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

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

+379 added−360 removedSource: 20-F (2024-03-28) vs 20-F (2023-03-23)

Top changes in Rail Vision Ltd.'s 2023 20-F

379 paragraphs added · 360 removed · 254 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

82 edited+32 added−28 removed211 unchanged
Biggest changeRisks Related to Israeli Law and Our Incorporation, Location and Operations in Israel ● Provisions of Israeli law and our articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, even when the terms of such a transaction are favorable to us and our shareholders. ● Your rights and responsibilities as a holder of our securities are governed by Israeli law, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies. ● It may be difficult to enforce a judgment of a U.S. court against us and our officers and directors and the Israeli experts named in this Annual Report in Israel or the United States, to assert U.S. securities laws claims in Israel or to serve process on our officers and directors and these experts. ● Our headquarters, research and development and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel. ● Our operations may be disrupted as a result of the obligation of management or key personnel to perform military service. 3 Risks Related to Our Financial Condition and Capital Requirements We are a development-stage company and have a limited operating history on which to assess the prospects for our business, have incurred significant losses since the date of our inception, and anticipate that we will continue to incur significant losses until we are able to successfully commercialize our products.
Biggest changeRisks Related to Israeli Law and Our Incorporation, Location and Operations in Israel ● Our headquarters, research and development and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel. ● Provisions of Israeli law and our articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, even when the terms of such a transaction are favorable to us and our shareholders. ● Your rights and responsibilities as a holder of our securities are governed by Israeli law, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies. ● It may be difficult to enforce a judgment of a U.S. court against us and our officers and directors and the Israeli experts named in this Annual Report in Israel or the United States, to assert U.S. securities laws claims in Israel or to serve process on our officers and directors and these experts. ● Our operations may be disrupted as a result of the obligation of management or key personnel to perform military service. 3 Risks Related to Our Financial Condition and Capital Requirements We are a development-stage company and have a limited operating history on which to assess the prospects for our business, have incurred significant losses since the date of our inception, and anticipate that we will continue to incur significant losses until we are able to successfully commercialize our products.
We do not intend to notify U.S. taxpayers that hold our ordinary shares if we believe we will be treated as a PFIC for any taxable year in order to enable U.S. taxpayers to consider whether to make a QEF election.
We do not intend to notify U.S. taxpayers that hold our ordinary shares if we believe we will be treated as a PFIC for any taxable year in order to enable U.S. taxpayers to consider whether to make a QEF election. U.S.
Fluctuations in our operating results and financial condition may be due to a number of factors, including those listed below: ● the degree of market acceptance of our products and services; ● the mix of products and services that we sell during any period; ● long sale cycles; ● changes in the amount that we spend to develop, acquire or license new products, technologies or businesses; ● changes in the amounts that we spend to promote our products and services; ● changes in the cost of satisfying our warranty obligations and servicing our installed base of systems; 7 ● delays between our expenditures to develop and market new or enhanced systems and the generation of sales from those products; ● development of new competitive products and services by others; ● difficulty in predicting sales patterns and reorder rates; ● litigation or threats of litigation, including intellectual property claims by third parties; ● changes in accounting rules and tax laws; ● changes in regulations and standards; ● the geographic distribution of our sales; ● our responses to price competition; ● general economic and industry conditions that affect end-user demand and end-user levels of product design and manufacturing; ● changes in interest rates that affect returns on our cash balances and short-term investments; ● changes in dollar-NIS exchange rates that affect the value of our net assets, future revenues and expenditures from and/or relating to our activities carried out in those currencies; ● the level of research and development activities by our company; and ● changes in end-use/end-user governmental regulation policy.
Fluctuations in our operating results and financial condition may be due to a number of factors, including those listed below: ● the degree of market acceptance of our products and services; ● the mix of products and services that we sell during any period; ● long sale cycles; ● changes in the amount that we spend to develop, acquire or license new products, technologies or businesses; ● changes in the amounts that we spend to promote our products and services; ● changes in the cost of satisfying our warranty obligations and servicing our installed base of systems; ● delays between our expenditures to develop and market new or enhanced systems and the generation of sales from those products; ● development of new competitive products and services by others; ● difficulty in predicting sales patterns and reorder rates; ● litigation or threats of litigation, including intellectual property claims by third parties; ● changes in accounting rules and tax laws; ● changes in regulations and standards; ● the geographic distribution of our sales; ● our responses to price competition; ● general economic and industry conditions that affect end-user demand and end-user levels of product design and manufacturing; ● changes in interest rates that affect returns on our cash balances and short-term investments; ● changes in dollar-NIS exchange rates that affect the value of our net assets, future revenues and expenditures from and/or relating to our activities carried out in those currencies; ● the level of research and development activities by our company; and ● changes in end-use/end-user governmental regulation policy.
Any potential acquisition or strategic partnership may entail numerous risks, including: ● increased operating expenses and cash requirements; ● the assumption of additional indebtedness or contingent liabilities; ● the issuance of our equity securities; ● assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; ● the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition; ● retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; ● risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and ● our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
Any potential acquisition or strategic partnership may entail numerous risks, including: ● increased operating expenses and cash requirements; ● the assumption of additional indebtedness or contingent liabilities; ● the issuance of our equity securities; ● assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; ● the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition; ● retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; ● risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and ● our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs. 25
Our reliance on a single or limited number of vendors involves a number of risks, including: ● potential shortages of some key components; ● product performance shortfalls, if traceable to particular product components, since the supplier of the faulty component cannot readily be replaced; ● discontinuation of a product on which we rely; 8 ● potential delays of several months in the delivery of components in the event a replacement product is sought; ● potential insolvency of these vendors; and ● reduced control over delivery schedules, manufacturing capabilities, quality and costs.
Our reliance on a single or limited number of vendors involves a number of risks, including: ● potential shortages of some key components; ● product performance shortfalls, if traceable to particular product components, since the supplier of the faulty component cannot readily be replaced; ● discontinuation of a product on which we rely; ● potential delays of several months in the delivery of components in the event a replacement product is sought; ● potential insolvency of these vendors; and ● reduced control over delivery schedules, manufacturing capabilities, quality and costs.
Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business. Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents.
Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business. 15 Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents.
Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation. There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters.
Environmental, social and corporate governance, or ESG, issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation. There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters.
There can be no assurance that our effective tax rates, tax payments, tax credits, or incentives will not be adversely affected by changes in tax laws in various jurisdictions. 10 We may not be able to successfully manage our planned growth and expansion. We expect to continue to make investments in our products in development.
There can be no assurance that our effective tax rates, tax payments, tax credits, or incentives will not be adversely affected by changes in tax laws in various jurisdictions. We may not be able to successfully manage our planned growth and expansion. We expect to continue to make investments in our products in development.
Due to all of the foregoing factors, and the other risks discussed herein, you should not rely on quarter to quarter and year to year comparisons of our operating results as an indicator of our future performance. The markets in which we participate are competitive.
Due to all of the foregoing factors, and the other risks discussed herein, you should not rely on quarter to quarter and year to year comparisons of our operating results as an indicator of our future performance. 7 The markets in which we participate are competitive.
Many countries around the world, including Israel and the United States, implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and the movement of people, and other material limitations on the conduct of business.
Many countries around the world, including in Israel and the United States, implemented significant governmental measures to control the spread of the virus, including temporary closure of businesses, severe restrictions on travel and the movement of people, and other material limitations on the conduct of business.
If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our ordinary shares. We may be subject to claims challenging the inventorship of our intellectual property.
If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our ordinary shares. 16 We may be subject to claims challenging the inventorship of our intellectual property.
As a result, these directors may face real or apparent conflicts of interest with respect to matters affecting both us and Knorr-Bremse or Foresight, whose interests may be adverse to ours in certain circumstances.
As a result, these directors may face real or apparent conflicts of interest with respect to matters affecting both us and Knorr-Bremse, whose interests may be adverse to ours in certain circumstances.
If we cannot obtain and maintain effective patent rights for our products, we may not be able to compete effectively, and our business and results of operations would be harmed. If we are unable to maintain effective proprietary rights for our products, we may not be able to compete effectively in our markets.
If we cannot obtain and maintain effective patent rights for our products, we may not be able to compete effectively, and our business and results of operations would be harmed. 14 If we are unable to maintain effective proprietary rights for our products, we may not be able to compete effectively in our markets.
Additionally, the absence of a significant number of the employees of our Israeli suppliers and contractors related to military service or the absence for extended periods of one or more of their key employees for military service may disrupt their operations. 20 General Risk Factors We incur significant additional costs as a result of being a public company subject to SEC reporting requirements in the United States, and our management is required to devote substantial additional time to new compliance initiatives as well as to compliance with ongoing United States reporting requirements.
Additionally, the absence of a significant number of the employees of our Israeli suppliers and contractors related to military service or the absence for extended periods of one or more of their key employees for military service may disrupt their operations. 24 General Risk Factors We incur significant additional costs as a result of being a public company subject to SEC reporting requirements in the United States, and our management is required to devote substantial additional time to new compliance initiatives as well as to compliance with ongoing United States reporting requirements.
Our employees and consultants in Israel, including members of our senior management, may be obligated to perform one month, and in some cases longer periods, of military reserve duty until they reach the age of 40 (or older, for citizens who hold certain positions in the Israeli armed forces reserves) and, in the event of a military conflict or emergency circumstances, may be called to immediate and unlimited active duty.
Our employees and consultants in Israel, including members of our senior management, may be obligated to perform one month, and in some cases longer periods, of military reserve duty until they reach the age of 45 (or older, for citizens who hold certain positions in the Israeli armed forces reserves) and, in the event of a military conflict or emergency circumstances, may be called to immediate and unlimited active duty.
We will be treated as a PFIC for U.S. federal income tax purposes in any taxable year in which either (1) at least 75% of our gross income is “passive income” or (2) on average at least 50% of our assets by value produce passive income or are held for the production of passive income.
Generally, we will be treated as a PFIC for U.S. federal income tax purposes in any taxable year in which either (1) at least 75% of our gross income is “passive income” or (2) on quarterly average at least 50% of our assets by value produce passive income or are held for the production of passive income.
Based on the projected composition of our income and valuation of our assets, we may have been a PFIC during 2022, and although we have not determined whether we will be a PFIC in 2023, or in any subsequent year, our operating results for any such years may cause us to be a PFIC.
Based on the projected composition of our income and valuation of our assets, we may have been a PFIC during 2023, and although we have not determined whether we will be a PFIC in 2024, or in any subsequent year, our operating results for any such years may cause us to be a PFIC.
Federal Income Tax Considerations—Passive Foreign Investment Companies” for additional information. 16 If a United States person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.
Federal Income Tax Considerations — Passive Foreign Investment Companies” for additional information. 19 If a United States person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.
If we are unable to protect the confidentiality of our trade secrets or know-how, such proprietary information may be used by others to compete against us, affecting our ability to compete. ● We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful and we may be subject to claims challenging the inventorship of our intellectual property, and we may not be able to protect our intellectual property rights throughout the world. 2 Risks Related to the Ownership of Our Securities ● Our principal shareholders, officers and directors beneficially own approximately 64.0% of our ordinary shares.
If we are unable to protect the confidentiality of our trade secrets or know-how, such proprietary information may be used by others to compete against us, affecting our ability to compete. ● We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful and we may be subject to claims challenging the inventorship of our intellectual property, and we may not be able to protect our intellectual property rights throughout the world. 2 Risks Related to the Ownership of Our Securities ● Our principal shareholders, officers and directors beneficially own approximately 13.8% of our ordinary shares.
Additionally, increases in inflation, along with the uncertainties surrounding COVID-19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing.
Additionally, increases in inflation, along with the uncertainties surrounding any resurgence of COVID-19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing.
Additionally, we are subject to data ownership and privacy regulations which may expose us to lawsuits and sanctions for violations. ● We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations. ● Certain events, developments, or social media posts and interactions may impact our reputation. ● Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk. ● Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.
Additionally, we are subject to data ownership and privacy regulations which may expose us to lawsuits and sanctions for violations. ● We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations. ● Any resurgence of the COVID-19 pandemic could adversely affect our business, financial condition and results of operations. ● Certain events, developments, or social media posts and interactions may impact our reputation. ● Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk. ● Environmental, social and corporate governance (ESG) issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.
U.S. taxpayers that have held our ordinary shares during a period when we were a PFIC will be subject to the foregoing rules, even if we cease to be a PFIC in subsequent years, subject to exceptions for U.S. taxpayer who made a timely QEF or mark-to-market election.
Holders that have held our ordinary shares during a period when we were a PFIC will be subject to the foregoing rules, even if we cease to be a PFIC in subsequent years, subject to exceptions for U.S. Holders who made a timely QEF or mark-to-market election.
An individual that is a United States shareholder with respect to a CFC generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation.
An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation.
Defects in products could give rise to product returns or product liability, warranty or other claims that could result in material expenses, diversion of management time and attention, and damage to our reputation. ● Our business may be adversely affected by changes in railway safety regulations. ● Our business may be subject to risks arising from the COVID-19 pandemic which has had an impact our business. ● Under applicable employment laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees. ● The markets in which we participate are competitive and our failure to compete successfully could cause any future revenues and the demand for our products not to materialize or to decline over time. ● If our relationships with suppliers for our products and services, especially with single source suppliers of components of our products, were to terminate or our manufacturing arrangements were to be disrupted, our business could be interrupted. ● Our planned international operations will expose us to additional market and operational risks, and failure to manage these risks may adversely affect our business and operating results. ● Significant disruptions of our information technology systems or breaches of our data security could adversely affect our business.
Defects in products could give rise to product returns or product liability, warranty or other claims that could result in material expenses, diversion of management time and attention, and damage to our reputation. ● Our business may be adversely affected by changes in railway safety regulations. ● Under applicable employment laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees. ● The markets in which we participate are competitive and our failure to compete successfully could cause any future revenues and the demand for our products not to materialize or to decline over time. ● If our relationships with suppliers for our products and services, especially with single source suppliers of components of our products, were to terminate or our manufacturing arrangements were to be disrupted, our business could be interrupted. ● Our planned international operations will expose us to additional market and operational risks, and failure to manage these risks may adversely affect our business and operating results. ● Significant disruptions of our information technology systems or breaches of our data security could adversely affect our business.
Our principal shareholders, officers and directors beneficially own approximately 64% of our ordinary shares. This significant concentration of share ownership may adversely affect the trading price for our ordinary shares because investors often perceive disadvantages in owning shares in companies with controlling shareholders.
Our principal shareholders, officers and directors beneficially own approximately 13.8% of our ordinary shares. This significant concentration of share ownership may adversely affect the trading price for our ordinary shares because investors often perceive disadvantages in owning shares in companies with controlling shareholders.
We have a growing portfolio of six patents registered in the USA; two patent registered in China; one patent registered from the European Patent Office (EPO) and being validated in Germany, Switzerland, Hungary, Austria, Denmark, France and Great Britain; two patent issued in Japan; 24 pending patent applications, of which two are US provisional patent applications and 21 are national phase patent applications filed in the USA, EPO, China, Japan and India under the provisions of the Patent Cooperation Treaty (PCT) through World Intellectual Property Organization (WIPO); and one of which is a patent application in Hong Kong and requested based on the Chinese national phase patent application.
We have a growing portfolio of seven patents registered in the USA; four patent registered in China; one patent registered from the European Patent Office (EPO) and being validated in Germany, Switzerland, Hungary, Austria, Denmark, France and Great Britain; two patent issued in Japan; 17 pending patent applications, of which two are US provisional patent applications and 14 are national phase patent applications filed in the USA, EPO, China, Japan and India under the provisions of the Patent Cooperation Treaty (PCT) through World Intellectual Property Organization (WIPO); and one of which is a patent application in Hong Kong and requested based on the Chinese national phase patent application.
We intend to take advantage of these exemptions until we are no longer an “emerging growth company.” We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement under the Securities Act, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
We intend to take advantage of these exemptions until we are no longer an “emerging growth company.” We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement under the Securities Act, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. 18 We cannot predict if investors will find our ordinary shares less attractive because we may rely on these exemptions.
Accordingly, our efforts to monitor and enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. 14 Risks Related to the Ownership of Our Securities Our principal shareholders, officers and directors beneficially own approximately 64% of our outstanding ordinary shares.
Accordingly, our efforts to monitor and enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. 17 Risks Related to the Ownership of Our Securities Our principal shareholders, officers and directors beneficially own approximately 13.8% of our outstanding ordinary shares.
Competitors may infringe our intellectual property. If we were to initiate legal proceedings against a third party to enforce a patent covering one of our products, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
If we were to initiate legal proceedings against a third party to enforce a patent covering one of our products, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
Parties with whom we do business may sometimes decline to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary in order to meet our business partners face to face.
Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary in order to meet our business partners face to face.
Accordingly, we will face significant operational risks from doing business internationally, including: ● having to ship and/or manufacture overseas; ● cultural barriers sustained by conducting business activity in foreign countries; ● fluctuations in foreign currency exchange rates; ● potentially longer sales and payment cycles; ● potentially greater difficulties in collecting accounts receivable; ● potentially adverse tax consequences; ● reduced protection of intellectual property rights in certain countries, particularly in Asia and South America; ● difficulties in staffing and managing foreign operations; ● laws and business practices favoring local competition; ● costs and difficulties of customizing products for foreign countries; ● compliance with a wide variety of complex foreign laws, treaties and regulations; ● tariffs, trade barriers and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets; and ● being subject to the laws, regulations and the court systems of many jurisdictions. 9 Our failure to manage the market and operational risks associated with our international operations effectively could limit the future growth of our business and adversely affect our operating results.
Accordingly, we will face significant operational risks from doing business internationally, including: ● having to ship and/or manufacture overseas; ● cultural barriers sustained by conducting business activity in foreign countries; ● fluctuations in foreign currency exchange rates; ● potentially longer sales and payment cycles; ● potentially greater difficulties in collecting accounts receivable; ● potentially adverse tax consequences; ● reduced protection of intellectual property rights in certain countries, particularly in Asia and South America; ● difficulties in staffing and managing foreign operations; ● laws and business practices favoring local competition; ● costs and difficulties of customizing products for foreign countries; ● compliance with a wide variety of complex foreign laws, treaties and regulations; ● tariffs, trade barriers and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets; and ● being subject to the laws, regulations and the court systems of many jurisdictions.
In addition, pursuant to our amended and restated articles of association, shareholders are entitled to appoint a director to our board of directors for each 10% of our outstanding share capital that they own and in such case the appointment will be for an undefined period.
Pure Capital Ltd., or Pure Capital, and appointed by our board of directors. Pursuant to our amended and restated articles of association, shareholders are entitled to appoint a director to our board of directors for each 10% of our outstanding share capital that they own and in such case the appointment will be for an undefined period.
Failure to comply with these reporting obligations may subject a United States shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such shareholder’s U.S. federal income tax return for the year for which reporting was due from starting.
A failure to comply with these reporting obligations may subject you to significant monetary penalties and may prevent the statute of limitations with respect to your U.S. federal income tax return for the year for which reporting was due from starting.
U.S. taxpayers that hold our ordinary shares are strongly urged to consult their tax advisors about the PFIC rules, including tax return filing requirements and the eligibility, manner, and consequences to them of making a QEF or mark-to-market election with respect to our ordinary shares in the event that we are a PFIC. See “Taxation—U.S.
Holders that hold our ordinary shares are strongly urged to consult their tax advisors about the PFIC rules, including tax return filing requirements and the eligibility, manner, and consequences to them of making a QEF or mark-to-market election with respect to our ordinary shares in the event that we are a PFIC. See “Item 10.E —Taxation — Certain Material U.S.
In addition, if the U.S. Internal Revenue Service, or the IRS, determines that we are a PFIC for a year with respect to which we have determined that we were not a PFIC, it may be too late for a U.S. taxpayer to make a timely QEF or mark-to-market election.
Holders with the information necessary to make a QEF Election. In addition, if the IRS determines that we are a PFIC for a year with respect to which we have determined that we were not a PFIC, it may be too late for a U.S. Holder to make a timely QEF or mark-to-market election. U.S.
If a United States person is treated as owning (directly, indirectly, or constructively) at least 10% of the value or voting power of our ordinary shares, such person may be treated as a “United States shareholder” with respect to each controlled foreign corporation, or CFC.
If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our ordinary shares, such person may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our group (if any).
A United States shareholder of a CFC may be required to report annually and include in its U.S. taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income,” and investments in U.S. property by CFCs, regardless of whether we make any distributions, and may be subject to tax reporting obligations.
A United States shareholder of a controlled foreign corporation may be required to annually report and include in its U.S. taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income” and investments in U.S. property by controlled foreign corporations, whether or not we make any distributions, and may be subject to tax reporting obligations.
Risks Related to Israeli Law and Our Incorporation, Location and Operations in Israel We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations. Our functional and reporting currency is the U.S. dollar.
We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and results of operations. Our functional and reporting currency is the U.S. dollar.
In addition, our trade secrets and intellectual property may otherwise become known or be independently discovered by competitors. 12 We cannot provide any assurances that our trade secrets and other confidential proprietary information will not be disclosed in violation of our confidentiality agreements or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
We cannot provide any assurances that our trade secrets and other confidential proprietary information will not be disclosed in violation of our confidentiality agreements or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our Company, we may become subject to penalties, and customers and consumers may choose to stop purchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition. 11 Risks Related to Our Intellectual Property If we are unable to obtain and maintain effective patent rights for our products, we may not be able to compete effectively in our markets.
The SEC’s climate disclosure rules, if they withstand litigation challenges, would require us to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our Company, we may become subject to penalties, and customers and consumers may choose to stop purchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition. 13 Risks Related to Our Intellectual Property If we are unable to obtain and maintain effective patent rights for our products, we may not be able to compete effectively in our markets.
Furthermore, the shareholders, including those who indicated their acceptance of the tender offer, may, at any time within six months following the completion of the tender offer, claim that the consideration for the acquisition of the shares does not reflect their fair market value, and petition an Israeli court to alter the consideration for the acquisition accordingly, unless the acquirer stipulated in its tender offer that a shareholder that accepts the offer may not seek such appraisal rights, and the acquirer or the company published all required information with respect to the tender offer prior to the tender offer’s response date.
Furthermore, the shareholders, including those who indicated their acceptance of the tender offer, may, at any time within six months following the completion of the tender offer, claim that the consideration for the acquisition of the shares does not reflect their fair market value, and petition an Israeli court to alter the consideration for the acquisition accordingly, unless the acquirer stipulated in its tender offer that a shareholder that accepts the offer may not seek such appraisal rights, and the acquirer or the company published all required information with respect to the tender offer prior to the tender offer’s response date. 23 Israeli tax considerations also may make potential transactions unappealing to us or to our shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax.
We are a development-stage company with a limited operating history. We have incurred net losses since our inception in 2016, including net losses of approximately $10.5 million for the year ended December 31, 2022. As of December 31, 2022, we had an accumulated deficit of approximately $54.8 million.
We are a development-stage company with a limited operating history. We have incurred net losses since our inception in 2016, including net losses of approximately $11.1 million for the year ended December 31, 2023. As of December 31, 2023, we had an accumulated deficit of approximately $66.0 million.
We cannot provide any assurances that we will assist investors in determining whether we are treated as CFC or whether any investor is treated as a United States shareholder with respect to CFC or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations.
We cannot provide any assurances that we will assist any shareholder in determining whether such shareholder is treated as a United States shareholder with respect to any “controlled foreign corporation” in our group (if any) or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations.
As a company incorporated under the law of the State of Israel, we are subject to Israeli law. Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to such types of transactions.
Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to such types of transactions.
Our business and operations might be adversely affected by security breaches, including any cybersecurity incidents. We depend on the efficient and uninterrupted operation of our computer and communications systems, and those of our consultants, contractors and vendors, which we use for, among other things, sensitive company data, including our intellectual property, financial data and other proprietary business information.
We depend on the efficient and uninterrupted operation of our computer and communications systems, and those of our consultants, contractors and vendors, which we use for, among other things, sensitive company data, including our intellectual property, financial data and other proprietary business information.
The market price of our ordinary shares and warrants is likely to be volatile. This volatility may prevent you from being able to sell your ordinary shares or warrants at or above the price you paid for your securities.
This volatility may prevent you from being able to sell your ordinary shares or warrants at or above the price you paid for your securities.
See “Directors, Senior Management and Employees—Board Practices—Duties of Shareholders” for additional information.
See “Item 6.C.—Directors, Senior Management and Employees—Board Practices—Duties of Shareholders” for additional information.
While we do not have any business relationships with SVB or Signature Bank, our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions.
Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions.
In general, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents, all of which could have a material adverse effect on our business and financial condition. 13 We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful.
In general, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents, all of which could have a material adverse effect on our business and financial condition.
Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring Arab countries, the Hamas (an Islamist militia and political group that controls the Gaza strip) and the Hezbollah (an Islamist militia and political group based in Lebanon).
Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred between Israel and its neighboring countries and terrorist organizations active in the region, including Hamas (an Islamist militia and political group in the Gaza Strip) and Hezbollah (an Islamist militia and political group in Lebanon).
Raising additional capital would cause dilution to our existing shareholders, and may affect the rights of existing shareholders. ● The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. 1 Risks Related to Our Business and Industry ● We depend entirely on the success of our current products in development, we may not be able to successfully introduce these products and commercialize them, and we may not be able to successfully manage our planned growth, and our operating results and financial condition may fluctuate.
Raising additional capital would cause dilution to our existing shareholders, and may affect the rights of existing shareholders. 1 Risks Related to Our Business and Industry ● We depend entirely on the success of our current products in development, we may not be able to successfully introduce these products and commercialize them, and we may not be able to successfully manage our planned growth, and our operating results and financial condition may fluctuate.
Accordingly, there can be no assurance that we currently are not or will not become a PFIC in the future. If we are a PFIC in any taxable year during which a U.S. taxpayer holds our ordinary shares, such U.S. taxpayer would be subject to certain adverse U.S. federal income tax rules.
Accordingly, there can be no assurance that we currently are not or will not become a PFIC in the future. If we are a PFIC in any taxable year during which a U.S. Holder (as defined below) holds our ordinary shares, such U.S.
Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions, could harm our results of operations and the market price of our securities, and could make it more difficult for us to raise capital.
Any hostilities, armed conflicts, terrorist activities involving Israel or the interruption or curtailment of trade between Israel and its trading partners, or any political instability in the region could adversely affect business conditions and our results of operations and could make it more difficult for us to raise capital and could adversely affect the market price of our ordinary shares.
If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares, and our market prices may be more volatile and may decline. 15 As a “foreign private issuer” we are permitted, and intend, to follow certain home country corporate governance practices instead of otherwise applicable SEC and Nasdaq requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.
As a “foreign private issuer” we are permitted, and intend, to follow certain home country corporate governance practices instead of otherwise applicable SEC and Nasdaq requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.
We may be subject to securities litigation, which is expensive and could divert management attention. In the past, companies that have experienced volatility in the market price of their shares have been subject to securities class action litigation. We may be the target of this type of litigation in the future.
In the past, companies that have experienced volatility in the market price of their shares have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business.
During such a long period, there is a risk that some of the system components of our products will become obsolete and will not be available from our suppliers. Therefore, there is a risk that we will be obliged to hold an inventory of components that may become obsolete, or be forced to locate or develop alternatives to such components.
During such a long period, there is a risk that some of the system components of our products will become obsolete and will not be available from our suppliers.
To the extent that we raise additional capital through the issuance of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a holder of our ordinary shares.
To the extent that we raise additional capital through the issuance of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a holder of our ordinary shares. 5 Risks Related to Our Business and Industry We depend entirely on the success of our current products in development, and we may not be able to successfully introduce these products and commercialize them.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or the ordinary shares, our share price and trading volume could decline.
Broad market and industry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance, and we have little or no control over these factors. 20 If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or the ordinary shares, our share price and trading volume could decline.
Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities. The market price of our securities may be highly volatile, and you could lose all or part of your investment.
Any adverse determination in litigation could also subject us to significant liabilities. The market price of our securities may be highly volatile, and you could lose all or part of your investment. The market price of our ordinary shares and warrants is likely to be volatile.
In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our ordinary shares, regardless of our actual operating performance, and we have little or no control over these factors.
In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
If we are not able to predict market trends accurately, we may not benefit from such research and development activities, and our results of operations may suffer. Our future success depends in part on our ability to retain our executive officers and to attract, retain and motivate other qualified personnel.
If we are not able to predict market trends accurately, we may not benefit from such research and development activities, and our results of operations may suffer.
As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a U.S. or foreign court. 19 Our headquarters, research and development and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel.
As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a U.S. or foreign court. Our operations may be disrupted as a result of the obligation of management or key personnel to perform military service .
Following our home country corporate governance practices as opposed to the requirements that would otherwise apply to a U.S. company listed on the Nasdaq may provide less protection to investors than what would otherwise be accorded to investors under the listing rules of the Nasdaq applicable to domestic U.S. issuers.
Following our home country corporate governance practices as opposed to the requirements that would otherwise apply to a U.S. company listed on the Nasdaq may provide less protection to investors than what would otherwise be accorded to investors under the listing rules of the Nasdaq applicable to domestic U.S. issuers. 21 Risks Related to Israeli Law and Our Incorporation, Location and Operations in Israel Our headquarters, research and development and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel.
If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our ordinary shares or trading volume to decline. 17 As a “foreign private issuer,” we are permitted, and intend, to follow certain home country corporate governance practices instead of otherwise applicable SEC and Nasdaq Capital Market requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.
As a “foreign private issuer,” we are permitted, and intend, to follow certain home country corporate governance practices instead of otherwise applicable SEC and Nasdaq Capital Market requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.
If we cannot demonstrate that such interests will be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be diminished. Certain events, developments, or social media posts and interactions may impact our reputation.
If we cannot demonstrate that such interests will be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be diminished. 11 Any resurgence of the COVID-19 pandemic could adversely affect our business, financial condition and results of operations.
Our executive offices, corporate headquarters and research and development facilities are located in Israel. In addition, all of our officers and directors are residents of Israel. Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect our business.
Our executive office is located in Ra’anana, Israel. In addition, certain of our key employees, officers and directors are residents of Israel. Accordingly, political, economic and military conditions in the Middle East may affect our business directly.
We have devoted substantially all of our financial resources to develop our solutions. We have financed our operations primarily through the issuance of equity securities.
We have devoted substantially all of our financial resources to develop our solutions. We have financed our operations primarily through the issuance of equity securities and credit facility that we entered into in January 2024. See “Item 5. Operating and Financial Review and Prospects— B.
To date, foreign currency transaction gains and losses and exchange rate fluctuations have not been material to our financial statements, and we have not engaged in any foreign currency hedging transactions. 18 Provisions of Israeli law and our articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, even when the terms of such a transaction are favorable to us and our shareholders.
Provisions of Israeli law and our articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, even when the terms of such a transaction are favorable to us and our shareholders. As a company incorporated under the law of the State of Israel, we are subject to Israeli law.
We plan to engage third parties for clinical trials and/or to obtain necessary permits, licenses, patent registrations and other regulatory approvals, and we can be held liable for the corrupt or other illegal activities of our personnel, agents or partners, even if we do not explicitly authorize or have prior knowledge of such activities.
We plan to engage third parties for clinical trials and/or to obtain necessary permits, licenses, patent registrations and other regulatory approvals, and we can be held liable for the corrupt or other illegal activities of our personnel, agents or partners, even if we do not explicitly authorize or have prior knowledge of such activities. 10 Changes in U.S. and foreign tax laws could have a material adverse effect on our business, cash flow, results of operations or financial conditions We are subject to taxation in several countries, including the United States and Israel; changes in tax laws or challenges to our tax positions could adversely affect our business, results of operations, and financial condition.
Because of our reliance on all of these production facilities, a disruption at any of those facilities could materially damage our ability to supply our products to the marketplace in a timely manner. Depending on the cause of the disruption, we could also incur significant costs to remedy the disruption and resume product shipments.
We plan to assemble and test the systems that we sell at single facilities in various locations that are specifically dedicated to separate categories of systems. Because of our reliance on all of these production facilities, a disruption at any of those facilities could materially damage our ability to supply our products to the marketplace in a timely manner.
The amount of our future net losses will depend, in part, on completing the development of our products, the rate of our future expenditures and our ability to obtain funding through the issuance of our securities, strategic collaborations or grants. We expect to continue to incur significant losses until we are able to successfully commercialize our products.
Operating Results— Financing Activities— Execution of Credit Facility Agreement and Issuance of Warrant (January 2024)” for additional information. The amount of our future net losses will depend, in part, on completing the development of our products, the rate of our future expenditures and our ability to obtain funding through the issuance of our securities, strategic collaborations or grants.
Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk. Our business depends on the economic health of the global economies.
While we have remediated such material weaknesses, we cannot assure you that we have identified all material weaknesses or that there will not be additional material weaknesses or deficiencies that we will identify in the future. 12 Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk.
There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur.
A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows. There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur.
Additionally, we rely on third-party manufacturers for components of our products, and we do not have control over the facilities of these third-party manufacturers. Our planned international operations will expose us to additional market and operational risks, and failure to manage these risks may adversely affect our business and operating results.
Our planned international operations will expose us to additional market and operational risks, and failure to manage these risks may adversely affect our business and operating results. We expect to derive a substantial percentage of our sales from international markets.
We cannot assure you that we have been or will be at all times in complete compliance with such laws, regulations and permits. 6 Our business is subject to risks arising from the COVID-19 pandemic which has impacted and continues to impact our business. Public health epidemics or outbreaks could adversely impact our business.
We cannot assure you that we have been or will be at all times in complete compliance with such laws, regulations and permits. 6 Our operating results and financial condition may fluctuate.
Our insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East or for any resulting disruption in our operations.
However, the intensity and duration of Israel’s current war against Hamas is difficult to predict at this stage, as are such war’s economic implications on our business and operations and on Israel’s economy in general, and we continue to monitor the situation closely and examine the potential disruptions that could adversely affect our operations. 22 Our insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East or for any resulting disruption in our operations.
Such disruptions may be caused by, among other factors, earthquakes, fire, flood and other natural disasters. Accordingly, any such disruption could result in a material adverse effect on our revenue, results of operations and earnings, and could also potentially damage our reputation.
Accordingly, any such disruption could result in a material adverse effect on our revenue, results of operations and earnings, and could also potentially damage our reputation. Additionally, we rely on third-party manufacturers for components of our products, and we do not have control over the facilities of these third-party manufacturers.
The United States Internal Revenue Service has provided limited guidance on situations in which investors may rely on publicly available information to comply with their reporting and tax paying obligations with respect to CFCs. A United States investor should consult its advisors regarding the potential application of these rules to an investment in our ordinary shares.
A United States investor should consult its tax advisors regarding the potential application of these rules to its investment in our ordinary shares. We may be subject to securities litigation, which is expensive and could divert management attention.
While we have resumed normal operations at this point, it is not possible at this time to estimate the full impact that the COVID-19 pandemic could have on our operations, as the impact will depend on future developments, which are highly uncertain and cannot be predicted with confidence.
The extent to which COVID-19 impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak, and the actions that may be required to contain COVID-19 or treat its impact.
Discontinuation of operations at our and third-parties’ manufacturing sites could prevent us from timely filling customer orders and could lead to unforeseen costs for us. We plan to assemble and test the systems that we sell at single facilities in various locations that are specifically dedicated to separate categories of systems.
Therefore, there is a risk that we will be obliged to hold an inventory of components that may become obsolete, or be forced to locate or develop alternatives to such components. 8 Discontinuation of operations at our and third-parties’ manufacturing sites could prevent us from timely filling customer orders and could lead to unforeseen costs for us.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changePursuant to the agreement, we agreed to pay Israel Railways the following payments: (i) during the period from August 3, 2016 and until the earliest of (a) a period of 5 years from the date of our first commercial sale or (b) our initial public offering on April 4, 2022 or (c) a change of control (as defined in the agreement), Israel Railways will be entitled to a payment of royalties in the amount of 2.75% of our net sales, and (ii) during the period from August 3, 2016 until the earliest of: (a) our initial public offering on April 4, 2022 or (b) a change of control (as defined in the agreement) Israel Railways will be entitled to 1.5% of the total proceeds from an IPO or consideration, received by us or our shareholders, as a result of a change of control.
Biggest changeUnder the terms of the agreement, we undertook to fulfill certain functions for the development, marketing, distribution and sale of the system, and Israel Railways undertook to provide us with services and the means to perform tests and experiments, mainly in logistics and manpower, and to provide us with information on certain data that will be given at the discretion of Israel Railways. 37 Pursuant to the agreement, we agreed to pay Israel Railways the following payments: (i) during the period from August 3, 2016 and until the earliest of (a) a period of 5 years from the date of our first commercial sale or (b) our initial public offering on April 4, 2022 or (c) a change of control (as defined in the agreement), Israel Railways will be entitled to a payment of royalties in the amount of 2.75% of our net sales, and (ii) during the period from August 3, 2016 until the earliest of: (a) our initial public offering on April 4, 2022 or (b) a change of control (as defined in the agreement) Israel Railways will be entitled to 1.5% of the total proceeds from an IPO or consideration, received by us or our shareholders, as a result of a change of control.
Our railway detection system actively classifies objects by severity to determine if an alarm should be signaled to the train driver. These data collection and classification capabilities can be extended to further use-cases such as predictive maintenance and big-data analyses. We believe that our technology demonstrates capabilities and results that are better than existing solutions.
Our railway detection system actively classifies objects by severity to determine if an alarm should be signaled to the train driver. These data collection and classification capabilities can be extended to further use-cases such as predictive maintenance and big-data analyses. 27 We believe that our technology demonstrates capabilities and results that are better than existing solutions.
ALSTROM Holdings Shunting Yard The system is based on an array of day cameras with integrated AI. Advantages: 1. Alstom is a major player within the railways industry with high technological and financial capabilities 2. Partnering with ELTA (major player in Radar’s) Disadvantages: 1. NA We are not aware of a standardization process that this competitor has initiated.
ALSTOM Holdings Shunting Yard The system is based on an array of day cameras with integrated AI. Advantages: 1. Alstom is a major player within the railways industry with high technological and financial capabilities 2. Partnering with ELTA (major player in Radar’s) Disadvantages: 1. NA We are not aware of a standardization process that this competitor has initiated.
Because global laws and regulations have continued to develop and evolve rapidly, it is possible that we may not be, or may not have been, compliant with each such applicable law or regulation. Intellectual Property We seek patent protection as well as other effective intellectual property rights for our products and technologies in the United States and internationally.
Because global laws and regulations have continued to develop and evolve rapidly, it is possible that we may not be, or may not have been, compliant with each such applicable law or regulation. 42 Intellectual Property We seek patent protection as well as other effective intellectual property rights for our products and technologies in the United States and internationally.
All of our employment and consulting agreements include employees’ and consultants’ undertakings with respect to non-competition and assignment to us of intellectual property rights developed in the course of employment and confidentiality. The enforceability of such provisions is subject to Israeli law. C. Organizational Structure We currently have no subsidiaries. D.
All of our employment and consulting agreements include employees’ and consultants’ undertakings with respect to non-competition and assignment to us of intellectual property rights developed in the course of employment and confidentiality. The enforceability of such provisions is subject to Israeli law. 43 C. Organizational Structure We currently have no subsidiaries. D.
These technologies aid in improving the overall operational efficiency and maintaining freight operations and systems. 22 Autonomous trains, also known as driverless trains, are operated automatically without any human intervention, and are monitored from the control station when communication is available.
These technologies aid in improving the overall operational efficiency and maintaining freight operations and systems. Autonomous trains, also known as driverless trains, are operated automatically without any human intervention, and are monitored from the control station when communication is available.
We see big data services as one of its most important growth engines in the next 3-5 years. 29 New Products and Applications We are currently exploring a number of additional railway detection system applications that are in various stages of research and development, as follows: Maintenance and predictive maintenance: customers who have installed Rail Vision Main line and Shunting yard systems for real time identification of objects, will have the option of receiving predictive track maintenance services, such as identification of vegetation invading the tracks, damage to infrastructures, sunk pylons, etc.
We see big data services as one of its most important growth engines in the next 3-5 years. 35 New Products and Applications We are currently exploring a number of additional railway detection system applications that are in various stages of research and development, as follows: Maintenance and predictive maintenance: customers who have installed Rail Vision Main line and Shunting yard systems for real time identification of objects, will have the option of receiving predictive track maintenance services, such as identification of vegetation invading the tracks, damage to infrastructures, sunk pylons, etc.
The RV200 system for the Shunting Yard The RV200 system used at the shunting yard is meant to streamline work in the operational areas of railways (shunting yards) which are used for the assembly, loading and unloading of freight trains.
The Shunting Yard System The Shunting Yard System used at the shunting yard is meant to streamline work in the operational areas of railways (shunting yards) which are used for the assembly, loading and unloading of freight trains.
The on-board computer system receives data from the external sensor unit and uses artificial intelligence to perform algorithmic calculations in real time to identify potential hazards for the train operator. 25 Our railway detection system is designed to discover and warn the train operator about hazards of up to 2,000 meters (1.2 miles) ahead of the train.
The on-board computer system receives data from the external sensor unit and uses artificial intelligence to perform algorithmic calculations in real time to identify potential hazards for the train operator. 30 Our railway detection system is designed to discover and warn the train operator about hazards of up to 2,000 meters (1.2 miles) ahead of the train.
As the installation of such a system requires standardization, it can be assumed that Bosch has the standard required to install such a system in the cities where the system is installed. 33 Shunting Yard Name Segment Product & Features Competitive Analysis Homologation OTIV Shunting Yard The system is based on an array of day cameras with integrated AI.
As the installation of such a system requires standardization, it can be assumed that Bosch has the standard required to install such a system in the cities where the system is installed. 40 Shunting Yard Name Segment Product & Features Competitive Analysis Homologation OTIV Shunting Yard The system is based on an array of day cameras with integrated AI.
Other technologies such as radar are sensitive to the presence of metallic objects (such as screws, springs and other metallic objects etc.) which are often found on or near railway tracks. 32 We believe the following table gives representative details of various solutions currently available on the market in the field of identifying obstacles on railway tracks.
Other technologies such as radar are sensitive to the presence of metallic objects (such as screws, springs and other metallic objects etc.) which are often found on or near railway tracks. 39 We believe the following table gives representative details of various solutions currently available on the market in the field of identifying obstacles on railway tracks.
We are not aware of a standardization process that this competitor has initiated. 34 Our competitive approach is in developing a unique know-how, achieving an advantage and differentiating our railway detection system technology by incorporating advanced technological solutions.
We are not aware of a standardization process that this competitor has initiated. 41 Our competitive approach is in developing a unique know-how, achieving an advantage and differentiating our railway detection system technology by incorporating advanced technological solutions.
Increasing the number of sales and marketing personnel will enable us to initiate and create additional opportunities while the sales and marketing personnel focus on and specialize in the territories that our strategy defines as most relevant. ● We are focused on the following markets: North America, Europe and Australia.
Increasing our sales and marketing efforts will enable us to initiate and create additional opportunities while the sales and marketing personnel focus on and specialize in the territories that our strategy defines as most relevant. ● We are focused on the following markets: North America, Europe and Australia.
Knorr-Bremse is a 110 year old multi-billion dollar market cap company traded on the Frankfurt Stock Exchange. With more than 30,000 employees at over 100 locations in more than 30 countries around the globe Knorr-Bremse is a world leader in braking & peripheral systems generating total of sales of EUR 6.7 billion in 2021.
Knorr-Bremse is a 110 year old multi-billion dollar market cap company traded on the Frankfurt Stock Exchange. With more than 30,000 employees at over 100 locations in more than 30 countries around the globe Knorr-Bremse is a world leader in braking & peripheral systems generating total of sales of EUR 7.1 billion in 2022.
We believe that railway companies will gradually implement autonomous trains. While a full transition to autonomous trains will require the development of additional technologies beyond those currently available, we believe that our obstacle detection technology has the potential to advance GoA 3 and GoA 4.
While a full transition to autonomous trains will require the development of additional technologies beyond those currently available, we believe that our obstacle detection technology has the potential to advance GoA 3 and GoA 4.
Our policy is to pursue, maintain and defend intellectual property rights developed internally and to protect the technology, inventions and improvements that are commercially important to the development of our business. We have eleven registered patents and 24 pending patent applications.
Our policy is to pursue, maintain and defend intellectual property rights developed internally and to protect the technology, inventions and improvements that are commercially important to the development of our business. We have 15 registered patents and 17 pending patent applications.
As one of our strategic investors, Knorr-Bremse has invested approximately $25 million in us.
As one of our strategic investors, Knorr-Bremse has invested approximately $28 million in us.
We have developed our railway detection and systems to save lives, increase efficiency, and dramatically reduce expenses for the railway operator. 21 We were incorporated under the laws of the State of Israel in April 2016. Our principal executive offices are located at 15 Hatidhar St. Ra’anana, 4366517 Israel. Our telephone number in Israel is +972-9-957-7706.
We have developed our railway detection and systems to save lives, increase efficiency, and dramatically reduce expenses for the railway operator. We were incorporated under the laws of the State of Israel in April 2016. Our principal executive offices are located at 15 Hatidhar St. Ra’anana, 4366517 Israel. Our telephone number in Israel is +972-9-957-7706. Our website address is http://www.railvision.io/.
The RV2000 railway detection system has been optimized to identify hazards at a distance more than 800 meters (0.5 miles) to provide the train operator with enough time to react to the hazard, and stop the train if necessary.
The Main Line System has been optimized to identify hazards at a distance more than 800 meters (0.5 miles) to provide the train operator with enough time to react to the hazard, and stop the train if necessary.
At the end of the term, we have the option to extend the lease for an additional five years. Our monthly rent payment is NIS 91,000 (approximately $26,000). In 2023, the monthly rent payments will increase to an average of NIS 92,000 (approximately $26,000), and in 2026, the monthly rent will increase to NIS 96,175 (approximately $27,000).
At the end of the term, we have the option to extend the lease for an additional five years. Our monthly rent payment is NIS 92,000 (approximately $25,000), and in 2026, the monthly rent will increase to NIS 96,175 (approximately $26,000).
ATO covers five Grades of Automation (GoA): - GoA 0 refers to a train with a human driver who exercises full control of the train – starting, stopping, opening and closing doors, and operation in emergencies. - GoA 1 refers to operation where the driver controls starting and stopping the train, operation of doors, emergencies and sudden deviations, with the assistance of ATP systems. - GoA 2 refers to semi-automatic operation, where stopping is automatic, but the driver starts the train, operates the doors, and drives the train in emergencies. 24 - GoA 3 refers to operation without a driver, where starting and stopping is automatic, but the controller operates the doors and drives the train in emergencies. - GoA 4 refers to train operation without supervision; starting, stopping, door operation and operation in emergencies is all automatic with no staff on the train.
ATO covers five Grades of Automation (GoA): - GoA 0 refers to a train with a human driver who exercises full control of the train – starting, stopping, opening and closing doors, and operation in emergencies. - GoA 1 refers to operation where the driver controls starting and stopping the train, operation of doors, emergencies and sudden deviations, with the assistance of ATP systems. - GoA 2 refers to semi-automatic operation, where stopping is automatic, but the driver starts the train, operates the doors, and drives the train in emergencies. - GoA 3 refers to operation without a driver, where starting and stopping is automatic, but the controller operates the doors and drives the train in emergencies. - GoA 4 refers to train operation without supervision; starting, stopping, door operation and operation in emergencies is all automatic with no staff on the train. 29 We believe that railway companies will gradually implement autonomous trains.
From time to time, we may become a party to litigation incident to the ordinary course of our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Legal proceedings We are not currently party to any pending material legal proceedings. From time to time, we may become a party to litigation incident to the ordinary course of our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Our advanced technology is designed to address this human deficiency. 23 Our railway detection system monitors the short and long-distance region of interest in front of the train, at an operational range of up to 2,000 meters (1.2 miles), which is longer than the braking distance of most trains.
Our railway detection system monitors the short and long-distance region of interest in front of the train, at an operational range of up to 2,000 meters (1.2 miles), which is longer than the braking distance of most trains.
Our website address is http://www.railvision.io/. Information contained on or accessible through our website is not a part of this Annual Report on Form 20-F, and the inclusion of our website address herein is an inactive textual reference only. Puglisi & Associates, or Puglisi, serves as our authorized representative in the United States for certain limited matters.
Information contained on or accessible through our website is not a part of this Annual Report on Form 20-F, and the inclusion of our website address herein is an inactive textual reference only. Puglisi & Associates, or Puglisi, serves as our authorized representative in the United States for certain limited matters. Puglisi’s address is 850 Library Avenue, Newark, Delaware 19711.
RTIO has 60 operations in 35 countries, has 47,500 employees and 2,000 customers. The RTIO fleet is autonomous and does not have the technical capability to foresee any obstacles or anomalies in front of the moving train. As such, RTIO is exploring solutions that can detect, alert and respond to an obstacle on the tracks.
The RTIO fleet is autonomous and does not have the technical capability to foresee any obstacles or anomalies in front of the moving train. As such, RTIO is exploring solutions that can detect, alert and respond to an obstacle on the tracks.
In addition, our railway detection system is currently in a pilot phase with several industry leading railway operators as we seek to move to the next stage of receiving commercial orders.
The customer is expected to start a long-term pilot soon after completing the installation. In addition, our railway detection system is currently in a pilot phase with several industry leading railway operators as we seek to move to the next stage of receiving commercial orders.
Locomotives for passenger and freight trains – Our strategic focus on this market segment derives from the fact that it includes the largest number of trains, and that the trains operating in this market segment are exposed to serious risks and the realistic probability for potentially fatal accidents.
The demonstration was successful, and we were asked to give an additional demonstration for the customer’s executives. 34 Locomotives for passenger and freight trains – Our strategic focus on this market segment derives from the fact that it includes the largest number of trains, and that the trains operating in this market segment are exposed to serious risks and the realistic probability for potentially fatal accidents.
Human operators, however, do not have the capacity to detect obstructions on the railway track, and halt a train within these braking distances.
Human operators, however, do not have the capacity to detect obstructions on the railway track, and halt a train within these braking distances. Our advanced technology is designed to address this human deficiency.
For more information, please see “Risks Related to our Intellectual Property.” In addition, we may be exposed to claims and/or suits regarding the use of proprietary rights of third parties who received approval for the registration of a patent in respect of an application which had already been filed when we made use of such rights. 35 Legal proceedings We are not currently party to any pending material legal proceedings.
For more information, please see “Item 3.D–Risk Factors—Risks Related to our Intellectual Property.” In addition, we may be exposed to claims and/or suits regarding the use of proprietary rights of third parties who received approval for the registration of a patent in respect of an application which had already been filed when we made use of such rights.
Apart from the expected contribution of our systems to increase the safety of train operations, our railway systems are also designed to help in predictive maintenance of railway infrastructure, due to the constant monitoring of the railway tracks by its sensors. As far as we know, this function does not exist in any competing systems.
Apart from the expected contribution of our systems to increase the safety of train operations, our railway systems are also designed to help in predictive maintenance of railway infrastructure, due to the constant monitoring of the railway tracks by its sensors.
Puglisi’s address is 850 Library Avenue, Newark, Delaware 19711. The 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. We use our website (http://www.railvision.io), LinkedIn (https://www.linkedin.com/company/rail-vision), , and Facebook (https://www.facebook.com/railvision.io) as channels of distribution of Company information.
The 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. We use our website (http://www.railvision.io), LinkedIn (https://www.linkedin.com/company/rail-vision), and Facebook (https://www.facebook.com/railvision.io) as channels of distribution of Company information. The information we post through this channel may be deemed material.
We intend to offer the Big Data applications as an added value to our system to be installed at the customer and not as a separate product. Commercial Agreements Israel Railways The Company has signed a contract with Israel Railways to supply 10 systems. The delivery is expected to start during Q4 2023.
We intend to offer the Big Data applications as an added value to our system to be installed at the customer and not as a separate product. Commercial Agreements Israel Railways On January 31, 2023, we signed a contract with Israel Railways to supply 10 systems. The initial deliveries started during the first quarter of 2023.
The Company believe that the first order for such system by a commercial operator will have an impact on the market. The total amount is approximately $1.40 million USD. Knorr-Bremse We have entered into a series of strategic and investment agreements with Knorr-Bremse or affiliates of Knorr-Bremse.
We believe that the first order for such system by a commercial operator will have an impact on the market. The total amount is approximately $1.40 million USD.
Our senior management, directors, and principal shareholders will be exempt from the requirements to report transactions in our equity securities and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private issuer, we will also not be subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. B.
Our senior management, directors, and principal shareholders will be exempt from the requirements to report transactions in our equity securities and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act.
Employees As of March 15, 2023, we have five senior management positions, all of whom are engaged on a full-time basis. In addition to our senior management, we have 60 employees in full or part-time capacities. All our employees are located in Israel. None of our employees are represented by labor unions or covered by collective bargaining agreements.
Employees As of March 28, 2024, we have five senior management positions, all of whom are engaged on a full-time basis. In addition to our senior management, we have 44 employees in full or part-time capacities. All our employees are located in Israel.
Our Solutions We develop solutions for a number of verticals in the railway market: 1. The RV2000 system for Main Line passenger and freight trains The RV2000 Main Line System is an application of our railway detection system for passengers and freight trains that travels in main line.
Our Solutions We develop solutions for a number of verticals in the railway market: 1. The Main Line System The Main Line System is an application of our railway detection system for passengers and freight trains that travels in main line. The system includes an external sensor unit installed on the train along with an on-board computer system (see below).
We believe that the market potential for our railway detection systems that are installed on the train is large and ever growing, as every single railway train or drivers’ cabin worldwide is a potential customer.
Generally, such railway detection systems fall into two main categories – those which are installed on the train (such as our railway detection system), and those that are fixed signaling systems installed as part of the stationary infrastructure. 28 We believe that the market potential for our railway detection systems that are installed on the train is large and ever growing, as every single railway train or drivers’ cabin worldwide is a potential customer.
The information we post through this channel may be deemed material. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. The contents of our website are not, however, a part of this Annual Report on Form 20-F.
Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. The contents of our website are not, however, a part of this Annual Report on Form 20-F. We are an emerging growth company, as defined in Section 2(a) of the Securities Act, as implemented under the JOBS Act.
We are now updating the system and working on the next version of the system. Following a long-term pilot with Israel Railways that was concluded in August 2022, in January 2023, we signed an agreement with Israel Railways for the purchase of 10 Rail Vision Main Line Systems. First delivery of the system is expected during Q4, 2023.
An advanced prototype of the Main Line System was completed and finalized its first field test phase with Israel Railways in March 2022. Following a long-term pilot with Israel Railways that was concluded in August 2022, in January 2023, we signed an agreement with Israel Railways for the purchase of 10 Rail Vision Main Line Systems.
We have developed our railway detection and systems to save lives, increase efficiency, and dramatically reduce expenses for the railway operator. Following a long-term pilot with Israel Railways that was concluded in August 2022, in January 2023, we signed an agreement with Israel Railways for the purchase of 10 Rail Vision Main Line Systems.
Following a long-term pilot with Israel Railways that was concluded in August 2022, in January 2023, we signed an agreement with Israel Railways for the purchase of 10 Rail Vision Main Line Systems, which installation started in February 2024.
To the best of our knowledge, several competing companies are developing systems to help drivers. Some derive from the world of trains, others from the wheeled vehicle industry. These companies adapt technologies from the vehicle industry for use with trains, for long distance identification of hazards, particularly in the LRV segment.
These companies adapt technologies from the vehicle industry for use with trains, for long distance identification of hazards, particularly in the LRV segment.
In addition to the transaction with SBBC, the Company has demonstrated the system to a Class I freight operator in the US. The demonstration was successful, and we were asked to give an additional demonstration for the customer’s executives.
In addition to the transaction with SBBC, the Company has demonstrated the system to a Class I freight operator in the US.
Business Overview Overview We are a development stage technology company that is seeking to revolutionize railway safety and the data-related market. We believe we have developed cutting edge, AI based, industry-leading detection technology specifically designed for railways, with investments from Knorr-Bremse, a world-class rail system manufacturer.
We believe we have developed cutting edge, AI based, industry-leading detection technology specifically designed for railways, with investments from Knorr-Bremse, a world-class rail system manufacturer. We have developed our railway detection and systems to save lives, increase efficiency, and dramatically reduce expenses for the railway operator.
In October 2020, we supplied a prototype of the RV200 system to Schweizerische Bundes Bahnen Cargo, or SBBC, for functional testing, which began in April 2021. As of the date of this Annual Report on Form 20-F, SBB (the mother company of SBB cargo) is planning to issue a tender for purchasing 9 systems for evaluation.
In October 2020, we supplied a prototype of the Shunting Yard System to Schweizerische Bundes Bahnen Cargo, or SBBC, for functional testing, which began in April 2021.
In addition, Israel Railways may terminate the agreement with 30 days prior written notice in the event of a change of control in us. The agreement was terminated and canceled by the parties on January 31, 2023. 31 Competition Many of our current and potential competitors have extensive track records and relationships within the rail industry and/or the automotive industry.
On January 25, 2023, Israel Railways provided notice of its exercise of the warrants, pursuant to which we issued 195,448 ordinary shares to Israel Railways. The agreement was terminated in January 2023. Competition Many of our current and potential competitors have extensive track records and relationships within the rail industry and/or the automotive industry.
It is important to detect the position of the switch because the switch selects the train’s continued direction from the main track line on which the train is currently riding to another rail. An advanced prototype of the RV2000 system was completed and finalized its first field test phase with Israel Railways in March 2022.
It is important to detect the position of the switch because the switch selects the train’s continued direction from the main track line on which the train is currently riding to another rail. 31 We have completed a homologation process of a driver assistance system on trains in a use-case of Main line (SIL-0 according to EN50126).
The potential sales opportunity with Israel Railways for our RV2000 system to be installed on up to 200 trains and assuming we can negotiate bidirectional installation, the potential sale opportunity could be doubled to install up to 400 RV2000 systems on up to 200 trains. 26 Rio Tinto Iron Ore, or RTIO, the world’s second-largest metals and mining corporation has engaged us to work on part of its AutoHaul autonomous train to improve train safety.
The first deliveries of the systems was completed in the first quarter of 2024. The potential sales opportunity with Israel Railways for our Main Line System is for installations on up to 200 trains, and assuming we can negotiate bidirectional installation, the potential sale opportunity could be doubled to install up to 400 RV2000 systems on up to 200 trains.
(a governmental company fully owned by the State of Israel), which was further amended on January 19, 2020.
The term of the agreement will expire three years after the date of the agreement, or August 19, 2024. Collaboration Agreement with Israel Railways On August 3, 2016, we entered into a Cooperation Agreement with Israel Railways Ltd. (a governmental company fully owned by the State of Israel), which was further amended on January 19, 2020.
The Company will explore business opportunities and will base its decision of whether or not to allocate resources towards this product on a case by case basis. 28 Business and Marketing Strategy Our vision is to become a global leading developer and supplier of innovative railway detection technologies to the railway industry.
The freight rail company, which is one of the largest in North America, will install and use the system on its locomotive for evaluation and testing different scenarios related to safety. Business and Marketing Strategy Our vision is to become a global leading developer and supplier of innovative railway detection technologies to the railway industry.
Following a technical workshop with Rio Tinto that was performed in Nov. 2022, the Company expects to receive from Rio Tinto more detailed requirements for the next phase. Light Rail Vehicle (LRV) – As of the date of this Annual Report on Form 20-F, the Company does not allocate its efforts or resources within this segment.
Following a technical workshop with Rio Tinto that was performed in Nov. 2022, the Company expects to receive from Rio Tinto more detailed requirements for the next phase. Our strategic focus is reflected in our marketing strategy: ● We plan to increase our marketing and sales efforts to reach more potential customers.
As of the date of this Annual Report on Form 20-F, SBB (the mother company of SBB cargo) is planning to issue a tender for purchasing 9 systems for evaluation. Upon successful trial, the Company estimates that the total potential is above 100 systems.
As of the date of this Annual Report on Form 20-F, SBB (the mother company of SBB cargo) has cancelled the procurement process for the evaluation of the shunting yards system due to lack of resources.
Following the completion of the long-term pilot, the company submitted a summary report of the pilot. Following a technical workshop with Rio Tinto that was performed in Nov. 2022, Rio Tinto should send the company more detailed requirements for the next phase. 2.
Following the completion of the long-term pilot, the company submitted a summary report of the pilot. As of today, we have not received any formal response from Rio Tinto relating to the next phase.
Removed
We are an emerging growth company, as defined in Section 2(a) of the Securities Act, as implemented under the JOBS Act.
Added
As a foreign private issuer, we will also not be subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. 26 B. Business Overview Overview We are a development stage technology company that is seeking to revolutionize railway safety and the data-related market.
Removed
Generally, such railway detection systems fall into two main categories – those which are installed on the train (such as our railway detection system), and those that are fixed signaling systems installed as part of the stationary infrastructure.
Added
In addition, after a successful six-month long-term pilot with a US-based rail and leasing services company, in January 2024, we signed a supply contract with this customer valued at up to $5,000,000 (USD) for the purchase our AI-based Switch Yard Systems. The first phase of the contract is valued at $1,000,000 (USD).
Removed
The system includes an external sensor unit installed on the train along with an on-board computer system (see below).
Added
Follow-on orders for additional Switch Yard Systems, valued at up to $4,000,000, are subject to customer approval. Also, in October 2023, we received a $500,000 purchase order for a single Main Line System and related services from a leading Latin American mining company, which was delivered to the customer in December 2023.
Removed
For additional information, see “Business and Marketing Strategy” – “Locomotives for shunting yards,” below. 27 3. The Light Rail Vehicle (LRV RV100) system for light rail and subways Many cities utilize light railways and underground railways as part of the city’s public transportation system. Light railways in cities also intersect with travel environments used by vehicles and pedestrians alike.
Added
Rio Tinto Iron Ore, or RTIO, the world’s second-largest metals and mining corporation has engaged us to work on part of its AutoHaul autonomous train to improve train safety. RTIO has 60 operations in 35 countries, has 47,500 employees and 2,000 customers.
Removed
This hybrid use of a road by cars, trains and people, causes a greater risk of traffic safety incidents. As part of a cooperation with Knorr Bremse, the company developed a preliminary prototype, LRV RV100 system. As of the date of this Annual Report on Form 20-F, the Company does not allocate its efforts or resources within this segment.
Added
On October 17, 2023, we received a $500,000 purchase order for a single Main Line System and related services from a leading Latin American mining company, which was delivered to the customer during December 2023. 32 2.
Removed
The Company will explore business opportunities and will base its decision of whether or not to allocate resources within this segment on a case by case basis. 4. Maintenance, Predictive maintenance applications based on measurements and data collection Predictive maintenance as a feature in the current systems will be developed according to customer specific use-cases.
Added
In February 2023, a leading US-based rail and leasing services company purchased a Switch Yard System and evaluated its performance during a six-month trial that was completed in September 2023, for a total amount of $140,000 including technical support services, during the six-month trial.
Removed
The Company has developed a preliminary paid prototype for one customer thus far. As of the date of this Annual Report on Form 20-F, the Company does not allocate its efforts or resources towards this product.
Added
In January 2024, we signed a supply contract with this customer valued at up to $5,000,000 (USD) for the purchase our AI-based Switch Yard Systems. The first phase of the contract is valued at $1,000,000 (USD). Follow-on orders for additional Switch Yard Systems, valued at up to $4,000,000, are subject to customer approval.
Removed
The Company will explore business opportunities and will base its decision of whether or not to allocate resources within this segment on a case by case basis. Our strategic focus is reflected in our marketing strategy: ● We plan on increasing our marketing and sales department to reach more potential customers.
Added
The contract also includes specific purchase quotas that, if met, provide the customer with exclusivity in the North American industrial railyards switching segment. 33 In March 2024 we received an order for our Switch Yard System from a Class 1 freight rail company in the United States.
Removed
LRV System MOU As of the date of this Annual Report on Form 20-F, the Company does not allocate its efforts or resources within this segment.
Added
Latin American mining company In October 2023, we received a $500,000 purchase order for a single Main Line system and related services from a leading Latin American mining company, which was delivered to the new customer in December 2023.
Removed
The Company will explore business opportunities and will base its decision of whether or not to allocate resources within this segment on a case by case basis. 30 Strategic Partnership Agreement On August 19, 2021, we entered into a Strategic Partnership Agreement with Knorr-Bremse.
Added
US-based rail and leasing services company In January 2024, we signed a supply contract with a leading US-based rail and leasing services company valued at up to $5,000,000 (USD) for the purchase our AI-based Switch Yard Systems. The first phase of the contract is valued at $1,000,000 (USD).
Removed
The term of the agreement will expire three years after the date of the agreement, or August 19, 2024. Knorr-Bremse has been in the railway business for 110 years, as a world leader in braking and other system operations.
Added
Follow-on orders for additional Switch Yard Systems, valued at up to $4,000,000, are subject to customer approval. The contract also includes specific purchase quotas that, if met, provide the customer with exclusivity in the North American industrial railyards switching segment. 36 Knorr-Bremse We have entered into a series of strategic and investment agreements with Knorr-Bremse or affiliates of Knorr-Bremse.
Removed
Knorr-Bremse has a global presence with 30,000 employees at 100 sites in 30 countries and is trading on the Frankfurt Stock Exchange with sales totaling €6.7 billion in 2021. Collaboration Agreement with Israel Railways On August 3, 2016, we entered into a Cooperation Agreement with Israel Railways Ltd.
Added
As of the date of this Annual Report on Form 20-F, SBB (the mother company of SBB cargo) has cancelled the procurement process of for the evaluation evaluation of the shunting yards system due to lack of resources. Strategic Partnership Agreement On August 19, 2021, we entered into a Strategic Partnership Agreement with Knorr-Bremse.
Removed
Under the terms of the agreement, we undertook to fulfill certain functions for the development, marketing, distribution and sale of the system, and Israel Railways undertook to provide us with services and the means to perform tests and experiments, mainly in logistics and manpower, and to provide us with information on certain data that will be given at the discretion of Israel Railways.
Added
As far as we know, this function does not exist in any competing systems. 38 To the best of our knowledge, several competing companies are developing systems to help drivers. Some derive from the world of trains, others from the wheeled vehicle industry.
Removed
On January 25, 2023, Israel Railways provided notice of its exercise of the warrants, pursuant to which we issued 195,448 ordinary shares to Israel Railways. The agreement may be terminated by either party by providing a 60 days prior written notice.
Added
In December 2023, we took steps to lower our expenses through a targeted reduction in headcount of our employee base by 12 employees representing approximately 20% of our workforce. None of our employees are represented by labor unions or covered by collective bargaining agreements. We believe that we maintain good relations with all our employees.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

28 edited+37 added−18 removed12 unchanged
Biggest changeThe following table discloses the breakdown of general and administrative expenses: Year ended December 31, Year ended December 31, (in thousands of USD) 2022 2021 Payroll and related expenses 1,845 1,508 Share-based payment 323 411 Professional services 1,451 1,133 Travel expenses 115 48 Rent and office maintenance 118 130 Depreciation 20 11 Marketing and other 393 75 Total 4,265 3,316 Comparison of the Year Ended December 31, 2022, to the Year Ended December 31, 2021 Results of Operations December 31 December 31, (in thousands of USD) 2022 2021 Revenues 421 888 Cost of revenues (661 ) (657 ) Gross profit (240 ) 231 Research and development expenses (6,230 ) (7,208 ) General and administrative expenses (4,265 ) (3,316 ) Operating loss (10,735 ) (10,293 ) Financial income, net 260 73 Net Loss (10,475 ) (10,220 ) Revenues Our revenues for the Year ended December 31, 2022, amounted to $421,000 including $219,000, due to the completion of the demonstration with a customer in the US and $202,000, due to the completion of the Long Term Pilot LTP with Rio Tinto.
Biggest changeThe following table discloses the breakdown of general and administrative expenses: Year ended December 31, Year ended December 31, (in thousands of USD) 2023 2022 Payroll and related expenses 1,815 1,845 Share-based payment 212 323 Professional services 1,635 1,451 Travel expenses 61 115 Rent and office maintenance 139 118 Depreciation 20 20 Marketing and other 457 393 Total 4,339 4,265 45 Comparison of the Year Ended December 31, 2023, to the Year Ended December 31, 2022 Results of Operations December 31 December 31, (in thousands of USD) 2023 2022 Revenues 142 421 Cost of revenues (61 ) (661 ) Gross profit 81 (240 ) Research and development expenses (7,145 ) (6,230 ) General and administrative expenses (4,339 ) (4,265 ) Operating loss (11,403 ) (10,735 ) Financial income, net 255 260 Net Loss (11,148 ) (10,475 ) Revenues Our revenues for the year ended December 31, 2023, amounted to $142,000 representing a decrease of $279,000 or 66% compared to $421,000 for the year ended December 31, 2022.
In addition, we believe that our technology has the potential to advance the revolutionary concept of autonomous trains into a practical reality. A. Operating Results Operating Expenses Our current operating expenses consist of two components — research and development expenses, and general and administrative expenses. To date, we have not generated significant revenues.
In addition, we believe that our technology has the potential to advance the revolutionary concept of autonomous trains into a practical reality. 44 A. Operating Results Operating Expenses Our current operating expenses consist of two components — research and development expenses, and general and administrative expenses. To date, we have not generated significant revenues.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 36 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this annual report.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this annual report.
E. Critical Accounting Estimates We describe our significant accounting policies more fully in Note 2 to our financial statements for the year ended December 31, 2022. We believe that the accounting policies below are critical in order to fully understand and evaluate our financial condition and results of operations.
E. Critical Accounting Estimates We describe our significant accounting policies more fully in Note 2 to our financial statements for the year ended December 31, 2023. We believe that the accounting policies below are critical in order to fully understand and evaluate our financial condition and results of operations.
As a result, if the Company’s assumptions change and different assumptions are used, the expense of a stock-based compensation award could be materially different in the future than what was originally planned for. 42
As a result, if the Company’s assumptions change and different assumptions are used, the expense of a stock-based compensation award could be materially different in the future than what was originally planned for. 51
The Company granted Aegis Capital Corp, the underwriter (“Aegis”), a 45-day over-allotment option to purchase additional ordinary shares and/or warrants to purchase additional ordinary shares up to 15% of the number of ordinary shares and warrants, respectively, sold in the IPO solely to cover over-allotments, if any.
We granted Aegis Capital Corp, or Aegis, the underwriter, a 45-day over-allotment option to purchase additional ordinary shares and/or warrants to purchase additional ordinary shares up to 15% of the number of ordinary shares and warrants, respectively, sold in the IPO solely to cover over-allotments, if any.
We have developed our railway detection and systems to save lives, increase efficiency, and dramatically reduce expenses for the railway operator. Following a long-term pilot with Israel Railways that was concluded in August 2022, in January 2023, we signed an agreement with Israel Railways for the purchase of 10 Rail Vision Main Line Systems.
We have developed our railway detection and systems to save lives, increase efficiency, and dramatically reduce expenses for the railway operator. Following a long-term pilot with Israel Railways that was concluded in August 2022, in January 2023, we signed an agreement with Israel Railways for the purchase of 10 Rail Vision Main Line Systems, which installation started in February 2024.
The following discussion of the financial condition and results of operations is for the years ended December 31, 2022 and 2021.
The following discussion of the financial condition and results of operations is for the years ended December 31, 2023 and 2022.
Discussion regarding our financial condition and results of operations for the year ended December 31, 2021 as compared to the year ended December 31, 2020 is included in Item 5 of our Annual Report on Form 20-F for the year ended December 31, 2021, filed with the SEC on May 16, 2022 (the “2021 Form 20-F”).
Discussion regarding our financial condition and results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021 is included in Item 5 of our Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 23, 2023.
The remaining amount of approximately $2,855,000 was used for professional services, travel, rent and other miscellaneous expenses. Investing Activities Net cash used in investing activities of $29,000 during 2022 and $273,000 during 2021, primarily reflected the purchase of fixed assets in both periods.
The remaining amount of $3,087,000 was used, for professional services, travel, rent and other miscellaneous expenses. Investing Activities Net cash used in investing activities of $152,000 during 2023 and $29,000 during 2022, primarily reflected the purchase of fixed assets in both periods.
Contractual Obligations The following table summarizes our contractual obligations at December 31, 2022: Total Less than 1 year 1-3 years 3-5 years More than 5 years (in thousands of U.S. dollars) Operating leases $ 1,079 $ 326 $ 629 $ 219 $ -- 41 C. Research and development, patents and licenses, etc.
Contractual Obligations The following table summarizes our contractual obligations at December 31, 2023: Total Less than 1 year 1-3 years 3-5 years More than 5 years (in thousands of U.S. dollars) Operating leases $ 849 $ 313 $ 536 $ - $ -- C. Research and development, patents and licenses, etc.
The table below presents our cash flows for the periods indicated: December 31, December 31, (in thousands of USD) 2022 2021 Operating activities $ (9,981 ) $ (9,948 ) Investing activities $ (29 ) $ (273 ) Financing activities $ 16,653 $ 5,127 Net increase (increase) in cash and cash equivalents $ 6,643 $ (5,094 ) 39 Operating Activities Net cash used in operating activities of $9,981,000 during the year ended December 31, 2022, was primarily used for payment of an aggregate of approximately $6,894,000 in salaries and related personnel expenses.
The table below presents our cash flows for the periods indicated: December 31, December 31, (in thousands of USD) 2023 2022 Operating activities $ (10,448 ) $ (9,981 ) Investing activities $ (152 ) $ (29 ) Financing activities $ 5,397 $ 16,653 Net increase (increase) in cash and cash equivalents $ (5,203 ) $ 6,643 Operating Activities Net cash used in operating activities of $10,448,000 during the year ended December 31, 2023, was primarily used for payment of an aggregate of approximately $7,487,000 in salaries and related personnel expenses.
Since inception, we have not generated significant revenues from the sale of products, and we do not expect to generate significant revenues from the sale of our products in the near future. As of December 31, 2022, our cash and cash equivalents were $8,492,000.
Since inception, we have not generated significant revenues from the sale of products, and we do not expect to generate significant revenues from the sale of our products in the near future. 49 As of December 31, 2023, our cash and cash equivalents were $3.1 million.
The remaining amount of $3,087,000 was used, for professional services, travel, rent and other miscellaneous expenses. Net cash used in operating activities of $9,948,000 during the year ended December 31, 2021, was primarily used for payment of an aggregate of approximately $7,093,000 in salaries and related personnel expenses.
The remaining amount of approximately $2,962,000 was used for professional services, travel, rent and other miscellaneous expenses. Net cash used in operating activities of $9,981,000 during the year ended December 31, 2022, was primarily used for payment of an aggregate of approximately $6,894,000 in salaries and related personnel expenses.
Our railway detection system is currently in the pilot phase with several industry leading railway operators as we seek to move to the next stage of receiving commercial orders.
The customer is expected to start a long-term pilot soon after completing the installation. In addition, our railway detection system is currently in a pilot phase with several industry leading railway operators as we seek to move to the next stage of receiving commercial orders.
Liquidity and Capital Resources Overview Since our inception through December 31, 2022, we have funded our operations principally with approximately $13,575,000 (net of issuance expenses) from the issuance of ordinary shares, Preferred Shares, and warrants. As of December 31, 2022, we had approximately $8,492,000 in cash and cash equivalents.
Liquidity and Capital Resources Overview Since our inception through December 31, 2023, we have funded our operations principally with approximately $68.7 (net of issuance expenses) from the issuance of ordinary shares, preferred shares, and warrants in public and private offerings. As of December 31, 2023, we had approximately $3.1 in cash and cash equivalents.
Net Loss As a result of the foregoing, our net loss for the year ended December 31, 2022, was $10,475,000 compared to $10,220,000 for the year ended December 31, 2021, an increase of $255,000 or 2.49%. B.
Net Loss As a result of the foregoing, our net loss for the year ended December 31, 2023, was $11,148,000 compared to $10,475,000 for the year ended December 31, 2022, an increase of $673,000 or 6%. 46 B.
Other than the foregoing and as disclosed elsewhere in this Annual Report on Form 20-F, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2022 to the present time that are reasonably likely to have a material adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
Operating and Financial Review and Prospectus—Operating Results” and elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2023 to December 31, 2023 that are reasonably likely to have a material effect on our total revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
Financing Activities Net cash provided by financing activities in the year ended December 31, 2022, consisted of $13,643,000 of net proceeds from our IPO in April 2022 and approximately $3,000,000 of pre-IPO Investment.
See “Registered Direct Offering and Concurrent Private Placement of Warrants (May 2023)” and “Private Placement of Ordinary Shares and Warrants (May 2023)”. Net cash provided by financing activities in the year ended December 31, 2022, consisted of $13,643,000 of net proceeds from our IPO in April 2022 and approximately $3,000,000 of pre-IPO Investment.
The following table discloses the breakdown of research and development expenses: Year ended December 31, Year ended December 31, (in thousands of USD) 2022 2021 Depreciation 130 132 Share-based payment 174 608 Payroll and related expenses 5,049 5,586 Subcontracted work and consulting 15 64 R&D consumables 160 318 Rent and office maintenance 355 390 Travel and other expenses 347 110 Total 6,230 7,208 We expect that our research and development expenses will materially increase as we continue to develop our products and recruit additional research and development employees. 37 General and Administrative Expenses General and administrative expenses consist primarily of salaries and related expenses, share-based payment, professional service fees for accounting, legal and bookkeeping, facilities, travel expenses and other general and administrative expenses.
The following table discloses the breakdown of research and development expenses: Year ended December 31, Year ended December 31, (in thousands of USD) 2023 2022 Depreciation 151 130 Share-based payment 62 174 Payroll and related expenses 5,671 5,049 Subcontracted work and consulting 4 15 R&D consumables 696 160 Rent and office maintenance 416 355 Travel and other expenses 145 347 Total 7,145 6,230 General and Administrative Expenses General and administrative expenses consist primarily of salaries and related expenses, share-based payment, professional service fees for accounting, legal and bookkeeping, facilities, travel expenses and other general and administrative expenses.
Research and Development Expenses Our research and development expenses for the year ended December 31, 2022, amounted to $6,230,000 representing a decrease of $978,000 or 13.5% as compared to $7,208,000 for the year ended December 31, 2021.
Research and Development Expenses Our research and development expenses for the year ended December 31, 2023, amounted to $7,145,000 representing an increase of $915,000 or 15% as compared to $6,230,000 for the year ended December 31, 2022.
Gross proceeds for the offering were approximately $15,647 (including exercise of over-allotment options as described below) and net proceeds of approximately $13,587 after deducting underwriting discounts and commissions and offering expenses.
The warrants are exercisable at any time up to five years after the IPO. Gross proceeds for the offering were approximately $15.6 million (including exercise of over-allotment options as described below) and net proceeds of approximately $13.6 million after deducting underwriting discounts and commissions and offering expenses.
Operating Results— Comparison of the year ended December 31, 2022 to the year ended December 31, 2021— Research and Development Expenses.” D.
Operating Results— Comparison of the year ended December 31, 2023 to the year ended December 31, 2022— Research and Development Expenses.” 50 D. Trend Information Other than as disclosed in “Item 5.
We recognized net financial income of $260,000 for the year ended December 31, 2022, compared to net financial expenses of $73,000 for the year ended December 31, 2021. The increase was primarily attributable to exchange rate differences and Interest from bank deposits.
Financial expense and income Financial expense and income consist of interest on deposits, bank fees and other transactional costs and exchange rate differences. We recognized net financial income of $255,000 for the year ended December 31, 2023, compared to net financial income of $260,000 for the year ended December 31, 2022.
On April 4, 2022, Aegis partially exercised its over-allotment option with respect to 568,086 warrants to purchase ordinary shares. 40 Current Outlook We have financed our operations to date primarily through proceeds from sales of our Ordinary and Preferred Shares. We have incurred losses and generated negative cash flows from operations since inception in April 2016.
On April 4, 2022, Aegis partially exercised its over-allotment option with respect to 71,011 warrants to purchase ordinary shares. Current Outlook We have financed our operations to date primarily through proceeds from sales of our equity securities in public and private offerings, as well as a loan from a related party.
Net cash provided by financing activities in the year ended December 31, 2021, consisted of $5,127,000 of net proceeds from our issuance of Preferred A Shares and exercise of options to purchase ordinary shares.
Financing Activities Net cash provided by financing activities in the year ended December 31, 2023, consisted of $5,397,000 in proceeds from the issuance of ordinary shares and warrants, net of issuance expenses, from a series of transactions we executed in May 2023 as detailed below.
Operating loss As a result of the foregoing, our operating loss for the year ended December 31, 2022 was $10,735,000 compared an operating loss of $10,293,000 for the year ended December 31, 2021, an increase of $442,000 or 4.3%. Financial expense and income Financial expense and income consist of bank fees and other transactional costs and exchange rate differences.
Operating loss As a result of the foregoing, our operating loss for the year ended December 31, 2023 was $11,403,000 compared an operating loss of $10,735,000 for the year ended December 31, 2022, an increase of $668,000 or 6%.
On April 4, 2022, the Company completed its IPO, in which the Company issued 3,787,241 units. Each unit includes one ordinary share and one warrant to purchase one ordinary share at an exercise price of $4.13. The warrants are exercisable at any time up to five years after the IPO.
Initial Public Offering (April 2022) On April 4, 2022, we completed our initial public offering on the Nasdaq, or the IPO, in which we issued 473,405 units. Each unit includes one ordinary share and one warrant to purchase one ordinary share at an exercise price of $33.04.
Removed
The decrease was primarily attributable to a decrease of $536,000 in payroll and related expenses related to employee’s resignation and significant changes in USD/NIS exchange rate, and a decrease of $434,000 in share-based payments related to end of vesting periods of Israeli railways warrants and employees options in 2021. 38 General and administrative expenses Our general and administrative expenses totaled $4,265,000 for the year ended December 31, 2022, an increase of $949,000 or 28.6% compared to $3,316,000 for the year ended December 31, 2021.
Added
In addition, after a successful six-month long-term pilot with a US-based rail and leasing services company, in January 2024, we signed a supply contract with this customer valued at up to $5,000,000 (USD) for the purchase our AI-based Switch Yard Systems. The first phase of the contract is valued at $1,000,000 (USD).
Removed
The increase was primarily attributable to an increase of $337,000 in salaries related to salaries update and one time IPO bonuses, an increase of $366,000 in professional fees mainly due to public company expenses and an increase of $233,000 in marketing and others mainly due to exhibition expenses and welfare expenses.
Added
Follow-on orders for additional Switch Yard Systems, valued at up to $4,000,000, are subject to customer approval. Also, in October 2023, we received a $500,000 purchase order for a single Main Line System and related services from a leading Latin American mining company, which was delivered to the customer during December 2023.
Removed
On October 13, 2020, we and Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, or Knorr-Bremse, entered into an investment agreement under which we issued 51,282 Preferred A shares to Knorr-Bremse, in consideration of a total investment of $10,000,000. The investment amount was transferred to us in two equal installments, the first installment upon closing and the second installment on April 13, 2021.
Added
This increase was primarily attributable to the allocation of salary expenses from R&D expenses to cost of sales in 2022 and an increase in R&D equipment purchases in 2023.
Removed
In addition, pursuant to the terms of the agreement, we were granted a call option for an additional amount of $5,000,000 at the same price per share and in exchange for the same class of shares.
Added
General and administrative expenses Our general and administrative expenses totaled $4,339,000 for the year ended December 31, 2023, representing an increase of $74,000 or 2% compared to $4,265,000 for the year ended December 31, 2022.
Removed
According to an amendment signed by and among the parties the exercise period of the option was extended to be in full force and effect until March 31, 2022.
Added
This increase was primarily attributable to increase in professional services related to operating as a public company offset by share-based payment expenses of grants which were fully vested in 2022.
Removed
On February 14, 2022, we and Knorr-Bremse signed a second amendment to the investment agreement according to which from February 14, 2022 we are entitled to exercise the option in two installments as follows: (i) to call for up to $2,000,000 out of the option amount no later than March 31, 2022; and (ii) to call for up to $2,286,000 out of the option amount no later than June 30, 2022.
Added
Private Placement (January 2024) On January 18, 2024, we entered into a binding term sheet directly with a global investment firm, or the Lead Investor, for the purchase and sale in a private placement, or the January 2024 PIPE, of units, or the Units, consisting of (i) one of our ordinary shares and/or pre-funded warrants to purchase our ordinary shares and (ii) one and a half warrants to purchase our ordinary shares to the Lead Investor and other investors, collectively, the Investors, of a minimum of $2.5 million of Units and up to a maximum of $3 million of Units.
Removed
The aforesaid option expired on the closing of our initial public offering on April 4, 2022. On March 6, 2022, we issued to Knorr-Bremse, a total of 10,256 Preferred A shares at a price of $195 per share, after we called an amount of $2,000,000 out of the option amount.
Added
The January 2024 PIPE closed on January 31, 2024 following the execution of definitive documentation between us and the Investors.
Removed
In January 2022, the Company entered into a Simple Agreement for Future Equity (“SAFE”) with its two main shareholders providing for financing in the aggregate amount of $1,000 (the “Investment Amount”) which was subsequently amended in March 2022.
Added
In the January 2024 PIPE, the Investors purchased $3.0 million of Units consisting of (A) (i) 1,651,458 of ordinary shares and/or (ii) pre-funded warrants to purchase up to 1,394,999 ordinary shares, or the January 2024 PIPE Pre-Funded Warrants and (B) warrants to purchase up to 4,569,688 ordinary shares, or the January 2024 Warrants. The purchase price per Unit is $0.98475.
Removed
The SAFE provides for the conversion of the Investment Amount into the Company’s ordinary shares under certain circumstances including in particular in the case of an Initial Public Offering (“IPO”) such that immediately prior to the closing of an IPO the Investment Amount shall automatically convert into the number of shares and warrants equal to the Investment Amount divided by the IPO price.
Added
The January 2024 PIPE Pre-Funded Warrants are immediately exercisable at an exercise price of $0.0001 per ordinary share, subject to certain adjustments and certain anti-dilution protection set forth therein, and will not expire until exercised in full.
Removed
The warrants which shall be issued shall have the same terms as the warrants to be issued in the IPO except such warrants shall not be registered under the Securities Act of 1933, as amended, and shall not be tradeable.
Added
The January 2024 PIPE Ordinary Share Warrants are exercisable upon issuance at an exercise price of $0.98475 per ordinary share, subject to certain adjustments and certain anti-dilution protection set forth therein, and have a 5.5-year term from the issuance date. 47 In connection with the closing of the January 2024 PIPE, we exercised our conversion right, or the Conversion Right, pursuant to the Facility Agreement (as defined below) to convert $500,000 of the Credit Facility (as defined below) as a portion of the January 2024 Conversion Loan Amount (as defined below).
Removed
Immediately prior to the completion of the IPO on April 4, 2022, the Investment Amount was automatically converted to 242,131 ordinary shares and 242,131 warrants to purchase ordinary shares, with an exercise price of $4.13 per share, immediately exercisable and will expire five years from the date of issuance.
Added
Following such conversion, we issued to the Lender (as defined below) (i) a pre-funded warrant to purchase up to 507,743 ordinary shares, or the Facility Conversion Pre-Funded Warrant and (ii) a warrant to purchase up to 761,615 ordinary shares, or the Facility Conversion Ordinary Share Warrant.
Removed
Until we can generate significant recurring revenues and profit, we expect to satisfy our future cash needs through debt or equity financings, through the utilization of our current financial resources and sales of our products. We cannot be certain that additional funding will be available to us when needed, on acceptable terms, if at all.
Added
The Facility Conversion Pre-Funded Warrant and the Facility Conversion Common Warrant are in substantially the same form and on substantially the same terms as the January 2024 PIPE Pre-Funded Warrant and January 2024 PIPE Ordinary Share Warrant, respectively. See “Item 7.B.—Major Shareholders and Related Party Transactions—Related Party Transactions—Pure Capital—Private Placement (January 2024)” for additional information.
Removed
If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to our products. Such conditions raise substantial doubts about the Company’s ability to continue as a going concern. Management’s plan includes raising funds from existing shareholders and/or outside potential investors.
Added
As of the date of this Annual Report, 1,394,999 January 2024 PIPE Pre-Funded Warrants, 507,743 Facility Conversion Pre-Funded Warrant, 761,615 Facility Conversion Common Warrant and 4,269,688 January 2024 PIPE Warrants have been exercised resulting in gross proceeds of approximately $5.0 million to the Company Execution of Credit Facility Agreement and Issuance of Warrant (January 2024) On January 9, 2024, we entered into a facility agreement, or the Facility Agreement, for a $6 million credit facility, or the Credit Facility, and an additional amount up to $3 million, subject to certain conditions, or the Additional Loans, with a global investment firm, or the Lender, who was also an Investor in the January 2024 PIPE.
Removed
However, there is no assurance such funding will be available to the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to successfully complete the development of, and to commercialize, its products.
Added
The Credit Facility, which had an initial term of 10 months, accrued interest at a rate of 8% per annum, and the first payment of $1.5 million was drawn down upon execution of the Facility Agreement and the remaining amount was able to be drawn down in eight equal installments as of March 7, 2024.
Removed
Trend Information We continue to closely monitor macro-economic conditions, including the headwinds caused by supply chain problems, inflation, increased interest rates and other trends that have been adversely impacting economic activity on a global scale in the aftermath of the COVID-19 pandemic.
Added
As detailed below, the Facility Agreement terminated on March 1, 2024. Pursuant to the Facility Agreement, the Lender’s financing obligations terminated in the event we drew down $7.5 million or more pursuant to an alternate credit facility or closes one or more equity financing transaction in an aggregate amount of at least $5 million.
Removed
We have been assessing, on an ongoing basis, the implications of those global conditions for our operations, supply chain, liquidity, cash flow and product orders, and will act in an effort to mitigate adverse consequences as needed. To the extent inflation increases our costs and expenses, we could consider price increases to offset those cost pressures.
Added
As of March 1, 2024, we had received aggregate gross proceeds of more than $5 million from the purchase of Units in the January 2024 Private Placement, the exercise of warrants issued in the January 2024 Private Placement and our exercise of the Conversion Right in the amount of $500,000.
Removed
Specific developments that may potentially impact our operating performance in an adverse manner include: ● further actions taken by central banks in Europe and the U.S. to increase interest rates as a means to slow down inflation, which may worsen credit/financing conditions for our customers who purchase our products; ● potential contraction of economic activities and recessionary conditions that could arise as a result of interest rate increases and a decrease in consumer demand; and ● the continued depreciated value of the Euro relative to the U.S. dollar, which may have an adverse impact on the U.S.- denominated value of our European-derived revenues for purposes of our financial statements.
Added
As a result, the Lender’s financing obligations have terminated pursuant to the terms of the Facility Agreement.
Removed
We cannot provide any assurances as to the extent of our resilience to the adverse impact of these specific developments in future periods.
Added
Until we close one or more equity financing transactions in an aggregate amount of at least $5 million (including the conversion of the Credit Facility), we had the right to convert into ordinary share up to $1.5 million, including accrued interest, of a loan extended or to be extended to us by the Lender, or the January 2024 Conversion Loan Amount, in connection with and in the framework of a financing transaction of ours on the date that follows the date upon which we notified the Lender of such financing transaction, which conversion will occur upon the same terms.
Added
As of the date hereof, we had converted $500,000 of the Credit Facility as a portion of the January 2024 Conversion Loan Amount.
Added
As part of the Facility Agreement, we issued a warrant, or the January 2024 Facility Warrant, to the Lender to purchase 2,419,354 of our ordinary shares representing an aggregate exercise amount of $7.5 million, with a per share exercise price of $3.10, subject to certain adjustments and certain anti-dilution protection, representing a 150% premium of the closing share price of our ordinary shares on January 5, 2024.
Added
The January 2024 Facility Warrant is immediately exercisable upon issuance and has a term of 5 years from the date of issuance.
Added
Following the closing of the January 2024 PIPE, the exercise price of the January 2024 Facility Warrant was adjusted to $0.408 which is the effective price per ordinary share in the January 2024 PIPE, or the January 2024 Facility Warrant Adjusted Exercise Price, and the number of ordinary shares issuable upon the exercise of the January 2024 Facility Warrant was also adjusted to a total 18,382,353, or the January 2024 Facility Warrant Adjusted Shares, such that the product of the January 2024 Facility Warrant Adjusted Exercise Price and the January 2024 Facility Warrant Adjusted Shares is equal to an aggregate exercise amount of $7.5 million.
Added
As of the date of this Annual Report, 920,000 January 2024 Facility Warrants have been exercised resulting in gross proceeds of approximately $0.375 million to the Company.
Added
See “Item 7.B.—Major Shareholders and Related Party Transactions—Related Party Transactions—Pure Capital—Execution of Credit Facility Agreement and Issuance of Warrant (January 2024)” for additional information. 48 Cashless Exercise of Warrants (January 2024) As of March 28, 2024, investors from our Private Placement (as defined below) from May 2023 exercised 493,424 Concurrent Warrants on a cashless basis.
Added
As a result of the cashless exercise, we issued 181,002 ordinary shares to such investors.
Added
Registered Direct Offering and Concurrent Private Placement of Warrants (May 2023) On May 10, 2023, we entered into definitive securities purchase agreements with investors for the purchase and sale of 493,421 ordinary shares, at a purchase price of $6.08 per unit in a registered direct offering, or the Registered Direct Offering.
Added
In a concurrent private placement, or the Private Placement, we also agreed to issue to the same investors a total of warrants to purchase an aggregate of 493,424 ordinary shares, or the Concurrent Warrants, at an exercise price of $6.72 per ordinary share.
Added
The Concurrent Warrants will be exercisable upon issuance and will have a 5-year term from the initial issuance date. The transactions closed on May 11, 2023.
Added
Private Placement of Ordinary Shares and Warrants (May 2023) In an additional concurrent private placement with the Registered Direct Offering and Private Placement, or the KB Private Placement, we entered into a definitive securities purchase agreement for the purchase and sale of an aggregate of 493,421 ordinary shares and 5-year term common warrants to purchase an aggregate of 493,421 ordinary shares, or the KB Warrants, at a purchase price of $6.08 per unit, to Knorr-Bremse.
Added
The KB Warrants are exercisable at $6.72 per ordinary share. The KB Private Placement closed on June 21, 2023, following approval of such transaction by our shareholders. See “Item 7.B.—Major Shareholders and Related Party Transactions—Related Party Transactions—Knorr-Bremse” for additional information.
Added
We have incurred losses and generated negative cash flows from operations since inception in April 2016.
Added
To date, we have not generated significant revenues from its activities and have incurred substantial operating losses. We expect that we will continue to generate substantial operating losses and will continue to fund our operations primarily through the utilization of our current financial resources, sales of our products, and through additional raises of capital.
Added
In January 2024, we completed the January 2024 PIPE resulting in aggregate gross proceeds approximately $3.5 million, which includes approximately $0.5 million that we received upon the partial conversion of the Credit Facility. See “Item 5. Operating and Financial Review and Prospects—B. Operating Results— Financing Activities” for additional information.
Added
In addition, to date, we have received approximately $5.0 million as a result of the exercise of warrants issued in the January 2024 PIPE. We expect that our cash and cash equivalents as of the issuance date of this annual report and the future expected cash flow from sales will be sufficient for 12 months of operations.

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Item 6. [Reserved]

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

72 edited+20 added−30 removed117 unchanged
Biggest changeThe duty of loyalty of an office holder requires an office holder to act in good faith and for the benefit of the company, and includes a duty to: ● refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs; ● refrain from any action that is competitive with the company’s business; ● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and ● disclose to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder. 55 Insurance Under the Companies Law, a company may obtain insurance for any of its office holders against the following liabilities incurred due to acts he or she performed as an office holder, if and to the extent provided for in the company’s articles of association: ● breach of his or her duty of care to the company or to another person, to the extent such a breach arises out of the negligent conduct of the office holder; ● a breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his or her act would not prejudice the company’s interests; and ● a financial liability imposed upon him or her in favor of another person.
Biggest changeInsurance Under the Companies Law, a company may obtain insurance for any of its office holders against the following liabilities incurred due to acts he or she performed as an office holder, if and to the extent provided for in the company’s articles of association: ● breach of his or her duty of care to the company or to another person, to the extent such a breach arises out of the negligent conduct of the office holder; ● a breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his or her act would not prejudice the company’s interests; and ● a financial liability imposed upon him or her in favor of another person.
Under the Companies Law, our audit committee is responsible for: ● determining whether there are deficiencies in the business management practices of our company, and making recommendations to the board of directors to improve such practices; ● determining whether to approve certain related party transactions (including transactions in which an office holder has a personal interest and whether such transaction is extraordinary or material under Companies Law) (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”); ● determining the approval process for transactions that are ‘non-negligible’ (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee; ● examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; ● where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto; ● examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; and ● establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees.
Under the Companies Law, our audit committee is responsible for: ● determining whether there are deficiencies in the business management practices of our company, and making recommendations to the board of directors to improve such practices; ● determining whether to approve certain related party transactions (including transactions in which an office holder has a personal interest and whether such transaction is extraordinary or material under Companies Law) (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”); ● determining the approval process for transactions that are ‘non-negligible’ (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee; ● examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; ● where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto; 62 ● examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; and ● establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees.
However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned foreseen events and amount or criteria; ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder (a) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment (as defined in the Companies Law) was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability as a substitute for the criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding, or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (b) in connection with a monetary sanction; ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder or imposed on him or her by a court: (1) in proceedings that the company institutes, or that another person institutes on the company’s behalf, against him or her; (2) in a criminal proceedings of which he or she was acquitted; or (3) as a result of a conviction for a crime that does not require proof of criminal intent; and ● expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees.
However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned foreseen events and amount or criteria; 66 ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder (a) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no indictment (as defined in the Companies Law) was filed against such office holder as a result of such investigation or proceeding; and (2) no financial liability as a substitute for the criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding, or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (b) in connection with a monetary sanction; ● reasonable litigation expenses, including attorneys’ fees, expended by the office holder or imposed on him or her by a court: (1) in proceedings that the company institutes, or that another person institutes on the company’s behalf, against him or her; (2) in a criminal proceedings of which he or she was acquitted; or (3) as a result of a conviction for a crime that does not require proof of criminal intent; and ● expenses incurred by an office holder in connection with an Administrative Procedure under the Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees.
Such options will vest one-third following 12 months from the completion date of our initial public offering and the balance on quarterly basis during the following 24 months. Directors’ Service Contracts We do not have written agreements with any director providing for benefits upon the termination of his engagement with our company.
Such options will vest one-third following 12 months from the completion date of our initial public offering and the balance on quarterly basis during the following 24 months. 56 Directors’ Service Contracts We do not have written agreements with any director providing for benefits upon the termination of his engagement with our company.
Our board has adopted a compensation policy which was approved by our shareholders on March 27, 2022. 53 The compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of executive officers and directors, including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement.
Our board has adopted a compensation policy which was approved by our shareholders on March 27, 2022. The compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of executive officers and directors, including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement.
Naveh has served as an external director of Upsellon Brands Holdings Ltd (TASE: UPSL). Mr. Naveh holds a B.A. in Accounting and Business from the College of Management Academic Studies, Israel and a M.A. in Law from Bar-Ilan University, Israel. Mr. Naveh is a Certified Public Accountant in Israel. 43 Zachi Bar-Yehoshua, Chief Operating Officer Mr.
Naveh has served as an external director of Upsellon Brands Holdings Ltd (TASE: UPSL). Mr. Naveh holds a B.A. in Accounting and Business from the College of Management Academic Studies, Israel and a M.A. in Law from Bar-Ilan University, Israel. Mr. Naveh is a Certified Public Accountant in Israel. Zachi Bar-Yehoshua, Chief Operating Officer Mr.
Bar-Yehoshua holds a B.A. in Management and M.B.A in Business Administration from the Open University of Israel. Ofer Grisaro, Vice President of Marketing and Sales Mr. Ofer Grisaro has served as our Vice President of Marketing and Sales since February 1, 2021. Mr. Grisaro has more than 15 years of experience in sales, marketing and business development.
Bar-Yehoshua holds a B.A. in Management and M.B.A in Business Administration from the Open University of Israel. 52 Ofer Grisaro, Vice President of Marketing and Sales Mr. Ofer Grisaro has served as our Vice President of Marketing and Sales since February 1, 2021. Mr. Grisaro has more than 15 years of experience in sales, marketing and business development.
Their terms of employment are subject to the approval of the board of directors’ compensation committee and of the board of directors, as well as our shareholders in the event such terms deviate from our office holder compensation policy, and are subject to the terms of any applicable employment agreements that we may enter into with them.
Their terms of employment are subject to the approval of the board of directors’ compensation committee and of the board of directors, as well as our shareholders in the event such terms deviate from our office holder compensation policy, and are subject to the terms of any applicable engagement agreements that we may enter into with them.
However, if the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company’s stated compensation policy, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provides detailed reasons for their decision. 58 Chief executive officer.
However, if the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company’s stated compensation policy, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provides detailed reasons for their decision. Chief executive officer.
Oz Adler have agreed to serve as our external directors. 48 According to regulations promulgated under the Companies law, at least one of the external directors is required to have “financial and accounting expertise,” unless another member of the audit committee, who is an independent director under the Nasdaq Listing Rules, has “financial and accounting expertise,” and the other external director or directors are required to have “professional expertise.” An external director may not be appointed to an additional term unless: (1) such director has “accounting and financial expertise;” or (2) he or she has “professional expertise,” and on the date of appointment for another term there is another external director who has “accounting and financial expertise” and the number of “accounting and financial experts” on the board of directors is at least equal to the minimum number determined appropriate by the board of directors.
Oz Adler have agreed to serve as our external directors. 58 According to regulations promulgated under the Companies law, at least one of the external directors is required to have “financial and accounting expertise,” unless another member of the audit committee, who is an independent director under the Nasdaq Listing Rules, has “financial and accounting expertise,” and the other external director or directors are required to have “professional expertise.” An external director may not be appointed to an additional term unless: (1) such director has “accounting and financial expertise;” or (2) he or she has “professional expertise,” and on the date of appointment for another term there is another external director who has “accounting and financial expertise” and the number of “accounting and financial experts” on the board of directors is at least equal to the minimum number determined appropriate by the board of directors.
Our board of directors has determined that we must have at least one director with accounting and financial expertise. The board of directors may elect one director to serve as the chairman of the board of directors to preside at the meetings of the board of directors, and may also remove that director as chairman.
Our board of directors has determined that we must have at least one director with accounting and financial expertise. 57 The board of directors may elect one director to serve as the chairman of the board of directors to preside at the meetings of the board of directors, and may also remove that director as chairman.
Family Relationships There are currently no family relationships between any members of our executive management and our directors. 45 Arrangements for Election of Directors and Members of Management Pursuant to our amended and restated articles of association, shareholders are entitled to appoint a director to our board of directors for each 10% of our outstanding share capital that they own and in such case the appointment will be for an undefined period.
Family Relationships There are currently no family relationships between any members of our executive management and our directors. 54 Arrangements for Election of Directors and Members of Management Pursuant to our amended and restated articles of association, shareholders are entitled to appoint a director to our board of directors for each 10% of our outstanding share capital that they own and in such case the appointment will be for an undefined period.
Oz Adler. 51 Our audit committee will also act as a committee for review of our financial statements as required under the Companies Law, and in such capacity will oversee and monitor our accounting; financial reporting processes and controls, audits of the financial statements, compliance with legal and regulatory requirements as they relate to financial statements or accounting matters, and the independent registered public accounting firm’s qualifications, independence and performance; and provide the board of directors with reports on the foregoing.
Our audit committee will also act as a committee for review of our financial statements as required under the Companies Law, and in such capacity will oversee and monitor our accounting; financial reporting processes and controls, audits of the financial statements, compliance with legal and regulatory requirements as they relate to financial statements or accounting matters, and the independent registered public accounting firm’s qualifications, independence and performance; and provide the board of directors with reports on the foregoing.
The compensation committee is subject to the same Companies Law restrictions as the audit committee as to (a) who may not be a member of the committee and (b) who may not be present during committee deliberations as described above. The members of our compensation committee are Mr. Yossi Daskal, Mr. Oz Adler and Mrs.
The compensation committee is subject to the same Companies Law restrictions as the audit committee as to (a) who may not be a member of the committee and (b) who may not be present during committee deliberations as described above. The members of our compensation committee are Mr. Yossi Daskal, Mr. Oz Adler and Ms.
Under the Companies Law, any shareholder holding at least one percent of our outstanding voting power may request that the board of directors include a matter on the agenda of a general meeting to be held in the future, provided that the board determines that the matter is appropriate to be considered in a general meeting including in order to nominate a director.
Under the Companies Law, any shareholder holding at least one percent of our outstanding voting power may request that the board of directors include a matter on the agenda of a general meeting to be held in the future, provided that the board determines that the matter is appropriate to be considered in a general meeting including in order to nominate a director in an annual shareholders meeting.
External directors may be elected for up to two additional three-year terms after their initial three-year term under the circumstances described below, with certain exceptions as described below. External directors may be removed from office only under the limited circumstances set forth in the Companies Law. See “Directors, Senior Management and Employees—Board Practices—External Directors” below.
External directors may be elected for up to two additional three-year terms after their initial three-year term under the circumstances described below, with certain exceptions as described below. External directors may be removed from office only under the limited circumstances set forth in the Companies Law. See “Item 6.C.—Directors, Senior Management and Employees—Board Practices—External Directors” below.
Diversity of the Board of Directors Board Diversity Matrix (As of March 23, 2023) Country of Principal Executive Offices Israel Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 8 Part I: Gender Identity Female Male Non-Binary Did Not Disclose Gender Directors 2 6 - - Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction - LGBTQ+ - Did Not Disclose Demographic Background 8 External Directors Under the Companies Law, an Israeli company whose shares have been offered to the public or whose shares are listed for trading on a stock exchange in or outside of Israel is required to appoint at least two external directors to serve on its board of directors.
Diversity of the Board of Directors Board Diversity Matrix (As of March 28, 2024) Country of Principal Executive Offices Israel Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 6 Part I: Gender Identity Female Male Non-Binary Did Not Disclose Gender Directors 1 5 - - Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction - LGBTQ+ - Did Not Disclose Demographic Background - External Directors Under the Companies Law, an Israeli company whose shares have been offered to the public or whose shares are listed for trading on a stock exchange in or outside of Israel is required to appoint at least two external directors to serve on its board of directors.
Amounts paid in NIS are translated into U.S. dollars at the rate of NIS 3.358 = $1.00, based on the average representative rate of exchange between the NIS and the U.S. dollar as reported by the Bank of Israel in the year ended December 31, 2022.
Amounts paid in NIS are translated into U.S. dollars at the rate of NIS 3.69 = $1.00, based on the average representative rate of exchange between the NIS and the U.S. dollar as reported by the Bank of Israel in the year ended December 31, 2023.
We currently do not have any controlling shareholder as defined by the Companies Law. See “Major Shareholders and Related Party Transactions.” D. Employees. See “Item 4.B. Business Overview—Employees.” E. Share Ownership. See “Item 7.A. Major Shareholders” below. 59 Share Incentive Plan We maintain one equity incentive plan (the “Option Plan”).
We currently do not have any controlling shareholder as defined by the Companies Law. See “Major Shareholders and Related Party Transactions.” D. Employees. See “Item 4.B. Business Overview—Employees.” E. Share Ownership. See “Item 7.A. Major Shareholders” below. Share Incentive Plan We maintain one equity incentive plan, or the Option Plan.
Inbal Kreiss, each of whom is “independent,” as such term is defined under the Nasdaq Listing Rules. Our compensation committee complies with the provisions of the Companies Law, the regulations promulgated thereunder, and our amended and restated articles of association, on all aspects referring to its independence, authorities and practice.
Hila Kiron-Revach, each of whom is “independent,” as such term is defined under the Nasdaq Listing Rules. Our compensation committee complies with the provisions of the Companies Law, the regulations promulgated thereunder, and our amended and restated articles of association, on all aspects referring to its independence, authorities and practice.
In addition, with the completion of our initial public offering, we paid a one-time IPO bonus to our Chief Financial Officer in the amount of NIS 270,000 (approximately $84,000), and granted our Chief Financial Officer options to purchase 124,865 ordinary shares (equal to 0.6% of our post-IPO share capital on a fully diluted basis), with an exercise price of $1.85 per share (equal to the average closing share price on the Nasdaq over the first 30 calendar days that followed our initial public offering on April 4, 2022).
In addition, with the completion of our initial public offering, we paid a one-time IPO bonus to our Chief Financial Officer in the amount of NIS 270,000 (approximately $84,000), and granted our Chief Financial Officer options to purchase 15,608 ordinary shares (equal to 0.6% of our post-IPO share capital on a fully diluted basis), with an exercise price of $14.80 per share (equal to the average closing share price on the Nasdaq over the first 30 calendar days that followed our initial public offering on April 4, 2022).
With the completion of our initial public offering, we paid a one-time IPO bonus to our Chief Executive Officer in the amount of NIS 312,000 (approximately $97,000), and granted our Chief Executive Officer options to purchase 156,081 ordinary shares (equal to 0.75% of our post-IPO share capital on a fully diluted basis), with an exercise price of $1.85 per share (equal to the average closing share price on the Nasdaq over the first 30 calendar days that followed our initial public offering on April 4, 2022).
With the completion of our initial public offering, we paid a one-time IPO bonus to our Chief Executive Officer in the amount of NIS 312,000 (approximately $97,000), and granted our Chief Executive Officer options to purchase 19,510 ordinary shares (equal to 0.75% of our post-IPO share capital on a fully diluted basis), with an exercise price of $14.80 per share (equal to the average closing share price on the Nasdaq over the first 30 calendar days that followed our initial public offering on April 4, 2022).
All of the elected directors, other than external directors, may be re-elected for an unlimited number of terms upon completion of their then-current term of office. There are no other arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were selected. See “Related Party Transactions” for additional information.
All of the elected directors, other than external directors, may be re-elected for an unlimited number of terms upon completion of their then-current term of office. There are no other arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were selected.
The Companies Law provides that a person is not qualified to be appointed as an external director if (i) the person is a relative of a controlling shareholder of the company, or (ii) if that person or his or her relative, partner, employer, another person to whom he or she was directly or indirectly subordinate, or any entity under the person’s control, has or had, during the two years preceding the date of appointment as an external director: (a) any affiliation or other disqualifying relationship with the company, with any person or entity controlling the company or a relative of such person, or with any entity controlled by or under common control with the company; or (b) in the case of a company with no shareholder holding 25% or more of its voting rights, had at the date of appointment as an external director, any affiliation or other disqualifying relationship with a person then serving as chairman of the board or chief executive officer, with a holder of 5% or more of the issued share capital or voting power in the company or with the most senior financial officer. 49 The term “Controlling Shareholder” means a shareholder with the ability to direct the activities of the company, other than by virtue of being an office holder.
The Companies Law provides that a person is not qualified to be appointed as an external director if (i) the person is a relative of a controlling shareholder of the company, or (ii) if that person or his or her relative, partner, employer, another person to whom he or she was directly or indirectly subordinate, or any entity under the person’s control, has or had, during the two years preceding the date of appointment as an external director: (a) any affiliation or other disqualifying relationship with the company, with any person or entity controlling the company or a relative of such person, or with any entity controlled by or under common control with the company; or (b) in the case of a company with no shareholder holding 25% or more of its voting rights, had at the date of appointment as an external director, any affiliation or other disqualifying relationship with a person then serving as chairman of the board or chief executive officer, with a holder of 5% or more of the issued share capital or voting power in the company or with the most senior financial officer.
We may use these exemptions in the future if we do not have a controlling shareholder. 50 Independent Directors Under the Companies Law Under the Companies Law an “independent director” is either an external director or a director who meets the same non-affiliation criteria as an external director, (except for (i) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (ii) the requirement for accounting and financial expertise or professional qualifications) as determined by the audit committee, and who has not served as a director of the company for more than nine consecutive years.
Independent Directors Under the Companies Law Under the Companies Law an “independent director” is either an external director or a director who meets the same non-affiliation criteria as an external director, (except for (i) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (ii) the requirement for accounting and financial expertise or professional qualifications) as determined by the audit committee, and who has not served as a director of the company for more than nine consecutive years.
(2) Cash compensation amounts denominated in NIS were converted into U.S. dollars at the average conversion rate for the year ended December 31, 2022. (3) Includes a one-time IPO bonus to our Chief Executive Officer in the amount of NIS 312,000 (approximately $97,000).
(2) Cash compensation amounts denominated in NIS were converted into U.S. dollars at the average conversion rate for the year ended December 31, 2023. (3) Includes a one-time bonus to our Chief Executive Officer in the amount of NIS 84,000 (approximately $23,000).
The members of our audit committee meet the requirements for financial literacy under the Nasdaq Listing Rules. Our board of directors has determined that each member of our audit committee is an audit committee financial expert as defined by the SEC rules and has the requisite financial experience as defined by the Nasdaq Listing Rules.
Our board of directors has determined that each member of our audit committee is an audit committee financial expert as defined by the SEC rules and has the requisite financial experience as defined by the Nasdaq Listing Rules.
For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service. Mrs. Inbal Kreiss has agreed to serve as our independent director.
For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service. Ms. Hila Kiron-Revach has agreed to serve as our independent director.
We intend to appoint an internal auditor. Remuneration of Directors Under the Companies Law, remuneration of directors is subject to the approval of the compensation committee, thereafter by the board of directors and thereafter, unless exempted under the regulations promulgated under the Companies Law, by the general meeting of the shareholders.
Remuneration of Directors Under the Companies Law, remuneration of directors is subject to the approval of the compensation committee, thereafter by the board of directors and thereafter, unless exempted under the regulations promulgated under the Companies Law, by the general meeting of the shareholders.
Our Option Plan was adopted by our board of directors on January 31, 2017, and awards may be granted under the Option Plan until January 31, 2027. Our Option Plan was last amended on September 13, 2022.
Our Option Plan was adopted by our board of directors on January 31, 2017, and awards may be granted under the Option Plan until January 31, 2027. Our Option Plan was last amended on March 28, 2024.
Exculpation Under the Companies Law, an Israeli company may not exculpate an office holder from liability for a breach of his or her duty of loyalty, but may exculpate in advance an office holder from his or her liability to the company, in whole or in part, for damages caused to the company as a result of a breach of his or her duty of care (other than in relation to distributions), but only if a provision authorizing such exculpation is included in its articles of association. 56 Limitations The Companies Law provides that we may not exculpate or indemnify an office holder nor enter into an insurance contract that would provide coverage for any liability incurred as a result of any of the following: (1) a breach by the office holder of his or her duty of loyalty unless (in the case of indemnity or insurance only, but not exculpation) the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice us; (2) a breach by the office holder of his or her duty of care if the breach was carried out intentionally or recklessly (as opposed to merely negligently); (3) any act or omission committed with the intent to derive an illegal personal benefit; or (4) any fine, monetary sanction, penalty or forfeit levied against the office holder.
Limitations The Companies Law provides that we may not exculpate or indemnify an office holder nor enter into an insurance contract that would provide coverage for any liability incurred as a result of any of the following: (1) a breach by the office holder of his or her duty of loyalty unless (in the case of indemnity or insurance only, but not exculpation) the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice us; (2) a breach by the office holder of his or her duty of care if the breach was carried out intentionally or recklessly (as opposed to merely negligently); (3) any act or omission committed with the intent to derive an illegal personal benefit; or (4) any fine, monetary sanction, penalty or forfeit levied against the office holder.
Prior to that, between January 2007 and April 2011, he served as Manager Sales & Systems Trains. During his twenty years of tenure at Knorr-Bremse, in addition to his executive roles, Mr.
Prior to that, between April 2011 and June 2016, Mr. Cleobury served as Vice President Sales and Systems for Client Management Trains. Prior to that, between January 2007 and April 2011, he served as Manager Sales & Systems Trains. During his twenty years of tenure at Knorr-Bremse, in addition to his executive roles, Mr.
On March 23, 2023 the Compensation Committee of our Board of Directors resolved to approve the renewal of the Company’s directors’ and officers’ insurance policy, for a period of 12 months as of March 31, 2023, of a $7.5 million coverage, and an annual premium not to exceed $313,415, pursuant to the applicable regulations under Companies Law.
On March 28, 2024 the Compensation Committee of our Board of Directors resolved to approve the renewal of the Company’s directors’ and officers’ insurance policy, for a period of 18 months as of March 31, 2023, of a $7.5 million coverage, and an annual premium not to exceed $246,400 ($369,600 for the 18 months period), pursuant to the applicable regulations under Companies Law.
Adler also worked in the audit department of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global between December 2012 and August 2017. Additionally, Mr. Adler currently serves on the board of directors of numerous private and publicly traded companies, including Elbit Imaging Ltd. (TASE: EMITF), Clearmind Medicine Inc.
Adler served as the chief financial officer of Medigus Ltd. Mr. Adler also worked in the audit department of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global between December 2012 and August 2017. Additionally, Mr. Adler currently serves on the board of directors of numerous private and publicly traded companies, including Elbit Imaging Ltd.
The compensation committee is also responsible for: ● recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years); ● recommending to the board of directors periodic updates to the compensation policy; ● assessing implementation of the compensation policy; ● determining whether the terms of compensation of certain office holders of the company need not be brought to approval of the shareholders; and ● determining whether to approve the terms of compensation of office holders that require the committee’s approval. 54 Internal Auditor Under the Companies Law, the board of directors of an Israeli public company must appoint an internal auditor nominated by the audit committee.
The compensation policy must also consider appropriate incentives from a long-term perspective. 64 The compensation committee is also responsible for: ● recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years); ● recommending to the board of directors periodic updates to the compensation policy; ● assessing implementation of the compensation policy; ● determining whether the terms of compensation of certain office holders of the company need not be brought to approval of the shareholders; and ● determining whether to approve the terms of compensation of office holders that require the committee’s approval.
The compensation policy is then brought for approval by our shareholders, which requires a special majority (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”).
Such policy must be adopted by the company’s board of directors, after considering the recommendations of the compensation committee. The compensation policy is then brought for approval by our shareholders, which requires a special majority (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”).
Each director, except external directors and directors appointed by shareholders entitled to appoint a director for each 10% of the issued and outstanding share capital of the company that the shareholders owns, will hold office until the annual general meeting of our shareholders for the year in which his or her term expires, he or she resigns or upon the occurrence of certain events, in accordance with the Companies Law and our amended and restated articles of association. 47 In addition, under certain circumstances, our amended and restated articles of association allow our board of directors to appoint directors to fill vacancies on our board of directors or in addition to the acting directors (subject to the limitation on the number of directors), until the next annual general meeting or special general meeting in which directors may be appointed or terminated.
Each director, except external directors and directors appointed by shareholders entitled to appoint a director for each 10% of the issued and outstanding share capital of the company that the shareholders owns, will hold office until the annual general meeting of our shareholders for the year in which his or her term expires, he or she resigns or upon the occurrence of certain events, in accordance with the Companies Law and our amended and restated articles of association.
Our compensation committee reviews and recommends to our board of directors, with respect to our executive officers’ and directors’: (1) annual base compensation; (2) annual incentive bonus, including the specific goals and amount; (3) equity compensation; (4) employment agreements, severance arrangements, and change in control agreements and provisions; (5) retirement grants and/or retirement bonuses; and (6) any other benefits, compensation, compensation policies or arrangements.
Our compensation committee reviews and recommends to our board of directors, with respect to our executive officers’ and directors’: (1) annual base compensation; (2) annual incentive bonus, including the specific goals and amount; (3) equity compensation; (4) employment agreements, severance arrangements, and change in control agreements and provisions; (5) retirement grants and/or retirement bonuses; and (6) any other benefits, compensation, compensation policies or arrangements. 63 The duties of the compensation committee include the recommendation to the company’s board of directors of a policy regarding the terms of engagement of office holders, to which we refer as a compensation policy.
In addition, a majority of the members of the audit committee of a publicly-traded company must be independent directors under the Companies Law. The members of our audit committee are Mr. Yossi Daskal, Mrs. Inbal Kreiss and Mr.
In addition, a majority of the members of the audit committee of a publicly-traded company must be independent directors under the Companies Law. The members of our audit committee are Mr. Yossi Daskal, Ms. Hila Kiron-Revach and Mr. Oz Adler.
Prior to that, from September 2017 until March 2018, he served as the VP Finance of SciSparc. From December 2020 to April 2021, Mr. Adler served as the chief financial officer of Medigus Ltd. Mr.
Adler currently serves as the chief executive officer and chief financial officer of SciSparc Ltd. Mr. Adler has served as SciSparc’s chief financial officer since April 2018 and as its chief executive officer since January 2022. Prior to that, from September 2017 until March 2018, he served as the VP Finance of SciSparc. From December 2020 to April 2021, Mr.
As noted above, the members of our audit committee are Mr. Yossi Daskal and Mr. Oz Adler, who will serve as external directors, and Mrs. Inbal Kreiss, who will serve as an independent director, each of whom is “independent,” as such term is defined in under Nasdaq Listing Rules.
Yossi Daskal and Mr. Oz Adler, who will serve as external directors, and Ms. Hila Kiron-Revach, who will serve as an independent director, each of whom is “independent,” as such term is defined in under Nasdaq Listing Rules. The members of our audit committee meet the requirements for financial literacy under the Nasdaq Listing Rules.
Cleobury held positions of increasing responsibility at Knorr-Bremse, including between July 2016 and April 2022, Mr. Cleobury served as a Member of the Management Board of Knorr-Bremse Systems for Rail. Prior to that, between April 2011 and June 2016, Mr. Cleobury served as Vice President Sales and Systems for Client Management Trains.
Mr Cleobury currently serves as Senior Vice President of Knorr-Bremse’s Rail Systems Division, since April 2022. Prior to this role, Mr. Cleobury held positions of increasing responsibility at Knorr-Bremse, including between July 2016 and April 2022, Mr. Cleobury served as a Member of the Management Board of Knorr-Bremse Systems for Rail.
Approval of Related Party Transactions under Israeli Law General Under the Companies Law, we may approve an action by an office holder from which the office holder would otherwise have to refrain, as described above, if: ● the office holder acts in good faith and the act or its approval does not cause harm to the company; and ● the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company’s approval of such matter.
Approval of Related Party Transactions under Israeli Law General Under the Companies Law, we may approve an action by an office holder from which the office holder would otherwise have to refrain, as described above, if: ● the office holder acts in good faith and the act or its approval does not cause harm to the company; and ● the office holder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company’s approval of such matter. 67 Disclosure of Personal Interests of an Office Holder The Companies Law requires that an office holder disclose to the company, promptly, and, in any event, not later than the board meeting at which the transaction is first discussed, any direct or indirect personal interest that he or she may have and all related material information known to him or her relating to any existing or proposed transaction by the company.
Our audit committee may not conduct any discussions or approve any actions requiring its approval (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”), unless at the time of the approval a majority of the committee’s members are present, which majority consists of independent directors under the Companies Law, including at least one external director. 52 Nasdaq Stock Market Requirements for Audit Committee Under the Nasdaq Listing Rules, we are required to maintain an audit committee consisting of at least three members, all of whom are independent and are financially literate and one of whom has accounting or related financial management expertise.
Our audit committee may not conduct any discussions or approve any actions requiring its approval (see “Directors, Senior Management and Employees—Board Practices—Approval of Related Party Transactions under Israeli law”), unless at the time of the approval a majority of the committee’s members are present, which majority consists of independent directors under the Companies Law, including at least one external director.
Directors and Senior Management The following table sets forth information regarding our executive officers, and directors as of March 23, 2023: Name Age Position Executive Officers Shahar Hania 50 Chief Executive Officer Ofer Naveh 51 Chief Financial Officer Zachi Bar-Yehoshua 48 Chief Operating Officer Ofer Grisaro 46 Vice President of Marketing and Sales Amit Klir 53 Vice President of Research and Development Non-Employee Directors Mark Cleobury 63 Chairman of the Board of Directors Keren Aslan 57 Director Eli Yoresh 52 Director Maximilian Eichhorn 54 Director Shmuel Donnerstein 70 Director Inbal Kreiss (1)(2)(3) 56 Director Yossi Daskal (1)(2)(3)(4) 69 Director Oz Adler (1)(2)(3)(4) 36 Director (1) Member of the audit committee.
Directors and Senior Management The following table sets forth information regarding our executive officers, and directors as of March 28, 2024: Name Age Position Executive Officers Shahar Hania 51 Chief Executive Officer Ofer Naveh 52 Chief Financial Officer Zachi Bar-Yehoshua 49 Chief Operating Officer Ofer Grisaro 47 Vice President of Marketing and Sales Amit Klir 54 Vice President of Research and Development Non-Employee Directors Eli Yoresh 53 Chairman of the Board of Directors Mark Cleobury 64 Director Ariel Dor 43 Director Hila Kiron-Revach (1)(2)(3) 52 Director Yossi Daskal (1)(2)(3)(4) 70 Director Oz Adler (1)(2)(3)(4) 37 Director (1) Member of the audit committee.
Under the Companies Law, an extraordinary transaction is a transaction: ● not in the ordinary course of business; ● not on market terms; or ● that is likely to have a material effect on the company’s profitability, assets or liabilities. 57 The Companies Law does not specify to whom within us nor the manner in which required disclosures are to be made.
Under the Companies Law, an extraordinary transaction is a transaction: ● not in the ordinary course of business; ● not on market terms; or ● that is likely to have a material effect on the company’s profitability, assets or liabilities.
Yoresh holds a B.A. in Business Administration from the College of Management, Israel and an M.A. in Law from Bar-Ilan University, Israel. Mr. Yoresh is a Certified Public Accountant in Israel. 44 Maximilian Eichhorn, Director Mr. Maximilian Eichhorn has served on our board of directors since October 2020. Mr.
Mr. Yoresh holds a B.A. in Business Administration from the College of Management, Israel and an M.A. in Law from Bar-Ilan University, Israel. Mr. Yoresh is a Certified Public Accountant in Israel. Mark Cleobury, Director Mr. Mark Cleobury has served on our board of directors since December 1, 2022 and served as the Chairman from January 2023 to January 2024.
A person may furthermore not continue to serve as an external director if he or she received direct or indirect compensation from the company including amounts paid pursuant to indemnification or exculpation contracts or commitments and insurance coverage, other than for his or her service as an external director as permitted by the Companies Law and the regulations promulgated thereunder.
A person may furthermore not continue to serve as an external director if he or she received direct or indirect compensation from the company including amounts paid pursuant to indemnification or exculpation contracts or commitments and insurance coverage, other than for his or her service as an external director as permitted by the Companies Law and the regulations promulgated thereunder. 60 Following the termination of an external director’s service on a board of directors, such former external director and his or her spouse and children may not be provided a direct or indirect benefit by the company, its controlling shareholder or any entity under its controlling shareholder’s control.
In the event of a vacancy created by an external director which causes the company to have fewer than two external directors, the board of directors is required under the Companies Law to call a shareholders meeting as soon as possible to appoint such number of new external directors in order that the company thereafter has two external directors.
In the event of a vacancy created by an external director which causes the company to have fewer than two external directors, the board of directors is required under the Companies Law to call a shareholders meeting as soon as possible to appoint such number of new external directors in order that the company thereafter has two external directors. 59 Each committee of the board of directors that exercises the powers of the board of directors must include at least one external director, except that the audit committee and the compensation committee must include all external directors then serving on the board of directors and an external director must serve as the chair thereof.
Furthermore, pursuant to these regulations, such company may reappoint a person as an independent director for additional terms, beyond nine years, which do not exceed three years each, if each of the audit committee and the board of directors determine, in that order, that in light of the independent director’s expertise and special contribution to the board of directors and its committees, the reappointment for an additional term is in the company’s best interest.
Furthermore, pursuant to these regulations, such company may reappoint a person as an independent director for additional terms, beyond nine years, which do not exceed three years each, if each of the audit committee and the board of directors determine, in that order, that in light of the independent director’s expertise and special contribution to the board of directors and its committees, the reappointment for an additional term is in the company’s best interest. 61 Alternate Directors Our amended and restated articles of association provide, as allowed by the Companies Law, that any director may, subject to the conditions set thereto, appoint a person as an alternate to act in his place, to remove the alternate and appoint another in his place and to appoint an alternate in place of an alternate whose office is vacated for any reason whatsoever.
Yoresh served as the chief executive officer of Tomcar Global Holdings Ltd., a global manufacturer of off-road vehicles, from 2005 to 2008. In addition, since March 2014, Mr. Yoresh has served as a director at Nano Dimension Ltd. (Nasdaq and TASE: NNDM). Mr. Yoresh’s previous directorships include Greenstone Industries Ltd.
Yoresh has served as chief financial officer since March 2010, and as a director since October 2010, at Foresight Autonomous Holdings Ltd. (Nasdaq and TASE: FRSX), one of our shareholders. Mr. Yoresh served as the chief executive officer of Tomcar Global Holdings Ltd., a global manufacturer of off-road vehicles, from 2005 to 2008. In addition, since March 2014, Mr.
Since 2021, he is the chairman of the board of directors and the director of the finance committee of the Tel Aviv Museum of Art. Mr. Daskal has a Bachelors of Arts in Mediterranean and Arabic History Science and a Masters of Arts in Political Science, and is completing a PhD in Decision-Making from Haifa University. Oz Adler, Director Mr.
Daskal has a Bachelors of Arts in Mediterranean and Arabic History Science and a Masters of Arts in Political Science, and is completing a PhD in Decision-Making from Haifa University. Oz Adler, Director Mr. Adler , CPA, has served on our board of directors since June 2022. Mr.
Such exemptions include an exemption from the requirement to appoint external directors and the requirement that an external director be a member of certain committees, as well as the exemption from limitations on directors’ compensation.
Such exemptions include an exemption from the requirement to appoint external directors and the requirement that an external director be a member of certain committees, as well as the exemption from limitations on directors’ compensation. We may use these exemptions in the future as of the date of this Annual Report we do not have a controlling shareholder.
The trustee may not release these options or shares to the holders thereof for two years from the date of the registration of the options in the name of the trustee.
The trustee may not release these options or shares to the holders thereof for two years from the date of the registration of the options in the name of the trustee, unless the beneficiary grantee waives the tax benefits under Section 102, as detailed below.
(TASE: GRTN) from January 2013 to June 2015, as the chairman of both Zmicha Investment House Ltd. (TASE: TZMI-M) from February 2013 to July 2015 and Gefen Biomed Investments Ltd. (TASE: GEFEN) from April 2013 to July 2015. Mr.
Yoresh has served as a director at Nano Dimension Ltd. (Nasdaq and TASE: NNDM). Mr. Yoresh’s previous directorships include Greenstone Industries Ltd. (TASE: GRTN) from January 2013 to June 2015, as the chairman of both Zmicha Investment House Ltd. (TASE: TZMI-M) from February 2013 to July 2015 and Gefen Biomed Investments Ltd. (TASE: GEFEN) from April 2013 to July 2015.
Duties of Shareholders Under the Companies Law, a shareholder has a duty to refrain from abusing its power in the company and to act in good faith and in an acceptable manner in exercising its rights and performing its obligations toward the company and other shareholders, including, among other things, in voting at general meetings of shareholders (and at shareholder class meetings) on the following matters: ● amendment of the articles of association; ● increase in the company’s authorized share capital; ● merger; and ● the approval of related party transactions and acts of office holders that require shareholder approval.
The approval of each of the compensation committee and the board of directors, with regard to the office holders and directors above, must be in accordance with the company’s stated compensation policy; however, under special circumstances, the compensation committee and the board of directors may approve compensation terms of a chief executive officer that are inconsistent with the company’s compensation policy provided that they have considered those provisions that must be included in the compensation policy according to the Companies Law and that shareholder approval was obtained by a special majority requirement. 69 Duties of Shareholders Under the Companies Law, a shareholder has a duty to refrain from abusing its power in the company and to act in good faith and in an acceptable manner in exercising its rights and performing its obligations toward the company and other shareholders, including, among other things, in voting at general meetings of shareholders (and at shareholder class meetings) on the following matters: ● amendment of the articles of association; ● increase in the company’s authorized share capital; ● merger; and ● the approval of related party transactions and acts of office holders that require shareholder approval.
(CSE: CMND) (OTC: CMNDF) (FSE:CWY), Jeffs’ Brands Ltd., Polyrizon Ltd. and Charging Robotics Ltd. Mr. Adler is a certified public accountant in Israel and holds a B.A. degree in Accounting and Business Management from The College of Management, Israel. Keren Aslan, Director Mrs. Keren Aslan has served on our board of directors since February 1, 2023. Ms.
(TASE: EMITF), Clearmind Medicine Inc. (CSE: CMND) (OTC: CMNDF) (FSE:CWY), Jeffs’ Brands Ltd., Polyrizon Ltd. and Charging Robotics Ltd. Mr. Adler is a certified public accountant in Israel and holds a B.A. degree in Accounting and Business Management from The College of Management, Israel.
Our Option Plan is administered by our board of directors, regarding the granting of options and the terms of option grants, including exercise price, method of payment, vesting schedule, acceleration of vesting and the other matters necessary in the administration of this Option Plan.
Our employees, directors, officers, and services providers, including those who are our controlling shareholders (if any), as well as those of our affiliated companies, are eligible to participate in this Option Plan. 70 Our Option Plan is administered by our board of directors, regarding the granting of options and the terms of option grants, including exercise price, method of payment, vesting schedule, acceleration of vesting and the other matters necessary in the administration of this Option Plan.
Executive Officer - Name and Principal Position (1) (2) (in thousands, US dollars) Salary and Related Benefits Share Based Compensation Total Shahar Hania, CEO $ 393 (3) $ 38 $ 431 Ofer Naveh, CFO $ 297 (4) $ 32 $ 329 Shmuel Donnerstein, Director (former Chairman) $ 149 (5) $ 163 $ 312 Amit Klir, VP R&D $ 216 $ 2 $ 218 Zachi Bar- Yehoshua, COO $ 176 $ 20 $ 196 (1) All amounts reported in the table are in terms of cost to us, as recorded in our financial statements.
Executive Officer - Name and Principal Position (1) (2) (in thousands, US dollars) Salary and Related Benefits Share Based Compensation Total Shahar Hania, CEO $ 302 (3) $ 51 $ 353 Ofer Naveh, CFO $ 229 $ 22 $ 251 Amit Klir, VP R&D $ 229 (4) $ 7 $ 236 Ofer Grisaro, VP Sales and Marketing $ 191 (5) $ 7 $ 198 Zachi Bar- Yehoshua, COO $ 180 $ 1 $ 181 (1) All amounts reported in the table are in terms of cost to us, as recorded in our financial statements.
In addition, any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest with a term of more than three years requires the abovementioned approval every three years; however, such transactions not involving the receipt of services or compensation can be approved for a longer term, provided that the audit committee determines that such longer term is reasonable under the circumstances.
In addition, the shareholder approval must fulfill one of the following requirements: ● at least a majority of the shares held by shareholders who have no personal interest in the transaction and are voting at the meeting must be voted in favor of approving the transaction, excluding abstentions; or ● the shares voted by shareholders who have no personal interest in the transaction who vote against the transaction represent no more than 2% of the voting rights in the company. 68 In addition, any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest with a term of more than three years requires the abovementioned approval every three years; however, such transactions not involving the receipt of services or compensation can be approved for a longer term, provided that the audit committee determines that such longer term is reasonable under the circumstances.
Daskal serves as the President of Israel-Canada Chamber of Commerce since 2013. From 2003 to 2019, Mr. Daskal established Bombardier Israel, working as Chief Country Representative, Project Manager, Financing & Head of Sales. Prior to that, Mr. Daskal was the General Manager of Chemitron Technologies from 1999 to 2003.
Daskal established Bombardier Israel, working as Chief Country Representative, Project Manager, Financing& Head of Sales. Prior to that, Mr. Daskal was the General Manager of Chemitron Technologies from 1999 to 2003. Since 2021, he is the chairman of the board of directors and the director of the finance committee of the Tel Aviv Museum of Art. Mr.
Our board members are each entitled to (i) an annual fee of NIS 48,000 and a per meeting fee of NIS 2,000. Board members may waive there right to receive the above fees or options or any part thereof, and director nominees may assign their right to remunerations to the shareholder which appointed them.
Board members may waive there right to receive the above fees or options or any part thereof, and director nominees may assign their right to remunerations to the shareholder that appointed them. C.
B. Compensation The following table presents in the aggregate all compensation we paid to all of our directors and senior management as a group for the year ended December 31, 2022. The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period.
The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period. All amounts reported in the table below reflect the cost to us in thousands of U.S. dollars, for the year ended December 31, 2023.
As of March 23, 2023, the number of ordinary shares reserved for issuance under the Option Plan was 2,332,352. As of March 23, 2023, 1,900,896 options to purchase 1,900,896 ordinary shares were issued and outstanding, of which 827,458 options were vested as of that date, with an exercise price approximately $1.85-6.139 per share.
As of March 28, 2024, the number of ordinary shares reserved for issuance under the Option Plan was 288,745. As of March 28, 2024, 206,539 options to purchase 206,539 ordinary shares were issued and outstanding, of which 108,498 options were vested as of that date, with an exercise price approximately $14.80-49.11 per share.
(4) Includes a one-time IPO bonus to our Chief Financial Officer in the amount of NIS 270,000 (approximately $84,000) (5) Includes a one-time IPO bonus to our former Chairman in the amount of $50,000 (plus VAT) 46 Employment Agreements and Service Agreements with Executive Officers We have entered into written employment agreements and/or service agreements with each of our executive officers.
(4) Includes a one-time bonus to our VP R&D in the amount of NIS 52,000 (approximately $14,000) (5) Includes sales bonuses to our VP Sales and Marketing in a total amount of NIS 62,375 (approximately $17,000) Employment Agreements and Service Agreements with Executive Officers We have entered into written employment agreements and/or service agreements with each of our executive officers.
Zoo in Poland, a Director of Knorr-Bremse Systemes Ferroviares France SA in France, Consiglio D’Amministrazione at Microelettrica Scientifica s.p.a in Italy, a Director of Knorr-Bremse Systems for Railways in Russia, and a Director of Knorr-Bremse 1520 in Russia. Shmuel Donnerstein, Director Mr. Shmuel Donnerstein has served on our board of directors since June 2020. Mr.
Zoo in Poland, a Director of Knorr-Bremse Systemes Ferroviares France SA in France, Consiglio D’Amministrazione at Microelettrica Scientifica s.p.a in Italy, a Director of Knorr-Bremse Systems for Railways in Russia, and a Director of Knorr-Bremse 1520 in Russia. 53 Ariel Dor, Director Mr. Ariel Dor is a seasoned entrepreneur and leader in the fields of engineering and business.
Mr. Yoresh is a seasoned executive with over 15 years of executive and financial management experience, mainly with companies in the financial, technology and industrial sectors. Mr. Yoresh has served as chief financial officer since March 2010, and as a director since October 2010, at Foresight Autonomous Holdings Ltd. (Nasdaq and TASE: FRSX), one of our shareholders. Mr.
Non-Employee Directors Eli Yoresh, Director Mr. Eli Yoresh has served on our board of directors since August 2017 and was appointed as the Chairman in January 2024. Mr. Yoresh is a seasoned executive with over 15 years of executive and financial management experience, mainly with companies in the financial, technology and industrial sectors. Mr.
In accordance with the Companies Law, we are required to disclose the compensation granted to our five most highly compensated officers. The table below reflects the compensation granted during or with respect to the year ended December 31, 2022.
The table below reflects the compensation granted during or with respect to the year ended December 31, 2023.
The duty of care of an office holder includes a duty to use reasonable means to obtain: ● information on the advisability of a given action brought for his approval or performed by him by virtue of his position; and ● all other important information pertaining to these actions.
The duty of care of an office holder includes a duty to use reasonable means to obtain: ● information on the advisability of a given action brought for his approval or performed by him by virtue of his position; and ● all other important information pertaining to these actions. 65 The duty of loyalty of an office holder requires an office holder to act in good faith and for the benefit of the company, and includes a duty to: ● refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs; ● refrain from any action that is competitive with the company’s business; ● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and ● disclose to the company any information or documents relating to the company’s affairs which the office holder has received due to his position as an office holder.
Our internal auditor is Mrs. Dana Spira, who has been serving as our internal auditor since May 2022. Mrs.
Under the Companies Law, the board of directors of an Israeli public company must appoint an internal auditor nominated by the audit committee. Our internal auditor is Mrs. Dana Spira, who has been serving as our internal auditor since May 2022. Mrs.
We require our office holders to make such disclosures to our board of directors.
The Companies Law does not specify to whom within us nor the manner in which required disclosures are to be made. We require our office holders to make such disclosures to our board of directors.
Salary and Related Benefits Pension, Retirement and Other Similar Benefits Share Based Compensation All directors and senior management as a group, consisting of 12 persons (as of December 31, 2022). $ 1,454,771 -- $ 273,286 As of December 31, 2022, options to purchase 1,269,568 ordinary shares granted to our directors and executive officers were outstanding under our Option Plan at a weighted average exercise price of $3.094 per share.
As of December 31, 2023, options to purchase 47,488 ordinary shares granted to our directors and executive officers were outstanding under our Option Plan at a weighted average exercise price of $14.8 per share. 55 In accordance with the Companies Law, we are required to disclose the compensation granted to our five most highly compensated officers.
Removed
Non-Employee Directors Mark Cleobury, Director Mr. Mark Cleobury has served on our board of directors since December 1, 2022 and was appointed as the Chairman on January 19, 2023. Mr Cleobury currently serves as Senior Vice President of Knorr-Bremse’s Rail Systems Division, since April 2022. Prior to this role, Mr.
Added
From 2011 to 2013, Mr. Dor served as the Team Leader of the Aerospace division at Elbit Systems. From 2014 to 2015, he served as Business Unit Director at Galooli Fleet & Energy, a subsidiary of the Galooli Group that specializes in IoT solutions for vehicles. Transitioning to the autonomous vehicle industry, Mr.
Removed
Donnerstein served as the Chairman of our board until January 2023. Since 2008, Mr. Donnerstein serves as the Chairman of the board of directors of Rav Bariach (08) Industries Ltd, a leading company in the door & locks industry in Israel for over 40 years, and also served as the CEO until 2016. Mr.
Added
Dor served as the Co-CEO of Foresight Autonomous Holdings from 2016 to 2019. In 2019, Mr. Dor founded Upsellon Brands Holdings and has served as its CEO since that time. Upsellon Brands is an innovative e-commerce dedicated to revolutionizing the landscape of Amazon FBA aggregation. Mr. Dor holds a B.Sc. in Electrical Engineering from the Tel Aviv University.
Removed
Donnerstein also serves on the board of directors of Scoutam Ltd. (OTCMKTS: SCTC), Safe-Food Ltd., Rav Bariach Locking Products Ltd, Doors (08) Industries Ltd., Norieali Construction Industries Ltd. And Rav Bariach (08) Industries Ltd. Mr. Donnerstein holds a B.A. in Economics from Tel-Aviv University. Eli Yoresh, Director Mr. Eli Yoresh has served on our board of directors since August 2017.
Added
Hila Kiron-Revach, Director Ms. Hila Kiron-Revach has served on our board of directors since January 2024. Ms. Kiron-Revach has served as a member of the board of directors of Geffen Biomed Ltd. since 2014 and has been a member of the board of directors of Zmiha Investment House Ltd. since 2021. In 2021, Ms.
Removed
Eichhorn has more than 15 years of experience in the rail industry. Mr. Eichhorn currently serves as the Vice President Digital Products and Services of Knorr-Bremse’s Rail Systems Division since November 2020. Prior to that Mr.
Added
Kiron-Revach served as a professional advisor to the chairman of the board of directors and acting secretary of Eilat Ashkelon Pipeline Company. From 2015 until 2021, Ms. Kiron-Revach served as a senior professional advisor to ministers in the Israeli government, including the minister of foreign affairs and minister of transportation. From 2012 until 2015, Ms.

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Item 7. Management's Discussion & Analysis

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

20 edited+22 added−15 removed11 unchanged
Biggest changePure Capital Ltd.(3) 869,470 5.35 % Directors and senior management who are not 5% holders: Shahar Hania (4) 500,694 3.09 % Ofer Naveh(5) 96,930 0.60 % Zachi Bar-Yehoshua (6) 35,200 0.22 % Shmuel Donnerstein* (7) 401,380 2.44 % Eli Yoresh *(8) 30,163 0.19 % Ofer Grisaro (9) 8,333 0.05 % Amit Klir (10) 8,333 0.05 % Maximilian Eichhorn* (11) - - Keren Aslan * (12) Yossi Daskal * (13) 13,311 0.08 % Inbal Kreiss * (14) 13,311 0.08 % Oz Adler* (15) - - Mark Cleobury* - - All directors and senior management as a group (13 persons) 1,107,654 6.61 % * Indicates director of the Company.
Biggest changeNo. of Shares Beneficially Owned Percentage Owned Holders of more than 5% of our voting securities: Knorr-Bremse (1) 1,718,539 12.97 % Directors and senior management who are not 5% holders: Shahar Hania (2) 76,140 ** Ofer Naveh(3) 17,293 ** Zachi Bar-Yehoshua (4) 4,650 ** Eli Yoresh* (5) 3,771 ** Ofer Grisaro (6) 2,604 ** Amit Klir (7) 2,604 ** Ariel Dor* - - Yossi Daskal* (8) 1,664 ** Hila Kiron Revach* - - Oz Adler* (9) 1,664 ** Mark Cleobury* - - All directors and senior management as a group (11 persons) 59,570 0.87 % * Indicates director of the Company. ** Indicates beneficial ownership of less than 1% of the total ordinary shares outstanding.
There are no arrangements known to us which would result in a change in control of our company at a subsequent date. B. Related Party Transactions The following is a description of the material terms of those transactions with related parties to which we are party since January 1, 2021.
There are no arrangements known to us which would result in a change in control of our company at a subsequent date. B. Related Party Transactions The following is a description of the material terms of those transactions with related parties to which we are party since January 1, 2023.
SAFE In January 2022, we entered into a SAFE with two of our current shareholders providing for financing in the aggregate amount of $1,000,000 (KB in the amount of $714,286 and Foresight in the amount of $285,714) which was subsequently amended in March 2022.
SAFE In January 2022, we entered into a SAFE with two of our current shareholders providing for financing in the aggregate amount of $1,000,000 (Knorr-Bremse in the amount of $714,286 and Foresight in the amount of $285,714) which was subsequently amended in March 2022.
Major Shareholders The following table sets forth information regarding beneficial ownership of our ordinary shares as of March 23, 2023 by: ● each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding ordinary shares; ● each of our directors and executive officers; and ● all of our directors and executive officers as a group.
Major Shareholders The following table sets forth information regarding beneficial ownership of our ordinary shares as of March 28, 2024 by: ● each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding ordinary shares; ● each of our directors and executive officers; and ● all of our directors and executive officers as a group.
(15) Does not include options to purchase 39,932 ordinary shares exercisable at $1.85 per share and expiring in June 2032, that vest in more than 60 days from the date hereof. 62 Changes in Ownership of Major Shareholders To our knowledge, other than as disclosed in the table above, our other filings with the SEC and this Annual Report, there has been no significant change in the percentage ownership held by any major shareholder since January 1, 2020.
Does not include options to purchase 3,328 ordinary shares exercisable at $14.80 per share and expiring in June 2032, that vest in more than 60 days from the date hereof. 72 Changes in Ownership of Major Shareholders To our knowledge, other than as disclosed in the table above, our other filings with the SEC and this Annual Report, there has been no significant change in the percentage ownership held by any major shareholder since January 1, 2021.
We describe our Option Plan under “Management—Equity Incentive Plan.” If the relationship between us and an executive officer or a director is terminated, except for cause (as defined in the various Option Plan agreements), options that are vested will generally remain exercisable for one month following the date of such termination if we initiate such termination or two weeks following the date of such termination, if an executive officer or a director initiates such termination.
We describe our Option Plan under “Item 6.E.—Directors, Senior Management and Employees—Share Incentive Plan.” If the relationship between us and an executive officer or a director is terminated, except for cause (as defined in the various Option Plan agreements), options that are vested will generally remain exercisable for one month following the date of such termination if we initiate such termination or two weeks following the date of such termination, if an executive officer or a director initiates such termination.
(1) Consists of (i) 5,248,427 ordinary shares and (ii) 605,151 warrants to purchase 605,151 ordinary shares. The shareholder is Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, which is a 100% subsidiary of Knorr-Bremse AG which is a German company publicly traded on the Frankfurt Stock Exchange. As of January 1, 2023, Marc Llistosella is the chief executive officer of Knorr-Bremse AG.
(1) Consists of (i) 1,149,474 ordinary shares and (ii) 569,065 warrants to purchase 569,065 ordinary shares. The shareholder is Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, which is a 100% subsidiary of Knorr-Bremse AG which is a German company publicly traded on the Frankfurt Stock Exchange. As of January 1, 2023, Marc Llistosella is the chief executive officer of Knorr-Bremse AG.
The aforesaid option expired on the closing of our initial public offering on April 4, 2022. 63 On March 6, 2022, we issued to Knorr-Bremse, a total of 10,256 Preferred A shares at a price of $195 per share, after we called an amount of $2,000,000 out of the option amount.
Knorr-Bremse On March 6, 2022, we issued to Knorr-Bremse, a total of 10,256 Preferred A shares at a price of $195 per share, after we called an amount of $2,000,000 out of the option amount.
Does not include options to purchase 26,621 ordinary shares exercisable at $1.85 per share and expiring in May 2032, that vest in more than 60 days from the date hereof. (9) Consists of 8,333 options vested within 60 days, exercisable at a weighted average exercise price of $1.85 and expiring in September 2032.
Does not include options to purchase 3,646 ordinary shares exercisable at $14.80 per share and expiring in September 2032, that vest in more than 60 days from the date hereof. (8) Consists of 1,664 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in May 2032.
Does not include options to purchase 26,621 ordinary shares exercisable at $1.85 per share and expiring in June 2032, that vest in more than 60 days from the date hereof. (14) Consists of 13,311 options vested within 60 days, exercisable at a weighted average exercise price of $1.85 and expiring in May 2032.
Does not include options to purchase 3,328 ordinary shares exercisable at $14.80 per share and expiring in May 2032, that vest in more than 60 days from the date hereof. (9) Consists of 1,664 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in June 2032.
Record Holders As of March 14, 2023, there were 69 holders of record of our ordinary shares, out of which one holder of record had a registered address in the United States.
Record Holders As of March 21, 2024, there were 75 holders of record of our ordinary shares, out of which 24 holders of record had a registered address in the United States.
Does not include options to purchase 134,855, ordinary shares exercisable at $1.85 per share and expiring in May 2032, that vest in more than 60 days from the date hereof. 61 (5) Consists of 96,930 options vested within 60 days, exercisable at a weighted average exercise price of $1.85 and expiring in January 2028, January 2030 and May 2032.
Does not include options to purchase 5,229 ordinary shares exercisable at $14.80 per share and expiring in May 2032, that vest in more than 60 days from the date hereof. (4) Consists of 4,650 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in January 2028, January 2030 and September 2032.
Does not include options to purchase 177,500 ordinary shares exercisable at $1.85 per share and expiring in May 2032, that vest in more than 60 days from the date hereof. (8) Consists of 30,163 options vested within 60 days, exercisable at a weighted average exercise price of $4.25 and expiring in January 2028 and September 2032.
Does not include options to purchase 251 ordinary shares exercisable at $14.80 per share and expiring in September 2032, that vest in more than 60 days from the date hereof. (5) Consists of 3,771 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in January 2028 and May 2032.
Does not include options to purchase 41,667 ordinary shares exercisable at $1.85 per share and expiring in September 2032, that vest in more than 60 days from the date hereof. (10) Consists of 8,333 options vested within 60 days, exercisable at a weighted average exercise price of $1.85 and expiring in September 2032.
Does not include options to purchase 3,646 ordinary shares exercisable at $14.80 per share and expiring in September 2032, that vest in more than 60 days from the date hereof. (7) Consists of 2,604 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in September 2032.
Does not include options to purchase 83,243 ordinary shares exercisable at $1.85 per share and expiring in May 2032, that vest in more than 60 days from the date hereof. (6) Consists of 35,200 options vested within 60 days, exercisable at a weighted average exercise price of $1.85 and expiring in January 2028 and January 2030.
Does not include options to purchase 45,801, ordinary shares exercisable at $14.80 per share and expiring in May 2032 and October 2033, that vest in more than 60 days from the date hereof. (3) Consists of 17,293 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in January 2028, January 2030 and May 2032.
Does not include options to purchase 4,000 ordinary shares exercisable at $1.85 per share and expiring in September 2032, that vest in more than 60 days from the date hereof.
Does not include options to purchase 3,328 ordinary shares exercisable at $14.80 per share and expiring in May 2032, that vest in more than 60 days from the date hereof. (6) Consists of 2,604 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in September 2032.
Except as indicated in the footnotes to this table, we believe that the shareholders named in this table have sole voting and investment power with respect to all shares shown to be beneficially owned by them, based on information provided to us by such shareholders.
Ordinary shares issuable under share options or warrants that are exercisable within 60 days after March 28, 2024 are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options or warrants but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. 71 Except as indicated in the footnotes to this table, we believe that the shareholders named in this table have sole voting and investment power with respect to all shares shown to be beneficially owned by them, based on information provided to us by such shareholders.
(7) Consists of (i) 34,232 ordinary shares, and (ii) 367,148 options vested within 60 days, exercisable at a weighted average exercise price of $5.10 and expiring in October 2030 and May 2032.
(2) Consists of (i) 50,820 ordinary shares, and (ii) 25,320 options vested within 60 days, exercisable at an exercise price of $14.80 and expiring in January 2028, October 2030, May 2032 and October 2033.
Unless otherwise noted below, each beneficial owner’s address is: c/o Rail Vision Ltd., 15 Ha’Tidhar St., Ra’anana, 4366517 Israel. No. of Shares Beneficially Owned Percentage Owned Holders of more than 5% of our voting securities: Knorr-Bremse (1) 5,853,578 35.06 % Foresight Autonomous Holdings Ltd. (2) 2,688,432 16.46 % L.I.A.
Unless otherwise noted below, each beneficial owner’s address is: c/o Rail Vision Ltd., 15 Ha’Tidhar St., Ra’anana, 4366517 Israel.
We are not controlled by another corporation, by any foreign government or by any natural or legal persons, except that that Knorr-Bremse beneficially owns approximately 35%, and Foresight beneficially owns approximately 16% of our outstanding ordinary shares as of the date of this Annual Report.
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. We are not controlled by another corporation, by any foreign government or by any natural or legal persons.
Removed
Ordinary shares issuable under share options or warrants that are exercisable within 60 days after March 23, 2023 are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options or warrants but are not deemed outstanding for the purpose of computing the percentage ownership of any other person.
Added
The number of record holders is not representative of the number of beneficial holders of our ordinary shares, as 88.802% of our outstanding ordinary shares are recorded in the name of Cede & Co. as nominee for the Depository Trust Company, in whose name all shares held in “street name” are held in the United States.
Removed
(2) Consists of (i) 2,446,152 ordinary shares, and (ii) 242,280 warrants to purchase 242,280 ordinary shares. Foresight Autonomous Holdings Ltd. is an Israeli company publicly traded on the Nasdaq. The chief executive officer of Foresight is Haim Siboni, and its address is 7 Golda Meir, Ness Ziona 7403650 Israel.
Added
Pure Capital Private Placement (January 2024) On January 18, 2024, we entered into the January 2024 PIPE, Units, consisting of (i) one of our ordinary shares and/or pre-funded warrants to purchase our ordinary shares and (ii) one and a half warrants to purchase our ordinary shares to the Investors, of a minimum of $2.5 million of Units and up to a maximum of $3 million of Units.
Removed
(3) Based solely on a Schedule 13G filed with the SEC on January 13, 2023. Consists of (i) 717,450 ordinary shares with sole voting power, and (ii) 152,020 ordinary shares with shared voting power. Kfir Silberman is the officer, sole director, chairman of the board of directors and controlling shareholder of L.I.A.
Added
The January 2024 PIPE closed on January 31, 2024 following the execution of definitive documentation between us and the Investors. 73 In the January 2024 PIPE, the Investors purchased $3.0 million of Units consisting of (A) (i) 1,651,458 of ordinary shares and/or (ii) January 2024 PIPE Pre-Funded Warrants to purchase up to 1,394,999 ordinary shares and (B) January 2024 PIPE Ordinary Share Warrants to purchase up to 4,569,688 ordinary shares.
Removed
Pure Capital, and its address is 20 Raoul Wallenberg Street, Tel Aviv, Israel 6971916. (4) Consists of (i) 406,560 ordinary shares, and (ii) 94,138 options vested within 60 days, exercisable at a weighted average exercise price of $5.17 and expiring in January 2028, October 2030 and May 2032.
Added
The purchase price per Unit is $0.98475. The January 2024 PIPE Pre-Funded Warrants are immediately exercisable at an exercise price of $0.0001 per ordinary share, subject to certain adjustments and certain anti-dilution protection set forth therein, and will not expire until exercised in full.
Removed
Does not include options to purchase 41,667 ordinary shares exercisable at $1.85 per share and expiring in September 2032, that vest in more than 60 days from the date hereof. (11) Does not include options to purchase 39,932 ordinary shares exercisable at $1.85 per share which Mr. Eichhorn is entitled to receive that have not yet been granted.
Added
The January 2024 PIPE Ordinary Share Warrants are exercisable upon issuance at an exercise price of $0.98475 per ordinary share, subject to certain adjustments and certain anti-dilution protection set forth therein, and have a 5.5-year term from the issuance date.
Removed
(12) Does not include options to purchase 39,932 ordinary shares exercisable at $1.85 per share which were approved by the board of directors in March 2023 and are subject to approval by our shareholders. (13) Consists of 13,311 options vested within 60 days, exercisable at a weighted average exercise price of $1.85 and expiring in May 2032.
Added
In connection with the closing of the January 2024 PIPE, we exercised our conversion right pursuant to the Facility Agreement to convert $500,000 of the Credit Facility as a portion of the January 2024 Conversion Loan Amount.
Removed
Does not include options to purchase 26,621 ordinary shares exercisable at $1.85 per share and expiring in June 2032, that vest in more than 60 days from the date hereof.
Added
Following such conversion, we issued to the Lender (i) the Facility Conversion Pre-Funded Warrant to purchase up to 507,743 ordinary shares and (ii) the Facility Conversion Ordinary Share Warrant to purchase up to 761,615 ordinary shares.
Removed
These numbers are not representative of the number of beneficial holders of our shares nor is it representative of where such beneficial holders reside, since many of these shares were held of record by brokers or other nominees.
Added
The Facility Conversion Pre-Funded Warrant and the Facility Conversion Common Warrant are in substantially the same form and on substantially the same terms as the January 2024 PIPE Pre-Funded Warrant and January 2024 PIPE Ordinary Share Warrant, respectively.
Removed
Registration Rights We are a party to an amended and restated investors rights agreement, dated as of October 13, 2020, or Investors Rights Agreement, with our founders, or the Founders, and two of our major shareholders, Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, a company incorporated under the laws of Germany, or KB, and Foresight Autonomous Holdings Ltd., or Foresight, and, together with KB and the Founders, the Right Holders.
Added
As of the date of this Annual Report, 1,394,999 January 2024 PIPE Pre-Funded Warrants, 507,743 Facility Conversion Pre-Funded Warrant, 761,615 Facility Conversion Common Warrant and 4,269,688 January 2024 PIPE Warrants have been exercised resulting in gross proceeds of approximately $5.0 million to the Company Execution of Credit Facility Agreement and Issuance of Warrant (January 2024) On January 9, 2024, we entered into the Facility Agreement for a $6 million the Credit Facility and an additional amount up to $3 million, subject to certain conditions, of Additional Loans, with the Lender, who was also an Investor in the January 2024 PIPE.
Removed
Pursuant to the Investors Rights Agreement, the Right Holders are entitled to certain registration rights following the closing of our initial public offering.
Added
The Credit Facility, which had an initial term of 10 months, accrued interest at a rate of 8% per annum, and the first payment of $1.5 million was drawn down upon execution of the Facility Agreement and the remaining amount were able to be drawn down in eight equal installments as of March 7, 2024.
Removed
Knorr-Bremse On March 18, 2019, we entered into an investment agreement, or the March 2019 Investment Agreement, with Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, or Knorr-Bremse, according to which, we issued to Knorr-Bremse an aggregate amount of 1,803,296 ordinary shares, at a price of $5.54 per share for a total investment of $10,000,000.
Added
As detailed below, the Facility Agreement terminated on March 1, 2024. Pursuant to the Facility Agreement, the Lender’s financing obligations terminated in the event we drew down $7.5 million or more pursuant to an alternate credit facility or closes one or more equity financing transaction in an aggregate amount of at least $5 million.
Removed
In addition, as part of the March 2019 Investment Agreement, we also granted Knorr-Bremse warrants to purchase 655,732 ordinary shares with an exercise price of $5.54, which can be exercised in the event of the exercise of certain warrants held by our other shareholders. Warrants to purchase 132,308 ordinary shares have been exercised in consideration of approximately $734,000.
Added
As of March 1, 2024, we had received aggregate gross proceeds of more than $5 million from the purchase of Units in the January 2024 Private Placement, the exercise of warrants issued in the January 2024 Private Placement and our exercise of the Conversion Right in the amount of $500,000.
Removed
All the remaining warrants expired. On October 13, 2020, we entered into an additional investment agreement with Knorr-Bremse, or the Additional Investment Agreement, which was amended on December 2, 2021, pursuant to which we issued to Knorr-Bremse 51,282 Preferred A shares at a price of $195 per share for a total investment of $10,000,000.
Added
As a result, the Lender’s financing obligations have terminated pursuant to the terms of the Facility Agreement.
Removed
Pursuant to the Additional Investment Agreement, Knorr-Bremse agreed that in the event that we do not complete additional capital raising in the amount of at least $3 million by September 30, 2021, we had an option during the period from October 1, 2021 to March 31, 2022, to demand that Knorr-Bremse invest in us an additional amount of $5 million in consideration for the allotment of 25,641 Preferred A shares, at a price of $195 per share, subject to certain limitations.
Added
Until we close one or more equity financing transactions in an aggregate amount of at least $5 million (including the conversion of the Credit Facility), we had the right to convert into ordinary share up to $1.5 million, including accrued interest, of a loan extended or to be extended to us by the Lender, or the January 2024 Conversion Loan Amount, in connection with and in the framework of a financing transaction of ours on the date that follows the date upon which we notified the Lender of such financing transaction, which conversion will occur upon the same terms.
Removed
On February 14, 2022, we and Knorr-Bremse signed a second amendment to the Additional Investment Agreement according to which from February 14, 2022, we are entitled to exercise the option in two installments as follows: (i) to call for up to $2,000,000 out of the option amount no later than March 31, 2022; and (ii) to call for up to $2,286,000 out of the option amount no later than June 30, 2022.
Added
As of the date hereof, we had converted $500,000 of the Credit Facility as a portion of the January 2024 Conversion Loan Amount.
Added
As part of the Facility Agreement, we issued a warrant, or the January 2024 Facility Warrant, to the Lender to purchase 2,419,354 of our ordinary shares representing an aggregate exercise amount of $7.5 million, with a per share exercise price of $3.10, subject to certain adjustments and certain anti-dilution protection, representing a 150% premium of the closing share price of our ordinary shares on January 5, 2024.
Added
The January 2024 Facility Warrant is immediately exercisable upon issuance and has a term of 5 years from the date of issuance.
Added
Following the closing of the January 2024 PIPE, the exercise price of the January 2024 Facility Warrant was adjusted to $0.408 which is the effective price per ordinary share in the January 2024 PIPE, or the January 2024 Facility Warrant Adjusted Exercise Price, and the number of ordinary shares issuable upon the exercise of the January 2024 Facility Warrant was also adjusted to a total 18,382,353, or the January 2024 Facility Warrant Adjusted Shares, such that the product of the January 2024 Facility Warrant Adjusted Exercise Price and the January 2024 Facility Warrant Adjusted Shares is equal to an aggregate exercise amount of $7.5 million.
Added
As of the date of this Annual Report, 920,000 January 2024 Facility Warrants have been exercised resulting in gross proceeds of approximately $0.375 million to the Company. 74 In connection with and as a condition to the Credit Facility, each of Shmuel Donnerstein, Inbal Kreiss and Keren Aslan tendered their resignations from our board of directors, and our board of directors appointed Amitay Weiss and Hila Kiron-Revach to our board of directors, to serve until our next annual general meeting of shareholders.
Added
On March 12, 2024, Mr. Weiss resigned from our board of directors. Mr. Weiss’s resignation was not due to any disagreement with us or management. Also on March 12, 2024, our board of directors appointed Mr. Ariel Dor to our board of directors to serve until our next annual general meeting of shareholders.
Added
In the KB Private Placement, we entered into a definitive securities purchase agreement for the purchase and sale of an aggregate of 493,421 ordinary shares and the KB Warrants, 5-year term common warrants to purchase an aggregate of 493,421 ordinary shares, at a purchase price of $6.08 per unit, to Knorr-Bremse.
Added
The KB Warrants are exercisable at $6.72 per ordinary share. The KB Private Placement closed on June 21, 2023, following approval of such transaction by our shareholders.

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