Filed Pursuant to Rule 424(b)(5)
Registration No. 333‑267646
Prospectus supplement
(To Prospectus dated October 11, 2022)
Innoviz Technologies Ltd.
28,776,978 Units
Each Consisting of One Ordinary Share and
Eight Tenths of a Warrant to Purchase One Ordinary Share
Innoviz Technologies Ltd. (“Innoviz”) is offering 28,776,978 units, with each unit consisting of (a) one ordinary share, no par value per share (“ordinary shares”) and (b) eight tenths of a warrant
to purchase one ordinary share (and the 23,021,582 ordinary shares issuable from time to time upon exercise of the warrants), in an offering to a limited number of purchasers pursuant to this prospectus supplement and the accompanying prospectus.
Each warrant will have an exercise price of $1.69 per share, will be exercisable upon issuance and will expire five years from the date of issuance. No fractional warrants will be issued. The units will not be issued or certificated. The ordinary
shares and the warrants are immediately separable and will be issued separately, but will be purchased together in this offering. The ordinary shares, warrants and ordinary shares underlying the warrants are sometimes collectively referred to
herein as the “securities.”
The ordinary shares are listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “INVZ”. The last reported sale price of the ordinary shares on Nasdaq on February 7, 2025 was $1.59 per
share. There is no established public trading market for the warrants and a public market may never develop. In addition, we do not intend to apply for listing of the warrants on Nasdaq, any national securities exchange or any other nationally
recognized trading system. We are both an “emerging growth company” and a “foreign private issuer” under applicable U.S. Securities and Exchange Commission rules and are eligible for reduced public company disclosure requirements.
See “Risk Factors” beginning on page S‑9 of this prospectus supplement, in the accompanying prospectus and under similar headings in the documents incorporated by reference into
this prospectus supplement, to read about factors you should consider before buying our securities.
None of the Securities and Exchange Commission, the Israel Securities Authority or any other regulatory body has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
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Offering price
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$
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1.39
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$
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39,999,999.42
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Placement agent fees(1)
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$
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0.072975
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$
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2,099,999.97
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Proceeds, before expenses, to Innoviz
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$
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1.317025
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$
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37,899,999.45
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(1) |
See “Plan of Distribution” beginning on page S‑35 of this prospectus supplement for more information concerning placement agent compensation. We have engaged WestPark Capital, Inc. (“WestPark” or
the “placement agent”) as our placement agent to use its “best efforts” to solicit offers to purchase our securities in this offering. The placement agent has no obligation to buy any securities from us or to arrange for the purchase or
sale of any specific number or dollar amount of securities.
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We expect to deliver the securities to purchasers on or about February 11, 2025.
Sole Placement Agent
WestPark Capital, Inc.
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Prospectus supplement dated February 10, 2025.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
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S - 2
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S - 3
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S - 7
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S - 9
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S - 15 |
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S - 17 |
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S - 18 |
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S - 19 |
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S - 20 |
TAXATION |
S - 22 |
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S - 35 |
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S - 37 |
EXPERTS |
S - 38 |
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S - 39 |
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S - 40 |
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S - 41 |
PROSPECTUS
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ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering of securities and also adds to and updates information contained in
the accompanying prospectus and the documents incorporated by reference into this prospectus supplement and the accompanying prospectus. The second part is the accompanying prospectus dated October 11, 2022, included in our registration statement
on Form F‑3 (File No. 333‑267646), along with the documents incorporated by reference therein, which provides more general information, some of which may not apply to this offering. Generally, when we refer to this prospectus, we are referring to
both parts of this document combined. To the extent there is a conflict between the information contained in this prospectus supplement, on the one hand, and the information contained in the accompanying prospectus or in any document incorporated
by reference that was filed with the Securities and Exchange Commission (the “SEC”), before the date of this prospectus supplement, on the other hand, you should rely on the information contained in this prospectus supplement. If any statement in
one of these documents is inconsistent with a statement in another document having a later date—for example, a document incorporated by reference in the accompanying prospectus—the statement in the document having the later date modifies or
supersedes the earlier statement.
This prospectus supplement and the accompanying prospectus are part of a “shelf” registration statement that we filed with the SEC. Under this shelf registration process, we may offer from time to
time various securities, of which this offering of securities is a part. Such registration statement also includes exhibits that provide more detail on the matters discussed in this prospectus supplement and the accompanying prospectus. You should
read this prospectus supplement, the accompanying prospectus, including the information incorporated by reference herein and therein, the exhibits filed with the SEC and any free writing prospectus that we have authorized for use in connection with
this offering in their entirety before making an investment decision.
We have not, and the placement agent has not, authorized anyone to provide you with information, or to make any representation, different from that contained or incorporated by reference in this
prospectus supplement and the accompanying prospectus, along with the information contained in any free writing prospectus that we have authorized for use in connection with this offering. We and the placement agent take no responsibility for, and
can provide no assurance as to the reliability of, any other information that others may give you. You should assume that the information appearing in this prospectus supplement, the accompanying prospectus, the documents incorporated by reference
in this prospectus supplement and the accompanying prospectus, and in any free writing prospectus that we have authorized for use in connection with this offering is accurate only as of the respective dates of those documents, unless we indicate
otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates.
We are not, and the placement agent is not, making an offer to sell our securities in any jurisdiction where the offer or sale is not permitted. Neither this prospectus supplement nor the
accompanying prospectus constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus supplement by any person in any jurisdiction in which it is unlawful for
such person to make such an offer or solicitation. You must comply with all applicable laws and regulations in force in any applicable jurisdiction and you must obtain any consent, approval or permission required by you for the purchase, offer or
sale of the securities under the laws and regulations in force in the jurisdiction to which you are subject or in which you make your purchase, offer or sale, and neither we nor the placement agent will have any responsibility therefor.
We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus
supplement or the accompanying prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a
representation, warranty or covenant to you. Moreover, such representations, warranties and covenants were accurate only as of the date when made; therefore, such representations, warranties and covenants should not be relied on as accurate
representations of the current state of our affairs.
This prospectus supplement, the accompanying prospectus and the documents incorporated by reference into this prospectus supplement and the accompanying prospectus contain references to trademarks,
trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference into
this prospectus supplement and the accompanying prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable
law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
Unless otherwise indicated, information contained in this prospectus supplement, the accompanying prospectus or the documents incorporated by reference into this prospectus supplement concerning
Innoviz’s industry and the regions in which it operates, including Innoviz’s general expectations and market position, market opportunity, market share and other management estimates, is based on information obtained from various independent
publicly available sources and other industry publications, surveys and forecasts. Innoviz has not independently verified the accuracy or completeness of any third‑party information. Similarly, internal surveys, industry forecasts and market
research, which Innoviz believes to be reliable based upon its management’s knowledge of the industry, have not been independently verified.
Except where the context otherwise requires or where otherwise indicated in this prospectus supplement, the terms “Innoviz,” the “Company,” “we,” “us,” “our,” “our company” and “our business” refer
to Innoviz Technologies Ltd., together with its consolidated subsidiaries as a consolidated entity. The term “ordinary shares” refers to our ordinary shares, no par value per share. The term “existing warrants” refers to our 16,231,141 outstanding
warrants to purchase ordinary shares (as of December 31, 2024), each entitling its holder to purchase one ordinary share at an exercise price equal to $11.50.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights information contained elsewhere in this prospectus supplement or the accompanying prospectus or incorporated by reference
herein or therein. This summary does not contain all the information that you should consider before deciding to invest in our securities. You should carefully read this entire prospectus supplement, the accompanying prospectus and any
related free writing prospectus, including each of the documents incorporated herein and therein by reference, before making an investment decision. You should carefully consider the information set forth under “Risk Factors” in this
prospectus supplement, in the accompanying prospectus and in any related free writing prospectus, and under similar headings in the documents that are incorporated by reference into this prospectus supplement or the accompanying
prospectus, including our Annual Report on Form 20‑F for the year ended December 31, 2023 (our “Annual Report”). You should also carefully read the information incorporated by reference into the accompanying prospectus, including our
financial statements, and the other information in the exhibits to the registration statement of which the accompanying prospectus is a part.
Company Overview
We are a leading Tier-1 direct supplier of high-performance, automotive grade LiDAR sensors and perception software that feature technological breakthroughs across core
components and bring enhanced vision and superior performance to enable safe autonomous driving at a mass scale. We believe that we provide a complete and comprehensive solution for OEMs and Tier-1 partners that are developing and
marketing autonomous driving vehicles to the passenger car and other relevant markets, such as robotaxis, shuttles, delivery vehicles and trucks.
We were founded in 2016. From our founding, our culture drew from our core values of solving sophisticated technological problems through creativity and agile
thinking. We have relied on these values to address the needs of autonomous vehicles in a manner that strikes the desired balance between performance and cost. We created a new type of LiDAR sensor from the chip-level up, including a
suite of powerful and sophisticated software applications for high-performance computer vision to allow superior perception. In 2018, we achieved a design win to power BMW’s Level 3 autonomous platform, a program which reached maturity
during 2024 and with vehicles already being sold with our LiDARs and perception software.
Since 2021, we have funded the development of two production path programs: the InnovizOne and the InnovizTwo LiDAR sensor and perception software suites. With the
InnovizOne program transitioned from the development phase into full series production in 2024, we eliminated duplicative cost structures and significantly reduced spending on InnovizOne development, while reinvesting a portion of the
savings into the InnovizTwo sensor and perception software platform. All quoting and bidding activity in our request for information and request for quotation pipeline is now focused on the InnovizTwo platform.
During 2022, we made the strategic decision to become a Tier-1 supplier of LiDAR and perception software to the automotive industry. This decision allows us to have
direct technical discussions with end customers and to improve pricing to automotive OEMs with the goal of continuing to strengthen our position in the automotive market. This strategic decision has played a significant role in our
subsequent major OEM program wins, as discussed below.
In 2022, following more than two years of extensive diligence and qualification, we were selected by Volkswagen as its direct LiDAR supplier for automated vehicles
within the Volkswagen brands with our InnovizTwo next generation high-performance automotive-grade LiDAR sensor, and in 2023, we announced that Volkswagen aims to expand its use of our InnovizTwo LiDAR to its existing light commercial
vehicle program, the I.D Buzz.
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In 2024, we announced that Mobileye Vision Technologies Ltd. (“Mobileye”) will use the InnovizTwo (for long-range sensing) and the new InnovizTwo MR (for short- and
medium-range sensing) LiDARs for the Mobileye Drive™ platform. The new InnovizTwo MR leverages InnovizTwo’s industrialization maturity and is designed to meet the requirements for light commercial vehicles, shuttles, robotaxis, and can
be customized to suit a wide array of vehicular design and functionality requirements. We believe that the combination of our LiDARs and Mobileye’s platform is critical to enabling comprehensive sensing capabilities for navigating
complex urban environments and enhancing the overall safety and reliability of autonomous driving systems, and that this partnership showcases the flexibility of our LiDARs to work across a variety of vehicle platforms to further
testing and deployment of autonomous vehicles. Our partners are leaders in deploying new technologies into the automotive industry. We believe that our close cooperation with these partners and OEMs positions us well to make Level 3 and
Level 4 autonomous driving a commercial reality.
The sustained cooperation with our customers provides our engineers and other research and development personnel with a valuable competitive edge. These engineers and
other research and development personnel have been meticulously trained to design, operate, and verify our many ground-breaking innovations in accordance and in compliance with the ISO26262 standard for Functional Safety in the
automotive industry and the IATF 16949:2016 certification for Quality Management in the automotive industry. Compliance with this and other standards have been enforced by regular ongoing audits of Innoviz and rigorous testing by our
key suppliers, existing customers and prospective customers that thoroughly review the performance of various elements of our operations. As a result, our products have been constructed from the bottom up with hardware and software
technology that meets the most stringent automotive safety, quality, environmental, manufacturing, and other standards.
Our innovation has produced LiDAR solutions that deliver market leading performance and that meet the current demanding safety requirements for Level 2+ through Level 5
autonomous vehicles at price points suitable for mass produced passenger vehicles.
Our robust software suite enables our ~905nm wavelength laser-based LiDAR architecture to be easily leveraged to provide compelling solutions for Level 2+ through Level
4 (and Level 5 when applicable), using both our long- and medium-range LiDARs. Our integrated custom design of advanced hardware and software components, which leverages the multidisciplinary expertise and experience of our team,
enables us to provide autonomous solutions that we believe will accelerate widespread adoption across automakers at serial production scale. This means that we are positioned to penetrate the current market, which is focused primarily
on Level 2+, 3 and 4 production, and to continue to capture and extend our market share to Level 5 as the market continues to mature.
We are currently expanding our third-party manufacturing capacity through contract manufacturers to meet an anticipated increase in customer demand for our products.
In 2024, we announced a strategic realignment of our operations to expand our cash runway and optimize our path towards profitability and free cash flow generation,
which included a reduction in the company’s headcount by approximately 13% during the first quarter of 2024.
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Recent Developments
Entered into Multi-Year NRE Payment Plan with Key Customers
On December 23, 2024, we announced a multi-year NRE (Non-Recurring Engineering services) payment plan of approximately $80 million with key existing customers. NREs are
expected to be paid between 2025 and 2027, of which over $40 million are expected to be paid in 2025 with further amounts expected in 2026 and 2027. These payments would be incremental to revenues generated from ongoing sales of LiDAR
products based on existing and expected new orders coming from new programs. There can be no assurances, however, that we will enter into definitive agreements, orders or receive payments with respect to the NRE payment plan.
Regained Compliance with Nasdaq’s Minimum Bid Price Requirement
On January 2, 2025, we announced that we received formal written confirmation from Nasdaq confirming that the Company has regained compliance with Nasdaq’s minimum bid
price requirement. The closing bid price of the ordinary shares was at $1.00 per share or greater for 10 consecutive business days from December 16 to December 30, 2024. Accordingly, Nasdaq Listing Qualifications Staff notified the
Company that it determined that the Company regained compliance with Nasdaq Listing Rule 5550(a)(2), and that the matter was closed.
Integration of Perception Software with NVIDIA DRIVE AGX Orin
On January 7, 2025, we announced our collaboration with NVIDIA to allow our perception software to run seamlessly with the NVIDIA DRIVE AGX Orin platform, offering a
range of software-driven features designed to accelerate autonomous driving applications by allowing for real-time processing and advanced understanding of the vehicle’s environment, enabling exceptional object detection,
classification, and tracking capabilities.
Optimization of Operations
On February 4, 2025, we announced an optimization of our operations to extend our cash runway and accelerate progress towards profitability and free cash flow generation, which includes
a reduction in our employee headcount by approximately 9% during the first quarter of 2025.
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Preliminary Cash Position as of December 31, 2024
Although our financial statements as of and for the year ended December 31, 2024 are not yet final, the preliminary cash position disclosed below is based on the
information available to us at this time. As such, our actual results may vary from the preliminary results presented herein and will not be finalized until after we complete our normal end-of-year accounting procedures, which have
not yet been completed.
The preliminary cash position presented below is not a comprehensive statement of our financial results for the year ended December 31, 2024. This estimate should not
be viewed as a substitute for our full interim or annual financial statements. Accordingly, you should not place undue reliance on this preliminary cash position. This summary of preliminary cash position should be read in conjunction
with (i) the information set forth under “Risk Factors” in this prospectus supplement, in the accompanying prospectus and in any related free writing prospectus, and under similar headings in the documents that are incorporated by
reference into this prospectus supplement or the accompanying prospectus, including our Annual Report, and (ii) the information incorporated by reference into the accompanying prospectus, including our financial statements, and the
other information in the exhibits to the registration statement of which the accompanying prospectus is a part.
Preliminary cash position included in this prospectus supplement have been prepared by, and are under the responsibility of, our management. Kesselman & Kesselman,
a member firm of PricewaterhouseCoopers International Limited, has not audited, examined, reviewed, compiled, or applied agreed-upon procedures with respect to the preliminary cash position. Accordingly, Kesselman & Kesselman does
not express an opinion or any other form of assurance with respect thereto.
As of December 31, 2024, the Company had approximately $68.0 million in cash and cash equivalents, bank deposits, marketable securities and short-term restricted cash.
Corporate Information
We were incorporated in Israel on January 18, 2016 under the Israeli Companies Law, 5759‑1999 (the “Companies Law”), and our principal executive office is located at
Innoviz Technologies Campus, 5 Uri Ariav St., Bldg. C, Nitzba 300, Rosh HaAin 4809202, Israel. Our legal and commercial name is Innoviz Technologies Ltd. Our website address is www.innoviz.tech, and our telephone number is
+972‑74‑700‑3692. Information contained on, or that can be accessed through, our website does not constitute a part of this prospectus supplement and is not incorporated by reference herein. We have included our website address in
this prospectus supplement solely for informational purposes. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, such as us, that file electronically,
with the SEC at www.sec.gov. Our agent for service of process in the United States is Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, NY 10168.
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Ordinary shares offered by us |
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28,776,978 ordinary shares and 23,021,582 ordinary shares underlying the warrants offered in this offering. |
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Warrants offered by us |
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Warrants to purchase up to 23,021,582 ordinary shares. Each warrant will have an exercise price of $1.69 per share, will be exercisable upon issuance and will expire five years
from the date of issuance. The exercise price of the warrants is subject to adjustment in certain circumstances. The ordinary shares and the warrants are immediately separable and will be issued separately, but will be purchased
together in this offering. This prospectus supplement also relates to the offering of the ordinary shares issuable upon exercise of the warrants offered hereby. |
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Offering price |
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$1.39 per unit. |
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Ordinary shares to be outstanding after this offering |
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198,174,008 ordinary shares (assuming no exercise of the warrants offered hereby). |
Use of proceeds |
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We expect to receive net proceeds from this offering of approximately $37.3 million, after deducting the placement agent fees and offering expenses payable by us, and assuming
none of the warrants issued in this offering are exercised. |
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We intend to use the net proceeds from this offering for general business purposes. See “Use of Proceeds.” |
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Dividend policy |
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We have never declared or paid any cash dividend on our ordinary shares. We currently intend to retain any future earnings and do not expect to pay any dividends in the
foreseeable future. Any further determination to pay dividends on our ordinary shares would be at the discretion of our board of directors, subject to applicable laws, and would depend on our financial condition, results of
operations, capital requirements, general business conditions, and other factors that our board of directors may deem relevant. |
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Risk factors |
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See “Risk Factors” and the other information included in this prospectus supplement, the accompanying prospectus and under similar
headings in the documents that are incorporated by reference into this prospectus supplement or the accompanying prospectus for a discussion of factors you should consider before deciding to invest in our ordinary shares. |
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Nasdaq trading symbol
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“INVZ”. |
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No listing of warrants |
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There is no established public trading market for the warrants and a market may never develop. In addition, we do not intend to apply for listing of the warrants on
Nasdaq, any other national securities exchange or other nationally recognized trading system. |
The number of our ordinary shares to be outstanding after this offering is based on 169,397,030 ordinary shares outstanding as of December 31, 2024. The number of
ordinary shares to be outstanding after this offering excludes:
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16,231,141 existing warrants outstanding as of December 31, 2024, each entitling its holder to purchase one ordinary share at an initial exercise price equal to $11.50 per share;
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2,402,178 ordinary shares issuable as earnout share consideration in the event the price of the ordinary shares exceeds $12.50 for any period of ten out of twenty consecutive trading days prior to April 5, 2025;
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10,857,287 ordinary shares issuable upon the exercise of options outstanding under our equity incentive plans as of December 31, 2024, at a weighted average exercise price of $4.76 per share;
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16,859,323 ordinary shares issuable upon the vesting of restricted share units (“RSUs”) outstanding under our equity incentive plans as of December 31, 2024; and
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1,282,260 ordinary shares reserved for future issuance under our equity incentive plan, which number is prior to the reduction of the ordinary shares subject to any outstanding options or RSUs granted subsequent to December 31,
2024, as well as any future increases in the number of ordinary shares for future issuances under our equity incentive plan.
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In addition, unless otherwise indicated, all information contained in this prospectus supplement assumes:
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no exercise of the outstanding existing warrants described above after December 31, 2024;
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no exercise of warrants offered hereby;
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no vesting of the earnout share consideration described above;
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no exercise of the outstanding options described above after December 31, 2024; and
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no vesting of the outstanding RSUs described above after December 31, 2024.
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Investing in our securities involves a high degree of risk. Our business, prospects, financial condition or operating results could be materially adversely affected by the risks
identified below, as well as other risks not currently known to us or that we currently consider immaterial. The trading price of our ordinary shares could decline due to any of these risks, and you may lose all or part of your investment. Before
deciding whether to invest in our securities, you should consider carefully the risk factors discussed below and those contained in the section entitled “Risk Factors” contained in our Annual Report, as filed with the SEC, which is incorporated
herein by reference in its entirety, as well as any amendment or update to our risk factors reflected in subsequent filings with the SEC.
Risks Relating to this Offering
We will have broad discretion over the use of proceeds we receive in this offering and may not apply the proceeds in ways that increase the value of your investment.
Our management will have broad discretion in the application of the net proceeds from this offering and, as a result, you will have to rely upon the judgment of our management with respect to the use
of these proceeds. Our management may spend a portion or all of the net proceeds in ways that not all shareholders approve of or that may not yield a favorable return. The failure by our management to apply these funds effectively could harm our
business.
The market price and trading volume of our ordinary shares may be volatile and could decline significantly.
Nasdaq, the stock market on which our ordinary shares are listed under the symbol “INVZ,” has from time to time experienced significant price and volume fluctuations. Even if an active, liquid and
orderly trading market is sustained for our ordinary shares, the market price of our ordinary shares may continue to be volatile and could decline significantly. In addition, the trading volume in our ordinary shares may fluctuate and cause
significant price variations to occur. We cannot assure you that the market price of our ordinary shares will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following:
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the realization of any of the risk factors presented in this prospectus supplement, the accompanying prospectus and in any related free writing prospectus, and under similar headings in the documents that are incorporated by reference
into this prospectus supplement or the accompanying prospectus;
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actual or anticipated differences in our estimates, or in the estimates of analysts, for our revenues (including NREs), operating losses, results of operations, level of indebtedness, liquidity or financial condition;
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availability of capital to fund our contracts and our growth;
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additions and departures of key personnel;
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failure to comply with the requirements of Nasdaq;
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failure to comply with the Sarbanes‑Oxley Act or other laws or regulations;
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future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of our securities including due to the expiration of contractual lock‑up agreements or the exercise of warrants;
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publication of research reports about us;
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the performance and market valuations of other similar companies;
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failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates by any securities analysts who follow us or our failure to meet these estimates or the expectations of investors;
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new laws, regulations, subsidies, or credits or new interpretations of existing laws applicable to us;
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commencement of, or involvement in, litigation involving us;
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broad disruptions in the financial markets, including sudden disruptions in the credit markets;
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speculation in the press or investment community;
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actual, potential or perceived control, accounting or reporting problems;
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changes in accounting principles, policies and guidelines; and
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other events or factors, including those resulting from war, acts of terrorism, infectious diseases, health epidemics and pandemics (including the COVID‑19 public health emergency), natural disasters or responses to these events.
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In the past, securities class‑action litigation has often been instituted against companies following periods of volatility in the market price of their shares. This type of litigation could result
in substantial costs and divert our management’s attention and resources, which could have a material adverse effect on us.
If securities or industry analysts cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our ordinary
shares adversely, then the price and trading volume of our ordinary shares could decline.
The trading market for our ordinary shares is influenced by the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts, or the
content and opinions included in their reports. As a relatively new public company, analysts who publish information about our ordinary shares will have had relatively little experience with us, which could affect their ability to accurately
forecast our results and make it more likely that we fail to meet our estimates. If any of the analysts who cover us issues an inaccurate or unfavorable opinion regarding us, the price of our ordinary shares would likely decline. In addition, the
share prices of many companies in the technology industry have declined significantly after those companies have failed to meet, or significantly exceed, the financial guidance publicly announced by the companies or the expectations of analysts. If
our financial results fail to meet, or significantly exceed, our announced guidance or the expectations of analysts or public investors, analysts could downgrade our ordinary shares or publish unfavorable research about us and our securities. If
one or more of these analysts cease coverage of us or fail to publish reports on it regularly, our visibility in the financial markets could decrease, which in turn could cause the price of our ordinary shares or trading volume to decline.
Sales of a substantial number of our ordinary shares in the public market, or the perception that they may occur, could cause the price of our ordinary shares to fall.
The market price of our ordinary shares could decline as a result of sales of a large number of our ordinary shares in the public market following this offering. A substantial majority of our
outstanding ordinary shares are, and the ordinary shares included in the units (or issuable upon exercise of the warrants included in the units) in this offering will be, freely tradeable without restriction or further registration under the
Securities Act of 1933, as amended (the “Securities Act”). Because the warrants are exercisable into our ordinary shares, volatility or a reduction in the market price of our ordinary shares could have an adverse effect on the market price of the
existing warrants. The perception that these sales might occur may also cause the market price of our ordinary shares to decline.
There is no public market for the warrants offered in this offering.
There is no established public trading market for the warrants being placed, and we do not expect a market to develop. In addition, we do not intend to apply for listing of the warrants on any
national securities exchange or other nationally recognized trading system, including Nasdaq. Without an active market, the liquidity of the warrants will be limited.
The warrants included in this offering may not be considered to have any value.
The warrants included in this offering may not be considered to have value by the holders of the warrants and we may not have sufficient funds on hand to fully redeem the holders of the warrants if
we experience a fundamental transaction.
Significant holders or beneficial holders of our ordinary shares may not be permitted to exercise warrants that they hold.
The terms of the warrants to be placed hereby prohibit a holder from exercising its warrants if doing so would result in such holder (together with such holder’s affiliates and any other persons
acting as a group together with such holder or any of such holder’s affiliates) beneficially owning more than 4.99% or 9.99%, at the holder’s option, of our ordinary shares or any other class of any equity security (other than an exempted
security) that is registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, you may not be able to exercise your warrants for our ordinary shares at a time when it would be financially
beneficial for you to do so. In such circumstance you could seek to sell your warrants to realize value, but you may be unable to do so.
Holders of the warrants will have no rights as a shareholder until such holders exercise their warrants and acquire our ordinary shares, except as set forth in the warrants.
Until holders of the warrants acquire our ordinary shares upon exercise of the warrants, holders of the warrants will have no rights with respect to the ordinary shares underlying such warrants,
except as set forth in warrants. Upon exercise of the warrants, the holders thereof will be entitled to exercise the rights of a shareholder only as to matters for which the record date occurs after the exercise date.
We do not intend to pay dividends in the foreseeable future.
We have never declared or paid any cash dividends on our ordinary shares and we currently intend to retain all available funds and any future earnings for use in the operation of our business and do
not anticipate paying any dividends on our ordinary shares in the foreseeable future. Consequently, you may be unable to realize a gain on your investment except by selling our ordinary shares after price appreciation, which may never occur.
Our board of directors has sole discretion whether to pay dividends. If our board of directors decides to pay dividends, the form, frequency, and amount will depend upon our future, operations and
earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that our directors may deem relevant. The Companies Law imposes restrictions on our ability to declare and pay dividends. See the
sections titled “Description of Ordinary Shares and Existing Warrants” in the accompanying prospectus and “Description of Registrant’s Securities—Ordinary Shares—Dividend and Liquidation Rights” in Exhibit 2.1 to our Annual Report incorporated herein by reference for additional information. Payment of dividends may
also be subject to Israeli withholding taxes. See the section titled “Taxation—Material Israeli Tax Considerations” for additional information.
Purchasers of securities in this offering will experience immediate and substantial dilution in the book value of their investment.
The offering price per unit is substantially higher than the as adjusted net tangible book value per ordinary share before giving effect to this offering. Therefore, if you purchase units in this
offering, you will pay a price per unit that substantially exceeds the as adjusted net tangible book value per share after the completion of this offering. Based on the offering price of $1.39 per unit, you will experience immediate dilution of
$0.73 per share, representing the difference between our as adjusted net tangible book value per share as of September 30, 2024 and the offering price per unit (without giving effect to the potential exercises of the warrants offered by this
prospectus supplement). See the section titled “Dilution” for a more detailed description of the dilution to new investors in the offering.
You may experience future dilution as a result of future equity offerings.
In order to raise additional capital, we may in the future offer additional ordinary shares or other securities convertible into or exchangeable for our ordinary shares at prices that may not be the
same as the price per share in this offering. We may sell shares or other securities in any other offering at a price per share that is less than the price per unit paid by any investors in this offering, and investors purchasing shares or other
securities in the future could have rights superior to existing shareholders. The price per share at which we sell additional ordinary shares, or securities convertible or exchangeable into ordinary shares, in future transactions may be higher or
lower than the price per unit paid by any investors in this offering. See the section titled “Dilution” for a more detailed discussion of the dilution you may incur if you purchase units in this offering.
U.S. holders of our ordinary shares or warrants may suffer adverse tax consequences if we are treated as a passive foreign investment company.
A non‑U.S. corporation generally will be treated as a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes, in any taxable year if either (1) at least 75% of its gross
income for such year is passive income (such as interest income) or (2) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or are held for
the production of passive income. As discussed below, whether we were a PFIC for any given taxable year is based on a complex and factual determination and there is no assurance that the Internal Revenue Service (“IRS”) will agree with our
determination. Based on the current and anticipated composition of the income, assets and operations of our company and our subsidiaries, we believe we were a PFIC for U.S. federal income tax purposes for our taxable year ending December 31,
2023. However, although there is a significant risk, we have not yet finally determined whether we were a PFIC for U.S. federal income tax purposes for our taxable year ended December 31, 2024 and cannot be sure as to whether we will be a PFIC
for U.S. federal income tax purposes for the current taxable year or in future taxable years. Moreover, because PFIC status is based on our income, assets and activities for the entire taxable year, it is not possible to determine whether we will
be characterized as a PFIC for our current taxable year or future taxable years until after the close of the applicable taxable year. This is an annual factual determination that depends on, among other things, the composition of our income
(including the relative size of our gross operating loss and our passive income) and assets, and the market value of our shares and assets (including unbooked goodwill), including the composition of income and assets of our subsidiaries, from
time to time, and thus a determination can only be made annually after the close of each taxable year. Moreover, the value of our assets (including unbooked goodwill) for purposes of the PFIC determination may be determined by reference to the
trading value of our ordinary shares, which could fluctuate significantly. If we are a PFIC for any taxable year, a U.S. Holder (as defined below under “Taxation – United States federal income tax considerations”)
of our ordinary shares or warrants may be subject to adverse tax consequences and may incur certain information reporting obligations, even if we cease to be a PFIC in the subsequent years. Under the generally applicable PFIC rules, a U.S. Holder
generally would be subject to U.S. federal income tax at the then prevailing maximum rates on ordinary income and possibly an “interest” charge, in respect of “excess distributions” and upon any gain from the disposition of our ordinary shares or
warrants, as applicable, as if the excess distribution or gain had been recognized ratably over such U.S. Holder’s holding period of our ordinary shares or warrants, as applicable. Certain elections (including a qualified electing fund or a
mark‑to‑market election) may be available to U.S. Holders of our ordinary shares (but not our warrants) to mitigate some of the adverse tax consequences resulting from PFIC treatment. For a further discussion, see “Taxation—United States Federal Income Tax Considerations—Passive Foreign Investment Company Considerations.”
Prospective U.S. Holders of our ordinary shares or warrants are strongly encouraged to consult their own tax advisors regarding the potential application of these rules to us and the ownership of our
ordinary shares and warrants.
If a United States person is treated as owning at least 10% of our shares, such person may be subject to adverse U.S. federal income tax consequences.
If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our shares, such person may be treated as a “United States
shareholder” with respect to us and any of our direct and indirect foreign affiliates (“Innoviz Group”) that is a “controlled foreign corporation” as defined in Section 957 of the Code. Because the Innoviz Group includes one or more U.S.
subsidiaries, certain of our non‑U.S. subsidiaries will be treated as controlled foreign corporations regardless of whether we are treated as a controlled foreign corporation.
A United States shareholder of a controlled foreign corporation may be required to report annually and include in its U.S. taxable income its pro rata share of the controlled foreign corporation’s
“Subpart F income” and, in computing its “global intangible low‑taxed income,” “tested income” and a pro rata share of the amount of U.S. property (including certain stock in U.S. corporations and certain tangible assets located in the United
States) held by the controlled foreign corporation regardless of whether such controlled foreign corporation makes any distributions. The amount includable by a United States shareholder under these rules is based on a number of factors, including
potentially, but not limited to, the controlled foreign corporation’s current earnings and profits (if any), tax basis in the controlled foreign corporation’s assets, and foreign taxes paid by the controlled foreign corporation on its underlying
income. Failure to comply with these reporting obligations (or related tax payment obligations) may subject such United States shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such United
States shareholder’s U.S. federal income tax return for the year for which reporting (or payment of tax) was due from starting. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not
be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation. We cannot provide any assurances that we will assist holders in determining whether any of our non‑U.S.
subsidiaries is treated as a controlled foreign corporation or whether any holder is treated as a United States shareholder with respect to any of such controlled foreign corporations or furnish to any holder information that may be necessary to
comply with reporting and tax paying obligations. U.S. Holders should consult their tax advisors regarding the potential application of these rules to their investment in our ordinary shares and warrants.
U.S. holders may be subject to tax if we make or fail to make certain adjustments to the exercise price of the warrants even though they do not receive a corresponding cash
distribution.
If the exercise price of the warrants is adjusted in certain circumstances (or in certain circumstances, there is a failure to make adjustments or a failure to make adequate adjustments), that
adjustment (or failure to adjust) may result in the deemed payment of a taxable dividend to a U.S. Holder of the warrants or our ordinary shares without the receipt of any cash. U.S. Holders should consult their tax advisors regarding the proper
U.S. federal income tax treatment of any adjustments to (or failure to adjust, or adjust adequately) the exercise price of the warrants. See “Taxation—United States Federal Income Tax Considerations—Possible
Constructive Distributions.”
Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our ordinary shares.
Our ordinary shares are currently listed for trading on Nasdaq. We must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum bid price requirement of $1.00 per
ordinary share or risk delisting.
On July 30, 2024, we received a letter from the Listing Qualifications Department indicating that for the thirty consecutive business days prior, the bid price for the ordinary shares had closed
below the minimum $1.00 per ordinary share requirement for continued listing on Nasdaq under Nasdaq Listing Rule 5450(a)(1). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided an initial period of 180 calendar days, or until
January 27, 2025, to regain compliance. The letter stated that the Listing Qualifications Department staff will provide written notification that we have achieved compliance with Rule 5450(a)(1) if at any time before January 27, 2025, the bid price
of the ordinary shares closed at $1.00 per ordinary share or more for a minimum of ten consecutive business days.
On January 2, 2025, we announced that we received formal written confirmation from Nasdaq confirming that the Company regained compliance with Nasdaq’s minimum bid price requirement. The closing
bid price of the ordinary shares was at $1.00 per share or greater for 10 consecutive business days from December 16 to December 30, 2024. Accordingly, Nasdaq Listing Qualifications Staff notified the Company that it determined that the Company
regained compliance with Nasdaq Listing Rule 5550(a)(2), and that the matter was closed.
No assurance can be given that the price of the ordinary shares will not again be in violation of Nasdaq’s minimum bid price requirement in the future. Our failure to meet this or other
requirements may result in our securities being delisted from Nasdaq. A delisting could substantially decrease trading in the ordinary shares, adversely affect the market liquidity of the ordinary shares as a result of the loss of market
efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, adversely affect our ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors,
suppliers, customers and employees and fewer business development opportunities. Additionally, the market price of the ordinary shares may decline further and shareholders may lose some or all of their investment.
We may be subject to securities litigation, class action and derivative lawsuits, which could result in substantial costs and could divert management
attention away from other business concerns.
The market price of our ordinary shares may be volatile and, in the past, companies that have experienced volatility in the market price of their securities have been subject to securities class
action litigation. We may be the target of this type of litigation in the future. Additionally, securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if
the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources from other business concerns, which could seriously harm our business. An adverse judgment could result in
monetary damages, which could have a negative impact on our liquidity and financial condition. For example, on March 28, 2024, Sheadrick Richards, a purported stockholder of Collective Growth Corporation (“Collective Growth”), filed a lawsuit
against Collective Growth’s directors and affiliates in the Court of Chancery for the State of Delaware. The lawsuit alleges that Collective Growth’s disclosures in connection with its business combination with Innoviz (completed in April 2021)
were materially incomplete and misleading, and that the directors breached their fiduciary duties.
We have entered into indemnification agreements with each of our current and former directors, certain of our current and former officers and certain third parties, and, in connection with the
business combination, agreed to indemnify certain former directors and officers of Collective Growth. Although we maintain insurance and run-off coverages in amounts and with deductibles that we believe are appropriate for our operations, and our
insurance and run-off coverages may not cover all claims that have been or may be brought against us, and insurance coverage may not continue to be available to us at a reasonable cost. As a result, we may be exposed to substantial uninsured
liabilities, including pursuant to our indemnification obligations, which could result in substantial costs and could divert management attention away from other business concerns.
CAUTIONARY STATEMENT REGARDING FORWARD‑LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein contain forward looking statements within the meaning of Section 27A of the Securities Act.
All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations, are
forward looking statements. In some cases, these forward‑looking statements can be identified by words or phrases such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,”
“predict,” “potential,” “continue,” “contemplate,” “possible” or similar words. Statements regarding our future results of operations and financial position, growth strategy and plans and objectives of management for future operations, including,
among others, expansion in new and existing markets, are forward‑looking statements.
Our estimates and forward‑looking statements are mainly based on our current expectations and estimates of future events and trends which affect or may affect our business, operations and industry.
Although we believe that these estimates and forward‑looking statements are based upon reasonable assumptions, they are subject to numerous risks and uncertainties.
Forward‑looking statements contained or incorporated in this prospectus supplement and the accompanying prospectus include, but are not limited to, statements about:
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our limited operating history and evolving business model makes evaluating our business and future prospects difficult and may increase the risk of your investment;
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• |
continued pricing pressures, automotive original equipment manufacturers (“OEM”) cost reduction initiatives and the ability of automotive OEMs to re‑source or cancel vehicle or technology programs may result in lower than anticipated
margins, or in incremental losses, which may adversely affect our business;
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• |
we are creating innovative technologies by designing and developing unique components, and the high price of, or low yield in, these components may affect our ability to sell at competitive prices, or may lead to losses;
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• |
there are significant risks to providing our products as a direct supplier to customers;
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• |
we expect to invest substantially in research and development for the purpose of developing and commercializing new products, and these investments could significantly reduce our profitability or increase our losses and may not generate
revenue for our company;
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• |
we will likely need to obtain additional funds in the future in order to execute our business plan and these funds may not be available to us when we need them, and our business, prospects, financial condition and operating results could
be negatively affected;
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we are substantially dependent on a limited number of customers. The automotive industry is comprised of a relatively small number of players, which makes each design win material for us, and our business could be materially and
adversely affected if any of our customers terminate our programs following such wins;
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designing and manufacturing LiDARs on a mass‑production scale requires meeting stringent quality requirements and we may face significant challenges and complexities in this process;
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the period of time from a design win to implementation is long and we are subject to the risk of cancellations or postponements of contracts or failure to successfully meet customers’ requirements for start of production (“SOP”);
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• |
certain of our strategic, development and supply arrangements could be terminated or may not materialize into long-term contract partnership arrangements;
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we target many customers that are large companies with substantial negotiating power, exacting product standards and potentially competitive internal solutions. If we are unable to sell our products to these customers, our prospects and
results of operations will be adversely affected;
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we continue to implement strategic initiatives designed to grow our business. These initiatives may prove more costly than we currently anticipate and we may not succeed in increasing our revenues by an amount sufficient to offset the
costs of these initiatives and to achieve and maintain profitability;
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the first vehicles deploying our LiDAR technology and software became commercially available to end users in 2024. If any vehicles deploying our LiDAR technology and software are involved in traffic accidents or collisions actually or
allegedly resulting from undetected defects, errors, or bugs in our products, or if our products actually or allegedly fail to perform as expected, we may be exposed to product liability, warranty and other claims, in addition to a decline
in the market adoption of our products, damage to our reputation with current or prospective customers, or increased regulatory scrutiny of our solutions, which would adversely affect our operating costs, business and prospects;
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we operate in a highly competitive market against a large number of both established competitors and new market entrants, and some market participants have substantially greater resources than ours; and
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the other matters described in the section entitled “Risk Factors” beginning on page S‑9 of this prospectus supplement and other risk factors contained in our Annual Report and our subsequent
filings with the SEC that we incorporated by reference herein.
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Many important factors, in addition to the factors described above and in other sections of this prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein,
could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties,
nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results and, in the case of our forward‑looking order book, actual orders to differ materially from estimates
or forward‑looking statements. We qualify all of our estimates and forward‑looking statements by these cautionary statements. Factors that could cause actual results to differ from our expectations or projections include the risks and uncertainties
relating to our business described in this prospectus supplement under “Risk Factors” as well as those listed under “Item 3. Key Information – Risk Factors” in our
Annual Report. We caution you to carefully consider these risks and not to place undue reliance on our forward‑looking statements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update
or revise any forward‑looking statements, whether as a result of new information, future events or otherwise, and we assume no responsibility for updating any forward‑looking statements.
We expect to receive net proceeds from this offering, after deducting the placement agent fees and offering expenses payable by us, of approximately $37.3 million. We will only receive additional
proceeds from the exercise of the warrants issuable in connection with this offering if the warrants are exercised and the holders of such warrants pay the exercise price in cash upon such exercise and do not utilize the cashless exercise provision
of the warrants.
We intend to use the net proceeds from this offering for general business purposes, including, but not limited to:
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research and development activities;
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commercializing our product sales;
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funding our continuing operations;
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expanding our production capabilities to produce LiDAR solutions;
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outsourcing the production of our LiDAR solutions; and
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producing inventory of our LiDAR solutions.
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We will have broad discretion in the way that we use the net proceeds of this offering. Our use of the net proceeds from this offering will depend on a number of factors, including our future revenue
and cash generated by operations and the other factors described in “Risk Factors.”
The table below sets forth our cash and cash equivalents and capitalization as of September 30, 2024:
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on an actual basis; and
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on an as adjusted basis to reflect the issuance and sale of units in this offering at the offering price of $1.39 per unit, after deducting the placement agent fees and offering expenses payable by us (and assuming no exercise of any of
the warrants offered hereby).
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The amounts depicted on an as adjusted basis do not reflect net proceeds from future capital that may be received upon the exercise of the warrants offered hereby, as warrant exercises are not
guaranteed events. If possible future capital is raised from warrant exercises and associated further ordinary share issuances were to be reflected, our capitalization would have been higher on an as adjusted basis at September 30, 2024 by the
amounts of such additional net proceeds.
Investors should read this table in conjunction with our audited and unaudited financial statements and notes thereto incorporated by reference herein as well as “Use
of Proceeds” included elsewhere in this prospectus supplement and Item 5. “Operating and Financial Review and Prospects” in our Annual Report.
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(in thousands, except share and per share data)
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Cash and cash equivalents, bank deposits, short‑term restricted cash and marketable securities
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$
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87,735
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$
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125,031
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Total debt
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$
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—
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$
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—
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Ordinary Shares of no par value: 500,000,000 shares authorized, 168,371,170 shares issued and outstanding, actual; 500,000,000 shares authorized, 197,148,148 shares
issued and outstanding, as adjusted
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—
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—
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Additional paid‑in capital
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804,077
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841,373
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Accumulated deficit
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(711,449
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)
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(711,449
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)
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Total shareholders’ equity
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$
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92,628
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$
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129,924
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Total capitalization
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$
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92,628
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$
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129,924
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As adjusted shareholders’ equity amounts shown in the table above exclude the impact of:
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16,231,141 existing warrants outstanding as of December 31, 2024, each entitling its holder to purchase one ordinary share at an initial exercise price equal to $11.50 per share;
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2,402,178 ordinary shares issuable as earnout share consideration in the event the price of the ordinary shares exceeds $12.50 for any period of ten out of twenty consecutive trading days prior to April 5, 2025;
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the warrants issued as part of this offering;
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10,857,287 ordinary shares issuable upon the exercise of options outstanding under our equity incentive plans as of December 31, 2024, at a weighted average exercise price of $4.76 per share;
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16,859,323 ordinary shares issuable upon the vesting of RSUs outstanding under our equity incentive plans as of December 31, 2024; and
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1,282,260 ordinary shares reserved for future issuance under our equity incentive plan, which number is prior to the reduction of the ordinary shares subject to any outstanding options or RSUs granted subsequent to December 31, 2024, as
well as any future increases in the number of ordinary shares for future issuances under our equity incentive plan.
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If you invest in our units in this offering, your ownership interest will be immediately diluted to the extent of the difference between the offering price per ordinary share included in the units
and the net tangible book value per ordinary share after this offering. Our net tangible book value as September 30, 2024 was $0.55 per ordinary share.
After giving effect to the sale of units that we are offering at the offering price of $1.39 per unit (and excluding ordinary shares issued and any proceeds received upon exercise of the warrants
offered hereby), after deducting the placement agent fees and offering expenses payable by us, our net tangible book value on an adjusted basis as of September 30, 2024 would have been $0.66 per ordinary share. This amount represents an immediate
increase in net tangible book value of $0.11 per ordinary share to our existing shareholders and an immediate dilution of $0.73 per ordinary share to new investors purchasing units in this offering. We determine dilution by subtracting the as
adjusted net tangible book value per share after this offering from the amount of cash that a new investor paid for a unit.
The following table illustrates this dilution:
Offering price per unit
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$
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1.39
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Net tangible book value per share as of September 30, 2024
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$ |
0.55 |
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Increase in net tangible book value per share attributable to this offering
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0.11
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As adjusted net tangible book value per share after this offering
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0.66
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Dilution per share to new investors in this offering
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$
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0.73
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The number of ordinary shares outstanding after this offering excludes shares issuable upon the exercise of the warrants offered hereby or issuable upon exercise of the existing warrants. Investors
that acquire additional ordinary shares through the exercise of the warrants offered hereby may experience additional dilution depending on our net tangible book value at the time of exercise.
To the extent any of our outstanding options or existing warrants are exercised or RSUs vest, there will be further dilution to new investors.
DESCRIPTION OF THE SECURITIES WE ARE OFFERING
In this offering, we are offering 28,776,978 units, with each unit consisting of one ordinary share and eight tenths of a warrant to purchase one ordinary share (and the 23,021,582 ordinary shares
issuable from time to time upon exercise of the warrants). The purchase price for each unit is $1.39. Each warrant will have an exercise price of $1.69 per share, will be exercisable upon issuance and will expire five years from the date of
issuance. No fractional warrants will be issued. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant. The units will not be issued or certificated. The ordinary shares and the warrants are
immediately separable and will be issued separately, but will be purchased together in this offering.
Ordinary Shares
The material terms and provisions of our ordinary shares are described under the caption “Description of Ordinary Shares and Existing Warrants” starting on page 11 of the accompanying prospectus.
Warrants
Duration and Exercise Price
Each warrant offered hereby will have an initial exercise price equal to $1.69 per share. The warrants will be immediately exercisable and will expire on the fifth year anniversary of the original
issuance date. The exercise price and number of ordinary shares issuable upon exercise is subject to appropriate proportional adjustment in the event of share dividends, share splits, reorganizations or similar events affecting our ordinary
shares and the exercise price. The warrants will be issued in certificated form.
The warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice and, within the number of trading days comprising the
standard settlement period with respect to the ordinary shares as in effect on the date of delivery of the notice of exercise thereafter, payment in full for the number of ordinary shares purchased upon such exercise (except in the case of a
cashless exercise as discussed below). A holder may not exercise any portion of the warrant to the extent that the holder, together with its affiliates and any other persons acting as a group together with any such persons, would own more than
4.99% (or, at the election of the purchaser, 9.99%) of the number of ordinary shares outstanding immediately after exercise (the “Beneficial Ownership Limitation”); provided that a holder, upon notice to us, may increase or decrease the
beneficial ownership limitation, provided, further, that any increase in such beneficial ownership limitation shall be effective 61 days after the date such notice is delivered to us; provided that in no event shall the Beneficial Ownership Limit
exceed 9.99% of the number of ordinary shares outstanding immediately after exercise.
If, at the time a holder exercises its warrants, a registration statement registering the issuance of the ordinary shares underlying the warrants under the Securities Act is not then effective or
available for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise
(either in whole or in part) the net number of ordinary shares determined according to a formula set forth in the warrants, which generally provides for a number of ordinary shares equal to (A) (1) the volume weighted average price on (x) the
trading day preceding the notice of exercise, if the notice of exercise is executed and delivered on a day that is not a trading day or prior to the opening of “regular trading hours” on a trading day or (y) the trading day of the notice of
exercise, if the notice of exercise is executed and delivered after the close of “regular trading hours” on such trading day, or (2) the bid price on the day of the notice of exercise, if the notice of exercise is executed during “regular trading
hours” on a trading day and is delivered within two hours thereafter, less (B) the exercise price, multiplied by (C) the number of ordinary shares the warrant was exercisable into, with such product then divided by the number determined under
clause (A) in this sentence.
No fractional ordinary shares will be issued upon the exercise of the warrants. Rather, we will, at our election, either pay a cash adjustment in respect of such final fraction in an amount equal
to such fraction multiplied by the exercise price or round up to the next whole share.
Subject to applicable laws, a warrant may be transferred at the option of the holder upon surrender of the warrant to us together with the appropriate instruments of transfer and funds sufficient
to pay any transfer taxes payable upon such transfer.
There is no trading market available for the warrants on any securities exchange or nationally recognized trading system and we do not expect a market to develop. We do not intend to list the
warrants on any securities exchange or nationally recognized trading system. The ordinary shares issuable upon exercise of the warrants are currently listed on Nasdaq under the symbol “INVZ”.
Except as otherwise provided in the warrants or by virtue of such holder’s ownership of the underlying ordinary shares, the holders of the warrants do not have the rights or privileges of holders
of our ordinary shares, including any voting rights, until they exercise their warrants.
In the event of a fundamental transaction, as described in the warrants and generally including any reorganization, recapitalization or reclassification of our ordinary shares, the sale, transfer
or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of the share capital of the Company, the holders of the warrants will be
entitled to receive upon exercise of the warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the warrants immediately prior to such fundamental transaction. Additionally, as
more fully described in the warrants, in the event of certain fundamental transactions, the holders of the warrants will be entitled to receive consideration in an amount equal to the Black Scholes value of the warrants on the date of
consummation of such transaction.
Amendments of the terms of each warrant require the written consent of us and the holder of the warrant.
The following description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of the units or
components thereof issued pursuant to this offering and our ordinary shares received upon exercise of the warrants. You should consult your own tax advisor concerning the tax consequences of your particular situation, as well as any tax
consequences that may arise under the laws of any state, local, foreign or other taxing jurisdiction.
Material Israeli Tax Considerations
The following is a brief summary of the material Israeli tax laws applicable to us, and certain Israeli Government programs that benefit us. This section also contains a discussion of material
Israeli tax consequences concerning the purchase, ownership and disposition of our ordinary shares and warrants. This summary does not discuss all the aspects of Israeli tax law that may be relevant to a particular investor in light of his or her
personal investment circumstances or to some types of investors subject to special treatment under Israeli law. Examples of such investors include residents of Israel or traders in securities who are subject to special tax regimes not covered in
this discussion. To the extent that the discussion is based on tax legislation that has not yet been subject to judicial or administrative interpretation, we cannot assure you that the appropriate tax authorities or the courts will accept the views
expressed in this discussion. The discussion below is subject to change, including due to amendments under Israeli law or changes to the applicable judicial or administrative interpretations of Israeli law, which change could affect the tax
consequences described below.
General corporate tax structure in Israel. Israeli companies are generally subject to corporate income tax. In December 2016, the Israeli Parliament approved
the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years) which reduces the corporate income tax rate from 25% to 24% effective from January 1, 2017, and to 23% effective from
January 1, 2018 onwards. However, the effective tax rate payable by a company that derives income from an Approved Enterprise, a Preferred Enterprise, a Special Preferred Enterprise, a Benefited Enterprise, a Preferred Technological Enterprise or
Special Preferred Technological Enterprise (as discussed below) may be considerably less. Capital gains derived by an Israeli company are generally subject to the corporate income tax rate.
Law for the Encouragement of Industry (Taxes), 5729‑1969. The Law for the Encouragement of Industry (Taxes), 5729‑1969, generally referred to as the Industry
Encouragement Law, provides several tax benefits for “Industrial Companies.” We believe that we currently qualify as an Industrial Company within the meaning of the Industry Encouragement Law.
The Industry Encouragement Law and the regulations promulgated thereunder provide that an “Industrial Company” is an Israeli resident‑company, of which 90% or more of its income in any tax year,
other than income from certain government loans, capital gains, dividends and interest and linkage differentials, is derived from an “Industrial Enterprise” owned by it and located in Israel or in the “Area,” in accordance with the definition under
section 3A of the Israeli Tax Ordinance (the “Ordinance”). An “Industrial Enterprise” is defined as an enterprise whose principal activity in a given tax year is industrial production.
Following are the main tax benefits available to Industrial Companies:
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Amortization of the cost of purchased patents, rights to use a patent, and know‑how, which are used for the development or advancement of the Industrial Enterprise, over an eight‑year period, commencing on the year in which the
Industrial Company began to use them;
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Under limited conditions, an election to file consolidated tax returns with controlled Israeli Industrial Companies; and
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Expenses related to a public offering are deductible in equal amounts over three years commencing on the year of the offering.
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Eligibility for benefits under the Industry Encouragement Law is not contingent upon approval of any governmental authority.
Tax benefits and grants for research and development. Israeli tax law allows, under certain conditions, a tax deduction for expenditures, including capital
expenditures, for the year in which they are incurred. Expenditures are deemed related to scientific research and development projects, if:
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The expenditures are approved by the relevant Israeli government ministry, determined by the field of research;
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The research and development must be for the promotion of the company; and
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The research and development is carried out by or on behalf of the company seeking such tax deduction.
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The amount of such deductible expenses is reduced by the sum of any funds received through government grants for the finance of such scientific research and development projects. No deduction under
these research and development deduction rules is allowed if such deduction is related to an expense invested in an asset depreciable under the general depreciation rules of the Ordinance. Expenditures that are unqualified under the conditions
above are deductible in equal amounts over three years commencing in the year of the payment of such expenses.
From time to time, we may apply to the Israel Innovation Authority (the “IIA”) for approval to allow a tax deduction for all or most of research and development expenses during the year incurred.
There can be no assurance that such application will be accepted. If we will not be able to deduct research and development expenses during the year of the payment, we will be able to deduct research and development expenses during a period of
three years commencing in the year of the payment of such expenses.
Law for the Encouragement of Capital Investments, 5719‑1959. The Law for the Encouragement of Capital Investments, 5719‑1959, generally referred to as the
Investment Law, provides certain incentives for capital investments in production facilities (or other eligible assets).
The Investment Law was significantly amended effective as of April 1, 2005 (the “2005 Amendment”), as of January 1, 2011 (the “2011 Amendment”) and as of January 1, 2017 (the “2017 Amendment”).
Pursuant to the 2005 Amendment, tax benefits granted in accordance with the provisions of the Investment Law prior to its revision by the 2005 Amendment remain in force, but any benefits granted subsequently are subject to the provisions of the
amended Investment Law. Similarly, the 2011 Amendment introduced new benefits to replace those granted in accordance with the provisions of the Investment Law in effect prior to the 2011 Amendment. However, companies entitled to benefits under the
Investment Law as in effect prior to January 1, 2011 were entitled to choose to continue to enjoy such benefits, provided that certain conditions are met, or elect instead, irrevocably, to forego such benefits and have the benefits of the 2011
Amendment apply. The 2017 Amendment introduces new benefits for Technological Enterprises, alongside the existing tax benefits.
Tax benefits under the 2011 amendment. The 2011 Amendment canceled the availability of the benefits granted to Industrial Companies under the Investment Law
prior to 2011 and, instead, introduced new benefits for income generated by a “Preferred Company” through its “Preferred Enterprise” (as such terms are defined in the Investment Law) as of January 1, 2011. The definition of a Preferred Company
includes a company incorporated in Israel that is not fully owned by a governmental entity, and that has, among other things, Preferred Enterprise status and is controlled and managed from Israel. Pursuant to the 2011 Amendment, a Preferred Company
is entitled to a reduced corporate tax rate of 15% with respect to its income derived by its Preferred Enterprise in 2011 and 2012, unless the Preferred Enterprise is located in a specified development zone, in which case the rate will be 10%.
Under the 2011 Amendment, such corporate tax rate was reduced from 15% and 10%, respectively, to 12.5% and 7%, respectively, in 2013, 16% and 9% respectively, in 2014, 2015 and 2016, and 16% and 7.5%, respectively, in 2017 and thereafter. Income
derived by a Preferred Company from a “Special Preferred Enterprise” (as such term is defined in the Investment Law) would be entitled, during a benefits period of 10 years, to further reduced tax rates of 8%, or 5% if the Special Preferred
Enterprise is located in a certain development zone.
Dividends distributed from income which is attributed to a “Preferred Enterprise” will be subject to withholding tax at source at the following rates: (i) Israeli resident corporations – 0%,
(although, if such dividends are subsequently distributed to individuals or a non‑Israeli company the below rates detailed in sub sections (ii) and (iii) shall apply), (ii) Israeli resident individuals – 20%, and (iii) non‑Israeli residents
(individuals and corporations) - if a valid certificate is obtained in advance from the Israel Tax Authority ("ITA"), 20% under the Investment Law or, to a reduced tax rate under the provisions of any applicable double tax treaty – if such a valid
certificate is not obtained then the applicable withholding tax rate shall be 25% or 30%..
The 2011 Amendment also provided transitional provisions to address companies already enjoying existing tax benefits under the Investment Law. These transitional provisions provide, among other
things, that unless an irrevocable request is made to apply the provisions of the Investment Law as amended in 2011 with respect to income to be derived as of January 1, 2011, a Benefitted Enterprise can elect to continue to benefit from the
benefits provided to it before the 2011 Amendment came into effect, provided that certain conditions are met.
We do not currently intend to implement the 2011 Amendment.
New tax benefits under the 2017 Amendment that became effective on January 1, 2017. The 2017 Amendment was enacted as part of the Economic Efficiency Law that
was published on December 29, 2016, and is effective as of January 1, 2017. The 2017 Amendment provides new tax benefits for two types of “Technological Enterprises,” as described below, and is in addition to the other existing tax beneficial
programs under the Investment Law. In addition, the 2017 Amendment also changed the definition of the term "preferred income," which is the income eligible for benefits according to the 2011 Amendment.
The 2017 Amendment provides that a technological company satisfying certain conditions including, inter alia, having will qualify as a “Preferred
Technological Enterprise” and will thereby enjoy a reduced corporate tax rate of 12% on income that qualifies as “Preferred Technological Income,” as defined in the Investment Law. The tax rate is further reduced to 7.5% for a Preferred
Technological Enterprise located in development zone “A.” In addition, a Preferred Technological Company will enjoy a reduced corporate tax rate of 12% on capital gain derived from the sale of certain “Benefitted Intangible Assets” (as defined in
the Investment Law) to a related foreign company if the Benefitted Intangible Assets were acquired from a foreign company on or after January 1, 2017 for at least NIS 200 million, and the sale receives prior approval from the IIA.
The 2017 Amendment further provides that a technology company satisfying certain conditions (group consolidated revenues of at least NIS 10 billion) will qualify as a “Special Preferred Technological
Enterprise” and will thereby enjoy a reduced corporate tax rate of 6% on “Preferred Technological Income” regardless of the company’s geographic location within Israel. In addition, a Special Preferred Technological Enterprise will enjoy a reduced
corporate tax rate of 6% on capital gain derived from the sale of certain “Benefitted Intangible Assets” to a related foreign company if the Benefitted Intangible Assets were either developed by the Special Preferred Technological Enterprise or
acquired from a foreign company on or after January 1, 2017, and the sale received prior approval from the IIA. A Special Preferred Technological Enterprise that acquires Benefitted Intangible Assets from a foreign company for more than NIS
500 million will be eligible for these benefits for at least 10 years, subject to certain approvals as specified in the Investment Law.
Dividends distributed to Israeli shareholders by a Preferred Technological Enterprise or a Special Preferred Technological Enterprise, paid out of Preferred Technological Income, are generally
subject to withholding tax at source at the rate of 20% (in the case of non‑Israeli shareholders—subject to the receipt in advance of a valid certificate from the ITA allowing for such reduced tax rate, or such lower rate as may be provided in an
applicable tax treaty). However, if such dividends are paid to an Israeli company, no tax is required to be withheld (although, if such dividends are subsequently distributed to individuals or a non‑Israeli company, withholding tax at a rate of 20%
or such lower rate as may be provided in an applicable tax treaty, will apply). If such dividends are distributed to a foreign company that holds solely or together with other foreign companies 90% or more in the Israeli company and other
conditions are met, the withholding tax rate will be 4% (in either case, subject to the receipt in advance of a valid certificate from the ITA allowing for such 4% rate or lower treaty tax rate).
We believe that we may be eligible to receive the tax benefits under the 2017 Amendment but there is no assurance that we will meet all the terms and conditions required under the Investment Law that
will allow us to enjoy any tax benefits under the Investment Law. It should be noted that the proportion of income that may be considered Preferred Technological Income and enjoy the tax benefits described above should be calculated according to
the Nexus Formula, which is based on the proportion as that of qualifying expenditures in the intellectual property compared to overall expenditures.
Taxation of Our Shareholders
Capital gains taxes applicable to non‑Israeli resident shareholders. A non‑Israeli resident who derives capital gains from the sale of ordinary shares in an
Israeli resident company that were purchased after December 31, 2008 should be exempt from Israeli tax unless, among other requirements, the ordinary shares were held through a permanent establishment that the non‑resident maintains in Israel. If
not exempt, a non‑Israeli resident shareholder would generally be subject to tax on capital gain at the ordinary corporate income tax rate (23% in 2025), if generated by a company, or at the rate of 25%, if generated by an individual, or 30%, if
generated by an individual who is a “substantial shareholder” (as defined under the Ordinance), at the time of sale or at any time during the preceding 12‑month period (or if the shareholder claims a deduction for interest and linkage differences
expenses in connection with the purchase and holding of such shares). A “substantial shareholder” is generally a person who, alone or together with such person’s relatives or another person who collaborates with such person on a permanent basis,
holds, directly or indirectly, at least 10% of any of the “means of control” of the corporation. “Means of control” generally include, among others, the right to vote, receive profits, nominate a director or an executive officer, receive assets
upon liquidation, or order someone who holds any of the aforesaid rights how to act, regardless of the source of such right. Individual and corporate shareholders dealing in securities in Israel are taxed at the tax rates applicable to business
income (corporate income tax rate for a corporation (23% in 2025) and a marginal tax rate of up to 47% for an individual in 2025 (excluding surtax, as discussed below)) unless contrary provisions in a relevant tax treaty apply. Non‑Israeli
corporations will not be entitled to the foregoing exemption if Israeli residents: (i) have a controlling interest of more than 25% in such non‑Israeli corporation or (ii) are the beneficiaries of, or are entitled to, 25% or more of the revenues or
profits of such non‑Israeli corporation, whether directly or indirectly. In addition, such exemption is not applicable to a person whose gains from selling or otherwise disposing of the ordinary shares are deemed to be business income.
Additionally, a sale of ordinary shares by a non‑Israeli resident may be exempt from Israeli capital gains tax under the provisions of an applicable tax treaty. For example, under The Convention
Between the Government of the United States of America and the Government of the State of Israel with respect to Taxes on Income, as amended (the “United States‑Israel Tax Treaty”), the sale, exchange or other disposition of ordinary shares by a
shareholder who is a United States resident (for purposes of the treaty) holding the ordinary shares as a capital asset and is entitled to claim the benefits afforded to such a resident by the United States‑Israel Tax Treaty (a “Treaty U.S.
Resident”) is generally exempt from Israeli capital gains tax, unless: (i) the capital gain arising from such sale, exchange or disposition is attributed to real estate located in Israel; (ii) the capital gain arising from such sale, exchange or
disposition is attributed to royalties; (iii) the capital gain arising from the such sale, exchange or disposition is attributed to a permanent establishment in Israel, under certain terms; (iv) such Treaty U.S. Resident holds, directly or
indirectly, shares representing 10% or more of the voting capital during any part of the 12‑month period preceding the sale, exchange or disposition, subject to certain conditions; or (v) such Treaty U.S. Resident is an individual and was present
in Israel for 183 days or more during the relevant taxable year. In each case, the sale, exchange or disposition of our ordinary shares would be subject to Israeli tax, to the extent applicable; however, under the United States‑Israel Tax Treaty,
the taxpayer may be permitted to claim a credit for such taxes against the U.S. federal income tax imposed with respect to such sale, exchange or disposition, subject to the limitations under U.S. law applicable to foreign tax credits. The United
States‑Israel Tax Treaty does not provide such credit against any U.S. state or local taxes.
In some instances where our shareholders may be liable for Israeli tax on the sale of their ordinary shares, the payment of the consideration may be subject to the withholding of Israeli tax at
source. Shareholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale (i.e., valid withholding tax certificate issued by the ITA, residency certificate
or other documentation may be required).
Taxation of non‑Israeli shareholders on receipt of dividends. Non‑Israeli residents (either individuals or corporations) are generally subject to Israeli
income tax on the receipt of dividends paid on our ordinary shares at the rate of 25%, which tax will be withheld at source, unless relief is provided in a treaty between Israel and the shareholder’s country of residence (subject to the receipt in
advance of a valid withholding tax certificate from the ITA allowing for a reduced tax rate). With respect to a person who is a “substantial shareholder” at the time of receiving the dividend or on any time during the preceding 12 months, the
applicable tax rate is 30%. Such dividends are generally subject to Israeli withholding tax at a rate of 25% so long as the ordinary shares are registered with a nominee company (whether the recipient is a substantial shareholder or not) and,
subject to the receipt in advance of a valid withholding tax certificate from the ITA allowing for a reduced tax rate, 15% if the dividend is distributed from income attributed to an Approved Enterprise or a Benefited Enterprise and 20% if the
dividend is distributed from income attributed to a Preferred Enterprise, a Special Preferred Enterprise, Preferred Technological Enterprise or Special Preferred Technological Enterprise or such lower rate as may be provided in an applicable tax
treaty. For example, under the United States‑Israel Tax Treaty, the maximum rate of tax withheld at source in Israel on dividends paid to a holder of our ordinary shares who is a Treaty U.S. Resident is 25%. However, generally, the maximum rate of
withholding tax on dividends, not generated by an Approved Enterprise, Benefited Enterprise, Preferred Enterprise, Special Preferred Enterprise, Preferred Technological Enterprise or Special Preferred Technological Enterprise, that are paid to a
U.S. corporation holding 10% or more of the outstanding voting capital throughout the tax year in which the dividend is distributed as well as during the previous tax year, is 12.5%, provided that not more than 25% of the gross income for such
preceding year consists of certain types of dividends and interest. Notwithstanding the foregoing, dividends distributed from income attributed to an Approved Enterprise, Benefited Enterprise, Preferred Enterprise, Special Preferred Enterprise,
Preferred Technological Enterprise or Special Preferred Technological Enterprise are not entitled to such reduction under the tax treaty but are subject to a withholding tax rate of 15% for a shareholder that is a U.S. corporation, provided that
the conditions related to 10% or more holdings and to our gross income for the previous year (as set forth in the previous sentence) is met. The aforementioned rates under the United States‑Israel Tax Treaty would not apply if the dividend income
is derived through a permanent establishment of the U.S. resident in Israel. If the dividend is attributable partly to income derived from an Approved Enterprise, Benefited Enterprise, Preferred Enterprise, Special Preferred Enterprise, Preferred
Technological Enterprise or Special Preferred Technological Enterprise and partly to other sources of income, the withholding rate will be a blended rate reflecting the relative portions of the two types of income. We cannot assure you that we
will designate the profits that we may distribute in a way that will reduce shareholders’ tax liability.
A non‑Israeli resident who receives dividends from which all tax due was withheld at source according to applicable provisions of the Ordinance and the regulations promulgated thereunder is generally
exempt from the obligation to file tax returns in Israel with respect to such income, provided that (i) such income was not generated from business conducted in Israel by the taxpayer, (ii) the taxpayer has no other taxable sources of income in
Israel with respect to which a tax return is required to be filed, and (iii) the taxpayer is not obligated to pay surtax (as further explained below).
Tax Treatment of Warrants. Israeli tax law is not sufficiently clear regarding the treatment of warrants. Purchasers should consult their tax advisors
regarding the proper Israeli tax treatment of warrants.
Exercise of Warrants. Purchasers will generally not recognize gain or loss for Israeli tax purposes on the exercise of a warrant and related receipt of an
ordinary share, unless, for instance, cash is received in lieu of the issuance of a fractional ordinary share. A purchaser’s initial tax basis in such ordinary share received on the exercise of a warrant should be equal to the sum of (i) the
purchaser’s tax basis in such warrant (that is, an amount equal to the portion of the purchase price of the unit that is attributed to the warrant) plus (ii) the exercise price paid by the purchaser on the exercise of the warrant. Also, for tax
purposes, the date of purchase of such ordinary share will be considered the date of purchase of the warrants (provided, however, that the portion of tax basis in the ordinary share attributed to the exercise price of the warrant (as described
above), should be considered as having a date of purchase that is the date of exercise of the warrant). The Israeli income tax treatment of a cashless exercise of warrants into ordinary shares is unclear, and the tax consequences of a cashless
exercise could differ from the consequences upon the exercise of a warrant described above.
Certain Adjustments to the Warrants. The exercise terms of the warrants may be adjusted in certain circumstances. An adjustment to the number of ordinary
shares that will be issued on the exercise of the warrants or an adjustment to the exercise price of such warrants may be treated as a taxable event under Israeli tax law, even if such holder does not receive any cash or other property in
connection with the adjustment. Purchasers should consult their tax advisors regarding the proper treatment of any adjustments to such warrants. The exemptions from Israeli capital gains tax available to non-Israeli residents, as discussed above,
should also apply to income resulting from an adjustment to the exercise terms of the warrants.
Surtax. Subject to the provisions of an applicable tax treaty, individuals who are subject to tax in Israel (whether any such individual is an Israeli
resident or non-Israeli resident) are also subject to an additional tax at a rate of 3% on annual income (including, but not limited to, dividends, interest and capital gain) exceeding NIS 721,560 for 2025, which amount is linked to the annual
change in the Israeli consumer price index. Additionally, effective from January 1, 2025, an additional surtax of 2% will apply exclusively to annual capital income (including from dividend distribution) exceeding NIS 721,560. It should be
emphasized that with respect to non-Israeli residents, these surtaxes apply to Israeli source income (unless such income is exempt under Israeli domestic law or an applicable tax treaty), whereas with respect to Israeli residents, these surtaxes
apply to worldwide income.
Estate and Gift Tax. Israeli law presently does not impose estate or gift taxes.
United States Federal Income Tax Considerations
The following is a description of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of the units and of the ordinary shares and warrants comprising the
units offered pursuant to this prospectus supplement. This description addresses only the U.S. federal income tax consequences to U.S. Holders (as defined below) that hold any of our units, ordinary shares or warrants as capital assets within the
meaning of Section 1221 of the the Internal Revenue Code of 1986, as amended (the "Code"), and that have the U.S. dollar as their functional currency.
This discussion is based upon the Code, applicable U.S. Treasury regulations, administrative pronouncements and judicial decisions, in each case as in effect on the date hereof, all of which are
subject to change (possibly with retroactive effect). No ruling has been or will be requested from the Internal Revenue Service (the “IRS”) regarding the tax consequences of the acquisition, ownership or disposition of the units, ordinary shares or
warrants, and there can be no assurance that the IRS will agree with the discussion set out below. This summary does not address any U.S. tax consequences other than U.S. federal income tax consequences (e.g., the estate and gift tax or the
Medicare tax on net investment income) and does not address any state, local or non‑U.S. tax consequences.
This description does not address tax considerations applicable to holders that may be subject to special tax rules, including, without limitation:
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banks, financial institutions or insurance companies;
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real estate investment trusts or regulated investment companies;
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traders that elect to mark to market;
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tax exempt entities or organizations;
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“individual retirement accounts” and other tax deferred accounts;
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certain former citizens or long term residents of the United States;
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persons that are resident or ordinarily resident in or have a permanent establishment in a jurisdiction outside the United States;
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persons subject to any alternative minimum tax;
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persons that acquired our ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation for the performance of services;
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persons holding our ordinary shares or warrants as part of a “hedging,” “integrated” or “conversion” transaction or as a position in a “straddle” for U.S. federal income tax purposes;
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partnerships or other pass through entities and persons holding ordinary shares or warrants through partnerships or other pass through entities; or
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holders that own directly, indirectly or through attribution 10% or more of the total voting power or value of all of our outstanding shares.
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For purposes of this description, a “U.S. Holder” is a beneficial owner of our ordinary shares or warrants that, for U.S. federal income tax purposes, is:
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an individual who is a citizen or resident of the United States;
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a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any state thereof, including the District of Columbia;
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an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
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a trust if such trust has validly elected to be treated as a United States person for U.S. federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over its administration and (2) one
or more United States persons have the authority to control all of the substantial decisions of such trust.
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If a partnership (or any other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our units, ordinary shares or warrants, the tax treatment of a partner in
such partnership will generally depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its tax advisor as to the particular U.S. federal income tax consequences of acquiring, owning
and disposing of our units, ordinary shares or warrants in its particular circumstance.
You should consult your tax advisor with respect to the U.S. federal, state, local and foreign tax consequences of acquiring, owning and disposing of our units, ordinary shares or warrants.
General Treatment of a Purcahse of a Unit
There is no statutory, administrative or judicial authority directly addressing the treatment, for U.S. federal income tax purposes, of securities with terms substantially the same as the units, and,
therefore, that treatment is not entirely clear. For U.S. federal income tax purposes, we intend to treat the acquisition of a unit as the acquisition of one ordinary share and eight tenths of one warrant to acquire one ordinary share and, by
purchasing a unit, you agree to adopt such treatment for U.S. federal income tax purposes. The foregoing treatment of our ordinary shares and warrants and a holder’s purchase price allocation (discussed below) are not binding on the IRS or the
courts. Because there are no authorities that directly address instruments that are similar to the units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below.
Accordingly, each holder is advised to consult its own tax advisor regarding the risks associated with an investment in a unit and regarding an allocation of the purchase price among the ordinary share and eight tenths of one warrant that comprise
a unit. The balance of this discussion generally assumes that the characterization of the units described above is respected for U.S. federal income tax purposes.
Each holder of a unit must allocate the purchase price paid by such holder for such unit between the ordinary share and the eight tenths of one warrant that comprise the unit based on their
respective relative fair market values at the time of issuance. Under U.S. federal income tax law, each investor must make its own determination of such value based on all the relevant facts and circumstances. Therefore, we urge each investor to
consult its own advisor regarding the determination of value for these purposes. A holder’s initial tax basis in the ordinary share and the eight tenths of one warrant included in each unit should equal the portion of the purchase price of the unit
allocated thereto. The separation of the ordinary share and the eight tenths of one warrant comprising a unit should not be a taxable event for U.S. federal income tax purposes.
Distributions on Ordinary Shares or Warrants
Subject to the discussion under “—Passive Foreign Investment Company Considerations” below, the gross amount of any distribution made to you with respect to
our ordinary shares or warrants, before reduction for any Israeli taxes withheld therefrom, generally will be includible in your income as dividend income on the date on which the dividends are actually or constructively received, to the extent
such distribution is paid out of our current or accumulated earnings and profits as determined under U.S. federal income tax principles. To the extent that the amount of any distribution by us exceeds our current and accumulated earnings and
profits as determined under U.S. federal income tax principles, it will be treated first as a tax free return of your adjusted tax basis in our ordinary shares or warrants and thereafter as capital gain. However, we do not expect to maintain
calculations of our earnings and profits under U.S. federal income tax principles and, therefore, you should expect that the entire amount of any distribution generally will be reported as dividend income to you. If you are a non‑corporate U.S.
Holder, you may qualify for the lower rates of taxation with respect to dividends on ordinary shares or warrants applicable to long term capital gains (i.e., gains from the sale of capital assets held for more than one year), provided that we are
not a PFIC (as discussed below under “—Passive Foreign Investment Company Considerations”) with respect to you in our taxable year in which the dividend was paid or in the prior taxable year and certain
other conditions are met, including certain holding period requirements and the absence of certain risk reduction transactions. However, such dividends will not be eligible for the dividends received deduction generally allowed to corporate U.S.
Holders.
Dividends paid to you with respect to our ordinary shares or warrants generally will be treated as foreign source income, which may be relevant in calculating your foreign tax credit limitation.
Subject to certain conditions and limitations, Israeli tax withheld on dividends may be credited against your U.S. federal income tax liability or, at your election, be deducted from your U.S. federal taxable income. Dividends that we distribute
generally should constitute “passive category income” for purposes of the foreign tax credit. A foreign tax credit for foreign taxes imposed on distributions may be subject to significant limitations. The rules relating to the determination of the
foreign tax credit are complex, and you should consult your tax advisor to determine whether and to what extent you would be entitled to this credit.
Sale, Exchange or Other Disposition of Ordinary Shares and Warrants
Subject to the discussion under “—Passive Foreign Investment Company Considerations” below, you generally will recognize gain or loss on the sale, exchange or
other disposition of our ordinary shares or warrants, as applicable, equal to the difference between the amount realized on such sale, exchange or other disposition and your adjusted tax basis in our ordinary shares or warrants, as applicable, and
such gain or loss will be capital gain or loss. If you are a non‑corporate U.S. Holder, capital gain from the sale, exchange or other disposition of our ordinary shares and warrants is currently generally eligible for a preferential rate of
taxation applicable to capital gains, if your holding period for such ordinary shares or warrants, as applicable, exceeds one year (i.e., such gain is long term capital gain). The deductibility of capital losses for U.S. federal income tax purposes
is subject to limitations. Any such gain or loss that a U.S. Holder recognizes generally will be treated as U.S. source income or loss for foreign tax credit limitation purposes. In addition, pursuant to applicable United States Treasury
regulations, if a U.S. Holder is not eligible for the benefits of an applicable income tax treaty or does not elect to apply such treaty, then such holder may not be able to claim a foreign tax credit arising from any foreign tax imposed on the
disposition of our ordinary shares or warrants, depending on the nature of such foreign tax. However, the Department of the Treasury and the IRS are considering amendments to these regulations. In addition, notices from the IRS provide temporary
relief by allowing taxpayers that comply with applicable requirements to apply many aspects of the foreign tax credit regulations as they previously existed (before the release of the current foreign tax credit regulations which imposed such
additional requirements) for taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance). The rules governing the
treatment of foreign taxes imposed on a U.S. Holder and foreign tax credits are complex, and U.S. Holders should consult their tax advisors as to whether the Israeli tax on gains may be creditable or deductible in light of their particular
circumstances, including their eligibility for benefits under an applicable treaty and the potential impact of applicable United States Treasury regulations.
Exercise or Lapse of a Warrant
Except as discussed below with respect to the cashless exercise of a warrant, a U.S. Holder generally will not recognize gain or loss upon the acquisition of an ordinary share on the exercise of
a warrant for cash. A U.S. Holder’s tax basis in the ordinary shares received upon exercise of warrants generally should be an amount equal to the sum of the U.S. Holder’s tax basis in the warrants exchanged therefor and the exercise price. The
U.S. Holder’s holding period for ordinary shares received upon exercise of warrants will begin on the date following the date of exercise (or possibly on the date of exercise) of the warrants and will not include the period during which the U.S.
Holder held the warrants. If a warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s tax basis in the warrant.
The tax consequences of a cashless exercise of a warrant are not clear under current U.S. federal income tax law. A cashless exercise may be tax-deferred, either because the exercise is not a
realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either tax-deferred situation, a U.S. Holder’s basis in the ordinary shares received would equal the U.S. Holder’s basis in the
warrants exercised therefore. If the cashless exercise is not treated as a realization event, a U.S. Holder’s holding period in the ordinary shares would be treated as commencing on the date following the date of exercise (or possibly on the date
of exercise) of the warrants. If the cashless exercise were treated as a recapitalization, the holding period of the ordinary shares would include the holding period of the warrants exercised therefore.
It is also possible that a cashless exercise of a warrant could be treated in part as a taxable exchange in which gain or loss would be recognized in the manner set forth above under “—Sale, Exchange or Other Disposition of Ordinary Shares and Warrants.” In such event, a U.S. Holder could be deemed to have surrendered the number of warrants equal to the number of ordinary shares having an
aggregate fair market value equal to the exercise price for the total number of warrants to be exercised. Under that treatment, subject to the discussion under “--Passive Foreign Investment Company Considerations”
below, the U.S. Holder would recognize capital gain or loss in an amount generally equal to the difference between (i) the fair market value of the warrants deemed surrendered and (ii) the U.S. Holder’s tax basis in such warrants deemed
surrendered. In this case, a U.S. Holder’s tax basis in the ordinary shares received would equal the sum of (i) U.S. Holder’s tax basis in the warrants deemed exercised and (ii) the exercise price of such warrants. A U.S. Holder’s holding period
for the ordinary shares received in such case generally would commence on the date following the date of exercise (or possibly on the date of exercise) of the warrants.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise of warrants, there can be no assurance which, if any, of the alternative tax consequences and
holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of a cashless exercise of warrants.
Possible Constructive Distributions
The terms of each warrant provide for an adjustment to the number of ordinary shares for which the warrant may be exercised or to the exercise price of the warrant in certain events. An adjustment
which has the effect of preventing dilution generally is not taxable. A U.S. Holder of a warrant would, however, generally be treated as receiving a constructive distribution from us if the adjustment increases such holder’s proportionate interest
in our assets or earnings and profits (for instance, through an increase in the number of ordinary shares that would be obtained upon exercise of such warrant). Such constructive distribution would be subject to tax as described under that section
in the same manner as if the U.S. Holder of such warrant received a cash distribution from us equal to the fair market value of such increased interest in our assets or earnings and profits.
Passive Foreign Investment Company Considerations
In general, a non‑U.S. corporation will be classified as a “passive foreign investment company” or “PFIC” for any taxable year if at least (i) 75% of its gross income is classified as “passive
income” or (ii) 50% of its gross assets (generally determined on the basis of a quarterly average) produce or are held for the production of passive income. Passive income for this purpose generally includes dividends, interest, royalties, rents,
gains from commodities and securities transactions and the excess of gains over losses from the disposition of assets which produce passive income. For these purposes, cash and other assets readily convertible into cash are considered passive
assets, and goodwill and other unbooked intangibles are generally taken into account. In making this determination, the non‑U.S. corporation is treated as earning its proportionate share of any income and owning its proportionate share of any
assets of any corporation in which it directly or indirectly holds 25% or more (by value) of the stock.
Whether we were a PFIC for any given taxable year is based on a complex and factual determination and there is no assurance that the IRS will agree with our determination. Based on the current and
anticipated composition of our income, assets and operations, and those of our subsidiaries, we believe we were a were a PFIC for U.S. federal income tax purposes for our taxable year ending December 31, 2023. However, although there is a
significant risk, we have not yet finally determined whether we were a PFIC for U.S. federal income tax purposes for our taxable year ending December 31, 2024 and cannot be sure as to whether we will be a PFIC for U.S. federal income tax purposes
for the current taxable year or in future taxable years. This is an annual factual determination that depends on, among other things, the composition of our income (including the relative size of our gross operating loss and our passive income) and
assets, and the market value of our shares and assets (including unbooked goodwill),including the composition of income and assets of our subsidiaries, from time to time, and thus a determination can only be made annually after the close of each
taxable year. Moreover, the value of our assets (including unbooked goodwill) for purposes of the PFIC determination may be determined by reference to the trading value of our ordinary shares, which could fluctuate significantly.
If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our ordinary shares or warrants, and, in the case of our
ordinary shares, the U.S. Holder did not make either a timely qualified electing fund (“QEF”) election or a mark‑to‑market election for our first taxable year as a PFIC in which the U.S. Holder held ordinary shares, as described below, such holder
generally will be subject to special rules with respect to:
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any gain recognized by the U.S. Holder on the sale or other disposition of its ordinary shares and warrants (or shares of any of our subsidiaries that are Lower-Tier PFICs, as defined and discussed below); and
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any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in
respect of the ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the ordinary shares and certain distributions received on shares of any of our subsidiaries
that are Lower-Tier PFICs, as defined and discussed below).
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Under these rules,
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the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the ordinary shares and warrants;
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the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of our first taxable year
in which we are a PFIC, will be taxed as ordinary income;
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the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and
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the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable year of the U.S. Holder.
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In general, if we are determined to be a PFIC, a U.S. Holder may avoid the PFIC tax consequences described above with respect to our ordinary shares (but not our warrants) by making a timely QEF
election to include in income its pro rata share of our net capital gains (as long‑term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S.
Holder in which or with which our taxable year ends. A U.S. Holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an
interest charge.
A U.S. Holder may not make a QEF election with respect to its warrants. As a result, if a U.S. Holder sells or otherwise disposes of such warrants (other than upon exercise of such warrants), under
currently proposed Treasury regulations, any gain recognized generally may be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above, if we were a PFIC at any time during the period the
U.S. Holder held the warrants. If a U.S. Holder that exercises such warrants properly makes a QEF election with respect to the newly acquired ordinary shares (or has previously made a QEF election with respect to our ordinary shares), the QEF
election will apply to the newly acquired ordinary shares, but the adverse tax consequences relating to PFIC shares, adjusted to take into account the current income inclusions resulting from the QEF election, will continue to apply with respect to
such newly acquired ordinary shares (which generally will be deemed to have a holding period for purposes of the PFIC rules that includes the period the U.S. Holder held the warrants), unless the U.S. Holder makes a purging election. One type of
purging election creates a deemed sale of such shares at their fair market value. Any gain recognized in this deemed sale will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above.
As a result of this election, the U.S. Holder will have additional tax basis and, solely for purposes of the PFIC rules, a new holding period in the ordinary shares acquired upon the exercise of the warrants. U.S. Holders are urged to consult their
tax advisors as to the application of the rules governing purging elections to their particular circumstances (including a potential separate “deemed dividend” purging election that may be available if we are a “controlled foreign corporation” for
U.S. federal income tax purposes).
The QEF election is made on a shareholder‑by‑shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes a QEF election by attaching a completed
IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information provided in a PFIC Annual Information Statement, to a timely filed U.S. federal income tax return for
the tax year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective statement with such return and if certain other conditions are met or with the consent of the IRS. U.S. Holders should consult
their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.
In order to comply with the requirements of a QEF election, a U.S. Holder must receive a PFIC Annual Information Statement from us. There can be no assurance, however, that we will timely provide
such information for the current taxable year or subsequent taxable years. The failure to provide such information on an annual basis could prevent a U.S. Holder from making a QEF election or result in the invalidation or termination of a U.S.
Holder’s prior QEF election.
If we are determined to be a PFIC and a U.S. Holder does not make a QEF election with respect to our ordinary shares as described above, we would continue to be treated as a PFIC with respect to such
U.S. Holder unless (i) we cease to be a PFIC and (ii) the U.S. Holder made a purging election under the PFIC rules. One type of purging election creates a deemed sale of such shares at their fair market value. Any gain recognized in this deemed
sale will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of this election, the U.S. Holder will have additional tax basis and, for purposes of the PFIC rules, a
new holding period in the ordinary shares. U.S. Holders are urged to consult their tax advisors as to the application of the rules governing purging elections to their particular circumstances (including a potential separate “deemed dividend”
purging election that may be available if we are a “controlled foreign corporation” for U.S. federal income tax purposes).
If a U.S. Holder has made a QEF election with respect to our ordinary shares, and the special tax and interest charge rules do not apply to such shares (because of a timely QEF election for our first
taxable year as a PFIC in which the U.S. Holder holds such shares or a purge of the PFIC taint pursuant to a purging election), any gain recognized on the sale of our ordinary shares generally will be taxable as capital gain and no interest charge
will be imposed under the PFIC rules. As discussed above, U.S. Holders of a QEF are currently taxed on their pro rata shares of our earnings and profits, whether or not distributed. In such case, a subsequent distribution of such earnings and
profits that were previously included in income generally should not be taxable as a dividend to such U.S. Holders. The tax basis of a U.S. Holder’s shares in a QEF will be increased by amounts that are included in income, and decreased by amounts
distributed but not taxed as dividends, under the above rules.
Although a determination as to our PFIC status will be made annually, an initial determination that our company is a PFIC will generally apply for subsequent years to a U.S. Holder with respect to
ordinary shares or warrants held while we were a PFIC, whether or not we meet the test for PFIC status in those subsequent years. A U.S. Holder who makes the QEF election discussed above for our first taxable year as a PFIC in which the U.S. Holder
holds (or is deemed to hold) ordinary shares, however, will not be subject to the PFIC tax and interest charge rules discussed above in respect to such shares. In addition, such U.S. Holder will not be subject to the QEF inclusion regime with
respect to such ordinary shares for any taxable year of us that ends within or with a taxable year of the U.S. Holder and in which we are not a PFIC. On the other hand, if the QEF election is not effective for each of our taxable years in which we
are a PFIC and the U.S. Holder holds ordinary shares, the PFIC rules discussed above will continue to apply to such ordinary shares unless the U.S. Holder makes a purging election, as described above, and pays the tax and interest charge with
respect to the gain inherent in such shares attributable to the pre‑QEF election period.
Alternatively, if a U.S. Holder, at the close of its taxable year, owns shares in a PFIC that are treated as marketable stock, the U.S. Holder may make a mark‑to‑market election with respect to such
shares for such taxable year. If the U.S. Holder makes a valid mark‑to‑market election for the first taxable year of the U.S. Holder in which the U.S. Holder holds (or is deemed to hold) ordinary shares and for which we are determined to be a PFIC,
such U.S. Holder generally will not be subject to the PFIC rules described above in respect to its ordinary shares. Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of its
ordinary shares at the end of its taxable year over the adjusted basis in its ordinary shares. Such a U.S. Holder also will be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its ordinary shares over the
fair market value of its ordinary shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark‑to‑market election). Such U.S. Holder’s basis in its ordinary shares will be
adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of the ordinary shares will be treated as ordinary income.
The mark‑to‑market election is available only for stock that is regularly traded on a national securities exchange that is registered with the SEC, including Nasdaq, or on a foreign exchange or
market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. Currently, a mark-to-market election may not be made with respect to our warrants. U.S. Holders should consult
their tax advisors regarding the availability and tax consequences of a mark‑to‑market election in respect to our ordinary shares under their particular circumstances.
Certain of the PFIC rules may impact U.S. Holders with respect to equity interests in subsidiaries and other entities which we may hold, directly or indirectly, that are PFICs (collectively,
“Lower‑Tier PFICs”). There can be no assurance, however, that we do not own, or will not in the future own or acquire, an interest in a subsidiary or other entity that is or would be treated as a Lower‑Tier PFIC. If we are a PFIC and own any
interests in a Lower‑Tier PFIC, a U.S. Holder generally must make a separate QEF election for each Lower‑Tier PFIC, subject to our providing the relevant tax information for each Lower‑Tier PFIC on an annual basis. Because a mark-to-market election
cannot be made for any Lower-Tier PFICs that we may own, you will generally continue to be subject to the adverse U.S. federal income tax consequences discussed above with respect to your indirect interest in any such Lower-Tier PFIC even if you
make a mark-to-market election with respect to our ordinary shares. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to any of our subsidiaries.
A U.S. Holder of a PFIC may be required to file an IRS Form 8621 on an annual basis in certain circumstances which include, but are not limited to, if a U.S. Holder recognizes gain on a disposition
of such ordinary shares or receives distributions with respect to such ordinary shares. U.S. Holders should consult their tax advisors regarding any reporting requirements that may apply to them if we are a PFIC.
The rules dealing with PFICs and with the QEF and mark‑to‑market elections are complex, are unclear in certain respects, and are affected by various factors in addition to those described above.
Accordingly, U.S. Holders of ordinary shares and warrants should consult their tax advisors concerning the application of the PFIC rules to our ordinary shares and warrants under their particular circumstances.
Backup Withholding Tax and Certain Information Reporting Requirements
Distributions on, and proceeds paid from the sale or other taxable disposition of, the ordinary shares or warrants may be subject to information reporting to the IRS. In addition, a U.S. Holder may
be subject to backup withholding on payments received in connection with distributions and proceeds from the sale or other taxable disposition of ordinary shares or warrants made within the United States or through certain U.S. related financial
intermediaries.
Backup withholding will not apply, however, to a U.S. Holder that furnishes a correct taxpayer identification number, provides other required certification and otherwise complies with the applicable
requirements of the backup withholding rules or that is otherwise exempt from backup withholding (and, when required, demonstrates such exemption). Backup withholding is not an additional tax. Rather, any amount withheld under the backup
withholding rules will be creditable or refundable against the U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
Foreign Asset Reporting
Certain U.S. Holders are required to report their holdings of certain foreign financial assets, including equity of foreign entities, if the aggregate value of all of these assets exceeds certain
threshold amounts, by filing IRS Form 8938 with their federal income tax return. Our ordinary shares and warrants are expected to constitute foreign financial assets subject to these requirements unless the ordinary shares or warrants, as
applicable, are held in an account at certain financial institutions. U.S. Holders are urged to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition of our ordinary
shares or warrants and the significant penalties for non‑compliance.
The above description is not intended to constitute a complete analysis of all U.S. federal income tax consequences relating to acquisition, ownership and disposition of our securities. You should
consult your tax advisor concerning the tax consequences to you in your particular situation.
WestPark has agreed to act as placement agent in connection with the offering described in this prospectus supplement subject to the terms and conditions of an engagement letter, dated January 29,
2025, between us and the placement agent (which we refer to as the “Engagement Letter”). The placement agent is not purchasing or selling any of the units offered pursuant to this prospectus supplement or the accompanying prospectus, nor is it
required to arrange the purchase or sale of any specific number or dollar amount of units, but has agreed to use reasonable efforts to arrange for the sale of all of the units offered pursuant to this prospectus supplement.
The offering price of the ordinary shares and warrants offered by this prospectus supplement and the accompanying base prospectus has been determined based upon arm’s-length negotiations between the
purchasers and us.
We have entered into a securities purchase agreement directly with the institutional investors in this offering. A form of the securities purchase agreement will be included as an exhibit to our
Report on Form 6-K to be filed with the SEC in connection with this offering. The securities purchase agreement provides such investors with certain representations, warranties and covenants, including indemnifications, from us. Our obligation to
issue and sell the securities to the investors who are party to the securities purchase agreement is subject to the closing conditions set forth in the securities purchase agreement, including the absence of any material adverse change in our
business and the receipt of certain opinions, letters and certificates from us or our counsel, which may be waived by the respective parties. All of the securities will be sold at the offering price specified in this prospectus supplement and, we
expect, at a single closing.
Delivery of the securities offered hereby is expected to take place on or about February 11, 2025, subject to satisfaction of certain closing conditions.
We have agreed to pay the placement agent (i) a cash fee equal to 5.25% of the aggregate gross proceeds of this offering, (ii) up to $6,000 for background checks, (iii) up to $125,000 for fees and
expenses of legal counsel, and (iv) up to $20,000 for the clearing expenses of the placement agent in connection with this offering.
We estimate the total expenses that will be payable by us in connection with the offering described in this prospectus supplement and the accompanying prospectus, will be approximately $2.7 million,
which includes our legal and accounting and printing costs (including the fees and expenses we agreed to pay to the paying agent as described in the previous paragraph).
We have agreed to indemnify the placement agent and specified other persons against liabilities relating to or arising out of the agent’s services under the Engagement Letter, to the fullest extent
lawful, and contribute to payments that the placement agent may be required to make in respect of such liabilities.
The placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit realized on the resale of
securities sold by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. As an underwriter, a placement agent would be required to comply with the requirements of the Securities Act and
the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of securities by the placement agent acting as principal. Under these rules
and regulations, the placement agent:
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May not engage in any stabilization activity in connection with our securities; and
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May not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.
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Investors will also be informed of the date and manner in which they must transmit the purchase price for their units purchased. Our obligation to issue and sell ordinary shares and warrants to the
investors is subject to the conditions set forth in the securities purchase agreement, which may be waived by us at our discretion. An investor’s obligation to purchase units is subject to the conditions set forth in the securities purchase
agreement, which may also be waived. There is no requirement that any minimum number or dollar amount of units be sold in this offering, and there can be no assurance that we will sell all or any of the units being offered.
Under the terms of the securities purchase agreement, from the date of such agreement until 90 days after the closing of this offering, neither we nor any subsidiary shall (i) issue, enter into any
agreement to issue or announce the issuance or proposed issuance of any ordinary shares or ordinary share equivalents, or (ii) file any registration statement or prospectus, or any amendment or supplement thereto, subject to certain exceptions.
We have also agreed under the terms of the securities purchase agreement, until one year after the closing of this offering, not to issue or sell, or enter into any agreement to issue or sell,any
debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional ordinary shares either (A) at a conversion price, exercise price or exchange rate or other price that is based upon,
and/or varies with, the trading prices of or quotations for the ordinary shares at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some
future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to our business or the market for our ordinary shares provided that, after 180 days after
the closing of this offering, we may enter into, or issue ordinary shares in an equity line of credit or an “at-the-market offering.”
This is a brief summary of the material provisions of the Engagement Letter and the Securities Purchase Agreement that we entered into and does not purport to be a complete statement of the terms and
conditions of such agreement.
Other Relationships
The placement agent and its affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory,
investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non‑financial activities and services. The placement agent and certain of its affiliates may in the future provide, a
variety of these services to the issuer and to persons and entities with relationships with the issuer, for which they received or will receive customary fees and expenses. However, except as disclosed in this prospectus supplement, we have no
present arrangements with WestPark for any further services.
In the ordinary course of their various business activities, the placement agent and its affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and
actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or
relate to assets, securities and/or instruments of the issuer (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the issuer. The placement agent and its affiliates may also
communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they
should acquire, long and/or short positions in such assets, securities and instruments.
Trading Market
Our ordinary shares are listed on Nasdaq under the symbol “INVZ”.
The validity of the ordinary shares offered hereby and certain other matters of Israeli law will be passed upon for us by Naschitz, Brandes, Amir & Co., Advocates. The validity of the warrants
and certain matters of U.S. federal law will be passed upon for us by Latham & Watkins LLP. Ellenoff Grossman & Schole LLP is acting as counsel to the placement agent in connection with this offering.
The consolidated financial statements as of December 31, 2023 and for the year ended December 31, 2023 incorporated in this prospectus supplement by reference to the Annual Report on Form 20-F for
the year ended December 31, 2023 have been so incorporated in reliance on the report of Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited, an independent registered public accounting firm, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements of Innoviz Technologies Ltd. as of December 31, 2022, and for each of the years in the two-year period ended December 31, 2022 appearing in Innoviz Technologies
Ltd.’s Annual Report (Form 20‑F) for the year ended December 31, 2023 have been audited by Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, independent registered public accounting firm, as set forth in their report thereon,
included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
ENFORCEABILITY OF CIVIL LIABILITIES
Service of process upon us and upon our directors and officers and the Israeli experts named in this prospectus supplement, most of whom reside outside the United States, may be difficult to obtain
within the United States. Furthermore, because substantially all of our assets and substantially all of our directors and officers are located outside the United States, any judgment obtained in the United States against us or any of our directors
and officers may not be collectible within the United States.
We have been informed by our legal counsel in Israel, Naschitz, Brandes, Amir & Co., Advocates, that it may be difficult to assert U.S. securities laws 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 because 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, which can be a time‑consuming and costly process. Matters of
procedure will also be governed by Israeli law.
We have irrevocably appointed Cogency Global Inc. as our agent to receive service of process in any action against us in any U.S. federal or state court arising out of this offering or any purchase
or sale of securities in connection with this offering. Subject to specified time limitations and legal procedures, Israeli courts may enforce a U.S. judgment in a civil matter which is non‑appealable, including a judgment based upon the civil
liability provisions of the Securities Act or the Exchange Act and including a monetary or compensatory judgment in a non‑civil matter, provided that, among other things:
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the judgment was rendered by a court of competent jurisdiction, according to the laws of the state in which the judgment is given;
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the judgment is enforceable according to the laws of Israel and according to the law of the foreign state in which the relief was granted; and
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the judgment is not contrary to public policy of Israel.
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Even if such conditions are met, an Israeli court may not declare a foreign civil judgment enforceable if:
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the prevailing law of the foreign state in which the judgment is rendered does not allow for the enforcement of judgments of Israeli courts (subject to exceptional cases);
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the defendant did not have a reasonable opportunity to be heard and to present his or her evidence, in the opinion of the Israeli court;
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the enforcement of the civil liabilities set forth in the judgment is likely to impair the security or sovereignty of Israel;
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the judgment was obtained by fraud;
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the judgment was rendered by a court not competent to render it according to the rules of private international law prevailing in Israel;
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the judgment conflicts with any other valid judgment in the same matter between the same parties; or
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an action between the same parties in the same matter was pending in any Israeli court or tribunal at the time at which the lawsuit was instituted in the foreign court.
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If a foreign judgment is enforced by an Israeli court, it generally will be payable in Israeli currency, which can then be converted into non‑Israeli currency and transferred out of Israel. The usual
practice in an action before an Israeli court to recover an amount in a non‑Israeli currency is for the Israeli court to issue a judgment for the equivalent amount in Israeli currency at the rate of exchange in force on the date of the judgment,
but the judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment of an Israeli court stated in Israeli currency ordinarily will be linked to the Israeli consumer price index plus interest at the annual
statutory rate set by Israeli regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement (including exhibits to the registration statement) on Form F‑3 under the Securities Act. This prospectus supplement and the accompanying prospectus
do not contain all of the information set forth in the registration statement. For further information, we refer you to the registration statement and the exhibits and schedules filed as part of the registration statement.
Statements made in this prospectus supplement concerning the contents of any contract, agreement or other document are not complete descriptions of all terms of these documents. If a document has
been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed for a complete description of its terms. Each statement in this prospectus supplement relating to a document filed as an exhibit is
qualified in all respects by the filed exhibit. You should read this prospectus supplement and the documents that we have filed as exhibits to the registration statement completely.
We are subject to the informational requirements of the Exchange Act. Accordingly, we are required to file reports and other information with the SEC, including annual reports on Form 20‑F and
reports on Form 6‑K. The SEC maintains an internet website that contains reports and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.
As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our officers, directors and
principal shareholders are exempt from the reporting and short‑swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements
with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
INCORPORATION BY REFERENCE
The SEC’s rules allow us to “incorporate by reference” information into this prospectus supplement, which means that we can disclose important information to you by referring you to another document
filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus supplement, and subsequent information that we file with the SEC will automatically update and supersede that information. Any
statement contained in this prospectus supplement or a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that a statement contained in this
prospectus supplement or a subsequently filed document incorporated by reference modifies or replaces that statement.
We incorporate by reference into this prospectus supplement the documents listed below and any future filings made by us with the SEC under Section 13(a), 13(c) 15(d) of the Exchange Act including
(i) any future annual reports on Form 20‑F and (ii) any future reports on Form 6‑K that are identified in such reports as being incorporated by reference in this prospectus supplement (but only to the extent identified in such report), except for
information “furnished” to the SEC which is not deemed filed and not incorporated in this prospectus supplement, until the termination of the offering of securities described in this prospectus supplement. This prospectus supplement incorporates by
reference the documents set forth below that have previously been filed with the SEC:
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the Company’s Annual Report on Form 20‑F for the fiscal year ended December 31, 2023 filed with the SEC on March 12, 2024.
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the Company’s Reports on Form 6‑K furnished to the SEC on August 8, 2024 (with respect to (a) the financial information included in
the consolidated statements of operations, consolidated balance sheets and consolidated statements of cash flows contained in Exhibit
99.1 and (b) Exhibit 99.2 to the Report on Form 6‑K), October 31, 2024, November 7, 2024, November 13, 2024 (with respect to the financial information included in the consolidated statements of operations, consolidated balance sheets
and consolidated statements of cash flows contained in Exhibit 99.1 to the Report on Form 6‑K), December 17, 2024 and January 3, 2025; and
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the description of the Company’s ordinary shares contained in the Company’s registration statement on Form 8‑A (File No. 001‑40310), filed
with the SEC on April 5, 2021, including any amendments or reports filed for the purpose of updating such description.
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We undertake to provide without charge to each person (including any beneficial owner) who receives a copy of this prospectus supplement and the accompanying prospectus, upon written or oral request,
a copy of all of the preceding documents that are incorporated by reference (other than exhibits, unless the exhibits are specifically incorporated by reference into these documents). You may request a copy of these filings, at no cost, by writing
to us at: c/o Innoviz Technologies Ltd., Innoviz Technologies Campus, 5 Uri Ariav St., Bldg. C, Nitzba 300 Rosh HaAin, Israel 4809202 or by telephone to: +972‑74‑700‑3692.
Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus supplement or the accompanying prospectus.