UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OrOR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20202022

OrOR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OrOR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File No. 333-206723

P.V. NANO CELL LTD.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of the Registrant’s name into English)

State of Israel

(Jurisdiction of incorporation or organization)

8 Hamasger Street, Migdal Ha’Emek, Israel 2310102

(Address of principal executive offices)

Ran EisenbergAvi Magid

Chief Executive Officer

8 Hamasger Street

Migdal Ha’Emek, Israel 2310102

Tel: 972.4.654.6881

Fax: 972.4.654.6880

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act: None.

Securities registered or to be registered pursuant to Section 12(g) of the Act: None.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

Ordinary Shares, nominal value NIS 0.01 per share

Indicate the number of outstanding ordinary shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 26,986,203147,134,792 ordinary shares, nominal value NIS 0.01 per share, as of December 31, 2020.2022.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐  No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐  No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such a shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐☒  No ☒☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “large accelerated filer,”�� “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange AcAct.t. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow: Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

TABLE OF CONTENTS

ABOUT THIS ANNUAL REPORT

All references to “we”, “us”, “our”, “the Company”, “PV Nano”, “our company” and “our Company”, in this Annual Report on Form 20-F, or our annual report, are to P.V. Nano Cell Ltd., unless the context otherwise requires. All references to “Group” in this annual report on Form 20-F, are to the Company and its direct and indirect subsidiaries, unless the context otherwise requires. All references to “shares”, “ordinary shares” or “our ordinary shares” are to our ordinary shares, NIS 0.01 (approximately $0.003) nominal value per share. All references to “Israel” are to the State of Israel. “U.S. GAAP” means the generally accepted accounting principles in the United States. Unless otherwise stated, all of our financial information presented in this annual report has been prepared in accordance with U.S. GAAP. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding. Unless otherwise indicated, or the context otherwise requires, references in this annual report to financial and operational data for a particular year refer to the fiscal year of our company ended December 31 of that year.

Our reporting currency and financial currency is the U.S. dollar. In this annual report on Form 20-F, “NIS” means New Israeli Shekel, and “$,” “US$” and “U.S. dollars” mean United States dollars. Unless stated otherwise, the conversion rate between US$ toU.S. dollar translation of NIS usedamounts presented in this annual report on Form 20-F is 3.215,are translated using the conversion rate of $1.00 =NIS 3.519, the exchange rate published by the Bank of Israel as ofon December 31, 2020.2022.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 20-F contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve risks and uncertainties. All statements other than statements of historical facts contained in this annual report on Form 20-F are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

Any forward-looking statements in this annual report on Form 20-F reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Item 3 D. — Risk Factors” and elsewhere in this annual report on Form 20-F. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This annual report on Form 20-F also contains estimates, projections, and other information concerning our industry, our business, and the markets for our products, including data regarding the estimated size of those markets. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry and general publications, government data and similar sources.

PART I

ITEM 1. Identity of Directors, Senior Management and Advisers.

Not applicable.

ITEM 2. Offer Statistics and Expected Timetable.

Not applicable.

ITEM 3. Key Information.

A. [Reserved].

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Our business faces significant risks. You should carefully consider all of the information set forth in this annual report and in our other filings with the United States Securities and Exchange Commission (the “SEC”), including the following risk factors which we face and which are faced by our industry. Our business, financial condition and results of operations could be materially and adversely affected by any of these risks. In that event, the trading price of our ordinary shares would likely decline and you might lose all or part of your investment. This report also contains forward-looking statements that involve risks and uncertainties. Our results could materially differ from those anticipated in these forward-looking statements, as a result of certain important factors including the risks described below and elsewhere in this report and our other SEC filings. See “Special“Cautionary Note Regarding Forward-Looking Statements” on page ii.

Risk Factors Summary

Risks Related to Our Financial Position and Capital Requirements

Risks Related to Our Business

Risks Related to Our Intellectual Property

Risks Related to Our Operations in Israel

Risks Related to Our Ordinary Shares

Risks Related to Our Financial Position and Capital Requirements

We have a relatively limited operating history on which to assess our business, have incurred significant losses since our inception, and anticipate that we will continue to incur significant losses for the foreseeable future.

We have a limited operating history. We have incurred net losses since our inception in 2009, including a net loss of approximately $12.5$4.5 million for the year ended on December 31, 20202022 and an accumulated deficit of approximately $33.6$40.6 million as of December 31, 2020.2022. We are in default in repayment of our convertible notes which as of December 31, 2022 aggregated to approximately $1.5 million (including principal and interest). To date, we have financed our operations primarily through the issuance of equity instruments and convertible notes as well as through government grants. The amount of our future net losses will depend, in part, on the rate of our future expenditures and our ability to generate significant revenues via commercialization of our products or technologies. We do not know whether or when we will become profitable. Even if we do achieve profitability, we may not be able to sustain or increase profitability on an ongoing basis. Our inability to achieve and then maintain profitability would negatively affect our business, financial condition, results of operations and cash flows.

Our history of net losses has raised substantial doubt regarding our ability to continue as a going concern. If we do not continue as a going concern, investors could lose their entire investment.

We generated relatively limited revenues, which are not presently sufficient to sustain our operations. Our total revenues generated from sales were $761,319, $478,520$603,359, $568,704 and $460,739$761,319 for the years ended December 31, 2020, 2019,2022, 2021, and 2018,2020, respectively. We have incurred net losses since our inception in 2009, including a net loss of approximately $12.5$4.5 million for the year ended December 31, 2020.2022. In addition, we are in default in repayment of our convertible notes which as of December 31, 2022 aggregated to approximately $1.5 million (including principal and interest). As of December 31, 2020,2022, and as of the date of the filing of this annual report on Form 20-F, we had limited cash resources.

Our history of net losses has raised substantial doubt about our ability to continue as a going concern, and as a result, our independent registered public accounting firm included an explanatory paragraph in its report on our consolidated financial statements as of and for the year ended December 31, 20202022 with respect to this uncertainty. We believe that we will need to raise significant additional funds before we have significant cash flow from operations. Accordingly, our ability to continue as a going concern will require us to seek alternative financing to fund our operations. The substantial doubt about our ability to continue as a going concern could materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise. Future reports on our consolidated financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern.

We will need significant additional capital on an immediate basis, which we may be unable to obtain.

As of December 31, 2020,2022, we had cash reservesbalance of $31,327.$362,609. We are in default in repayment of our convertible notes which as of December 31, 2022 aggregated to approximately $1.5 million (including principal and interest). As of the date of this annual report, we had sufficient cash to fund operations as presently maintained through August 2022.June 2023. We will need to raise additional capital to continue our operations beyond such period. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are commercially acceptable to us. We may be required to pursue sources of additional capital through various means, including debt or equity financings. Future financingsfinancing through equity investments areis likely to be dilutive to existing shareholders. Furthermore, the terms of securities we may issue in future capital transactions may be more favorable for our new investors. Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and the issuancesissuance of incentive awards under equity employee incentive plans, which may have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and/or financing, including finder fees, investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition. Our ability to obtain needed financing may be impaired by such factors as the capital markets and our history of losses and capital market conditions, including inflation and rising interest rates across the global economy, which have resulted in, and may continue to result in, significant disruption of global financial markets and could impact the availability or cost of future financings. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to cease operations.

Risks Relating to COVID-19

The global COVID-19constraints may continue to negatively impact the global economy in a significant manner for a further extended period of time, and may also adversely affect our operating results in a material manner.

The coronavirus pandemic has created macro-economic uncertainty and disruption in the business and financial markets. Many countries around the world, including Israel, have been taking measures designated to limit the continued spread of the coronavirus, including closing workplaces, restricting travel, prohibiting assembling, closing international borders and quarantining populated areas. These measures have impacted, and may further impact, our workforce and operations, the operations of our customers and our partners, and those of our respective vendors and suppliers (including our subcontractors and third-party contract manufacturers). Our customers worldwide, as well as the end markets that we support have also been affected and may continue to be affected by coronavirus-related implications, and may recover at different rates. In addition, as the implementation of the above-mentioned measures extends, and as additional measures may be required in the event that the measures already taken prove to be insufficient or ineffective, we may face new and/or increasing concerns that may dramatically affect our ability to conduct our business effectively, including, but not limited to, adverse effect on employees’ health, a slowdown and stoppage of manufacturing, commerce, delivery, work, travel and other activities which are essential and critical for maintaining on-going business activities.

During 2020, due to COVID-19 constraints, we have had to adjust our working mode (mainly changing working hours and make sure the Company complies with the government guidelines which have included full and partial lockdowns). While our business grew in 2020, our growth has been limited (sales grew less than expected) due to slow down of our customers and partners, and also due to traveling constrains imposed by governments due to COVID-19. Two of our main customers have purchased inks and services from us much less than forecasted and expected. Our plans to upgrade our DemonJet printers, develop the inks and technologies to print passive components have been slowed down due to the reduction of activities of our partners in Europe and reduced available resources. We have placed one of our employees on unpaid leave and reduced the team by two team members. Furthermore, due to the influence of COVID-19 on the world economy, the price of silvers (our main raw material) have increased by almost 50% from January 2019 through December 2020. Given the continued uncertainty around the extent and timing of the future spread or mitigation of the coronavirus outbreak and around the imposition or relaxation of protective measures, we cannot reasonably estimate the impact to our future results of operations, cash flows or financial condition. The extent of the impact of COVID-19 on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected time frame, will depend on future developments, including, but not limited to, the duration and continued spread of the pandemic, its severity, the actions to contain the disease or treat its impact, further related restrictions on travel, and the duration, timing and severity of the impact on customer spending, including any recession resulting from the pandemic, all of which are uncertain and cannot be predicted. An extended period of global supply chain and economic disruption as a result of COVID-19 could have a material adverse effect on our business, results of operations, access to sources of liquidity and financial condition, though the full extent and duration is uncertain; infections may become more widespread and the limitation on our ability to work, travel and timely sell and distribute our products, as well as any closures or supply disruptions, may be extended for longer periods of time and to other locations, all of which would have a negative impact on our business, financial condition and operating results. In addition, as the scale and duration of these developments remain uncertain, they may have, or continue to have, macro and micro negative effects on the financial markets and global economy, which could result in an economic downturn that could affect demand for our products and have a material adverse effect on our operations and financial results, earnings, cash flow, financial condition and share price. These effects could be material and long-term in duration.

Since the outbreak of the coronavirus pandemic, we have been closely monitoring the developments and continually assessing the potential impact on our business. Below are some of the risks and challenges that we may face as a result of the continuation of the coronavirus pandemic for a further extended period of time:

Risks Related to Our Business

We have generated only minimal revenue from product sales and may never be profitable.

We have generated only minimal revenue in the past, primarily from limited sales of our Sicrys™ inks. The contribution of our subsidiary Digiflex Ltd. or Digiflex, to our revenues for the year ended December 31, 2020 was limited to the sale of inks foils and maintenance of the three (3) printers sold since inception.pastes. Our ability to generate revenue and achieve profitability depends on (among other things) our ability to demonstrate the technological advantage and successfully commercialize our Sicrys™ inks Digiflex printers for the conducive and printed passive components marketpastes and future products and technologies. Our ability to generate revenues will also depend on (i) our ability to modify and bring to market Digiflex printers so we will be able to serve the electronics market and to use our Sicrys™ inks; and (ii) our ability to adapt Digiflex’s inks and/or develop additional inks to allow for the printing of full printed circuit boards, embedded passive components or PCBs. There is no assurance that we will be successful in any of these endeavors.

Our ability to generate future revenue from product sales depends heavily on our success in many areas, including but not limited to:

Our failure to complete the development of our technology and introduce improved Sicrys™ ink and paste formulations, may adversely affect our ability to successfully commercialize our products and technologies.

We need to continue to invest significant financial resources in the completion of the development of our Sicrys™ inks and pastes for commercialization in the solar manufacturing market. However, research and development activities are inherently uncertain, and we could encounter difficulties in commercializing our research results. We seek to continuously improve our products and processes. While we believe that we will be able to manage these uncertainties, we may encounter unanticipated challenges and there can be no guarantee that our significant research and development expenditures will produce corresponding benefits. If we are unable to achieve the necessary technological developments, our overall growth and financial performance and our operating results could be adversely impacted.

If our conductive inks and Digiflex printerspastes fail to achieve and sustain sufficient market acceptance or if market penetration occurs more slowly than expected, our future revenues will be adversely affected.

Our success depends, among other things, on our ability to gain additional market acceptance of our Sicrys™ inks and Digiflex printerspastes as a reliable and cost-saving alternative to existing production technologies. Compared to some competing technologies, our nano-metric conductive ink technology is relatively new, and most potential customers have limited knowledge of, or experience with, our conductive inks and pastes, may have substantial investments and know-how related to their existing printing technologies, and may perceive risks relating to the reliability, quality, usefulness and profitability of adopting our conductive inks and pastes when compared to other production technologies available in the market. Our potential customers may also need to devote significant time and effort to testing and validating our technology prior to its adoption. Any failure of our technology to meet our potential customer benchmarks could result in customers choosing to retain their existing technology or to purchase technologies other than ours. If we fail to achieve market acceptance of our conductive inks and pastes or if market penetration is slower than expected, then our opportunities to grow our revenues and reach profitability will be severely limited. In addition, our success depends on our ability to implement our Complete Solution Approach or End-to-End Approach (providing customers with the whole system of printers, process and inks), and gain market acceptance of Digiflex printers. There is no assurance that we will succeed in any of the foregoing.

We believe that our future success depends on our ability to deliver products and services that meet changing technology and customer needs.

Our business may be affected by rapid technological change, changes in user and customer requirements and preferences, frequent new product and service introductions embodying new technologies and the emergence of new standards and practices, any of which could render our existing products and proprietary technology obsolete. Accordingly, our ongoing research and development programs are intended to enable us to maintain technological leadership. We believe that to remain competitive we must continually enhance and improve the functionality and features of our products, services and technologies. However, there is a risk that we may not be able to:

If we are unable to meet changing technology and customer needs, our competitive position, revenue, results of operations and financial condition could be adversely affected.

Our ink products may not be compatible with all commercially available printers and printer heads.

Printer heads generally require compatible inks. An ink may be incompatible for use with a particular printer head for a number of reasons, including, without limitations, because the chemicals used in the ink are not compatible with the materials used in the manufacture of the printer head or because the physical properties of the ink (e.g., viscosity, surface tension, etc.) are not compatible with the printer head. As a result, there can be no assurance that our inks will be compatible with additional sufficient number of printer heads, to support wide scale sales of our inks for digital inkjet printing. Although we have successfully certified our ink with several manufacturers of commercially available printers and printer heads and we are in the process of certifying our ink products with additional manufacturers, if we are unable to certify our ink products with a sufficient number of such manufacturers our ability to widely market our ink products and to gain market penetration will be impaired and we may be unable to generate additional revenues.

Given our limited resources, there is no assurance that we will be able to enter into additional contracts or comply with our existing contracts.

We have several customers which have started to purchase recurring growing amounts of inks, including Dip Tech Ltd (with which we had an exclusive agreement which was terminated by us in 2020). Two additional customers in the Automotive glass field and an additional customer in the solar cell field in final stages of qualification. There is no assurance that these customers will continue to purchase inks from us and that we will successfully enter into additional contracts. In addition, there is no assurance that we will be able to produce and supply all the ink required to satisfy all orders under our current or future supply contracts.

We currently have minimal marketing and sales capabilities. If we are unable to establish significant sales and marketing capabilities or enter into agreements with third parties to market and sell our products once development of our technology for mass production is completed, we may be unable to generate significant revenue.

We have limited experience and capabilities in selling and marketing our conductive inks and our marketing and sales efforts are currently being led primarily by our chief executive officer, chief technology officer and chief business development officer.inks. In order to successfully commercialize our Sicrys™ inks and pastes or any other products, we will need to either further develop these capabilities on our own or by collaboration with third party distributors and sales agents with established sales and marketing operations and industry experience. We have entered into distribution and sales agreements with respect to the United States, Italy and Japan. However, there can be no assurance that we will be able to enter into other agreements with such third-party distribution and sales agents agreements on terms acceptable to us, or at all, or that such distributors or sales agents will be successful in marketing our inks.inks and pastes. If we are not successful entering into such agreement our results of operation may be adversely affected.

Our ability to grow our business successfully depends, among other things, on our ability to develop and implement our production and operating infrastructure in a way that would effectively support our growth in our target markets.

We manufacture our inks and pastes at our Migdal Ha’Emek facilities. We currently have capacity to produce an estimated two (2) tonsone ton of ink and paste per year (three shifts work) and intendplan to upgrade our facilities (capital cost estimated at $500,000) to increase production capacity to 20 tons per year (estimated capital cost of at least $2.5 million), if and when demand for our inks and pastes is projected to surpass our production capabilities.capabilities and we have sufficient available capital to do so.

Our future success requires among others that we have adequate capacity in our manufacturing facilities to manufacture the quantities of products to support our current sales level and the anticipated increased levels that may result from our growth. There can be no assurance as to the timing or our ability to achieve planned, needed, or desired manufacturing capacity levels. We believe that the capacity of our current manufacturing facilities is sufficient to meet anticipated demand for our products through the end of 2022. If the demand for our conductive inks does not increase, we may have significant excess manufacturing capacity and under-absorption of our fixed costs, which could in turn adversely affect our gross margins.2023. In the event that demand for our inks and pastes outgrows our internal manufacturing capacity, we intend to engage third-party manufacturers to produce additional inks.inks and pastes. There can be no assurance that we will be able to enter into agreements with such manufacturers on terms acceptable to us, or at all, or that, once contracted, such manufacturers will perform as expected. If we are not successful entering into such agreement our results of operation may be adversely affected.

We are subject to a multitude of manufacturing risks, any of which could substantially increase our costs and limit supply of our products and technologies.

We currently only have one operating manufacturing line. The process of manufacturing our products and technologies is complex and subject to several risks and uncertainties, including but not limited to availability and prices of the raw materials (including silver in particular) necessary for production of our inks, and any major malfunctions in our manufacturing line. Any adverse developments affecting manufacturing operations for our products and technologies may result in shipment delays, inventory shortages, lot failures, withdrawals or recalls, or other interruptions in the supply of our products and technologies. We may also have to take inventory write-offs and incur other charges and expenses for products and technologies that fail to meet specifications, undertake costly remediation efforts, or seek more costly manufacturing alternatives.

We are subject to risks resulting from fluctuations in the price of silver.silver and other raw materials.

The manufacturing process for our silver-based inks and pastes utilizes a silver salt, the price of which is linked to the price of silver. The price of silver as well as the price of other raw materials used in the manufacturing process for our inks and pastes, is affected by numerous factors beyond our control, including inflation, fluctuation of the United States dollar and foreign currencies, global and regional demand, speculative activities by commodities traders and others and the political and economic conditions of major silver producing countries throughout the world and recently affected by the COVID-19 influence on the world economic environment. The volatility of mineral prices represents a substantial risk which no amount of planning or technical expertise can fully eliminate. In the event the prices of silver pricesor other raw materials used in our manufacturing process increase and remain high for prolonged periods of time, we may not be able to produce silver-based inks and pastes at a price which is cost effective for manufacturers of printed electronics.and competitive price. Furthermore, if the price of silver decreases substantially and remains low for prolonged periods of time, the value proposition that we believe is offered by our copper-based nano-metric ink and paste may be substantially decreased, since a low price of the silver used in their manufacturing processes reduces the incentive for manufacturers of electronic devices to replace silver with another metal, such as copper. Any of the foregoing would have a material adverse effect on our business, financial condition, results of operations, and cash flows.

We are subject to risks resulting from fluctuations in the price of some raw materials.

The manufacturing process for our silver-based inks utilizes a range of raw materials, the prices of which are affected by numerous factors beyond our control, including inflation, fluctuation of the United States dollar and foreign currencies, global and regional demand, and recently affected by the COVID-19 influence on the world economic environment. In the event raw materials prices increase and remain high for prolonged periods of time, we may not be able to produce silver-based inks at a price which is cost effective for manufacturers of printed electronics.

Our business involves the use of hazardous materials, and we must comply with environmental, health and safety laws and regulations, which can be expensive and restrict how we do business, and if we fail to comply with such laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

Our business involves the blending, controlled storage, use and disposal of hazardous materials. We and our suppliers are subject to federal, state, localnumerous environmental, health and foreignsafety laws, regulations and regulationspermitting requirements, currently mainly in Israel, including those governing the use,emission and discharge of hazardous materials into ground, air or water; the manufacture, storage, use, management, handling and disposal of these hazardous materials.waste; the registration of chemicals and in the future also import and export of chemicals; the clean-up of contaminated sites; and the health and safety of our employees. We expect to be subject to similar regulations in any other jurisdictions in which we may establish manufacturing operations in the future. Although we believe the safety procedures we utilized for handling and disposing of these materials comply with the standards prescribed by these laws and regulations, we cannot eliminate the risk of accidental contamination or injury from these materials. Some of these laws and regulations require us to obtain licenses or permits to conduct our operations. Environmental laws and regulations are complex, change frequently and have tended to become more stringent over time. If we violate or fail to comply with these laws, regulations, licenses or permits, we could be fined or otherwise sanctioned by regulators. We cannot predict the impact on our business of new or amended laws or regulations or any changes in the way existing and future laws and regulations are interpreted or enforced, nor can we ensure we will be able to obtain or maintain any required licenses or permits. In the event of an accident, local state, federal or foreign authorities may curtail the use of these materials and interrupt our business operations. If we are subject to any liability as a result of activities involving hazardous materials, our business and financial condition may be adversely affected and our reputation may be harmed.

We face competition in the markets in which we operate and the possibility that our competitors may develop products that are similar to, more advanced than, or more effective than ours, which may adversely affect our financial condition and our ability to successfully commercialize our products and technologies.

We are currently aware of various existing products in the market and in development that may compete with our products and technologies, directly and indirectly. To our knowledge, other companies are currently developing and selling silver-based inkjet inks and pastes for printed electronics or PE,(“PE”), digital electronic inkjet printing applications. To our knowledge and feedbacks received from customers most of these products in the market are not suitable and compatible for mass production applications as our inks. There can be no assurance that this knowledge is complete and/or if complete that it will continue to be like this in the future.

We are aware of several companies seeking to develop copper-based inks and pastes for printing, however, to our knowledge, none of our competitors has copper-based low viscosity inks in mass production and at a commercially viable price and quantity to be used in digital printing, and some are using copper oxide as a precursor in their inks instead of copper. Copper precursors are less effective for thick patterns and high throughput. To our knowledge, we are the only company offering as much as a 50% copper inkjet low viscosity ink, althoughink; however, we arehave not yet in mass production. As, to our knowledge, no one has proven our strategyability to be effective, there is no assurance that we will be successful andmass produce the utilization of 50% copper inkjet ink may not prevail.product.

Many of our competitors have substantially greater financial, technical, and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations. Mergers and acquisitions in the conductive ink industry may result in even more resources being concentrated in our competitors. As a result, these companies may be more effective in selling and marketing their products. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in this industry. Our competitors may succeed in developing, acquiring, or licensing on an exclusive basis, products that are more effective or less costly than our current or future products or technologies, or achieve earlier patent protection, product commercialization, and market penetration than we do. Additionally, technologies developed by our competitors may render our potential products and technologies uneconomical or obsolete, and we may not be successful in marketing our products and technologies against competitors.

We may not be successful in our efforts to identify, license, or discover additional products and technologies.

Although we intend to focus a substantial amount of our research and development efforts on the continued development and commercialization of our existing products and technologies, the success of our business also depends upon our ability to identify, license, or discover additional products and technologies. Given our limited resources it would be difficult to license or otherwise begin development of additional products. Our research programs or licensing efforts may fail to yield additional products and technologies for development for a number of reasons, including but not limited to the following:

If any of these events occurs, we may be forced to abandon our development efforts for a program or programs, or we may not be able to identify, license, or discover additional products and technologies, which would have a material adverse effect on our business. Research programs to identify new products and technologies require substantial technical, financial, and human resources. We may focus our efforts and resources on potential programs or products and technologies that ultimately prove to be unsuccessful.

International expansion of our business exposes us to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of Israel.

Our headquarters are located in Israel and we have an active subsidiary in the United States.Israel. Nevertheless, our business strategy incorporates potentially significant international expansion. Doing business internationally involves a number of risks, including but not limited to:

Any of these factors could significantly harm our future international expansion and operations and, consequently, our results of operations.

The health effects of nanotechnology are unknown.

There is no scientific agreement on the health effects of nanomaterials, but some scientists believe that, in some cases, nanomaterials may be hazardous to an individual’s health or the environment. The science of nanotechnology is based on arranging atoms in such a way as to modify or build materials. Depending on the nanomaterials used, the resulting material may not be found in nature; therefore, the effects are unknown. Our technologies are based on nanometals that are, at most times, dispersed in a liquid minimizing the exposures risks. Moreover, once the metal particles have been printed and sintered they are no longer nanometals, therefore lowering exposure risks. Although, we take appropriate precautions for employees working with our materials and believe that any health risks related to the nanometals used in potential products can be minimized, we cannot assure that such precautions will be effective. Future research in the field of nanomaterials, in general, on health and environmental issues may have an adverse effect on products using our technology.

Public perceptions of ethical and social issues may discourage the use of nanotechnology.

Nanotechnology has received both positive and negative publicity and is the subject of public discussion and debate. Governments and regulatory bodies may, for social or health purposes, prohibit or regulate the use of nanotechnology. This may restrict our ability to license our technology, or the ability of our future licensees (if any) to sell products.

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

We are highly dependent on Dr. Fernando de la Vega, our co-founder and current chief technology officer (formerly chief executive officer),key management personnel, and the loss of histheir services without proper replacements would adversely impact the achievement of our objectives. Under the terms of his services agreement with us, Dr. de la Vega may cease providing services to us at any time by providing three (3) months’ prior written notice. Recruiting and retaining another chief technology officeradditional key personnel and other qualified employees, consultants, and advisors for our business, including scientific and technical personnel, will also be critical to our success. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous high-tech companies for individuals with similar skill sets. The inability to recruit and retain qualified personnel, or the loss of the services of Dr. de la Vegaour key management personnel without proper replacement, may impede the progress of our research, development, and commercialization objectives.

We may not be successful in our efforts to identify, license, or discover additional products and technologies.

Although we intend to focus a substantial amount of our research and development efforts on the continued development and commercialization of our existing products and technologies, the success of our business also depends upon our ability to identify, license, or discover additional products and technologies. Given our limited resources it would be difficult to license or otherwise begin development of additional products. Our research programs or licensing efforts may fail to yield additional products and technologies for development for a number of reasons, including but not limited to the following:

If any of these events occurs, we may be forced to abandon our development efforts for a program or programs, or we may not be able to identify, license, or discover additional products and technologies, which would have a material adverse effect on our business. Research programs to identify new products and technologies require substantial technical, financial, and human resources. We may focus our efforts and resources on potential programs or products and technologies that ultimately prove to be unsuccessful.

Environmental, social and corporate governance (“ESG”) issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.

There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, public interest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor, employee or other stakeholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmental stewardship, support for local communities, Board of Director and employee diversity, human capital management, employee health and safety practices, product quality, supply chain management, corporate governance and transparency, our reputation and employee retention may be negatively impacted, and our suppliers may be unwilling to continue to do business with us.

Investors and other stakeholders are increasingly focusing on environmental issues, including climate change, energy and water use, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment. Increased regulatory requirements may result in increased demands or requirements regarding components of our products and their environmental impact on sustainability. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.

In addition, new sustainability rules and regulations have been adopted and may continue to be introduced in various states and other jurisdictions. For example, the SEC has published proposed rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors.

If we do not adapt to or comply with new regulations, or fail to comply with environmental, healthmeet evolving investor, industry or stakeholder expectations and safety laws and regulations, we could become subject to fines or penalties or incur costs thatconcerns regarding ESG issues, investors may reconsider their capital investment in our Company, which could have a material adverse effect on the success of our business.business or financial condition.

We are subjectOur business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to numerous environmental,financial institutions and associated liquidity risk.

Our business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to be volatile, or if they deteriorate, including as a result of the impact of military conflict, such as the war between Russia and safety laws, regulationsUkraine, terrorism or other geopolitical events, our business, operating results and permitting requirements mainlyfinancial condition may be materially adversely affected. Economic weakness, inflation and increases in Israel, including those governinginterest rates, limited availability of credit, liquidity shortages and constrained capital spending have at times in the emissionpast resulted, and discharge of hazardous materials into ground, air or water; the generation, storage, use, management and disposal of hazardous waste; the registration of chemicals andmay in the future also importresult, in challenging and exportdelayed sales cycles, slower adoption of chemicals;new technologies and increased price competition, and could negatively affect our ability to forecast future periods. In addition, the clean-upmilitary conflict may affect the ability to purchase materials sourced in Russia.

In addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertainties surrounding COVID-19, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of contaminated sites;operations or cash flows.

More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bank-specific and broader financial institution liquidity risk and concerns. Although the Department of the Treasury, the Federal Reserve and the healthFDIC jointly released a statement that depositors at SVB and safetySignature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty. There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our employees. We expect to be subject to similar regulations in any other jurisdictions in which we may establish manufacturingstrategy, our financial condition, results of operations in the future. Some of these lawsor cash flows and regulationsstock price and could require us to obtain licensesalter our plans. In addition, there is a risk that one or permitsmore of our service providers, financial institutions, manufacturers, suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to conductattain our operations. Environmental lawsoperating goals on schedule and regulationson budget.

A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business, financial condition and operating results.

Public health crises such as pandemics or similar outbreaks could adversely impact our business. Beginning in 2019, a novel strain of a virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes COVID-19, spread to most countries across the world, including Israel. The COVID-19 pandemic led to the implementation of various responses, including government-imposed quarantines, travel restrictions and other public health safety measures. In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic. We experienced disruptions to our operations as a result of the COVID-19 pandemic, including disruptions to the Company’s clinical studies.  The extent to which the COVID-19 pandemic may in the future impact our operations or those of our third-party partners will depend on future developments, which are complex, change frequentlyhighly uncertain and cannot be predicted with confidence. In particular, any future spread of COVID-19 globally or the reinstatement of restrictions or other actions that may be required to contain COVID-19 or treat its impact could materially adversely impact our operations and workforce, including our research and development activities and could result in the inability of our suppliers to deliver components or raw materials on a timely basis or at all, each of which in turn could have tended to become more stringent over time. If we violate or fail to comply with these laws, regulations, licenses or permits, we could be fined or otherwise sanctioned by regulators. We cannot predict thea material adverse impact on our business, financial condition and results of new or amended laws or regulations or any changes inoperation. Further, uncertainty around the way existingCOVID-19 pandemic and future lawsrelated issues could lead to adverse effects on the economy of Israel, the United States and regulations are interpreted or enforced, nor can we ensure we will be ableother economies, which could impact our ability to obtain or maintain any required licenses or permits.raise the necessary capital needed to develop and commercialize our products.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain effective patent rights for our products and technologies or any future products and technologies, we may not be able to compete effectively in our markets.

We rely upon a combination of patents, trade secret protection, and confidentiality agreements to protect the intellectual property related to our products and technologies. Our success depends in large part on our and our licensors’ ability to obtain and maintain patent and other intellectual property protection in the United States and in other countries with respect to our proprietary technology and products.

We have sought to protect our proprietary position by filing patent applications in the United States and in other countries, as well as related to our novel technologies and products that are important to our business. The silver ink-relatedink and dispersions-related patent applications based on PCT/US2011/063459, have been granted in several countries, including China, Russia, Japan, India, Israel, Korea, Brazil, France, Germany, the United States, China, Japan, Europe, Israel, India, Korea, BrazilKingdom, the Netherlands, the U.S. and Russiathe European Union and arewe currently have additional patent applications pending in a number of additional countries. The applications for copper ink-related patents havethe U.S. supporting our silver-based inks, dispersions and some pastes. Our patent application based on PCT/IB2015/051536, relating to copper-based inks and dispersions, has been granted in several countries, including Europe, Russia, the United States,Kingdom, Belgium, Germany, Finland, France, Ireland, the Netherlands, Israel, Brazil, India and the United States. Additionally, we have patent applications based on PCT/IB2015/051536, relating to copper-based ink, which have been submitted to national phase in South Korea, Japan and Russia and are pending in a number of countries.China. This process is expensive and time consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.

The patent position of technology companies generally is highly uncertain and involves complex legal and factual questions for which legal principles remain unsolved. The patents or patent applications that we own or in-license may fail to result in issued patents with claims that cover our products and technologies in the United States or in other foreign countries. There is no assurance that all potentially relevant prior art relating to our patents and patent applications has been found. The discovery of relevant prior art can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue, and even if such patents cover our products and technologies, third parties may challenge their validity, enforceability, or scope, which may result in such patents being narrowed, found unenforceable or invalidated. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property, provide exclusivity for our products and technologies, or prevent others from designing around our claims. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.

We, independently or together with our licensors, have filed several patent applications covering various aspects of our products and technologies. Even though some have already been granted, we cannot provide any assurances about which, if any, additional patents will issue, the breadth of any such patent or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties. Any successful opposition to these patents or any other patents owned by or licensed to us after patent issuance could deprive us of rights necessary for the successful commercialization of any products and technologies that we may develop. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product under patent protection could be reduced.

If we cannot obtain and maintain effective patent rights for our products and technologies, we may not be able to compete effectively and our business and results of operations would be harmed.

If we are unable to maintain effective proprietary rights for our products and technologies or any future products and technologies, we may not be able to compete effectively in our markets.

In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary knowhow that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product candidate discovery and development processes that involve proprietary knowhow, information or technology that is not covered by patents. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors, and contractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors.

Although we expect all of our employees and consultants to assign their inventions to us, and all of our employees, consultants, advisors, and any third parties who have access to our proprietary knowhow, information, or technology to enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed or that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Misappropriation or unauthorized disclosure of our trade secrets could impair our competitive position and may have a material adverse effect on our business. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret.

Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.

There have been many lawsuits and other proceedings involving patent and other intellectual property rights in the high-technology industries, including patent infringement lawsuits, interferences, oppositions, and reexamination proceedings before the USPTO and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing products and technologies. As the conductive ink and paste industry expands and more patents are issued, the risk increases that our products and technologies may be subject to claims of infringement of the patent rights of third parties. We have never conducted a freedom to operate study.

Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to materials, formulations, or methods of manufacture related to the use or manufacture of our products and technologies. Because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that our products and technologies may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of our products and technologies, the holders of any such patents may be able to block our ability to commercialize such product or technology unless we obtained a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable.

Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture, or methods of use, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product or technology unless we obtained a license or until such patent expires or is finally determined to be invalid or unenforceable. In either case, such a license may not be available on commercially reasonable terms or at all.

Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our products and technologies. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages (including treble damages and attorneys’ fees for willful infringement), pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.

We may become subject to claims of intellectual property infringement by third parties or may be required to indemnify our distributors or other third parties against such claims, which, regardless of their merit, could result in litigation, distract our management and materially adversely affect our business, results of operations or financial condition.

We have in the past and may in the future become subject to third-party claims that assert that our solutions, services and intellectual property infringe, misappropriate or otherwise violate third-party intellectual property or other proprietary rights.

Intellectual property disputes can be costly and disruptive to our business operations by diverting the attention and energies of management and key technical personnel, and by increasing our costs of doing business. Even if a claim is not directly against us, our agreements with distributors generally require us to indemnify them against losses from claims that our products infringe third-party intellectual property rights and entitle us to assume the defense of any claim as part of the indemnification undertaking. Our assumption of the defense of such a claim may result in similar costs, disruption and diversion of management attention to that of a claim that is asserted directly against us. We may not prevail in any such dispute or litigation, and an adverse decision in any legal action involving intellectual property rights could harm our intellectual property rights and the value of any related technology or limit our ability to execute our business.

Adverse outcomes in intellectual property disputes could:

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

All of our intellectual property has been developed by our employees in the course of their employment for us. Under the Israeli Patent Law, 5727-1967, or the Patent Law, inventions conceived by an employee in the course and as a result of or arising from his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent a specific agreement between the employee and employer giving the employee proprietary rights. The Patent Law also provides under Section 134 that if there is no agreement between an employer and an employee as to whether the employee is entitled to consideration for service inventions, and to what extent and under which conditions, the Israeli Compensation and Royalties Committee, or the Committee, a body constituted under the Patent Law, shall determine these issues. Section 135 of the Patent law provides criteria for assisting the Committee in making its decisions. According to case law handed down by the Committee, an employee’s right to receive consideration for service inventions is a personal right and is entirely separate from the proprietary rights in such invention. Therefore, this right must be explicitly waived by the employee. A decision handed down in May 2014 by the Committee clarifies that the right to receive consideration under Section 134 can be waived and that such waiver can be made orally, in writing or by behavior like any other contract. The Committee will examine, on a case by case basis, the general contractual framework between the parties, using interpretation rules of the general Israeli contract laws. Further, the Committee has not yet determined one specific formula for calculating this remuneration, nor the criteria or circumstances under which an employee’s waiver of his right to remuneration will be disregarded. Similarly, it remains unclear whether waivers by employees in their employment agreements of the alleged right to receive consideration for service inventions should be declared as void being a depriving provision in a standard contract. We generally enter into assignment-of-invention agreements with our employees pursuant to which such individuals assign to us all rights to any inventions created in the scope of their employment or engagement with us. Although our employees have agreed to assign to us service invention rights and have specifically waived their right to receive any special remuneration for such service inventions beyond their regular salary and benefits, we may face claims demanding remuneration in consideration for assigned inventions.

We may not be successful in obtaining or maintaining necessary rights to our products and technologies through intellectual property rights in-licenses.

We currently have rights to the intellectual property, through licenses from third parties and under patents that we own, to develop our products and technologies. Because our programs may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to in-license, or use these proprietary rights. In addition, our products and technologies may require specific formulations to work effectively and efficiently and the rights to these formulations may be held by others. We may be unable to acquire or in-license any compositions, methods of use, processes, or other third-party intellectual property rights from third parties that we identify as necessary for our products and technologies. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources, and greater development and commercialization capabilities.

In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment. If we are unable to successfully obtain rights to required third-party intellectual property rights, we may have to abandon development of that program and our business and financial condition could suffer.

We may not be able to fully enforce covenants not to compete with our key employees, and therefore we may be unable to prevent our competitors from benefiting from the expertise of such employees.

Our employment agreements with our key employees contain non-compete provisions. These provisions prohibit our key employees, if they cease working for us, from competing directly with us or working for our competitors for a limited period of time. We may be unable to enforce these provisions under applicable laws in Israel where all of our key employees reside. In Israel, the Basic Law: Freedom of Occupation, as interpreted by binding case law, may restrict our ability to enforce non-compete provisions against our employees. If we cannot enforce our non-compete provisions against our employees, we may be unable to prevent our competitors from benefiting from the expertise of such employees. Even if these provisions are enforceable, they may not adequately protect our interests. As a result, if one or more of our employees leaves our employment and subsequently becomes employed by one of our competitors, our business, results of operations and ability to capitalize on our proprietary information may be materially adversely affected.

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

Filing, prosecuting, and defending patents on products and technologies in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.

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

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

Risks Related to Our Operations in Israel

Our headquarters and other significant operations are located in Israel and, therefore, our results may be adversely affected by political, economic and military instability in Israel.

Our executive offices, application department, labs, production site and warehouse are located in Migdal Ha’Emek, Israel. In addition, all of our officers and directors are residents of Israel. Accordingly, political, economic and military conditions in Israel may directly affect our business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries and militia groups. Any hostilities involvingIn recent years, Israel orhas been engaged in sporadic armed conflicts with Hamas, an Islamist terrorist group that controls the interruption or curtailmentGaza Strip, with Hezbollah, an Islamist terrorist group that controls large portions of trade between Israelsouthern Lebanon, and its trading partners could adversely affect our operations and results of operations.with Iranian-backed military forces in Syria. Certain of these conflicts involved missile strikes against civilian targets in various parts of Israel, including the city in which our headquarters are located as well as areas in which our employees and some of our consultants are located, and negatively affected business conditions in Israel..Israel. In addition, Iran has threatened to attack Israel, may be developing nuclear weapons and has targeted cyber attacks against Israeli entities.

Popular uprisings in various countries in the Middle East and North Africa have affected the political stability of those countries. Such instability may lead to deterioration in the political and trade relationships that exist between the State of Israel and these countries. Furthermore, several countries, principally in the Middle East, still restrict doing business with Israel and Israeli companies, while some of these countries are eliminating these constrains, additional countries may impose restrictions on doing business with Israel and Israeli companies if hostilities in Israel or political instability in the region continues or increases. These restrictions may limit materially our ability to obtain raw materials from these countries or sell our products to companies or persons in these countries. Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions and could harm our results of operations and could make it more difficult for us to raise capital. Parties with whom we do business may sometimes decline to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary in order to meet our business partners face to face. In addition, the political and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements. Israel also faces threats from more distant neighbors, in particular, Iran, an ally of Hezbollah and Hamas.

Several countries, principally in the Middle East, still restrict doing business with Israel and Israeli companies, while some of these countries are eliminating these constrains, additional countries may impose restrictions on doing business with Israel and Israeli companies if hostilities in Israel or political instability in the region continues or increases. These restrictions may limit materially our ability to obtain raw materials from these countries or sell our products to companies or persons in these countries. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners, or significant downturn in the economic or financial condition of Israel, could adversely affect our operations and product development, cause our sales to decrease and, if our securities become publicly traded, adversely affect the share price of our securities.

Our commercial insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East. Although the Israeli government is currently committed to covering the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, 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. Any armed conflicts or political instability in the region would likely negatively affect business conditions generally and could harm our results of operations.

Furthermore, the Israeli government is currently pursuing extensive changes to Israel’s judicial system. In response to the foregoing developments, individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that the proposed changes may negatively impact the business environment in Israel including due to reluctance of foreign investors to invest or conduct business in Israel, as well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in securities markets, and other changes in macroeconomic conditions. Such proposed changes may also adversely affect the labor market in Israel or lead to political instability or civil unrest. To the extent that any of these negative developments do occur, they may have an adverse effect on our business, our results of operations and our ability to raise additional funds.

In addition, our operations could also be disrupted by the obligations of personnel to perform military service. As of December 31, 2022, we had 11 employees and independent contractors, all of whom were based in Israel. Some of these Israeli employees and independent contractors may be called upon to perform up to 54 days in each three year period (and in the case of military officers, up to 84 days in each three year period) of military reserve duty until they reach the age of 40 (and in some cases, depending on their specific military profession up to 45 or even 49 years of age) and, in certain emergency circumstances, may be called to immediate and unlimited active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists and it is possible that there will be similar large-scale military reserve duty call-ups in the future. Our operations could be disrupted by the absence of a significant number of employees related to military service, which could materially adversely affect our business and results of operations.

The Israeli government grants we have received for research and development expenditures restrict our ability to manufacture products and transfer technologies outside of Israel and require us to satisfy specified conditions. If we fail to satisfy these conditions, we may be required to refund grants previously received together with interest and penalties.

We have received grants from the Israel NationalInnovation Authority for Technology and Innovation (“NATI”(the “IIA”), for research and development programs and intend tomay apply for further grants in the future. In order to maintain our eligibility for these grants, we must comply with the requirements of the Encouragement of Research, Development and Technological Innovation in the Industry Law 5744-1984 (formerly known as the Law for the Encouragement of Research and Development in Industry 5744-1984), and the regulations and guidelines promulgated thereunder or the Innovation Law.(the “Innovation Law”). Under the terms of the grants under the Innovation Law, alsoin exchange for the research and development grants we received, we are required to pay the IIA royalties at the rate of 3% from our revenues up to an aggregate of 100% (which may be increased under certain circumstances, as described below) of the U.S. dollar-linked value of the grant, plus interest at the rate of 12-month LIBOR. As of December 31, 2022, we and our wholly-owned subsidiaries had received funding from the IIA in the aggregate amount of approximately $3.7 million. As of December 31, 2022, we and our wholly-owned subsidiaries had paid royalties to the IIA in the aggregate amount of approximately $1.1 million and had an obligation to the IIA with respect to such funding (including interest) in the amount of approximately $3.2 million (approximately $2.0 million out of such amount are contingent liabilities and therefore, not recorded in our liabilities).

The Innovation Law generally requires that the products developed as part of the programs under which the grants were given be manufactured in Israel and that the know-how developed thereunder may not be transferred outside of Israel, unless a prior written approval is received from NATIIIA (such approval is not required for the transfer of a portion of the manufacturing capacity which does not exceed, in the aggregate, 10% of the portion declared to be manufactured outside of Israel in the applications for funding, in which case only notification is required) and additional payments are required to be made to NATI. It should be noted, that this does not restrict theIIA. The export of products that incorporate the funded know-how.know-how is not restricted. As of the date of this annual report on Form 20-F, we have not sought to obtain such approvals, as we do not have immediate plans to manufacture outside of Israel. We may not receive the required approvals for any transfer of manufacturing activities, if such transfer will be contemplated in the future. Even if we do receive approval to manufacture products developed with governmentIIA grants outside of Israel, the royalty rate may be increased and we may be required to pay up to 300% of some or all of the grant amounts requiring repayment plus interest, depending on the manufacturing volume that is performed outside of Israel. This restriction may impair our ability to outsource manufacturing or engage in our own manufacturing operations for those products or technologies.

Additionally, under the Innovation Law, we are prohibited from transferring, including by way of license, the Authority-financedIIA-financed technologies and related intellectual property rights and knowhow outside of the State of Israel, except under limited circumstances and only with the prior approval of the Authority’s Research Committee.IIA. As of the date of this annual report on Form 20-F, we have not sought to obtain such approvals, as we do not have immediate plans to transfer the Authority-financedIIA-funded technologies and related intellectual property rights and knowhow outside of Israel. We may not receive the required approvals for any proposed transfer, if any, and even if received, we may be required to pay the AuthorityIIA a portion of the consideration that we receive upon any sale of such technology to a non-Israeli entity up to 600% of the grant amounts plus interest. The scope of the support received, the royalties that we have already paid to the Authority,IIA, the amount of time that has elapsed between the date on which the knowhow or the related intellectual property rights were transferred and the date on which the AuthorityIIA grants were received and the sale price and the form of transaction will be taken into account in order to calculate the amount of the payment to the Authority.IIA. Approval of the transfer of technology to residents of the State of Israel is required, and may be granted in specific circumstances only if the recipient abides by the provisions of applicable laws, including the restrictions on the transfer of knowhow and the obligation to pay royalties. No assurance can be made that approval to any such transfer, if requested, will be granted.

These restrictions may impair our ability to sell our technology assets or to perform or outsource manufacturing outside of Israel, engage in change of control transactions or otherwise transfer our knowhow outside of Israel and may require us to obtain the approval of the AuthorityIIA for certain actions and transactions and pay additional royalties and other amounts to the Authority. In addition, any change of control and any change of ownership of our ordinary shares that would make a non-Israeli citizen or resident an “interested party,” as defined in the Innovation Law, requires a written notice to the Authority, and such non-Israeli “interested party” will be required to execute an undertaking to the Authority to abide with the provisions of the Innovation Law.IIA.

These restrictions will continue to apply even after we have repaid the full amount of royalties on the grants. If we fail to satisfy the conditions of the Innovation Law, we may be required to refund certain grants previously received together with interest and penalties, and may become subject to criminal charges.

The Government of Israel has reduced the grants available under the Authority’sIIA’s program in recent years, and this program may be discontinued or curtailed in the future. If we do not receive additional grants in the future, we will be required to allocate other funds to product development at the expense of other operational costs.

We have also received a grant from the Office of the Authority of theIsraeli Ministry of National Infrastructures, Energy and Water Resources, or the Ministry of Infrastructures,(the “Ministry”) for one of our research and development programs. In order to maintain our eligibility for this grant, we must meet specified conditions, including the payment of royalties of 5% (plus interest) of any revenues generated from the intellectual property generated under the program. As of December 31, 2022, we had received funding from the Ministry in the aggregate amount of approximately NIS 585,119 ($168,574, based on the NIS/US$ exchange rate published by the Bank of Israel on December 31, 2013 of $1.00 = NIS 3.471). As of December 31, 2022, we had a contingent obligation to the Ministry with respect to such funding (including interest), following the grant received.payment of royalties up to that date, in the amount of NIS 576,773 (approximately $163,903). If we fail to comply with these conditions in the future, sanctions (such as the cancellation of the grant) might be imposed on us, and we could be required to refund any payments previously received. Even following full repayment of any Ministry of Infrastructures grants, we must nevertheless continue to comply with the requirements of our agreement with the Ministry of Infrastructures. The terms of the Ministry of Infrastructures’Ministry’s grant require us, among other things, to obtain the Ministry of Infrastructures’Ministry’s approval prior to any assignment of knowhowknow-how developed under the research and development program funded with its grant and we must continue to comply with the grant requirements of our agreement with the Ministry regarding intellectual property even following full repayment of any Ministry grant. The Ministry of Infrastructures also has a right to receive a nonexclusive royalty free license to the know howknow-how developed under any such program to the extent necessary for national needs (as determined by the Minister of Science and Technology, the Minister of Treasury and the Minister of Justice).needs. Pursuant to the terms of the grant, until the later of (i) full repayment of our contingent liability to the Ministry, or (ii) finalization of the research and development program, we will beare required to notify the Ministry of Infrastructures of any new investment we receive, and any new investor will be requiredfunding offered to undertake in writing tous, including by the MinistryState of Infrastructures to make reasonable efforts to ensure that the Company shall observe the terms of the research and development agreement with the Ministry of InfrastructuresIsrael, and the law governing the grant program of the Ministry of Infrastructures. In addition, in any case where one or more new investors makes an investment with the Company, the Ministry of Infrastructures has a right to negotiate with such investor(s) for the repayment by us of the grant provided to us by the Ministry of Infrastructures. At our request, the Ministry of Infrastructures confirmed our interpretation that the registration of the securities herein will not be deemed as a new investment.Ministry.

Exchange rate fluctuations, primarily between the U.S. dollar and the NIS currencies, and inflation may negatively affect our earnings.results of operations.

We incur expenses both in U.S. dollars and NIS, but our consolidated financial statements are denominated in U.S. dollars. As a result, we are exposed to the risks that the New Israeli ShekelNIS may appreciate relative to the U.S. dollar, or, if the New Israeli ShekelNIS instead devaluesdepreciates relative to the U.S. dollar, that the inflation rate in Israel may exceed such rate of devaluationdepreciation of the New Israeli Shekel,NIS, or that the timing of such devaluationdepreciation may lag behind inflation in Israel. In any such event, the U.S. dollar cost of our operations in Israel would increase and our U.S. dollar-denominated results of operations would be adversely affected. We cannot predict any future trends in the rate of inflation in Israel or the rate of devaluationdepreciation (if any) of the New Israeli ShekelNIS against the U.S. dollar. In addition, we may incur operating expenses denominated in Euros, and therefore, our operating results may also be subject to fluctuations due to changes in the U.S. dollar/Euro exchange rate. We cannot predict any future trends in the rate of inflation in Israel or the rate of depreciation (if any) of the NIS, the Euro and other foreign currencies against the U.S. dollar. Given our general lack of currency hedging arrangements to protect us from fluctuations in the exchange rates of the NIS and Euro and other foreign currencies in relation to the U.S. dollar (and/or from inflation of such foreign currencies), we may be exposed to adverse effects from such movements. The rate of inflation in Israel or Europe or in currency exchange rates may materially change and we might not be able to effectively mitigate these risks.

Provisions of Israeli law and our Fourth Amended and Restated Articles of Association or our (“Articles of Association,Association”), may delay, prevent or make undesirable an acquisition of all or a significant portion of our shares or assets.

Provisions of Israeli law and our Articles of Association could have the effect of delaying or preventing a change in control of our Company;company; may make it more difficult for a third-party to acquire us; may make it more difficult for our shareholders to elect different individuals to our board of directors, even if doing so would be considered to be beneficial by some of our shareholders; and may limit the price that investors may be willing to pay in the future for our ordinary shares. Among other things:

On September 24, 2015, we held a general meeting of shareholders at which our shareholders approved, among other things, an amendment to the provisions of ourOur Articles of Association applicable to the election of directors to provide for a board of directors consisting of no less than three (3) and no more than seven (7) directors, with all directors (other than the external directors, whose appointment is required under the Israeli Companies Law, 1999 (the “Companies Law”), as described below) divided into three (3) classes with staggered three-year terms with each class of directors to consist, as nearly as possible, of one-third of the total number of directors other than the external directors. This provision may make it more difficult for our shareholders to elect different individuals to our board of directors, even if doing so would be considered to be beneficial by some of our shareholders, may limit the price that investors may be willing to pay in the future for our ordinary shares, and may make it more difficult for a potential acquiror to effect a change of control of our Company or may deter potential acquirors from seeking to effect a change of control. On November 29, 2018, we held a general meeting of shareholders at which our shareholders approved, among other things, an amendment to the provisions of

In addition, under our Articles of Association, applicableas approved by our shareholders on November 29, 2018, GTRIMG Investments Ltd. (“GTRIMG”), our controlling shareholder, has the right, so long it holds at least 5% of our issued and outstanding share capital, conditioned upon a $2.0 million investment by GTRIMG following such date, to appoint a director to the election of directors to provide for GTRIMG Investments Ltd., or GTRIMG, to designate one non-voting observer to the board of directors, or the Observer. The Observer is entitled to attend and participate in all meetings of the board of directors in a non-voting, observer capacity. Subject to limitations, the Observer is entitled to receive notice of, to attend and to receive copies of any documentation distributed to the directors before, during or after, all meetings of the board of directors at the same time such notice or material is provided or delivered to members of the board of directors. In addition, in the event that and conditioned upon the conversion of the loan amount or the investment of at least US $2,000,000, GTRIMGBoard who shall be entitled to appoint one director for election to our board of directors. Such director shallalso serve as the chairman of the board of directors,Board, provided that such nominee has the required qualifications under applicable laws, including the stock exchange rules then applicableapplicable. In April 2020, following completion of GTRIMG’s $2.0 million investment, GTRIMG appointed Mr. Dov Farkash to us.serve as a member of our Board as Active Chairman.

Furthermore, under an agreement dated October 27, 2021, entered into in connection with a private placement of our securities, certain of the investors, including GTRIMG, Messrs. Leon and Lenny Recanati, Dan Vilenski and Teuza, have the right to appoint three directors to our Board. Accordingly, Mr. Ofer Greenberger and Mr. David Boas were appointed to our Board as of May 19, 2022. Mr. Boas resigned from our Board as of January 1, 2023, and was replaced by Mr. Keinan Maman, who was appointed as a director as of March 6, 2023.

Further, Israeli tax considerations may make potential transactions undesirable to us or to some of our shareholders whose country of residence does not have a tax treaty with Israel granting tax relief to such shareholders from Israeli tax. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfillment of numerousvarious conditions, including a holding period of two (2) years from the date of the transaction during which certain sales and dispositions of shares of the participating companies are restricted. Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable even if no actual disposition of the shares has occurred.

The tax benefits that are available to us as a preferred enterprise require us to continue to meet various conditions and may be terminated or reduced in the future, which could increase our costs and taxes.

We have not yet elected to be treated as a preferred enterprise for Israeli tax purposes, a designation which would allow us to receive certain tax benefits, since we are still not at a stage where we have to pay tax due to carry forward losses. Once we are liable for tax payments, we may be entitled to reduced tax rates and other tax benefits. See “Item 10 E. — Taxation — Law for the Encouragement of Capital Investments, 5719-1959”. If these tax benefits were reduced or eliminated or if we no longer comply with the various pre-conditions required, the amount of taxes that we pay would consequently be subject to corporate tax at the standard rate, which could adversely affect our results of operations.

It may be difficult to enforce a judgment of a United States court against us and our officers and directors and the Israeli experts named in this annual report on Form 20-F located in Israel or the United States, to assert United States securities laws claims in Israel or to serve process on our officers and directors and these experts.

We were incorporated in Israel. Our executive officers and all of our directors reside outside of the United States, and all of our assets and most of the assets of these persons are located outside of the United States. Therefore, a judgment obtained against us, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may not necessarily be enforced by an Israeli court. It also may be difficult for you to effect service of process on these persons in the United States or to assert U.S. securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action with respect to United States securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of United States securities laws, reasoning that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not United States law is applicable to the claim. If United States law is found to be applicable, the content of applicable United States law must be proven as a fact by expert witnesses, which can be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the matters described above. As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a United States or foreign court.

Risks Related to Our SecuritiesOrdinary Shares

Our U.S. investors may suffer adverse tax consequences if we are characterized as a passive foreign investment company.

Generally, if for any taxable year 75% or more of our gross income is passive income, or at least 50% of our assets are held for the production of, or produce, passive income, we would be characterized as a passive foreign investment company or a PFIC,(“PFIC”), for U.S. federal income tax purposes. We have not determined whether we have been a PFIC for 20202022 or any previous year, or whether we will be a PFIC in any future year. Because PFIC status is determined annually and is based on our income, assets and activities for the entire taxable year, there can be no assurance that we will not be classified as a PFIC in any year. If we were to be characterized as a PFIC for U.S. federal income tax purposes in any taxable year during which a U.S. Investor as defined in “Item 10 E. — Taxation — Certain Material U.S. Federal Income Tax Considerations”, owns ordinary shares, such U.S. Investor could face adverse U.S. federal income tax consequences, including having gains realized on the sale of our ordinary shares classified as ordinary income, rather than as capital gain, the loss of the preferential rate applicable to dividends received on our ordinary shares by individuals who are U.S. Investors, and having interest charges apply to distributions by us and the proceeds of share sales. A “qualified electing fund” election may alleviate some of the adverse consequences of PFIC status; however, we do not intend to provide the information necessary for U.S. Investors to make qualified electing fund elections if we are classified as a PFIC. See “Item 10 E. — Taxation — Certain Material U.S. Federal Income Tax Considerations.”

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

The rights and responsibilities of our shareholders are governed by Israeli law and our Articles of Association. These rights and responsibilities differ in some material respects from the rights and responsibilities of shareholders in typical U.S.-based corporations. In particular, a shareholder of an Israeli company has a duty to act in good faith and in a customary manner in exercising its rights and performing its obligations towards the company and other shareholders and to refrain from abusing its power in the company, including, among other things, in voting at general meetings of shareholders on certain matters, such as an amendment to the company’s articles of association, an increase of the company’s authorized share capital, a merger of the company and approval of related party transactions that require shareholder approval. A shareholder also has a general duty to refrain from discriminating against other shareholders. In addition, a controlling shareholder or a shareholder who knows that it possesses the power to determine the outcome of a shareholders’ vote or to appoint or prevent the appointment of an office holder in the company has a duty to act in fairness towards the company. However, Israeli law does not define the substance of this duty of fairness. There is limited case law available to assist us in understanding the nature of this duty or the implications of these provisions. These provisions may be interpreted to impose additional obligations and liabilities on our shareholders that are not typically imposed on shareholders of U.S. corporations.

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

We have never declared or paid cash dividends on our share capital, nor do we anticipate paying any cash dividends on our share capital in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. As a result, capital appreciation, if any, of our ordinary shares will be investors’ sole source of gain for the foreseeable future. In addition, Israeli law limits our ability to declare and pay dividends, and may subject our dividends to Israeli withholding taxes. Furthermore, our payment of dividends (out of tax-exempt income) may retroactively subject us to certain Israeli corporate income taxes, to which we would not otherwise be subject.

Our major shareholders, directors executiveand officers and controlling persons as a group have significant voting power and may take actions that may not be in the best interest of shareholders.

Our major shareholders, GTRIMG, Messrs. Leon and Lenny Recanati or companies under their control and Teuza – A Fairchild Technology Venture Ltd. (“Teuza”), and our directors (including shareholders’ they represent, as applicable), executiveand officers certain controlling persons, as a group beneficially owned approximately 49.6%81.05% of our outstanding ordinary shares as of May 16, 2022.15, 2023. As a result, they will have the ability to exert substantial influence over all matters requiring approval by our shareholders, including the election and removal of directors and any proposed merger, consolidation or sale of all or substantially all of our assets. Their interests may not be consistent with those of our other shareholders. In addition, due to their share ownership, our major shareholders, the directors appointed by them, our other directors and executive officers and controlling persons could dictate the management of our business and affairs. Following conversionAs of its CLAs and the most recent investment,May 15, 2023, GTRIMG holdsbeneficially owned in the aggregate approximately 38.8%40.23% of our outstanding common stocks. .ordinary shares. This concentration of ownership may discourage third parties from seeking to acquire control of us and could have the effect of delaying, deferring or preventing a change in control, or impeding a merger or consolidation, takeover or other business combination that could be favorable to you. This significant concentration of share ownership may also adversely affect the trading price for our ordinary shares, if a public market further develops for such securities, because investors may perceive disadvantages in owning stock in a company with controlling affiliated shareholders.

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

We are subject to the requirements to file periodic and annual reports under Section 15(d) of the Exchange Act, and are otherwise subject to laws applicable to public reporting companies in the United States. As a public reporting company, we incur significant legal, accounting, and other expenses. In addition, the Sarbanes-Oxley Act, as amended, and the rules and regulations of the SEC thereunder, have imposed various requirements on public companies. Shareholder activism, the current political environment, and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate. Our management and other personnel need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations increase our legal and financial compliance costs and will make some activities more time consuming and costly.

Due to lack of available resources, we have not been able to comply with our SEC periodic filing obligations for the years ended December 31, 2020 and 2021. This report and consolidated financial statements contained herein is part of our efforts to regain compliance under SEC reporting regulations.

We are a “foreign private issuer” and have disclosure obligations that are different from those of U.S. domestic reporting companies.

We are a foreign private issuer and are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we are subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. For example, we are not required to issue quarterly reports and proxy statements that comply with the requirements applicable to U.S. domestic reporting companies. Furthermore, although under a recent amendment to the regulations promulgated under the Companies Law, as an Israeli public company listed overseasoutside of Israel we are required to disclose the compensation of our five (5) most highly compensated officers on an individual basis, (rather than on an aggregate basis, as was previously permitted for Israeli public companies listed overseas prior to such amendment), this disclosure is not as extensive as that required of U.S. domestic reporting companies. We also have four (4) months and an automatic extension of 15 days after the end of each fiscal year to file our annual reports with the SEC and are not required to file current reports as frequently or promptly as U.S. domestic reporting companies. Furthermore, our officers, directors and principal shareholders are exempt from the requirements to report short-swing profit recovery contained in Section 16 of the Exchange Act. Also, as a “foreign private issuer,” we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. These exemptions and leniencies will reduce the frequency and scope of information and protections available to you in comparison to those applicable to a U.S. domestic reporting companies.

Offers or availability for sale of a substantial number of our ordinary shares may cause the price of our ordinary shares to decline.

If our major shareholders sell substantial amounts of our ordinary shares in the public market (if one develops) or if there is a perception in the market that substantial sales may occur in the future upon the expiration of any statutory holding period, under Rule 144, or upon the exercise of outstanding options held by our director and officers or Warrants,warrants held by investors, the market price of our ordinary shares could fall. The occurrence of such substantial sales or the perception that substantial sales of common stockour ordinary shares may occur in the future could alsoput downward pressure on the market price of our ordinary shares and may make it more difficult for us to raise additional financing through the sale of equity or equity related securities in the future at a time and price that we deem reasonable or appropriate.

Furthermore, we issued a significant number of warrants to an investor,certain investors, which, if exercised, willmay have a material dilutive effect on our share capital. For more information see “Item 7 A. Major Shareholders and Related Party Transactions — Major Shareholders”.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting and concluded that our internal control over financial reporting was not effective as of December 31, 2022. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures are designed to prevent fraud. Our management is required to assess the effectiveness of our internal controls and procedures and disclose changes in these controls on an annual basis. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us of our internal controls and procedures may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting and concluded that our internal control over financial reporting was not effective as of December 31, 2022, and also concluded that our disclosure controls and procedures were not effective as of December 31, 2022, due to material weaknesses in our internal control over financial reporting, all as described in Item 15, “Controls and Procedures” of this annual report. As defined in Regulation 12b-2 under the Exchange Act, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual financial statements will not be prevented or detected on a timely basis.

The material weaknesses in internal control over financial reporting that were identified (among other things) were: (i) significant parts of entity level controls are missing, (ii) lack of segregation of duties, (iii) controls’ effectiveness testing was predominantly not performed, among other things due to nonperformance of controls or absence of evidence for controls’ performance, and (iv) non-remediation of material weaknesses identified in prior years. Based on such assessment, management has concluded that, as of December 31, 2022, our internal control over financial reporting is ineffective based on those criteria.

We have made, and will continue to make, changes in these and other areas. In any event, the process of determining whether our existing internal controls are compliant with applicable requirements and sufficiently effective will require the investment of substantial time and resources, including by our chief financial officer and other members of our senior management. As a result, this process may divert internal resources and take a significant amount of time and effort to complete. In addition, we cannot predict the outcome of this process and whether we will need to implement remedial actions in order to implement effective controls over financial reporting. The determination of whether or not our internal controls are sufficient and any remedial actions required could result in us incurring additional costs that we did not anticipate. We may also fail to complete our evaluation, testing and any required remediation needed to comply with applicable requirements in a timely fashion. Irrespective of compliance with applicable requirements, any additional failure of our internal controls could have a material adverse effect on our stated results of operations and harm our reputation. As a result, we may experience higher than anticipated operating expenses, as well as higher independent auditor fees during and after the implementation of these changes. If we are unable to implement any of the required changes to our internal control over financial reporting effectively or efficiently or are required to do so earlier than anticipated, it could adversely affect our operations, financial reporting or results of operations.

Furthermore, if we are unable to certify that our internal control over financial reporting is effective and in compliance with applicable requirements, we may be subject to sanctions or investigations by regulatory authorities, such as the SEC, and we could lose investor confidence in the accuracy and completeness of our financial reports, which could hurt our business and our ability to access the capital markets.

The market price of our ordinary shares may fluctuate significantly.

If a public trading market further develops for our ordinary shares, the market price of the ordinary shares may fluctuate significantly in response to numerous factors, some of which are beyond our control, such as:

Further, in recent years, the stock market has experienced extreme price and volume fluctuations. Continued or renewed market fluctuations could result in extreme volatility in the price of our ordinary shares, which could cause a decline in the value of the ordinary shares. Price volatility of our ordinary shares might be significant if the trading volume of the ordinary shares is low, which often occurs with respect to securities quoted on the OTCQB or the OTC Pink.

Because our ordinary shares are traded as a “penny stock,” it may be more difficult for investors to sell our ordinary shares, and the market price of our ordinary shares may be adversely affected.

Our ordinary shares are deemed a “penny stock” since, among other things, the stock price is currently trading below $5.00$5.0 per share. Broker-dealers who sell penny stocks must provide purchasers of these stocks with a standardized risk-disclosure document prepared by the SEC. This document provides information about penny stocks and the nature and level of risks involved in investing in the penny-stock market. A broker must also give a purchaser, orally or in writing, bid and offer quotations and information regarding broker and salesperson compensation, make a written determination that the penny stock is a suitable investment for the purchaser and obtain the purchaser’s written agreement to the purchase. Broker-dealers must also provide customers that hold penny stock in their accounts with such broker-dealer a monthly statement containing price and market information relating to the penny stock. If a penny stock is sold to an investor in violation of the penny stock rules, the investor may be able to cancel its purchase and get its money back.

The penny stock rules may make it difficult for investors to sell their ordinary shares. Because of the rules and restrictions applicable to a penny stock, there is less trading in penny stocks and the market price of the ordinary shares may be adversely affected. Also, many brokers choose not to participate in penny stock transactions. Accordingly, investors may not always be able to resell their ordinary shares publicly at times and prices that they feel are appropriate.

Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.

There have been changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act, new regulations promulgated by the SEC and rules promulgated by the national securities exchanges. These new or changed laws, regulations and standards are subject to varying interpretations in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. As a result, our efforts to comply with evolving laws, regulations and standards are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Our directors and executive officers could face an increased risk of personal liability in connection with the performance of their duties. As a result, we may have difficulty attracting and retaining qualified directors and executive officers, which could harm our business. If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies, we could be subject to liability under applicable laws or our reputation may be harmed.

ITEM 4. Information on the Company

A. History and development of the company

P.V. Nano Cell Ltd. was incorporated in Israel on June 24, 2009 as a private limited liability company, organized under the laws of State of Israel. In September 2015, we successfully filed our Registration Statement on Form F-1 in the United States. We have three (3) wholly ownedwholly-owned subsidiaries, Nano Size Ltd., or Nano Size, aall of which are private companycompanies organized under the laws of the stateState of IsraelIsrael: (i) Nano Size Ltd. (“Nano Size”), which we acquired on December 31, 2009,2009; (ii) Digiflex Ltd. (“Digiflex”), which we acquired on December 3, 20172017; and (iii) Jet CU commencingP.C.B. Ltd. (“Jet CU”), which we acquired on July 26, 2020. Additionally, Digiflex wholly-owns one subsidiary based in the US: Digiflex Inc., incorporated under the laws of the State of Delaware.

Our Registration Statement on Form F-1 was declared effective by the SEC on September 30, 2015, and a FINRA-registered market maker subsequently filed an application on Form 211 with FINRA to quote the ordinary shares on the OTCQB. On March 31, 2016, the application on Form 211 with FINRA to make a market in our ordinary shares was approved by FINRA, and on December 15, 2016, quotation of our ordinary shares began on the OTCQB under the ticker symbol “PVNNF”. SinceOn December 18, 2019, our ordinary shares arebegan to be quoted on the OTC Pink. However, due to lack of available resources, we have not been able to comply in a timely manner with our SEC periodic filing obligations for the years ended December 31, 2020 and 2021. Accordingly, as of September 29, 2021, the public quote for our stock has beenwas removed formfrom the OTC PinkPink. Depending on market and trading in our stock has been restricted. Once we file our annual report on Form 20-F forother conditions and the years ended December 31, 2020 and 2021, the public reportingcontinued development of our trading prices is expectedproducts, we will consider applying to resume. Thereafter, a new Form 211 will need to be filed with FINRA and following approval thereof by FINRA, unrestricted trading inhave our stockordinary shares quoted on the OTC Markets is expected to resume.Pink.

Our principal offices are located at 8 Hamasger Street, Migdal Ha’Emek, Israel 2310102. Our telephone number is (972) 4-654-6881. Our website address is www.pvnanocell.com. This website address is included in this annual report on Form 20-F as an inactive textual reference only. The information and other content appearing on our website are not part of this annual report on Form 20-F. The Company does not have a registered agent in the United States.

B. Business Overview

We are a conductive ink and pastes manufacturing company focused on developing, manufacturing, marketing and commercializing conductive inks and pastes for digital conductive printing applications (mainly inkjet and aerosol printing technologies). We have developed the Sicrys™ family of single crystal nano-metric conductive inks and pastes, which we believe enables ais significantly less costly and less wastefulmore effective alternative to other current printing processes, such as screen printing photolithography and in some cases, photolithography etching processes, for photovoltaic (PV)heterojunction technology (PV-HJT) and digital printed electronics (PE) applications. Our main strategy includes providing a “Complete Solution” or “End-to-End Solution” approach to our costumer, meaning we provide the printing equipment, process and inks as a package. In some cases, we will subsidize the printer, thus implementing a razor razor-blade model. We also adapt our basic inks and pastes to specific customer requirements. We began low volume sales ofcurrently sell our Sicrys™ silver-based inks and pastes for PV and PE applications in 2010low volumes and are in the process of seeking to expand our sales efforts to include sales of Sicrys™ inks and pastes for a wider range of digital PE applications, including for the printing of windshields insuch as solar, automotive applications, photovoltaic devices, printed passive components, circuit boards, mobile phone antennas, 3D printed electronic devices, radio-frequency identification chips, sensors and touchscreens, among other digitally printed electronics. We have also developed what we believe is the first available commercially viable copper-based nano-metric low viscosity stable ink for mass-production of printed electronics. We believe that copper inks and pastes represent a significant improvement over silver-based inks and pastes given copper’s significantly lower cost and nearly identical electrical and conductive properties. We began low volume sales of our copper-based ink for printed electronics applications in the second half of 2014.

During 2020, we increased the sale of our Sicrys™ inks, During 2021 we have continued to expand our potential customer base, proceeding with qualification processes (which are quite long). COVID-19 related constrains in Israel and worldwide have slowed these processes. In this period, we have also continued to expand our ink portfolio adding additional silver, copper, gold, resistor and dielectric inks.

Background

Printed Electronics

Digital printed electronics is a set of methodologies by which electrical devices are digitally printed onto various substrates (i.e., base material) by depositing electrically functional inks (and possibly other additional functional inks such as insulating materials) on the substrate, creating active or passive devices, such as conductors, capacitors or resistors. The use of digital printed electronics presents an opportunity to facilitate widespread, production of new electronics, more efficient electronics, new electronic designs and customized and personalized electronics while keeping production costs low.

According to our internal estimates based on various market studies and publications which are expecting substantial market growths in all the relevant fields for PVN products and technologies (due to the constant growth of demand of electronics, autonomous cars and renewable energy), we expect that the total addressable worldwide market for the sale of inks which the Company is aiming to penetrate will be in excess of $40 billion by 2027 (assuming the metallization is around 10% of the market). The total addressable market could be increased by an increase in the need and future capability to print embedded passive components economically and if we are able to address additional available market segments.

The total addressable worldwide market is more specifically projected as set forth below (partial relevant market sectors):

We believe that the current analog printing and etching methods have inherent limitations when implemented in flexible electronics, 3D (three dimensional) electronics and in customized and small-scale printing. Furthermore, these processes currently utilize expensive materials and produce toxic by products which must be disposed of, which increases overall production costs. We believe that a significant market opportunity exists for inks, such as ours, that enable digital inkjet conductive printing, enabling printing on flexible substrates, three-dimensional printing and customized and small-scale printing at a lower price.

Photovoltaic Cell Metallization

PV cells (commonly known as solar cells) are the building blocks of solar module arrays that convert energy from sunlight into electricity. Multiple PV cells in an integrated group, all oriented in one plane, constitute a solar photovoltaic panel or module, and a group of connected modules make up an array. An array of PV cells is capable of converting solar energy into a usable amount of direct current electricity.

Most modern solar cells are made from either crystalline silicon or thin-film semiconductor material. Crystalline silicon cells are more efficient at converting sunlight to electricity, but generally have higher manufacturing costs. Thin-film materials are typically less efficient at converting sunlight into electricity, but can be cheaper to manufacture.

A key part of the PV crystalline silicon cell manufacturing process is the metallization of the cell – i.e., laying down metal electrodes to collect the electricity generated by the cell when exposed to sunlight. Typically, the metallization process is completed by the application of a silver paste to the front side and aluminum-silver pastes on the rear side of the cell using a screen-printing process. This process is one of the main bottlenecks to reducing the costs of the cells and the cost of electricity produced by the cells due to: high usage of metal (expensive silver), loss of paste in the process (some paste stays in the screens), cell breakage in the printing process (contact printing), wide printed patterns (higher shading of cells, less surface exposed to the light) and limited electrical properties of the pastes.

Although silver demand for photovoltaic applications is hard to estimate as markets and technologies are constantly changing, the leading new PV cells need only one-fifth or less as much silver as a decade before. According to a 2020 report from the Silver Institute, the photovoltaic sector accounts for ~ 10% of the total silver consumption, which is around 25,00 metric tons per year (or ~ 17.6 ton/W).

Silicon crystalline solar cells are beenbeing replaced by different types of cells like thin fil, HTJ,film, HJT, CIGS, perovskite solar cells and others. By 2025 is expected that more than 40% of the market will be these type of cells (up from 15-20% today). MostSome of these cells are temperature sensitive to high temperatures, therefore, the potential to increase such cells’ efficiencies and lower costs utilizing the screen printing process not really compatible with them.is limited. Inkjet printing withand other non-contact printing processes utilizing our low temperature sintering inks is compatible with these cells. PVNand pastes has been demonstrated with one of its customersto increase cell efficiency and lower production costs. Therefore, we believe that implementing Sicrys™ silver inks with inkjet printing increases substantially the efficiency of the cells.temperature sensitive cells (such as HJT cells) would benefit from our technologies.

We believe that a significant market opportunity exists for a non-contact metallization low temperature sintering solution that is competitive with traditional screen printing process, does not break silicon cells, allows for thinner PV cell wafers (thus reducing silicon costs, which we believe to be a major obstacle to the wider proliferation of solar cell technologies), increases the active area of the cell by printing narrower conductors, and yields better electrical performance than screen-printed conductors. We believe that the market for inks and pastes to be used in inkjet printing for PV applications is a small subset of the market for silver pastes and inks in PV cell production generally, as described above. We further believe that such market has a potential to grow over time given the benefits of inkjet printersprinting technologies and the benefits of our silver and copper based Sycris™ inks and pastes, which, among others, may apply to a range of printer devices,printing technologies, and have lower costs and simpler operating procedures when compared to photolithographyscreen-printing processes commonly used. See “ITEM 4 B. — Business Overview — Our Solutions — Printed Electronics”.

The Market

Printed Electronics

Digital printed electronics is a set of methodologies by which electrical devices are digitally printed onto various substrates (i.e., base material) by depositing electrically functional inks and pastes (and possibly other additional functional inks and pastes such as insulating materials) on the substrate, creating active or passive devices, such as conductors, capacitors or resistors. The use of digital printed electronics presents an opportunity to facilitate widespread, production of new electronics, more efficient electronics, new electronic designs and customized and personalized electronics while keeping production costs low.

We believe that the current analog process used toprinting and etching methods have inherent limitations when implemented in flexible electronics, 3D (three dimensional) electronics and in customized and small-scale printing. Furthermore, these processes currently utilize expensive materials and produce electronics are very complicated, environmentally unfriendly,toxic byproducts which must be disposed of, which increases overall production costs. We believe that a significant market opportunity exists for inks and inefficientpastes, such as it contains many production steps,ours, that enable digital inkjet conductive printing, enabling printing on flexible substrates, three-dimensional printing and is capex expensivecustomized and limited in its performance.small-scale printing at a lower price.

Digitally printing electronics present many advantages over the traditional analog method, including:

While there are quite a few companies that have silver conductive inks and pastes (which are not compatible with mass production processes), there are very few companies offering copper nano particle dispersions, which, to our knowledge, are not inks.inks or pastes. The Company offers silver and copper-based inks. Over 2019-2021we have expanded our ink portfolio to include gold, resistors and dielectric inks.

As of December 15, 2020, the silver metal was approximately 100 times more expensive than copper metal which may eventually allow us to price copper inks at two to three times lower than silver inks and easily compete with analog conductive inks and processes.pastes.

Product Development

We offer and sell several conductive inks based on either silver or copper. Inks are sold through our web site as well as directly to customers or through distributors. Our operations team is well-trained for prompt delivery at a consistently high quality. To date, although we have had limited sales, we have not had any product returns.

Our Application and Research and Development, or R&D, team’s efforts are focused on four main goals:

This printer is intended to include all the necessary elements to print electronics in the same tool. These capabilities include the capability to print up to ten inks in parallel with very high accuracy, sintering, drying, and inspection capabilities at an affordable price.

Our Solutions

Printed Electronics

We currently offer silver-based Sicrys™ inks and our developed copper-based Sicrys™ for use in the production of PE utilizing inkjet printers. We believe that inkjet production of PE utilizing our Sicrys™ inks results in the following benefits relative to traditional screen printing and photolithography processes:

Photovoltaic Cell Metallization

Our Sicrys™ family of inks are low viscosity, nano-particle inks optimized for inkjet printing. We believe that PV cell metallization via inkjet printingHJT utilizing our Sicrys™ inks results in the following benefits relative to traditional screen-printing processes:

Printed Electronics

We currently offer silver-based Sicrys™ inks and pastes and our developed copper-based Sicrys™ for use in the production of PE utilizing inkjet printing technologies. We believe that inkjet production of PE utilizing our Sicrys™ inks and pastes results in the following benefits relative to traditional screen printing and photolithography processes:

Our Strategy

Our goal is to become a leading producer of conductive inks and pastes for digital electronic printingthe solar industry and PE applications. Our strategy is to concentrate our efforts on mass production applicationsapplication opportunities by selling inks and pastes to be used in mass production printersprinting technologies with high throughputs and high consumption of inks and pastes per year. We are currently strivingfocusing our efforts on demonstrating the advantages of our Sicrys™ technology primarily to apply our “Complete Solution” or “End-to-End” Approach, in which we will supply our customers with equipment, process and inks for their applications.dedicated customers. We also intend to provide a service towork with our customers by not only selling inks, but also securing equipment suitable for implementation in their production lines, including Digiflex printers, and by working with them to develop the production processes suitable to the relevant applications and their needs (including printing strategy, printing temperature, sintering temperatures and time).

To date, we have generated limited sales and market our products primarily online presence and printed electronics exhibitions. However, we are also working on supplying conductive dispersions and inks based on our nano metal particles (Sicrys™) that may yield additional sales.

A significant amount of our expenditures will be used to implement our “Complete Solution Approach” for mass production processes. We are also considering different business models to allow us to quickly and efficiently implement the “Complete Solution Approach”.

In addition, we are continuing our efforts to:

We have several development consortiums in the framework of the European Horizon 2020, an R&D support programs in Europe and Israel, which providesprovide grants for research and development, including to companies in Israel which are a part of the organization.Israel. The grants are used to expand our knowhowknow-how and network through research and development that we commit to, the costs of which will beis reimbursed in part by European Horizon 2020 and local financing entities Two consortiums have been successfully finalized during 2019 and 2020 (HIPERLAM and DigiMan).entities. One consortium program for the inkjet-based fabrication of multilayer printed circuit boards with embedded printed passive elements was recently concluded.

The DigiMan project commenced its activities in December 2018 and was successfully finished in November 2020. The goal of the project was to develop digitally printed sensors in a roll-to-roll continuous digital printing system. The partners in this projectfollowing additional projects were commercial companies and research entities in Israel, Germany and Russia. Namely, Chemnitz University (Germany), National Research Nuclear University (Russia), MEPHI (Russia), IKTS (Germany), Kerafol Keramische Folien (Germany) and CPC (Israel).

Additional projects have been approved for financing in 2019 and 2021 which are active:2021:

Research and Development

The conductive inks and pastes we manufacture for digital conductive printing applications are based on either silver or copper. Our Application and Research and Development (“R&D”), team’s efforts are focused primarily on the following two goals:

We have and our wholly-owned subsidiaries have received grants from the Government of Israel through the IIA for the financing of a portion of our research and development expenditures pursuant to the Innovation Law. As of December 31, 2022, we and our wholly-owned subsidiaries had received funding from the IIA in the aggregate amount of approximately $3.7 million. As of December 31, 2022, we and our wholly-owned subsidiaries had paid royalties to the IIA in the aggregate amount of approximately $1.1 million and had an obligation to the IIA with respect to such funding (including interest) in the amount of approximately $3.2 million (approximately $2.0 million out of such amount are contingent liabilities and therefore, not recorded in our liabilities). We may apply for additional IIA grants in the future; however, there is no assurance that such applications will be approved in the amount requested or at all. We have also received a grant from the Ministry for one of our research and development programs. As of December 31, 2022, we had received funding from the Ministry in the aggregate amount of approximately NIS 585,119 ($168,574, based on the NIS/US$ exchange rate published by the Bank of Israel on December 31, 2013, of $1.00 = NIS 3.471). As of December 31, 2022, we had a contingent obligation to the Ministry with respect to such funding (including interest), following the payment of royalties up to that date, in the amount of NIS 576,773 (approximately $163,903). See “Item 3 D –Risk Factors – Risks Related to Our Operations in Israel – The Israeli government grants we have received for research and development expenditures restrict our ability to manufacture products and transfer technologies outside of Israel and require us to satisfy specified conditions. If we fail to satisfy these conditions, we may be required to refund grants previously received together with interest and penalties.”

Competition

The digital electronic printing and inkjet conductive ink and paste manufacturing industries are extremely competitive. We are currently aware of various existing products in the market and in development that may compete with our products and technologies. To our knowledge, more than twentyseveral other companies are currently developing silver-based inkjet inks for PE digital electronic inkjet printing applications. Some of these companies already sell conductive inkjet inks and pastes for PE applications. While at the same time we are seeing that some of these companies don’t succeed to develop and commercialize products with the quality and price tag that the market needs. We also see a trend of bigger companies buying out some of the smaller players, and still not been able to supply products for mass production. Of those, to our knowledge, no other company claims to have metallization inkjet inks for silicon nitride-based PV applications. We are aware of companies seeking to develop copper-based inks and pastes for inkjet printing, including NovaCentrix Corp, Hitachi Chemical Co. Ltd., Promethean Particles Ltd., Copprint Technologies Ltd., Printcb Ltd and Nanotec Electronic U.S. Inc. However,printing; however, to our knowledge none of our competitors has copper based low viscosity inks compatible with digital printing in mass production and at a commercially viable price and quantity. 

We believe that a number of other companies and entities, that we are not completely familiar with, claim to be able to supply nano silver particles, dispersions or inks. These include, but not limited to:

To our knowledge, our competitors’ inks differ substantially from our inks. We believe that our inks have the following competitive advantages, relative to those currently being sold by our competitors, especially when aiming to print on mass production applications and throughputs:

Based on the advantages of our inks, we are developing a paste for solar applications.

Furthermore, we believe that there is a high barrier to entry for competitors to develop and successfully bring competing inks to market due to the long lead times required to develop nano particles of an appropriate size to formulate inks compatible with inkjet printing and the difficulty in producing nano-based inks in large-scale quantities.

Notwithstanding the foregoing, many of our competitors have substantially greater financial, technical, and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations. Mergers and acquisitions in the conductive ink and paste industry may result in even more resources being concentrated in our competitors. As a result, these companies may be more effective in selling and marketing their products. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in this industry. Our competitors may succeed in developing, acquiring, or licensing on an exclusive basis, products that are more effective or less costly than our current or future products or technologies, or achieve earlier patent protection, product commercialization, and market penetration than we do. Additionally, technologies developed by our competitors may render our potential products and technologies uneconomical or obsolete, and we may not be successful in marketing our products and technologies against competitors.

System Competition to our Digiflex Printer

To our knowledge, most print producers offer printers that can print one or two prints at a time and do not have the additional capabilities that the Digiflex printers include, such as drying, laser sintering and inspection. We note that one of our competitors, Nano Dimension Ltd (Nasdaq: NNDM), focuses on the 3D PCB prototype market, using silver & Dielectric inks to print at very low speeds.

Research and Development Agreements, License Agreements and Material Contracts

We are engaged in R&D programs with the Authority, pursuant to the Encouragement of Research, Development and Technological Innovation in the Industry Law 5744-1984 (formerly known as the Law for the Encouragement of Research and Development in Industry 5744-1984), and the regulations promulgated thereunder. Under the terms of these programs, we are required to pay to a royalty of 3.0% of sales of products resulting from research and development partially financed by the Authority. However, such royalty obligations will not exceed the grant amount received, as linked to the U.S. dollar and including accrued interest at the LIBOR rate. The obligation to pay these royalties is contingent on actual sales of the products and in the absence of such sales, no payment is required. During 2020, 2019 and 2018, we paid royalties to the Authority in the amount of $10,067, $2,091 and $2,551, respectively. The total grants we and Nano Size received as of December 31, 2020 aggregated to $1,445,622. Our total contingent liability (including interest) as of December 31, 2020 with respect to royalty-bearing participation received, net of royalties paid, amounted to $1,930,769. As of December 31, 2020 and 2019, Digiflex, received grants for research and development efforts from the Authority in an aggregate amount of approximately $2.2 million, out of which an amount of approximately $1.1 million was repaid to the Authority by Jet CU as a result of their technology and know-how sale to a foreign company which was authorized by the Authority and resulted in such payment in January 2018. The remaining liability (after additional payments) was reduced to approximately $1.0 million and recorded in Jet CU, see Note 3 to the audited consolidated financial statements for the year ended December 31, 2020 included elsewhere in this annual report on Form 20-F

Intellectual Property

An important part of our business and product development strategy is to seek, when appropriate, protection for our products and proprietary technology through the use of various United States and foreign patents. Our patent application based on PCT/US2011/063459 covering silver single crystal particle inks, dispersions and some pastes and dispersions have been granted in several countries, including China, Russia, Japan, Europe, India, Israel, Korea, Brazil, Germany, France, UK, Netherlands, the U.S. and the U.S. WeEuropean Union and we currently have additional patent applications pending in the European Union and IsraelU.S. supporting our silver-based inks. Weinks, dispersions and some pastes. Our patent application based on PCT/IB2015/051536, relating to copper-based ink, has been granted in several countries, including Russia, Europe, the United Kingdom, Belgium, Germany, Finland, France, Ireland, the Netherlands, Israel, Brazil, India and the United States. Additionally, we have patent applications based on PCT/IB2015/051536, relating to copper-based ink, filed on March 3, 2015, which have been submitted to national phase in South Korea, Japan and has been granted in the Russia and United States and are pending in additional countries. We have an approved joint patent with Ramot (Tel Aviv University) for “Conductive Nanowire Films” (WO 2013/128458, US 9,373,515 B2) which Ramot maintains pursuant to the termination settlement of the Magneton Program.China.

The silver family (granted in the United States (9,556,350), Russia (RU 2593311 and RU 2013130145), China (CN 103282969), Europe (EP 2649621 and EP 3113897), Israel (226665), India (324986), Korea (10-1932781), Brazil (11 2013 013885-8 A2) and Japan (JP 6067573 & JP 6363138)) main claims are on the concentrated dispersions and inks made of a majority of single crystal Nano silver particles and the method for producing them. Patent applications are in different stages of qualification in additional countries. The single crystal particles are easy to police against infringement. The priority date for the silver family is December 6, 2010.

The copper family relates to nano-metric copper formulations and stable dispersions containing single-crystal metallic copper particles, and to the method of producing such formulations and dispersions. It is in national phase in the United Kingdom, Europe, Brazil, India, South Korea, Japan, China, Israel, Russia and the United States. The priority date for the copper family is March 3, 2015. The patent has been granted in the United States (1/1/2019 number 10,166,602) and in Russia (RU 2730285).

In 2013, we submittedWe have a granted joint patent with TelRamot (Tel Aviv University: Device and process to make transparent conductive coatings based on very high aspect ratio nano-wires, which form on the substrate:University) for “Conductive Nanowire Films” (WO 2013/128458, US 9,373,515 B2 Conductive Nanowires Films.B2), which Ramot maintains pursuant to the termination settlement of the Magneton Program.

Our wholly-owned subsidiary, Nano Size, has been granted several patents in the field of ultrasonic manufacturing of nano materials (7,157,058 (US); 7,504,075 (US); 144638 (IL); 149932 (IL)). We do not believe that these patents are material to our business. We intend to continue to seek patent protection for our products that we may develop in the future.

Digiflex has been granted several patents for inks, primers and primer lamination in the field of graphic arts in several countries, including, but not limited to, the United States, European Union, Canada, China, France, Germany, United Kingdom, Germany, India and Israel. These include: Process for Producing a Photomask on a Photopolymeric Surface; USA 9,513,551 and 12 countries and Process for Dry-coating of Flexographic Surfaces; USA 9,352,544.

We intend to continue to seek patent protection for our products that we may develop in the future. The patenting of technology-related products and processes involves uncertain and complex legal and factual questions. To date, no consistent policy has emerged regarding the breadth of claims of such technology patents. Therefore, there is no assurance that our pending applications will issue, or what scope of protection any issued patents will provide, or whether any such patents ultimately will be upheld as valid by a court of competent jurisdiction in the event of a legal challenge. The costs of such proceedings would be significant and an unfavorable outcome could result in the loss of rights to the invention at issue in the proceedings. If we fail to obtain patents for our technology and are required to rely on unpatented proprietary technology, there is no assurance that we can protect our rights in such unpatented proprietary technology, or that others will not independently develop substantially equivalent proprietary products and techniques, or otherwise gain access to our proprietary technology.

Competitors have filed applications for, or have been issued patents, and may obtain additional patents and proprietary rights relating to products or processes used in, necessary to, competitive with, or otherwise related to, our patents. The scope and validity of these patents, and the extent to which we may be required to obtain licenses under these patents or under other proprietary rights and the cost and availability of licenses is unknown. This may limit our ability to license our technology. Litigation concerning these or other patents could be protracted and expensive. If suit were brought against us for patent infringement, a challenge in the suit by us as to the validity of the other patent would have to overcome a legal presumption of validity. There can be no assurance that the validity of the patent would not be upheld by the court or that, in such event, a license of the patent to us would be available. Moreover, even if a license were available, the payments that would be required are unknown and could materially reduce the value of our interest in the affected products.

We also rely upon unpatented trade secrets. No assurances can be given that others will not independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose such technology or that we can meaningfully protect our rights to our unpatented trade secrets. We require our employees, consultants, advisors, and any third parties who have access to our proprietary know-how, information, or technology to enter into confidentiality agreements with us, which provide that all confidential information developed or made known to the individual during the course of the relationship is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case of employees and consultants, the agreements provide that all inventions conceived by the individual will be our exclusive property or will be assigned to us. There is no assurance, however, that these agreements will provide meaningful protection for our trade secrets and other confidential proprietary information in the event of unauthorized use or disclosure of such information.

Marketing and Sales

We currently have a small marketingoffer and sales operation consisting of two full-time employees (Chief Business Development Officersell several conductive inks and Inside Sales Manager). In addition,pastes based on either silver or copper, which are sold through our Chief Executive Officer and our Chief Technology Officer generally devote a portion of their effortswebsite as well as directly to increasing awareness of, and marketing, our products.customers or through distributors. We are already workingfocused on providing more efficient ink and paste solutions for the growing solar market segment and we work with distributorsour customers in the United States, South Korea, Italy, Japan and China and intend to collaborate with additional third-party distributors and sales agents with established sales and marketing operations and industry experience to marketdevelopment of our inks. However, there can be no assurance that we will be able to enter into distribution and/or sales agency agreements on terms acceptable to us or at all, or that such distributors or sales agents will be successful in marketingsolutions as part of our inks. We are not currently aiming to expand the Digiflex graphics arts fields, as we transition and integrate its printers into the electronics field. As such we are not yet marketing these printers for the graphic arts field and just have started to market them for the electronics field now.go-to-market strategy.

Seasonality

Our business and operations are generally not affected by seasonal fluctuations or factors.

Raw Materials and Suppliers

We believe that the raw materials that we require to manufacture our inks and pastes are readily available in adequate quantities from multiple sources. In addition, the manufacturing process for our silver-based inks and pastes utilizes a silver salt the price of which is linked to the price of silver. The price of silver as well as the price of other raw materials used in the manufacturing process for our inks and pastes, is affected by numerous factors beyond our control, including inflation, fluctuation of the United States dollar and foreign currencies, global and regional demand, speculative activities by commodities traders and others and the political and economic conditions of major silver producing countries throughout the world. The volatility of mineral prices represents a substantial risk which no amount of planning or technical expertise can fully eliminate. In the event the prices of silver or other raw materials used in our manufacturing process increase and remain high for prolonged periods of time, we may not be able to produce inks and pastes at a cost effective and competitive price. See “Item 3 D. — Risk Factors — We are subject to risks resulting from fluctuations in the price of silver.silver and other raw materials.”

Manufacturing

We manufacture our inks and pastes at our Migdal Ha’Emek facilities. We currently have capacity to produce an estimated two (2) tonsone ton of ink per year, and intendplan to upgrade our facilities (at an estimated cost of $500,000) to increase production capacity to 1920 tons per year (estimated capital cost of at least $2.5 million), if and when demand for our inks and pastes is projected to surpass our production capabilities and we have sufficient financingavailable capital to do so. In the event that demand for our inks outgrows our internal manufacturing capacity, we intend to engage third-party manufacturers to produce additional inks.inks and pastes. There can be no assurance that we will be able to enter into agreements with qualified manufacturers on terms acceptable to us, or at all, or that, once contracted, such manufacturers will perform as expected.

Government Regulation

We are subject to various environmental, health and safety laws, regulations and permitting requirements, including those governing the emission and discharge of hazardous materials into ground, air or water; noise emissions, the generation, storage, use, management and disposal of hazardous waste; the registration of chemicals and in the future also import and export; the clean-up of contaminated sites; and the health and safety of our employees. Under such laws and regulations, we are required to obtain environmental permits from governmental authorities for certain operations. The manufacture of our products requires storing or using certain hazardous materials. Pursuant to the Israeli Dangerous Substances Law - 1993, we are required to (and did) obtain a toxin permit from the Ministry of Environmental Protection. Our permit is valid until May 10, 2025.

Other than applicable local laws in Israel relating to the handling and disposal of hazardous materials and waste, there are no government regulations that are material to the conduct of our business. If we establish manufacturing operations in other jurisdictions, we expect to become subject to environmental, health and safety laws, regulations and permitting requirements in those jurisdictions, which may be similar to or more onerous than those described above.

C. Organizational structure

We have three (3) wholly owned subsidiaries,P.V. Nano SizeCell Ltd., or Nano Size, was incorporated in Israel on June 24, 2009, as a private limited liability company, organized under the laws of State of Israel. We have three wholly-owned subsidiaries, all of which are private companies organized under the statelaws of Israelthe State of Israel: (i) Nano Size, which we acquired on December 31, 2009,2009; (ii) Digiflex, which we acquired on December 3, 2017. Additionally, we indirectly own, through Digiflex, two (2) subsidiaries of Digiflex, one in the USA (Digiflex Inc.)2017; and one in Hong Kong, Digiflex HK Limited, which was inactive since inception and materially dissolved during March 2019 and(iii) Jet CU, a private company organized under the laws of the state of Israel which we acquired on July 26, 2020. Additionally, Digiflex wholly-owns one subsidiary based in the US: Digiflex Inc., incorporated under the laws of the State of Delaware.  

D. Property, plants and equipment

We currently leases,lease, through Nano Size, approximately 678 square meters (approximately 7,300 square feetfeet) of space in Migdal Ha’Emek, Israel for itsour principal offices and manufacturing facilities at a monthly cost of approximately NIS 15,49318,000 (approximately $4,818)$5,115). Those currentThis lease agreements expireagreement expires on June 30, 2022.2025, and we have an option to extend the lease for an additional three years.

Additionally, Digiflex currently leases approximately 110 square meters (approximately 1,200 square feetfeet) of space in Migdal Ha’Emek, Israel for its principal office and laboratory at a monthly cost of approximately NIS 5,000 (approximately $1,555)$1,420). This lease agreement, expireswhich was scheduled to expire on March 14, 2023.2023, was renewed in February 2023 for a period until March 15, 2024, and we have an option to extend the lease for an additional period of one year.

We currently own production equipment, housed in our Migdal Ha’Emek facilities, capable of producing up to two (2) tonsone ton of ink per year. We intend to upgrade our facilities (at an estimated cost of $500,000) to increase production capacity to 20 tons per year (estimated capital cost of at least $2.5 million), if and when demand for our inks and pastes is projected to surpass our production capabilities.capabilities and we have sufficient available capital to do so.

ITEM 4A. Unresolved Staff Comments.

Not applicable.

ITEM 5. Operating and Financial Review and Prospects.

A. Operating results

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Item 3 A. — Selected Financial Data” above and our consolidated financial statements and related notes that appear elsewhere in this annual report on Form 20-F. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this annual report on Form 20-F, particularly in the sections titled “Item 3 D. — Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”

Overview

We are a conductive ink and pastes manufacturing company focused on developing, manufacturing, marketing and commercializing conductive inks and pastes for digital conductive printing applications (mainly inkjet and aerosol printing technologies). We have developed the Sicrys™ family of single crystal nano-metric conductive inks and pastes, which we believe enablesis significantly a significantly less costly and less wastefulmore effective alternative to other current printing processes, such as screen printing photolithography and in some cases, photolithography etching processes, for photovoltaic (PV)heterojunction technology (PV-HJT) and digital printed electronics (PE) applications. Our main strategy includes providing a “complete solution” to our costumer, meaning we provide the printing equipment, process and inks as a package. In some cases we subsidize the printer, thus implementing a razor blade model). We also adapt our basic inks and pastes to specific customer requirements. We begancurrently sell a low volume sales of our Sicrys™ silver-based inks and pastes for PV and PE applications in 2010 and are in the process of seeking to expand our sales efforts to include sales of Sicrys™ inks and pastes for a wider range of PE applications, including for the printing of windshields insuch as solar, automotive applications, circuit boards, mobile phone antennas, 3D printed electronic devices, radio-frequency identification chips, sensors and touchscreens, among other digitally printed electronics. We have also developed what we believe is the first available commercially viable copper-based nano-metric low viscosity stable ink for mass-production of printed electronics. We believe that copper inks and pastes represent a significant improvement over silver-based inks and pastes given copper’s significantly lower cost and nearly identical electrical and conductive properties. We began low volume sales of our copper-based ink for printed electronics applications in the second half of 2014. The sales of our Sicryssilver inks have continued to increase from 2018 to 2020 through 2019.

Notwithstanding the effects of COVID-19, our business (sales and projects) has continued to grow. Our growth has been limited (sales grew less than expected) due to slow down of our customers and partners, and also due to traveling constrains imposed by governments due to COVID-19. Two of our main customers have purchased inks and services from us much less than forecasted and expected. Our plans to upgrade our DemonJet printers, develop the inks and technologies to print passive components have been slowed down due to the reduction of activities of our partners in Europe and reduced available resources. One of our employees has been put in unpaid leave and we have reduced the team by two team members. Due to the COVID-19 influence on the world economics, silver prices (our main raw material have increased substantially (from $17.1/oz in January 2019 to $24.08/oz in December 14 2020, https://ycharts.com/indicators/silver price). Until now we have managed to raise our product prices to counter effect this price increase of silver. We have started to test the anti-viral activity of our nano particles. First tests have shown positive results but these tests have not been completed yet.

Financial Overview

We have incurred net losses since our inception in 2009, including a net loss of approximately $12.5$4.5 million for the year ended December 31, 2020.2022. As of December 31, 2020,2022, we had an accumulated deficit of approximately $33.6$40.6 million. We are in default in repayment of our convertible notes which as of December 31, 2022 aggregated to approximately $1.5 million (including principal and interest). We have devoted substantially all of our financial resources to identifying, acquiring, licensing, and developing our products and technologies and providing general and administrative support for these operations. To date, we have financed our operations primarily through the sale of equity and convertible securities and government grants. The amount of our future net losses will depend, in part, on the rate of our future expenditures and our ability to generate significant revenues via commercialization of our products or technologies. We are dependent upon external sources to finance our operations and there can be no assurance that we will succeed in obtaining the necessary financing to continue our operations. As a result, our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.

Key Components of our Statements of Comprehensive Loss

Revenues

Sources of revenues - we derive revenues primarily from sales of inks.inks and pastes.

Cost of Revenues

Our total cost of revenues includes expenses for the manufacturing of inks and pastes, including: the cost of raw materials; employee-related expenses, including salaries, equity-based compensation and other benefits and related expenses, lease payments, utility payments, depreciation, changes in inventory of finished products, royalties and other manufacturing expenses. These expenses are partially reduced by an allotment of manufacturing costs associated with research and development activities to research and development expenses.

Operating Expenses

Research and Development Expenses, net

Research and development activities are central to our business model. We expect research and development costs to increase significantly for the foreseeable future as we continue to expand our business. However, we do not believe that it is possible at this time to accurately project total program-specific expenses.

Research and development expenses consist primarily of compensation for employees engaged in research and development activities, including salaries, equity-based compensation, benefits and related expenses, clinical trials, contract research organization sub-contractors, development materials, external advisors and the allotted cost of our manufacturing facility for research and development purposes.

Our research and development expenses, net, are net of grants for the research and development that we have received grants from the government of the State of Israel, through the IIA, pursuant to the Innovation Law, for the financing of a portion of our research and development expenditures. As of December 31, 2022, we and our wholly-owned subsidiaries had received funding from the IIA in the aggregate amount of approximately $3.7 million. As of December 31, 2022, we and our wholly-owned subsidiaries had paid royalties to the IIA in the aggregate amount of approximately $1.1 million and had an obligation to the IIA with respect to such funding (including interest) in the amount of approximately $3.2 million (approximately $2.0 million out of such amount are contingent liabilities and therefore, not recorded in our liabilities). We may apply for additional IIA grants in the future; however, there is no assurance that such applications will be approved in the amount requested or at all.

We have also received a grant from the Ministry for one of our research and development programs. In order to maintain our eligibility for this grant, we must meet specified conditions, including the payment of royalties with respect to the grant received. As of December 31, 2022, we had received funding from the Ministry in the aggregate amount of approximately NIS 585,119 ($168,574, based on the NIS/US$ exchange rate published by the Bank of Israel on December 31, 2013 of $1.00 = NIS 3.471). As of December 31, 2022, we had a contingent obligation to the Ministry with respect to such funding (including interest), following the payment of royalties up to that date, in the amount of NIS 576,773 (approximately $163,903).

For additional information regarding grants from the Israeli government, see “Item 3 D –Risk Factors – Risks Related to Our Operations in Israel – The Israeli government grants we have received for research and development expenditures restrict our ability to manufacture products and transfer technologies outside of Israel and require us to satisfy specified conditions. If we fail to satisfy these conditions, we may be required to refund grants previously received together with interest and penalties.”

In addition, from time to time, we participate in several development consortiums European Horizon 2020 and others in which we receive supporting grants which we record as a deduction to the research and development expenses. The grants are used to expand our knowhow and network through research and development that we commit to, the costs of which will be reimbursed in part by European Horizon 2020 and local financing entities.

Selling and Marketing Expenses

Selling and marketing expenses consist primarily of compensation expenses for personnel engaged in sales and marketing, including salaries, equity-based compensation and benefits and related expenses, as well as promotion, marketing, market access and sales and distribution activities.

General and Administrative Expenses

General and administrative expenses consist principally of compensation for employees in executive and administrative functions, including salaries, equity-based compensation, benefits and other related expenses, professional consulting services, including legal and audit fees, as well as costs of office and overhead.

Financial Income/Financial Expense

Financial income/expenses includes primarily change in fair value of warrants and capital note presented at fair value, Interest and accretion back in connection with convertible loans and exchange rate differences.

Results of Operations

The following table sets forth a summary of our operating results:

Year ended December 31, 2020,2022, compared to year ended December 31, 2019:2021:

Revenues

With respect to the years ended December 31, 20202022 and December 31, 2019,2021, total revenues amounted to $761,319$603,359 and $478,520,$568,704, respectively, an increase of $282,799$34,655 or 59%6%. The increase in revenues relates primarily to sales of more inks and represents our growing business in the Company. Such increase was partially offset by a decrease in Digiflex business, as the Digiflex business is not consistent with our shift towards printed electronics technology. Therefore, we expect this decrease trend to continue.No significant change year over year.

Cost of revenues

With respect to the years ended December 31, 20202022 and December 31, 2019,2021, total cost of revenues amounted to $307,713$375,877 and $236,493,$271,817, respectively, an increase of $71,220$104,060 or 30%38%. The increase related primarily to an additional employee joined and the increase of salary of another employee.

Amortization of intangible assets

With respect to the years ended December 31, 2022 and December 31, 2021, total amortization of intangible assets amounted to an aggregate amount of $428,431 for both years. The amortization of intangible assets expense in both years related to amortization of technology we recorded as part of the Digiflex purchase as of December 3, 2017.

Gross loss

With respect to the years ended December 31, 2022 and December 31, 2021, total gross loss amounted to $200,949 and $131,544, respectively, an increase of $69,405 or 53%. The increase related to an increase of $104,060 in cost of revenues, offset in part by an increase of $34,655 in revenues.

Research and development expenses, net

With respect to the years ended December 31, 2022 and December 31, 2021, net research and development expenses, net were $268,601, net of $437,045 grants recorded and $467,698, net of $315,697 grants recorded, respectively, a decrease of $199,097 or 43%. The decrease in research and development, net related primarily to higher research and development grants recorded in 2022.

Sales and marketing expenses

With respect to the years ended December 31, 2022 and December 31, 2021, sales and marketing expenses amounted to $566,896 and $625,031, respectively, a decrease of $58,135 or 9%. No significant change year over year.

General and administrative expenses

With respect to the years ended December 31, 2022 and December 31, 2021, general and administrative expenses amounted to $1,893,179 and $1,345,495, respectively, an increase of $547,684 or 41%. The increase related primarily to additional management salaries and fees, professional services fees and legal fees.

Intangible asset impairment

With respect to the years ended December 31, 2022 and December 31, 2021, intangible asset impairment amounted to $2,108,117 and $0, respectively. As of December 31, 2022, we recorded an impairment charge of $2,108,117, which is equal to the technology, net amount that we recorded as part of the Digiflex purchase in 2017. We have ceased the marketing activities associated with this technology and expect a negative cash-flow throughout its life, which led to such impairment charge of the remaining asset, net as of December 31, 2022.

Operating expenses

With respect to the years ended December 31, 2022 and December 31, 2021, operating expenses amounted to $4,836,793 and $2,438,224, respectively, an increase of $2,398,569 or 98%. The increase related to an increase of $2,108,117 and $547,684 in intangible asset impairment and general and administrative expenses, respectively, offset in part by a decrease of $199,097 and $58,135 in research and development, net and sales and marketing expenses, respectively.

Operating loss

With respect to the years ended December 31, 2022 and December 31, 2021, operating loss amounted to $5,037,742 and $2,569,768, respectively, an increase of $2,467,974 or 96%. The increase in operating loss related to an increase of $2,398,569 and $69,405 in operating expenses and gross loss, respectively.

Financial income, net

With respect to the years ended December 31, 2022 and December 31, 2021, financial income, net, amounted to $528,195 and $50,904, respectively, an increase of $477,291 or 938%. The increase in financial income, net, related primarily to a change in interest and accretion back in connection with convertible loans and foreign exchange income, net of $8,059,996 and $398,995, respectively, offset in part by a change in fair value of warrants and capital note presented at fair value of $8,020,602.

Net loss

With respect to the years ended December 31, 2022 and December 31, 2021, net loss amounted to $4,509,547 and $2,518,864, respectively, an increase of $1,990,683 or 79%. The increase in operating loss related to an increase of $2,467,974 and $477,291 in operating loss and financial income, net, respectively.

Year ended December 31, 2021, compared to year ended December 31, 2020:

Revenues

With respect to the years ended December 31, 2021 and December 31, 2020, total revenues amounted to $568,704 and $761,319, respectively, a decrease of $192,615 or 25%. The decrease in revenues relates primarily to lower sales of inks and pastes. We believe that our lack of resources for marketing efforts contributed to that decrease.

Cost of revenues

With respect to the years ended December 31, 2021 and December 31, 2020, total cost of revenues amounted to $271,817 and $307,713, respectively, a decrease of $35,896 or 12%. The decrease in cost of revenues is consistent with the increasedecrease in revenues as mentioned above.

Amortization of intangible assets

With respect to the years ended December 31, 20202021 and December 31, 2019,2020, total amortization of intangible assets amounted to $428,434$428,431 and $428,431,$428,434, respectively. The amortization in both years (which is basically the same) related to amortization of Technologytechnology we recorded as part of the Digiflex purchase as of December 3, 2017.

Gross loss (income)

With respect to the years ended December 31, 20202021 and December 31, 2019,2020, total gross loss (income) amounted to $(25,172)$131,544 and $186,404,$(25,172), respectively, an increasea decrease of $211,576.$156,716. The increasedecrease related to an increasea decrease of $282,799$192,615 in revenues, partially offset by an increasea decrease of $71,220$35,896 in cost of revenues and an increasedecrease of $3 in amortization of intangible assets.

Research and development expenses, net

With respect to the years ended December 31, 20202021 and December 31, 2019, net2020, research and development expenses, net were $467,698, net of $315,697 grants recorded, and $400,859, net of $525,838 grants recorded, and $731,021, netrespectively, an increase of $256,423 grants recorded, respectively, a decrease of $330,162$66,839 or 45%17%, respectively. The decreaseincrease in research and development, net related primarily to higherlower grants recorded year over year. Over the last few years, we have succeeded to build several network projects which helped us with research and development efforts and at the same time resulted in receiving supporting research and development grants.

Sales and marketing expenses

With respect to the years ended December 31, 20202021 and December 31, 2019,2020, sales and marketing expenses amounted to $625,031 and $673,986, and $673,983, respectively, an increasea decrease of $3.$48,955 or 7%. No significant change year over year.

General and administrative expenses

With respect to the years ended December 31, 20202021 and December 31, 2019,2020, general and administrative expenses amounted to $1,345,495 and $1,414,370, and $1,319,239, respectively, an increasea decrease of $95,131$68,875 or 7%5%. No significant change year over year.

Goodwill impairment

With respect to the years ended December 31, 20202021 and December 31, 2019,2020, goodwill impairment amounted to $265,089_and $0 and $265,089, respectively. SuchThe goodwill impairment for the year ended December 31, 2020 was recorded following the purchase of Jet CU since that company havehas no activity.

Operating expenses

With respect to the years ended December 31, 20202021 and December 31, 2019,2020, operating expenses amounted to $2,438,224 and $2,754,304 and $2,724,243 respectively, an increasea decrease of $30,061$316,080 or 1%11%. The increasedecrease related to an increasea decrease of $265,089 in goodwill impairment, $95,131$68,875 in general and administrative expenses and $3$48,955 in sales and marketing expenses, such decrease was partially offset by a decreasean increase of $330,162$66,839 in research and development, net.

Operating loss

With respect to the years ended December 31, 20202021 and December 31, 2019,2020, operating loss amounted to $2,729,132$2,569,768 and $2,910,647,$2,729,132, respectively, a decrease of $181,515$159,364 or 6%. The decrease in operating loss related to an increasea decrease of $211,576$316,080 in operating expenses, such decrease was partially offset by a decrease of $156,716 in gross loss (income), partially offset by an increase of $30,061 in operating expenses..