Brenx Ltd 20-F for FY2025
Brenx Ltd. (BRNX)
About this 20-F
Brenx Ltd filed this 20-F on March 25, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $387K
- Net loss
- $13.91M
- compared with a net loss of $6.77M a year earlier
- Diluted EPS
- -$57.14
- compared with -$45.27 a year earlier
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
OR
For the fiscal year ended
OR
OR
Commission File No.:
(Exact name of registrant as specified in its charter)
Translation of registrant’s name into English: Not applicable
State of
(Jurisdiction of incorporation or organization)
Tel: +
(Address of principal executive offices)
Chief Executive Officer
Tel: +972-77-693-5140
(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:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
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: None
Indicate the number of outstanding 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:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
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 Exchange Act of 1934.
Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such 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.
Indicate by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Emerging Growth Company |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
| † | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
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.
Yes ☐ No
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.
| ☒ | International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ | Other ☐ |
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.
Yes ☐ No
TABLE OF CONTENTS
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Brenmiller Energy Ltd.
INTRODUCTION
We are a leading energy company powered by proprietary thermal energy storage, or TES, technology, specializing in energy supply to industrial clients through our patented bGen™ systems. Our unique technology enables full vertical integration from renewable energy assets and grid management to reliable end-customer delivery for factories requiring power and heat. We combine this breakthrough TES with a fully integrated energy optimization platform to create a 360° solution that transforms inflexible industrial energy needs into flexible, clean operations.
Sustainable energy and power system resilience are critical infrastructure challenges as the rapid global expansion of data centers, driven in part by advances in computing and artificial intelligence, or AI, is projected to significantly increase electricity demand. According to the International Energy Agency, global electricity consumption by data centers is expected to more than double to about 945 terawatt-hours by 2030, up from approximately 415 TWh in 2024, underscoring the scale of future demand growth and its implications for energy systems planning (IEA Energy and AI report, 2025). This rising demand places additional pressure on power grids and highlights the importance of dispatchable, grid-responsive technologies, flexible energy delivery, and adaptable industrial energy strategies to support both reliability and the clean energy transition (IEA Energy and AI report, 2025). Brenmiller addresses this need through advanced economical models, proprietary TES technology, and a differentiated commercial strategy. Our bGen™ systems can convert renewable electricity into stored thermal energy, and/or capture and reuse waste heat, and deliver controlled steam output. By aligning variable renewable generation with real time industrial heat demand, we reduce carbon emissions and energy costs while enabling clients to strengthen their energy independence and long-term operational resilience.
We have developed our bGen™ technology over the past thirteen years and validated it across three generations of demonstration units at multiple sites worldwide. The system stores heat in crushed rock at temperatures of up to 1,400 degrees Fahrenheit, 760 degrees Celsius, and integrates bCubes™ thermal storage units, electric heaters, heat exchangers, electricity to heat conversion, and steam generation within a single durable and independent unit. The use of crushed rock as the storage medium avoids hazardous environmental impacts and provides long term durability, maintaining performance over tens of thousands of charge and discharge cycles without degradation or the need to replace the storage material. The system can be charged from multiple energy sources, including residual heat and renewable or grid supplied electricity via embedded electric heaters, and dispatches thermal energy on demand as saturated steam for industrial processes or as superheated steam to drive steam turbines.
In 2023, we launched our Energy-as-a-Service, or EaaS, model, pursuant to which we finance the project, install systems at customer sites, provide ongoing Operations and Maintenance, or O&M, and sell thermal energy at fixed rates, enabling customers to reduce energy costs, concentrate on their core operations, support their transition to clean energy, and enhance energy stability, while allowing us to generate recurring and diversified revenue streams in this expanding market.
We are an Israeli corporation based in Rosh Haayin, Israel, and were incorporated in Israel in 2012 as Brenmiller Energy Consulting Ltd. On July 2, 2013, we filed a name change certificate to change our name to Brenmiller Energy Ltd. In August 2017, we became a public company in Israel and our Ordinary Shares were listed for trade on the Tel Aviv Stock Exchange, or TASE. On May 25, 2022, our Ordinary Shares were listed and began trading on Nasdaq. On March 23, 2023 we announced our intension to voluntary delist our securities from trading on the TASE, which took effect on September 11, 2023 (the last trading day was September 7, 2023). Our principal executive offices are located at 13 Amal St. 4th Floor, Park Afek, Rosh Haayin, 4809249 Israel. Our telephone number in Israel is +972-77-693-5140. Our website address is https://bren-energy.com/. The information contained on, or that can be accessed through, our website is not part of this annual report and is not incorporated by reference herein. We have included our website address in this annual report solely as an inactive textual reference.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information included or incorporated by reference in this annual report on Form 20-F may be deemed to be “forward-looking statements”. Forward-looking statements are often characterized by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” “intends” or “continue,” or the negative of these terms or other comparable terminology.
These forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections of results of operations or of financial condition, expected capital needs, and expenses, statements relating to the research, development, completion and use of our products, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.
Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments, and other factors they believe to be appropriate.
Important factors that could cause actual results, developments, and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:
| ● | our planned level of revenues and capital expenditures; |
| ● | our ability to market and sell our products; |
| ● | our plans to continue to invest in research and development to develop technology for both existing and new products; |
| ● | our ability to maintain our relationships with suppliers, manufacturers, and other partners; |
| ● | our ability to maintain or protect the validity of our European, U.S., and other patents and other intellectual property; |
| ● | our ability to retain key executive members; |
| ● | our ability to internally develop and protect new inventions and intellectual property; |
| ● | our ability to expose and educate the industry about the use of our products; |
| ● | our expectations regarding our tax classifications; |
| ● | our ability to maintain compliance with Nasdaq’s continued listing requirements; |
| ● | interpretations of current laws and the passages of future laws; |
| ● | general market, political, and economic conditions in the countries in which we operate including those related to recent unrest and actual or potential armed conflict in Israel and other parts of the Middle East; and |
| ● | those factors referred to in “Item 3.D. Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects”, as well as in this annual report on Form 20-F generally. |
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Readers are urged to carefully review and consider the various disclosures made throughout this annual report on Form 20-F which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
You should not put undue reliance on any forward-looking statements. Any forward-looking statements in this annual report on Form 20-F are made as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
In addition, the section of this annual report on Form 20-F entitled “Item 4. Information on the Company” contains information obtained from independent industry sources and other sources that we have not independently verified.
Unless otherwise indicated, all references to “we,” “us,” “our,” the “Company” and “Brenmiller” refer to Brenmiller Energy Ltd. and its fully owned subsidiaries, Brenmiller Energy U.S. Inc., a company incorporated under the laws of Delaware.
On June 18, 2025, we announced a 5-for-1 reverse share split of our issued and outstanding ordinary shares and on January 21, 2026, we announced a 7-for-1 reverse share split of our issued and outstanding ordinary shares. All historical quantities of the ordinary shares and per share data herein are presented on a post-split basis to give effect to our 5-for-1 reverse share split effected at the market open on Nasdaq on June 20, 2025 and to our 7-for-1 reverse share split effected at the market open on Nasdaq on January 26, 2026.
Our reporting and functional currency is the U.S. dollar. Unless otherwise expressly stated or the context otherwise requires, references in this annual report to “NIS” are to New Israeli Shekels, to “dollars”, “USD” or “$” are to U.S. dollars, and to “EUR” or “€” are to the Euro. This annual report contains translations of NIS amounts into U.S. dollars. Unless otherwise noted, all conversion rates from NIS to U.S. dollars in this annual report were made at a rate of NIS 3.19 per $1.00 per U.S. dollar, the exchange rate as of December 31, 2025 published by the Bank of Israel. The aforementioned exchange rate is provided solely for your convenience and may differ from the actual rates used in the preparation of the consolidated financial statements included in this annual report and other financial data appearing in this annual report.
This report contains trademarks, trade names and service marks, which are the property of their respective owners. Solely for convenience, trademarks, trade names and service marks referred to in this report may appear without the ®, ™ or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent permitted under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.
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Summary Risk Factors
The risk factors described below are a summary of the principal risk factors associated with an investment in us. These are not the only risks we face. You should carefully consider these risk factors, together with the section entitled “Risk Factors” set forth in Item 3.D of this annual report on Form 20-F, and the other reports and documents filed by us with the U.S. Securities and Exchange Commission, or the SEC.
Risks Related to Our Business and Industry
| ● | We are highly dependent on the successful development, marketing and sale of our proprietary technology; |
| ● | we are highly dependent on our key employees; |
| ● | our field of business is generally new, and we may not be aware of all of the risks that our company faces; |
| ● | we are exposed to risk relating to volatility in the commodity price of fossil fuels and electricity prices, which could have a material adverse impact on prices of alternative energies and related products. It is possible that revenues received from the sale of alternative energy and related products may be insufficient to cover our costs and we may never be profitable; |
| ● | alternative energies are becoming increasingly important in certain countries, causing increasing investment devoted to improvements and development of new alternatives and technologies; |
| ● | we may be subject to unexpected maintenance warranty expenses or service claims that could reduce our profits; |
| ● | we are dependent upon third-party manufacturers and suppliers making us vulnerable to supply shortages and problems, increased costs and quality or compliance issues, any of which could harm our business; |
| ● | we are dependent upon third-party service providers to provide a high quality of service, which if not met, may impact the utility of our products, our business, operating results and reputation; |
| ● | we are dependent on the use of certain raw materials and changes in the price or availability of such raw materials may impact our ability to efficiently produce our products; |
| ● | our international activities expose us to potential operational risks in new territories, which includes navigating unfamiliar regulatory environments and may lead to compliance and financial exposure; |
| ● | we need to obtain and uphold permits, certifications and authorization in various jurisdictions; and |
| ● | the field of energy storage integration is relatively new and still developing, and the regulation of the field is also changing and developing in several jurisdictions. |
Risks Related to Our Financial Condition and Capital Requirements
| ● | Our management has concluded, and the report of our independent registered public accounting firm contains an explanatory paragraph that indicates that there are conditions that raise substantial doubt about our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all; |
| ● | we have not generated significant revenue from the sale of our current products, expect to incur operating losses in the future and may never be profitable; |
| ● | we expect to be exposed to fluctuations in the rate of energy tariffs, interest rates, and currency exchange rates, which could adversely affect our results of operations; |
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| ● | we may enter into agreements to operate projects at a financial loss in order to penetrate certain markets and to show our ability to scale-up and execute proof-of-concept agreements for our products in a commercial setting; |
| ● | we expect that we will need to raise substantial additional funding, which may not be available on acceptable terms, or at all, which may require us to curtail, delay or adjust our commercialization and product development efforts, expansion to new markets, or other activities; and |
| ● | our revenues and efforts to become profitable may be impacted by our need to pay royalties on government grants and other agreements, which may also include terms subjecting us to penalties if we are in default of material terms. |
Risks Related to Our Intellectual Property
| ● | If we are unable to obtain and maintain effective patent rights for our products and services, we may not be able to compete effectively in our markets. If we are unable to protect the confidentiality of our trade secrets or know-how, such proprietary information may be used by others to compete against us; |
| ● | intellectual property rights of third parties could adversely affect our ability to commercialize our products and services, and we might be required to litigate or obtain licenses from third parties in order to develop or market our product candidates. Such litigation or licenses could be costly or not available on commercially reasonable terms; and |
| ● | we may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful. |
Risks Related to Ownership of our Securities
| ● | Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions; |
| ● | the market price of our Ordinary Shares may be highly volatile and fluctuate substantially, which could result in substantial losses for purchasers of our Ordinary Shares; |
| ● | future sales of our Ordinary Shares could reduce the market price of our Ordinary Shares; | |
| ● | There can be no assurance that we will be able to maintain continued Nasdaq listing criteria; | |
| ● | Substantial future sales or other issuances of our Ordinary Shares could depress the market for our Ordinary Shares; | |
| ● | We have outstanding warrants and preferred shares, some of which contain “full-ratchet” anti-dilution protection, which have caused significant dilution to our shareholders and may cause further significant dilution to our shareholders; |
| ● | we may be a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes in the current taxable year or may become one in any subsequent taxable year. There generally would be negative tax consequences for U.S. taxpayers that are holders of the Ordinary Shares if we are or were to become a PFIC. |
Risks Related to our Incorporation and Our Operations in Israel
| ● | Our headquarters and other significant operations are located in Israel. Conditions in Israel, including implications of political, economic and military instability, may adversely affect our operations and results and may limit our ability raise additional funds. |
| ● | we received grants from the Israel Innovation Authority, or the IIA, and from the Israeli Ministry of Energy that may require us to pay royalties and restrict our ability to transfer technologies or know-how outside of Israel; |
| ● | it may be difficult to enforce a judgment of a U.S. court against us and our executive officers and directors and the Israeli experts named in this annual report in Israel or the United States, to assert U.S. securities laws claims in Israel or to serve process on our executive officers and directors and these experts; |
| ● | your rights and responsibilities as a shareholder will be governed in key respects by Israeli laws, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies; and |
| ● | 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. |
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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 the risks described below, together with all of the other information in this annual report on Form 20-F. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business operations. If any of these risks actually occurs, our business and financial condition could suffer, and the price of our Ordinary Shares could decline. 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 factors including the risks described below and elsewhere in this report and our other SEC filings. See “Cautionary Note Regarding Forward-Looking Statements” above.
Risks Related to Our Business and Industry
We are highly dependent on the successful development, marketing and sale of our proprietary technology.
Our proprietary technology is the basis of our business. As a result, the success of our business plan is highly dependent on our ability to remain competitive by selling our TES systems to customers in our main focus area, the industrial heat sector. To the best of our knowledge, our technology and know-how are proprietary. However, there is no certainty that potential customers will prefer our technology over that of other companies currently existing or that will exist in the future. Additionally, competitors with stronger liquidity positions may be better positioned to expand their commercial footprint, provide more attractive financing or pricing structures, and capture market share at our expense. Moreover, many of our competitors are privately held companies that are not required to publicly disclose detailed financial information, while we are subject to public reporting obligations as a listed company, which may provide them with greater operational and commercial flexibility and potentially facilitate their market penetration relative to us. If any new or existing competitor develops a product that is perceived as more efficient than, lower in cost than, or generally preferable to our current or future products, our financial results may be negatively impacted.
Furthermore, we are at an important stage of our operations, and we are currently demonstrating our technology to the market through the use of development projects, operating pilots and initial commercial projects on the premises of a number of our significant customers in Israel and abroad. If we do not succeed in showcasing our technology to the marketplace, this may have a material adverse effect on our operations and sales.
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We are highly dependent on our key employees.
Our future growth and success depend to a large extent on the continued services of members of our current management. Any of our employees and consultants may leave the Company at any time, subject to certain notice periods. The loss of the services of any of our executive officers or any key employees or consultants may adversely affect our ability to execute our business plan and harm our operating results. Our operational success will substantially depend on the continued employment of senior executives, technical staff, and other key personnel. The loss of key personnel may have an adverse effect on our operations and financial performance.
Our field of business is generally new, and we may not be aware of all of the risks that we will face.
The field of TES is comprised of technologies that are still in their early stages with limited implementations and track record. While we attempt to anticipate the risks, we and holders of our securities may face resulting from our operations, there may be certain risks specific to our sector to which we have yet to be exposed or made aware. For example, certain TES unit components may be unique, and we could be dependent on a single approved supplier for these critical parts. Further, there may be certain risks that will develop depending on the manner in which the field develops. For example, because TES is comprised of new technologies, the terms of commercial engagement with our customers require finding solutions to finance the working capital and collateral required for the establishment of a particular project. Unless we find the required financing, we may have difficulty entering into new commercial contracts. Accordingly, holders of our Ordinary Shares may be unable to anticipate all of the risks that are associated with the Company.
In addition, our relatively EaaS offering may pose risks due to the evolving nature of the EaaS business model, which require expertise that is still being developed internally and could introduce operational challenges. Our management has limited prior experience in EaaS business operation. There can be no assurance that we will be able to successfully implement and manage our new business models. Our business, results of operations, financial condition and cash flows could be materially adversely affected if we are unable to successfully integrate our the EaaS business model into our existing operations and any inability to do so may also hinder our ability to grow, divert the attention of management and our key personnel, disrupt our business and impair our financial results. Further, our EaaS business model increases our exposure to market dynamics such as energy prices and grid balancing costs.
We are exposed to risk relating to volatility in the commodity price of fossil fuels and electricity prices, which could have a material adverse impact on prices of alternative energies and related products that need to be consolidated into our business model. It is possible that the cost of alternative energy and related products will impact our commercial efforts and affect our ability to become profitable.
We expect to generate a portion of our revenues from the sale of products related to the production and use of alternative energy and electricity as commodities. Some of the significant incentives for customers to use our intended products and services are the rising cost and scarcity of fossil fuels such as oil, natural gas and coal. We offer our customers an alternative to fossil fuel reliance through the electrification of industrial processes. As a result, we will be exposed to the fluctuating commodity prices applicable to fossil fuels and electricity. Historically, fossil fuel and electricity prices have been volatile, and we expect such volatility to continue. Furthermore, future supply of and demand for fossil fuels and electricity are unpredictable. There are many entities in the fossil fuels and electricity commodities markets, such large energy companies, and governments, that are of far greater size and influence than us and which can often cause significant movement in the short- and long-term supply and prices of fossil fuels and electricity. Fluctuations in the commodity price of fossil fuels and electricity may have a materially adverse impact on our profitability. We have to factor these fluctuations into our business plan in order to mitigate the associated commodity price risk. There is a risk that we may expend large sums of money to generate alternative energy products and yet a market never properly develops for them and thus we may not become profitable due to the market volatility of fossil fuels and electricity.
2
Alternative energies are becoming increasingly important in certain countries, causing increasing investment devoted to improvements and development of new alternatives and technologies.
As a result of increasing interest and investment in the development of alternative energy sources, it is expected that there will be significant developments during the next decade. The development and implementation of new technologies may cause a reduction in the costs or use of certain alternative energies or result in better alternatives. It cannot be predicted when new technologies may become available, the rate of acceptance of new technologies by competitors and customers, or the costs associated with such new technologies. In addition, advances in the development of alternatives energies could significantly reduce demand for or eliminate the need for certain other technologies. Any advances in technology may require significant capital expenditures to remain competitive. In addition, they may have an impact on the efficacy of our operations and future results of operations and financial condition.
We may be subject to unexpected maintenance warranty expenses or service claims that could reduce our profits.
We generally provide our customers with a maintenance warranty period of twenty-four months in connection with the sale of our TES systems and no longer than twenty-eight months from the delivery date of the BNRG products set forth in the purchase order. This product warranty covers defects in used material and manufacturing workmanship- the latter of which is related to mis-production, mis-assembly or fatigue. As a result, we may bear the risk of warranty claims after we have completed the installation of a TES system. Upon completion of installation of a TES system, we intend to record an estimated liability for potential warranty or service claims. Our failure to predict accurately future warranty claims, including if claims are in excess of our recorded lability, could adversely affect our financial results.
We are dependent upon third-party manufacturers and suppliers making us vulnerable to supply shortages and problems, increased costs and quality or compliance issues, any of which could harm our business.
We rely on third parties to manufacture and supply us with proprietary custom subcomponents for our TES systems. We rely on a limited number of suppliers who provide us with materials and components as well as manufacture and assemble certain components of our TES systems. Accordingly, in the event equipment must be repaired or replaced, our operations may be interrupted, and, in turn, our financial results may be negatively impacted. Further, we may encounter expenses in the event that the equipment requires a repair or replacement.
Additionally, our suppliers may encounter problems themselves during manufacturing for a variety of reasons, including, for example, failure to follow specific protocols and procedures, failure to comply with applicable legal and regulatory requirements, equipment malfunction and environmental factors, failure to properly conduct their own business affairs and infringement of third-party intellectual property rights, any of which could delay or impede their ability to meet our requirements. Our reliance on these third-party suppliers also subjects us to other risks that could harm our business, including:
| ● | we may not be able to obtain an adequate supply in a timely manner or on commercially reasonable terms; |
| ● | our suppliers, especially new suppliers, may make errors in manufacturing that could negatively affect the efficacy or safety of our products or cause delays in shipment; |
| ● | we may have difficulty locating and qualifying alternative suppliers; |
| ● | switching components or suppliers may require product redesign, which could significantly impede or delay our commercial activities; |
| ● | the occurrence of a fire, natural disaster or other catastrophe impacting one or more of our suppliers may affect their ability to deliver products to us in a timely manner; and |
| ● | our suppliers may encounter financial or other business hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements. |
We may not be able to quickly establish additional or alternative suppliers, if necessary, in part because we may need to undertake additional activities to establish such suppliers. Any interruption or delay in obtaining products from our third-party suppliers, or our inability to obtain products from qualified alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers and cause them to switch to competing products.
3
We are dependent upon third-party service providers. If such third-party service providers fail to maintain a high quality of service, the utility of our products could be impaired, which could adversely affect the penetration of our products, our business, operating results and reputation.
The success of certain services and products that we provide are dependent upon third-party service providers. Such service providers include engineering, procurement, and construction companies which are responsible for preparing the infrastructure for installing our prototype systems and TES systems, and the maintenance and operation service companies at the next stages after commissioning of our TES systems and sites. As we expand our commercial activities, an increased burden will be placed upon the quality of such third-party providers. If third-party providers fail to maintain a high quality of service, our products, business, reputation and operating results could be adversely affected. In addition, poor quality of service by third-party service providers could result in liability claims and litigation against us for damages, fines or injuries.
In particular, we are dependent on our customers’ industrial production floors and operation managers of utility plants and factories in which we plan to commission and/or operate our TES systems and ensure the proper utilization of our energy storage output.
We are dependent on the use of certain raw materials and changes in the price or availability of such raw materials may impact our ability to efficiently produce our products.
We use certain raw materials in the production of our energy storage elements, including crushed rocks, metal sheet rolls, processed metal parts, piping accessories, construction and support metal parts, and stainless-steel pipes. We use purchased parts for assemblies, such as pumps, heat exchangers, insulation units, control items such as control electronics and controlled valves, heating elements, and fasteners such as screws and rivets. Although we are not dependent on any one supplier of any of the above materials or items, we are dependent on their general availability and market prices.
The availability and market price of any of the above materials or items are affected by a number of external factors that are outside of our control such as product and raw material demand, commodity market fluctuations, currency fluctuations, trade tariffs, pandemics, transportation costs, energy prices, work stoppages or changes in the labor market and government regulation. Inflationary pressures have resulted in increases in the cost of certain of the components, parts, raw materials, and other supplies necessary for the production of our products, and such increases may continue to impact us in the future.
Our inability to obtain sufficient quantities of components, parts, raw materials, and other supplies from sources necessary for the production of our products could result in reduced or delayed sales or lost orders. Our suppliers also may encounter difficulties or increased costs in obtaining the materials necessary to produce the components and parts that we use in our products. The time lost in seeking and acquiring new sources of supply or our inability to locate alternative sources of supply of comparable quality at an acceptable price, or at all, could negatively impact our sales and results of operations.
We need to obtain and uphold permits, certifications, and authorization in various jurisdictions.
Our products are intended to be sold globally. This means that we will operate in different jurisdictions, some of which have requirements for regulatory permits, certifications, authorizations, or requirements from government authorities or other administrative bodies. In addition, these may have different local standards or specific divergences, which is normal in the energy industry. We intend to apply for and obtain all relevant permits and authorization that are required in accordance with agreements or to carry out our operations. This includes our intention to operate within, and obtain approvals for, the requirements of the International Organization for Standardization, or ISO, that are relevant to our field (such as ISO14001, ISO9000, ISO18001, and ISO 27001:2022).
Furthermore, in certain circumstances, we are dependent on our ability or our customers’ ability to obtain and maintain building permits, environmental permits, and permits to import and install our products in each local market. If we cannot obtain or were to lose such permits, certifications, and authorizations, or if our customers were to lose any of their permits, this could have a significant negative impact on our operations, financial position and earnings. Failure to comply with local, national, or international environmental and safety regulations could lead to fines or shutdowns.
4
The field of energy storage integration is relatively new and still developing, and the regulation of the field is also changing and developing.
Our field of business is rapidly developing and, accordingly, so is its regulatory scheme. It is likely that the regulatory schemes in which we operate will continue to change and develop, which may affect our operations. Some of our current projects are still pending permits and/or approvals and there is no certainty that we will receive such permits and/or approvals on our projected timeline or at all or if we are approved, that the outcome will be favorable to us. Further, if our permits are approved, the approval may be conditioned based on certain terms, which may cause a delay in our timelines and increase process costs. Additional conditions like geopolitical challenges may make our projects unfeasible or significantly undesirable for us.
Our international activities expose us to operational risks in new territories, which includes navigating unfamiliar regulatory environments and may lead to compliance and financial exposure.
Expansion of our operations outside of our existing markets will require management attention and resources, involves additional risks, and may be unsuccessful, which could harm our future business development and existing operations. Our international expansion includes new potential risks that we must navigate. Our international operations complicate and extend our supply chains and present additional logistical concerns. The ability to source raw materials and deliver our products in a timely manner and on budget requires capable and reliable distribution channels. Disruptions caused by uncontrollable events, such as natural disasters, geopolitical actions or pandemics, can lead to delays in production and distribution.
Our business operations in multiple international jurisdictions creates a myriad of regulatory concerns. These arise from the need to comply with diverse and, often, complex regulatory frameworks in various countries. There are many types of regulatory risks, but some of the most common involve environmental regulations, local content requirements, labor laws and taxes, may impact our business models and local filing and permitting can be costly, lengthy and unpredictable. Investing time and resources in establishing the necessary local infrastructure that complies with local requirements may lead to compliance and financial exposure.
We have expanded our operations in certain European territories through our joint venture company, Brenmiller Europe S.L., a company incorporated under the laws of the Kingdom of Spain, or Brenmiller Europe, and plan to further expand into other markets in Europe and in the U.S. through third-party distribution agreements. These expansion plans will require management attention and resources and may be unsuccessful. In certain markets, we may have limited or no operating experience, may not benefit from any first-to-market advantages and may have to compete with local companies that have developed a strong understanding of the local market and TES needs. We have limited experience entering into new markets. Because we do not have experience in this regard, we may not be able to accurately predict the costs of, or anticipate and manage potential challenges in, establishing distribution efforts and operations in such markets. Furthermore, to deliver satisfactory performance for customers in new markets, it may be necessary to locate physical facilities, and establish logistics networks to and from such markets. We have limited experience establishing such procurement networks to and from other countries. We may not be successful in expanding into additional international markets or in generating revenue or profits from such operations. Furthermore, laws and regulations in countries we enter may increase our costs or interfere with our business in these countries.
Operating internationally requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required to establish and expand our operations will produce desired levels of revenues or profitability. If we invest substantial time and resources to establish and expand our operations and are unable to do so successfully and in a timely manner, our business, financial condition and operating results may be materially and adversely affected. In addition, the quality of our current engineering documentation can lead to delays in overall project timeline.
We may be subject to litigation for a variety of claims, which could adversely affect our results of operations, harm our reputation, or otherwise negatively impact our business.
We may be subject to litigation for a variety of claims arising from our normal business activities. These may include claims, suits, and proceedings involving labor and employment, wage and hour, commercial, real property and other matters. The outcome of any litigation, regardless of its merits, is inherently uncertain. Any claims and lawsuits, and the disposition of such claims and lawsuits, could be time-consuming and expensive to resolve, divert management attention and resources, and lead to attempts on the part of other parties to pursue similar claims. Any adverse determination related to litigation could adversely affect our results of operations, harm our reputation or otherwise negatively impact our business. In addition, depending on the nature and timing of any such dispute, a resolution of a legal matter could materially affect our future operating results, our cash flows and our ability to raise capital.
5
Our management team has limited experience managing a U.S. reporting company.
Prior to our Nasdaq listing on May 25, 2022, none of our management team had experience managing a publicly traded company in the United States, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies in the United States. Our management team may not successfully or efficiently manage our transition to being a public company in the United States that is subject to significant regulatory oversight and reporting obligations under the U.S. federal securities laws and the continuous scrutiny of securities analysts and investors. These obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, results of operations and prospects.
Our business may be impacted by changes in general economic conditions.
Our business is subject to risks arising from changes in domestic and global economic conditions, including adverse economic conditions in markets in which we operate, which may harm our business. For example, recent concerns regarding inflation and the state of the economy have caused significant volatility and uncertainty in U.S. and international markets. If our future customers significantly reduce spending in areas in which our technology and products are utilized, or prioritize other expenditures over our technology and products, our business, financial condition, results of operations and prospects would be materially adversely affected.
Disruption to the global economy could also result in a number of follow-on effects on our business, including a possible slow-down resulting from lower customer expenditures; inability of customers to pay for products, solutions or services on time, if at all; more restrictive export regulations which could limit our potential customer base; negative impact on our liquidity, financial condition and share price, which may impact our ability to raise capital in the market, obtain financing and secure other sources of funding in the future on terms favorable to us.
In addition, the occurrence of catastrophic events, such as missile attacks, hurricanes, storms, earthquakes, tsunamis, floods, medical epidemics and other catastrophes that adversely affect the business climate in any of our markets could have a material adverse effect on our business, financial condition and results of operations. Some of our operations can be located in areas that have been in the past, and may be in the future, susceptible to such occurrences.
Changes in environmental laws and regulations, or fundamental changes in the operations of government agencies, could reduce demand for our products or impact the timing for our services.
A portion of our business is driven by environmental laws and regulations. In August 2022, the U.S. Congress passed, and President Biden signed into law, the Inflation Reduction Act, or IRA, which provides $128 billion in new funding for renewable energy and grid energy storage. On January 20, 2025, however, President Donald Trump issued an executive order directing federal agencies to immediately pause the disbursement of funds appropriated through the IRA. The full impact of this Executive Order and related administrative actions is uncertain at this time. In addition to pausing such disbursement, the Trump administration may also seek to challenge, repeal, or revise this rule and Congress may attempt to repeal or amend the IRA with respect to renewable energy and grid energy storage; however, we cannot predict what, when, or how the new administration or Congress may take actions to rollback or otherwise revise existing laws, rules, or regulations related to renewable energy and grid energy storage or the ultimate impact such changes may have on our business or results of operations.
Furthermore, President Trump has signed several executive orders rescinding many of the Biden administration’s executive orders and associated climate-related initiatives. President Trump’s directives included, among other things, directing the U.S. Environmental Protection Agency, or EPA, to reconsider its 2009 endangerment findings relating to greenhouse gases, or GHGs, which provides regulatory justification for federal GHG permitting and methane emission control requirements, and directing the EPA to reconsider its use of social cost of GHG estimates in federal permitting decisions. We cannot predict the ultimate impact of these executive orders or any similar future changes on our business or results of operations.
Moreover, President Trump signed an executive order to withdraw the United States from the Paris Agreement under the UN’s Framework Convention on Climate Change, or the Paris Agreement and the Convention.
6
If the U.S. federal government does not continue to address environmental laws and regulations relating to renewable energy and TES, it may adversely impact the ability of companies in the renewable energy sector to generate revenue, including us. Fundamental changes in the operations of government agencies (i.e., significant agency staff reductions, changes or delays in processes for awarding contracts, and decisions to shutdown portions of local or state government) also could impact the amount or timing of our revenue, if any. Also, reduced spending by governmental agencies may increase competition within our industry, which may directly affect future revenue and profits, if any.
Many U.S. states have renewable energy bills and goals, including laws to increase renewable energy sources and to reduce carbon emissions. If state governments do not continue to address environmental laws and regulations, it may adversely impact the ability of companies in the TES sector to generate revenue, including us.
We may be subject to securities litigation, which is expensive and could divert management attention.
In the past, companies that have experienced volatility in the market price of their shares have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities.
Our business and operations might be adversely affected by security breaches, including any cybersecurity incidents.
We depend on the efficient and uninterrupted operation of our computer and communications systems, and those of our consultants, contractors and vendors, which we use for, among other things, sensitive company data, including our intellectual property, financial data and other proprietary business information.
While we have recently obtained ISO 27001 certification, and certain of our operations have business continuity and disaster recovery plans and other security measures intended to prevent and minimize the impact of IT-related interruptions, our IT infrastructure and the IT infrastructure of our consultants, contractors and vendors are vulnerable to damage from cyberattacks, computer viruses, unauthorized access, electrical failures and natural disasters or other catastrophic events. We could experience failures in our information systems and computer servers, which could result in an interruption of our normal business operations and require a substantial expenditure of financial and administrative resources to remedy. System failures, accidents, or security breaches can cause interruptions in our operations and can result in a material disruption of our business operations. The loss of data or data security breaches could result in delays in our development and regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach was to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur regulatory investigations and redresses, penalties and liabilities and the development of our product candidates could be delayed or otherwise adversely affected. Because there are many different security breach techniques and such techniques continue to evolve, we may be unable to anticipate attempted security breaches, react in a timely manner or implement adequate preventative measures. If a breach of security or other data security incident occurs or is perceived to have occurred, the perception of the effectiveness of our security measures and reputation could be harmed and we could lose current and potential customers.
Even though we believe we carry commercially reasonable business interruption and liability insurance, following international standard protocols, we might suffer losses as a result of business interruptions that exceed the coverage available under our insurance policies or for which we do not have coverage. For example, we are not insured against terrorist attacks or cyberattacks. Any natural disaster or catastrophic event could have a significant negative impact on our operations and financial results. Moreover, any such event could delay the development of our products under development.
Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cybersecurity.
Despite our recent ISO 27001 certification, the implementation of security measures intended to secure our data against impermissible access and to preserve the integrity, privacy and confidentiality of our data, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization. We have also begun implementing the ISO 42001 artificial intelligence governance framework; however, such implementation has not yet been completed and there can be no assurance that these measures will prevent cyber incidents, system failures, or misuse of artificial intelligence systems. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our products development programs. For example, the loss of data from our projects could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. We may not be able to remedy any problems caused by hackers or other similar actors in a timely manner, or at all. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until after they are launched against a target, we and our service providers may be unable to anticipate these techniques or to implement adequate preventative measures. To the extent that any disruption or security breach was to result in a loss of or damage to our project data, or inappropriate disclosure of confidential, personal or proprietary information, we could incur material legal claims and liability, including under data privacy laws such as the Protection of Privacy Law, 5741-1981, damage to our reputation, and the finalization of our products under development could be delayed.
7
Risks Related to Our Financial Condition and Capital Requirements
Our management has concluded, and the report of our independent registered public accounting firm contains an explanatory paragraph that indicates that there are conditions that raise substantial doubt about our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all.
We have not yet generated significant revenues from our operations, we had an accumulated deficit as of December 31, 2025 of $116,105 thousand and we also have a history of net losses and negative operating cash flows. In 2022, we began commercializing our products and services and recently commenced operating a new production facility in Dimona, Israel after shifting our operations from the development stage to commercial operations. However, we expect to continue incurring losses and negative cash flows from operations until we reach profitability. As a result of these expected losses and negative cash flows from operations, along with our current cash position, our management has concluded that these conditions raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of the uncertainty regarding our ability to continue as a going concern. This going concern opinion could materially limit our ability to commercialize our products and services and raise additional funds through the issuance of equity or debt securities or otherwise. Further reports on our consolidated financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through debt or equity financing. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to our products. This may raise substantial doubts about our ability to continue as a going concern.
We expect that we will need to raise substantial additional funding, which may not be available on acceptable terms, or at all. Failure to obtain funding on acceptable terms and on a timely basis may require us to curtail, delay or adjust our commercialization and product development efforts, expansion to new markets, or other activities.
Our primary business activity is the development and commercial sale of our TES systems through equipment sales and through the adoption of new energy or heat as a service business models. We anticipate that we will need to rely on external sources of financing, such as credit, project financing or other forms of investments, for our working capital and project development costs. As of December 31, 2025, our cash and cash equivalents and restricted deposits were $4,945 thousand. We expect that we will require substantial additional capital to continue our research and development activity and to proceed with pilot projects that partly will have to be financed by us in order to penetrate relevant markets or secure certain clients and commercialize our products. In addition, our operating plans may change as a result of many factors that may currently be unknown to us. Our future funding requirements will depend on many factors, including but not limited to:
| ● | the costs to produce our TES systems, including expenses related to research and development to further develop our TES systems; |
| ● | the increase in the cost of financing as a result of reasons not necessarily related to our Company, which may affect the profitability of our projects; |
| ● | increasing our marketing efforts to increase the commercialization of our TES systems; and |
| ● | the level of revenues received from commercial sales of our products. |
Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our products. We cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. In addition, our ability to raise capital could be affected by various factors, including prevailing market and economic conditions. Moreover, the terms of any financing may adversely affect the holdings or the rights of holders of our securities and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of the Ordinary Shares to decline. The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights, and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable, and we may be required to relinquish rights to some of our technologies or products or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results, and prospects. Even if we believe that we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.
If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue our research or development efforts or the development or commercialization of our existing products or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition, and results of operations.
8
We have not generated significant revenue from the sale of our current products, expect to incur operating losses in the future and may never be profitable.
We have not significantly commercialized our products and have not generated significant revenues since the date of our inception. Our ability to generate revenue and achieve profitability depends on our ability to successfully complete the development of, and to materially commercialize, our products. Our ability to generate future revenue from product sales depends heavily on our success in many areas, including but not limited to:
| ● | our dependency on the successful development, marketing and sale of our proprietary technology, including our TES systems, to our target customers; |
| ● | the loss of the services of any of our executive officers or any key employees or consultants may adversely affect our ability to execute our business plan and harm our operating results; |
| ● | our dependency upon third-party manufacturers and suppliers making us vulnerable to supply shortages and problems, increased costs and quality or compliance issues, any of which could harm our business; |
| ● | our dependency on the use of certain raw materials and changes in the price or availability of such raw materials may impact our ability to efficiently produce our products; |
| ● | the field of energy storage integration is relatively new and still developing, and the regulation of the field is also changing and developing; |
| ● | general economic weakness, including inflation, or industry and market conditions; |
| ● | addressing any competing technological and market developments; |
| ● | negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; |
| ● | maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and |
| ● | attracting, hiring and retaining qualified personnel. |
We expect our operating expenses to increase in the future as we expand our operations. If our revenue does not grow at a greater rate than our expenses, we will not be able to achieve and maintain profitability. We may incur significant losses in the future for many reasons, including without limitation the other risks and uncertainties described in this annual report. Additionally, we may encounter unforeseen expenses, operating delays, or other unknown factors that may result in losses in future periods. If our expenses exceed our revenue, our business may be seriously harmed, and we may never achieve or maintain profitability.
We expect to be exposed to fluctuations in the rate of energy tariffs, which could adversely affect our results of operations.
Our advantages in enhancing both the green side of energy storage to potential clients and the cost of produced energy to charge our TES is connected to changing tariffs of the different energy sources including, but not limited to, renewable energy, natural gas, and fossil fuels. Drastic changes in these tariffs have a high effect on the economics or return on investment of our projects. Changes to energy tariffs could impact our, results of operations and profitability as well as the feasibility of entering new projects.
Industrialized countries are struggling to limit their greenhouse gas emissions. Energy use and energy tariffs have a high effect in this climate debate. The tariffs and prices for fossil fuel and coal energy sources, together with the tariffs of the carbon tax and the trading prices per each tone of CO2, will dictate the speed at which we can shift towards adopting new technologies and utilize greener technologies in the process of our customers’ production floors and for power production. The speed at which we are able to shift to utilizing more green technologies is a major factor which effects the level of demand for products we develop for the industrial segments we target as potential customers. We anticipate that if prices for natural gas and coal increase as their availability diminishes worldwide due to geopolitical crises and burdensome regulations, together with expected increases in the prices due to carbon taxes and the price per credit for tons of CO2, there will be more demand for our products.
9
We may enter into agreements to operate projects at a financial loss in order to penetrate certain markets.
In order to penetrate certain markets or demonstrate our technological capabilities, and as part of our long-term business strategy, we may enter into agreements to finance, build and operate projects at a financial loss to us. Such agreements may materially affect our business, financial condition, and results of operations.
The terms of our credit facility agreement with the European Investment Bank, or the EIB, will and future indebtedness may, restrict our current and future operations, particularly our ability to take certain actions and to raise capital for future projects.
The terms of the credit facility agreement with the EIB contain, and agreements governing future indebtedness may contain, a number of covenants that impose operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest without the consent of EIB or other future lender, including restrictions on our ability to:
| ● | transfer or sell assets; |
| ● | pay dividends or distributions on our shares or repurchase shares; |
| ● | merge, amalgamate or consolidate with another company; |
| ● | acquire another entity or business; |
| ● | incur additional debt or indebtedness other than permitted indebtedness; |
| ● | create or incur liens on our assets; and |
| ● | provide project finance guarantees. |
As a result of the restrictions contained in the credit facility agreement with EIB, and that may be contained in any agreements for future indebtedness, we may be limited in how we conduct our business, unable to raise additional debt financing to operate during general economic or business downturns or unable to compete effectively or take advantage of new business opportunities or raise capital for project finance. These restrictions may affect our ability to grow in accordance with our strategy.
Our revenues and efforts to become profitable may be impacted by our need to pay royalties on government grants and other agreements, which may also include terms subjecting us to penalties if we are in default of material terms.
We are required to pay annual royalties to the Israeli government at a rate of between 3% and 5% on revenues from the use of technology that has been developed under IIA, the Israeli Ministry of Economy and Industry, and the Israeli Ministry of Energy programs up to the total amount of grants received and bearing interest i) the annual interest rate that applied at the time of the approval of the applicable IIA file which applies to all of the funding received under that IIA approval for grants received before June 30, 2017 and ii) the annual interest rate based on the 12-month Secured Overnight Financing Rate, or SOFR, or at an alternative rate published by the Bank of Israel plus 0.71513%. Grants approved after January 1, 2024, shall bear the higher interest rate of (i) 12 months SOFR, plus 1%, or (ii) a fixed annual interest rate of 4%.
In addition, in consideration for the support from the BIRD Foundation, the Israel-United States Binational Research and Development Foundation, we are obligated, among other things, to pay annual royalties at a rate of 5% on all of the revenues deriving from the technology that has been developed and up to a maximum ceiling of 150% of the amount of the grant, subject to the terms of the agreement with the BIRD Foundation. Moreover, under the terms of our credit facility agreement with the EIB, we are required to pay annual royalties at a rate of 2.0% on all gross sales of TES that we produce each quarter until a royalty cap of the amounts that have been disbursed under the facility is reached. Furthermore, as part of our agreement with the New York Power Authority of the State of New York, or NYPA, we are obligated pay annual royalties to NYPA of 5% from gross sales made, beginning June 1, 2022, until NYPA has been fully compensated for the expenditure amounts agreed between the parties.
If we are able to generate revenues from the commercialization of our technology, the requirement that we pay royalties on certain projects will impact the amount of revenue that we generate and may delay our efforts to become profitable.
Our BNRG360 strategy may require substantial capital commitments and could increase our financing needs and exposure to long-term contractual and project risks.
On January 22, 2026, we announced our BNRG360 strategy, pursuant to which we intend to provide integrated heat and power solutions through HaaS and power purchase agreement structures without upfront capital expenditure by customers. The implementation of this strategy may require us to finance, develop, own or otherwise support long-term energy assets, which could significantly increase our capital expenditure, working capital requirements and reliance on external financing. If we are unable to secure sufficient debt or equity financing on acceptable terms, or at all, our ability to execute this strategy and expand our project pipeline could be materially adversely affected. In addition, long-term contractual arrangements may expose us to counterparty credit risk, performance obligations and market risks over extended periods, which could adversely affect our liquidity, financial condition and results of operations.
10
Risks Related to Our Intellectual Property
If we are unable to obtain and maintain effective patent rights for our products and services, we may not be able to compete effectively in our markets. If we are unable to protect the confidentiality of our trade secrets or know-how, such proprietary information may be used by others to compete against us.
Our success and future revenue growth will depend, in part, on our ability to protect our patent rights. In addition to the protection afforded by any patents that may be granted, historically, we have relied on trade secret protection and confidentiality agreements with our employees, consultants, and contractors to protect proprietary know-how that is not patentable or that we elect not to patent, processes that are not easily known, knowable or easily ascertainable, and for which patent infringement is difficult to monitor and enforce and any other elements of our product candidate discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. However, agreements may be breached, trade secrets may be difficult to protect, and we may not receive adequate remedies for any breach. In addition, our trade secrets and intellectual property may otherwise become known or be independently discovered by competitors or other unauthorized third parties.
Although our patent applications were approved in certain jurisdictions, 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 may not adequately protect our intellectual property, products, or services and provide exclusivity for our new products or services or prevent others from designing around our claims. Furthermore, there is no guarantee that third parties will not infringe or misappropriate our patents or similar proprietary rights. In addition, there can be no assurance that we will not have to pursue litigation against other parties to assert its rights.
Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.
If we cannot obtain and maintain effective patent rights for our products and services, we may not be able to compete effectively, and our business and results of operations would be harmed.
No assurance can be made that our trade secrets and other confidential proprietary information will not be disclosed in violation of our confidentiality agreements, or those competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Also, misappropriation or unauthorized and unavoidable disclosure of our trade secrets and intellectual property could impair our competitive position and may have a material adverse effect on our business. Additionally, if the steps taken to maintain our trade secrets and intellectual property are deemed inadequate, we may have insufficient recourse against third parties for misappropriating any trade secret.
Intellectual property rights of third parties could adversely affect our ability to commercialize our products and services, and we might be required to litigate or obtain licenses from third parties in order to develop or market our products. Such litigation or licenses could be costly or not available on commercially reasonable terms and may prevent or delay our development and commercialization efforts.
It is inherently difficult to conclusively assess our freedom to operate without infringing on third-party rights. Our competitive position may be adversely affected if existing patents or patents resulting from patent applications issued to third parties or other third-party intellectual property rights are held to cover our products or services or elements thereof, or our manufacturing or uses relevant to our development plans. In such cases, we may not be in a position to develop or commercialize products or services or our products (and any relevant services) unless we successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned or enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms. There may also be pending patent applications that if they result in issued patents, could be alleged to be infringed by our new products or services. If such an infringement claim should be brought and be successful, we may be required to pay substantial damages, be forced to abandon our new products or services or seek a license from any patent holders. Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. No assurances can be given that a license will be available on commercially reasonable terms, if at all.
11
It is also possible that we have failed to identify relevant third-party patents or applications. For example, U.S. patent applications filed before November 29, 2000, and certain U.S. patent applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Patent applications in the United States and elsewhere are published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent applications covering our new products or services could have been filed by others without our knowledge. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our services, our new products, or the use of our new products. Third-party intellectual property rights holders may also actively bring infringement claims against us by asserting that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to materials, designs, or methods of manufacture related to the use or manufacture of our products or services. If any third-party patents were held by a court of competent jurisdiction to cover aspects of our processes for designs or methods of use, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product candidate unless we obtain 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.
If any third-party patents were held by a court of competent jurisdiction to cover aspects of our processes for designs or methods of use, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product candidate unless we obtain 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 or services. 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 services, or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.
Thus, we cannot guarantee that we will be able to successfully settle or otherwise resolve such infringement claims. If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or continue costly, unpredictable, and time-consuming litigation and may be prevented from or experience substantial delays in pursuing the development of and/or marketing our new products or services. If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing our new products or services that are held to be infringing. We might, if possible, also be forced to redesign our new products so that we no longer infringe third-party intellectual property rights. Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.
Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents.
Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of any patents that may issue from our patent applications or narrow the scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. We therefore cannot be certain that we were the first to file the invention claimed in our owned and licensed patent or pending applications, or that we or our licensor were the first to file for patent protection of such inventions. Assuming all other requirements for patentability are met, in the United States prior to March 15, 2013, the first to make the claimed invention without undue delay in filing is entitled to the patent, while generally outside the United States, the first to file a patent application is entitled to the patent. After March 15, 2013, under the Leahy-Smith America Invents Act, or the Leahy-Smith Act, enacted on September 16, 2011, the United States has moved to a first-to-file system. The Leahy-Smith Act also includes a number of significant changes that affect the way patent applications will be prosecuted and may also affect patent litigation. In general, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents, all of which could have a material adverse effect on our business and financial condition.
We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming, and unsuccessful.
Competitors may infringe our intellectual property. If we were to initiate legal proceedings against a third party to enforce a patent covering one of our new products or services, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the United States Patent and Trademark Office, or USPTO, or made a misleading statement, during prosecution. Under the Leahy-Smith Act, the validity of U.S. patents may also be challenged in post-grant proceedings before the USPTO. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
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Derivation proceedings initiated by third parties or brought by us may be necessary to determine the priority of inventions and/or their scope with respect to our patent or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our product development, continue our research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring our new products or services to market.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our Ordinary Shares.
We may be subject to claims challenging the inventorship of our intellectual property.
We may be subject to claims that former employees, collaborators or other third parties have an interest in, or right to compensation, with respect to our current patent and patent applications, future patents, or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our products or services. Litigation may be necessary to defend against these and other claims challenging inventorship or claiming the right to compensation. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
We may not be able to protect our intellectual property rights throughout the world.
Filing, prosecuting, and defending patents on products and services, as well as monitoring their infringement in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries 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 develop their own products or services in jurisdictions where we have not obtained patent protection to and may export infringing products or services to territories where we have patent protection, but where patents are not enforced as strictly as they are in the United States. These products or services may compete with our products or services. Future patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, which could make it difficult for us to stop the marketing of competing products or services in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our future patents at risk of being invalidated or interpreted narrowly, put the issuance of our patent applications at risk, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and any damages or other remedies that we may be awarded, may not be commercially meaningful. Accordingly, our efforts to monitor and enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
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Risks Related to Ownership of our Securities
There can be no assurance that we will be able to maintain continued Nasdaq listing criteria.
On August 12, 2024, we received a written notice from the Nasdaq Stock Market indicating that we are not in compliance with the minimum bid price requirement for continued listing set forth in Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share. Under Nasdaq Listing Rule 5810(c)(3)(A), we were granted a grace period of 180 calendar days to regain compliance with the minimum bid price requirement. On January 16, 2025, we announced that we received a written notice from Nasdaq that we have regained compliance with the minimum bid price requirement for continued listing set forth in Nasdaq Listing Rule 5550(a)(2). The Nasdaq staff made this determination of compliance after the closing bid price of our ordinary shares on Nasdaq was at $1.00 per share or greater for the 10 consecutive business days prior to the date of the notice. Accordingly, we have regained compliance with Nasdaq Listing Rule 5550(a)(2), and Nasdaq considers the prior bid price deficiency matter now closed. However, there can be no assurance that we will be able to maintain compliance with the minimum bid price requirement or that we will otherwise be in compliance with other Nasdaq listing criteria.
In the past year, we have effected two reverse share splits in order to support compliance with Nasdaq’s minimum bid price requirement, including (i) a 5-for-1 reverse share split effected at the market open on June 20, 2025, and (ii) a 7-for-1 reverse share split effected on January 26, 2026. There can be no assurance that these reverse share splits will result in sustained compliance with the minimum bid price requirement.
Pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iv), because we have effected one or more reverse stock splits within the prior one-year period, if our ordinary shares again have a closing bid price below $1.00 per share for 30 consecutive business days, we would not be eligible for an additional compliance period and Nasdaq staff may issue a delisting determination without providing a further cure period. As a result, if our ordinary shares again trade below $1.00 per share for 30 consecutive business days, we could be subject to immediate delisting from Nasdaq.
In addition, Nasdaq Listing Rule 5550(b)(1) requires listed companies to maintain stockholders’ equity of at least $2.5 million. As of December 31, 2025, our stockholders’ equity was $3,494 thousand, which was below the minimum requirement. Although, following the financing we received in connection with the July 2025 Private Placement, we believe we currently demonstrate compliance with the stockholders’ equity requirement, there can be no assurance that we will be able to maintain compliance with this or other applicable Nasdaq continued listing standards in the future.
In addition to the minimum bid price and stockholders’ equity requirements described above, Nasdaq imposes numerous other quantitative and qualitative continued listing standards, including, and there can be no assurance that we will be able to satisfy all applicable continued listing criteria at all times. Failure to comply with any such requirements could result in the issuance of a deficiency notice, the imposition of additional compliance requirements, or the initiation of delisting proceedings. Moreover, Nasdaq periodically proposes and adopts amendments to its listing standards, and the SEC must approve such rule changes. Future amendments could impose additional burdens on us or make it more difficult or costly for us to maintain our listing. If Nasdaq were to adopt more stringent listing standards or interpret existing standards more strictly, we may be required to take additional actions, such as raising capital, effecting additional reverse share splits, modifying our governance practices, or restructuring certain transactions, any of which could be costly, dilutive to shareholders, or disruptive to our business. There can be no assurance that we would be able to comply with any such amended or newly adopted standards.
If, for any reason, Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
| ● | a limited availability of market quotations for our securities; | |
| ● | reduced liquidity for our securities; | |
| ● | a decrease in the number of institutional and general investors that will consider investing in our ordinary shares; | |
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a determination that our ordinary shares are a “penny stock” which will require brokers trading in our ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; and | |
| ● | an event of default or similar triggering event under certain of our financing arrangements, including under the July 2025 SPA, as defined below, and the Finance Agreement with the EIB, which require that our ordinary shares remain listed on Nasdaq or another national securities exchange. A delisting could permit the applicable counterparty to exercise remedies, including acceleration of outstanding obligations, increased interest or penalty provisions, mandatory prepayment, conversion at alternative terms, or other enforcement actions, any of which could have a material adverse effect on our liquidity, financial condition and results of operations. |
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Substantial future sales or other issuances of our Ordinary Shares could depress the market for our Ordinary Shares.
Sales of a substantial number of Ordinary Shares and any future sales of a substantial number of Ordinary Shares in the public market, including the issuance of shares or any shares issuable upon the conversion of preferred shares or the exercise of the Ordinary Warrants, or the perception by the market that those sales could occur, could cause the market price of our Ordinary Shares to decline or could make it more difficult for us to raise funds through the sale of equity and equity-related securities in the future at a time and price that our management deems acceptable, or at all. In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred shares or Ordinary Shares, which could also depress the market for our Ordinary Shares. We cannot predict the effect, if any, that market sales of those Ordinary Shares or the availability of those shares for sale will have on the market price of our Ordinary Shares.
On July 25, 2025 we entered into a securities purchase agreement, or the SPA, with Alpha Capital Anstalt, or Alpha, pursuant to which we agreed to issue and sell to Alpha, subject to certain conditions, up to an aggregate of $25 million in securities across multiple tranches, consisting of preferred shares, pre-funded warrants, and ordinary warrants, or the July 2025 Private Placement. In connection with the July 2025 Private Placement, subject to certain conditions, Alpha has the right to purchase additional preferred shares and warrants from us, which has resulted and may result in further dilution as well.
We have outstanding warrants and preferred shares, some of which contain “full-ratchet” anti-dilution protection, which have caused significant dilution to our shareholders and may cause further significant dilution to our shareholders.
We have outstanding warrants, which are exercisable into ordinary shares, and preferred shares, which are convertible into ordinary shares. The issuance of the ordinary shares upon the exercise of the warrants or the conversion of such preferred shares would dilute the percentage ownership interest of all shareholders, might dilute the book value per share of our ordinary shares and would increase the number of our publicly traded shares, which could depress the market price of our ordinary shares. The warrants issued to Alpha on July 28, 2025, September 29, 2025, December 3, 2025, December 30, 2025, February 13, 2026, and March 11, 2026, and the preferred shares issued on September 29, 2025, December 3, 2025, December 30, 2025, February 13, 2026, and March 11, 2026, to Alpha contain a “full-ratchet” anti-dilution provision which, subject to limited exceptions, reduce the exercise price of the warrants or the conversion price of the preferred shares (and increase the number of shares issuable) in the event that we in the future issue ordinary shares, or securities convertible into or exercisable to purchase ordinary shares, including any securities issued to Alpha in connection to the SPA, at a price per share lower than the applicable exercise price or conversion price then in effect.
You may experience future dilution as a result of future capital raising and other issuances of our securities.
In order to raise additional capital, we may in the future offer additional Ordinary Shares or other securities convertible into or exchangeable for our Ordinary Shares prices that may not be the same as the price per share paid by the investors in this offering. We may not be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by the investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing shareholders. The price per share at which we sell additional Ordinary Shares or securities convertible into Ordinary Shares in future transactions may be higher or lower than the price per share paid to the selling shareholders. Our shareholders will incur dilution upon exercise of any outstanding share options, warrants or other convertible securities or upon the issuance of Ordinary Shares under our share incentive programs.
Any additional capital raised through the sale of equity or equity-backed securities may dilute our shareholders’ ownership percentages and could also result in a decrease in the market value of our equity securities.
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The terms of any securities issued by us in future capital transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of any of our securities then outstanding.
We may need to raise additional capital through a combination of private and public equity offerings, debt financings and collaborations, and strategic and licensing arrangements. To the extent that we raise additional capital through the issuance of equity or otherwise including through convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a shareholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take certain actions, such as incurring debt, making capital expenditures or declaring dividends. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates or grant licenses on terms that are not favorable to us. If we are unable to raise additional funds through equity or debt financing when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Future sales of our Ordinary Shares or of securities convertible into our Ordinary Shares, or the perception that such sales may occur, could cause immediate dilution and adversely affect the market price of our Ordinary Shares.
In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition.
The market price of our Ordinary Shares may be highly volatile and fluctuate substantially, which could result in substantial loses for purchasers of our Ordinary Shares.
The trading price of our Ordinary Shares is likely to be volatile. As a result of this volatility, you may not be able to sell the Ordinary Shares at or above the price at which you paid. The market price for the Ordinary Shares may be influenced by many factors, including:
| ● | our dependency on the successful development, marketing and sale of our proprietary technology, including our TES systems, to our target customers; |
| ● | the loss of the services of any of our executive officers or any key employees or consultants may adversely affect our ability to execute our business plan and harm our operating results; |
| ● | our dependency upon third-party manufacturers and suppliers making us vulnerable to supply shortages and problems, increased costs and quality or compliance issues, any of which could harm our business; |
| ● | our dependency upon third-party service providers to provide a high quality of service, which if not met, may impact the utility of our products, our business, operating results and reputation; |
| ● | our dependency on the use of certain raw materials and changes in the price or availability of such raw materials may impact our ability to efficiently produce our products; |
| ● | obtaining and upholding permits, certifications and authorization in various jurisdictions; |
| ● | the field of energy storage integration is relatively new and still developing, and the regulation of the field is also changing and developing; |
| ● | general economic weakness, including inflation, or industry and market conditions; |
| ● | whether a market for the Ordinary Shares will be sustained; |
| ● | the granting or exercise of employee stock options or other equity awards; and |
| ● | changes in investors’ and securities analysts’ perception of the business risks and conditions of our business. |
In addition, the stock market in general, and the Nasdaq in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of small companies. Broad market and industry factors may negatively affect the market price of our Ordinary Shares, regardless of our actual operating performance. Further, a systemic decline in the financial markets and related factors beyond our control may cause our share price to decline rapidly and unexpectedly.
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We do not know whether a market for the Ordinary Shares will be sustained or what the trading price of the Ordinary Shares will be and as a result, it may be difficult for you to sell your Ordinary Shares.
Although our Ordinary Shares are listed on Nasdaq, an active trading market for the Ordinary Shares may not be sustained. It may be difficult for you to sell your Ordinary Shares without depressing the market price for the Ordinary Shares or at all. As a result of this and other factors, you may not be able to sell your Ordinary Shares at or above the sale price or at all. Further, an inactive market may also impair our ability to raise capital by selling Ordinary Shares and may impair our ability to enter into strategic partnerships or acquire companies, products, or services by using our equity securities as consideration.
We have never paid cash dividends on our share capital, and we do not anticipate paying any cash dividends in the foreseeable future.
In the two financial years prior to December 31, 2025, we have incurred losses of approximately $20.7 million in the aggregate, which has resulted in our inability to distribute dividends. We have never declared or paid cash dividends, and we do not anticipate paying cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the Ordinary Shares as a source for any future dividend income. Our board of directors has complete discretion as to whether to distribute dividends. Even if our board of directors decides to declare and pay dividends, the timing, amount, and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions, and other factors deemed relevant by our board of directors. In addition, the Israeli Companies Law, 5759-1999, or the Companies Law, imposes restrictions on our ability to declare and pay dividends.
We may be a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes in the current taxable year or may become one in any subsequent taxable year. There generally would be negative tax consequences for U.S. taxpayers that are holders of the Ordinary Shares if we are or were to become a PFIC.
Based on the projected composition of our income and valuation of our assets, we may be a passive foreign investment company, or PFIC, for 2025 and may become or continue to be a PFIC in the future. The determination of whether we are a PFIC is made on an annual basis and will depend on the composition of our income and assets from time to time. We will be treated as a PFIC for U.S. federal income tax purposes in any taxable year in which either (1) at least 75% of our gross income is “passive income” or (2) on average at least 50% of our assets by value produce passive income or are held for the production of passive income. Passive income for this purpose generally includes, among other things, certain dividends, interest, royalties, rents and gains from commodities and securities transactions and from the sale or exchange of property that gives rise to passive income. Passive income also includes amounts derived by reason of the temporary investment of funds, including those raised in a public offering. In determining whether a non-U.S. corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account. The tests for determining PFIC status are applied annually, and it is difficult to make accurate projections of future income and assets which are relevant to this determination. In addition, our PFIC status may depend in part on the market value of the Ordinary Shares. Accordingly, there can be no assurance that we currently are not or will not become a PFIC in the future. If we are a PFIC in any taxable year during which a U.S. taxpayer holds the Ordinary Shares, such U.S. taxpayer would be subject to certain adverse U.S. federal income tax rules. In particular, if the U.S. taxpayer did not make an election to treat us as a “qualified electing fund”, or QEF, or make a “mark-to-market” election, then “excess distributions” to the U.S. taxpayer, and any gain realized on the sale or other disposition of the Ordinary Shares by the U.S. taxpayer: (1) would be allocated ratably over the U.S. taxpayer’s holding period for the Ordinary Shares; (2) the amount allocated to the current taxable year and any period prior to the first day of the first taxable year in which we were a PFIC would be taxed as ordinary income; and (3) the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. In addition, if the U.S. Internal Revenues Service, or the IRS, determines that we are a PFIC for a year with respect to which we have determined that we were not a PFIC, it may be too late for a U.S. taxpayer to make a QEF or mark-to-market election. U.S. taxpayers that have held the Ordinary Shares during a period when we were a PFIC will be subject to the foregoing rules, even if we cease to be a PFIC in subsequent years, subject to exceptions for U.S. taxpayer who made a timely QEF or mark-to-market election. A U.S. taxpayer can make a QEF election by completing the relevant portions of and filing IRS Form 8621 in accordance with the instructions thereto. We do not intend to notify U.S. taxpayers that hold the Ordinary Shares if we believe we will be treated as a PFIC for any taxable year in order to enable U.S. taxpayers to consider whether to make a QEF election. In addition, we do not intend to furnish such U.S. taxpayers annually with information needed in order to complete IRS Form 8621 and to make and maintain a valid QEF election for any year in which we or any of our subsidiaries are a PFIC. U.S. taxpayers that hold the Ordinary Shares are strongly urged to consult their tax advisors about the PFIC rules, including tax return filing requirements and the eligibility, manner, and consequences to them of making a QEF or mark-to-market election with respect to the Ordinary Shares in the event that we are a PFIC (see “Item 10.E. Taxation—U.S. Federal Income Tax Considerations—Passive Foreign Investment Companies” for additional information).
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The JOBS Act will allow us to postpone the date by which we must comply with some of the laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC, which could undermine investor confidence in the Company and adversely affect the market price of the Ordinary Shares.
For so long as we remain an “emerging growth company” as defined in the JOBS Act, we intend to take advantage of certain exemptions from various requirements that are applicable to public companies that are not “emerging growth companies”, including the provisions of the Sarbanes-Oxley Act requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting and the extended transition period for complying with new or revised financial accounting standards.
We intend to take advantage of these exemptions until we are no longer an “emerging growth company.” We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the date of our first sale of our Ordinary Shares pursuant to an effective registration statement under the Securities Act, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Ordinary Shares that is held by non-affiliates exceeds $700 million as of the prior June 30; and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
We cannot predict if investors will find the Ordinary Shares less attractive because we may rely on these exemptions. If some investors find the Ordinary Shares less attractive as a result, there may be a less active trading market for the Ordinary Shares, and our market prices may be more volatile and may decline.
As a “foreign private issuer” we are subject to less stringent disclosure requirements than domestic registrants and are permitted and may in the future elect to follow certain home country corporate governance practices instead of otherwise applicable SEC and Nasdaq requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. registrants.
As a foreign private issuer and emerging growth company, we may be subject to different disclosure and other requirements than domestic U.S. registrants and non-emerging growth companies. As a foreign private issuer in the United States, we are not subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act, including the requirements to prepare and issue quarterly reports on Form 10-Q or to file current reports on Form 8-K upon the occurrence of specified significant events, the proxy rules applicable to domestic U.S. registrants under Section 14 of the Exchange Act or the 10% shareholder reporting and short-swing profit rules applicable to domestic U.S. registrants under Section 16 of the Exchange Act. In addition, we intend to rely on exemptions from certain U.S. rules which will permit us to follow Israeli legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants.
We will follow Israeli laws and regulations that are applicable to Israeli companies with securities registered under the Exchange Act. However, Israeli laws and regulations applicable to Israeli companies do not contain any provisions comparable to the U.S proxy rules, the U.S. rules relating to the filing of reports on Form 10-Q or 8-K, or the U.S. rules relating to liability for insiders who profit from trades made in a short period of time, as referred to above.
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Furthermore, foreign private issuers are required to file their annual report on Form 20-F within 120 days after the end of each fiscal year, while U.S. domestic registrants that are non-accelerated filers are required to file their annual report on Form 10-K within 90 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information, although we will be subject to Israeli laws and regulations having substantially the same effect as Regulation Fair Disclosure. As a result of the above, even though we are required to file reports on Form 6-K disclosing the limited information which we have made or are required to make public pursuant to Israeli law, or are required to distribute to shareholders generally, and that is material to us, you may not receive information of the same type or amount that is required to be disclosed to shareholders of a U.S. registrant.
These exemptions and leniencies will reduce the frequency and scope of information and protections to which you are entitled as an investor.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2026. In the future, we would lose our foreign private issuer status if a majority of our shareholders, directors, or management are U.S. citizens or residents, and we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic registrant may be significantly higher.
As a public company in the United States, our management will be required to devote substantial time to new compliance initiatives as well as compliance with ongoing U.S. requirements.
As a public company in the United States, we incur additional significant accounting, legal and other expenses that we did not incur before May 2022. We also anticipate that we will incur costs associated with corporate governance requirements of the SEC, as well as requirements under Section 404 and other provisions of the Sarbanes-Oxley Act as they become applicable to us. We expect these rules and regulations to increase our legal and financial compliance costs, introduce new costs such as investor relations, stock exchange listing fees, and shareholder reporting, and make some activities more time-consuming and costly. The implementation and testing of such processes and systems may require us to hire outside consultants and incur other significant costs. Any future changes in the laws and regulations affecting public companies in the United States, including Section 404 and other provisions of the Sarbanes-Oxley Act, and the rules and regulations adopted by the SEC, for so long as they apply to us, will result in increased costs to us as we respond to such changes. These laws, rules, and regulations could make it more difficult or more costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees, or as executive officers.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they adversely change their recommendations or publish negative reports regarding our business or our Ordinary Shares, our share price and trading volume could decline.
The trading market for our Ordinary Shares will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. We do not have any control over these analysts, and we cannot provide any assurance that analysts will cover us or provide favorable coverage. If any of the analysts who may cover us adversely change their recommendation regarding our Ordinary Shares, or provide more favorable relative recommendations about our competitors, the price of our Ordinary Shares would likely decline. If any analyst who may cover us were to cease coverage of the Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our Ordinary Shares or trading volume to decline.
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Risks Related to our Incorporation and Our Operations in Israel
Potential political, economic and military instability in Israel, where our headquarters, members of our management team, our production facilities, and employees are located, may adversely affect our results of operations.
Our executive offices and production plant, wherein most of our employees are employed, are located in Rosh Haayin and Dimona, Israel. In addition, the majority of our key employees, officers, and directors are Israeli citizens. 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 groups in its neighboring countries, Hamas (an Islamist militia and political group that has controlled the Gaza Strip) and Hezbollah (an Islamist militia and political group based in Lebanon). While Israel has entered into peace agreements with Egypt, Jordan, the United Arab Emirates, Bahrain, Morocco and Sudan, it has no peace arrangements with any other neighboring or other Arab countries.
In April 2024 and October 2024, Iran launched direct attacks on Israel involving hundreds of drones and missiles and has threatened to continue to attack Israel. On June 13, 2025, in light of continued nuclear threats and intelligence assessments indicating imminent attacks, Israel launched a preemptive strike directly targeting military and nuclear infrastructure inside Iran aimed to disrupt Iran’s capacity to coordinate or launch further hostilities against Israel, as well as disrupt its nuclear program. On June 21, 2025, the United States military conducted targeted air strikes against three nuclear sites within Iran and on June 23, 2025 Iran retaliated against U.S. interests in the region.
On June 24, 2025, a ceasefire was implemented between Iran and Israel and. More recently, in February 2026, hostilities between Israel and Iran escalated again. In late February 2026, Israel, together with the United States, conducted a major joint military campaign of air and missile strikes against targets in Iran, which triggered a broad Iranian response and contributed to significant regional instability. The situation remains highly fluid, and we are unable to predict when, or on what terms, this escalation will be resolved.
Further escalation, whether involving direct confrontation between Israel and Iran or through regional proxy groups, could result in additional mobilization of reserve personnel, further restrictions on movement or commerce, damage to infrastructure, supply chain interruptions, disruptions to global energy markets, and heightened cybersecurity threats. Any of the foregoing could materially and adversely affect our operations, financial condition, and results of operations, particularly if disruptions are prolonged or recur.
Further, many Israeli citizens are obligated to perform several days, and in some cases, more, of annual military reserve duty each year until they reach the age of 40 (or older for certain reservists). In response to increases in terrorist and military activity hostile to Israel, there have been periods of significant call-ups of military reservists to active duty. For example, on October 7, 2023, Hamas terrorists invaded southern Israel and launched thousands of rockets in a widespread terrorist attack on Israel. On the same day, the Israeli government declared that the country was at war and the Israeli military began to call-up reservists for active duty, including a few of our employees. As of March 25, 2026, one of our employees, who is not a member of our management, is deployed for reserve military service.
As of October 9, 2025, Israel and Hamas have entered into a ceasefire agreement intended to permanently end the war. However, there are no assurances that such an agreement will hold. The security situation in the region remains fluid and any renewed military actions, restrictions, or government-imposed measures could adversely affect our operations and financial condition. While none of our facilities or infrastructure have been damaged since the war with Hamas broke out on October 7, 2023, the import and export of goods may experience disruptions in and out of Israel as a result of military conflict. A prolonged war could result in further military reserve duty call-ups in the future as well as irregularities to our supply chain and the movement of components and raw material into Israel and our finished products exported from Israel. Such disruption could materially adversely affect our business, prospects, financial condition, and results of operations.
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In addition, several countries, principally in the Middle East, restrict doing business with Israel, and additional countries may impose restrictions on doing business with Israel and Israeli companies whether as a result of hostilities in the region or otherwise. The restrictive laws, policies, or practices directed towards Israel or Israeli businesses could, individually or in the aggregate, have a material adverse effect on our business in the future, for example by way of sales opportunities that we could not pursue or from which we will be precluded. In addition, should the movement for boycotting, divesting, and sanctioning Israel and Israeli institutions (including universities) and products become increasingly influential in the United States and Europe, this may also adversely affect our business and financial condition. Further deterioration of Israel’s relations with the Palestinian Authority or countries in the Middle East could expand the disruption of international trading activities in Israel, may materially and negatively affect our business conditions, could harm our results of operations, and adversely affect the market price of our Ordinary Shares.
Any hostilities involving Israel, terrorist activities, political instability or violence in the region, or the interruption or curtailment of trade or transport between Israel and its trading partners could adversely affect our operations and results of operations and the market price of our Ordinary Shares.
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, financial condition, and results of operations.
Furthermore, the Israeli government is currently pursuing extensive changes to Israel’s judicial system. In response, 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, financial condition and our ability to raise additional funds.
We expect to be exposed to fluctuations in currency exchange rates, which could adversely affect our results of operations.
We are exposed to foreign currency risk mainly with respect to revenue generated outside of Israel, the purchase of raw materials, foreign subcontractors and advisors and royalty liabilities that are denominated or linked to dollars. Most of our expenses are denominated in NIS, which expenses primarily include payroll expenses, the dollar and, to a lesser extent, the Euro. In the years ended December 31, 2025 and 2024, approximately 72% and 73%, respectively, of our expenses were denominated in NIS. Our NIS-denominated expenses consist principally of salaries and related costs as well as other related personnel expenses. In addition, our lease and Israeli facility-related expenses and certain engagements with other Israeli vendors are denominated in NIS. We anticipate that a portion of our expenses will continue to be denominated in NIS. The appreciation of the NIS in relation to the dollar amounted to 12.5% for the year ended December 31, 2025 and the depreciation of the NIS in relation to the dollar amounted to 0.6% for the year ended December 31, 2024.
Exchange rates between the NIS and the U.S. dollar have been volatile in recent years due to macroeconomic conditions, geopolitical developments in Israel and the region, global inflationary pressures and monetary policy decisions of the Bank of Israel and the U.S. Federal Reserve. We cannot predict future trends in the rate of appreciation or depreciation of the NIS against the U.S. dollar. Continued strengthening of the NIS against the U.S. dollar would increase the dollar value of our NIS-denominated expenses and could materially adversely affect our gross margins and results of operations. Conversely, significant depreciation of the NIS could impact the dollar value of our NIS-denominated assets.
We cannot predict any future trends in the rate of depreciation or appreciation of the NIS against the dollar. Accordingly, we face exposure to adverse movements in currency exchange rates.
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We expect to derive a significant portion of our revenues in dollars and in local currencies of customers outside the United States. Therefore, devaluation in the local currencies of our customers relative to the NIS could have a negative impact on our revenues and results of operations. We are also subject to other foreign currency risks including repatriation restrictions in certain countries, particularly in Latin America.
We do not use derivative financial instruments, such as foreign exchange forward contracts, to mitigate the risk of changes in foreign exchange rates on our balance sheet accounts and forecast cash flows. In some countries, we are unable to use “hedging” techniques to mitigate our risks because hedging options are not available for certain government-restricted currencies. Moreover, derivative instruments are usually limited in time and as a result, cannot mitigate currency risks for the longer term. The volatility in the foreign currency markets may make it challenging to hedge our foreign currency exposures effectively.
In some cases, we may face regulatory, tax, accounting or corporate restrictions on money transfer from the country from which consideration should have been paid to us (or to our respective selling subsidiary) or revenues could have accumulated and allocated to us or could face general restriction on foreign currency transfer outside of such country. Inability to collect and receive amounts that are already due and payable could have a negative impact on our results of operations.
We received grants from the IIA, the Israeli Ministry of Energy and other governmental ministries that may require us to pay royalties and restrict our ability to transfer intellectual property or know-how outside of Israel.
We have received government grants from IIA and other governmental ministries for the financing of a significant portion of our research and development expenditures in Israel. Unless otherwise agreed by the applicable authority of the IIA, we must nevertheless continue to comply with the requirements of Israeli Law for the Encouragement of Industrial Research and Development, 1984 and regulations promulgated thereunder, or the R&D Law, with respect to technologies that were developed using such grants, or the Financed Know-How, including an obligation to repay such grants from consideration received from sales of products which are based on the Financed Know-How, if and when such sales occur and if applicable in accordance with the grant plan.
In accordance with certain grant plans, in addition to the obligation to pay royalties to the IIA and the Israeli Ministry of Energy, the R&D Law requires that products which incorporate Financed Know-How be manufactured in Israel and prohibits the transfer of Financed Know-How and any right derived therefrom to third parties unless otherwise approved in advance by the IIA and the Israeli Ministry of Energy. Such prior approval may be subject to payment of increased royalties. Although such restrictions do not apply to the export from Israel of the Company’s products developed with such Financed Know-How, they may prevent us from engaging in transactions involving the sale, outsource or transfer of such Financed Know-How or of manufacturing activities with respect to any product or technology-based on Financed Know-How, outside of Israel, which might otherwise be beneficial to us. Furthermore, the consideration available to our shareholders in a transaction involving the transfer outside of Israel of Financed Know-How (such as a merger or similar transaction) may be reduced by any amounts that we are required to pay to the IIA.
We may not be able to enforce covenants not-to-compete to their fullest extent under current Israeli law that might result in added competition for our products.
We have non-competition agreements with certain of our employees, such as those employees engaged in our research and development activities or management positions, all of which are governed by Israeli law. These agreements prohibit our employees from competing with or working for our competitors, generally during their employment and for up to 12 months after termination of their employment. However, Israeli courts are reluctant to enforce non-compete undertakings of former employees and tend, if at all, to enforce those provisions for relatively brief periods of time in restricted geographical areas, and only when the employee has obtained unique value to the employer specific to that employer’s business and not just regarding the professional development of the employee. If we are not able to enforce non-compete covenants, we may be faced with added competition.
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Provisions of Israeli law, our amended and restated articles of association and certain of our agreements may delay, prevent or otherwise impede a merger with, or an acquisition of, us, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders.
Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers, or significant shareholders, and regulates other matters that may be relevant to such types of transactions. For example, a merger may not be consummated unless at least 50 days have passed from the date on which a merger proposal is filed by each merging company with the Israel Registrar of Companies and at least 30 days have passed from the date on which the shareholders of both merging companies have approved the merger. In addition, a majority of each class of securities of the target company must approve a merger. Moreover, a tender offer for all of a company’s issued and outstanding shares can only be completed if the acquirer receives positive responses from the holders of at least 95% of the issued share capital. Completion of the tender offer also requires approval of a majority of the offerees that do not have a personal interest in the tender offer, unless, following consummation of the tender offer, the acquirer would hold at least 98% of the Company’s outstanding shares. Furthermore, the shareholders, including those who indicated their acceptance of the tender offer, may, at any time within six months following the completion of the tender offer, claim that the consideration for the acquisition of the shares does not reflect their fair market value, and petition an Israeli court to alter the consideration for the acquisition accordingly, unless the acquirer stipulated in its tender offer that a shareholder that accepts the offer may not seek such appraisal rights, and the acquirer or the company published all required information with respect to the tender offer prior to the tender offer’s response date.
Certain provisions of our amended and restated articles of association may delay changes in control. Our amended and restated articles of association provide for a staggered board of directors consisting of three classes of directors. Directors of each class are chosen for three-year terms upon the expiration of their current terms and each year one class of our directors will be elected by our shareholders. This classified board provision could have the effect of making the replacement of incumbent directors more time consuming and difficult. At least two annual meetings of shareholders, instead of one, will generally be required to effect a change in a majority of our board of directors. Thus, the classified board provision could increase the likelihood that incumbent directors will retain their positions. The staggered terms of directors may delay, defer or prevent a change in control in the Company, even though a change in control might be considered by our shareholders to be in their best interest.
Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to our shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax. For example, Israeli tax law does not recognize tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfillment of a number of conditions, including, in some cases, a holding period of two years from the date of the transaction during which sales and dispositions of shares of the participating companies are subject to certain restrictions. Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable even if no disposition of the shares has occurred.
In addition, in accordance with the Restrictive Trade Practices Law, 1988, and the R&D Law, to which we are subject due to our receipt of grants from the IIA and the Ministry of Energy, a change in control in the Company (such as a merger or similar transaction) may be subject to certain regulatory approvals in certain circumstances.
As a corporation incorporated under the laws of the State of Israel, we are also subject to the Israeli Economic Competition Law, 1988 and the regulations promulgated thereunder (formerly known as the Israeli Antitrust Law, 1988), under which we may be required in certain circumstances to obtain the approval of the Israel Competition Authority (formerly known as the Israel Antitrust Authority) in order to consummate a merger or a sale of all or substantially all of our assets.
These provisions of Israeli law could have the effect of delaying or preventing a change in control and may make it more difficult for a third party to acquire us, or for our shareholders to elect different individuals to our board of directors, even if doing so would be beneficial to our shareholders, and may also limit the price that investors may be willing to pay in the future for our Ordinary Shares.
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It may be difficult to enforce a judgment of a U.S. court against us and our executive officers and directors and the Israeli experts named in this annual report in Israel or the United States, to assert U.S. securities laws claims in Israel or to serve process on our executive officers and directors and these experts.
We were incorporated in Israel. All of our executive officers and 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 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 U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israeli court is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proven as a fact by expert witnesses, which can be a time-consuming, and costly process. Certain matters of the procedure will also be governed by Israeli law. There is little binding case law in Israel that addresses the matters described above. Additionally, Israeli courts might not enforce judgments rendered outside Israel, which may make it difficult to collect on judgments rendered against us or our non-U.S. officers and directors. Moreover, an Israeli court will not enforce a non-Israeli judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases), if its enforcement is likely to prejudice the sovereignty or security of the State of Israel if it was obtained by fraud or in the absence of due process, if it is at variance with another valid judgment that was given in the same matter between the same parties, or if a suit in the same matter between the same parties was pending before a court or tribunal in Israel at the time the foreign action was brought. As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a U.S. or foreign court.
Your rights and responsibilities as a shareholder will be governed in key respects by Israeli laws, which differ in some material respects from the rights and responsibilities of shareholders of U.S. companies.
The rights and responsibilities of the holders of our Ordinary Shares are governed by our amended and restated articles of association and by Israeli law. These rights and responsibilities differ in some material respects from the rights and responsibilities of shareholders in U.S. companies. In particular, a shareholder of an Israeli company has a duty to act in good faith and in a customary manner in exercising its rights and performing its obligations towards the company and other shareholders, and to refrain from abusing its power in such company, including, among other things, in voting at a general meeting of shareholders on matters such as amendments to a company’s amended and restated articles of association, increases in a company’s authorized share capital, mergers and acquisitions and related party transactions requiring shareholder approval, as well as a general duty to refrain from discriminating against other shareholders. In addition, a controlling shareholder of an Israeli company or a shareholder who is aware that it possesses the power to determine the outcome of a vote at a meeting of the shareholders or to appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness toward the company. Israeli Law does not describe the substance of this duty of fairness but states that the remedies generally available upon a breach of contract, will also apply in the event of a breach of duty of fairness, taking into account such shareholder’s position. There is limited case law available to assist us in understanding the nature of these duties or the implications of these provisions. These provisions may be interpreted to impose additional obligations and liabilities on holders of our Ordinary Shares that are not typically imposed on shareholders of U.S. companies.
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.
A portion 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 Israeli 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 service invention rights. The Israeli Patent Law also provides that if there is no such agreement between an employer and an employee, the Israeli Compensation and Royalties Committee, or the Compensation and Royalties Committee, a body constituted under the Israeli Patent Law, shall determine whether the employee is entitled to remuneration for his or her inventions. Case law clarifies that the right to receive consideration for “service inventions” can be waived by the employee. The Compensation and Royalties 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 Compensation and Royalties Committee has not yet determined one specific formula for calculating this remuneration but rather uses the criteria specified in the Israeli Patent Law. Although we enter into assignment-of-invention agreements with our employees pursuant to which such individuals waive their right to remuneration for service inventions, we may face claims demanding remuneration in consideration for assigned inventions. Due to such claims, we could be required to pay additional remuneration or royalties to our current and/or former employees or be forced to litigate such claims, which could negatively affect our business.
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General Risk Factors
Our amended and restated articles of association provide that, unless we consent in writing to an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit our shareholders’ ability to choose the judicial forum for disputes with us, our directors, shareholders, or other employees.
Our amended and restated articles of association provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Section 22 of the Securities Act creates concurrent jurisdiction for U.S. federal and state courts over all such Securities Act actions. Accordingly, both U.S. state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated articles of association provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. This exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act, and our shareholders cannot and will not be deemed to have waived our compliance with the U.S. federal securities laws and the rules and regulations promulgated under the Securities Act or the Exchange Act as a result of our exclusive forum provision.
Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to the foregoing provision of our amended and restated articles of association. However, the enforceability of similar forum provisions (including exclusive federal forum provisions for actions, suits, or proceedings asserting a cause of action arising under the Securities Act) in other companies’ organizational documents has been challenged in legal proceedings, and there is uncertainty as to whether courts would enforce the exclusive forum provision in our amended and restated articles of association. If a court were to find the exclusive forum provision contained in our amended and restated articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition, and results of operations.
Although we believe the exclusive forum provision benefit us by providing increased consistency in the application of U.S. federal securities laws the Israeli Companies Law, or New York law, as applicable, in the types of lawsuits to which they apply, such exclusive forum provision may limit a shareholder’s ability to bring a claim in the judicial forum that they find favorable and may increase certain litigation costs for disputes with us or any of our directors, shareholders, officers, or other employees, which may discourage lawsuits with respect to such claims against us and our current and former directors, shareholders, officers, or other employees.
ITEM 4. INFORMATION ON THE COMPANY
A. History and Development of the Company.
We are an Israeli corporation based in Rosh Haayin, Israel, and were incorporated in Israel in 2012 as Brenmiller Energy Consulting Ltd. On July 2, 2013, we filed a name change certificate to change our name to Brenmiller Energy Ltd. In August 2017, we became a public company in Israel and our Ordinary Shares were listed for trade on the TASE. On May 25, 2022, our Ordinary Shares were listed and began trading on Nasdaq. On September 11, 2023, we delisted our ordinary shares from trading on the TASE.
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We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the JOBS Act. As such, we are eligible to, and intend to, take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not “emerging growth companies” such as not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. We could remain an “emerging growth company” for up to five years, or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenues exceeds $1.235 billion, (b) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our Ordinary Shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (c) the date on which we have issued more than $1 billion in nonconvertible debt during the preceding three-year period.
Our principal executive offices are located at 13 Amal St. 4th Floor, Park Afek, Rosh Haayin, 4809249 Israel. Our telephone number in Israel is +972-77-693-5140. Our website address is https://bren-energy.com/. The information contained on our website or available through our website is not incorporated by reference into and should not be considered a part of this annual report on Form 20-F, and the reference to our website in this annual report on Form 20-F is an inactive textual reference only.
We are a foreign private issuer as defined by the rules under the Securities Act and the Exchange Act. Our status as a foreign private issuer also exempts us from compliance with certain laws and regulations of the SEC and certain regulations of the Nasdaq Stock Market, including the proxy rules, the short-swing profits recapture rules, and certain governance requirements such as independent director oversight of the nomination of directors and executive compensation. In addition, we are not required to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. domestic companies registered under the Exchange Act.
In 2023, 2024 and 2025, our net capital expenditures amounted to $2,654 thousand, $343 thousand, and $160 thousand, respectively. Our current capital expenditures are primarily for manufacturing facility and equipment, computers, software, research and development equipment and office improvements substantially all in Israel, and we expect to finance these expenditures primarily from cash on hand.
B. Business Overview.
We are a technology and project development company that develops, produces, markets and sells TES systems based on our proprietary and patented bGen™ technology. We also initiate and execute TES EaaS projects in line with our current business model. In January 2026, we announced our BNRG360 integrated energy platform, pursuant to which we intend to expand our business model to offer bundled clean heat and power solutions combining TES, solar photovoltaic and battery energy storage systems under long-term contractual arrangements. As of the date of this annual report, we have not yet executed projects under the BNRG360 framework. Our solutions are designed to enable the electrification and decarbonization of industrial processes, improve integration with renewable energy sources and reduce carbon emissions. Our business is not subject to material seasonality.
The Need
Increasing global electricity demand, driven by industrial electrification and energy-intensive sectors such as data centers, is placing growing pressure on power systems and accelerating the need for flexible, dispatchable and storage-based energy infrastructure. At the same time, we believe that climate change is one of the greatest challenges of our times. A major contributor to climate change is carbon emissions being emitted to the atmosphere. To combat this, countries and organizations have set and are continuing to set targets for themselves and various industries to reduce their carbon emissions. In order to meet such carbon emission targets, and to address increasing strain on energy systems, we believe it is necessary to expedite the transition from reliance on fossil fuels to the widescale adoption of renewable energy sources and systems that result in carbon capture, energy storage, efficient energy recovery, and can benefit from the reuse of wasted heat or renewable energy. Our bGen™ TES system stores energy from electrical heaters and can also recover wasted heat from available energy resources to provide one consistent energy output. By doing so, the bGen™ TES system can precisely match energy supplies with demand and bridge the gap between renewable energy and conventional power sources. Accordingly, we believe TES systems such as our bGen™ system have become essential to the renewable energy market to help ensure the reliability and stability of energy supplies.
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Our Technology
We have developed our bGen™ technology over the last thirteen years and have tested it across three generations of demonstration units at various sites globally. Our bGen™ technology uses crushed rocks to store heat at temperatures of up to 1400 degrees Fahrenheit (760 degrees Celsius) and is comprised of key elements inside one unit: thermal storage, heaters, heat exchangers, and a steam generator. The use of crushed rock as a means of storage results in no hazardous challenges to the environment and enhances system durability so that even after tens of thousands of charge and discharge cycles, the storage material does not need to be replaced because the storage material does not suffer from degradation in performance. Additionally, the bGen™ technology can be charged with multiple heat sources, such as residual heat, and renewables, as well as from electrical sources using embedded electric heaters within the TES system. The TES system dispatches thermal energy on demand in the form of power, steam, air, hot water and heat, which can be saturated for industrial use, or in the form of a superheated steam, which can also be used to activate steam turbines.
The following image depicts our bGen™ system charged by flue gases.
The TES system is capable of being implemented as a stand-alone system or into both power plants and industrial facilities. Its applications may vary, but include, and are not limited to, the use in producing industrial steam by recovering wasted heat in production processes, solar thermal power plants, cogeneration plants, and the electrification of heat. The TES system is passive, meaning that it can function with no moving parts, motors or chemical materials that change their accumulation state and, therefore, has relatively low maintenance and operating requirements compared to other energy storage solutions.
Certain key advantages of our bGen™ TES system include that our TES systems are made using environmentally friendly materials, with no chemicals or hazardous materials; the TES systems are built using low cost, natural resources such as metals, piping, and crushed rocks; the TES systems are passive systems that require minimal operations and maintenance during the system’s approximately 30-year lifetime; the TES systems are built using modules, each of which contains approximately 0.5 MWh capacity, a full TES system can be constructed using multiple modules with an aggregate capacity of up to hundreds of MWh; and the TES systems are compatible with thermal and electric sources for charging, and either or both can be used to charge the unit at any time.
The following image depicts potential energy inputs and outputs from the bGen™ unit.
On August 9, 2023, we unveiled the next generation of our market-leading, high-performance TES system, the bGen™ ZERO as part of our strategic focus to deliver cost-efficient, zero-carbon emissions heat. By electrifying heat, the bGen™ ZERO is designed to address growing market demand for decarbonization solutions in the industrial and power sectors. The bGen™ ZERO offers a modular, flexible design with fast charge and discharge times, all without the use of hazardous materials. Additional highlights and improvements from prior bGen™ systems include:
| ● | Improved Efficiency: 33% reduction in heat loss, 99% charging efficiency, 97% cycle efficiency (power to heat), and 98% year-round availability. |
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| ● | Boosted Energy Density: 34% improvement in energy density and 40% improvement in discharge power. |
| ● | Swift Response and Continuous Operation: Engineered for fast one second response rate and uninterrupted operation at maximum capacity, tailored for high demands of the power grid for reserve power and stability. |
| ● | Compact and Modular: Fully modular, productized solution that ensures the highest quality standards, rapid on-site installation, and commissioning. Occupies minimal space due to its unlimited storage height. |
| ● | Impressive Steam Power Generation: Delivers substantial steam power generation, offering a stable steam supply for various power, commercial and industrial applications. |
| ● | Smart and Safe Operations: Features an intelligent module operation package with predictive maintenance and optimized performance based on market prices one day ahead, coupled with storage performance insights. Remote control operation via the Brenmiller control center. Robust cyber protection measures to ensure security and reliability. |
The unveiling of this new product underscores a strategic evolution in our focus on power-to-heat for the industrial market. The bGen™ ZERO design, paired with performance improvements, presents a multi-use solution to tap into decarbonization which we believe will unlock new revenue streams across applications including grid services. We have also identified two avenues in which to offer our product in order to expand access to our TES solution:
| ● | Direct Equipment Sale: We continue to offer our second-generation TES solution for direct purchase by and integration with industrial facilities and power plants. We plan to generate recurring revenues through royalties and by providing, inter alia, after sales services such as operations, maintenance, and optimization. |
| ● | Energy as a Service: We plan to generate recurring revenue streams by partnering with clean energy utilities for grid services. We provide the bGen™ ZERO technology and integration while the partner provides clean electricity and financial support. Engaging in grid services unlocks a new, significant revenue stream, while the end customer benefits from no capital expenditures, reduced operation risk, and emissions reductions. The bGen™ ZERO helps boost flexibility and stability for power grids by using excess renewable energy to generate heat. |
bGen™ Cool
On July 18, 2024, we announced that we would expand our proprietary technology’s capabilities and develop a Cold Thermal Energy Storage, or CTES, solution for data center applications, referred to as bGen™ Cool. Leveraging the bGen™ platform’s core competencies, we believe that limited incremental adaptation would be required to extend our existing TES architecture to address data center cooling demand. As of the date of this annual report, further development activities relating to bGen™ Cool are subject to internal resource allocation priorities and market conditions, and we are currently focused on advancing our core thermal energy storage platforms. We may resume or accelerate development of bGen™ Cool in the future depending on commercial opportunities and strategic considerations.
bGen™ ZTO
On February 4, 2025, we announced the commencement of development of a TES system, the bGen™ ZERO Thermal Oil™, or bGen™ ZTO, designed to electrify thermal oil for industrial applications. In February 2026, we outlined our Technology Roadmap 2030, which included the continued advancement of the bGen™ ZTO platform as part of our strategy to expand our addressable industrial heat market and reduce system-level costs across next-generation TES solutions. The roadmap emphasized performance improvements, cost reductions and product standardization intended to enhance scalability and commercial competitiveness. bGen™ ZTO is designed as a modular TES system combining internal electric conversion for storage with integrated heat exchange, targeting high cycle efficiency through simplified maintenance and indirect oil heating while enabling thermal oil temperatures of up to 340 degrees Celsius. As of the date of this annual report, development activities related to bGen™ ZTO are being evaluated in light of broader strategic priorities and capital allocation considerations, and there can be no assurance regarding the timing or extent of further advancement toward commercialization.
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bGen™ ONE
On February 11, 2026, we announced the early launch of bGen™ ONE, a next-generation TES system design. The bGen™ ONE platform is designed to materially reduce installed and on-site project costs through a standardized, factory-built architecture intended to streamline deployment and reduce field construction complexity. The launch of bGen™ ONE reflects continued advancement of our TES platform and builds upon the technological foundation of our bGen ZERO system. The new configuration is intended to accelerate project timelines, enhance scalability and support broader commercial adoption across industrial and utility-scale decarbonization applications.
Through the factory-assembled, productized design of bGen™ ONE, we aim to reduce engineering and on-site labor requirements, shorten installation schedules and improve overall cost competitiveness. The system is designed to support both direct equipment sales and Energy as a Service deployment models, including grid services applications that utilize excess renewable electricity to generate industrial heat.
In June 2025, we launched the bGen™ Thermal platform, a family of modular TES systems designed to provide clean, flexible and electrified heat for industrial and commercial applications. The bGen™ Thermal platform is intended to enable customers to shift from fossil fuel-derived heat to electrically stored heat, supporting decarbonization objectives across a range of end-use markets. The platform includes multiple configurations of TES solutions capable of charging from grid or renewable electricity and discharging on demand to meet process heat requirements. It is designed to offer high efficiency, modular scalability and to support various deployment models, including direct equipment sales and EaaS arrangements.
Business Strategy and Addressable Markets
We are focused on the sale of TES equipment through several business models. To date, completed projects have primarily employed the equipment sale model, pursuant to which we design and sell our systems to third-party customers, install the equipment at the customer’s site, and the customer retains ownership of the system while we provide warranty and maintenance services at a predetermined price as part of the sale package.
In 2023, we began implementing our EaaS model, under which we install a bGen™ TES system at a customer’s site, provide operation and maintenance services, and sell energy, such as steam or hot air, to the customer at agreed-upon prices. The EaaS model is intended for industrial customers seeking to outsource their energy infrastructure and management. In connection with the Tempo Beverages Ltd. project, we initiated our first EaaS contracts, pursuant to which we plan to own, finance, build and operate TES systems at or near customer sites and either sell energy at a fixed price or receive a fixed revenue stream in connection with the energy services provided. In such arrangements, customers are generally granted an option to acquire the TES system after a defined period.
In January 2026, we announced our BNRG360 integrated energy platform, representing a natural evolution of our business to offer a fully packaged clean heat and power solution built around our proprietary bGen™ technology. Under this model, we intend to expand our business model to offer bundled clean heat and power solutions combining TES, solar photovoltaic and battery energy storage systems under long-term contractual structures. By anchoring the platform in our owned technology, we differentiate ourselves from traditional energy companies that are not technology developers, positioning Brenmiller uniquely in the market. As of the date of this annual report, projects under the BNRG360 framework remain subject to development sequencing, commercial prioritization and capital allocation considerations.
Our TES manufacturing facility in Dimona, Israel has a designed annual production capacity of approximately 1 GWh. As of the date of this annual report, this capacity has not yet been fully utilized and remains available to support future commercial deployment. The facility was engineered with modular scalability and, with incremental investment and operational ramp-up, may be expanded to a targeted capacity of up to 4 GWh. At such expanded capacity, we estimate potential annual system revenues of approximately $200 million, subject to market demand, order intake and commercialization progress. Leveraging this scalable manufacturing platform, we have developed a global pipeline of commercial opportunities representing potential revenues in millions of dollars across multiple industrial sectors and geographies.
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We market our products through exclusive distributers in our target markets, with online marketing efforts to attract potential customers, and direct outreach to potential customers through our sales team. Our primary target markets are in the United States, Europe, and Israel. We are initiating commercial equipment sales or EaaS model agreements in many of these target markets and, depending on their success, we expect to develop our sales and services for future customers in these regions.
Since our incorporation, we have had ongoing losses and incurred negative cash flows from operating activities. For example, as of December 31, 2025, and December 31, 2024, we had operating losses of $12,738 thousand and $10,562 thousand, respectively. We have mainly financed our activities through issuances of Ordinary Shares, preferred shares, and warrants, revenues from the sale of products, and engineering services, governmental grants and a loan from the EIB. Management plans continuing commercialization of our products and services, which require substantial funding. In addition, management is planning to find additional cash sources through additional equity and/or debt financing. There are no assurances however, that we will be successful in obtaining the level of financing needed for our operations or that such financing will be available on terms acceptable to us. If we are unsuccessful in commercializing our products and raising capital, we may need to reduce, delay, or adjust its operating expenses, including commercialization of existing products or be unable to expand its operations, as desired.
The Industrial Facilities Market
Our primary focus is expanding the use of our bGen™ technology into industrial facilities with heavy thermal consumptions, such as the food, beverages, pulp and paper, steel, plastic, chemical, and pharmaceuticals industries, and organizations looking to reduce their carbon footprint by replacing their fossil fuel-based steam generation with a renewable-based system, such as hospitals. Our bGen™ TES systems also offer solutions for waste heat recovery, electrification of heat, and several other applications.
Industrial heat makes up to two-thirds of industrial energy demand and almost one-fifth of global energy consumption. Industrial heat is also the primary source of direct CO₂ emissions in the industrial sector, as most industrial heat is still generated through fossil fuel combustion. According to the International Energy Agency’s Renewables 2023 report, renewable heat sources, including biomass and electrification, have gained traction, but they still account for only 13% of global industrial heat consumption, underscoring the urgent need for further decarbonization efforts.
The Power Plants Market
As of the year 2021, thermal power plants constitute the main source of electricity production in most countries around the world. We expect that this will continue to be the case for many years to come. Operators of these stations are facing significant challenges as they attempt to shift from operating solely as a continuous source of electricity to operating as a supplemental source to the production of renewable energy. This results in the need to change their operational profile from baseload (flat) operations to a fluctuating operation profile, with which many companies struggle. In order to overcome these technical challenges, and in order to maintain competitiveness in the market, power plants are expected to integrate means of energy storage that support maximum efficiency while allowing for more flexible operation profiles.
Our TES systems are suitable for integration into gas-powered and combined cycle power plants, which can provide energy shifting, improve their ramp-up rates, and add flexibility to their operations profile. Integration of the TES system in coal power plants can provide customers with grid storage capabilities by charging with curtailed renewable energy and by generating electricity during peak hours. Massive implementation of this application could eventually transform coal power plants into grid storage plants.
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Manufacturing
We manufacture our proprietary bCube™ components for our TES systems at our production facility in Dimona, Israel. After production, TES system components are shipped to customer sites for on-site assembly. The current production line is designed to support an annual capacity of up to 1 GWh of bCube™ thermal storage units, which aligns with our existing pipeline of commercial opportunities.
Our Dimona facility, inaugurated on May 2, 2023, is Industry 4.0 compliant and has been designed to accommodate a fully automated production process. As of the end of the first quarter of 2025, the facility reached full automation, supporting a production capacity of 1 GWh annually. The facility is built with infrastructure and flexibility to scale up to a production capacity of up to 4 GWh per year, subject to increased market demand and the receipt of additional orders beyond our current capacity.
The facility has also been designed with replicability in mind, enabling the establishment of similar gigafactories in strategic markets such as Europe and the United States. This approach supports localized manufacturing, shortens supply chains, and reduces logistics costs.
While the initial build-out of the Dimona plant was financed through a non-dilutive €7.5 million credit facility agreement with the EIB, of which €4 million was withdrawn in July 2022—we did not draw on the remaining €3.5 million tranche. Instead, we plan to prioritize investment in localized production facilities in Europe and the U.S. to support our global expansion strategy.
Commercial Projects
As of March 25, 2026, our primary activity is focused on the development of our technology and its application into products and commercial solutions and continuing the assembly of our new production line.
We are currently in the process of installing projects in various geographic regions in an effort to demonstrate the use of its technologies for both industrial and utility scale applications, which are ultimately expected to support the commercialization of the technology. Our projects are progressing as planned and are expected to reach major milestones over the next twelve months.
Tempo
On February 13, 2025, our contractor has started assembling our 32 MWh bGen™ ZERO TES system for Tempo. In February 2026, we announced the successful completion of system assembly and the commencement of the commissioning phase of the 32 MWh bGen™ ZERO TES system at Tempo’s facility. On March 2, 2026, we announced the completion of construction of the Tempo project and the initiation of start-up and commissioning of the 32 MWh bGen™ TES system. With the completion of the mechanical and electrical installation of the 32MWh bGen TES system and the integration with the facility’s steam network, the project is now beginning system charging, functional validation, steam output testing and operational optimization to verify readiness for full scale operation. Accordingly, we are currently anticipating completion of commissioning during the first half of 2026.
The Tempo project is subject to the System Purchase Agreement with Baran Energy Ltd., described under “System Purchase Agreement with Baran Energy Ltd.” below, pursuant to which Baran has agreed to acquire certain bGen™ ZERO TES systems, including the system installed at Tempo’s facility.
The contractor is responsible for ensuring that the construction and installation of Tempo’s bGen™ TES system complies with safety standards, includes mechanisms for supervision, reporting and coordination with Brenmiller, and stays on schedule. Under the contract we are is set to replace Tempo’s fossil fuel boilers with a 32 MWh bGen™ ZERO TES system. By enabling the switch from heat derived from fossil fuels to heat derived from electricity, eliminating the use of approximately 2,000 tons of heavy fuel each year, our bGen™ is estimated to mitigate over 6,200 tons of carbon emissions annually and save Tempo an estimated $7.5 million over 15 years. Upon successful commissioning, the system is expected to begin supplying clean thermal energy to Tempo’s operations, marking a key milestone in the commercial deployment of our bGen™ ZERO platform.
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The following image shows the installed bGen™ unit at Tempo:
Wolfson Medical Center
On January 29, 2024, an agreement was signed with the Wolfson Medical Center, or Wolfson Hospital, in the city of Holon, Israel for the construction of a TES System pursuant to which we will build and install on the Wolfson Hospital premises a TES System that will provide industrial steam and other services to the Wolfson Hospital (including training and certification of the Wolfson Hospital related staff that will be responsible for the operation and maintenance of the TES System.
In February 2026, we announced the groundbreaking of the project and the commencement of on-site construction works, marking a significant milestone toward deployment of the TES system at Wolfson Hospital. The project is being implemented in collaboration with Baran Energy, a subsidiary of Baran Group Ltd., or Baran, (TASE: BRAN).
The Wolfson project is also subject to the System Purchase Agreement with Baran Energy Ltd., described under “System Purchase Agreement with Baran Energy Ltd.” below, pursuant to which Baran has agreed to acquire certain bGen™ ZERO TES systems, including the system designated for Wolfson Medical Center.
The TES System will operate using electricity and water supplied by the Wolfson Hospital and will provide the Services for a period of seven years, commencing no later than 15 months after obtaining all necessary regulatory approvals and allowing for a two-month running-in period. The operation of the TES System, and the required maintenance thereafter will be our responsibility including efficiency ratio of the TES System during the service period that will be examined annually; subject to a contractual remedy period, any failure to meet the efficiency ratio may give Wolfson Hospital cause to terminate the agreement and claim compensation as determined in the agreement. In consideration for the services, Wolfson Hospital will pay a total of approximately NIS 11.9 million (approximately - $3.7 million), in non-equal monthly payments and will have the option to acquire the TES System after the conclusion of the 7 year service period for an agreed amount equal to NIS 1 million (approximately - $0.3 million), and following which the Hospital will also have the option to acquire annual maintenance services (including spare parts) from us. If the option to acquire is not exercised, then we will be responsible to dismantle and vacate the TES System from the Wolfson Hospital premises.
System Purchase Agreement with Baran Energy Ltd.
On September 29, 2025, we entered into a System Purchase Agreement with Baran, pursuant to which Baran agreed to acquire bGen™ ZERO TES systems for certain projects, including systems for Tempo Beverages and Wolfson Medical Center. Under the agreement, Baran will make milestone-based payments to us during the construction and commissioning phases of the projects, and we are also entitled to additional contingent consideration that may be applicable in the future, subject to terms and conditions as described in the agreement. We will retain all related intellectual property rights and will continue to provide operations and maintenance services for the bGen™ ZERO systems covered by the agreement.
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Philip Morris
We entered into a Master Supply and Services Agreement, effective as of December 1, 2021, with Philip Morris Products SA, or Philip Morris, a large international company in the field of tobacco to supply our bGen™ storage systems to Philip Morris and its subsidiaries. The agreement is set for a period of five years, and it sets out, among other things, logistical, technical terms as well as engineering, procurement, and construction terms. Under the agreement various international companies and manufacturing plants around the world, all of whom are affiliates of Philip Morris, would be able to contract us directly, through a local service agreement, to supply our systems and integration services. The agreement also includes customary representations, conditions and indemnification terms.
Also, we entered into a local service agreement, or the Local Service Agreement, dated February 28, 2022, with Philip Morris Romania S.R.I., or Philip Morris Romania, to sell Philip Morris Romania our bGen™ thermal storage system and services with a capacity of 31.5 megawatt-hour and steam power of 18.5 megawatts, including biomass system and auxiliary equipment. On April 27, 2023, we received a notice of termination from Philip Morris Romania with respect to the Local Service Agreement. The notice terminated the Local Service Agreement effective June 26, 2023, commensurate with the 60-day termination notice requirement under the terms of the Local Service Agreement. We have no further obligations under the Local Service Agreement after the date of the termination. The termination notice had no effect on the Master Supply and Services Agreement with Philip Morris, which remains fully in force and unchanged.
Pilot Projects
While our initial focus was on the production of electricity, in 2020 we began to concentrate on thermal projects which are more compatible with our core technology. We believe these pilot projects demonstrate different applications of our technology in various geographic regions and will support us in the commercialization of our technology. Our pilot projects are described below:
New York Power Authority
On February 6, 2024, we announced that we had completed all required system tests and operator training and had handed over our first bGen™ installation at the State University of New York, or SUNY, Purchase College campus in New York. The bGen™ storage system installation at a SUNY college charges by using both exhaust gas and electricity and discharges heat on demand. Our bGen™ is expected to eliminate approximately 550 metric tons of greenhouse gas emissions for SUNY annually. Developed and deployed in partnership with the New York Power Authority, or NYPA, the largest state public power organization in the United States, the project was financed in part by a grant from the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation.
In July 2025, we announced that the SUNY Purchase College project has continued to operate as designed and serves as a commercial reference site supporting our expansion efforts in the North American market. We believe the successful deployment in collaboration with NYPA strengthens our strategic positioning with U.S. public-sector and institutional customers seeking electrified, low-carbon thermal energy solutions.
Our TES system that was installed at Purchase College is fully operational, heating the school’s gymnasium, and is expected to demonstrate an increase in energy efficiency and cut carbon emissions on the State University of New York campus.
The project represents our first operational installation in the United States and is intended to showcase the ability of our bGen™ technology to integrate with existing campus energy infrastructure while reducing emissions and improving system flexibility.
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The following image shows the installed bGen™ unit at SUNY Purchase College in New York.
Enel
On April 21, 2020, we entered into a supply agreement with Enel Produzione S.p.A., an Italian international manufacturer and distributor of electricity and gas, or Enel, to plan, manufacture, supply, transport, and install a TES in a combined cycle power plant belonging to Enel in Santa Barbara, Italy. The project is our first utility-based project and is partially funded by us, Enel, and the IIA. The goal of this project is to build an innovative TES which is completely sustainable and capable of accelerating the energy transition. The integration of the TES system with the existing power plant enables Enel and us to test the technology in the field, in challenging operating conditions and on a large scale. The system offers reduced power plant start-up times and greater speed in load variations, which are necessary performance requirements to enable the efficient use of renewable energy. The system can be used to store excess energy produced from renewable sources in the form of heat to offer decarbonization services and to integrate long-term storage solutions with renewable plants.
This TES utilizes a two-stage charge and discharge process to provide thermal energy. During the charging phase, steam produced by the Santa Barbara facility passes through pipes to heat adjacent crushed rocks; during the discharging phase, the accumulated heat is released to heat pressurized water and generate steam for electricity. This first-of-its-kind TES system can store up to 24MWh of clean heat at a temperature of about 550°C for five hours, providing critical resiliency to the power plant.
The bGen™ unit was inaugurated in November 2022. On November 27, 2025, the parties formally agreed to terminate the underlying contract, including the transfer of ownership of the TES system and related components to Enel. For the six-month period ended June 30, 2025, we recognized €385,000 in revenue related to the Enel Santa Barbara TES pilot project. Our conclusion to recognize such revenue was based on the following: completion of key contractual and technical milestones under the pilot project; written acknowledgment by Enel of system performance and related payments; no repayment obligations, clawback provisions, or outstanding financial claims associated with the amounts recognized; Enel’s assumption of ownership of the TES system and related repair and maintenance responsibilities upon termination; and our assessment that revenue recognition was appropriate and conservative under ASC 606, Revenue from Contracts with Customers, including evaluation of performance obligations, transfer of control, and collectability.
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The following image shows the installed bGen™ pilot unit at Enel, Santa Barbara, Italy
Fortlev
In 2019, we entered into a project agreement with Fortlev Energia Solar Ltd., a Brazilian plastic tank manufacturer, or Fortlev, to design, manufacture and install a TES system at Fortlev’s production facility in Anápolis, Brazil, in consideration for $380,000, to be paid pursuant to certain milestones. In August 2022, we inaugurated the bGen™ TES unit at Fortlev’s facility. The 1 MWh bGen™ unit enables Fortlev to use renewable biomass rather than natural gas to heat the air it uses to make plastic water tanks with rotational molding machines.
On January 11, 2020, we entered into an agreement with Fortlev pursuant to which we granted Fortlev an exclusive license for a period of 25 years, or until validity date of our patent rights over the bGen™ technology (whichever comes first), to engineer, manufacture, commercialize and sell our bGen™ technology in Brazil and Columbia. Fortlev will pay the total amount of $1.5 million to the Company in consideration for the marketing license, in addition to royalty payments equal to 10% of sales.
The agreement also provides that Fortlev will make its best efforts to construct a manufacturing facility in Brazil as soon as possible after the effective date of the agreement, and to obtain any licenses necessary to commercially produce bGen™, with all costs of the construction and licensing of the manufacturing facility to be paid by Fortlev. On August 31, 2020, Fortlev has notified us that they intend to start planning and building a production facility to produce products incorporating the bGen™ technology. Fortlev is expected to bear all the expenses of the building of this facility in Brazil. During 2024, the agreement between the parties was terminated by mutual understanding.
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The following image shows the installed bGen™ pilot unit at Fortlev, Brazil
Rotem 1
The Rotem 1 project is a concentrated solar thermal project in Dimona, Israel. Concentrated solar thermal collectors are coupled with a TES system and steam turbine power block set to supply electricity to Israel’s Electric Corporation under a power purchase agreement with Israel’s Electric Corporation. After December 31, 2020, we began to act to realize our holdings in the Rotem 1 Project and to construct it for a third party. In 2022, following an agreement reached with the lessor of the land on which the Rotem 1 project was built, we vacated the premises and the land was returned to the lessor after dismantling the facility. Following this, we ceased operations of our Rotem 1 project and consequently derecognized the lease obligation and right of use of the land. For the year ended December 31, 2022, we recorded an impairment charge of $360 thousand in connection with this project. On July 17, 2023, our board of directors approved the liquidation of Brenmiller Energy (Rotem) Ltd. and the sale of the hydroelectric microturbine from Brenmiller (Rotem) Ltd. to Brenmiller Energy Ltd. in accordance with its fair value as shown in its consolidated financial statements. In 2024, the Company has written-off the hydroelectric microturbine in the amount of $229 thousand. For more information, see “Item 5.A. Operating and Financial Review and Prospects—Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024—Other income (expenses), net.”
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Prospective Projects
In September 2022, we signed a Memorandum of Understanding with Green Enesys Deutschland GmbH, or Green Enesys, and Viridi Energias Renovables Espana, S.L., or Viridi RE, two European based developers of green energy projects, to perform engineering studies for incorporating our bGen™ TES for Green Enesys’ and Viridi REs’ proposed green hydrogen production facilities throughout Spain. Green Enesys and Viridi RE are currently developing three green hydrogen projects in Spain, with the goal of decarbonizing the European Union’s industrial, power generation and transportation sectors. The projects will have a combined capacity to produce over 100,000 tons of green methanol annually. Further to this memorandum of understanding with Green Enesys and Viridi RE, on December 10, 2023 we signed a non-binding memorandum of understanding with SolWinHy Cádiz S.L, a special purpose company jointly owned by Green Enesys Group and Viridi RE, to develop new build hydrogen and e-methanol projects and that our bGen™ was selected as the preferred solution for the SolWinHy Cádiz S.L project in Arcos de la Frontera, Spain, or the Cadiz Project. The Cadiz Project is expected to integrate bGen™ TES capabilities with a capacity of at least 55 MWh and a final investment decision for the Cadiz Project is expected to be made by the end of 2026.
On April 20, 2023, we announced that we signed a non-binding term sheet with a utility company that is one of the largest producers of clean energy in the world and Green Enesys Group toward a definitive agreement to jointly identify, build, and accelerate electrification by using renewable energies our TES system to electrify heat and achieve full decarbonization for their clients. The two companies expect to join forces with Green Enesys to accelerate TES deployments and provide a quick response to the global economy’s USD $1.7 - $3.6 trillion need for net-zero heat. Under the terms of this non-binding term sheet, our bGen units will be produced at our gigawatt-scale production facility in Israel. The parties have the option to implement a joint production line in Europe to be used for the utility’s projects. The non-binding term sheet also includes the option for the utility to become a strategic investor for a minority stake in our Company. To date we continue to work on developing additional projects.
In July 2023, we signed a memorandum of understanding with Waeree Energies Ltd, India’s largest manufacturer of solar panels, to implement bGen™ TES in India. Under the terms of the memorandum of understanding, both parties are jointly exploring, developing and deploying solar-powered TES systems in India, subject to a future definitive agreement.
On January 11, 2024, we signed a non-binding memorandum of understanding with RSP Systems outlining the terms of a distribution agreement for RSP Systems to be the exclusive distributor of our bGen units in the northeast region of the United States. On June 3, 2024, we entered into a distribution agreement with Rock Energy Storage LLC to sell and distribute our bGen™ thermal energy storage systems in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont and New York. The definitive 5-year agreement includes cumulative projected sales milestones exceeding $150 million.
On June 12, 2024, we signed a non-binding memorandum of understanding with Proactive Planet, a renewable energy solutions provider based in Calgary, Canada to distribute bGen™ TES systems to industrial companies and electric utilities in the province of Alberta in Canada. The agreement aims to expand and accelerate the rollout of our bGen™ TES technology through equipment sales. Under its terms, a prospective 3-year definitive agreement would include projected sales milestones based on the companies’ pipeline. The term of the memorandum of understanding expired on December 7, 2024, and the parties did not extend the longstop date, however, there is still ongoing dialogue about several potential customers, and if such leads would materialize, 5h3 the parties would operate under the terms of the memorandum of understanding.
On August 19, 2024, we announced that we had entered into a 12-year EaaS agreement with Partner in Pet Food Hungaria KFT, or PPF, one of Europe’s leading private label pet food producers. Under the terms of the agreement, we will deliver low-cost and low-carbon steam to PPF and be in a position to offer grid balancing services to the local transmission system operator, MAVIR. Under the terms of the agreement, we will design, build, own and operate a 30 MWh bGen™ ZERO system next to PPF’s pet food manufacturing plant in Dombovar, Hungary. Our bGen™ ZERO will take priority over PPF’s existing fossil fuel boilers, significantly reducing the pet food manufacturer’s energy costs and carbon footprint. PPF will purchase steam from Brenmiller at a fixed rate. As of March 4, 2025, progress continues on project development, including the signing of a land option agreement and submission of a grid connection request. While project financing had initially been expected to be secured by the end of 2025, financing has not yet been finalized. In connection with our evolving BNRG 360 strategy, we have initiated discussions with PPF and other relevant stakeholders to evaluate potential modifications to the project structure. The proposed revised structure shifts the balance from reliance on grid balancing mechanisms toward greater utilization of on-site photovoltaic generation, thereby expanding potential financing alternatives and improving capital flexibility. These discussions remain ongoing, and there can be no assurance that the revised structure will be approved or that financing will be secured on acceptable terms, or at all.
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On September 25, 2024, we announced the formation of a new joint venture, Brenmiller Europe, together with Integrated Renewable Energy Solutions S.L, or IRES. IRES is jointly owned by Green Enesys Group and Viridi RE. The new entity will distribute our products, such as the bGen™ and recently unveiled bGen™ ZERO, through either an equipment sale model and/or an EaaS business model, starting in Spain, Hungary, Germany and Portugal. We hold 60% and IRES holds 40% of the shares issued of Brenmiller Europe. Brenmiller Europe will capitalize on Green Enesys and Viridi’s expertise in developing and deploying large-scale clean energy projects in Europe. The JV aims to rapidly expand the adoption of our bGen™ technology across Europe, focusing on driving product sales, delivering energy services, and securing project-level financing in high-growth markets, starting in major European countries where Brenmiller Europe has the exclusive rights to distribute bGen™ systems, subject to certain revenue and performance requirements. We will manufacture bGen™ modules at our gigafactory in Dimona, Israel, while retaining ownership of our intellectual property.
On October 24, 2024, we announced that, together with Brenmiller Europe, we have signed a non-binding Letter of Intent, or LOI, with Entelios AG, a leading flexibility service provider in Germany. Entelios AG specializes in the aggregation and trading of decentralized flexible assets. Entelios AG focuses on maximizing revenues across relevant short-term flexibility markets through its Entelios AG Cross-Market Optimisation platform. Through the LOI, we plan to mutually develop business models to manage the operation of our bGen™ systems and optimize energy costs by entering into multiple flexibility markets. This setup would allow the supply of renewable thermal energy to industrial users in Germany, aiming to reduce emissions by transitioning from natural gas to electricity. Entelios AG will serve as an expert in optimization and flexibility management services. As of March 25, 2026, we are collaborating under the memorandum of understanding to develop various potential leads and explore the German market.
On February 20, 2025, we announced that we entered into a strategic cooperation agreement with Baran an international engineering company that provides management, design and financing solutions for large-scale infrastructure projects, to accelerate bGen™ ZERO project development and deployments through sales, acquisitions, and operations of selected projects in Israel. To further bGen™ uptake within industrial sectors, we plan to sell certain projects to Baran, subject to the satisfaction of certain conditions precedent, benefiting from Baran’s core project capabilities to ensure effective and timely deployment.
On June 20, 2025, we entered into a non-binding memorandum of understanding with a major Japanese corporation to explore opportunities to deploy TES solutions in Japan’s industrial sector. The collaboration under the memorandum of understanding is intended to identify and evaluate potential applications for TES systems that could replace fossil fuel-based boilers with zero-emission thermal energy storage technology in industrial settings within Japan. Under the memorandum of understanding, the Japanese partner will work with us to assess direct equipment sales as well as HaaS models for industrial and utility-scale applications, subject to further negotiations and definitive agreements. No financial terms or specific implementation timelines were disclosed in connection with the memorandum of understanding.
In July 2025, we announced that our bGen™ TES system was selected as the storage technology component for a large-scale sustainable heat project led by a major European utility company. The project has been advanced to the funding phase of the European Union Innovation Fund 2023 Call for Net Zero Technologies, subject to the execution of definitive grant and off-take agreements. Under the terms of the project as currently contemplated, Brenmiller Europe, our Spain-based joint venture, is expected to supply distributed bGen™ TES systems with an aggregate electrical charge capacity of approximately 5 MWe, representing approximately €4 million in potential equipment revenues. The project configuration integrates renewable generation, TES and high-temperature heat pump technologies to provide sustainable industrial heat and is designed to decouple steam demand from grid power consumption. The project is expected, once operational, to contribute to improvements in energy efficiency and to avoid an estimated 1.45 million metric tons of CO₂ equivalent over its first ten years of operation, although the timing and realization of these outcomes are subject to the conclusion of definitive project agreements and ongoing project development.
On July 16, 2025, we entered into a non-binding memorandum of understanding with ENASCO Ltd., or ENASCO, a developer of nuclear Small Modular Reactor, or SMR, projects, to jointly explore the development of TES solutions integrated with SMR generation platforms. Under the memorandum of understanding, we and ENASCO intend to collaborate on a commercial roadmap targeting an initial joint bGen™ TES project expected to launch as early as 2027 and the development of additional projects with an aggregate target of approximately $50 million in value by 2030, with a longer-term pipeline of projects under consideration through 2035. The collaboration is intended to explore opportunities to combine SMR heat generation with our TES technology to support applications that may include AI data centers, hydrogen production, and other industrial uses requiring reliable, low-carbon baseload thermal energy. The parties believe that an SMR-integrated TES solution could offer enhanced operational flexibility and resilience, although no definitive agreements regarding specific projects or commercial terms have been finalized as of the date of this filing. The memorandum of understanding does not obligate either party to proceed with any transactions or definitive project agreements, and any future project development will be subject to further negotiation, due diligence and regulatory approvals, as applicable.
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Research and Development
Research and development are a central part of our business and allows us to further develop and improve our products. Our research and development team includes engineers, researchers, technicians, quality personnel, and prototyping teams, all of whom work closely together to design, enhance and deliver the next generations of our products based on our core technology. This research and development team conceptualizes technologies, examines the feasibility of selected approaches, reviews the basic and detailed designs, and then builds and tests prototypes before refining and/or redesigning as necessary. Our quality personnel work in parallel with engineers and researchers, which allows us to anticipate and resolve potential issues at early stages in the development cycle. We conduct our research and development efforts at our facility in Rosh Haayin, Israel at our production factory in Dimona and on certain land leased from the Rotem Industrial Park. We believe that the close interaction among our research and development teams allows for the timely and effective realization of our products.
The development of the key components that are required for each of our TES products begins at the analysis of concept stage, following which we evaluate the feasibility of each component, create the basic design with a number of alternatives, and, finally, identify a single approach and carry out a detailed design for its development. All of the stages of development are managed in our Product Life Cycle Management system, which is a structured management approach for research and development, through gates of feasibility, basic design, detailed design, Alpha sites, and Beta sites, until a detailed product file is built. The results are managed in a PDM system with configuration management and our engineering office. The key components that are developed are subject to checks and rest in each stage of the development processes, including quality control checks and in-use testing, the results of which are benchmarked against the relevant product specifications. Market requirement specifications of the developed products are built by our marketing team, based on the market analysis with potential customers and with the experience from previous products. The research and development team takes the marketing requirement specifications and converts them into technical and functional specifications which are the contract to the research and development stage.
Our research and development activities work concurrently with the launching and engineering stages of already developed products. We plan to increase our research and development activities in connection with the next generations of products that we are designed to deliver higher densities, at higher temperatures of up to 1800 degrees Fahrenheit and offer better performance from our core TES technology. We have received a grant from the IIA for this high-temperature development.
We finance our research and development activity in part by investing our cash flow and in part by grants from the Israeli Ministry of Economy and Industry, including grants from the IIA, the Israeli Ministry of Energy, the BIRD Foundation, and the NYPA. These grants are awarded after examination of applications, which are submitted by our research and development managers. For more information, see “Item 5.B. Liquidity and Capital Resources—Grants and other Funding Arrangements.”.
Financing that is granted by the IIA is in the range of 30%-50% of the submitted budget of the development of a particular product, which includes the costs of manpower and the costs of the materials that are required to develop and manufacture a first prototype of the product. In light of this government financing, we are required to comply with the provisions of the Israeli Encouragement of Research and Development Law related to intellectual property and we are required to pay yearly royalties to the Israeli government at a rate of 3%-5% on the revenues generated from the sale of our products developed under an IIA program up to the total amount of the grants received from IIA plus the relevant interest rate, if any. Under IIA regulations, grants received before June 30, 2017, bear the annual interest rate that applied at the time of the approval of the applicable IIA file which will apply to all of the funding received under such IIA approval. Grants received from the IIA after June 30, 2017, bear an annual interest rate based on the 12-month Secured Overnight Financing Rate, or SOFR, or at an alternative rate published by the Bank of Israel plus 0.71513%. Grants approved after January 1, 2024, shall bear the higher interest rate of (i) 12 months SOFR, plus 1%, or (ii) a fixed annual interest rate of 4%.
The transfer or license of IIA-supported technology or know-how outside of Israel and the transfer of manufacturing of IIA-supported products, technology or know-how outside of Israel may involve the payment of significant amounts, depending upon the value of the transferred or licensed technology or know-how, our research and development expenses, the amount of IIA support, the time of completion of the IIA-supported research project and other factors. These restrictions and requirements for payment may impair our ability to sell, license or otherwise transfer our technology assets outside of Israel or to outsource or transfer development or manufacturing activities with respect to any product or technology outside of Israel. Furthermore, the consideration available to our shareholders in a transaction involving the transfer outside of Israel of technology or know-how developed with IIA funding (such as a merger or similar transaction) may be reduced by any amounts that we are required to pay to the IIA.
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In connection with our project agreement with Fortlev on the bGen™ product, we notified the IIA regarding the feasibility of partially transferring production of the bGen™ technology outside of Israel, the maximum royalties to pay to the Israeli government have been increased to 120% of the total amount of grants that have been received. In consideration for the support from the BIRD Foundation, we are obligated, inter alia, to pay royalties at a rate of 5% on all of the revenues deriving from the technology that has been developed and up to a maximum ceiling of 150% of the amount of the grant, subject to the terms of the agreement with the BIRD Foundation.
The core technology which we have developed is the TES unit which includes the embedded heat exchanger, the embedded steam generator, the embedded storage capability, and the embedded conversion from electricity to high-temperature heat. All these embedded functionalities reside inside the TES unit and are built on a special structure with special insulation. This special developed TES enables to installed modular and fit to size units at production floors and inside power utilities, to increase flexibility, to enable renewable energy penetration, and to overcome the intermediate nature of renewable sources while energy has to be supplied to these sites on a regular basis with no dependency on timing of the renewable sources.
The main application of the energy storage unit with multi-functions inside has been submitted to patent offices in the United States, Europe, Israel, and South Africa. All of these submissions have been granted patents. See “Item 4.B.—Business Overview—Intellectual Property” below for additional information.
Our total research and development expenses, net, were $3,960 thousand for the year ended December 31, 2025, $3,589 thousand for the year ended December 31, 2024, and $3,178 thousand in the year ended December 31, 2023. For more information, see “Item 5.A.Operating and Financial Review and Prospects—Operating Results”. As of the years ended December 31, 2025, 2024, and 2023, the company reduced its net research and development expenses by $0 thousand, $0 thousand, and $92 thousand, respectively, using portions of the gross grant amounts received from various government authorities and agencies. For more information, see “Item 5.B.—Liquidity and Capital Resources—Grants and other Funding Arrangements.”
Intellectual Property
Protection of our intellectual property is important to our business. We seek to protect our intellectual property through a combination of patents, trademarks, and confidentiality agreements with our employees and certain of our contractors and confidentiality agreements with certain of our consultants, scientific advisors, and other vendors and contractors. In addition, we rely on trade secrets law to protect our product candidates and products in development.
We have registered a patent for our core energy storage technology in Israel, the United States, the United Kingdom, Switzerland, Norway, certain European Union countries - Germany, Belgium, Denmark, Spain, France, Italy, and South Africa. The patent covers our fundamentals of the energy storage unit which we have developed using three central functions in one unit: the heat exchanger, the receipt and storage of the heat, and the production of steam inside the storage unit.
We believe our patented technology for our combined thermal storage system is unique and it affords us a significant competitive advantage. We may apply to register additional patents in the future based on the technology developed alongside or in addition to our already patented technology.
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We plan to license the usage of technology we have developed to our customers. We expect that we will bundle the licensing of the technology usage with offering our customers products and services.
No assurance can be given that our intellectual property will provide us with a competitive advantage or that we will not infringe on the intellectual property rights of others. In addition, we cannot be sure that any trademarks will be granted in a timely manner or at all with respect to any of our pending applications. For further discussion of the risks related to our intellectual property, see “Item 3.D.—Risk Factors—Risks Related to Our Intellectual Property.”
Patents
The following table sets forth information regarding our patent portfolio as of December 31, 2025:
| Patent No. | Application No. | Title | Grant Date | Expiration Date | Country | |||||
| 2015/05655 10,145,365 |
2015/05655 14/766,136 |
Integrated Thermal Storage, Heat Exchange, and Steam Generation | March 29, 2017 December 4, 2018 |
January 22, 2034 May 14, 2035 |
South Africa United States(1) | |||||
| EP2976579(2) | 14767720.7 | Integrated Thermal Storage, Heat Exchange, and Steam Generation | June 5, 2019 | January 22, 2034 | Belgium, Switzerland, Germany, Denmark, Spain, France, United Kingdom, Italy, Luxembourg, Norway | |||||
| 240,502 | 240,502 | Integrated Thermal Storage, Heat Exchange, and Steam Generation | December 27, 2019 | January 22, 2034 | Israel(3) |
| (1) | On September 17, 2018, we received a Notice of Allowance from the USPTO stating that our application for a patent had been approved. This patent deals with our integrated thermal storage product, which is based on the performance of three central functions: heat exchange, storage of heat at high temperatures, and the production of steam inside of the storage unit. The registration of the patent, which is called: “Integrated Thermal Storage, Heat Exchanger, and Steam Generator” was done on December 4, 2018. |
| (2) | On February 5, 2019, we received a Notice of Allowance from the European Patent Office stating that our application for a patent in Europe had been approved. This patent deals with our integrated thermal storage product, which is based on the performance of three central functions: heat exchange, storage of heat at high temperatures, and the production of steam inside of the storage unit. The granting of the patent, which is called: “Integrated Thermal Storage, Heat Exchanger, and Steam Generation” was received in June 2019, upon the payment of the registration fee. The Company has continued to the national phase stage in Europe and registered the patent in the following countries on June 5, 2019: Belgium, Spain, Switzerland, Denmark, Germany, France, Great Britain, Italy, Luxembourg and Norway. |
| (3) | On July 4, 2019, we received a Notice of Allowance from the Israeli Patent Office stating that our application for a patent in Israel had been approved. This patent deals with our integrated thermal storage product, which is based on the performance of three central functions: heat exchange, storage of heat at high temperatures, and the production of steam inside of the storage unit. The granting of the patent, which is called: “Integrated Thermal Storage, Heat Exchanger, and Steam Generation” was done on December 27, 2019. |
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Trademarks
We have taken steps to register a trademark for our main product, the bGen™ storage system. If our trademark application is approved, we can add the TM mark on all of our documentation for the bGen™, which is used to describe the product, its functionalities, and the technology.
The following table sets forth the jurisdictions in which we have submitted an application for the registration of the bGen™ as a trademark as of December 31, 2025:
| Trademark No. | Application No. | Trademark | Grant Date | Application Date | Country | |||||
| 920352340 | 920352340 | bGen in class 11 | May 25, 2021 | August 4, 2020 | Brazil | |||||
| 6,708,110 | 90/088,601 | bGen in class 11 | April 19, 2022 | August 3, 2020 | United States | |||||
| 48639379 | 48639379 | bGen in class 11 | March 14, 2021 | August 4, 2020 | China | |||||
| 4598578 | 4598578 | bGen in class 11 | August 6, 2020 | August 6, 2020 | India | |||||
| 018347359 | 018347359 | bGen in class 11 | May 20, 2021 | December 1, 2020 | European Union | |||||
| 330,213 | 330,213 | bGen in class 11 | March 2, 2021 | August 3, 2020 | Israel |
Competition
We operate as a supplier of TES solutions. The energy storage market is broad and contains segments that range from TES to electrical energy storage and other forms of energy storage. The current standard technologies for storing thermal energy are (a) molten salt, which tends to be high in price and maintenance costs, and (b) water, which is limited at low temperatures.
There are a number of companies currently operating in the TES market, primarily due to technological and funding challenges that exist in developing innovative energy storage solutions. Our direct competitors in the TES space are companies such as Antora, Energy Nest, KraftBlock, Kyoto, and Rondo. The focused segment by these competitors is the industrial decarbonization, where companies are required to switch to non-fossil fuels due to environment and increasing cost of carbon tax, while their required process heat, in the production lines, is in the medium to high temperature range. Kraftblock and Kyoto focused more on Europe, Rondo in the US. The companies differ in their Technology Readiness Level, or TRL, according to their number of installed Pilots and maturity, by their modularity approach which is essential in the industrial segment and by their capability of output temperatures. These companies are using mainly the sensible heat approach where Antora uses solid carbon as its storage media, Kyoto is using molten salt as the storage media, Rondo uses Shamot Bricks and Energy Nest the special developed concrete. Additional used technologies and approaches are observed in the TES arena but with a much lower TRL.
We believe that we have several advantages over other technologies in parts due to: (i) the supply of energy continuously, economically, and around-the-clock, (ii) our modularity and solutions from small scale operations without impairing economic feasibility, (iii) our lower pricing due to low-cost materials, and (iv) our mature stage of TRL and are moving towards commercialization.
Environmental Matters
Our objective with using TES technology and implementations is to reduce carbon footprints, by contributing to expedite the transition from a reliance on fossil fuels to the widescale use of renewable energy sources. The bGen™ storage solution’s main components are its crushed rock storage media, metals, and piping. Our technology does not use any hazardous materials. To the best of our knowledge, as of the date of this annual report, we do not have environmental risks that might have a significant impact on us. In addition, neither we nor our senior officers are a party to significant legal or administrative proceedings in connection with environmental matters.
Government Regulation
Our business includes the development, manufacturing, installation, maintenance, and operation of energy storage units. For each of these installations, a set of industry regulations, codes, and standards, are defined. These regulations relate to the specific installed environment, either in the industrial factory setting or in power-utilities setting. These codes and standards are related to equipment such as energy storage units, steam generation units, and boilers. The regulations and standards vary by jurisdiction, according to the installation site. For each new installation, the set of the required codes and standards is defined as part of the contract for the installation site. The system parts need to be designed, manufactured, and built in accordance with applicable local regulations and codes in force.
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In addition, in accordance with the Business Licensing Order (Businesses Required for Licensing), 2013, our facility in the city of Dimona, Israel requires a business license. We have obtained such a business license that is effective through December 31, 2027.
C. Organizational Structure.
The following is a depiction of our organizational structure as of March 25, 2026:
Brenmiller Energy U.S. Inc., a company incorporated under the laws of Delaware, United States, is wholly owned by Brenmiller Energy Ltd.
On September 25, 2024, we announced the establishment of a new joint venture subsidiary company called Brenmiller Europe, established under the laws of Spain. Brenmiller Europe was established together with IRES, a company that is jointly owned by Green Enesys Group and Viridi RE. Brenmiller Europe will act as a distributor for our products, such as the bGen™ and recently unveiled bGen™ ZERO, through equipment sale models and/or our EaaS business model, commencing in Spain, Hungary, Germany and Portugal. Brenmiller Energy holds 60% of the issued shares of Brenmiller Europe, and IRES holds the remainder 40% of the issued shares of Brenmiller Europe.
On January 21, 2025 we announced the establishment of Bren Dom TES Kft, a fully owned subsidiary (100%) owned by Brenmiller Europe. Bren Dom TES Kft was established according to the laws of Hungary and is intended to be our project and corporate arm for developing all of Brenmiller Europe’s future projects and business activities in Hungary, starting with our Partner in PPF TES project.
D. Property, Plant and Equipment.
Our executive offices are located in Rosh Haayin, Israel and our primary production plant is located in Dimona, Israel. Our offices and the production plant in Dimona are leased and we do not own any real property.
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 our consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in “Cautionary Note Regarding Forward-Looking Statements” and under “Risk Factors” elsewhere in this annual report on Form 20-F. Our discussion and analysis for the year ended December 31, 2023 and December 31, 2024 can be found in our Annual Report on Form 20-F for the fiscal year ended December 31, 2024, filed with the SEC on March 4, 2025.
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Overview
We are a technology company that develops, produces, markets, and sells TES systems based on our proprietary and patented bGen™ technology. Our bGen™ technology uses crushed rocks to store heat at high temperatures, and our TES systems use that heat to dispatch consistent thermal energy on demand. For additional information on our technology and products, see “Item 4.D.—Business Overview - Our Products” for additional information.
Components of our Operating Results
We have not generated significant revenues to date. Our revenues consist mainly of revenues from the sale of our storage units, and engineering services.
Our costs and expenses consist of the following components:
| ● | Cost of Revenues. Our cost of revenues consists of expenditures on materials, payments to consultants and subcontractors, as well as labor, royalty payments, and write down of work-in-progress inventory to net realizable value. In addition, the cost of revenues consists of costs and expenses relating to periods in which the plant did not operate in full capacity (which include mainly payroll and related expenses). |
| ● | Research and Development, net. Our research and development expenses consist primarily of payroll, including share-based compensation and related personnel expenses, cost of third-party consultants and subcontractors, expenditure on materials, office maintenance, and depreciation. Such expenses are net of government grants. We expect that our research and development expenses will not change significantly as we continue to develop our storage units and bGen™ technology. |
| ● | Selling and Marketing. Our selling and marketing expenses consist primarily of payroll, including share-based compensation and related personnel expenses, office maintenance, project promotion and cost of third-party consultants. Although we continue to enhance our market penetration efforts mainly by partnering with local agents in our target markets we expect that our selling and marketing expenses will not change significantly. |
| ● | General and Administrative. General and administrative consist primarily of payroll, including share-based compensation and related personnel expenses, professional service fees for accounting, legal, bookkeeping, directors fees and associate costs, allowances for credit losses and depreciation. |
| ● | Other Income (expenses), net. Other income (expenses), net consist primarily of the write-off of the remaining value in connection with the Rotem 1 project. |
Results of Operations
The following table presents our results of operations for the periods presented.
| Year Ended December 31, | ||||||||
| Dollars in thousands, except per share data | 2025 | 2024 | ||||||
| Revenues: | ||||||||
| Thermal energy storage units sold | 387 | - | ||||||
| $ | 387 | $ | - | |||||
| Costs and expenses: | ||||||||
| Cost of revenues | (3,596 | ) | (985 | ) | ||||
| Research and development, net | (3,960 | ) | (3,589 | ) | ||||
| Selling and marketing | (1,238 | ) | (1,197 | ) | ||||
| General and administrative | (4,332 | ) | (4,557 | ) | ||||
| Other income (expenses), net | 1 | (234 | ) | |||||
| Operating loss | (12,738 | ) | (10,562 | ) | ||||
| Interest expenses | (374 | ) | (244 | ) | ||||
| Other financial income (expenses), net | (670 | ) | 4,034 | |||||
| Financial income (expenses), net | (1,044 | ) | 3,790 | |||||
| Share in equity loss of joint venture | (123 | ) | - | |||||
| Net loss | $ | (13,905 | ) | (6,772 | ) | |||
| Loss per share: | ||||||||
| Basic and diluted | $ | *(57.14 | ) | $ | *(45.27 | ) | ||
| Weighted average number of shares outstanding used in the computation of basic and diluted loss per share | *408,792 | *149,585 | ||||||
| * | Post reverse split. |
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Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024
Revenues
Revenues for the year ended December 31, 2025 were $387 thousand, compared to $0 thousand for the year ended December 31, 2024. The revenues recognized in 2025 relate to the sale of a thermal energy storage unit to a customer in Europe. By contrast, no revenues were recognized in 2024. This change reflects an initial inflection point from a period of no recognized revenues toward early-stage commercial execution of the Company’s TES technology. While revenues remain limited in absolute terms, the recognition of product-related revenue in 2025 represents the first step toward commercialization following several years of development and pilot activity.
Cost of Revenues
The following table presents the breakdown of the cost of revenues for the years ended December 31, 2025 and 2024.
| Year Ended December 31, | ||||||||
| Dollars in thousands | 2025 | 2024 | ||||||
| Consultants and subcontractors | $ | 426 | $ | - | ||||
| Write down of work-in-progress inventory to net realizable value | 1,642 | - | ||||||
| Expenditure on materials | 5 | - | ||||||
| Operating costs not attributed to projects (mainly salary and related expenses) | 1,523 | 985 | ||||||
| Total | $ | 3,596 | $ | 985 | ||||
Cost of revenues for the year ended December 31, 2025 increased by approximately 265% to $3,596 thousand, compared to $985 thousand for the year ended December 31, 2024. The increase was primarily attributable to a write-down of work-in-progress inventory to net realizable value of approximately $1,642 thousand. This write-down relates to a commercial-scale TES project under construction and reflects project-specific commercial and contractual developments identified during the year. The adjustment does not indicate a broader deterioration in the Company’s technology or product roadmap, but rather reflects the execution risks inherent in early-stage commercial deployments. In addition, cost of revenues in 2025 included operating costs not directly attributed to projects, mainly salary and related expenses, incurred during periods in which the production facility did not operate at full capacity. Overall, the year-over-year increase reflects the resumption of commercial project activity in 2025 combined with project-specific accounting adjustments, rather than a recurring structural increase in cost levels.
Research and Development, Net
The following table discloses the breakdown of net research and development expenses for the year ended December 31, 2025 and 2024:
| Year Ended December 31, | ||||||||
| Dollars in thousands | 2025 | 2024 | ||||||
| Salary and related expenses | $ | 2,725 | $ | 2,604 | ||||
| Consultants and subcontractors | 290 | 342 | ||||||
| Expenditure on materials | 277 | 56 | ||||||
| Depreciation and other | 300 | 200 | ||||||
| Office maintenance | 368 | 387 | ||||||
| Total | $ | 3,960 | $ | 3,589 | ||||
Net research and development expenses for the year ended December 31, 2025 increased by approximately 10% to $3,960 thousand, compared to $3,589 thousand for the year ended December 31, 2024. The increase was primarily driven by higher salary and related expenses, materials consumption and depreciation associated with continued development and operational readiness activities. Research and development expenses in 2025 continued a multi-year investment trend, with the year-over-year increase reflecting scale and intensity.
We expect a slight decrease in our research and development expenses as we transition from the primary development phase of our core storage product to ongoing optimization and incremental improvements.
Selling and Marketing
Selling and marketing expenses for the year ended December 31, 2025 increased by approximately 3% to $1,238 thousand, compared to $1,197 thousand for the year ended December 31, 2024. The increase was primarily attributable to higher salary and related expenses and project promotion activities. Selling and marketing expenses remained broadly stable year over year, indicating a controlled and consistent approach to market development.
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Although we continue to enhance our market penetration efforts mainly by partnering with local agents in our target markets, we expect that our selling and marketing expenses will not change significantly.
General and Administrative
General and administrative expenses for the year ended December 31, 2025 decreased by approximately 5% to $4,332 thousand, compared to $4,557 thousand for the year ended December 31, 2024. The decrease was driven mainly by lower consultants and insurance expenses and reduced allowance for credit losses, partially offset by higher salary and related expenses. The year-over-year decrease reflects continued management focus on controlling overhead costs while maintaining the organizational infrastructure required to support commercialization.
Other Income (expenses), net
Other income (expenses), net for the year ended December 31, 2025 improved to income of $1 thousand, compared to net expenses of $234 thousand for the year ended December 31, 2024. The favorable change was primarily attributable to the absence in 2025 of the write-off of the remaining value of the Rotem 1 project that was recorded in 2024.
Operating Loss
Operating loss for the year ended December 31, 2025 increased by approximately 21% to $12,738 thousand, compared to $10,562 thousand for the year ended December 31, 2024. The increase reflects the continuation of the Company’s pre-commercialization cost structure, combined with project-related impacts in 2025, prior to achieving revenue scale sufficient to absorb fixed operating costs.
Financial Income, Net
Net financial expenses for the year ended December 31, 2025 amounted to $1,044 thousand, compared to net financial income of $3,790 thousand for the year ended December 31, 2024, representing an unfavorable variance of approximately $4,834 thousand. The unfavorable year-over-year variance was driven primarily by the absence in 2025 of significant non-cash financial income recognized in 2024, mainly related to fair value adjustments and reclassification of warrants, and by a material increase in foreign exchange losses. Foreign exchange losses in 2025 were primarily attributable to adverse movements in the EUR/USD exchange rate, which affected the remeasurement of Euro-denominated monetary items, including the Company’s loan and related obligations to the European Investment Bank.
Net Loss
Net loss for the year ended December 31, 2025 increased by approximately 105% to $13,905 thousand, compared to $6,772 thousand for the year ended December 31, 2024. The increase in net loss was driven by the higher operating loss in 2025 and the shift from net financial income in 2024 to net financial expenses in 2025, as described above.
Net Loss Per Ordinary Share
Basic loss per ordinary share for the year ended December 31, 2025 increased to $57.14, based on a weighted average of 408,792 ordinary shares outstanding during the period, compared to $45.27 based on a weighted average of 149,585 ordinary shares for the year ended December 31, 2024. The increase in loss per share was primarily attributable to the higher net loss in 2025 and to deemed dividend adjustments related to preferred shares and warrants, which increased the loss attributable to ordinary shareholders.
B. Liquidity and Capital Resources.
Overview
Since inception, the Company has financed its operations primarily through the issuance of equity securities, a loan from the European Investment Bank and governmental grants. As of December 31, 2025, cash, cash equivalents and restricted deposits increased by approximately 20% to $4,945 thousand, compared to $4,130 thousand as of December 31, 2024. The Company has incurred recurring operating losses and negative cash flows from operating activities and expects that additional financing will be required to support ongoing operations.
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The table below presents our cash flows for the periods indicated.
| Year Ended December 31, | ||||||||
| Dollars in thousands | 2025 | 2024 | ||||||
| Cash used in operating activities | $ | (10,399 | ) | $ | (9,507 | ) | ||
| Cash used in investing activities | (398 | ) | (422 | ) | ||||
| Cash provided by financing activities | 11,500 | 10,939 | ||||||
| Net increase in cash and cash equivalents and restricted deposits | $ | 703 | $ | 1,010 | ||||
Operating Activities
Since our incorporation, we have had ongoing losses and incurred negative cash flows from operating activities. For example, in the year ended December 31, 2025, we had operating losses of $12,738 thousand. We have mainly financed our activities in the year ended December 31, 2025 through the issuance of our Ordinary Shares, preferred shares and warrants and receipt of governmental grants. Management plans continuing commercialization of our products and services, which require substantial funding. There are no assurances however, that we will be successful in obtaining the level of financing needed for our operations or that such financing will be available on terms acceptable to us.
Cash flows from operating activities consist primarily of loss adjusted for various non-cash items, including depreciation, fair value adjustment of warrants’ liability, warrants issuance costs, share-based compensation expenses, loss from the write off the remaining asset from the closure of the Rotem 1 project and non-cash interest and exchange rate differences, net. In addition, cash flows from operating activities are impacted by changes in operating assets and liabilities, which include inventory, prepaid expenses, accounts receivable, trade payables and other assets and accounts payable.
Net cash used in operating activities for the year ended December 31, 2025 increased by approximately 9% to $10,399 thousand, compared to $9,507 thousand for the year ended December 31, 2024. Operating cash outflows remained broadly consistent year over year, reflecting a sustained cash burn pattern typical of companies transitioning from development to early commercialization.
Investing Activities
Net cash used in investing activities for the year ended December 31, 2025 decreased by approximately 6% to $398 thousand, compared to $422 thousand for the year ended December 31, 2024. Investing activities primarily related to capital expenditures and investment in a joint venture, with no material change in trend.
Financing Activities
Net cash provided by financing activities for the year ended December 31, 2025 increased by approximately 5% to $11,500 thousand, compared to $10,939 thousand for the year ended December 31, 2024. Financing inflows were primarily derived from issuances of equity instruments, including investments under securities purchase agreements, and were a key source of liquidity supporting ongoing operations and project execution.
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Grants and other Funding Arrangements
The following table sets forth a summary of grants we have received from various institutions and government authorities as of the year ended December 31, 2025 (translated at an exchange rate of NIS 3.647 per U.S. dollar).
| Institution/Government Authority | Approved Grant (1) | Aggregate Amount received up to December 31, 2025 (1) | Total liabilities in respect of grants received (including interest) included in financial statements (2) | |||||||||
| (U.S. dollars, thousands) | ||||||||||||
| IIA | $ | 5,644 | $ | 4,469 | $ | 449 | ||||||
| Ministry of Economy and Industry | 837 | 227 | 62 | |||||||||
| Ministry of Energy | 873 | 619 | 44 | |||||||||
| BIRD Foundation | 662 | 662 | - | |||||||||
| NYPA | 580 | 580 | 19 | |||||||||
| Total | $ | 8,596 | $ | 6,557 | $ | 574 | ||||||
| (1) | Approved grants and aggregate amounts received also include grants for programs from institutional and government authorities that during the years have ended or been canceled. As of December 31, 2025, the company remains entitled to receive up to $731 thousand in grants for active programs. |
| (2) | Liability for royalties included in our financial statements include also a royalty liability concerning the EIB credit facility agreement in the amount of $348 thousand. |
European Investment Bank
On July 8, 2024, we signed an amendment to the credit facility agreement, or the Amendment, with the EIB. The initial credit facility agreement dated March 31, 2021, or the EIB Agreement, included funding limited to a total sum of €7.5 million. The funding was granted in a co-funding track, where EIB allowed withdrawals of sums equal to capital investments in the Company available in two tranches. On July 28, 2022, the first tranche of €4 million was drawn down by us with a 5.0% fixed annual interest rate. Interest payments are due annually on July 28 of each year and the principal shall be repaid in equal annual payments starting from July 28, 2026 and maturing on July 28, 2028. Following the EIB Amendment, the second tranche of €3.5 million is available within 48 months instead of 36 months of signing the EIB Agreement, or March 31, 2025, subject to certain conditions, with a 5.0% fixed annual interest rate. We did not draw on the remaining €3.5 million tranche. Instead, we plan to prioritize investment in localized production facilities in Europe and the U.S. to support our global expansion strategy.
Pursuant to the terms of the credit facility agreement with EIB, we are required to pay annual royalties at a rate of 2.0% on all gross sales of TES systems that we produce each quarter until a royalty cap of the amounts that have been disbursed under the facility is reached. Prior to the receipt of the first tranche, on May 29, 2022, we pledged to EIB a first ranking floating security interest in the equipment that has been purchased for the expansion of our automated production facility as well as all of the revenues generated from the sale of TES systems manufactured by us.
Among other customary terms included in the agreement, the facility agreement with EIB provides for the following covenants, including a prohibition on the sale of certain assets except in the ordinary course of business, a prohibition on the execution of a merger or a structural change in the Company’s group, restrictions on incurring indebtedness without the prior written consent of EIB other than trade credit extension, restrictions on intercompany loans, our compliance with EU and Israeli environmental laws, prohibitions on the distribution of dividends without the prior written consent of EIB and limitations on our ability to receive only permitted government grants scheduled in the agreement and up to the amount that is set forth in the agreement. Furthermore, we may not create a negative pledge of security over our assets, subject to certain conditions, and we covenant to maintain a balance of cash and cash equivalents of at least €350,000. The EIB agreement also includes a defined “Delisting Event,” which generally refers to our ordinary shares ceasing to be listed or publicly traded without being promptly re-listed on an acceptable alternative trading venue. The occurrence of a delisting event may entitle EIB to exercise certain remedies under the agreement, including the potential acceleration of outstanding amounts. For more information on our facility with EIB, see Note 10 to our audited consolidated financial statements included elsewhere in this annual report.
On November 27, 2024, we signed an additional amendment to the credit facility agreement by and between us and the EIB, in which EIB provided its consent and amended certain provisions of the EIB Agreement to facilitate us to close the August 2024 Private Placement (as defined below).
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Current Outlook
As of December 31, 2025, our total cash and cash equivalents and restricted deposits shown in the statement of cash flows were $4,945 thousand. See, “Item 5.B Operating and Financial Review and Prospects — Liquidity and Capital Resources” for more information.
We have financed our operations to date primarily through proceeds from the issuance of our ordinary shares, preferred shares, pre-funded warrants and warrants, revenues from the sale of products, and engineering services, a loan from EIB and governmental grants. We have incurred losses and generated negative cash flows from operations since inception in 2012.
We expect that revenues from the sale of TES systems and related services will increase over time; however, it does not expect such revenues to fully support operations in the near term. The independent auditor’s report includes an explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern. Management’s plans to address this uncertainty include continued focus on commercialization, execution of initial projects and securing additional financing as required.
On June 9, 2023, we entered into a Sales Agreement, or the Sales Agreement, with A.G.P./Alliance Global Partners, or A.G.P, as the Sales Agent, pursuant to which we may offer and sell, from time to time, to or through A.G.P as agent or principal Ordinary Shares in an “at-the-market” offering, as defined in Rule 415(a)(4) promulgated under the Securities Act, for an aggregate offering price of up to $9.35 million. On June 9, 2025, we filed a prospectus supplement to supplement and amend the previously filed prospectus supplement, dated June 9, 2023, to increase the dollar amount of ordinary shares that may be offered and sold under the Sales Agreement by $2,381,812. We will pay A.G.P a commission equal to 3.0% of the gross sales price per share sold pursuant to the terms of the Sales Agreement. We are not obligated to sell any Ordinary Shares under the Sales Agreement and no assurance can be given that we will sell any Ordinary Shares under such agreement, or, if we do, as to the price or number of such shares that we will sell or the dates on which any such sales will take place. As of December 31, 2025, the aggregate number of Ordinary Shares that were sold under the Sales Agreement was 260,641 Ordinary Shares for aggregate gross proceeds of $10,566 thousand. We may use our current “at-the-market” offering facility opportunistically subject to management discretion and market conditions.
On January 22, 2024, we entered into a securities purchase agreement with a U.S. based institutional investor for the sale of 6,857 Ordinary Shares, warrants to purchase up to 25,397 Ordinary Shares, and pre-funded warrants to purchase up to 18,540 Ordinary Shares, at a price of $157.5 per Ordinary Share and accompanying warrant, less $0.0035 per pre-funded warrant, for aggregate gross proceeds of approximately $4.0 million before deducting placement agent fees and other offering expenses, or the January 2024 Offering. After deducting costs associated with the offering, our net proceeds were $3.4 million. The warrants are exercisable immediately at a price of $175 per share and will expire five years from the date of issuance. The pre-funded warrants were exercisable immediately at a price of $0.0035 per share and were exercisable until exercised in full. The offering closed on January 25, 2024. On May 17, 2024 the pre-funded warrants were fully exercised.
On January 22, 2024, we entered into a placement agency agreement with A.G.P., as the placement agent, pursuant to which A.G.P agreed to serve as placement agent for the January 2024 Public Offering. We agreed to pay A.G.P an aggregate cash fee equal to 7.0% of the gross proceeds received by from the sale of the securities in the January 2024 Public Offering, however in the case of certain identified investors we agreed to pay a cash fee equal to 3.5% of the gross proceeds received by us from such investors. Pursuant to the placement agency agreement, we also agreed to pay A.G.P. $105 thousand for accountable expenses and $25 thousand for non-accountable expenses. The placement agency agreement has indemnification and other customary provisions for transactions of this nature.
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On August 4, 2024, we entered into a definitive securities purchase agreement with Alpha Capital Anstalt, or Alpha, for a private placement of 28,571 Ordinary Shares at a price of $36.75 per share, or the August 2024 Private Placement. The closing of the August 2024 Private Placement was subject to certain conditions, including us obtaining consent from an existing lender. On November 3, 2024, we entered into an amendment, or the First Amendment, to the securities purchase agreement with Alpha. Pursuant to the First Amendment, it was agreed to extend the time by which we shall obtain consent from an existing lender, in connection with the transactions contemplated by the securities purchase agreement, from within 90 days of signing the securities purchase agreement to within 120 days of signing the securities purchase agreement. On November 27, 2024, we received the required approval from the lender and on December 4, 2024, the offering was closed. Under the terms of the securities purchase agreement, Alpha also had the right to make a further investment for 28,571 additional Ordinary Shares (or ordinary share equivalents) in the event that our Ordinary Shares close at or above $87.5 per share within the next 12 months from the date of the securities purchase agreement. The securities purchase agreement provides for registration rights for the Ordinary Shares and we have agreed to file a registration statement with the SEC to register the resale of the Ordinary Shares within thirty (30) days of closing on December 4, 2024. The private placement resulted in gross proceeds of $1.05 million. We intend to use the net proceeds from the private placement for general corporate purposes, including working capital. On January 16, 2025, we entered into a second amendment, or the Second Amendment, to the securities purchase agreement with Alpha. Pursuant to the Second Amendment, it was agreed to extend the notice period provided by Alpha to us to fifteen (15) business days in connection with Alpha’s right to make a further investment for 28,571 additional Ordinary Shares (or ordinary share equivalents) in the event that our Ordinary Shares close at or above $87.5 per share within 12 months from the date of the securities purchase agreement. Under the Second Amendment we also had the right to call Alpha’s additional investment right under certain circumstances in the event that the closing price of our Ordinary Shares is $140 or more for three consecutive trading days. The option under the Second Amendment has expired.
On May 12, 2025, we entered into a securities purchase agreement with certain investors for the issuance and sale of 65,934 ordinary shares, series B warrants to purchase up to 65,934 Ordinary Shares, or the Series B Warrants, and series C warrants to purchase up to 65,934 Ordinary Shares, or the Series C Warrants, at a combined price of $22.75 per ordinary share and accompanying warrants, for aggregate gross proceeds of approximately $1.5 million before deducting placement agent fees and other offering expenses. Each warrant has an exercise price of $26.25 per ordinary share, and will be exercisable upon issuance, or the Initial Exercise Date. The Series B Warrants will expire five years from the Initial Exercise Date and the Series C Warrants will expire 12 months from the Initial Exercise Date. Following the satisfaction of customary closing conditions, the offering closed on May 14, 2025. The ordinary shares, Series B Warrants and Series C Warrants were offered and sold pursuant to an effective Registration Statement on Form F-1, as amended (File No. 333-286789).
On May 12, 2025, we entered into a placement agency agreement with A.G.P., pursuant to which A.G.P. agreed to serve as lead placement agent for the issuance and sale of the Ordinary Shares, Series B Warrants and Series C Warrants. We agreed to pay A.G.P. an aggregate cash fee equal to 7.0% of the gross proceeds received by us from the sale of the securities in the offering. Pursuant to the placement agency agreement, we also agreed to pay A.G.P. $65 thousand for accountable expenses and $10 thousand for non-accountable expenses. The placement agency agreement has indemnification and other customary provisions for transactions of this nature.
On July 25, 2025, we entered into a securities purchase agreement, or the July 2025 SPA, with Alpha, pursuant to which we agreed to issue and sell to Alpha, subject to certain conditions, up to an aggregate of $25 million in securities across multiple tranches, consisting of preferred shares, pre-funded warrants, and ordinary warrants. On July 28, 2025, an initial closing, or the PFW Closing, took place for a subscription amount of $1.2 million whereby we issued (i) pre-funded warrants to purchase 90,225 ordinary shares at an exercise price of $0.00007 per share, or the Pre-Funded Warrants, and (ii) ordinary warrants to purchase 90,225 ordinary shares at an exercise price of $14.63 per share, or the July 2025 Ordinary Warrants. On August 11, 2025, we and Alpha entered into an amendment to the July 2025 SPA, and agreed, among other things, to amend the aggregate subscription amount of the Pre-Funded Warrants and July 2025 Ordinary Warrants in connection with the PFW Closing to $1,395 thousand.
On September 25, 2025, we received the required shareholder approval at its Annual and Special General Meeting of Shareholders to, among other things, amend and restate its Articles of Association to, among other things, create a class of preferred shares.
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On September 29, 2025, we issued 3,800 preferred shares with a stated value of $1,000 per share, or the September 2025 Preferred Shares, to Alpha for consideration of $3.8 million, or the Equity Closing. Each September 2025 Preferred Share is convertible into ordinary shares at a fixed conversion price of $16.016 per share. At the Equity Closing, we also issued 237,263 accompanying ordinary warrants, with an exercise price of $16.8 per share, or the September 2025 Ordinary Warrants, equal to 100% of the ordinary shares underlying the September 2025 Preferred Shares, which are exercisable upon issuance and will expire five years from the initial exercise date.
On December 3, 2025, we closed a subsequent funding with Alpha in the amount of $1,000 thousand, or the First Subsequent Funding, pursuant to which we issued (i) 1,000 preferred shares with a stated value of $1,000 per share, convertible into ordinary shares at a fixed conversion price of $7.826 per share, or the First December 2025 Preferred Shares, and (ii) ordinary warrants to purchase 127,779 ordinary shares at an exercise price of $16.8 per share, or the First December 2025 Ordinary Warrants, equal to 100% of the ordinary shares underlying the First December 2025 Preferred Shares, which are exercisable upon issuance and will expire five years from the initial exercise date.
On December 30, 2025, we closed a second subsequent funding with Alpha in the amount of $1,000 thousand, or the Second Subsequent Funding, pursuant to which we issued (i) 1,000 preferred shares with a stated value of $1,000 per share, convertible into ordinary shares at a fixed conversion price of $4.816 per share, or the Second December 2025 Preferred Shares, and (ii) ordinary warrants to purchase 207,641 ordinary shares at an exercise price of $4.816 per share, or the Second December 2025 Ordinary Warrants, equal to 100% of the ordinary shares underlying the Second December 2025 Preferred Shares, which are exercisable upon issuance and will expire five years from the initial exercise date.
On February 13, 2026, we closed an additional subsequent funding with Alpha in the amount of $1,000 thousand, or the Third Subsequent Funding, pursuant to which we issued (i) 1,000 preferred shares with a stated value of $1,000 per share, convertible into ordinary shares at a fixed conversion price of $2.541 per share, or the February 2026 Preferred Shares, and (ii) ordinary warrants to purchase 343,407 ordinary shares at an exercise price of $2.912 per share, or the February 2026 Ordinary Warrants, which are exercisable upon issuance and will expire five years from the initial exercise date.
On March 11, 2026, we closed an additional subsequent funding with Alpha in the amount of $1,000 thousand, or the Fourth Subsequent Funding, pursuant to which we issued (i) 1,000 preferred shares with a stated value of $1,000 per share, convertible into ordinary shares at a fixed conversion price of $1.222 per share, or the March 2026 Preferred Shares, and (ii) ordinary warrants to purchase 343,407 ordinary shares at an exercise price of $2.912 per share, or the March 2026 Ordinary Warrants, which are exercisable upon issuance and will expire five years from the initial exercise date.
The net proceeds from the Alpha financing described above will be used for general corporate purposes, working capital and execution of our commercial TES projects across Europe, the U.S. and the Middle East.
In addition, as a result of the pricing of the Second Subsequent Funding and the Third Subsequent Funding and in accordance with the anti-dilution adjustment provisions contained in the SPA and in the applicable warrant agreements, certain warrants previously issued to Alpha were adjusted. At the Third Subsequent Funding: the July 2025 Ordinary Warrants were adjusted to reflect an exercise price of $2.912 per share and the number of ordinary shares underlying such warrants was correspondingly adjusted to 453,297; the September 2025 Ordinary Warrants were adjusted to reflect an exercise price of $2.912 per share and the number of ordinary shares underlying such warrants was correspondingly adjusted to 1,368,823; the December 2025 Ordinary Warrants were adjusted to reflect an exercise price of $2.912 per share and the number of ordinary shares underlying such warrants was correspondingly adjusted to 737,187; and, the Second December 2025 Ordinary Warrants were adjusted to reflect an exercise price of $2.912 per share and the number of ordinary shares underlying such warrants was correspondingly adjusted to 343,407. In addition, following the Fourth Subsequent Funding, under the anti-dilution and ratchet adjustment provisions contained in our Amended and Restated Articles of Association, the conversion price of the preferred shares previously issued pursuant to the SPA was adjusted to $1.222.
We have filed registration statements with the SEC to register the resale of the ordinary shares underlying the preferred shares, pre-fended warrants, and ordinary warrants, issued to Alpha pursuant to the July 2025 SPA.
Until we can generate significant recurring revenues and profit, we expect to satisfy our future cash needs through debt and/or equity financings and through government grants. However, there is no assurance that we will be successful accomplishing these plans. If we are unable to obtain sufficient capital, we may need to reduce, delay, or adjust our operating expenses, including commercialization of existing products, or we will be unable to expand our operations as desired.
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We expect to continue incurring losses and negative cash flows from operations until our products reach profitability. As a result of these expected losses and negative cash flows from operations, along with our current cash position, our management has concluded that these conditions raise substantial doubt about our ability to continue as a going concern.
See “Item 3.D.—Risk Factors—Risks Related to Our Financial Condition and Capital Requirements—Our management has concluded and the report of our independent registered public accounting firm contains an explanatory paragraph that indicates that there are conditions that raise substantial doubt about our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all.”
C. Research and development, patents and licenses, etc.
For a description of our research and development programs and the amounts that we have incurred over the last two years pursuant to those programs, please see “Item 4.B. — Intellectual Property—Patents”, “Item 5.A. Operating Results—Research and Development, Net” and “Item 5.A. Results of Operations— Comparison of the year ended December 31, 2025, to the year ended December 31, 2024— Research and Development, net.”
D. Trend Information
The trends impacting us are described elsewhere in this Annual Report on Form 20-F, including in “Item 3.D. — Risk Factors”, “Item 4.B. — Business Overview”, “Item 5.A. — Operating Results”, “Item 5.B. —Liquidity and Capital Resources”, and “Item 10.C. —Material Contracts”.
E. Critical Accounting Estimates
Use of Estimates in the Preparation of Financial Statements
Our consolidated financial statements are prepared in conformity with U.S. GAAP, as issued by the Financial Accounting Standards Board. In preparing our consolidated financial statements, we make estimates and assumptions about the application of our accounting policies which affect the reported amounts of assets, liabilities, revenue and expenses. Any estimates and assumptions are continually reviewed. The changes to the accounting estimates are credited during the period in which the change to the estimate is made. Estimates are primarily used for, but not limited to, realization value of inventory, valuation of share-based compensation, useful lives of property, plant and equipment and royalty liabilities. Actual results could differ from those estimates, and such differences may have a material impact on our financial position or results of operations.
Realization value of inventory
In accordance with ASC 330, inventory is stated at the lower of cost and Net Realizable Value (NRV). NRV is defined as the estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. NRV is served as a valuation ceiling to ensure that inventory costs with respect to the Company’s contracts with customers (per sale-lease arrangements) and estimated costs to fulfill the contracts, are not overstated on the balance sheet.
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Property, Plant and Equipment
In accordance with the ASC 360-10, accounting for property, plant and equipment subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, or it is reasonably possible that these assets could become impaired as a result of technological or other industrial changes. The determination of recoverability of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flows to be generated by the assets.
If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell.
Royalty Liabilities
Royalty-bearing grants for funding approved research and development projects are recognized at the time we are entitled to such grants, on the basis of the costs incurred, and are presented as a deduction from research and development expenses, except for amounts attributed to royalties that are probable to be paid therefor at time of the grant recognition. Non-royalty-bearing grants for funding approved research and development projects are recognized at the time we are entitled to such grants, on the basis of the costs incurred, and are presented as a deduction from research and development expenses. In the event of failure of a project that was partly financed by such a grant, we would not be obligated to pay any royalties or repay the amounts received. As of December 31, 2025, we have royalty liabilities of $922 thousand.
Share-Based Payment
The Company measures all share-based awards, including share options, restricted shares, or RS, and restricted share units, or RSUs, based on their estimated fair value on the grant date for awards to our employees, directors and service providers.
The Company uses the Black-Scholes pricing model to determine the fair values of share options. The option pricing model requires the input of highly subjective assumptions, including the expected share price volatility and expected term. Any changes in these highly subjective assumptions would significantly impact the share-based compensation expense. We measure the fair value of RSs and RSUs based on the grant-date share price of the underlying ordinary share.
Share-based compensation expenses for options, RS and RSUs are recognized using the accelerated attribution method, over the requisite service period (primarily a four- or three-years period for share options and one year for RSUs), net of estimated forfeitures.
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management.
The following table sets forth information regarding our executive officers, key employees and directors as of the date of this annual report on Form 20-F:
| Name | Age | Position | ||
| Avraham Brenmiller(3)(5) | 73 | Chief Executive Officer, Chairman of the Board of Directors | ||
| Ofir Zimmerman | 50 | Chief Financial Officer | ||
| Doron Brenmiller(7) | 42 | Chief Business Officer, Director | ||
| Nir Brenmiller(6) | 46 | Deputy CEO, Director | ||
| Avi Sasson | 51 | Chief Operating Officer | ||
| Orna Ben Yosef(2)(4)(7) | 59 | Director | ||
| Michael Korner(3)(4)(5) | 64 | Director | ||
| Zvi Joseph(1)(2)(4)(6) | 60 | Director | ||
| Boaz Toshav(1)(2)(4)(5) | 49 | Director | ||
| Harel Gadot(1)(3)(4)(7) | 54 | Director |
| (1) | Member of the Compensation Committee |
| (2) | Member of the Audit Committee |
| (3) | Member of the Company’s Strategy Committee |
| (4) | Independent Director (as defined under Nasdaq Stock Market rules) |
| (5) | Class I directors shall hold office until the annual general meeting to be held in 2027 and until their successors shall have been elected and qualified. |
| (6) | Class II directors shall hold office until the annual general meeting to be held in 2028 and until their successors shall have been elected and qualified. |
| (7) | Class III directors shall hold office until the annual general meeting to be held in 2026 and until their successors shall have been elected and qualified. |
Avraham Brenmiller, Chief Executive Officer and Chairman of the Board of Directors
Mr. Avraham Brenmiller has served as our Chief Executive Officer since January 2012 and as Chairman of our board of directors since January 2012. Mr. A. Brenmiller graduated from Ohio State University, with a Mechanical Engineering degree. Additionally, he holds another Mechanical Engineering degree from ORT Technikum Givatayim in Israel, and an M.B.A for engineers from The Israeli Center for Management. Mr. A. Brenmiller has vast operational experience as chief executive officer and director at international companies, which our board of directors believes qualifies him to serve as a director.
Ofir Zimmerman, Chief Financial Officer
Mr. Ofir Zimmerman has served as our Chief Financial Officer since August 2020. Mr. Zimmerman holds a B.A. in Business Management and Accounting from the College of Management Academic Studies in Israel, Additionally, he holds a certificate as an Industrial and Management Technician. He was the Deputy Chief Financial Officer of Mitrelli Group and BSW International group. Mr. Zimmerman was also a financial advisor to Brenmiller Energy Ltd. prior to becoming its Chief Financial Officer for a year and a half.
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Doron Brenmiller, Chief Business Officer and Director
Mr. Doron Brenmiller has served as our Chief Business Officer since January 16, 2022 and has been a member of our board of directors since 2012. Previously, Mr. Doron Brenmiller served as our Executive Vice President since 2012. Mr. Doron Brenmiller holds a B.A, in Electrical Engineering from Tel Aviv University in Israel, and an M.B.A from INSEAD Business School in France. Mr. Doron Brenmiller excellence and executive experience, qualifies him to serve as a director.
Nir Brenmiller, Deputy CEO and Director
Mr. Nir Brenmiller has served as our Deputy CEO since July 2012. Mr. Nir Brenmiller also served as Chief Operating Officer from January 16, 2022 until November 2025, and in November 2025, as part of an internal organizational alignment to standardize executive role titles, his title was updated without any change to his responsibilities. Mr. Nir Brenmiller has been a member of our board of directors since 2012. From 2012 until his appointment as Chief Operating Officer, Mr. Nir Brenmiller served as our Executive Vice President. Mr. Nir Brenmiller holds a B.A. in Computer Science from the IDC - Reichman University in Israel, and an M.B.A from The Hebrew University in Jerusalem. Mr. N. Brenmiller technological and executive experience qualifies him to serve as a director.
Avi Sasson, Chief Operating Officer
Mr. Avi Sasson has served as our Chief Operating Officer since November 2025. In November 2025, as part of an internal organizational alignment to standardize executive role titles, his title was updated without any change to his responsibilities. Prior to his current role, Mr. Avi Sasson has served as our Executive Vice President - Operation since January 16, 2022. From 2012 until his appointment as Executive Vice President - Operation, Mr. Avi Sasson served as our Chief Operating Officer. Mr. Sasson holds a B.Sc. in Industrial Engineering and Management from Tel Aviv University.
Orna Ben Yosef, Director
Ms. Ben Yosef has served on our board of directors since November 2025. Ms. Ben Yosef has also served as Chief Financial Officer of Creator of All Ltd since 2024. Since 2022, she has also served as External Director of Inter Industries Plus Ltd. (TASE: ININ) where she chairs the audit, financial statements review, and compensation committees. Ms. Ben Yosef has served as Chief Financial Officer of Therapin Ltd. since 2022 and as an External Director of P.C.B. Technologies Ltd. (TASE: PCBT) since 2017. From 2019 to 2022, she was Corporate Controller at Mendelson Infrastructure and Industries Ltd., where she was responsible for preparation of consolidated IFRS financial statements, budgeting, and public-company reporting. Ms. Ben Yosef holds a Master of Business Administration (M.B.A.) and a Bachelor’s degree in Economics and Accounting from the University of Haifa and is a Certified Public Accountant (Israel).
Michael Korner, Director
Mr. Michael Korner has served on our board of directors since August 2024. Mr. Korner is an expert in energy and environmental consulting, and has been owner and Chief Executive Officer of M. Korner Ltd., since 2010, a consulting company with a focus on techno-economics, business strategy, regulation, and business evaluations, as well as a provider of studies and reports on energy and environmental issues. Mr. Korner has extensive experience working for entrepreneurs, energy companies and financial institutions in both the public and private sectors. From 2021 to present, Mr. Korner has acted as a board observer to Flowlit Ltd., a technology company, which developed an optical and non-invasive technology for highly accurate measurements of fluid flow-rates in pipes, while enabling simultaneously to monitor the density and size distribution of particles in the measured flow. Mr. Korner holds an M.B.A. from the Recanati Business School at Tel Aviv University in Israel, including completion of a multinational management program from the Wharton School of the University of Pennsylvania, and a B.Sc. in Mechanical Engineering from Tel Aviv University.
Zvi Joseph, Director
Mr. Zvi Joseph, has served on our board of directors since August 2024. Mr. Joseph has a diverse work experience spanning multiple industries. Since 2005, Mr. Joseph has served as Deputy General Counsel of Amdocs, Inc. (NASDAQ: DOX). Mr. Joseph has acted as an Independent Director of AYRO, Inc. (NASDAQ: AYRO) a technology company which designs and manufactures compact, sustainable electric vehicles for closed campus mobility, low speed urban and community transport, local delivery and government use, since 2020. From 2018 to 2020, Mr. Joseph served as an Independent Director for DropCar, Inc, which offered a cloud-based platform and mobile app that helped consumers and automotive-related companies access garages. Mr. Joseph holds a Bachelor of Arts degree from New York University and a Juris Doctor from Fordham University School of Law. Mr. Joseph is also a graduate of the Advanced Management Program of the Harvard Business School (2024) and was awarded a Corporate Director Certificate in Corporate Governance by the school in 2020. Mr. Joseph obtained NACD Directorship Certification® from the National Association of Corporate Directors (NACD) in April 2022.
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Boaz Toshav, Director
Mr. Toshav has served on our board of directors since June 2025. Mr. Toshav previously served on our board of directors from June 2023 until August 2024. Mr. Toshav has 20 years of experience in investment banking, fixed income and mergers and acquisitions advisory services. He is currently President and Chairman of Rio Ave FC (Primeira Liga), a professional Portuguese football (soccer) club, and he previously served as a senior financial advisor to UK-based Nottingham Forest FC and Greece-based Olympiacos FC. Mr. Toshav also currently serves as the Chief Executive Officer of Umbrella Advisors Ltd., a boutique investment bank and financial advisory firm he founded in 2014. Mr. Toshav has also been a board member of Intelicanna Ltd. (TASE: INTL) and Getruck Ltd. since 2018 and 2021, respectively. Mr. Toshav received a Bachelor of Arts degree in Economics and Business Administration from Tel Aviv University, as well as a Master of Philosophy from Tel Aviv University. Mr. Toshav qualified as a United Kingdom Financial Services Authority certified investment advisor in 2005.
Harel Gadot, Director
Mr. Gadot has served on our board of directors since August 2025. Mr. Gadot has over 25 years of leadership experience in the healthcare sector in the United States, Europe and Israel. He is the founder, Chief Executive Officer, President, and Chairman of Microbot Medical Inc. (Nasdaq: MBOT), which he led through its NASDAQ listing in 2016, and is the founder and Chairman of MEDX Ventures Group and MEDX Xelerator LP, a government-supported medical device incubator in Israel established in partnership with Boston Scientific Corporation and Sheba Medical Center. Mr. Gadot previously founded XACT Robotics in 2013, serving as its Executive Chairman until 2023, and served on the board of ConTIPI Ltd. until its acquisition by Kimberly Clark Corporation. Earlier in his career, he held senior marketing positions at Johnson & Johnson in the United States, France and Israel. Mr. Gadot holds a Bachelor of Science degree from Siena College (USA), a Master of Business Administration from the University of Manchester (UK) and an Executive Degree in Finance from Harvard Business School (USA).
Family Relationships
Mr. Avraham Brenmiller, our Chief Executive Officer, Chairman of the board of directors, is the father of Doron Brenmiller, our Chief Business Officer and director, and Nir Brenmiller, our Deputy CEO and director (see “Item 7.B. —Related Party Transactions” for additional information).
Arrangements for Election of Directors and Members of Management
There are no arrangements or understandings with controlling shareholders, customers, suppliers, or others pursuant to which any of our executive management or our directors were selected (see “Item 7.B. —Related Party Transactions” for additional information).
B. Compensation
Employment Agreements with Executive Officers
Compensation
The aggregate compensation, including share-based compensation and benefits in kind granted by us to our executive officers and directors for the year ended December 31, 2025 was $2,303 thousand. The following table sets forth information concerning the compensation of our five most highly compensated executive officers for the year ended December 31, 2025. The table does not include any amounts we paid to reimburse any of such persons for costs incurred in providing us with services during this period.
All amounts reported in the tables below reflect the cost to the Company, in thousands of dollars, translated at an average exchange rate of 3.43 NIS per U.S. dollar, which was used for salary calculations, for the year ended December 31, 2025.
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| Name and Principal Position | Salary, Pension, Retirement and Other Similar Benefits (Management) | Share Based Compensation | Total | |||||||||
| Avraham Brenmiller | ||||||||||||
| Chief Executive Officer, Chairman of the Board of Directors | $ | 391 | $ | 328 | $ | 719 | ||||||
| Ofir Zimmerman | ||||||||||||
| Chief Financial Officer | $ | 279 | $ | 73 | $ | 352 | ||||||
| Doron Brenmiller | ||||||||||||
| Chief Business Officer, Director | $ | 280 | $ | 106 | $ | 386 | ||||||
| Avi Sasson | ||||||||||||
| Chief Operating Officer | $ | 254 | $ | 39 | $ | 293 | ||||||
| Nir Brenmiller | ||||||||||||
| Deputy CEO, Director | $ | 280 | $ | 119 | $ | 399 | ||||||
Employment and Advisory Agreements with Executive Officers
We have entered into written employment and advisory agreements with each of our executive officers. All of these agreements contain customary provisions regarding noncompetition, confidentiality of information and assignment of inventions. However, the enforceability of the noncompetition provisions may be limited under applicable law. In addition, we have entered into agreements with each executive officer and director pursuant to which we have agreed to indemnify each of them up to a certain amount and to the extent that these liabilities are not covered by directors’ and officers’ insurance.
For a description of the terms of our options and option plans, see “Item 6.E.—Share Ownership” below.
Directors’ Service Contracts
Other than with respect to our directors that are also executive officers, we do not have written agreements with any director providing for benefits upon the termination of his employment with the Company. In addition, On September 25, 2025, following the recommendation of our compensation committee, and the approval of the board of directors, our shareholders approved the adoption of a new compensation policy for our officers and directors.
Our directors collectively earned approximately $154 thousand out of which direct service cost paid was approximately $141 thousand and share based compensation of approximately $13 thousand for their services as directors in the year ended December 31, 2025.
Compensation policy for the Company’s officers and directors
Pursuant to the approval of an annual and special general meeting of the Company’s shareholders held on September 25, 2025, and as recommended by the board of directors and compensation committee, the Company adopted a new compensation policy, including the following changes to their previous compensation policy:
| ● | To increase the permitted discount used when exchanging basic salary with equity-based compensation from up to 15% to up to 50%, and to expand the permitted equity instruments used for such exchange to include options to purchase Ordinary Shares (in addition to RS and RSUs). |
| ● | To remove the requirement that an office holder not be a controlling shareholder in connection with approval of a one-time bonus for the CEO. |
| ● | To remove the restriction providing that any office holder who is a controlling shareholder and/or a relative of a controlling shareholder will not be entitled to long-term compensation. |
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| ● | To broaden the acceleration mechanism by permitting the Board to allow immediate acceleration not only upon closing of a transaction, but also upon any other event, including termination of employment and change of control. |
| ● | To change the minimum exercise price requirement for equity-based compensation awards (where applicable) from “not less than the average share price over the last 30 trading days prior to the grant date” to a fixed minimum floor of $0.01 (with the exercise price otherwise determined by the compensation committee and the Board). |
| ● | To expand the “exchange accrued and unpaid cash salary for equity-based compensation” provision by adding options. |
| ● | To clarify that the prohibition on receiving directors’ compensation in addition to office holder compensation applies only to directors who also serve as office holders on a full-time (100%) basis (instead of applying more generally to any director who also serves as an office holder). |
| ● | To allow an annual equity-based plan to purchase Ordinary Shares by non-executive directors under the plan, with the approval of the compensation committee and the board of directors, such that each year, at a date determined by the board, non-executive directors who are members of the board at the determined time shall be entitled to a certain amount of options or RSUs to be vested into ordinary shares, subject to annual maximum values of $40,000 per non-executive director who is not a committee member and $50,000 per non-executive director who is also a committee member (with vesting over four quarters). For new non-executive directors joining the board outside of the normal annual general meeting cycle, annual equity awards will be pro-rated to reflect the remaining period in the annual cycle until the next planned award date, and such pro-rated RSUs or options will be subject to the same vesting schedule. If a non-executive director ceases any of his or her duties as mentioned in the proposed policy, the unvested RSUs or options granted for such duty will expire immediately, and in case of options, all vested options shall be exercisable for a period of up to five years from date of grant. At the request of each non-executive director, the compensation committee and the board will have full discretion to determine the combination of cash and equity-based compensation for each non-executive director each year, determined proportionally, provided that in any case the cash compensation will not exceed the maximum amount allowed under the applicable regulations promulgated under the Companies Law. |
Differences between the Companies Law and Nasdaq Requirements
Companies incorporated under the laws of the State of Israel whose shares are publicly traded, including companies with shares listed on Nasdaq, are considered public companies under Israeli law and are required to comply with various corporate governance requirements under Israeli law relating, among others, to such matters as the composition and responsibilities of the audit committee and the compensation committee (subject to certain exceptions that we utilize), and a requirement to have an internal auditor. These requirements are in addition to the corporate governance requirements imposed by the rules of the Nasdaq Stock Market and other applicable provisions of U.S. securities laws to which we are subject as a foreign private issuer. Under the Nasdaq Stock Market Rules, a foreign private issuer may generally follow its home country rules of corporate governance in lieu of the comparable requirements of the Nasdaq Rules, except for certain matters including the composition and responsibilities of the audit committee.
In accordance with Israeli law and practice and subject to the exemption set forth in Rule 5615 of the Nasdaq Stock Market rules, we have elected to follow the provisions of the Companies Law, rather than the Nasdaq Stock Market rules, with respect to the following requirements:
| ● | Distribution of periodic reports to shareholders; proxy solicitation. As opposed to the Nasdaq Stock Market rules, which require listed issuers to make such reports available to shareholders in one of a number of specific manners, Israeli law does not require us to distribute periodic reports directly to shareholders, and the generally accepted business practice in Israel is not to distribute such reports to shareholders but to make such reports available through a public website. In addition to making such reports available on a public website, we currently make our audited consolidated financial statements available to our shareholders at our offices and will only mail such reports to shareholders upon request. As a foreign private issuer, we are generally exempt from the SEC’s proxy solicitation rules. |
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| ● | Quorum. While the Nasdaq Stock Market rules require that the quorum for purposes of any meeting of the holders of a listed company’s common voting stock, as specified in the company’s bylaws, be no less than 33 1/3% of the company’s outstanding common voting stock, under Israeli law, a company is entitled to determine in its articles of association the number of shareholders and percentage of holdings required for a quorum at a shareholders meeting. As permitted under the Companies Law, our amended and restated articles of association provide that a quorum of two (2) or more shareholders, in person or by proxy, holding at least 25% of the voting rights, is required for commencement of business at a general meeting. However, the quorum set forth in our amended and restated articles of association with respect to an adjourned meeting consists of at least one shareholders present in person or by proxy. If the original meeting was convened upon requisition under Section 63 of the Companies Law, one or more Shareholders, present in person or by proxy, and holding the number of shares required for making such requisition, shall constitute a quorum. | |
| ● | Nomination of our directors. With the exception of directors elected by our board of directors and external directors, our directors are elected by an annual or special meeting of our shareholders (i) to hold office until the next annual meeting following his or her election or (ii) for three-year term, as described below under “Management-Board Practices-External Directors.” The nominations for directors, which are presented to our shareholders by our board of directors, are generally made by the board of directors itself, in accordance with the provisions of our amended and restated articles of association and the Companies Law. Nominations need not be made by a nominating committee of our board of directors consisting solely of independent directors, as required under the Nasdaq Stock Market rules. | |
| ● | Compensation of officers. Israeli law and our amended and restated articles of association do not require that the independent members of our board of directors (or a compensation committee composed solely of independent members of our board of directors) determine an executive officer’s compensation, as is generally required under the Nasdaq Stock Market rules with respect to the chief executive officer and all other executive officers. Instead, compensation of executive officers is determined and approved by our compensation committee and our board of directors, and in certain circumstances by our shareholders, either in consistency with our office holder compensation policy or, in special circumstances in deviation therefrom, taking into account certain considerations stated in the Companies Law. See “Item 6.C —Board Practices - Approval of Related Party Transactions under Israeli Law” for additional information. | |
| ● | Shareholder approval. We will seek shareholder approval for all corporate actions requiring such approval under the requirements of the Companies Law, rather than seeking approval for corporation actions in accordance with Nasdaq Listing Rule 5635. In particular, under this Nasdaq Stock Market rule, shareholder approval is generally required for: (i) an acquisition of shares/assets of another company that involves the issuance of 20% or more of the acquirer’s shares or voting rights or if a director, officer or 5% shareholder has greater than a 5% interest in the target company or the consideration to be received; (ii) the issuance of shares leading to a change of control; (iii) adoption/amendment of equity compensation arrangements (although under the provisions of the Companies Law there is no requirement for shareholder approval for the adoption/amendment of the equity compensation plan); and (iv) issuances of 20% or more of the shares or voting rights (including securities convertible into, or exercisable for, equity) of a listed company via a private placement (and/or via sales by directors/officers/5% shareholders) if such equity is issued (or sold) at below the greater of the book or market value of shares. By contrast, under the Companies Law, shareholder approval is required for, among other things: (i) transactions with directors concerning the terms of their service or indemnification, exemption and insurance for their service (or for any other position that they may hold at a company), for which approvals of the compensation committee, board of directors and shareholders are all required, (ii) extraordinary transactions with controlling shareholders of publicly held companies, which require the special approval, and (iii) terms of employment or other engagement of the controlling shareholder of us or such controlling shareholder’s relative, which require special approval. In addition, under the Companies Law, a merger requires approval of the shareholders of each of the merging companies. |
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| ● | Approval of Related Party Transactions. All related party transactions are approved in accordance with the requirements and procedures for approval of interested party acts and transaction as set forth in the Companies Law, which requires the approval of the audit committee, or the compensation committee, as the case may be, the board of directors and shareholders, as may be applicable, for specified transactions, rather than approval by the audit committee or other independent body of our board of directors as required under the Nasdaq Stock Market rules. See “Item 6.C —Board Practices - Approval of Related Party Transactions under Israeli Law” for additional information. | |
| ● | Annual Shareholders Meeting. As opposed to the Nasdaq Stock Market Rule 5620(a), which mandates that a listed company hold its annual shareholders meeting within one year of the company’s fiscal year-end, we are required, under the Companies Law, to hold an annual shareholder meeting each calendar year and within 15 months of the last annual shareholders meeting. |
C. Board Practices
Introduction
Our board of directors presently consists of eight members, as required under the Companies Law. We believe that Orna Ben Yosef, Michael Korner, Zvi Joseph, Boaz Toshav, and Harel Gadot are “independent” for purposes of the Nasdaq Stock Market rules.
Under the Company’s amended and restated articles of association, the board of directors is to consist of not less than three (3) and not more than nine (9) directors, including external directors (if applicable).
Our business and affairs are managed under the direction of our board of directors. Our board of directors may exercise all powers and may take all actions that are not specifically granted to our shareholders or executive management. Our Chief Executive Officer is responsible for our day-to-day management and has individual responsibilities established by our board of directors. The Chief Executive Officer is appointed by and serves at the discretion of our board of directors, subject to the employment agreement that we have entered into with him.
All other executive officers are appointed by the Chief Executive Officer, subject to applicable corporate approvals, and are subject to the terms of any applicable employment or consulting agreements that we may enter into with them.
Our amended and restated articles of association provide for a split of the board of directors into three classes with staggered three-year terms (excluding external directors, if applicable). At each annual general meeting of our shareholders, the election or re-election of directors following the expiration of the term of office of the directors of that class of directors will be for a term of office that expires on the third annual general meeting following such election or re-election, such that each year the term of office of only one class of directors will expire. The director whom is to be retired and re-elected shall be the director that served the longest period since its appointment or last re-election or, if more than one director served the longest time, or if a director who is not to be re-elected agrees to be re-elected, the meeting of the board of directors which sets the date and agenda for the annual general meeting (acting by a simple majority) will decide which of such directors will be brought for re-election at the relevant general meeting.
Each director, except external directors, will hold office until the third annual general meeting of our shareholders following his or her appointment (other than in certain cases as described below), or until he or she resigns or unless he or she is removed by a majority of 70% of our shareholders’ votes at a general meeting of our shareholders or upon the occurrence of certain events, in accordance with the Companies Law and our amended and restated articles of association.
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In addition, under certain circumstances, our amended and restated articles of association allow our board of directors to appoint directors to fill vacancies on our board of directors, due to a director no longer serving or due to the number of directors serving being less than the maximum amount, for the remaining term of the director whose service has ended (in case the appointment is due to a director no longer serving) or for a period in accordance with the class to which the director was appointed (in case the appointment is in addition to the acting directors), subject to the limitation on the number of directors. External directors, if applicable, may be elected for up to two additional three-year terms after their initial three-year term under certain circumstances and may be removed from office only under the limited circumstances set forth in the Companies Law. See “Item 6.C —Board Practices-External Directors” below for additional information.
Under the Companies Law, nominations for directors may be made by any shareholder holding at least one percent of our outstanding voting power. However, any such shareholder may make such a nomination only if a written notice of such shareholder’s intent to make such nomination has been given to our board of directors. Any such notice must include certain information, the consent of the proposed director nominee(s) to serve as our director(s) if elected and a declaration signed by the nominee(s) declaring that there is no limitation under the Companies Law preventing their election and that all of the information that is required to be provided to us in connection with such election under the Companies Law and our amended and restated articles of association has been provided.
Further however, under exemptions applicable for Israeli companies whose shares are listed on stock exchanges outside of Israel, generally referred to as the Exemptions Regulations, one or more shareholders, may request its company’s board of directors to include an appointment of a candidate for a position on the board of directors or the termination of a board member as an item on the agenda of a future general meeting, provided that the shareholder hold at least five percent of the voting rights of the company, instead of the one percent required in the past. The decision whether to include the suggested item on the agenda is subject to the Company’s discretion, under the provisions of the Companies Law.
Under the Companies Law, our board of directors must determine the minimum number of directors who are required to have accounting and financial expertise. In determining the number of directors required to have such expertise, our board of directors must consider, among other things, the type and size of the company and the scope and complexity of its operations. Our board of directors has determined that the minimum number of directors of the Company who are required to have accounting and financial expertise is three. Accordingly, we have determined that Mr. Zvi Joseph, Ms. Orna Ben Yosef, Mr. Doron Brenmiller, Mr. Miki Korner, Mr. Nir Brenmiller, Mr. Harel Gadot, and Mr. Boaz Toshav have accounting and financial expertise.
The board of directors must elect one director to serve as the chairman of the board of directors to preside at the meetings of the board of directors and may also remove that director as chairman. Pursuant to the Companies Law, neither the chief executive officer nor any of his or her relatives is permitted to serve as the chairman of the board of directors, and a company may not vest the chairman or any of his or her relatives with the chief executive officer’s authorities. In addition, a person who reports, directly or indirectly, to the chief executive officer may not serve as the chairman of the board of directors; the chairman may not be vested with authorities of a person who reports, directly or indirectly, to the chief executive officer; and the chairman may not serve in any other position in the company or a controlled company, but he or she may serve as a director or chairman of a controlled company. However, the Companies Law permits a company’s shareholders to determine, for periods not exceeding three years each, that the chairman or his relative may serve as chief executive officer or be vested with the chief executive officer’s authorities, and that the chief executive officer or his relative may serve as chairman or be vested with the chairman’s authorities. Such determination of a company’s shareholders requires either: (1) the approval of at least a majority of the shares of those shareholders present and voting on the matter (other than controlling shareholders and those having a personal interest in the determination) (shares held by abstaining shareholders shall not be considered); or (2) that the total number of shares opposing such determination does not exceed 2% of the total voting power in the company. Currently, our Chief Executive Officer also serves as our Chairman of the Board of Directors, and as such requires a shareholder approval by a special majority, which was most recently given on September 25, 2025, for a period of three (3) years as of the date of shareholder approval.
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The board of directors may, subject to the provisions of the Companies Law, delegate any or all of its powers to committees of the board, and it may, from time to time, revoke such delegation or alter the composition of any such committees, subject to certain limitations. Unless otherwise expressly provided by the board of directors, the committees shall not be empowered to further delegate such powers. The composition and duties of our audit committee and compensation committee are described below.
Minutes of the Board meetings are kept at our offices.
The board of directors oversees how management monitors compliance with our risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by us. The board of directors is assisted in its oversight role by an internal auditor. The internal auditor undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to our audit committee.
The quorum for starting a meeting of the board of directors shall be constituted by the presence in person or by any means of communication of a majority of the directors then in office who are lawfully entitled to participate and vote in the meeting. Resolutions of the board of directors are adopted by a majority of the directors present and voting at the meeting, without taking into account the votes of abstainers.
According to the Companies Law, a person who does not possess the skills required and the ability to devote the appropriate time to the performance of the office of director in a company, taking into consideration, among other things, the special requirements and size of that company, shall neither be appointed as a director nor serve as a director in a public company. A public company shall not convene a general meeting if the agenda of which includes the appointment of a director, and a director shall not be appointed unless the candidate has submitted a declaration that he or she possesses the skills required and the ability to devote the appropriate time to the performance of the office of director in the company, that sets forth the aforementioned skills and further states that the limitations set forth in the Companies Law regarding the appointment of a director do not apply in respect of such candidate.
A director who ceases to possess any qualification required under the Companies Law for holding the office of director or who becomes subject to any ground for termination of his/her office must inform the company immediately and his/her office shall terminate upon such notice.
External Directors
Under the Companies Law, an Israeli company whose shares have been offered to the public or whose shares are listed for trading on a stock exchange in or outside of Israel is required to appoint at least two external directors to serve on its board of directors. External directors must meet stringent standards of independence. The definitions of an external director under the Companies Law and independent director under Nasdaq rules are similar such that it would generally be expected that the external directors will also comply with the independence requirement under Nasdaq rules.
However, under the Exemption Regulations, Israeli companies whose shares are traded on stock exchanges, such as The Nasdaq Capital Market and that do not have a controlling shareholder (as defined in the Exemption Regulations) and which comply with the requirements of the jurisdiction where the company’s shares are traded with respect to the appointment of independent directors and the composition of an audit committee and compensation committee, may elect not to follow the Companies Law requirements with respect to the composition of its audit committee and compensation committee and the appointment of external directors. As we do not have a controlling shareholder, and we comply with the requirements of the Nasdaq Stock Market with respect to the composition of our board and such committees, we therefore choose to follow such exemption from the Companies Law requirements with respect thereto, including the appointment of external directors.
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Pursuant to regulations under the Companies Law, the board of directors of a company such as us is not required to have external directors if: (i) the company does not have a controlling shareholder (as such term is defined in the Companies Law); (ii) a majority of the directors serving on the board of directors are “independent,” as defined under Nasdaq Rule 5605(a)(2); and (iii) the company follows Nasdaq Rule 5605(e)(1), which requires that the nomination of directors be made, or recommended to the board of directors, by a nominating committee of the board of directors consisting solely of independent directors, or by a majority of independent directors. The Company meets all these requirements and adopted the corporate governance exemption set forth above.
Independent Directors Under the Companies Law
An “independent director” under the Companies Law is either an external director or a director who meets the same non-affiliation criteria as an external director (except for (i) the requirement that the director be an Israeli resident (which does not apply to companies such as ours whose securities have been offered outside of Israel or are listed outside of Israel) and (ii) the requirement for accounting and financial expertise or professional qualifications), as determined by the audit committee, and who has not served as a director of the company for more than nine consecutive years. For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service.
The Exemptions Regulations provide that a director of a public company whose shares are listed for trading on specified exchanges outside of Israel, including the Nasdaq Capital Market, who qualifies as an independent director under the relevant non-Israeli rules and who meets certain non-affiliation criteria, which are less stringent than those applicable to independent directors as set forth above, would be deemed an “independent” director pursuant to the Companies Law provided: (i) he or she has not served as a director for more than nine consecutive years; (ii) he or she has been approved as such by the audit committee; and (iii) his or her remuneration shall be in accordance with the Companies Law and the regulations promulgated thereunder. For these purposes, ceasing to serve as a director for a period of two years or less would not be deemed to sever the consecutive nature of such director’s service. The Company meets such conditions and therefore uses the above exemptions.
The company may extend the office of an independent director for more than nine consecutive years, for period(s) which do not exceed three years each, provided that the audit committee and the board of directors of the company confirmed and presented to the general meeting of shareholders that, in light of the independent director’s expertise and special contribution to the board of directors and its committees, the re-election for such additional period(s) is in the company’s best interest.
Alternate Directors
As required under the Companies Law, our amended and restated articles of association provide that any director may appoint as an alternate director, by written notice to us, any individual who is qualified to serve as director and who is not then serving as a director or alternate director for any other director. An alternate director of an external director, or an independent director, shall be qualified to serve as an external director or an independent director. The alternate director must have the same financial expertise or professional qualifications as the director who appointed him or her. Unless the appointing director limits the time or scope of the appointment, the appointment is effective for all purposes until the appointing director ceases to be a director or terminates the appointment. Currently, no alternate directors serve on our Board.
Committees of the Board of Directors
Our board of directors has established two statutory standing committees, the audit committee and the compensation committee.
Audit Committee
Under the Companies Law, we are required to appoint an audit committee. The audit committee must be comprised of at least three directors, including all of the external directors (one of whom must serve as chair of the committee). The audit committee may not include the chairman of the board; a controlling shareholder of the company or a relative of a controlling shareholder; a director employed by or providing services on a regular basis to the company, to a controlling shareholder or to an entity controlled by a controlling shareholder; or a director who derives most of his or her income from a controlling shareholder.
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In addition, a majority of the members of the audit committee of a publicly traded company must be independent directors under the Companies Law. However, under the Exemptions Regulations, a company with no controlling shareholder may be exempted from certain obligations mentioned above.
Our audit committee is comprised of Ms. Orna Ben Yosef, Mr. Zvi Joseph, and Mr. Boaz Toshav.
Under the Companies Law, our audit committee is responsible for:
| (i) | determining whether there are deficiencies in the business management practices of the Company, and making recommendations to the board of directors to improve such practices; |
| (ii) | determining whether to approve certain related party transactions (including transactions in which an officeholder has a personal interest and whether such transaction is extraordinary or material under Companies Law) and establishing the approval process for certain transactions with a controlling shareholder or in which a controlling shareholder has a personal interest. See “Item 6.C —Board Practices - Approval of Related Party Transactions under Israeli law” for additional information; | |
| (iii) | determining the approval process for transactions that are “non-negligible” (i.e., transactions with a controlling shareholder that are classified by the audit committee as non-negligible, even though they are not deemed extraordinary transactions), as well as determining which types of transactions would require the approval of the audit committee, optionally based on criteria which may be determined annually in advance by the audit committee; | |
| (iv) | examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities; |
| (v) | examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; | |
| (vi) | establishing procedures for the handling of employees’ complaints as to deficiencies in the management of our business and the protection to be provided to such employees; and | |
| (vii) | where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto. |
Our audit committee may not conduct any discussions or approve any actions requiring its approval, unless at the time of the approval a majority of the committee’s members are present, which majority consists of independent directors under the Companies Law, including at least one external director. See “Item 6.C —Board Practices - Approval of Related Party Transactions under Israeli law” for additional information.
Our board of directors adopted an audit committee charter effective upon the listing of our Ordinary Shares on Nasdaq setting forth, among others, the responsibilities of the audit committee consistent with the rules of the SEC and Nasdaq Listing Rules (in addition to the requirements for such committee under the Companies Law), including, among others, the following:
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● | oversight of our independent registered public accounting firm and recommending the engagement, compensation, or termination of engagement of our independent registered public accounting firm to the board of directors in accordance with Israeli law; |
| ● | recommending the engagement or termination of the person filling the office of our internal auditor, reviewing the services provided by our internal auditor, and reviewing the effectiveness of our system of internal control over financial reporting; |
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| ● | recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors; and | |
| ● | reviewing and monitoring, if applicable, legal matters with significant impact, finding of regulatory authorities’ findings, receiving reports regarding irregularities and legal compliance, acting according to “whistleblower policy” and recommending to our board of directors if so required. |
Nasdaq Stock Market Requirements for Audit Committee
Under the Nasdaq Stock Market rules, we are required to maintain an audit committee consisting of at least three members, all of whom are independent and are financially literate, and one of whom has accounting or related financial management expertise.
As noted above, the members of our audit committee currently include Ms. Orna Ben Yosef, Mr. Zvi Joseph and Mr. Boaz Toshav, each of whom is “independent,” as such term is defined in under Nasdaq Stock Market rules. Ms. Orna Ben Yosef serves as the Chairperson of our audit committee. All members of our audit committee meet the requirements for financial literacy under the Nasdaq Stock Market rules. Our board of directors has determined that each member of our audit committee is an audit committee financial expert as defined by the SEC rules and has the requisite financial experience as defined by the Nasdaq Stock Market rules.
Compensation Committee
Under the Companies Law, the board of directors of any public company must establish a compensation committee. The compensation committee must be comprised of at least three directors, including all of the external directors, who must constitute a majority of the members of the compensation committee. Each compensation committee member that is not an external director must be a director whose compensation does not exceed an amount that may be paid to an external director. The compensation committee is subject to the same Companies Law restrictions as the audit committee as to (i) who may not be a member of the committee; and (ii) who may not be present during committee deliberations as described above. However, under the Exemptions Regulations, a company with no controlling shareholder might be exempted from certain obligations mentioned above.
Our compensation committee consists of Mr. Harel Gadot, Mr. Zvi Joseph and Mr. Boaz Toshav. The Chairperson of our compensation committee is Mr. Zvi Joseph. Our compensation committee complies with the provisions of the Companies Law, the regulations promulgated thereunder, and our amended and restated articles of association, on all aspects referring to its independence, authorities, and practice. Our compensation committee follows home country practice as opposed to complying with the compensation committee membership and charter requirements prescribed under the Nasdaq Stock Market rules.
Our compensation committee is responsible for, among other things:
(a) reviewing and making recommendations to the board of directors with respect to the approval of the compensation policy with respect to the terms of office and employment of officeholders and (please see below for details on compensation policy under Israeli law);
(b) periodically reviewing the implementation of the compensation policy and providing the board of directors with recommendations with respect to any amendments or updates thereto;
(c) reviewing and resolving whether or not to approve arrangements with respect to the terms of office and employment of officeholders;
(d) overriding a determination of the shareholders in relation to certain compensation-related issues, subject to the approval of the board of directors and under special circumstances, such as, the approval of our compensation policy, after such compensation policy was reconsidered by the committee and on the basis of detailed reasons, the committee and thereafter the board of directors determined that the adoption of the compensation policy is in the best interests of the Company despite the objection of the general meeting; and
(e) the administration of our clawback policy.
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Compensation Policy
Under the Companies Law, a compensation policy with respect to the terms of office and employment of officeholders must be adopted by the company’s board of directors, after considering the recommendations of the compensation committee. The compensation policy is then brought for approval by our shareholders, which requires a special majority. See “Item 6.C— Board Practices-Approval of Related Party Transactions under Israeli law” for additional information. Under the Companies Law, the board of directors may adopt the compensation policy if it is not approved by the shareholders, provided that after the shareholders oppose the approval of such policy, the compensation committee and the board of directors revisit the matter and determine that adopting the compensation policy would be in the best interests of the company.
The compensation policy must serve as the basis for decisions concerning the financial terms of employment or engagement of executive officers and directors, including exemption, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement. The compensation policy must relate to certain factors, including the advancement of the company’s objectives, the company’s business, and its long-term strategy, and the creation of appropriate incentives for executives. It must also consider, among other things, the company’s risk management, size, and the nature of its operations. The compensation policy must furthermore consider the following additional factors:
| ● | the education, skills, expertise, and accomplishments of the relevant director or executive; | |
| ● | the director’s or executive’s roles and responsibilities and prior compensation agreements with him or her; |
| ● | the relationship between the cost of the terms of service of an officeholder and the average median compensation of the other employees of the company (including those employed through manpower companies), including the impact of disparities in salary upon work relationships in the company; | |
| ● | the possibility of reducing variable compensation at the discretion of the board of directors; and the possibility of setting a limit on the exercise value of non-cash variable compensation; and | |
| ● | as to severance compensation, the period of service of the director or executive, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards the company’s achievement of its goals, and the maximization of its profits, and the circumstances under which the person is leaving the company. | |
The compensation policy must also include the following principles:
| ● | with the exception of officeholders who report directly to the chief executive officer, the link between variable compensation and long-term performance and measurable criteria; | |
| ● | the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation at the time of its grant; | |
| ● | the conditions under which a director or executive would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements; | |
| ● | the minimum holding or vesting period for variable, equity-based compensation; and | |
| ● | maximum limits for severance compensation. |
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The compensation policy must also consider appropriate incentives from a long-term perspective.
Our compensation policy is designed to promote our long-term goals, work plan and policy, retain, motivate and incentivize our directors and executive officers while considering the risks that our activities involve, our size, the nature and scope of our activities, and the contribution of an officer to the achievement of our goals and maximization of profits, and align the interests of our directors and executive officers with our long-term performance. On the other hand, our compensation policy includes measures designed to reduce the executive officer’s incentives to take excessive risks that may harm us in the long-term, such as limits on the value of cash bonuses and equity-based compensation, limitations on the ratio between the variable and the total compensation of an executive officer and minimum vesting periods for equity-based compensation.
Our compensation policy also addresses our executive officer’s individual characteristics (such as his or her respective position, education, scope of responsibilities, and contribution to the attainment of our goals) as the basis for compensation variation among our executive officers and considers the internal ratios between compensation of our executive officers and directors and other employees. Pursuant to our compensation policy, the compensation that may be granted to an executive officer may include base salary, annual bonuses, equity-based compensation, benefits and retirement and termination of service arrangements. All cash bonuses (including annual and one-time bonus) are limited to a maximum amount. In addition, our compensation policy provides for a recommended maximum ratio between the total variable (cash bonuses and equity-based compensation) and non-variable (base salary) compensation components, in accordance with an officer’s respective position with the company.
An annual cash bonus may be awarded to executive officers upon the attainment of pre-set periodic objectives and individual targets. Our Chief Executive Officer will be entitled to recommend performance objectives to such executive officers, and such performance objectives will be approved by our compensation committee (and if required by law, by our board of directors and the general meeting, in the case of board members and/or officeholders which are controlling shareholders).
The performance measurable objectives of our Chief Executive Officer will be determined annually by our compensation committee and board of directors. In case the Chief Executive Officer is not a controlling shareholder, according to the Company’s compensation policy, a less significant portion of Chief Executive Officer’s annual cash bonus may be based on a discretionary evaluation of the Chief Executive Officer’s respective overall performance by the compensation committee and the board of directors and require shareholder approval for such payment in the event the Chief Executive Officer is also a controlling shareholder of the company.
The equity-based compensation under our compensation policy for our executive officers is designed in a manner consistent with the underlying objectives in determining the base salary and the annual cash bonus, with its main objectives being to enhance the alignment between the executive officers’ interests with our long-term interests and those of our shareholders and to strengthen the retention and the motivation of executive officers in the long term. Our compensation policy provides for executive officer compensation in the form of share options or other equity-based compensation such as RSUs or RS in accordance with our equity plan then in place. Share options, restricted shares, or restricted share units granted to executive officers shall be subject to vesting periods in order to promote long-term retention of the awarded executive officers. The equity-based compensation shall be granted from time to time and be individually determined and awarded according to the performance, educational background, prior business experience, qualifications, role and the personal responsibilities of the executive officer.
In addition, our compensation policy contains compensation recovery provisions which allows us under certain conditions to recover bonuses paid in excess, enables our Chief Executive Officer to approve an immaterial change in the terms of employment of an executive officer (provided that the changes of the terms of employment are in accordance our compensation policy) and allows us to exempt, indemnify and insure our executive officers and directors subject to certain limitations set forth thereto.
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Our compensation policy also provides compensation to the members of our board of directors as follows: (i) an annual compensation and participation compensation which will be determined in accordance with the provisions of the Companies Regulations (Rules Regarding Renumeration and Expenses for an External Director), 2000, and the Exemptions Regulations (as defined above), as may be amended from time to time and according to the Company’s rank; (ii) compensation for travel and parking expenses; and (iii) equity-based compensation, including external directors and independent directors, all in accordance with our compensation policy and applicable law. According to our compensation policy, directors who also serve as officeholders will not receive directors’ compensation in addition to their compensation for their duty as officeholders.
Internal Auditor
Under the Companies Law, the board of directors of an Israeli public company must appoint an internal auditor nominated by the audit committee. Our internal auditor is Haim Laham. The role of the internal auditor is to examine, among other things, whether a company’s actions comply with the law and proper business procedure. The audit committee is required to oversee the activities, to assess the performance of the internal auditor as well as to review the internal auditor’s work plan. An internal auditor may not be an interested party or officeholder, or a relative of any interested party or officeholder, and may not be a member of the company’s independent accounting firm or its representative. The Companies Law defines an interested party as a holder of 5% or more of the outstanding shares or voting rights of a company, any person or entity that has the right to appoint at least one director or the general manager of the company or any person who serves as a director or as the general manager of a company. Our internal auditor is not an interested party in the Company and not our employee.
Remuneration of Directors
Under the Companies Law, remuneration of our directors is subject to the approval of the compensation committee, thereafter by the board of directors, and thereafter, unless exempted under the regulations promulgated under the Companies Law, by the general meeting of the shareholders. According to the regulations, directors who are being compensated in accordance with such regulations are generally entitled to an annual fee, a participation fee for board or committee meetings and reimbursement of travel expenses for participation in a meeting which is held outside of the director’s place of residence. The minimum fixed and maximum amounts of the annual and participation fees are set forth in the regulations and are based on the classification of the Company according to the size of its capital. Remuneration of a director who is compensated in accordance with the regulations, in an amount which is less than the fixed annual fee or the fixed participation fee, requires the approval of the compensation committee, the board of directors and the shareholders (in that order). A company may compensate a director (who is compensated in accordance with the regulations) in shares or rights to purchase shares, in addition to the annual and the participation fees, and the reimbursement of expenses, subject to certain limitations set forth in the regulations and the compensation policy. Where the director is also a controlling shareholder, the requirements for approval of transactions with controlling shareholders apply.
Fiduciary Duties of Officeholders
The Companies Law imposes a duty of care and a duty of loyalty on all officeholders of a company.
The duty of care requires an officeholder to act with the level of care with which a reasonable officeholder in the same position would have acted under the same circumstances. The duty of care of an officeholder includes a duty to use reasonable means to obtain:
| ● | information on the advisability of a given action brought for his approval or performed by him by virtue of his position; and |
| ● | all other important information pertaining to these actions. |
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The duty of loyalty of an officeholder requires an officeholder to act in good faith and for the benefit of the company and includes a duty to:
| ● | refrain from any conflict of interest between the performance of his duties in the company and his performance of his other duties or personal affairs; | |
| ● | refrain from any action that is competitive with the company’s business; | |
| ● | refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and | |
| ● | disclose to the company any information or documents relating to the company’s affairs which the officeholder has received due to his position as an officeholder. |
Under the Companies Law, a company may approve an act specified above which would otherwise constitute a breach of the officeholder’s fiduciary duty, provided that the officeholder acted in good faith, neither the act nor its approval harms the company, and the officeholder discloses his, her or its personal interest a sufficient time before the approval of such act. Any such approval is subject to the terms of the Companies Law setting forth, among other things, the appropriate bodies of the company required to provide such approval and the methods of obtaining such approval.
Insurance
Under the Companies Law, a company may obtain insurance for any of its officeholders against the following liabilities incurred due to acts he or she performed as an officeholder, if and to the extent provided for in the company’s articles of association:
| ● | breach of his or her duty of care to the company or to another person, to the extent such a breach arises out of the negligent conduct of the officeholder; | |
| ● | a breach of his or her duty of loyalty to the company provided that the officeholder acted in good faith and had reasonable cause to assume that his or her act would not prejudice the company’s interests; | |
| ● | a financial liability imposed upon him or her in favor of another person; and | |
| ● | any other event, occurrence or circumstance in respect of which it may lawfully insure an officeholder. |
Without derogating from the aforementioned, subject to the provisions of the Companies Law and the Israeli Securities Law, 5728-1968, or the Israeli Securities Law, we may also enter into a contract to insure an officeholder, in respect of expenses arising from their legal liability, including reasonable litigation expenses and legal fees, incurred by an officeholder in relation to an administrative proceeding instituted against such officeholder or payment required to be made to an injured party, pursuant to certain provisions of the Israeli Securities Law.
We currently have directors’ and officers’ liability insurance, providing total coverage of $7.5 million per occurrence and in the aggregate for all losses arising out of all claims made against all insured, including reasonable defense costs, subject to the terms, conditions and exclusions of the policy. We also have a Side A Policy, covering $5 million per occurrence and in the aggregate, including reasonable defense costs.
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Indemnification
The Companies Law and the Israeli Securities Law provide that a company may indemnify an officeholder against the following liabilities and expenses incurred for acts performed by him or her as an officeholder, either pursuant to an undertaking made in advance of an event or following an event, provided its articles of association include a provision authorizing such indemnification:
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● | a financial liability imposed on him or her in favor of another person by any judgment concerning an act performed in his or her capacity as an officeholder, including a settlement or arbitrator’s award approved by a court; |
| ● | reasonable litigation expenses, including attorneys’ fees, expended by the officeholder (i) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (a) no indictment was filed against such officeholder as a result of such investigation or proceeding; and (b) no financial liability as a substitute for the criminal proceeding (as defined in the Companies Law) was imposed upon him or her as a result of such investigation or proceeding, or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; or (ii) in connection with a monetary sanction; | |
| ● | reasonable litigation expenses, including attorneys’ fees, expended by the officeholder or imposed on him or her by a court: (i) in proceedings that the company institutes, or that are instituted on the company’s behalf, or by another person, against him or her; (ii) in criminal proceedings of which he or she was acquitted; or (iii) as a result of a conviction for a crime that does not require proof of criminal intent; | |
| ● | expenses incurred by an officeholder in connection with an Administrative Procedure under the Israeli Securities Law, including reasonable litigation expenses and reasonable attorneys’ fees or payment required to be made to an injured party, pursuant to certain provisions of the Israeli Securities Law. An “Administrative Procedure” is defined as a procedure pursuant to chapters H3 (Monetary Sanction by the Israeli Securities Authority), H4 (Administrative Enforcement Procedures of the Administrative Enforcement Committee) or I1 (Arrangement to prevent Procedures or Interruption of procedures subject to conditions) to the Israeli Securities Law; and | |
| ● | any other liability or expense for which it is permitted and/or will be permitted to indemnify an officeholder. |
The Companies Law also permits a company to undertake in advance to indemnify an officeholder, provided that if such indemnification relates to financial liability imposed on him or her, as described above, then the undertaking should be limited and shall detail the following foreseen events and amount or criterion:
| ● | to events that in the opinion of the board of directors can be foreseen based on the company’s activities at the time that the undertaking to indemnify is made; and | |
| ● | in amount or criterion determined by the board of directors, at the time of the giving of such undertaking to indemnify, to be reasonable under the circumstances. |
Under the Companies Law, exemption, indemnification, and insurance of officeholders must be approved by the compensation committee and the board of directors (and, with respect to directors and the chief executive officer, by the shareholders). However, under regulations promulgated under the Companies Law, the insurance of officeholders does not require shareholder approval and may be approved by only the compensation committee if the engagement terms are determined in accordance with the company’s compensation policy, which was approved by the shareholders by the same special majority required to approve a compensation policy, provided that the insurance policy is on market terms and the insurance policy is not likely to materially impact the company’s profitability, assets or obligations. In addition, under regulations promulgated under the Companies Law, the insurance of office holders of a company in which there is a controlling shareholder who is also an office holder, board approval is also required, subject to meeting the aforesaid conditions.
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On December 5, 2024, the general meeting of our shareholders approved granting an indemnification and exemption letters to our officeholders and directors as may be from time to time, in the form previously approved by our shareholders. Indemnification letters, covering indemnification and insurance of those liabilities imposed under the Companies Law and the Israeli Securities Law, as discussed above, were granted to each of our officeholders and were approved for any future officeholders. All of the Company’s directors and the officers have executed indemnification letters.
The maximum indemnification amount set forth in such letters to all of our officeholders is limited to an amount equal to the higher of: (i) $5,000,000; and (ii) 25% of our total shareholders’ equity, neutralizing a provision made for such indemnification, as reflected in our most recent financial statements (annual or quarterly) prior to the date on which the indemnity payment is made. The maximum amount set forth in such letters is in addition to any amount paid (if paid) under insurance and/or by a third party pursuant to an indemnification arrangement.
In the opinion of the SEC, indemnification of directors and officeholders for liabilities arising under the Securities Act, however, is against public policy and therefore unenforceable.
Exemption
Under the Companies Law, an Israeli company may not exempt an officeholder from liability for a breach of his or her duty of loyalty but may exempt in advance an officeholder from his or her liability to the company, in whole or in part, for damages caused to the company as a result of a breach of his or her duty of care (other than in relation to distributions), but only if a provision authorizing such exemption is included in its articles of association. Our amended and restated articles of association provide that we may exempt, in whole or in part, any officeholder from liability to us for damages caused to the company as a result of a breach of his or her duty of care. Subject to the aforesaid limitations and to the limitations under the indemnification agreements, we exempt and release our officeholders from any and all liability to us related to any breach by them of their duty of care to us to the fullest extent permitted by law.
Indemnification and exemption were granted to each of our officeholders and were approved for any future officeholders.
Limitations
The Companies Law provides that we may not exempt or indemnify an officeholder nor enter into an insurance contract that would provide coverage for any liability incurred as a result of any of the following: (1) a breach by the officeholder of his or her duty of loyalty unless (in the case of indemnity or insurance only, but not exemption) the officeholder acted in good faith and had a reasonable basis to believe that the act would not prejudice us; (2) a breach by the officeholder of his or her duty of care if the breach was carried out intentionally or recklessly (as opposed to merely negligently); (3) an act committed with the intention of making a personal profit unlawfully; or (4) any fine, monetary sanction, penalty or forfeit levied against the officeholder.
Under the Companies Law, exemption, indemnification and insurance of officeholders in a public company must be approved by the compensation committee (and, with respect to directors and the chief executive officer, by the shareholders).
Our amended and restated articles of association permit us to exempt (subject to the aforesaid limitation), indemnify and insure our officeholders to the fullest extent permitted or to be permitted by the Companies Law.
The foregoing descriptions summarize the material aspects and practices of our board of directors. For additional details, we also refer you to the full text of the Companies Law, as well as of our amended and restated articles of association, which are exhibits to this annual report on Form 20-F.
There are no service contracts between us or any of our subsidiaries, on the one hand, and our directors in their capacity as directors, on the other hand, providing for benefits upon termination of service.
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Approval of Related Party Transactions under Israeli Law
General
Under the Companies Law, we may approve an action by an officeholder from which the officeholder would otherwise have to refrain, as described above, if:
| ● | the officeholder acts in good faith and the act or its approval does not cause harm to the company; and | |
| ● | the officeholder disclosed the nature of his or her interest in the transaction (including any significant fact or document) to the company at a reasonable time before the company’s approval of such matter. |
Disclosure of Personal Interests of an Officeholder
The Companies Law requires that an officeholder discloses to the company, promptly, and, in any event, not later than the board meeting at which the transaction is first discussed, any direct or indirect personal interest that he or she may have and all related material information known to him or her relating to any existing or proposed transaction by the company, including without limitations, any material document or fact regarding such transaction. If the transaction is an extraordinary transaction, the officeholder must also disclose any personal interest held by:
| ● | the officeholder’s relatives; or | |
| ● | any corporation in which the officeholder or his or her relatives holds 5% or more of the shares or voting rights, serves as a director or general manager or has the right to appoint at least one director or the general manager. |
An officeholder is not, however, obliged to disclose a personal interest if it derives solely from the personal interest of his or her relative in a transaction that is not considered an extraordinary transaction. Under the Companies Law, an extraordinary transaction is a transaction:
| ● | not in the ordinary course of business; or | |
| ● | not on market terms; or | |
| ● | that is likely to have a material effect on the company’s profitability, assets or liabilities. |
The Companies Law does not specify to whom within us nor the manner in which required disclosures are to be made. We require our officeholders to make such disclosures to our board of directors.
Under the Companies Law, once an officeholder complies with the above disclosure requirement, the board of directors may approve a transaction between the company and an officeholder, or a third party in which an officeholder has a personal interest unless the articles of association provide otherwise and provided that the transaction is in the company’s interest. If the transaction is an extraordinary transaction in which an officeholder has a personal interest, first the audit committee and then the board of directors, in that order, must approve the transaction. Under specific circumstances, shareholder approval may also be required. Generally, a person who has a personal interest in a matter which is considered at a meeting of the board of directors, or the audit committee may not be present at such a meeting unless the chairman of the audit committee or board of directors (as applicable) determines that he or she should be present in order to present the transaction that is subject to approval. A director who has a personal interest in a transaction, which is considered at a meeting of the board of directors or the audit committee, may not be present at this meeting or vote on this matter, unless a majority of members of the board of directors or the audit committee, as the case may be, has a personal interest. If a majority of the board of directors has a personal interest, then shareholder approval is generally also required.
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Disclosure of Personal Interests of a Controlling Shareholder
Under the Companies Law, the disclosure requirements that apply to an officeholder also apply to a controlling shareholder of a public company. Extraordinary transactions with a controlling shareholder or in which a controlling shareholder has a personal interest, including a private placement in which a controlling shareholder has a personal interest, as well as transactions for the provision of services whether directly or indirectly by a controlling shareholder or his or her relative, or a company such controlling shareholder controls, and transactions concerning the terms of engagement and compensation of a controlling shareholder or a controlling shareholder’s relative, whether as an officeholder or an employee, require the approval of the audit committee or the compensation committee, as the case may be, the board of directors and a majority of the shares voted by the shareholders of the company participating and voting on the matter in a shareholders’ meeting. In addition, the shareholder approval must fulfill one of the following requirements or a Special Majority:
| ● | at least a majority of the shares held by shareholders who are not controlling shareholders and have no personal interest in the transaction and are voting at the meeting must be voted in favor of approving the transaction, excluding abstentions; or | |
| ● | the shares voted by shareholders who vote against the transaction represent no more than 2% of the voting rights in the company. |
In addition, any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest with a term of more than three years requires the abovementioned approval every three years; however, such transactions not involving the receipt of services or compensation can be approved for a longer-term, provided that the audit committee determines that such longer-term is reasonable under the circumstances.
The Companies Law requires that every shareholder that participates, in person, by proxy or by voting instrument, in a vote regarding a transaction with a controlling shareholder, must indicate in advance or in the ballot whether or not that shareholder has a personal interest in the vote in question. Failure to indicate such personal interest will result in the invalidation of that shareholder’s vote.
However, according to the Exemptions Regulations, by signing and submitting a proxy card, a shareholder declares and approves that he has no personal interest in the approval of any of the items on a general meeting agenda that requires such declaration under the Companies Law, with the exception of a personal interest that the shareholder positively informed the Company about.
The term “controlling shareholder” is defined in the Companies Law as a shareholder with the ability to direct the activities of the company, other than by virtue of being an officeholder. A shareholder is presumed to be a controlling shareholder if the shareholder holds 50% or more of the voting rights in a company or has the right to appoint 50% or more of the directors of the company or its general manager. In the context of a related party transactions involving a shareholder of the company, a controlling shareholder also includes a shareholder who holds 25% or more of the voting rights in the company if no other shareholder holds more than 50% of the voting rights in the company. For this purpose, the holdings of all shareholders who have a personal interest in the same transaction will be aggregated.
In accordance with the regulations promulgated under the Companies Law, certain defined types of extraordinary transactions between a public company and its controlling shareholder(s) are exempt from the shareholder approval requirements.
The approval of the board of directors and the shareholders, is required to effect a private placement of securities, in which either: (i) 20% or more of the company’s outstanding share capital prior to the placement is offered, and the payment for which (in whole or in part) is not in cash, in tradable securities registered in a stock exchange or not under market terms, and which will result in (a) an increase of the holdings of a shareholder that holds 5% or more of the company’s outstanding share capital or voting rights; or (b) will cause any person to become, as a result of the issuance, a holder of more than 5% of the company’s outstanding share capital or voting rights; or (ii) a person will become a controlling shareholder of the company.
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Approval of the Compensation of Directors and Executive Officers
The compensation of, or an undertaking to indemnify, insure or exculpate, an officeholder who is not a director requires the approval of the company’s compensation committee, followed by the approval of the company’s board of directors, and, if such compensation arrangement or an undertaking to indemnify, insure or exculpate is inconsistent with the company’s stated compensation policy, or if the said officeholder is the chief executive officer of the company (subject to a number of specific exceptions), then such arrangement is subject to the approval of our shareholders, subject to a Special Majority requirement.
Directors. Under the Companies Law, the compensation of our directors requires the approval of our compensation committee, the subsequent approval of the board of directors and unless exempted under the regulations promulgated under the Companies Law, the approval of the general meeting of our shareholders. Unless exempted under the regulations promulgated under the Companies Law, if the compensation of our directors is inconsistent with our stated compensation policy, then, provided that those provisions that must be included in the compensation policy according to the Companies Law have been considered by the compensation committee and board of directors, shareholder approval by a Special Majority will be required.
Executive officers other than the chief executive officer. The Companies Law requires the approval of the compensation of a public company’s executive officers (other than the chief executive officer) in the following order: (i) the compensation committee, (ii) the company’s board of directors, and (iii) only if such compensation arrangement is inconsistent with the company’s stated compensation policy, the company’s shareholders by a Special Majority. However, if the shareholders of the company do not approve a compensation arrangement with an executive officer that is inconsistent with the company’s stated compensation policy, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committee and the board of directors provide detailed reasons for their decision, including regarding the shareholders of the Company objection. In addition, the regulations promulgated under the Companies Law provide that non-material changes to the terms of office of officeholders who are subordinated to the company’s Chief Executive Officer will require only Chief Executive Officer approval, provided that the company’s compensation policy includes a reasonable range for such non-material changes.
Chief executive officer. Under the Companies Law, the compensation of a public company’s chief executive officer is required to be approved by: (i) the company’s compensation committee; (ii) the company’s board of directors, and (iii) the company’s shareholders by a Special Majority. However, if the shareholders of the company do not approve the compensation arrangement with the chief executive officer, the compensation committee and board of directors may override the shareholders’ decision if each of the compensation committees and the board of directors provides detailed reasons for their decision, after rediscussing the terms of the compensation and the shareholders decline the approval thereof. In addition, the compensation committee may exempt the engagement terms of a candidate to serve as the chief executive officer from shareholders’ approval, if the compensation committee determines that the compensation arrangement is consistent with the company’s stated compensation policy, that the chief executive officer did not have a prior business relationship with the company or a controlling shareholder of the company, and that subjecting the approval to a shareholder vote would impede the company’s ability to attain the candidate to serve as the company’s chief executive officer (and provide detailed reasons for the latter).
In addition, the compensation committee may waive the shareholder approval requirement with regards to the approval of the engagement terms of a candidate for the chief executive officer position, if they determine that the compensation arrangement is consistent with the company’s stated compensation policy and that the chief executive officer candidate did not have a prior business relationship with the company or a controlling shareholder of the company and that subjecting the approval of the engagement to a shareholder vote would impede the company’s ability to employ the chief executive officer candidate. In the event that the chief executive officer candidate also serves as a member of the board of directors, his or her compensation terms as chief executive officer will be approved in accordance with the rules applicable to the approval of the compensation of directors.
Other Officeholders and Directors. The approval of each of the compensation committee and the board of directors, with regard to the officeholders and directors above, must be in accordance with the company’s stated compensation policy; however, under special circumstances, the compensation committee and the board of directors may approve compensation terms of a chief executive officer that are inconsistent with the company’s compensation policy provided that they have considered those provisions that must be included in the compensation policy according to the Companies Law and that shareholder approval was obtained by a Special Majority requirement.
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Amendment of existing terms of office and employment of officeholders who are not directors, including chief executive officers, require the approval of the compensation committee only if the compensation committee determines that the amendment is immaterial (as defined in our compensation policy).
On September 25, 2025, the general meeting of our shareholders approved several compensation-related items, including: (i) the renewal of the Company’s compensation policy; (ii) an update to the terms of compensation of Mr. Avraham Brenmiller, CEO and Chairman of the Board of Directors of the Company; (iii) an update to the terms of compensation of Mr. Nir Brenmiller, Chief Operating Officer and Director, and of Mr. Doron Brenmiller, Chief Business Officer and Director; and (iv) an equity-based grant for Mr. Avraham Brenmiller, CEO and Chairman of the Board of Directors of the Company; and (v) an equity-based grant for Mr. Nir Brenmiller, Chief Operating Officer and Director, and for Mr. Doron Brenmiller, Chief Business Officer and Director.
Duties of Shareholders
Under the Companies Law, a shareholder has a duty to refrain from abusing his power in the company and to act in good faith and in an acceptable manner in exercising his rights and performing his obligations toward the company and other shareholders, including, among other things, in voting at general meetings of shareholders (and at shareholder class meetings) on the following matters:
| ● | amendment of the articles of association; | |
| ● | increase in the company’s authorized share capital; | |
| ● | merger; and | |
| ● | the approval of related party transactions and acts of officeholders that require shareholder approval. |
A shareholder also has a general duty to refrain from oppressing other shareholders. The remedies generally available upon a breach of contract will also apply to a breach of the above-mentioned duties, and in the event of oppression of other shareholders, additional remedies are available to the injured shareholder.
In addition, any controlling shareholder, any shareholder that knows that its vote can determine the outcome of a shareholder vote and any shareholder that, under a company’s articles of association, has the power to appoint or prevent the appointment of an officeholder, or has another power with respect to a company, is under a duty to act with fairness towards the company. The Companies Law does not describe the substance of this duty except to state that the remedies generally available upon a breach of contract will also apply in the event of a breach of the duty to act with fairness, taking the shareholder’s position in the company into account.
Equity Incentive Plan
In 2013, our board of directors approved and adopted our 2013 global incentive option plan, designed to grant awards consisting of options exercisable to our shares, restricted shares, or restricted share units. Our employees, directors, consultants and contractors are eligible to participate in this plan. Our board of directors shall have the power to administer the plan either directly or upon the recommendation of our compensation committee. Generally, options granted under this plan expire between five to ten years from the date of grant unless such shorter term of expiration is otherwise designated by the administrator. Each option shall vest following the vesting dates and for the number of shares as shall be provided in the grant notification letter or award agreement In addition, our board of directors has sole discretion to determine, in the event of a transaction with another corporation, as defined in the plan, that each option shall either: (i) be substituted for an option to purchase securities of the other corporation; (ii) be assumed by the other corporation; or (iii) be cancelled.
On October 24, 2021, our board of directors extended the plan for a period of 10 years until December 31, 2031 and on January 4, 2023, our board of directors amended the plan to allow for restricted shares and restricted share units. The plan has been approved by the Israeli Tax Authority as required by applicable law.
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The following table presents certain option grant information concerning the distribution of options (granted under the Plan) among directors and employees of the Company as of December 31, 2025:
| Options Outstanding | Unvested Options | |||||||
| Directors and Senior Management: | ||||||||
| Avraham Brenmiller | 75,073 | 57,851 | ||||||
| Nir Brenmiller | 38,196 | 27,711 | ||||||
| Doron Brenmiller | 35,770 | 27,711 | ||||||
| Avi Sasson | 11,254 | 6,927 | ||||||
| Ofir Zimmerman | 18,233 | 6,927 | ||||||
| Nava Swersky Sofer(1) | - | - | ||||||
| Chen Franco-Yehuda(2) | - | - | ||||||
| Boaz Toshav | - | - | ||||||
| Michael Korner | 857 | 571 | ||||||
| Zvi Joseph | 857 | 571 | ||||||
| Orna Ben-Yosef | - | - | ||||||
| All Other Grantees | 21,321 | 13,854 | ||||||
| (1) | On June 16, 2025, Mrs. Swersky Sofer resigned from our board of directors. The options held by Mrs. Swersky Sofer were forfeited. |
| (2) | On August 25, 2025, Mrs. Franco-Yehuda resigned from our board of directors. The options held by Mrs. Franco-Yehuda were forfeited. |
The following table presents the distribution of RS (granted under the Plan) among directors and employees of the Company as of December 31, 2025:
| RS Outstanding | ||||
| Directors and Senior Management: | ||||
| Avi Sasson | 1,240 | |||
| Ofir Zimmerman | 1,437 | |||
| All Other Grantees | 11,940 | |||
In January 2025, the board of directors approved the grant of share-based payments as follows:
With respect to 2024 remuneration scheme to officers of the Company: share options with a value of $163 thousand and RS with a value of $137 thousand, that were presented in the December 31, 2024 balance sheet as a liability (the number of options and RS granted were determined post balance sheet date upon approval by the compensation committee, as follows: 2,081 share options and 1,737 RS);
Under the 2025 preservation of employees’ plan: 412 share options with the value of $32 thousand and 4,954 RS with a value of $390 thousand, that will be recognized as an expense in 2025.
Amendment of the plan
Subject to applicable law, our board of directors may amend the plan, provided that any action by our board of directors which will alter or impair the rights or obligations of an option holder requires the prior consent of that option holder.
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D. Employees
As of December 31, 2023, we had 50 full-time employees and 2 part-time employees. As of December 31, 2024, we had 52 full-time employees and 3 part-time employees. As of December 31, 2025, we have 43 full-time employees and 3 part-time employees. As of December 31, 2025, all of these employees are located in Israel. We believe that our future success will depend in part on our continued ability to attract, hire and retain qualified personnel.
Our employees are not represented by labor unions or covered by collective bargaining agreements. We believe that we maintain good relations with our employees. However, in Israel, we are subject to certain Israeli labor laws, regulations and national labor court precedent rulings, as well as certain provisions of collective bargaining agreements applicable to us by virtue of extension orders issued in accordance with relevant labor laws by the Israeli Ministry of Economy and which apply such agreement provisions to our employees even though they are not part of a union that has signed a collective bargaining agreement.
All of our employment and consulting agreements include employees’ and consultants’ undertakings with respect to non-competition and assignment to us of intellectual property rights developed in the course of employment and confidentiality. With respect to our employees, the enforceability of such provisions is limited by Israeli law.
E. Share Ownership
See “Item 7.A. — Major Shareholders” below.
F. Action to Recover Erroneously Awarded Compensation
Not applicable.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders.
The following table sets forth information regarding beneficial ownership of our Ordinary Shares as of March 23, 2026 by:
| ● | each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our outstanding ordinary shares; |
| ● | each of our directors and executive officers; and |
| ● | all of our directors and executive officers as a group. |
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to Ordinary Shares. Ordinary shares issuable under share options or warrants that are exercisable within 60 days after March 23, 2026, are deemed outstanding for the purpose of computing the percentage ownership of the person holding the options or warrants but are not deemed outstanding for the purpose of computing the percentage ownership of any other person.
We are not controlled by another corporation, by any foreign government or by any natural or legal persons except as set forth herein, and there are no arrangements known to us which would result in a change in control of the Company at a subsequent date.
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Except as indicated in footnotes to this table, we believe that the shareholders named in this table have sole voting and investment power with respect to all shares shown to be beneficially owned by them, based on information provided to us by such shareholders. Unless otherwise noted below, each beneficial owner’s address is: c/o Brenmiller Energy Ltd., 13 Amal St. 4th Floor, Park Afek, Rosh Haayin, 4809249 Israel.
| No. of Shares Beneficially Owned |
Percentage Owned | |||||||
| Holders of more than 5% of our voting securities: | ||||||||
| Alpha Capital Anstalt(1) | 257,475 | 9.99 | % | |||||
| Directors and senior management who are not 5% holders: | ||||||||
| Avraham Brenmiller(2)* | 22,973 | 0.88 | % | |||||
| Doron Brenmiller (3)* | ** | % | ||||||
| Nir Brenmiller (4)* | ** | % | ||||||
| Ofir Zimmerman (5)* | ** | % | ||||||
| Avi Sasson(6) | ** | % | ||||||
| Michael Korner(7)* | ** | % | ||||||
| Zvi Joseph(8)* | ** | % | ||||||
| Orna Ben Yosef* | ||||||||
| Harel Gadot* | ||||||||
| Boaz Toshav* | ||||||||
| All directors and senior management as a group (11 persons) | 2.33 | % | ||||||
| (1) | Based on: (i) 96,129 Ordinary Shares issued and outstanding; (ii) 3,589,528 Ordinary Shares issuable upon the exercise of warrants exercisable within 60 days of March 23, 2026, which contain a beneficial ownership limitation of 9.99%; and (iii) 2,632,570 Ordinary Shares issuable upon the conversion of Preferred Shares convertible within 60 days of March 23, 2026, which contain a beneficial ownership limitation of 9.99%. The address for Alpha Capital Anstalt is Altenbach 8, 9490 Vaduz, Lichtenstein. Nicola Feuerstein and Konrad Ackerman, Directors of Alpha Capital Anstalt, holds voting and dispositive power over the securities held by Alpha Capital Anstalt. Based on information provided by Alpha Capital Anstalt on March 13, 2026.
|
| (2) |
Includes 3,908 Ordinary Shares issued and outstanding and 19,065 Ordinary Shares issuable upon the exercise of warrants and options exercisable within 60 days of March 23, 2026, and does not include 57,851 Ordinary Shares issuable upon the exercise of options that are not exercisable within 60 days of March 23, 2026. Mr. A. Brenmiller alone has the voting and dispositive power over such Ordinary Shares and mailing address is 19 Habosem St., Ramat Hasharon, Israel 4704048.
|
| (3) |
Includes 8,059 Ordinary Shares issuable upon the exercise of options that are exercisable within 60 days of March 23, 2026, and does not include 27,711 Ordinary Shares issuable upon the exercise of options that are not exercisable within 60 days of March 23, 2026. Mr. Doron Brenmiller alone has the voting and dispositive power over such Ordinary Shares and mailing address is Pichman 11/11, Tel Aviv, Israel, 6902711.
|
| (4) | Includes 10,485 Ordinary Shares issuable upon the exercise of options that are exercisable within 60 days of March 23, 2026, and does not include 27,711 Ordinary Shares issuable upon the exercise of options that are not exercisable within 60 days of March 23, 2026. Mr. Nir Brenmiller alone has the voting and dispositive power over such Ordinary Shares and mailing address is 13 Igal Mosinson St., Tel Aviv, Israel. |
| (5) | Includes 1,437 Ordinary Shares issued and outstanding and 11,306 Ordinary Shares issuable upon the exercise of options that are exercisable within 60 days of March 23, 2026 and does not include 6,927 Ordinary Shares issuable upon the exercise of options that are not exercisable within 60 days of March 23, 2026. Mr. Zimmerman alone has the voting and dispositive power over such Ordinary Shares and mailing address is 5 Ben-Hur St., Petach Tikva, Israel. |
| (6) | Includes 1,242 Ordinary Shares issued and outstanding and 4,327 Ordinary Shares issuable upon the exercise of options that are exercisable within 60 days of March 23, 2026 and does not include 6,927 Ordinary Shares issuable upon the exercise of options that are not exercisable within 60 days of March 23, 2026. Mr. Sasson alone has the voting and dispositive power over such Ordinary Shares and mailing address is David Elazar St. 59, Modi’in Makabim-Re’ut, Israel. |
| (7) | Includes 286 Ordinary Shares issuable upon the exercise of options that are exercisable within 60 days of March 23, 2026, and does not include 571 Ordinary Shares issuable upon the exercise of options that are not exercisable within 60 days of March 23, 2026. |
| (8) | Includes 286 Ordinary Shares issuable upon the exercise of options that are exercisable within 60 days of March 23, 2026, and does not include 571 Ordinary Shares issuable upon the exercise of options that are not exercisable within 60 days of March 23, 2026. |
| * | Indicates director of the Company. |
| ** | Less than 1%. |
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Changes in Percentage Ownership by Major Shareholders
On June 12, 2023, we entered into a definitive securities purchase agreement with Snowdrop Holding SA for the issuance and sale in a private placement offering of 7,108 units, each unit consisting of one Ordinary Share and one non-tradeable warrant to purchase one Ordinary Share at a price per unit of $350, for aggregate gross proceeds of approximately $2.5 million. The warrants have an exercise price of $420 per warrant and may be exercised beginning on June 12, 2024, until June 12, 2029. The offering closed on June 15, 2023. As of December 31, 2025, Snowdrop Holding SA beneficially owned 6,823 Ordinary Shares issued and outstanding and 8,951 Ordinary Shares issuable upon the exercise of warrants exercisable, with 1.05% beneficial ownership.
On August 4, 2024, we entered into a definitive securities purchase agreement with Alpha, for a private placement of 28,571 Ordinary Shares at a price of $36.75 per share, or the August 2024 Private Placement.
Between July 2025 and March 2026, we completed a series of equity financings with Alpha, pursuant to which we issued pre-funded warrants and warrants for total gross proceeds of 1.395 million and preferred shares, each with a stated value of $1,000 per share, for total gross proceeds of $7.8 million. The preferred shares are convertible into our ordinary shares at fixed conversion prices. In connection with each closing, we also issued accompanying ordinary warrants, exercisable upon issuance and with a five-year term. The issuances described above, together with the related anti-dilution adjustments, resulted in changes to Alpha’s beneficial ownership of our ordinary shares. A more detailed description of the Alpha Financings and related adjustments is included under “Item 5.B. Liquidity and Capital Resources” in this Annual Report on Form 20-F. As a result of the Alpha financing described above, as of March 25, 2026, Alpha beneficially owns 9.99% of our issued and outstanding share capital. See, “Item 5.B Operating and Financial Review and Prospects — Liquidity and Capital Resources- Current Outlook” for more information.
Based on a Schedule 13G filed with the SEC on January 31, 2024, which reflects holdings as of December 31, 2023, Migdal Insurance & Financial Holdings Ltd has ceased to be a beneficial owner of more than 5% of our issued and outstanding share capital.
Based on a Schedule 13G/A filed with the SEC on February 6, 2024, which reflects holdings as of December 31, 2023, Y.D More Investments Ltd. has ceased to be a beneficial owner of more than 5% of our issued and outstanding share capital.
On June 25, 2025, a Schedule 13G was filed by A.Y.L. Sela (1991) Ltd. and Itzhak Sela reporting beneficial ownership of 13,157 ordinary shares, representing approximately 4.1 % of the issued and outstanding ordinary shares based on 317,552 shares outstanding, and Itzhak Sela beneficially owned 27,513 ordinary shares, representing approximately 8.7% of the issued and outstanding ordinary shares. As of December 2025, due to the issuance of Ordinary Shares during 2025, Mr. Itzhak Sela has ceased to be a beneficial owner of more than 5% of our issued and outstanding share capital.
Based on a Schedule 13D/A filed with the SEC on October 21 2025, which reflects holdings as of August 31, 2025, Avraham Brenmiller has ceased to be a beneficial owner of more than 5% of our issued and outstanding share capital.
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Record Holders
Based on a review of information provided to us by our transfer agent, as of March 25, 2026, there were 26 holders of record of our Ordinary Shares in the United States, Cede & Co., the nominee of the Depositary Trust Company. The shares held of record by Cede & Co. includes beneficial owners whose shares are held in street name by brokers and other nominees.
The Company is not controlled by another corporation, by any foreign government or by any natural or legal persons except as set forth herein, and there are no arrangements known to the Company which would result in a change in control of the Company at a subsequent date.
B. Related Party Transactions.
Employment Agreements
We have entered into written employment or services agreements with each of our executive officers. All of these agreements contain customary provisions regarding noncompetition, confidentiality of information, and assignment of inventions. However, the enforceability of the noncompetition provisions may be limited under applicable law. In addition, we have entered into agreements with each executive officer and director pursuant to which we have agreed to indemnify each of them up to a certain amount and to the extent that these liabilities are not covered by directors’ and officers’ insurance. Certain members of our senior management may be eligible for bonuses each year. To the extent a member of management is entitled to a bonus, some of the bonuses are payable upon meeting objectives and targets that are set by our Chief Executive Officer and approved annually by our Compensation Committee that also set the bonus targets for our Chief Executive Officer.
Indemnification Agreements and Exemption Letters
We have entered into indemnification agreements and exemption letters with all of our directors and with members of our senior management. Each such indemnification agreement provides the officeholder with indemnification permitted under applicable law and up to a certain amount, and to the extent permitted by Companies Law. Each such exemption letter provides that we may exempt, in whole or in part, the relevant director or member of senior management from liability to us for damages caused to the Company as a result of a breach of his or her duty of care.
On December 5, 2024, the general meeting of our shareholders approved granting an indemnification and exemption letters to our officeholders and directors as may be from time to time, in the form previously approved by our shareholders. Indemnification letters, covering indemnification and insurance of those liabilities imposed under the Companies Law and the Israeli Securities Law, as discussed above, were granted to each of our officeholders and were approved for any future officeholders.
Securities Purchase Agreement
On November 29, 2022, we entered into a definitive securities purchase agreements with certain investors, including Mr. Avraham Brenmiller, Chief Executive Officer and the Chairman of our board of directors in connection with the 2022 Private Placement. Pursuant to the securities purchase agreement we entered into with Mr. Avraham Brenmiller, we sold 1,843 units consisting of 1,843 Ordinary Shares of the Company and 1,843 associated warrants to Mr. Avraham Brenmiller at a price of NIS 1,865.5 (approximately $542.6) per unit, based on an exchange rate of NIS/USD 3.438 published on November 28, 2022 (the exchange rate on the day prior to the signing of the 2022 Private Placement), for a total consideration of $1,000 thousand. The warrants have exercise price of $583.1 per share and are exercisable until January 31, 2028.
Mr. Avraham Brenmiller received piggyback registration rights for the Ordinary Shares and shares underlying the associated warrants sold in this private placement. On June 29, 2023, we filed a registration statement with the SEC to register the resale of the warrant shares. Upon effectiveness of such registration statement on July 10, 2023, the aforementioned piggyback rights expired.
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Options and Restricted Shares
Since our inception, we have granted options to purchase our Ordinary Shares to our officers and certain of our directors who are also officers of the Company. Such option agreements may contain acceleration provisions upon certain merger, acquisition, or change of control transactions, as defined in our stock option plan or the stated compensation policy, as the case may be. Pursuant to the approval of an extraordinary meeting of the Company’s shareholders held on January 24, 2023, and as recommended by the board of directors and compensation committee, the Company adopted an amendment to the Company’s compensation policy. The amendment presents the following changes:
| i. | To allow the compensation committee and the board of directors to exchange basic salary with equity-based compensation, either in whole or in part, by issuing RS or RSU which will be vested immediately or on an annual basis. In such case, the calculation of the RS and RSU value in comparison to the basic salary will include a discount of up to 15%. |
| ii. | To allow the compensation committee and the board of directors to exchange accrued and unpaid cash salary to office holders, including shareholders and /or relative of controlling shareholders, with RSU or any other equity-based compensation in accordance with the Company’s option plan (as defined in the current compensation policy) with the following minimum terms: vesting period of no less than one month, share price that will be calculated according to the average of Company’s market share price in the last 5-30 days (at the Boards’ discretion), with a discount of up to 15%. |
For more information see “Item 6.B. — Compensation” and “Item 6.E. — Equity Incentive Plan”.
Unpaid CEO Salary Conversion to Equity
As of December 31, 2022, Mr. Avraham Brenmiller had an unpaid salary balance (in respect of prior years) in the amount of NIS 790 thousand (approximately $225 thousand). In exchange for the above unpaid salary, on November 17, 2022, and November 23, 2022, the compensation committee and the board of directors, respectively, approved and voted to recommend that the shareholders approve to convert the unpaid salary into equity under the terms of the November 2022 definitive securities purchase agreements, as described above, respectively, except the exercise period as described below. Accordingly, on January 24, 2023, our shareholders approved the conversion, and we granted Mr. Brenmiller 14,822 units, consisting of 14,822 Ordinary Shares and 14,822 associated warrants, at a price of NIS 53.3 (approximately $15.5) per each issued unit, based on an exchange rate of NIS/USD 3.438 published on November 28, 2022 (the exchange rate on the day prior to the signing of the 2022 Private Placement). Each warrant is exercisable into one Ordinary Share subject to payment of exercise price of NIS 61.3 (approximately $17.8) per warrant and has a term of two (2) years as of the issuance date of the warrants for Mr. Brenmiller. These warrants expired on January 24, 2025. See “Item 6.B. — Compensation.”
C. Interests of Experts and Counsel.
None.
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ITEM 8. FINANCIAL INFORMATION.
A. Consolidated Statements and Other Financial Information.
See “Item 18. —Financial Statements.”
Legal Proceedings
From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. As of the date of this annual report, we are not currently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Dividends
We have never declared or paid any cash dividends on our Ordinary Shares or preferred shares and do not anticipate paying any cash dividends in the foreseeable future. Payment of cash dividends, if any, in the future will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects, and other factors our board of directors may deem relevant.
Pursuant to the terms of our outstanding preferred shares, the holders thereof are entitled to certain dividend rights. In addition to participating in dividends paid on our Ordinary Shares on an as-if-converted-to-Ordinary Share basis and in the same form as such dividends, when, as and if declared, the Preferred Shares accrue dividends at an annual rate of 8% of the stated value of such preferred shares from the date of issuance, or Preferred Dividend. Subject to applicable law, including Sections 302-303 of the Companies Law, we are required, within 30 days after receipt of its audited financial statements for the previous fiscal year, to take the necessary corporate action to declare and pay all accrued and unpaid Preferred Dividends through the end of such fiscal year, to the extent such dividends may be declared and paid in accordance with the Companies Law and any applicable exemptions thereunder. We may not declare or pay any other dividend until all accrued Preferred Dividends have been paid in full.
The Companies Law imposes further restrictions on our ability to declare and pay dividends. Under the Companies Law, we may declare and pay dividends only if, upon the determination of our board of directors, there is no reasonable concern that the distribution will prevent us from being able to meet the terms of our existing and foreseeable obligations as they become due. Under the Companies Law, the distribution amount is further limited to the greater of retained earnings or earnings generated over the two most recent years legally available for distribution according to our then last reviewed or audited financial statements, provided that the end of the period to which the financial statements relate is not more than six months prior to the date of distribution, generally referred to as the Earnings Criteria. In the event that we do not meet such earnings criteria, we may seek the approval of a court in order to distribute a dividend. The court may approve our request if it is convinced that there is no reasonable concern that the payment of a dividend will prevent us from satisfying our existing and foreseeable obligations as they become due, generally referred to as the Solvency Criteria.
However, under the Exemptions Regulations, an Israeli company whose shares are listed outside of Israel, is permitted to perform distribution in a way of repurchasing its own shares, even if the Earnings Criteria is not met, without the need for court’s approval. The exemption is subject to certain conditions, including, among others: (i) The distribution meets the Solvency Criteria; and (ii) no rejection was filed by any of the company’s creditors to the court. If any creditor objects to the distribution, the company will be required to obtain the court’s approval for the distribution.
Payment of dividends may be subject to Israeli withholding taxes. See “Item 10.E. — Taxation”, for additional information.
B. Significant Changes.
No significant change, other than as otherwise described in this annual report on Form 20-F, has occurred in our operations since the date of our consolidated financial statements included in this annual report on Form 20-F.
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ITEM 9. THE OFFER AND LISTING
A. Offer and Listing Details.
Our Ordinary Shares are listed on Nasdaq under the symbol “BNRG” since May 25, 2022.
B. Plan of Distribution.
Not applicable.
C. Markets.
Our Ordinary Shares are listed on the Nasdaq Capital Market.
D. Selling Shareholders.
Not applicable.
E. Dilution.
Not applicable.
F. Expenses of the Issue.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
A. Share Capital.
Not applicable.
B. Memorandum and Articles of Association.
A copy of our amended and restated articles of association is attached as Exhibit 1.1 to this annual report. The information called for by this Item is set forth in Exhibit 1.1 to this annual report and is incorporated by reference into this annual report.
C. Material Contracts.
We have not entered into any material contract within the two years prior to the date of this annual report, other than contracts entered into in the ordinary course of business, as otherwise described herein in “Item 4.A. History and Development of the Company” above, “Item 4.B. Business Overview” above, “Item 6.C Board Practices - Indemnification,” “Item 6.E Share Ownership - Equity Incentive Plan,” “Item 7.A. Major Shareholders,” or “Item 7.B. Related Party Transactions,” above, or as otherwise described below:
D. Exchange Controls.
There are currently no Israeli currency control restrictions on payments of dividends or other distributions with respect to our Ordinary Shares or the proceeds from the sale of the shares, except for the obligation of Israeli residents to file reports with the Bank of Israel regarding certain transactions. However, legislation remains in effect pursuant to which currency controls can be imposed by administrative action at any time.
The ownership or voting of our Ordinary Shares by non-residents of Israel, except with respect to citizens of countries that are in a state of war with Israel, is not restricted in any way by our memorandum of association or amended and restated articles of association or by the laws of the State of Israel.
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E. Taxation.
Israeli Tax Considerations and Government Programs
The following is a description of the material Israeli income tax consequences of the ownership of our Ordinary Shares. The following also contains a description of material relevant provisions of the current Israeli income tax structure applicable to companies in Israel, with reference to its effect on us. To the extent that the discussion is based on new tax legislation which has not been subject to judicial or administrative interpretation, there can be no assurance that the tax authorities will accept the views expressed in the discussion in question. The discussion is not intended, and should not be taken, as legal or professional tax advice and is not exhaustive of all possible tax considerations.
The following description is not intended to constitute a complete analysis of all tax consequences relating to the ownership or disposition of our Ordinary Shares. Shareholders should consult their own tax advisors concerning the tax consequences of their particular situation, as well as any tax consequences that may arise under the laws of any state, local, foreign, or other taxing jurisdiction.
General Corporate Tax Structure in Israel
Israeli companies are generally subject to corporate tax. As of January 2018, the corporate tax rate is 23%. However, the effective tax rate payable by a company that derives income from a “Preferred Enterprise” (as discussed below) may be considerably less.
Capital gains derived by an Israeli resident company are subject to tax at the prevailing corporate tax rate. Under Israeli tax legislation, a corporation will be considered as an “Israeli resident company” if it meets one of the following: (i) it was incorporated in Israel; or (ii) the control and management of its business are exercised in Israel.
The Encouragement of Industry (Taxes) Law, 5729-1969
The Encouragement of Industry (Taxes) Law, 5729-1969, generally referred to as the Industry Encouragement Law, provides several tax benefits for industrial companies, or Industrial Companies.
The Industry Encouragement Law defines an “Industrial Company” as an Israeli resident-company, that was incorporated in Israel, of which 90% or more of its income in a tax year, other than income from defense loans, is derived from an “Industrial Enterprise” owned by it located in Israel or in the “Area”, in accordance with the definition under section 3A of the Income Tax Ordinance (New Version), 1961. An “Industrial Enterprise” is defined as an enterprise whose principal activity in a given tax year is industrial production.
The following corporate tax benefits, among others, are available to Industrial Companies:
| ● | amortization of the cost of purchasing a patent, rights to use a patent, and know-how, which are used for the development or advancement of the company, over an eight-year period, commencing on the year in which such rights were first exercised; | |
| ● | under limited conditions, an election to file consolidated tax returns with related Israeli Industrial Companies; | |
| ● | expenses related to a public offering are deductible in equal amounts over three years; and | |
| ● | accelerated depreciation rated on certain equipment and buildings. |
Eligibility for benefits under the Industry Encouragement Law is not contingent upon approval of any governmental authority.
It is possible that the Company may fail to qualify or may not continue to qualify as an “Industrial Company” or that the benefits described above will not be available in the future.
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Grants for Research and Development
Under the Israeli Encouragement of Research, Development and Industrial Initiative Technology Law, 5744-1984, as amended, and related regulations, or the Research Law, research and development programs that meet specified criteria and are approved by the IIA are eligible for grants of up to 50% of the project’s expenditure, as determined by the research committee, in exchange for the payment of royalties from the revenues generated from the sale of products and related services developed, in whole or in part pursuant to, or as a result of, a research and development program funded by the IIA. The royalties are generally at a range of 3.0% to 5.0% of revenues until the entire IIA grant is repaid, together with relevant interest. Under IIA regulations, grants received before June 30, 2017, bear the annual interest rate that applied at the time of the approval of the applicable IIA file which will apply to all of the funding received under such IIA approval. Grants received from the IIA after June 30, 2017, bear an annual interest rate based on the 12-month SOFR, or at an alternative rate published by the Bank of Israel plus 0.71513%. Grants approved after January 1, 2024, shall bear the higher interest rate of (i) 12 months SOFR, plus 1%, or (ii) a fixed annual interest rate of 4%.
The terms of the Research Law also require that the manufacture of products developed with government grants be performed in Israel unless the IIA approved otherwise in the original approval letter of the funded program. The transfer of manufacturing activity outside Israel which was not originally approved in the approval letter is subject to the prior approval of the IIA. Under the regulations of the Research Law, assuming we receive approval from the IIA to manufacture our IIA-funded products outside Israel, we may be required to pay increased royalties. The increase in royalties depends upon the manufacturing volume that is performed outside of Israel as follows:
| Percentage of manufacturing activities performed outside of Israel, cumulatively | The increased payment to the IIA | |
| Up to 50% | 120% of the received grants + interest | |
| 50% - 90% | 150% of the received grants + interest | |
| 90% or more | 300% of the received grants + interest |
If the manufacturing is performed outside of Israel by us, the rate of royalties payable by us on revenues from the sale of products manufactured outside of Israel will increase by 1% over the regular rates. If the manufacturing is performed outside of Israel by a third party, the rate of royalties payable by us on those revenues will be equal to the ratio obtained by dividing the amount of the grants received from the Office of the IIA and our total investment in the project that was funded by these grants. The transfer of no more than 10% of the manufacturing capacity in the aggregate outside of Israel is exempt under the Research Law from obtaining the prior approval of the IIA, however, the Company is required to notify the IIA regarding such transfer. A company requesting funds from the IIA also has the option of declaring in its IIA grant application an intention to perform part of its manufacturing outside Israel, thus avoiding the need to obtain additional approval. On January 6, 2011, the Research Law was amended to clarify that the potential increased royalties specified in the table above will apply even in those cases where the IIA approval for transfer of manufacturing outside of Israel is not required, namely when the volume of the transferred manufacturing capacity is less than 10% of total capacity or when the company received an advance approval to manufacture abroad in the framework of its IIA grant application. For applications to manufacture abroad submitted to the IIA after October 25, 2023, the maximum increased payment has been reduced to 150% of the IIA grants, plus interest accrued thereon, from 300% plus interest accrued thereon.
The know-how developed within the framework of the IIA plan may not be transferred to parties outside Israel without the prior approval of a governmental committee charted under the Research Law. The approval, however, is not required for the export of any products developed using grants received from the IIA. The IIA approval to transfer know-how created, in whole or in part, in connection with an IIA-funded project to a party outside Israel where the transferring company remains an operating Israeli entity is subject to payment of a redemption fee to the IIA calculated according to a formula provided under the Research Law that is based, in general, on the ratio between the aggregate IIA grants to the company’s aggregate investments in the project that was funded by these IIA grants, multiplied by the transaction consideration, or the Basic Account. The transfer of such know-how to a party outside Israel where the transferring company ceases to exist as an Israeli entity is subject to a redemption fee formula that is based, in general, on the ratio between the aggregate IIA grants received by the company and the company’s aggregate research & development expenses, multiplied by the transaction consideration. The maximum amount payable to the IIA in case of transfer of know-how outside Israel shall not exceed six times the value of the grants received plus interest minus the royalties paid, with a possibility to reduce such payment to up to three times the value of the grants received plus interest if it is demonstrated, to the satisfaction of the IIA, that the recipient of the know-how will keep at least 75% of the research& development activity in Israel for a period of three years after payment to the IIA and retain at least 75% of the research and development employees who were at the Company at least 6 months before the know-how was transferred, subject to additional conditions specified in the regulations.
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Transfer of know-how within Israel is subject to an undertaking of the recipient Israeli entity to comply with the provisions of the Research Law and related regulations, including the restrictions on the transfer of know-how and the obligation to pay royalties, as further described in the Research Law and related regulations.
These restrictions may impair our ability to outsource manufacturing, engage in change of control transactions or otherwise transfer our know-how outside Israel and may require us to obtain the approval of the IIA for certain actions and transactions and pay additional royalties to the IIA. In particular, 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 Research Law, requires a prior written notice to the IIA in addition to any payment that may be required of us for transfer of manufacturing or know-how outside Israel. If we fail to comply with the Research Law, we may be subject to criminal charges or liable to the mandatory repayment of grants received by us (together with interest and penalties).
The Research Law defines an “interested party” as a non-Israeli citizen or resident who holds 5% or more of the shares or voting rights of the Company. Section 47B of the Research Law empowers the IIA to impose financial sanctions on the Company for failure to provide the required prior notification if such notification is not filed within 45 days following the Company’s receipt of a written notice from the IIA of the Company’s failure to provide such notification or for the Company’s failure to provide the IIA with any requested information. Such financial sanctions range from NIS 6,000 (approximately $1,880) for the Company’s failure to provide the required notice of an investor becoming an “interested party” and NIS 24,000 (approximately $7,525) for the Company’s failure to provide the IIA with such requested information. While persons becoming interested parties are also required to provide prior notice to the IIA, the Research Law does not contain provisions empowering the IIA to impose sanctions or other penalties on persons who fail to provide the required notification to the IIA. Other than providing the required notification prior to becoming an “interested party”, such persons do not have any ongoing obligations under the Research Law and are not required to provide the Company with any citizenship or residency information in connection with the IIA notification. Therefore, we believe that no direct material risk exists to investors from non-compliance with the notification obligations under the Research Law.
The Company will provide the IIA with prior written notice in connection with any change of control event and any change of ownership of the Ordinary Shares that would make a non-Israeli citizen or resident an “interested party” in the future.
Tax Benefits for Research and Development
Israeli tax law allows, under certain conditions, a tax deduction for expenditures, including capital expenditures, for the year in which they are incurred. Expenditures are deemed related to scientific research and development projects, if:
| ● | The expenditures are approved by the relevant Israeli government ministry, determined by the field of research; |
| ● | The research and development must be for the promotion of the company; and |
| ● | The research and development are carried out by or on behalf of the company seeking such tax deduction. |
The amount of such deductible expenses is reduced by the sum of any funds received through government grants for the finance of such scientific research and development projects. No deduction under these research and development deduction rules is allowed if such deduction is related to an expense invested in an asset depreciable under the general depreciation rules of the Tax Ordinance. Expenditures not so approved are deductible in equal amounts over three years.
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From time to time, we may apply the IIA for approval to allow a tax deduction for all research and development expenses during the year incurred. There can be no assurance that such an application will be accepted.
Encouragement of Capital Investments Law, 5719-1959
The Law for the Encouragement of Capital Investments, 1959, or the Investment Law, provides certain incentives for capital investments in production facilities (or other eligible assets) by “Industrial Enterprises” (as defined under the Investment Law). The benefits available under the Investment Law are subject to the fulfillment of conditions stipulated therein. If a company does not meet these conditions, it may be required to refund the amount of tax benefits, as adjusted by the Israeli consumer price index, interest, or other monetary penalties.
Taxation of our Shareholders
Under Section 97(b3) of the Income Tax Ordinance, or ITO, foreign residents are generally exempted from Israeli capital gains tax upon the sale of securities acquired by the seller following December 31, 2008, which were issued by an Israeli resident company if the following conditions are met:
| ● | The capital gain is not attributable to a “permanent establishment” in Israel of the foreign resident seller; |
| ● | The securities were not acquired by the foreign resident seller from a relative (as defined under Section 88 of the ITO), and the provisions of Part E2 of the ITO (i.e., tax-exempt reorganizations) and Section 70 of the Real Estate Taxation Law (i.e., tax-exempt share issuances in real estate associations) do not apply to the securities. |
| ● | The securities were not traded on a stock exchange in Israel at the time of the sale; and at the time the securities were acquired by the foreign resident sellers and during the two years preceding the foreign resident sellers’ disposition of the securities, the majority (i.e., more than 50%) of the value of the assets held by the company, directly or indirectly, was not sourced from one or more of the following: |
| 1. | A right in real estate in Israel or in an Israeli Real Estate Association, each as defined under the Real Estate Taxation Law, and including any other right in Israeli real estate as defined under the Real Estate Law, 1969; |
| 2. | A usage right in Israeli real estate or in any asset attached to real estate in Israel; |
| 3. | A right to exploit natural resources in Israel; |
| 4. | Right to the fruits (i.e., income) from real estate located in Israel. |
Additionally, a sale of securities by a non-Israeli resident may be exempt from Israeli capital gains tax under the provisions of an applicable tax treaty subject to receipt in advance of valid certificate from the ITA. For example, under Convention Between the Government of the United States of America and the Government of the State of Israel with respect to Taxes on Income, as amended, or the United States-Israel Tax Treaty, the sale, exchange or other disposition of shares by a shareholder who is a United States resident (for purposes of the treaty) holding the shares as a capital asset and is entitled to claim the benefits afforded to such a resident by the United States-Israel Tax Treaty, or a Treaty U.S. Resident, is generally exempt from Israeli capital gains tax unless: (i) the capital gain arising from such sale, exchange or disposition is attributed to real estate located in Israel; (ii) the capital gain arising from such sale, exchange or disposition is attributed to royalties; (iii) the capital gain arising from the such sale, exchange or disposition is attributed to a permanent establishment in Israel, under certain terms; (iv) such Treaty U.S. Resident holds, directly or indirectly, shares representing 10% or more of the voting capital during any part of the 12-month period preceding the disposition, subject to certain conditions; or (v) such Treaty U.S. Resident is an individual and was present in Israel for 183 days or more during the relevant taxable year.
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In some instances where our shareholders may be liable for Israeli tax on the sale of their Ordinary Shares, the payment of the consideration may be subject to the withholding of Israeli tax at source. Shareholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale.
Taxation of Non-Israeli Shareholders on Receipt of Dividends. Non-Israeli residents are generally subject to Israeli income tax on the receipt of dividends paid on our Ordinary Shares at the rate of 25% (before surtax on individuals that can be 5% above certain threshold on dividend distributed after January 1, 2025), which tax will be withheld at source, unless relief is provided in a treaty between Israel and the shareholder’s country of residence. With respect to a person who is a “substantial shareholder” at the time of receiving the dividend or on any time during the preceding twelve months, the applicable tax rate is 30% (before surtax that can be 5% above certain threshold on dividend distributed after January 1, 2025). A “substantial shareholder” is generally a person who alone or together with such person’s relative or another person who collaborates with such person on a permanent basis, holds, directly or indirectly, at least 10% of any of the “means of control” of the corporation. “Means of control” generally include the right to vote, receive profits, nominate a director or an executive officer, receive assets upon liquidation, or order someone who holds any of the aforesaid rights how to act, regardless of the source of such right. However, a distribution of dividends to non-Israeli residents is subject to withholding tax at source at a rate of 20% if the dividend is distributed from income attributed to a Preferred Enterprise, unless a reduced tax rate is provided under an applicable tax treaty. For example, under the United States-Israel Tax Treaty, the maximum rate of tax withheld at source in Israel on dividends paid to a holder of our Ordinary Shares who is a Treaty U.S. Resident is 25%. However, generally, the maximum rate of withholding tax on dividends, not generated by a Preferred Enterprise, that are paid to a United States corporation holding 10% or more of the outstanding voting capital throughout the tax year in which the dividend is distributed as well as during the previous tax year, is 12.5%, provided that not more than 25% of the gross income for such preceding year consists of certain types of dividends and interest. Notwithstanding the foregoing, dividends distributed from income attributed to a Preferred Enterprise are not entitled to such reduction under the tax treaty but are subject to a withholding tax rate of 15% for a shareholder that is a U.S. corporation, provided that the condition related to our gross income for the previous year (as set forth in the previous sentence) is met. If the dividend is attributable partly to income derived from a Preferred Enterprise, and partly to other sources of income, the withholding rate will be a blended rate reflecting the relative portions of the two types of income. We cannot assure you that we will designate the profits that we may distribute in a way that will reduce shareholders’ tax liability.
U.S. FEDERAL INCOME TAX CONSIDERATIONS
THE FOLLOWING SUMMARY IS INCLUDED HEREIN FOR GENERAL INFORMATION AND IS NOT INTENDED TO BE, AND SHOULD NOT BE CONSIDERED TO BE, LEGAL OR TAX ADVICE. EACH U.S. HOLDER SHOULD CONSULT WITH HIS OR HER OWN TAX ADVISOR AS TO THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP, AND SALE OF ORDINARY SHARES, INCLUDING THE EFFECTS OF APPLICABLE STATE, LOCAL, FOREIGN OR OTHER TAX LAWS AND POSSIBLE CHANGES IN THE TAX LAWS.
Subject to the limitations described in the next paragraph, the following discussion summarizes the material U.S. federal income tax consequences to a “U.S. Holder” arising from the purchase, ownership, and sale of our Ordinary Shares. For this purpose, a “U.S. Holder” is a holder of our Ordinary Shares that is: (1) an individual citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States or meets the substantial presence residency test under U.S. federal income tax laws; (2) a corporation (or entity treated as a corporation for U.S. federal income tax purposes) or a partnership (other than a partnership that is not treated as a U.S. person under any applicable U.S. Treasury regulations) created or organized under the laws of the United States or the District of Columbia or any political subdivision thereof; (3) an estate, the income of which is includable in gross income for U.S. federal income tax purposes regardless of source; (4) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust; or (5) a trust that has a valid election in effect to be treated as a U.S. person to the extent provided in U.S. Treasury regulations.
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This summary is for general information purposes only and does not purport to be a comprehensive description of all of the U.S. federal income tax considerations that may be relevant to a decision to purchase our Ordinary Shares. This summary generally considers only U.S. Holders that will own our Ordinary Shares as capital assets. Except to the limited extent discussed below, this summary does not consider the U.S. federal tax consequences to a person that is not a U.S. Holder, nor does it describe the rules applicable to determine a taxpayer’s status as a U.S. Holder. This summary is based on the provisions of the Internal Revenues Code of 1986, as amended, or the Code, final, temporary and proposed U.S. Treasury regulations promulgated thereunder, administrative and judicial interpretations thereof, (including with respect to the Tax Cuts and Jobs Act of 2017), and the U.S.-Israel Income Tax Treaty, all as in effect as of the date hereof and all of which are subject to change, possibly on a retroactive basis, and all of which are open to differing interpretations. We will not seek a ruling from the IRS with regard to the U.S. federal income tax treatment of an investment in our Ordinary Shares by U.S. Holders and, therefore, can provide no assurances that the IRS will agree with the conclusions set forth below.
This discussion does not address all of the aspects of U.S. federal income taxation that may be relevant to a particular U.S. holder based on such holder’s particular circumstances and in particular does not discuss any estate, gift, generation-skipping, transfer, state, local, excise or foreign tax considerations. In addition, this discussion does not address the U.S. federal income tax treatment of a U.S. Holder who is: (1) a bank, life insurance company, regulated investment company, or other financial institution or “financial services entity;” (2) a broker or dealer in securities or foreign currency; (3) a person who acquired our Ordinary Shares in connection with employment or other performance of services; (4) a U.S. Holder that is subject to the United States alternative minimum tax; (5) a U.S. Holder that holds our Ordinary Shares as a hedge or as part of hedging, straddle, conversion or constructive sale transaction or other risk-reduction transaction for U.S. federal income tax purposes; (6) a tax-exempt entity; (7) real estate investment trusts or grantor trusts; (8) a U.S. Holder that expatriates out of the United States or a former long-term resident of the United States; or (9) a person having a functional currency other than the dollar. This discussion does not address the U.S. federal income tax treatment of a U.S. Holder that owns, directly or constructively, at any time, our Ordinary Shares representing 10% or more of our voting power. Additionally, the U.S. federal income tax treatment of partnerships (or other pass-through entities) or persons who hold our Ordinary Shares through a partnership or other pass-through entity is not addressed.
Each prospective investor is advised to consult his or her own tax adviser for the specific tax consequences to that investor of purchasing, holding or disposing of our Ordinary Shares, including the effects of applicable state, local, foreign or other tax laws and possible changes in the tax laws.
Taxation of Dividends Paid on Ordinary Shares
We do not intend to pay dividends in the foreseeable future. In the event that we do pay dividends, and subject to the discussion under the heading “Passive Foreign Investment Companies” below and the discussion of “qualified dividend income” below, a U.S. Holder, other than certain U.S. Holder’s that are United States corporations, will be required to include in gross income as ordinary income the amount of any distribution paid on our Ordinary Shares (including the amount of any Israeli tax withheld on the date of the distribution), to the extent that such distribution does not exceed our current and accumulated earnings and profits, as determined for U.S. federal income tax purposes. The amount of a distribution that exceeds our earnings and profits will be treated first as a non-taxable return of capital, reducing the U.S. Holder’s tax basis for the Ordinary Shares to the extent thereof, and then capital gain. We do not expect to maintain calculations of our earnings and profits under U.S. federal income tax principles and, therefore, U.S. Holders should expect that the entire amount of any distribution generally will be reported as dividend income.
In general, preferential tax rates for “qualified dividend income” and long-term capital gains are applicable for U.S. Holders that are individuals, estates, or trusts. For this purpose, “qualified dividend income” means, inter alia, dividends received from a “qualified foreign corporation.” A “qualified foreign corporation” is a corporation that is entitled to the benefits of a comprehensive tax treaty with the United States which includes an exchange of information program. The IRS has stated that the U.S.-Israel Tax Treaty satisfies this requirement and we believe we are eligible for the benefits of that treaty.
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In addition, our dividends will be qualified dividend income if our Ordinary Shares are readily tradable on Nasdaq or another established securities market in the United States. Dividends will not qualify for the preferential rate if we are treated, in the year the dividend is paid or in the prior year, as a PFIC, as described below under “Passive Foreign Investment Companies.” A U.S. Holder will not be entitled to the preferential rate: (1) if the U.S. Holder has not held our Ordinary Shares for at least 61 days of the 121-day period beginning on the date which is 60 days before the ex-dividend date, or (2) to the extent the U.S. Holder is under an obligation to make related payments on substantially similar property. Any days during which the U.S. Holder has diminished its risk of loss on our Ordinary Shares are not counted towards meeting the 61-day holding period. Finally, U.S. Holders who elect to treat the dividend income as “investment income” pursuant to Code section 163(d)(4) will not be eligible for the preferential rate of taxation.
The amount of a distribution with respect to our Ordinary Shares will be measured by the amount of the fair market value of any property distributed, and for U.S. federal income tax purposes, the amount of any Israeli taxes withheld therefrom. Cash distributions paid by us in NIS will be included in the income of U.S. Holders at a dollar amount based upon the spot rate of exchange in effect on the date the dividend is includible in the income of the U.S. Holder, and U.S. Holders will have a tax basis in such NIS for U.S. federal income tax purposes equal to such dollar value. If the U.S. Holder subsequently converts NIS into dollars or otherwise disposes of it, any subsequent gain or loss in respect of such NIS arising from exchange rate fluctuations will be United States source ordinary exchange gain or loss.
Taxation of the Disposition of Ordinary Shares
Except as provided under the PFIC rules described below under “Passive Foreign Investment Companies,” upon the sale, exchange or other disposition of our Ordinary Shares, a U.S. Holder will recognize capital gain or loss in an amount equal to the difference between such U.S. Holder’s tax basis for the Ordinary Shares in dollars and the amount realized on the disposition in dollar (or its dollar equivalent determined by reference to the spot rate of exchange on the date of disposition, if the amount realized is denominated in a foreign currency). The gain or loss realized on the sale, exchange or other disposition of our Ordinary Shares will be long-term capital gain or loss if the U.S. Holder has a holding period of more than one year at the time of the disposition. Individuals who recognize long-term capital gains may be taxed on such gains at reduced rates of tax. The deduction of capital losses is subject to various limitations.
Passive Foreign Investment Companies
Special U.S. federal income tax laws apply to United States taxpayers who own shares of a corporation that is a PFIC. We will be treated as a PFIC for U.S. federal income tax purposes for any taxable year that either:
| ● | 75% or more of our gross income (including our pro-rata share of gross income for any company, in which we are considered to own 25% or more of the shares by value), in a taxable year is passive; or |
| ● | At least 50% of our assets, averaged over the year and generally determined based upon fair market value (including our pro-rata share of the assets of any company in which we are considered to own 25% or more of the shares by value) are held for the production of, or produce, passive income. |
For this purpose, passive income generally consists of dividends, interest, rents, royalties, annuities and income from certain commodities transactions and from notional principal contracts. Cash is treated as generating passive income.
The tests for determining PFIC status are applied annually, and it is difficult to make accurate projections of future income and assets which are relevant to this determination. In addition, our PFIC status may depend in part on the market value of our Ordinary Shares. Accordingly, there can be no assurance that we currently are not or will not become a PFIC.
If we currently are or become a PFIC, each U.S. Holder who has not elected to mark the shares to market (as discussed below), would, upon receipt of certain distributions by us and upon disposition of our Ordinary Shares at a gain: (1) have such distribution or gain allocated ratably over the U.S. Holder’s holding period for the Ordinary Shares, as the case may be; (2) the amount allocated to the current taxable year and any period prior to the first day of the first taxable year in which we were a PFIC would be taxed as ordinary income; and (3) the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. In addition, when shares of a PFIC are acquired by reason of death from a decedent that was a U.S. Holder, the tax basis of such shares would not receive a step-up to fair market value as of the date of the decedent’s death, but instead would be equal to the decedent’s basis if lower, unless all gain was recognized by the decedent. Indirect investments in a PFIC may also be subject to these special U.S. federal income tax rules.
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The PFIC rules described above would not apply to a U.S. Holder who makes a QEF election for all taxable years that such U.S. Holder has held our Ordinary Shares while we are a PFIC, provided that we comply with specified reporting requirements. Instead, each U.S. Holder who has made such a QEF election is required for each taxable year that we are a PFIC to include in income such U.S. Holder’s pro-rata share of our ordinary earnings as ordinary income and such U.S. Holder’s pro-rata share of our net capital gains as long-term capital gain, regardless of whether we make any distributions of such earnings or gain. In general, a QEF election is effective only if we make available certain required information. The QEF election is made on a shareholder-by-shareholder basis and generally may be revoked only with the consent of the IRS. We do not intend to notify U.S. Holders if we believe we will be treated as a PFIC for any tax year. In addition, we do not intend to furnish U.S. Holders annually with information needed in order to complete IRS Form 8621 and to make and maintain a valid QEF election for any year in which we or any of our subsidiaries are a PFIC. Therefore, the QEF election will not be available with respect to our Ordinary Shares.
In addition, the PFIC rules described above would not apply if we were a PFIC and a U.S. Holder made a mark-to-market election. A U.S. Holder of our Ordinary Shares which are regularly traded on a qualifying exchange, including Nasdaq, can elect to mark the Ordinary Shares to market annually, recognizing as ordinary income or loss each year an amount equal to the difference as of the close of the taxable year between the fair market value of our Ordinary Shares and the U.S. Holder’s adjusted tax basis in our Ordinary Shares. Losses are allowed only to the extent of net mark-to-market gain previously included income by the U.S. Holder under the election for prior taxable years.
U.S. Holders who hold our Ordinary Shares during a period when we are a PFIC will be subject to the foregoing rules, even if we cease to be a PFIC. U.S. Holders are strongly urged to consult their tax advisors about the PFIC rules.
Tax on Net Investment Income
U.S. Holders who are individuals, estates or trusts will generally be required to pay a 3.8% Medicare tax on their net investment income (including dividends on and gains from the sale or other disposition of our Ordinary Shares), or in the case of estates and trusts on their net investment income that is not distributed. In each case, the 3.8% Medicare tax applies only to the extent the U.S. Holder’s total adjusted income exceeds applicable thresholds.
Tax Consequences for Non-U.S. Holders of Ordinary Shares
Except as provided below, an individual, corporation, estate or trust that is not a U.S. Holder referred to below as a non-U.S. Holder, generally will not be subject to U.S. federal income or withholding tax on the payment of dividends on, and the proceeds from the disposition of, our Ordinary Shares.
A non-U.S. Holder may be subject to U.S. federal income tax on a dividend paid on our Ordinary Shares or gain from the disposition of our Ordinary Shares if: (1) such item is effectively connected with the conduct by the non-U.S. Holder of a trade or business in the United States and, if required by an applicable income tax treaty is attributable to a permanent establishment or fixed place of business in the United States; or (2) in the case of a disposition of our Ordinary Shares, the individual non-U.S. Holder is present in the United States for 183 days or more in the taxable year of the disposition and other specified conditions are met.
In general, non-U.S. Holders will not be subject to backup withholding with respect to the payment of dividends on our Ordinary Shares if payment is made through a paying agent or office of a foreign broker outside the United States. However, if payment is made in the United States or by a United States-related person, non-U.S. Holders may be subject to backup withholding unless the non-U.S. Holder provides an applicable IRS Form W-8 (or a substantially similar form) certifying its foreign status or otherwise establishes an exemption.
The amount of any backup withholding from a payment to a non-U.S. Holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.
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Information Reporting and Withholding
A U.S. Holder may be subject to backup withholding at a rate of 24% with respect to cash dividends and proceeds from a disposition of our Ordinary Shares. In general, backup withholding will apply only if a U.S. Holder fails to comply with specified identification procedures. Backup withholding will not apply with respect to payments made to designated exempt recipients, such as corporations and tax-exempt organizations. Backup withholding is not an additional tax and may be claimed as a credit against the U.S. federal income tax liability of a U.S. Holder, provided that the required information is timely furnished to the IRS.
Pursuant to recently enacted legislation, a U.S. Holder with interests in “specified foreign financial assets” (including, among other assets, our Ordinary Shares, unless such Ordinary Shares are held on such U.S. Holder’s behalf through a financial institution) may be required to file an information report with the IRS if the aggregate value of all such assets exceeds $50,000 on the last day of the taxable year or $75,000 at any time during the taxable year (or such higher dollar amount as may be prescribed by applicable IRS guidance); and may be required to file a Report of Foreign Bank and Financial Accounts if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. You should consult your own tax advisor as to the possible obligation to file such information report.
F. Dividends and Paying Agents
Not applicable.
G. Statement by Experts
Not applicable.
H. Documents on Display
We are subject to certain information reporting requirements of the Exchange Act, applicable to foreign private issuers and under those requirements will file reports with the SEC. The SEC maintains an Internet website that contains reports and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are also available to the public through the SEC’s website at www.sec.gov.
We are an Israeli company and are a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act. We are subject to the informational requirements of the Exchange Act applicable to foreign private issuers. As a “foreign private issuer,” we are exempt from the rules under the Exchange Act prescribing certain disclosure and procedural requirements for proxy solicitations, and until March 18, 2026, our officers and directors, are exempt, and our principal shareholders will continue to be exempt, from the reporting provisions contained in Section 16 of the Exchange Act. Further, our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
We maintain a corporate website at https://bren-energy.com/. Information contained on, or that can be accessed through, our website and the other websites referenced above do not constitute a part of this annual report on Form 20-F. We have included these website addresses in this annual report on Form 20-F solely as inactive textual references.
I. Subsidiary Information.
Not applicable.
J. Annual Report to Security Holders.
Not applicable.
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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the ordinary course of our operations, we are exposed to certain market risks, primarily changes in foreign currency exchange rates. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Currently, a substantial majority of our cash is held in our operating cash bank account. Our market risk exposure is primarily a result of foreign currency exchange rates, which is discussed in the following paragraph.
Foreign Exchange Risk
Our results of operations and cash flow are subject to fluctuations due to changes in currency exchange rates between the NIS and the dollar or euro. A certain portion of our liquid assets are held in dollars, and the vast majority of our expenses are denominated in NIS. For instance, during the year ended December 31, 2025, approximately 72% of our expenses were denominated in NIS. A change of 5% and 10% in the exchange rate of the NIS to the dollar and euro would change our operating expenses for the year ended December 31, 2025 by approximately 1% and 3%, respectively. However, these historical figures may not be indicative of future exposure. Currently, we do not hedge our foreign currency exchange risk. In the future, we may enter into formal currency hedging transactions to decrease the risk of financial exposure from fluctuations in the exchange rates of our principal operating currencies. These measures, however, may not adequately protect us from the material adverse effects of such fluctuations.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. Debt Securities.
Not applicable.
B. Warrants and rights.
Not applicable.
C. Other Securities.
Not applicable.
D. American Depositary Shares
Not applicable.
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not applicable.
ITEM 15. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2025, or the Evaluation Date. Based on such evaluation, those officers have concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be included in periodic filings under the Exchange Act and that such information is accumulated and communicated to management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based principally on the framework and criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission as of the end of the period covered by this report. Based on that evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2025, at providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
(c) Attestation Report of the Registered Public Accounting Firm
This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting due to an exemption for Emerging Growth Companies provided in the JOBS Act.
(d) Changes in Internal Control over Financial Reporting
During the year ended December 31, 2025, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16. [RESERVED]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our audit committee is comprised of Ms. Orna Ben Yosef, Mr. Zvi Joseph and Mr. Boaz Toshav, each of whom is “independent,” as such term is defined in under Nasdaq Stock Market rules. Ms. Orna Ben Yosef serves as the Chairperson of our audit committee. All members of our audit committee meet the requirements for financial literacy under the Nasdaq Stock Market rules. Our board of directors has determined that each member of our audit committee is an audit committee financial expert as defined by the SEC rules and has the requisite financial experience as defined by the Nasdaq Stock Market rules.
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ITEM 16B. CODE OF ETHICS
We have adopted a written code of ethics that applies to our officers and employees, including our principal executive officer, principal financial officer, principal controller and persons performing similar functions as well as our directors. Our Code of Business Conduct and Ethics is posted on our website at www.bren-energy.com/. Information contained on, or that can be accessed through, our website does not constitute a part of this annual report on Form 20-F and is not incorporated by reference herein. If we make any amendment to the Code of Business Conduct and Ethics or grant any waivers, including any implicit waiver, from a provision of the code, we will disclose the nature of such amendment or waiver on our website to the extent required by the rules and regulations of the SEC including the instructions to Item 16B of Form 20-F. We have not granted any waivers under our Code of Business Conduct and Ethics.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited, has served as our principal independent registered public accounting firm for each of the two years ended December 31, 2025 and 2024.
The following table provides information regarding fees paid by us to Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited, including audit services, for the years ended December 31, 2025 and 2024.
| Year Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Audit fees (1) | $ | 124,000 | $ | 143,499 | ||||
| Audit-related fees (2) | 77,500 | 84,000 | ||||||
| Tax fees(3) | 1,473 | 1,688 | ||||||
| All other fees | - | - | ||||||
| Total | $ | 202,973 | $ | 229,187 | ||||
| (1) | Includes professional services rendered in connection with the audit of our annual financial statements and review of our interim financial statements. |
| (2) | Includes professional services rendered in connection with the fees relating to our private placements. All of the services provided were approved by our board of directors. Pursuant to the regulations promulgated under the Israeli Companies Law, pre-approval of audit fees is only mandatory for a public company. |
| (3) | Tax fees are the aggregate fees billed (in the year) for professional services rendered for tax compliance and tax advice other than in connection with the audit. |
Pre-Approval of Auditors’ Compensation
Our audit committee charter sets forth, among others, the responsibilities of the audit committee consistent with the rules of the SEC and Nasdaq Listing Rules (in addition to the requirements for such committee under the Companies Law), including, among others, the following:
| ● | oversight of our independent registered public accounting firm and recommending the engagement, compensation or termination of engagement of our independent registered public accounting firm to the board of directors in accordance with Israeli law; |
| ● | recommending the engagement or termination of the person filling the office of our internal auditor, reviewing the services provided by our internal auditor and reviewing effectiveness of our system of internal control over financial reporting; |
| ● | recommending the terms of audit and non-audit services provided by the independent registered public accounting firm for pre-approval by our board of directors; and |
| ● | reviewing and monitoring, if applicable, legal matters with significant impact, finding of regulatory authorities’ findings, receive reports regarding irregularities and legal compliance, acting according to “whistleblower policy” and recommend to our board of directors if so required. |
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
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ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Not applicable.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
Under Nasdaq rules, we may elect to follow certain corporate governance practices permitted under the Companies Law in lieu of compliance with corresponding corporate governance requirements otherwise imposed by the Nasdaq Stock Market rules for U.S. domestic issuers.
In accordance with Israeli law and practice and subject to the exemption set forth in Rule 5615 of the Nasdaq Stock Market rules, we have elected to follow the provisions of the Companies Law, rather than the Nasdaq Stock Market rules, with respect to the following requirements:
| ● | Distribution of periodic reports to shareholders; proxy solicitation. As opposed to the Nasdaq Stock Market rules, which require listed issuers to make such reports available to shareholders in one of a number of specific manners, Israeli law does not require us to distribute periodic reports directly to shareholders, and the generally accepted business practice in Israel is not to distribute such reports to shareholders but to make such reports available through a public website. In addition to making such reports available on a public website, we currently make our audited consolidated financial statements available to our shareholders at our offices and will only mail such reports to shareholders upon request. As a foreign private issuer, we are generally exempt from the SEC’s proxy solicitation rules. | |
| ● | Quorum. While the Nasdaq Stock Market rules require that the quorum for purposes of any meeting of the holders of a listed company’s common voting stock, as specified in the company’s bylaws, be no less than 33 1/3% of the company’s outstanding common voting stock, under Israeli law, a company is entitled to determine in its articles of association the number of shareholders and percentage of holdings required for a quorum at a shareholders meeting. As permitted under the Companies Law, our amended and restated articles of association provide that a quorum of two (2) or more shareholders, in person or by proxy, holding at least 25% of the voting rights, is required for commencement of business at a general meeting. However, the quorum set forth in our amended and restated articles of association with respect to an adjourned meeting consists of at least one shareholders present in person or by proxy. If the original meeting was convened upon requisition under Section 63 of the Companies Law, one or more Shareholders, present in person or by proxy, and holding the number of shares required for making such requisition, shall constitute a quorum. | |
| ● | Nomination of our directors. With the exception of directors elected by our board of directors and external directors, our directors are elected by an annual or special meeting of our shareholders (i) to hold office until the next annual meeting following his or her election or (ii) for three-year term, as described above under “Management-Board Practices-External Directors.” The nominations for directors, which are presented to our shareholders by our board of directors, are generally made by the board of directors itself, in accordance with the provisions of our amended and restated articles of association and the Companies Law. Nominations need not be made by a nominating committee of our board of directors consisting solely of independent directors, as required under the Nasdaq Stock Market rules. | |
| ● | Compensation of officers. Israeli law and our amended and restated articles of association do not require that the independent members of our board of directors (or a compensation committee composed solely of independent members of our board of directors) determine an executive officer’s compensation, as is generally required under the Nasdaq Stock Market rules with respect to the chief executive officer and all other executive officers. Instead, compensation of executive officers is determined and approved by our compensation committee and our board of directors, and in certain circumstances by our shareholders, either in consistency with our office holder compensation policy or, in special circumstances in deviation therefrom, taking into account certain considerations stated in the Companies Law. See “Item 6.C — Board Practices - Approval of Related Party Transactions under Israeli Law” for additional information. |
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| ● | Shareholder approval. We will seek shareholder approval for all corporate actions requiring such approval under the requirements of the Companies Law, rather than seeking approval for corporation actions in accordance with Nasdaq Listing Rule 5635. In particular, under this Nasdaq Stock Market rule, shareholder approval is generally required for: (i) an acquisition of shares/assets of another company that involves the issuance of 20% or more of the acquirer’s shares or voting rights or if a director, officer or 5% shareholder has greater than a 5% interest in the target company or the consideration to be received; (ii) the issuance of shares leading to a change of control; (iii) adoption/amendment of equity compensation arrangements (although under the provisions of the Companies Law there is no requirement for shareholder approval for the adoption/amendment of the equity compensation plan); and (iv) issuances of 20% or more of the shares or voting rights (including securities convertible into, or exercisable for, equity) of a listed company via a private placement (and/or via sales by directors/officers/5% shareholders) if such equity is issued (or sold) at below the greater of the book or market value of shares. By contrast, under the Companies Law, shareholder approval is required for, among other things: (i) transactions with directors concerning the terms of their service or indemnification, exemption and insurance for their service (or for any other position that they may hold at a company), for which approvals of the compensation committee, board of directors and shareholders are all required, (ii) extraordinary transactions with controlling shareholders of publicly held companies, which require the special approval, and (iii) terms of employment or other engagement of the controlling shareholder of us or such controlling shareholder’s relative, which require special approval. In addition, under the Companies Law, a merger requires approval of the shareholders of each of the merging companies. | |
| ● | Approval of Related Party Transactions. All related party transactions are approved in accordance with the requirements and procedures for approval of interested party acts and transaction as set forth in the Companies Law, which requires the approval of the audit committee, or the compensation committee, as the case may be, the board of directors and shareholders, as may be applicable, for specified transactions, rather than approval by the audit committee or other independent body of our board of directors as required under the Nasdaq Stock Market rules. See “Item 6.C —Board Practices -Approval of Related Party Transactions under Israeli Law” for additional information. | |
| ● | Annual Shareholders Meeting. As opposed to the Nasdaq Stock Market Rule 5620(a), which mandates that a listed company hold its annual shareholders meeting within one year of the company’s fiscal year-end, we are required, under the Companies Law, to hold an annual shareholder meeting each calendar year and within 15 months of the last annual shareholders meeting. |
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
97
ITEM 16J. INSIDER TRADING POLICIES
We have
This policy prohibits, among other things, insider trading and certain speculative transactions in our securities (including in short sales, transactions in put or call options, hedging transactions, margin accounts or other inherently speculative transactions with respect to our shares) and establishes a regular blackout period schedule during which directors, senior management, employees and other covered persons may not trade in our securities, as well as certain pre-clearance procedures that directors and senior management must observe prior to effecting any transaction in our securities.
We believe that our insider trading policy is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and listing standards applicable to us. A copy of this policy is filed as Exhibit 11.1 to this annual report on Form 20-F.
ITEM 16K. CYBERSECURITY.
Our board of directors recognizes the critical importance of maintaining the trust and confidence of our customers, business partners and employees. Our board of directors is guided by stringent regulatory requirements and best practices. Our approach, aligned with the new SEC cybersecurity disclosure requirements and the ISO 27001 and ISO 27002 standards, encompasses a broad spectrum of activities from incident response and risk management to governance, compliance documentation, and continuous improvement. We have established a proactive incident identification and evaluation process, leveraged advanced detection tools and we encourage both internal and external incident reporting. The board of directors is actively involved in oversight of our risk management program, and cybersecurity represents an important component of our overall approach to risk management. Our risk management strategy is thorough and dynamic, incorporating annual risk assessments to identify and mitigate potential cybersecurity threats.
Risk Management and Strategy
Our cybersecurity risk management framework is designed to align with our risk management strategy, through adherence to the ISO:27001:2022 and ISO/IEC 27005:2022 information security, cybersecurity and privacy protection guidance on managing information security risks the standard for information security risk management. This structured approach facilitates the comprehensive identification, assessment, and mitigation of cybersecurity threats, underscoring our commitment to protecting our valuable information.
In our risk management structure, we conduct annual internal risk assessments alongside a significant external evaluation performed by a reputable third party. These internal assessments are crucial for preemptively identifying and mitigating cybersecurity vulnerabilities, spearheaded by our dedicated cybersecurity team. Leading this initiative is the vice president of quality assurance/regulatory affairs (VP QA/RA), who holds certifications in ISO 27001, ISO 27002, ISO 27005, and is a qualified auditor. The VP QA/RA is supported by the IT Manager, ensuring a comprehensive and informed approach to managing cybersecurity risks.
To ensure the integrity of our operations and data, we vet third-party service providers. This includes periodic evaluations of their cybersecurity protocols, a strategy that effectively mitigates potential risks associated with these external entities.
98
Although no past cybersecurity incidents have materially impacted our business strategy, operations, or financial condition, we proactively incorporate potential cybersecurity risks into our risk management framework. This precautionary measure ensures our readiness to address any emergent threats, thereby maintaining the resilience and integrity of our business.
While we have achieved ISO 27001 certification and aligned our information security management system with ISO 27002 standards, cybersecurity and information systems remain subject to evolving threats and operational risks. Our internal computer systems, as well as those of third parties on which we rely, are designed to safeguard data integrity, confidentiality and availability; however, they operate in environments that are exposed to risks such as malware, system failures, natural disasters, telecommunications disruptions and unauthorized access attempts, including insider misuse. We have also begun implementing the ISO 42001 artificial intelligence governance framework to formalize oversight of artificial intelligence systems and related risks. Implementation of ISO 42001 is ongoing and forms part of our broader continuous improvement program. Our cybersecurity governance framework includes monitoring emerging threat vectors, reviewing incident response preparedness, and updating technical and administrative safeguards as new risks and technologies develop. We recognize that threat techniques evolve frequently, and our program is structured to adapt through periodic reassessment, third-party evaluations and board-level oversight.
Through continuous assessment and improvement, guided by international standards and the expertise of a dedicated team, we are committed to addressing cybersecurity to maintain the trust and confidence of our stakeholders.
As part of our comprehensive approach to mitigating cybersecurity risks, we implement several key strategies to enhance our digital security posture:
| ● | Annual awareness training is conducted for all employees to ensure they are informed about the latest cybersecurity threats and best practices. |
| ● | We perform a monthly initiated copy of key servers to Bren PDM, BrenVeeam, Vcenter disks, housed in a secure, fireproof safe that offers redundancy protection against physical damage. |
| ● | The IT department has taken steps to ensure data is doubly safeguarded through these measures. | |
| ● | We have integrated the LANSWEEPER system to continuously monitor and safeguard hardware and software across all of our network segments. |
| ● | Kaspersky antivirus blocks have been deployed via the DOK system for an added layer of security. |
Priority (or ERP system) servers are backed up weekly to a separate offsite location, ensuring that in the event of a data loss, we can recover up to a month’s worth of data, maintaining our operational integrity and mitigate against potential cybersecurity threats.
We engage in the periodic assessment and testing of our policies, standards, and processes that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities, including audits, assessments, tabletop exercises, threat modeling, vulnerability testing, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
99
Governance
Our board of directors oversees our risk management process, including the management of risks arising from cybersecurity threats.
In addition to its oversight of information security aligned with ISO 27001 and ISO 27002 standards, the board is informed of our ongoing implementation of the ISO 42001 artificial intelligence governance framework, which is designed to enhance oversight of artificial intelligence systems and associated risks. Management periodically updates the board on the status of ISO 42001 implementation, artificial intelligence-related risk monitoring, and the integration of AI governance controls into our broader cybersecurity and enterprise risk management framework. The board’s oversight includes review of evolving regulatory expectations, including SEC cybersecurity disclosure requirements and applicable data protection laws, and consideration of how emerging technologies and threat vectors may affect our control environment.
We have implemented a comprehensive Incident Response Plan, or IRP, and Incident Response Management Procedure, ensuring compliance with ISO 27001:2022, NIST standards, and SEC disclosure requirements. The Incident Response Team, or IRT, led by senior management, oversees cybersecurity incidents, mitigation efforts, and business continuity. The Incident Management Team, or IMT, is responsible for overseeing the response process, including containment, coordination, and resolution. Key personnel include the Information Technology Officer, Chief Operations Officer, our legal counsel, and VP QA/RA as the Incident Response Manager. Our IT and Security Teams is responsible for implementing technical controls for containment and eradication, our legal and compliance team ensures that incidents are reported in accordance with applicable law and regulations, and the communications/IR team would manage public and internal communications regarding the incident. We perform automated monitoring, a 24/7 reporting system, and structured escalation based on severity. Upon detection, incidents are contained, investigated, and reported as required, with secure forensic evidence collection. Post-incident reviews ensure continuous improvement, with quarterly testing and annual updates to address emerging threats. This structured approach ensures effective risk mitigation, regulatory compliance, and operational resilience.
Neither cybersecurity threats nor any previous cybersecurity incidents have materially affected or are reasonably likely to affect us, including its business strategy, results of operations or financial condition.
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PART III
ITEM 17. FINANCIAL STATEMENTS
We have elected to provide financial statements and related information pursuant to Item 18.
ITEM 18. FINANCIAL STATEMENTS
The consolidated financial statements and the related notes required by this Item are included in this annual report on Form 20-F beginning on page F-1.
ITEM 19. EXHIBITS.
101
| * | Filed herewith. |
| % | Furnished herewith. |
| + | Management contract or compensatory plan or arrangement. |
102
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on Form 20-F filed on its behalf.
| Brenmiller Energy Ltd. | ||
| Date: March 25, 2026 | By: | /s/ Avraham Brenmiller |
| Avraham Brenmiller | ||
| Chief Executive Officer | ||
103
Brenmiller Energy Ltd.
2025 Consolidated Financial Statements
| INDEX TO FINANCIAL STATEMENTS | ||
| Page | ||
| Report of Independent Registered Public Accounting Firm (PCAOB ID No. | F-2 | |
| Consolidated Financial Statements in US Dollars ($): | ||
| Consolidated Balance Sheets | F-3 | |
| Consolidated Statements of Comprehensive Loss | F-5 | |
| Consolidated Statements of Changes in Equity | F-6 | |
| Consolidated Statements of Cash Flows | F-8 | |
| Notes to the Consolidated Financial Statements | F-10 | |
___________________
_________________________________
___________________
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Brenmiller Energy Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Brenmiller Energy Ltd. and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive loss, changes in equity and cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1c to the consolidated financial statements, the Company has incurred recurring losses from operations and negative operating cash flows that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1c. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
| /s/ |
| Certified Public Accountants (Isr.) |
| A member firm of PricewaterhouseCoopers International Limited |
| Tel Aviv, |
| March 25, 2026 |
| We have served as the Company’s auditor since 2017. |
Kesselman & Kesselman, 146 Derech Menachem Begin St. Tel-Aviv 6492103, Israel,
P.O Box 7187 Tel-Aviv 6107120, Telephone: +972 -3-
7954555, Fax:+972 -3- 7954556, www.pwc.com/il
F-2
Brenmiller Energy Ltd.
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except for number of shares and par value)
| December 31 | ||||||||||||
| Note | 2025 | 2024 | ||||||||||
| Assets | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | 3 | $ | $ | |||||||||
| Restricted deposits | ||||||||||||
| Prepaid expenses and other receivables | 4 | |||||||||||
| Inventory | 5 | |||||||||||
| TOTAL CURRENT ASSETS | ||||||||||||
| NON-CURRENT ASSETS: | ||||||||||||
| Restricted deposits | 8 | |||||||||||
| Operating lease right-of-use assets, net | 8 | |||||||||||
| Property, plant and equipment, net | 7 | |||||||||||
| Investment in joint venture | 6 | |||||||||||
| TOTAL NON-CURRENT ASSETS | ||||||||||||
| TOTAL ASSETS | $ | $ | ||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
F-3
Brenmiller Energy Ltd.
CONSOLIDATED BALANCE SHEETS (Cont.)
(U.S. dollars in thousands, except for number of shares and par value)
| December 31 | ||||||||||
| Note | 2025 | 2024 | ||||||||
| Liabilities and Shareholders’ Equity | ||||||||||
| CURRENT LIABILITIES: | ||||||||||
| Trade payables | $ | $ | ||||||||
| Deferred revenue | ||||||||||
| Other payables | 13A | |||||||||
| Current maturities of European Investment Bank (“EIB”) Loan | 10 | |||||||||
| Current maturities of operating lease liabilities | 8 | |||||||||
| TOTAL CURRENT LIABILITIES | ||||||||||
| NON-CURRENT LIABILITIES: | ||||||||||
| European Investment Bank (“EIB”) Loan | 10 | |||||||||
| Share based payment liability | ||||||||||
| Warrants’ liability | ||||||||||
| Operating lease liabilities | 8 | |||||||||
| TOTAL NON-CURRENT LIABILITIES | ||||||||||
| COMMITMENTS | 12 | |||||||||
| TOTAL LIABILITIES | ||||||||||
| SHAREHOLDERS’ EQUITY: | 11 | |||||||||
| Ordinary Shares, par value - Authorized | ||||||||||
| Preferred Shares, -par value - Authorized | ||||||||||
| Additional paid in capital | ||||||||||
| Foreign currency cumulative translation reserve | ( | ) | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| TOTAL SHAREHOLDERS’ EQUITY | ||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||||
| * |
The accompanying notes are an integral part of the consolidated financial statements.
F-4
Brenmiller Energy Ltd.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(US dollars in thousands, except for per share data)
| For the year ended December 31 | ||||||||||||||
| Note | 2025 | 2024 | 2023 | |||||||||||
| REVENUES: | 13B | |||||||||||||
| Thermal energy storage units sold | $ | $ | $ | |||||||||||
| Engineering services | ||||||||||||||
| COSTS AND EXPENSES: | ||||||||||||||
| COST OF REVENUES | 13C | ( | ) | ( | ) | ( | ) | |||||||
| RESEARCH AND DEVELOPMENT, NET | 13D | ( | ) | ( | ) | ( | ) | |||||||
| SELLING AND MARKETING | 13E | ( | ) | ( | ) | ( | ) | |||||||
| GENERAL AND ADMINISTRATIVE | 13F | ( | ) | ( | ) | ( | ) | |||||||
| OTHER INCOME (EXPENSES), NET | 13G | ( | ) | |||||||||||
| OPERATING LOSS | ( | ) | ( | ) | ( | ) | ||||||||
| INTEREST EXPENSES | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER FINANCIAL INCOME )EXPENSES(, NET | 13H | ( | ) | |||||||||||
| FINANCIAL INCOME (EXPENSES), NET | ( | ) | ||||||||||||
| SHARE IN EQUITY LOSS OF JOINT VENTURE | ( | ) | ||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| NET LOSS PER ORDINARY SHARE: | 13I | |||||||||||||
| NET LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| Basic and diluted loss ATTRIBUTIBLE TO ORDINARY SHAREHOLDERS | $ | *( | ) | $ | *( | ) | $ | *( | ) | |||||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE | * | * | * | |||||||||||
| NET LOSS, as above | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| OTHER COMPREHENSIVE LOSS - EXCHANGE DIFFERENCES ON TRANSLATION TO PRESENTATION CURRENECY | 2E | ( | ) | |||||||||||
| COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
| * | Post reverse split, see Note 11A. |
The accompanying notes are an integral part of the consolidated financial statements.
F-5
Brenmiller Energy Ltd.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(US dollars in thousands, except for number of shares)
| Ordinary Shares | Additional | Foreign currency cumulative | ||||||||||||||||||||||
| Number of shares** | Amount | paid in capital | translation reserve | Accumulated deficit | Total Equity | |||||||||||||||||||
| BALANCE AS OF JANUARY 1, 2023 | ( | ) | ( | ) | ||||||||||||||||||||
| CHANGES DURING 2023: | ||||||||||||||||||||||||
| Comprehensive loss for the year | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| Issuance of ordinary shares and warrants, net of issuance costs of $ | ||||||||||||||||||||||||
| Exercise of warrants (Series 3) and prefunded warrants | ||||||||||||||||||||||||
| Deemed dividend of $ | - | |||||||||||||||||||||||
| Share-based compensation (Note 11D) | ||||||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||
| CHANGES DURING 2024: | ||||||||||||||||||||||||
| Comprehensive loss for the year | - | ( | ) | ( | ) | |||||||||||||||||||
| Issuance of ordinary shares and prefunded warrants, net of issuance costs of $ | ||||||||||||||||||||||||
| Exercise of prefunded warrants | * | * | ||||||||||||||||||||||
| Warrants reclassified to equity (Note 11C) | - | |||||||||||||||||||||||
| Warrants reclassified to liabilities (Note 11C) | - | ( | ) | ( | ) | |||||||||||||||||||
| Exercise of options | ||||||||||||||||||||||||
| Share-based compensation (Note 11D) | ||||||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||
| * |
| ** | Post reverse split, see Note 11A. |
The accompanying notes are an integral part of the consolidated financial statements.
F-6
Brenmiller Energy Ltd.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Cont.)
(US dollars in thousands, except for number of shares)
| Ordinary Shares | Preferred Shares | Additional | Foreign currency cumulative | |||||||||||||||||||||||||
| Number of shares** | Amount | Number of shares | paid in capital | translation reserve | Accumulated deficit | Total Equity | ||||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Comprehensive loss for the year | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Issuance of ordinary shares, prefunded warrants and warrants, net of issuance costs of $ | ||||||||||||||||||||||||||||
| Issuance of preferred shares and warrants, net of issuance costs of $ | ||||||||||||||||||||||||||||
| Exercise of prefunded warrants | * | * | ||||||||||||||||||||||||||
| Conversion of preferred shares | ( | ) | ||||||||||||||||||||||||||
| Deemed dividend for down-round adjustments of $ | - | - | ||||||||||||||||||||||||||
| Share-based compensation (Note 11D) | ||||||||||||||||||||||||||||
| BALANCE AS OF DECEMBER 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||
| * | Less than one thousand U.S. dollars. |
| ** | Post reverse split, see Note 11A. |
The accompanying notes are an integral part of the consolidated financial statements.
F-7
Brenmiller Energy Ltd.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(US dollars in thousands)
| For the year ended December 31 | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| CASH FLOWS - OPERATING ACTIVITIES: | ||||||||||||
| Loss for the year | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Depreciation (Note 7) | ||||||||||||
| Non-cash interest and exchange rate differences, net | ( | ) | ( | ) | ||||||||
| Fair value adjustment of warrants’ liability | ( | ) | ( | ) | ||||||||
| Share in equity loss of joint venture | ||||||||||||
| Warrants issuance costs | ||||||||||||
| Share-based compensation (Note 11D) | ||||||||||||
| Other | ( | ) | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Decrease in prepaid expenses and receivables | ||||||||||||
| Decrease (increase) in inventory | ( | ) | ( | ) | ||||||||
| Increase (decrease) in trade payables | ( | ) | ( | ) | ||||||||
| Increase in other payables and deferred revenue | ||||||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ( | ) | ||||||
| CASH FLOWS - INVESTING ACTIVITIES: | ||||||||||||
| Purchase of equipment | ( | ) | ( | ) | ( | ) | ||||||
| Sale of equipment | ||||||||||||
| Investment in joint venture | ( | ) | ( | ) | ||||||||
| Installation of a production facility | ( | ) | ( | ) | ( | ) | ||||||
| Participation of Israeli Innovation Authority in production facility investment | ||||||||||||
| Restricted deposit funded | ( | ) | ( | ) | ||||||||
| Other | ||||||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ||||||
| CASH FLOWS - FINANCING ACTIVITIES: | ||||||||||||
| Proceeds from issuance of ordinary shares, preferred shares, warrants and prefunded warrants | ||||||||||||
| Proceeds from issuance of warrants’ liability | ||||||||||||
| Fund raising and issuance costs | ( | ) | ( | ) | ( | ) | ||||||
| Grants recognized as liability for royalties | ||||||||||||
| Exercise of options, prefunded warrants and warrants | * | |||||||||||
| Net cash provided by financing activities | ||||||||||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS | ( | ) | ||||||||||
| EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITTS | ( | ) | ( | ) | ||||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS - BEGINNING OF YEAR | ||||||||||||
| CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS - END OF YEAR | $ | $ | $ | |||||||||
| * |
The accompanying notes are an integral part of the consolidated financial statements.
F-8
Brenmiller Energy Ltd.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Cont.)
(US dollars in thousands)
| For the year ended December 31 | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| B. Supplemental information: | ||||||||||||
| Investing and financing activities not involving cash flows | ||||||||||||
| Recognition of operating lease liability and right-of-use asset | $ | $ | $ | |||||||||
| Borrowing costs capitalized | $ | $ | ||||||||||
| Reclassification of share options and warrants from liabilities to equity | $ | $ | ||||||||||
| Supplier’s credit for the acquisition of equipment | $ | |||||||||||
| Conversion of unpaid salary to Ordinary Shares and warrants | $ | |||||||||||
| Deemed dividend for down-round adjustments | $ | $ | ||||||||||
| Reclassification of warrants from equity to liabilities | $ | |||||||||||
| Cash paid during the year for - | ||||||||||||
| Interest (net of amounts capitalized) | $ | $ | $ | |||||||||
| C. Reconciliation of cash and cash equivalents, and restricted DEPOSITS reported in the statement of financial position | ||||||||||||
| Cash and cash equivalents | $ | $ | $ | |||||||||
| Restricted bank deposits | ||||||||||||
| Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ | $ | $ | |||||||||
The accompanying notes are an integral part of the consolidated financial statements.
F-9
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - GENERAL:
| A. | General description of the Company and its operations |
Brenmiller Energy Ltd. (hereinafter - The “Company” or the “Parent Company”) was incorporated and commenced its business operations in Israel in 2012. The Company’s registered offices are in Rosh Ha’Ayin in Israel. On May 25, 2022, the Company’s ordinary shares (the “Ordinary Shares”) were listed and began trading on the Nasdaq Stock Market LLC (“Nasdaq”; CIK - “BNRG”). On September 11, 2023, the Company’s voluntary delisting of its securities from the Tel Aviv Stock Exchange (“TASE”) took effect (the last trading day was September 7, 2023).
The Company is a technology company that develops, produces, markets and sells thermal energy storage (“TES”) systems based on our proprietary and patented bGen™ technology. The use of the Company’s technology allows electrification and decarbonization of the industrial industry sector resulting in better integration with renewable energy sources and further reduction of carbon emissions. Through 2022, the Company’s main activity was focused on the development of its technology and its application into products and commercial solutions. In 2023, the Company commenced the commercialization of its products and services and assembled a new production line to facilitate commercial operations, that commenced operations in October 2024.
As of December 31, 2025, the Company has one wholly owned subsidiary (in the United States) that is currently inactive (“the Group”). In addition, a joint venture in Spain was established in the second half of 2024 that commenced non-significant operations in 2025 (collectively with the Company, “the Group”). - see Note 6.
| B. | The impact of the regional war involving Israel |
While none of the Company’s facilities or infrastructure were damaged during the hostilities that began on October 7, 2023, the situation remains uncertain and have escalated on February 28, 2026, when Israel and the United States commenced a joint operation against Iran, which has led Iran to launch ballistic missiles and drones against Israel and other countries in the region, followed by the joining of Hizballah on the Lebanese front. Iran closed the Strait of Hormuz, leading to disruption of the global supply chain, including in oil and gas, which could potentially destabilize the Israeli and global economies. As of the date of this Annual Report, this operation is undergoing and its outcome and the effect that it may have are uncertain. To date, the Company has not experienced a material adverse impact on its operations. Nevertheless, regional geopolitical instability, including disruptions to international shipping routes, may from time to time affect logistics, lead times and costs.
The Company’s primary operations are located in Israel. However, the Company also conducts marketing and operational activities through its European joint venture company, Brenmiller Europe S.L. (hereinafter - “BRSL”), which supports international commercial activities and contributes to mitigating certain risks associated with operating from Israel. The Company continues to implement efficiency measures and actively manages procurement and logistics by regularly evaluating alternative sourcing options and working with suppliers to support operational continuity.
Negative sentiment toward Israel or Israeli companies in certain markets may also affect demand or the Company’s ability to raise capital. Any deterioration in the political or security situation in Israel or the region could adversely affect the Company’s business, financial condition and results of operations.
| C. | Liquidity |
The Company has not yet generated significant revenues from its operations and has an accumulated deficit as of December 31, 2025, as well as a history of net losses and negative operating cash flows. Towards the end of 2024, the Company commenced operations of its new production line, facilitating the transition from the development stage to commercial operations, and began production of TES systems under lease arrangements with two Israeli customers.
F-10
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - GENERAL (cont.):
| C. | Liquidity (cont.) |
The Company expects to continue incurring losses and negative cash flows from operations until its products achieve sustainable profitability. These conditions, together with the Company’s current cash position, raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date the financial statements are issued.
These financial statements have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty.
Management’s plans to address these conditions include continued commercialization of the Company’s products and services, which require substantial funding. During the second half of 2025, management took steps to secure long-term financing, including, inter alia, entering into a Securities Purchase Agreement with Alpha Capital Anstalt (“Alpha”) (see Note 11A), as well as implementing measures to align operating expenditures with available financial resources. In addition, the Company has recently expanded its commercial offering toward integrated energy solutions for industrial customers, intended to support longer-term contractual arrangements and improve project financing, which management believes may enhance access to financing and support future cash flows.
There can be no assurance, however, that these plans will be successfully implemented or that sufficient financing will be obtained. If the Company is unsuccessful in executing its commercialization strategy or raising additional capital, it may be required to reduce, delay, or modify its operating activities, including the commercialization of existing products and planned expansion.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
| A. | Basis of presentation: |
The Group’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
| B. | Use of estimates in the preparation of financial statements: |
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Estimates are primarily used for, but not limited to realization value of inventory, valuation of share-based compensation, useful lives of property, plant and equipment and royalty liabilities. Actual results could differ from those estimates, and such differences may have a material impact on the Company’s financial position or results of operations.
| C. | Principles of consolidation: |
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
| D. | Joint venture |
The Company’s investment in joint venture (“JV”) in Spain (see Note 6), in which it has the ability to exercise significant influence, is accounted for under the equity method.
F-11
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (cont.):
| E. | Functional and presentation currency: |
Throughout 2023, the functional currency of the Parent Company’s financial statements was the New Israeli Shekel (“NIS”) and the presentation currency was the U.S. Dollar ($). Effective January 1, 2024 the Company changed its functional currency to the U.S. dollar from the NIS.
The change in functional currency to the U.S. dollar resulted inter-alia in a reclassification of the Company’s certain equity-classified warrants (whose fair value as of January 1, 2024 was $
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are generally recognized in financial income or expenses.
| F. | Cash, cash equivalents and restricted cash deposits |
The Company considers as cash equivalents all short-term, highly liquid investments, which include short-term bank deposits with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash. Restricted cash consists primarily of bank deposits to secure obligations under our operating lease agreements. Restricted cash is presented at cost, including accrued interest, and is classified as current or non-current based on the remaining term of the restriction.
| G. | Accounts receivable |
Accounts receivable balances are due from customers that receive engineering services or enter into projects with the Company for the installation of TES systems. Contracts with customers are entered into based on evaluation of a customer’s financial condition and typically include customers with high credit rating. Trade accounts receivable from sales of services or systems are typically due within 60 days from reaching the agreed milestone between the parties.
| H. | Concentration of Credit Risk |
Financial instruments which potentially subject the Company to concentrations of credit risk consist of trade and other receivables, and cash, cash equivalents and restricted deposits held at financial institutions.
The Company places its cash and cash equivalents, bank deposits and restricted deposits in high credit quality financial institutions. In general, customers are not required to provide collateral or any other security to support accounts receivable but are required to make progress payments during the course of project execution.
The Company estimates the expected credit losses by applying the related corporate default rate which corresponds to the credit rating of the specific customer.
As of December 31, 2025 and 2024 there are current expected credit loss allowances.
F-12
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (cont.):
| I. | Inventories |
Inventory is measured at the lower of cost and net realizable value.
Inventory costing is based on the first-in-first-out method. In the case of purchased goods and work in process, costs include raw materials, direct labor and other direct costs and fixed production overheads (based on the normal operating capacity of the production facilities).
Net realizable value is the estimated selling price in the ordinary course of business, less attributable selling expenses.
| J. | Property, plant and equipment |
Property, plant and equipment items (including leasehold improvements) are initially recognized at cost of acquisition or construction, less relevant government investment grants and accumulated depreciation and impairment.
The cost of self-constructed assets includes the cost of the direct materials, as well as any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Repairs and maintenance are charged to the statement of comprehensive loss during the period in which they are incurred.
The assets are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Annual rates of depreciation are as follows:
| Plant | ||
| Computers and equipment | ||
| Leasehold improvements | | |
| Furniture and equipment | ||
| Vehicles |
Gains and losses on disposals are determined by comparing proceeds with the associated carrying amount. These are included in the statements of comprehensive loss.
| K. | Research and development |
Research and development expenses include costs associated with the ongoing development of the Company’s TES units and technology, including compensation and employee benefits and allocated costs associated with the research and development department. Research and development expenses are expensed as incurred.
| L. | Impairment of long-lived assets |
Long lived assets held and used by the Company are reviewed for impairment, whenever events or changes in circumstances indicate that the carrying amount of the assets (or asset group) may not be recoverable. In the event that the sum of the expected future cash flows (undiscounted and without interest charges) of the long-lived assets (or asset group) is less than the carrying amount of such assets, an impairment charge would be recognized, and the assets (or asset group) would be written down to their estimated fair values.
F-13
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (cont.):
| M. | Government grants |
Government grants, which are received from Israeli government agencies and ministries, from the BIRD Foundation and New York Power Authority (“NYPA”) (in a combined agreement - see Note 12), as participation in research and development that is conducted by the Company, are recognized when the grant becomes receivable, provided there is reasonable assurance that the Company will comply with the conditions attached to the grant and there is reasonable assurance that the grant will be received. Grants are recognized as a deduction from research and development expenses as the applicable costs are incurred, and presented in research and development expenses, net, except for amounts attributed to royalties that are probable to be paid therefore at time of the grant recognition.
Research and development expenses, net for the years ended December 31, 2025, 2024 and 2023, include participation in research and development expenses in the amount of approximately $
| N. | Loss Contingencies |
The Company may be involved, from time to time, in various claims and legal proceedings that arise in the ordinary course of business. The Company recognizes a liability when it is probable that a loss has incurred and can reasonably estimate the loss. The Company regularly evaluates current information to determine whether it should adjust a recorded liability or record a new one. As of December 31, 2025, no such claims or proceedings are pending against the Company.
| O. | Fair value measurements |
Fair value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described as follows:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
Level 3: Unobservable inputs that are used when little or no market data is available.
The carrying amount of the cash and cash equivalents, restricted deposits, trade receivable, trade payables, accrued expenses and EIB loan, approximates their fair value.
As of December 31, 2025 and 2024, except for warrants liability (level 2 in the hierarchy) of $ thousand and $
| P. | Warrants |
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance. The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability under ASC 480, and meet all of the requirements for equity classification, including whether the warrants are indexed to the Company’s own common stock. Warrants that determined to be classified as equity, are recorded as a component of additional paid-in capital.
| Q. | Convertible preferred shares |
Following the issuance of its convertible preferred shares, the Company considered their classification as either equity or debt in accordance with ASC 480. The Company determined and classified them as permanent equity as they do not contain any mandatory redeemable provisions. Further, the Company concluded that the conversion features associated with the convertible preferred shares were deemed to be clearly and closely related to the host instrument (the ordinary shares) and were therefore not bifurcated as a derivative under ASC 815.
F-14
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (cont.):
| R. | Loss per share |
Net loss per share is calculated and reported under the “two-class” method. Basic loss per share is computed by dividing net income or loss, reduced by preference and deemed dividends for down-round adjustments, by the weighted-average number of Ordinary Shares outstanding during the year including prefunded warrants with token exercise price (“penny” warrants). Diluted loss per share is based on the weighted average number of Ordinary Shares used for basic computation, taking into account that the preferred shares do not participate in losses and as the inclusion of any potential Ordinary Shares in the reported years would be anti-dilutive.
Potentially dilutive Ordinary Shares result from the conversion of preferred shares, the assumed exercise of options and warrants, using the “treasury stock” method, and the assumed vesting of restricted share units.
| S. | Share-based payment |
The Company measures all share-based awards, including share options, restricted shares (“RS”) and restricted share units (“RSUs”), based on their estimated fair value on the grant date for awards to its employees, directors and service providers.
The Company uses the Black-Scholes pricing model to determine the fair values of share options. The option pricing model requires the input of highly subjective assumptions, including the expected share price volatility and expected term. Any changes in these highly subjective assumptions would significantly impact the share-based compensation expense. We measure the fair value of RSs and RSUs based on the grant-date share price of the underlying ordinary share.
Share-based compensation expenses for options and RSUs are recognized using the accelerated attribution method, over the requisite service period (primarily a three or four year vesting period for share options and one year for RSUs), net of estimated forfeitures. See Note 11D for further information. The Company’s RS and RSU’s are registered under the Company’s S-8 registration statements and therefore, once fully vested, they are included in the Company’s outstanding ordinary shares.
| T. | Revenue recognition: |
Revenues are recognized in accordance with ASC 606; revenue from contracts with customers is recognized when control of the promised goods or services is transferred to the customers, in an amount that the Company expects in exchange for those goods or services.
The Company recognizes revenue under the core principle that transfer of control to the Company’s customers should be depicted in an amount reflecting the consideration the Company expects to receive in revenue. In order to achieve that core principle, the Company applies the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when the performance obligation is satisfied.
Deferred revenue is mainly comprised of payment made on completion of certain milestones, prior to final delivery, or up-front fees. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Group’s contract liabilities from contracts with customers consist primarily of deferred revenue.
| (1) | Revenue from sale of TES units |
The Company manufactures and sells TES units based on the development and its technological know-how and patents. The Group sells the TES units as a finished product, either under a sale contract with the customer or a sale type lease (see also Note 2U).
F-15
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (cont.):
| T. | Revenue recognition (cont.): |
The sale of TES units is recognized at a point in time when the Group delivers the product to the customer. Delivery of the TES units does not occur until the products have been sent to the specified location, and the customer has received the products in accordance with the contract of sale and the Group has objective evidence that all the criteria for receipt have been met.
| (2) | Revenue from rendering engineering services |
The Company provides, from time to time, ancillary engineering services in connection with the potential sale of the TES units. Revenue from the provision of such services is recognized in accordance with milestones performed.
| U. | Leases: |
1) The Company as a lessee
The Group leases buildings, offices and vehicles under operating leases. Lease agreements are for a period of between
The Company determines if an arrangement is a lease at inception, and recognizes right-of- use (“ROU’) assets and current and non-current operating lease liabilities in the consolidated balance sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized as of the commencement date based on the present value of lease payments over the lease term. Lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will either exercise or not exercise the option to renew or terminate the lease. The discount rate for the lease is the rate implicit in the lease unless that rate cannot be readily determined, in which case the Company’s uses its estimated incremental borrowing rate based on the information available at the commencement date.
The Company recognizes a single lease expense on a straight-line basis over the lease term and reduces the lease liabilities by the payments made. ROU asset amortization, referred to as non-cash lease expense, along with the change in the operating lease liabilities are separately presented within the cash flows from operating activities on the consolidated statements of cash flows.
Lease liabilities and right-of-use assets are remeasured when there is a change in the lease term or the lease payments.
2) The Company as a lessor
The Company has entered into several contracts to build TES systems that will be commissioned to customers under long-term lease arrangements with purchase options; these arrangements typically include certain support services that are accounted for separately under ASC 606.
The Company applies ASC 842: “leases” to determine whether these transactions are a sale-type or operating-type leases. For that purpose, the Company considers the terms and conditions of each contract and all relevant terms and circumstances upon commencement of the lease as promulgated in ASC 842-10-25-2.
F-16
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (cont.):
| U. | Leases (cont.): |
The Company has determined that the lessee does not obtain control of the TES systems under construction and that the commencement date for these contracts is when the systems is functional and provides energy according to established specifications.
At the commencement date:
- for sale type leases, the Company shall recognize revenue in the aggregated amount of its net investment in the lease and selling profit or selling loss arising from the lease, and derecognize the underlying asset. The net investment in the lease includes the lease receivable, which is measured at the present value, discounted using the rate implicit in the lease, and the present value of any unguaranteed residual asset at the end of the lease.
- For operating leases, the Company shall defer initial direct costs, and subsequently recognize the lease payments as income in profit or loss over the lease term on a straight-line basis.
| V. | Retirement and Severance Pay |
The Israeli Severance Pay Law, 1963 (“Severance Pay Law”), specifies that employees are entitled to severance payment, following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one-month’s salary for each year of employment, or a portion thereof.
The Company’s liability for severance pay is covered by the provisions of Section 14 of the Israeli Severance Pay Law (“Section 14”). Under Section 14 employees are entitled to monthly deposits, at a rate of
The expenses recognized in 2025, 2024 and 2023 in relation to these contributions were $
| W. | Income Taxes |
Income taxes are recognized using the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
A valuation allowance is recognized to the extent that it is more likely than not that the deferred taxes will not be realized in the foreseeable future. The Company has provided a full valuation allowance with respect to its deferred tax assets.
The Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the available evidence indicates that it is more likely than not that the position will be sustained on examination. If this threshold is met, the second step is to measure the tax position as the largest amount that is greater than
F-17
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (cont.):
| X. | Segments |
The Company identifies operating segments in accordance with ASC Topic 280, “Segment Reporting”. Accordingly, the Company has determined that it has one operating and reportable segment - see also Note 14.
| Y. | New Accounting Pronouncements |
The Company qualifies as an emerging growth company (“EGC”) as defined under the Jumpstart Our Business Startups Act (the “JOBS Act”). Using exemptions provided under the JOBS Act for EGCs, and as long as the Company qualifies for this status, it may elect to defer compliance with new or revised ASUs until it is required to comply with such updates, which is generally consistent with the adoption dates of private companies.
Newly issued and not yet adopted accounting pronouncements:
ASU 2023-09 Income Taxes (Topic 740). This pronouncement requires improvements to income tax disclosures, and is effective for entities other than public business entities for annual reporting periods beginning after December 15, 2025. This is not expected to have a material effect on the consolidated financial statements as a result of its future adoption.
ASU 2025-10—Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities: this pronouncement will require business entities to recognize, measure, and present government grants based on the following principles: grants will be recognized when compliance with conditions is probable, and that the grant will be received, while offering specific accounting approaches for grants related to assets versus income.
This pronouncement will be effective for annual reporting periods beginning after December 15, 2028.
NOTE 3 - CASH AND CASH EQUIVALENTS:
Comprised as follows (U.S. dollars in thousands)
| December 31 | ||||||||
| 2025 | 2024 | |||||||
| Cash at bank | $ | $ | ||||||
| Short-term bank deposits | ||||||||
| Total cash and cash equivalent* | $ | $ | ||||||
| *Including cash held per commitment to EIB - see Note 10 | $ | $ | ||||||
F-18
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - prepaid expenses and other receivables (U.S. dollars in thousands):
| December 31 | ||||||||
| 2025 | 2024 | |||||||
Institutional receivables | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Others | ||||||||
| $ | $ | |||||||
NOTE 5 - INVENTORY:
Comprised as follows (U.S. dollars in thousands):
| December 31 | ||||||||
| 2025 | 2024 | |||||||
| Work in progress | $ | * | $ | |||||
| Raw materials | ||||||||
| $ | $ | |||||||
| * |
NOTE 6 - INVESTMENT IN JOINT VENTURE
In 2024, under a joint venture agreement with a Spanish partner in the field of renewable energy (an agreement that became effective on September 24, 2024), the parties established a new company - BRSL - where
BRSL Board of directors is comprised of 2 representatives from each party and one independent director that will serve as chairman of the board but has no decisive vote. The agreement sets a list of issues that require “de-facto” mutual agreement of both parties in board’s decisions. Any change in this mechanism requires a qualified majority of
F-19
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT:
| A. | The composition of assets, grouped by major classifications and accumulated depreciation, is as follows (U.S. dollars in thousands): |
| December 31 | ||||||||
| 2025 | 2024 | |||||||
| Cost: | ||||||||
| Plant (new production facility) | $ | $ | ||||||
| Computers and equipment | ||||||||
| Leasehold improvements | ||||||||
| Office furniture and equipment | ||||||||
| Vehicles | ||||||||
| Less - Accumulated depreciation | ( | ) | ( | ) | ||||
| Property, Plant and Equipment, Net | $ | $ | ||||||
| B. | Depreciation expenses totaled $ |
During the years ended December 31, 2025, 2024 and 2023, the Company disposed of property and equipment in the net amount of $
As of December 31, 2025 and 2024, all the property, plant and equipment are located in Israel.
| C. | New production facility in Dimona |
In August 2022, the Company began the construction of its newly upgraded production facility in Dimona, Israel, which commenced operations in October 2024.
The new production facility includes inter-connectivity and smart automation of production in the production of bGenTM TES modules.
The total cost of the facility includes capitalized borrowing costs of $
| D. | Rotem 1 project |
Following the closure decision of the subsidiary’s project from 2022, during 2024, the Company wrote-off the remaining value of the main asset of the Israeli subsidiary (see Note 13G). In August 2025 the subsidiary was liquidated in legal proceedings.
NOTE 8 - OPERATING LEASES:
The Company’s leases include production space for its new production facility (see Note 7C), office premises and car leases, which are all classified as operating leases. The lease term for the production space is for
The car leases are generally for a three-year period.
F-20
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - OPERATING LEASES (cont.):
As collateral for the office and lease agreement, a restricted deposit was pledged against bank guarantees provided to the property owner. The balance of the restricted deposit, presented as a non-current asset as of December 31, 2025 and 2024, amounted to $
Operating lease expenses and cash flows for the years ended December 31, 2025 and 2024 totaled $
The operating lease costs include variable lease payments of $
Supplemental information related to leases:
Balance sheet information (U.S. dollars in thousands):
| December 31 | ||||||||
| 2025 | 2024 | |||||||
| Operating lease right-of-use assets | ||||||||
| Current lease liabilities | ||||||||
| Non-current lease liabilities | ||||||||
| Total lease liabilities | ||||||||
| Weighted average remaining lease term | ||||||||
| Weighted average discount rate | % | % | ||||||
As of December 31, 2025, the maturities of operating lease liabilities were as follows (U.S. dollars in thousands):
| Year ending December 31, | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total undiscounted lease payments | ||||
| Less - imputed interest | ( | ) | ||
| Present value of lease liabilities* | $ | |||
| * Including amounts linked to the Israeli CPI of | $ | |||
NOTE 9 - TAXES ON INCOME:
| A. | Taxation of companies in Israel |
The revenue of the Company is subject to corporate tax at a regular rate.
The corporate tax rate that applies to the Company’s profits is
Capital gains of the Company and its subsidiary in Israel are taxable according to the regular corporate tax rate applying to the tax year.
| B. | Losses carried forward for tax purposes |
As of December 31, 2025, the Company had losses carried forward in the amount of approximately $
F-21
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 - TAXES ON INCOME (cont.):
| C. | Deferred income taxes (U.S. dollars in thousands): |
| December 31 | ||||||||
| 2025 | 2024 | |||||||
| Deferred tax assets | ||||||||
| Tax loss carryforward* | ||||||||
| Research and development | ||||||||
| Employee and payroll accrued expenses | ||||||||
| Operating lease liabilities | ||||||||
| Other | ||||||||
| Total gross deferred tax assets | ||||||||
| Deferred tax liabilities: | ||||||||
| Operating lease assets | ||||||||
| Total deferred tax assets, net | ||||||||
| Less - valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets | ||||||||
| * |
Realization of deferred tax assets is contingent upon sufficient future taxable income during the period that deductible temporary differences and carried forward losses are expected to be available to be offset against taxable income. As the achievement of required future taxable income is not more likely than not, the Company recorded a full valuation allowance.
| D. | Reconciliation of theoretical tax expenses to actual expenses |
The primary difference between the statutory tax rate of the Company and the effective rate of
| E. | Uncertain tax positions |
As of December 31, 2025 and 2024, the Company does not have a provision for uncertain tax positions.
| F. | Roll forward of valuation allowance (U.S. dollars in thousands): |
| Balance as of December 31, 2023 | ( | ) | ||
| Additions | ( | ) | ||
| Balance as of December 31, 2024 | ( | ) | ||
| Additions | ( | ) | ||
| Balance as of December 31, 2025 | ( | ) |
| G. | Tax assessments |
The Company has final tax assessments up to and including the tax year 2020. The company’s wholly owned subsidiary has not been assessed for tax purposes since incorporation.
F-22
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - LOAN FROM THE EUROPEAN INVESTMENT BANK (“EIB”)
On March 31, 2021, the Company and EIB signed an agreement for the receipt of financing for the expansion plan of the Company and the establishment of an advanced production plant for TES systems in Israel (“the Financing Agreement”), the main terms of which are as follows:
| 1) | The financing is limited to an amount of EUR |
| 2) | The drawing down of the loan was available to the Company in 2 tranches - the first, in the amount of EUR |
| 3) | The loan is payable in EUR and is for a period of |
| Year | 2026 | 2027 | 2028 | Total | ||||||||||||
| Amount | $ | $ | $ | $ | ||||||||||||
In addition, the Company will pay royalties to EIB at a rate of
The liability presented in the balance sheets is comprised as follows ($ in thousands):
| Effective interest rate | December 31 | |||||||||||
| % | 2025 | 2024 | ||||||||||
| Loan component: | ||||||||||||
| Current maturity | ||||||||||||
| Non- Current | ||||||||||||
| Royalties’ component | ||||||||||||
| 4) | The EIB has the right to cancel part of the loan that has not been granted to the Company and to demand the immediate repayment of the amount of the loan that has been made available to the Company in the event of a change in control in the Company. |
| 5) | As security for the loan, the Company pledged the equipment that has been agreed upon in the financing agreement as well as all of the revenues generated from the sale of TES systems manufactured by the Company under a first ranking fixed lien. |
F-23
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - LOAN FROM THE EUROPEAN INVESTMENT BANK (“EIB”) (cont.):
| 6) | The Company is to comply with the following main covenants: a prohibition on the sale of certain assets except for those used in the regular course of business, a prohibition on the execution of a merger or a structural change in the Company’s group, except in cases that have been determined in the financing agreement with the bank, the Company may not distribute a dividend except in the cases that are set forth in the financing agreement with bank; the Company is entitled to receive a government grant up to the amount that is set forth in the financing agreement with the bank; and the Company is to hold cash and cash equivalents in an amount of not less than EUR |
NOTE 11 - EQUITY:
| A. | Share capital |
On June 18, 2025, the Company performed a reverse stock split of
| 1) | On February 16, 2023, the Company completed a private placement by certain investors, some of whom are existing shareholders of the Company (the “Investors”), and the former controlling shareholder of the Company, in an aggregate amount of NIS |
Issuance costs (of approximately $
The above private placement includes
| 2) | On June 9, 2023, the Company, entered into a Sales Agreement with A.G.P./Alliance Global Partners (“the Sales Agent”), pursuant to which the Company may offer and sell, from time to time, to or through the Sales Agent as agent or principal, Ordinary Shares under an “at the market offering” (“ATM”) as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, or the Securities Act. The Ordinary Shares will be offered and sold pursuant to the Company’s currently effective registration statement on Form F-3, the prospectus contained therein and the prospectus supplement filed with the SEC dated June 9, 2023, under which the Company may offer and sell its Ordinary Shares having an aggregate offering price of up to $ |
F-24
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - EQUITY (cont.):
| A. | Share capital (cont.): |
During the second half of 2023, under the agreement with A.G.P., the Company issued
On June 9, 2025, the Company filed a prospectus supplement to increase the dollar amount from Ordinary Shares, that may be offered and sold under its agreement with A.G.P., by $
| 3) | On June 15, 2023, the Company completed a private placement offering of its securities for the aggregate gross proceeds of $ |
The warrants are exercisable at a price of $
Issuance costs (of approximately $
| 4) | On January 25, 2024, the Company closed a public offering under which it completed the issuance and sale of |
The Ordinary Shares, Warrants and Pre-Funded Warrants were offered and sold pursuant to an effective Registration Statement on Form F-1, as amended. The aggregate gross proceeds from this offering were approximately $
| 5) | On August 4, 2024, the Company entered into a definitive securities purchase agreement with Alpha for a private placement of |
Under the terms of the agreement, the investor will have a one-time future investment right, from the date hereof until the date that is 12 months after the closing date, to subscribe for an additional
F-25
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - EQUITY (cont.):
| A. | Share capital (cont.): |
| 6) | On April 2, 2025, a special general meeting of the Company’s shareholders approved an increase in the authorized share capital of |
| 7) | During 2024 and 2025 , the Company filed several registration statements on Form S-8 under the Securities Act of 1933, as amended, to register additional Ordinary Shares, in the aggregate of |
| 8) | On May 14, 2025, the Company completed a public offering that included the issuance of |
| 9) | On July 25, 2025, the Company entered into a securities purchase agreement (the “SPA”) with Alpha pursuant to which, the Company agreed to issue and sell to Alpha, subject to certain conditions, up to an aggregate of $ |
At the initial closing, which took place on July 28, 2025, for a subscription gross amount of $
On September 25, 2025, the Company received the required shareholders’ approval at its Annual and Special General Meeting of Shareholders to, among other things, amend and restate its Articles of Association to create a class of preferred shares. Following these, on September 29,2025, the Company issued
Under the terms of the Securities Purchase Agreement, subject to certain conditions, Alpha also has the right to purchase additional preferred shares and warrants from the Company up to an additional $
The conversion ratio for all preferred shares issued under the agreement and the exercise price and number of underlying ordinary shares of all warrants issued under the agreement, are subject to anti-dilution adjustments, including full ratchet adjustment (for down-rounds).
F-26
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - EQUITY (cont.):
| A. | Share capital (cont.): |
In this framework, two subsequent fundings were done by Alpha in December in the gross amount of $
Consequently, and under the anti-dilution provisions in the agreement, the conversion ratio of all outstanding preferred shares, and the exercise price of all warrants issued under the agreement were down adjusted to $
The Securities Purchase Agreement also provides for certain additional fundings by Alpha after the Equity Closing which can come in the form of warrant exercises, subsequent financing or other financing arranged by Alpha, subject to certain conditions, up to $
Per the agreement, the Company has agreed to file registration statements with the U.S. Securities and Exchange Commission pertaining to the resale of ordinary shares resulting from the conversion or exercise of the Preferred Shares, pre-funded warrants and warrants issued at the initial closing and Equity Closing.
| B. | Preferred shares |
The preferred shares have no par value and are issued for a stated value of $
The preferred shares are convertible into the company’s listed ordinary shares at any time, in whole or in part, exclusively into the Company’s ordinary shares.
As of December 31, 2025, and following the dilution provisions of the SPA agreement (see A(9) above), all preferred shares have conversion ratio of $
Subsequent to December 31, 2025, preferred shares with a stated value of $
F-27
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - EQUITY (cont.):
| C. | Warrants: |
| 1) | Quoted Warrants (Series 3) |
During 2023 and as part of the delisting process of the Company’s Ordinary Shares from TASE, the Company made an arrangement with the holders of Series 3 warrants, following which
| 2) | The following table presents the outstanding non-marketable warrants, as of December 31, 2025 and their terms: |
| Date of issuance | Number of outstanding warrants(*) | Exercise price for one Ordinary share(*) | Expiration date | |||||||
| February 16, 2023 (a) | $ | |||||||||
| February 16, 2023 (a) | (**) | NIS | ||||||||
| June 15, 2023 (a) | $ | |||||||||
| January 25, 2024 (b) | $ | |||||||||
| May 14, 2025 | $ | |||||||||
| May 14, 2025 | $ | |||||||||
| July 7, 2025 | $ | |||||||||
| September 30, 2025 | $ | |||||||||
| December 4, 2025 | $ | |||||||||
| December 30, 2025 | $ | |||||||||
| (*) | Number of outstanding warrants and exercise prices have been adjusted to give retroactive effect to the down round anti-dilution provision included in the terms of such warrants, as affected by new equity investments up to December 31, 2025 (see also Note 15A). |
| (**) | Representing the balance of warrants that are presented as a liability - see (a) below |
| (a) | The 2023 warrants that originally had a NIS denominated exercise price, were reclassified from equity to liabilities on January 1, 2024, as a result of the change in the functional currency of the Company (at their fair value of $ |
F-28
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - EQUITY (cont.):
| C. | Warrants (cont.): |
| (b) | These warrants were initially classified as a liability, following which, the gross proceeds received in the January 25, 2024 offering were initially allocated to the warrant’s, based on their fair value, and the residual was allocated to the shares and the prefunded warrants issued. Upon issuance, the warrants liability was valued at $ |
The features of these warrants were amended under an agreement with the holding investor which became effective on June 6, 2024. Consequently, the Company reclassified these warrants to equity at their fair value of $
| D. | Share-based payments: |
| 1) | 2013 Option Scheme |
In July 2013, the Company’s Board approved a share option scheme that is intended to provide an incentive to retain or attract employees, directors, consultants and service providers of the Company and its Affiliates and will be administered by the Board (“the 2013 plan”). On September 15, 2022, the Board approved an amendment to the plan, that will allow the Company to reserve from time-to-time, out of its authorized unissued share capital, such number of Shares, as the Board deems appropriate.
The options can be exercised for a period of up to
Pursuant to the options plan, the options for the Company’s employees and officers, other than its former controlling shareholder, will be allocated under Section 102 of the Israeli Income Tax Ordinance (where the Board can determine the type of option as “Option 102 in the Non-Trustee Track” or “Option 102 in the Trustee Track”) and the options for service providers and the former controlling shareholder of the Group, will be allocated in accordance with Section 3(i) of the Israeli Income Tax Ordinance.
See also A(7) above.
| 2) | Amendment to the Company’s compensation policy and Restricted Shares and Restricted Share Units |
On January 24, 2023, the Company adopted an amendment to the Company’s compensation policy, which includes an efficiency plan to decrease expenses and the Company’s burn rate. The adopted plan allows the Compensation Committee and the Board, subject to certain minimum terms and conditions, to exchange basic salary (in whole or in part), accrued and unpaid cash salary to Company’s employees and officers, with equity-based compensation (the “Efficiency Plan”), by issuing Restricted Shares or Restricted Shares Units (“RSUs”).
Under the above approved compensation plan, the Company also granted during 2023 to its employees and service providers: (a)
F-29
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - EQUITY (cont.):
| D. | Share-based payments (cont.): |
During 2024, the Company granted
In January 2025, following the approval of the remuneration committee of the amounts due of $
Under the 2025 preservation of employees’ plan, the Company granted:
All Restricted Shares and Restricted Share Units (RS and RSU) are fully vested as of December 31, 2025.
| 3) | Information on the share option awards outstanding and the related weighted average exercise price as of and for the years ended December 31, 2025 and 2024 are presented in the table below: |
| Year ended December 31, 2025 | Year ended December 31, 2024 | |||||||||||||||||||||||
| Relating to options: | Number of potential Ordinary Shares | Exercise price range* | Aggregate Intrinsic Value | Number of potential Ordinary Shares | Exercise price range* | Aggregate Intrinsic Value | ||||||||||||||||||
| Outstanding at beginning of the year | $ | $ | $ | $ | ||||||||||||||||||||
| Granted | $ | $ | $ | $ | ||||||||||||||||||||
| Exercised** | ( | ) | $ | |||||||||||||||||||||
| Forfeited | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Expired | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Outstanding at end of the year | $ | $ | $ | $ | ||||||||||||||||||||
| Exercisable at end of the year | $ | $ | $ | $ | ||||||||||||||||||||
| * | Per 1 Ordinary Share with no par value. |
| ** | Including options exercised. Average share price for options exercised in 2024 - $ |
F-30
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - EQUITY (cont.):
| D. | Share-based payments (cont.): |
| 4) | The following table summarizes information about stock-based awards outstanding and exercisable at December 31, 2025: |
| Outstanding | Exercisable | |||||||||||||||||
| Exercise price range | Number of potential Ordinary Shares | Weighted average remaining contractual life (years) | Number of potential Ordinary Shares | Weighted average remaining contractual life (years) | ||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| $ | ||||||||||||||||||
| 5) | Share-based compensation expense for the years ended December 31, 2025, 2024 and 2023 was as follows (U.S. dollars in thousands): |
| Year ended December 31 | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Cost of revenue | ||||||||||||
| Research and development | ||||||||||||
| Sales and marketing | ||||||||||||
| General and administrative | ||||||||||||
| Total share-based compensation expenses | ||||||||||||
As of December 31, 2025, there is an unrecognized share-based compensation expense of $
F-31
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - EQUITY (cont.):
| D. | Share-based payments (cont.): |
| 6) | The calculated fair value of option grants was estimated using the Black-Scholes pricing model with the following assumptions: |
| Year ended December 31 | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Risk-free interest rate | ||||||||||||
| Expected option term (in years) | ||||||||||||
| Expected price volatility | ||||||||||||
| Fair value of an ordinary share | $ | $ | NIS | |||||||||
| Dividend yield | ||||||||||||
NOTE 12 - COMMITMENTS:
| A. | Israeli government grants: |
| 1) | Through December 31, 2025, the Company received grants from the Israeli Innovation Authority (“IIA”) in the cumulative amount of approximately $ |
Out of the above $
(ii) $
(iii) $
| 2) | As of December 31, 2025, the Company received grants from the Israel Ministry of Energy in the cumulative amount of approximately $ |
F-32
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 - COMMITMENTS (cont.):
| A. | Israeli government grants (cont.): |
| 3) | In addition, the Company received in prior years under two support programs of the Israel Ministry of Economy and Industry, an amount of approximately $ |
| 4) | As of December 31, 2025, the total amount that may be payable by the Company under the above grants (including accrued interest) is approximately $ |
| B. | New York Power Authority (“NYPA”) Project |
Under a cooperation agreement (the “Agreement”) signed in January 2018 with the NYPA the Company designed and built a pilot facility that includes a high temperature storage combined heat established and power unit developed by the Company (“the Product”), the costs of which were bore both by NYPA and the Company. As from January 2024, the facility is fully operative and provides electricity and hot water to the campus of the university.
As part of the Project financing, the Company and NYPA (hereinafter - “the Parties”) received a conditional grant from the Bird Foundation (Israel-United States Research and Development Foundation), in the sum of $
Under the Agreement, the Company will also pay annual royalties to NYPA of
As of December 31, 2025, the balance of the royalty commitment to NYPA under the above grants amounts to $
After NYPA is fully compensated for the above amount, NYPA shall receive
F-33
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 - COMMITMENTS (cont.):
| C. | Lease agreements with customers: |
As of December 31, 2025, the Company has two sale type lease agreements, for bGen™ TES units, for which the Company has signed an agreement with Baran - see D. hereafter:
| 1) | On September 14, 2023 the Company signed an agreement with an Israeli beverage producing company (“Tempo”), to build and assemble a bGen™ TES unit (see Note 5), that will provide, when commissioned, industrial steam to one of Tempo’s manufacturing locations. |
Under the agreement, Tempo has undertaken to participate in all costs to build, install and integrate the system with its facilities, and pay to the Company participation up to the amount of NIS
Commencement of the lease will be after a running-in period of
During the steam provision period, the Company will provide level B maintenance services to the unit for NIS
Starting the third year of the provision of steam, Tempo will have the right to purchase the unit (for its own use only and on “as is” basis) for a consideration that is based on a formula stipulated in the agreement. Tempo will also have the right for termination and compensation if the system fails to supply certain performance measurements as determined in the agreement; termination by Tempo after commissioning for any other reason will oblige Tempo, inter alia, to pay any outstanding balance of the participation amount and the minimum “take-or-pay” fees for the remainder of the lease term. As of the balance sheet date, the Company completed the second milestone of the agreement, for which Tempo has paid
| 2) | On January 29, 2024, an agreement was signed with the Wolfson Medical Center (“Hospital”) in the city of Holon, pursuant to which the Company will build and install on the Hospital premises a bGenTM TES unit that will provide industrial steam and other services to the Hospital (including maintenance services of the TES System that will be charged separately (the “Services”)). |
The TES System will operate using electricity and water supplied by the Hospital and will provide the Services for a period of
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Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 - COMMITMENTS (cont.):
| C. | Lease agreements with customers (cont.): |
The operation of the TES unit, and the required maintenance thereafter will be the responsibility of the Company which has also guaranteed efficiency ratios of the TES unit during the service period that will be examined annually; subject to a contractual remedy period, any failure to meet certain efficiency ratio may give the Hospital cause to terminate the agreement and claim compensation as determined in the agreement.
In consideration for the Services, the Hospital will pay a total of approximately NIS
The Company is in the process of obtaining the regulatory permission to the construction of the TES unit on the hospital grounds.
| D. | Baran purchase agreement |
On February 20, 2025 the Company and Baran Energy, a subsidiary of the Baran Group Ltd. (“Baran”) announced they have signed a strategic cooperation agreement to accelerate bGen™ ZERO project development and deployments through sales, acquisitions, and operations of selected projects in Israel (“the Baran Cooperation Agreement”). To further bGen™ uptake within industrial sectors, Brenmiller will sell certain projects to Baran, subject to the satisfaction of certain conditions precedent, benefiting from the engineering firm’s core project capabilities to ensure effective and timely deployment. These projects include the lease agreements with Tempo and the Wolfson Medical center, see Note C above.
Further to the Baran Cooperation Agreement signed during the reporting period, on September 14, 2025, the Company and Baran Energy Ltd. (a subsidiary of Baran; hereinafter “Baran Energy”) have signed a system purchase agreement for the completion and operational launch of two bGen™ ZERO TES systems currently in development in Brenmiller’s portfolio in Israel (at Tempo Beverages Ltd. and Wolfson Medical Center). Under the agreement, Baran will make milestone-based payments amounting in total $
| E. | Steam service agreement |
On August 12, 2024 an agreement was signed between the Company and a pet food manufacturer in Hungary (“the customer”), whereby the Company will build and operate a bGenTM TES unit on a piece of land that is adjacent to the customer’s factory, and provide agreed upon steam outputs (as specified in the agreement) to the customer on exclusive basis (the service). The initial term of the service under the agreement is for
On January 2025, the Company and its Spanish partner incorporated a new Hungarian company (
F-35
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 - COMMITMENTS (cont.):
| F. | Product & Service Distribution Agreement (certain U.S. states) |
On June 3, 2024, the Company entered into an agreement with a United States domiciled third party, that will act as an exclusive distributor of the Company’s products and services in certain US states in North America (“the Distributor”), for a period of
In addition to payments for the Company’s products and services, the Company shall be entitled to royalties of
The Company may yet establish local bGenTM TES System manufacturing capabilities in the territory or offer sale prospects and/or customers in the territory various forms of EaaS (Energy as a Service) business model without limitation, which does not preclude the Distributor’s right to receive equipment profit margin.
| G. | The Company has entered into an agreement with a number of service providers for the purpose of locating and recruiting investors. The consideration for these agreements is on a basis of success in recruitment only, at a rate of |
| H. | The Company has also entered into an agreement with a sales agent, pursuant to which the Company may offer and sell its Ordinary Shares, from time to time, to or through the Sales Agent - see Note 11A. |
NOTE 13 - SUPPLEMENTRY FINANCIAL STATEMENT INFORMATION
| A. |
| December 31 | ||||||||
| 2025 | 2024 | |||||||
| Employees and employee institutions | ||||||||
| Expenses payable | ||||||||
| Royalties payable | ||||||||
| Advances from Baran | ||||||||
| Other liabilities | ||||||||
| B. | REVENUES: |
In 2025 the Company recognized revenue from thermal energy storage unit provided to a customer in Europe (
In 2023, the Company recognized revenue from engineering services provided to customers in Europe (
Revenue recognized that was included in the contract liability balance (deferred revenue) at the beginning of the years ended December 31, 2025 and 2024, and 2023 amounts to $
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Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 - SUPPLEMENTRY FINANCIAL STATEMENT INFORMATION (cont.):
| C. |
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Salary and related expenses | ||||||||||||
| Consultants and subcontractors | ||||||||||||
| Write down of work-in-progress inventory to net realizable value | ||||||||||||
| Expenditure on materials | ||||||||||||
| Royalties | ||||||||||||
| Operating costs not attributed to projects (mainly salary and related expenses) * | ||||||||||||
| * |
| D. |
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Salary and related expenses | ||||||||||||
| Consultants and subcontractors | ||||||||||||
| Expenditure on materials | ||||||||||||
| Depreciation and other | ||||||||||||
| Office maintenance | ||||||||||||
| Less: Government Grants, see Note 2M | ( | ) | ||||||||||
| E. | SELLING AND MARKETING (U.S. dollars in thousands): |
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Salary and related expenses | ||||||||||||
| Office maintenance | ||||||||||||
| Project Promotion | ||||||||||||
| Consultants | ||||||||||||
| Other | ||||||||||||
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Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 - SUPPLEMENTRY FINANCIAL STATEMENT INFORMATION (cont.):
| F. |
| Year ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Salary and related expenses | ||||||||||||
| Office maintenance | ||||||||||||
| Consultants and insurance | ||||||||||||
| Allowance for credit losses | ||||||||||||
| Depreciation and other | ||||||||||||
| G. | OTHER INCOME (EXPENSES), NET |
In 2024, include mainly the write-off of the remaining value of Rotem 1 remaining asset in the amount of $
| H. | OTHER FINANCIAL INCOME (EXPENSES), NET (U.S. dollars in thousands): |
Financial income (expenses):
| Year ended December 31 | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Interest income | ||||||||||||
| Fair value adjustment of warrants | ||||||||||||
| Warrants issuance costs | ( | ) | ||||||||||
| Exchange rate differences, Net | ( | ) | ||||||||||
| Bank fees | ( | ) | ( | ) | ( | ) | ||||||
| Other adjustment of royalty obligation | ||||||||||||
| ( | ) | |||||||||||
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Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 - SUPPLEMENTRY FINANCIAL STATEMENT INFORMATION (cont.):
| I. | Loss per ordinary share: |
Basic and diluted loss per share is computed as follows:
| Year ended December 31, | ||||||||||||
| Numerator ($ in thousands): | 2025 | 2024 | 2023 | |||||||||
| Net loss for the year, as reported | ( | ) | ( | ) | ( | ) | ||||||
| ( | ) | |||||||||||
| Deemed dividend for down-round adjustments: | ||||||||||||
| - Preferred shares | ( | ) | ||||||||||
| - Warrants | ( | ) | ||||||||||
| The effect of change in terms of Series 3 warrants | ( | ) | ||||||||||
| Numerator for basic and diluted net loss per Ordinary Share - net loss attributable to shareholders | ( | ) | ( | ) | ( | ) | ||||||
| Denominator (Ordinary Shares in thousands)* | ||||||||||||
| Weighted average number of shares outstanding during the year | ||||||||||||
| Weighted average number of potential shares under prefunded warrants with token exercise price (“penny” warrants) | ||||||||||||
| Denominator for basic and diluted loss per share - weighted number of Ordinary Shares | ||||||||||||
| Basic and dilutive loss per Ordinary Share (in dollars) | ( | ) | ( | ) | ( | ) | ||||||
| * |
For the reported years, all ordinary shares underlying the conversion of preferred shares, options and warrants (except for “penny warrant”) have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive.
These include as of December 31, 2025: Share option and warrants exercisable to
F-39
Brenmiller Energy Ltd.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 - SEGMENT INFORMATION:
The Company operates in operating and reportable segment, that is the sale or lease of bGenTM TES units, and/or the provision of energy generated therefrom and the provision of engineering or maintenance services for that purpose.
The significant segment expenses and other segment items that are provided to the CODM align with expense information that is included in the Company’s consolidated income statement and notes thereto.
The measure of segment assets is reported in the balance sheet as total consolidated assets. The Company’s long-lived assets are located in Israel.
NOTE 15 - SUBSEQUENT EVENTS:
| A. | On February 13, 2026, under the SPA with Alpha, Alpha made subsequent fundings in the gross amount of $ |
On March 11, 2026, under the SPA with Alpha, Alpha made subsequent fundings in the gross amount of $
Consequently, and under the anti-dilution provisions in the agreement, the conversion ratio of all outstanding previously issued preferred shares were down adjusted to $
| B. | See also Note 11A regarding a subsequent reverse split and Note 11B regarding subsequent conversion of Preferred shares. |
F-40
Exhibit 2.1
Description of Securities
The following description of Brenmiller Energy Ltd. (the “Company”) share capital, provisions of our amended and restated articles of association (“Articles”) as may be amended and restated from time to time, and Israeli law are summaries and do not purport to be complete, and is qualified in its entirety by reference to, the provisions of our Articles as well as Israeli law and any other documents referenced in the summary and from which the summary is derived.
General
As of December 31, 2025, our authorized share capital consisted of (i) 150,000,000 Ordinary Shares, no par value per share (the “Ordinary Shares”), and (ii) 25,000 Preferred Shares, no par value per share (the “Preferred Shares”).
The Ordinary Shares shall rank pari passu among themselves in all respects.
The Preferred Shares shall rank pari passu among themselves in all respects.
As of December 31, 2025, 715,852 Ordinary Shares and 5,008 Preferred Shares were issued and outstanding as of such date.
Our registration number with the Israeli Registrar of Companies is 514720374.
Name of exchange on which we are registered
Our Ordinary Shares have been listed on Nasdaq Capital Market (“Nasdaq”) under the symbol “BNRG” since May 25, 2022.
Transfer of shares
No transfer of shares shall be registered unless a proper writing or instrument of transfer (in any customary form or any other form satisfactory to the board of directors “Board of Directors”) has been submitted to the Company (or its transfer agent), together with any share certificate(s) and such other evidence of title as the Board of Directors may reasonably require, in accordance with the Company’s Articles and subject to the provisions of the Israeli Companies Law 5759-1999 (the “Companies Law”).
The Board of Directors, may, from time to time, prescribe a fee for the registration of a transfer, and may approve other methods of recognizing the transfer of shares in order to facilitate the trading of the Company’s shares on the Nasdaq or on any other stock exchange on which the Company’s shares are then listed for trading.
The ownership or voting of our Ordinary Shares by non-residents of Israel, except with respect to citizens of countries that are in a state of war with Israel, is not restricted in any way by our memorandum of association or amended and restated articles of association or by the laws of the State of Israel.
Liability to further capital calls
Our Board of Directors may make, from time to time, such calls as it may deem fit upon shareholders with respect to any sum unpaid with respect to shares held by such shareholders which is not payable at a fixed time. Such shareholder has to pay the amount of every call so made upon him or her.
Election of directors
Under the Company’s Articles, the board of directors is to consist of not less than three (3) and not more than nine (9) directors, including external directors (if any).
Other than external directors, if any (who shall be elected and serve in office in strict accordance with the provisions of the Companies Law), directors of the Company shall be elected only at an annual general meeting. Unless appointed for a shorter term, a director’s term lasts until either (i) the third annual general meeting following the general meeting in which such director was appointed, in which such directors are either re-elected or replaced or (ii) before the third annual general meeting following general meeting in which such director was appointed, in accordance with the provisions of our Articles or the Companies Law.
In each annual general meeting, only directors whose service terms lapse are deemed to have retired and are eligible for re-election and all other directors whose service terms lapse shall be deemed to have been re-elected for an additional term until the next annual general meeting. The director that served the longest since his or her appointment or last re-election is to be deemed eligible for re-election. If two or more of the longest-serving directors have served equally as long, the Board of Directors shall decide which director will be eligible for re-election at the relevant general meeting.
In addition, if a director’s office becomes vacant, the remaining serving directors may continue to act in any manner, provided that the number of the serving directors shall not be less than three (3). If the number of directors is fewer than three, the Board of Directors may only act in an emergency or to fill the director vacancy so that there are up to three directors, but not for any other purpose.
Under the Companies Law, except as provided below, companies incorporated under the laws of the State of Israel that are publicly traded, including Israeli companies with shares listed on the Nasdaq, are required to appoint at least two external directors who meet the qualification requirements set forth in the Companies Law. The definitions of an external director under the Companies Law and independent director under Nasdaq rules are similar such that it would generally be expected that our two external directors will also comply with the independence requirement under Nasdaq rules.
Under regulations promulgated pursuant to the Companies Law, or the Exemptions Regulations, a company with no controlling shareholder whose shares are listed for trading on specified exchanges outside of Israel, including Nasdaq, may adopt exemptions from various corporate governance requirements of the Companies Law, so long as such company satisfies the requirements of applicable foreign country laws and regulations, including applicable stock exchange rules, that apply to companies organized in that country and relating to the appointment of independent directors and the composition of audit and compensation committees. Such exemptions include an exemption from the requirement to appoint external directors and the requirement that an external director be a member of certain committees, as well as exemption from limitations on directors’ compensation. We do not currently have a controlling shareholder and we use this exemption from the requirement described herein.
Dividend rights
Subject to the Preferred Dividends (as defined below), the Board of Directors may from time to time declare, and cause the Company to pay, such dividend as may appear to the Board of Directors to be justified by the profits of the Company and as permitted by the Companies Law.
Except for the Preferred Dividends (as defined below), the Board of Directors shall determine the time for payment of such dividends and the record date for determining the shareholders entitled thereto.
According to our Articles, preferred shareholders are entitled to dividends equivalent to those paid on Ordinary Shares on an as-converted basis. In addition, Preferred Shares accrue an 8% annual dividend on their stated value, which must be declared and paid (subject to legal limitations) before any other dividends can be distributed (the “Preferred Dividends”). These Preferred Dividends are generally paid in cash but shall accrue if unpaid and can be converted into Ordinary Shares under certain conditions.
Pursuant to the Companies Law, the distribution amount is limited to the greater of retained earnings or earnings generated over the previous two years, according to our then last reviewed or audited consolidated financial statements, provided that the date of the financial statements is not more than six months prior to the date of the distribution, or we may distribute dividends that do not meet such criteria only with Israeli court approval. In each case, we are only permitted to distribute a dividend if our Board of Directors and the court, if applicable, determines that there is no reasonable concern that payment of the dividend will prevent us from satisfying our existing and foreseeable obligations as they become due.
2
Shareholder meetings
Under the Companies Law, we are required to hold an annual general meeting of our shareholders once every calendar year that must be held no later than 15 months after the date of the previous annual general meeting. All general meetings other than the annual meeting of shareholders are referred to in our Articles as special meetings. Our Board of Directors may call special meetings whenever it sees fit, at such time and place, as it may determine. In addition, the Companies Law provides that our Board of Directors is required to convene a special meeting upon the written request of (i) any two of our directors or one-quarter of the members of our Board of Directors or (ii) one or more shareholders holding, in the aggregate, either (a) 5% or more of our outstanding issued shares and 1% or more of our outstanding voting power or (b) 5% or more of our outstanding voting power (the “Non Exempted Holding”), however, in accordance with the Exemptions Regulations, the Board of Directors of an Israeli company whose shares are listed outside of Israel, shall convene a special meeting at the request of one or more shareholders holding at least ten percent (10%) of the issued and outstanding share capital instead of five (5%) in the past, and at least one percent (1%) of the voting rights in the company, or one or more shareholders holding at least ten percent (10%) of the voting rights in the company, provided that if the applicable law as applicable to companies incorporated in the country which the Company is listed for trade, establishes a right to demand convening of such a meeting for those holding a percentage of holdings lower than ten percent (10%), then the Non Exempted Holding shall apply.
Under the Companies Law, one or more shareholders holding at least 1% of the voting rights may request that the Board of Directors include a matter in the agenda of a general meeting to be convened in the future, provided that it is appropriate to discuss such a matter at the general meeting. However, under the Exemptions Regulations, one or more shareholders of an Israeli company whose shares are listed outside of Israel, may request the company’s board of directors to include an appointment of a candidate for a position on the board of directors or the termination of a board member, as an item on the agenda of a future general meeting (if the company sees fit), provided that the shareholder hold at least 5% of the voting rights of the company (instead of 1% in the past). any such shareholder may make such a request for nomination of directors only if a notice of such shareholder’s intent to make such nomination has been given to our board of directors in accordance with the regulations promulgated under the Companies Law and our Articles. Any such notice must include certain information, including the consent of the proposed director nominee to serve as our director if elected, and a declaration that the nominee signed declaring that he or she possesses the requisite skills and has the availability to carry out his or her duties. Additionally, the nominee must provide details of such skills, demonstrate an absence of any limitation under the Companies Law that may prevent his or her election, and affirm that all of the required election-information is provided to us, pursuant to the Companies Law.
Subject to the provisions of the Companies Law and the regulations promulgated thereunder, shareholders entitled to participate and vote at general meetings are the shareholders of record on a date to be decided by the Board of Directors, which according to the Companies Law may be between four (4) and sixty (60) days prior to the date of the meeting, as applicable according to the matters on the general meeting agenda. According to the Companies Law, resolutions regarding the following matters must be passed at a general meeting of the Company’s shareholders:
| ● | amendments our Articles; | |
| ● | the exercise of the Board’s powers by a general meeting if the Board’s is unable to exercise its powers and the exercise of any of its powers is required for the Company’s proper management; |
| ● | appointment or termination of the Company’s auditors; |
| ● | appointment of Directors (other than in the cases specified in the Company’s amended and restated articles of association); |
| ● | approval of acts and transactions requiring general meeting approval pursuant to the provisions of the Companies Law and any other applicable law; |
| ● | increases or reductions of the Company’s authorized share capital; |
| ● | a merger (as such term is defined in the Companies Law); and | |
| ● | dissolution of the company by the court, voluntary dissolution, or by voluntary dissolution in an expedited procedure. |
3
Under our Articles, we are not required to give notice to our registered shareholders pursuant to the Companies Law, unless otherwise required by law. The Companies Law requires that a notice of any annual or special general meeting be provided at least 14 or 21 days prior to the meeting, and if the agenda of the meeting includes certain matters prescribed under the Companies Law and the regulations promulgated thereafter, among others, the appointment or removal of directors, the approval of transactions with office holders or interested or related parties, approval of the Company’s general manager to serve as the chairman of the Board of Directors or an approval of a merger, notice must be provided at least 35 days prior to such meeting.
Voting rights
Every shareholder shall have one vote for each share held by him of record, on every resolution, without regard to whether the vote thereon is conducted by a show of hands, by written ballot or by any other means.
Quorum requirements
As permitted under the Companies Law and as stated in our Articles, the quorum required for the Company’s general meetings consists of two or more shareholders, present in person or by proxy and holding shares conferring in the aggregate at least twenty five percent (25%) of the voting power of the Company. If within half an hour of the time set forth for the general meeting a quorum is not present, then without any further notice the general meeting shall stand adjourned either (i) to the same day of the following week, at the same hour and in the same place (ii) to such other date, time and place as prescribed in the notice to the shareholders and in such adjourned meeting or (iii) to such day and at such time and place as the chairperson of the general meeting shall determine (which may be earlier or later than the date pursuant to clause (i) above). At such adjourned meeting, if the original meeting was convened upon requisition under Section 63 of the Companies Law, one or more shareholders, present in person or by proxy and holding the number of shares required for making such requisition, shall constitute a quorum, but in any other case any shareholder present in person or by proxy shall constitute a quorum.
Vote requirements
Our Articles provide that all resolutions of our shareholders require a simple majority vote, unless otherwise required by the Companies Law or by our Articles. Under the Companies Law, each of (i) the approval of an extraordinary transaction with a controlling shareholder and (ii) the terms of employment or other engagement of the controlling shareholder of the company or such controlling shareholder’s relative (even if not extraordinary) requires the approval described under “Item 6.C. Directors, Senior Management and Employees—Board Practices— Fiduciary Duties of Officeholders and Approval of Related Party Transactions under Israeli Law — Disclosure of Personal Interests of an Officeholder.” Certain transactions with respect to remuneration of our office holders and directors require further approvals described under “Item 6. Directors, Senior Management and Employees—C. Board Practices— Fiduciary Duties of Office Holders and Disclosure of Personal Interests of an Officeholder.” Another exception to the simple majority vote requirement is a resolution for the voluntary winding up, or an approval of a scheme of arrangement or reorganization, of the company pursuant to Section 350 of the Companies Law, which requires the approval of the court and the approval of the majority of the shareholders voting their shares, other than abstainees, holding at least 75% of the voting rights represented at the meeting, in person, by proxy or by voting deed and voting on the resolution.
Access to corporate records
Under the Companies Law, shareholders are entitled to have access to: minutes of the Company’s general meetings; the Company’s shareholders register and principal shareholders register, articles of association and annual audited financial statements; and any document that the Company is required by law to file publicly with the Israeli Companies Registrar or the Israel Securities Authority. These documents are publicly available and may be found and inspected at the Israeli Registrar of Companies. In addition, shareholders may request to be provided with any document related to an action or transaction requiring shareholder approval under the related party transaction provisions of the Companies Law. The Company may deny this request if the Company believes it has not been made in good faith or if such denial is necessary to protect the Company’s interest or protect a trade secret or patent.
4
Special or Class Rights; Modification of Rights.
(a) The rights attached to any class, unless otherwise provided by the Companies Law or the Company’s Articles, may be modified or cancelled by the Company by a resolution of the General Meeting of the holders of all shares as one class, without any required separate resolution of any class of shares (except for with respect to amending the provisions of Article 7A of the Company’s Articles (on rights and limitations of preferred shares), which will require a Preferred Share class vote by a simple majority).
The provisions of our Articles relating to General Meetings shall, mutatis mutandis, apply to any separate General Meeting of the holders of the shares of a particular class, it being clarified that the requisite quorum at any such separate General Meeting shall be two or more shareholders present in person or by proxy and holding not less than 15 percent of the issued shares of such class entitled to vote thereon..
Unless otherwise provided by Company’s Articles, an increase in the authorized share capital, the creation of a new class of shares, an increase in the authorized share capital of a class of shares, or the issuance of additional shares thereof out of the authorized and unissued share capital, shall not be deemed to modify or derogate or cancel the rights attached to previously issued shares of such class or of any other class.
Acquisitions under Israeli law
Full tender offer
If, as a result of an acquisition of shares, the acquirer will hold more than 90% of an Israeli public company’s outstanding shares or of certain class of shares, the acquisition must be made by means of a tender offer for all of the outstanding shares, or for all of the outstanding shares of such class, as applicable. In general, if less than 5% of the outstanding shares, or of applicable class, are not tendered in the tender offer and more than half of the offerees who have no personal interest in the offer tendered their shares, all the shares that the acquirer offered to purchase will be transferred to it by operation of law. However, a tender offer will also be accepted if the shareholders who do not accept the offer hold less than 2% of the issued and outstanding share capital of the company or of the applicable class of shares. Any shareholders that was an offeree in such tender offer, whether such shareholder accepted the tender offer or not, may request, by petition to an Israeli court, (i) appraisal rights in connection with a full tender offer, and (ii) that the fair value should be paid as determined by the court, for a period of six months following the acceptance of the offer. However, the acquirer is entitled to stipulate, under certain conditions, that tendering shareholders will forfeit such appraisal rights.
Special tender offer
The Companies Law also provides that, subject to certain exceptions, an acquisition of shares in an Israeli public company must be made by means of a “special” tender offer if as a result of the acquisition (1) the purchaser would become a holder of 25% or more of the voting rights in the company, unless there is already another holder of at least 25% or more of the voting rights in the company or (2) the purchaser would become a holder of 45% or more of the voting rights in the company, unless there is already a holder of more than 45% of the voting rights in the company. These requirements do not apply if, in general, the acquisition (1) was made in a private placement that received shareholders’ approval, subject to certain conditions, (2) was from a holder of 25% or more of the voting rights in the company which resulted in the acquirer becoming a holder of 25% or more of the voting rights in the company, or (3) was from a holder of more than 45% of the voting rights in the company which resulted in the acquirer becoming a holder of more than 45% of the voting rights in the company. A “special” tender offer must be extended to all shareholders. In general, a “special” tender offer may be consummated only if (1) at least 5% of the voting power attached to the company’s outstanding shares will be acquired by the offeror and (2) the offer is accepted by a majority of the offerees who notified the company of their position in connection with such offer (excluding the offeror, controlling shareholders, holders of 25% or more of the voting rights in the company or anyone on their behalf, or any person having a personal interest in the acceptance of the tender offer). If a special tender offer is accepted, then the purchaser or any person or entity controlling it or under common control with the purchaser or such controlling person or entity may not make a subsequent tender offer for the purchase of shares of the target company and may not enter into a merger with the target company for a period of one year from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial special tender offer.
5
In accordance with the regulations promulged under the Companies Law relating to Israeli companies whose shares are listed on foreign stock exchanges, the aforesaid limitations regarding a special tender offer do not apply to such companies, provided that if the law as applicable to companies incorporated in the country in which the foreign company is listed for trade, provide a restriction on the acquisition of control of any proportion of a company or that the acquisition of control of any proportion requires the purchaser to also offer a purchase offer to shareholders from among the public.
Merger
The Companies Law includes provisions that allow a merger transaction and requires that each company that is a party to the merger have the transaction approved by its Board of Directors and, unless certain requirements described under the Companies Law are met, a vote of the majority of its shareholders, and, in the case of the target company, also a majority vote of each class of its shares. For purposes of the shareholder vote of each party, unless a court rules otherwise, the merger will not be deemed approved if shares representing a majority of the voting power present at the shareholders meeting and which are not held by the other party to the merger (or by any person or group of persons acting in concert who holds 25% or more of the voting power or the right to appoint 25% or more of the directors of the other party) vote against the merger. If, however, the merger involves a merger with a company’s own controlling shareholder or if the controlling shareholder has a personal interest in the merger, then the merger is instead subject to the same Special Majority (as defined below) approval that governs all extraordinary transactions with controlling shareholders. Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that as a result of the merger the surviving company will be unable to satisfy the obligations of any of the parties to the merger, and may further give instructions to secure the rights of creditors. If the transaction would have been approved by the shareholders of a merging company but for the separate approval of each class or the exclusion of the votes of certain shareholders as provided above, a court may still approve the merger upon the petition of holders of at least 25% of the voting rights of a company. For such petition to be granted, the court must find that the merger is fair and reasonable, taking into account the value of the parties to the merger and the consideration offered to the shareholders. In addition, a merger may not be completed unless at least (1) 50 days have passed from the time that the requisite proposals for approval of the merger were filed with the Israeli Registrar of Companies by each merging company; and (2) 30 days have passed since the merger was approved by the shareholders of each merging company.
The term “Special Majority” will be defined as described in section 275(a)(3) of the Companies Law as:
| ● | at least a majority of the shares held by shareholders who are not controlling shareholders and do not have personal interest in the merger have voted in favor of the proposal (shares held by abstaining shareholders shall not be considered); or | |
| ● | the total number of shares voted against the merger does not exceed 2% of the aggregate voting rights of the company. |
6
Borrowing powers
Pursuant to the Companies Law and our Articles, our Board of Directors may exercise all powers and take all actions that are not required under law or under our Articles to be exercised or taken by a certain organ of the Company, including the power to borrow money for company purposes.
Changes in capital
Our Articles enable us to increase or reduce our authorized share capital. Any such changes are subject to the provisions of the Companies Law and must be approved by a resolution duly adopted by our shareholders at a general meeting. In addition, transactions that have the effect of reducing capital, such as the declaration and payment of dividends in the absence of sufficient retained earnings or profits, require the approval of both our Board of Directors and an Israeli court.
Debt Securities
The Company does not have any debt securities that are registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Other Securities
The Company does not have any other securities that are registered under Section 12 of the Exchange Act.
7
Exhibit 8.1
LIST OF SUBSIDIARIES
| Company Name | Jurisdiction of Incorporation | |
| Brenmiller Energy U.S. Inc. | Delaware |
Exhibit 11.1
BRENMILLER ENERGY LTD.
Corporate Policy On Insider Trading
Effective as of March 25, 2026
| I. | INTRODUCTION |
This policy determines acceptable transactions in the securities of Brenmiller Energy Ltd. (the “Company”) by our directors, officers, employees, consultants and other related persons including employees of our subsidiaries1. This policy arises from the Company’s status as a public company whose shares are traded on the Nasdaq Capital Market under the symbol “BNRG”. During the course of your employment, directorship or consultancy with the Company, you may receive important information that is not yet publicly available (“inside information”), about the Company or about other publicly-traded companies with which the Company has business dealings. Because of your access to this inside information, you may be in a position to profit financially by buying or selling, or in some other way dealing, in the Company’s securities, or securities of another publicly-traded company, or to disclose such information to a third party who does so profit or which you may have reasonable belief to assume will use the inside information (a “tippee”)2.
It should be noted that under the Israeli Securities Law, in the event an inside information is known to the Company, the prohibition to use such inside information applies to all the insiders of the Company regardless if they are not aware of the inside information.
In addition, the prohibition of use of inside information applies to the repurchase of the Company’s securities by the Company. The company will be considered as having access to or possessing inside information, in the event a director or an employee of the company has access to or the inside information is in his possession.
If any provision of this policy contradicts the provisions of securities laws and regulations applicable to the Company, then the provisions of such securities laws and regulations shall prevail.
In addition, the Company itself must comply with securities laws applicable to its own securities trading activities, and must not engage in any transaction involving a purchase or sale of its securities, including any offer to purchase or offer to sell or other disposition of its securities, when it is in possession of material nonpublic information concerning the Company, other than in compliance with applicable law, subject to the policies and procedures adopted by the Company and the exceptions listed in Section III(c) of this policy to the extent applicable.
| II. | INSIDER TRADING POLICY |
| A. | Securities Transactions |
Use of inside information by someone for personal gain, or to pass on, or “tip,” the inside information to someone who uses it for personal gain, is illegal, regardless of the quantity of shares, and is therefore prohibited. You can be held liable both for your own transactions and for transactions effected by a tippee, or even a tippee of a tippee. Furthermore, it is important that the appearance of insider trading in securities be avoided. The only exception is that transactions directly with the Company, e.g., option exercises for cash or purchases under an employee share purchase plan, are permitted. However, the subsequent sale (including the sale of shares in a cashless exercise program) or other disposition of such shares is fully subject to these restrictions.
| 1 | Under the Israeli Securities Law, an insider also includes a principal shareholder of the company (i.e., a shareholder who holds 5% or more of the issued share capital or of the voting power, or who can appoint one or more directors of the company). |
| 2 | Under the Israeli Securities Law, the use of inside information also relates to a person who delivers inside information or an opinion on the security of a company or on some other security for which the security of the company is an underlying asset while inside information is in his possession to any person who – he knows or has reasonable grounds to believe – will make use of the inside information or will utilize the opinion for purposes of a transaction or will pass it on to another. |
| B. | Inside Information |
As a practical matter, it is sometimes difficult to determine whether you possess inside information. The key to determining whether nonpublic information you possess about a public company is inside information is whether dissemination of the information would likely affect the market price of the company’s shares or would likely be considered important, or “material,” by investors who are considering trading in that company’s shares.
Remember, both positive and negative information can be material. If you possess inside information, you may not trade in a company’s shares, advise anyone else to do so or communicate the information to anyone else until you know that the information has been publicly disseminated. This means that in some circumstances, you may have to forego a proposed transaction involving a purchase or sale of the Company’s securities, including any offer to purchase or offer to sell or gift or other disposition of the Company’s securities, even if you planned to execute the transaction prior to learning of the inside information and even though you believe you may suffer an economic loss or sacrifice an anticipated profit by waiting.
“Trading” includes engaging in short sales, transactions in put or call options, hedging transactions and other inherently speculative transactions, for your own account or for others.
Although by no means an all-inclusive list, information regarding the following subjects is reasonably likely to be found as material inside information until it is publicly disseminated:
| ● | financial results or forecasts, changes in earnings estimates or unusual gains or losses in major operations; |
| ● | major contract awards or cancellations, or corporate partner relationships or joint venture developments (including gain or loss of a significant commercial agreement or other contracts with customers or suppliers, pricing changes or discount policies); |
| ● | confirming or updating previous disclosures or analysts’ reports; |
| ● | major product or technological developments; |
| ● | M&A activity, including acquisitions or dispositions of assets or pending public or private sales of debt or equity securities |
| ● | declaration of share splits, dividends or changes in dividend policy; |
| ● | possible tender offers or proxy fights; |
| ● | significant write-offs; |
| ● | significant litigation or settlements or any government agency investigations; |
| ● | impending bankruptcy; |
| ● | liquidity problems and extraordinary borrowings; |
| ● | changes in dividends, changes in debt ratings; and |
| ● | changes in the Company’s management or the board of directors, significant changes in the Company’s prospects. |
2
For information to be considered publicly disseminated, it must be widely disclosed through a press release or filing pursuant to U.S. Securities Exchange Commission (the “SEC”). Generally speaking, information will be considered publicly disseminated after two full trading days have elapsed since the date of public disclosure of the information. For example, if an announcement of inside information of which you were aware was made prior to trading on Wednesday, then you may execute a transaction in the Company’s securities on Friday.
| III. | TRADING BY DIRECTORS, OFFICERS AND OTHER EMPLOYEES |
We require directors, officers and other employees to do more than refrain from insider trading. We require that they limit their transactions in the Company’s shares to defined time periods following public dissemination of annual and semi-annual financial results and notify, and receive approval from, the Chief Financial Officer prior to engaging in transactions in the Company’s shares and observe other restrictions designed to minimize the risk of apparent or actual insider trading.
It should be noted that under the Israeli Securities Law, if a principal insider in a company buys securities of the company in which he is a principal insider or other securities for which the company’s securities are an underlying asset within three months after the day on which he sold said securities, or if he sells such securities within three months after the day on which he bought said securities, that shall be prima facie evidence that he made use of inside information that he had, except if he proves that he had no inside information at the time of the sale or purchase or that, under the circumstances of the case, it is reasonable that he had no inside information at that time.
A “principal insider in a company” means under the Israeli Securities Law – (1) Director, general manager, deputy general manager, assistant general manager, accountant, internal auditor and any person who performs the function of one of them under a different title, and also an individual who is a principal shareholder of the company; (2) a relative of one of those enumerated in paragraph (1); (3) a body corporate controlled by one of those enumerated in paragraphs (1) and (2).
| A. | Covered Insiders |
The provisions outlined in this policy apply to all directors, officers and employees of the Company and its subsidiaries. Generally, any entities or family members of those individuals whose trading activities are controlled or influenced by any of such persons should be considered to be subject to the same restrictions.
| B. | Trading Window Period |
The period beginning one week before the end of the annual or semi-annual period and ending two (2) trading days following the date of public disclosure of the financial results for that period is a particularly sensitive period of time for transactions in the Company’s shares from the perspective of compliance with applicable securities laws. This sensitivity is due to the fact that directors, officers and certain other employees will, during that period, often possess material nonpublic information about the expected financial results for the period.
Generally, except as set forth in this paragraph B and in paragraphs C and D of this policy, directors, officers and other employees may buy or sell securities of the Company only during a “window period” that opens after two full trading days have elapsed after the public dissemination of the Company’s annual or interim,) financial results and closes on the last trading day one week before the end of the annual or semi-annual period. This window period may be closed early or may not open if, in the judgment of the Company’s Chief Financial Officer, there exists undisclosed information that would make trades by members of the Company’s directors, officers or employees inappropriate. It is important to note that the fact that the window period has closed early or has not opened should be considered inside information. A director, officer or other employee who believes that special circumstances require him or her to trade outside the window period should consult with the Company’s Chief Financial Officer. Permission to trade outside the window period will be granted only where the circumstances are extenuating and there appears to be no significant risk that the trade may subsequently be questioned.
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NOTWITHSTANDING THESE TIMING GUIDELINES, IT IS ILLEGAL FOR ANY PERSON TO TRADE WHILE IN POSSESSION OF MATERIAL NONPUBLIC INFORMATION, INCLUDING SITUATIONS IN WHICH THE PERSON IS AWARE OF INSIDER INFORMATION THAT HAVE NOT YET BEEN PUBLICLY ANNOUNCED BY THE COMPANY.
| C. | Exceptions to Window Period |
1. Option/Warrant Exercises. Other than as provided in paragraphs III.C.3 and III.C.4 below, directors, officers and other employees may exercise options/warrants for cash granted under the Company’s equity incentive plans without restriction to any particular period in light of information then available to the public. However, the subsequent sale of the shares (including sales of shares in a cashless exercise) acquired upon the exercise of options/warrants is subject to all provisions of this policy.
2. 10b5-1 Automatic Trading Programs. In addition, purchases or sales of the Company’s securities made pursuant to, and in compliance with, a written plan established by a director, officer or other employee that meets the requirements of Rule 10b5-1 under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) (a “Trading Plan”) may be made without restriction to any particular period provided that (i) the Trading Plan was established in good faith, in compliance with the requirements of Rule 10b5-1, at the time when such individual was not in possession of material nonpublic information about the Company and the Company had not imposed any trading blackout period, (ii) the Trading Plan was reviewed by the Company prior to establishment, solely to confirm compliance with this policy and the securities laws and (iii) the Trading Plan allows for the cancellation of a transaction and/or suspension of such Trading Plan upon notice and request by the Company to the individual if any proposed trade (a) fails to comply with applicable laws (e.g., exceeding the number of shares that may be sold under Rule 144 under the U.S. Securities Act of 1933, as amended (“Rule 144”)) or (b) would create material adverse consequences for the Company. The Company must be notified of the establishment of any such Trading Plan, any amendments to such Trading Plan and the termination of such Trading Plan.
3. Financial statements. According to the Israeli Securities Authority, there is a presumption that any material information which is included in the Company’s financial statements, prior to their distribution to the public, is considered as inside information. Therefore, the Company’s management may define a ‘Blackout Period’ prior to the publication of the financial statements in which no transactions will be made in Company’s securities by directors, officers and other employees.
4. Former Employees. Former employees of the Company who have left the Company and still own securities of the Company that have not been forfeited shall contact the Company’s Chief Financial Officer to discuss trading outside the window period on a case-by-case basis.
| D. | Pre-Clearance and Advance Notice of Transactions |
In addition to the requirements of paragraph B above, directors, officers and other employees that the Clearing Officer (as defined below) deems to have routine access to material non-public information may not engage in any transaction in the Company’s securities, including any purchase or sale in the open market, loan or other transfer of beneficial ownership without first obtaining pre-clearance of the transaction from the Company’s Chief Financial Officer (the “Clearing Officer”), at least two business days in advance of the proposed transaction. The Clearing Officer will then determine whether the transaction may proceed. Pre-cleared transactions not completed within five business days shall require new pre-clearance under the provisions of this paragraph. The Company may, at its discretion, shorten such period of time.
Advance notice of gifts or an intent to exercise an outstanding share option shall be given to the Clearing Officer. To the extent possible, advance notice of upcoming transactions to be effected pursuant to an established Trading Plan under Section III.C.2 above shall also be given to the Clearing Officer.
Before each transaction in the Company’s securities, each officer and director should contact the Clearing Officer regarding compliance with Rule 144, which contains guidelines for the sale of privately issued shares and sales by affiliates of the Company, if such sales are not covered by an effective registration statement, to the extent applicable, and regarding compliance with the provisions of Section 16(a) of the Exchange Act (“Section 16”) which, effective March 18, 2026, require the Company’s directors and officers (as defined in Section 16) to make public electronic filings with the SEC reporting their beneficial ownership and to disclose their transactions in the Company’s securities.
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| E. | Prohibition of Speculative or Short-term Trading |
No director, officer or other employee may engage in short sales, transactions in put or call options, hedging transactions, margin accounts or other inherently speculative transactions with respect to the Company’s shares at any time.
| F. | Rule 144 and Section 16 Matters for Directors and Officers. |
Directors and officers should take care not to violate the restrictions on sales by control persons and should file any notices of sale required by Rule 144. The practical effect of Rule 144 is that directors and officers who sell the Company’s securities may be required to comply with a number of requirements including holding period, volume limitation, manner of sale and SEC filing requirements.
Directors and officers (as defined in Section 16) of the Company must also comply with the provisions of Section 16 which, effective March 18, 2026, requires the Company’s directors and officers to report transactions in the Company’s securities through filing of Form 3, Form 4 and Form 5 with the SEC. It is the responsibility of each director and officer to comply with their Section 16 reporting obligations.
| IV. | DURATION OF POLICY’S APPLICABILITY |
This policy continues to apply to your transactions in the Company’s shares or in the Company’s tradeable options or the securities of other publicly traded companies engaged in business transactions with the Company even after your employment, directorship or consultancy with the Company has terminated. If you are in possession of inside information when your relationship with the Company concludes, you may not trade in the Company’s shares or in the Company’s tradeable options or the securities of any such other company until the information has been publicly disseminated or is no longer material.
| V. | VIOLATIONS OF INSIDER TRADING LAWS |
Penalties for trading on or communicating material nonpublic information can be severe, both for individuals involved in such unlawful conduct and their employers and supervisors, and may include jail terms, criminal fines, civil penalties and civil enforcement injunctions. Given the severity of the potential penalties, compliance with this policy is mandatory. Anyone who effects transactions in the Company’s securities or the securities of other public companies engaged in business transactions with the Company (or provides information to enable others to do so) on the basis of inside information is subject to both civil liability and criminal penalties, as well as disciplinary action by the Company.
| A. | Legal Penalties |
A person who violates insider trading laws by engaging in transactions in a company’s securities when he or she has material nonpublic information can be sentenced to a substantial jail term and required to pay a criminal penalty of several times the amount of profits gained or losses avoided. In addition, a person who tips others may also be liable for transactions by the tippees to whom he or she has disclosed material nonpublic information. Tippers can be subject to the same penalties and sanctions as the tippees and the SEC has imposed large penalties even when the tipper did not profit from the transaction.
The SEC can also seek substantial civil penalties from any person who, at the time of an insider trading violation, “directly or indirectly controlled the person who committed such violation,” which would apply to the Company and/or management and supervisory personnel. These control persons may be held liable for up to the greater of $1 million or three times the amount of the profits gained or losses avoided. Even for violations that result in a small or no profit, the SEC can seek penalties from a company and/or its management and supervisory personnel as control persons.
| B. | Company-Imposed Penalties. |
Directors, officers or employees who violate this policy may be subject to disciplinary action by the Company, including dismissal for cause. Any exceptions to the policy, if permitted, may only be granted by the Clearing Officer and must be provided before any activity contrary to the above requirements takes place.
| VI. | QUESTIONS ABOUT THE POLICY |
Please sign the attachment acknowledging that you have read and agree to abide by this Policy in your transactions in Company’s securities and return it to the Company’s Chief Financial Officer.
An employee, director or consultant who has questions about this policy should contact his or her own attorney or our Chief Financial Officer, Ofir Zimmerman, at ofirz@bren-energy.com, who would be responsible to assist with implementation and enforcement of this policy, and circulate it to all employees.
* * *
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ACKNOWLEDGMENT
Please sign below acknowledging that you have read and agreed to abide the Company’s insider trading policy.
I received, reviewed and agree to be bound by the Company’s insider trading policy.
| Date: | |||
| Name: | |||
| Title: | |||
| Signature: |
Return this Acknowledgment to the Company’s Chief Financial Officer
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Exhibit 12.1
CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(a) or 15d-14(a)
I, Avraham Brenmiller, certify that:
| 1. | I have reviewed this annual report on Form 20–F of Brenmiller Energy Ltd. (the “Company”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
| 4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. |
| 5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
| Date: March 25, 2026 | /s/ Avraham Brenmiller |
| Avraham Brenmiller | |
| Chief Executive Officer |
Exhibit 12.2
CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(a) or 15d-14(a)
I, Ofir Zimmerman, certify that:
| 1. | I have reviewed this annual report on Form 20–F of Brenmiller Energy Ltd. (the “Company”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
| 4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
| 5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
| Date: March 25, 2026 | /s/ Ofir Zimmerman |
| Ofir Zimmerman | |
| Chief Financial Officer |
Exhibit 13.1
CERTIFICATION PURSUANT TO
18 U.S.C. Section 1350
In connection with the filing of the Annual Report on Form 20-F for the period ended December 31, 2025 (the “Report”) by Brenmiller Energy Ltd. (the “Company”), the undersigned, as the Chief Executive Officer of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, that, to my knowledge:
| (1) | the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: March 25, 2026 | /s/ Avraham Brenmiller |
| Avraham Brenmiller | |
| Chief Executive Officer |
Exhibit 13.2
CERTIFICATION PURSUANT TO
18 U.S.C. Section 1350
In connection with the filing of the Annual Report on Form 20-F for the period ended December 31, 2025 (the “Report”) by Brenmiller Energy Ltd. (the “Company”), the undersigned, as the Chief Financial Officer of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, that, to my knowledge:
| (1) | the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: March 25, 2026 | /s/ Ofir Zimmerman |
| Ofir Zimmerman | |
| Chief Financial Officer |
Exhibit 15
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form F-3 (Nos. 333-289219, 333-283874, 333-272377, 333-273028, 333-290642, 333-292634, 333-293660 and 333-294341) and Form S-8 (Nos. 333-272266, 333-278602, 333-284377 and 333-290040) of Brenmiller Energy Ltd. of our report dated March 25, 2026, relating to the financial statements, which appears in this Form 20-F.
| /s/ Kesselman & Kesselman | |
| Certified Public Accountants (lsr.) | |
| A member firm of PricewaterhouseCoopers International Limited | |
| Tel-Aviv, Israel | |
| March 25, 2026 |
Kesselman
& Kesselman, 146 Derech Menachem Begin St. Tel-Aviv 6492103, Israel,
P.O Box 7187 Tel-Aviv 6107120, Telephone: +972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il