10q10k10q10k.net

What changed in Jeffs' Brands Ltd's 20-F — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Jeffs' Brands Ltd's 2022 and 2023 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+455 added−515 removedSource: 20-F (2024-04-01) vs 20-F (2023-04-10)

Top changes in Jeffs' Brands Ltd's 2023 20-F

455 paragraphs added · 515 removed · 324 edited across 6 sections

Item 2. Properties

Properties — owned and leased real estate

1 edited+5 added−1 removed0 unchanged
Biggest changeITEM 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 Summary Risk Factors 1 ITEM 4. INFORMATION ON THE COMPANY. 37 A. History and Development of the Company. 37 B. Business Overview. 38 C.
Biggest changeITEM 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. 32 A. History and Development of the Company. 32 B. Business Overview. 33 C. Organizational Structure. 50 D.
Removed
Organizational Structure. 56 D. Property, Plants and Equipment. 56
Added
Property, Plants and Equipment. 50 ITEM 4A. UNRESOLVED STAFF COMMENTS. 50 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS. 51 A. Operating Results. 51 B. Liquidity and Capital Resources. 55 C. Research and development, patents and licenses, etc. 56 D. Trend information. 56 E. Critical Accounting Estimates. 56 F.
Added
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation 57 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES. 58 A. Directors and Senior Management. 58 B. Compensation. 61 C. Board Practices. 63 D. Employees. 80 E. Share Ownership. 80 F. Disclosure of a registrant’s action to recover erroneously awarded compensation. 80 ITEM 7.
Added
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS. 80 A. Major Shareholders. 80 B. Related Party Transactions. 82 C. Interests of Experts and Counsel. 83 ITEM 8. FINANCIAL INFORMATION. 83 A. Consolidated Statements and Other Financial Information. 83 B. Significant Changes. 84 i Page ITEM 9. THE OFFER AND LISTING. 84 A. Offer and Listing Details. 84 B.
Added
Plan of Distribution. 84 C. Markets. 84 D. Selling Shareholders. 84 E. Dilution. 84 F. Expenses of the Issue. 84 ITEM 10. ADDITIONAL INFORMATION. 85 A. Share Capital. 85 B. Memorandum and Articles of Association. 85 C. Material Contracts. 85 D. Exchange Controls. 85 E. Taxation. 85 F. Dividends and Paying Agents. 94 G. Statement by Experts. 94 H.
Added
Documents on Display. 94 I. Subsidiary Information. 94 J. Annual Report to Security Holders. 94 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 94 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES. 95 A. Debt Securities. 95 B. Warrants and rights. 95 C. Other Securities. 95 PART II 96

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

111 edited+47 added−51 removed301 unchanged
Biggest changeAlthough we believe the exclusive forum provision benefit us by providing increased consistency in the application of U.S. federal securities laws, the Companies Law, or New York law, as applicable, in the types of lawsuits to which they apply, such exclusive forum provision may limit a shareholder’s ability to bring a claim in the judicial forum of their choosing for disputes with us or any of our directors, shareholders, officers, or other employees, which may discourage lawsuits with respect to such claims against us and our current and former directors, shareholders, officers, or other employees. 33 If securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business or our market, or if they change their recommendations regarding our Ordinary Shares or Warrants adversely, the trading price or trading volume of our Ordinary Shares could decline.
Biggest changeAlthough we believe the exclusive forum provision benefit us by providing increased consistency in the application of U.S. federal securities laws, the Companies Law, or New York law, as applicable, in the types of lawsuits to which they apply, such exclusive forum provision may limit a shareholder’s ability to bring a claim in the judicial forum of their choosing for disputes with us or any of our directors, shareholders, officers, or other employees, which may discourage lawsuits with respect to such claims against us and our current and former directors, shareholders, officers, or other employees.
In addition, maintaining and enhancing our current and future brands may require us to make substantial investments, and these investments may not be yield sufficient returns. If we fail to promote and maintain our brands, or if we incur excessive expenses in this effort, our business, operating results and financial condition may be materially adversely affected.
In addition, maintaining and enhancing our current and future brands may require us to make substantial investments, and these investments may not yield sufficient returns. If we fail to promote and maintain our brands, or if we incur excessive expenses in this effort, our business, operating results and financial condition may be materially adversely affected.
Customers may also make safety-related claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retail partner removing the product from its marketplace. Such removal may materially impact our financial results depending on the product that is removed and length of time that it is removed.
Customers may also make safety-related claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retail partner removing the product from its marketplace. Such removal may materially impact our financial results depending on the product that is removed and the length of time that it is removed.
We and such third parties may not anticipate or prevent all types of attacks until after they have already been launched. Further, techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or our third-party service providers.
We and such third parties may not anticipate or prevent all types of attacks until after they have already been launched. Further, techniques used to obtain unauthorized access to sabotage systems change frequently and may not be known until launched against us or our third-party service providers.
Any potential acquisition or strategic partnership may entail numerous risks, including: ● increased operating expenses and cash requirements; ● the assumption of additional indebtedness or contingent liabilities; ● the issuance of our equity securities; 35 ● assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; ● the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition; ● retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; ● risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and ● our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
Any potential acquisition or strategic partnership may entail numerous risks, including: ● increased operating expenses and cash requirements; ● the assumption of additional indebtedness or contingent liabilities; ● the issuance of our equity securities; ● assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; ● the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition; ● retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; ● risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and ● our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
For example, if a large number of customers purchase our products in a short period of time due to increased holiday demand, inefficient management of our inventory may prevent us from efficiently fulfilling orders, which may reduce sales and harm our brands. 13 General economic factors may adversely affect our business, financial performance and results of operations.
For example, if a large number of customers purchase our products in a short period of time due to increased holiday demand, inefficient management of our inventory may prevent us from efficiently fulfilling orders, which may reduce sales and harm our brands. General economic factors may adversely affect our business, financial performance and results of operations.
These risks may increase over time as the complexity and number of technical systems and applications we use also increases. 17 Breaches of our security measures or those of our third-party service providers or cyber security incidents could result in unauthorized access to our sites, networks, systems and accounts; unauthorized access to, and misappropriation of, consumer information, including customers’ personally identifiable information, or other confidential or proprietary information of ourselves or third parties; viruses, worms, spyware or other malware being served from our sites, networks or systems; deletion or modification of content or the display of unauthorized content on our sites; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; or litigation, regulatory action and other potential liabilities.
These risks may increase over time as the complexity and number of technical systems and applications we use also increases. 13 Breaches of our security measures or those of our third-party service providers or cyber security incidents could result in unauthorized access to our sites, networks, systems and accounts; unauthorized access to, and misappropriation of, consumer information, including customers’ personally identifiable information, or other confidential or proprietary information of ourselves or third parties; viruses, worms, spyware or other malware being served from our sites, networks or systems; deletion or modification of content or the display of unauthorized content on our sites; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; or litigation, regulatory action and other potential liabilities.
If an acquired business fails to meet our expectations, our business, operating results and financial condition may suffer. Risks Related to Information Technology Assertions by third parties of infringement or misappropriation by us of their intellectual property rights or confidential know how could result in significant costs and substantially harm our business and results of operations.
If an acquired business fails to meet our expectations, our business, operating results and financial condition may suffer. 11 Risks Related to Information Technology Assertions by third parties of infringement or misappropriation by us of their intellectual property rights or confidential know how could result in significant costs and substantially harm our business and results of operations.
As a result, these changes may have a material adverse effect on our business, results of operations, financial condition and prospects. We are subject to anti-corruption, anti-bribery, anti-money laundering and similar laws, and non-compliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation.
As a result, these changes may have a material adverse effect on our business, results of operations, financial condition and prospects. 17 We are subject to anti-corruption, anti-bribery, anti-money laundering and similar laws, and non-compliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation.
We may incur additional expenses and our reputation could be harmed if or current or potential customers believe that our merchandise is not of high quality or may be damaged. Risks associated with the suppliers from whom our products are sourced could materially adversely affect our financial performance, as well as our reputation and brand.
We may incur additional expenses and our reputation could be harmed or if current or potential customers believe that our merchandise is not of high quality or may be damaged. 7 Risks associated with the suppliers from whom our products are sourced could materially adversely affect our financial performance, as well as our reputation and brand.
Also, as employee options vest and the lock-up agreements expire, we may have difficulty retaining key employees. If we fail to attract new personnel or fail to retain and motivate our current personnel, our growth prospects could be severely harmed. We may not accurately forecast revenues, profitability and appropriately plan our expenses.
Also, as employee options vest and the lock-up agreements expire, we may have difficulty retaining key employees. If we fail to attract new personnel or fail to retain and motivate our current personnel, our growth prospects could be severely harmed. 9 We may not accurately forecast revenues, profitability and appropriately plan our expenses.
In addition, as we enter a new consumer product markets in the future, we may initially provide discounts to customers to gain market traction, and the amount and effect of these discounts may vary greatly. No such discounts have been given to date. Finally, we are evaluating our total addressable market with respect to new product offerings and new markets.
In addition, as we enter new consumer product markets in the future, we may initially provide discounts to customers to gain market traction, and the amount and effect of these discounts may vary greatly. No such discounts have been given to date. Finally, we are evaluating our total addressable market with respect to new product offerings and new markets.
Either result could materially adversely affect our business, financial condition and operating results. 16 Furthermore, the regulations governing domain names and laws protecting marks and similar proprietary rights could change in ways that block or interfere with our ability to use relevant domains or our current brand names.
Either result could materially adversely affect our business, financial condition and operating results. Furthermore, the regulations governing domain names and laws protecting marks and similar proprietary rights could change in ways that block or interfere with our ability to use relevant domains or our current brand names.
Furthermore, as a foreign private issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. 28 These exemptions and leniencies will reduce the frequency and scope of information and protections to which you are entitled as an investor.
Furthermore, as a foreign private issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. These exemptions and leniencies will reduce the frequency and scope of information and protections to which you are entitled as an investor.
Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in credit and capital markets. 14 Additionally, Russia’s prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system.
Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in credit and capital markets. 10 Additionally, Russia’s prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system.
To the extent that we do not succeed in expanding our operations internationally and managing the associated legal and operational risks, our results of operations may be adversely affected. 9 Use of social media and email may adversely impact our reputation or subject us to fines or other penalties.
To the extent that we do not succeed in expanding our operations internationally and managing the associated legal and operational risks, our results of operations may be adversely affected. Use of social media and email may adversely impact our reputation or subject us to fines or other penalties.
Any such inappropriate use of social media or email could also cause reputational damage. Customers value readily available information concerning retailers and their goods and services and often act on such information without further investigation and with no regard to its accuracy.
Any such inappropriate use of social media or email could also cause reputational damage. 6 Customers value readily available information concerning retailers and their goods and services and often act on such information without further investigation and with no regard to its accuracy.
Public officials and entities may seek injunctive relief or other remedies to enforce applicable environmental laws and regulations. If we are found to not have complied with these laws and are unable to sell out products, our business and financial results will be negatively impacted.
Public officials and entities may seek injunctive relief or other remedies to enforce applicable environmental laws and regulations. If we are found to not have complied with these laws and are unable to sell our products, our business and financial results will be negatively impacted.
Any failure to accurately predict net revenue or gross margins could cause our operating results to be lower than expected, which could materially adversely affect our financial condition and share price. 29 Our management team has limited experience managing a public company.
Any failure to accurately predict net revenue or gross margins could cause our operating results to be lower than expected, which could materially adversely affect our financial condition and share price. Our management team has limited experience managing a public company.
Federal Income Tax Considerations — Passive Foreign Investment Companies” for additional information. 34 As a public company in the United States, our management is required to devote substantial time to new compliance initiatives as well as compliance with ongoing U.S. requirements.
Federal Income Tax Considerations — Passive Foreign Investment Companies” for additional information. As a public company in the United States, our management is required to devote substantial time to new compliance initiatives as well as compliance with ongoing U.S. requirements.
Such sales also may impair our ability to raise capital through the sale of additional equity securities in the future at a time and price that our management deems acceptable, if at all. 36
Such sales also may impair our ability to raise capital through the sale of additional equity securities in the future at a time and price that our management deems acceptable, if at all.
Congress recently passed the Uyghur Forced Labor Prevention Act in an effort to prevent what it views as forced labor and human rights abuses in the Xinjiang Uyghur Autonomous Region, or XUAR.
Congress passed the Uyghur Forced Labor Prevention Act in an effort to prevent what it views as forced labor and human rights abuses in the Xinjiang Uyghur Autonomous Region, or XUAR.
If we acquire additional businesses, we may not be able to integrate the acquired personnel, operations, existing contracts and technologies successfully or effectively manage the combined business following the acquisition.
If we acquire additional businesses, we may not be able to integrate the acquired operations, existing contracts and technologies successfully or effectively manage the combined business following the acquisition.
Our amended and restated articles of association provide that, unless we consent to an alternative forum, the federal district courts of the United States shall be the exclusive forum for resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit our shareholders’ ability to choose the judicial forum for disputes with us, our directors, shareholders, or other employees.
Our amended and restated articles of association provide that, unless we consent to an alternative forum, the federal district courts of the United States shall be the exclusive forum for resolution of any complaint asserting a cause of action arising under the Securities Act of 1933 as amended, or the Securities Act, which could limit our shareholders’ ability to choose the judicial forum for disputes with us, our directors, shareholders, or other employees.
We also may not achieve the anticipated benefits from any future acquired business due to a number of factors, including: ● failure to identify all of the issues, liabilities or other shortcomings or challenges of an acquired company or technology, including issues related to intellectual property, regulatory compliance practices, revenue recognition or other accounting practices, or employee or client issues; ● difficulty incorporating acquired technology and rights into our existing algorithm and operations and of maintaining quality and security standards consistent with our brands; ● inability to generate sufficient revenue to offset acquisition or investment costs; ● incurrence of acquisition-related costs or equity dilution associated with funding the acquisition; ● difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; ● risks of entering new markets or new product categories in which we have limited or no experience; ● difficulty converting the customers of the acquired business into our customers; ● diversion of our management’s attention from other business concerns; 15 ● adverse effects to our existing business relationships as a result of the acquisition; ● potential loss of key employees, customers, vendors and suppliers from either our current business or an acquired company’s business; ● use of resources that are needed in other parts of our business; ● possible write offs or impairment charges relating to acquired businesses; ● compliance with regulatory matters related to the acquired business or its products; and ● use of substantial portions of our available cash to consummate the acquisition.
We also may not achieve the anticipated benefits from any future acquired business due to a number of factors, including: ● failure to identify all of the issues, liabilities or other shortcomings or challenges of an acquired company or technology, including issues related to intellectual property, regulatory compliance practices, revenue recognition or other accounting practices, or employee or client issues; ● difficulty incorporating acquired technology and rights into our existing algorithm and operations and of maintaining quality and security standards consistent with our brands; ● inability to generate sufficient cashflow to offset acquisition or investment costs; ● incurrence of acquisition-related costs or equity dilution associated with funding the acquisition; ● difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; ● risks of entering new markets or new product categories in which we have limited or no experience; ● diversion of our management’s attention from other business concerns; ● adverse effects to our existing business relationships as a result of the acquisition; ● potential loss of customers, vendors and suppliers from either our current business or an acquired company’s business; ● use of resources that are needed in other parts of our business; ● possible write offs or impairment charges relating to acquired businesses; ● compliance with regulatory matters related to the acquired business or its products; and ● use of substantial portions of our available cash to consummate the acquisition.
Litigation and other claims and regulatory proceedings against us could result in unexpected expenses and liabilities, which could have a material adverse effect on our business, results of operations, financial condition and prospects. 18 A failure to comply with current laws, rules and regulations or changes to such laws, rules and regulations and other legal uncertainties may adversely affect our business, financial performance, results of operations or business growth.
Litigation and other claims and regulatory proceedings against us could result in unexpected expenses and liabilities, which could have a material adverse effect on our business, results of operations, financial condition and prospects. 14 A failure to comply with current laws, rules and regulations or changes to such laws, rules and regulations and other legal uncertainties may adversely affect our business, financial performance, results of operations or business growth.
For example, five U.S. states have passed comprehensive privacy legislation intended to provide consumers with greater transparency and control over their personal information by providing consumers with certain rights, such as the right to know what personal information is being collected about them, and the right to access, delete, correct, or opt out of the sale of their personal information.
For example, fourteen U.S. states have passed comprehensive privacy legislation intended to provide consumers with greater transparency and control over their personal information by providing consumers with certain rights, such as the right to know what personal information is being collected about them, and the right to access, delete, correct, or opt out of the sale of their personal information.
Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business.
Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that such government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business.
Our data handling also is subject to contractual obligations and industry standards. The U.S. federal and various state and foreign governments have adopted or proposed limitations on the collection, distribution, use and storage of data relating to individuals, including the use of contact information and other data for digital marketing, advertising and other communications with individuals and businesses.
Our data handling also is subject to industry standards. The U.S. federal and various state and foreign governments have adopted or proposed limitations on the collection, distribution, use and storage of data relating to individuals, including the use of contact information and other data for digital marketing, advertising and other communications with individuals and businesses.
Potential growth of our businesses is based on international expansion, making us susceptible to risks associated with international sales and operations. We have historically mainly sold products in the United States, and in 2021 also began selling products in the United Kingdom and Germany. We intend to expand our operations to reach new markets and localities.
Potential growth of our businesses is based on international expansion, making us susceptible to risks associated with international sales and operations. We have historically mainly sold products in the United States, and since 2021 began selling products in, the United Kingdom, Germany. We intend to expand our operations to reach new markets and localities.
If we fail to keep up with rapid technological changes to remain competitive in our rapidly evolving industry, our future success may be adversely affected. 6 Our business depends on our ability to build and maintain strong product listings on e-commerce platforms.
If we fail to keep up with rapid technological changes to remain competitive in our rapidly evolving industry, our future success may be adversely affected. 3 Our business depends on our ability to build and maintain strong product listings on e-commerce platforms.
For example, we subject to the reporting requirements of the Exchange Act, and are required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the rules and regulations subsequently implemented by the SEC, including the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.
For example, we subject to the reporting requirements of the Exchange Act of 1934, as amended, or the Exchange Act, and are required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the rules and regulations subsequently implemented by the SEC, including the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.
Based on the projected composition of our income and valuation of our assets, we do not expect to be a PFIC for 2022, and we do not expect to become a PFIC in the future, although there can be no assurance in this regard.
Based on the projected composition of our income and valuation of our assets, we do not expect to be a PFIC for 2023, and we do not expect to become a PFIC in the future, although there can be no assurance in this regard.
In addition, the widespread adoption of new internet, networking or telecommunications technologies or other technological changes could require substantial expenditures to modify or adapt our products, services or infrastructure.
In addition, the widespread adoption of networking or telecommunications technologies or other technological changes could require substantial expenditures to modify or adapt our products, services or infrastructure.
Multiple U.S. states have enacted related legislation and other states are now considering such legislation. Furthermore, the U.S. Supreme Court recently has held in South Dakota v.
Multiple U.S. states have enacted related legislation and other states are now considering such legislation. Furthermore, the U.S. Supreme Court held in South Dakota v.
The market price of our Ordinary Shares and/or Warrants could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including: ● actual or anticipated fluctuations in our financial condition and operating results; ● the financial projections we may provide to the public, and any changes in projected operational and financial results; ● addition or loss of significant customers; ● changes in laws or regulations applicable to our products; ● actual or anticipated changes in our growth rate relative to our competitors; ● announcements of technological innovations or new offerings by us or our competitors; ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments; 31 ● additions or departures of key personnel; ● changes in our financial guidance or securities analysts’ estimates of our financial performance; ● discussion of us or our share price by the financial press and in online investor communities; ● reaction to our press releases and filings with the SEC; ● changes in accounting principles; ● lawsuits threatened or filed against us; ● fluctuations in operating performance and the valuation of companies perceived by investors to be comparable to us; ● sales of our Ordinary Shares by us or our shareholders; ● share price and volume fluctuations attributable to inconsistent trading volume levels of our Ordinary Shares; ● price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; ● changes in laws or regulations applicable to our business; ● changes in our capital structure, such as future issuances of debt or equity securities; ● short sales, hedging and other derivative transactions involving our shares; ● the expiration of contractual lock-up periods; ● other events or factors, including those resulting from war, incidents of terrorism or responses to these events; and ● general economic and market conditions.
The market price of our Ordinary Shares and/or Warrants could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including: ● actual or anticipated fluctuations in our financial condition and operating results; ● the financial projections we may provide to the public, and any changes in projected operational and financial results; ● addition or loss of significant customers; ● changes in laws or regulations applicable to our products; ● actual or anticipated changes in our growth rate relative to our competitors; ● announcements of technological innovations or new offerings by us or our competitors; ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments; ● additions or departures of key personnel; ● changes in our financial guidance or securities analysts’ estimates of our financial performance; ● discussion of us or our share price by the financial press and in online investor communities; ● reaction to our press releases and filings with the SEC; ● changes in accounting principles; ● lawsuits threatened or filed against us; ● fluctuations in operating performance and the valuation of companies perceived by investors to be comparable to us; ● sales of our Ordinary Shares by us or our shareholders; ● share price and volume fluctuations attributable to inconsistent trading volume levels of our Ordinary Shares; ● price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; ● changes in laws or regulations applicable to our business; ● changes in our capital structure, such as future issuances of debt or equity securities; ● short sales, hedging and other derivative transactions involving our shares; ● the expiration of contractual lock-up periods; ● other events or factors, including those resulting from war, incidents of terrorism or responses to these events; and ● general economic and market conditions. 27 Furthermore, in recent years, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies, and technology companies in particular.
As a result, our business is subject to risks associated with doing business in China, including: ● trade protection measures, such as tariff increases, and import and export licensing and control requirements; ● potentially negative consequences from changes in tax laws; ● difficulties associated with the Chinese legal system, including increased costs and uncertainties associated with enforcing contractual obligations in China; ● historically lower protection of intellectual property rights; ● unexpected or unfavorable changes in regulatory requirements; and ● changes and volatility in currency exchange rates.
As a result, our business is subject to risks associated with doing business in China, including: ● trade protection measures, such as tariff increases, and import and export licensing and control requirements; ● potentially negative consequences from changes in tax laws; ● difficulties associated with the Chinese legal system, including increased costs and uncertainties associated with enforcing contractual obligations in China; ● unexpected or unfavorable changes in regulatory requirements; and ● changes and volatility in currency exchange rates.
Economic factors such as increased commodity prices, shipping costs, higher costs of labor, insurance and healthcare, and changes in or interpretations of other laws, regulations and taxes may also increase our cost of goods sold and our selling, general and administrative expenses, and otherwise adversely affect our financial condition and results of operations. Global inflation has risen in 2022.
Economic factors such as increased commodity prices, shipping costs, higher costs of labor, insurance and healthcare, and changes in or interpretations of other laws, regulations and taxes may also increase our cost of goods sold and our selling, general and administrative expenses, and otherwise adversely affect our financial condition and results of operations.
In response to the foregoing developments, individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that the proposed changes may negatively impact the business environment in Israel including due to reluctance of foreign investors to invest or transact business in Israel as well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in security markets, and other changes in macroeconomic conditions.
In response to such initiative, many individuals, organizations and institutions, both within and outside of Israel, voiced concerns that the proposed changes may negatively impact the business environment in Israel including due to reluctance of foreign investors to invest or transact business in Israel, as well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in security markets and other changes in macroeconomic conditions.
If we fail to keep up with rapid technological changes, our future success may be adversely affected. A.I. and machine learning technologies are subject to rapid changes and our technology is yet to be fully automated.
If we fail to keep up with rapid technological changes, our future success may be adversely affected. Modern technologies are subject to rapid changes and our technology is yet to be fully automated.
Our future success will depend in large part upon our ability to, among other things: ● manage our inventory and supply chain effectively; ● successfully develop, retain and expand our consumer product offerings and geographic reach; ● compete effectively; ● anticipate and respond to macroeconomic changes; ● effectively manage our growth; ● hire, integrate and retain talented people at all levels of our organization; ● avoid interruptions in our business from information technology downtime, cybersecurity breaches or labor stoppages; ● maintain the quality of our technology infrastructure; and ● develop new features to enhance functionality. 4 We may not be able to manage our growth effectively, and such rapid growth may adversely affect our corporate culture.
Our future success will depend in large part upon our ability to, among other things: ● manage our inventory and supply chain effectively; ● successfully develop, retain and expand our consumer product offerings and geographic reach; ● compete effectively; ● anticipate and respond to macroeconomic changes; ● effectively manage our growth; 1 ● hire, integrate and retain talented people at all levels of our organization; ● avoid interruptions in our business from information technology downtime, cybersecurity breaches or labor stoppages; ● maintain the quality of our technology infrastructure; and ● develop new features to enhance functionality.
As our operations grow in size, scope and complexity, we will need to continuously improve and upgrade our systems and infrastructure to offer an increasing number of consumer-enhanced services, features and functionalities, while maintaining and improving the reliability and integrity of our systems and infrastructure. 5 Our future success also depends on our ability to use A.I. tools and infrastructure, including logistics and fulfillment platform which leverages, to meet rapidly evolving e-commerce trends and demands.
As our operations grow in size, scope and complexity, we will need to continuously improve and upgrade our systems and infrastructure to offer an increasing number of consumer-enhanced services, features and functionalities, while maintaining and improving the reliability and integrity of our systems and infrastructure. 2 Our future success also depends on our ability to assimilate different analytical tools as well as internal methodologies, including logistics and fulfillment platform which leverages, to meet rapidly evolving e-commerce trends and demands.
Our status as an emerging growth company will end as soon as any of the following take place: ● the last day of the fiscal year in which we have more than $1.235 billion in annual revenue; ● the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; ● the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or ● the last day of the fiscal year ending after the fifth anniversary after we become a public company. 30 We cannot predict if investors will find our Ordinary Shares or Warrants less attractive if we choose to rely on any of the exemptions afforded emerging growth companies.
Our status as an emerging growth company will end as soon as any of the following take place: ● the last day of the fiscal year in which we have more than $1.235 billion in annual revenue; ● the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; ● the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or ● the last day of the fiscal year ending after the fifth anniversary after we become a public company.
Any failure or perceived failure by us to comply with rapidly evolving privacy or security laws, policies (including our own stated privacy policies), legal obligations or industry standards or any security incident that results in the unauthorized release or transfer of personally identifiable information or other consumer data may result in governmental enforcement actions, litigation (including consumer class actions), fines and penalties or adverse publicity and could cause our customers to lose trust in us, which could have a material adverse effect on our business, results of operations, financial condition and prospects.
Any failure or perceived failure by us to comply with rapidly evolving privacy or security laws, policies (including our own stated privacy policies), legal obligations or industry standards or any security incident that results in the unauthorized release or transfer of personally identifiable information or other consumer data may result in governmental enforcement actions, litigation (including consumer class actions), fines and penalties or adverse publicity and could cause our customers to lose trust in us, which could have a material adverse effect on our business, results of operations, financial condition and prospects. 16 In Europe, where we expect to expand our business operations in the future as part of our growth, the data privacy and information security regime continues to evolve and is subject to increasing regulatory scrutiny.
The inability to acquire, use or maintain our marks and domain names for our sites could substantially harm our business and operating results. We currently have registered trademarks for our brands in numerous jurisdictions and have registered the Internet domain names for our websites, as well as various related domain names.
The inability to acquire, use or maintain our marks and domain names for our sites could substantially harm our business and operating results. We currently have registered trademarks for certain of our brands in numerous jurisdictions and have registered the Internet domain names for Fort's website.
If we are unable to acquire new customers who purchase products in numbers sufficient to grow our business, we may not be able to generate the scale necessary to drive beneficial network effects with our suppliers, our net revenue may decrease and our business, financial condition and operating results may be materially adversely affected.
If we are unable to acquire new customers who purchase products in numbers sufficient to grow our business, we may not be able to generate the scale necessary to drive beneficial network effects with our suppliers, our net revenue may decrease and our business, financial condition and operating results may be materially adversely affected. 4 We believe new customers can originate from word-of-mouth and other non-paid referrals from existing customers.
As a result, we are exposed to the currency fluctuation risks relating to the recording of our expenses in U.S. dollars. 25 It may be difficult to enforce a judgment of a U.S. court against us and our executive officers and directors and the Israeli experts named in this Annual Report on Form 20-F in Israel or the United States, to assert U.S. securities laws claims in Israel or to serve process on our executive officers and directors and these experts.
It may be difficult to enforce a judgment of a U.S. court against us and our executive officers and directors and the Israeli experts named in this Annual Report on Form 20-F in Israel or the United States, to assert U.S. securities laws claims in Israel or to serve process on our executive officers and directors and these experts.
Further, as we continue to expand our fulfillment capability or add new businesses with different requirements, our logistics networks will become increasingly complex and operating them will become more challenging.
Further, as we continue to expand our fulfillment capability or add new businesses with different requirements, our logistics networks will become increasingly complex and operating them will become more challenging. There can be no assurance that we will be able to operate our networks effectively.
We may acquire other companies or technologies, which could divert our management’s attention, result in additional dilution to our shareholders and otherwise disrupt our operations and adversely affect our operating results.
We may acquire other companies or technologies, which could divert our management’s attention, result in additional dilution to our shareholders and otherwise disrupt our operations and adversely affect our operating results. Since our IPO, we have acquired Fort and invested in SciSparc U.S.
The market price of our Ordinary Shares and/or Warrants may be volatile. Market volatility may affect the value of an investment in our Ordinary Shares and/or Warrants and could subject us to litigation. Technology shares have historically experienced high levels of volatility.
Market volatility may affect the value of an investment in our Ordinary Shares and/or Warrants and could subject us to litigation. Technology shares have historically experienced high levels of volatility. There has been and could continue to be significant volatility in the market price and trading volume of equity securities.
The issuance of any additional Ordinary Shares or any securities that are exercisable for or convertible into Ordinary Shares, may have an adverse effect on the market price of our Ordinary Shares and will have a dilutive effect on our existing shareholders and holders of Ordinary Shares.
The issuance of any additional Ordinary Shares or any securities that are exercisable for or convertible into Ordinary Shares, may have an adverse effect on the market price of our Ordinary Shares and will have a dilutive effect on our existing shareholders and holders of Ordinary Shares. 23 We cannot assure you that our Ordinary Shares and Warrants will remain listed on Nasdaq or any other securities exchange.
Your rights and responsibilities as a shareholder will be governed in key respects by Israeli laws, which differ in some material respects from the rights and responsibilities of shareholders of U.S. companies. The rights and responsibilities of the holders of our Ordinary Shares are governed by our amended and restated articles of association and by Israeli law.
The rights and responsibilities of the holders of our Ordinary Shares are governed by our amended and restated articles of association and by Israeli law. These rights and responsibilities differ in some material respects from the rights and responsibilities of shareholders in U.S. companies.
We have a short operating history in a rapidly evolving industry that may not develop in a manner favorable to our business. Our relatively short operating history makes it difficult to assess our future performance. You should consider our business and prospects in light of the risks and difficulties we may encounter.
Our relatively short operating history makes it difficult to assess our future performance. You should consider our business and prospects in light of the risks and difficulties we may encounter.
If our sales and procurement teams do not predict demand well or if our algorithms do not help us reorder the right products or write off the right products timely, we may not effectively manage our inventory, which could result in inventory excess or shortages, and our operating results and financial condition could be adversely affected. 10 Our business, including our costs and supply chain, is subject to risks associated with sourcing, importing and warehousing.
If our sales and procurement teams do not predict demand well or if our algorithms do not help us reorder the right products or write off the right products timely, we may not effectively manage our inventory, which could result in inventory excess or shortages, and our operating results and financial condition could be adversely affected.
If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.
Any adverse determination in litigation could also subject us to significant liabilities. 30 General Risk Factors If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.
We cannot assure you that we will not be adversely affected in the future. Any significant increases in costs may affect our business disproportionately than our competitors. Changes in trade policies or increases in tariffs, may have a material adverse effect on global economic conditions and the stability of global financial markets and may reduce international trade.
Any significant increases in costs may affect our business disproportionately compared to our competitors. Changes in trade policies or increases in tariffs, may have a material adverse effect on global economic conditions and the stability of global financial markets and may reduce international trade.
However, the enforceability of similar forum provisions (including exclusive federal forum provisions for actions, suits, or proceedings asserting a cause of action arising under the Securities Act) in other companies’ organizational documents and similar agreements has been challenged in legal proceedings, and there is uncertainty as to whether courts would enforce the exclusive forum provision in our articles of association or the agreements governing the Warrants.
The agreement governing the Warrants and the warrant agent agreement provide that the foregoing provisions do not limit or restrict the federal district court in which a party may bring a claim under the U.S. federal securities laws. 28 However, the enforceability of similar forum provisions (including exclusive federal forum provisions for actions, suits, or proceedings asserting a cause of action arising under the Securities Act) in other companies’ organizational documents and similar agreements has been challenged in legal proceedings, and there is uncertainty as to whether courts would enforce the exclusive forum provision in our articles of association or the agreements governing the Warrants.
We cannot predict what actions may ultimately be taken with respect to tariffs, export controls, countermeasures, or other trade measures between the U.S. and China or other countries and what products may be subject to such actions. To the extent such actions inhibit our transactions with contract manufacturing facilities and suppliers in China, our business may be materially adversely affected.
We cannot predict what actions may ultimately be taken with respect to tariffs, export controls, countermeasures, or other trade measures between the U.S. and China or other countries and what products may be subject to such actions.
We cannot predict if investors will find our Ordinary Shares and/or Warrants less attractive because we may rely on either of these exemptions. If some investors find our Ordinary Shares and/or Warrants less attractive as a result, there may be a less active trading market for our Ordinary Shares and/or Warrants and our share price may be more volatile.
If some investors find our Ordinary Shares and/or Warrants less attractive as a result, there may be a less active trading market for our Ordinary Shares and/or Warrants and our share price may be more volatile. 26 The market price of our Ordinary Shares and/or Warrants may be volatile.
We may not be successful in increasing our sales in the United Kingdom and Germany and currently do not have an estimated starting date for sales in these other major European countries.
We may not be successful in increasing our sales in any or all territories and currently do not have an estimated commencement date for sales in these other major European countries.
Such recalls or voluntary removal of merchandise can result in, among other things, suspension of our seller accounts on Amazon and other online marketplaces, lost sales, diverted resources, potential harm to our reputation and increased client service costs and legal expenses, which could have a material adverse effect on our operating results.
Such recalls or voluntary removal of merchandise can result in, among other things, suspension of our seller accounts on Amazon and other online marketplaces, lost sales, diverted resources, potential harm to our reputation and increased client service costs and legal expenses, which could have a material adverse effect on our operating results. 15 Some of the products we sell may expose us to product liability claims and litigation or regulatory action relating to personal injury or environmental or property damage.
If these FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our Ordinary Shares, which may limit the ability of our shareholders to buy and sell our Ordinary Shares and could have an adverse effect on the market for and price of our Ordinary Shares.
If these FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our Ordinary Shares, which may limit the ability of our shareholders to buy and sell our Ordinary Shares and could have an adverse effect on the market for and price of our Ordinary Shares. 29 We may become a “passive foreign investment company”, or PFIC, for U.S. federal income tax purposes in the current taxable year or may become one in any subsequent taxable year.
Additional Ordinary Shares issued by us in the future will dilute an investor’s investment in the Company. In addition, we may seek shareholder approval to increase the amount of the Company’s authorized shares, which would create the potential for further dilution of current investors.
In addition, we may seek shareholder approval to increase the amount of the Company’s authorized shares, which would create the potential for further dilution of current investors.
The failure of our marketing activities could also adversely affect our ability to promote our product listings and sell our products, and to develop and maintain relationships with our customers, retailers and brands, which may have a material adverse effect on our business, results of operations, financial condition and prospects. 7 If we fail to acquire new customers or retain existing customers, or fail to do so in a cost-effective manner, we may not be able to achieve profitability.
The failure of our marketing activities could also adversely affect our ability to promote our product listings and sell our products, and to develop and maintain relationships with our customers, retailers and brands, which may have a material adverse effect on our business, results of operations, financial condition and prospects.
Shipping is a critical part of our business and any changes in shipping costs or any interruptions in shipping could adversely affect our operating results. If we are not able to negotiate acceptable pricing and other terms with vendors or if vendors experience performance problems or other difficulties, it could negatively impact our operating results and our customers’ experience.
If we are not able to negotiate acceptable pricing and other terms with vendors or if vendors experience performance problems or other difficulties, it could negatively impact our operating results and our customers’ experience.
These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of our Ordinary Shares or Warrants. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation.
These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market price of our Ordinary Shares or Warrants.
As regulations continue to develop and regulatory oversight continues to focus on these areas, we cannot ensure compliance at all times with all applicable laws or regulations. 22 In the event our controls should fail, or we are found to be not in compliance for other reasons, we could be subject to monetary damages, civil and criminal monetary penalties, withdrawal of business licenses or permits, litigation and damage to our reputation and the value of our brand.
In the event our controls should fail, or we are found to be not in compliance for other reasons, we could be subject to monetary damages, civil and criminal monetary penalties, withdrawal of business licenses or permits, litigation and damage to our reputation and the value of our brand.
Any natural disaster or catastrophic event could have a significant negative impact on our operations and financial results.
For example, we are not insured against terrorist attacks or cyberattacks. Any natural disaster or catastrophic event could have a significant negative impact on our operations and financial results.
Any significant disruption in service on our websites or in our computer systems, a number of which are currently hosted or provided by third-party providers, could materially affect our ability to operate, damage our reputation and result in a loss of customers, which would harm our business and results of operations.
As a result, we may not be able to register, use or maintain the domain names that utilize the name Jeffs’ Brands or our other brands in all of the countries in which we currently or intend to conduct business. 12 Any significant disruption in service on our websites or in our computer systems, a number of which are currently hosted or provided by third-party providers, could materially affect our ability to operate, damage our reputation and result in a loss of customers, which would harm our business and results of operations.
We may become a “passive foreign investment company”, or PFIC, for U.S. federal income tax purposes in the current taxable year or may become one in any subsequent taxable year. There generally would be negative tax consequences for U.S. taxpayers that are holders of the Ordinary Shares if we are or were to become a PFIC.
There generally would be negative tax consequences for U.S. taxpayers that are holders of the Ordinary Shares if we are or were to become a PFIC.
If our products are not delivered in a timely fashion or are damaged or lost during the delivery process, our customers could become dissatisfied and cease using our products or services, which would adversely affect our business and operating results. 12 We depend on highly skilled personnel, including senior management, and if we are unable to retain or motivate key personnel or hire, retain and motivate qualified personnel, our business could be harmed.
If our products are not delivered in a timely fashion or are damaged or lost during the delivery process, our customers could become dissatisfied and cease using our products or services, which would adversely affect our business and operating results.
For example, several of the reports and data on which our estimates and forecasts are based rely on projections of consumer adoption and incorporate data from secondary sources, such as company websites as well as industry, trade and government publications.
For example, several of the reports and data on which our estimates and forecasts are based rely on projections of consumer adoption and incorporate data from secondary sources, such as company websites as well as industry, trade and government publications. 24 Net revenue and operating results are difficult to forecast because they generally depend on the volume, timing and type of orders we receive, all of which are uncertain.
The staggered terms of directors may delay, defer or prevent an attempt to change control of us, even though a change in control might be considered by our shareholders to be in their best interest. 26 Risks Related to Our Status as a Public Company and Ownership of our Ordinary Shares and Warrants We incur significant increased costs as a result of operating as a public company.
The staggered terms of directors may delay, defer or prevent an attempt to change control of us, even though a change in control might be considered by our shareholders to be in their best interest.
We believe new customers can originate from word-of-mouth and other non-paid referrals from existing customers. Therefore, we must ensure that our existing customers remain loyal to us in order to continue receiving those referrals.
Therefore, we must ensure that our existing customers remain loyal to us in order to continue receiving those referrals.
We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could also harm our business. 32 Our investors’ ownership in the Company may be diluted in the future.
In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could also harm our business.
Some of our agreements with members of our supply chain may not indemnify us from product liability claims for a particular product, and some members of our supply chain may not have sufficient resources or insurance to satisfy their indemnity and defense obligations. 19 Any failure by us or our vendors to comply with product safety, labor or other laws, or our standard vendor terms and conditions, or to provide safe factory conditions for our or their workers may damage our reputation and brand and harm our business.
Any failure by us or our vendors to comply with product safety, labor or other laws, or our standard vendor terms and conditions, or to provide safe factory conditions for our or their workers may damage our reputation and brand and harm our business.
Market volatility may affect the value of an investment in our Ordinary Shares and/or Warrants and could subject us to litigation. Risks Related to Our Businesses, Strategies, Technology, and Industry We have a short operating history in an evolving industry and, as a result, our past results may not be indicative of future operating performance.
Risks Related to Our Businesses, Strategies, Technology, and Industry We have a short operating history in an evolving industry and, as a result, our past results may not be indicative of future operating performance. We have a short operating history in a rapidly evolving industry that may not develop in a manner favorable to our business.
See “Enforceability of Civil Liabilities” for additional information on your ability to enforce a civil claim against us and our executive officers or directors named in this Annual Report on Form 20-F.
See “Enforceability of Civil Liabilities” for additional information on your ability to enforce a civil claim against us and our executive officers or directors named in this Annual Report on Form 20-F. 21 Your rights and responsibilities as a shareholder are governed in key respects by Israeli laws, which differ in some material respects from the rights and responsibilities of shareholders of U.S. companies.
We believe our past success has depended, and our future success depends, on the efforts and talents of our senior management and our highly skilled team members. Our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees.
We depend on highly skilled personnel, including senior management, and if we are unable to retain or motivate key personnel or hire, retain and motivate qualified personnel, our business could be harmed. We believe our past success has depended, and our future success depends, on the efforts and talents of our senior management and our highly skilled team members.
As a seller of pest control products, we are subject to continual government oversight by the U.S. Environmental Protection Agency, or EPA, and other regulatory authorities. The EPA strictly regulates the advertising and promotion of pest control products, and these pest control products may only be marketed or promoted for their EPA approved uses, consistent with the product’s approved labeling.
The EPA strictly regulates the advertising and promotion of pest control products, and these pest control products may only be marketed or promoted for their EPA approved uses, consistent with the product’s approved labeling.

… 129 more changes not shown on this page.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

81 edited+21 added−52 removed92 unchanged
Biggest changeWe believe that doing business in the online consumer product market requires a profound understating of material trends and factors impacting the market and this can only be done by analyzing massive amounts of data.
Biggest changeWhile our sales represent a small fraction of the sales on Amazon, we believe that Amazon provides us with a unique opportunity to grow our sales. 36 Annual Net Sales Revenues of Amazon from 2004 to 2023 (in billion U.S. dollars) Source: Statista — Annual net sales revenues of Amazon from 2004 to 2023 Note that Amazon’s net sales presented in this chart are not necessarily indicative of our current or future sales. 37 We believe that doing business in the online consumer product market requires a profound understating of material trends and factors impacting the market and this can only be done by analyzing massive amounts of data.
Following the closing of the Contribution Transactions pursuant to the SEA, Jeffs’ Brands held all of the outstanding shares of Smart Repair Pro and Purex, Medigus held 50.03% of the outstanding Ordinary Shares and Mr. Hakmon, our Chief Executive Officer, held the remaining 49.97% of our outstanding Ordinary Shares. Mr.
Following the closing of the Contribution Transactions pursuant to the SEA, Jeffs’ Brands held all of the outstanding shares of Smart Repair Pro and Purex, Medigus held 50.03% of our outstanding Ordinary Shares and Mr. Hakmon, our Chief Executive Officer, held the remaining 49.97% of our outstanding Ordinary Shares. Mr.
These products will also have to achieve significant positive customer reviews and high search ranking for relevant key words and are in product categories where frequent product improvement is not required. We believe that acquisitions fitting the above criteria will contribute our revenue growth and operational efficiency, while reducing the risk involved in executing our process.
These products will also have to achieve significant positive customer reviews and high search ranking for relevant key words and are in product categories where frequent product improvement is not required. We believe that acquisitions fitting the above criteria will contribute to our revenue growth and operational efficiency, while reducing the risk involved in executing our process.
Every product opportunity that we encounter is handled with strong and efficient logistical tools and no opportunity will be neglected due to lack of logistical capabilities or low profitability. ● Strong proactive approach in purchasing new brands and active stores with law performance and high potential growth: Our goal-oriented team consists of people with a combined business experience and Amazon’s knowledge, along with a competitive culture and attitude, which allow us to identify low performance brands with high growth potential.
Every product opportunity that we encounter is handled with strong and efficient logistical tools and no opportunity will be neglected due to lack of logistical capabilities or low profitability. 35 ● Strong proactive approach in purchasing new brands and active stores with law performance and high potential growth: Our goal-oriented team consists of people with a combined business experience and Amazon’s knowledge, along with a competitive culture and attitude, which allow us to identify low performance brands with high growth potential.
Any failure or perceived failure by our subsidiaries or by us to comply with our posted privacy policies, our privacy-related obligations to users or other third parties, or any other legal obligations or regulatory requirements relating to privacy, data protection, or data security may result in governmental investigations or enforcement actions, litigation, claims, or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our users to lose trust in us, and otherwise materially and adversely affect our reputation and business.
Any failure or perceived failure by our subsidiaries or by us to comply with our posted privacy policies, cookies policies, our privacy-related obligations to users or other third parties, or any other legal obligations or regulatory requirements relating to privacy, data protection, or data security may result in governmental investigations or enforcement actions, litigation, claims, or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our users to lose trust in us, and otherwise materially and adversely affect our reputation and business.
Furthermore, the Plan requires that a national pollutant discharge permit management information platform shall be established by 2017 to strengthen the information disclosure and social supervision. Regulations Relating to Intellectual Property Rights Patents Pursuant to the Patent Law of China and its implementation rules, patents in China fall into three categories, namely invention patent, utility model and design patent.
Furthermore, the Plan requires that a national pollutant discharge permit management information platform shall be established by 2017 to strengthen the information disclosure and social supervision. 43 Regulations Relating to Intellectual Property Rights Patents Pursuant to the Patent Law of China and its implementation rules, patents in China fall into three categories, namely invention patent, utility model and design patent.
These regulations and laws may cover privacy, data collection and protection, location of data storage and processing, cybersecurity, e-commerce, content, use of “cookies”, pricing, advertising, marketing, distribution of products, consumer protection, taxation and online payment services. For example, we collect, use, maintain and otherwise process certain data about consumers of our products, partners, candidates and employees, consultants, and leads .
These regulations and laws may cover privacy, data collection and protection, location of data storage and processing, cybersecurity, e-commerce, content, use of “cookies”, pricing, advertising, marketing, distribution of products, consumer protection, taxation and online payment services. 46 For example, we collect, use, maintain and otherwise process certain data about consumers of our products, partners, candidates and employees, consultants, and leads.
Our current lease, which we entered into on September 16, 2022, effective as of October 1, 2022, expires on September 30, 2025 with an option to extend the lease on the same terms for an additional two years. Our monthly rent payment as of December 31, 2022, was approximately NIS 15,665 (approximately $4,350).
Our current lease, which we entered into on September 16, 2022, effective as of October 1, 2022, expires on September 30, 2025, with an option to extend the lease on the same terms for an additional two years. Our monthly rent payment as of December 31, 2023, was approximately NIS 15,665 (approximately $4,350).
For some products, we set out written warranties in compliance with the mandatory requirements of the Magnuson-Moss Warranty Act. 48 Some chemicals pose perceived or real risks to the environment and human health. We require our products that contain chemicals regulated by the EPA to comply with certification reporting and other requirements of imposed by the EPA.
For some products, we set out written warranties in compliance with the mandatory requirements of the Magnuson-Moss Warranty Act. 42 Some chemicals pose perceived or real risks to the environment and human health. We require our products that contain chemicals regulated by the EPA to comply with certification reporting and other requirements of imposed by the EPA.
As of the date of this Annual Report on Form 20-F, we have warehousing and distribution agreements with four warehouses in the United States, one in Canada, one in the United Kingdom and one in Germany, which generally provide that the service provider will provide warehousing services at its warehousing facility and distribution services for our products.
As of the date of this Annual Report on Form 20-F, we have warehousing and distribution agreements with three warehouses in the United States, one in Canada, one in the United Kingdom and one in Germany, which generally provide that the service provider will provide warehousing services at its warehousing facility and distribution services for our products.
Regulations Relating to Data Privacy and Security Regulations, legislation or self-regulation relating to privacy, data collection and protection, e-commerce and internet advertising and uncertainties regarding the application or interpretation of existing or newly adopted laws and regulations, could harm our business and subject us to significant legal liability for non-compliance.
Regulations Relating to Data Privacy and Security Regulations, legislation or self-regulation relating to privacy, data collection and protection, e-commerce and internet advertising (including, behavioral advertising) and uncertainties regarding the application or interpretation of existing or newly adopted laws and regulations, could harm our business and subject us to significant legal liability for non-compliance.
We consider that our current office space is sufficient to meet our anticipated needs for the foreseeable future and is suitable for the conduct of our business. We have contracts with third party warehouses in four locations in the United States, one location in Canada, one location in the United Kingdom, and one location in Germany.
We consider that our current office space is sufficient to meet our anticipated needs for the foreseeable future and is suitable for the conduct of our business. We have contracts with third party warehouses in three locations in the United States, one location in Canada, one location in the United Kingdom, and one location in Germany.
Also in connection with the closing of the Fort Acquisition, on March 9, 2023, we and the Fort Sellers entered into a consulting agreement, pursuant to which the Fort Sellers will provide us with consultancy services for a period of six months following the closing, at monthly fee of £2,500 (approximately $3,000). C.
In addition, in connection with the closing of the Fort Acquisition, on March 9, 2023, we and the Fort Sellers entered into a consulting agreement, pursuant to which the Fort Sellers will provide us with consultancy services for a period of six months following the closing, at monthly fee of £2,500 (approximately $3,000).
Expansion into the Nutritional Supplements Market On February 23, 2023, we and Jeffs’ Brands Holdings entered into a stock purchase agreement with SciSparc, or the Wellution Agreement, as amended on March 22, 2023 by Addendum No. 1 to the Wellution Agreement, or the Addendum, pursuant to which, on March 22, 2023, Jeffs’ Brands Holdings acquired from SciSparc 57 shares of common stock of SciSparc U.S., a wholly-owned subsidiary of SciSparc that owns and operates Wellution, a top-selling Amazon food supplements and cosmetics brand, subject to the holdback by SciSparc of 11 shares as described below, representing approximately 49% of the issued and outstanding shares of common stock of SciSparc U.S., for approximately $3.0 million in cash (including the Price Adjustment, as defined below), of which approximately $2.5 million was paid at the closing, or the Wellution Transaction.
Expansion into the Nutritional Supplements Market On February 23, 2023, we and Jeffs’ Brands Holdings entered into a stock purchase agreement with SciSparc, or the Wellution Agreement, as amended on March 22, 2023 by Addendum No. 1 to the Wellution Agreement, or the Addendum, pursuant to which, on March 22, 2023, Jeffs’ Brands Holdings acquired from SciSparc 57shares of common stock of SciSparc U.S., a wholly-owned subsidiary of SciSparc that owns and operates Wellution, a top-selling Amazon food supplements and cosmetics brand, representing approximately 49% of the issued and outstanding shares of common stock of SciSparc U.S., for approximately $3.0 million in cash (including the Price Adjustment, as defined below), of which approximately $2.5 million was paid at the closing, or the Wellution Transaction.
We intend to execute on acquisitions when all the relevant factors and criteria fit our goals and business aspirations. We will target businesses that have built significant market share. We will aim for products with strong unit economics and high product quality.
We intend to execute our acquisitions when all the relevant factors and criteria fit our goals and business aspirations. We will target businesses that have built a market share. We will aim for products with strong unit economics and high product quality.
Organizational Structure We have five wholly-owned subsidiaries: Smart Repair Pro, Purex, Top Rank and Fort, e-commerce companies that operate online stores for the sale of various consumer products on the Amazon marketplace and Jeffs’ Brands Holdings, a holding company that owns approximately 49% (subject to holdback) of the issued and outstanding shares of common stock of SciSparc U.S., which owns and operates Wellution, a food supplements and cosmetics brand.
Organizational Structure We have five wholly-owned subsidiaries: Smart Repair Pro, Top Rank, Fort and Fort Products LLC, e-commerce companies that operate online stores for the sale of various consumer products on the Amazon marketplace and Jeffs’ Brands Holdings, a holding company that owns approximately 49% of the issued and outstanding shares of common stock of SciSparc U.S., which owns and operates Wellution, a food supplements and cosmetics brand.
The SciSparc Consulting Agreement is for an undefined period of time and may be terminated by either party with 30 days advance notice.
The SciSparc Consulting Agreement is for an undefined period of time and may be terminated by either party with 30 days’ advance notice.
Under the Wellted brand, we offer reusable, self-cleansing pet hair removers for cats and dogs; ● Jeffs’ Brands Holdings, owns a minority interest in SciSparc Nutraceuticals Inc., or SciSparc U.S., a majority-owned subsidiary of SciSparc Ltd., or SciSparc, that owns and operates Wellution, an Amazon food supplements and cosmetics brand; and ● Fort, a company that sells pest control products primarily through Amazon.uk.
Under the Wellted brand, we offer reusable, self-cleansing pet hair removers for cats and dogs. 33 ● Fort owns and operates the Fort brand which sells pest control products primarily through Amazon UK. ● Jeffs’ Brands Holdings, owns a minority interest in SciSparc U.S., a majority-owned subsidiary of SciSparc Ltd., or SciSparc, that owns and operates Wellution, an Amazon food supplements and cosmetics brand.
Pursuant to the SEA, Medigus and Mr. Hakmon, as shareholders of Smart Repair Pro and Purex, contributed all of the equity interests they owned in Smart Repair Pro and Purex to Jeffs’ Brands in exchange for Ordinary Shares, or the Contribution Transactions.
Hakmon, Purex and Smart Repair Pro became wholly-owned subsidiaries of Jeffs’ Brands. Pursuant to the SEA, Medigus and Mr. Hakmon, as shareholders of Smart Repair Pro and Purex, contributed all of the equity interests they owned in Smart Repair Pro and Purex to Jeffs’ Brands in exchange for Ordinary Shares of the Company, or the Contribution Transactions.
Viki Hakmon, our Chief Executive Officer. Mr. Hakmon has vast experience in the retail markets, having served in various capacities over the past 25 years, 15 of which were in U.S. markets. Mr. Hakmon also has a profound understanding and knowledge of developing and discovering products and leveraging their growing market demand. Mr.
Hakmon has vast experience in the retail markets, having served in various capacities over the past 25 years, 15 of which were in U.S. markets. Mr. Hakmon also has a profound understanding and knowledge of developing and discovering products and leveraging their growing market demand. Mr.
Further, laws in all 50 states require businesses to provide notice to consumers whose personal information has been disclosed as a result of a data breach.
Further, laws in all 50 states require businesses to provide notice to consumers whose personal information has been disclosed or subject to unauthorized access as a result of a data breach.
Also pursuant to the Wellution Agreement, in connection with the closing of the Wellution Transaction, effective as of March 22, 2023, we issued 247,415 Ordinary Shares to SciSparc and on March 29, 2023, SciSparc issued 360,297 of its ordinary shares to us in a mutual share exchange, or, collectively, the Exchange Shares, representing approximately 2.97% and 4.99%, respectively, of the Company’s and SciSparc’s issued and outstanding ordinary shares.
Also pursuant to the Wellution Agreement, in connection with the closing of the Wellution Transaction, effective as of March 22, 2023, we issued 35,345 Ordinary Shares to SciSparc and on March 29, 2023, SciSparc issued 13,858 of its ordinary shares to us in a mutual share exchange, or, collectively, the Exchange Shares, representing approximately 2.97% and 4.99%, respectively, of the Company’s and SciSparc’s issued and outstanding ordinary shares as of the closing of the Wellution Transaction.
(Nasdaq: ATER) Other CPG competitors Helen of Troy Ltd., Newell Brands (Nasdaq: NWL), Frigidaire Appliance Company, Trademark Global Inc., and other CPG players who are operating on Amazon 46 We believe that our competitive advantages include: ● Senior and experienced management team; ● Strong logistical capabilities; ● Skillful use of sophisticated data analytics software; ● Fast and proactive approach to changes in the market; and ● Well targeted products which we believe reduces risk and costs.
(Nasdaq: ATER) Other CPG competitors Helen of Troy Ltd., Newell Brands (Nasdaq: NWL), Frigidaire Appliance Company, Trademark Global Inc., and other CPG players who are operating on Amazon We believe that our competitive advantages include: ● Senior and experienced management team; ● Strong logistical capabilities; ● Skillful use of sophisticated data analytics software; ● Fast and proactive approach to changes in the market; and ● Well targeted products which we believe reduces risk and costs. 40 Development After executing our procurement process and owning new products and brands, we then invest in additional development of the procured products.
Additional U.S. states have implemented, or are in the process of implementing, similar new laws or regulation (for example, the Virginia Consumer Data Protection Act, or the VCDPA, that went into effect on January 1, 2023 and the Colorado Privacy Act, or the CPA, which will go into effect on July 1, 2023) that impose new privacy rights and obligations.
Additional U.S. states have implemented, or are in the process of implementing, similar new laws or regulation (for example, the Virginia Consumer Data Protection Act, or the VCDPA, that went into effect on January 1, 2023; the Colorado Privacy Act, or the CPA, which went into effect on July 1, 2023; the Connecticut Data Privacy Act, or the CDPA, which went into effect on July 1, 2023; the Utah Consumer Privacy Act, or the UCPA, which went into effect on December 31, 2023; and other upcoming laws which will go into effect on 2024 and in the coming years) that impose new privacy rights and obligations.
As of the date of this Annual Report on Form 20-F, our material stores on the Amazon platform, brands and products consist of the following: Whoobli Store Our revenues from sales on the Whoobli store for the year ended December 31, 2022 were approximately $3,319 thousand, or 56.6%, of our total revenues for such period.
As of the date of this Annual Report on Form 20-F, our material stores on the Amazon platform, brands and products consist of the following: Whoobli Store Our revenues from sales on the Whoobli store for the year ended December 31, 2023 were approximately $1,913 thousand, or 19.12 %, of our total revenues for such period.
Intellectual Property As of April 10, 2023, we owned 13 trademarks: KnifePlanet, CC-Exquisite, Zendora, Whoobli, PetEvo, Wellted, Roshield, Entopest, Rempro, Birdgo, ProPest, Topperama and Seaheaven. Competition The consumer goods and e-commerce market is a highly competitive environment.
Intellectual Property As of March 28, 2024, we owned 13 trademarks: KnifePlanet, CC-Exquisite, Whoobli, PetEvo, Wellted, Roshield, Entopest, Rempro, Birdgo, ProPest, Topperama and Seaheaven. Competition The consumer goods and e-commerce market are a highly competitive environment.
In March 2023, we completed the acquisition of Fort, a company that sells pest control products, and in March 2023, we completed the acquisition of approximately 49% (subject to a hold back) of the issued and outstanding shares of common stock of SciSparc U.S., a company that operates and owns the Wellution brand.
In March 2023, we completed the acquisition of Fort, a company that sells pest control products, and in March 2023, we completed as well the acquisition of approximately 49% of the issued and outstanding shares of common stock of SciSparc Nutraceuticals Inc, or SciSparc U.S., a company that operates and owns the Wellution brand.
In April 2021, Top Rank, an Israeli company, was formed as a wholly owned subsidiary of Jeffs’ Brands. On May 10, 2021, pursuant to the Stock Exchange and Plan of Restructuring Agreement, or the SEA, entered into by and between the Company, Medigus and Mr. Hakmon, Purex and Smart Repair Pro became wholly-owned subsidiaries of Jeffs’ Brands.
This acquisition closed on January 4, 2021. In April 2021, Top Rank, an Israeli company, was formed as a wholly owned subsidiary of Jeffs’ Brands. On May 10, 2021, pursuant to the Stock Exchange and Plan of Restructuring Agreement, or the SEA, entered into by and between the Company, Medigus and Mr.
In connection with the closing of the Fort Acquisition, on March 9, 2023, we and Fort entered into settlement agreements with all of Fort’s employees, including the Fort Sellers, by which such employees’ employment with Fort will terminate three months following March 9, 2023 and certain other customary conditions.
In connection with the closing of the Fort Acquisition, on March 9, 2023, we and Fort entered into settlement agreements with all of Fort’s employees, including the Fort Sellers, by which, inter alia, such employees’ employment with Fort terminated and containing other customary conditions.
On May 3, 2022, our board of directors approved a 0.806-for-1 reverse split of our issued and outstanding Ordinary Shares, effective as of May 3, 2022, pursuant to which holders of our Ordinary Shares received .806 of an Ordinary Share for every one Ordinary Share held as of such date.
Reverse Split On September 5, 2023, our board of directors approved a 1-for-7 reverse split of our issued and outstanding Ordinary Shares, effective as of November 3, 2023, pursuant to which holders of our Ordinary Shares received one Ordinary Share for every 7 Ordinary Shares held as of such date.
Our spending and approach on advertising is aimed to be as low as possible given the resources we spent prior to the actual sale on selecting the different products depending on the life cycle of products on our platform.
We believe that this knowledge will bring significant competitive advantages for our products. Our spending and approach on advertising is aimed to be as low as possible given the resources we spent prior to the actual sale on selecting the different products depending on the life cycle of products on our platform.
Our Competitive Strengths We believe that our competitive strengths include: ● Senior and experienced management team; ● Sophisticated know-how regarding use of data analysis technology platforms; ● Strong logistical capabilities, using sophisticated BI tools to optimize the supply chain management; ● Strong proactive approach in purchasing new brands and active stores with law performance and high potential growth; and ● Procurement of well targeted products. 40 We believe that these strengths, as further described below, differentiate us from our competitors and provide us with numerous advantages: ● Senior and experienced management team: We are led by Mr.
Our Competitive Strengths We believe that our competitive strengths include: ● Senior and experienced management team; ● Sophisticated know-how regarding use of data analysis technology platforms; ● Strong logistical capabilities, using sophisticated BI tools to optimize the supply chain management; ● Strong proactive approach in purchasing new brands and active stores with low performance and high potential growth; and ● Procurement of well targeted products.
These facilities are used for storage of the products prior to the shipment of such products to Amazon’s warehouses, based on availability. ITEM 4A. UNRESOLVED STAFF COMMENTS None. 56
These facilities are used for storage of the products prior to the shipment of such products to Amazon’s warehouses, based on availability.
Like any other e-commerce business, we are affected by the high season shopping, which is from October through December. Our business model is to take into consideration this sales cycle and introduce new products right before high season.
In each of 2023 and 2022, approximately 96% to 99% of our revenue was through or with Amazon sales platform. Like any other e-commerce business, we are affected by the high season shopping, which is from October through December. Our business model is to take into consideration this sales cycle and introduce new products right before high season.
Amazon’s algorithm is a crucial factor in the success of CPG companies, and we believe we have a profound understating of it According to BCG, top-selling brands on Amazon, often differ significantly from top sellers in brick-and-mortar stores.
Moreover, we are constantly rethinking our efficiency, logistics and fulfillment networks including investments in warehouses and delivery infrastructure. Amazon’s algorithm is a crucial factor in the success of CPG companies, and we believe we have a profound understating of it According to BCG, top-selling brands on Amazon, often differ significantly from top sellers in brick-and-mortar stores.
The products manufactured thereby are subject to our successful completion of testing and assembly checks before shipment. We may terminate these contracts at any time with an advance notice.
The products manufactured thereby are subject to our successful completion of testing and assembly checks before shipment. We may terminate these contracts at any time with an advance notice. We have strong and long-term relationships with these manufacturers and we believe we have a safe and stable supply chain.
The parties whose trade secrets are being misappropriated may petition for administrative corrections, and regulatory authorities may stop any illegal activities and fine infringing parties in the amount of RMB 10,000 — 200,000.
The parties whose trade secrets are being misappropriated may petition for administrative corrections, and regulatory authorities may stop any illegal activities and fine infringing parties in the amount of RMB 10,000 — 200,000. Alternatively, persons whose trade secrets are being misappropriated may file lawsuits in a Chinese court for loss and damages caused by the misappropriation.
In addition, some countries are considering or have enacted legislation requiring local storage and processing of data that could increase the cost and complexity of delivering our services. 52 If we were found in violation of any applicable laws or regulations relating to privacy, data protection, or security, in any jurisdiction, including in jurisdictions where we operate remotely (such as by selling to shoppers residing in such jurisdictions), our business may be materially and adversely affected and we would be liable for any damages and regulatory fines and would likely have to change our business practices.
If we were found in violation of any applicable laws or regulations relating to privacy, data protection, or security, in any jurisdiction, including in jurisdictions where we operate remotely (such as by selling to shoppers residing in such jurisdictions), our business may be materially and adversely affected and we would be liable for any damages and regulatory fines and would likely have to change our business practices.
The Addendum provided for the payment by us to SciSparc of an additional amount of $489,330 in cash for the purchase price adjustments, or the Price Adjustment, related to inventory and working capital, payable in five equal installments of $97,866 on the tenth day of each consecutive calendar month, beginning in May 2023.
The Addendum provided for the payment by us to SciSparc of an additional amount of $489,330 in cash for the purchase price adjustments, or the Price Adjustment, related to inventory and working capital which was paid in five equal installments of $97,866.
In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which specifies that the administration by the SAFE or its local branches over direct investment by foreign investors in China will be conducted by way of registration, and banks must process foreign exchange business relating to the direct investment in China based on the registration information provided by SAFE and its branches.
In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which specifies that the administration by the SAFE or its local branches over direct investment by foreign investors in China will be conducted by way of registration, and banks must process foreign exchange business relating to the direct investment in China based on the registration information provided by SAFE and its branches. 45 Under the Circular of the SAFE on Further Improving and Adjusting the Policies for Foreign Exchange Administration under Capital Accounts promulgated by the SAFE on January 10, 2014, and effective from February 10, 2014, administration over the outflow of the profits by domestic institutions has been further simplified.
The information contained on our website or available through our website is not incorporated by reference into and should not be considered a part of this Annual Report on Form 20-F, and the reference to our website in this Annual Report on Form 20-F is an inactive textual reference only. 37 Puglisi & Associates is our agent in the United States and its address is 850 Library Avenue, Suite 204, Newark, Delaware 19711.
The information contained on our website or available through our website is not incorporated by reference into and should not be considered a part of this Annual Report on Form 20-F, and the reference to our website in this Annual Report on Form 20-F is an inactive textual reference only.
The reverse stock split proportionally reduced the number of authorized share capital. Unless the context expressly dictates otherwise, all references to share and per share amounts referred to herein give effect to the bonus shares issuance and the reverse share splits.
The Reverse Split did not reduce the number of our authorized share capital. Unless the context expressly dictates otherwise, all references to share and per share amounts referred to herein give effect to the Reverse Split.
Under this law, business persons are prohibited from employing the following methods to infringe trade secrets: (1) obtaining the trade secrets from the legal owners or holders by any unfair methods such as stealing, solicitation or coercion; (2) disclosing, using or permitting others to use the trade secrets obtained illegally under item (1) above; or (3) disclosing, using or permitting others to use the trade secrets, in violation of any contractual agreements or any requirements of the legal owners or holders to keep such trade secrets in confidence.
Trade Secrets According to the Anti-Unfair Competition Law of China, the term “trade secrets” refers to technical information and business information that is unknown to the public, that has utility and may create business interest or profit for its legal owners or holders, and that is maintained as a secret by its legal owners or holders. 44 Under this law, business persons are prohibited from employing the following methods to infringe trade secrets: (1) obtaining the trade secrets from the legal owners or holders by any unfair methods such as stealing, solicitation or coercion; (2) disclosing, using or permitting others to use the trade secrets obtained illegally under item (1) above; or (3) disclosing, using or permitting others to use the trade secrets, in violation of any contractual agreements or any requirements of the legal owners or holders to keep such trade secrets in confidence.
We were incorporated in Israel in March 2021, under the name Jeffs’ Brands Ltd, to serve as the holding company of three other e-commerce companies, Smart Repair Pro, Purex, and Top Rank, that operate online stores for the sale of various consumer products on Amazon online marketplace, utilizing the FBA model.
We were incorporated in Israel in March 2021, under the name Jeffs’ Brands Ltd, to provide a variety of professional and business support as well as marketing support services to Smart Repair Pro that operate online stores for the sale of various consumer products on Amazon online marketplace, utilizing the FBA model.
Pursuant to the Wellution Agreement, in connection with the closing of the Wellution Transaction, on March 22, 2023, we entered into a consulting agreement with SciSparc U.S., or the SciSparc Consulting Agreement, pursuant to which we will provide management services to SciSparc U.S. for the Wellution brand for a monthly fee of $20,000, and will receive a one-time signing bonus in the amount of $51,000.
As collateral for the payment in full of the Price Adjustment, SciSparc held back 11 shares of common stock of SciSparc U.S, which was released to Jeffs’ Brands Holdings on March 6, 2024, when the final payment was made. 49 Pursuant to the Wellution Agreement, in connection with the closing of the Wellution Transaction, on March 22, 2023, we entered into a consulting agreement with SciSparc U.S., or the SciSparc Consulting Agreement, pursuant to which we will provide management services to SciSparc U.S. for the Wellution brand for a monthly fee of $20,000, and received a one-time signing bonus in the amount of $51,000.
Acquisition Strategy Our growth, as described above, will be generated mainly by our strategic acquisition of high demand products. We also intend to supplement our acquisitions by growing our logistical capabilities, which we believe will bolster our competitive advantage. We recently completed the acquisition of two Amazon marketplace brands.
We also intend to supplement our acquisitions by growing our logistical capabilities, which we believe will bolster our competitive advantage. In 2023, we completed the acquisition of two Amazon marketplace brands.
EEA and UK privacy laws are constantly developing, including through case law and regulatory guidance, which increases our compliance costs and regulatory exposure. We are also subject to evolving EEA and the UK privacy laws on cookies, tracking technologies and e-marketing.
EEA and UK privacy laws are constantly developing, including through case law and regulatory guidance, which increases our compliance costs and regulatory exposure.
The PetEvo Store offers car door protectors in sets of two that fit any vehicle and protects from pet scratches and is also waterproof. 45 Strategy Growth Strategy The key elements of our growth strategy include: ● High-end search and identification of high value products and their markets; ● Frequent introduction of new products to our customers in various geographical markets; ● Effective use of our competitive advantage — our know-how uses of software-based technology; ● Leverage of our logistical capabilities and knowledge to reduce costs and increase purchasing power; and ● Continued monetarization of our competitors to ensure we maintain our competitive differentiation and advantages.
Strategy Growth Strategy The key elements of our growth strategy include: ● High-end search and identification of high value products and their markets; ● Frequent introduction of new products to our customers in various geographical markets; ● Effective use of our competitive advantage — our know-how uses of software-based technology; ● Leverage of our logistical capabilities and knowledge to reduce costs and increase purchasing power; and ● Continued monetarization of our competitors to ensure we maintain our competitive differentiation and advantages. 39 Acquisition Strategy Our growth, as described above, will be generated mainly by our strategic acquisition of high demand products.
We have strong and long-term relationships with these manufacturers and we believe we have a safe and stable supply chain. 47 As of the date of this Annual Report on Form 20-F, we use third party warehouses to fulfill direct-to-consumer orders, through agreements or terms of services.
As of the date of this Annual Report on Form 20-F, we use third party warehouses to fulfill direct-to-consumer orders, through agreements or terms of services.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company In December 2017, Smart Repair Pro, a California corporation, was founded by our Chief Executive Officer, Viki Hakmon, and began operating in June 2019. Following its acquisition of the KnifePlanet brand, Smart Repair Pro began selling the KnifePlanet brand on Amazon, using the FBA model.
ITEM 4. INFORMATION ON THE COMPANY A. History and Development of the Company Jeffs’ Brands was incorporated in March 2021 under the Companies Law in the State of Israel. In December 2017, Smart Repair Pro, a California corporation, was founded by our Chief Executive Officer, Viki Hakmon, and began operating in June 2019.
Additionally, we are or may soon be subject to the California Consumer Privacy Act, or the CCPA, as amended by the California Privacy Rights Act, or the CPRA, which came into effect on January 1, 2020 and, imposes heightened transparency obligations, adds restrictions on the “sale” or “share” of personal information (which it defines broadly), and creates new data privacy rights for California residents and carries significant enforcement penalties for non-compliance.
Recent European court and regulatory decisions are driving increased attention to cookies and tracking technologies, which could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities. 47 Additionally, we are or may soon be subject to the California Consumer Privacy Act, or the CCPA, as amended by the California Privacy Rights Act, or the CPRA, which came into effect on January 1, 2020 and, imposes heightened transparency obligations, adds restrictions on the “sale” or “share” of personal information (which it defines broadly), and creates new data privacy rights for California residents and carries significant enforcement penalties for non-compliance.
More generally, some observers have noted the CCPA and CPRA could mark the beginning of a trend toward more stringent privacy legislation in the US, including similar laws in other US states and a potential federal privacy law, all of which could increase our potential liability and adversely affect our business. 53 In addition, we are also subject to the Israeli Privacy Law, and its regulations, including the Israeli Privacy Protection Regulations (Data Security) 2017, or the Data Security Regulations, which came into effect in Israel in May 2018 and impose obligations with respect to the manner personal data is processed, maintained, transferred, disclosed, accessed and secured, as well as the guidelines of the Israeli Privacy Protection Authority.
In addition, we are also subject to the Israeli Privacy Law, and its regulations, including the Israeli Privacy Protection Regulations (Data Security) 2017, or the Data Security Regulations, which came into effect in Israel in May 2018 and impose obligations with respect to the manner personal data is processed, maintained, transferred, disclosed, accessed and secured, as well as the guidelines of the Israeli Privacy Protection Authority.
Our ability to collect, use, maintain or otherwise process personal data has been, and could be further, restricted by existing and new laws and regulations relating to privacy and data collection and protection, including the EU General Data Protection Regulation 2016/5679, or the GDPR, the Israeli Privacy Protection Law, 1981 and the regulations thereunder, or the Israeli Privacy Law, as well as other applicable laws, including in the United States.
Our ability to collect, use, maintain or otherwise process personal data has been, and could be further, restricted by existing and new laws and regulations relating to privacy and data collection and protection.
Alternatively, persons whose trade secrets are being misappropriated may file lawsuits in a Chinese court for loss and damages caused by the misappropriation. 50 The measures to protect trade secrets include oral or written agreements or other reasonable measures to require the employees of, or persons in business contact with, legal owners or holders to keep trade secrets confidential.
The measures to protect trade secrets include oral or written agreements or other reasonable measures to require the employees of, or persons in business contact with, legal owners or holders to keep trade secrets confidential.
The Patent Law of China adopts the principle of “first to file,” which means where more than one person files a patent application for the same invention, a patent will be granted to the person who first filed the application. 49 Existing patents can become invalid or unenforceable due to a number of factors, including known or unknown prior art, deficiencies in patent application and lack of novelty in technology.
The Patent Law of China adopts the principle of “first to file,” which means where more than one person files a patent application for the same invention, a patent will be granted to the person who first filed the application.
The number of Exchange Shares acquired by each company was calculated by dividing $288,238, which was adjusted from $300,000, pursuant to the 4.99% ownership limitation included in the Wellution Agreement, by the average closing price of the relevant company’s shares on the Nasdaq Capital Market for the 30 consecutive trading days ending on the third trading day immediately prior to the closing date. 55 Expansion into the Market of Pest Control Products On March 2, 2023, we entered into a share purchase agreement, or the Fort SPA, with the holders, or the Fort Sellers, of all of the issued and outstanding share capital of Fort, a company incorporated under the laws of England and Wales and sells pest control products primarily through Amazon.uk, pursuant to which on March 9, 2023, we acquired all of the issued and outstanding share capital of Fort, for approximately £2,000,000 (approximately $2,400,000), or the Fort Acquisition.
Expansion into the Market of Pest Control Products On March 2, 2023, we entered into a share purchase agreement, or the Fort SPA, with the holders, or the Fort Sellers, of all of the issued and outstanding share capital of Fort, a company incorporated under the laws of England and Wales and sells pest control products primarily through Amazon UK, pursuant to which on March 9, 2023, we acquired all of the issued and outstanding share capital of Fort, for approximately £2,000,000 (approximately $2,400,000), or the Fort Acquisition.
Our Customers Our customers are primarily individual online consumers who purchase our products primarily on the Amazon U.S. and Amazon EU marketplaces, which contributed to our increase in sales year over year. In 2022 and 2021, approximately 95% to 100% of our revenue was through or with Amazon sales platform.
We do not consolidate the financial results of SciSparc U.S or the sales of the Wellution products in our consolidated financial statements. 34 Our Customers Our customers are primarily individual online consumers who purchase our products primarily on the Amazon U.S. and Amazon EU marketplaces, which contributed to our increase in sales year over year.
In October 2020, Medigus Ltd., or Medigus, a publicly traded company (Nasdaq: MDGS) incorporated under the laws of the State of Israel, entered into a share purchase agreement to acquire 50.01% of Smart Repair Pro and 50.03% of Purex. This acquisition closed on January 4, 2021. In March 2021, Jeffs’ Brands was formed as a wholly owned subsidiary of Medigus.
At that time, Purex was 100% owned by affiliates of Mr. Hakmon. Purex was voluntarily dissolved on July 13, 2023. In October 2020, Medigus, a publicly traded company (Nasdaq: MDGS) incorporated under the laws of the State of Israel, entered into a share purchase agreement to acquire 50.01% of Smart Repair Pro and 50.03% of Purex.
In August 2019, Smart Repair Pro acquired the CC-Exquisite store, which owns the DARTS ® brand. In April 2020, Purex was incorporated in California for the purpose of purchasing an online store. At that time, Purex was 100% owned by affiliates of Mr. Hakmon.
Following its acquisition of the KnifePlanet brand, Smart Repair Pro began selling the KnifePlanet brand on Amazon, using the FBA model. In August 2019, Smart Repair Pro acquired the CC-Exquisite store, which owns the DARTS ® brand. In April 2020, Purex Corp, or Purex was incorporated in California for the purpose of purchasing an online store.
Our developments remain within the product history ranking and overviews on Amazon, hence, the upgraded products are being promoted under the same brand and its positioning on Amazon.
Our development is focused on upgrading the existing products and/or adding additional value and features to them, such as additional colors or shapes, new design or version. Our developments remain within the product history ranking and overviews on Amazon, hence, the upgraded products are being promoted under the same brand and its positioning on Amazon.
Hakmon’s affiliates, who were minority shareholders of Smart Repair Pro and Purex, transferred all their holdings in Smart Repair Pro and Purex to Mr. Hakmon, effective immediately prior to the Contribution Transactions pursuant to a Share Transfer Deed dated May 10, 2021.
Hakmon’s affiliates, who were minority shareholders of Smart Repair Pro and Purex, transferred all their holdings in Smart Repair Pro and Purex to Mr.
The KnifePlanet Store offers a complete premium stone knife-sharpening set, which includes flattening stone, bamboo base, and two nonslip rubber bases. The Wellted Store offers the Pet Hair Remover for cats and dogs. It’s reusable, self-cleansing and includes a brush for cleaning furniture, carpets, clothing, car seats, etc. The CC-Exquisite Store offers CC-exquisite professional steel-tip darts sets.
The Wellted Store offers the Pet Hair Remover for cats and dogs. It’s reusable, self-cleansing and includes a brush for cleaning furniture, carpets, clothing, car seats, etc. The CC-Exquisite Store offers CC-exquisite professional steel-tip darts sets. The PetEvo Store offers car door protectors in sets of two that fit any vehicle and protects from pet scratches and is also waterproof.
KnifePlanet Store Our revenues from sales on the KnifePlanet store for the year ended December 31, 2022 were approximately $2,070, or 35.3%, of our total revenues for such period. The KnifePlanet store sells the following products: 1. CC-Exquisite Professional Steel Tip Darts Set.
KnifePlanet Store Our revenues from sales on the KnifePlanet store for the year ended December 31, 2023 were approximately $2,424 , or 24.22 %, of our total revenues for such period.
After each profit outflow, the bank must affix its seal to and endorsements on the original copy of the relevant tax record-filing form to indicate the actual amount of the profit outflow and the date of the outflow. 51 On March 30, 2015, SAFE promulgated the Circular on Reforming the Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises, or SAFE Circular 19, which became effective on June 1, 2015.
After each profit outflow, the bank must affix its seal to and endorsements on the original copy of the relevant tax record-filing form to indicate the actual amount of the profit outflow and the date of the outflow.
As of the date on this Annual Report on Form 20-F, we have five wholly-owned subsidiaries: Smart Repair Pro, Purex, Top Rank , Fort and Jeffs’ Brands Holdings. 38 In addition to executing the FBA business model, we utilize A.I. and machine learning technologies to analyze sales data and patterns on Amazon in order to identify existing stores, niches and products that have the potential for development and growth, and for maximizing sales of existing proprietary products.
In addition to executing the FBA business model, we utilize internal methodologies to analyze sales data and patterns on Amazon in order to identify existing stores, niches and products that have the potential for development and growth, and for maximizing sales of existing proprietary products.
The Whoobli store sells the following products: 1. Whoobli Adjustable Kids Punching Bag with Stand (for 3-10 year olds); 2. Whoobli Ninja Inflatable Kids Punching Bag; 3. Whoobli Unicorn Birthday Party Supplies (Serves 16); 4. Whoobli Mermaid Party Supplies (Serves 16); 5. Whoobli Dinosaur Party Supplies (Serves 16); and 6. Whoobli Construction Birthday Party Supplies (Serves 16).
The Whoobli store sells a variety of punching bag sets, including: Whoobli Adjustable Kids Punching Bag with Stand; Whoobli Ninja Inflatable Kids Punching Bag; Whoobli Unicorn Birthday Party Supplies; Whoobli Mermaid Party Supplies; Whoobli Dinosaur Party Supplies; and the Whoobli Construction Birthday Party Supplies.
Phase III: Sell and Ship We then sell the most desired products to our consumers, maximizing our positioning for high profitability (with minimal marketing required, offering the optimum price being both lucrative and competitive). 44 Below are recent examples of products that were identified by our process and offered to consumers, which significantly contributed to our increase in sales year over year: Product Name and Description Illustration The Whoobli Store offers the Whoobli punching bag, adjustable stand and boxing gloves for children aged 3-8 years old.
Below are recent examples of products that were identified by our process and offered to consumers, which contributed to our increase in sales year over year: Product Name and Description Illustration The Whoobli Store offers the Whoobli punching bag, adjustable stand and boxing gloves for children aged 3-8 years old. 38 The KnifePlanet Store offers a complete premium stone knife-sharpening set, which includes flattening stone, bamboo base, and two nonslip rubber bases.
Our Stores, Brands and Products As of the date of this Annual Report on Form 20-F: ● Smart Repair Pro operates three stores on Amazon, which sell 12 products under the KnifePlanet, CC-Exquisite and PetEvo brands. Under the KnifePlanet brand, we offer a complete premium stone knife-sharpening sets, sharpeners and nonslip rubber bases.
Our Stores, Brands and Products As of the date of this Annual Report on Form 20-F: ● Smart Repair Pro owns and operates three stores on Amazon (i) KnifePlanet with 3 different Brands: KnifePlanet, CC-Exquisite and PetEvo brands, (ii) the Whoobli brand, and (iii) Wingman, which has the Wellted brand.
Searching and Identifying + Purchasing + Selling and Shipping 41 Industry Overview and Market Opportunity The e-commerce market is expected to continue growing. According to analysis published by technavio in December 2022, the e-commerce market is estimated to grow at a compound annual growth rate, or CAGR, of 27.15% from 2022 to 2027.
Searching and Identifying + Purchasing + Selling and Shipping Industry Overview and Market Opportunity The e-commerce market is expected to continue growing. According to analysis published by Statista, the e-commerce market is estimated to reach $3.2 trillion in 2024.
Marketing, Distribution Methods and Sales We believe our marketing expenses are lower and more efficient than our competitors since we are only engaged with well established brands that are already familiar to many of our customers and potential customers on Amazon. In addition, we expect to hire managers to handle our digital marketing and advertising efforts.
Through these third parties, we believe we can deliver products within two days of the order being placed on Amazon through ground shipment across approximately 95% of the U.S. market. 41 Marketing, Distribution Methods and Sales We believe our marketing expenses are lower and more efficient than our competitors since we are only engaged with well established brands that are already familiar to many of our customers and potential customers on Amazon.
The SEC maintains an Internet website that contains reports and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are also available to the public through the SEC’s website at www.sec.gov. We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act as modified by the JOBS Act.
Puglisi & Associates is our agent in the United States and its address is 850 Library Avenue, Suite 204, Newark, Delaware 19711. The SEC maintains an Internet website that contains reports and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are also available to the public through the SEC’s website at www.sec.gov.
With respect to distribution , we see logistics as a main and important consideration and we prioritize creating an effective and efficient distribution channel. Every product opportunity that we encounter will be handled with strong and efficient logistical tools and no opportunity will be left out due to lack of logistical capabilities or low profitability.
Every product opportunity that we encounter will be handled with strong and efficient logistical tools and no opportunity will be left out due to lack of logistical capabilities or low profitability. Furthermore, we plan to own warehouses in the future in lieu of relying on Amazon or other third-party warehouses, which would improve our distribution channel.
The CCPA may require us to modify our data practices and policies and to incur substantial costs and expenses in order to comply. In addition, on November 3, 2020, California voters passed the CPRA into law, which took effect on January 1, 2023 with enforcement beginning on July 1, 2023.
The CCPA may require us to modify our data practices and policies and to incur substantial costs and expenses in order to comply.
The GDPR and UK regime also impose conditions on obtaining valid consent for cookies, such as a prohibition on pre-checked consents. If and when it comes into effect, proposed legislation known as the Regulation of Privacy and Electronic Communications, or the ePrivacy Regulation, would replace the current ePrivacy Directive, and significantly increase fines for non-compliance.
The GDPR and UK regime also impose conditions on obtaining valid consent for cookies, such as a prohibition on pre-checked consents.
Furthermore, we plan to own warehouses in the future in lieu of relying on Amazon or other third-party warehouses, which would improve our distribution channel. Our sales phase, as further described above, is the third phase after a deep analysis is conducted by our software, identification and procurement process.
Our sales phase, as further described above, is the third phase after a deep analysis is conducted by our software, identification and procurement process. Using the most advanced software, provides us with all the data needed to launch and to operate our Amazon brands in the highest levels.
Phase II: Acquisition of identified products We then quickly and efficiently acquire identified products using our strong logistical capacities.
Phase II: Acquisition of identified products We then quickly and efficiently acquire identified products using our strong logistical capacities. Phase III: Sell and Ship We then sell the most desired products to our consumers, maximizing our positioning for high profitability (with minimal marketing required, offering the optimum price being both lucrative and competitive).
We believe, this new normal creates a huge opportunity for e-commerce players, such as Jeffs’ Brands, which has the capability to respond to the current demand. Moreover, Amazon, which is the primary platform that our business is based on, continues to rise and grow.
Also, besides all of the above, the recent onset of the coronavirus disease (COVID-19) pandemic accelerated the shift toward online shopping, accelerating the sales demand We believe, this new normal created a huge opportunity for e-commerce players, such as Jeffs’ Brands, which has the capability to respond to the current demand and market trends.
We have completed processes with Amazon, which allow us to open our stores for sale to consumers in the United Kingdom, Germany, France, Spain, Italy and Australia. Our principal executive offices are located at 7 Mezada Street, Bnei Brak, Israel 5126112. Our telephone number in Israel is +972-3-7713520. Our website address is www.jeffsbrands.com .
Hakmon, effective immediately prior to the Contribution Transactions pursuant to a Share Transfer Deed dated May 10, 2021. 32 The result of the Contribution Transactions is reflected in the following diagram: Our principal executive offices are located at 7 Mezada Street, Bnei Brak, Israel 5126112. Our telephone number in Israel is +972-3-7713520. Our website address is www.jeffsbrands.com .
The Ordinary Shares and Warrants were immediately separable from the Units and were issued separately. Our Ordinary Shares and Warrants began trading on the Nasdaq Capital Market on August 26, 2022 under the symbols “JFBR” and “JFBRW,” respectively. The Company received net proceeds of $13.4 million, after deducting underwriting discounts and commissions and other estimated offering expenses.
We completed the initial public offering of our Ordinary Shares and Warrants in the United States in August 2022 and our Ordinary Shares and Warrants began trading on the Nasdaq Capital Market on August 26, 2022, under the symbols “JFBR” and “JFBRW,” respectively. For a description of our principal capital expenditures and divestitures, see Item 5.
Under the Whoobli brand, we offer punching bag sets, including adjustable stands and boxing gloves, and party supply kits for children; ● Purex operates one store on Amazon, which sells one product under the Zendora brand used for filtering and purifying air in vehicles; ● Top Rank operates one store on Amazon, which sells six products under the Wellted brand.
Under the Whoobli brand, we offer punching bag sets and party supply kits for children.

… 74 more changes not shown on this page.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

32 edited+30 added−54 removed12 unchanged
Biggest changeIn addition, in connection with the Exercise Price Adjustment, the Company issued Additional Warrants to purchase up to 2,824,525 Ordinary Shares to Qualified Holders (as defined in the Warrant). 57 Comparison of the Results for the Year Ended December 31, 2022 and 2021 Results of Operations Year Ended December 31, U.S. dollars in thousands 2022 2021 Revenues 5,859 6,509 Cost of sales 5,060 4,560 Gross Profit 799 1,949 Sales and marketing 1,198 1,314 General and administrative 4,113 1,480 Other expense - 87 Operating Profit (loss) (4,512 ) (932 ) Financial expense, net (2,305 ) 629 Net profit (loss) (2,201 ) (1,540 ) Profit (Loss) attributable to holders of Ordinary Shares (2,201 ) (1,540 ) Revenues Our revenues consist of revenue derived from sales on Amazon.
Biggest changeComparison of the Results for the Year Ended December 31, 2023 and 2022 Results of Operations Year Ended December 31, U.S. dollars in thousands 2023 2022 Revenues 10,008 5,859 Cost of sales 9,032 5,060 Gross Profit 976 799 Sales and marketing 833 1,198 General and administrative 4,262 4,113 Equity losses 1,248 Other income (279 ) - Operating loss (5,089 ) (4,512 ) Financial expense, net (523 ) (2,305 ) Net loss (4,598 ) (2,201 ) Loss attributable to holders of Ordinary Shares (4,598 ) (2,201 ) 51 Revenues Our revenues consist of revenue derived from sales on Amazon.
Hakmon before and after the Contribution Transactions, Jeffs’ Brands accounted for the Contribution Transactions as a pooling of interests, resulting in the comparative financial information of the Company being replaced with the combined financial information of Smart Repair Pro and Purex, the carrying values of asset and liabilities being retained, and no purchase accounting applied.
Hakmon before and after the Contribution Transactions, Jeffs’ Brands accounted for the Contribution Transactions as a pooling of interests, resulting in the comparative financial information of the Company being replaced with the combined financial information of Smart Repair Pro, the carrying values of asset and liabilities being retained, and no purchase accounting applied.
The Additional Warrants were calculated according to the binomial model under the following assumptions: expected stock-price volatility, expected life, dividend yield and risk-free interest rate and revenue forecast over the life of the Additional Warrants. 64
The Additional Warrants were calculated according to the binomial model under the following assumptions: expected stock-price volatility, expected life, dividend yield and risk-free interest rate and revenue forecast over the life of the Additional Warrants.
As a result of the Contribution Transactions which occurred in May 2021 and discussed above, Smart Repair Pro and Purex became wholly owned subsidiaries of Jeffs’ Brands. As the Contribution Transactions were consummated among entities under common control, i.e., there was no change in the ownership percentages of Medigus and Mr.
As a result of the Contribution Transactions which occurred in May 2021 and discussed above, Smart Repair Pro became a wholly owned subsidiary of Jeffs’ Brands. As the Contribution Transactions were consummated among entities under common control, i.e., there was no change in the ownership percentages of Medigus and Mr.
The Ordinary Shares and Warrants were approved for listing on the Nasdaq Capital Market and commenced trading under the symbol “JFBR” and “JFBRW,” respectively, on August 26, 2022. On September 7, 2022, the Company’s volume weighted average stock price was less than the exercise floor of $4.04 for the Warrants.
The Ordinary Shares and Warrants were approved for listing on the Nasdaq Capital Market and commenced trading under the symbol “JFBR” and “JFBRW,” respectively, on August 26, 2022. On September 7, 2022, the Company’s volume weighted average stock price was less than the exercise floor of $28.28 for the Warrants.
Therefore this Annual Report on Form 20-F includes the audited financial statements of Jeffs’ Brands as of and for the year ended December 31, 2022, with the financial information in these financial statements being the combined financial information of Smart Repair Pro and Purex based on the pooling method of accounting.
Therefore, our Annual Report on Form 20-F includes the audited financial statements of Jeffs’ Brands as of and for the year ended December 31, 2022, with the financial information in these financial statements being the combined financial information of Smart Repair Pro based on the pooling method of accounting.
Accordingly, effective after the closing of trading on November 28, 2022 (the 90th calendar day immediately following the issuance date of the Warrants), the Warrants have been adjusted pursuant to their terms, including, but not limited to, to adjust the exercise price of the Warrants to $2.02.
Accordingly, effective after the closing of trading on November 28, 2022 (the 90th calendar day immediately following the issuance date of the Warrants), the Warrants have been adjusted pursuant to their terms, including, but not limited to, to adjust the exercise price of the Warrants to $14.14.
Warrants We account for the Additional Warrants as liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification, or ASC, Topic 480, “Distinguishing Liabilities from Equity”, or ASC Topic 480, and ASC Topic 815, “Derivatives and Hedging”, or ASC Topic 815.
We have identified the following critical accounting policies: 56 Derivative Liabilities We account for the Additional Warrants as liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification, or ASC, Topic 480, “Distinguishing Liabilities from Equity”, or ASC Topic 480, and ASC Topic 815, “Derivatives and Hedging”, or ASC Topic 815.
Investing Activities Our net cash used in investing activities was $41 for the year ended December 31, 2022, as compared to net cash used in investment activities of $4,730 for the year ended December 31, 2021.
Our net cash used in investing activities was $4,814 for the year ended December 31, 2023, as compared to net cash used in investment activities of $41 for the year ended December 31, 2022.
In addition to executing the FBA business model, we utilize A.I. and machine learning technologies to analyze sales data and patterns on Amazon in order to identify existing stores, niches and products that have the potential for development and growth, as well as maximize sales of its existing proprietary products.
In addition to executing the FBA business model, we utilize internal methodologies to analyze sales data and patterns on Amazon in order to identify existing stores, niches and products that have the potential for development and growth, as well as maximize sales of its existing proprietary products.
As of December 31, 2022 and 2021, we had approximately $8,137 and $393, respectively, in cash and cash equivalents.
As of December 31, 2023, and 2022, we had approximately $535 and $8,137, respectively, in cash and cash equivalents.
On September 22, 2021, Smart Repair Pro entered into a loan agreement with Amazon, pursuant to which, Smart Repair Pro received from Amazon an aggregate amount of $153. The loan matured on May 09, 2022 and bore an interest at an annual rate of 9.99%.
Financial Arrangements On May 9, 2022 Smart Repair Pro entered into a loan agreement with Amazon, pursuant to which, Smart Repair Pro received from Amazon an aggregate amount of $153. The loan bares an interest at an annual rate of 9.99%.
The decrease is mainly attributable to increase in competition. Cost of goods sold Our cost of goods sold consist of the purchase of finished goods, freight, cost of commissions to Amazon and change in inventory.
The increase is mainly attributable to the acquisition of Fort on March 9, 2023. Cost of goods sold Our cost of goods sold consist of the purchase of finished goods, freight, cost of commissions to Amazon and change in inventory.
The following table discloses the breakdown of marketing and sales expenses for the periods set forth below: Year Ended December 31, U.S. dollars in thousands 2022 2021 Advertising $ 1,163 $ 1,211 Wages, salaries and related expenses 35 76 Other - 27 Total 1,198 1,314 The decrease of $116, or 8.8% for the year ended December 31, 2022, as compared to the year ended December 31, 2021 is mainly attributable to the overall decreases in advertising, wages, salaries and other expenses.
The following table discloses the breakdown of marketing and sales expenses for the periods set forth below: Year Ended December 31, U.S. dollars in thousands 2023 2022 Advertising $ 754 $ 1,163 Wages, salaries and related expenses 79 35 Total 833 1,198 The decrease of $365, or 30.5% for the year ended December 31, 2023, as compared to the year ended December 31, 2022, is mainly attributable to the decrease in advertising expenses.
Liquidity and Capital Resources Overview Since Jeffs’ Brands inception in March 2021 and since the earlier inception of our subsidiaries, Smart Repair Pro and Purex in 2019 and 2020, respectively, to date, we have financed our operations primarily through funds we received from loans and proceeds from sales on Amazon (after deducting FBA fees and advertising fees) and the issuance of Ordinary Shares and warrants.
Liquidity and Capital Resources Overview Since our inception in March 2021 and since the earlier inception of our subsidiaries, we have financed our operations primarily through funds we received from loans and proceeds from sales on Amazon (after deducting FBA fees and advertising fees) and the issuance of our securities.
In order to secure the loan, Smart Repair Pro pledged its financial balances on its Amazon account and its inventories held in Amazon’s warehouses, in favor of Amazon. As the date of this Annual Report on Form 20-F, the loan was fully repaid.
In order to secure the loan, Smart Repair Pro pledged its financial balances on its Amazon account and its inventories held in Amazon’s warehouses, in favor of Amazon. As of December 31, 2023, the remaining loan balance to Amazon was fully repaid.
The increase of $2,633, or 178% for the year ended December 31, 2022, as compared to the year ended December 31, 2021 is mainly attributable to professional services and consulting fees related to services provided in connection with the IPO.
The increase of $149, or 3.6%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022, is mainly attributable to decrease in professional services and consulting fees related to services provided in 2022 and were connected with the IPO.
The following table discloses the breakdown of our revenues, cost of sales and gross profit for the periods set forth below: Year Ended December 31, U.S. dollars in thousands 2022 2021 Revenues $ 5,809 $ 6,509 Cost of sales 5,060 4,560 Gross profit 799 1,949 Our revenues for the year ended December 31, 2022 were $5,809 compared to $6,509 for the year ended December 31, 2021, a decrease of $700 , or 10.8 % .
The following table discloses the breakdown of our revenues, cost of sales and gross profit for the periods set forth below: Year Ended December 31, U.S. dollars in thousands 2023 2022 Revenues $ 10,008 $ 5,809 Cost of sales 9,032 5,060 Gross profit 976 799 Our revenues for the year ended December 31, 2023, were $10,008 compared to $5,809 for the year ended December 31, 2022, an increase of $4,199, or 72%.
We were incorporated in Israel in March 2021, under the name Jeffs’ Brands Ltd, to serve as the holding company of three other e-commerce companies that operate online stores for the sale of various consumer products on Amazon online marketplace, utilizing the FBA model — Smart Repair Pro, Purex and Top Rank.
We were incorporated in Israel in March 2021, under the name Jeffs’ Brands Ltd, to provide a variety of professional and business support as well as marketing support services to e-commerce companies that operate online stores for the sale of various consumer products on the Amazon online marketplace, utilizing the FBA model.
The following table discloses the breakdown of cost of goods sold for the periods set forth below: Year Ended December 31, U.S. dollars in thousands 2022 2021 Purchases of finished goods $ 1,738 $ 2,050 Freight $ 691 $ 553 Storage $ 634 $ — Cost of commissions $ 2,561 $ 2,406 increase in inventory $ (564 ) $ (449 ) Total $ 5,060 $ 4,560 58 Fright and storage expenses for the year ended December 31, 2022, amounted $1,325, compared to $553 for the year ended December 31, 2021, an increase of $772 or 72%.
The following table discloses the breakdown of cost of goods sold for the periods set forth below: Year Ended December 31, U.S. dollars in thousands 2023 2022 Purchases of finished goods $ 3,817 $ 1,738 Freight $ 311 $ 691 Storage $ 660 $ 634 Salary $ 70 $ - Packing Supplies $ 14 $ - Cost of commissions $ 4,431 $ 2,561 increase in inventory $ (271 ) $ (564 ) Total $ 9,032 $ 5,060 Fright and storage expenses for the year ended December 31, 2023, amounted $971, compared to $1,325 for the year ended December 31, 2022, a decrease of $354 or 26.7%.
Current Outlook As of December 31, 2022, our cash and cash equivalents were $8,137. We expect that our existing cash and cash equivalents as of December 31, 2022, will be sufficient to fund our current operations for the next twelve months.
We expect that our existing cash and cash equivalents as of December 31, 2023, will be sufficient to fund our current operations for the next twelve months taking into consideration the proceeds raised from the January 2024 PIPE.
In connection with the IPO, we issued and sold: (i) 3,717,473 Ordinary Shares, (ii) Warrants to purchase up to 4,143,385 Ordinary Shares (after giving effect to the partial exercise of the Underwriter’s over-allotment option), and (iii) Underwriter’s Warrants to purchase up to 185,873 Ordinary Shares.
In connection with the IPO, we issued and sold: (i) 531,068 Ordinary Shares, (ii) Warrants to purchase up to 591,912 Ordinary Shares (after giving effect to the partial exercise of the Underwriter’s over-allotment option), and (iii) Underwriter’s Warrants to purchase up to 26,553 Ordinary Shares, in each case after given effect to the Reverse Split.
The following table discloses the breakdown of our general and administrative expenses for the periods set forth below: Year Ended December 31, U.S. dollars in thousands 2022 2021 Payroll and related expenses $ 831 $ 448 Subcontractors 39 78 Professional services and consulting fees 2,314 297 Rent and office maintenance 75 37 Amortization of intangible assets 570 524 Other expenses 284 96 Total 4,113 1,480 59 Operating Profit (Loss) Our operating loss for the year ended December 31, 2022 was $4,512, compared to an operating loss of $932 for the year ended December 31, 2021, an increase of $3,880, or 284%.
The following table discloses the breakdown of our general and administrative expenses for the periods set forth below: Year Ended December 31, U.S. dollars in thousands 2023 2022 Payroll and related expenses $ 989 $ 831 Subcontractors 78 39 Professional services and consulting fees 1,456 2,314 Rent and office maintenance 169 75 Amortization of intangible assets 739 570 Insurance 359 145 Other expenses 472 139 Total 4,262 4,113 Equity losses Our equity losses for the year ended December 31, 2023, derive from investment in SciSparc U.S under the equity method.
The change is mainly attributable to no investments in intangible assets during 2022, compared to investment of $4,728, in intangible assets during 2021. 60 Financing Activities Our net cash provided by financing activities was $12,625 for the year ended December 31, 2022, as compared to net cash provided by investing activities of $5,695 for the year ended December 31, 2021.
Our net cash used in financing activities was $86 for the year ended December 31, 2023, as compared to net cash provided by investing activities of $12,625 for the year ended December 31, 2022.
General and Administrative Expenses Our general and administrative expenses consist primarily of salaries and related expenses, professional service fees for accounting, legal and bookkeeping, facilities, amortization of intellectual property assets and other general and administrative expenses.
General and Administrative Expenses Our general and administrative expenses consist primarily of salaries and related expenses, professional service fees for accounting, legal and bookkeeping, facilities, amortization of intellectual property assets and other general and administrative expenses. The decision how much to spend in advertising is the seller’s sole decision according to different parameters that may vary within a short terms.
GAAP and IFRS, including differences related to lease accounting and accounting treatment related to derivative liabilities. 63 E. Critical Accounting Estimates We describe our significant accounting policies more fully in Note 2 to our financial statements included elsewhere in this Annual Report on Form 20-F.
See also Item 3.D. “Risk Factors” – General economic factors may adversely affect our business, financial performance and results of operations”. E. Critical Accounting Estimates We describe our significant accounting policies more fully in Note 2 to our financial statements included elsewhere in this Annual Report on Form 20-F.
Results of Operations— Comparison of the years ended December 31, 2022 and December 31, 2021— Research and Development Expenses, net.” D. Trend information Effective January 1, 2022, we prepare our financial statements in accordance with U.S. GAAP. There are certain differences between U.S.
C. Research and development, patents and licenses, etc. None. D. Trend information Effective January 1, 2022, we prepare our financial statements in accordance with U.S. GAAP. There are certain differences between U.S. GAAP and IFRS, including differences related to lease accounting and accounting treatment related to derivative liabilities.
Our financial income, net was $2,305 for the year ended December 31, 2022, compared to net financial expenses of $629 for the year ended December 31, 2021, a decrease of $2,934 , or 266 % . The decrease was primarily attributable to a revaluation of derivatives in the total amount of $2,822.
Financial income Financial expense consists of mainly interest, bank fees, revaluation of derivatives and other transactional costs. Our financial income, net was $523 for the year ended December 31, 2023, compared to net financial expenses of $2,305 for the year ended December 31, 2022, a decrease of $1,782, or 77.3%.
The table below presents our cash flow for the periods indicated: Year Ended December 31, U.S. dollars in thousands 2022 2021 Net cash used in operating activities $ (4,840 ) $ (863 ) Net cash used in investing activities $ (41 ) $ (4,730 ) Net cash provided by financing activities $ 12,625 $ 5,695 Net increase in cash and cash equivalents $ 7,744 $ 102 We expect that for the foreseeable future we will finance our activities using the proceeds we received at the IPO or from additional related party or investor loans and proceeds from sales on Amazon of our existing and future new brands.
The table below presents our cash flow for the periods indicated: Year Ended December 31, U.S. dollars in thousands 2023 2022 Net cash used in operating activities $ (2,668 ) $ (4,840 ) Net cash used in investing activities $ (4,814 ) $ (41 ) Net cash from (used in) financing activities $ (86 ) $ 12,625 Net (decrease) increase in cash and cash equivalents $ (7,568 ) $ 7,744 Our net cash used in operating activities was $2,668 for the year ended December 31, 2023, as compared to net cash from operating activities of $4,840 for the year ended December 31, 2022.
Our discussion and analysis of our operating results for the years ended December 31, 2020 and December 31, 2021 can be found in our prospectus dated August 25, 2022, filed with the SEC on August 30, 2022 (Registration No. 333- 262835). The amounts below are in in thousands of U.S. dollars.
Our discussion and analysis of our operating results for the years ended December 31, 2021 and December 31, 2022 can be found in our Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on April 10, 2023. Overview We are a fast-growing e-commerce CPG company, operating primarily on Amazon.
The decrease is mainly attributable to the increase in fees charged by Amazon resulted in higher cost of sales and decrease in revenue due to higher competition in 2022 compared to 2021. Operating Expenses Our current operating expenses consist of three components — cost of goods sold, marketing and sales expenses and general and administrative expenses.
The increase is mainly attributable to the increase in sales as of result of the acquisition of Fort on March 9, 2023that was offset by decrease in gross profit in the other brands. Operating Expenses Our current operating expenses consist of four components — marketing and sales expenses and general, administrative expenses, equity losses expenses and other income.
Net profit (loss) and total comprehensive profit (loss) Our net loss and total comprehensive loss for the year ended December 31, 2022 was $2,201, compared to net loss and total comprehensive loss of $1,540 for the year ended December 31, 2020, an increase of $661 , or 42 % .
Purchases of finished goods for the year ended December 31, 2023, amounted $3,817, compared to $1,738 for the year ended December 31, 2022, an increase of $2,079 or 119.6%.
Removed
Overview We are a fast-growing e-commerce CPG company, operating primarily on Amazon.
Added
In addition, in connection with the Exercise Price Adjustment, the Company issued Additional Warrants to purchase up to 403,504 Ordinary Shares to Qualified Holders (as defined in the Warrant).
Removed
The increase is mainly due to Company's concerns regarding the quarantines in China and the decision to accelerate its purchase of goods to the first part of 2022 and store it for a longer period in external warehouses.
Added
The decrease is mainly due to Company’s decrease in freight costs which dropped compared to 2022 due to all over decrease in freight costs as well as less purchase of goods from China compared to 2022.
Removed
Gross Profit Our gross profit for the year ended December 31, 2022, was $799, compared to gross profit of $1,949 for the year ended December 31, 2021, a decrease of $1,150, or 59%.
Added
Cost of commissions for the year ended December 31, 2023, amounted $4,431, compared to $2,561 for the year ended December 31, 2022, an increase of $1,870 or 73%. The increase is mainly attributable to the increase in sales as of result of the acquisition of Fort on March 9, 2023 and the fees related to Fort’s revenue.
Removed
The decrease is mainly attributable to the increase in fees charged by Amazon and professional services and consulting fees related to services provided in connection with the IPO. Financial Expense and Income Financial expense consists of mainly interest on related party loans and third-party loans, bank fees, revaluation of derivatives and other transactional costs.
Added
The increase is mainly attributable to the acquisition of Fort on March 9, 2023 and the purchase of finished goods related to Fort that was offset with less purchase of goods in the other brands. 52 Gross Profit Our gross profit for the year ended December 31, 2023, was $976, compared to gross profit of $799 for the year ended December 31, 2022, an increase of $177, or 22%.
Removed
The increase was primarily attributable to the increase in the costs of sales and general and administrative costs, including increase in fees charged by Amazon and shipment and storage costs. B.
Added
This decrease was offset by an increase in insurance cost in 2023, as 2022 insurance costs started only in August 25, 2022.
Removed
Operating Activities Our net cash used in operating activities was $4,840 for the year ended December 31, 2022, as compared to net cash from operating activities of $863 for the year ended December 31, 2021. The increase in net loss and increase in the proceeds used in operating activities is mainly attributable to changes in fair value of derivative liabilities.
Added
Revenue sharing payment which included in other expenses is higher in 2023 compare to 2022 due to increase in revenue in 2023 compare to 2023 as well as the revenue sharing in 2022 is referring to the H2 only.
Removed
The increase is mainly attributable to issuance of Ordinary shares and additional paid in capital offset with repayment of short term loans. Financial Arrangements On May 23, 2019, Smart Repair Pro entered into loan agreements, or the May 2019 Loans, with a relative of its then operating manager and controlling shareholder, Viki Hakmon, and L.I.A.
Added
The amount includes $955 thousand impairment loss. Other income Our other income for the year ended December 31, 2023, derive mainly from SciSparc Consulting Agreement, pursuant to which we provide management services to SciSparc U.S. for the Wellution brand.
Removed
Pure Capital Ltd., or Pure Capital, a company owned by this family relative, or collectively, the Investors. The May 2019 Loans bore interest at an annual rate of 4% (which was paid quarterly commencing on December 2020) and was due on August 13, 2022.
Added
In addition, we provide a variety of professional and business support services in accordance with transfer pricing work received in SciSparc U.S.
Removed
The May 2019 Loans were secured by a pledge of 50% on the issued share capital of Smart Repair Pro held by its shareholders. During July and August 2019, Smart Repair Pro entered into additional loan agreements with the Investors, or the August 2019 Loans, on the same terms. The total amount of loans made during 2019 was $1,106.
Added
The aforementioned services are provided in collaboration with SciSparc. 53 Operating loss Our operating loss for the year ended December 31, 2023 was $5,089, compared to an operating loss of $4,512 for the year ended December 31, 2022, an increase of $577, or 12.79%. The increase in 2023 was due to factors mentioned above.
Removed
During April and May 2020, additional loans, or the May 2020 Loans, were provided to Smart Repair Pro by the Investors in the aggregate sum of $105, on the same terms. During the first quarter of 2021, an amount of approximately $1,102 was repaid to the Investors, and additional amount of $109 was converted into 31,535 Ordinary Shares.
Added
The decrease was primarily attributable to decrease in revaluation of derivatives liabilities and revaluation of securities -fair value through profit or loss offset by Revaluation of securities -fair value through profit or loss.
Removed
On September 11, 2019, Smart Repair Pro entered into a loan agreement with Amazon, or the Amazon Loan. Pursuant to the Amazon Loan, Smart Repair Pro borrowed from Amazon an aggregate amount of $193. The Amazon Loan matured within 12 months and bore interest at a rate of 16.72% per year.
Added
The following table discloses the breakdown of our financial income for the periods set forth below: Year ended December 31 2023 2022 U.S. dollars in thousands Finance income: Change in fair value of derivative liabilities (841 ) (2,822 ) Interest income (4 ) - Total finance income (845 ) (2,822 ) Finance expense: Finance expenses in respect of third-party loan - 83 Change in fair value of derivative liabilities - - Amortization of loan discount - 37 Exchange rate changes 91 156 Interest expense on loans from shareholders and related parties - 203 Other finance expenses 10 38 Revaluation of securities -fair value through profit or loss 221 - Total finance expenses 322 517 Finance income, net (523 ) (2,305 ) Net loss Our net loss for the year ended December 31, 2023, was $4,598, compared to net loss of $2,201 for the year ended December 31, 2022, an increase of $2,397, or 108.9%.
Removed
In order to secure the Amazon Loan, Smart Repair Pro pledged its financial balances on its Amazon account and its inventories held in Amazon’s warehouses, in favor of Amazon. In January 2020, the loan was fully repaid. On March 1, 2020, Smart Repair Pro, entered into a loan agreement, or the March 1, 2020 Loan Agreement, with Purex.
Added
The increase in 2023 was due to factors mentioned above. 54 B.
Removed
Pursuant to the March 1, 2020 Loan Agreement, Smart Repair Pro loaned Purex an aggregate amount of $135. The loan was due on July 13, 2021 and bore interest at a rate of 4% per year.
Added
The change in our liquidity for the year ended December 31, 2023, resulted from several factors, including: Operating Activities Our net cash used in operating activities consists primarily of net loss of $4,598 thousand, increase in inventory of $596 thousand, increase in trade receivables of $302 thousand, change in fair value of derivative liabilities of $841 thousand offset by depreciation and amortization of intangible assets of $738 thousand, loss from change in value of investment at fair value of $221 thousand, equity losses of $1,249 thousand, increase in accounts payable and other payables of $1,304 thousand and decrease in other receivables of $182 thousand.
Removed
In order to secure the loan until its full repayment, Purex pledged its full rights in the seller account on Amazon, in Smart Repair Pro’s favor. The loan was fully repaid on May 3, 2021. On October 8, 2020, Smart Repair Pro and Purex and their then shareholders, entered into a share purchase agreement, or the Medigus SPA, with Medigus.
Added
Investing Activities Our net cash used in investing activities consists primarily of purchase of SciSparc U.S in the amount of $3,091 thousand and purchase of Fort brand in the amount of $1,681 thousand. Financing Activities Our net cash used in financing activities consists of repayment of short-term loan in the amount of $86 thousand.
Removed
Pursuant to the Medigus SPA, Medigus and Smart Repair Pro’s shareholders committed to transfer funds, as loans to Smart Repair Pro, in order to finance its day-to-day operations in exchange for its shares. During October and November 2020, an amount of $250 was transferred to Smart Repair Pro, on account of the loans.
Added
January 2024 PIPE On January 25, 2024, we entered into the January 2024 PIPE, in which we issued Ordinary Shares; Pre-Funded Warrants to purchase Ordinary Shares; Series A Warrants to purchase Ordinary Shares and Series B Warrants to purchase Ordinary Shares. The January 2024 PIPE closed on January 29, 2024.
Removed
The loans bear an annual interest rate of 4%.
Added
The Company’s aggregate gross proceeds from the January 2024 PIPE were approximately $7.275 million, before deducting fees to the placement agent and other expenses payable by the Company in connection with the January 2024 PIPE. See “Item 4.B.
Removed
On January 4, 2021, the terms and conditions to the Medigus SPA were satisfied and Medigus advanced approximately $1,100 on behalf of a loan from investors, which the first principal was borrowed on October 2020 and in exchange for the repayment of the loan, Smart Repair Pro issued to Medigus 5,572 of its shares of common stock.
Added
Recent Developments – January 2024 PIPE ” above for further information. 55 The Pre-Funded Warrants were immediately exercisable at an exercise price of $0.00001 per Ordinary Share and do not expire until exercised in full.
Removed
Also on January 4, 2021, Purex issued 557 shares of its common stock to Medigus in exchange for its payment of $150. In February 2021, Smart Repair Pro, received additional loans under the Medigus SPA, on the same terms (annual interest rate of 4% and repayment after five years).
Added
The Series A Warrants were immediately exercisable, have an exercise price of $2.69 per whole Ordinary Share (subject to certain anti-dilution and share combination event protections) and have a term of 5.5 years from the date of issuance.
Removed
Subsequently, on February 3, 2021, Medigus transferred to Smart Repair Pro an amount of $560 as a controlling shareholder loan, in order to finance the purchase of two additional Amazon stores, PetEvo and Wellted. In addition, according to the terms of the Medigus SPA, the minority shareholders (Mr.
Added
The Series B Warrants will be exercisable following the Reset Date (as defined below), have an exercise price of $0.00001 per Ordinary Share and have a term of 5.5 years from the date of issuance.
Removed
Hakmon’s affiliates, as detailed below) are obligated to keep a 20:80 ratio with Medigus for amounts transferred to Smart Repair Pro by Medigus for the purpose of purchasing two stores. To illustrate, when a new store is being purchased, Medigus is obligated to invest 80% of the purchase price, and Mr.
Added
The exercise price and number of Ordinary Shares issuable under the Series A Warrants are subject to adjustment and the number of Ordinary Shares issuable under the Series B Warrant will be determined following the reset date, or the Reset Date, which is the earliest to occur of: (i) the date on which a resale registration statement covering the resale of all registrable securities has been declared effective for 30 consecutive trading days, (ii) the date on which the selling shareholders may sell the registrable securities pursuant to Rule 144 under the Securities Act of 1933, as amended, or the Securities Act, for a period of 30 consecutive trading days, and (iii) twelve months and 30 days following the issuance date of the Series B Warrant, to be determined pursuant to the lowest daily average trading price of the Ordinary Shares during a period of 20 trading days, subject to a pricing floor of $0.68, or Pricing Floor.
Removed
Hakmon’s affiliates are obligated to invest 20% of the purchase price.
Added
As our Ordinary Shares are currently trading at a price per share lower than the Pricing Floor, we expect that on the Reset Date: (i) the Series A Warrants will be exercisable into a total number of 13,373,177 Ordinary Shares, and (ii) the Series B Warrants will be exercisable into a total number of 7,904,181 Ordinary Shares.
Removed
Therefore, on March 5, 2021 and on April 29, 2021, a total sum of $140 was transferred from the minority shareholders to the broker in the store purchase transaction, on account of the loan to Smart Repair Pro. 61 On February 2, 2021, Smart Repair Pro acquired a virtual store pursuant to a purchase agreement entered into with a third party, or the Whoobli Seller.
Added
As of March 28, 2024, 320,000 Ordinary Shared have been issued following exercise of Pre-Funded Warrants and 2,580,036 Ordinary Shares have been issued following exercise of Series B Warrants. Current Outlook As of December 31, 2023, our cash and cash equivalents were $535 thousand.
Removed
Pursuant to the agreement, Smart Repair Pro purchased the Whoobli Seller’s seller account which operates on Amazon under the name “Whoobli”, which markets a private label of basketball hoops, children’s punching bags and related party decorations, including, the intellectual property attributed to it and including trademarks attributed to products sold on the account’s sales page, for a total of $4,000.
Added
Adverse macroeconomic conditions, including recent inflation, slower growth, changes to fiscal and monetary policy, higher interest rates, and currency fluctuations have impacted companies in Israel and around the world, and as the future market conditions and possible recession remain highly uncertain, we cannot predict severity of the possible recession and its effects on our customers and their spending habits.
Removed
In addition, in accordance with the agreement, Smart Repair Pro purchased from the Whoobli Seller the remaining inventory for a total amount of approximately $350, at its original cost.
Added
Intangible Assets Valuation We review our intangible assets and equity investment for impairment when performance expectations, events, or changes in circumstances indicate that the asset's carrying value may not be recoverable. For intangible assets, when impairment indicators exist, we evaluate the undiscounted future cash flows to the carrying value of the intangible asset group.

… 36 more changes not shown on this page.

Item 6. [Reserved]

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

76 edited+21 added−20 removed153 unchanged
Biggest changeThe 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.
Biggest changeAn “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; and ● any other obligation or expense in respect of which it is permitted or will be permitted under the Companies Law, to indemnify an officer or director, subject to and in accordance with all applicable law. 78 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.
For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service.
For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service.
The compensation policy must furthermore consider the following additional factors: ● the education, skills, expertise and accomplishments of the relevant officer holder; ● the officer holder’s roles and responsibilities and prior compensation agreements with him or her; ● the relationship between the cost of the terms of service of an office holder and the average median compensation of the other employees of the company (including those employed through manpower companies), in particular the ratio between such cost to the average and median salary of such employees of the company including the impact of disparities in salary upon work relationships in the company; ● if the terms of employment include variable components the possibility of reducing variable compensation at the discretion of the board of directors; and the possibility of setting a limit on the exercise value of non-cash variable compensation; and ● as to severance compensation, the period of service of the office holder, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company. 77 The compensation policy must also include the following principles: ● with the exception of office holders who report to the chief executive officer, a means of determining the variable components on the basis of long-term performance and measurable criteria; provided that the company may determine that an immaterial part of the variable components of the compensation package of an office holder shall be awarded based on non-measurable criteria, or if such amount is not higher than three months’ salary per annum, taking into account such office holder’s contribution to the company; ● the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation at the time of payment, or in the case of equity-based compensation, at the time of grant; ● the conditions under which an officer holder would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and such data was restated in the company’s financial statements; ● the minimum holding or vesting period for variable, equity-based compensation to be set in the terms of office or employment, as applicable, while taking into consideration long-term incentives; and; and ● maximum limits for severance compensation.
The compensation policy must furthermore consider the following additional factors: ● the education, skills, expertise and accomplishments of the relevant officer holder; ● the officer holder’s roles and responsibilities and prior compensation agreements with him or her; ● the relationship between the cost of the terms of service of an office holder and the average median compensation of the other employees of the company (including those employed through manpower companies), in particular the ratio between such cost to the average and median salary of such employees of the company including the impact of disparities in salary upon work relationships in the company; ● if the terms of employment include variable components the possibility of reducing variable compensation at the discretion of the board of directors; and the possibility of setting a limit on the exercise value of non-cash variable compensation; and ● as to severance compensation, the period of service of the office holder, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company. 71 The compensation policy must also include the following principles: ● with the exception of office holders who report to the chief executive officer, a means of determining the variable components on the basis of long-term performance and measurable criteria; provided that the company may determine that an immaterial part of the variable components of the compensation package of an office holder shall be awarded based on non-measurable criteria, or if such amount is not higher than three months’ salary per annum, taking into account such office holder’s contribution to the company; ● the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation at the time of payment, or in the case of equity-based compensation, at the time of grant; ● the conditions under which an officer holder would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and such data was restated in the company’s financial statements; ● the minimum holding or vesting period for variable, equity-based compensation to be set in the terms of office or employment, as applicable, while taking into consideration long-term incentives; and ● maximum limits for severance compensation.
Duties of Shareholders Under the Companies Law, a shareholder has a duty to refrain from abusing his power in the company and to act in good faith and in an customary manner in exercising his rights and performing his obligations toward the company and other shareholders, including, among other things, in voting at general meetings of shareholders (and at shareholder class meetings) on the following matters: ● amendment of the articles of association; ● increase in the company’s authorized share capital; ● merger; and ● the approval of related party transactions and acts of office holders that require shareholder approval.
Duties of Shareholders Under the Companies Law, a shareholder has a duty to refrain from abusing his power in the company and to act in good faith and in a customary manner in exercising his rights and performing his obligations toward the company and other shareholders, including, among other things, in voting at general meetings of shareholders (and at shareholder class meetings) on the following matters: ● amendment of the articles of association; ● increase in the company’s authorized share capital; ● merger; and ● the approval of related party transactions and acts of office holders that require shareholder approval.
Board Practices — Fiduciary Duties and Approval of Related Party Transactions under Israeli law” for additional information, unless at the time of the approval a majority of the committee’s members are present, which majority consists of unaffiliated directors under the Companies Law, including at least one external director. 75 Our board of directors adopted an audit committee charter which was effective upon the listing of our Ordinary Shares on Nasdaq 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.
Board Practices — Fiduciary Duties and Approval of Related Party Transactions under Israeli law” for additional information, unless at the time of the approval a majority of the committee’s members are present, which majority consists of unaffiliated directors under the Companies Law, including at least one external director. 69 Our board of directors adopted an audit committee charter which was effective upon the listing of our Ordinary Shares on Nasdaq 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.
Under the Companies Law, the term “affiliation” and the similar types of disqualifying relationships include (subject to certain exceptions): ● an employment relationship; ● a business or professional relationship even if not maintained on a regular basis (excluding insignificant relationships); ● control; and ● service as an office holder, excluding service as a director in a private company prior to the initial public offering of its shares if such director was appointed as a director of the private company in order to serve as an external director following the initial public offering.
Under the Companies Law, the term “affiliation” and the similar types of disqualifying relationships include (subject to certain exceptions): ● an employment relationship; ● a business or professional relationship even if not maintained on a regular basis (excluding insignificant relationships); 66 ● control; and ● service as an office holder, excluding service as a director in a private company prior to the initial public offering of its shares if such director was appointed as a director of the private company in order to serve as an external director following the initial public offering.
Carmel is qualified to serve as a member of our board of directors because of his diverse business, management and leadership experience. Tali Dinar, Director Mrs. Dinar has served as one of our directors since September 2021. Mrs. Dinar is a senior executive with a two-decade track record in public and private companies in a global environment. Mrs.
Carmel is qualified to serve as a member of our board of directors because of his diverse business, management and leadership experience. 59 Tali Dinar, Director Mrs. Dinar has served as one of our directors since September 2021. Mrs. Dinar is a senior executive with a two-decade track record in public and private companies in a global environment. Mrs.
However, if such non-director executive officer is subordinate to the chief executive officer, an immaterial amendment to an existing compensation arrangement shall not require the approval of the compensation committee if (i) such amendment is approved by the chief executive officer, (ii) the company’s compensation policy allows for such immaterial amendments to be approved by the chief executive officer and (iii) the engagement terms are consistent with the company’s compensation policy.
However, if such non-director executive officer is subordinate to the chief executive officer, an immaterial amendment to an existing compensation arrangement shall not require the approval of the compensation committee if (i) such amendment is approved by the chief executive officer, (ii) the company’s compensation policy allows for such immaterial amendments to be approved by the chief executive officer and (iii) the engagement terms are consistent with the company’s compensation policy. 76 Chief executive officer.
For the purpose of determining the holding percentage stated above, two or more shareholders who have a personal interest in a transaction that is brought for the company’s approval are deemed as joint holders. The Companies Law provides for an initial three-year term for an external director.
For the purpose of determining the holding percentage stated above, two or more shareholders who have a personal interest in a transaction that is brought for the company’s approval are deemed as joint holders. 65 The Companies Law provides for an initial three-year term for an external director.
Dinar is qualified to serve as a member of our board of directors because of her diverse business, management and proven leadership skills in managing global finance, holding and industrial organizations. 66 Moshe Revach, Director Mr. Revach has served as one of our directors since September 2021. Mr.
Dinar is qualified to serve as a member of our board of directors because of her diverse business, management and proven leadership skills in managing global finance, holding and industrial organizations. Moshe Revach, Director Mr. Revach has served as one of our directors since September 2021. Mr.
Zalayet holds a B.A. in Economics and Accounting and an MBA from Tel Aviv University, Israel, and is a certified public accountant in Israel. Naor Bergman, Chief Operating Officer Mr. Bergman has served as our Chief Operating Officer since April 2021. From September 2018 to April 2021, Mr.
Zalayet holds a B.A. in Economics and Accounting and an MBA from Tel Aviv University, Israel, and is a certified public accountant in Israel. 58 Naor Bergman, Chief Operating Officer Mr. Bergman has served as our Chief Operating Officer since April 2021. From September 2018 to April 2021, Mr.
The compensation committee is 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.
The compensation committee is 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; ● administering the Company’s clawback 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.
Unless the appointing director limits the time or scope of the appointment, the appointment is effective for all purposes until the appointing director ceases to be a director or terminates the appointment. 74 Committees of the Board of Directors Our board of directors has established two standing committees, the audit committee and the compensation committee.
Unless the appointing director limits the time or scope of the appointment, the appointment is effective for all purposes until the appointing director ceases to be a director or terminates the appointment. Committees of the Board of Directors Our board of directors has established two standing committees, the audit committee and the compensation committee.
In addition, our compensation policy provides for maximum permitted ratios between the total variable (cash bonuses and equity based compensation) and non-variable (base salary) compensation components, in accordance with an officer’s respective position with the company. 78 An annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets.
In addition, our compensation policy provides for maximum permitted ratios between the total variable (cash bonuses and equity based compensation) and non-variable (base salary) compensation components, in accordance with an officer’s respective position with the company. 72 An annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets.
Such benefits may include, to the extent applicable to the executive, payments, contributions and/or allocations for savings funds, education funds (referred to in Hebrew as “Keren Hishtalmut”), pension, severance, risk insurances (e.g., life or work disability insurance) and payments for social security. (2) Share-based compensation includes the cost of our non-cash share-based compensation in 2022.
Such benefits may include, to the extent applicable to the executive, payments, contributions and/or allocations for savings funds, education funds (referred to in Hebrew as “Keren Hishtalmut”), pension, severance, risk insurances (e.g., life or work disability insurance) and payments for social security. (2) Share-based compensation includes the cost of our non-cash share-based compensation in 2023.
Upon termination of employment due to death or disability, all the options vested at the time of termination and within 60 days after the date of such termination, will generally be exercisable for six (6) months, or such other period as determined by t he plan administrator, subject to the terms of our 2022 Incentive Plan and the governing option agreement.
Upon termination of employment due to death or disability, all the options vested at the time of termination and within 60 days after the date of such termination, will generally be exercisable for six (6) months, or such other period as determined by the plan administrator, subject to the terms of our 2022 Incentive Plan and the governing option agreement.
(TASE: EMITF) since August 2021 and Viewvix Inc. (Nasdaq: VBIX) since September 2022. From August 2014 to February 2020, Mr. Yoresh served as a member of the board of directors of Nano Dimension Ltd. (Nasdaq: NNDM) and from August 2005 to July 2008 as the chief executive officer of Tomcar Global Holdings Ltd., a global manufacturer of off-road vehicles, from.
(TASE: EMITF) since August 2021 and Viewbix Inc. (Nasdaq: VBIX) since September 2022. From August 2014 to February 2020, Mr. Yoresh served as a member of the board of directors of Nano Dimension Ltd. (Nasdaq: NNDM) and from August 2005 to July 2008 as the chief executive officer of Tomcar Global Holdings Ltd., a global manufacturer of off-road vehicles, from.
Compensation The following table presents in the aggregate all compensation we paid to all of our directors and senior management as a group for the year ended December 31, 2022. The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period.
Compensation The following table presents in the aggregate all compensation we paid to all of our directors and senior management as a group for the year ended December 31, 2023. The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period.
External directors may be elected for up to two additional three-year terms after their initial three-year term under the circumstances described below, with certain exceptions as described in “External Directors” below. External directors may be removed from office only under the limited circumstances set forth in the Companies Law. See “Item 6.C.
External directors may be elected for up to two additional three-year terms after their initial three-year term under the circumstances described below, with certain exceptions as described in “External Directors” below. External directors may be removed from office only under the limited circumstances set forth in the Companies Law. See “Item 6.C. Board Practices — External Directors” below.
Amounts paid in NIS are translated into U.S. dollars at the rate of NIS 3.36 = U.S. $1.00, based on the average representative rate of exchange between the NIS and the U.S. dollar as reported by the Bank of Israel during such period of time.
Amounts paid in NIS are translated into U.S. dollars at the rate of NIS 3.69 = U.S. $1.00, based on the average representative rate of exchange between the NIS and the U.S. dollar as reported by the Bank of Israel during such period of time.
In accordance with the Israeli Companies Law, we are required to disclose the compensation granted to our five most highly compensated officers. The table below reflects the compensation granted during or with respect to the year ended December 31, 2022.
In accordance with the Israeli Companies Law, we are required to disclose the compensation granted to our five most highly compensated officers. The table below reflects the compensation granted during or with respect to the year ended December 31, 2023.
(6) Class II directors shall hold office until the annual general meeting to be held in 2024 and until their successors shall have been elected and qualified. (7) Class I directors shall hold office until the annual general meeting to be held in 2023 and until their successors shall have been elected and qualified.
(6) Class II directors shall hold office until the annual general meeting to be held in 2024 and until their successors shall have been elected and qualified. (7) Class I directors shall hold office until the annual general meeting to be held in 2026 and until their successors shall have been elected and qualified.
The initial Class I directors shall hold office until the first annual general meeting to be held in 2023 and until their successors shall have been elected and qualified. The initial Class II directors shall hold office until the annual general meeting to be held in 2024 and until their successors shall have been elected and qualified.
The initial Class I directors shall hold office until the first annual general meeting to be held in 2026 and until their successors shall have been elected and qualified. The initial Class II directors shall hold office until the annual general meeting to be held in 2024 and until their successors shall have been elected and qualified.
All amounts reported in the tables below reflect the cost to the Company, in thousands of U.S. dollars, for the year ended December 31, 2022.
All amounts reported in the tables below reflect the cost to the Company, in thousands of U.S. dollars, for the year ended December 31, 2023.
As noted above, the members of our audit committee include Asaf Itzhaik and Tomer Etzyoni, who are external directors, and Moshe Revach, each of whom is “independent,” as such term is defined in under Nasdaq listing rules and Rule 10A-3 under the Exchange Act.
As noted above, the members of our audit committee include Israel Berstein and Tomer Etzyoni, who are external directors, and Moshe Revach, each of whom is “independent,” as such term is defined in under Nasdaq listing rules and Rule 10A-3 under the Exchange Act.
C. Board Practices Introduction Our board of directors presently consists of nine members, including our two external directors appointed under the Companies Law. We believe that Tomer Etzyoni, Asaf Itzhaik and Moshe Revach are “independent” for purposes of the Nasdaq listing rules and SEC rules and regulations.
C. Board Practices Introduction Our board of directors presently consists of nine members, including our two external directors appointed under the Companies Law. We believe that Tomer Etzyoni, Israel Berstein and Moshe Revach are “independent” for purposes of the Nasdaq listing rules and SEC rules and regulations.
We believe that Mr. Etzyoni is qualified to serve as a member of our board of directors because of his diverse fitness and health knowledge and his vast experience in fitness and health — issues that are related to the brands we sell or will sell in the future. Asaf Itzhaik, External Director Mr.
We believe that Mr. Etzyoni is qualified to serve as a member of our board of directors because of his diverse fitness and health knowledge and his vast experience in fitness and health — issues that are related to the brands we sell or will sell in the future. 60 Israel Berenstein, External Director Mr.
Unicargo is a one-stop-shop to FBA specializing in logistics services for Amazon sellers and e-commerce. From September 2017 to September 2018, Mr. Bergman was a strategic customer manager at Pick & Pack Ltd., a company fully owned by Israel Cargo Logistics Ltd, an international shipping company. Mr.
Unicargo is a one-stop-shop to FBA specializing in logistics services for Amazon sellers and e-commerce. From September 2017 to September 2018, Mr. Bergman was a strategic customer manager at Pick & Pack Ltd., a company fully owned by Israel Cargo Logistics Ltd, an international shipping company. Mr. Bergman holds a B.A. in Economics and Sustainability from Reichman University, Israel.
On September 29, 2022, we convened a Special General Meeting of Shareholders in which the Company’s shareholders appointed Tomer Etzyoni and Asaf Itzhaik to serve as external directors on our board of directors for a three-year term.
External directors must meet stringent standards of independence. On September 29, 2022, we convened a Special General Meeting of Shareholders in which the Company’s shareholders appointed Tomer Etzyoni and Asaf Itzhaik to serve as external directors on our board of directors for a three-year term.
Compensation Committee Our compensation committee is composed of Moshe Revach, Tomer Etzyoni and Asaf Itzhaik. Asaf Itzhaik is the chairman of the compensation committee. Companies Law Requirements Under the Companies Law, the board of directors of any public company must establish a compensation committee.
Compensation Committee Our compensation committee is composed of Moshe Revach, Tomer Etzyoni and Israel Berstein. Israel Berstein is the chairman of the compensation committee. Companies Law Requirements Under the Companies Law, the board of directors of any public company must establish a compensation committee.
Unaffiliated Directors Under the Companies Law An “unaffiliated director” is either an external director or a director who (i) meets the same non-affiliation criteria as an external director, except for (y) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (z) the requirement for accounting and financial expertise or professional qualifications, as determined by the audit committee, and (ii) who has not served as a director of the company for more than nine consecutive years.
We may use these exemptions in the future if we do not have a controlling shareholder. 67 Unaffiliated Directors Under the Companies Law An “unaffiliated director” is either an external director or a director who (i) meets the same non-affiliation criteria as an external director, except for (y) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (z) the requirement for accounting and financial expertise or professional qualifications, as determined by the audit committee, and (ii) who has not served as a director of the company for more than nine consecutive years.
Board Practices — External Directors” below. 70 Under the Companies Law, any shareholder holding at least one percent of our outstanding voting power may ask to add nomination of a director for the approval of the general meeting of shareholders.
Under the Companies Law, any shareholder holding at least one percent of our outstanding voting power may ask to add nomination of a director for the approval of the general meeting of shareholders.
For additional details, we also refer you to the full text of the Companies Law, as well as of our amended and restated articles of association, which are filed as exhibits to this Annual Report on Form 20-F and are incorporated herein by reference.
The foregoing descriptions summarize the material aspects and practices of our board of directors. For additional details, we also refer you to the full text of the Companies Law, as well as of our amended and restated articles of association, which are filed as exhibits to this Annual Report on Form 20-F and are incorporated herein by reference.
Audit Committee Our audit committee is composed of Moshe Revach, Asaf Itzhaik and Tomer Etzyoni. Asaf Itzhaik is the chairman of the audit committee. Companies Law Requirements Under the Companies Law, we are required to appoint an audit committee.
Audit Committee Our audit committee is composed of Moshe Revach, Israel Berstein and Tomer Etzyoni. Israel Berstein is the chairman of the audit committee. 68 Companies Law Requirements Under the Companies Law, we are required to appoint an audit committee.
Itzhaik is qualified to serve as a member of our board of directors because of his diverse business experience and leadership skills. 67 Family Relationships There are no family relationships between any members of our executive management and our directors.
Berenstein is qualified to serve as a member of our board of directors because of his diverse business, legal and management experience. Family Relationships There are no family relationships between any members of our executive management and our directors.
However, if the chief executive officer candidate will serve as a member of the board of directors, such candidate’s compensation terms as chief executive officer must be approved in accordance with the rules applicable to approval of compensation of directors. 82 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 the Special Majority Approval.
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 the Special Majority Approval.
Etzyoni has served as a fitness and health instructor at Wingate College since September 2016, professional course, as workshop instructor at Wingate College since March 2012 and as therapist at Dr. Gill Solberg’s Muscle and Motion Clinic since January 2012. Mr.
Etzyoni has served as one of our external directors since August 2022. Mr. Etzyoni has served as a fitness and health instructor at Wingate College since September 2016, professional course, as workshop instructor at Wingate College since March 2012 and as therapist at Dr. Gill Solberg’s Muscle and Motion Clinic since January 2012. Mr.
Directors and Senior Management The following table sets forth information regarding our executive officers, key employees and directors as of April 10, 2023: Name Age Position Class Viki Hakmon 46 Chief Executive Officer and Director Class III (5) Ronen Zalayet 54 Chief Financial Officer N/A Naor Bergman 32 Chief Operating Officer N/A Oz Adler 36 Chairman of the Board of Directors Class III (5) Eliyahu Yoresh 52 Director Class II (6) Liron Carmel 38 Director Class II (6) Tali Dinar 51 Director Class I (7) Moshe Revach (1)(2)(3) 46 Director Class I (7) Amitay Weiss 60 Director Class I (7) Tomer Etzyoni (1)(2)(3)(4) 42 External Director Asaf Itzhaik (1)(2)(3)(4) 50 External Director (1) Independent Director (as defined under Nasdaq listing rules) (2) Member of the Audit Committee (3) Member of the Compensation Committee (4) External Director (as defined under Israeli law) (5) Class III directors shall hold office until the annual general meeting to be held in 2025 and until their successors shall have been elected and qualified.
Directors and Senior Management The following table sets forth information regarding our executive officers, key employees and directors as of December 31, 2023: Name Age Position Class Viki Hakmon 47 Chief Executive Officer and Director Class III (5) Ronen Zalayet 55 Chief Financial Officer N/A Naor Bergman 33 Chief Operating Officer N/A Oz Adler 37 Chairman of the Board of Directors Class III (5) Eliyahu Yoresh 53 Director Class II (6) Liron Carmel 39 Director Class II (6) Tali Dinar 52 Director Class I (7) Moshe Revach (1)(2)(3) 47 Director Class I (7) Amitay Weiss 61 Director Class I (7) Tomer Etzyoni (1)(2)(3)(4) 43 External Director Israel Berstein (1)(2)(3)(4) 52 External Director (1) Independent Director (as defined under Nasdaq listing rules) (2) Member of the Audit Committee (3) Member of the Compensation Committee (4) External Director (as defined under Israeli law) (5) Class III directors shall hold office until the annual general meeting to be held in 2025 and until their successors shall have been elected and qualified.
Prior to the approval of the reelection- of the external director at a general shareholders meeting, the company’s shareholders must be informed of the term previously served by him or her and of the reasons why the board of directors and audit committee recommended the extension of his or her term. 72 The Companies Law provides that a person is not qualified to serve as an external director if (i) the person is a relative of a controlling shareholder of the company, or (ii) if that person or his or her relative, partner, employer, another person to whom he or she was directly or indirectly subordinate, or any entity under the person’s control, has or had, during the two years preceding the date of appointment as an external director: (a) any affiliation or other disqualifying relationship with the company, with any person or entity controlling the company or a relative of such person, or with any entity controlled by or under common control with the company; or (b) in the case of a company with no shareholder holding 25% or more of its voting rights, had at the date of appointment as an external director, any affiliation or other disqualifying relationship with a person then serving as chairman of the board or chief executive officer, with a holder of 5% or more of the issued share capital or voting power in the company or with the most senior financial officer.
The Companies Law provides that a person is not qualified to serve as an external director if (i) the person is a relative of a controlling shareholder of the company, or (ii) if that person or his or her relative, partner, employer, another person to whom he or she was directly or indirectly subordinate, or any entity under the person’s control, has or had, during the two years preceding the date of appointment as an external director: (a) any affiliation or other disqualifying relationship with the company, with any person or entity controlling the company or a relative of such person, or with any entity controlled by or under common control with the company; or (b) in the case of a company with no shareholder holding 25% or more of its voting rights, had at the date of appointment as an external director, any affiliation or other disqualifying relationship with a person then serving as chairman of the board or chief executive officer, with a holder of 5% or more of the issued share capital or voting power in the company or with the most senior financial officer.
Exculpation, Insurance and Indemnification of Directors and Officers Insurance As permitted 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 a third party, including a breach arises out of the negligent conduct of the office holder; ● 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 a third party. ● financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law; ● expenses incurred or to be incurred by an office holder in connection with an administrative proceeding, instituted against him or her, pursuant to certain provisions of the Israeli Securities Law, including reasonable litigation expenses, and including attorneys’ fees; and ● any other event in respect of which it is permitted and/or shall be permitted by Law to insure the liability of an officeholder. 83 Our amended and restated articles of association provide that we may incuse an office holder against the abovementioned liabilities.
The Companies Law does not describe the substance of this duty except to state that the remedies generally available upon a breach of contract will also apply in the event of a breach of the duty to act with fairness, taking the shareholder’s position in the company into account. 77 Exculpation, Insurance and Indemnification of Directors and Officers Insurance As permitted 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 a third party, including a breach arises out of the negligent conduct of the office holder; ● 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 a third party. ● financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law; ● expenses incurred or to be incurred by an office holder in connection with an administrative proceeding, instituted against him or her, pursuant to certain provisions of the Israeli Securities Law, including reasonable litigation expenses, and including attorneys’ fees; and ● any other event in respect of which it is permitted and/or shall be permitted by Law to insure the liability of an officeholder.
However, under regulations promulgated under the Companies Law, the insurance of office holders shall not require shareholder approval and may be approved by only the compensation committee if the engagement terms are determined in accordance with the company’s compensation policy, which was approved by the shareholders by the same special majority required to approve a compensation policy, provided that the insurance policy is on market terms and the insurance policy is not likely to materially impact the company’s profitability, assets, or obligations.
However, under regulations promulgated under the Companies Law, the insurance of office holders shall not require shareholder approval and may be approved by only the compensation committee if the engagement terms are determined in accordance with the company’s compensation policy, which was approved by the shareholders by the same special majority required to approve a compensation policy, provided that the insurance policy is on market terms and the insurance policy is not likely to materially impact the company’s profitability, assets, or obligations. 79 Our amended and restated articles of association permit us to exculpate (subject to the aforesaid limitation), indemnify and insure our office holders to the fullest extent permitted or to be permitted by the Companies Law.
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.
Any such approval is subject to the terms of the Companies Law, setting forth, among other things, the appropriate bodies of the company required to provide such approval, and the methods of obtaining such approval. 74 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.
However, the enforceability of the noncompetition provisions may be limited under applicable law. In addition, we have entered into our standard form of indemnification agreement, in the form filed as an exhibit to this Annual Report on Form 20-F, with each of our directors and members of our senior management.
In addition, we have entered into our standard form of indemnification agreement, in the form filed as an exhibit to this Annual Report on Form 20-F, with each of our directors and members of our senior management.
In addition, under certain circumstances, our amended and restated articles of association allow our board of directors to appoint directors to fill vacancies on our board of directors or in addition to the acting directors (subject to the limitation on the number of directors), in one of the classes and until the next annual general meeting according to the appropriate class in which directors may be appointed or terminated.
If the number of directors is changed, any newly created directors or decrease in directors must be apportioned by the board among the classes to make them equal in number. 63 In addition, under certain circumstances, our amended and restated articles of association allow our board of directors to appoint directors to fill vacancies on our board of directors or in addition to the acting directors (subject to the limitation on the number of directors), in one of the classes and until the next annual general meeting according to the appropriate class in which directors may be appointed or terminated.
Revach holds an LL.B from the Ono Academic College, Israel, and a B.A. in management and economics from the University of Derby. We believe that Mr. Revach is qualified to serve as a member of our board of directors because of his diverse management and leadership experience. Amitay Weiss, Director Mr.
Weiss holds a B.A in economics from New England College, an M.B.A. in business administration and an LL.B. from Ono Academic College, Israel. We believe that Mr. Weiss is qualified to serve as a member of our board of directors because of his diverse business, management and leadership experience. Tomer Etzyoni, External Director Mr.
Compensation Committee Role Our compensation committee reviews and recommends to our board of directors: with respect to our executive officers’ and directors’: (1) annual base compensation (2) annual incentive bonus, including the specific goals and amounts; (3) equity compensation; (4) employment agreements, severance arrangements, and change in control agreements and provisions; (5) retirement grants and/or retirement bonuses; and (6) any other benefits, compensation, compensation policies or arrangements.
Our board of directors has determined that each member of our compensation committee is independent under the corporate governance rules of Nasdaq, including the additional independence considerations applicable to the members of a compensation committee. 70 Compensation Committee Role Our compensation committee reviews and recommends to our board of directors: with respect to our executive officers’ and directors’: (1) annual base compensation (2) annual incentive bonus, including the specific goals and amounts; (3) equity compensation; (4) employment agreements, severance arrangements, and change in control agreements and provisions; (5) retirement grants and/or retirement bonuses; and (6) any other benefits, compensation, compensation policies or arrangements.
As a default, our 2022 Incentive Plan provides that upon termination of employment for any reason, other than in the event of death, retirement, disability or cause, all unvested options will expire and all vested options will generally be exercisable for 90 days following such termination, subject to the terms of our 2022 Incentive Plan and the governing option agreement. 69 Notwithstanding the foregoing, in the event the engagement is terminated for cause, including, inter alia, due to dishonesty toward the Company or its affiliate, substantial malfeasance or nonfeasance of duty, unauthorized disclosure of confidential information, and conduct substantially prejudicial to the business of the Company or affiliate; or any substantial breach by the optionee of his or her employment or service agreement, all options granted to such optionee, whether vested or unvested, will not be exercisable and will terminate on the date of the termination of his employment.
Notwithstanding the foregoing, in the event the engagement is terminated for cause, including, inter alia, due to dishonesty toward the Company or its affiliate, substantial malfeasance or nonfeasance of duty, unauthorized disclosure of confidential information, and conduct substantially prejudicial to the business of the Company or affiliate; or any substantial breach by the optionee of his or her employment or service agreement, all options granted to such optionee, whether vested or unvested, will not be exercisable and will terminate on the date of the termination of his employment.
Such exemptions include an exemption from the requirement to appoint external directors and the requirement that an external director be a member of certain committees, as well as exemption from limitations on directors’ compensation. We may use these exemptions in the future if we do not have a controlling shareholder.
Such exemptions include an exemption from the requirement to appoint external directors and the requirement that an external director be a member of certain committees, as well as exemption from limitations on directors’ compensation.
Weiss is qualified to serve as a member of our board of directors because of his diverse business, management and leadership experience. Tomer Etzyoni, External Director Mr. Etzyoni has served as one of our external directors since August 2022. Mr.
Revach is qualified to serve as a member of our board of directors because of his diverse management and leadership experience. Amitay Weiss, Director Mr. Weiss has served as one of our directors since August 2022. Mr. Weiss has a vast experience serving on boards of directors and other high positions.
A personal interest includes the personal interest of a person for whom the office holder holds a voting proxy or the personal interest of the office holder with respect to the officer holder’s vote on behalf of a person for whom he or she holds a proxy even if such shareholder has no personal interest in the matter. 80 The Companies Law does not specify to whom within us nor the manner in which required disclosures are to be made.
A personal interest includes the personal interest of a person for whom the office holder holds a voting proxy or the personal interest of the office holder with respect to the officer holder’s vote on behalf of a person for whom he or she holds a proxy even if such shareholder has no personal interest in the matter.
In case the remuneration of the directors is in accordance with regulations applicable to remuneration of the external directors then such remuneration shall be exempt from the approval of the general meeting.
In case the remuneration of the directors is in accordance with regulations applicable to remuneration of the external directors then such remuneration shall be exempt from the approval of the general meeting. Where the director is also a controlling shareholder, the requirements for approval of transactions with controlling shareholders apply.
Each such indemnification agreement provides the indemnified person with indemnification to the maximum extent permitted under applicable law and up to a certain amount, and to the extent that these liabilities are not covered by directors and officers insurance or other indemnification agreement. 84 Exculpation Under the Companies Law, an Israeli company may not exculpate an office holder from liability for a breach of his or her duty of loyalty, but may exculpate in advance an office holder from his or her liability to the company, in whole or in part, for damages caused to the company as a result of a breach of his or her duty of care (other than in relation to distributions), but only if a provision authorizing such exculpation is included in its articles of association.
Exculpation Under the Companies Law, an Israeli company may not exculpate an office holder from liability for a breach of his or her duty of loyalty, but may exculpate in advance an office holder from his or her liability to the company, in whole or in part, for damages caused to the company as a result of a breach of his or her duty of care (other than in relation to distributions), but only if a provision authorizing such exculpation is included in its articles of association.
Where the director is also a controlling shareholder, the requirements for approval of transactions with controlling shareholders apply. 79 Fiduciary Duties and Approval of Related Party Transactions under Israeli Law Fiduciary Duties of Office Holders The Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company.
Fiduciary Duties and Approval of Related Party Transactions under Israeli Law Fiduciary Duties of Office Holders The Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company.
In addition, transactions with a controlling shareholder or a controlling shareholder’s relative who serves as an executive officer in a company, directly or indirectly (including through a corporation under his control), involving the receipt of services by a company or their compensation can have a term of five years from the company’s initial public offering under certain circumstances. 81 The Companies Law requires that every shareholder that participates, in person, by proxy or by voting instrument, in a vote regarding a transaction with a controlling shareholder, must indicate in advance or in the ballot whether or not that shareholder has a personal interest in the vote in question.
In addition, transactions with a controlling shareholder or a controlling shareholder’s relative who serves as an executive officer in a company, directly or indirectly (including through a corporation under his control), involving the receipt of services by a company or their compensation can have a term of five years from the company’s initial public offering under certain circumstances.
According to regulations promulgated under the Companies law, at least one of the external directors is required to have “financial and accounting expertise,” and the other external director or directors are required to have “professional expertise.” Our board of directors has determined that Asaf Itzhaik has accounting and financial expertise. 71 A director with accounting and financial expertise is a director who, due to his or her education, experience and skills, possesses a high degree of proficiency in, and an understanding of, business — accounting matters and financial statements, such that he or she is able to understand the financial statements of the company in depth and initiate a discussion about the manner in which financial data is presented.
A director with accounting and financial expertise is a director who, due to his or her education, experience and skills, possesses a high degree of proficiency in, and an understanding of, business — accounting matters and financial statements, such that he or she is able to understand the financial statements of the company in depth and initiate a discussion about the manner in which financial data is presented.
Our 2022 Incentive Plan is administered by our board of directors, regarding the granting of options and the terms of option grants, including exercise price, method of payment, vesting schedule, acceleration of vesting and the other matters necessary in the administration of this plan.
As of March 28, 2024, no Ordinary Shares had been issued under our 2022 Incentive Plan and the total number of Ordinary Shares reserved for the exercise of options granted under our 2022 Incentive Plan is 186,718. 62 Our 2022 Incentive Plan is administered by our board of directors, regarding the granting of options and the terms of option grants, including exercise price, method of payment, vesting schedule, acceleration of vesting and the other matters necessary in the administration of this plan.
Nasdaq Listing Rules for Compensation Committee Under the corporate governance rules of Nasdaq, we are required to maintain a compensation committee consisting of at least two independent directors. 76 Our board of directors has determined that each member of our compensation committee is independent under the corporate governance rules of Nasdaq, including the additional independence considerations applicable to the members of a compensation committee.
Nasdaq Listing Rules for Compensation Committee Under the corporate governance rules of Nasdaq, we are required to maintain a compensation committee consisting of at least two independent directors.
(Maintaince) (TASE: INFR-M) since July 2021 and chairman of the board of directors of Upsellon Brands Holdings Ltd. (previously Chiron Ltd.) (TASE: UPSL) since June 2019. He has also served as a member of the board of directors of Automax Motors Ltd. (TASE: AMX) since March 2021, Gix Internet Ltd.
He has served as chairman of the board of directors of Save Foods Inc. (Nasdaq: SVFD) since August 2020, chairman of the board of directors of Infimer Ltd. (Maintaince) (TASE: INFR-M) since July 2021 and chairman of the board of directors of Upsellon Brands Holdings Ltd. (previously Chiron Ltd.) (TASE: UPSL) since June 2019.
External Directors Under the Companies Law, an Israeli company whose shares have been offered to the public or whose shares are listed for trading on a stock exchange in or outside of Israel is required to appoint at least two external directors to serve on its board of directors. External directors must meet stringent standards of independence.
The internal auditor undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to our audit committee. 64 External Directors Under the Companies Law, an Israeli company whose shares have been offered to the public or whose shares are listed for trading on a stock exchange in or outside of Israel is required to appoint at least two external directors to serve on its board of directors.
Remuneration of Directors Under the Companies Law, remuneration of directors is subject to the approval of the compensation committee, thereafter by the board of directors and thereafter, unless exempted under the regulations promulgated under the Companies Law, by the general meeting of the shareholders.
Daniel Shapira from Daniel Shapira Accountants was appointed by the board of directors on December 13, 2022, to serve as the Internal Auditor of the Company. 73 Remuneration of Directors Under the Companies Law, remuneration of directors is subject to the approval of the compensation committee, thereafter by the board of directors and thereafter, unless exempted under the regulations promulgated under the Companies Law, by the general meeting of the shareholders.
In addition, the shareholder approval must fulfill one of the following requirements: ● at least a majority of the shares held by shareholders who are not controlling shareholders and 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 and non-controlling shareholders and have no personal interest in the transaction who vote against the transaction represent no more than 2% of the voting rights in the company.
In addition, the shareholder approval must fulfill one of the following requirements: ● at least a majority of the shares held by shareholders who are not controlling shareholders and 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 and non-controlling shareholders and have no personal interest in the transaction who vote against the transaction represent no more than 2% of the voting rights in the company. 75 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.
(previously Algomizer Ltd.) (TASE: GIX) since March 2019, Clearmind Medicine Inc. (previously Cyntar Ventures Inc.) (CSE: CMND) since August 2019, Perihelion Capital Ltd. (PCL.P: CVE) since June 2021, as an external director of Cofix Group Ltd. (TASE: CFCS) since August 2015 and as a member of the board of directors of SciSparc since August 2020. Mr.
He has also served as a member of the board of directors of Automax Motors Ltd. (TASE: AMX) since March 2021, Gix Internet Ltd. (previously Algomizer Ltd.) (TASE: GIX) since March 2019, Clearmind Medicine Inc. (previously Cyntar Ventures Inc.) (CSE: CMND) since August 2019, as an external director of Cofix Group Ltd.
Revach serves as deputy mayor of the city of Ramat Gan, Israel, has headed both the sports and government relations portfolios in the Ramat Gan, Israel municipality since 2013, and previously served in various other municipality positions since 2008. Mr.
Revach serves as member of the city council of Ramat Gan, Israel, and member of the finance committee of the city council of Ramat Gan, Israel, and previously served in various other municipality positions since 2008. Mr.
Dinar has served as a director of Canzon Israel Ltd. (TASE: CNZN) since August 2020. Mrs. Dinar holds a B.A. in Accounting and Business Administration from The College of Management, Israel. We believe that Mrs.
(Nasdaq: MICT) and as Chief Financial Officer of MICT Telematics Ltd. Mrs. Dinar holds a B.A. in Accounting and Business Administration from The College of Management, Israel. We believe that Mrs.
Revach currently serves as a member of the board of directors of L.L.N IT solutions, a wholly-owned subsidiary of the Jewish Agency for Israel and of Biomedico Hadarim Ltd. Mr. Revach previously served as a member of the board of directors of the RPG Economic Society and Jewish Experience Company on behalf of the Jewish Agency. Mr.
Revach currently serves as a member of the board of directors of L.L.N IT solutions, a wholly-owned subsidiary of the Jewish Agency for Israel, a board member of Biomedico Hadarim Ltd., a board member of ParaZero Technologies Ltd (Nasdaq: PRZO) since 2022 and a board member of PLANTIFY FOODS, INC. since 2023. Mr.
None of our employees are members of a union or subject to the terms of a collective bargaining agreement.
Employees As of March 28, 2024, we had ten full-time employees and two part time employees. None of our employees are members of a union or subject to the terms of a collective bargaining agreement. None of our employees are members of a union or subject to the terms of a collective bargaining agreement.
Each committee of the board of directors that exercises the powers of the board of directors must include at least one external director, except that the audit committee and the compensation committee must include all external directors then serving on the board of directors and an external director must serve as chair thereof. 73 Under the Companies Law, external directors of a company are prohibited from receiving, directly or indirectly, any compensation from the company other than for their services as external directors pursuant to the Companies Law and the regulations promulgated thereunder.
Under the Companies Law, external directors of a company are prohibited from receiving, directly or indirectly, any compensation from the company other than for their services as external directors pursuant to the Companies Law and the regulations promulgated thereunder.
Bergman holds a B.A. in Economics and Sustainability from Reichman University, Israel. 65 Oz Adler, Chairman of the Board of Directors Mr. Adler has served as one of our directors since September 2021. Mr. Adler has served as the chief financial officer of SciSparc since April 2018, as the chief executive officer of SciSparc since January 2022.
Oz Adler, Chairman of the Board of Directors Mr. Adler, CPA, has served on our board of directors since September 2021. Mr. Adler currently serves as the chief executive officer and chief financial officer of SciSparc Ltd. Mr. Adler has served as SciSparc’s chief financial officer since April 2018 and as its chief executive officer since January 2022. Mr.
Weiss served as chief executive officer of SciSparc from August 2020 to January 2022. He also previously served as chairman of the board of directors of Value Capital One Ltd. (previously P.L.T Financial Services Ltd.) (TASE: VALU) from April 2016 to February 2021 and of Matomy Media Group Ltd. (LSE: MTMY, TASE: MTMY.TA) from May 2020 to March 2021.
(previously P.L.T Financial Services Ltd.) (TASE: VALU) from April 2016 to February 2021 and of Matomy Media Group Ltd. (LSE: MTMY, TASE: MTMY.TA) from May 2020 to March 2021. In April 2016, Mr. Weiss founded Amitay Weiss Management Ltd., an economic consulting company, and now serves as its chief executive officer. Mr.
(5) Haim Ratzabi served as Chief Financial Officer from May 23, 2021 until May 31, 2022. 68 E mployment and Service Agreements with Executive Officers We have entered into written employment and service agreements with each of our executive officers. All of these agreements contain customary provisions regarding confidentiality of information and assignment of inventions.
E mployment and Service Agreements with Executive Officers We have entered into written employment and service agreements with each of our executive officers. All of these agreements contain customary provisions regarding confidentiality of information and assignment of inventions. However, the enforceability of the noncompetition provisions may be limited under applicable law.
Adler is qualified to serve as a member of our board of directors because of his diverse business, management, and leadership experience. Eliyahu Yoresh, Director Mr. Yoresh has served as one of our directors since September 2021. Mr.
Adler is a certified public accountant in Israel and holds a B.A. degree in Accounting and Business Management from The College of Management, Israel. Eliyahu Yoresh, Director Mr. Yoresh has served as one of our directors since September 2021. Mr.
For so long as we qualify as a foreign private issuer, we will not be required to comply with the proxy rules applicable to U.S. domestic companies regarding disclosure of the compensation of certain executive officers on an individual basis.
Salary, bonuses and Related Benefits Pension, Retirement and Other Similar Benefits Share Based Compensation (1) All directors and senior management as a group, consisting of 12 persons for the year ended December 31, 2023 (1) $ 763 $ 35 $ 0 (1) Includes Asaf Itzhaik who served as External Director until his resignation on December 14, 2023. 61 For so long as we qualify as a foreign private issuer, we will not be required to comply with the proxy rules applicable to U.S. domestic companies regarding disclosure of the compensation of certain executive officers on an individual basis.
Form March 2918 to April 2018 Mr. Adler served as vice president of finance of SciSparc and from September 2017 to Mach 2018 as controller of SciSparc. Mr. Adler has experience in a wide variety of managerial, financial, tax and accounting roles. Mr.
Adler has experience in a wide variety of managerial, financial, tax and accounting roles. From December 2020 to April 2021, Mr. Adler served as the chief financial officer of Medigus, from 2021 – 2022 served as a director of Elbit Imaging Ltd. (TASE: EMITF) Ltd. Mr.
Itzhaik has served as one of our external directors since August 2022. Mr. Itzhaik has served as the chief executive officer of A.K.A Optics Ltd., a manufacturer of adaptive optics, since 1994 and as a member of the board of directors of A.K.A Optics Ltd. since 1998. Mr.
(TASE: CFCS) since August 2015 and as a member of the board of directors of SciSparc since August 2020. Mr. Weiss served as chief executive officer of SciSparc from August 2020 to January 2022. He also previously served as chairman of the board of directors of Value Capital One Ltd.
We require our office holders to make such disclosures to our board of directors.
The Companies Law does not specify to whom within us nor the manner in which required disclosures are to be made. We require our office holders to make such disclosures to our board of directors.
In April 2016, Mr. Weiss founded Amitay Weiss Management Ltd., an economic consulting company, and now serves as its chief executive officer. Mr. Weiss holds a B.A in economics from New England College, an M.B.A. in business administration and an LL.B. from Ono Academic College, Israel. We believe that Mr.
Revach previously served as a member of the board of directors of the RPG Economic Society and Jewish Experience Company on behalf of the Jewish Agency. Mr. Revach holds an LL.B from the Ono Academic College, Israel, and a B.A. in management and economics from the University of Derby. We believe that Mr.
Removed
Adler currently serves as a member of the board of directors of numerous private and public companies, including Charging Robotics Ltd., Elbit Imaging Ltd. (TASE: EMITF) and Clearmind (CSE: CMND), (OTC: CMNDF), (FSE: CWY), and previously served as the chief financial officer of Medigus Ltd. (Nasdaq: MDGS) from December 2020 to April 2021. From 2012 until 2017, Mr.
Added
Adler also worked in the audit department of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global between December 2012 and August 2017. Additionally, Mr. Adler currently serves on the board of directors of numerous private and publicly traded companies, including: Clearmind Medicine Inc. (NASDAQ: CMND) (FSE:CWY), Rail Vision Ltd. (NASDAQ: RVSN). Mr.
Removed
Adler worked in the audit department of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global. Mr. Adler is a certified public accountant in Israel and holds a B.A. degree in Accounting and Business Management from The College of Management, Israel. We believe that Mr.
Added
Dinar has served as chief financial officer of Medigus (Nasdaq: MDGS) since June 2021. Mrs. Dinar also currently serves as a member of the board of directors of ParaZero Ltd. beginning February 13, 2022, as a director in Charging Robotics Ltd. since November 2021, a director in Fuel Doctor Holding Inc since April 4, 2023. Mrs.

… 37 more changes not shown on this page.

Item 7. Management's Discussion & Analysis

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

23 edited+7 added−13 removed18 unchanged
Biggest changeHakmon, our Chief Executive Officer, held the remaining 49.97% of our outstanding Ordinary Shares. Mr. Hakmon’s affiliates, who were minority shareholders of Smart Repair Pro and Purex, transferred all their holdings in Smart Repair Pro and Purex to Mr.
Biggest changePursuant to the SEA, following the Contribution Transactions, Jeffs’ Brands held all of the outstanding shares of Smart Repair Pro and Purex, Medigus held 50.03% of our outstanding Ordinary Shares and Hakmon, our Chief Executive Officer, held the remaining 49.97% of our outstanding Ordinary Shares Hakmon’s affiliates, who were minority shareholders of Smart Repair Pro and Purex, transferred all their holdings in Smart Repair Pro and Purex to Hakmon pursuant to the Share Transfer Deed dated May 10, 2021, which was effective immediately prior to the Contribution Transactions.
On April 29, 2022 and August 24, 2022, Medigus advanced $80,000 and $70,000, respectively, to the Company for certain working capital matters, which the Company fully repaid on September 6, 2022. For further description on the agreements and loans described above, see “Item 5.B. Liquidity and Capital Resources – Financial Agreements ” above.
On April 29, 2022 and August 24, 2022, Medigus advanced $80,000 and $70,000, respectively, to the Company for certain working capital matters, which the Company fully repaid on September 6, 2022. 82 For further description on the agreements and loans described above, see “Item 5.B. Liquidity and Capital Resources – Financial Agreements ” above.
Following that, Medigus held approximately 39.54% of our issued and outstanding share capital On August 30, 2022, Pure Capital purchased in our IPO 180,288 Units comprised of 180,288 Ordinary Shares and Warrants to purchase up to 180,288 Ordinary Shares for an aggregate purchase price of approximately $750,000.
Following that, Medigus held approximately 39.54% of our issued and outstanding share capital. 81 On August 30, 2022, Pure Capital purchased in our IPO 180,288 Units comprised of 180,288 Ordinary Shares and Warrants to purchase up to 180,288 Ordinary Shares for an aggregate purchase price of approximately $750,000.
Related Party Transactions Employment and Service Agreements We have entered into written employment and service agreements with each of our executive officers. All of these agreements contain customary provisions regarding confidentiality of information and assignment of inventions. However, the enforceability of the non-competition provisions may be limited under applicable law.
Employment and Service Agreements We have entered into written employment and service agreements with each of our executive officers. All of these agreements contain customary provisions regarding confidentiality of information and assignment of inventions. However, the enforceability of the non-competition provisions may be limited under applicable law.
(2) Based on Schedule 13D filed with the SEC on September 13, 2022, Medigus has sole voting and dispositive power over all Ordinary Shares shown to be beneficially owned by it. The mailing address of Medigus is Omer Industrial Park No. 7A, P.O. Box 3030, 8496500, Israel. Medigus is a publicly traded company.
(2) Based on Schedule 13D filed with the SEC on September 13, 2022 and information provided to the Company by Medigus. Medigus has sole voting and dispositive power over all Ordinary Shares shown to be beneficially owned by it. The mailing address of Medigus is Omer Industrial Park No. 7A, P.O. Box 3030, 8496500, Israel.
Major Shareholders The following table sets forth information regarding beneficial ownership of our Ordinary Shares as of April 10, 2023 by: ● each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding Ordinary Shares; ● each of our directors, and executive officers; and ● all of our directors, and executive officers as a group.
Major Shareholders The following table sets forth information regarding beneficial ownership of our Ordinary Shares as of March 28, 2024 by: ● each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding Ordinary Shares; ● each of our directors, and executive officers; and ● all of our directors, and executive officers as a group.
Ordinary Shares issuable pursuant to outstanding options or warrants to purchase Ordinary Shares that are exercisable, or securities that are convertible into Ordinary Shares, within 60 days after April 10, 2023, are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options, warrants or convertible securities, but are not deemed outstanding for the purpose of computing the percentage ownership of any other person.
Ordinary Shares issuable pursuant to outstanding options or warrants to purchase Ordinary Shares that are exercisable, or securities that are convertible into Ordinary Shares, within 60 days after March 28, 2024, are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options, warrants or convertible securities, but are not deemed outstanding for the purpose of computing the percentage ownership of any other person.
(1) Includes Warrants to purchase up to 240,385 Ordinary Shares and Additional Warrants to purchase up to 240,385 Ordinary Shares that are exercisable within 60 days, at an exercise price of $2.02 per Ordinary Share following the Exercise Price Adjustment (see “Description of Share Capital — Warrants” for additional information).
(1) Includes Warrants to purchase up to 34,341 Ordinary Shares and Additional Warrants to purchase up to 34,341 Ordinary Shares that are exercisable within 60 days, at an exercise price of $14.14per Ordinary Share following the Exercise Price Adjustment (see “Description of Share Capital — Warrants” for additional information).
To the best of our knowledge, no person has sole voting and sole investment power with respect to the shares. (3) Based on Schedule 13D/A filed with the SEC on November 8, 2022, Viki Hakmon has sole voting and dispositive power over all Ordinary Shares shown to be beneficially owned by it.
Medigus is a publicly traded company. To the best of our knowledge, no person has sole voting and sole investment power with respect to the shares. (3) Based on Schedule 13D/A filed with the SEC on February 26, 2024. Viki Hakmon has sole voting and dispositive power over all Ordinary Shares shown to be beneficially owned by it.
Consulting Agreement with Pure Capital On October 26, 2022, we entered into a consulting agreement with Pure Capital, pursuant to which Pure Capital provides us with consultancy services for a monthly fee of NIS 57,750 (approximately $16,042).
Consulting Agreement with Pure Capital On October 26, 2022, we entered into a consulting agreement with Pure Capital, a company owned by a family member of Mr. Viki Hakmon, our Chief Executive Officer, pursuant to which Pure Capital provides us with consultancy services for a monthly fee of NIS 57,750 (approximately $16,042).
The consulting agreement is for an undefined period of time and may be terminated after three years from October 26, 2022 by either party upon a 30 days of advance notice.
The consulting agreement is for an undefined period of time and may be terminated after three years from October 26, 2022 by either party upon a 30 days of advance notice. As of December 31, 2023, we paid $516,000 to Pure Capital pursuant to the agreement.
As of December 31, 2022, we paid $218,000 to Pure Capital pursuant to the agreement. 89 Agreement with Pure Logistics In November 2022, we entered into an agreement with Pure Logistics, a U.S. based storage and logistics center, intended to support our plans to sell our brands’ products directly to consumers and launch new e-commerce platforms. Mr.
Agreement with Pure Logistics In November 2022, we entered into an agreement with Pure NJ Logistics LLC, or Pure Logistics, a U.S. based storage and logistics center, intended to support our plans to sell our brands’ products directly to consumers and launch new e-commerce platforms. Pure Capital holds a majority of the equity interest in Pure Logistics. Mr.
We are not controlled by another corporation, by any foreign government or by any natural or legal persons except as set forth herein, and there are no arrangements known to us which would result in a change in control of our company at a subsequent date.
Percentage of shares beneficially owned is based on 6,000,009 Ordinary Shares outstanding on March 28, 2024. 80 We are not controlled by another corporation, by any foreign government or by any natural or legal persons except as set forth herein, and there are no arrangements known to us which would result in a change in control of our company at a subsequent date.
Significant Changes in Percentage Ownership by Major Shareholders On May 10, 2021, pursuant to the SEA, Smart Repair Pro and Purex become wholly-owned subsidiaries of Jeffs’ Brands. Pursuant to the SEA, following the Contribution Transactions, Jeffs’ Brands held all of the outstanding shares of Smart Repair Pro and Purex, Medigus held 50.03% of our outstanding Ordinary Shares and Mr.
Significant Changes in Percentage Ownership by Major Shareholders On May 10, 2021, pursuant to the SEA, Smart Repair Pro and Purex become wholly-owned subsidiaries of Jeffs’ Brands.
On November 1, 2022, Viki Hakmon, our Chief Executive Officer, purchased 7,500 Ordinary Shares in an open market transaction, at a price per share of $1.28. Following that, Mr. Hakmon held approximately 17.65% of our issued and outstanding share capital. Record Holders As of April 10, 2023, there were 5 shareholders of record of our Ordinary Shares.
On November 1, 2022, Viki Hakmon, our Chief Executive Officer, purchased 7,500 Ordinary Shares in an open market transaction, at a price per share of $1.28. Following that, Hakmon held approximately 17.65% of our issued and outstanding share capital. All shareholders have been diluted due to the January 2024 PIPE. See “Item 5.A.
Unless otherwise noted below, each beneficial owner’s address is c/o Jeffs’ Brands Ltd, 7 Mezada Street, Bnei Brak, Israel 5126112. 86 No. of Shares Beneficially Owned Percentage Owned Holders of 5% or more of our voting securities: Medigus Ltd. (1)(2) 3,382,905 38.43 % Viki Hakmon *(3) 1,468,578 17.65 % L.I.A. Pure Capital Ltd.
Unless otherwise noted below, each beneficial owner’s address is c/o Jeffs’ Brands Ltd, 7 Mezada Street, Bnei Brak, Israel 5126112. No. of Shares Beneficially Owned Percentage Owned Holders of 5% or more of our voting securities: Medigus Ltd.
(4)(5) 1,352,142 9.99 % Directors and named executive officers who are not 5% holders: Liron Carmel — — Eliyahu Yoresh — — Tali Dinar — — Moshe Revach — — Ronen Zalayet — — Naor Bergman — — Oz Adler (6) 4,808 0.06 % Amitay Wiess — — Tomer Etzyoni — — Assaf Itzhaik — — All directors and executive officers as a group (11 persons) 5,606,178 66.13 % * Indicates officer and/or director of the Company.
(1)(2) 483,272 37.6 % Viki Hakmon *(3) 209,797 17.3 % Directors and named executive officers who are not 5% holders: Liron Carmel — — Eliyahu Yoresh — — Tali Dinar — — Moshe Revach — — Ronen Zalayet — — Naor Bergman — — Oz Adler (4) 686 0.1 % Amitay Wiess — — Tomer Etzyoni — — Israel Berstein All directors and executive officers as a group (11 persons) 210,483 17.3 % * Indicates officer and/or director of the Company.
Hakmon pursuant to the Share Transfer Deed dated May 10, 2021, which was effective immediately prior to the Contribution Transactions. 87 On August 30, 2022, Medigus purchased in our IPO 240,385 Units comprised of 240,385 Ordinary Shares and Warrants to purchase up to 240,385 Ordinary Shares for an aggregate purchase price of approximately $1,000,001.
On August 30, 2022, Medigus purchased in our IPO 240,385 Units comprised of 240,385 Ordinary Shares and Warrants to purchase up to 240,385 Ordinary Shares for an aggregate purchase price of approximately $1,000,001.
Stock Purchase Agreement with SciSparc On February 23, 2023, we and Jeffs’ Brands Holdings entered into the Wellution Agreement, as amended on March 22, 2023 by the Addendum, pursuant to which, on March 22, 2023, Jeffs’ Brands Holdings acquired from SciSparc 57 shares of common stock of SciSparc U.S., a wholly-owned subsidiary of SciSparc that owns and operates Wellution, a top-selling Amazon food supplements and cosmetics brand, subject to the holdback by SciSparc of 11 shares as described below, representing approximately 49% of the issued and outstanding shares of common stock of SciSparc U.S., for approximately $3.0 million in cash (including the Price Adjustment), of which approximately $2.5 million was paid at the closing.
Stock Purchase Agreement with SciSparc On February 23, 2023, we and Jeffs’ Brands Holdings entered into the Wellution Agreement, as amended on March 22, 2023 by the Addendum, pursuant to which, among other things, on March 22, 2023, Jeffs’ Brands Holdings acquired from SciSparc 57 shares of common stock of SciSparc U.S., a wholly-owned subsidiary of SciSparc that owns and operates Wellution, representing approximately 49% of the issued and outstanding shares of common stock of SciSparc U.S.
The mailing address of Pure Capital Ltd. and Kfir Silberman is 20 Raoul Wallenberg Street, Tel Aviv, Israel 6971916. (6) Includes Warrants to purchase up to 2,404 Ordinary Shares exercisable within 60 days, at an exercise price of $2.02 per Ordinary Share following the Exercise Price Adjustment (see “Description of Share Capital — Warrants” for additional information).
The mailing address of Viki Hakmon is 7 Mezada Street, Bnei Brak, Israel 5126112. (4) Includes Warrants to purchase up to 343 Ordinary Shares exercisable within 60 days, at an exercise price of $14.14 per Ordinary Share following the Exercise Price Adjustment (see “Description of Share Capital — Warrants” for additional information).
The bonuses are payable upon meeting objectives and targets that are set by our Chief Executive Officer and approved annually by our board of directors that also set the bonus targets for our Chief Executive Officer. 88 Shareholders Agreements and Loans Since our inception, we have entered into several shareholders’ and loan agreements with our shareholders, our subsidiaries and our Chief Executive Officer, in order to finance our activities.
The bonuses are payable upon meeting objectives and targets that are set by our Chief Executive Officer and approved annually by our board of directors that also set the bonus targets for our Chief Executive Officer. Shareholders Agreements and Loans In February 2021, Smart Repair Pro received loans at an amount of approximately $4,010,000 under the Medigus SPA.
Pursuant to the Wellution Agreement, in connection with the closing of the Wellution Transaction, on March 22, 2023, we entered into the SciSparc Consulting Agreement, pursuant to which we will provide management services to SciSparc U.S. for the Wellution brand for a monthly fee of $20,000, and will receive a one-time signing bonus in the amount of $51,000.
Pursuant to the Wellution Agreement, we also entered into on March 22, 2023, the SciSparc Consulting Agreement, pursuant to which we will provide management services to SciSparc U.S. for the Wellution brand. Mr. Oz Adler, the Chairman and a member of our board of directors is the chief executive officer and chief financial officer of SciSparc, Mr.
Mr. Oz Adler, the Chairman and a member of our board of directors is the chief executive officer and chief financial officer of SciSparc, Mr. Amitai Weiss, is the chairman of the board of directors of SciSparc, and is a member of our board of directors, and Mr.
Amitai Weiss, is the chairman of the board of directors of SciSparc, and is a member of our board of directors, and Mr. Moshe Revach is a member of our board of directors and SciSparc’s board of directors. See “Item 4.B. Recent Developments – Expansion into the Nutritional Supplements Market ” above for further information.
Removed
Percentage of shares beneficially owned is based on 8,321,632 Ordinary Shares outstanding on April 10, 2023.
Added
Financial Arrangements – January 2024 PIPE ,” for further information. Record Holders As of March 28, 2024, there were 42 registered shareholders of our Ordinary Shares.
Removed
The mailing address of Viki Hakmon is 7 Mezada Street, Bnei Brak, Israel 5126112.
Added
Related Party Transactions The following is a description of related-party transactions we have entered into since January 1, 2021, with any of the members of the board of directors, executive officers or holders of more than 5% of any class of our voting securities at the time of such transaction.
Removed
(4) Includes Warrants to purchase up to 114,800 Ordinary Shares and Additional Warrants to purchase up to180,288 Ordinary Shares exercisable within 60 days, at an exercise price of $2.02 per Ordinary Share following the Exercise Price Adjustment (see “Description of Share Capital — Warrants” for additional information), and an option to purchase up to 602,255 Ordinary Shares, or the Call Option, exercisable within 60 days, granted to Pure Capital pursuant to a Call Option Agreement with Viki Hakmon, dated November 14, 2021, or the Call Option Agreement.
Added
On July 25, 2023, we entered into an amendment to the Assignment Agreement, pursuant to which, among others, the outstanding debt between the Company and Smart Repair Pro was converted into and paid in capital of Smart Repair Pro.
Removed
(5) Based on Schedule 13G filed with the SEC on September 29, 2022 by Pure Capital, Kfir Silberman is the officer, sole director, chairman of the board of directors and control shareholder of Pure Capital, and has sole voting and dispositive power over all Ordinary Shares shown to be beneficially owned by Pure Capital.
Added
Eliyahu Yoresh, a director of the Company, is also a director of Pure Logistics.
Removed
On May 23, 2019, our subsidiary, Smart Repair Pro, entered into the May 2019 Loans, with a relative of Viki Hakmon, and Pure Capital, a company owned by a family relative, or the Investors. On March 1, 2020, Smart Repair Pro entered into the March 1, 2020 Loan Agreement with Purex.
Added
Naor Bergman, the Chief Operating Officer of the Company may be deemed to have a personal interest in the matter, due to a promise by Pure NJ Logistics LLC to grant him options upon an initial public offering of Pure Logistics for the year ended December 31, 2023, the total expenses related to Pure Logistics were $545,015 pursuant to the agreement.
Removed
On October 8, 2020, Smart Repair Pro and Purex and their then shareholders entered into the Medigus SPA, with Medigus. Medigus is our controlling shareholder and holds 38.43% of our issued and outstanding share capital as of April 10, 2023. In February 2021, Smart Repair Pro received additional loans under the Medigus SPA.
Added
January 2024 PIPE On January 25, 2024, we entered into the January 2024 PIPE pursuant to a securities purchase agreement, with certain institutional investors, providing for the issuance, in a private placement of our securities.
Removed
Eliyahu Yoresh, a director of the Company, is also a director of Pure Logistics. As of November 28, 2022, we paid $300,000 to Pure Logistics pursuant to the agreement. See “Item 4.B. Recent Developments – Expansion of Sales into New E-commerce Platforms ” above for further information.
Added
As part of the January 2024 PIPE, Pure Capital, a company owned by a family member of Viki Hakmon our Chief Executive Officer, participated in the private placement as a purchaser. See “Item 4.B. Recent Developments – January 2024 PIPE ” above, for further information. C. Interests of Experts and Counsel None.
Removed
The Addendum provided for the payment by us to SciSparc of an additional amount of $489,330 in cash for the Price Adjustment related to inventory and working capital, payable in five equal installments of $97,866 on the tenth day of each consecutive calendar month, beginning in May 2023.
Removed
As collateral for the payment in full of the Price Adjustment, SciSparc held back 11 shares of common stock of SciSparc U.S, which will be released to Jeffs’ Brands Holdings once the final payment is made.
Removed
The SciSparc Consulting Agreement is for an undefined period of time and may be terminated by either party with 30 days advance notice.
Removed
Also pursuant to the Wellution Agreement, in connection with the closing of the Wellution Transaction, effective as of March 22, 2023, we issued 247,415 Ordinary Shares to SciSparc and on March 29, 2023, SciSparc issued 360,297 of its ordinary shares to us in a mutual share exchange, representing approximately 2.97% and 4.99%, respectively, of the Company’s and SciSparc’s issued and outstanding ordinary shares.
Removed
The number of Exchange Shares acquired by each company was calculated by dividing $288,238, which was adjusted from $300,000, pursuant to the 4.99% ownership limitation included in the Wellution Agreement, by the average closing price of the relevant company’s shares on the Nasdaq Capital Market for the 30 consecutive trading days ending on the third trading day immediately prior to the closing date.
Removed
Moshe Revach is a member of our board of directors and SciSparc’s board of directors. C. Interests of Experts and Counsel None.

Other JFBR 10-K year-over-year comparisons