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Item 1A. Risk Factors

2024-11-12 compared with 2024-05-09 · 39 added, 83 removed, 1 unchanged (99% of the section changed)

Risk Factors.

In addition to the other information set forth in this report, you

should carefully consider the factors discussed below and in Part I, “Item 1A.

Risk Factors” in our 2023 Annual Report, which

could materially affect our business, financial condition or future results.

Failure to meet Nasdaq’s

continued listing requirements could result in the delisting of our common shares, negatively impact the price of our common shares and

negatively impact our ability to raise additional capital.

As of March 31, 2024, our shareholders’ deficit totaled $356.

The minimum shareholders’ equity requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(1)

requires listed companies to maintain shareholders’ equity of at least $2.5 million.

As a result, we do not believe we are in compliance

with the shareholders’ equity standard and anticipate receiving a deficiency letter from Nasdaq.

Upon receipt of such deficiency

letter, we will have a period of time to resolve such deficiency and, if necessary, will have the opportunity to present a plan to regain

There can be no assurance

that Nasdaq will accept our plan to regain compliance or that we will meet the minimum shareholders’ equity requirement during

any compliance period, if one is provided to us.

If our common shares are de-listed from Nasdaq, it will have material negative impact

on the actual and potential liquidity of our securities, as well as material negative impact on our ability to raise future capital.

If, for any reason, Nasdaq

should delist our common shares from trading on its exchange and we are unable to obtain listing on another national securities exchange

or take action to restore our compliance with the Nasdaq continued listing requirements, a reduction in some or all of the following

may occur, each of which could have a material adverse effect on our shareholders:

liquidity of our common shares;

market price of our common shares;

ability to obtain financing for the continuation of our operations;

number of institutional and general investors that will consider investing in our common shares;

number of investors in general that will consider investing in our common shares;

number of market makers in our Common Shares;

availability of information concerning the trading prices and volume of our common shares;

number of broker-dealers willing to execute trades in shares of our common shares.

We conduct our operations

Conditions in Israel, including the armed conflict between Israel and Hamas, Hezbollah and other terrorist organizations

from the Gaza Strip and Lebanon.

Our offices are located in

Haifa, Israel, thus, political, economic, and military conditions in Israel may directly affect our business.

On October 7, 2023, Hamas terrorists

infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets.

launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip

and in other areas within the State of Israel.

Following the attack, Israel’s security cabinet declared war against Hamas and

the Israeli military began to call-up reservists for active duty.

At the same time, and because of the war declaration against Hamas,

the clash between Israel and Hezbollah in Lebanon has escalated to an armed conflict and there is a possibility that it will turn into

a greater regional conflict in the future.

As of today, there is no material

impact on the Company’s operations.

According to the recent guidelines of the Israeli government, the Company’s offices are

open and functioning as usual.

However, if the war will escalate and expand further to the Northern border with Lebanon, and the Israeli

government will impose additional restrictions on movement and travel, our management and employees’ ability to effectively perform

their daily tasks might be temporarily disrupted, which may result in delays in some of our projects.

The Company currently has

the supply of raw materials needed for its regular operations.

While there may be some possible delays in supply, those are currently

not anticipated to be material to the Company’s operations.

However, if the war continues for a significant amount of time, this

situation may change.

Any hostilities involving

Israel, terrorist activities, political instability or violence in the region, or the interruption or curtailment of trade or transport

between Israel and its trading partners could make it more difficult for us to raise capital, if needed in the future, and adversely affect

our operations and results of operations and the market price of our common shares.

In addition, to the extent the IIA no longer makes

grants similar to those we have received in the past, it could adversely affect our financial results.

Our insurance does not cover

damage or losses that may occur as a result of the current war by Israel against Hamas.

Although the Israeli government is currently committed

to covering the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this

government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for damages incurred.

Any losses or

damages incurred by us could have a material adverse effect on our business, financial condition, and results of operations.

Further, many Israeli citizens

are obligated to perform several days, and in some cases, more, of annual military reserve duty each year until they reach the age of

40 (or older for certain reservists) and, in the event of an escalated military conflict, may be called to active duty.

In response to

the series of attacks on civilian and military targets in October 2023, there have been significant call-ups of military reservists.

the third quarter of fiscal year 2024, three of our employees in military service have been called up.

However, if there will be call-ups

for reservists in our Company, our operations could be disrupted by such call-ups.

It is currently not possible

to predict the duration or severity of the ongoing conflict or its effects on our business, operations and financial condition.

conflict is rapidly evolving and developing, and could disrupt our business and operations, and adversely affect our ability to raise

additional funds or sell our securities, among other impacts.

addition to the other information set forth in this report, you should carefully consider the factors discussed below and in Part I,

Risk Factors” of our 2024 Annual Report, which could materially affect our business, financial condition or future

principal research, development and manufacturing facilities are located in Haifa, Israel and the escalated military conditions of Israel

may cause interruption or suspension of our business operations without warning.

principal R&D and manufacturing facilities are located in Haifa, Israel.

Due to the ongoing armed conflict between Israel and Hamas,

Hezbollah in Lebanon, Iran and other Arab terrorists’ groups, there is a high possibility risk that it will turn into a greater

regional conflict in the near future.

recently, the war has escalated and expanded further from the Northern border of Israel with Lebanon.

Consequently, there has been a

major increase in the amount and frequency of the attacks on Israel, and on Haifa in particular.

to the recent guidelines of the Israeli government, the Company’s offices in Haifa are open and functioning, however, if the war

will escalate and expand even further, the Israeli government may impose additional restrictions on movement and travel, which will affect

our management and employees’ ability to effectively perform their daily tasks, and may result in disruptions and delays in some

of our projects.

hostilities involving Israel, terrorist activities, political instability or violence in the region, or the interruption or curtailment

of trade or transport between Israel and its trading partners could make it more difficult for us to raise capital, if needed in the

future, and adversely affect our operations and results of operations and the market price of our common shares.

In addition, to the

extent the IIA no longer makes grants similar to those we have received in the past, it could adversely affect our financial results.

certain of our employees may be obligated to perform annual reserve duty in the Israel Defense Forces and are subject to being called

up for active military duty at any time.

Many Israeli citizens who have served in the army are required to perform reserve duty until

they reach the age of 40 or older, depending upon the nature of their military service.

Currently, three of our employees have been called

up for active military duty.

intensity and duration of Israel’s current war is difficult to predict, as are such war’s economic implications on the Company’s

business and operations and on Israel’s economy in general.

These events may be intertwined with wider macroeconomic indications

of a deterioration of Israel’s economic standing, for instance, a downgrade in Israel’s credit rating by rating agencies,

which may have a material adverse effect on the Company and its ability to effectively conduct its operations.

addition, Israeli-based companies and companies doing business with Israel, have been the subject of an economic boycott by members of

the Arab League and certain other predominantly Muslim countries since Israel’s establishment.

Although Israel has entered into

various agreements with certain Arab countries and the Palestinian Authority, and various declarations have been signed in connection

with efforts to resolve some of the economic and political problems in the Middle East, we cannot predict whether or in what manner these

problems will be resolved.

Wars and acts of terrorism have resulted in significant damage to the Israeli economy, including reducing

the level of foreign and local investment.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors