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LAMINERA FLOW OPTIMIZATION LTD.

Date Filed : Aug 05, 2022

F-11ff12022_laminera.htmREGISTRATION STATEMENT

As filed with the Securities and Exchange Commission on August 4, 2022

Registration No. 333-              

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

____________________

FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

____________________

Laminera Flow Optimization Ltd.
(Exact name of registrant as specified in its charter)

____________________

State of Israel

 

3561

 

Not Applicable

(State or other jurisdiction of
incorporation or organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(I.R.S. Employer
Identification Number)

____________________

31 Hamelacha St.
Netanya, 4250566, Israel
Tel: +972-77-955-5828

 

Puglisi & Associates
850 Library Ave., Suite 204
Newark, DE 19711
Tel: 302-738-6680

(Address, including zip code, and telephone
number, including area code, of registrant’s
principal executive offices)

 

(Name, address, including zip code, and
telephone number, including area code,
of agent for service)

____________________

David Huberman, Esq.
McDermott Will &
Emery LLP
One Vanderbilt Avenue
New York, NY 10017-3852
Tel: 312-372-2000

 

Perry Wildes, Adv.
Nathan Hyman, Adv.
Gross & Co.
One Azrieli Center Tel Aviv 6701101, Israel
Tel: +972
-3-607-4444

 

Gregory Sichenzia, Esq.
Darrin Ocasio, Esq.
Sichenzia Ross Ference LLP.
1185 Avenue of the Americas
New York, NY 10036
Tel: 212-930-9700

____________________

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date hereof.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 7(a)(2)(B) of the Securities Act.

____________

         The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

 

SUBJECT TO COMPLETION,

 

DATED AUGUST 4, 2022

         Units
Each Consisting of One Ordinary Share and
One Warrant to Purchase One Ordinary Share

Laminera Flow Optimization Ltd.

This is the initial public offering of Laminera Flow Optimization Ltd. We are offering          units, or Units, each consisting of one of our Ordinary Shares, par value NIS 0.01 per share, or Ordinary Shares, and one warrant to purchase one of our Ordinary Shares, or each, a Warrant. We anticipate that the initial public offering price per Unit will be between $         and $        , and the assumed exercise price of each Warrant included in the Unit will be $         (based on an assumed public offering price of $         per Unit, the midpoint of the price range of the Units) per Ordinary Share (100% of the public offering price per Unit). The Units have no stand-alone rights and will not be certificated or issued as stand-alone securities. The Ordinary Shares and Warrants are immediately separable and will be issued separately in this offering. The Warrants offered hereby will be immediately exercisable on the date of issuance and will expire five years from the date of issuance.

We intend to apply to list our Ordinary Shares and our Warrants on The Nasdaq Capital Market, or Nasdaq, under the symbols “        ” and “        ”, respectively. It is a condition to the closing of this offering that our Ordinary Shares and Warrants qualify for listing on a national securities exchange.

We are both an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and a “foreign private issuer,” as defined under the U.S. federal securities laws and are subject to reduced public company reporting requirements. See “Prospectus Summary — Implications of Being an Emerging Growth Company and a Foreign Private Issuer” for additional information.

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 10.

Neither the Securities and Exchange Commission, or the SEC, nor any state or other foreign securities commission has approved nor disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

Per Unit

 

Total

Public offering price

 

$

   

$

 

Underwriting discounts and commissions(1)

 

$

   

$

 

Proceeds to us (before expenses)(2)

 

$

   

$

 

____________

(1)      Does not include a non-accountable expense allowance equal to 1.0% of the initial public offering price payable to the underwriters. In addition, we have agreed to issue warrants to the representative of the underwriters in an amount equal to 10% of the aggregate number of Ordinary Shares sold in this offering, but excluding the shares sold through the exercise of the over-allotment option). See the section titled “Underwriting” beginning on page 96 of this prospectus for additional disclosure regarding underwriter compensation and offering expenses.

(2)      Does not include proceeds from the exercise of the Warrants in cash, if any.

We have granted the representative of the underwriters an option to purchase from us, up to additional          Ordinary Shares and/or up to an additional          Warrants, within 45 days from the date of this prospectus to cover over-allotments, if any. The purchase price to be paid per additional Ordinary Share will be equal to the public offering price of one Unit, less the underwriting discount, and the purchase price to be paid per additional Warrant will be $0.001. If the representative exercises the option in full, the total underwriting discounts and commissions and management fees payable will be $        , and the total proceeds to us, before expenses, will be $        .

The underwriters expect to deliver the Ordinary Shares on or about             , 2022.

Sole Book-Running Manager

Aegis Capital Corp.

The date of this prospectus is             , 2022.

 

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About This Prospectus

You should rely only on the information contained in this prospectus or in any related free-writing prospectus. We and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectus prepared by us or on our behalf or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any information that others may give you. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. The information contained in this prospectus is current only as of the date of the front cover of the prospectus. Our business, financial condition, operating results and prospects may have changed since that date.

Persons who come into possession of this prospectus and any applicable free writing prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus and any such free writing prospectus applicable to that jurisdiction. See “Underwriting” for additional information on these restrictions.

Neither we nor the underwriters have authorized anyone to provide you with information that is different from that contained in this prospectus, any amendment or supplement to this prospectus, or in any free writing prospectus we may authorize to be delivered or made available to you. Neither we nor the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell securities and seeking offers to purchase securities only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date on the front of this prospectus, regardless of the time of delivery of this prospectus or any sale of securities. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.

Through and including            , 2022 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Neither we nor any of the underwriters have taken any action to permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

The terms “shekel,” “Israeli shekel” and “NIS” refer to New Israeli Shekels, the lawful currency of the State of Israel, and the terms “dollar,” “U.S. dollar” or “$” refer to United States dollars, the lawful currency of the United States of America. All references to “shares” in this prospectus refer to Ordinary Shares of Laminera Flow Optimization Ltd., par value NIS 0.01 per share.

TRADEMARKS

We own or have rights to trademarks, service marks and trade names that we use in connection with the operation of our business, including our corporate name, logos and website names. This prospectus also includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, our trademarks and tradenames referred to in this prospectus appear without the ® or symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor to our trademark and tradenames.

MARKET, INDUSTRY AND OTHER DATA

This prospectus contains estimates, projections and other information concerning our industry, our business, and the markets for our product. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from our own internal estimates and research as well as from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, and general publications, government data and similar sources.

In addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Special Note Regarding Forward-Looking Statements.”

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PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before deciding to invest in our securities, you should read this entire prospectus carefully, including the sections of this prospectus entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes included elsewhere in this prospectus. Unless the context otherwise requires, references in this prospectus to the “company,” “Laminera,” “we,” ”us,” “our” and other similar designations refer to Laminera Flow Optimization Ltd.

Company Overview

We are a deep-tech development stage company that aims to disrupt fluid transportation. We are committed to improving and optimizing the global infrastructure of water, oil and gas pipeline transportation by reducing energy costs, maintenance costs, and enhancing capacity without having to replace infrastructure. Our energy efficiency technology is unique in its ability to suppress turbulence by continuously generating low-frequency pressure waves, which achieves minimal hydrodynamic resistance for the pipeline transport process. As a result, friction losses within the pipeline are reduced. Following a proof of concept industrial test in 2015 of the pressure waves generator, or PWG, that was shown to decrease specific energy consumption by 35% for approximately five minutes, we believe that our current prototype in development will have the potential to reduce pump energy consumption significantly.

Pipe transportation technology is based on the universal conservation law of mass, impulse, and energy of fluid flow. In order to start the flow, energy is required to pump the liquid into the pipes. A significant amount of energy is spent maintaining the flow. One of the major energy loss factors in pumping and fluid transportation is determined by turbulent friction in the pipeline flow. This is also known as the turbulent friction loss, or head loss or drag reduction. Turbulent flow is a physical phenomenon present in every pressurized flow medium transported in pipelines under pressure (i.e., any pump causes turbulent flow). In turbulent flow, the fluid particles undergo irregular fluctuations, or mixing, in contrast to laminar flow, in which the fluid particles move in smooth paths or layers. In turbulent flow, the speed of the fluid particles at any specific point is continuously undergoing changes in both magnitude and direction. This causes the flow to slow down, which increases hydrodynamic resistance and thus causes electric motors to consume more energy during the pumping process. Since turbulent flow is a stable state, it is extremely challenging to modify it into partially laminar flow and keep it in that manner without consuming a considerable amount of energy for this process.

Three main sectors of critical infrastructure, oil, gas and water, rely heavily on pipes and pumps. Pumps consume an enormous amount of energy in the global water, oil, and gas markets. All three critical infrastructure sectors are actively seeking to improve energy efficiency.

In an era of increasing awareness of climate change, the desire to achieve sustainable growth while reducing environmental impact is strengthening the momentum of global efforts to reduce energy consumption. The historic 2015 Paris Climate Accords, endorsed nearly worldwide, calls for keeping the rise in average global temperatures “well below” two degrees Celsius (2°C) during the present century, compared to pre-industrial levels. According to the International Renewable Energy Agency, Global Energy Transformation Report, renewable energy and energy efficiency can, in combination, provide over 90% of the necessary energy-related CO2 emission reductions necessary to meet this goal of the Paris Climate Accords. Our technology has been designed to address the major challenge of reducing energy consumption in pipeline fluid transportation. The main technological challenge is to develop a sustainable and practical cost-efficient solution that makes the flow less turbulent. We are hopeful that our technology will be part of the vision of the Paris Climate Accords and will enhance energy efficiency to reduce CO2 emissions.

We have developed a novel active flow control device that introduces pressure waves into turbulent pipe flow and causes a relaminarization of the flow reducing friction on the pipe walls and hence reducing drag. Our device, referred to as a PWG, involves a rotating impeller located outside of the main pipe flow which induces a small inflow upstream of the mainline pump and returns the extracted fluid via an outflow pipe imparted with oscillating pressure waves from the impeller. This effect is designed to be sustainable for a significant pipe length and thereby introduce non-trivial energy savings regarding input pump work. Since February 2022, we have engaged with Ozen Engineering, a California based company, to perform commercial-grade computational fluid dynamics, or CFD, simulations of the PWG by considering the impact of generated pressure waves on fully-developed turbulent pipe flow. The overall goal was to further optimize and improve the original PWG design. In addition, we have established in Israel an open-source CFD software/hardware environment and initiated simulation studies to compliment and expand on the Ozen effort.

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Our product is designed in a modular concept. It consists of four separate yet interconnected components/systems: (i) a pressure waves generator, or PWG, (ii) control panel, (iii) measuring instruments, and (iv) a program (currently in development) for automatic control and dynamic optimization of the energy saving mode. The PWG is connected parallel to the pump and designed for the given flow and pipeline parameters. Once operating, our product generates immediate pressure waves in the discharge pipeline after the pump resulting in an immediate reduction in electricity consumption by the pump.

A significant advantage of our PWG is that it can be applied with minimal modifications to existing pipeline systems and without changing the pipeline itself. Also, the PWG consumes no more than one percent of the energy used by the pump.

In November 2018, we entered into a beta test agreement, or the Beta Test Agreement, with Mekorot Water Company Ltd., or Mekorot, Israel’s national water company. The Beta Test Agreement provides for Mekorot to test and examine the performance of our product for commercial production and its compliance with test specifications. The testing is planned to commence in late 2024 and take place over 30 months. The testing consists of several stages: (i) the preparation of a working plan, specification of the beta product and definition of the success criteria (completed in December 2018); (ii) after meeting the specification of the beta product, testing the performance of our product at an experimental site (planned in late 2024); (iii) testing the performance of our product at an operational site; and (iv) at the final stage of the product evaluation, a group from both sides will issue a final report analyzing the product performance compared to the success criteria defined for the beta test and discuss the suitability of the product for Mekorot.

In December 2018, we completed the first stage of the Beta Test Agreement, consisting of preparation of a working plan, specification of the beta product, and definition of the success criteria. Commencing in 2019, we leased our research and development facility and began the construction of a hydrodynamic experimental lab facility on which to conduct preliminary testing of the PWG performance in order to achieve at least 10% pump energy savings. The hydrodynamic lab consists of a pump, a water tank, and 136 meter long water pipeline with sensors detecting temperature, speed, flow rate, and pressure. In 2019, we developed an initial prototype of the PWG and developed prototypes of the other components/systems of the product, and we are currently developing the software for automatic control of the PWG for dynamic optimization for energy savings. The construction of the lab facility, along with the development of the initial prototype of the PWG, was completed in the fourth quarter of 2019, followed by subsequent improvements in 2020.

We are currently in the process of developing a new generation of the prototype of the PWG that will be designed to meet the specifications of the beta product, upon which we plan to commence testing under the Beta Test Agreement by late 2024.

Corporate Information

We are an Israeli corporation based in Netanya, Israel, and were incorporated on June 27, 2017, under the name ABI Energy, Ltd. On May 3, 2022, we changed our name to Laminera Flow Optimization Ltd. Our principal executive offices are located at 31 Hamelacha Street, Netanya, 4250566, Israel. Our telephone number is +972-77-955-5828. Our website address is www.laminera.com. The information contained on our website and available through our website is not incorporated by reference into and should not be considered a part of this prospectus, and the reference to our website in this prospectus is an inactive textual reference only.

Summary of Risks Associated with our Business

Investing in our securities involves substantial risk. The risks described under the heading “Risk Factors” may cause us to not realize the full benefits of our strengths or may cause us to be unable to successfully execute all or part of our strategy. Some of the more significant challenges include the following:

Risks Related to Our Financial Condition and Capital Requirements

        We are a development-stage company and have a limited operating history, 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 product, and may never be profitable.

        We expect that we will need to raise substantial additional capital before we can expect to become profitable from sales of our product. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.

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        Our grant from the Israeli Ministry of Energy contains certain limitations on our ability to obtain further investments, and our financial statements contain an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.

Risks Related to the Industry

        Our results may be adversely affected by global macroeconomic supply and demand conditions related to the energy and water industries.

        Increases in the prices of materials, components and other commodities could adversely affect operations.

        Changes in tax legislation regarding our future U.S. or foreign earnings could materially affect future results.

Risks Related to Our Business Operations

        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.

        We are exposed to political, economic and other risks that arise from operating a multinational business.

        Our product is sold in highly competitive markets, which could negatively impact sales and profitability.

        Inability to achieve or maintain market acceptance with existing or new products may cause our revenues to decrease.

        Our product is subject to regulation and government performance requirements.

        Our operations are dependent on information technology infrastructure and failures could significantly affect our business.

        The loss of or the failure to attract and retain key personnel could adversely impact our results of operations.

        Our customers could be impacted by commodity availability and price fluctuations. In addition, our current and planned products may contain defects or errors that are detected only after delivery to customers. If that occurs, our reputation may be harmed and we may face additional costs.

Risks Related to Our Intellectual Property

        If we are unable to obtain and maintain effective intellectual property rights for our product, we may not be able to compete effectively in our markets.

        A portion of our activities have been partly financed with government subsidies and grants. Failure to comply with the conditions stipulated in our grant agreements could result an obligation to repay the contributions already received or other adverse consequences. In addition, the Israeli government has certain rights to use our intellectual property.

        Our grant from the Israeli Ministry of Energy limits our ability to grant licenses to third parties of intellectual property developed with the grant and limits our ability to transfer ownership or registration of intellectual property developed with the grant.

        As a result of our founders being previously engaged with other companies, such companies may have claims to certain of our intellectual property. In addition, we may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.

        We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful.

Risks Related to the Offering and the Ownership of Our Securities

        An active, liquid and orderly trading market for our Ordinary Shares or Warrants may not develop, which may inhibit the ability of our shareholders to sell Ordinary Shares and Warrants.

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        Our principal shareholders, officers and directors beneficially own over 62% of our outstanding Ordinary Shares prior to the offering, and         % after consummation of the offering. They will therefore be able to exert significant control over matters submitted to our shareholders for approval.

        The JOBS Act, allows us to postpone the date by which we must comply with some of the laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC, and as a “foreign private issuer” we are permitted to and follow certain home country corporate governance practices instead of otherwise applicable SEC and Nasdaq requirements.

        We may be a “passive foreign investment company”, or PFIC, for U.S. federal income tax purposes in the current taxable year or may become one in any subsequent taxable year.

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.

        Your rights and responsibilities as a shareholder will be governed by Israeli law, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies.

        Our amended and restated articles of association provide that, unless we consent otherwise, the District Court (Economic Division), located in Tel Aviv, Israel shall be the sole and exclusive forum for substantially all disputes between us and our shareholders under the Companies Law and the Israeli Securities Law.

General Risk Factors

        Raising additional capital would cause dilution to our existing shareholders and may affect the rights of existing shareholders.

        Sales of a substantial number of our Ordinary Shares in the public market by our existing shareholders could cause our share price to fall.

        Our future success depends in part on our ability to retain our senior management team and to attract, retain and motivate other qualified personnel.

        We have never paid cash dividends on our share capital, and we do not anticipate paying any cash dividends in the foreseeable future.

        We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

Implications of Being an “Emerging Growth Company” and a “Foreign Private Issuer”

Emerging Growth Company

As a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. In particular, as an emerging growth company, we:

        may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure in our initial registration statement;

        are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as “compensation discussion and analysis”;

        are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on frequency” and “say-on-golden-parachute” votes);

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        are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and chief executive officer pay ratio disclosure; and

        are exempt from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002.

We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company upon the earlier to occur of: (1) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (2) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (3) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission, or the SEC. We may choose to take advantage of some but not all of these reduced burdens, and therefore the information that we provide holders of our Ordinary Shares may be different than the information you might receive from other public companies in which you hold equity. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards applicable to public companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our financials to those of other public companies more difficult. In addition, the information that we provide in this prospectus may be different than the information you may receive from other public companies in which you hold equity interests.

Foreign Private Issuer

Upon consummation of this offering, we will report under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as a non-U.S. company with foreign private issuer status. Even after we no longer qualify as an emerging growth company, as long as we continue to qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

        the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations with respect to a security registered under the Exchange Act;

        the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

        the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial statements and other specified information, and current reports on Form 8-K upon the occurrence of specified significant events.

We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a semi-annual basis through press releases, distributed pursuant to the rules and regulations of the Nasdaq Stock Exchange. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information, which would be made available to you, were you investing in a U.S. domestic issuer.

We may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We would cease to be a foreign private issuer at such time as more than 50% of our outstanding voting securities are held by U.S. residents and any of the following three circumstances applies: (i) the majority of our executive officers or directors are U.S. citizens or residents; (ii) more than 50% of our assets are located in the United States; or (iii) our business is administered principally in the United States.

Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company, but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither an emerging growth company nor a foreign private issuer.

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THE OFFERING

Ordinary Shares currently issued and outstanding

 

           Ordinary Shares

Units offered by us

 

           Units (based on an assumed public offering price of $           per Unit, the midpoint of the range set forth on the cover page of this prospectus), each consisting of one Ordinary Share and one Warrant to purchase one Ordinary Share. The Units have no stand-alone rights and will not be certificated or issued as stand-alone securities. The Ordinary Shares and Warrants are immediately separable and will be issued separately in this offering.

Warrants

 

Each Warrant will have an exercise price of $           (based on an assumed public offering price of $           per Unit, the midpoint of the range set forth on the cover page of this prospectus), per Ordinary Share (100% of the public offering price per Unit), will be immediately exercisable and will expire five years from the date of issuance. To better understand the terms of the Warrants, you should carefully read the “Description of Securities we are Offering” section of this prospectus. You should also read the form of Warrant, which is filed as an exhibit to the registration statement that includes this prospectus.

Ordinary Shares to be issued and outstanding after this offering

 


           Ordinary Shares (assuming no exercise of the representative’s warrant and excluding            Ordinary Shares issuable upon exercise of the Warrants sold in this offering), or            Ordinary Shares if the underwriter exercises in full the over-allotment option to purchase additional Ordinary Shares.

Over-allotment option

 

We have granted the representative of the underwriters an option to purchase form us, up to            additional Ordinary Shares, and/or up to an additional            Warrants, within 45 days from the date of this prospectus to cover over-allotments, if any. The purchase price to be paid per additional Ordinary Share will be equal to the public offering price of one Unit (less $0.001 allocated to the Warrants), as applicable, less the underwriting discount, and the purchase price to be paid per additional Warrant will be $0.001.

Representative’s Warrants

 

We will issue to the representative of the underwriters warrants to purchase up to            Ordinary Shares. The representative’s warrants will have an exercise price of 125% of the per Unit public offering price, will be exercisable at any time and from time to time, in whole or in part, during the four-year period commencing six months after the closing of this offering.

Lock-Up Agreements

 

Our directors, executive officers, and any other holder(s) of 10 percent or more of the outstanding shares have agreed with the representative not to offer for sale, issue, sell, contract to sell, pledge or otherwise dispose of any of our Ordinary Shares or securities convertible into Ordinary Shares for a period of 180 days from the closing of this offering.

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Use of proceeds

 

We expect to receive approximately $         million in net proceeds from the sale of securities offered by us in this offering (approximately $         million if the underwriter exercises its over-allotment option in full), based upon an assumed public offering price of $         per Unit, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

   

We currently expect to use the net proceeds from this offering for the following purposes:

   

   approximately $    million for product development, product testing in beta sites for the purpose of examining our product’s performance and its compliance with certain predefined specifications;

   approximately $    million for research and development, including completion of our existing systems and continued development of new products;

   approximately $    million for marketing, advertising and pre-commercialization activities; and

   the remainder for working capital and general corporate purposes and possible future acquisitions.

   

The amounts and schedule of our actual expenditures will depend on multiple factors. As a result, our management will have broad discretion in the application of the net proceeds of this offering.

Risk factors

 

Investing in our securities involves a high degree of risk. You should read the “Risk Factors” section starting on page 10 of this prospectus for a discussion of factors to consider carefully before deciding to invest in the Ordinary Shares.

Nasdaq Capital Market symbol

 

We intend to apply to list the Ordinary Shares and our Warrants on Nasdaq under the symbol “        ” and “        ”, respectively. No assurance can be given that our application will be approved or that a trading market will develop.

The number of the Ordinary Shares to be issued and outstanding immediately after this offering as shown above assumes that all of the Ordinary Shares offered hereby are sold, and is based on            Ordinary Shares issued and outstanding as of the date of this prospectus. This number excludes:

        849 Ordinary Shares issuable upon the exercise of options granted under our incentive plan, with an exercise price equal to the offering price per share in this offering;

        Ordinary Shares issuable upon the exercise of options granted to members of management under our incentive plan to purchase 6.5% of the share capital of the Company (on a fully diluted basis) immediately prior to the consummation of this offering, approximately 23% percent of which have an exercise price of $99.60 per share and the remainder of which have an exercise price equal to the offering price per share in this offering; and

        Ordinary Shares issuable upon the exercise of warrants granted to consultants to purchase (i) 1% of the share capital of the Company (on a fully diluted basis) immediately after the consummation of this offering at an exercise price of $99.6016 per share, (ii) 2.5% of the share capital of the Company (on a fully diluted basis) immediately after the consummation of this offering at an exercise price equal to the offering price per share in this offering and under our incentive plan, and (iii) 1% of the share capital of the Company (on a fully diluted basis) immediately after the consummation of this offering at an exercise price equal to the offering price per share in this offering.

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Unless otherwise indicated, all information in this prospectus assumes or gives effect to:

        the issuance of 3,401 Ordinary Shares to Mekorot, Israel’s national water company upon the exercise of warrants currently outstanding with a nominal exercise price;

        no exercise of the underwriter’s over-allotment option; and

        no exercise of the Warrants or the representative’s warrants.

See “Description of Share Capital” for additional information.

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SUMMARY FINANCIAL DATA

The following table summarizes our financial data. We have derived the following statements of operations data for the years ended December 31, 2021 and 2020 and the balance sheet data as of December 31, 2021 from our audited financial statements included elsewhere in this prospectus. Such financial statements have been prepared in accordance with U.S. GAAP. Our historical results are not necessarily indicative of the results that may be expected in the future. The following summary financial data should be read in conjunction with “Selected Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and related notes included elsewhere in this prospectus.

(in USD)

 

Year Ended December 31,

   

2021

 

2020

Statements of Operations Data:

       

Research and development expenses, net

 

62,178

 

151,350

General and administrative expenses

 

67,630

 

89,873

Operating loss

 

129,808

 

241,223

Finance expenses, net

 

7,451

 

26,150

Net loss

 

137,259

 

267,373

Basic and diluted net loss per share

 

4.309

 

8.563

Weighted average number of shares outstanding used in computing basic and diluted net loss per share

 

31,856

 

31,224

(in USD)

 

As of December 31, 2021

   

Actual

 

Pro Forma(1)

 

Pro Forma
As Adjusted
(2)

Balance Sheet Data:

 

 

 

 

 

 

 

 

   

Cash and cash equivalents

 

$

331,998

 

 

$

1,099,999

 

   

Short term investment

 

$

 

 

$

400,000

 

   

Receivables due from shareholders

 

$

63,001

 

 

$

 

   

Total assets

 

$

515,437

 

 

$

1,620,437

 

   

Accumulated deficit

 

$

(2,216,918

)

 

$

(2,216,918

)

   

Total shareholders’ equity

 

$

355,588

 

 

$

1,460,588

 

   

____________

(1)      Pro Forma data gives effect to the following events as if each event had occurred on December 31, 2021: On March 31, 2022, we issued 11,094 Ordinary Shares in a private placement, at a price per share of $99.60, for total gross consideration of $705,000 in cash and $400,000 in 6,493,506 restricted shares of Medigus Ltd.

(2)      Pro Forma as Adjusted data gives additional effect to the sale of Units in this offering at an initial public offering price of $         per Unit, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, as if the sale had occurred on December 31, 2021.

The as adjusted information discussed above is illustrative only and will be adjusted based on the actual initial public offering price and other terms of our initial public offering determined at pricing. Each $1.00 increase (decrease) in the assumed initial public offering price of $         per Unit, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of cash, cash equivalents and short-term deposits, total assets and shareholders’ equity (deficiency) by $         million, assuming that the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million Units offered by us at the assumed initial public offering price would increase (decrease) each of cash, cash equivalents and short-term deposits, total assets and shareholders’ equity (deficiency) by $         million.

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RISK FACTORS

Investment in our securities involves a high degree of risk. You should carefully consider the risks described below and all other information contained in this prospectus, including our financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before you decide whether to purchase our Ordinary Shares or Warrants. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely impacted. In that event, the trading price of our Ordinary Shares or Warrants would likely decline and you might lose all or part of your investment.

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 product.

We are a development-stage company with a limited operating history. We have incurred net losses since our inception in 2017, including net losses of $137,259 for the year ended December 31, 2021. As of December 31, 2021, we had an accumulated deficit of $2,216,918.

We have devoted substantially all of our financial resources to develop our product. We have financed our operations primarily through the issuance of equity securities and grants. The amount of our future net losses will depend, in part, on completing the development of our product, 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 product. We anticipate that our expenses will increase substantially if and as we:

        continue the development of our product;

        establish a sales, marketing, distribution and technical support infrastructure to commercialize our product;

        seek to identify, assess, acquire, license, and/or develop other products and subsequent generations of our current product;

        seek to maintain, protect, and expand our intellectual property portfolio;

        seek to attract and retain skilled personnel; and

        create additional infrastructure to support our operations as a public company and our product development and planned future commercialization efforts.

We have not generated any revenue from the sale of our current product and may never be profitable.

We have not generated any revenue from our current product since our inception. Our ability to generate revenue and achieve profitability depends on our ability to successfully complete the development of, and to commercialize, our product. Our ability to generate future revenue from product sales depends heavily on our success in many areas, including but not limited to:

        completing development of our product;

        establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products to support market demand for our product;

        launching and commercializing products, either directly or with a collaborator or distributor;

        addressing any competing technological and market developments;

        identifying, assessing, acquiring and/or developing new products;

        negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;

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        maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and

        attracting, hiring and retaining qualified personnel.

We expect that we will need to raise substantial additional capital before we can expect to become profitable from sales of our product. This additional capital may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.

We expect that we will require substantial additional capital to commercialize our product. In addition, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. Our future capital requirements will depend on many factors, including but not limited to:

        the scope, rate of progress, results and cost of product development, and other related activities;

        the cost of establishing commercial supplies of our product;

        the cost and timing of establishing sales, marketing, and distribution capabilities; and

        the terms and timing of any collaborative, licensing, and other arrangements that we may establish.

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. In addition, our grant from the Israeli Ministry of Energy provides that the Ministry must receive prompt notice of any proposed investment in the Company by another party and gives it a unilateral right to veto such proposed investment and/or conduct discussions with the potential investor. Moreover, the terms of any financing may adversely affect the holdings or the rights of our shareholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our Ordinary Shares to decline. The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable, and we may be required to relinquish rights to some of our technologies or products or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. Even if we believe that we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of our product or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

Our grant from the Israeli Ministry of Energy contains certain limitations on our ability to obtain further investments.

We have received a grant from the Israeli Ministry of Energy to develop energy saving technology using pressure waves. Pursuant to this grant, we are required to provide advance notice of any proposed investment in the Company by a third party. The Ministry of Energy may elect to conduct discussions with the potential investor and is entitled to veto the proposed investment if it has a reasonable basis for doing so. The foregoing requirements could make it more difficult and more time consuming for us to raise additional capital and may discourage potential investors from investing in our company. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue research or development or the commercialization of our product or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations. For more information, see “Business — Israeli Grant.”

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Our financial statements contain an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all.

Our audited financial statements for the period ended December 31, 2021, contain an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. We have incurred losses in each year since our inception, including net losses of approximately $137,259 and $267,373 for the years ended December 31, 2021 and December 31, 2020, respectively. As of December 31, 2021, we had an accumulated deficit of approximately $2,216,918. These events and conditions, along with other matters, indicate that a material uncertainty exists that may cast significant doubt on our ability to continue as a going concern. The financial statements for 2021 do not include any adjustments that might result from the outcome of this uncertainty. This going concern opinion could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise. Future financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through debt or equity financing. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. 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 product. This may raise substantial doubts about our ability to continue as a going concern.

Risks Related to the Industry

Our results may be adversely affected by global macroeconomic supply and demand conditions related to the energy and water industries.

The energy and water industries are users of our product, including the water, oil, and natural gas industries. Decisions to purchase our product are dependent upon the performance of the industries in which our customers operate. If demand or output in these industries increases, the demand for our product will generally increase. Likewise, if demand or output in these industries declines, the demand for our product will generally decrease. The energy and mining industries’ demand and output are impacted by the prices of commodities in these industries which are frequently volatile and change in response to general economic conditions, economic growth, commodity inventories, and any disruptions in production or distribution. Changes in these conditions could adversely impact sales, gross margin, and operating results.

Increases in the prices of raw materials, components, finished goods and other commodities could adversely affect operations.

We purchase most of the raw materials for our product on the open market and relies on third parties for the sourcing of certain finished goods. Accordingly, the cost of our product may be affected by changes in the market price of raw materials, sourced components, or finished goods. We do not generally engage in commodity hedging for raw materials and energy. Significant increases in the prices of commodities, sourced components, finished goods, energy or other commodities could cause product prices to increase, which may reduce demand for products or make us more susceptible to competition. Furthermore, in the event we are unable to pass along increases in operating costs to our customers, margins and profitability may be adversely affected.

Demand for fueling systems products is impacted by environmental legislation which may cause significant fluctuations in costs and revenues.

Environmental legislation related to air quality and fuel containment may create demand for certain fueling systems products which must be supplied in a relatively short timeframe to meet the governmental mandate. During periods of increased demand our revenues and profitability could increase significantly, although we can also be at risk of not having capacity to meet demand or cost overruns due to inefficiencies during ramp up to the higher production levels. After our customers have met the compliance requirements, our revenues and profitability may decrease significantly as the demand for certain products declines substantially. The risk of not reducing production costs in relation to the decreased demand and reduced revenues could have a material adverse impact on gross margins and our results of operations.

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Changes in tax legislation regarding our future U.S. or foreign earnings could materially affect future results.

Since we plan to operate in different countries and may be subject to taxation in different jurisdictions, our future effective tax rates could be impacted by changes in such countries’ tax laws or their interpretations. Both domestic and international tax laws are subject to change as a result of changes in fiscal policy, legislation, evolution of regulation and court rulings. The application of these tax laws and related regulations is subject to legal and factual interpretation, judgment, and uncertainty. We cannot predict whether any proposed changes in tax laws will be enacted into law or what, if any, changes may be made to any such proposals prior to their being enacted into law. If the tax laws change in a manner that increases our tax obligation, it could have a material adverse impact on our results of operations and financial condition.

Risks Related to Our Business Operations

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.

We have invested almost all of our efforts and financial resources in the research, development and testing of our product in development. As a result, our business is entirely dependent on our ability to complete the development of, and to successfully commercialize, our product. The process of development and commercialization is long, complex, costly and uncertain of outcome. While we intend to complete a beta test with Mekorot through which we hope to demonstrate our technology, we cannot assure you that this beta test program will result in subsequent sales of our products. Furthermore, our commercial operations are currently limited to the single Beta Test Agreement with Mekorot.

If we are not able to meet all the milestones in the Beta Test Agreement, it may adversely affect our potential revenues.

Pursuant to the Beta Test Agreement, the beta test will be conducted in several stages: (i) the preparation of a working plan, specification of the beta product and definition of the success criteria (completed in December 2018); (ii) after meeting the specification of the beta product, testing the performance of our product at an experimental site; and (iii) testing the performance of our product at an operational site. At the final stage of the product evaluation, a group from both sides will issue a final report analyzing the product performance compared to the success criteria defined for the beta test and discuss the suitability of the product for Mekorot. There is a risk that we will be unable to meet all the remaining milestones in the Best Test Agreement, due to, among others, our inability to meet the required specifications, insufficient resources, lack of qualified personnel and/or our inability to reach the desired proof of reduction in energy consumption for Mekorot. In such an event, we may be unsuccessful in securing Mekorot as a customer of our product and Mekorot may not introduce us to potential customers under our Referral and Reference Agreement with them, each of which may adversely affect our potential revenues. See “Business — Beta Test Agreement with Mekorot.”

Our business, operations and financial performance have been and may continue to be impacted by the COVID-19 pandemic.

The global spread of the COVID-19 pandemic and measures introduced by local, state and federal governments to contain the virus and mitigate its public health effects have significantly impacted the global economy. There remains considerable uncertainty around the duration and extent of the COVID-19 pandemic and its ongoing impacts, and we expect the evolving COVID-19 pandemic to continue to impact our business and these impacts may be substantial. In particular, we cannot accurately predict the future impact COVID-19 may have on, among others, (i) labor availability and supply lines, (iii) availability of essential supplies, or (iii) our ability to obtain necessary financing. We may also experience limitations on employee resources in the future, including because of sickness of employees or their families. These factors may hamper our efforts to comply with filing or reporting obligations or requirements under securities laws.

The effects of government actions and our own policies and those of third parties to reduce the spread of COVID-19 have and may continue to negatively impact productivity, slow down our research and development activities, cause disruptions to our supply chain and impair our ability to execute our business development strategy. To the extent our suppliers and service providers are unable to comply with their obligations under our agreements with them or they are otherwise unable to deliver or are delayed in delivering goods and services to us due to the COVID-19 pandemic, our ability to continue meeting demand for or otherwise advancing development of our product may be impaired.

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While many jurisdictions have partially or entirely relaxed various “shelter-in-place” orders, quarantines, executive orders and similar government orders and restrictions, some have not, such as those in much of Europe. Additionally, if there is a resurgence in infections in jurisdictions that have eased restrictions, then such restrictions may be reimplemented. Such orders or restrictions, as well as the perceived need by individuals to continue such practices to avoid infection, among other factors, continue to result in business closures, work stoppages, slowdowns and delays, work-from-home policies, travel restrictions and cancellation of events, among other effects. The states and countries in which our product and its components are manufactured, assembled, shipped and distributed are in varying stages of restrictions and re-opening to address the COVID-19 pandemic. Any existing or renewed quarantines, government actions related to the pandemic or shutdowns could disrupt our supply chain, manufacturing or shipping process, or sales channel.

The widespread pandemic has resulted, and may continue to result for an extended period, in significant disruption of global financial markets, reducing our ability to access capital, which would negatively affect our liquidity. In addition, if the COVID-19 pandemic results in a prolonged economic recession, it could harm our future sales, if any, and our ability to continue as a going concern. A prolonged economic contraction or recession may also result in employer layoffs in markets where we conduct business.

Despite global vaccination efforts, it is not possible to reliably estimate the length and severity of these developments and the impact the COVID-19 pandemic will continue to have on our financial results and condition in the future. To the extent the COVID-19 pandemic adversely affects our financial results and business, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.

We are exposed to political, economic and other risks that arise from operating a multinational business.

We have significant operations outside the United States, including Israel. Further, we will obtain raw materials and finished goods from foreign suppliers. Accordingly, our business is subject to political, economic, and other risks that are inherent in operating a multinational business. These risks include, but are not limited to, the following:

        Difficulty in enforcing agreements and collecting receivables through foreign legal systems

        Trade protection measures and import or export licensing requirements

        Inability to obtain raw materials and finished goods in a timely manner from foreign suppliers

        Imposition of tariffs, exchange controls or other restrictions

        Difficulty in staffing and managing widespread operations and the application of foreign labor regulations

        Compliance with foreign laws and regulations

        Changes in general economic and political conditions in countries where we operate

Additionally, our operations outside the United States could be negatively impacted by changes in treaties, agreements, policies, and laws implemented by the United States.

If we do not anticipate and effectively manage these risks, these factors may have a material adverse impact on our international operations or on the business as a whole.

Our product is sold in highly competitive markets, by numerous competitors whose actions could negatively impact sales volume, pricing and profitability.

We are a development stage company that develops products to improve the energy efficiency of fluid transportation systems. End user demand, distribution relationships, industry consolidation, new product capabilities of our competitors or new competitors, and many other factors contribute to a highly competitive environment. Additionally, some of our competitors have substantially greater financial resources than ours. We believe that consistency of product quality, timeliness of delivery, service, and continued product innovation, as well as price, are principal factors considered by customers in selecting suppliers. Competitive factors previously described may lead to declines in sales or in the prices of our product which could have an adverse impact on our results of operations and

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financial condition. See “Risks Related to our Intellectual Property — In certain circumstances, the Israeli Government may assert rights to all of our intellectual property which was acquired independently of the Ministry of Energy Grant and used in connection with the workplan under the grant.”

We have significant purchases in foreign denominated currencies creating exposure to foreign currency exchange rate fluctuations.

We make purchases of raw materials and finished goods also in foreign denominated currencies. Accordingly, we have exposure to fluctuations in foreign currency exchange rates relative to the U.S. dollar. Foreign currency exchange rate risk is partially mitigated through several means: maintenance of local production facilities in the markets served, prompt settlement of intercompany balances, limited use of foreign currency denominated debt, and application of derivative instruments when appropriate. To the extent that these mitigating strategies are not successful, foreign currency rate fluctuations can have a material adverse impact on our international operations or on the business as a whole.

Delays in introducing new products or the inability to achieve or maintain market acceptance with existing or new products may cause our revenues to decrease.

The industries to which we belong are characterized by intense competition, changes in end-user requirements, and evolving product offerings and introductions. We believe future success will depend, in part, on the ability to anticipate and adapt to these factors and offer, on a timely basis, products that meet customer demands. Failure to successfully develop new and innovative products or to enhance existing products could result in the loss of existing customers to competitors or the inability to attract new business, either of which may adversely affect our revenues.

Our product is subject to regulation and government performance requirements in addition to the warranties provided by us.

Our product is subject to government regulations and standards for manufacture, assembly, and performance in addition to the warranties provided by us. Our failure to meet all such standards or perform in accordance with warranties could result in significant warranty or repair costs, lost sales and profits, damage to our reputation, fines or penalties from governmental organizations, and increased litigation exposure. Changes to these regulations or standards may require us to modify our business objectives and incur additional costs to comply. Any liabilities or penalties actually incurred could have a material adverse effect on our earnings and operating results.

Our business may be affected by weather conditions.

Demand for residential and agricultural water systems are also affected by weather-related disasters including heavy flooding and drought. Changes in these patterns could reduce demand for our product and impact sales, gross margins, and operating results.

We may depend on certain key suppliers, and any loss of those suppliers or their failure to meet commitments may adversely affect business and results of operations.

We may be dependent on a single or limited number of suppliers for some materials or components required in the manufacture of our product. If any of those suppliers fail to meet their commitments to us in terms of delivery or quality, we may experience supply shortages that could result in our inability to meet customer requirements, or could otherwise experience an interruption in operations that could negatively impact our business and results of operations.

Our operations are dependent on information technology infrastructure and failures could significantly affect our business.

We depend on information technology infrastructure in order to achieve business objectives. If we experience a problem that impairs this infrastructure, such as a computer virus, a problem with the functioning of an important IT application, or an intentional disruption of IT systems by a third party, the resulting disruptions could impede our ability to record or process orders, manufacture and ship products in a timely manner, or otherwise carry on business in the ordinary course. Any such events could cause the loss of customers or revenue and could cause significant expense to be incurred to eliminate these problems and address related security concerns. We are also subject to certain

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U.S. and international data protection and cybersecurity regulations. Complying with these laws may subject us to additional costs or require changes to our business practices. Any inability to adequately address privacy and security concerns or comply with applicable privacy and data security laws, rules and regulations could expose us to potentially significant liabilities.

The loss of or the failure to attract and retain key personnel could adversely impact our results of operations.

The loss of the services of any of our executive officers could have a material adverse effect on our financial condition and results of operations. In addition, our ability to grow successfully will be dependent upon our ability to attract and retain qualified management and technical and operational personnel. The failure to attract and retain such persons could materially adversely affect our financial condition and results of operations.

Our future results will be impacted by our ability to implement our internal growth strategy.

We do not have a commercially available product or existing customers as of the date of this prospectus. Our future results will depend in part on our success in implementing our internal growth strategy, which includes expanding our existing geographic areas, selling additional products to existing customers and adding new customers. Our ability to implement this strategy will depend on our success in selling more products and services to existing customers, acquiring new customers, hiring qualified salespersons, and marketing integrated forms of supply management. We may not be successful in efforts to increase sales and product offerings to existing customers. Consolidation in our industry could heighten the impacts of competition on our business and results of operations discussed above.

Our business depends on capital investment and maintenance expenditures by our customers.

Demand our product depends on the level of new capital investment and planned maintenance expenditures by our customers. The level of capital expenditures by our customers fluctuates based on planned expansions, general economic conditions, availability of credit, and expectations of future market behavior. Any of these factors, individually or in the aggregate, could have a material adverse effect on our customers and, in turn, our business, financial condition, results of operations and cash flows.

Our customers could be impacted by commodity availability and price fluctuations.

A number of factors outside our control, including fluctuating commodity prices, impact the demand for our product. Increased commodity prices may increase our customers’ cost of doing business, thus causing them to delay or cancel large capital projects.

On the other hand, declining commodity prices may cause mines and other customers to delay or cancel projects relating to the production of such commodities. Also, oversupply could cause manufacturers to cut back on expenditures. Reduced demand for our product and services could result in the delay or cancellation of existing orders or lead to excess manufacturing capacity, which unfavorably impacts our absorption of fixed manufacturing costs. This reduced demand may also erode average selling prices in the relevant market.

Our current and planned products may contain defects or errors that are detected only after delivery to customers. If that occurs, our reputation may be harmed and we may face additional costs.

We cannot assure you that our product development, manufacturing and integration testing will be adequate to detect all defects, errors, failures and quality issues that could impact customer satisfaction or result in claims against us with regard to our product. As a result, we may have, and from time to time have had, to replace certain components and/or provide remediation in response to the discovery of defects in product that are shipped. The occurrence of any defects, errors, failures or quality issues could result in cancellation of orders, product returns, diversion of our resources, legal actions by our customers or our customers’ end users and other losses to us or to any of our customers or end users, and could also result in the loss of or delay in market acceptance of our product and loss of sales, which would harm our business and adversely affect our revenues and profitability.

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The Beta Test agreement with Mekorot grants it the right to acquire any quantity of our product for its own use or for implementation in projects conducted worldwide by any of its subsidiaries for a period of seven years after completion of the beta test at the lowest price at which we sell the product outside of Israel.

In November 2018, we entered into a Beta Test Agreement with Mekorot. The Beta Test Agreement grants Mekorot the right to acquire any quantity of our product for its own use or for implementation in projects conducted worldwide by any of its subsidiaries for a period of seven years after completion of the beta test and at the lowest price at which we sell the product outside of Israel, and receive a retroactive credit to the extent we sell the product outside of Israel at a price lower than paid by Mekorot.

We may face challenges in meeting this provision in the agreement. In such an event, we may incur damages as a result of the breach of the agreement and may be unsuccessful in retaining Mekorot as a customer of our product and Mekorot may not introduce us to potential customers under our Referral and Reference Agreement with them, each of which may adversely affect our business. See “Business — Beta Test Agreement with Mekorot.”

In addition, this requirement to provide product to Mekorot may limit our ability to supply the needs of other customers or serve more profitable customers or markets, and may adversely affect our sales and profitability.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain effective intellectual property rights for our product, we may not be able to compete effectively in our markets.

Historically, we have relied on patents, trade secret protection and confidentiality agreements to protect the intellectual property related to our technologies and product. Our success depends in large part on our ability to obtain and maintain patent and other intellectual property protection in the United States and in other countries with respect to our proprietary technology and new product.

We have sought to protect our proprietary position by filing patent applications in Israel and the United States, with respect to our novel technologies and product, which are important to our business. Patent prosecution is expensive and time consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.

We have a growing portfolio of three patents. We cannot offer any assurances about which, if any, patent applications will issue, the breadth of any such patent or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties. Any successful opposition to these patents or any other patents owned by or licensed to us after patent issuance could deprive us of rights necessary for the successful commercialization of any new products that we may develop.

Further, there is no assurance that all potentially relevant prior art relating to our patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue, and even if such patents cover our product, third parties may challenge their validity, enforceability, or scope, which may result in such patents being narrowed, found unenforceable or invalidated. Furthermore, even if they are unchallenged, our patent applications and any future patents may not adequately protect our intellectual property, provide exclusivity for our new products, or prevent others from designing around our claims. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.

If we cannot obtain and maintain effective patent rights for our product, 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 product, we may not be able to compete effectively in our markets.

In addition to the protection afforded by any patents that may be granted, historically, we have relied on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes that are not easily known, knowable or easily ascertainable, and for which patent infringement

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is difficult to monitor and enforce and any other elements of our product discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors, and contractors. We also seek to preserve the integrity and confidentiality of our data, trade secrets and intellectual property by maintaining physical security of our premises and physical and electronic security of our information technology systems. Agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets and intellectual property may otherwise become known or be independently discovered by competitors.

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. Also, misappropriation or unauthorized and unavoidable disclosure of our trade secrets and intellectual property could impair our competitive position and may have a material adverse effect on our business. Additionally, if the steps taken to maintain our trade secrets and intellectual property are deemed inadequate, we may have insufficient recourse against third parties for misappropriating any trade secret.

A portion of our activities have been partly financed with government subsidies and grants. Failure to comply with certain conditions stipulated in our grant agreements could result an obligation to repay the contributions already received or other adverse consequences.

A portion of our activities have been partly financed through a grant from the European Union’s Executive Agency for Small and Medium-sized Enterprises, or the EU Grant, and funding from the Israeli Ministry of Energy, or the Ministry of Energy Grant. The EU Grant contains certain requirements, including but not limited to requirements concerning publication and reports on the Company’s activities funded by the grant. The Ministry of Energy Grant contains a number of ongoing reporting obligations, such as:

        submission of biannual reports on the Company’s revenue from products or intellectual property developed using the Ministry of Energy Grant;

        reporting requirements with respect to (i) the development of intellectual property with practical applications that may be protected under applicable intellectual property law, (ii) the registration of new patents and commercial exploitation deriving from such intellectual property, (iii) licenses granted to third parties of know-how, intellectual property and technology developed using the grant; and

        reports on all financial and scientific matters related to the Company that are relevant to the Ministry of Energy.

Failure to comply with conditions stipulated in our grant agreements could result an obligation to repay the grants already received. For more information, see “Business — Israeli Grant.”

The Israeli government has certain rights to use our intellectual property for “national needs”.

The Israeli Grant provides the Israeli government with a non-exclusive, non-revocable and non-transferable license to make use of Company technology funded by the grant in connection with “national needs.” No additional consideration is payable by the Israeli government for such use. The determination of what constitutes a “national need” is not defined in the Ministry of Energy Grant, but it is expected to be made by certain ministries of the Israeli government. In the event the Israeli government exercises this right and interprets it in a broad manner, this could lead to disputes between us and the Ministry of Energy. In addition, the exercise of this right in a broad manner may limit our ability to generate revenue from commercial agreements with utility, pipeline and other companies in Israel, which may adversely affect our business, operating results and prospects. For more information, see “Business — Israeli Grant.”

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In certain circumstances, the Israeli Government may assert rights to all of our intellectual property which was acquired independently of the Ministry of Energy Grant and used in connection with the workplan under the grant.

Pursuant to the Ministry of Energy Grant, we must further the purposes and develop the end-products specified in the grant’s workplan, or the Workplan, in Israel. If we cease to do so for any reason, then for a reasonable period of time following the end of the project funded by the grant, the Israeli government has the right to act in order to further such purposes and develop such products. In connection with such right, we will be obligated to grant the Israeli government a license (which may be sublicensed), on reasonable commercial terms, to use all of our intellectual property related to furthering such purposes and developing such products, even if such intellectual property was developed independently of the grant.

A determination by the Ministry of Energy that we are not furthering the purposes of the grant and developing the end-products specified in the Workplan and the requirement that we grant to the Israeli government a license (which may be sublicensed) to use all our intellectual property would introduce additional competitors into the market that use our technology, which would materially adversely affect and prospects, significantly decrease the value of our company and discourage potential investors from investing in our company. For more information, see “Business — Israeli Grant.”

Our grant from the Israeli Ministry of Energy limits our ability to grant licenses to third parties of intellectual property developed with the grant.

The Ministry of Energy Grant provides that when we license intellectual property developed thereunder to third parties, we must use our best efforts to take into the account the interests of the Israeli public in realizing the purposes of the grant and developing the products specified in the Workplan, including the scope of the license and the extent of its exclusivity. The ambiguity of this requirement could lead to disputes between us and the Ministry of Energy regarding whether licenses granted by us to third parties violate the terms of the grant. Additionally, we are obligated to ensure that the terms of licenses we provide to third parties (i) obligate such parties to reasonably exploit the intellectual property developed with the grant within a reasonable time and in accordance with a predefined workplan between us and our licensee and (ii) allow us to revoke the license or grant a license to another party if the licensee fails to comply with the foregoing obligation.

The foregoing provisions of the Ministry of Energy Grant could discourage potential third parties from entering into licensing agreements with us given, among other things, the ability of the Israeli government to revoke licenses and make it more difficult for us to commercialize our product. This could materially affect our business, financial condition and results of operations.

Our grant from the Israeli Ministry of Energy limits our ability to transfer ownership or registration of IP developed with the grant, which may have the effect of delaying or preventing a change in control and may make it more difficult for a third party to acquire us or to enter into joint ventures with us.

Pursuant to the Ministry of Energy Grant, we may not transfer ownership or registration of intellectual property developed with the grant without advance written approval from the Ministry of Energy. The Ministry of Energy may block the transfer of intellectual property if it believes there is a concern that it will adversely affect the rights of the State of Israel under the grant, including the Ministry of Energy’s ability to recoup its investment following successful completion of the project funded by the grant and the State of Israel and its economy’s ability to benefit from exploiting the achievements of the project.

The foregoing requirements may have the effect of delaying or preventing a change in control and may make it more difficult for a third party to acquire us or to enter into joint ventures with us, which may limit the price that investors may be willing to pay in the future for our Ordinary Shares and adversely affect the prospects of our company.

As a result of our founders being previously engaged with other companies, such companies may have claims to certain of our intellectual property.

Prior to our incorporation, one of the founders of our company provided consulting services to a private US company, and in the course of such engagement, co-invented a patent that was assigned to the private company. In addition, during this engagement, such founder worked on a specific theoretical structure for architecting a certain

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component that was developed by the private company for pre-defined purposes. We have modified the component by using fundamentally new methods and technical solutions for its product. These methods were developed by the aforementioned founder following the termination of his engagement with the private company.

As a result, certain of our intellectual property could be considered as a “derivative work” or “improvement” of intellectual property that may be owned by the private company. As such, we may be exposed to claims from the private company that it has rights to certain of our intellectual property. Defending against these claims could be expensive, time consuming, and unsuccessful. We might be required to obtain licenses from the private company in order to develop or market our product, and such licenses could be costly or not available on commercially reasonable terms.

Intellectual property rights of third parties could adversely affect our ability to commercialize our product, and we might be required to litigate or obtain licenses from third parties in order to develop or market our product. Such litigation or licenses could be costly or not available on commercially reasonable terms.

It is inherently difficult to conclusively assess our freedom to operate without infringing on third party rights. Our competitive position may be adversely affected if existing patents or patents resulting from patent applications issued to third parties or other third-party intellectual property rights are held to cover our product or elements thereof, or our manufacturing or uses relevant to our development plans. In such cases, we may not be in a position to develop or commercialize products unless we successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned or enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms. There may also be pending patent applications that if they result in issued patents, could be alleged to be infringed by our new products. If such an infringement claim should be brought and be successful, we may be required to pay substantial damages, be forced to abandon our new products or seek a license from any patent holders. No assurances can be given that a license will be available on commercially reasonable terms, if at all.

It is also possible that we have failed to identify relevant third-party patents or applications. For example, U.S. patent applications filed before November 29, 2000, and certain U.S. patent applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Patent applications in the United States and in most of the other countries are published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent applications covering our new products or platform technology could have been filed by others without our knowledge. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our platform technologies, our new products or the use of our new products. Third party intellectual property right holders may also actively bring infringement claims against us. We cannot guarantee that we will be able to successfully settle or otherwise resolve such infringement claims. If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or continue costly, unpredictable and time-consuming litigation and may be prevented from or experience substantial delays in pursuing the development of and/or marketing our new products. If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing our new products that are held to be infringing. We might, if possible, also be forced to redesign our new products so that we no longer infringe the third party’s intellectual property rights. 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.

Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of any patents that may issue from our patent applications or narrow the scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. We therefore cannot be certain that we were the first to file the invention claimed in our owned and licensed patent or pending applications, or that we or our licensor were the first to file for patent protection of such inventions. Assuming all other requirements for patentability are met, in the United States prior to March 15, 2013, the first to make the claimed invention without undue delay in filing is entitled to the patent, while outside the United States, the

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first to file a patent application is entitled to the patent. Since March 15, 2013, the United States has moved to a first to file system. Changes to the way patent applications will be prosecuted 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.

We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful.

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 new products, the defendant could counterclaim that the patent covering our product is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the United States Patent and Trademark Office, or USPTO, or made a misleading statement, during prosecution. The validity of U.S. patents may also be challenged in post-grant proceedings before the USPTO. The outcome following legal assertions of invalidity and unenforceability is unpredictable.

Derivation proceedings initiated by third parties or brought by us may be necessary to determine the priority of inventions and/or their scope with respect to our patent or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring our new products to market.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. 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.

We may be subject to claims that former employees, collaborators or other third parties have an interest in, or right to compensation, with respect to our current patent and patent applications, future patents or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our product. Litigation may be necessary to defend against these and other claims challenging inventorship or claiming the right to compensation. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

We may not have sufficient patent lifespan to effectively protect our product and business.

Patents have a limited lifespan. The natural expiration of a patent is generally 20 years counted from its filing date (or PCT filing date in case it is derived from an international application). Although various extensions may be available, they are uncommon and the protection they afford, is limited. Even if any of our patent applications matures into issued patents, if we do not have sufficient patent terms or regulatory exclusivity to protect our product, our business and results of operations will be adversely affected.

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We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting, and defending patents on products, as well as monitoring their infringement in all countries throughout the world would be prohibitively expensive. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.

Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our product. Future patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, which could make it difficult for us to stop the marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our future patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. 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.

We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.

We have entered into assignment of invention agreements with our research and development employees for the Company pursuant to which such individuals agree to assign to us all rights to any inventions created during and as a result of their employment or engagement with us. A significant portion of our intellectual property has been developed by our employees in the course and as a result of their employment for us. Under the Israeli Patents Law, 5727-1967, or the Patents Law, inventions conceived by an employee during the scope of his or her employment with a company and as a result thereof are regarded as “service inventions,” which belong to the employer, absent a specific agreement between the employee and employer giving the employee service invention rights. The Patents Law also provides that if there is no agreement between an employer and an employee with respect to the employee’s right to receive compensation for such “service inventions,” the Israeli Compensation and Royalties Committee, or the Committee, a body constituted under the Patents Law, shall determine whether the employee is entitled to remuneration for his or her service inventions and the scope and conditions for such remuneration. Recent decision by the Committee clarifies that the right to receive consideration for “service inventions” can be waived by the employee and that in certain circumstances, such waiver does not necessarily have to be explicit. In order to determine the scope and validity of such wavier, the Committee will examine, on a case-by-case basis, the general contractual framework between the parties, using interpretation rules of the general Israeli contract laws. Further, the Committee has not yet determined one specific formula for calculating this remuneration (but rather uses the criteria specified in the Patents Law). Although our employees have agreed to assign to us service invention rights and have specifically waived their right to receive any special remuneration for such assignment beyond their regular salary and benefits, we may face claims demanding remuneration in consideration for assigned inventions. As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current and/or former employees, or be forced to litigate such claims, which could negatively affect our business.

Risks Related to the Offering and the Ownership of Our Securities

An active, liquid and orderly trading market for our Ordinary Shares or Warrants may not develop, which may inhibit the ability of our shareholders to sell Ordinary Shares and Warrants.

Prior to this offering, there has not been a public market for our securities. Although we intend to apply to list our Ordinary Shares and Warrants on Nasdaq, an active liquid or orderly trading market for the Ordinary Shares or Warrants may not develop or be sustained and you may not be able to sell your Ordinary Shares or Warrants quickly or at the market price. The initial public offering price for the Units will be determined by negotiations between us and representative of the underwriters and may not be indicative of prices that will prevail in the trading market.

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In addition, the stock market in general, and the Nasdaq in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of small companies. Broad market and industry factors may negatively affect the market price of our securities, regardless of our actual operating performance. Further, a systemic decline in the financial markets and related factors beyond our control may cause our share price to decline rapidly and unexpectedly.

Our principal shareholders, officers and directors beneficially own over 62% of our outstanding Ordinary Shares. They will therefore be able to exert significant control over matters submitted to our shareholders for approval.

As of May 8, 2022, our principal shareholders, officers and directors beneficially own approximately 62.33% of our Ordinary Shares. Upon completion of this offering, our principal shareholders, officers and directors will, in the aggregate, beneficially own approximately % of our outstanding 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. As a result, these shareholders, if they acted together, could significantly influence or even unilaterally approve matters requiring approval by our shareholders, including the election of directors and the approval of mergers or other business combination transactions. The interests of these shareholders may not always coincide with our interests or the interests of other shareholders.

If you purchase securities in this offering, you will incur immediate and substantial dilution in the book value of your shares.

The offering price of our Ordinary Shares is substantially higher than the net tangible book value per share of our Ordinary Shares. Therefore, if you purchase securities in this offering, you will pay a price per Ordinary Share that substantially exceeds our net tangible book value per Ordinary Share after this offering. To the extent outstanding options or warrants are exercised, you will incur further dilution. Based on the offering price of $     per Unit, you will experience immediate dilution of $     per Ordinary Share, representing the difference between our pro forma net tangible book value per Ordinary Share after giving effect to this offering and the offering price. See “Dilution” for further information.

The Warrants are speculative in nature.

Except as otherwise set forth therein, the Warrants offered in this offering do not confer any rights of Ordinary Share ownership on their holders, such as voting rights, but rather merely represent the right to acquire Ordinary Shares at a fixed price for a limited period of time. Specifically, commencing on the date of issuance, holders of the Warrants may exercise their right to acquire Ordinary Shares and pay an exercise price of $     (based on an assumed public offering price of $     per Unit, the midpoint of the range set forth on the cover page of this prospectus) per Ordinary Share, 100% of the public offering price per Unit, prior to five years from the date of issuance, after which date any unexercised Warrants will expire and have no further value. There can be no assurance that the market price of our Ordinary Shares will continue to equal or exceed the exercise price of the Warrants offered by this prospectus. In the event that our Ordinary Shares price does not exceed the exercise price of such Warrants during the period when such Warrants are exercisable, the Warrants may not have any value.

There is no established market for the Warrants being offered in this offering.

There is no established trading market for the Warrants offered in this offering. Although we intend to apply to list the Warrants on Nasdaq there can be no assurance that there will be an active trading market for the Warrants. Without an active trading market, the liquidity of the Warrants will be limited.

Management will have broad discretion as to the use of the net proceeds from this offering.

Our management will have broad discretion in the allocation of the net proceeds and could use them for purposes other than those contemplated at the time of this offering. Our shareholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds.

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The JOBS Act allows us to postpone the date by which we must comply with some of the laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC, which could undermine investor confidence in our company and adversely affect the market price of our Ordinary Shares.

For so long as we remain an “emerging growth company” as defined in the JOBS Act, we intend to take advantage of certain exemptions from various requirements that are applicable to public companies that are not “emerging growth companies” including:

        the provisions of the Sarbanes-Oxley Act requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting;

        Section 107 of the JOBS Act, which provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. This means that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to delay such adoption of new or revised accounting standards. As a result of this adoption, our financial statements may not be comparable to companies that comply with the public company effective date; and

        any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.

        our ability to furnish two rather than three years of income statements and statements of cash flows in various required filings.

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 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 cannot predict if investors will find our Ordinary Shares less attractive because we may rely on these exemptions. If some investors find our Ordinary Shares less attractive as a result, there may be a less active trading market for our Ordinary Shares, and our market prices may be more volatile and may decline.

As a “foreign private issuer” we are permitted to and 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.

Our status as a foreign private issuer also exempts us from compliance with certain SEC laws and regulations and certain regulations of the Nasdaq Stock Market, including the proxy rules, the short-swing profits recapture rules, and certain governance requirements such as independent director oversight of the nomination of directors and executive compensation. In addition, we are not required, under the Exchange Act, to file current reports and financial statements with the SEC as frequently or as promptly as U.S. domestic companies whose securities are registered under the Exchange Act and we are generally exempt from filing quarterly reports with the SEC. Also, although the Companies Law requires us to disclose the annual compensation of our five most highly compensated senior officers on an individual basis, this disclosure is not as extensive as that required of a U.S. domestic issuer. For example, the disclosure required under Israeli law would be limited to compensation paid in the immediately preceding year without any requirement to disclose option exercises and vested stock options, pension benefits or potential payments upon termination or a change of control. Furthermore, as a foreign private issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act.

These exemptions and leniencies will reduce the frequency and scope of information and protections to which you are entitled as an investor.

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Following this offering, the determination of foreign private issuer status will be made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2022. In the future, we would lose our foreign private issuer status if a majority of our shareholders, directors or management are U.S. citizens or residents and we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic registrant may be significantly higher.

We may be a “passive foreign investment company”, or PFIC, for U.S. federal income tax purposes in the current taxable year or may become one in any subsequent taxable year. There generally would be negative tax consequences for U.S. taxpayers that are holders of our Ordinary Shares if we are or were to become a PFIC.

Based on the projected composition of our income and valuation of our assets, we may be a PFIC for 2022 and in the future, although there can be no assurance in this regard. The determination of whether we are a PFIC is made on an annual basis and will depend on the composition of our income and assets from time to time. 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. Passive income for this purpose generally includes, among other things, certain dividends, interest, royalties, rents and gains from commodities and securities transactions and from the sale or exchange of property that gives rise to passive income. Passive income also includes amounts derived by reason of the temporary investment of funds, including those raised in a public offering. In determining whether a non-U.S. corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account. The tests for determining PFIC status are applied annually and it is difficult to make accurate projections of future income and assets which are relevant to this determination. In addition, our PFIC status may depend in part on the market value of our Ordinary Shares. 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. In particular, if the U.S. taxpayer did not make an election to treat us as a “qualified electing fund”, or QEF, or make a “mark-to-market” election, then “excess distributions” to the U.S. taxpayer, and any gain realized on the sale or other disposition of our Ordinary Shares by the U.S. taxpayer: (1) would be allocated ratably over the U.S. taxpayer’s holding period for our Ordinary Shares; (2) the amount allocated to the current taxable year and any period prior to the first day of the first taxable year in which we were a PFIC would be taxed as ordinary income; and (3) the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. 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. 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. A U.S. taxpayer can make a QEF election by completing the relevant portions of and filing IRS Form 8621 in accordance with the instructions thereto. 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. In addition, we do not intend to furnish such U.S. taxpayers annually with information needed in order to complete IRS Form 8621 and to make and maintain a valid QEF election for any year in which we or any of our subsidiaries are a PFIC. 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. Federal Income Tax Considerations — Passive Foreign Investment Companies” for additional information.

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 stock 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. Any adverse determination in litigation could also subject us to significant liabilities.

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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.

Our corporate headquarters is located in Netanya, Israel. If these or any future facilities in Israel were to be damaged, destroyed or otherwise unable to operate, whether due to war, acts of hostility, earthquakes, fire, floods, hurricanes, storms, tornadoes, other natural disasters, employee malfeasance, terrorist acts, power outages or otherwise, or if performance of our research and development is disrupted for any other reason, such an event could delay our operations, jeopardize our ability to manufacture our product as promptly as our prospective customers will likely expect, or possibly at all. If we experience delays in achieving our development objectives, or if we are unable to manufacture an approved product within a timeframe that meets our prospective customers’ expectations, our business, prospects, financial results and reputation could be harmed.

Political, economic and military conditions in Israel may directly affect our business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries, Hamas (an Islamist militia and political group that controls the Gaza Strip) and Hezbollah (an Islamist militia and political group based in Lebanon). In addition, several countries, principally in the Middle East, restrict doing business with Israel, and additional countries may impose restrictions on doing business with Israel and Israeli companies whether as a result of hostilities in the region or otherwise. Any hostilities involving Israel, terrorist activities, political instability or violence in the region or the interruption or curtailment of trade or transport between Israel and its trading partners could adversely affect our operations and results of operations and adversely affect the market price of our Ordinary Shares and Warrants.

Our commercial insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East. Although the Israeli government is currently committed to covering the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, there can be no assurance that this government coverage will be maintained, or if maintained, will be sufficient to compensate us fully for damages incurred. Any losses or damages incurred by us could have a material adverse effect on our business, financial condition and results of operations.

Further, our operations could be disrupted by the obligations of our employees to perform military service. As of December 31, 2021, all of our employees were based in Israel. Of these employees, some may be military reservists, and may be called upon to perform military reserve duty for several weeks until they reach the age of 40 (or older for reservists who are military officers or have certain occupations). Additionally, they may be called to active duty at any time under emergency circumstances. In response to increased tension and hostilities in the region, there have been, at times, call-ups of military reservists, and it is possible that there will be additional call-ups in the future. Our operations could be disrupted by the absence of these employees due to military service. Such disruption could harm our business and operating results.

Provisions of Israeli law and our amended and restated articles of association to be effective upon closing of this offering may delay, prevent or otherwise impede a merger with, or an acquisition of, us, even when the terms of such a transaction would be considered beneficial to us and our shareholders.

Provisions of Israeli law and our amended and restated articles of association to be effective upon the closing of this offering could have the effect of delaying, preventing or otherwise impeding a change in control and may make it more difficult for a third party to acquire us or our shareholders to elect different individuals to our board of directors, even if doing so would be considered beneficial by some of our shareholders, which may limit the price that investors may be willing to pay in the future for our Ordinary Shares. 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. For example, a tender offer for all of a company’s issued and outstanding shares can only be completed if shareholders not accepting the tender offer hold less than 5% of the issued share capital. Completion of the tender offer also requires approval of a majority of the offerees that do not have a personal interest in the tender offer, unless shareholders not accepting the tender offer hold less than 2% of the company’s outstanding shares. 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, petition an Israeli court to alter the consideration for the acquisition,

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unless the acquirer stipulated in its tender offer that a shareholder that accepts the offer may not seek such appraisal rights. The Companies Law also requires special approvals for certain transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions. In addition, our amended and restated articles of association to be effective upon the closing of this offering divide our directors into three classes, each of which is elected once every three years and do not permit a director to be removed except by a vote of the holders of at least     % of our outstanding shares entitled to vote at a general meeting of shareholders.

Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to our shareholders. For example, Israeli tax law does not recognize tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfilment of a number of conditions, including, in some cases, a holding period of two years from the date of the transaction during which sales and dispositions of shares of the participating companies are subject to certain restrictions. Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable even if no disposition of the shares has occurred. These provisions could delay, prevent or impede an acquisition of us or our merger with another company, even if such an acquisition or merger would be beneficial to us or to our shareholders.

It may be difficult to enforce a judgment of a U.S. court against us and our officers and directors or the Israeli experts named in this prospectus 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.

We are incorporated in Israel. The majority of our directors and all of our executive officers listed in this prospectus reside outside of the United States, and most of our assets and most of the assets of these persons are located outside of the United States. Therefore, a judgment obtained against us, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may not be enforced by an Israeli court. It may also be difficult for you to effect service of process on these persons in the United States or to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proven as a fact by expert witnesses, which can be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law.

There is little binding case law in Israel that addresses the matters described above. 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. Please see the section entitled “Enforcement of Civil Liabilities” for additional information on your ability to enforce a civil claim against us and our executive officers or directors named in this prospectus.

Your rights and responsibilities as a shareholder will be governed by Israeli law, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies.

The rights and responsibilities of the holders of our Ordinary Shares are governed by our amended and restated articles of association and by Israeli law. These rights and responsibilities differ in some material respects from the rights and responsibilities of shareholders in typical U.S. companies. In particular, a shareholder of an Israeli company has a duty to act in good faith and in a customary manner in exercising its rights and performing its obligations towards the company and other shareholders, and to refrain from abusing its power in the company, including, among other things, in voting at a general meeting of shareholders on matters such as amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers and related party transactions requiring shareholder approval, as well as a general duty to refrain from discriminating against other shareholders. In addition, a shareholder who is aware that it possesses the power to determine the outcome of a vote at a meeting of the shareholders or to appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness toward the company.

There is limited case law available to assist us in understanding the nature of these duties or the implications of these provisions. These provisions may be interpreted to impose additional obligations and liabilities on holders of our Ordinary Shares that are not typically imposed on shareholders of U.S. companies.

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Our amended and restated articles of association provide that, unless we consent otherwise, the District Court (Economic Division), located in Tel Aviv, Israel shall be the sole and exclusive forum for substantially all disputes between us and our shareholders under the Companies Law and the Israeli Securities Law. In addition, our amended and restated articles of association provide that, unless we consent otherwise, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. These exclusive forum provisions could limit our shareholders’ ability to bring claims and proceedings against, as well as obtain favorable judicial forum for disputes with, us, our directors, officers and other employees.

The District Court (Economic Division), located in Tel Aviv, Israel shall be the exclusive forum for (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of ours to us or our shareholders, or (iii) any action asserting a claim arising pursuant to any provision of the Companies Law or the Israeli Securities Law. This exclusive forum provision is intended to apply to claims arising under Israeli law and would not apply to claims brought pursuant to the Securities Act or the Exchange Act or any other claim for which U.S. federal courts would have exclusive jurisdiction. The enforceability of similar forum provisions (including exclusive federal forum provisions for actions, suits, or proceedings asserting a cause of action arising under the Securities Act) in other companies’ organizational documents and similar agreements has been challenged in legal proceedings, and there is uncertainty as to whether courts would enforce the exclusive forum provision in our amended and restated articles of association. Such exclusive forum provisions in our amended and restated articles of association will not relieve us of our duties to comply with federal securities laws and the rules and regulations thereunder and our duties to comply with Israeli law, including fiduciary duty obligations or obligations under the Companies Law or the Israeli Securities Law, and our shareholders will not be deemed to have waived our compliance with any of these laws, rules and regulations. These exclusive forum provisions may limit a shareholder’s ability to bring claims and proceedings in a judicial forum of its choosing against and for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us, our directors, officers and other employees.

General Risk Factors

We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine. Our business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions.

U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in credit and capital markets.

Additionally, Russia’s prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, payment system. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets.

Any of the abovementioned factors could affect our business, prospects, financial condition, and operating results. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in this prospectus.

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Raising additional capital would cause dilution to our existing shareholders and may affect the rights of existing shareholders.

We may seek additional capital through a combination of private and public equity offerings, debt financings and collaborations and strategic and licensing arrangements. 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.

Sales of a substantial number of our Ordinary Shares in the public market by our existing shareholders could cause our share price to fall.

Sales of a substantial number of our Ordinary Shares in the public market, or the perception that these sales might occur, could depress the market price of our Ordinary Shares and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our Ordinary Shares.

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 Ordinary Shares, our Ordinary Shares price and trading volume could decline.

The trading market for our Ordinary Shares will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. We do not have any control over these analysts and we cannot provide any assurance that analysts will cover us or provide favorable coverage. If any of the analysts who may cover us adversely change their recommendation regarding our Ordinary Shares, or provide more favorable relative recommendations about our competitors, our Ordinary Shares price would likely decline. 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 our Ordinary Shares price or trading volume to decline.

Our business and operations would suffer in the event of computer system failures, cyber attacks or a deficiency in our cybersecurity.

Despite the implementation of security measures intended to secure our data against impermissible access and to preserve the integrity and confidentiality of our data, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyber attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our business. To the extent that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur material legal claims and liability, including under data privacy laws such as the General Data Protection Regulation, damage to our reputation, and the further development of our product could be delayed.

Our future success depends in part on our ability to retain our senior management team and to attract, retain and motivate other qualified personnel.

We are highly dependent on the members of our senior management team. The loss of their services without a proper replacement may adversely impact the achievement of our objectives. Our employees may leave our employment at any time. Recruiting and retaining other qualified employees, consultants and advisors for our business, including scientific and technical personnel, will also be critical to our success. There is currently a shortage of skilled personnel in our industry, which is likely to continue for the foreseeable future. As a result, competition for skilled personnel is intense, and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among different companies for individuals with similar skill sets. The inability to recruit and retain qualified personnel, or the loss of the services of any members of our senior management team without proper replacement, may impede the progress of our research, development and commercialization objectives. We do not maintain key man insurance for our senior management team.

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We have never paid cash dividends on our share capital, and we do not anticipate paying any cash dividends in the foreseeable future.

We have never declared or paid cash dividends on our Ordinary Shares. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends in the foreseeable future. As a result, capital appreciation, if any, of our Ordinary Shares will be investors’ sole source of gain for the foreseeable future. In addition, Israeli law limits our ability to declare and pay dividends, and may subject our dividends to Israeli withholding taxes.

We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company whose Ordinary Shares and Warrants will be listed in the United States, we will incur significant legal, accounting and other expenses that we did not incur as a private company. We will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, the other rules and regulations of the Securities and Exchange Commission, or SEC, and the rules and regulations of The Nasdaq Stock Market, and provisions of the Companies Law that apply to public companies such as us. The expenses that will be required in order to adequately prepare for being a public company will be material, and compliance with the various reporting and other requirements applicable to public companies will require considerable time and attention of management. For example, the Sarbanes-Oxley Act and the rules of the SEC and national securities exchanges have imposed various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. These rules and regulations will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits on coverage or incur substantial costs to maintain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified personnel to serve on our board of directors, our board committees, or as executive officers.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, beginning as early as our annual report on Form 20-F for the fiscal year ended December 31, 2023. In addition, we will be required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting beginning with our annual report on Form 20-F following the date on which we are no longer an emerging growth company. Our compliance with Section 404 of the Sarbanes-Oxley Act will require that we incur substantial accounting expense and expend significant management efforts. We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. If we are not able to comply with the requirements of Section 404 in a timely manner, the market price of our shares could decline and we could be subject to sanctions or investigations by Nasdaq Stock Market, the SEC or other regulatory authorities, which would require additional financial and management resources.

Our ability to successfully implement our business plan and comply with Section 404 requires us to be able to prepare timely and accurate financial statements. We expect that we will need to continue to improve existing, and implement new operational and financial systems, procedures and controls to manage our business effectively. Any delay in the implementation of, or disruption in the transition to, new or enhanced systems, procedures or controls, may cause our operations to suffer and we may be unable to conclude that our internal control over financial reporting is effective and to obtain an unqualified report on internal controls from our auditors as required under Section 404 of the Sarbanes-Oxley Act. This, in turn, could have an adverse impact on trading prices for our Ordinary Shares and could adversely affect our ability to access the capital markets.

Furthermore, we are only in the early stages of determining formally whether our existing internal control over financial reporting systems are compliant with Section 404 and whether there are any material weaknesses or significant deficiencies in our existing internal controls. These controls and other procedures are designed to ensure that information required to be disclosed by us in the reports that we file with the SEC is disclosed accurately and is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

        our business, development and operating goals and strategies and plans for the development of existing and new businesses, ability to implement such strategies and plans and expected time;

        our future business development, financial condition and results of operations;

        expected changes in our revenues, costs or expenditures;

        our expectations regarding demand for and market acceptance of our product;

        our expectations regarding our relationships with customers, business partners and strategic partners;

        our dependence on and the success of our strategic relationships with third parties and service providers;

        the trends in, expected growth in and market size of the global water, gas and oil industries;

        our estimates of, and future expectations regarding, our market opportunity;

        our ability to attract customers, grow our retention rates, and sell our product;

        our ability to continue to develop new technologies and/or upgrade our existing technologies;

        competitive environment and landscape and potential competitor behavior in our industry and the overall outlook in our industry;

        our ability to maintain the security and availability of our product and to maintain privacy, data protection and cybersecurity;

        our plans and ability to obtain or protect intellectual property rights, or to obtain, maintain, protect and enforce sufficiently broad intellectual property rights therein, including extensions of patent terms where available and our ability to avoid infringing the intellectual property rights of others;

        the need to hire additional personnel and our ability to attract, train and retain such personnel;

        our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

        the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future development and operating expenses and capital expenditure requirements;

        risks related to our ability to expand our international business operations;

        risks related to business, political, social, economic and security conditions in Israel;

        changes in applicable tax law, the stability of effective tax rates and adverse outcomes resulting from examination of our income or other tax returns;

        the effects of currency exchange rate fluctuations on our results of operations;

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        the length and severity of the recent COVID-19 pandemic and its impact on our business and industry; and

        our ability to generate revenue and profit margin under our collaboration with third parties and anticipated contracts which is subject to certain risks.

Forward-looking statements are based on our management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions, and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this prospectus may turn out to be inaccurate. Important factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk Factors” and elsewhere in this prospectus. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements.

The forward-looking statements included in this prospectus speak only as of the date of this prospectus. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this prospectus. See “Where You Can Find More Information.”

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USE OF PROCEEDS

We estimate that the net proceeds from the sale of securities in this offering will be approximately $            million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, based on an assumed initial public offering price of $            per Unit, which is the midpoint of the price range set forth on the cover page of this prospectus. If the underwriters exercise their option to purchase up to an additional            Ordinary Shares and Warrants in full, we estimate that the net proceeds to us from this offering will be approximately $            million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each $1.00 increase (decrease) in the assumed initial public offering price of $            per Unit would increase (decrease) the net proceeds to us from this offering, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, by $            million, assuming that the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of Units we are offering. An increase (decrease) of 1.0 million in the number of Units we are offering would increase (decrease) the net proceeds to us from this offering, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, by $            million, assuming the assumed initial public offering price stays the same.

We currently expect to use the net proceeds from this offering for the following purposes:

        approximately $            million for product development, product testing in beta sites for the purpose of examining our product’s performance and its compliance with certain predefined specifications;

        approximately $            million for research and development, including completion of our existing systems and continued development of new products;

        approximately $            million for marketing, advertising and pre-commercialization activities; and

        the remainder for working capital and general corporate purposes and possible future acquisitions.

Although we currently anticipate that we will use the net proceeds from this offering as described above, there may be circumstances where a reallocation of funds is necessary. Amounts and timing of our actual expenditures will depend upon a number of factors, including our sales, marketing and commercialization efforts, regulatory approval and demand for our product, operating costs and other factors described under “Risk Factors” in this prospectus. Accordingly, our management will have flexibility in applying the net proceeds from this offering. An investor will not have the opportunity to evaluate the economic, financial or other information on which we base our decisions on how to use the proceeds.

Based on our current plans, we believe that our existing cash, cash equivalents and short-term deposits, together with the net proceeds of this offering, will be sufficient to enable us to fund our operating expenses and capital expenditure requirements through            . We anticipate that these funds, together with the net proceeds of this offering, will be sufficient to            . We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect.

Pending our application of the net proceeds from this offering, we plan to invest such proceeds in short-term, investment-grade, interest-bearing securities and depositary institutions.

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DIVIDEND POLICY

We have never declared or paid any cash dividends to our shareholders of our Ordinary Shares, and we do not anticipate or intend to pay cash dividends in the foreseeable future. Payment of cash dividends, if any, in the future will be at the discretion of our board of directors in compliance with applicable legal requirements and will depend on a number of factors, including future earnings, our financial condition, operating results, contractual restrictions, capital requirements, business prospects, our strategic goals and plans to expand our business, applicable law and other factors that our board of directors may deem relevant.

The Israeli Companies Law imposes further restrictions on our ability to declare and pay dividends. See “Description of Share Capital — Dividend and Liquidation Rights” for additional information.

Payment of dividends may be subject to Israeli withholding taxes. See “Taxation — Material Israeli Tax Considerations” for additional information.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and our capitalization as of December 31, 2021:

        on an actual basis.

        on a pro forma basis to give effect to $63,001 received on January 5, 2022, in return for 3,178 Ordinary Shares issued in a private placement completed on December 22, 2021, and the issuance of: 11,094 Ordinary Shares, on March 31, 2022, in a private placement, at a price per share of $99.60, for total gross consideration of $705,000 received in cash and $400,000 value in 6,493,506 restricted shares of Medigus Ltd.

        on a pro forma as adjusted basis to give effect to the additional issuance of            Units in this offering, at an assumed public offering price of $            per Unit, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses, as if the sale of the securities had occurred on December 31, 2021.

The pro forma as adjusted information set forth in the table below is illustrative only and will be adjusted based on the actual public offering price and other terms of this offering determined at pricing.

You should read this table in conjunction with the sections titled “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes included elsewhere in this prospectus.

 

As of December 31, 2021

U.S. dollars

 

Actual

 

Pro Forma

 

Pro Forma
As Adjusted(1)

Cash and cash equivalents

 

331,998

 

 

1,099,999

 

   

Short term investment

 

 

 

400,000

 

   

Receivables on account of issued shares

 

63,001

 

 

 

   
     

 

   

 

   

Shareholders’ equity:

   

 

   

 

   

Ordinary Shares

 

161

 

 

197

 

   

Additional paid-in capital

 

2,572,345

 

 

3,677,309

 

   
     

 

   

 

   

Accumulated deficit

 

(2,216,918

)

 

(2,216,918

)

   

Total shareholders’ equity

 

355,588

 

 

1,460,588

 

   

Total capitalization

 

355,588

 

 

1,460,588

 

   

____________

(1)      Each $1.00 increase or decrease in the assumed initial public offering price of $            per Unit, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, respectively, the amount of cash, cash equivalents and short-term deposits, total shareholders’ (deficiency) equity and total capitalization by $            million, assuming the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of Units we are offering. An increase or decrease of 1.0 million in the number of Units we are offering would increase or decrease, respectively, the amount of cash, cash equivalents and short-term deposits, total shareholders’ (deficiency) equity and total capitalization by $            million, assuming the assumed initial public offering price per Unit, as set forth on the cover page of this prospectus, remains the same. The pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing.

The outstanding share information in the table above excludes:

        849 Ordinary Shares issuable upon the exercise of options granted under our incentive plan, with an exercise price equal to the offering price per share in this offering;

        Ordinary Shares issuable upon the exercise of options granted to members of management under our incentive plan to purchase 6.5% of the share capital of the Company (on a fully diluted basis) immediately prior to the consummation of this offering, approximately 23% percent of which have an exercise price of $99.60 per share and the remainder of which have an exercise price equal to the offering price per share in this offering; and

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        Ordinary Shares issuable upon the exercise of warrants granted to consultants to purchase (i) 1% of the share capital of the Company (on a fully diluted basis) immediately after the consummation of this offering at an exercise price of $99.6016 per share, (ii) 2.5% of the share capital of the Company (on a fully diluted basis) immediately after the consummation of this offering at an exercise price equal to the offering price per share in this offering and under our incentive plan, and (iii) 1% of the share capital of the Company (on a fully diluted basis) immediately after the consummation of this offering at an exercise price equal to the offering price per share in this offering.

Unless otherwise indicated, all information in this prospectus assumes or gives effect to:

        the issuance of 3,401 Ordinary Shares to Mekorot upon the exercise of warrants currently outstanding with a nominal exercise price;

        no exercise of the underwriter’s over-allotment option; and

        no exercise of the Warrants or the representative’s warrants.

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DILUTION

If you invest in our securities, your interest will be immediately diluted to the extent of the difference between the initial public offering price per Ordinary Share in this offering and the pro forma as adjusted net tangible book value per Ordinary Share after this offering. Dilution results from the fact that the initial public offering price per Ordinary Share is substantially in excess of the net tangible book value per Ordinary Share. As of December 31, 2021, we had a historical net tangible book value of $355,588, or $6.256 per Ordinary Share. Our net tangible book value per share represents total tangible assets less total liabilities, divided by the number of Ordinary Shares outstanding on December 31, 2021.

Our pro forma net tangible book value as of December 31, 2021, was $1,460,588, or $21.500 per Ordinary Share. Pro forma net tangible book value per share represents total tangible assets less total liabilities, divided by the number of Ordinary Shares outstanding as of December 31, 2021, after giving effect to a total amount of $63,001 received on January 5, 2022, in return to 3,178 shares issued in a private placement completed on December 22, 2021 and the issuance of 11,094 Ordinary Shares, on March 31, 2022, in a private placement, at a price per share of $99.60, for total gross consideration of $705,000 received in cash and $400,000 value in 6,493,506 restricted shares of Medigus Ltd.

After giving effect to the sale of Units in this offering at an assumed initial public offering price of $            per Unit, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses, and after taking into account       , our pro forma as adjusted net tangible book value at December 31, 2021 would have been $            per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $            per share to existing shareholders and immediate dilution of $            per Ordinary Share to new investors. The following table illustrates this dilution per Ordinary Share:

Assumed public offering price per Unit

     

$

 

Pro forma net tangible book value per Ordinary Share as of December 31, 2021

 

21.500

 

 

 

Increase in net tangible book value per Ordinary Share attributable
to new investors

     

 

 

Pro forma as adjusted net tangible book value per Ordinary Share after this offering(1)

     

 

 

Dilution per Ordinary Share to new investors

     

 

 

Percentage of dilution in net tangible book value per Ordinary Share for new investors

     

 

 

The pro forma and pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing. A $1.00 increase (decrease) in the assumed initial public offering price of $            per Unit, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value as of December 31, 2021 after this offering by approximately $            per Ordinary Share, and would increase (decrease) dilution to investors in this offering by $            per Ordinary Share, assuming that the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of Units we are offering. An increase (decrease) of 1.0 million in the number of Units we are offering would increase (decrease) our pro forma as adjusted net tangible book value as of December 31, 2021 after this offering by approximately $            per Ordinary Share, and would decrease (increase) dilution to investors in this offering by approximately $            per Ordinary Share, assuming the assumed initial public offering price per Ordinary Share remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise in full their option to purchase additional Ordinary Shares and Warrants, the pro forma as adjusted net tangible book value will increase to $            per Ordinary Share, representing an immediate increase in pro forma as adjusted net tangible book value to existing shareholders of $            per Ordinary Share and an immediate dilution of $            per Ordinary Share to new investors participating in this offering.

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The following table shows, as of December 31, 2021, on a pro forma as adjusted basis, the number of Ordinary Shares purchased from us as part of the Units, the total consideration paid to us and the average price paid per share by existing shareholders and by new investors purchasing Units in this offering at an assumed initial public offering price of $            per Unit, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us:

 

Shares

 

Total Consideration

 

Average Price
Per Ordinary
Share

   

Number

 

Percent

 

Amount

 

Percent

 

Existing shareholders

     

%

 

$

   

%

 

$

 

New investors

     

%

 

$

   

%

 

$

 

Total

     

100.0%

 

$

   

100%

 

$

 

A $1.00 increase (decrease) in the assumed initial public offering price of $            per Unit (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) the total consideration paid by investors participating in this offering, total consideration paid by all shareholders and the average price per share paid by all shareholders by approximately $            million, $            million and $            , respectively, assuming that the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same and before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, a 1.0 million share increase (decrease) in the number of Units offered by us, as set forth on the cover of this prospectus, would increase (decrease) the total consideration paid by investors participating in this offering, total consideration paid by all shareholders and the average price per share paid by all shareholders by approximately $            million, $            million and $            , respectively, assuming the assumed initial public offering price of $            per Unit (the midpoint of the price range set forth on the cover page of this prospectus) remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The number of the Ordinary Shares to be issued and outstanding immediately after this offering as shown above assumes that all of the Ordinary Shares offered hereby are sold, and is based on Ordinary Shares issued and outstanding as of the date of this prospectus. This number excludes:

        849 Ordinary Shares issuable upon the exercise of options granted under our incentive plan, with an exercise price equal to the offering price per share in this offering;

        Ordinary Shares issuable upon the exercise of options granted to members of management under our incentive plan to purchase 6.5% of the share capital of the Company (on a fully diluted basis) immediately prior to the consummation of this offering, approximately 23% percent of which have an exercise price of $99.60 per share and the remainder of which have an exercise price equal to the offering price per share in this offering; and

        Ordinary Shares issuable upon the exercise of warrants granted to consultants to purchase (i) 1% of the share capital of the Company (on a fully diluted basis) immediately after the consummation of this offering at an exercise price of $99.6016 per share, (ii) 2.5% of the share capital of the Company (on a fully diluted basis) immediately after the consummation of this offering at an exercise price equal to the offering price per share in this offering and under our incentive plan, and (iii) 1% of the share capital of the Company (on a fully diluted basis) immediately after the consummation of this offering at an exercise price equal to the offering price per share in this offering.

Unless otherwise indicated, all information in this prospectus assumes or gives effect to:

        The issuance of 3,401 Ordinary Shares to Mekorot upon the exercise of warrants currently outstanding with a nominal exercise price.

To the extent that outstanding options are exercised, new options or warrants are issued or we issue additional Ordinary Shares in the future, there will be further dilution to new investors. We may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our equity holders.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FIN
ANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our audited financial statements including the related notes thereto, beginning on page F-1 of this prospectus. In addition to historical information, this discussion contains forward-looking statements that involve risks and uncertainties. You should read the sections of this prospectus titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” for a discussion of the factors that could cause our actual results to differ materially from our expectations.

Overview

We are a deep-tech development stage company that aims to disrupt fluid transportation. We are committed to improving and optimizing the global infrastructure of water, oil and gas pipeline transportation by reducing energy costs, maintenance costs, and enhancing capacity without having to replace infrastructure. Our energy efficiency technology is unique in its ability to suppress turbulence by continuously generating low-frequency pressure waves, which achieves minimal hydrodynamic resistance for the pipeline transport process. As a result, friction losses within the pipeline are reduced. Following a proof of concept industrial test in 2015 of the PWG that was shown to decrease specific energy consumption by 35% for approximately five minutes, we believe that our current prototype in development will have the potential to reduce pump energy consumption significantly.

We have experienced net losses in every period since our inception in 2017. We incurred net losses of $137,259 and $267,373 for the year ended December 31, 2021, and the year ended December 31, 2020, respectively. As of December 31, 2021, we had an accumulated deficit of $2,216,918. We anticipate that we will continue to incur significant losses for the foreseeable future as our operating expenses and capital expenditures increase substantially due to our continued investment in our research and development activities and as we hire additional employees over the coming years. Furthermore, upon closing of this offering, we expect to incur additional expenses associated with operating as a U.S. public company, including significant legal, accounting, investor relations and other expenses.

Components of Operating Results

Research and Development Expenses

Research and development activities are our primary focus. We do not believe that it is possible at this time to accurately project total expenses required for us to reach the point at which we will be ready to commercialize our technologies. Development timelines, the probability of success and development costs can differ materially from expectations. We expect our research and development expenses to increase over the next several years as our development program progresses. We would also expect to incur increased research and development expenses if we were to identify and develop additional technologies.

Research and development expenses include the following:

        employee-related expenses, such as salaries and share-based compensation;

        expenses relating to outsourced and contracted services, such as consulting, research and advisory services;

        supply and development costs;

        expenses incurred in operating our small-scale equipment; and

        costs associated with lab facility costs.

We recognize research and development expenses as we incur them.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs, including facility costs, patent application and maintenance expenses, and external professional service costs, including legal, accounting, audit, finance, business development, investor relations and human resource services, and other consulting fees.

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We anticipate that our general and administrative expenses will increase in the future as we increase our administrative headcount and infrastructure to support our continued research and development programs and the potential commercialization of our product. We also anticipate that we will incur increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq and SEC requirements, director and officer insurance premiums, director compensation, and other costs associated with being a public company.

Finance Expenses, Net

Finance expenses, net, consisted primarily of rate exchange differences between the NIS and USD.

Income Taxes

As of December 31, 2021, our operating tax loss carryforwards were approximately $763,849 (NIS 2,376,333). We anticipate that we will continue to generate tax losses for the foreseeable future and that we will be able to carry forward these tax losses indefinitely to future taxable years. Accordingly, we do not expect to pay taxes in Israel until we have taxable income after the full utilization of our carry forward tax losses.

Results of Operations

Our results of operations have varied in the past and can be expected to vary in the future due to numerous factors. We believe that period-to-period comparisons of our operating results are not necessarily meaningful and should not be relied upon as indications of future performance.

Below is a summary of our results of operations for the periods indicated:

 

Year Ended December 31,

   

2021

 

2020

   

USD

Operating expenses:

       

Research and development expenses

 

62,178

 

151,350

General and administrative expenses

 

67,630

 

89,873

Loss from operations

 

129,808

 

241,223

Finance expense, net

 

7,451

 

26,150

Net loss

 

137,259

 

267,373

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Research and development expenses

Research and development expenses decreased by approximately $89,172, or 59%, to approximately $62,178 for the year ended December 31, 2021, compared to $151,350 for the year ended December 31, 2020. The decrease resulted mainly from decrease in headcount and related expenses.

General and administrative expenses

General and administrative expenses decreased by approximately $22,243, or 25%, to approximately $67,630 for the year ended December 31, 2021, compared to approximately $89,873 for the year ended December 31, 2020. The decrease resulted mainly from decrease in headcount and related expenses.

Net loss

Net loss decreased by approximately $130,114, or 49%, to approximately $137,259 for the year ended December 31, 2021, compared to $267,373 for the year ended December 31, 2020. The decrease was mainly the result of overall decrease in our activity and decrease in rate exchange differences.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

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Critical Accounting Policies

We describe our significant accounting policies and estimates in Note 2 to our annual financial statements contained elsewhere in this prospectus. We believe that these accounting policies and estimates are critical in order to fully understand and evaluate our financial condition and results of operations.

We prepare our financial statements in accordance with generally accepted accounting principles in the United States of America (US GAAP).

Use of estimates in the preparation of financial statements:

In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of our accounting policies and the reported amounts recognized in the financial statements. On a periodic basis, we evaluate our estimates, including those related to revenue recognition derivatives. We base our estimates on historical experience, authoritative pronouncements and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

Revenue recognition:

Effective as of January 1, 2018, we have followed the provisions of ASC Topic 606, Revenue from Contracts with Customers, which applies to all contracts with Topic 606. Under Topic 606, revenues are recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. To determine the appropriate revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps:

        identify the contract(s) with a customer;

        identify the performance obligations in the contract;

        determine the transaction price;

        allocate the transaction price to the performance obligations in the contract; and

        recognize revenue when (or as) the entity satisfies a performance obligation.

At contract inception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within the contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. We evaluate each performance obligation to determine if it is satisfied at a point in time or over time.

Fair value measurements

We account for fair value in accordance with ASC 820. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. We use a three-tier hierarchy, which prioritizes the inputs used in measuring fair value as follows:

        Level 1:    Quoted prices in active markets for identical assets or liabilities.

        Level 2:    Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

        Level 3:    Unobservable inputs for the asset or liability used to measure fair value that are supported by little or no market activity and that re significant to the fair value of the asset or liability at measurement date.

The first two levels in the hierarchy are considered observable inputs and the last is considered unobservable. The carrying value of accounts receivable and payables and our cash and cash equivalents, restricted cash and short-term investments, approximates fair value due to the short time to expected payment or receipt of cash.

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Recently-Issued Accounting Pronouncements

Certain recently-issued accounting pronouncements are discussed in Note 2, Summary of Significant Accounting Policies, to the financial statements included in elsewhere in this registration statement, regarding the impact of the US GAAP standards as issued by the FASB that we will adopt in future periods in our financial statements.

Emerging Growth Company Status

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

        a requirement to present only two years of audited financial statements herein in addition to any required interim financial statements and correspondingly reduced Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure;

        to the extent that we no longer qualify as a foreign private issuer, (i) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (ii) exemptions from the requirement to hold a non-binding advisory vote on executive compensation, including golden parachute compensation;

        an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; and

        an exemption from compliance with the requirement that the Public Company Accounting Oversight Board has adopted regarding a supplement to the auditor’s report providing additional information about the audit and the financial statements.

We may take advantage of these exemptions for up to five years or until such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company upon the earliest to occur of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; (iii) the date on which we are deemed to be a large accelerated filer under the rules of the SEC; or (iv) the last day of the fiscal year following the fifth anniversary of this offering. We may choose to take advantage of some but not all of these exemptions. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This means that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our financials to those of other public companies more difficult.

Liquidity and Capital Resources

We have financed our operations for the last three years primarily from equity investments and governmental grants. Currently, our business activity is in Israel.

From our inception through December 31, 2021, we raised an aggregate of $1,106,360 in capital and $308,410 in proceeds from governmental grants and one-time income from Mekorot. As of December 31, 2021, we had $331,988 in cash and cash equivalents. Our management expects that we will continue to generate losses and negative cash flows from operations for the foreseeable future. Based on the projected cash flows and cash balances as of the date of these financial statements, management is of the opinion that its existing cash will not be sufficient to meet its obligations for a period which is longer than 12 months.

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The table below shows a summary of our cashflows for the periods indicated:

 

Year Ended
December 31,
2021

 

Year Ended
December 31,
2020

   

USD

Net cash used in operating activities

 

(38,481

)

 

(55,374

)

Net cash used in investing activities

 

 

 

(33,536

)

Net cash provided by financing activities

 

330,505

 

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted deposits

 

1,368

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted deposits

 

293,392

 

 

(88,910

)

Net cash used in operating activities

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Net cash provided by (used in) operating activities

Net cash used in operating activities decreased by $16,893, or 31%, to approximately $38,481 for the year ended December 31, 2021, compared to approximately $55,374 for the year ended December 31, 2020. This decrease was mainly due to overall lower activity and increase in liabilities taken by us.

Net cash used in investing activities

Net cash used in investing activities was $0 for the year ended December 31, 2021, compared to net cash used in investing activities of approximately $33,536 for the year ended December 31, 2020. This decrease was because we did not invest in purchase of equipment.

Net cash used in financing activities

Net cash provided by financing activities increased by $330,505 to $330,505 for the year ended December 31, 2021, compared to $0 for the year ended December 31, 2020. This increase was due to issuance of Ordinary Shares and exercise of options to Ordinary Shares.

We have incurred losses and cash flow deficits from operations since our inception, resulting in an accumulated deficit at December 31, 2021 of approximately $2,216,918. We anticipate that we will continue to incur net losses for the foreseeable future. As of December 31, 2021, we had $331,988 in cash and cash equivalents. We expect that our existing cash and cash equivalents will be sufficient to fund our current operations until December 2022 without using the net proceeds from this offering. To meet future capital needs, we would need to raise additional capital through equity or debt financing or other strategic transactions. However, any such financing may not be on favorable terms or even available to us. Our failure to obtain sufficient funds on commercially acceptable terms when needed would have a material adverse effect on our business, results of operations and financial condition. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and the actual amount of our expenses could vary materially and adversely as a result of a number of factors. We have based our estimates on assumptions that may prove to be wrong, and our expenses could prove to be significantly higher than we currently anticipate.

Our future capital requirements will depend on many factors, including, but not limited to:

        the progress and costs of our research and development activities;

        the costs of development and expansion of our operational infrastructure;

        our ability, or that of our collaborators, to achieve development milestones and other events or developments under potential future licensing agreements;

        the amount of revenues and contributions we receive under future licensing, collaboration, development and commercialization arrangements with respect to our technologies;

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        the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;

        the costs of contracting with third parties to provide sales and marketing capabilities for us or establishing such capabilities ourselves, once our technologies are developed and ready for commercialization;

        the costs of acquiring or undertaking development and commercialization efforts for any future products or technology;

        the magnitude of our general and administrative expenses; and

        any additional costs that we may incur under future in- and out-licensing arrangements relating to our technologies and futures products.

We have a limited operating history and we have incurred significant operating losses since our inception, and anticipate that we will incur continued losses for the foreseeable future

Even following the Second round of financing, until we can generate significant recurring revenues, we expect to satisfy our future cash needs through capital raising or by out-licensing and/or co-developing applications of one or more of our product. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available on favorable terms, or at all, we may be required to delay, reduce the scope of or eliminate research or development efforts or plans for commercialization with respect to our technologies and make necessary change to our operations to reduce the level of our expenditures in line with available resources.

We are a development-stage technology company and it is not possible for us to predict with any degree of accuracy the outcome of our research and development efforts. As such, it is not possible for us to predict with any degree of accuracy any significant trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net loss, liquidity or capital resources, or that would cause financial information to not necessarily be indicative of future operating results or financial condition. However, to the extent possible, certain trends, uncertainties, demands, commitments and events are described herein.

We manage our business through a small number of employees and key consultants. We may need to expand our organization and we may experience difficulties in recruiting needed additional employees and consultants, which could disrupt our operations.

Our management team has limited experience managing a U.S. reporting company.

Financing Activities

In March 2022, we and Medigus Ltd., or Medigus, and certain additional investors, or together with Medigus, the Investors, entered into a share purchase agreement, or the March 2022 Purchase Agreement, whereby the Investors invested $705,000 in us in consideration of an issuance of an aggregate number of 7,078 Ordinary Shares reflecting a price per share of $99.60, or the March 2022 PPS. In addition, according to the March 2022 Purchase Agreement, we sold and issued an additional 4,016 Ordinary Shares to Medigus in consideration of 6,493,506 shares of Medigus, reflecting value of the aggregate amount of $400,000 of the market price of an ordinary share of Medigus at the end of the last trading day on the NASDAQ prior to the initial closing date of the March 2022 Purchase Agreement, or the Initial Closing, plus a 10% premium on such market price.

Pursuant to the terms of the March 2022 Purchase Agreement, during a period of up to ninety days following the Initial Closing, we may sell and issue to one or more investors, on the same terms and conditions as those contained in the March 2022 Purchase Agreement, at one or more closings, or the Deferred Closing, up to additional 2,962 Ordinary Shares (subject to appropriate adjustments in the event of any dividend, shares split, combination or similar recapitalization affecting such shares), for the total aggregate consideration of up to $295,000.

In addition, pursuant to the terms of the March 2022 Purchase Agreement, in the event we, during a period of 24 months from the later of the Initial Closing or the Deferred Closing (if any), issue new securities on one or more occasions, without consideration or for a consideration per share less than the March 2022 PPS (subject to any share split, combination or similar changes), or the Reduced PPS, then on each such issuance of new securities we shall issue to each Investor additional Ordinary Shares, at no cost to the Investor, in such number equal to the difference between (i) the number of Investor’s shares which would be held by the Investor if it had made the investment under the

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Reduced PPS; and (ii) the number of Investor’s shares issued to such Investor for its investment under the March 2022 Purchase Agreement (based on the March 2022 PPS), or the March 2022 Anti-Dilution Protection. The March 2022 Anti-Dilution Protection expires immediately prior to the earlier of (a) the closing of an initial public offering, and (b) the lapse of 24 months following the date of the later of the Initial Closing or the Deferred Closing (if any).

Quantitative and Qualitative Disclosures About Market Risk

Liquidity Risk

Liquidity risk is the risk that we will encounter difficulty in meeting the obligations associated with our financial liabilities that are settled in cash. We monitor forecasts of our liquidity requirements to ensure we have sufficient cash to meet operational needs. We may be reliant on our ability to raise additional investment capital from the issuance of both debt and equity securities to fund our business operating plans and future obligations.

Credit risk

Credit risk is the risk of financial loss to us if a debtor or counterparty to a financial instrument fails to meet its contractual obligations, or company expectations to receive certain amounts, and arises mainly from holding marketable securities subject to lock up period ending on October 31, 2022.

Inflation risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations in the reporting period.

Foreign Currency Exchange Risk

Currency fluctuations could affect us through increased or decreased costs, mainly for goods and services acquired in Israel that require us to convert funds held in other currencies to NIS.

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BUSINESS

Overview

We are a deep-tech development stage company that aims to disrupt fluid transportation. We are committed to improving and optimizing the global infrastructure of water, oil and gas pipeline transportation by reducing energy costs, maintenance costs, and enhancing capacity without having to replace infrastructure. Our energy efficiency technology is unique in its ability to suppress turbulence by continuously generating low-frequency pressure waves, which achieves minimal hydrodynamic resistance for the pipeline transport process. As a result, friction losses within the pipeline are reduced. Following a proof of concept industrial test in 2015 of the pressure waves generator, or PWG, that was shown to decrease specific energy consumption by 35% for approximately five minutes, we believe that our current prototype in development will have the potential to reduce pump energy consumption significantly.

Pipe transportation technology is based on the universal conservation law of mass, impulse, and energy of fluid flow. In order to start the flow, energy is required to pump the liquid into the pipes. A significant amount of energy is spent maintaining the flow. One of the major energy loss factors in pumping and fluid transportation is determined by turbulent friction in the pipeline flow. This is also known as the turbulent friction loss, or head loss or drag reduction. Turbulent flow is a physical phenomenon present in every pressurized flow medium transported in pipelines under pressure (i.e., any pump causes turbulent flow). In turbulent flow, the fluid particles undergo irregular fluctuations, or mixing, in contrast to laminar flow, in which the fluid particles move in smooth paths or layers. In turbulent flow, the speed of the fluid particles at any specific point is continuously undergoing changes in both magnitude and direction. This causes the flow to slow down, which increases hydrodynamic resistance and thus causes electric motors to consume more energy during the pumping process. Since turbulent flow is a stable state, it is extremely challenging to modify it into partially laminar flow and keep it in that manner without consuming a considerable amount of energy for this process.

Three main sectors of critical infrastructure, oil, gas and water, rely heavily on pipes and pumps. Pumps consume an enormous amount of energy in the global water, oil, and gas markets. All three critical infrastructure sectors are actively seeking to improve energy efficiency.

In an era of increasing awareness of climate change, the desire to achieve sustainable growth while reducing environmental impact is strengthening the momentum of global efforts to reduce energy consumption. The historic 2015 Paris Climate Accords, endorsed nearly worldwide, calls for keeping the rise in average global temperatures “well below” two degrees Celsius (2°C) during the present century, compared to pre-industrial levels. According to the International Renewable Energy Agency, Global Energy Transformation Report, renewable energy and energy efficiency can, in combination, provide over 90% of the necessary energy-related CO2 emission reductions necessary to meet this goal of the Paris Climate Accords. Our technology has been designed to address the major challenge of reducing energy consumption in pipeline fluid transportation. The main technological challenge is to develop a sustainable and practical cost-efficient solution that makes the flow less turbulent. We are hopeful that our technology will be part of the vision of the Paris Climate Accords and will enhance energy efficiency to reduce CO2 emissions.

We have developed a novel active flow control device that introduces pressure waves into turbulent pipe flow and causes a relaminarization of the flow reducing friction on the pipe walls and hence reducing drag. Our device, referred to as a PWG, involves a rotating impeller located outside of the main pipe flow which induces a small inflow upstream of the mainline pump and returns the extracted fluid via an outflow pipe imparted with oscillating pressure waves from the impeller. This effect is designed to be sustainable for a significant pipe length and thereby introduce non-trivial energy savings regarding input pump work. Since February 2022, we have engaged with Ozen Engineering, a California based company, to perform commercial-grade CFD simulations of the PWG by considering the impact of generated pressure waves on fully-developed turbulent pipe flow. The overall goal was to further optimize and improve the original PWG design. In addition, we have established in Israel an open-source CFD software/hardware environment and initiated simulation studies to complement and expand on the Ozen effort.

Our product is designed in a modular concept. It consists of four separate yet interconnected components/systems: (i) a PWG, (ii) control panel, (iii) measuring instruments, and (iv) a program (currently in development) for automatic control and dynamic optimization of the energy saving mode. The PWG is connected parallel to the pump and designed for the given flow and pipeline parameters. Once operating, our product generates immediate pressure waves in the discharge pipeline after the pump resulting in an immediate reduction in electricity consumption by the pump. Regarding the current status of this system, the PWG is undergoing further analysis and development

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using CFD. Once a new generation of the prototype for the PWG is completed, it will be tested in our hydrodynamic lab in Israel or other suitable labs and integrated with the other three components. These other components will be updated accordingly as part of the new round of testing. Once a complete system is operational, the control software, which would monitor upstream and downstream pressure and controls the PWG RPM would be finalized.

A significant advantage of our PWG is that it can be applied with minimal modifications to existing pipeline systems and without changing the pipeline itself. Also, the PWG consumes no more than one percent of the energy used by the pump as shown in our lab results.

As described herein, we are party to a Beta Test Agreement with Mekorot providing for Mekorot to test and examine the performance of our product for commercial production and its compliance with test specifications. We would also consider entering into testing agreements or pilots with other parties when the opportunities arise.

Proof of Concept

In 2015, a proof of concept of the preliminary hardware of the PWG was first installed and used in an industrial plant to test its concept and technology in a 146-meter pipeline containing water. The modulator test was carried out directly in industrial conditions, from the research and development stage, bypassing laboratory tests. The proof of concept tests were conducted to measure the generation of the pressure waves by the modulator; to study the propagation of the pressure waves along the entire pipeline; and observe the influence of pressure waves on the hydrodynamic resistance of the turbulent water flow, for the given flow parameters, inlet and outlet pressure of the pump, length and pipe diameter, and its configuration. Experimental data were recorded independently by two groups: the first, a research group, and the second was an engineering group from the industrial company where the proof of concept was conducted. The results obtained by the two research groups were consistent. The results were also compared with the main factory computer and all were similar.

The trial was conducted on a 146-meter water pipeline in an industrial facility. By operating the proof of concept PWG the following was achieved for the actual measured flow rate value: (i) reduction of pressure in the pipe; (ii) increase in flow rate; and (iii) pump energy decrease.

The trial consisted of three stages as described below:

1.      Base line flow — proof of concept PWG was off, measured flow rate 134 gpm.

2.      Stabilization time proof of concept PWG was turned on, average measured flow rate 136 gpm during 30 minutes (1.5% increase in flow rate compared to when the proof of concept PWG was off).

3.      Increasing flow rate time proof of concept PWG was turned on, average measured flow rate 164.6 gpm during 12 minutes (22.8% increase in flow rate).

During the increasing flow rate time (12 minutes) the best results were obtained for approximately five minutes during which there was an increase of the flow rate to 171 gpm (27.6% increase in specific flow rate), a decrease of the specific discharge pressure of the pump by approximately 36%, a decrease of specific mechanical power of the pump of 35%, a decrease of specific energy consumption of 35% and a decrease of the specific speed of the pump impeller of 12%.

The proof of concept results suggest that by using our PWG system, a water utility can reduce energy costs. This can lead to a significant reduction in operating expenses. The PWG is designed to impose pressure waves on the pipe flow downstream of the pump. These pressure waves are designed to break up the turbulence (suppressing turbulence) and laminarize the flow, hence reducing frictional pressure drop and drag. Therefore the PWG is a potential game-changing technology for utilities as it is an innovative and practical and sustainable retrofit solution that converts turbulent flow into partially laminar flow in a stable state over long distances.

Beta Test Agreement with Mekorot and Further Development of Our Product

In November 2018, we entered into the Beta Test Agreement with Mekorot. The Beta Test Agreement provides for Mekorot to test and examine the performance of our product for commercial production and its compliance with test specifications. The testing, which is planned to commence in late 2024 and take place over 30 months, will measure success specifications such as proof of reduction in energy consumption, in a range of 10%-12%, maintenance of water quality during

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the transporting process and creating higher value than costs. We have analyzed and approved two pumping sites suggested by Mekorot for the commercial pilot project, one for the experimental site and one for the operational site. Pursuant the agreement, the beta test will be conducted in four agreed stages at two facilities of Mekorot, where each side will allocate, at its own expense, skilled personnel to test the product. The testing consists of several stages: (i) the preparation of a working plan, specification of the beta product and definition of the success criteria (completed in December 2018); (ii) after meeting the specification of the beta product, testing the performance of our product at an experimental site (planned in late 2024); (iii) testing the performance of our product at an operational site; and (iv) at the final stage of the product evaluation, a group from both sides will issue a final report analyzing the product performance compared to the success criteria defined for the beta test and discuss the suitability of the product for Mekorot.

In December 2018, we completed the first stage of the Beta Test Agreement, consisting of preparation of a working plan, specification of the beta product, and definition of the success criteria. Commencing in 2019, we leased our research and development facility and began the construction of a hydrodynamic experimental lab facility on which to conduct preliminary testing of the PWG performance in order to achieve at least 10% pump energy savings. The hydrodynamic lab consists of a pump, a water tank, and 136 meter long water pipeline with sensors detecting temperature, speed, flow rate, and pressure. In 2019, we developed an initial prototype of the PWG and developed prototypes of the other components/systems of the product, and we are currently developing the software for automatic control of the PWG for dynamic optimization for energy savings. The construction of the lab facility, along with the development of the initial prototype of the PWG, was completed in the fourth quarter of 2019, followed by subsequent improvements in 2020.

We are currently in the process of developing a new generation of the prototype of the PWG that will be designed to meet the specifications of the beta product, upon which we plan to commence testing under the Beta Test Agreement by late 2024.

According to obtained experimental results achieved by our research and development team in December 2020 at our hydrodynamic laboratory using a 136 meter long pipe with a 4-inch diameter, we succeeded by operating the PWG to increase the average water flow rate in the pipe by 3.3% for 0.9 seconds and an average of 2.6% during ten seconds for the same pump power. These preliminary results were obtained in a non-optimal frequency. The results demonstrate that generated pressure waves by the PWG lead to reduction of friction in the pipeline. Further experiments and measurements of pump output are planned.

Other Terms of the Beta Test Agreement

In conjunction with the Beta Test Agreement, the Company granted to Mekorot warrants to purchase 3,401 Ordinary Shares of the Company, par value NIS 0.01 each, all of which were fully vested upon grant, at an exercise price per share of NIS 0.01. The warrant may be exercised, in whole or in part, during the period beginning on the date of grant and ending on the earlier of: (a) the date which is ten years following the date of the warrant, or (b) immediately prior to and conditioned upon a change in control of the Company’s ownership.

Additionally, the Beta Test Agreement grants Mekorot the right to acquire our product for a period of seven years after completion of the beta test in any quantity and at the lowest price at which we sell the product outside of Israel, and receive a retroactive credit to the extent we sell the product outside of Israel at a price lower than paid by Mekorot.

The Beta Test Agreement also states that we shall pay to Mekorot cash royalties in an amount of 4% of the net revenues, provided that such amount shall be decreased to 3% with respect to net revenues derived directly from referrals made by Mekorot, until the aggregate royalties’ amount paid to Mekorot reaches an agreed capped amount. The royalties to Mekorot are capped to NIS 1,350,000 (approximately $433,944) linked to the Israeli Customer Price Index. Simultaneously with the closing of any transaction for the sale of more than 50% of the issued share capital of the Company, any merger or consolidation in which the Company participates, any sale or licensing of all or substantially all of the assets or intellectual property of the Company and/or any transaction like any of the foregoing, we will pay Mekorot an amount equal to a cap amount minus the aggregate royalties amount already paid to Mekorot until such time pursuant to the first paragraph of this section.

The Company will provide personnel and the beta product needed for the evaluation. Mekorot will also reimburse the Company for the resources provided on each stage of the beta test, up to a total amount of NIS 300,000 (approximately $88,236) in the following terms: NIS 150,000 (approximately $40,021) after achieving the first milestone (completed in December 2018), NIS 60,000 (approximately $19,286) after achieving the second milestone, NIS 70,000 (approximately $22,500) after achieving the third milestone, and NIS 20,000 (approximately $6,429) after achieving the fourth milestone.

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In January 2018, we were declared a “single supplier” with Mekorot. The single supplier test under Israel’s Tender Obligation Regulations, 1993 is a designation that a supplier is the only party capable of satisfying the contract requirements. Israeli government contracts with a ‘single supplier’ are exempt from the bidding and other competitive requirements of the Mandatory Tenders Law, 5752-1992. Mekorot offered us a draft framework contract that will be negotiated after we submit our business plan.

As Mekorot invests and partners with various high-tech companies, including companies that develop various technological solutions for the water industry, we believe that success in our beta test with Mekorot could help open channels to new markets and customers worldwide

The Beta Test Agreement provides for reimbursement to us of up to NIS 300,000, based on achievement of certain milestones, as well as certain royalty obligations to Mekorot none of which have been paid to date.

In connection with the Mekorot Agreement, we also entered into a Referral and Reference Agreement, or Referral Agreement, with Mekorot. Pursuant to the Referral Agreement, Mekorot may introduce us to potential clients in the water, wastewater and/or effluent industry. During the five-year term of the Referral Agreement and for a period of 24 months thereafter, Mekorot is entitled to 7% of the net revenues received by us from clients introduced to it by Mekorot.

Industry Overview and Market Opportunity

As the world’s resources are becoming scarcer, reducing energy consumption is a global demand in all sectors, most notably within global water, oil, and gas sectors. One of the main problems of the pipeline transportation process, where water, oil and gas are flowing, is the high use of energy due to friction substantially correlated to turbulent flow in the pipeline.

Water

Our initial strategic focus is the water utility. We expect the first phase of our technology development is to be able to operate in water pipeline systems or infrastructure that are up to 10km long. The aim of our development is to operate in longer pipeline infrastructure and pipeline systems. The global water utility sector is in a severe status. Water utilities are not covering their operating expenses due to high energy consumption and maintenance costs (including replacing aging infrastructure).

Energy costs can represent 25–30% of total operation costs for water and wastewater utilities and pumping water typically makes up greater than 80% of potable water utility energy use. According to International Energy Agency, electricity consumption in water sector by process, 2014-2040 chart (last updated March 23, 2020), the following graph shows anticipation of approximately 50% increase in the electricity demand of the water sector’s various processes by 2040.

Electricity Consumption in the Water Sector by Process, 2014–2040

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The European water utility market serves a population of more than half a billion consumers. Faced with the challenges of aging infrastructure, utility spending in Europe is directed towards rejuvenating infrastructure, building resilient, future-proof systems, and improving operational and energy efficiency.

Americans use more water per person than almost anywhere else in the world — more than triple that of China and 15 times more than Denmark. Domestic water use has been incredibly high in the driest western states. For example, Arizona residents consume 147 gallons a day compared to the 51 gallons in Wisconsin. However, extreme droughts have forced water use to trend downward. The droughts in the western United States began in 2001 and could last for decades as climate change affects weather and water cycles. More than 70 million people (a population covering 40% of the U.S. land area) are affected by this historic drought.

In the latest survey by the American Water Works Association, 54% of the water professionals say their utility’s access to capital is as good as or better than any time in the past five years. Rate increases are their top funding source and the greatest need is for infrastructure upgrades. Only 57% say their utilities are prepared to meet long-term water supply demands.

The top remaining concerns for the water industry include replacing aging infrastructure, obtaining financing for capital improvements, and the availability of long-term water supplies because of drought, climate variability and extreme weather events. To address some of these challenges, President Biden proposed an ambitious infrastructure plan which includes an unprecedented $111 billion to upgrade U.S. water infrastructure. These include: $45 billion to replace all lead pipes and service lines; $56 billion to modernize aging drinking water, storm water, and wastewater systems; $10 billion to monitor and remediate Polyfluoroalkyl Substances (PFAS) chemicals in drinking water and upgrade small rural and household water systems; and $5 billion to store water in rural regions. In May 2022, the Department of the Interior announced an investment of $240.4 million for infrastructure repairs in fiscal year 2022 from President Biden’s Bipartisan Infrastructure Law. The program, facilitated through the Bureau of Reclamation, includes significant repairs on canal linings, dam spillways and water pipeline replacements.

Oil and Gas

After a 4% drop in 2020, natural gas demand is expected to progressively recover in the upcoming years.

The Asia Pacific region accounts for over half of incremental global gas consumption, driven principally by the development of gas in China and India. Despite the current economic headwinds and uncertainty, natural gas still benefits from strong policy support in both countries, with ongoing reforms to increase the role of gas in the energy mix. Future growth in the industry sector, which constitutes the main driver of incremental gas demand in both countries, depends on the pace of economic recovery, both for domestic and export markets for industrial goods.

Global Gas Demand in Initial and Revised Forecasts, 2019–2025

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As the oil and gas industry remains highly relevant, the pressure on companies and governments to improve infrastructure and increase efficiency is high. In September 2021, the Oil and Gas Climate Initiative, which aims to accelerate the industry’s response to climate change, announced an updated strategy and related under its members’ control.

To achieve these targets, members must improve efficiencies, electrify processes, and reduce methane and other leakages. These adaptations should, in theory, allow assets to gain financing or continue operating while there is still demand for fossil fuels.

Our Solution

A basic component of our technology is the PWG connected parallel to a pump inlet and outlet. PWG and the pump provide generation of pressure waves and their propagation through the flow along the pipeline.

Our patented PWG will be used as the main tool, for providing energy efficiency of technology of pipeline transportation of flowable media. This technology decreases the hydrodynamic resistance, and as a consequence, decreases pressure in the discharge pipeline, maintaining the same flow rate. This achieves the aims of our technology: improve the energy efficiency of pipeline transportation process and according to the results achieved in the proof of concept the industrial team estimated an increase of the lifespan of pipes by ~10-15% due to the reduction of pressure in the pipe while maintaining the initial value of the flow rate. The PWG can be installed on existing pumping stations as well as new ones. Preliminary experimental data of proof of concept and laboratory research of our technology show that we can expect to save energy in pipeline transportation process, in addition we expect additional reduction in maintenance and pipelines replacement (with the PWG reducing drag in the pipeline it is anticipated that the load on the pump will also be reduced and this should reduce the pump’s and pipe’s wear and maintenance). The PWG can be installed on existing pumping stations as well as new ones. We plan initially to focus on the water sector and will thereafter expand to oil and gas.

Decrease of hydrodynamic resistance is provided by interaction between turbulent flow and pressure wave of very low frequencies, propagating through a flow along the pipeline. The PWG is connected parallel to a pump inlet and outlet and a pump produces the pressure waves as shown in the diagram below.

Measurement devices continuously measure the flow parameters and transmit to the Control Panel. Our partially-designed program aims to process these parameters, and determine the optimal wave form, amplitude, and frequency of pressure waves, providing maximal decrease of hydrodynamic resistance, for the current value of the flow rate. Results are transmitted to the drive of the PWG. Accordingly, the PWG will provide automatic dynamic control of the generated waves, corresponding to minimal hydrodynamic resistance at any flow rate.

Experimental results of the proof of concept and laboratory research allow us to assume that the energy efficiency technology proposed by Laminera can be implemented in the field of energy-intensive technologies to reduce the energy consumption of pipeline transportation of water and aqueous solutions, multicomponent liquids, petroleum products, powders, mixtures and others.

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We plan and design our technology in order to achieve the following goals: Increase the flow rate, decrease the discharge pressure of the pump, decrease the specific mechanical power of the pump, decrease the specific energy consumption, and decrease the specific speed of the pump impeller.

Technology in Detail

The main components of our technology are the PWG, the control panel, measuring instruments, and the program for automatic control of the energy saving mode. Designed in a modular concept, these four components are separate and interconnected components/systems.

The PWG is connected parallel to the pump and can be scaled for the given flow and pipeline parameters. The control panel receives signals from the measuring instruments, processes them and transmits them to the control drive of the PWG that is located near the pump. The measuring instruments are devices connected to the control panel to measure pressure on the inlet and outlet of the pump, flow rate, speed of the pump impeller, flow temperature, and electrical current. Each device continuously measures a given physical quantity and transmits it to the control panel. The PWG size varies between 9.8-19.6 inches (depending on pipeline length).

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The major advantage of our energy efficiency technology solution design is its continuous automatic dynamic optimization of the interaction between the turbulent flow parameters and parameters of generating pressure waves propagating through the flow along the pipeline. This dynamic optimization is expected to minimize the hydrodynamic resistance of the pipeline transporting process.

The phenomena of suppression, restructuration and re-laminarization of turbulence, attenuation of the wall shear stress that takes place in the turbulent flow under the influence of nonsymmetrical pressure waves, leads to decrease of hydrodynamic resistance.

Before:

 

After:

Weak flow at the perimeter of the pipeline. Turbulent flow at the rest of the pipeline.

 

Smooth (laminar) flow “increases” the diameter of the pipeline, enabling full flow at the nearly entire diameter of pipeline. Two options are available: same transportation per time unit with reduced energy consumption, or increased transportation per time unit with unchanged energy consumption.

Standards

Since our technology is new to the market, there are no international standards that govern its use. However, we intend to use high grade raw materials to safeguard our product against climate hardships and corrosion and will implement appropriate safety measures. The product does not require any special coating of the pipelines.

Business Model and Marketing Strategy

Our business strategy is based on our expected development program and its outcome. Our initial focus will be integration in pipeline systems that are less than 10 km long. We expect the first phase of our technology and development program to be suitable for monitoring this range of pipelines systems that can be found in: water reservoirs and water infrastructure such as wastewater treatment and water purification plants, sea fish-cages, as well as up to 10 km sewerage system and others.

Our business model derives from the unique advantages of the product in potentially saving energy costs for pipeline transportation of water, oil, and gas and significant savings in maintenance and replacement costs of pipelines. We expect that our customer agreements will provide for payment based on an agreed-upon percentage of the energy savings we provide to the customer. We may also sell or license our product to customers at a fixed cost.

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We plan to focus on the water market and, later on, the oil and gas markets. Additional markets may follow. We estimate that we will enter the water, oil and gas markets by combining the following business channels:

        The original equipment manufacturer (OEM) channel: selling the PWG to large national and international companies. We also believe that there is potential to license the product to large international companies for the OEM market. We will initially target pipeline systems that are up to 10 km and later, as our development program advances, we plan to address longer ranges.

        Direct sales of projects: selling small and medium projects directly to the end user. For example, the market of small and medium size municipal water and wastewater treatment plants is controlled by local companies and by local dealers. This sales channel aligns with our technology development program which will potentially be ready for implementation in infrastructure or pipeline systems up to 10 km. To operate in this type of market, we will engage local dealers who are able to present the product to engineering companies, hold local tradeshows, participate in tenders, sale projects to municipalities, install projects (by subcontractors or by their own technicians), and supply spare parts and service.

        We forecast sales of replacement units after 15 to 20 years.

Competition

There are several methods for decreasing hydrodynamic resistance of turbulent flows based on the perturbation of the flow. However, to the best of our knowledge, these approaches are not currently operational, and are just theoretical and experimental.

There may be other solutions in the market that can compete against us. Our direct competitors are products which provide a similar outcome, i.e., reducing friction loss in pipelines by suppressing turbulent flow or by other means of operation.

Additionally, we compete indirectly with water services companies in different countries, that offer energy efficiency projects to water utilities. However, these water services companies are also potential customers.

Government Regulation

Pumps and pipelines are designed, built and operated in strict accordance with regulatory requirements that set limits to flow rate and pressure in the suction and discharge pipelines. The process of generating pressure waves/perturbations is not covered by pump regulatory requirements and does not negatively affect the mode of operation of a pumping station and pipeline. Therefore, our product is not currently subject to special government regulation.

Israeli Grant

Between April 2019 and March 2021, we received a grant of NIS 736,378, or the Ministry of Energy Grant, from the Israeli Ministry of Energy, or the Ministry, to support the development of energy efficiency technology based on generation of pressure waves. The grant was used mainly for the planning and construction of our Hydrodynamic experimental lab facility, development of the initial prototype of the PWG which was completed in the fourth quarter of 2019, improvements in the lab facility, adjustments to the initial prototype and the testing of the prototype in the lab facility. The work supported by the grant concluded on December 31, 2020.

Under the Ministry of Energy Grant, we are obligated to pay the State of Israel a 5% royalty on all revenue from energy efficiency technology based on generation of pressure waves, until the government has recouped the grant amount of NIS 736,378 linked to the Israeli Consumer Price Index from the date of the first revenue generated that is subject to such royalty. We do not expect to generate revenue in the foreseeable future and thus on the date of receiving the grant and in subsequent periods, we determined that it was reasonably certain that the amount received will not be refunded and was recognized as a deduction of research and development expenses.

The Ministry of Energy Grant provides the Israeli government with a non-exclusive, non-revocable and non-transferable license to make use of Company technology funded by the grant in connection with “national needs.” No additional consideration is payable by the Israeli government for such use. The determination of what constitutes a “national need” is not defined in the Ministry of Energy Grant but it is expected to be made by certain ministries of the Israeli government.

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Pursuant to the Ministry of Energy Grant, we must further the purposes and develop the end-products specified in the grant’s workplan, or the Workplan, in Israel. If we cease to do so for any reason, then for a reasonable period of time following the end of the project funded by the grant, the Israeli government has the right to act in order to further such purposes and develop such products. In connection with such right, we will be obligated to grant the Israeli government a license (which may be sublicensed), on reasonable commercial terms, to use all of our intellectual property related to furthering such purposes and developing such products, even if such intellectual property was developed independently of the grant.

The Ministry of Energy Grant also provides for a number of limitations on transfer or licenses of Grant IP, including the following:

        When we license intellectual property developed thereunder to third parties, we must use our best efforts to take into the account the interests of the Israeli public in realizing the purposes of the grant and developing the products specified in the Workplan including the scope of the license and the extent of its exclusivity.

        We are obligated to ensure that the terms of licenses we provide to third parties obligate such parties to reasonably exploit the intellectual property developed with the grant within a reasonable time and in accordance with a predefined workplan between us and our licensee and (ii) allow us to revoke the license or grant a license to another party if the licensee fails to comply with the foregoing obligation.

        We may not transfer ownership or registration of intellectual property developed with the grant without advance written approval from the Ministry of Energy. The Ministry of Energy may block the transfer of intellectual property if it believes there is a concern that it will adversely affect the rights of the State of Israel under the grant, including the Ministry of Energy’s ability to recoup its investment following successful completion of the project funded by the grant and the State of Israel and its economy’s ability to benefit from exploiting the achievements of the project.

The Ministry of Energy Grant provides for a number of ongoing reporting obligations, including:

        Submission of biannual reports on the Company’s revenue from products or intellectual property developed using the Ministry of Energy Grant.

        Reporting requirements with respect to (i) the development of intellectual property with practical applications that may be protected under applicable intellectual property law, (ii) the registration of new patents and commercial exploitation deriving from such intellectual property, (iii) licenses granted to third parties of know-how, intellectual property and technology developed using the grant.

        Reports on all financial and scientific matters related to the Company that are relevant to the Ministry of Energy.

EU Grant

Between December 2019 and September 2020, we received the EU Grant, a grant of 50,000 Euros from the European Innovation Council and Small and Medium-sized Enterprises Executive Agency, pursuant to the Horizon 2020 program. The EU Grant was provided to support the development of energy efficiency technology based on generation of pressure waves, and the work supported by the grant concluded on December 31, 2020.

Intellectual Property

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 seek patent protection for our products and technologies in the United States and internationally, and also rely on trade secrets, know-how, and continuing innovation to develop and maintain our competitive position. Our key intellectual property relates to the following areas of applied fluid mechanics:

i.       Decrease of hydrodynamic resistance of turbulent flows during transportation process of flowable media through pipelines: water, oil and oil products, mixtures powders.

ii.      Intensification of filtration liquids process.

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We currently own three patents:

1.      U.S. Patent No. 10233952 B1. Method of profiling openings of elements of mechanical system for generating optimal pressure waves in elastic fluids, which expires on August 2, 2038.

2.      U.S. Patent No. 11002299 B1. Pressure wave generator with dynamic reflector of pressure impulse, which expires on May 19, 2040.

3.      Israeli Patent No. 273420. Method of profiling openings of elements of mechanical system for generating optimal pressure waves in elastic fluids, which expires on August 2, 2038.

We cannot be certain that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents granted to us in the future will be commercially useful in protecting our technology.

Our success depends, in part, on an intellectual property portfolio that supports future revenue streams and erects barriers to our competitors. We are maintaining and building our patent portfolio through filing new patent applications, prosecuting existing applications, and licensing and acquiring new patents and patent applications.

Despite these measures, any of our intellectual property and proprietary rights could be challenged, invalidated, circumvented, infringed or misappropriated. Intellectual property and proprietary rights may not be sufficient to permit us to take advantage of current market trends or otherwise to provide competitive one. For more information, see “Risk Factors — Risks Related to our Intellectual Property.”

Property and Facilities

Our corporate headquarters, which include our research and development facility, is located at Hamelacha 31, Natanya, Israel, where we currently occupy approximately 860 square feet. We leased our facilities on monthly basis until the end of May 2022. We have extended the lease for an additional one-year term. Our monthly rent payment is NIS 10,000 (approximately $3,000).

Our current space may not be sufficient to meet our anticipated needs for the foreseeable future and following this offering we may need to move to a space that will be suitable for conducting our business.

Employees

As of the date of this prospectus, we have two senior management positions, who are currently engaged on a part-time basis. In addition to our senior management, we have two independent contractors in full or part-time capacities. The majority of our senior management and independent contractors are located in Israel. We currently have no additional employees.

None of our senior managers, service providers and contractors are represented by labor unions or covered by collective bargaining agreements. We believe that we maintain good relations with all senior management and independent contractors. However, in Israel, we are subject to certain Israeli labor laws, regulations and national labor court precedent rulings, as well as certain provisions of collective bargaining agreements applicable to us by virtue of extension orders issued in accordance with relevant labor laws by the Israeli Ministry of Economy and which apply such agreement provisions to our employees even though they are not part of a union that has signed a collective bargaining agreement.

All of our employment and consulting agreements include undertakings with respect to non-competition and assignment of intellectual property rights developed in the course of employment and confidentiality. The enforceability of such provisions is subject to Israeli law.

Legal Proceedings

We are not currently party to any material legal proceedings.

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MANAGEMENT

Executive Officers and Directors

The following table sets forth information regarding our executive officers and directors, including their ages as of            , 2022:

Name

 

Age

 

Position

Yair Volovitz

 

44

 

Chief Executive Officer

Yuval Tovias

 

61

 

Chief Financial Officer

Shoshana Eizenberg Hertz(1)

 

60

 

Director

Dr. Aharon Mor

 

74

 

Director

Amitay Weiss(1)

 

60

 

Director

Yehezkel Cohen(1)

 

44

 

Director Nominee

Liran Goral(1)

 

41

 

Director Nominee

____________

(1)      Independent director (as defined under Nasdaq Stock Market Listing Rules).

Yair Volovitz, Chief Executive Officer

Yair Volovitz, 44, serves as our Chief Executive Officer since January 2022. Mr. Volovitz brings more than a decade of global experience in the energy, water, agriculture, and construction industries. Since December 2013, Mr. Volovitz has served as a business consultant, where he consulted to numerous deep tech, high tech and innovation focused companies, and government agencies, including the Israeli Ministry of Economy and the Export and International Cooperation Institute of Israel. Prior to that, in 2012, Mr. Volovitz served as Business Development Manager and Marketing Manager at Kaiima Bio-Agritech Ltd., a biotech company. Prior to that, between 2012 and 2014, Mr. Volovitz served as Product Manager and Marketing Manager at NaanDanJain, a leading global irrigation company. Prior to that, between 2008 and 2011, Mr. Volovitz served as Business Development and Product Manager at Machteshim Agan, a global manufacturer of generic crop protection products. Mr. Volovitz holds a Bachelor of Science degree in agriculture, a Master of Science degree in agriculture, both from the Hebrew University of Jerusalem, and a Master’s degree in Business Administration from the Open University Israel.

Yuval Tovias, Chief Financial Officer

Yuval Tovias, 61, serves as our Chief Financial Officer since December 2021. Mr. Tovias brings more than three decades of global experience in finance across industries. Prior to joining us, between November 2014 and June 2020, Mr. Tovias served as Chief Financial Officer at TechFinancials, Inc., a software FinTech company (traded on AIM London stock exchange until February 2020), providing online trading and development platforms for blockchain technologies. Prior to that, between 2012 and 2014, Mr. Tovias served as chief financial officer at PerfAction Ltd., a medical devices company. Prior to that, between 2009 and 2011, Mr. Tovias served as chief financial officer at Scodix Ltd., a leading digital equipment company. Between 1999 and 2002 Mr. Tovias was on relocation to the US where he served as Chief Financial Officer at ProActivity, Inc. a software company located in Boston, MA. Mr. Tovias holds a Master’s degree in Business Administration from Tel Aviv University and a Bachelor’s degree in economics and marketing from Haifa University.

Shoshana Eizenberg Hertz, Director

Shoshana Eizenberg Hertz, 60, has served as a board member of our company since April 2022. Ms. Eizenberg Hertz holds multiple executive positions. Ms. Eizenberg Hertz has served as a senior flight coordinator at Ben Gurion Airport, Ministry of Health. Since 2014 Ms. Eizenberg Hertz has served as Head of Suicide Prevention Unit, Ministry of Health. Since 2019 Ms. Eizenberg Hertz has served as an external director at Algomizer (TASE: ALMO), an internet technology company specializing in the online marketing field. Ms. Eizenberg Hertz holds a Bachelor’s degree in law from Ono Academic College and a Bachelor degree in Bible studies and Jewish philosophy from Michlalah Jerusalem College.

Dr. Aharon Mor, Director

Dr. Aharon Mor, 74, has served as a board member of our company since December 2021, and has served as Co-Chief Executive Officer since he co-founded our company in 2017 until December 2021. Dr. Mor brings more than three decades of diverse experience in public economics, foreign investments, investor relations, and operations.

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Prior to founding Laminera, Dr. Mor held numerous executive and directorship positions. Between 2016 and 2022, Dr. Mor served as member of the board of directors at Ofek Eshkolot Ltd. and ORT Braude Academic College of Engineering. Between 2008 and 2014, Dr. Mor served as senior director of the Department for Restitution of Jewish Rights and Property, Ministry for Senior Citizens. Between 2005 and 2008, Dr. Mor served as director at the International Division, Ministry of Finance. Between 2003 and 2005, Dr. Mor served as senior adviser on restitution of Jewish rights and property at the Prime Minister’s Office. Between 2002 and 2003, Dr. Mor served as director at the International Division, Ministry of Finance. Dr. Mor holds a Doctor of Philosophy degree in history from Tel Aviv University, a Master’s degree in public administration and public policy, and a Bachelor’s degree in economics, both from the Hebrew University of Jerusalem.

Amitay Weiss, Director

Amitay Weiss, 60, has served as a board member of our company since April 2022. Mr. Weiss has a vast experience serving on boards of directors and other senior positions. He has served as chairman of the board of directors of Save Foods Inc. (Nasdaq: SVFD) since August 2020, chairman of the board of directors of Infimer Ltd. (TASE: INFR-M) since July 2021 and chairman of the board of directors of Upsellon Brands Holdings Ltd. (previously Chiron Ltd.) (TASE: UPSL) since June 2019. He has also served as a member of the board of directors of Automax Motors Ltd. (TASE: AMX) since March 2021, Gix Internet Ltd. (previously Algomizer Ltd.) (TASE: GIX) since March 2019, Clearmind Medicine Inc. (previously Cyntar Ventures Inc.) (CSE: CMND) since August 2019, Perihelion Capital Ltd (PCL.P: CVE) since June 2021, as an external director of Cofix Group Ltd. (TASE: CFCS) since August 2015, and as a member of the board of directors and chief executive officer of SciSparc Ltd. (previously Therapix Biosciences Ltd.) (OTC: SPRCY) since August 2020. Mr. Weiss previously served as chairman of the board of directors of Value Capital One Ltd. (previously P.L.T Financial Services Ltd.) (TASE: VALU) from April 2016 to February 2021, Matomy Media Group Ltd. (LSE: MTMY, TASE: MTMY.TA) from May 2020 to March 2021. In April 2016, Mr. Weiss founded Amitay Weiss Management Ltd., an economic consulting company and now serves as its chief executive officer. Mr. Weiss holds a B.A in economics from New England College, and an M.B.A. and LL.B. from Ono Academic College, Israel.

Yehezkel Cohen, Director Nominee

Yehezkel Cohen, 44, has agreed to serve on our board of directors subject to the consummation of this offering. Mr. Cohen has extensive experience in finance and operations. Prior to joining us, since April 2019, Mr. Cohen has served as Chief Financial Officer at Jack Yulzari Ltd., a transportation company. Since April 2012, Mr. Cohen has served as Financial and Management Consultant for Patron Capital, a real estate development fund operating in Romania. Between August 2007 and March 2012, Mr. Cohen served as Financial Director at Tagor Capital Ltd. Between December 2004 and July 2007, Mr. Cohen served as an intern and Senior Advisor at Kesselman & Kesselman C.P.A.s (PWC). Since August 2015 and May 2019, Mr. Cohen has served as a member of the board of directors at Maslavi Construction Company Ltd. and Seach Medical Group, respectively. Between July 2013 to April 2015, Mr. Cohen served as a member of the board of directors at Gefen Biomed Investments Ltd. Mr. Cohen holds a Bachelor’s degree in accounting and economics from Tel Aviv University.

Liran Goral, Director Nominee

Liran Goral, 41, has agreed to serve on our board of directors subject to the consummation of this offering. Mr. Goral has extensive experience in finance and business development. Prior to joining us, since August 2020, Mr. Goral has served as Vice President of Business Development of the Diagnostic Unit at BATM Advanced Communications Ltd. (TASE: BVC; LON: BVC), and as Chief Financial Officer at Adaltis S.r.l, a medical technology manufacturer. Between March 2017 to August 2020, Mr. Goral served as Chief Financial Officer at Omtime Distribution Ltd., a leading jewellery and watches retail chain in Israel. Between January 2015 to March 2017, Mr. Goral served as a co-founder of Airplants.co.il, an e-commence platform. Between February 2012 to May 2015, Mr. Goral served as Finance Manager at Mediline Ltd., and between February 2010 to February 2012, he served as Controller at Opticana, the largest optical retail chain in Israel. Since October 2018, Mr. Goral has served as a member of the board of directors at Lapidoth-Heletz Limited Partnership (TASE: LPHL). Mr. Goral holds a Master’s degree in Business Administration, and a Bachelor’s degree in economics, management, and accounting, both from Tel Aviv University.

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Family Relationships

There are no family relationships between any members of our executive management and our directors.

Arrangements for Election of Directors and Members of Management

There are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were selected. See “Related Party Transactions” for additional information.

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, 2021. 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 our cost, in U.S. dollars. Amounts paid in NIS are translated into U.S. dollars at the rate of NIS 3.11 = U.S. $1.00, based on the average representative rate of exchange between the NIS and the U.S. dollar as reported by the Bank of Israel during such period of time.

 

Salary, bonuses
and
 Related
Benefits

 

Pension,
 Retirement