i) 1,007,570 ordinary shares held by Disruptive Technologies III L.P., and (ii) 48,720 ordinary shares held by Disruptive Technologies L.P.
(1) Consists of (i) 976,320 ordinary shares held by Disruptive Technologies III L.P., and (ii) 79,970 ordinary shares held by Disruptive Technologies L.P.
Does not include 17,416 options to purchase ordinary shares that are not exercisable within 60 days of April 15, 2023 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, 2020. 100 B.
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. B.
Does not include 20,625 options to purchase ordinary shares that are not exercisable within 60 days of April 15, 2023. (9) Consists of 12,000 ordinary shares, and (ii) 30,658 options to purchase ordinary shares that are currently exercisable or will be exercisable within 60 days from April 15, 2023.
Does not include 9,375 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 1, 2024. (5) Consists of 12,000 ordinary shares, and (ii) 76,647 options to purchase ordinary shares that are currently exercisable or will be exercisable within 60 days from March 1, 2024.
The ordinary shares do not include shares held by Disruptive Technologies III L.P. or Disruptive Technologies L.P. Does not include 17,416 options to purchase ordinary shares that are not exercisable within 60 days of April 15, 2023.
Does not include 12,136 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 1, 2024. The ordinary shares do not include shares held by Disruptive Technologies III L.P. or Disruptive Technologies L.P.
Major Shareholders The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of April 15, 2023 by: ● each of our directors and senior management; ● all of our directors and senior management as a group; and ● each person (or group of affiliated persons) known by us to be the beneficial owner of 5% or more of the outstanding ordinary shares. 98 The beneficial ownership of our ordinary shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power, or the right to receive the economic benefit of ownership.
Major Shareholders The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 1, 2024 by: ● each of our directors and senior management; ● all of our directors and senior management as a group; and ● each person (or group of affiliated persons) known by us to be the beneficial owner of 5% or more of the outstanding ordinary shares.
Number of Shares Name of beneficial owner beneficially owned Percentage 5% or Greater Shareholder Marker II LP (1) 2,272,150 17.6 % Innovation Endeavors II, L.P. (2) 1,042,445 8.1 % Disruptive Technologies III L.P.
Name of beneficial owner Number of Shares beneficially owned Percentage of Shares beneficially owned 5% or Greater Shareholder Disruptive Technologies III L.P.
Does not include 44,250 options to purchase ordinary shares that are not exercisable within 60 days of April 15, 2023. (7) Consists of 92,050 options to purchase ordinary shares that are currently exercisable or will be exercisable within 60 days from April 15, 2023.
(7) Consists of 6,864 options to purchase ordinary shares that are currently exercisable or will be exercisable within 60 days from March 1, 2024. Does not include 12,136 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 1, 2024.
Does not include 18,750 options to purchase ordinary shares that are not exercisable within 60 days of April 15, 2023. (8) Consists of 114,335 options to purchase ordinary shares that are currently exercisable or will be exercisable within 60 days from April 15, 2023.
Does not include 30,750 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 1, 2024. 95 (4) Consists of 101,425 options to purchase ordinary shares that are currently exercisable or will be exercisable within 60 days from March 1, 2024.
Does not include 216,616 options to purchase ordinary shares that are not exercisable within 60 days of April 15, 2023. (10) Consists of (i) 97,440 ordinary shares, and (ii) 188,950 options to purchase ordinary shares that are currently exercisable or will be exercisable within 60 days from April 15, 2023.
Does not include 168,627 ordinary shares issuable upon exercise of outstanding options that are not exercisable within 60 days of March 1, 2024. (6) Consists of (i) 63,121 ordinary shares and (ii) options to purchase 54,864 ordinary shares that are currently exercisable or will be exercisable within 60 days from March 1, 2024.
(3) 1,056,290 8.2 % Verizon Ventures LLC (4) 1,073,731 8.3 % Directors and Executive Officers Sharon Carmel (5) 3,693,190 28.67 % Danny Sandler (6) 27,750 * Tamar Shoham (7) 92,050 * Dan Julius (8) 114,335 * Dani Megrelishvili (9) 42,658 * Eliezer Lubitch (10) 286,390 2.22 % Tal Barnoach (11) 241,105 1.87 % Lluis Pedragosa (12) 1,584 * Yair Shoham (12) 1,584 * Osnat Michaeli (12) 1,584 * All directors, director nominees and executive officers as a group (10 persons) 4,502,230 32.76 % * Indicates beneficial ownership of less than 1% of the total ordinary shares outstanding.
(1) 1,056,290 7.0 % Directors and Executive Officers Sharon Carmel (2) 3,693,190 24.5 % Danny Sandler (3) 41,250 * Tamar Shoham (4) 101,425 * Dani Megrelishvili (5) 88,647 * Michael Ozeryansky Tal Barnoach (6) 117,985 * Lluis Pedragosa (7) 6,864 * Yair Shoham (7) 6,864 * Osnat Michaeli (7) 6,864 * All directors, director nominees and executive officers as a group (9 persons) 4,063,089 26.9 % * Indicates beneficial ownership of less than 1% of the total ordinary shares outstanding.
The address of the principal office of Technologies L.P & Disruptive Technologies III L.P is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. (4) Consists of 1,073,731 ordinary shares. Verizon Ventures LLC is an indirect, wholly-owned subsidiary of Verizon Communications, Inc.
The address of the principal office of Technologies L.P & Disruptive Technologies III L.P is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. (2) Based on information contained in a Schedule 13G filed with the SEC on February 13, 2024. Consists of 3,693,190 ordinary shares.
Removed
(1) Consists of (i) 2,272,150 ordinary shares. Richard Scanlon is the sole director of the managers and the general partner of the Marker II LP. Ohad Finkelstein and Yuval Shachar are independent members of the investment committee of the Marker II LP.
Added
The beneficial ownership of our ordinary shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power, or the right to receive the economic benefit of ownership.
Removed
Voting and investment power over the shares held by the Marker II LP resides with the general partner and the members of any such investment committee. The address of the foregoing entity and individuals is c/o Marker LLC, 10 East 53rd Street, New York, NY 10022. 99 (2) Consists of 1,042,445 ordinary shares.
Added
Any unpaid on-going fee payments would be added to the Current Liability. Following the completion of our initial public offering, which closed in March 2023, the Current Liability was equal to $462,000 which is being paid in 18 equal installments (without an interest) that commenced in March 2023.
Removed
Dror Berman is a managing partner at Innovation Endeavors, and as such may be deemed to have voting and investment control over the shares held by Innovation Endeavors II, L.P. The address of the principal office of Innovation Endeavors II, L.P. is 1845 El Camino Real, Palo Alto, CA 94306.
Removed
The address of the principal office of Verizon Ventures LLC is 1095 Avenues of the Americas, New York, NY 10036. (5) Consists of 3,693,190 ordinary shares. (6) Consists of 27,750 options to purchase ordinary shares that are currently exercisable or will be exercisable within 60 days from April 15, 2023.
Removed
Does not include 26,250 options to purchase ordinary shares that are not exercisable within 60 days of April 15, 2023. (11) Consists of (i) 63,121 ordinary shares, (iii) 128,400 ordinary shares held in favor of certain beneficiaries, and (iv) options to purchase 49,584 ordinary shares that are currently exercisable or will be exercisable within 60 days from April 15, 2023.
Removed
The 2021 AIAs provide for the conversion of the investment amount into our ordinary shares under certain circumstances including in particular in the case of an initial public offering such that immediately prior to the closing of our initial public offering the investment amount automatically convert into such number of our ordinary shares equal to the initial public offering price multiplied by 0.8.
Removed
Since January 1, 2020, we have not been paying SCM for the consulting services and as further discussed below, we have accrued expenses of an aggregate of $460,000 as of December 31, 2022.
Removed
Indemnification Agreements Our amended and restated articles of association permits us to exculpate, indemnify and insure each of our directors and office holders to the fullest extent permitted by the Israeli Companies Law.

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