What changed in Brainsway Ltd.'s 2023 10-K compared to 2022?

Across the narrative sections we track, Brainsway Ltd. (BWAY) added 333 paragraphs, removed 301, and edited 260 between the 2022 and 2023 10-K filings. The biggest movers are Item 4. Mine Safety Disclosures (+204/−179), Item 6. [Reserved] (+53/−50), Item 7. Management's Discussion & Analysis (+37/−32).

What changed in Brainsway Ltd.'s MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 37 new/edited paragraphs and 32 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Where does this BWAY 10-K diff come from?

The source filings are Brainsway Ltd.'s official 2022 and 2023 Form 20-F annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

Brainsway Ltd.BWAY财报

Nasdaq · Health Care · Surgical & Medical Instruments & Apparatus

BrainsWay Ltd. is an international company that is engaged in the development of a medical device that uses H-coil for deep transcranial magnetic stimulation as a non-invasive treatment for depression, OCD, and smoking addiction. The company was founded in 2003 and has offices in the US and Jerusalem.

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

Top changes in Brainsway Ltd.'s 2023 20-F

333 paragraphs added · 301 removed · 260 edited across 4 sections

Item 4. Mine Safety Disclosures+204 / −179 · 162 edited
Item 6. [Reserved]+53 / −50 · 39 edited
Item 7. Management's Discussion & Analysis+37 / −32 · 24 edited
Item 5. Market for Registrant's Common Equity+39 / −40 · 35 edited

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

162 edited+42 added−17 removed327 unchanged

2022 filing

2023 filing

Our pivotal trial for MDD demonstrated statistically significant response and remission rates of 38.4% and 32.6%, respectively, in week five of Deep TMS treatment of 20 minutes per session, compared to 21.4% and 14.6%, respectively, after sham treatment.

Our pivotal trial for OCD demonstrated statistically significant response and partial response rates of 38.1% and 54.8%, respectively, after six weeks of daily active Deep TMS treatment of 19 minutes per session, compared to 11.1% and 26.7%, respectively, after sham treatment.

We are also currently selling Deep TMS for MDD in Canada, Europe, Asia, India, Israel, the United Arab Emirates, Australia, and certain other countries. We received reimbursement coverage applicable to Deep TMS in Australia in November 2021 and in Israel in June 2022. We are also increasing our commercialization efforts for Deep TMS for OCD.

We are also currently selling Deep TMS for MDD in Canada, Europe, Asia, India, Israel, the United Arab Emirates , and certain other countries. We received reimbursement coverage applicable to Deep TMS in Australia in November 2021 and in Israel in June 2022. We are also increasing our commercialization efforts for Deep TMS for OCD.

Positive coverage decisions for Deep TMS for OCD have been issued by Centene Corporation (with 26 million covered lives), Health Care Service Corporation (HCSC) (with 17 million covered lives), TriCare (with 9.6 million covered lives), Cigna Corporation (with 17 million covered lives), Highmark (with 6.8 million covered lives), Premera (with 2.6 million covered lives) and LifeWise (with 2.2 million covered lives).

Furthermore, following receipt of this clearance, a publication of the study in The Journal of Clinical Investigation (JCI) Insight included a retrospective analysis of the study results which identify preliminary predictors that could help optimize treatment based on individual patients’ attributes.

This analysis examined clinician rating scales and EEG data revealing intriguing differences between the patient treatment of the two coils.

Categorizing patients according to “clusters” of clinical depressive and anxiety baseline symptoms derived from a subset of the Hamilton Depression Rating Scale (HDRS-21) resulted in two subject groups: One with higher severity of the cluster, which on average responded better to the H1 Coil, and another with lower severity of the cluster, which on average responded better to the H7 Coil.

Additional potential revenues may be derived from extended warranty fees paid for the system for service coverage beyond the standard included warranty period, and from variable or usage fees based on the number of treatments performed with the system.

Government Regulation United States Our products and our operations are subject to extensive regulation by the FDA and other federal and state authorities in the United States, as well as comparable authorities in foreign jurisdictions. Our products are subject to regulation as medical devices under the U.S.

Government in the Regulation United States Our products and our operations are subject to extensive regulation by the FDA and other federal and state authorities in the United States, as well as comparable authorities in foreign jurisdictions. Our products are subject to regulation as medical devices under the U.S.

Beginning in 2022, applicable manufacturers were also required to report information regarding payments and transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives; and ● foreign and state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, that may impose similar or more prohibitive restrictions, and may apply to items or services reimbursed by any non-governmental third-party payors, including private insurers; state laws that require device manufacturers to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; and other federal and state laws that govern the privacy and security of health information or personally identifiable information in certain circumstances, including state health information privacy and data breach notification laws which govern the collection, use, disclosure, and protection of health-related and other personal information, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus requiring additional compliance efforts and data privacy and security laws and regulations in foreign jurisdictions that may be more stringent than those in the United States (such as the European Union, which adopted the General Data Protection Regulation, which became effective in May 2018). 113 Because of the breadth of these laws and the narrowness of their statutory exceptions and regulatory safe harbors, it is possible that some of a medical device manufacturer’s business activities could be subject to challenge under one or more of these laws.

Beginning in 2022, applicable manufacturers were also required to report information regarding payments and transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives; and ● foreign and state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, that may impose similar or more prohibitive restrictions, and may apply to items or services reimbursed by any non-governmental third-party payors, including private insurers; state laws that require device manufacturers to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; and other federal and state laws that govern the privacy and security of health information or personally identifiable information in certain circumstances, including state health information privacy and data breach notification laws which govern the collection, use, disclosure, and protection of health-related and other personal information, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus requiring additional compliance efforts and data privacy and security laws and regulations in foreign jurisdictions that may be more stringent than those in the United States (such as the European Union, which adopted the General Data Protection Regulation, which became effective in May 2018). 49 Because of the breadth of these laws and the narrowness of their statutory exceptions and regulatory safe harbors, it is possible that some of a medical device manufacturer’s business activities could be subject to challenge under one or more of these laws.

There are also criminal penalties, including imprisonment and criminal fines, for making or presenting false, fictitious or fraudulent claims to the federal government; 112 ● HIPAA, which prohibits and imposes criminal liability for, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program, including private third party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services.

There are also criminal penalties, including imprisonment and criminal fines, for making or presenting false, fictitious or fraudulent claims to the federal government; ● HIPAA, which prohibits and imposes criminal liability for, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program, including private third party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services.

Among other ways in which it may impact a medical device manufacturer’s business, the PPACA: 114 ● establishes a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical efficacy research in an effort to coordinate and develop such research; ● implements payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians, and other providers to improve the coordination, quality, and efficiency of certain healthcare services through bundled payment models; and ● expands the eligibility criteria for Medicaid programs.

Among other ways in which it may impact a medical device manufacturer’s business, the PPACA: ● establishes a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical efficacy research in an effort to coordinate and develop such research; ● implements payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians, and other providers to improve the coordination, quality, and efficiency of certain healthcare services through bundled payment models; and ● expands the eligibility criteria for Medicaid programs.

After the receipt of FDA clearance for our products for smoking addiction, the Company initiated a clinical data collection effort to facilitate and support the long term viability of the commercial plan for this product. 78 ● Pursue additional indications and technological innovations for Deep TMS We are considering expanding the application to other areas as well including - neurological and/or addiction disorders.

After the receipt of FDA clearance for our products for smoking addiction, the Company initiated a clinical data collection effort to facilitate and support the long term viability of the commercial plan for this product. ● Pursue additional indications and technological innovations for Deep TMS We are considering expanding the application to other areas as well including - neurological and/or addiction disorders.

For patients with severe depression and later stage treatment, somatic treatments such as ECT may be an option. 81 The central group of anti-depressant medicines is the selective serotonin reuptake inhibitors (SSRI) and selective serotonin and norepinephrine reuptake (SNR). A significant systematic review of the existing evidence linking serotonin levels to depression was published in Nature in July of 2022.

For patients with severe depression and later stage treatment, somatic treatments such as ECT may be an option. The central group of anti-depressant medicines is the selective serotonin reuptake inhibitors (SSRI) and selective serotonin and norepinephrine reuptake (SNR). A significant systematic review of the existing evidence linking serotonin levels to depression was published in Nature in July of 2022.

For Deep TMS for MDD, the FDA also cleared a 3 minute “Theta Burst” treatment protocol. Patients may experience some discomfort during treatment and must use earplugs to reduce exposure to the loud sounds produced by the device. The treatment requires no anesthesia, hospitalization or sedation, and no systemic side effects are associated with the therapy.

For Deep TMS for MDD, the FDA has also cleared a 3 minute “Theta Burst” treatment protocol. Patients may experience some discomfort during treatment and must use earplugs to reduce exposure to the loud sounds produced by the device. The treatment requires no anesthesia, hospitalization or sedation, and no systemic side effects are associated with the therapy.

We are actively engaged in efforts to work with payors to facilitate a continuation of this trend. 70 In 2021, for the first time, several payors issued policies and coverage determinations allowing for reimbursement coverage applicable to Deep TMS for OCD, with over 90 million covered lives in the U.S. eligible for coverage as of March 2023.

We are actively engaged in efforts to work with payors to facilitate a continuation of this trend. In 2021, for the first time, several payors issued policies and coverage determinations allowing for reimbursement coverage applicable to Deep TMS for OCD, with over 90 million covered lives in the U.S. eligible for coverage as of March 2023.

In 2013, the FDA cleared Deep TMS for the treatment of MDD in adult patients who have failed to achieve satisfactory improvement from previous anti-depressant medication treatment in the current episode. (a) Trial Design This randomized, double-blind, placebo-controlled, multicenter trial investigated the efficacy and safety of Deep TMS in 212 treatment-resistant adult MDD patients.

In 2013, the FDA cleared Deep TMS for the treatment of MDD in adult patients who have failed to achieve satisfactory improvement from previous anti-depressant medication treatment in the current episode. 35 (a) Trial Design This randomized, double-blind, placebo-controlled, multicenter trial investigated the efficacy and safety of Deep TMS in 212 treatment-resistant adult MDD patients.

Our Deep TMS system for MDD is currently marketed to and installed at psychiatrists’ offices and other facilities principally in the United States and in certain other countries throughout the world. 68 Additionally, in April 2021, we received FDA clearance for a shorter 3-minute “Theta-Burst” protocol for our MDD treatment.

Our Deep TMS system for MDD is currently marketed to and installed at psychiatrists’ offices and other facilities principally in the United States and in certain other countries throughout the world. Additionally, in April 2021, we received FDA clearance for a shorter 3-minute “Theta-Burst” protocol for our MDD treatment.

VNS and DBS include surgical related risks, such as infection or local damage to the recurrent laryngeal nerve, which may lead to permanent voice alteration. 83 Prescription Digital Therapeutics, or PDTs, are a new therapeutic class of products designed to directly treat diseases with software.

VNS and DBS include surgical related risks, such as infection or local damage to the recurrent laryngeal nerve, which may lead to permanent voice alteration. Prescription Digital Therapeutics, or PDTs, are a new therapeutic class of products designed to directly treat diseases with software.

Baseline demographic, clinical and safety assessments were performed on the ITT analysis set. Primary efficacy analysis was performed only on the PP group. 85 (b) Trial Results The primary efficacy endpoint was a change in the HDRS total score from baseline through week five. The change was measured as the slope of a graph of time point versus HDRS score.

Baseline demographic, clinical and safety assessments were performed on the ITT analysis set. Primary efficacy analysis was performed only on the PP group. (b) Trial Results The primary efficacy endpoint was a change in the HDRS total score from baseline through week five. The change was measured as the slope of a graph of time point versus HDRS score.

The address of BrainsWay USA, Inc. is 1 Van de Graaf Drive, Burlington, MA 01803. The Securities and Exchange Commission, or SEC, maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://sec.gov.

The address of BrainsWay USA, Inc. is 1 Van de Graaf Drive, Burlington, MA 01803. 27 The Securities and Exchange Commission, or SEC, maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://sec.gov.

Our commercial opportunity could be reduced or eliminated if these competitors develop and commercialize antidepressant medications or other treatments that are safer or more effective than Deep TMS. At any time, these and other potential market entrants may develop treatment alternatives that may render our products uncompetitive or less competitive.

Our commercial opportunity could be reduced or eliminated if these competitors develop and commercialize antidepressant medications or other treatments that are safer, more effective or more convenient than Deep TMS. At any time, these and other potential market entrants may develop treatment alternatives that may render our products uncompetitive or less competitive.

Secondary safety endpoint measures included the number of adverse events, physical and cognitive evaluations, and vital signs. 92 Inclusion and exclusion criteria required patients to be diagnosed with OCD, have a YBOCS score of greater than 20, and not be diagnosed with any severe personality disorders.

Secondary safety endpoint measures included the number of adverse events, physical and cognitive evaluations, and vital signs. Inclusion and exclusion criteria required patients to be diagnosed with OCD, have a YBOCS score of greater than 20, and not be diagnosed with any severe personality disorders.

The laws that may affect a medical device manufacturer’s ability to operate include, but are not limited to: 111 ● the federal healthcare Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or providing remuneration (broadly interpreted to include anything of value), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease, order, or arrange for or recommend a good or service for which payment may be made, in whole or in part, under a federal healthcare program, such as Medicare and Medicaid.

The laws that may affect a medical device manufacturer’s ability to operate include, but are not limited to: 48 ● the federal healthcare Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or providing remuneration (broadly interpreted to include anything of value), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease, order, or arrange for or recommend a good or service for which payment may be made, in whole or in part, under a federal healthcare program, such as Medicare and Medicaid.

The Company had filed a motion to dismiss the case, and, while that motion was pending, agreed to settle the case on mutually agreeable terms and without any admission of liability or wrongdoing, including the release of certain potential counterclaims, to avoid the time, expense and uncertainty of litigation. C.

The foreign regulatory approval process includes all the risks associated with FDA regulation, as well as country-specific regulations. Employees Our employees include professionals with extensive experience in medical device development and applications, neurology and psychopathology, pre-clinical experimentation, clinical development, and business development.

The foreign regulatory approval process includes all the risks associated with FDA regulation, as well as country-specific regulations. 50 Employees Our employees include professionals with extensive experience in medical device development and applications, neurology and psychopathology, pre-clinical experimentation, clinical development, and business development.

Furthermore, 54.8% of the Deep TMS treatment group achieved a partial response, compared to 26.7% of the sham treatment group. The differences between groups were statistically significant for both response rate (p = 0.0033) and partial response rate (p = 0.0076). Figure 3.

Following our receipt of FDA clearance for smoking addiction, we completed controlled and limited market releases of our system for this indication, and are currently in the process of a clinical data collection effort to facilitate a long term commercial plan for this product. 98 The training for operation of our Deep TMS system is not complex and requires about a day of training which includes theoretical learning and a number of practical hours of practice of placing the helmet on the head of the patient and providing treatment.

Following our receipt of FDA clearance for smoking addiction, we completed controlled and limited market releases of our system for this indication, and are currently in the process of a clinical data collection effort to facilitate a long term commercial plan for this product. 42 The training for operation of our Deep TMS system is not complex and requires about a day of training which includes theoretical learning and a number of practical hours of practice of placing the helmet on the head of the patient and providing treatment.

Each system can accommodate two helmets, and a third helmet can be incorporated using a separate auxiliary stand. 72 ● Helmet, including proprietary H-Coil ● Stimulator, which provides the power supply and source of the Deep TMS electromagnetic field ● Graphic User Interface (GUI) ● One or More Arm(s)/Positioning Device(s) ● Cooling System ● Movable Medical Cart We believe our Deep TMS platform has many advantages relative to other TMS systems.

Each system can accommodate two helmets, and a third helmet can be incorporated using a separate auxiliary stand. ● Helmet, including proprietary H- Coil ● Stimulator, which provides the power supply and source of the Deep TMS electromagnetic field ● Graphic User Interface (GUI) ● One or More Arm(s)/Positioning Device(s) ● Cooling System ● Movable Medical Cart 30 We believe our Deep TMS platform has many advantages relative to other TMS systems.

After the receipt of FDA clearance for our Deep TMS product for smoking addiction, we initiated a clinical data collection effort to facilitate a long term commercial plan for this product. 76 ● Our flexible pricing models are designed to achieve market penetration We market our products utilizing two basic pricing models: (i) a fixed-fee lease model enabling unlimited use; and (ii) a sales or purchase model.

After the receipt of FDA clearance for our Deep TMS product for smoking addiction, we initiated a clinical data collection effort to facilitate a long term commercial plan for this product. 32 ● Our flexible pricing models are designed to achieve market penetration We market our products utilizing two basic pricing models: (i) a fixed-fee lease model enabling unlimited use; and (ii) a sales or purchase model.

Medicare coverage for Deep TMS generally requires one to four failed (inadequate response or intolerable) trials of psychopharmacologic agents (such as antidepressant medications). 104 In the United States, there is no uniform policy of coverage and reimbursement among private third-party payors. Reimbursement rates from private payors vary depending on the procedure performed, the commercial payor, contract terms, and other factors.

Medicare coverage for Deep TMS generally requires one to four failed (inadequate response or intolerable) trials of psychopharmacologic agents (such as antidepressant medications). 45 In the United States, there is no uniform policy of coverage and reimbursement among private third-party payors. Reimbursement rates from private payors vary depending on the procedure performed, the commercial payor, contract terms, and other factors.

Patients reporting abstinence at 6 weeks were invited for a long follow-up (L-UP) visit at 4 months. 96 Of the 169 participants in the study who actually completed three weeks of Deep TMS or sham treatment, plus the mandatory additional three weeks of follow-up (reaching the six-week endpoint), the CQR was 28.0% in the treatment group compared to 11.7% in the sham group (p=0.007).

Patients reporting abstinence at 6 weeks were invited for a long follow-up (L-UP) visit at 4 months. 41 Of the 169 participants in the study who actually completed three weeks of Deep TMS or sham treatment, plus the mandatory additional three weeks of follow-up (reaching the six-week endpoint), the CQR was 28.0% in the treatment group compared to 11.7% in the sham group (p=0.007).

Devices deemed by the FDA to pose the greatest risks, such as life-sustaining, life- supporting or some implantable devices, or devices that have a new intended use, or use advanced technology that is not substantially equivalent to that of a legally marketed device, are placed in Class III, requiring approval of a PMA. 106 Our Deep TMS system is classified as a Class II medical device.

Devices deemed by the FDA to pose the greatest risks, such as life-sustaining, life- supporting or some implantable devices, or devices that have a new intended use, or use advanced technology that is not substantially equivalent to that of a legally marketed device, are placed in Class III, requiring approval of a PMA. 46 Our Deep TMS system is classified as a Class II medical device.

Our production activities also include manually assembling certain components of our devices for all required clinical and commercial quantities, and the integration of all components into a functioning Deep TMS system. 102 We rely on suppliers for most of the components used in manufacturing Deep TMS, including the computer controlling the stimulator, the helmet, and the arm of the helmet.

Our production activities also include manually assembling certain components of our devices for all required clinical and commercial quantities, and the integration of all components into a functioning Deep TMS system. 44 We rely on suppliers for most of the components used in manufacturing Deep TMS, including the computer controlling the stimulator, the helmet, and the arm of the helmet.

HDRS Score Change (Slope) and Remission Rates for Deep TMS and Sham Groups in Subpopulations of Patients Who Failed 1 to 2 Medications versus Patients Who Failed 3+ Medications Source: Levkovitz et al., 2015 I Safety Results Overall, Deep TMS treatment was safe and well-tolerated by patients.

Figure 2. HDRS Score Change (Slope) and Remission Rates for Deep TMS and Sham Groups in Subpopulations of Patients Who Failed 1 to 2 Medications versus Patients Who Failed 3+ Medications Source: Levkovitz et al., 2015 37 I Safety Results Overall, Deep TMS treatment was safe and well-tolerated by patients.

In addition, we received from MAGNET approvals for grants in an aggregate amount of NIS 8.2 million (approximately $2.3 million based on the NIS to USD exchange rate as of December 31, 2022). There is no requirement to repay the grants or pay royalties thereon.

In addition, we received from MAGNET approvals for grants in an aggregate amount of NIS 8.2 million (approximately $2.3 million based on the NIS to USD exchange rate as of December 31, 2023). There is no requirement to repay the grants or pay royalties thereon.

As of December 31, 2022, we had 134 employees, of which 65 were based in the United States and 69 were based outside of the United States (in Israel). Our U.S. employee base includes 55 employees in sales, marketing, and service/operations, 3 employees in medical affairs, and 7 general and administrative employees.

As of December 31, 2023, we had 134 employees, of which 65 were based in the United States and 69 were based outside of the United States (in Israel). Our U.S. employee base includes 55 employees in sales, marketing, and service/operations, 3 employees in medical affairs, and 7 general and administrative employees.

Figure 4 highlights the continued decrease in unadjusted mean YBOCS score from baseline over the ten-week period. 93 Figure 4.

Figure 4 highlights the continued decrease in unadjusted mean YBOCS score from baseline over the ten-week period. Figure 4.

The data also showed that patients exhibited a significant reduction in disability, with self-reported unproductive days per week dropping from 5.5 days (±0.4) to 1.8 days (±0.4), and self-reported lost days per week dropping from 1.9 (±0.6) to 0.3 days (±0.2). 94 Figure 5.

In 2021, for the first time, several payors issued policies and coverage determinations allowing for reimbursement coverage applicable to Deep TMS for OCD, with over 90 million covered lives in the U.S. eligible for coverage as of March 2023.

Also, in these circumstances, the manufacturer may be subject to significant regulatory fines or penalties. 109 Post-market Regulation After a device is cleared or approved for marketing, numerous and extensive regulatory requirements continue to apply.

Also, in these circumstances, the manufacturer may be subject to significant regulatory fines or penalties. 47 Post-market Regulation After a device is cleared or approved for marketing, numerous and extensive regulatory requirements continue to apply.

Our Israel-based principal executive offices are located at 19 Hartum Street, Bynet Building, 3rd Floor, Har HaHotzvim, Jerusalem 9777518, Israel, and our telephone number is +972-2-582-4030. We also have U.S. offices located in Boston and New Jersey. Our registered agent in the United States is BrainsWay USA, Inc.

Our Israel-based principal executive offices are located at 19 Hartum Street, Bynet Building, 3rd Floor, Har HaHotzvim, Jerusalem 9777518, Israel, and our telephone number is +972-2-582-4030. We also have U.S. offices located in Boston and plan to move to New Jersey. Our registered agent in the United States is BrainsWay USA, Inc.

Remission rates at week 16 were 31.8% for the Deep TMS group and 22.2% for the sham group, which was a nonsignificant difference between groups (p = 0.1492). 86 Figure 1.

Remission rates at week 16 were 31.8% for the Deep TMS group and 22.2% for the sham group, which was a nonsignificant difference between groups (p = 0.1492). 36 Figure 1.

Specifically, over 165 million covered lives in the US with commercial coverage now qualify for Deep TMS for MDD after two to three failed medication trials, and all Medicare Administrative Contractors (MACs) have issued Local Coverage Determinations (LCDs) qualifying approximately 62 million lives in the US for Medicare reimbursement after just one to two failed medication trials.

Specifically, 194 million covered lives in the US with commercial coverage now qualify for Deep TMS for MDD after two to three failed medication trials, and all Medicare Administrative Contractors (MACs) have issued Local Coverage Determinations (LCDs) qualifying approximately 62 million lives in the US for Medicare reimbursement after just one to two failed medication trials.

Research and Development, Patents and Licenses .” Government Grants As of December 31, 2022, we have received grants from the IIA in an aggregate amount of approximately $13.4 million.

Research and Development, Patents and Licenses .” Government Grants As of December 31, 2023, we have received grants from the IIA in an aggregate amount of approximately $13,4 million.

The Company is boldly advancing neuroscience with its proprietary Deep Transcranial Magnetic Stimulation (Deep TMS™) platform technology to improve health and transform lives. We are dedicated to leading through superior science and building on what we believe to be an unparalleled body of clinical evidence. We are the first and only TMS company to obtain from the U.S.

In addition, Deep TMS is administered at stimulation levels that we believe are as safe and tolerable as Traditional TMS. ● We have obtained FDA marketing authorizations of Deep TMS for MDD (including anxious depression), OCD, and smoking addiction We are the only manufacturer of a TMS device to have been cleared by the FDA for three indications based on clinically proven efficacy which was demonstrated in pivotal studies conducted on the device: MDD, for which our H1 Coil device was cleared by the FDA in 2013, (and which clearance was expanded in August 2021 to include reduction of comorbid anxiety symptoms, or anxious depression) and for which our H7 Coil received 510(k) clearance from the FDA in August 2022; OCD, for which our device was classified by FDA as a Class II device in a de novo classification in August 2018; and smoking addiction, for which our device was cleared for short term treatment in August 2020.

In addition, Deep TMS is administered at stimulation levels that we believe are as safe and tolerable as Traditional TMS. 31 ● We have obtained FDA marketing authorizations of Deep TMS for MDD (including anxious depression), OCD, and smoking addiction We are the only manufacturer of a TMS device to have been cleared by the FDA for three separate mental health disorder indications based on clinically proven efficacy which was demonstrated in pivotal randomized placebo controlled studies conducted on the device: MDD, for which our H1 Coil device was cleared by the FDA in 2013, (and which clearance was expanded in August 2021 to include reduction of comorbid anxiety symptoms, or anxious depression) and for which our H7 Coil received 510(k) clearance from the FDA in August 2022; OCD, for which our device was classified by FDA as a Class II device in a de novo classification in August 2018; and smoking addiction, for which our device was cleared for short term treatment in August 2020.

Overall, Deep TMS treatment was safe and well-tolerated by patients in these trials. 75 With respect to our MDD labeling expansion which now includes anxious depression, data from 573 patients who had undergone Deep TMS treatment in 11 studies, including both randomized controlled trials (RCT) and open-label studies, which was submitted by us in support of our application to the FDA, demonstrated a treatment effect that was consistent, robust, and clinically meaningful for decreasing anxiety symptoms in adult patients suffering from major depressive disorder.

With respect to our MDD labeling expansion which now includes anxious depression, data from 573 patients who had undergone Deep TMS treatment in 11 studies, including both randomized controlled trials (RCT) and open-label studies, which was submitted by us in support of our application to the FDA, demonstrated a treatment effect that was consistent, robust, and clinically meaningful for decreasing anxiety symptoms in adult patients suffering from major depressive disorder.

Our research and development costs for the years ended December 31, 2022, 2021, and 2020 amounted to $7.7 million, $6.3 million and $5.8 million, respectively. These research and development costs primarily consisted of expenses incurred in connection with the development of our existing and future indication pipeline, and the development of our Deep TMS system.

Our research and development costs for the years ended December 31, 2023, 2022, and 2021 amounted to $6.7 million, $7.7 million and $6.3 million, respectively. These research and development costs primarily consisted of expenses incurred in connection with the development of our existing and future indication pipeline, and the development of our Deep TMS system.

Our capital expenditures for the years ended December 31, 2022, 2021, and 2020 were approximately $1.7 million, $2.2 million and $2.5 million, respectively. Our current capital expenditures primarily involve purchase of equipment and system components in both Israel and the United States.

Our capital expenditures for the years ended December 31, 2023, 2022, and 2021 were approximately $2.3 million, $1.7 million and $2.2 million, respectively. Our current capital expenditures primarily involve purchase of equipment and system components in both Israel and the United States.

Safety was assessed at every treatment and additional safety evaluations included auditory threshold tests and cognitive evaluations. 84 Inclusion and exclusion criteria required patients to meet the following criteria: ● Antidepressant medication-free (following washout period) ● Failure to respond to one to four antidepressant trials or not tolerant of at least two antidepressant treatments in the current episode ● Diagnosed with MDD with a single or recurrent episode ● Duration of current episode must be at least one month but less than seven years ● Score of at least four on the Clinical Global Impression Severity of Illness (CGI-S) ● Score of at least 20 on the HDRS ● No current (or within past year) diagnosis of other Diagnostic and Statistical Manual of Mental Disorders (DSM-IV) Axis I disorders (e.g., PTSD, OCD, other mood disorders, eating disorders, psychotic disorders, or dissociative disorders) ● No history or increased risk of seizures During analysis, the study results were analyzed in two separate groups: the intention-to-treat (ITT) and per-protocol (PP) analysis sets.

Inclusion and exclusion criteria required patients to meet the following criteria: ● Antidepressant medication-free (following washout period) ● Failure to respond to one to four antidepressant trials or not tolerant of at least two antidepressant treatments in the current episode ● Diagnosed with MDD with a single or recurrent episode ● Duration of current episode must be at least one month but less than seven years ● Score of at least four on the Clinical Global Impression Severity of Illness (CGI- S) ● Score of at least 20 on the HDRS ● No current (or within past year) diagnosis of other Diagnostic and Statistical Manual of Mental Disorders (DSM-IV) Axis I disorders (e.g., PTSD, OCD, other mood disorders, eating disorders, psychotic disorders, or dissociative disorders) ● No history or increased risk of seizures During analysis, the study results were analyzed in two separate groups: the intention-to-treat (ITT) and per-protocol (PP) analysis sets.

For Deep TMS for MDD, the FDA also recently cleared a 3 minute “Theta Burst” treatment protocol.

For Deep TMS for MDD, the FDA has also cleared a 3 minute “Theta Burst” treatment protocol.

These flexible offerings are designed to facilitate market penetration by addressing the differing clinical needs and risk tolerance among our customer base. As of December 31, 2022, approximately 46% of our global Deep TMS systems installed base for MDD utilized the fixed-fee lease model, and approximately 54% utilized the sales model.

These flexible offerings are designed to facilitate market penetration by addressing the differing clinical needs and risk tolerance among our customer base. As of December 31, 2023, approximately 44% of our global Deep TMS systems installed base for MDD utilized the fixed-fee lease model, and approximately 56% utilized the sales model.

We may also face competition from the SAINT™ Neuromodulation System, a brain stimulation technology for treatment of neuropsychiatric disorders, which received an FDA clearance for the treatment of MDD in adults who have failed to achieve satisfactory improvement from prior antidepressant medications in the current episode.

We may also face competition from the SAINT™ Neuromodulation protocol (Magnus Medical), a brain stimulation technique for treatment of neuropsychiatric disorders, which received an FDA clearance for the treatment of MDD in adults who have failed to achieve satisfactory improvement from prior antidepressant medications in the current episode.

We further believe these enhancements hold the potential to make Deep TMS even more efficient for clinicians, researchers, and patients, and may serve to better position its use in neurology. 79 ● Increase our international commercial footprint We are working to expand our existing commercial footprint in Europe, Asia, Latin America, Australia, and Israel, and pursue commercialization in additional markets.

We further believe these enhancements hold the potential to make Deep TMS even more attractive for clinicians, researchers, and patients, and may serve to better position its use in neurology. 33 ● Increase our international commercial footprint We are working to expand our existing commercial footprint in Europe, Asia, Latin America, Australia, the broader Middle East, and to pursue commercialization in additional markets.

Until recently payors typically required that patients fail multiple antidepressant medications prior to receiving TMS; however, there has been a trend which continued over the past year to reduce the number of required failures to one or two medication failures before qualifying for TMS.

Currently, TMS for MDD is generally recommended for treatment-resistant MDD patients. Until recently payors typically required that patients fail multiple antidepressant medications prior to receiving TMS; however, there has been a trend which continued over the past year to reduce the number of required failures to one or two medication failures before qualifying for TMS.

Outside of the United States Approximately 25%, 12% and 13% of our revenues for the fiscal years ended December 31, 2022, 2021 and 2020, respectively, were generated outside of the United States. A significant part of our sales outside the United States are made indirectly with local distributors and agents.

Government Regulation Outside of the United States Approximately 25% of our revenues for the fiscal years ended December 31, 2023 and 2022 and 12% of our revenues for the fiscal years ended December 31, 2021, were generated outside of the United States. A significant part of our sales outside the United States are made indirectly with local distributors and agents.

We comply with such regulatory requirements. Certain of our foreign marketing authorizations requires compliance of said manufacturing process with the ISO 13485 standard, with which we are compliant.

Certain of our foreign marketing authorizations requires compliance of said manufacturing process with the ISO 13485 standard, with which we are compliant.

The discovery of previously unknown problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls. 110 The FDA has broad regulatory compliance and enforcement powers.

As of December 31, 2022, we have paid royalties to the IIA in an aggregate amount of approximately $4.4 million (including amounts in respect of accrued interest), with remaining outstanding royalties of up to $11.6 million.

As of December 31, 2023, we have paid royalties to the IIA in an aggregate amount of approximately $5,1 million (including amounts in respect of accrued interest), with remaining outstanding royalties of up to $11 million.

Organizational Structure Our three subsidiaries, all of which wholly-owned, are: BrainsWay, Inc., incorporated in Delaware on March 31, 2003; Brain Research and Development Services Ltd., incorporated in Israel on August 13, 2003; and BrainsWay USA Inc., incorporated in Delaware on November 24, 2014. D.

Among the 168 participants in the study who completed three weeks of Deep TMS or sham treatment, plus the mandatory additional three weeks of follow-up (reaching the six-week endpoint), the CQR was 28.4% in the treatment group, compared to 11.7% in the sham group (p=0.007).

We anticipate our capital expenditures and research and development costs in 2023 to be financed from our existing cash and cash equivalents, including the proceeds from the follow-on underwritten public offering of ADSs closed on February 25, 2021.

We anticipate our capital expenditures and research and development costs in 2024 to be financed from our existing cash and cash equivalents, including the proceeds from the follow-on underwritten public offering of ADSs closed on February 25, 2021, and from our ongoing sales and leases of our Deep TMS systems.

We cannot yet assess the impact that the IRA will have on the medical-products industry, but it will likely be significant. 115 There is seemingly constant evolution with regard to healthcare in the United States, and we cannot predict what healthcare programs and regulations may be implemented or changed at the federal and/or state level or the effect of any future legislation or regulation on our business or that of our current or prospective customers, suppliers, and/or the U.S. healthcare industry as a whole.

There is seemingly constant evolution with regard to healthcare in the United States, and we cannot predict what healthcare programs and regulations may be implemented or changed at the federal and/or state level or the effect of any future legislation or regulation on our business or that of our current or prospective customers, suppliers, and/or the U.S. healthcare industry as a whole.

We have used the 510(k) clearance process to obtain authorization from the FDA for changes to our marketed Deep TMS system, including applications extending our clearances to our proprietary stimulator, and expansions to our MDD indication which now allow us to market a shorter 3 minute depression protocol as well the ability to market our MDD therapy for the reduction of comorbid anxiety symptoms among depressed patients, and we received an extension for the FDA clearance of our H7 Coil for treatment of MDD (including anxious depression). 108 Clinical Trials A clinical trial is typically required to support a PMA application or de novo classification, and is sometimes required for a 510(k) premarket notification.

While the criteria for this emerging Deep TMS for OCD coverage varies with each payor, generally, coverage requires the failure of between two and four medication trials before qualifying for reimbursement. We are actively engaged in efforts to facilitate increased coverage for OCD treatment by more payors, including both commercial and governmental.

While the criteria for this emerging Deep TMS for OCD coverage varies with each payor, generally, coverage requires the failure of between two and four medication trials before qualifying for reimbursement. Our strategy is to look for ways to facilitate increased coverage for OCD treatment by more payors, including both commercial and governmental.

We are subject to extensive governmental regulation in connection with the manufacture of our devices. We must ensure that all of the processes, methods, and equipment are compliant with the current Quality System Regulations (QSR) for devices on an ongoing basis, mandated by the FDA and other regulatory authorities, and must conduct extensive audits of vendors, contract laboratories and suppliers.

We must ensure that all of the processes, methods, and equipment are compliant with the current Quality System Regulations (QSR) for devices on an ongoing basis, mandated by the FDA and other regulatory authorities, and must conduct extensive audits of vendors, contract laboratories and suppliers. We comply with such regulatory requirements.

While the criteria for this emerging Deep TMS for OCD coverage varies with each payor, generally, coverage requires the failure of between two and four medication trials before qualifying for reimbursement. Our strategy is to look for ways to facilitate increased coverage for OCD treatment by more payors, including both commercial and governmental.

The standard Deep TMS treatment protocol for OCD requires 29 treatment sessions over six weeks. The clearance for this indication is categorized as an adjunct therapy, which means that it should be administered in conjunction with other first-line therapies and/or medications, as determined in the independent medical judgment of the treating healthcare professional on a case-by-case basis.

The clearance for this indication is categorized as an adjunct therapy, which means that it should be administered in conjunction with other first-line therapies and/or medications, as determined in the independent medical judgment of the treating healthcare professional on a case-by-case basis.

In addition, we could face competition by the recently approved AUVELITY (dextromethorphan HBr -bupropion HCl) extended-release tablets for the treatment of major depressive disorder (MDD) in adults, which are the first and only oral N-methyl D-aspartate (NMDA) receptor antagonist approved for the treatment of MDD. 101 We are also subject to competition from invasive neuromodulation therapies such as ECT, VNS, and DBS.

Reimbursement is not yet available for Deep TMS for smoking addiction; however, we are actively communicating our FDA clearance and evidence outcomes to payors for future coverage consideration as our evidence and commercialization efforts for that indication progress, based on the novelty of the technology, unmet clinical need, and the efficacy and safety profile of the treatment.

We are actively communicating our FDA clearance, evidence outcomes, and the CTMSS recommendations to payors for future coverage consideration as our evidence and commercialization efforts for that indication progress, based on the novelty of the technology, unmet clinical need, and the efficacy and safety profile of the treatment.

The data suggest that Deep TMS is a cost-effective alternative, and particularly indicate that it may serve as an incremental strategy to employ when higher intensity strategies, such as facility-based approaches, are either unavailable, not financially feasible, or have extended waits for admission. 91 In 2021, for the first time, several payors issued policies and coverage determinations allowing for reimbursement coverage applicable to Deep TMS for OCD.

Remission was defined as a total HDRS score of less than 10. Tertiary efficacy endpoints included a change in HDRS score from baseline to week 16 and the response and remission rates at week 16.

Remission was defined as a total HDRS score of less than 10. Tertiary efficacy endpoints included a change in HDRS score from baseline to week 16 and the response and remission rates at week 16. Safety was assessed at every treatment and additional safety evaluations included auditory threshold tests and cognitive evaluations.

Traditional TMS is limited to stimulating relatively narrower and shallower areas of the brain, and the manual positioning of the figure 8 coil in Traditional TMS may cause inaccuracies in the region treated. Studies suggest that the figure 8 coil misses the target in a substantial number of patients.

However, this method does not treat the psychological-behavioral component of the addiction, and therefore there is a high probability that the patient will return to smoking if nicotine patch treatment is discontinued. A study found that 93% of over-the-counter NRT users relapse and return to smoking within six months.

The economic burden in the United States for major depressive disorder totaled $326 billion per year between 2010 and 2018. 67 OCD is a common, chronic, and long-lasting disorder in which a person has uncontrollable, reoccurring thoughts (obsessions) and behaviors (compulsions) that he or she feels the urge to repeat over and over in a manner that can interfere with all aspects of life, such as work, school, and personal relationships.

OCD is a common, chronic, and long-lasting disorder in which a person has uncontrollable, reoccurring thoughts (obsessions) and behaviors (compulsions) that he or she feels the urge to repeat over and over in a manner that can interfere with all aspects of life, such as work, school, and personal relationships.

Assuming a course of treatment per patient of 33 treatment sessions and a price paid to us per treatment session of $70 (which is our benchmark price per treatment session), we believe our total annual addressable market opportunity for MDD in the United States is approximately $14.6 billion. Comorbid anxiety symptoms symptoms are common in patients with major depressive disorder.

Assuming a course of treatment per patient of 33 treatment sessions and a price paid to us per treatment session of $70 (which has historically served as our benchmark price per treatment session), we believe our total annual addressable market opportunity for MDD in the United States is approximately $14.6 billion.

When a patient shows no or nearly no symptoms, the patient is referred to as being in remission. Experiencing one episode of MDD places an individual at an estimated 50% risk of experiencing an additional episode of MDD. Approximately 80% of those individuals who have experienced two episodes of MDD will experience an additional episode.

One of the most important discoveries in neuroscience has been the recognition that improper regulation of one or more of the three major neurotransmitters, serotonin, norepinephrine, and dopamine, plays a key role in a patient’s depression.

In people with MDD, the complex system of neuronal communication does not function properly. One of the most important discoveries in neuroscience has been the recognition that improper regulation of one or more of the three major neurotransmitters, serotonin, norepinephrine, and dopamine, plays a key role in a patient’s depression.

Deep TMS for smoking addiction is not currently eligible for reimbursement. We plan to seek to obtain coverage as we progress in our commercialization for this indication.

In addition, there is currently an out-of-pocket market for our Deep TMS systems for OCD. Deep TMS for smoking addiction is not currently eligible for reimbursement. We plan to seek to obtain coverage as we progress in our commercialization for this indication.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

35 edited+4 added−5 removed61 unchanged

2022 filing

2023 filing

We are also able to leverage our platform technology, which includes the ability to treat multiple indications using different H-Coil helmets, to facilitate transactions utilizing combined pricing models often involving a single system with one or more add-on helmets.

In August 2022, we received 510(k) clearance from the FDA for the use of our H7 Coil to treat MDD (including anxious depression). Our sales and marketing efforts are currently focused in the United States, where we generated approximately 75 % of our revenues in the year ended December 31, 2022.

In August 2022, we received 510(k) clearance from the FDA for the use of our H7 Coil to treat MDD (including anxious depression). Our sales and marketing efforts are currently focused in the United States, where we generated approximately 75% of our revenues in the year ended December 31, 2023.

After initial recognition, the liability is measured at amortized cost using the effective interest method. Royalty payments are recorded as a reduction of the liability. 124 If no economic benefits are expected from the research activity, the grants received are recognized as a reduction of the related research and development expenses.

After initial recognition, the liability is measured at amortized cost using the effective interest method. Royalty payments are recorded as a reduction of the liability. If no economic benefits are expected from the research activity, the grants received are recognized as a reduction of the related research and development expenses.

We offer the following main pricing models: ● Fixed-fee Lease Model: The customer leases the Deep TMS system and pays a fixed annual or monthly fee for the term of the lease (generally between 48 and 60 months). ● Sale Model: The Deep TMS system is sold to the customer for a fixed purchase price.

We offer the following main pricing models: ● Sale Model: The Deep TMS system is sold to the customer for a fixed purchase price. 52 ● Fixed-fee Lease Model: The customer leases the Deep TMS system and pays a fixed annual or monthly fee for the term of the lease (generally between 48 and 60 months).

Additional clinical trials of Deep TMS in various psychiatric, neurological, and addiction disorders are underway or planned. 118 Our first commercial H1 Coil Deep TMS product received clearance from the FDA in 2013 for the treatment of MDD in adult patients who have failed to achieve satisfactory improvement from anti-depressant medication in the current episode.

Additional clinical trials of Deep TMS in various psychiatric, neurological, and addiction disorders are underway or planned. 51 Our first commercial H1 Coil Deep TMS product received clearance from the FDA in 2013 for the treatment of MDD in adult patients who have failed to achieve satisfactory improvement from anti-depressant medication in the current episode.

The decrease of $1 million is mainly attributed to an increase in interest income from bank deposits. For information on the impact of currency fluctuations on the company, please see Item 11 “Quantitative and Qualitative Disclosures About Market Risk” below.

The increase of $1.4 million is mainly attributed to an increase in interest income from bank deposits. For information on the impact of currency fluctuations on the company, please see Item 11 “Quantitative and Qualitative Disclosures About Market Risk” below.

Income taxes expense Our income taxes expense is derived primarily from income generated from the sales and lease of our Deep TMS systems from our U.S. subsidiary. During the year ended December 31, 2022, the Company recorded deferred tax assets in respect of temporary differences in the U.S. subsidiary.

Income taxes expense Our income taxes expense is derived primarily from income generated from the sales and lease of our Deep TMS systems from our U.S. subsidiary. During the year ended December 31, 2023, the Company recorded deferred tax assets in respect of temporary differences in the U.S. subsidiary.

There has been no material change in our gross margin as a percentage of revenue for the last three years. Research and development expenses, net Our research and development expenses, net, were $7.7 million for the year ended December 31, 2022 compared to $6.4 million for the year ended December 31, 2021.

There has been no material change in our gross margin as a percentage of revenue for the last three years. Research and development expenses, net Our research and development expenses, net, were $6.7 million for the year ended December 31, 2023 compared to $7.7 million for the year ended December 31, 2022.

Our estimates are primarily guided by observing the following critical accounting policies: 123 Revenue Recognition We generate revenues from the sale and lease of our systems.

Our estimates are primarily guided by observing the following critical accounting policies: 53 Revenue Recognition We generate revenues from the sale and lease of our systems.

We are boldly advancing neuroscience with our proprietary Deep Transcranial Magnetic Stimulation (Deep TMS™) platform technology to improve health and transform lives. We are dedicated to leading through superior science and building on what we believe to be an unparalleled body of clinical evidence. We are the first and only TMS company to obtain from the U.S.

Share-based compensation Share-based compensation reflects the compensation expense of our stock option, and more recently, restricted share unit (RSU) programs granted to employee and other service providers, in which the compensation expense is measured at the grant date fair value of the award.

Share-based compensation Share-based compensation reflects the compensation expense of our stock option, and restricted share unit (RSU) programs granted to employees and other service providers, in which the compensation expense is measured at the grant date fair value of the award.

These parameters include the expected volatility of our share price over the expected term of the grant, the risk-free interest rate assumption, forfeitures behaviors and expected dividends. 125 Some of our more recent incentive equity grants were in the form of restricted share units (RSUs).

These parameters include the expected volatility of our share price over the expected term of the grant, the risk-free interest rate assumption, forfeitures behaviors and expected dividends. Some of our incentive equity grants are in the form of restricted share units (RSUs).

Cost of revenues and gross margin Our cost of revenues was $7.1 million for the year ended December 31, 2022 compared to $6.6 million for the year ended December 31, 2021. The increase is primarily attributed to increase in sales volumes.

Cost of revenues and gross margin Our cost of revenues was $8.3 million for the year ended December 31, 2023 compared to $7.1 million for the year ended December 31, 2022. The increase is primarily attributed to increase in sales volumes.

In addition, as of December 31, 2022, we had shipped 414 H1 Coils as additional coils attached to certain of our new and existing systems following our receipt in August 2018 of marketing approval from the FDA for our OCD system.

In addition, as of December 31, 2023, we had shipped 607 H7 Coils as additional coils attached to certain of our new and existing systems following our receipt in August 2018 of marketing approval from the FDA for our OCD system.

Year ended December 31, 2021 compared to year ended December 31, 2020 For comparison of fiscal year 2021 to fiscal year 2020 please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Year ended December 31, 2021 compared to year ended December 31, 2020” section in our annual report on form 20-F filed with the SEC on April 12, 2022.

Year ended December 31, 2022 compared to year ended December 31, 2021 For comparison of fiscal year 2022 to fiscal year 2021 please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Year ended December 31, 2022 compared to year ended December 31, 2021” section in our annual report on form 20-F filed with the SEC on March 27, 2023.

The treatment requires no anesthesia, hospitalization or sedation and no systemic side effects are associated with this therapy. 119 In the United States, we sell or lease Deep TMS systems by one of the following two methods: (i) a fixed-fee lease model in which the Deep TMS system is leased to a customer for a fixed annual fee, generally with a term of between 48 and 60 months, for unlimited use; and (ii) a sales or purchase model in which the Deep TMS system is sold to the customer for a fixed purchase price.

In the United States, we sell or lease Deep TMS systems by one of the following two methods: (i) a fixed-fee lease model in which the Deep TMS system is leased to a customer for a fixed annual fee, generally with a term of between 48 and 60 months, for unlimited use; and (ii) a sales or purchase model in which the Deep TMS system is sold to the customer for a fixed purchase price.

Under the new compensation policy approved by the Company’s shareholders on December 22, 2021, the exercise price for any newer options grants are to be based on the closing price of our ADSs on the day prior to the grant. See “Item 7. Major Shareholders and Related Party Transactions – Related Party Transactions.” 54 Volatility.

While continuing to pursue these strategic initiatives, we also plan on streamlining existing resources as we shift more of our focus to our commercial operations.

While continuing to pursue these strategic initiatives, we also plan on streamlining existing resources as we shift more of our focus to our commercial operations. As a result, we expect our research and development expenses to decrease.

As of December 31, 2022, we had an installed base of approximately 884 Deep TMS systems, whereby 411 systems were leased from us, and an additional 473 systems were sold by us prior to December 31, 2022. Our installed base increased by 130 systems during 2022.

As of December 31, 2023, we had an installed base of approximately 1,101 Deep TMS systems, whereby 514 systems were leased from us, and an additional 587 systems were sold by us prior to December 31, 2023. Our installed base increased by 217 systems during 2023.

As a result, we expect our research and development expenses to decrease. 122 General and administrative expenses General and administrative expenses consist primarily of personnel expenses, including salaries and related benefits, share-based compensation, and travel expenses for employees in executive, finance, information technology, legal, and human resource functions.

General and administrative expenses General and administrative expenses consist primarily of personnel expenses, including salaries and related benefits, share-based compensation, and travel expenses for employees in executive, finance, information technology, legal, and human resource functions.

For the year ended December 31, 2022, our revenues were $27.2 million compared to $29.7 million for the year ended December 31, 2021, representing a decrease of 8.4% over the revenues generated in 2021. We incurred net losses of $13.3 million for the year ended December 31, 2022.

For the year ended December 31, 2023, our revenues were $31.8 million compared to $27.2 million for the year ended December 31, 2022, representing an increase of 17% over the revenues generated in 2022. We incurred net losses of $4.2 million for the year ended December 31, 2023.

As of December 31, 2022, we had an accumulated deficit of $97.1 million. Our primary sources of capital to date have been from public offerings in Israel and in the United States, and private placements of our securities, grants from the Israel Innovation Authority (IIA), borrowings under our credit facilities, and the lease and sale of our products.

Our primary sources of capital to date have been from public offerings in Israel and in the United States, and private placements of our securities, grants from the Israel Innovation Authority (IIA), borrowings under our credit facilities, the lease and sale and commercialization of our products and services.

Year ended December 31, 2022 compared to year ended December 31, 2021 Revenues Our total revenues decreased by $2.5 million, or 8.4%, from $29.7 million for the year ended December 31, 2021 to $27.2 million for the year ended December 31, 2022.

Year ended December 31, 2023 compared to year ended December 31, 2022 Revenues Our total revenues increased by $4.6 million, or 17%, from $27.2 million for the year ended December 31, 2022 to $31.8 million for the year ended December 31, 2023.

For Deep TMS for MDD, the FDA has also cleared a 3 minute “Theta Burst” treatment protocol. Patients may experience some discomfort during treatment and must use earplugs to reduce exposure to the loud sounds produced by the device. The treatment requires no anesthesia, hospitalization or sedation and no systemic side effects are associated with this therapy.

We expect to continue to own those of our Deep TMS systems which have been placed under these models for the foreseeable future, which allows us to maintain our relatively low cost of revenues for those systems. 121 In the case of the Deep TMS systems that we sell under our sales model, the entire cost of the Deep TMS system is recognized upon such sale.

The decrease in revenues was attributed mainly to a decrease in lease of our Deep TMS systems to customers. Revenues from leases were 40% of the revenues for the year ended December 31, 2022, compared to 45% of the revenues for the year ended December 31, 2021.

The increase in revenues was attributed mainly to an increase in sales of our Deep TMS systems to customers. Revenues from sales were 64% of the revenues for the year ended December 31, 2023, compared to 60% of the revenues for the year ended December 31, 2022.

We have prepared this quarterly information on a basis consistent with our audited financial statements. 126 Three months ended March 31 June 30 Sep. 30 Dec. 31 March 31 June 30 Sep. 30 Dec. 31 March 31 June 30 Sep. 30 Dec. 31 2022 2021 2020 Statements of operations U.S dollars in thousands Revenues 7,970 8,006 5,168 6,033 6,121 7,005 8,061 8,470 4,157 4,820 6,014 7,066 Cost of revenues 1,867 2,192 1,341 1,729 1,463 1,300 1,930 1,906 1,015 992 1,485 1,566 Gross profit 6,103 5,814 3,827 4,304 4,658 5,705 6,131 6,564 3,142 3,828 4,529 5,500 Research and development expenses, net 1,576 1,731 2,220 2,151 925 1,650 1,786 2,032 1,795 1,041 1,411 1,576 Selling and marketing expenses 4,146 4,552 4,751 4,750 3,129 4,191 4,042 4,518 3,713 2,178 2,393 2,999 General and administrative expenses 1,863 1,539 1,726 1,726 1,405 1,377 1,536 1,466 1,255 824 1,311 1,332 Total Operating expenses 7,585 7,822 8,697 8,627 5,459 7,218 7,364 8,016 6,763 4,043 5,115 5,907 Total Operating Loss 1,482 2,008 4,870 4,323 801 1,513 1,233 1,452 3,621 215 586 407 Finance expenses, net 324 329 99 (401 ) 412 269 360 379 (309 ) 179 210 239 Loss before income taxes 1,806 2,337 4,969 3,922 1,213 1,782 1,593 1,831 3,312 394 796 646 Income taxes (tax benefit) 187 113 70 (55 ) 160 156 211 (484 ) 130 177 170 (240 ) Net loss and comprehensive loss 1,993 2,450 5,039 3,867 1,373 1,938 1,804 1,347 3,442 571 966 406 Our quarterly revenues and operating results have varied in the past and are expected to vary in the future due to numerous factors.

Three months ended March 31 June 30 Sep. 30 Dec. 31 March 31 June 30 Sep. 30 Dec. 31 March 31 June 30 Sep. 30 Dec. 31 2023 2022 2021 Statements of operations U.S dollars in thousands Revenues 6,625 7,829 8,302 9,029 7,970 8,006 5,168 6,033 6,121 7,005 8,061 8,470 Cost of revenues 1,792 2,095 2,131 2,290 1,867 2,192 1,341 1,729 1,463 1,300 1,930 1,906 Gross profit 4,833 5,734 6,171 6,739 6,103 5,814 3,827 4,304 4,658 5,705 6,131 6,564 Research and development expenses, net 1,785 1,902 1,544 1,434 1,576 1,731 2,220 2,151 925 1,650 1,786 2,032 Selling and marketing expenses 4,912 3,983 3,602 3,959 4,146 4,552 4,751 4,750 3,129 4,191 4,042 4,518 General and administrative expenses 1,803 1,192 1,158 1,162 1,863 1,539 1,726 1,726 1,405 1,377 1,536 1,466 Total Operating expenses 8,500 7,077 6,304 6,555 7,585 7,822 8,697 8,627 5,459 7,218 7,364 8,016 Total operating income (loss) ( 3,667 ) ( 1,343 ) ( 133 ) 184 (1,482 ) (2,008 ) (4,870 ) (4,323 ) ( 801 ) ( 1,513 ) ( 1,233 ) ( 1,452 ) Finance expenses (income), net ( 1,407 ) 135 (38 ) 221 324 329 99 (401 ) 412 269 360 379 Loss before income taxes (2,260 ) (1,478 ) (171 ) (37 ) (1,806 ) ( 2,337 ) (4,969 ) (3,922 ) ( 1,213 ) (1,782 ) (1,593 ) ( 1,831 ) Income taxes (tax benefit) 171 185 59 (164 ) 187 113 70 (55 ) 160 156 211 (484 ) Net income (loss) and Comprehensive income (loss) (2,431 ) (1,663 ) (230 ) 127 (1,993 ) ( 2,450 ) (5,039 ) (3,867 ) (1,373 ) (1,938 ) (1,804 ) (1,347 ) Our quarterly revenues and operating results have varied in the past and are expected to vary in the future due to numerous factors.

Food and Drug Administration (FDA) three cleared indications backed by pivotal studies demonstrating clinically proven efficacy. Current indications include major depressive disorder (MDD), including reduction of comorbid anxiety symptoms, commonly referred to as anxious depression, obsessive-compulsive disorder (OCD), and smoking addiction. We have also received CE Mark for a variety of psychiatric and neurological indications.

Food and Drug Administration (FDA) for three separate mental health condition indications based on clinically proven efficacy as demonstrated in pivotal randomized placebo controlled studies. Current indications include major depressive disorder (MDD), including reduction of comorbid anxiety symptoms, commonly referred to as anxious depression, obsessive-compulsive disorder (OCD), and smoking addiction.

We are focused on increasing global awareness of and broad access to Deep TMS. Deep TMS uses magnetic pulses to stimulate neurons and consequently modulates the physiological activity of the brain. Our technology can either increase brain activity in neuronal networks which are hypoactive, or alternatively decrease brain activity in neuronal networks which are hypoactive.

We have also received CE Mark for a variety of psychiatric and neurological indications. We are focused on increasing global awareness of and broad access to Deep TMS. Deep TMS uses magnetic pulses to stimulate neurons and consequently modulates the physiological activity of the brain.

Selling and marketing expenses Our selling and marketing expenses were $18.2 million for the year ended December 31, 2022 compared to $15.9 million for the year ended December 31, 2021. The increase of $2.3 million, or 14.6%, was primarily attributable to increased investments in the commercial team in the United States.

The decrease of $1 million, or 13%, was primarily attributable to a decrease in headcount and in investments in clinical trial and post-marketing studies. 55 Selling and marketing expenses Our selling and marketing expenses were $16.5 million for the year ended December 31, 2023 compared to $18.2 million for the year ended December 31, 2022.

The increase of $1.1 million, or 19% is mainly attributed to one-time professional and legal fees. Finance expenses, net Our finance expenses, net, were $0.4 million for the year ended December 31, 2022 compared to $1.4 million for the year ended December 31, 2021.

The decrease of $1.6 million, or 23% is mainly attributed to lower Directors and Officers' insurance fees as well as restructuring and decrease in allowance for doubtful debts. Finance expenses, net Our finance income, net, was $1 million for the year ended December 31, 2023 compared to finance expenses, net of $0.4 million for the year ended December 31, 2022.

In addition, we expect to incur significant commercialization expenses for product sales, marketing, manufacturing, and distribution. On February 25, 2021, we closed a follow-on underwritten public offering of ADSs with gross proceeds of approximately $45.2 million before deducting underwriting discount and commissions and offering expenses.

On February 25, 2021, we closed a follow-on underwritten public offering of ADSs with gross proceeds of approximately $45.2 million before deducting underwriting discount and commissions and offering expenses. We believe that our existing cash resources will be sufficient to enable us to fund our operating expenses and capital expenditure requirements for at least the next 24 months.

The Company also had higher marketing expenses to support increased awareness including trades shows, and digital marketing initiatives. 127 General and administrative expenses Our general and administrative expenses were $6.9 million for the year ended December 31, 2022 compared to $5.8 million for the year ended December 31, 2021.

The Company also improved its cost effectiveness for marketing expenses by targeting the investments to specific groups and growing markets. General and administrative expenses Our general and administrative expenses were $5.3 million for the year ended December 31, 2023 compared to $6.9 million for the year ended December 31, 2022.

We believe that our existing cash resources will be sufficient to enable us to fund our operating expenses and capital expenditure requirements for at least the next 24 months. 120 Components of Our Results of Operations Revenues We derive our revenues from the lease and sale of our Deep TMS systems.

Components of Our Results of Operations Revenues We derive our revenues from the lease and sale of our Deep TMS systems.

These investments included increased headcounts, recruiting expenses, as well as higher travel costs which are due to both increased headcount and increases in travel related expenses during the year.

The decrease of $1.7 million, or 9%, was primarily attributable to decrease in the costs of the commercial team in the United States. These cost savings included decreased headcounts and costs associated with same, recruiting expenses, advertising and promotional expenses, as well as lower travel costs which are due to decreased headcount during the year.

Removed

Traditionally, the preferred form of equity compensation to our employees, consultants and directors was in the form of options.

Added

Our technology can either increase brain activity in neuronal networks which are hypoactive, or alternatively decrease brain activity in neuronal networks which are hypoactive.

Removed

On May 4, 2021, we commenced a tender offer to exchange eligible options (“Eligible Options”) to purchase Ordinary Shares, par value NIS 0.04 per Ordinary Share, for replacement options to purchase Ordinary Shares (“New Options”), with modified terms pursuant to the Offer to Exchange Eligible Options for New Options, dated May 4, 2021 (the “Exchange Offer”).

Added

As of December 31, 2023, we had an accumulated deficit of $101.3 million.

Removed

Following the Exchange Offer, to better align with the interests of prospective grantees, among other factors, we diversified our equity grants to prospective grantees to be either in the form of options or in the form of RSUs, according to the form of equity that bests suits the grantee.

Added

In the case of the Deep TMS systems that we sell under our sales model, the entire cost of the Deep TMS system is recognized upon such sale.

Removed

On June 2, 2021, we completed the Exchange Offer and the exercise price per Ordinary Share of the new options granted pursuant to the exchange offer is $4.675 per Ordinary Share. See “Item 7. Major Shareholders and Related Party Transactions – Related Party Transactions.” Volatility.

Added

We have prepared this quarterly information on a basis consistent with our audited financial statements.

Removed

The increase of $1.3 million, or 20%, was primarily attributable to increased investments in clinical trial and post-marketing studies related to our OCD and depression indications, as well as increased regulatory expenses to support the clearances in the geographies we sell in.

Item 6. [Reserved]

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

39 edited+14 added−11 removed18 unchanged

2022 filing

2023 filing

Yossi Ben Shalom has served as our Director since December 2018 and is a member of our executive committee. Mr. Ben Shalom is a co-founder of D.B.S.I, a private investment company specializing in investments in mature companies that are positioned globally for high growth or built for vast expansion through M&As. As such, Mr.

Yossi Ben Shalom has served as our Director since December 2018 and is a member of our executive committee and our nomination committee . Mr. Ben Shalom is a co-founder of D.B.S.I, a private investment company specializing in investments in mature companies that are positioned globally for high growth or built for vast expansion through M&As. As such, Mr.

For more information, please see the proxy statement filed on February 13, 2023 and resulting resolution approved by the shareholders on March 20, 2023. We also have a consultancy agreement with Prof. Zangen, a director and scientific founder of the Company. For more information, please see “

For more information, please see our proxy statement filed on February 13, 2023 and resulting resolution approved by the shareholders on March 20, 2023. We also have a consultancy agreement with Prof. Zangen, a director and scientific founder of the Company. For more information, please see “

Ben-Shalom served as Chief Financial Officer of Tadiran Ltd. between 1994 and 1998. Mr. Ben Shalom holds a BA in Economics and an MA in Business Administration both from Tel Aviv University. 142 Avner Lushi has served as our Director since January 2020 and currently serves as a member of our audit committee.

Ben-Shalom served as Chief Financial Officer of Tadiran Ltd. between 1994 and 1998. Mr. Ben Shalom holds a BA in Economics and an MA in Business Administration both from Tel Aviv University. Avner Lushi has served as our Director since January 2020 and currently serves as a member of our audit committee and our nomination committee .

On February 13, 2023 the board appointed Mr. Boehm as our new Chairman, succeeding Dr. David Zacut, co-founder of BrainsWay, who has held the role of Chairman since our inception, and now serves as a vice chairman on the board . In tandem with the transition to a new Chairman, on February 13, 2023, our board of directors appointed Mr.

David Zacut, co-founder of BrainsWay, who has held the role of Chairman since our inception, and now serves as a vice chairman on the board . In tandem with the transition to a new Chairman, on February 13, 2023, our board of directors appointed Mr.

Prior to that, Ms. Mitrany held various positions at Teva, including serving as CFO of its global specialty business (commercial, R&D, and new ventures), head of Financial Planning & Analysis of the global branded business, and global CFO of Copaxone (a multiple sclerosis treatment) and various other specialty products. Ms.

Mitrany held various positions at Teva, including serving as CFO of its global specialty business (commercial, R&D, and new ventures), head of Financial Planning & Analysis of the global branded business, and global CFO of Copaxone (a multiple sclerosis treatment) and various other specialty products. Ms.

Out of that amount, $2.3 million was paid as salary, $1.1 million was attributed to the value of the equity-based awards granted to senior management during 2022 and approximately $0.2 million was attributed to retirement plans. No additional amounts have been set aside or accrued by us to provide pension, retirement, or similar benefits.

Out of that amount, $1.7 million was paid as salary, $0.3 million was attributed to the value of the equity-based awards granted to senior management during 2023 and approximately $0.3 million was attributed to retirement plans. No additional amounts have been set aside or accrued by us to provide pension, retirement, or similar benefits.

(3) Member of our executive committee. 138 Board Diversity Matrix Nasdaq’s Board Diversity Rule is designed to encourage a minimum board diversity objective for companies and provide stakeholders with consistent, comparable disclosures concerning a company’s current board composition.

(3) Member of our executive committee (4) Member of our nomination committee. Board Diversity Matrix Nasdaq’s Board Diversity Rule is designed to encourage a minimum board diversity objective for companies and provide stakeholders with consistent, comparable disclosures concerning a company’s current board composition.

From 2001 to 2005, he co-founded and served as CEO of Life Sciences Transaction Support Ltd. (LTS), a PwC subsidiary dealing with life sciences investment banking. Since 2005, Mr. Lushi has served as an independent board member at nine public companies, the two last active ones being Ram-On Investments and Holdings (1999) Ltd and Allmed Solutions Ltd.

From 2001 to 2005, he co-founded and served as CEO of Life Sciences Transaction Support Ltd. (LTS), a PwC subsidiary dealing with life sciences investment banking. Since 2005, Mr. Lushi has served as an independent board member at nine public companies, the two active one being Ram-On Investments and Holdings (1999) Ltd.

Compensation The aggregate compensation paid, and benefits-in-kind granted to or accrued on behalf of all of our directors and executive officers for their services, in all capacities, to us during the year ended December 31, 2022, was approximately $3.6 million.

In addition, he was granted 300,000 options to purchase Ordinary Shares of the Company, subject to a 4 year vesting schedule and acceleration in the event of a change of control, at an exercise price equal to 125% of half of the closing ADS price on the NASDAQ exchange on March 17, 2023, subject to standard terms in the company's Amended and Restated 2019 Share Incentive Plan and compliance with all applicable laws.

In addition, he was granted 300,000 options to purchase Ordinary Shares of the Company, subject to a 4 year vesting schedule and acceleration in the event of a change of control, at an exercise price equal to 125% of half of the closing price of our ADSs on the Nasdaq Global Market on March 17, 2023, subject to standard terms in our Amended and Restated 2019 Share Incentive Plan and compliance with all applicable laws.

Prior to that he has served as our Chairman of the Board of Directors since our inception, is a member of our executive committee, and has been providing consulting services to Brain Research and Development Services since May 2001. Since 1983, Dr.

David Zacut serves as Vice-Chairman of our Board of Directors since February 2023. Prior to that he served as our Chairman of the Board of Directors since our inception, is a member of our executive committee, and has been providing consulting services to Brain Research and Development Services since May 2001. Since 1983, Dr.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management Recent Developments In the beginning of 2023, we underwent a transition in our leadership. On January 12, 2023 our board of directors appointed Mr. Ami Boehm, an experienced, accomplished, and well-respected leader in capital markets, investing, and advising in multiple global industries, as a director.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management Recent Developments In the beginning of 2023, we underwent a transition in our leadership. Our board of directors appointed Mr. Ami Boehm, an experienced, accomplished, and well-respected leader in capital markets, investing, and advising in multiple global industries, as our new Chairman, succeeding Dr.

Prior to her service as a Vice President of Research and Development, from 2010 to 2017, Ms. Ankri served as a manager at the Biomedical Development Department of our Company and as a research and development project manager at our Company. Ms.

Moria Ben Soussan (Ankri) has served as our Vice President of Research and Development since September 2017. Prior to her service as a Vice President of Research and Development, from 2010 to 2017, Ms. Ankri served as a manager at the Biomedical Development Department of our Company and as a research and development project manager at our Company. Ms.

Zangen) an annual cash fee of NIS 133,000 (approximately $39,610) Additionally, as of the date of the filing of this annual report, we pay a cash fee of NIS 2,480 (approximately $740) per meeting of the Board and any committee thereof, which is increased to (i) NIS 4,020 (approximately $1,200) in the case of a committee chairperson; or (ii) NIS 4,390 (approximately $1,310) in the case of a director determined to be an expert.

Additionally, as of the date of the filing of this annual report, we pay a cash fee of NIS 2,480 per meeting of the Board and any committee thereof, which is increased to (i) NIS 4,020 in the case of a committee chairperson; or (ii) NIS 4,390 in the case of a director determined to be an expert.

David Zacut(3) 71 Vice Chairman of the Board Avner Hagai(2) 67 Director Eti Mitrany(1)(2) 53 Director Karen Sarid(1)(2)(3) 72 Director Prof. Abraham Zangen 53 Director Yossi Ben Shalom(3) 66 Director Avner Lushi(1) 56 Director (1) Member of our audit committee, which also serves as our financial statements committee. (2) Member of our compensation committee.

David Zacut(3) 72 Vice Chairman of the Board Avner Hagai(2)(4) 68 Director Eti Mitrany(1)(2) 54 Director Karen Sarid(1)(2)(3) 73 Director Prof. Abraham Zangen 54 Director Yossi Ben Shalom(3)(4) 67 Director Avner Lushi(1)(4) 57 Director (1) Member of our audit committee, which also serves as our financial statements committee. (2) Member of our compensation committee.

(3) Consists of the fair value of the equity-based compensation granted during the year ended December 31, 2022 in exchange for the directors' and officers' services recognized as an expense in profit or loss and is carried to the accumulated deficit under equity. The total amount is recognized as an expense over the vesting period of the RSUs and/or options.

(3) Value of Equity Based Compensation Granted consists of the fair value of the equity-based compensation granted during the year ended December 31, 2023 in exchange for the directors' and officers' services recognized as an expense in profit or loss and is carried to the accumulated deficit under equity.

Boyer held marketing roles of increasing responsibility at Smith & Nephew and Stryker. Prior to his medical device career, he was a field artillery captain in the United States Army, and he received a Bronze Star Medal for his service. Mr.

Prior to this, Mr. Levy served as our Senior Vice President and General Manager North America since May 2020, and before that as Chief Financial Officer from September 2014 to May 2020. Mr. Levy also serves as a director in ReWalk Robotics Ltd. (NASDAQ listed) since July 2022.

Executive officers Hadar Levy serves as our Chief Executive Officer since February 13, 2023. Prior to this, Mr. Levy served as our Senior Vice President and General Manager North America since May 2020, and before that as Chief Financial Officer from September 2014 to May 2020. Mr. Levy also serves as a director in ReWalk Robotics Ltd.

However, the enforceability of the noncompetition provisions may be limited under applicable laws. 144 For information on exemption and indemnification letters granted to our directors and officers, please see “Item 6C. – Board Practices – Exculpation, Insurance and Indemnification of Directors and Officers.” Director Compensation As of the date of the filing of this annual report, we pay our non-executive directors (i.e., all directors other than Mr.

For information on exemption and indemnification letters granted to our directors and officers, please see “Item 6C. – Board Practices – Exculpation, Insurance and Indemnification of Directors and Officers.” Director Compensation As of the date of the filing of this annual report, we pay our non-executive directors (i.e., all directors other than Mr. Boehm and Prof.

Employment Agreements We have entered into written employment or service agreements with each member of our senior management. All of these agreements contain customary provisions regarding noncompetition, confidentiality of information, and assignment of inventions.

Prior to his service at the Company, from August 2011 to September 2014 Mr. Levy served as Chief Financial Officer of the Latin American Division at Amdocs; and from 2008 to 2011, served as Chief Financial Officer & Vice President of Business Development of Notalvision. Prior to this position, he served as Controller of GE Healthcare Israel. Mr.

(NASDAQ listed) since July 2022. Prior to his service at the Company, from August 2011 to September 2014 Mr. Levy served as Chief Financial Officer of the Latin American Division at Amdocs; and from 2008 to 2011, served as Chief Financial Officer & Vice President of Business Development of Notalvision.

The compensation terms for our directors and officers are derived from their employment agreements, and comply with our Amended and Restated Compensation Policy for Executive Officers and Directors approved by our shareholders on December 22, 2021 (the “Compensation Policy”).

The compensation terms for our directors and officers are derived from their employment agreements and/or board/shareholder approvals, and comply with our Amended and Restated Compensation Policy for Executive Officers and Directors, which was approved by our shareholders on December 22, 2021 and amended with the consent of our shareholders on March 20, 2023 (as amended, the “Compensation Policy”).

Our current board composition is reflected in the following matrix: Board Diversity Matrix (As of March 27, 2023) Country of Principal Executive Offices: Israel Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 8 Female Male Non-binary Did Not Disclose Gender Part I: Gender Identity Directors 2 6 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ 0 Did Not Disclose Demographic Background 0 Directors who are Jewish People 8 Directors with Disabilities 0 As a Foreign Issuer subject to the added flexibility provided under Nasdaq’s Board Diversity Rule, we currently meet the diversity objectives promulgated under this rule by having two female directors, as reflected in the above matrix. 139 Executive officers Hadar Levy serves as our Chief Executive Officer since February 13, 2023.

The rule requires companies listed on Nasdaq to: (1) publicly disclose board-level diversity statistics using a standardized template; and (2) have or explain why they do not have at least two diverse directors. 60 Our current board composition is reflected in the following matrix: Board Diversity Matrix (As of March 28, 2024) Country of Principal Executive Offices: Israel Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 8 Female Male Non- binary Did Not Disclose Gender Part I: Gender Identity Directors 2 6 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 Directors who are Jewish People 8 Directors with Disabilities 0 As a Foreign Issuer subject to the added flexibility provided under Nasdaq’s Board Diversity Rule, we currently meet the diversity objectives promulgated under this rule by having two female directors, as reflected in the above matrix.

Ankri holds a B.Sc. in Biomedical Engineering from the Jerusalem College of Technology, and a B.Sc. in neurobiology studies at the Hebrew University of Jerusalem. Christopher Boyer has served as our Vice President Global Marketing since June 2020.

Ankri holds a B.Sc. in Biomedical Engineering from the Jerusalem College of Technology, and a B.Sc. in neurobiology studies at the Hebrew University of Jerusalem. Colleen Hanlon, PhD has served as our Vice President Medical Affairs since November 2022.

Avner Hagai has served as our Director since November 2006 and currently serves as a member of our compensation committee. He currently serves as a director at several companies, including at Prisma F.S. Ltd., a building management company (where he has served since 2002), and previously served as a director at Hofit Kibbutz Kinneret Ltd., a plastics manufacturer. Mr.

Avner Hagai has served as our Director since November 2006 and currently serves as a member of our compensation committee and our nomination committee . He currently serves as a director at several companies, including at Prisma F.S.

Yiftach Roth 53 Chief Scientist Moria Ben Soussan (Ankri) 38 Vice President of Research and Development Christopher Boyer 45 Vice President of Global Marketing Eric Hirt 47 Vice President of US Sales Directors: Ami Boehm 54 Chairman of the Board Dr.

Yiftach Roth 54 Chief Scientist Christopher Boyer 46 Vice President of Global Marketing Moria Ben Soussan (Ankri) 40 Vice President of Research and Development Colleen Hanlon, PhD 44 Vice President of Medical Affairs Directors: Ami Boehm 55 Chairman of the Board Dr.

From April 2021 until December 2022, she served as CFO and Head of Corporate Strategy at CytoReason, a life sciences AI company developing a computational model of the human body. From 2012 until January 2020, she served as Senior Vice President, Head of the Corporate Economic Department at Teva Pharmaceuticals, with global responsibility for Teva’s business planning and analysis.

From 2012 until January 2020, she served as Senior Vice President, Head of the Corporate Economic Department at Teva Pharmaceuticals, with global responsibility for Teva’s business planning and analysis. Prior to that, Ms.

Levy holds a BA in Economics and Accounting from Ruppin and an LLM from Bar Ilan University. Mr. Levy is a Certified Public Accountant. R. Scott Areglado has served as our Senior Vice President and Chief Financial Officer since May 2021. Prior to his service at the Company, Mr.

Prior to this position, he served as Controller of GE Healthcare Israel. Mr. Levy holds a BA in Economics and Accounting from Ruppin and an LLM from Bar Ilan University. Mr. Levy is a Certified Public Accountant. Ido Marom has served as our Chief Financial Officer since May 2023.

Mitrany is an executive with over 25 years of global experience in the life sciences industry. She has served as an active board member since January 2023 at TrioxNano, a nanotechnology treatment company, and also serves as a consultant at pharmaceutical and digital health companies.

She has served as an active board member since January 2023 at TrioxNano, a nanotechnology treatment company, and also serves as a consultant at pharmaceutical and digital health companies. From April 2021 until December 2022, she served as CFO and Head of Corporate Strategy at CytoReason, a life sciences AI company developing a computational model of the human body.

Roth has served as our Research and Development Manager since May 2006. In 2010, Dr. Roth became our Chief Scientist. From 2003 through 2006, Dr. Roth worked in the Advanced Technology Center of the Chaim Sheba Medical Center at Tel Hashomer as a researcher in the field of Magnetic Resonance Imaging (MRI). Dr.

Roth worked in the Advanced Technology Center of the Chaim Sheba Medical Center at Tel Hashomer as a researcher in the field of Magnetic Resonance Imaging (MRI). Dr. Roth holds B.Sc. and M.Sc. degrees in Physics and a Ph.D. in Medical Physics from Tel Aviv University. Dr.

Boehm has sourced and led dozens of control equity investments, and led improvement processes of FIMI’s portfolio companies and strategic activities of the portfolio companies in Israel, China, Europe and the U.S. He has served as Chairman of the Board or Director of numerous public and private companies, including Ormat Technologies, Inc. (NYSE and TASE listed), Gilat Satellite Networks, Ltd.

He has served as Chairman of the Board or Director of numerous public and private companies, including Ormat Technologies, Inc. (NYSE and TASE listed), Gilat Satellite Networks, Ltd. (NASDAQ and TASE listed), TAT Industries Ltd. (NASDAQ and TASE listed), Kamada Ltd. (NASDAQ and TASE listed), Rekah Pharmaceutical Industries, Ltd. (TASE listed), Novolog Ltd. (TASE listed), Hamlet, Ltd.

Hagai established A.A. Glass Ltd., an automotive glass and services company, where he has served as a director since 1984. 141 Eti Mitrany has served as our Director since June 2016, and currently serves as chairperson of our compensation committee and a member of our audit committee. Ms.

Eti Mitrany has served as our Director since June 2016, and currently serves as chairperson of our compensation committee and a member of our audit committee. Ms. Mitrany is an executive with over 25 years of global experience in the life sciences industry.

(NASDAQ and TASE listed), TAT Industries Ltd. (NASDAQ and TASE listed), Kamada Ltd. (NASDAQ and TASE listed), Rekah Pharmaceutical Industries, Ltd. (TASE listed), Novolog Ltd. (TASE listed), Hamlet, Ltd. (TASE listed), Galam Ltd., and Greenstream Ltd., and has worked closely with management teams across the continuum of business and corporate development activities. Mr.

(TASE listed), Galam Ltd., and Greenstream Ltd., and has worked closely with management teams across the continuum of business and corporate development activities. Mr. Boehm received a Master of Business Administration from Northwestern University and Tel-Aviv University, a Bachelor of Law from Tel-Aviv University, and a Bachelor of Economics from Tel-Aviv University. 61 Dr.

Boehm has deep expertise in providing strategic advice for companies operating in multiple global industries. From 2004 until 2022, he served as a partner at FIMI Opportunity Funds, Israel’s leading private equity firm. As a partner at FIMI, Mr.

From 2004 until 2022, he served as a partner at FIMI Opportunity Funds, Israel’s leading private equity firm. As a partner at FIMI, Mr. Boehm has sourced and led dozens of control equity investments, and led improvement processes of FIMI’s portfolio companies and strategic activities of the portfolio companies in Israel, China, Europe and the U.S.

(4) “All Other Compensation” includes, among other things, bonuses, car-related expenses (including tax gross-up) and communication expenses. (5) Christopher Boyer was granted 28,000 RSUs commencing on April 1, 2022 and vesting over a 4 year period. Amit Ginou was granted 19,500 RSUs commencing on April 1, 2022 and vesting over a 4 year period.

The total amount is recognized as an expense over the vesting period of the RSUs and/or options. (4) “All Other Compensation” includes, among other things, bonuses, car-related expenses (including tax gross-up) and communication expenses. (5) Hadar Levy was granted 320,000 options on February 13, 2023 subject to a 4-year vesting period. Equity referenced for Mr.

Roth holds B.Sc. and M.Sc. degrees in Physics and a Ph.D. in Medical Physics from Tel Aviv University. Dr. Roth is the brother-in-law of Professor Zangen, a director and scientific consultant for the Company . Moria Ben Soussan (Ankri) has served as our Vice President of Research and Development since September 2017.

Roth is the brother-in-law of Professor Zangen, a director and scientific consultant for the Company . Christopher Boyer has served as our Vice President Global Marketing since June 2020.

Hadar Levy as our new Chief Executive Officer. Christopher R. von Jako, Ph.D., who served in that role since January 2020, stepped down from the Company to pursue other opportunities. The following table sets forth the name, age and position of each of our executive officers and directors as of the date of this Annual Report.

The following table sets forth the name, age and position of each of our executive officers and directors as of the date of this Annual Report. Name Age Position Senior Management: Hadar Levy 50 Chief Executive Officer Ido Marom 48 Chief Financial Officer Dr.

Scott Areglado, Senior Vice President and Chief Financial Officer 377,251 50,162 78,839 - 506,252 Christopher Boyer, VP Global Marketing 291,850 46,102 63,583 - 401,535 Amit Ginou, VP, and Israel Site Manager (6) 202,747 47,789 50,926 15,689 317,152 (1) “Base Salary or Other Payments” means the aggregate yearly gross monthly salaries or other payments with respect to our senior management and members of the board of directors which was actually paid during the year ended December 31, 2022.

(1) “Base Salary or Other Payments” means the aggregate yearly gross monthly salaries or other payments with respect to our senior management and members of the board of directors which was actually paid during the year ended December 31, 2023.

Hadar Levy was granted 30,000 RSUs commencing on September 1, 2022 and vesting over a 3.5 year period. (6) Mr. Ginou’s employment with the company will conclude on June 20, 2023, following a 3-month notice period. Certain equity-based compensation listed in the table above was granted pursuant to an equity incentive plan.

Hirt refers to a grant of RSUs from a previous year which was forfeited in 2023 upon his departure from the Company. (6) Mr. Hirt’s employment with the Company concluded on November 6, 2023. Certain equity-based compensation listed in the table above was granted pursuant to an equity incentive plan.

Removed

Name Age Position Senior Management: Hadar Levy 49 Chief Executive Officer R. Scott Areglado 59 Senior Vice President and Chief Financial Officer Dr.

Added

Hadar Levy as our new Chief Executive Officer, and on May 23, 2023 our board of directors appointed Mr, Ido Marom, an experienced senior financial leader in global industries, including medical technology, as the Company’s new Chief Financial Officer (CFO).

Removed

Added

Prior to joining the Company, he served as CFO of Surgical Theater Inc., a start-up medical technology company since 2019. Prior to this, he served as Finance Director – Commercial Finance Business Officer at Amdocs, a global market leader in the communication and media industry.

Removed

Areglado served as Chief Financial Officer of iCAD, Inc., a publicly traded global medical technologies provider of advanced image analysis, from May 2018, and previously served as its Vice President and Corporate Controller (from 2011 to 2018). From 2005 to 2010, Mr.

Added

Previously, he served as CFO and Chief Operating Officer of The Jewish Agency in North America and as Vice President of Finance of Ness Technologies, a global provider of IT services. Mr. Marom is a Certified Public Accountant and holds a BA in Accounting and Finance from Haifa University, Israel. Dr.

Removed

Areglado served as Vice President and Controller at AMICAS, Inc., a Nasdaq-listed image and information management solutions company serving the healthcare industry. From 1991 to 2004, he held various accounting and financial roles of increasing responsibility in the software, communications, and transportation and logistics industries.

Added

Yiftach Roth is one of our scientific founders and key inventors of the Deep TMS technology. Dr. Roth has led and/or participated in our key scientific and Research and Development initiatives since May 2006. In 2010, Dr. Roth became our Chief Scientist. From 2003 through 2006, Dr.

Removed

He holds a Bachelor of Business Administration degree in Accounting from the University of Massachusetts, Amherst, and a Master of Business Administration in Entrepreneurship from the Franklin W. Olin Graduate School of Business at Babson College. Dr. Yiftach Roth is one of our scientific founders and key inventors of the Deep TMS technology. Dr.

Added

Prior to joining the Company, she spent nine years as a faculty member in the Department of Psychiatry at the Medical University of South Carolina (2010-2019), before being recruited to design, build, and manage a Neuromodulation Program as a tenured professor in the Departments of Cancer Biology and Translational Neuroscience at Wake Forest School of Medicine (2019-2022).

Removed

Boyer holds a B.S. in Mathematical Sciences from the United States Military Academy at West Point. 140 Eric Hirt has served as our Vice President of US Sales since May 2022. Prior to joining the Company, he led the US Sales Team at Aerogen, a world leader in aerosol drug delivery for patients in the acute care setting.

Added

She has experience leading multidisciplinary clinical research programs bridging neurology, psychiatry and pain. She has published over 100 articles, authored over 10 book chapters, been involved in hiring and managing over 50 people, mentored over 80 trainees, delivered over 100 invited talks and educational sessions globally.

Removed

Prior to Aerogen, he also held sales leadership roles at Teleflex and Integra LifeSciences, in addition to sales and marketing leadership positions at Covidien (now part of Medtronic). Before his management roles, Mr. Hirt was a territory sales professional for Covidien and Phenomenex. Mr.

Added

Recognized as a leader and pioneer in the field of brain imaging and brain stimulation research for addiction, Dr. Hanlon received over $13 million from the National Institute of Health to develop neural-circuit based therapeutics, like Transcranial Magnetic stimulation (TMS) for patients with a variety of psychiatric and neurologic disorders – including addiction, pain, and stroke rehabilitation. Dr.

Removed

Hirt holds an MBA from Pepperdine Graziadio Business School (Malibu, CA) and a BS degree in Allied Health from The Ohio State University (Columbus, OH). Directors Ami Boehm serves as our Director since January 12, 2023, and as Chairman of our Board of Directors since February, 2023. Mr.

Added

Hanlon received a B.S. from the University of Florida in 2001 and a Ph.D. in Neurobiology from Duke University in 2005. Directors Ami Boehm serves as our Director since January 12, 2023, and as Chairman of our Board of Directors since February, 2023. Mr. Boehm has deep expertise in providing strategic advice for companies operating in multiple global industries.

Removed

Boehm received a Master of Business Administration from Northwestern University and Tel-Aviv University, a Bachelor of Law from Tel-Aviv University, and a Bachelor of Economics from Tel-Aviv University. Dr. David Zacut serves as Vice-Chairman of our Board of Directors since February, 2023.

Added

Ltd., a building management company (where he has served since 2002), and previously served as a director at Hofit Kibbutz Kinneret Ltd., a plastics manufacturer. Mr. Hagai established A.A. Glass Ltd., an automotive glass and services company, where he has served as a director since 1984.

Removed

The table and summary below outline the actual compensation granted or paid to our five highest compensated officers during the year ended December 31, 2022. 143 Name and position of director or officer Base Salary or Other Payments(1) Value of Social benefit (2) Value of Equity Based Compensation Granted(3)(5) All Other Compensation(4) Total Christopher von Jako, former President and CEO 524,262 55,868 286,918 - 867,048 Hadar Levy, former SVP and General Manager OUS, CEO since February 2023 411,694 50,746 80,668 7,717 550,824 R.

Added

On November 14, 2023, our directors adopted the Policy for Recovery of Erroneously Awarded Compensation (the “Compensation Recovery Policy”), which provides for certain incentive-based compensation awarded to our officers to be recovered in the event that we are required to prepare an accounting restatement to correct material noncompliance with any financial reporting requirement to which we are subject.

Removed

For more information, please see our proxy statement filed on February 13, 2023 and resulting resolution approved by the shareholders on March 20, 2023. According to the consultancy agreement between Dr. Zacut and the Company, as of May 30, 2016, Dr. Zacut is entitled to a monthly consulting fee of NIS 30,000, set based on a 40% capacity position.

Added

This description of the Compensation Recovery Policy is qualified by reference to the full text of such policy, which is filed as an exhibit hereto. 62 The table and summary below outline the actual compensation granted or paid to our five highest compensated officers during the year ended December 31, 2023.

Added

Name and position of director or officer* Base Salary or Other Payments(1) Value of Social benefit(2) Value of Equity Based Compensation Granted(3)(5) All Other Compensation(4) Total Hadar Levy, CEO 335 71 172 28 606 Eric Hirt, former VP U.S.

Added

Sales(6) 373 33 (20) 0 386 Christopher Boyer, VP Global Marketing 243 49 45 0 337 Colleen Hanlon, VP Medical Affairs 255 25 26 0 306 Moria Ben Soussan (Ankri), VP R&D 139 41 50 11 241 *Compensation for Mr. Marom, our CFO, who only joined the Company in mid-2023, is not included in this table.

Added

Zangen) an annual cash fee of NIS 133,000.

Item 7. Management's Discussion & Analysis

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

24 edited+13 added−8 removed20 unchanged

2022 filing

2023 filing

B. Related Party Transactions Employment Agreements We have entered into written employment agreements with each member of our senior management. These agreements provide for notice periods of varying duration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary and benefits.

Related Party Transactions Employment Agreements We have entered into written employment agreements with each member of our senior management. These agreements provide for notice periods of varying duration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive base salary and benefits.

Levy was appointed as the CEO, namely February 13, 2023: Annualized gross base salary of NIS 1,020,000 (calculated on the basis of NIS 85,000 monthly); Performance-based bonus in a gross amount not exceeding six (6) months of then current base salary based on achievement of the milestones, goals and targets to be set each year by the Board; 320,000 options to purchase Ordinary Sharers of the Company, at an exercise price based on the closing price of the Company on the last trading day prior to the date of this shareholders meeting, subject to standard terms in the company's Amended and Restated 2019 Share Incentive Plan and compliance with all applicable laws.

Levy was appointed as the CEO, namely February 13, 2023: Annualized gross base salary of NIS 1,020,000 (calculated on the basis of NIS 85,000 monthly); Performance-based bonus in a gross amount not exceeding six (6) months of then current base salary based on achievement of the milestones, goals and targets to be set each year by the Board; 320,000 options to purchase Ordinary Sharers of the Company, at an exercise price based on the closing price of the Company on the last trading day prior to the date of the shareholders meeting, namely March 19, 2023, subject to standard terms in the company's Amended and Restated 2019 Share Incentive Plan and compliance with all applicable laws.

This consists of shares held directly by the named beneficial owner as well as shares held by family members or affiliates of the named beneficial owner. (4) The shares are held by Masters Capital Management, LLC and Michael Masters has beneficial ownership by virtue of his role as a control person of Masters Capital Management, LLC.

This consists of shares held directly by the named beneficial owner as well as shares held by family members or affiliates of the named beneficial owner. (3) The shares are held by Masters Capital Management, LLC and Michael Masters has beneficial ownership by virtue of his role as a control person of Masters Capital Management, LLC.

For purposes of the table below, we deem Ordinary Shares issuable pursuant to options that are currently exercisable or exercisable within 60 days of March 27, 2023, if any, to be outstanding and to be beneficially owned by the person holding the options for the purposes of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person.

For purposes of the table below, we deem Ordinary Shares issuable pursuant to options that are currently exercisable or exercisable within 60 days of March 21, 2024, if any, to be outstanding and to be beneficially owned by the person holding the options for the purposes of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person.

The majority of Delek Group Ltd.’s outstanding share capital and voting rights are owned, directly and indirectly, by Itshak Sharon (Tshuva) through private companies wholly-owned by him, and the remainder is held by the public. The address of the Phoenix Provident Funds is HaShalom Road 53 Giv’atayim, 5345433, Israel.

None of our shareholders have different voting rights from other shareholders. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company. As of March 27, 2023, there was one shareholder of record of our Ordinary Shares.

None of our shareholders have different voting rights from other shareholders. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company. As of March 21, 2024, there was one shareholder of record of our Ordinary Shares.

We have obtained directors and officers insurance for each of our senior management and directors. We have provided an undertaking to our directors and senior management to exculpate to the fullest extent permitted by law and to indemnify them for certain liabilities, subject to limited exceptions, to the extent that these liabilities are not covered by insurance.

We have provided an undertaking to our directors and senior management to exculpate to the fullest extent permitted by law and to indemnify them for certain liabilities, subject to limited exceptions, to the extent that these liabilities are not covered by insurance.

Major Shareholders The following table sets forth information with respect to the beneficial ownership of our Ordinary Shares as of March 15, 2023 by: ● each person or entity known by us to own beneficially 5% or more of our outstanding Ordinary Shares; ● our directors and members of senior management, or our Named Directors and Officers; and ● all of our directors and members of senior management as a group.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS The following table sets forth information with respect to the beneficial ownership of our Ordinary Shares as of March 18, 2024 by: ● each person or entity known by us to own beneficially 5% or more of our outstanding Ordinary Shares; ● our directors and members of senior management, or our Named Directors and Officers; and ● all of our directors and members of senior management as a group.

The percentage of Ordinary Shares beneficially owned is based on 33,082,492 Ordinary Shares outstanding as of March 27, 2023. Except where otherwise indicated, we believe, based on information furnished to us by such owners, that the beneficial owners of the ordinary shares listed below have sole investment and voting power with respect to such shares.

The percentage of Ordinary Shares beneficially owned is based on 33,273,984 Ordinary Shares outstanding as of March 21, 2024. Except where otherwise indicated, we believe, based on information furnished to us by such owners, that the beneficial owners of the ordinary shares listed below have sole investment and voting power with respect to such shares.

(12) Consists of options to purchase 27,500 Ordinary Shares currently exercisable or exercisable within 60 days. The exercise price of the options is NIS 15.26. The options expire on December 3, 2027. (13) Consists of 295,000 Ordinary Shares and options to purchase 27,500 Ordinary Shares currently exercisable or exercisable within 60 days.

(8) Consists of 295,000 Ordinary Shares and options to purchase 27,500 Ordinary Shares currently exercisable or exercisable within 60 days. The exercise price of the options is NIS 15.26. The options expire on November 12, 2026. (9) Consists of options to purchase 27,500 Ordinary Shares currently exercisable or exercisable within 60 days.

As of March 27, 2023, there were 73 U.S. persons that were holders of record of ADSs representing our Ordinary Shares, representing approximately 52% of our outstanding Ordinary Shares.

As of March 22, 2024, there were 83 U.S. persons that were holders of record of ADSs representing our Ordinary Shares, representing approximately 52% of our outstanding Ordinary Shares.

The exercise price of the options is NIS 15.26. The options expire on November 12, 2026. (14) Consists of options to purchase 20,625 Ordinary Shares currently exercisable or exercisable within 60 days. The exercise price of the options is NIS 15.26. The options expire on January 13, 2028.

The exercise price of the options is NIS 15.26. The options expire on January 13, 2028. (10) Consists of options to purchase 27,500 Ordinary Shares currently exercisable or exercisable within 60 days. The exercise price of the options is NIS 15.26. The options expire on January 13, 2028.

Directors, Senior Management and Employees—Share Ownership—Award Plans.” 171 Since January 1, 2020, we granted options to purchase 370,000 Ordinary Shares to employees and directors, with a weighted average exercise price, following the completion of the Exchange Offer, of approximately $3.94 per share, or approximately NIS 13.87 per share (based on the exchange rate reported by the Bank of Israel on December 31, 2022), and 1,108,130 restricted share units (RSUs).

Directors, Senior Management and Employees—Share Ownership—Award Plans.” Since January 1, 2021, we granted options to purchase 1,123,000 Ordinary Shares to employees and directors, with a weighted average exercise price, following the completion of the Exchange Offer, of approximately $1.48 per share, or approximately NIS 5.02 per share (based on the exchange rate reported by the Bank of Israel on December 31, 2023), and 269,638 restricted share units (RSUs).

Unless otherwise noted below, the address for each beneficial owner is c/o BrainsWay Ltd., 19 Hartum Street, Bynet Building 3rd Floor, Har HaHotzvim, Jerusalem, 9777518, Israel. 168 Shares Beneficially Owned Number Percentage 5% or Greater Shareholders RTW Funds(2) 3,204,762 9.69 % Dr.

Unless otherwise noted below, the address for each beneficial owner is c/o BrainsWay Ltd., 19 Hartum Street, Bynet Building 3rd Floor, Har HaHotzvim, Jerusalem, 9777518, Israel. 73 Shares Beneficially Number Percentage 5% or Greater Shareholders The Phoenix Provident Funds (1) 3,768,718 11.33 % Dr.

(9) Consists of 28,710 Ordinary Shares and options to purchase 385,500 Ordinary Shares currently exercisable or exercisable within 60 days. The exercise price of the options is $4.65, as 220,000 expires on December 8, 2025, 128,00 expires on November 12, 2026 and the remainder expires on October 1, 2027.

The exercise price of the options is $4.68, with 220,000 expiring on December 8, 2025, 128,000 expiring on November 12, 2026, 50,000 expiring on October 1, 2027, and 100,000 expiring on February 9, 2033. (6) Consists of 14,000 Ordinary Shares and options to purchase 56,250 Ordinary Shares currently exercisable or exercisable within 60 days.

Avner Hagai increased holdings from 5.3% to 6.5%, Cowen Financial Products LLC which decreased holdings below 5%. 170 Control by Another Corporation, Foreign Government or Other Persons To the best of our knowledge, the Company is not directly or indirectly owned or controlled by another corporation(s), by any foreign government or by any other natural or legal person(s) severally or jointly.

Control by Another Corporation, Foreign Government or Other Persons To the best of our knowledge, the Company is not directly or indirectly owned or controlled by another corporation(s), by any foreign government or by any other natural or legal person(s) severally or jointly. 74 B.

(10) Consists of options to purchase 41,250 Ordinary Shares currently exercisable or exercisable within 60 days. The exercise price of the options is $4.68. The options expire on June 1, 2028. (11) Consists of 6,775 Ordinary Shares and options to purchase 108,000 Ordinary Shares currently exercisable or exercisable within 60 days.

The exercise price of the options is $4.68. The options expire on June 1, 2028. (7) Consists of options to purchase 27,500 Ordinary Shares currently exercisable or exercisable within 60 days. The exercise price of the options is NIS 15.26. The options expire on December 3, 2027.

Each New Option has the same expiration date, vesting schedule and other terms (other than exercise price) as the Eligible Option exchanged therefor. Directors and Officers Insurance Policy and Indemnification Agreements Our articles of association permit us to exculpate, indemnify, and insure each of our directors and officers to the fullest extent permitted by the Israeli Companies Law.

Directors and Officers Insurance Policy and Indemnification Agreements Our articles of association permit us to exculpate, indemnify, and insure each of our directors and officers to the fullest extent permitted by the Israeli Companies Law. We have obtained directors and officers insurance for each of our senior management and directors.

Scott Areglado(8) 57,500 * Hadar Levy(9) 418,377 1.26 % Christopher Boyer(10) 41,250 * Amit Ginou(11) 114,775 * Karen Sarid(12) 27,500 * Yossi Ben Shalom(13) 322,500 * Avner Lushi(14) 20,625 * Eti Mitrany(15) 20,625 * All directors and members of senior management as a group 7,665,992 23.17 % * Less than 1.0% (1) The shares are beneficially owned by various direct or indirect, majority or wholly-owned subsidiaries of the Phoenix Holding Ltd.

Avraham Zangen (4) 937,143 2.82 % Hadar Levy (5) 538,620 1.62 % Moria Ben Soussan (Ankri) (15) 74,438 * Christopher Boyer (6) 70,250 * Karen Sarid (7) 27,500 * Yossi Ben Shalom (8) 322,500 * Avner Lushi (9) 27,500 * Eti Mitrany (10) 27,500 * Ami Boehm (11) 93,750 * Ido Marom (12) 37,500 * Eric Hirt (13) 12,500 * Colleen Hanlon (14) 12,000 * All directors and members of senior management as a group 7,502,276 22.55 % * Less than 1.0% (1) The shares are beneficially owned by various direct or indirect, majority or wholly-owned subsidiaries of the Phoenix Holding Ltd.

Mr. Chris von Jako left the Company during February 2023. (8) Consists of options to purchase 57,500 Ordinary Shares currently exercisable or exercisable within 60 days. The exercise price of the options is $4.72. The options expire on May 5, 2031.

(11) Consists of options to purchase 93,750 Ordinary Shares currently exercisable or exercisable within 60 days. The exercise price of the options is NIS 4.56. The options expire on February 9,2033. (12) Consists of options to purchase 37,500 Ordinary Shares currently exercisable or exercisable within 60 days. The exercise price of the options is NIS 4.28.

The address of Masters Capital Management, LLC is 3060 Peachtree Road, Suite 1425, Atlanta, Georgia 30305, United States of America. (5) The address of Wasatch Advisors Inc. is 505 S Wakara Way FL 3 Salt Lake City, UT, 84108-1246 United States. (6) The address of Prof. Avraham Zangen is Mish’ol HaHadas 23, Jerusalem, Israel. (7) Consists of 158,750 Ordinary Shares.

The address of Masters Capital Management, LLC is 3060 Peachtree Road, Suite 1425, Atlanta, Georgia 30305, United States of America. (4) The address of Prof. Avraham Zangen is Mish’ol HaHadas 23, Jerusalem, Israel. (5) Consists of 40,620 Ordinary Shares and options to purchase 498,000 Ordinary Shares currently exercisable or exercisable within 60 days.

Changes in Percentage Ownership by Major Shareholders Since January 1, 2021, there have been no significant changes in the percentage ownership held by any of our 5% or greater shareholders other than The Phoenix Provident Funds which decreased holdings from 8.90% to 5.09%, Dr. David Zacut increased holdings from 5.4% to 6.7% and Mr.

Changes in Percentage Ownership by Major Shareholders Since April 19, 2021, which was the date we filed our 2020 Annual Report, we are not aware of significant changes in the reported percentage ownership held by any of our 5% or greater shareholders other than The Phoenix Provident Funds which increased from 9.7% to 11.33%, Dr.

Such indemnification amounts are in addition to any insurance amounts. 172 C. Interests of Experts and Counsel Not applicable.

Such indemnification amounts are in addition to any insurance amounts. C. Interests of Experts and Counsel Not applicable. 75 ITEM 8. FINANCIAL INFORMATION A. Consolidated Statements and Other Financial Information The financial statements required by this item are found at the end of this Annual Report, beginning on page F- 1.

(15) Consists of options to purchase 20,625 Ordinary Shares currently exercisable or exercisable within 60 days. The exercise price of the options is NIS 15.26. The options expire on January 13, 2028. The voting rights of our major shareholders do not differ from the voting rights of holders of our Ordinary Shares who are not major shareholders.

The exercise price of the options is $4.68, with 50,000 expiring on December 8, 2025, and 10,000 expiring on November 12, 2026. The voting rights of our major shareholders do not differ from the voting rights of holders of our Ordinary Shares who are not major shareholders.

Removed

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A.

Added

David Zacut (2) 2,157,668 6.48 % Avner Hagai (2) 2,072,517 6.23 % Masters Capital Management, LLC (3) 1,800,000 5.41 % Directors and Named Executive Officers Dr. Yiftach Roth 1,090,890 3.28 % Prof.

Removed

David Zacut (3) 2,273,948 6.87 % Avner Hagai(3) 2,179,609 6.59 % Masters Capital Management, LLC(4) 1,800,000 5.44 % Wasatch Advisors Inc.(5) 1,800,000 5.44 % The Phoenix Provident Funds(1) 1,673,390 5.06 % Named Directors and Officers Dr. Yiftach Roth 1,083,390 3.27 % Prof. Avraham Zangen(6) 937,143 2.83 % Christopher von Jako(7) 158,750 * R.

Added

The options expire on August 8, 2033. (13) Consists of 12,500 Ordinary Shares resulting from vested RSUs. Eric Hirt’s employment with the company concluded on November 6, 2023. (14) Consists of 12,000 RSUs vested or to be vested within 60 days.

Removed

(2) The shares are held by RTW Master Fund, Ltd., one or more private funds (together the “Funds”) managed by RTW Investments, LP (the “Adviser”), and Roderick Wong. The Adviser, in its capacity as the investment manager of the Funds, has the power to vote and the power to direct the disposition of all Shares held by the Funds.

Added

(15) Consists of 14,438 RSUs which either vested (and thus converted to Ordinary Shares) or RSUs which will be vested within 60 days, as well as options to purchase 60,000 Ordinary Shares currently exercisable or exercisable within 60 days.

Removed

Roderick Wong is the Managing Partner of the Adviser. The address of RTW Master Fund, Ltd. Is 412 West 15 th Street Floor 9, New York, New York 10011. 169 (3) A director of the Company.

Added

David Zacut which increased from 5.4% to 6.48%, and Mr. Avner Hagai which increased from 5.3% to 6.23%, and RTW Funds which decreased from 9.4% to below 5%.

Removed

The exercise price of the options is NIS 15.26, as 50,000 expires on December 8, 2025, 50,00 expires on November 12, 2026 and the remainder expires on July 1, 2023. Mr. Ginou’s employment with the company will conclude on June 20, 2023, following a 3-month notice period.

Added

Additionally, during this three-year period, Cowen Financial Products, LLC, Wasatch Advisors Inc. and AIGH Capital Management, LLC each became 5% or greater shareholders but have since decreased their respective holdings to below 5% as of the date of this report.

Removed

Option Exchange On May 4, 2021, we commenced the Exchange Offer, which expired on June 2, 2021.Pursuant to the Exchange Offer, the Company accepted for cancellation Eligible Options to purchase an aggregate of 1,371,500 Ordinary Shares, representing approximately 93.06% of the total Ordinary Shares underlying the Eligible Options.

Added

Employment Agreement with Ido Marom our Chief Financial Officer In September 2023 we entered into an employment agreement with Ido Marom reflecting his compensation and other terms as our new CFO. The following is a description of Mr.

Removed

On June 2, 2021, following the expiration of the Exchange Offer, the Company granted New Options to purchase 1,371,500 Ordinary Shares, pursuant to the terms of the Exchange Offer and the Company’s 2014 Share Incentive Plan, as amended by our Amended and Restated 2019 Share Incentive Plan (together, the “Plan”).

Added

Marom’s compensation package, effective as of September 1, 2023: Monthly base salary of NIS 50,000 and beginning from November 16, 2023 a monthly base salary of NIS 55,000 (approximately an annual amount of NIS 647,500); Target Annual Bonus up to three (3) months of then current base salary based on achievements of the milestones, goals and targets to be set each year by the CEO and the Board and subject to Compensation Policy; 150,000 options to purchase Ordinary Sharers of the Company, at an exercise price based on the closing price of the Company on the last trading day prior to the date of the Board approval, namely August 7, 2023, subject to standard terms in the company's Amended and Restated 2019 Share Incentive Plan and compliance with all applicable laws.

Removed

The exercise price per Ordinary Share of the New Options granted pursuant to the Exchange Offer is $4.675 ( NIS15.26 based on January 25, 2021 US$/NIS exchange rate of 1/3.265) (being the closing price per ADS of the Company, as reported on Nasdaq on January 25, 2021, the last day of trading prior to the approval of the Exchange Offer by our Board of Directors, divided by 2 to reflect the exercise price per Ordinary Share).

Added

The options are subject to our standard 4 year vesting period, with acceleration in the event of a change of control; Mr.

Added

Marom undertook not to compete with the products and services offered by the Company and not to do any interfering activities during the term of his employment and for 12 months of the date of termination of his employment for any reason.

Added

Legal Proceedings From time to time, we may become a party to legal proceedings and claims in the ordinary course of business. We are not currently a party to any significant active legal proceedings, subject to any disclosure set forth under “Item 4. Information on the Company – Business Overview – Legal Proceedings” is incorporated herein by reference.

Added

Export Sales For geographical breakdown of the Company’s sales, see Note 17 to the financial statements. Dividend Policy We have never declared or paid cash dividends to our shareholders. We do not have current plans to pay cash dividends in the near term. We currently intend to reinvest any future earnings, if any, in developing and expanding our business.

Added

Any future determination relating to our dividend policy will be at the discretion of our board of directors and will depend on a number of factors, including future earnings, if any, our financial condition, operating results, contractual restrictions, capital requirements, business prospects, applicable Israeli law and other factors our board of directors may deem relevant. B.

Added

Significant Changes Except as otherwise disclosed in this Annual Report, no significant change has occurred since December 31, 2023.

Other BWAY 10-K year-over-year comparisons

BWAY 10-K 2023 vs 2024