Hold Me Ltd F-1/A, filed May 26, 2021
Hold Me Ltd (HMELF)
F-1/A
2021-05-26
View Original
Added on
October 26, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1 to
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Hold Me Ltd.
(Exact name of Registrant as specified in its charter)
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Israel
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7372
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Not applicable
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(State or other jurisdiction
of incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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30 Golomb Street
Ness Zioyna, Israel 7401337
972-50-222-2755
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(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
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Mark E. Crone, Esq.
The Crone Law Group P.C.
500 Fifth Ave, Suite 938
New York, NY 10110
Phone: (646) 861-7891
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(Name, address, including zip code, and telephone number, including area code, of agent for service)
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Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on the Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF
SECURITIES TO BE REGISTERED |
AMOUNT TO BE
REGISTERED |
PROPOSED
MAXIMUM OFFERING PRICE PER SHARE(1) |
PROPOSED
MAXIMUM
AGGREGATE
OFFERING PRICE
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AMOUNT OF
REGISTRATION FEE |
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Ordinary Shares, par value 0.01 NIS per share
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2,000,000
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(2) |
$
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0.95
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$
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1,900,000
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$
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207.29
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Total Registration Fee
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2,000,000
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$
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207.29
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*
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(1)
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Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(o) under the Securities Act of 1933.
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(2)
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Pursuant to Rule 416 under the Securities Act, the securities being registered hereunder include such indeterminate number of additional ordinary shares as may be issued after the date hereof
as a result of share splits, share dividends or similar transactions.
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*Previously paid
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
The information in this
preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the United States Securities and Exchange Commission is declared effective. This preliminary prospectus is not an
offer to sell these securities and it is not soliciting any offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, Dated May __, 2021
PROSPECTUS
HOLD ME LTD.
Up to 2,000,000 Ordinary Shares at $0.95 per Share
This is the initial public offering of Hold Me Ltd. We are selling up to a maximum of 2,000,000 of our ordinary shares at the fixed price of $0.95 per share. The shares are being offered on a “best efforts basis.” The
shares will be offered and sold by the sole officer and director of Hold Me Ltd., on its behalf, and no underwriters or broker-dealers will be involved in such offering. The offering will commence as soon as practicable after the effective date of
the registration statement relating to this prospectus. It will terminate 180 days after such effective date, but such termination date may be extended for up to an additional 90 days in our discretion. Hold Me Ltd. reserves the right to terminate
the offering at an earlier date, in its sole discretion, even if no or only some of the shares are sold.
There are no minimum purchase requirements, and there are no arrangements to place the funds in an escrow, trust, or similar account. Funds received by Hold Me Ltd. for the payment of shares subscribed for in the
offering will be deposited into a bank account maintained by us and under our control and be immediately available for our use. Such funds will not be placed into escrow, trust or any other similar arrangement. All funds received by Hold Me Ltd. will
be retained by it for its use and will not be refunded.
We are both an "emerging growth company" and a “foreign private issuer” under applicable U.S. Securities and Exchange Commission rules and are subject to reduced public company disclosure requirements. See
“Summary-Implications of Being an ‘Emerging Growth Company’ and a ‘Foreign Private Issuer’” on page 5 of this prospectus.
There has been no market for our securities and a public market may not develop, or, if any market does develop, it may not be sustained. We intend to seek quotation of the ordinary shares on The OTC Markets Group, Inc.
OTCQB Venture Markets or the OTCQB after effectiveness of the registration statement for this prospectus. Quotation of our common stock on the OTC Markets will require a market maker filing an application to quote our common stock and approval of
that application. We do not have a market maker willing to file the necessary application for quoting our common stock on the OTCQB as of the date of this prospectus. There is a risk that no public market will develop for our common stock.
Investing in our Company involves many risks. You should carefully read the “Risk Factors” beginning on page 8 of this prospectus before investing.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
PROSPECTUS DATED , 2021
Table of Contents
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Index to Consolidated Financial Statements
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You should rely only on the information contained in this prospectus and any prospectus supplement or amendment. We have not authorized anyone to provide you with different information. This
prospectus may only be used where it is legal to sell these securities. The information in this prospectus is only accurate as of the date of this prospectus, regardless of the time of any sale of securities.
For investors outside the United States: We have not taken any action that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required,
other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.
About this prospectus
Except where the context otherwise requires or where otherwise indicated, references to “Hold Me Ltd.” the “Company,” “we,” “our” and “us” refer to Hold Me Ltd., a corporation established in the
State of Israel.
Basis of presentation
Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). We present our consolidated financial statements in U.S.
dollars.
Our fiscal year ends on December 31 of each year. References to fiscal 2020 are references to the fiscal year ended December 31, 2020 and references to fiscal 2019 are references to the fiscal year
ended December 31, 2019. Some amounts in this prospectus may not total due to rounding. All percentages have been calculated using unrounded amounts.
Throughout this prospectus, we provide a number of key performance indicators used by our management and often used by competitors in our industry. These and other key performance indicators are
discussed in more detail in the section entitled "Management's discussion and analysis of financial condition and results of operations—Key financial and operating metrics." We define certain terms used in this prospectus as follows:
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“API” means Application Programming Interface, a computing interface that defines interactions between multiple software intermediaries.
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“APP” means an Application, especially as downloaded by a user to a mobile device.
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"Companies Law" means the Israeli Companies Law, 5759-1999.
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“CAGR” means compound annual growth rate.
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“NIS” means New Israeli Shekel, the currency of the State of Israel.
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“VAT” means Value Added Tax.
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Unless the context provides otherwise, “we,” “us,” “our company,” “our,” the “Company” and “Hold Me” is to Hold Me Ltd., an Israel company.
This disclosure contains translations of certain NIS amounts into U.S. dollar amounts at specified rates solely for the convenience of the reader. The relevant exchange rates are listed below:
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For the
Year Ended December 31, 2020 |
For the
Year Ended December 31, 2019 |
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Period Ended NIS: USD exchange rate
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3.215
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3.456
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Period Average NIS: USD exchange rate
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3.215
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3.456
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Numerical figures included in this disclosure have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the
figures that precede them.
1
Market and industry data
Unless otherwise indicated, information in this prospectus concerning economic conditions, our industry, our markets and our competitive position is based on a variety of sources, information from
independent industry analysts and publications, as well as our own estimates and research.
Our estimates are derived from publicly available information released by third-party sources, as well as data from our internal research, which we believe to be reasonable. None of the independent
industry publications used in this prospectus were prepared on our behalf.
The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements appearing elsewhere in this
prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our Shares discussed under “Risk Factors,” before deciding whether to invest in our Shares.
Our Business
Hold Me Ltd. is a software company with a platform that enables its customers to enhance their brand and loyalty with digital payments and reward programs. Our prospect customers, including but not limited to restaurant
chains, media companies and financial organizations, can connect their unique brands with their customers through innovative yet completely intuitive digital payment mobile applications.
Our Market Opportunity
The mobile payments market was valued at $897.68 billion in 2018 and is expected to reach a value of $3695.46 billion by 2024, at a CAGR of 26.93% over the forecast period of 2019 – 2024. The Company's products
provide relevant yet partial functionality to the market of mobile payments. We hope that our products and services can penetrate some portion of the growing mobile payments market. Stores and services across the world are rapidly adopting and
integrating mobile payment applications to accept mobile payments. Owing to changing lifestyle, daily commerce, and rapid growth in online retailing, this trend is expected to continue for many years.
With the rapidly increasing global economy, mobile phones (especially smartphones) have become an essential commodity for every individual. Similarly, the internet has also become part and parcel of life for many people.
This has increased the penetration of smartphones and internet users all over the world driving the growth of the mobile payment market.
Companies are rigorously investing in mobile payment technology due to significant growth in the industry. Many governments are also encouraging banks to build infrastructure to enable safe and secure mobile payments in
rural areas, which is a massive opportunity for vendors.
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The financial services ecosystem is shifting rapidly towards consumer convenience, digitization, and granular product offerings. Brands and financial service providers are looking to merge payments with marketing and
brand awareness. Many are looking to offer branded wallets (mobile applications) coupled with their products and loyalty programs.
More and more consumers look to settle payments with speed, security, and most importantly, through their mobile device. In addition, during the COVID-19 pandemic, we see more and more merchants and consumers shifting
into the cashless society where payments are settled through digital tools – mainly using smartphones.
Going Concern
We currently only have one customer and have not yet established an ongoing source of revenues sufficient to cover our operating costs and allow us to continue as a going concern. For the fiscal year ended December
31, 2020, we had a net loss of NIS377,833, and a cumulative deficit balance of NIS1,521,738. The ability of the Company to continue as a going concern is dependent on obtaining adequate capital to fund operating losses until we become
profitable. If we are unable to obtain adequate capital, we could be forced to cease operations.
Impact of the Covid-19 Pandemic
The COVID-19 pandemic and resulting global disruptions have affected our businesses, as well as those of our customers and suppliers. There are material uncertainties related to events or conditions
due to the COVID-19 pandemic that may cast significant doubt upon our ability to achieve our commercial goals. Although lots of merchants and consumers witnessed shifts from traditional payments to the cashless society where payments are settled
through digital payments using smartphones which brings us market opportunities, the consequences of COVID-19 might combine with other events or conditions to create material uncertainty.
The currently known impacts of COVID-19 on the Company are:
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A decline in the ability to generate new sales;
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A significant delay in our expected investments in R&D and rollout of our products; and
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Negative impact on ability to collect from our customer.
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Corporate Information
Our principal executive offices are located at 30 Golomb Street, Nes Ziona, Israel, 7401337. Our telephone number at this address is ++972.50.2222755 and our email is info@holdme.co.il.
Investors should submit any inquiries to the address and telephone number of our principal executive offices. Our corporate website is www.holdme.co.il. The information contained on our websites is not a part of this
prospectus. Our agent for service of process in the United States is located at 500 Fifth Avenue, Suite 938, New York, N.Y. 10110, United States.
3
Summary Risk Factors
Our business is subject to numerous risks and uncertainties that you should be aware of before making a decision to invest in our ordinary shares. These risks are more fully described in the section
titled “Risk Factors” immediately following this prospectus summary. These risks include, among others, the following:
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We are a startup company with limited resources and no significant revenue. Research shows that a significant high percentage of companies in similar situation fail to achieve their business
goals and end-up failing and losing the investments raised by them.
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Our financial situation creates doubt whether we will continue as a going concern.
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We are solely dependent on one customer. If we fail to acquire new customers or retain existing customer in a cost-effective manner, our business, financial condition and results of operations
may be materially and adversely affected.
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Our business depends on the overall demand for information technology and loyalty and payment software spend and on the economic health of our current and prospective customers.
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Since we are solely dependent on Amazon Cloud, our business, financial condition and results of operations may be materially and adversely affected if this agreement is terminated or if there
are service issues with the cloud that affects our application and operations.
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Any security breaches, unauthorized access, unauthorized usage, virus or similar breach or disruption could result in loss of confidential information, damage to our reputation, early
termination of our contracts, litigation, regulatory investigations, indemnity obligations or other liabilities.
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Many of our competitors and potential competitors are larger and have greater brand name recognition, longer operating histories, larger marketing budgets and significantly greater resources
than we do.
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We do not have any patents or trademark or other form of registered IP.
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Mr. Menachem Shalom, our sole director and officer, beneficially owns 100% of our outstanding shares and his interests may differ from the interests of other shareholders, which could cause
a material decline in the value of our shares.
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Conditions in Israel could materially and adversely affect our business.
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It may be difficult to enforce a U.S. judgment against us, our officer and director or to assert U.S. securities laws claims in Israel or serve process on our officer and director.
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An active trading market for our ordinary shares may not develop and the trading price for our shares may fluctuate significantly.
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The company is an Israeli company and as such it is subject to Israeli tax, accounting, corporate and securities regulations and practices.
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Our registration with the SEC may make the Company subject to US tax, accounting, securities and other requirements and regulation. Such dual-regime is likely to increase the overall
operational effort by the company and may increase substantially the costs associated with compliance and regulation.
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Your rights and responsibilities as our shareholder are governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations.
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Implications of Being an Emerging Growth Company
As a company with less than US$1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act.
As long as we remain an emerging growth company, we may rely on exemptions from some of the reporting requirements applicable to public companies that are not emerging growth companies. These exemptions include: (1) being permitted to provide only
two years of selected financial data (rather than five years) and only two years of audited financial statements (rather than three years), in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” disclosure; (2) not being required to comply with the auditor attestation requirements of the Sarbanes-Oxley Act of 2002 in the assessment of our internal control over
financial reporting; and (3) not being required to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We have taken, and
may continue to take, advantage of some of these exemptions until we are no longer an emerging growth company. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards
until such date that a private company is otherwise required to comply with such new or revised accounting standards. However, we have elected to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards as
required when they are adopted for public companies. This decision to opt out of the extended transition period under the JOBS Act is irrevocable.
4
We will remain an emerging growth company until the earliest of: (1) the last day of our fiscal year during which we have total annual gross revenues of at least US$1.07 billion; (2) the last day of our fiscal year
following the fifth anniversary of the completion of our initial public offering; (3) the date on which we have, during the previous three-year period, issued more than US$1.00 billion in non-convertible debt; or (4) the date on which we become a
“large accelerated filer” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if we have been a public company for at least 12 months and the market value of our ordinary shares held by non-affiliates exceeds
US$700 million as of the last business day of our most recently completed second fiscal quarter. We will not be entitled to the above exemptions if we cease to be an emerging growth company.
Implications of Our Foreign Private Issuers Status
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic
issuers, including: (i) the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; (ii) the sections of the Exchange Act regulating the solicitation of proxies, consents, or
authorizations in respect of a security registered under the Exchange Act; (iii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from
trades made in a short period of time; and (iv) the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, if we are successful at having our shares quoted on the OTCQB, we will
publish our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the OTCQB. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However,
the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or
information, which would be made available to you, were you investing in a U.S. domestic issuer.
5
The Offering
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Ordinary Shares Being Offered:
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2,000,000 ordinary shares.
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Offering Price:
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$0.95 per share.
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Ordinary Shares Issued and Outstanding:
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4,000,000 shares of ordinary stock if the maximum 2,000,000 shares being offered by this prospectus are sold by us.
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Market for our Ordinary Shares:
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There is no market for our securities. Our ordinary shares are not traded on any exchange or quoted on the OTC Markets. After the effective date of the registration statement relating to this
prospectus, we hope to have a market maker file an application for our shares to be eligible for quotation on the OTC Markets. We do not yet have a market maker who has agreed to file such application.
There is no assurance that a trading market will develop, or, if developed, that it will be sustained. Consequently, a purchaser of our ordinary shares may find it difficult to resell the
securities offered herein should the purchaser desire to do so when eligible for public resale.
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Use of Proceeds:
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If we are successful at selling all the shares being offered, we expect to receive net proceeds from this offering of approximately $1,840,000.
We intend to use the net proceeds from this offering for working capital, to fund growth and other general corporate purposes, pay existing liabilities including the repayment of approximately $184,000 to Mr. Shalom, our sole officer and director and shareholder. See “Use of Proceeds”. |
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Risk Factors:
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See “Risk Factors” and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our ordinary shares.
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Listing:
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We intend to apply to quote our ordinary shares on the OTCQB. There is no assurance that we will be successful at having our shares quoted.
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6
Summary Consolidated Financial Data
The following summary consolidated financial data for the years ended December 30, 2020 and 2019 has been derived from our audited consolidated financial statements included elsewhere in this
prospectus. Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our historical results are not necessarily indicative of results
expected for future periods. You should read this Summary Consolidated Financial Data section together with our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” included elsewhere in this prospectus.
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Fiscal Year Ended
December 31, 2020
(audited)
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Fiscal Year Ended
December 31, 2019
(audited)
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Balance Sheet Data
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Cash
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NIS
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149,791
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NIS
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5,313
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Total Assets
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NIS
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736,478
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NIS
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1,096,265
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Total Liabilities
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NIS
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1,958,213
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NIS
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1,940,167
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Total Stockholder’s Equity
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NIS
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(1,221,735)
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NIS
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(843,902)
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Fiscal Year Ended
December 31, 2020
(audited)
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Fiscal Year Ended
December 31, 2019
(audited)
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Statement of Operations
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Revenue
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NIS
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486,360
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134,377
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Net Income for Reporting Period
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NIS
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(1,521,738)
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(1,143,905)
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7
You should consider carefully the risks described below making an investment decision. Additional risks not presently known to us or that we currently deem immaterial may also impair our business
operations. Our business, financial condition or results of operations could be materially and adversely affected by any of these risks. The trading price and value of our ordinary shares could decline due to any of these risks, and you may lose all
or part of your investment. This prospectus also contains forward-looking statements that involve risks and uncertain. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain
factors, including the risks faced by us described below and elsewhere in this prospectus.
Risks Relating to our business and industry
Our financial situation creates doubt whether we will continue as a going concern.
There can be no assurances that we will ever be able to achieve a level of revenues adequate to generate sufficient cash flow from operations or obtain additional financing through private
placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, we will have to raise
additional working capital and no assurance can be given that additional financing will be available, or if available, will be on acceptable terms. These conditions raise substantial doubt about our ability to continue as a going concern. If
adequate working capital is not available, we may be forced to discontinue operations, which would cause investors to lose their entire investment.
Our consolidated financial statements for the year ended December 31, 2020, were prepared assuming that we would continue as a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The accompanying financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary
should the Company be unable to continue as a going concern.
The report of our independent registered public accounting firm on our audited consolidated financial statements as of December 31, 2020 and 2019 and for each of the two years then ended includes
an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern based upon our recurring losses, cash used in operations and accumulated deficit,
8
We are solely dependent on one customer. If we fail to acquire new customers or retain existing customers in a cost-effective manner, our business, financial
condition and results of operations may be materially and adversely affected.
As of the date of this prospectus, we only have one customer in Israel. For the year ended December 31, 2020, this customer accounted for a majority of our revenues, an aggregate of NIS470,000, or approximately
96.6% of our sales for said year.
Our ability to cost-effectively attract new customers and retain our sole existing customer is crucial to driving net revenues growth and achieving profitability. We have invested significantly in branding, sales and
marketing to acquire and retain customers since our inception. For example, we attend domestic and international expos and exhibitions in marketing our products and attracting new customers. We also expect to continue to invest significantly to
acquire new customers and retain our sole customer. There can be no assurance that new customers will stay with us, or the net revenues from new customers we acquire will ultimately exceed the cost of acquiring those customers. In addition, if our
existing customer no longer finds our products appealing, or if our competitors offer more attractive products, prices, discounts or better customer services, our customers may lose interest in us, decrease their orders or even stop ordering from
us. If we are unable to retain our existing customer or acquire new customers in a cost-effective manner, our revenues may decrease, and our results of operations will be adversely affected.
Our sole customer was not able to provide us with all the cash payments in a timely manner in the amounts and dates agreed for the license granted to the customer in 2020. However, if our customer is once again not
able to pay us in a timely manner, this will have a material negative impact on our financial condition. We will not be able to market our services and therefore our revenues will decrease. We would like to spend NIS500,000 this year on marketing
and sales, but will only be able to do so if we are successful at raising funds in this offering.
If the market for digital payments does not continue to grow, our business will be adversely affected.
The market for digital payments may not continue to grow. Continued growth of this market will depend, in large part, upon:
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the continued expansion of Internet usage and the number of organizations adopting or expanding intranets;
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the continued adoption of “cloud” infrastructure by organizations;
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the ability of the infrastructures implemented by organizations to support an increasing number of users and services;
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the continued development of new and improved services for implementation across the Internet and between the Internet and intranets;
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the adoption of data security measures as it pertains to data encryption and data loss prevention technologies;
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continued access to mobile API’s, APPs and application stores with Apple, Google and Microsoft, etc.;
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government regulation of the Internet and governmental and non-governmental requirements and standards with respect to data security and privacy; and
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general economic conditions in the markets in which we, our customers and our suppliers operate.
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In 2020, global and regional economies around the world and financial markets remained volatile as a result of a multitude of factors, including COVID-19 pandemic, economic and political
uncertainty, terrorism, governmental instability and other factors. During this period, many organizations limited their expenditures and a significant portion of such organizations have remained reluctant to increase expenditures. If challenging
conditions continue or worsen, it may cause our customers to reduce or postpone their technology spending significantly, which could result in reductions in sales of our products, longer sales cycles, slower adoption of new technologies and
increased price competition.
Further, if the necessary infrastructure or complementary products and services are not developed in a timely manner and, consequently, the enterprise security, data security, Internet or intranet
markets fail to grow or grow more slowly than we currently anticipate, our business, results of operations and financial condition may be materially adversely affected.
We may not be able to successfully compete, which could adversely affect our business and results of operations.
The digital payment market is profoundly shifting in the Covid-19 pandemic context. The crisis has affected the way people think about payments and financial services, with the use of cash
declining and the rise of contactless encouraged by many countries. All the actors are being impacted by this move towards a cashless society, including retailers, merchants, consumers, governments, financial institutions, and service providers.
The market for digital payment is intensely competitive and we expect that competition will continue to increase in the future. Our competitors include big tech companies, such as Google, Apple and
PayPal who are eagerly looking to grab an increasing share in the digital payment market. We also compete with several other companies, including wallet factory and dejamobile, with respect to digital wallets that we offer. In addition, there are
hundreds of small and large companies that offer digital payment products that we may compete with from time to time.
Some of our current and potential competitors have various advantages over us, including longer operating histories; access to larger customer bases; significantly greater financial, technical and
marketing resources; a broader portfolio of products, applications and services; and larger patent and intellectual property portfolios. As a result, they may be able to adapt better than we can to new or emerging technologies and changes in
customer requirements, or to devote greater resources to the promotion and sale of their products. Furthermore, some of our competitors with more diversified product portfolios and larger customer bases may be better able to withstand a reduction
in spending on digital payment solutions, as well as a general slowdown or recession in economic conditions in the markets in which they operate. In addition, some of our competitors have greater financial resources than we do, and they have
offered, and in the future may offer, their products at lower prices than we do, or may bundle digital payment products with their other offerings, which may cause us to lose sales or to reduce our prices in response to competition.
In addition, consolidation in the markets in which we compete may affect our competitive position. This is particularly true in circumstances where customers are seeking to obtain a broader set of
products and services than we are able to provide.
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The markets in which we compete also include many niche competitors, generally smaller companies at a relatively early stage of operations, which are focused on specific digital payment needs.
These companies’ specialized focus may enable them to adapt better than we can to new or emerging technologies and changes in customer requirements in their specific areas of focus. In addition, some of these companies can invest relatively large
resources on very specific technologies or customer segments. The effect of these companies’ activities in the market may result in price reductions, reduced gross margins and loss of market share, any of which will materially adversely affect our
business, results of operations and financial condition.
We may not be able to continue competing successfully against our current and future competitors, and increased competition within the market may result in price reductions, reduced gross margins
and operating margins, reduced net income, and loss of market share, any or all of which may materially adversely affect our business, results of operations and financial condition.
We may not be able to maintain and improve the network effects of our digital economy, which could negatively affect our business and prospects.
Our ability to maintain a healthy and vibrant digital economy that creates strong network effects among financial institutions, consumers, merchants, brands, retailers and other participants is critical to our success.
The extent to which we are able to maintain and strengthen these network effects depends on our ability to:
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offer secure and open platforms for all participants and balance the interests of these participants;
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provide a wide range of high-quality product, service and content offerings to consumers;
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attract and retain consumers, merchants, brands and retailers of all sizes;
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provide effective technologies, infrastructure and services that meet the evolving needs of financial institutions, consumers, merchants, brands, retailers and other businesses;
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secure and trusted digital payment services;
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address user concerns with respect to data security and privacy measures;
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attract and retain third-party service providers that are able to provide quality services on commercially reasonable terms to our customers;
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maintain the quality of our customer service; and
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continue adapting to the changing demands of the digital payment market.
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In addition, changes to current operations we may make to enhance and improve our digital economy or to comply with regulatory requirements may be viewed positively from one participant group’s perspective, such as our
customers, but may have negative effects from another group’s perspective, such as the clients of our customers. If we fail to balance the interests of all participants in our digital economy, our customers may spend less time, mind-share and
resources on our Platform and may conduct fewer transactions or use alternative platforms, any of which could result in a material decrease in our revenue and net income.
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Raising additional capital and the conversion of our outstanding preferred shares owned by our majority controlling shareholder would cause significant
dilution to our existing shareholders and may affect the rights of existing shareholders.
We will have to seek additional capital through a combination of private and public equity offerings, debt financing and collaborations and strategic and licensing arrangements. To the extent that
we raise additional capital through the issuance of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a holder of our
shares.
In addition, Mr. Shalom, our sole officer and director and majority shareholder, owns 10,000,000 shares of preferred shares, with each share being convertible at any time by Mr. Shalom to 100
shares of ordinary shares. Accordingly, if Mr. Shalom would convert some or all his preferred shares, your ownership interest in the Company will be further diluted.
We may not be able to introduce products acceptable to customers and we may not be able to improve the technology used in our current systems in response to
changing technology and end-user needs.
The markets in which we operate are subject to rapid and substantial innovation, regulation and technological change, mainly driven by technological advances and end-user requirements and
preferences, as well as the emergence of new standards and practices. Even if we are able to complete the development of our products, our ability to compete in the digital market will depend, in large part, on our future success in enhancing our
existing products and developing new systems that will address the varied needs of prospective end-users, and respond to technological advances and industry standards and practices on a cost-effective and timely basis to otherwise gain market
acceptance.
Even if we successfully introduce our existing products in development, it is likely that new systems and technologies that we develop will eventually supplant our existing systems or that our
competitors will create systems that will replace our systems. As a result, any of our products may be rendered obsolete or uneconomical by our or others’ technological advances.
We may need to change our pricing models to compete successfully.
The intense competition we face in the sales of our products and services and general economic and business conditions can put pressure on us to change our prices. If our competitors offer deep
discounts on certain products or services or develop products that the marketplace considers more valuable, we may need to lower prices or offer other favorable terms in order to compete successfully. Any such changes may reduce margins and could
adversely affect results of operations.
If our products fail to protect against attacks and our customers experience security breaches, our reputation and business could be harmed.
Hackers and other malevolent actors are increasingly sophisticated, often affiliated with organized crime and operate large scale and complex attacks. In addition, their techniques change
frequently and generally are not recognized until launched against a target. If we fail to identify and respond to new and increasingly complex methods of attack and to update our products to detect or prevent such threats in time to protect our
customers’ high-value business data, our business and reputation will suffer.
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In addition, an actual or perceived security breach or theft of the sensitive data of one of our customers, regardless of whether the breach is attributable to the failure of our products, could
adversely affect the market’s perception of our products. Despite our best efforts, there is no guarantee that our products will be free of flaws or vulnerabilities, and even if we discover these weaknesses we may not be able to correct them
promptly, if at all. Our customers may also misuse our products, which could result in a breach or theft of business data.
Defects in products could give rise to product returns or product liability, warranty or other claims that could result in material expenses, diversion of
management time and attention, and damage to our reputation.
Even if we are successful in introducing our products to the market, our products may contain undetected defects or errors that, despite testing, are not discovered until after a product has been
used. This could result in delayed market acceptance of those products, claims from distributors, end-users or others, increased end-user service and support costs and warranty claims, damage to our reputation and business, or significant costs to
correct the defect or error. We may from time to time become subject to warranty or product liability claims that could lead to significant expenses as we need to compensate affected end-users for costs incurred related to product quality issues.
Any claim brought against us, regardless of its merit, could result in material expense, diversion of management time and attention, and damage to our reputation, which could cause us to fail to
retain or attract customers. Currently, we do not maintain product liability insurance, which will be necessary prior to the commercialization of our products. It is likely that any product liability insurance that we will have in the future will be
subject to significant deductibles and there is no guarantee that such insurance will be available or adequate to protect against all such claims, or we may elect to self-insure with respect to certain matters. Costs or payments made in connection
with warranty and product liability claims and product recalls or other claims could materially affect our financial condition and results of operations.
We expect that we will need to raise substantial additional capital before we can expect to become profitable from sales of our products. This additional
capital may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.
We expect that we will require substantial additional capital to commercialize our products. In addition, our operating plans may change as a result of many factors that may currently be unknown to
us, and we may need to seek additional funds sooner than planned. Our future capital requirements will depend on many factors, including but not limited to:
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the scope, rate of progress, results and cost of product development, and other related activities;
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the cost of establishing commercial supplies of our products;
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the cost and timing of establishing sales, marketing, and distribution capabilities; and
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the terms and timing of any collaborative, licensing, and other arrangements that we may establish.
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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. In addition, we cannot
guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional
securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline. The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree
to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our
ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable, and we may be required to relinquish rights to some of our
technologies or products or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. Even if we believe that we have sufficient funds for our current or future
operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.
If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of
our 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.
Since we are solely dependent on Amazon Cloud, our business, financial condition and results of operations may be materially and adversely affected if this
agreement is terminated or if there are service issues with the cloud that affects our application and operations.
As of the date of this prospectus, Amazon Cloud (also known as Amazon Web Services) is our sole cloud provider. Our entire technology was developed in Amazon’s cloud environment and is currently
deployed on it. Our reliance on a single vendor for our business involves high risks. Our agreement with Amazon was not negotiated but the standard, boilerplate agreement which Amazon utilizes with all its customers. Amazon has the ability to
terminate its services to us at any time. Accordingly, if Amazon terminates the agreement, our business may be severely interrupted, and our financial condition and results of operations may be materially and adversely affected. In addition, all
our software and code are held in Amazon cloud and could be subject to attacks, deletion or other bad affects.
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If our relationships with other suppliers for our products and services were to terminate or our software development arrangements were to be disrupted, our
business could be interrupted.
Our products depend on certain third-party technology and we purchase component parts that are used in our products from third-party suppliers, some of whom may compete with us. For example, we
develop our products via a software company situated in India. Our reliance on a single or limited number of vendors involves several risks, including:
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potential shortages of some key personnel or talented developers;
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Developers performance shortfalls, if traceable to particular persons , since the developers of our software cannot readily be replaced;
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discontinuation of service and talent-pool on which we rely;
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potential insolvency of these vendors; and
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reduced control over delivery schedules, quality and costs.
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If certain suppliers were to decide to discontinue their service with us, the unanticipated change in the availability of supplies, or unanticipated supply limitations, could cause delays in, or loss
of, developments, integrations, sales, increased production or related costs and consequently reduced margins, and damage to our reputation. If we were unable to find a suitable supplier on time, we could be required to modify our existing
development and production settings or the end-solution that we offer to our customers.
A significant interruption in the operations of our third-party suppliers could potentially disrupt our operations.
We have limited control over the operations of our third-party suppliers and other business partners and any significant interruption in their operations may have an adverse impact on our operations.
For example, a significant interruption in the operations of the India software company, one of our suppliers, may cause interruption to our business. If we could not solve the impact of the interruptions of operations of our third-party suppliers,
our business operations and financial results may be materially and adversely affected.
Mr. Menachem Shalom, our sole director and officer, beneficially owns 100% of our outstanding shares and his interests may differ from the interests of other
shareholders, which could cause a material decline in the value of our shares.
Mr. Menachem Shalom, our sole director and officer, currently beneficially owns 100% of our outstanding ordinary shares. Assuming all the 2,000,000 shares offered in this offering are sold, Mr.
Shalom will have 50% of the outstanding ordinary shares. In addition, he owns, and is expected to own after the completion of the registration, 100% of the issued preferred shares of the company. Accordingly, he has a significant influence on
determining the outcome of any matters submitted to the shareholders for approval, including mergers, consolidations, the election of directors and other significant corporate actions. Without his consent, we may be prevented from entering into
transactions that could be beneficial to us or our minority shareholders. His interest may differ from the interests of our other shareholders. The concentration in the ownership of our shares may cause a material decline in the value of our shares.
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We cannot assure you that Mr. Menachem Shalom will act in the best interests of all of our shareholders given Mr. Shalom’s ability to control the Company. See “Certain
Relationships and Related Transactions, and Director Independence”.
We are dependent upon our sole executive and we cannot assure his retention.
Our success depends, in part, upon the continued services of Mr. Shalom, whose knowledge of the market, our business and our Company represents a key strength of our business, which cannot be easily
replicated. The success of our business strategy and our future growth also depend on our ability to attract, train, retain and motivate skilled managerial, sales, administration, development and operating personnel. Even though we have a management
agreement with Mr. Shalom, there is no required time period in which he needs to be employed by us.
There can be no assurance that our existing personnel will be adequate or qualified to carry out our strategy, or that we will be able to hire or retain experienced, qualified employees to carry out
our strategy. The loss of Mr. Shalom or the failure to attract and retain additional key personnel, could have a material adverse effect on our business, financial condition and results of operations.
If we fail to adopt new technologies to evolving customer needs or emerging industry standards, our business may be materially and adversely affected.
To remain competitive, we must continue to stay abreast of the constantly evolving industry trends and to enhance and improve our technology accordingly. Our success will depend, in part, on our
ability to identify, develop, acquire or license leading technologies useful in our business. There can be no assurance that we will be able to use new technologies effectively or meet customer’s requirements. If we are unable to adapt in a
cost-effective and timely manner in response to changing market conditions or customer preferences, whether for technical, legal, financial or other reasons, our business may be materially and adversely affected.
We may experience significant liability claims or complaints from customers, or adverse publicity involving our products and our services.
We face an inherent risk of liability claims or complaints from our customers. We take our customers’ complaints seriously and endeavor to reduce such complaints by implementing various remedial
measures. Nevertheless, we cannot assure you that we can successfully prevent or address all customer complaints.
Any complaints or claims against us, even if meritless and unsuccessful, may divert management attention and other resources from our business and adversely affect our business and operations.
Customers may lose confidence in us and our brand, which may adversely affect our business and results of operations. Furthermore, negative publicity including but not limited to negative online reviews on social media and crowd-sourced review
platforms, industry findings or media reports related to safety and quality of our products, whether or not accurate, and whether or not concerning our products, can adversely affect our business, results of operations and reputation.
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We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.
We cannot be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate intellectual property rights held by third parties. We have not but in
the future may be, subject to legal proceedings and claims relating to the intellectual property rights of others. There could also be existing intellectual property of which we are not aware that our products may inadvertently infringe. We cannot
assure you that holders of intellectual property purportedly relating to some aspect of our technology or business, if any such holders exist, would not seek to enforce such intellectual property against us in Israel, or any other jurisdictions. If
we are found to have violated the intellectual property rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or be forced to
develop alternatives of our own. In addition, we may incur significant expenses, and may be forced to divert management’s time and other resources from our business and operations to defend against these infringement claims, regardless of their
merits. Successful infringement or licensing claims made against us may result in significant monetary liabilities and may materially disrupt our business and operations by restricting or prohibiting our use of the intellectual property in question,
and our business, financial position and results of operations could be materially and adversely affected.
Further, the application and interpretation of Israel’s patent laws and the procedures and standards for granting patents in Israel are still evolving and are uncertain, and we cannot assure you that
the courts or regulatory authorities in Israel would agree with our analysis.
We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
Although we regard our know-how, proprietary technologies, and similar intellectual property as critical to our success, we have no patents or trademarks protecting our intellectual property. We may
become an attractive target to intellectual property attacks in the future with the increasing recognition of our brand. Any of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated, or such intellectual
property may not be sufficient to provide us with competitive advantages. In addition, there can be no assurance that (i) all of our intellectual property rights will be adequately protected, or (ii) our intellectual property rights will not be
challenged by third parties or found by a judicial authority to be invalid or unenforceable.
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Because we are an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public
companies that are not “emerging growth companies.”
We are an “emerging growth company” as defined under the Jumpstart our Business Startups Act (“JOBS Act”). We will remain an “emerging growth company” for up to five years, or until the earliest of:
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the last day of the first fiscal year in which our total annual gross revenues exceed $1.07 billion,
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the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our ordinary shares that is held by
non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or
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the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.
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As an “emerging growth company”, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”
including, but not limited to:
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not being required to comply with the auditor attestation requirements of section 404(b) of the Sarbanes-Oxley Act (“Sarbanes Oxley”) (we also will not be subject to the auditor attestation
requirements of section 404(b) as long as we are a “smaller reporting company”, which includes issuers that had a public float of less than $75 million as of the last business day of their most recently completed second fiscal quarter);
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reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and
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exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
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In addition, section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in section 7(a)(2)(B) of the Securities Act of 1933
(the “Securities Act”) for complying with new or revised accounting standards. Under this provision, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
However, we are choosing to “opt out” of such extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth
companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
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The nature of our business requires the application of complex revenue recognition rules. Significant changes in U.S. generally accepted accounting
principles, or GAAP, including the adoption of the new revenue recognition rules, could materially affect our financial position and results of operations.
We prepare our financial statements in accordance with GAAP, which is subject to interpretation or changes by the Financial Accounting Standards Board, or FASB, the SEC, and other various bodies
formed to promulgate and interpret appropriate accounting principles. New accounting pronouncements and changes in accounting principles have occurred in the past and are expected to occur in the future, which may have a significant effect on our
financial results. For example, pursuant to the new revenue recognition rules, effective as of January 1, 2018, an entity recognizes sales and usage-based royalties as revenue only when the later of the following events occurs: (1) the subsequent
sale or usage occurs or (2) the performance obligation to which some or all of the sales-based or usage-based royalty allocated has been satisfied (or partially satisfied). Recognizing royalty revenue on a lag time basis is not permitted. As a
result, the royalties we generate from customers is based on royalty of units shipped during the quarter as estimated by our customers, not a quarter in arrears that we previously report. Adoption of this standard and any difficulties in
implementation of changes in accounting principles, including uncertainty associated with royalty revenues for the quarter based on estimates provided by our customer, could cause us to fail to meet our financial reporting obligations, which could
result in regulatory discipline and harm investors’ confidence in us.
Risks relating to legal uncertainty and doing business in Israel
Conditions in Israel could materially and adversely affect our business.
Our executive offices are located in Israel. In addition, our sole officer and director is a resident of Israel. Accordingly, political, economic and military conditions in Israel and the
surrounding region may directly affect our business and operations. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries, as well as terrorist acts
committed within Israel, the Palestinian Authority areas and Lebanon by hostile elements.
Civil unrest and political turbulence has occurred in many other countries in the region, including those which share a common border with Israel, and is affecting the political stability of those
countries. This instability and any intervention may lead to deterioration of the political and economic relationships that exist between the State of Israel and some of these countries and may have the potential for additional conflicts in the
region. In addition, Iran has threatened to attack Israel and is widely believed to be developing nuclear weapons. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, and Hezbollah in Lebanon.
Iran is known to support the government of Syria in its battles against various rebel militia groups in Syria.
Any future armed conflict, political instability, continued violence in the region or restrictions could have a material adverse effect on our business, operating results and financial condition.
While such hostilities did not in the past have a material adverse impact on our business, we cannot guarantee that hostilities will not be renewed and have such an effect in the future. The political and security situation in Israel may result in
parties with whom we have contracts claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions.
Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could adversely affect our operations and could make it more difficult for
us to raise capital or obtain components used in our products. Since many of our facilities are located in Israel, we could experience serious disruptions if acts associated with this conflict result in any serious damage to our facilities. Any
future armed conflict or political instability in the region could negatively affect business conditions and harm our results of operations.
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Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers 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 that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a
material adverse effect on our business.
Furthermore, several countries still restrict trade with Israeli companies and additional countries may impose such restrictions as a result of changes in the military and/or political conditions
in Israel and/or the surrounding countries, which may limit our ability to make sales in, or purchase components from, those countries. In addition, such boycott, restrictive laws, policies, or practices may change over time in unpredictable ways,
and could, individually or in the aggregate, have a material adverse effect on our business in the future. Should the BDS Movement, the movement for boycotting, divesting and sanctioning Israel and Israeli institutions (including universities) and
products become increasingly influential in the United States, Europe and around the world, this may also adversely affect our business and financial condition.
In addition, 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 reservists
who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military
reservists. It is possible that there will be military reserve duty call-ups in the future. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management. Such disruption could materially adversely
affect our business, prospects, financial condition and results of operations.
The legislative power of the State of Israel resides in the Knesset, a unicameral parliament that consists of 120 members elected by nationwide voting under a system of proportional representation.
Israel's most recent general elections were held on April 9, 2019, September 17, 2019 and March 2, 2020, following which a process of composing and approving a new government has commenced. This uncertainty surrounding future elections and/or the
results of such elections in Israel may continue and the political situation in Israel may further deteriorate. Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the
aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations and prospects.
It may be difficult to enforce a U.S. judgment against us, our officer and director or to assert U.S. securities laws claims in Israel or serve process on our
officer and director.
Since our sole director and officer is not a resident of the United States and all of our assets are located outside the United States, service of process upon us or our non-U.S. resident director
and officers may be difficult to obtain within the United States. We have been informed by our legal counsel in Israel that it may be difficult to assert claims under U.S. securities laws in original actions instituted in Israel or obtain a
judgment based on the civil liability provisions of U.S. federal securities laws. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws against us or our non-U.S. officer and director because Israel may not be the
most appropriate forum 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 proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing the matters described above.
Additionally, Israeli courts might not enforce judgments obtained in the United States against us or our non-U.S. director and executive officer, which may make it difficult to collect on judgments rendered against us or our non-U.S. officer and
director.
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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. For more information, see "Enforceability of civil liabilities."
Your rights and responsibilities as our shareholder are governed by Israeli law, which may differ in some respects from the rights and responsibilities of
shareholders of U.S. corporations.
We are incorporated under Israeli law. The rights and responsibilities of holders of our ordinary shares are governed by our articles of association and the Israeli Companies Law, 5759-1999 (the
"Companies Law"). These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations. In particular, pursuant to the Companies Law each shareholder of an Israeli company has
to act in good faith and in a customary manner in exercising his or her rights and fulfilling his or her obligations toward the company and other shareholders and to refrain from abusing his or her power in the company, including, among other
things, in voting at the general meeting of shareholders on amendments to a company's articles of association, increases in a company's authorized share capital, mergers and certain transactions requiring shareholders' approval under the Companies
Law. In addition, a controlling shareholder of an Israeli company or a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or who has the power to appoint or prevent the appointment of a director or
officer in the company or has other powers toward the company has a duty of fairness toward the company. However, Israeli law does not define the substance of this duty of fairness. There is little case law available to assist in understanding the
implications of these provisions that govern shareholder behavior.
Provisions of Israeli law and our articles of association may delay, prevent or make undesirable an acquisition of all or a significant portion of our shares
or assets.
Provisions of Israeli law and our articles of association could have the effect of delaying or preventing a change in control and may make it more difficult for a third-party to acquire us or our
shareholders to elect different individuals to our board of directors, even if doing so would be considered to be beneficial by some of our shareholders, and may limit the price that investors may be willing to pay in the future for our ordinary
shares. Among other things:
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Israeli corporate law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares in a company are purchased;
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Israeli corporate law does not provide for shareholder action by written consent, thereby requiring all shareholder actions to be taken at a general meeting of shareholders;
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our articles of association divide our directors into three classes, each of which is elected once every three years;
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our articles of association generally require a vote of the holders of a majority of our outstanding ordinary shares entitled to vote present and voting on the matter at a general meeting of shareholders (referred to as simple majority),
and the amendment of a limited number of provisions, such as the provision dividing our directors into three classes, requires a vote of the holders of at least 65% of the total voting power of our shareholders;
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our articles of association do not permit a director to be removed except by a vote of the holders of at least 65% of the total voting power of our shareholders and any amendment to such provision requires the approval of at least 65% of
the total voting power of our shareholders; and
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our articles of association provide that director vacancies may be filled by our board of directors.
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Further, Israeli tax considerations may make potential transactions undesirable to us or to some of our shareholders whose country of residence does not have a tax treaty with Israel granting tax
relief to such shareholders from Israeli tax.
We may be exposed to liabilities under the U.S. Foreign Corrupt Practices Act and other U.S. and foreign anti-corruption anti-money laundering, export
control, sanctions and other trade laws and regulations, and any determination that we violated these laws could have a material adverse effect on our business.
We are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations
administered by the U.S. Treasury Department's Office of Foreign Assets Control. We are also subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act,
the USA PATRIOT Act, the United Kingdom Bribery Act 2010, the Proceeds of Crime Act 2002, Chapter 9 (sub-chapter 5) of the Israeli Penal Law, 1977, the Israeli Prohibition on Money Laundering Law—2000 and possibly other anti-bribery and anti-money
laundering laws in countries outside of the United States in which we conduct our activities. Compliance with these laws has been the subject of increasing focus and activity by regulatory authorities, both in the United States and elsewhere, in
recent years. Anti-corruption laws are interpreted broadly and prohibit companies and their employees and third-party intermediaries from authorizing, promising, offering, providing, soliciting or accepting, directly or indirectly, improper
payments or benefits to or from any person whether in the public or private sector.
Noncompliance with anti-corruption, anti-money laundering, export control, sanctions and other trade laws could subject us to whistleblower complaints, investigations, sanctions, settlements,
prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting with certain persons, the loss of export privileges,
reputational harm, adverse media coverage and other collateral consequences. If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our
business, results of operations and financial condition could be materially harmed. Responding to any action will likely result in a materially significant diversion of management's attention and resources and significant defense and compliance
costs and other professional fees. In addition, regulatory authorities may seek to hold us liable for successor liability for violations committed by companies in which we invest or that we acquire. As a general matter, enforcement actions and
sanctions could harm our business, results of operations and financial condition.
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Risks relating to our ordinary shares and the offering
An active trading market for our ordinary shares may not develop and the trading price for our shares may fluctuate significantly.
Although we intend to apply to have our shares of ordinary stock quoted on the OTCQB, there has been no public market for our ordinary shares, and we cannot assure you that a liquid public market for
our shares will develop. If an active public market for our shares does not develop, the market price and liquidity of our shares may be materially and adversely affected. The offering price for our shares was determined arbitrarily by us, and we can
provide no assurance that the trading price of our shares after this offering will not decline below the initial public offering price. As a result, investors in our securities may experience a significant decrease in the value of their shares.
The trading price of our shares is likely to be volatile, which could result in substantial losses to investors.
If we are successful at developing a market for our shares, the trading price of our shares is likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen
because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with business operations located mainly in Israel that have listed their securities in the United States. In addition to
market and industry factors, the price and trading volume for our shares may be highly volatile for factors specific to our own operations, including the following:
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variations in our revenues, earnings and cash flow;
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announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors;
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announcements of new offerings, solutions and expansions by us or our competitors;
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changes in financial estimates by securities analysts;
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detrimental adverse publicity about us, our services or our industry;
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additions or departures of key personnel;
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sales of additional equity securities; and
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potential litigation or regulatory investigations.
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Any of these factors may result in large and sudden changes in the volume and price at which our shares will trade.
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In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we
were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our
results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay
significant damages, which could have a material adverse effect on our financial condition and results of operations.
Our sole officer and director has substantial influence over our company and his interests may not be aligned with the interests of our shareholders.
Menachem Shalom, our sole officer and director, currently owns all the total voting power of our outstanding ordinary shares. If we are successful at selling all the shares offered in this
prospectus, Mr. Shalom will own 50% of our issued and outstanding ordinary shares and 100% of our issued and outstanding preferred shares. As a result, he will maintain substantial influence over our business, including significant corporate actions
such as mergers, consolidations, sales of all or substantially all of our assets, election of directors and other significant corporate actions.
Mr. Shalom may take actions that are not in the best interest of our other shareholders. This concentration of ownership may discourage, delay or prevent a change in control of our company, which
could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of the shares. These actions may be taken even if they are opposed by our other shareholders. In
addition, the significant concentration of share ownership may adversely affect the trading price of the shares due to investors’ perception that conflicts of interest may exist or arise. For more information regarding our principal shareholders and
their affiliated entities, see “Principal Shareholders.”
If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our
shares, the market price for our shares and trading volume could decline.
The trading market for our shares will be influenced by research or reports that industry or securities analysts publish about our business. If one or more analysts who cover us downgrade our shares,
the market price for our shares would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or
trading volume for our shares to decline.
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The sale or availability for sale of substantial amounts of our shares could adversely affect their market price.
Sales of substantial amounts of our shares in the public market after the completion of this offering, or the perception that these sales could occur, could adversely affect the market price of our
shares and could materially impair our ability to raise capital through equity offerings in the future. The Shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, and shares held by
our existing shareholders may also be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities Act. There will be 12,000,000 ordinary shares outstanding immediately after this offering,
assuming all 2,000,000 offered in this prospectus are sold. We cannot predict what effect, if any, market sales of securities held by our significant shareholder or any other shareholder or the availability of these securities for future sale will
have on the market price of our Shares.
Negative publicity may harm our brand and reputation and have a material adverse effect on our business.
Negative publicity about us, including our services, management, business model and practices, compliance with applicable rules, regulations and policies, or our network partners may materially and
adversely harm our brand and reputation and have a material adverse effect on our business. We cannot assure you that we will be able to defuse any such negative publicity within a reasonable period of time, or at all. Additionally, allegations,
directly or indirectly against us, may be posted on the internet by anyone on a named or anonymous basis, and can be quickly and widely disseminated. Information posted may be inaccurate, misleading and adverse to us, and it may harm our reputation,
business or prospects. The harm may be immediate without affording us an opportunity for redress or correction. Our reputation may be negatively affected as a result of the public dissemination of negative and potentially inaccurate or misleading
information about our business and operations, which in turn may materially adversely affect our relationships with our customers, employees or business partners, and adversely affect the price of our shares.
Because we do not expect to pay dividends in the foreseeable future after this offering, you must rely on price appreciation of our shares for return on your
investment.
We currently intend to retain most, if not all, of our available funds and any future earnings after this offering to fund the development and growth of our business. As a result, we do not expect to
pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our 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. Accordingly, the return on your investment will likely depend entirely upon any future price appreciation of our shares. There is no guarantee that our shares will appreciate in value after
this offering or even maintain the price at which you purchased the shares. You may not realize a return on your investment in our shares and you may even lose your entire investment in our shares.
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We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United
States domestic public companies.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic
issuers, including: (i) the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; (ii) the sections of the Exchange Act regulating the solicitation of proxies, consents, or
authorizations in respect of a security registered under the Exchange Act; (iii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from
trades made in a short period of time; and (iv) the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis through press releases,
distributed pursuant to the rules and regulations of the Nasdaq Stock Exchange. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or
furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information, which would be made available to you,
were you investing in a U.S. domestic issuer.
We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from requirements applicable to other public companies that are not emerging growth
companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 for so long as we are an emerging growth company until the earliest of (a) the last day
of the fiscal year during which we have total annual gross revenues of at least US$1.07 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (c) the date on which we have, during the
preceding three-year period, issued more than US$1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which would occur if the market value of our Shares that are held
by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter.
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We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an “emerging growth company.”
As a public company, we expect to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently
implemented by the SEC and FINRA and OTC Markets, impose various requirements on the corporate governance practices of public companies. As a company with less than US$1.07 billion in revenues for our last fiscal year, we qualify as an “emerging
growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the
auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised
accounting standards until such time as those standards apply to private companies. However, we have elected to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards as required when they are adopted
for public companies. This decision to opt out of the extended transition period under the JOBS Act is irrevocable.
We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. After we are no longer an “emerging
growth company,” we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. For
example, as a result of becoming a public company, we will need to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures. We also expect that operating as a public company
will make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.
In addition, we will incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. We are currently
evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.
We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
As discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. 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, 2021. In the
future, we would lose our foreign private issuer status if (1) more than 50% of our outstanding voting securities are owned by U.S. residents and (2) a majority of our directors or executive officers are U.S. citizens or residents, or we fail to
meet additional requirements necessary to avoid loss of foreign private issuer status. If we lose our foreign private issuer status, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer
forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become
subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses
that we will not incur as a foreign private issuer.
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If we fail to establish and maintain proper internal financial reporting controls, our ability to produce accurate financial statements or comply with
applicable regulations could be impaired.
Prior to this offering, we were a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. Our management has not completed an
assessment of the effectiveness of our internal controls over financial reporting, and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. In the course of auditing our
consolidated financial statements for the years ended December 31, 2020 and 2019, we identified several material weaknesses in our internal control over financial reporting and other control deficiencies as of December 31, 2020. A “material weakness”
is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or
detected on a timely basis.
The material weaknesses identified to date relate to (i) a lack of accounting staff and resources with appropriate knowledge of generally accepted accounting principles in the United States (“U.S.
GAAP”) and SEC reporting and compliance requirements; (ii) a lack of sufficient documented financial closing policies and procedures; (iii) a lack of independent directors and an audit committee; (iv) lack of risk assessment in accordance with the
requirement of COSO 2013 framework and (v) a lack of an effective review process by the accounting manager which led to material audit adjustments to the financial statements.
Following the identification of the material weaknesses and control deficiencies, we plan to continue to take remedial measures including (i) hiring more qualified accounting personnel with relevant
U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting
training programs for our accounting and financial reporting personnel; (iii) setting up an internal audit function as well as engaging an external consulting firm to assist us with assessment of Sarbanes-Oxley compliance requirements and improvement
of overall internal control; and (iv) appointing independent directors, establishing an audit committee, and strengthening corporate governance.
We plan to take measures to remedy these material weaknesses. The implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting, and
we cannot conclude that they have been fully remedied. Our failure to correct theses material weaknesses or our failure to discover and address any other material weaknesses could result in inaccuracies in our financial statements and could also
impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our
Ordinary shares, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud. Upon the completion of this offering, we will become a public company in
the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, will require that we include a report from management on our internal control over financial reporting in our annual report on
Form 20-F beginning with our annual report for the fiscal year ending December 30, 2020. In addition, once we cease to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must
attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal
control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at
which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our
management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.
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We have broad discretion over the use of proceeds we receive in this offering and may not apply the proceeds in ways that increase the value of your
investment.
Our management will have broad discretion in the application of the net proceeds from this offering and, as a result, you will have to rely upon the judgment of our management with respect to the
use of these proceeds. Our management may spend a portion or all of the net proceeds in ways that not all shareholders approve of or that may not yield a favorable return. The failure by our management to apply these funds effectively could harm
our business.
We do not expect to pay any dividends in the foreseeable future.
We have never declared or paid any dividends on our ordinary shares. We do not anticipate paying any dividends in the foreseeable future. We currently intend to retain future earnings, if any, to
finance operations and expand our business. Our board of directors has sole discretion whether to pay dividends. If our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings,
capital requirements and surplus, general financial condition, contractual restrictions and other factors that our directors may deem relevant. The Companies Law imposes restrictions on our ability to declare and pay dividends. Payment of dividends
may also be subject to Israeli withholding taxes. See "Taxation and government programs" for more information.
This prospectus contains forward-looking statements about our current expectations and views of future events, which are contained principally in the sections entitled “Prospectus Summary”, “Risk
Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business.” These forward-looking statements relate to events that involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or achievements to be materially different from those expressed or implied by these statements.
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You can identify some of these forward-looking statements by words or phrases such as “may,” “will,” “could,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely
to,” “propose,” “potential,” “continue” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial
condition, results of operations, business strategy and financial needs. The forward-looking statements included in this prospectus relate to, among other things:
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our goals and strategies;
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our business and operating strategies and plans for the development of existing and new businesses, ability to implement such strategies and plans and expected time;
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our future business development, financial condition and results of operations;
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expected changes in our revenues, costs or expenditures;
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our dividend policy;
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our expectations regarding demand for and market acceptance of our products and services;
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our expectations regarding our relationships with customers and business partners;
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the trends in, expected growth in and market size of the global digital wallet industry;
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our ability to maintain and enhance our market position;
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our ability to continue to develop new technologies and/or upgrade our existing technologies;
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developments in, or changes to, laws, regulations, governmental policies, incentives and taxation affecting our operations, in particular in the digital wallet industry;
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relevant governmental policies and regulations relating to our businesses and industry;
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competitive environment, competitive landscape and potential competitor behavior in our industry and the overall outlook in our industry;
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our ability to attract, train and retain executives and other employees;
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the development of the global financial and capital markets;
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general business, political, social and economic conditions in Israel and the overseas markets we have business;
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the length and severity of the recent COVID-19 outbreak and its impact on our business and industry; and
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assumptions underlying or related to any of the foregoing.
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These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations and
our actual results could be materially different from our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are generally set forth in “Prospectus Summary—Our Challenges,”
“Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Regulation” and other sections in this prospectus. Moreover, we operate in an evolving environment. New risk factors and
uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors,
may cause actual results to differ materially from those contained in any forward-looking statements. You should read thoroughly this prospectus and the documents that we refer to with the understanding that our actual future results may be
materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements.
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This prospectus contains information derived from government and private publications. These publications include forward-looking statements, which are subject to risks, uncertainties and
assumptions. Although we believe the data and information to be reliable, we have not independently verified the accuracy or completeness of the data and information contained in these publications. Statistical data in these publications also include
projections based on a number of assumptions. The digital wallet industry may not grow at the rate projected by market data, or at all. Failure of these markets to grow at the projected rate may have a material and adverse effect on our business and
the market price of our ordinary shares. In addition, the rapidly evolving nature of the industry results in significant uncertainties for any projections or estimates relating to the growth prospects or future condition of our market. Furthermore,
if any one or more of the assumptions underlying the market data are later found to be incorrect, actual results may differ from the projections based on these assumptions. See “Risk Factors—Risks Relating to Our Shares and General Risk Factors.”
Therefore, you should not place undue reliance on these statements.
You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements in this prospectus are made based on events and information as of the date of this
prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to
reflect the occurrence of unanticipated events. You should read this prospectus and the documents that we refer to in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with
the understanding that our actual future results or performance may materially differ from what we expect.
This prospectus relates to the offering and sale by our Company of up to an aggregate of 2,000,000 ordinary shares of our stock, par value NIS 0.01 per share. The purchase price per share is $0.95. If we are successful
at selling all the shares in the offering, we would receive gross proceeds of $1,900,000.
The shares to be offered and sold by us will be offered on a “best efforts basis.” The shares will be sold by our sole director and officer on our behalf, and no underwriters or broker-dealers will be involved in such
offering. The offering will commence as soon as practicable after the effective date of the registration statement relating to this prospectus. It will terminate 180 days after such effective date, but such termination date may be extended for up
to an additional 90 days in our discretion. We reserve the right to terminate the offering at an earlier date, in our sole discretion, even if no shares are sold.
USE OF PROCEEDS
We expect to receive net proceeds from this offering, after deducting offering expenses payable by us, of approximately $1,840,000.
We intend to use the net proceeds from this offering for working capital, to fund growth and for other general corporate purposes.
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The following table lists the anticipated use of proceeds from the sale of the Shares assuming sale of all the Shares or a lesser amount thereof.
The Company is offering the 2,000,000 ordinary shares on a best-efforts basis such that the funds received from an investment in this offering will be available to the Company immediately for
use. Funds will not be placed in an escrow account and there is no minimum investment amount that needs to be reached before the funds are available for use by the Company. Estimated use of proceeds (all numbers are in USD):
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|
|
Proceeds (USD):
|
475,000
|
950,000
|
1,425,000
|
1,900,000
|
|
Working capital
|
322,000
|
644,000
|
966,000
|
1,288,000
|
|
Business development
|
92,000
|
184,000
|
276,000
|
368,000
|
|
Repayment of debt to Mr. Shalom
|
46,000
|
92,000
|
138,000
|
184,000
|
The amount reflected above for the working capital will be used for our ongoing operations; specifically, for research and software development, sales
and marketing efforts and for management and overhead.
The amount reflected above for business development will be used mainly to license and/or to buy additional technology and software that may complement
the Company's technology.
As of December 31, 2020, we are indebted to Mr. Shalom in the aggregate amount of NIS1,474,171 (approximately $446,718), consisting of NIS900,900 of management fees pursuant to the terms of
the Management Services Agreement dated December 30, 2017 and NIS573,271 borrowed by the Company from Mr. Shalom pursuant to the terms of the Shareholders’ Loan Agreement dated February 1, 2018. See “Certain Relationships and Related Party
Transactions”. As indicated above, we intend to reduce the amount of our obligation to Mr. Shalom by utilizing approximately 9% from the net proceeds of this offering.
We will retain broad discretion over the use of the net proceeds of this offering which may result in an allocation of net proceeds in differing amounts than those listed above, or in entirely new
areas. Our use of the net proceeds from this offering will depend on a number of factors, including our future revenue and cash generated by operations and the other factors described in "Risk Factors." As a result, you will be relying on the
judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that the proceeds will
be used in a way that does not yield a favorable, or any, return for us. Pending application of the net proceeds as described above, we intend to invest the proceeds in investment grade interest bearing instruments or will hold the proceeds in
interest bearing or non-interest-bearing bank accounts.
We are offering up to a maximum of 2,000,000 ordinary shares by direct public offering on a "best efforts basis." The offering price is $0.95 per share. The shares will be sold on our behalf by our sole officer and
director. Mr. Shalom will not receive any commissions or proceeds from the offering for selling shares on our behalf. No brokers, dealers or finders or agent for commission are involved in this offering.
33
The offering will commence as soon as practicable after the effective date of the registration statement relating to this prospectus. It will terminate 180 days after such effective date, but such termination date may be
extended for up to an additional 90 days in our discretion. We reserve the right to terminate the offering at an earlier date, in our sole discretion, even if no shares are sold.
There are no other minimum purchase requirements, and there are no arrangements to place the funds in an escrow, trust, or similar account. Funds received by us for the payment of shares subscribed for in the offering
will be deposited into a bank account maintained by us and under our control and be immediately available for our use. All funds received by us will be retained by us for our use and will not be refunded.
There has been no market for our securities. Our ordinary shares are not traded on any exchange or quoted on the OTC Markets. After the effective date of the registration statement relating to this prospectus, we hope to
have a market maker file an application with the National Association of Securities Dealers, Inc. for our ordinary shares to eligible for trading on the OTCQB. We do not yet have a market maker who has agreed to file such application.
As noted above, we will sell the shares in this offering through Mr. Shalom, our sole officer and director. Such person will receive no commission from the sale of any shares. He will not register as a broker-dealer
under section 15 of the Exchange Act in reliance upon Rule 3a4-1. Rule 3a4-1 sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer's securities and not be deemed to be a
broker/dealer. The conditions are namely: (1) The person is not statutorily disqualified, as that term is defined in Section 3(a)(39) of the Act, at the time of his participation; (2) The person is not compensated in connection with his participation
by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities; (3) The person is not at the time of their participation, an associated person of a broker/dealer; and (4) The person meets the
conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that he (A) primarily performs, or is intended primarily to perform at the end of the offering, substantial duties for or on behalf of the issuer otherwise than in connection
with transactions in securities; and (B) is not a broker or dealer, or an associated person of a broker or dealer, within the preceding twelve (12) months; and (C) does not participate in selling and offering of securities for any issuer more than
once every twelve (12) months other than in reliance on Paragraphs (a)(4)(i) or (a)(4)(iii).
Our officer and director is not statutorily disqualified, is not being compensated, and is not associated with a broker/dealer. He is and will continue to be our officer and director at the end of the offering and has
not been during the last twelve months and is currently not a broker/dealer or associated with a broker/dealer. He will not participate in selling and offering securities for any issuer more than once every twelve months.
Only after our registration statement relating to this prospectus is declared effective by the SEC, do we intend to hold investment meetings in various states where the offering will be registered. We will not utilize
the Internet or any form of paid media to advertise our offering, but rather through meetings arranged by our officer and director and his business associates and his friends or relatives who may also distribute the prospectus to potential investors,
to see who are interested in us and in making a possible investment in the offering. No shares purchased in this offering will be subject to any kind of lock-up or trust agreement, implicit or explicit.
34
Procedures for Subscribing
We will not accept any money until this registration statement is declared effective by the SEC. Once the registration statement is declared effective by the SEC, if you decide to subscribe for any shares in this
offering, you must
1. execute and deliver a subscription agreement, a copy of which is included with the prospectus; and
2. deliver payment to us for acceptance or rejection.
All checks for subscriptions must be made payable to "Hold Me Ltd." All wire transfer fees, currency exchange differences and credit card processing fees must be paid by the subscriber.
Right to Reject Subscriptions
We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or
deductions. Subscriptions for securities will be accepted or rejected within 48 hours after we receive them.
Underwriters
We have no underwriter and do not intend to have one. In the event that we sell or intend to sell by means of any arrangement with an underwriter, then we will file a post-effective amendment to accurately reflect the
changes to us and our financial affairs and any new risk factors, and in particular to disclose such material relevant to this Plan of Distribution.
Regulation M
We are subject to Regulation M of the Securities Exchange Act of 1934. Regulation M governs activities of underwriters, issuers, selling security holders, and others in connection with offerings of securities. Regulation
M prohibits distribution participants and their affiliated purchasers from bidding for purchasing or attempting to induce any person to bid for or purchase the securities being distribute.
Penny Stock Regulations
You should note that our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less
than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons
other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the
SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the
transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of
broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
35
We have never declared or paid any dividends on our ordinary shares. We do not anticipate paying any dividends in the foreseeable future. We currently intend to retain future earnings, if any, to
finance operations and expand our business. Our board of directors has sole discretion whether to pay dividends. If our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings,
capital requirements and surplus, general financial condition, contractual restrictions and other factors that our directors may deem relevant.
The Companies Law imposes restrictions on our ability to declare and pay dividends. See "Description of share capital and articles of association—Dividend and liquidation rights" for additional
information. Payment of dividends may be subject to Israel withholding taxes. See “Taxation and government programs-Israeli tax considerations and government programs” for additional information.
The following table sets forth our capitalization as of December 31, 2020 presented on:
|
•
|
An actual basis (assuming the addback of 1,997,000 common shares that were issued on April 12, 2021); and
|
|
•
|
a pro forma as adjusted basis to give effect to the issuance and sale of the 2,000,000 Shares by us in this offering at an assumed initial public offering price of US$0.95 per share, after
deducting the estimated offering expenses.
|
The pro forma and pro forma as adjusted information below is illustrative only and our capitalization following the completion of this offering is subject to adjustment based on the initial public offering price of
our ordinary shares. You should read this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this
prospectus.
|
|
Actual Capitalization in NIS as of December 31, 2020
|
|||||||||||||||||||
|
|
Actual
|
Proforma Assuming 500,000 shares sold (a)(b)
|
Proforma Assuming 1,000,000 shares sold (a)(b)
|
Proforma Assuming 1,500,000 shares sold (a)(b)
|
Proforma Assuming 2,000,000 shares sold (a)(b)
|
|||||||||||||||
|
Long term debt
|
90,053
|
90,053
|
90,053
|
90,053
|
90,053
|
|||||||||||||||
|
Par Value of Ordinary Shares
|
0.01
|
0.01
|
0.01
|
0.01
|
0.01
|
|||||||||||||||
|
Ordinary Shares, 2,000,000 issued and outstanding as of December 31, 2020;
|
3
|
5,003
|
10,003
|
15,003
|
20,003
|
|||||||||||||||
|
Additional paid in capital
|
300,000
|
1,709,600
|
3,119,200
|
4,528,800
|
5,938,400
|
|||||||||||||||
|
Accumulated deficit
|
(1,521,738
|
)
|
(1,521,738
|
)
|
(1,521,738
|
)
|
(1,521,738
|
)
|
(1,521,738
|
)
|
||||||||||
|
Total capitalization
|
(1,221,735
|
)
|
192,865
|
1,607,465
|
3,022,065
|
4,436,665
|
||||||||||||||
|
|
Actual Capitalization in USD as of December 31, 2020
|
|||||||||||||||||||
|
|
Actual
|
Proforma Assuming 500,000 shares sold (a)(b)
|
Proforma Assuming 1,000,000 shares sold (a)(b)
|
Proforma Assuming 1,500,000 shares sold (a)(b)
|
Proforma Assuming 2,000,000 shares sold (a)(b)
|
|||||||||||||||
|
Long term debt
|
28,010
|
28,010
|
28,010
|
28,010
|
28,010
|
|||||||||||||||
|
Par Value of Ordinary Shares
|
0.0031
|
0.0031
|
0.0031
|
0.0031
|
0.0031
|
|||||||||||||||
|
Ordinary Shares, 2,000,000 issued and outstanding as of December 31, 2020;
|
0.93
|
1,556
|
3,111
|
4,667
|
6,222
|
|||||||||||||||
|
Additional paid in capital
|
93,313
|
531,757
|
970,202
|
1,408,647
|
1,847,092
|
|||||||||||||||
|
Accumulated deficit
|
(473,324
|
)
|
(473,324
|
)
|
(473,324
|
)
|
(473,324
|
)
|
(473,324
|
)
|
||||||||||
|
Total capitalization
|
(380,011
|
)
|
59,989
|
499,989
|
939,989
|
1,379,989
|
||||||||||||||
36
|
|
Actual Capitalization in NIS as of December 31, 2020
plus Common and Preferred Shares Issued on April 12, 2021
|
|||||||||||||||||||
|
|
Actual
|
Proforma Assuming 500,000 shares sold (a)(b)
|
Proforma Assuming 1,000,000 shares sold (a)(b)
|
Proforma Assuming 1,500,000 shares sold (a)(b)
|
Proforma Assuming 2,000,000 shares sold (a)(b)
|
|||||||||||||||
|
Long term debt
|
90,053
|
90,053
|
90,053
|
90,053
|
90,053
|
|||||||||||||||
|
Par Value of Ordinary Shares
|
0.01
|
0.01
|
0.01
|
0.01
|
0.01
|
|||||||||||||||
|
Ordinary Shares, 2,000,000 issued and outstanding as of December 31, 2020;
|
3
|
5,003
|
10,003
|
15,003
|
20,003
|
|||||||||||||||
|
Add: 1,999,700 common shares and 10,000,000
preferred shares issued on April 12, 2021 to reduce debt
|
119,997
|
119,997
|
119,997
|
119,997
|
119,997
|
|||||||||||||||
|
Additional paid in capital
|
300,000
|
1,709,600
|
3,119,200
|
4,528,800
|
5,938,400
|
|||||||||||||||
|
Accumulated deficit
|
(1,521,738
|
)
|
(1,521,738
|
)
|
(1,521,738
|
)
|
(1,521,738
|
)
|
(1,521,738
|
)
|
||||||||||
|
Total capitalization
|
(1,101,738
|
)
|
312,862
|
1,727,462
|
3,142,062
|
4,556,662
|
||||||||||||||
|
|
Actual Capitalization in USD as of December 31, 2020
plus Common and Preferred Shares Issued on April 12, 2021
|
|||||||||||||||||||
|
|
Actual
|
Proforma Assuming 500,000 shares sold (a)(b)
|
Proforma Assuming 1,000,000 shares sold (a)(b)
|
Proforma Assuming 1,500,000 shares sold (a)(b)
|
Proforma Assuming 2,000,000 shares sold (a)(b)
|
|||||||||||||||
|
Long term debt
|
28,010
|
28,010
|
28,010
|
28,010
|
28,010
|
|||||||||||||||
|
Par Value of Ordinary Shares
|
0.0031
|
0.0031
|
0.0031
|
0.0031
|
0.0031
|
|||||||||||||||
|
Ordinary Shares, 2,000,000 issued and outstanding as of December 31, 2020;
|
0.93
|
1,556
|
3,111
|
4,667
|
6,222
|
|||||||||||||||
|
Add: 1,999,700 common shares and 10,000,000
preferred shares issued on 04.12.2021 to reduce debt
|
37,324
|
37,324
|
37,324
|
37,324
|
37,324
|
|||||||||||||||
|
Additional paid in capital
|
93,313
|
531,757
|
970,202
|
1,408,647
|
1,847,092
|
|||||||||||||||
|
Accumulated deficit
|
(473,324
|
)
|
(473,324
|
)
|
(473,324
|
)
|
(473,324
|
)
|
(473,324
|
)
|
||||||||||
|
Total capitalization
|
(342,687
|
)
|
97,313
|
537,313
|
977,313
|
1,417,313
|
||||||||||||||
(a) Assumes the sale of 2,000,000 shares at $0.95 USD, less $60,000 in $USD offering expenses resulting in net proceeds of $1,840,000 USD
(b) Conversion rate used 3.215 shekels to the $USD as of December 31, 2020 as published by the Bank of Israel.
DILUTION
Purchasers of our securities in this offering will experience immediate and substantial dilution in the net tangible book value of their ordinary shares from the initial public offering price.
The historical net tangible book value as of December 31, 2020 was (USD560,847) (or (NIS1,803,124)), or approximately (USD1,869.49) (equal to (NIS6,010.41)) per share calculated with the number of shares as of
December 31, 2020 (300 ordinary shares) or approximately (USD0.90) (equal to (NIS0.28)) per share calculated with the adjusted number of shares prior to this registration (2,000,000 ordinary shares). Historical net tangible book value per
share of ordinary shares is equal to our total tangible assets less total liabilities, divided by the number of shares of ordinary shares outstanding as of December 31, 2020.
Adjusted to give effect to the receipt of net proceeds, after deducting the estimated offering expenses payable by us, from the sale of 2,000,000 ordinary shares for $1,900,000, net tangible book value will be
approximately USD0.64 (or NIS2.06) per share. This will represent an immediate increase of approximately USD0.92 (or NIS2.96) per share to the existing stockholder and an immediate and substantial dilution of approximately $(0.31) per share,
or approximately (33%), to new investors purchasing our securities in this offering. Dilution in pro forma net tangible book value per share represents the difference between the amount per share paid by purchasers of shares of our ordinary
shares in this offering and the pro forma net tangible book value per share of our ordinary shares immediately following this offering.
The following table sets forth as of December 31, 2020 the number of shares of ordinary shares purchased from us and the total consideration paid by our existing stockholders and by new investors in this offering if
new investors purchase the maximum offering, assuming a purchase price in this offering of $0.95 per share of ordinary shares.
|
Number
|
Percent
|
|||||||
|
Existing Stockholder
|
2,000,000
|
50.00
|
||||||
|
New Investors
|
2,000,000
|
50.00
|
||||||
|
Total
|
4,000,000
|
100
|
||||||
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Hold Me Ltd.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Hold Me Ltd. as of December 31, 2020 and 2019, the related statements of operations, stockholders' equity (deficit), and cash flows for the years
then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and
the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered
recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 audit included performing procedures to assess the risks of material misstatement of the 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 financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
38
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1)
relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue recognition — identification of contractual terms in certain customer arrangements
As described in Note 2 to the financial statements, management assesses relevant contractual terms in its customer arrangements to determine the transaction price and recognizes revenue upon transfer of control of the
promised goods or services in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Management applies judgment in determining the transaction price which is dependent on the
contractual terms. In order to determine the transaction price, management may be required to estimate variable consideration when determining the amount and timing of revenue recognition.
The principal considerations for our determination that performing procedures relating to the identification of contractual terms in customer arrangements to determine the transaction price is a critical audit matter
are there was significant judgment by management in identifying contractual terms due to the volume and customized nature of the Company’s customer arrangements. This in turn led to significant effort in performing our audit procedures which were
designed to evaluate whether the contractual terms used in the determination of the transaction price and the timing of revenue recognition were appropriately identified and determined by management and to evaluate the reasonableness of
management’s estimates.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included testing the effectiveness of
controls relating to the revenue recognition process, including those related to the identification of contractual terms in customer arrangements that impact the determination of the transaction price and revenue recognition. These procedures also
included, among others, (i) testing the completeness and accuracy of management’s identification of the contractual terms by examining customer arrangements on a test basis, and (ii) testing management’s process for determining the appropriate
amount and timing of revenue recognition based on the contractual terms identified in the customer arrangements.
/S/ BF Borgers CPA PC
We have served as the Company's auditor since 2021
Lakewood, CO
April 22, 2021
39
Balance Sheets
|
As at December 31
|
||||||||||||
|
2020
|
2019
|
|||||||||||
|
Notes
|
New Israeli Shekels
|
|||||||||||
|
Current Assets
|
||||||||||||
|
Cash and Cash Equivalents
|
3
|
149,791
|
5,313
|
|||||||||
|
Customers
|
1,832
|
|||||||||||
|
Receivables and Debit Balances
|
4
|
3,466
|
110,000
|
|||||||||
|
155,089
|
115,313
|
|||||||||||
|
Fixed Assets
|
5
|
581,389
|
980,952
|
|||||||||
|
Intangible Assets
|
-
|
-
|
||||||||||
|
736,478
|
1,096,265
|
|||||||||||
|
Current Liabilities
|
||||||||||||
|
Credit from Banking Corporations
|
6
|
45,502
|
70,359
|
|||||||||
|
Suppliers and Service Providers
|
423
|
-
|
||||||||||
|
Payables and Credit Balances
|
7
|
1,822,235
|
1,733,190
|
|||||||||
|
1,868,160
|
1,803,549
|
|||||||||||
|
Long-Term Liabilities
|
||||||||||||
|
Loans from Banking Corporations and other Credit Providers
|
8
|
90,053
|
136,618
|
|||||||||
|
Capital Deficit
|
||||||||||||
|
Share Capital
|
9
|
3
|
3
|
|||||||||
|
Premium on Shares
|
300,000
|
300,000
|
||||||||||
|
Deficit Balance
|
(1,521,738
|
)
|
(1,143,905
|
)
|
||||||||
|
(1,221,735
|
)
|
(843,902
|
)
|
|||||||||
|
736,478
|
1,096,265
|
|||||||||||
The Notes Attached to the Financial Statements Form an Integral Part Hereof.
40
Statements of Profit and Loss
|
|
For the Year Ended December 31,
|
|||||||||||
|
|
2020
|
2019
|
||||||||||
|
|
Notes
|
New Israeli Shekels
|
||||||||||
|
Revenue
|
486,360
|
134,377
|
||||||||||
|
Cost of projects
|
455,035
|
289,692
|
||||||||||
|
Gross deficit
|
31,325
|
(155,315
|
)
|
|||||||||
|
Selling, administrative and general expenses
|
10
|
(397,481
|
)
|
(769,543
|
)
|
|||||||
|
Operating deficit
|
(366,156
|
)
|
(924,858
|
)
|
||||||||
|
Financing expenses, net
|
(11,677
|
)
|
(14,898
|
)
|
||||||||
|
Loss for the year after financing
|
(377,833
|
)
|
(939,756
|
)
|
||||||||
|
Other expenses
|
-
|
(10,000
|
)
|
|||||||||
|
Loss for the period
|
(377,833
|
)
|
(949,756
|
)
|
||||||||
|
Loss from previous years
|
(1,143,905
|
)
|
(194,149
|
)
|
||||||||
|
Deficit balance
|
(1,521,738
|
)
|
(1,143,905
|
)
|
||||||||
|
Basic and diluted loss per common share
|
NIS 5,072.46
|
NIS 3,813.02
|
||||||||||
|
Weighted-average number of common shares outstanding: Basic and Diluted
|
300
|
300
|
||||||||||
The Notes Attached to the Financial Statements Form an Integral Part Hereof.
41
Statements of Changes in Shareholders' Equity
|
Number of Issued shared
|
Ordinary shares
|
Additional Paid-in Capital
|
Accumulated Deficit
|
Total Shareholders' Equity
|
||||||||||||||||
|
Balance at January 1, 2019
|
300
|
3
|
-
|
(194,149
|
)
|
(194,146
|
)
|
|||||||||||||
|
Issuance of Shares and Premium
|
-
|
-
|
300,000
|
-
|
300,000
|
|||||||||||||||
|
Total comprehensive loss
|
-
|
-
|
-
|
(949,756
|
)
|
(949,756
|
)
|
|||||||||||||
|
Balance at December 31, 2019
|
300
|
3
|
300,000
|
(1,143,905
|
)
|
(843,902
|
)
|
|||||||||||||
|
Balance at January 1, 2020
|
300
|
3
|
300,000
|
(1,143,905
|
)
|
(843,902
|
)
|
|||||||||||||
|
Total comprehensive loss
|
-
|
-
|
-
|
(377,833
|
)
|
(377,833
|
)
|
|||||||||||||
|
Balance at December 31, 2020
|
300
|
3
|
300,000
|
(1,521,738
|
)
|
(1,221,735
|
)
|
|||||||||||||
The Notes Attached to the Financial Statements Form an Integral Part Hereof.
42
Statements of Cash Flows
|
For the Year Ended
December 31,
|
||||||||
|
2020
|
2019
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net loss
|
(377,833
|
)
|
(949,756
|
)
|
||||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
|
Depreciation
|
433,044
|
297,017
|
||||||
|
Increase (Decrease) in Customers
|
(1,832
|
)
|
||||||
|
Decrease (Increase) in other accounts receivable and prepaid expenses
|
106,534
|
(87,624
|
)
|
|||||
|
Increase in Creditors
|
423
|
|||||||
|
Increase in accrued expenses and other accounts payable
|
89,045
|
806,381
|
||||||
|
Net cash provided by (used in) operating activities
|
249,381
|
66,018
|
||||||
|
Cash flows from investing activities:
|
||||||||
|
Purchase of property and equipment
|
(33,481
|
)
|
(341,685
|
)
|
||||
|
Net cash provided by (used in) investing activities
|
(33,481
|
)
|
(341,685
|
)
|
||||
|
Cash flows from financing activities:
|
||||||||
|
Cash for issuance of shares
|
-
|
300,000
|
||||||
|
Short Term Credit from Bank, net
|
(24,857
|
)
|
6,747
|
|||||
|
Repayment of Long-Term Loans and Liabilities
|
(46,565
|
)
|
(30,752
|
)
|
||||
|
Net cash provided by (used in) financing activities
|
(71,422
|
)
|
275,995
|
|||||
|
Increase (Decrease) in cash and cash equivalents
|
144,478
|
328
|
||||||
|
Cash and cash equivalents at the beginning of the period
|
5,313
|
4,985
|
||||||
|
Cash and cash equivalents at the end of the period
|
149,791
|
5,313
|
||||||
43
Note 1 - General
| A. |
The Company was incorporated under the laws of the state of Israel and commenced operations as a private company in January 2007, under Companies Registrar number 513933218.
|
| B. |
The Company develops a software-based platform that enables its customers to enhance their brand and loyalty plans with digital payments and reward programs through the creation and offering of branded mobile applications.
|
| C. |
Since inception, the Company incurred an accumulated deficit of NIS 1,521,738. The Company will need funds to continue its operations until profitability is achieved or until additional funding is raised.
|
Note 2 - Summary of Significant Accounting Policies
The principal accounting policies, consistently applied in the preparation of the financial statements, are as follows:
| A. |
Financial Statements Reporting Basis
|
The financial statements are drawn up on the basis of generally accepted accounting principles ("GAAP"), and are expressed in New Israeli Shekel ("NIS") based
on historical values, and provide no information on changes in the general purchasing power of the Israeli currency on the business results.
Those reports are filed as part of form F-1 (Registration Statement Under the Securities Act of 1933). Since the Company was incorporated in Israel and is
considered a Foreign Issuer and as such is allowed to file the statement and the financial reports in its home country currency, New Israeli Shekel (NIS).
| B. |
Cash and Cash Equivalents
|
The Company considers high-liquidity investments, including short-term cash deposits in banks (up to three months), as cash equivalents.
| C. |
Fixed Assets
|
Property and equipment are stated at cost. Major improvements and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation
is computed using the straight-line method over the estimated useful life. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is
reflected in the statements of operations as other gain or loss, net.
Annual depreciation rates are as follows:
|
%
|
| Office furniture and equipment |
6 - 15
|
| Vehicles |
15
|
| Computers |
33
|
| D. |
Use of Estimates in Preparing the Financial Statements
|
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingencies at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results may differ from those estimates.
44
| E. |
Income Tax
|
The Company accounts for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"). ASC 740 prescribes the use of the liability method whereby
deferred tax assets and liability account balances are determined based on differences between the financial reporting and the tax basis 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. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value, and if it is more likely than not that a portion or all of the deferred tax assets will
not be realized.
| F. |
Revenue Recognition
|
Significant management judgments and estimates must be made and used in connection with the recognition of revenue in any accounting period. Material differences in the amount
of revenue in any given period may result if these judgments or estimates prove to be incorrect or if management’s estimates change on the basis of development of business or market conditions.
We have decided to follow the provisions of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The guidance provides a
unified model to determine how revenue is recognized.
Revenues are recognized when control of the promised goods or services are transferred to the customers in an amount that reflects the consideration that we expect to receive in
exchange for those goods or services.
We determine revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the
contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, we satisfy a performance obligation.
We enter into contracts that can include various combinations of products and services, as detailed below, which are generally capable of being distinct and accounted for as
separate performance obligations.
We generate our revenues from (1) licensing intellectual properties, which in certain circumstances are modified for customer-specific requirements, (2) royalty revenues and (3)
other revenues, which include revenues from support, training and sale of development systems and chips. We license our assets IP to other companies who can then resell, develop or market otherwise in variety of business models.
We account for license revenues and related services, which provide our customers with rights to use our platform, in accordance with ASC 606. A license may be perpetual or time
limited in its application. In accordance with ASC 606, we recognize revenue from platform license at the time of delivery when the customer accepts control of the platform, as the platform is functional without professional services, updates and
technical support. We have concluded that our platform license is distinct as the customer can benefit from the software on its own.
45
Revenues that are derived from the sale of a licensee’s products that incorporate our platform are classified as royalty revenues. Royalty revenues are recognized during the
quarter in which the sale of the product incorporating our platform occurs. Royalties are calculated either as a percentage of the revenues received by our licensees on sales of products incorporating our platform or on a per unit basis, as specified
in the agreements with the licensees. We receive the actual sales data from our customers after the quarter ends and accounts for it as unbilled receivables. When we do not receive actual sales data from the customer prior to the finalization of its
financial statements, royalty revenues are recognized based on our estimation of the customer’s sales during the quarter. We may engage a third party to perform royalty audits of our licensees, and if these audits indicate any over- or under-reported
royalties, we account for the results when the audits are resolved.
As of end of 2020, Galileo owed us an amount of NIS330,000, which was not recorded as an account receivable.
As the 2020 history with Galileo demonstrated, the uncollected amount was not certain to be collected. At the time of revenue recognition the Company did not feel with
certainty that Galileo would pay due to (i) the preliminary nature of the Agreement and (ii) the actual performance of Galileo. Since ASC 606-10-32-14 requires reasonable assurance that the amount collectible is definite and collectible, the
Company did not book the revenue or the account receivable. According to ASC 606-10-32-14, if amount is not reasonably fixed and collectible, then revenue cannot be recognized.
| G. |
Going Concern
|
The accompanying financial statements have been prepared in conformity with GAAP, which contemplates continuation of the Company as a going concern.
The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a
going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources
of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Note 3 - Cash and Cash Equivalents
|
As at December 31,
|
||||||||
|
2020
|
2019
|
|||||||
|
`
|
Israel Shekels
|
|||||||
|
Bank Mizrahi Current Account No. 684795
|
-
|
5,313
|
||||||
|
Bank Mizrahi Current Account No. 073959
|
149,791
|
-
|
||||||
|
149,791
|
5,313
|
|||||||
Note 4 - Receivables and Debit Balances
|
As at December 31,
|
||||||||
|
2020
|
2019
|
|||||||
|
Israel Shekels
|
||||||||
|
Prepaid expenses
|
-
|
110,000
|
||||||
|
Institutions
|
-
|
-
|
||||||
|
Other receivables
|
3,466
|
-
|
||||||
|
3,466
|
110,000
|
|||||||
46
Note 5 - Fixed Assets
|
As at December 31,
|
||||||||||||||||
|
2020
|
2019
|
|||||||||||||||
|
Cost
|
Accumulated Depreciation
|
Depreciated Cost
|
Depreciated Cost
|
|||||||||||||
|
Israel Shekels
|
||||||||||||||||
|
R&D expenses
|
1,290,062
|
715,411
|
574,651
|
966,889
|
||||||||||||
|
Computers
|
22,196
|
15,458
|
6,738
|
14,063
|
||||||||||||
|
1,312,258
|
730,869
|
581,389
|
980,952
|
|||||||||||||
Note 6 - Credit from Banking Institutions
|
As at December 31,
|
||||||||
|
2020
|
2019
|
|||||||
|
Israel Shekels
|
||||||||
|
Bank Mizrahi Current Account 684728
|
7,639
|
9,789
|
||||||
|
Bank Mizrahi Current Account 73959
|
-
|
29,978
|
||||||
|
Current maturities of long-term loans
|
37,863
|
30,592
|
||||||
|
45,502
|
70,359
|
|||||||
Note 7 - Payables and Credit Balances
|
As at December 31,
|
||||||||
|
2020
|
2019
|
|||||||
|
Israel Shekels
|
||||||||
|
Payable Expenses
|
216,000
|
-
|
||||||
|
Down payments from clients
|
1,453
|
2,179
|
||||||
|
Government institutions
|
81,867
|
9,710
|
||||||
|
Employees and institutions - salaries
|
-
|
-
|
||||||
|
Related parties
|
48,744
|
121,144
|
||||||
|
Shareholders (1)
|
1,474,171
|
1,583,338
|
||||||
|
Others
|
-
|
16,819
|
||||||
|
1,822,235
|
1,733,190
|
|||||||
| 1. |
The amount provided does not include NIS280,000 management fees which accrued from May 2020 through December 31, 2020 as said amounts were not invoiced by the shareholder.
|
Note 8 - Loans from Banking Corporations and other Credit Providers
|
As at December 31,
|
||||||||
|
2020
|
2019
|
|||||||
|
Israel Shekels
|
||||||||
|
Loan from Mizrahi Bank A/c 73959
|
125,669
|
151,772
|
||||||
|
Loan from Mizrahi Bank A/c 684728
|
2,247
|
15,438
|
||||||
|
Less - current maturities
|
(37,863
|
)
|
(30,592
|
)
|
||||
|
90,053
|
136,618
|
|||||||
47
Note 9 - Share Capital
|
December 31, 2019 and 2020
|
||||||||
|
Registered
|
Issued and Paid Up
|
|||||||
|
Number of Shares
|
||||||||
|
Ordinary shares of ILS 1 each p.v.
|
100,000
|
300
|
||||||
Note 10 - Selling, Administrative and General Expenses
|
For the Year Ended on December 31,
|
||||||||
|
2020
|
2019
|
|||||||
|
Israel Shekels
|
||||||||
|
Salary
|
-
|
20,484
|
||||||
|
Advertising
|
10,945
|
13,324
|
||||||
|
Rent (*)
|
820
|
12,009
|
||||||
|
Management fees (*) (**) (***)
|
320,000
|
660,001
|
||||||
|
Communication
|
2,235
|
3,519
|
||||||
|
Professional services
|
51,524
|
21,793
|
||||||
|
Travel abroad
|
1,552
|
19,621
|
||||||
|
Maintenance and Electricity
|
307
|
-
|
||||||
|
Office expenses
|
-
|
8,490
|
||||||
|
Refreshments
|
405
|
-
|
||||||
|
Taxes and fees
|
1,511
|
1,133
|
||||||
|
Travel and parking
|
857
|
1,844
|
||||||
|
Depreciation expenses
|
7,325
|
7,325
|
||||||
|
397,481
|
769,543
|
|||||||
(*) Re-classified
(**) 2019 Includes differences for 2018
(***) Management fee for the period starting May 2020 onwards, and until the date of this report, was not charged yet and is expected to be charged during 2021
Note 11 – Subsequent Events
| • |
Following the execution and delivery of the Addendum to Sales Agreement on December 27, 2020 with our sole customer Galileo Tech Ltd, Galileo made all payments in accordance with the terms of the Addendum – NIS120,000 (plus VAT) was
paid on December 31, 2020 (as reflected in the revenues for year ended December 31, 2020) and NIS150,000 (plus VAT) was paid by end of January 2021. In addition, on February 23, 2021, Galileo issued the Company 128,571 of its ordinary
shares. The shares we received in Galileo were assigned to Mr. Shalom, our sole officer and director, in consideration for the reduction in the debt owed to him by the Company.
|
|
•
|
On April 12, 2021 the Company changed its articles of association and its capital structure. As a result, the new authorized capital of the company is:
|
990,000,000 Ordinary shares of nominal value NIS 0.01 per share
10,000,000 Preferred shares of nominal value NIS 0.01 per share
|
•
|
On April 12, 2021, the Company issued 1,999,700 Ordinary shares and 10,000,000 Preferred shares for an aggregate purchase price of NIS 119,997 to Menachem Shalom. The purchase amount was not paid in cash but by deducting the amount from the Company's debt owed to Menachem Shalom.
|
| • |
The Company accrued management fees payable to Menachem Shalom pursuant to the management agreement from January 1, 2021 through April 30, 2021 in the amount of NIS140,000.
|
48
RESULTS OF OPERATIONS
Key Financial Performance Indicators
In assessing our financial performance, we consider a variety of financial performance measures, including principal growth in net revenue and gross profit, our ability to control costs and operating
expenses to improve our operating efficiency and net income. Our review of these indicators facilitates timely evaluation of the performance of our business and effective communication of results and key decisions, allowing our business to respond
promptly to competitive market conditions and different demands and preferences from our customers. The key measures that we use to evaluate the performance of our business are set forth below and are discussed in greater details under “Results of
Operations”:
Net Revenue
Our revenues are generated primarily (approximately 96%) from licensing fees received from our sole customer, Galileo Tech Ltd.
Gross Profit
Gross profit is equal to net revenue minus cost of goods sold. Cost of goods sold primarily includes all direct and indirect software development expenses paid to service providers, contractors and freelancers.
Selling, administrative and general expenses
Our SA&G expenses consist of all other expenses of the business including management, rent and maintenance, professional services, and depreciation.
Results of Operations for the Years Ended December 31, 2020 and 2019
Comparison of Results of Operations for the Years Ended December 31, 2020 and 2019
Revenues
Revenues were NIS 486,360 for the year ended December 31, 2020, an increase of NIS 351,983, or approximately 262%, as compared to NIS 134,377 for the year ended December 31, 2019.
The increase in revenues was attributed primarily to revenues from our licensing agreement with Galileo. We recognize NIS100,000 of the establishment fee agreed with Galileo in our 2019 revenues
and NIS470,000 in 2020 revenues. No annual licensing fee or royalties were recognized.
Cost of Revenues
Our cost of revenues primarily consists of all direct and indirect software development expenses paid to service providers, contractors and freelancers. Our cost of revenues increased by NIS 165,343
from NIS 289,692 in fiscal year 2019 to NIS 455,035 in fiscal year 2020. The increase in our cost of revenue was a result of increased software development costs.
49
Gross Profit
Our gross profit in fiscal year 2020 of NIS 1,521,738 increased by NIS377,833, or approximately 33%, from our gross profit in fiscal year 2019 of NIS1,143,905. The increase was due to an increase in
the amount generated from our licensing agreement with Galileo.
General and administrative expenses
General and administrative expenses decreased by NIS372,062, or approximately 48%, from NIS769,543 in fiscal year end 2019 to NIS397,481 of expenses in fiscal year end 202020. The change was
primarily due to (i) a decrease in management fees payable from NIS320,000 in 2020 to NIS660,001 in 2019; (ii) no salary paid in 2020 compared to NIS20,484 paid in 2019; (iii) professional services increased in 2020 to NIS51,524 from NIS21,793 in
2019; (iv) travel abroad in 2019 was NIS19,621 to NIS1,552 in 2020; and (v) no office expenses in 2020 compared to NIS8,490 in 2019.
Research and development expenses
We do not have research and developments expenses itemized as specific line items as they are included in the cost of revenues.
Net income
As a result of the foregoing, our net income increased from NIS1,143,905 in fiscal year 2019 to NIS1,521,738 in fiscal year 2020.
Liquidity and Capital Resources
As reflected in the Company’s financial statements, the Company had a cash balance of NIS149,791, liabilities of NIS1,958,213 and a net total stockholders’ equity of NIS1,221,735 as of December 31,
2020.
As of December 31, 2020, we borrowed a total of NIS135,555 from a bank in Israel. The outstanding principal amount, plus accrued and unpaid interest, is due May 24, 2024. We are currently paying
NIS3,204 a month to the bank.
Management estimates that in order to continue operations we will need $90,000 for the next 12 months of operations. Using currently available capital resources, which consists of (NIS41,500),
the Company cannot continue operations unless it raises money. Other than this public offering, we currently have no material commitments for capital expenditures. Accordingly, if we are not successful at raising funds in this offering, there is
no assurance that the Company will have sufficient cash to remain in business. Even if we are successful at selling all the shares offered in this prospectus, we may be required to raise additional funds, particularly if we are unable to continue
generating positive cash flow as a result of our operations. We estimate that based on current plans and assumptions, that our available cash will not be sufficient to satisfy our cash requirements under our present operating expectations,
without further financing, for up to 12 months. In addition, our company may, from time to time, receive continued funding and capital resources from related parties. However, as of the date of this annual report, such related parties do not have
any existing obligation to advance funds or working capital to support our business, nor can our company rely on any advance funds from such related parties. We may not have sufficient working capital to fund the expansion of our operations and
to provide working capital necessary for our ongoing operations and obligations. We may need to raise significant additional capital to fund our operating expenses, pay our obligations, and grow our company. We do not anticipate we will be
profitable in 2021. Therefore our future operations may be dependent on our ability to secure additional financing. Financing transactions may include the issuance of equity or debt securities, obtaining credit facilities, or other financing
mechanisms. However, we have no current arrangements to issue any securities. Also, a downturn in the U.S. equity and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are
able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Furthermore, if
we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. The inability to
obtain additional capital will restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail our marketing and
development plans and possibly cease our operations.
50
We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our
ability to continue as a going concern.
Our liquidity may be negatively impacted by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements,
including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance
costs and to make some activities more time consuming and costly
Cash flows from operating activities
The operating activity has provided a net cash amount of NIS249,381.
Cash flows from investing activities
NIS33,481 was used in the Company investing activity.
Cash flows from financing activities
NIS71,422 was used in the Company financing activity.
Off Balance Sheet Arrangements
We have no off balance sheet arrangements.
51
Tabular Disclosure of Contractual Obligations
As of December 31, 2020, we had the following contractual obligations:
|
|
|
Payments Due by Period
|
|
|||||||||||||||||
|
Contractual Obligations
|
|
|
Total
|
|
|
|
Less than 1 year
|
|
|
|
1-3 years
|
|
|
|
3-5 years
|
|
|
|
More than 5 years
|
|
|
Debt Obligations(1)
|
|
NIS125,606
|
|
NIS35,616
|
|
|
NIS89,990
|
|
|
|
|
—
|
|
|||||||
|
Debt to Shareholder(2)
|
1,474,171
|
1,474,171
|
||||||||||||||||||
|
Total
|
|
NIS1,599,777
|
|
NIS1,509787
|
|
NIS89,990
|
|
|
|
|
|
|||||||||
(1) Amount specified represents payments due to Bank Mizrachi, which is due and payable on _____.
(2) Amounts specified exclude the NIS245,000 management fee owed to Menachem Shalom for the period of May 2020 until December 31, 2020.
Legal proceedings
We are currently not a party to any material legal or administrative proceedings. We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary
course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, may result in substantial cost and diversion of our resources, including our management’s time and attention.
Quantitative and Qualitative Analysis about Market Risk
Foreign Exchange Risk
Foreign Currency Exchange Rates
Currently, our revenues from Israeli customers are collected in NIS. Some of our expenses are paid in NIS and some are paid in USD. We face foreign currency rate translation risks when our results
are translated to U.S. dollars.
The NIS was relatively stable against the U.S. dollar at approximately NIS3.215 to the US$1.00. There can be no assurance that such exchange rate will continue to remain stable in the future amongst
the volatility of currencies, globalization and the unstable economies in recent years. Since our revenues and net income are denominated in NIS, any decrease in the value of NIS against U.S. dollars would adversely affect our revenues.
52
Interest Rate Risk
We are not currently exposed to interest rate risk. We do not own any interest-bearing instruments and our interest-bearing debt carries a fixed rate.
Market Price Risk
We are not currently exposed to commodity price risk or market price risk.
Inflation
Inflation does not materially affect our business or the results of our operations.
Seasonality
Seasonality does not materially affect our business or the results of our operations.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements are prepared in accordance with U.S.
GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenues and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements,
and to disclose the reported amounts of revenues and expenses incurred during the financial reporting period. The most significant estimates and assumptions include the valuation of accounts receivable and inventories, useful lives of property, plant
and equipment and intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, and revenue recognition. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the
circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial
reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies as disclosed in this prospectus reflect
the more significant judgments and estimates used in preparation of our consolidated financial statements.
Risks and Uncertainties
Our operation is located in the State of Israel. Accordingly, our business, financial condition, and results of operations may be influenced by political, economic, and legal environments in Israel,
as well as by the general state of the Israeli economy. Our results may be adversely affected by changes in the political, regulatory and social conditions in Israel. Although we have not experienced losses from these situations and believes that we
are in compliance with existing laws and regulations including our organization and structure, this may not be indicative of future results.
53
Our business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic
incidents, such as the recent outbreak and spread of the COVID-19, which could significantly disrupt our operations.
An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if
different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur, could materially impact the consolidated financial statements. We believe that the following accounting
policies involve a higher degree of judgment and complexity in their application and require us to make significant accounting estimates. The following description of critical accounting policies, judgments and estimates should be read in conjunction
with our consolidated financial statements and other disclosures included in this prospectus.
The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our consolidated financial statements:
Uses of estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods and accompanying notes. Significant items subject to such estimates and
assumptions include, but are not limited to, the allocation of transaction price among various performance obligations, the estimated customer life on deferred contract acquisition costs, the allowance for doubtful accounts, the fair value of
financial assets and liabilities; including accounting and fair value of derivatives, the fair value of acquired intangible assets and goodwill, the useful lives of acquired intangible assets and property and equipment, share-based compensation
including the determination of the fair value of the Company’s ordinary shares, and the valuation of deferred tax assets and uncertain tax positions. The Company bases these estimates on historical and anticipated results, trends, and various other
assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates.
Accounts receivable, net
Accounts receivable are recorded at the invoiced amount and amounts for which revenue has been recognized but not invoiced, net of allowance for doubtful accounts. The allowance for doubtful accounts
is based on the Company’s assessment of the collectability of accounts. The Company regularly reviews the adequacy of the allowance for doubtful accounts based on a combination of factors, including an assessment of the current customer’s aging
balance, the nature and size of the customer, the financial condition of the customer, and the amount of any receivables in dispute. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. The
allowance of doubtful accounts was not material for the periods presented.
54
Inventories, net
Not relevant
Capitalized Software Costs
Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, with no substantive plans to market such software at the time of development are capitalized. Costs
incurred during the preliminary planning and evaluation stage of the project and during the post implementation operational stage are expensed as incurred. Costs incurred during the application development stage of the project are capitalized.
Maintenance costs are expensed as incurred.
Revenue recognition
The Company elected to adopt Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), effective as of January 1, 2018, utilizing the full retrospective method of adoption.
In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services are delivered. The amount of revenue recognized reflects the consideration that the Company expects to
receive in exchange for these goods or services.
Contract Assets and Liabilities
Income Tax
Income tax income or expense reflects our current income tax, as well as our deferred tax income (expense).
Shareholder Taxation
Investors should consult their own tax advisor regarding the specific tax consequences of owning and disposing of our common stock, including eligibility for the benefits of any treaty for the
avoidance of double taxation, the applicability or effect of any special rules to which they may be subject, and the effect of any state, local, or other tax laws.
Recently Issued Accounting Pronouncements
We have reviewed other recent accounting pronouncements issued to the date of the issuance of these consolidated financial statements, and we do not believe any of these pronouncements will have a
material impact on the Company.
55
Overview
We were originally incorporated under the name of P.M.E SAL Technologies Ltd. under the laws of the State of Israel on January 29, 2007. In September 2008, we changed our name to Hold Me Ltd. by filing a Certificate of
Amendment with the Registrar of Companies in Israel to effect a name change. Initially we were engaged in providing website design and development services. We ceased conducting such business activity in 2011 and have not had any significant business
activity until 2018.
At the beginning of 2018, we started to develop a mobile-wallet-as-a-service platform for organizations interested in launching mobile wallet applications for their brand.
Today, we are a software company offering a well-rounded platform that supports a wide range of digital payment services integrating into mobile apps (“Platform”). Our Platform enables the creation of applications and
digital wallets for our customers, including but not limited to financial institutions, brands, retailers, credit card companies, insurance companies and other organizations, in a quick and cost-saving manner.
Innovation has always been at the core of our fundamental philosophy, as it continuously pursues various new initiatives, including the commercial applications of our Platform.
We are committed to democratizing financial services to improve the financial health of individuals and to increase economic opportunity for entrepreneurs and businesses of all sizes around the world. Our goal is to
enable our customers and their clients to manage and move their money anywhere in the world, anytime, on any platform, and using any device when sending payments or getting paid. By achieving our goal, we will continue to expand our product offerings
by adding additional services, functions and capabilities with our innovative and evolving technologies, combined with our marketing efforts.
Our Platform
We started the research and development for the Platform in 2018 and offered its first commercial application at 2019. Our Platform provides the technical infrastructure through Amazon cloud to our customers, using
Application Programming Interface, or API. API is a computing interface that defines interactions between multiple software intermediaries, which could be utilized and integrated by our customers into their own mobile apps. It connects brands,
merchants, retailers, financial institutions, insurance companies and other organizations with their clients through our innovative digital payment solutions.
Our Revenue Model
We generate revenues primarily through license fees from our customers. In general, the amount of the license fee is determined by the range and type of API services offered and consumed on our platform and by the usage
volume of our customer on our API software – meaning number of end-users and transactions (API-calls) triggered on our platform.
For the year ended December 31, 2020 and 2019, our revenues were NIS486,360 and NIS134,377, respectively.
Our products
Our current product portfolio consists of a digital wallet platform (used for commercial engagement of brands with their end-customers) and a digital banking service that can be used for innovation and development
purposes by financial institutions. For the year ended December 31, 2020, the digital payment services generated NIS486,360, or 100% of our total revenues, and digital banking services generated no revenues. For the year ended December 31, 2019, we
generated NIS134,377 in sales.
56
Digital Payment Services
Through our Platform, we provide a digital platform that can support creation and operation of mobile wallets applications that allow our business customers to stay engaged with their end clients through the application
that include payments and loyalty functionalities.
Similar to peer-to-peer money transfer applications we developed a platform that enables the transfer of payments between end users and between end users and businesses.
We will continue to be the active software provider of the digital payment market, while expanding the functionality offered through our platform to include marketing and marketing automation tasks and capabilities,
additional loyalty schemes and more.
Digital Financial Services
In today’s hyper-connected world, sustainable digital innovation has become a survival strategy for banks and financial institutions. As technologies evolve, consumers constantly continue to raise the bar for their
expectations of better service, new products, and ongoing connectivity. Digital creativity and trust must always be reflected to customers as the competitors are using a new wealth of information to satisfy customers and attempt to attract new ones.
Incumbent banks' core banking systems are legacy systems built over decades using multiple hardware and software providers. These various parts have been "patched" one on top of one another raising significant
difficulties for connectivity and compatibility, intensifying the already-substantial security challenges and operational risks. Such patches cannot foster the market-presence of an innovation-minded bank.
Our Platform may serve as the basis for innovation programs for our potential customers, which simulates a banking core system, so as to create a digital environment that enables collaboration between their development
teams and external software providers, such as start-ups and development-stage companies, developers, and other financial institutions, without exposing the technological manufacturing environments of our customers to outsiders.
Since it saves the effort and time needed to develop an innovation platform, our Platform provides cost-effective and time-saving solutions to our customers as it enables them to integrate our digital financial services
into their mobile apps. This significantly minimizes the financial and business exposure of our customers to external security threats
Our Platform serves as a core-banking-as-a-service solution for legacy banks to build their own banking and financial innovation programs, to connect with developers’ communities, and to meet market and regulatory
demands while saving on IT investments across hardware, software, and support staff.
The solution delivers three key capabilities:
| ◾ |
API gateway for external and internal systems including a ready-to-use set of PCI-DSS certified banking APIs for user and account management, transactions and payments, credit cards, loans, and more, through a single integration point
|
| ◾ |
Business logic layer for banking products
|
| ◾ |
Hosted and managed database
|
57
The Platform is an exceptionally market-responsive Core-Banking-as-a-Service solution. It’s the bank's innovation mock-up platform that revs up innovation engines with agile, customer-centric BaaS powers. The bank can
have in-house developers, thought leaders, and intrapreneurs join forces with software providers and fintech firms to innovate easily around a ready-to-use set of banking APIs. Launch POCs with providers securely, purposefully, and effortlessly with
no need to allocate valuable IT resources or risk your existing operational systems. Platform includes APIs for user and account management, transactions and payments, credit cards, loans, and more – all that is needed is one integration point to
connect the bank with the future.
Use Cases
The Platform is a secure, cloud-native, and highly scalable digital innovation platform for innovation-driven legacy banks. Use cases may include:
| ◾ |
Building a fully-customizable white-label developer portal to invite, manage, and service developers
|
| ◾ |
Running fintech programs, competitions, and hackathons
|
| ◾ |
Launching secure and purposeful POCs with the fintech industry
|
| ◾ |
Possessing a production environment built for the new serverless era
|
| ◾ |
Shortening time-to-market: from inception to the launch of new digital products and services
|
| ◾ |
Migrating existing bank products and services to the Innovatn.io micro-services-based architecture
|
The market-responsive of the Platform is designed to allow banks to foster digital creativity in-house and reflect it to the outside world. The Platform is integrable and interoperable with existing systems.
Our customer
We anticipate that our future customers may include businesses of all sizes and from various industries in Israel, such as financial institutions, credit card companies, insurance companies, and retailers, etc. We
currently do not have international customers and our sole customer is located in Israel. We plan to extend our business internationally and develop customers outside of Israel in future.
For the year ended December 31, 2020, we served 1 customer in Israel. During the same period, our main customer, Galileo Tech Ltd., a company located in Israel, accounted for 96% of our revenues. Approximately 4% of the
revenues derived from other non-substantial sales.
On December 5, 2019, we entered into an Agreement for Operation and Sale of Digital Wallets, which was amended by an Addendum to Sales Agreement on December 27, 2020, with our sole customer Galileo Tech Ltd.
We granted Galileo an exclusive license to commercialize our technology in Israel. However, we are not bound to make any development, consultation, management and/or other service of our technology to Galileo or its
customers.
In accordance with the terms of our agreement with Galileo, the licensing fee included an one-time establishment fee of approximately NIS800,000 (including the annual licensing fee for the first year of the agreement)
and an annual licensing fee of NIS 100,000 for the second and third years (2021 and 2022), and NIS 150,000 per additional year commencing December 5, 2020. In addition, Hold Me is also entitled to 12% of all income generated by Galileo from using or
sub-licensing the Company's products licensed to Galileo.
58
Galileo was also given the right to use our technology for clearing payments between various digital wallets and the businesses registers in Israel. For such right we are to receive 10% of all gross profits generated by
Galileo from their customers.
Galileo is entitled to market and commercialize in Israel the applications developed by Hold Me and to make changes and/or additions as it deems fit. For this right we were paid NIS100,000 and are entitled to 10% of all
gross profits.
Pursuant to the terms of the agreement, we are obligated to fix or repair the failures and/or inadequacies, but not those developed or changed by Galileo.
The agreement does not provide for a term. Each party has the right to terminate the agreement if the other party in breach fails to cure a breach within 30 days or conducts illegal activities or violates the laws.
As a result of not making payment to us for the year ended December 31, 2020, Galileo issued us shares of Galileo; we are entitled to additional shares of Galileo if the stock price of Galileo is less than NIS1.4 in June
2021. In addition, the payment of the 100,000 NIS annual registration fee was postponed until June 2021; however, if Galileo does not enter into one contract for a significant payment transaction before such date, then the fee shall be paid upon the
execution of such sub-licensing agreement but in any event no later than December 5, 2021.
During 2020 Galileo paid us NIS470,000which were recognized as revenues.
As a result of Galileo not paying us the full 800,000 owed to us for the year ended December 31, 2020 in accordance with the terms of the Agreement, we signed an Addendum with Galileo on December 27, 2020. According
to the Addendum, Galileo undertook to pay us (1) NIS120,000 until December 31, 2020 (which was fully paid); (2) NIS150,000 until January 31, 2021 (which was fully paid) and (3) in exchange for NIS180,000 owed, Galileo issued us 128,571 shares of
Galileo. If the stock price of Galileo is less than NIS1.4 in June 2021, we are entitled to additional shares of Galileo. In addition, the payment of the NIS100,000 annual registration fee was postponed until June 2021; however, if Galileo does
not enter into one contract with a customer for a significant payment transaction before such date, then the fee shall be paid upon the execution of such sub-licensing agreement, but in any event we shall be paid the annual registration fee no
later than December 5, 2021.
The shares we received in Galileo were assigned to Mr. Shalom, our sole officer and director, in consideration for the reduction in the debt owed to him. It is anticipated that if Galileo issues the Company additional
shares, such shares will also be assigned to Mr. Shalom in order to reduce the amount we owe Mr. Shalom. See “Certain Relationships and Related Party Transactions”.
Our Suppliers
Our only relationship with vendors are with a software company in India which assisted us in developing our software and Amazon. Amazon provides us networking and hosting services through which additional
software-as-a-service products and services are offered.
Intellectual Property
We do not have any intellectual property protection on our source code or any other aspect of the Platform.
Marketing and Competition
The company does not currently have the resources to market its Platform, but when and if it does, it will attempt to generate customers by:
| • |
Direct sales to business customers;
|
| • |
Establishment of subsidiaries to do sales and marketing in different geographies;
|
| • |
Engaging with distributors and partners to engage in distributors, reseller or other forms of marketing; and
|
| • |
Joint ventures
|
In addition we may launch paid digital campaign(s) on different relevant social media networks (mainly LinkedIn) to approach relevant organizations and decision makers in those organizations.
59
Leading Competitors
There are many companies, both large and small, which are our competitors. Companies to which we hope to offer the Platform can choose to develop their own mobile wallet. Software development
companies can be engaged by our potential customers to develop a mobile wallet. Software or payment companies such as Stripe, Paypal and GooglePay, can offer services and solutions which can easily enable customers to have their own mobile wallets.
Competitive Challenges and Advantages
Given the extremely fast changes that occur in the overall technology world, including in the payment and software sectors, management does not believe that the Platform has any competitive
advantage.
Development and Expansion Strategy
The key components of our development and expansion strategy over the next two-to-five years are as follows:
| • |
ongoing continues development of the company's products.
|
| • |
marketing and sales efforts of the company's products to potential customers.
|
| • |
licensing or buying of additional technology, software or products that may increase the attractiveness or the price of the company's products.
|
| • |
the Company will be looking to form commercial partnerships with software distributors and integrators – to expand its market reach and sales.
|
| • |
once substantial sales are achieved, the company is looking to expand its product offering by developing, acquiring or licensing additional products relevant for its customer-base.
|
Property, Plant, and Equipment
We currently have an office in the house of Menachem Shalom, our sole officer and director.
Employees
Other than our sole officer and director, we have no employees.
60
Board of Directors, Executive Officers and Significant Employees
|
Name
|
Age
|
Position
|
|
|
|
|
|
Menachem Shalom
|
46
|
Chief Executive Officer, Chief Financial Officer and Director
|
Set forth below is a brief description of the background and business experience of our executive officers and directors:
Menachem Shalom, age 46, has been our Chief Executive Officer, Chief Financial Officer and member of our Board of Directors since 2008. Mr. Shalom founded and
served as the chief executive officer for Wayerz Solutions Ltd. from January 2015 to August 2017. From August 2013 to April 2014, Mr. Shalom served as vice president development, sales and marketing, of Dsnr Media Group Ltd. Mr. Shalom obtained a LLM
with honors from Columbia University School of Law in 2000, a MBA from Hebrew University in 2003 and a LLB, magna cum laude, from Hebrew University of Jerusalem in 1998.
Menachem Shalom is currently our sole officer and director. Prior to the effectiveness of this registration statement we intend to elect additional officers and directors in accordance with the
applicable provisions of the Companies Law. Currently we do not have any agreement or arrangement with any person to become an officer or director.
Compensation
Set forth below is the compensation paid during the fiscal year ended December 31, 2020 for our sole executive officer and director.
|
Name
|
|
2020 Compensation
|
| Menachem Shalom |
NIS140,000 |
The amount received by Mr. Shalom was pursuant to the terms of the Management Services Agreement. This amount does not include NIS280,000 which has been accrued but not invoiced and not paid by
the Company for management services for the year ended December 31, 2020.
Management Services Agreement
We entered into a written management services agreement with our sole executive officer and director as of December 30, 2017 to provide us services full time. Mr. Shalom shall be entitled to
receive a monthly management fee of NIS35,000 (USD10,606) plus VAT, which shall increase to NIS45,000 (USD13,636) plus VAT upon completion of the development of the system and the commencement of the sales stage. Upon completion of fundraising in
the sum of NIS5,000,000 (USD1,515,152) or more, Mr. Shalom shall be entitled to payment of monthly fee of NIS60,000 (USD18,181) plus VAT. Mr. Shalom is also entitled to reimbursement for travel expenses as well as all his expenses related to the
execution of the agreement. The Company has the right to terminate the agreement upon 6-months notice.
Corporate governance practices
As an Israeli company, we are subject to various corporate governance requirements under the Companies Law. Our directors have a duty to act honestly, in good faith and with a view to our best
interests. Our directors also have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our
memorandum and articles of association and the class rights vested thereunder in the holders of the shares. A shareholder may in certain circumstances have rights to damages if a duty owed by the directors is breached.
Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs. The functions and powers of our board of directors include, among others:
|
|
●
|
convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings;
|
|
|
|
|
|
|
●
|
declaring dividends and distributions;
|
|
|
|
|
|
|
●
|
appointing officers and determining the term of office of the officers; and
|
|
|
|
|
|
|
●
|
exercising the borrowing powers of our company and mortgaging the property of our company;
|
61
Approval of related party transactions under Israeli law
Fiduciary duties of directors and officers
The Companies Law codifies the fiduciary duties that office holders owe to a company. An office holder is defined in the Companies Law as a general manager, chief business manager, deputy general
manager, vice general manager, executive Vice President, vice President, any other person assuming the responsibilities of any of these positions regardless of such person's title, a director and any other manager directly subordinate to the
general manager. Each person listed in the table under "Management—Executive officers and directors" is an office holder under the Companies Law.
An office holder's fiduciary duties consist of a duty of care and a duty of loyalty. The duty of care requires an office holder to act with the level of care with which a reasonable office holder
in the same position would have acted under the same circumstances. The duty of loyalty requires that an office holder act in good faith and in the best interests of the company.
Disclosure of personal interests of an office holder and approval of certain transactions
The Companies Law requires that an office holder promptly disclose no later than the first Board Meeting in which such transaction is discussed, to the board of directors any personal interest that
he or she may have and all related material information known to him or her concerning any existing or proposed transaction with the company. A personal interest includes an interest of any person in an act or transaction of a company, including a
personal interest of one's relative or of a corporate body in which such person or a relative of such person is a 5% or greater shareholder, director or general manager or in which he or she has the right to appoint at least one director or the
general manager, but excluding a personal interest stemming solely from one's ownership of shares in the company. A personal interest includes the personal interest of a person for whom the office holder holds a voting proxy or the personal
interest of the office holder with respect to his or her vote on behalf of a person for whom he or she holds a proxy even if such shareholder has no personal interest in the matter.
If it is determined that an office holder has a personal interest in a non-extraordinary transaction, meaning any transaction that is in the ordinary course of business, on market terms or that is
not likely to have a material impact on the company's profitability, assets or liabilities, approval by the board of directors is required for the transaction, unless the company's articles of association provide for a different method of approval.
Any such transaction that is not for the benefit of the company may not be approved by the board of directors.
62
In addition to any approval required by the articles of association, approval first by the company's audit committee and subsequently by the board of
directors, and, under specified circumstances, by a meeting of the shareholders, as well, is required for an extraordinary transaction (meaning, any transaction that is not in the ordinary course of business, not on market terms or that is likely
to have a material impact on the company's profitability, assets or liabilities) in which an office holder has a personal interest.
A director and any other office holder who has a personal interest in a transaction which is considered at a meeting of the board of directors or the audit committee may generally (unless it is
with respect to a transaction which is not an extraordinary transaction) not be present at such a meeting or vote on that matter however, with respect to an office holder, he/she may be present at the meeting discussions if the chairman determines
that the presence of the office holder is necessary in order to present the matter. However, if a majority of the members of the audit committee or the board of directors has a personal interest in the approval of such a transaction then all of the
directors may participate in the meeting with respect to such transaction and vote on the approval thereof and, in such case, shareholder approval is also required.
Certain disclosure and approval requirements apply under Israeli law to certain transactions with controlling shareholders, certain transactions in which a controlling shareholder has a personal
interest and certain arrangements regarding the terms of service or employment of a controlling shareholder.
For a description of the approvals required under Israeli law for compensation arrangements of officers and directors, see above under "—Compensation of directors and executive officers."
Shareholder duties
Pursuant to the Companies Law, a shareholder has a duty to act in good faith and in a customary manner toward the company and other shareholders and to refrain from abusing his or her power with
respect to the company, including, among other things, in voting at a general meeting and at shareholder class meetings with respect to the following matters:
| • |
an amendment to the company's articles of association;
|
| • |
an increase of the company's authorized share capital;
|
| • |
a merger; or
|
| • |
interested party transactions that require shareholder approval.
|
In addition, a shareholder has a general duty to refrain from discriminating against other shareholders.
Certain shareholders also have a duty of fairness toward the company. These shareholders include any controlling shareholder, any shareholder who knows that it has the power pursuant to the
provisions of a company's articles of association, to determine the outcome of a shareholder vote and any shareholder who has the power to appoint or to prevent the appointment of an office holder of the company. The Companies Law does not define
the substance of this duty of fairness, except to state that the remedies generally available upon a breach of contract adjusted according to the circumstances, and taking into account the status within the company of such shareholder, will also
apply in the event of a breach of the duty of fairness.
63
Exculpation, insurance and indemnification of office holders
We entered into an indemnification agreement with Menachem Shalom to indemnify Mr. Shalom to the fullest extent permitted under Israeli law. We are not
contractually obligated to indemnify Mr. Shalom for, among others, (i) a breach of duty of loyalty, unless such breach was done in good faith and having reasonable cause to assume that such act would not prejudice the interests of the Company and
(ii) a willful or reckless breach of his duty of care, unless such breach was done solely in negligence.
Under the Companies Law, a company may not exculpate an office holder from liability for a breach of the duty of loyalty. An Israeli company may exculpate an office holder in advance from liability
to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care but only if a provision authorizing such exculpation is included in its articles of association. Our articles of association include such
a provision. An Israeli company may not exculpate a director from liability arising out of a prohibited dividend or distribution to shareholders.
An Israeli company may indemnify an office holder in respect of the following liabilities and expenses incurred for acts performed as an office holder, either in advance of an event or following an
event, provided a provision authorizing such indemnification is contained in its articles of association:
| • |
financial liability imposed on him or her in favor of another person pursuant to a judgment, settlement or arbitrator's award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is
provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company's activities when the undertaking to indemnify is given, and to an amount or
according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned events and amount or criteria;
|
| • |
reasonable litigation expenses, including attorneys' fees, incurred by the office holder (1) 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 (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for
the criminal proceeding 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 and (2) in connection with a
monetary sanction;
|
| • |
reasonable litigation expenses, including attorneys' fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third-party or in connection with criminal
proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent; and
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| • |
expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party
imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law, 1968 (the "Israeli Securities Law").
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An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company's articles of
association:
| • |
a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
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| • |
a breach of the duty of care to the company or to a third-party, including a breach arising out of the negligent conduct of the office holder;
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| • |
a financial liability imposed on the office holder in favor of a third-party;
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| • |
a financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding; and
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| • |
expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her pursuant to certain provisions of the Israeli Securities Law.
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An Israeli company may not indemnify or insure an office holder against any of the following:
| • |
a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
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| • |
a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;
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| • |
an act or omission committed with intent to derive illegal personal benefit; or
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| • |
a fine, monetary sanction or forfeit levied against the office holder.
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Under the Companies Law, exculpation, indemnification and insurance of office holders must be approved by the compensation committee and the board of directors (and, with respect to directors and
the Chief Executive Officer, by shareholders).
Our articles of association allow us to indemnify and insure our office holders for any liability imposed on them as a consequence of an act (including any omission) which was performed by virtue
of being an office holder. (Our office holders are currently covered by a directors and officers' liability insurance policy).
We have entered into agreements with (each of) our director(s) and executive officer(s) exculpating them, to the fullest extent permitted by law, from liability to us for damages caused to us as a
result of a breach of duty of care, and undertaking to indemnify them to the fullest extent permitted by law. This indemnification is limited to events determined as foreseeable by the board of directors based on our activities, and to an amount or
according to criteria determined by the board of directors as reasonable under the circumstances.
In the opinion of the SEC, indemnification of directors and office holders for liabilities arising under the Securities Act, however, is against public policy and therefore unenforceable.
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Management Services Agreement
We entered into a written management services agreement with our sole executive officer and director as of December 30, 2017 to provide us services full time. Mr. Shalom shall be entitled to
receive a monthly management fee of NIS35,000 (USD10,606) plus VAT, which shall increase to NIS45,000 (USD13,636) plus VAT upon completion of the development of the system and the commencement of the sales stage. Upon completion of fundraising in
the sum of NIS5,000,000 (USD1,515,152) or more, Mr. Shalom shall be entitled to payment of monthly fee of NIS60,000 (USD18,181) plus VAT. Mr. Shalom is also entitled to reimbursement for travel expenses as well as all his expenses related to the
execution of the agreement. The Company has the right to terminate the agreement upon 6-months notice.
Committees of the Board
We currently do not have any committees under the board of directors.
Share Incentive Plan
We currently do not have any stock incentive plans.
The following table sets forth, as of the date of this prospectus, the beneficial ownership of our ordinary shares by each executive officer and director, by each person known by us to beneficially
own more than 5% of our ordinary shares and by the executive officers and directors as a group. As used in this table, “beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared
investment power with respect to a security (i.e., the power to dispose of, or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have “beneficial ownership” of any security that
such person has the right to acquire within 60 days after such date.
The persons named above have full voting and investment power with respect to the shares indicated. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed
to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than
one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our ordinary
shares.
All of our shareholders, including the shareholders listed below, have the same voting rights attached to their ordinary shares. See “Description of share capital and articles of association”. None
of our principal shareholders or our directors and executive officers have different or special voting rights with respect to their ordinary shares. Unless otherwise noted below, each shareholder’s address is 30 Golomb Street, Nes Ziona, Israel.
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Except as otherwise indicated, all shares are owned directly and the percentage shown is based on 2,000,000 ordinary shares issued and outstanding, and 4,000,000 ordinary shares outstanding after the
close of this offering.
|
Title of class
|
|
Name of beneficial owner
|
|
Amount of
beneficial ownership
|
|
Percent
of class
|
|
Percent of class after close of offering
|
||||||
|
Current Executive
Officers and Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Ordinary Shares
|
|
Menachem Shalom
|
2,000,000(1)
|
100
|
% |
50.00
|
%
|
|||||||
|
Preferred Shares
|
Menachem Shalom |
10,000,000
|
100 | % |
100 | % |
||||||||
|
Total of All Current
Officers and Directors
(1 person):
|
Menachem Shalom
|
|
|
2,000,000(1)
|
|
|
100
|
|
|
50.00
|
%
|
|||
| (1) |
Does not include 10,000,000 shares of Preferred Shares owned by Mr. Shalom. Each Preferred Share is convertible at any time by the holder thereof to 100 shares of ordinary shares.
|
The following is a description of transactions during our preceding three fiscal years up to the date of this prospectus, to which we were a party or will be party, in which the amount involved
exceeded or will exceed the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years, and any of our directors, executive officers or holders of more than 5% of our outstanding capital stock, or
any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest.
As of December 31, 2020, we are indebted to Mr. Shalom in the aggregate amount of NIS 1,474,171 (approximately $446,718), consisting of NIS900,900 of management fees pursuant to the terms of the
Management Services Agreement and NIS573,271 borrowed by the Company from Mr. Shalom pursuant to the terms of the Shareholders’ Loan Agreement. Those amounts do not include a management fee owed to Mr. Shalom in an amount of NIS 420,000, which have
not been invoiced since May 2020 until April 2021.
Upon receipt of the 128,571 shares received from Galileo pursuant to the terms of our agreement, we transferred the shares to Mr. Shalom to reduce the outstanding balance owed by us to Mr. Shalom to reduce the amount of
accrued NIS180,000 pursuant to the management agreement.
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In addition, as indicated in our financial reports, we owe Tamarindi Ltd, an Israeli company owned by Menachem Shalom, NIS48,744. Billio Ltd, another Israeli company owned by Menachem Shalom, owes us
NIS3,466.
See “Employment Agreement” for terms of Mr. Shalom’s management services agreement with the Company.
Our board of directors has not adopted a written related party transaction policy to set forth the policies and procedures for the review and approval or ratification of related person
transactions.
The following is a description of the material terms of our articles of association. The following description may not contain all of the information that is important to you, and we therefore
refer you to our articles of association, a copy of which is filed with the SEC as an exhibit to the registration statement of which this prospectus is a part.
Share capital
Our authorized share capital consists of 990,000,000 ordinary shares, par value NIS 0.01 per share, and 10,000,000 shares of Preferred Shares, par value NIS 0.01 per share. Currently there are
2,000,000 ordinary shares and 10,000,000 shares of Preferred Shares issued and outstanding, all of which are owned by Menachem Shalom. Assuming all the shares will be sold in this offering, 4,000,000 ordinary shares will be issued and outstanding.
All of our outstanding ordinary shares are validly issued, fully paid and non-assessable. Our ordinary shares are not redeemable and do not have any preemptive rights.
Our board of directors may determine the issue prices and terms for such shares or other securities and may further determine any other provision relating to such issue of shares or securities. We
may also issue and redeem redeemable securities on such terms and in such manner as our board of directors shall determine.
The following descriptions of share capital and provisions of our articles of association are summaries and are qualified by reference to our articles of association. A copy of our articles of
association is filed with the SEC as an exhibit to our registration statement, of which this prospectus forms a part.
Registration number and purposes of the company
We are registered with the Israeli Registrar of Companies. Our registration number is 51-3933218. Our purpose as set forth in our articles of association is to engage in any lawful act or activity.
Voting rights
All ordinary shares will have identical voting and other rights in all respects.
The Preferred Shares do not have tt voting rights.
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Transfer of shares
Our fully paid ordinary shares are issued in registered form and may be freely transferred under our articles of association, unless the transfer is restricted or prohibited by another instrument,
applicable law or the rules of a stock exchange on which the ordinary shares are listed for trade. The ownership or voting of our ordinary shares by non-residents of Israel is not restricted in any way by our articles of association or the laws of
the State of Israel, except for ownership by nationals of some countries that are, or have been, in a state of war with Israel.
Election of directors
Under our articles of association, our board of directors shall have up to 11 directors. Pursuant to our articles of association, each of our directors will be appointed by a simple majority vote
of holders of our ordinary shares, participating and voting at an annual general meeting of our shareholders, In addition, other than in certain circumstances our articles of association allow our board of directors only to appoint new directors to
fill vacancies on the board of directors temporarily up to the maximum number of directors permitted under articles of association. Any director so appointed serves for a term of office equal to the remaining period of the term of office of the
director whose office has been vacated (or in the case of any new director, for a term of office according to the class to which such director was assigned upon appointment).
Dividend and liquidation rights
We may declare a dividend to be paid to the holders of our ordinary shares in proportion to their respective shareholdings. Under the Companies Law, dividend distributions are determined by the
board of directors and do not require the approval of the shareholders of a company unless the company's articles of association provide otherwise. Our articles of association do not require shareholder approval of a dividend distribution and
provide that dividend distributions may be determined by our board of directors.
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 financial statements (less the amount of previously distributed dividends, if not reduced from the earnings), provided that the end of the period to which the financial statements relate is not more than six months prior to the date of the
distribution. If we do not meet such criteria, then we may distribute dividends only with court approval. In each case, we are only permitted to distribute a dividend if our board of directors and, if applicable, the court 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.
In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of our ordinary shares in proportion to their shareholdings. This
right, as well as the right to receive dividends, may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with preferential rights that may be authorized in the future.
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Exchange controls
There are currently no Israeli currency control restrictions on remittances of dividends on our ordinary shares, proceeds from the sale of the ordinary shares or interest or other payments to
non-residents of Israel, except for shareholders who are subjects of countries that are, or have been, in a state of war with Israel.
Shareholder meetings
Under Israeli 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 meetings other than the annual general meeting of shareholders are referred to in our articles of association as special general meetings. Our board of directors may call special general meetings whenever it sees fit, at such
time and place, within or outside of Israel, as it may determine. In addition, the Companies Law provides that our board of directors is required to convene a special general meeting upon the written request of (i) any two or more of our directors
or one-quarter or more of the serving 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.
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, as a company listed on an exchange outside Israel, may be between four and 40 days prior to the date of the meeting. Furthermore, the Companies Law requires that resolutions regarding the following
matters must be passed at a general meeting of our shareholders:
| • |
amendments to our articles of association;
|
| • |
appointment, termination or the terms of service of our auditors;
|
| • |
appointment of external directors (if applicable);
|
| • |
approval of certain related party transactions;
|
| • |
increases or reductions of our authorized share capital;
|
| • |
a merger; and
|
| • |
the exercise of our board of director's powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management.
|
The Companies Law requires that a notice of any annual general meeting or special general meeting be provided to shareholders at least 21 days prior to the meeting and if the agenda of the meeting
includes, among other things, the appointment or removal of directors, the approval of transactions with office holders or interested or related parties or the approval of a merger, notice must be provided at least 35 days prior to the meeting.
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Voting rights
Quorum
Pursuant to our articles of association, holders of our ordinary shares have one vote for each ordinary share held on all matters submitted to a vote before the shareholders at a general meeting.
The quorum required for our general meetings of shareholders consists of at least two shareholders present in person, by proxy or written ballot who hold or represent between them at least 33.3% of the total outstanding voting rights, within half
an hour of the time fixed for the commencement of the meeting. A meeting adjourned for lack of a quorum shall be adjourned to the same day in the next week, at the same time and place, to such day and at such time and place as indicated in the
notice to such meeting, or to such day and at such time and place as the Board may determine in a notice to the Shareholders. If within half an hour from the time scheduled for the adjourned meeting a legal quorum is not present, then any two
Shareholders entitled to vote, present in person or by proxy, shall constitute a legal quorum for such adjourned meeting and shall be entitled to resolve any matters on the agenda of the meeting. unless a meeting was called pursuant to a request by
our shareholders, in which case the quorum required is one or more shareholders present in person or by proxy and holding the number of shares required to call the meeting as described under "—Shareholder meetings."
Vote requirements
Our articles of association provide that all resolutions of our shareholders require a simple majority vote, unless otherwise required by the Companies Law or by our articles of association. Under
the Companies Law, certain actions require a special majority, including: (i) the approval of an extraordinary transaction with a controlling shareholder or in which the controlling shareholder has a personal interest, (ii) the terms of employment
or other engagement of a controlling shareholder of the company or a controlling shareholder's relative (even if such terms are not extraordinary) and (iii) approval of certain compensation-related matters require the approval described above under
"—Board of directors and officers—Compensation committee." Under our articles of association, the alteration of the rights, privileges, preferences or obligations of any class of our shares (to the extent there are classes other than ordinary
shares) may require a simple majority of the class so affected (or such other percentage of the relevant class that may be set forth in the governing documents relevant to such class), in addition to the ordinary majority vote of all classes of
shares voting together as a single class at a shareholder meeting.
Access to corporate records
Under the Companies Law, all shareholders generally have the right to review minutes of our general meetings, our shareholder register, including with respect to material shareholders, our articles
of association, our financial statements, other documents as provided in the Companies Law, and any document we are required by law to file publicly with the Israeli Companies Registrar or the Israeli Securities Authority. Any shareholder who
specifies the purpose of its request may request to review any document in our possession that relates to any action or transaction with a related party which requires shareholder approval under the Companies Law. We may deny a request to review a
document if we determine that the request was not made in good faith, that the document contains a commercial secret or a patent or that the document's disclosure may otherwise impair our interests.
71
Preferred Shares
On April 11, 2021, our shareholders approved the amendment to our amended and restated articles of association, as well as to our memorandum of association, for the addition to Hold Me Ltd.’s
registered share capital of 10,000,000 Preferred Shares, par value NIS 0.01 per share (the “Preferred Shares”). Each Preferred Share is convertible at the option of the holder to 100 ordinary shares.
The rules and procedures for calling and conducting any meeting of the holders of Preferred Shares (including, without limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written consents and any other procedural aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Directors, in its discretion,
may adopt from time to time, which rules and procedures shall conform to the requirements of our amended and restated articles of association (including the provisions set forth above), applicable law and, if applicable, the rules of any national
securities exchange or other trading facility on which the Preferred Shares are listed or traded at the time.
Acquisitions under Israeli law
Full tender offer. A person wishing to acquire shares of a public Israeli company and who would as a result hold over 90% of the target company's voting
rights or the target company's issued and outstanding share capital (or of a class thereof), is required by the Companies Law to make a tender offer to all of the company's shareholders for the purchase of all of the issued and outstanding shares
of the company (or the applicable class). If (a) the shareholders who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company (or the applicable class) and the shareholders who accept the offer
constitute a majority of the offerees that do not have a personal interest in the acceptance of the tender offer or (b) the shareholders who did not accept the tender offer hold less than two percent (2%) of the issued and outstanding share capital
of the company (or of the applicable class), all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation of law. A shareholder who had its shares so transferred may petition the court within six months
from the date of acceptance of the full tender offer, regardless of whether such shareholder agreed to the offer, to determine whether the tender offer was for less than fair value and whether the fair value should be paid as determined by the
court. However, an offeror may provide in the offer that a shareholder who accepted the offer will not be entitled to appraisal rights as described in the preceding sentence, as long as the offeror and the company disclosed the information required
by law in connection with the full tender offer. If the full tender offer was not accepted in accordance with any of the above alternatives, the acquirer may not acquire shares of the company that will increase its holdings to more than 90% of the
voting rights or the issued and outstanding share capital of the company (or the applicable class) from shareholders who accepted the tender offer.
Special tender offer. The Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special tender
offer if as a result of the acquisition the purchaser would become a holder of 25% or more of the voting rights in the company. This rule does not apply if there is already another holder of 25% or more of the voting rights in the company.
Similarly, the Companies Law provides that an acquisition of shares in a public company must be made by means of a tender offer if as a result of the acquisition the purchaser would become a holder of more than 45% of the voting rights in the
company, if there is no other shareholder of the company who holds more than 45% of the voting rights in the company. These requirements do not apply if the acquisition (i) occurs in the context of a private placement by the company that received
shareholder approval as a private placement whose purpose is to give the acquirer at least 25% of the voting rights in the company if there is no person who holds 25% or more of the voting rights in the company, or as a private placement whose
purpose is to give the acquirer 45% of the voting rights in the company, if there is no person who holds 45% of the voting rights in the company, (ii) was from a shareholder holding 25% or more of the voting rights in the company and resulted in
the acquirer becoming a holder of 25% or more of the voting rights in the company, or (iii) was from a holder of more than 45% of the voting rights in the company and 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 of a company. A special tender offer may be consummated only if (i) at least 5% of the voting power attached to the company's outstanding shares will be acquired by the
offeror and (ii) the special tender offer is accepted by a majority of the votes of those offerees who gave notice of their position in respect of the offer; (excluding the purchaser, its controlling shareholders, holders of 25% or more of the
voting rights in the company and any person having a personal interest in the acceptance of the tender offer, or anyone on their behalf, including any such person's relatives and entities under their control).
72
In the event that a special tender offer is made, a company's board of directors is required to express its opinion on the advisability of the offer, or shall abstain from expressing any opinion if
it is unable to do so, provided that it gives the reasons for its abstention. The board of directors shall also disclose any personal interest that any of the directors has with respect to the special tender offer or in connection therewith. An
office holder in a target company who, in his or her capacity as an office holder, performs an action the purpose of which is to cause the failure of an existing or foreseeable special tender offer or is to impair the chances of its acceptance, is
liable to the potential purchaser and shareholders for damages, unless such office holder acted in good faith and had reasonable grounds to believe he or she was acting for the benefit of the company. However, office holders of the target company
may negotiate with the potential purchaser in order to improve the terms of the special tender offer, and may further negotiate with third parties in order to obtain a competing offer.
If a special tender offer is accepted, then shareholders who did not respond to or that had objected the offer may accept the offer within four days of the last day set for the acceptance of the
offer and they will be considered to have accepted the offer.
In the event that a special tender offer is accepted, then the purchaser or any person or entity controlling it, at the time of the offer, 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.
Merger. The Companies Law permits merger transactions if approved by each party's board of directors and, unless certain conditions described under the
Companies Law are met, a majority of each party's shares voted on the proposed merger at a shareholders’ meeting called with at least 35 days’ prior notice. The board of directors of a merging company is required pursuant to the Companies Law to
discuss and determine whether in its opinion there exists a reasonable concern that as a result of a proposed merger, the surviving company will not be able to satisfy its obligations towards its creditors, such determination taking into account
the financial status of the merging companies. If the board of directors determines that such a concern exists, it may not approve a proposed merger. Following the approval of the board of directors of each of the merging companies, the boards of
directors must jointly prepare a merger proposal for submission to the Israeli Registrar of Companies.
73
For purposes of the shareholder vote of a merging company whose shares are held by the other merging company or a person or entity holding 25% or more of the voting rights at the general meeting or
the right to appoint 25% or more of the directors of the other merging company, unless a court rules otherwise, the merger will not be deemed approved if a majority of the shares voted on the matter at the shareholders meeting (excluding
abstentions) that are held by shareholders other than the other party to the merger, or by any person or entity who holds 25% or more of the voting rights or the right to appoint 25% or more of the directors of the other party, or any one on their
behalf including their relatives or corporations controlled by any of them, vote against the merger. In addition, if the non-surviving entity of the merger has more than one class of shares, the merger must be approved by each class of
shareholders. If the transaction would have been approved 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 request of holders of at
least 25% of the voting rights of a company, if the court holds that the merger is fair and reasonable, taking into account the valuation of the merging companies and the consideration offered to the shareholders. If a merger is with a company's
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 approval that governs all extraordinary transactions with controlling shareholders.
Under the Companies Law, each merging company must deliver to its secured creditors the merger proposal and inform its unsecured creditors of the merger proposal and its content. 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.
In addition, a merger may not be completed unless at least 50 days have passed from the date that a proposal for approval of the merger is filed with the Israeli Registrar of Companies and 30 days
from the date that shareholder approval of both merging companies is obtained.
Anti-takeover measures
The Companies Law allows us to create and issue shares having rights different from those attached to our ordinary shares, including shares providing certain preferred rights with respect to
voting, distributions or other matters and shares having preemptive rights. We recently authorized the Company to issue 10,000,000 Preferred Shares, with each Preferred Share being convertible at the option of the holder to 100 ordinary shares. We
issued 10,000,000 Preferred Shares to Mr. Shalom.
In the future, if we authorize additional shares of preferred stock, we will have the ability to create and issue a specific class of preferred shares, such class of shares, depending on the
specific rights that may be attached to it, may have the ability to frustrate or prevent a takeover or otherwise prevent our shareholders from realizing a potential premium over the market value of their ordinary shares. The authorization and
designation of a class of preferred shares will require an amendment to our articles of association, which requires the prior approval of the holders of a majority of the voting power attaching to our issued and outstanding shares at a general
meeting. The convening of the meeting, the shareholders entitled to participate and the majority vote required to be obtained at such a meeting will be subject to the requirements set forth in the Companies Law and our amended articles of
association as described above in "—Voting Rights."
74
Borrowing powers
Pursuant to the Companies Law and our articles of association, our board of directors may exercise all powers and take all actions that are not required under law or under our articles of
association to be exercised or taken by our shareholders, including the power to borrow money for company purposes.
Changes in capital
Our articles of association enable us to increase or reduce our share capital. Any such changes are subject to Israeli law and must be approved by a resolution duly passed by our shareholders at a
general meeting by voting on such change in the capital. 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.
Transfer agent and registrar
We have not yet appointed a transfer agent and registrar for our ordinary shares.
Future sales of substantial amounts of our ordinary shares in the public market could adversely affect market prices prevailing from time to time. Furthermore, because a significant number of our
ordinary shares will not be available for sale shortly after this offering due to existing contractual and legal restrictions on resale as described below, there may be sales of substantial amounts of our ordinary shares in the public market after
such restrictions lapse. This may adversely affect the prevailing market price of our ordinary shares and our ability to raise equity capital in the future.
Upon consummation of the sale of all the shares in this offering, we will have an aggregate of 4,000,000 ordinary shares outstanding. Our ordinary shares are available for sale in the public
market, subject to the expiration or waiver of the lock-up agreements described below, and in certain cases subject to limitations imposed by U.S. securities laws on resale by our "affiliates" as that term is defined in Rule 144 under the
Securities Act ("Rule 144").
All of the ordinary shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, unless purchased by "affiliates" as that term is
defined under Rule 144. In addition, following the expiration or waiver of the lock-up agreements described below, all of our ordinary shares, including ordinary shares issuable pursuant to awards granted under certain of our share option plans
will be freely tradable without restriction or further registration under the Securities Act unless held by "affiliates" as that term is defined under Rule 144.
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Eligibility of restricted shares for sale in the public market
Any ordinary shares held by "affiliates" as that term is defined under Rule 144 will be "restricted securities" as that phrase is defined in Rule 144. Subject to certain contractual restrictions,
holders of restricted shares will be entitled to sell those shares in the public market only if the sale is registered or pursuant to an exemption from registration, such as the safe harbor discussed below under "—Rule 144."
Rule 144
In general, under Rule 144, a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has
beneficially owned restricted securities within the meaning of Rule 144 for at least six months (including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those shares, subject only to the
availability of current public information about us. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled to sell those shares without regard to the
provisions of Rule 144.
A person (or persons whose shares are aggregated) who is deemed to be an affiliate of ours and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six
months would be entitled to sell within any three-month period a number of shares that does not exceed the greater of one percent of the then outstanding shares of our ordinary shares or the average weekly trading volume of our ordinary shares on
the NYSE during the four calendar weeks preceding such sale. Such sales are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about us.
The following description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of our ordinary shares. You should consult
your own tax advisor concerning the tax consequences of your particular situation, as well as any tax consequences that may arise under the laws of any state, local, foreign or other taxing jurisdiction.
Israeli tax considerations and government programs
The following is a brief summary of the material Israeli tax laws applicable to us, and certain Israeli Government programs that benefit us. This section also contains a discussion of material
Israeli tax consequences concerning the ownership and disposition of our ordinary shares purchased by investors in this offering. This summary does not discuss all the aspects of Israeli tax law that may be relevant to a particular investor in
light of his or her personal investment circumstances or to some types of investors subject to special treatment under Israeli law. Examples of such investors include residents of Israel or traders in securities who are subject to special tax
regimes not covered in this discussion. To the extent that the discussion is based on new tax legislation that has not yet been subject to judicial or administrative interpretation, we cannot assure you that the appropriate tax authorities or the
courts will accept the views expressed in this discussion. The discussion below is subject to change, including due to amendments under Israeli law or changes to the applicable judicial or administrative interpretations of Israeli law, which change
could affect the tax consequences described below.
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General corporate tax structure in Israel
Israeli companies are generally subject to corporate tax. The corporate tax rate for 2017 was 24%, and in 2018 and thereafter the corporate tax rate is 23% of their taxable income. However, the
effective tax rate payable by a company that derives income from an Approved Enterprise, a Preferred Enterprise, a Benefited Enterprise or a Technology Enterprise (as discussed below) may be considerably less. Capital gains derived by an Israeli
company are generally subject to the prevailing corporate tax rate.
Law for the Encouragement of Industry (Taxes), 5729-1969
The Law for the Encouragement of Industry (Taxes), 5729-1969, generally referred to as the Industry Encouragement Law, provides several tax benefits for "Industrial Companies." We believe that we
currently qualify as an Industrial Company within the meaning of the Industry Encouragement Law.
The Industry Encouragement Law defines an "Industrial Company" as an Israeli resident-company, of which 90% or more of its income in any tax year, other than income from certain government loans,
is derived from an "Industrial Enterprise" owned by it and located in Israel or in the "Area", in accordance with the definition under section 3A of the Israeli Income Tax Ordinance (New Version) 1961, or the Ordinance. 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 purchased patent, rights to use a patent, and know-how, which are used for the development or advancement of the Industrial Enterprise, over an eight-year period, commencing on the year in
which such rights were first exercised;
• under limited conditions, an election to file consolidated tax returns with controlled Israeli Industrial Companies; and
• expenses related to a public offering are deductible in equal amounts over three years commencing on the year of the offering.
Eligibility for benefits under the Industry Encouragement Law is not contingent upon approval of any governmental authority.
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Tax benefits and grants for research and development
Israeli tax law allows, under certain conditions, a tax deduction for expenditures, including capital expenditures, for the year in which they are incurred. Expenditures are deemed related to
scientific research and development projects, if:
• 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 is 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 Ordinance. Expenditures that are unqualified under the conditions
above are deductible in equal amounts over three years.
From time to time we may apply to the Israel Innovation Authority for approval to allow a tax deduction for all or most of research and development expenses during the year incurred. There can be
no assurance that such application will be accepted.
Law for the Encouragement of Capital Investments, 5719-1959
The Law for the Encouragement of Capital Investments, 5719 1959, generally referred to as the Investment Law, provides certain incentives for capital investments in production facilities (or other
eligible assets).
The Investment Law was significantly amended effective as of April 1, 2005 (the "2005 Amendment"), as of January 1, 2011 (the "2011 Amendment") and as of January 1, 2017 (the "2017 Amendment").
Pursuant to the 2005 Amendment, tax benefits granted in accordance with the provisions of the Investment Law prior to its revision by the 2005 Amendment remain in force but any benefits granted subsequently are subject to the provisions of the
amended Investment Law. Similarly, the 2011 Amendment introduced new benefits to replace those granted in accordance with the provisions of the Investment Law in effect prior to the 2011 Amendment. However, companies entitled to benefits under the
Investment Law as in effect prior to January 1, 2011 were entitled to choose to continue to enjoy such benefits, provided that certain conditions are met, or elect instead, irrevocably, to forego such benefits and have the benefits of the 2011
Amendment apply. The 2017 Amendment introduces new benefits for Technological Enterprises, alongside the existing tax benefits.
Tax benefits subsequent to the 2005 amendment
The 2005 Amendment applies to new investment programs and investment programs commencing after 2004, but does not apply to investment programs approved prior to April 1, 2005. The 2005 Amendment
provides that terms and benefits included in any certificate of approval that was granted before the 2005 Amendment became effective (April 1, 2005) will remain subject to the provisions of the Investment Law as in effect on the date of such
approval. Pursuant to the 2005 Amendment, the Investment Center will continue to grant Approved Enterprise status to qualifying investments. The 2005 Amendment, however, limits the scope of enterprises that may be approved by the Investment Center
by setting criteria for the approval of a facility as an Approved Enterprise, such as provisions generally requiring that at least 25% of the Approved Enterprise's income be derived from exports.
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In order to receive the tax benefits, a company must make an investment which meets all of the conditions, including exceeding a minimum entitling investment amount, set forth in the Investment
Law. Such investment allows a company to receive "Benefited Enterprise" status, and may be made over a period of no more than three years ending at the end of the year in which the company chose to have the tax benefits apply to its Benefited
Enterprise, referred to as the "Year of Election."
The extent of the tax benefits available under the 2005 Amendment to qualifying income of a Benefited Enterprise depend on, among other things, the geographic location in Israel of the Benefited
Enterprise. The location will also determine the period for which tax benefits are available. In the event that the Company is profitable for tax purposes, such tax benefits include an exemption from corporate tax on undistributed income for a
period of between two to ten years, depending on the geographic location of the Benefited Enterprise in Israel, and a reduced corporate tax rate of between 10% to 25% for the remainder of the benefits period, depending on the level of foreign
investment in the company in each year. A company qualifying for tax benefits under the 2005 Amendment which pays a dividend out of income derived by its Benefited Enterprise during the tax exemption period will be subject to corporate tax in
respect of the gross amount of the dividend (to reflect the pre-tax income that it would have had to earn in order to distribute the dividend) which would have otherwise been applicable, or a lower rate in the case of a qualified foreign investment
company which is at least 49% owned by non-Israeli residents. In addition dividends paid out of income attributed to a Benefited Enterprise are generally subject to withholding tax at source at the rate of 15% or such lower rate as may be provided
under any applicable tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate).
The benefits available to a Benefited Enterprise are subject to the fulfillment of conditions stipulated in the Investment Law and its regulations. 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, and interest, or other monetary penalties.
The Company has not applied for "Benefited Enterprise" status.
Tax benefits under the 2011 amendment
The 2011 Amendment canceled the availability of the benefits granted to Industrial Companies under the Investment Law prior to 2011 and, instead, introduced new benefits for income generated by a
"Preferred Company" through its "Preferred Enterprise" (as such terms are defined in the Investment Law) as of January 1, 2011. The definition of a Preferred Company includes a company incorporated in Israel that is not fully owned by a
governmental entity, and that has, among other things, Preferred Enterprise status and is controlled and managed from Israel. Pursuant to the 2011 Amendment, a Preferred Company is entitled to a reduced corporate tax rate of 15% with respect to its
income derived by its Preferred Enterprise in 2011 and 2012, unless the Preferred Enterprise is located in a specified development zone, in which case the rate will be 10%. Under the 2011 Amendment, such corporate tax rate was reduced from 15% and
10%, respectively, to 12.5% and 7%, respectively, in 2013, 16% and 9% respectively, in 2014, 2015 and 2016, and 16% and 7.5%, respectively, in 2017 and thereafter. Income derived by a Preferred Company from a "Special Preferred Enterprise" (as such
term is defined in the Investment Law) would be entitled, during a benefits period of 10 years, to further reduced tax rates of 8%, or 5% if the Special Preferred Enterprise is located in a certain development zone.
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Dividends distributed from income which is attributed to a "Preferred Enterprise" will be subject to withholding tax at source at the following rates: (i) Israeli resident corporations–0%,
(although, if such dividends are subsequently distributed to individuals or a non-Israeli company the below rates detailed in sub sections (ii) and (iii) shall apply) (ii) Israeli resident individuals–20% (iii) non-Israeli residents (individuals
and corporations)–20%, subject to a reduced tax rate under the provisions of any applicable double tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate).
The 2011 Amendment also provided transitional provisions to address companies already enjoying existing tax benefits under the Investment Law. These transitional provisions provide, among other
things, that unless an irrevocable request is made to apply the provisions of the Investment Law as amended in 2011 with respect to income to be derived as of January 1, 2011, a Benefited Enterprise can elect to continue to benefit from the
benefits provided to it before the 2011 Amendment came into effect, provided that certain conditions are met.
We currently do not intend to implement the 2011 Amendment.
New tax benefits under the 2017 amendment that became effective on January 1, 2017
The 2017 Amendment was enacted as part of the Economic Efficiency Law that was published on December 29, 2016, and is effective as of January 1, 2017. The 2017 Amendment provides new tax benefits
for two types of "Technology Enterprises," as described below, and is in addition to the other existing tax beneficial programs under the Investment Law.
The 2017 Amendment provides that a technology company satisfying certain conditions will qualify as a "Preferred Technology Enterprise" and will thereby enjoy a reduced corporate tax rate of 12% on
income that qualifies as "Preferred Technology Income", as defined in the Investment Law. The tax rate is further reduced to 7.5% for a Preferred Technology Enterprise located in development zone "A". In addition, a Preferred Technology Company
will enjoy a reduced corporate tax rate of 12% on capital gain derived from the sale of certain "Benefitted Intangible Assets" (as defined in the Investment Law) to a related foreign company if the Benefitted Intangible Assets were acquired from a
foreign company on or after January 1, 2017 for at least NIS 200 million, and the sale receives prior approval from the National Authority for Technological Innovation ("NATI").
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The 2017 Amendment further provides that a technology company satisfying certain conditions (group turnover of at least NIS 10 billion) will qualify as a "Special Preferred Technology Enterprise"
and will thereby enjoy a reduced corporate tax rate of 6% on "Preferred Technology Income" regardless of the company's geographic location within Israel. In addition, a Special Preferred Technology Enterprise will enjoy a reduced corporate tax rate
of 6% on capital gain derived from the sale of certain "Benefitted Intangible Assets" to a related foreign company if the Benefitted Intangible Assets were either developed by the Special Preferred Enterprise or acquired from a foreign company on
or after January 1, 2017, and the sale received prior approval from NATI. A Special Preferred Technology Enterprise that acquires Benefitted Intangible Assets from a foreign company for more than NIS 500 million will be eligible for these benefits
for at least ten years, subject to certain approvals as specified in the Investment Law.
Dividends distributed by a Preferred Technology Enterprise or a Special Preferred Technology Enterprise, paid out of Preferred Technology Income, are generally subject to withholding tax at source
at the rate of 20% or such lower rate as may be provided in an applicable tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate). However, if such dividends are paid to an
Israeli company, no tax is required to be withheld. If such dividends are distributed to a foreign company that holds solely or together with other foreign companies 90% or more in the Israeli company and other conditions are met, the withholding
tax rate will be 4%.
We are examining the impact of the 2017 Amendment and the degree to which we will qualify as a Preferred Technology Enterprise, the amount of Preferred Technology Income that we may have and other
benefits that we may receive from the 2017 Amendment.
Taxation of our shareholders
Capital gains taxes applicable to non-Israeli resident shareholders. A non-Israeli resident who derives capital gains from the sale of shares in an Israeli
resident company that were purchased after the company was listed for trading on a stock exchange outside of Israel, will be exempt from Israeli tax so long as the shares were not held through a permanent establishment that the non-resident
maintains in Israel. However, non-Israeli corporations will not be entitled to the foregoing exemption if Israeli residents: (i) have a controlling interest more than 25% in such non-Israeli corporation or (ii) are the beneficiaries of, or are
entitled to, 25% or more of the revenues or profits of such non-Israeli corporation, whether directly or indirectly. In addition, such exemption is not applicable to a person whose gains from selling or otherwise disposing of the shares are deemed
to be business income.
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. 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 (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 U.S. Israel Tax Treaty (a "Treaty U.S. Resident") is generally exempt from Israeli
capital gains tax unless: (i) the capital gain arising from such sale, exchange or disposition is attributed to real estate located in Israel; (ii) the capital gain arising from such sale, exchange or disposition is attributed to royalties;
(iii) the capital gain arising from the such sale, exchange or disposition is attributed to a permanent establishment in Israel, under certain terms; (iv) such Treaty U.S. Resident holds, directly or indirectly, shares representing 10% or more of
the voting capital during any part of the 12 month period preceding the disposition, subject to certain conditions; or (v) such Treaty U.S. Resident is an individual and was present in Israel for 183 days or more during the relevant taxable year.
In some instances where our shareholders may be liable for Israeli tax on the sale of their ordinary shares, the payment of the consideration may be subject to the withholding of Israeli tax at
source. Shareholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding at source at the time of sale (i.e., resident certificate or other documentation).
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Taxation of non-Israeli shareholders on receipt of dividends. Non-Israeli residents (either individuals or corporations) are generally subject to Israeli
income tax on the receipt of dividends paid on our ordinary shares at the rate of 25%, which tax will be withheld at source, unless relief is provided in a treaty between Israel and the shareholder's country of residence. 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%. 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. Such dividends are generally subject to Israeli
withholding tax at a rate of 25% so long as the shares are registered with a nominee company (whether the recipient is a substantial shareholder or not) and 20% if the dividend is distributed from income attributed to an Approved Enterprise, a
Benefited Enterprise or a Preferred Enterprise , unless a reduced rate is provided under an applicable tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate). 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 or Benefited 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
an Approved Enterprise, Benefited Enterprise or 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 conditions
related to holding 10% or more from the outstanding voting capital and our gross income for the previous year (as set forth in the previous sentence) are met. If the dividend is attributable partly to income derived from an Approved Enterprise,
Benefited Enterprise or 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.
Surtax. Subject to the provisions of an applicable tax treaty, individuals who are subject to tax in Israel are also subject to an additional tax at a
rate of 3% on annual income (including, but not limited to, dividends, interest and capital gain) exceeding NIS 647,640 for 2021, which amount is linked to the annual change in the Israeli consumer price index.
Estate and Gift Tax. Israeli law presently does not impose estate or gift taxes.
United States federal income taxation
United States federal income taxation
The following is a description of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of our ordinary shares. This description addresses only the U.S.
federal income tax consequences to U.S. Holders (as defined below) that are initial purchasers of our ordinary shares pursuant to the offering and that will hold such ordinary shares as capital assets within the meaning of Section 1221 of the
Internal Revenue Code of 1986, as amended (the "Code"), and that have the U.S. dollar as their functional currency. This discussion is based upon the Code, applicable U.S. Treasury regulations, administrative pronouncements and judicial decisions,
in each case as in effect on the date hereof, all of which are subject to change (possibly with retroactive effect). No ruling will be requested from the Internal Revenue Service (the "IRS") regarding the tax consequences of the acquisition,
ownership or disposition of the ordinary shares, and there can be no assurance that the IRS will agree with the discussion set out below. This summary does not address any U.S. tax consequences other than U.S. federal income tax consequences
(e.g., the estate and gift tax or the Medicare tax on net investment income) and does not address any state, local or non-U.S. tax consequences.
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This description does not address tax considerations applicable to holders that may be subject to special tax rules, including, without limitation:
• banks, financial institutions or insurance companies;
• real estate investment trusts or regulated investment companies;
• dealers or brokers;
• traders that elect to mark-to-market;
• tax exempt entities or organizations;
• "individual retirement accounts" and other tax deferred accounts;
• certain former citizens or long-term residents of the United States;
• persons that are resident or ordinarily resident in or have a permanent establishment in a jurisdiction outside the United States;
• persons that acquired our ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation for the performance of services;
• persons holding our ordinary shares as part of a "hedging," "integrated" or "conversion" transaction or as a position in a "straddle" for U.S. federal income tax purposes;
• persons subject to special tax accounting as a result of any item of gross income with respect to the ordinary shares being taken into account in an applicable financial statement;
• partnerships or other pass through entities and persons holding the ordinary shares through partnerships or other pass through entities; or
• holders that own directly, indirectly or through attribution 10% or more of the total voting power or value of all of our outstanding shares.
For purposes of this description, a "U.S. Holder" is a beneficial owner of our ordinary shares that, for U.S. federal income tax purposes, is:
• an individual who is a citizen or resident of the United States;
• a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any state thereof, including the District of Columbia;
• an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
• a trust if such trust has validly elected to be treated as a United States person for U.S. federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over its
administration and (2) one or more United States persons have the authority to control all of the substantial decisions of such trust.
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If a partnership (or any other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our ordinary shares, the tax treatment of a partner in such partnership
will generally depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its tax advisor as to the particular U.S. federal income tax consequences of acquiring, owning and disposing of
our ordinary shares in its particular circumstance.
You should consult your tax advisor with respect to the U.S. federal, state, local and foreign tax consequences of acquiring, owning and disposing of our ordinary shares.
Distributions
Subject to the discussion under "—Passive Foreign Investment Company considerations" below, the gross amount of any distribution made to you with respect to our ordinary shares, before reduction
for any Israeli taxes withheld therefrom, generally will be includible in your income as dividend income on the date on which the dividends are actually or constructively received, to the extent such distribution is paid out of our current or
accumulated earnings and profits as determined under U.S. federal income tax principles. To the extent that the amount of any distribution by us exceeds our current and accumulated earnings and profits as determined under U.S. federal income tax
principles, it will be treated first as a tax-free return of your adjusted tax basis in our ordinary shares and thereafter as capital gain. However, we do not expect to maintain calculations of our earnings and profits under U.S. federal income tax
principles and, therefore, you should expect that the entire amount of any distribution generally will be reported as dividend income to you. If you are a non-corporate U.S. Holder you may qualify for the lower rates of taxation with respect to
dividends on ordinary shares applicable to long-term capital gains (i.e., gains from the sale of capital assets held for more than one year), provided that we are not a PFIC (as discussed below under "—Passive Foreign Investment Company
considerations") with respect to you in our taxable year in which the dividend was paid or in the prior taxable year and certain other conditions are met, including certain holding period requirements and the absence of certain risk reduction
transactions. However, such dividends will not be eligible for the dividends received deduction generally allowed to corporate U.S. Holders.
Dividends paid to you with respect to our ordinary shares generally will be treated as foreign source income, which may be relevant in calculating your foreign tax credit limitation. Subject to
certain conditions and limitations, Israeli tax withheld on dividends may be credited against your U.S. federal income tax liability or, at your election, be deducted from your U.S. federal taxable income. Dividends that we distribute generally
should constitute "passive category income" for purposes of the foreign tax credit. A foreign tax credit for foreign taxes imposed on distributions may be denied if you do not satisfy certain minimum holding period requirements. The rules relating
to the determination of the foreign tax credit are complex, and you should consult your tax advisor to determine whether and to what extent you will be entitled to this credit.
Sale, exchange or other disposition of ordinary shares
Subject to the discussion under "Passive Foreign Investment Company considerations" below, you generally will recognize gain or loss on the sale, exchange or other disposition of our ordinary
shares equal to the difference between the amount realized on such sale, exchange or other disposition and your adjusted tax basis in our ordinary shares, and such gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder,
capital gain from the sale, exchange or other disposition of ordinary shares is generally eligible for a preferential rate of taxation applicable to capital gains, if your holding period for such ordinary shares exceeds one year (i.e., such gain is
long-term capital gain). The deductibility of capital losses for U.S. federal income tax purposes is subject to limitations under the Code. Any such gain or loss that a U.S. Holder recognizes generally will be treated as U.S. source income or loss
for foreign tax credit limitation purposes.
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Passive foreign investment company considerations
If a non-U.S. company is classified as a PFIC in any taxable year, a U.S. Holder of such passive foreign investment company ("PFIC")'s shares will be subject to special rules generally intended to
reduce or eliminate any benefits from the deferral of U.S. federal income tax that such U.S. Holder could derive from investing in a non-U.S. company that does not distribute all of its earnings on a current basis.
In general, a non-U.S. corporation will be classified as a PFIC for any taxable year if at least (i) 75% of its gross income is classified as "passive income" or (ii) 50% of its gross assets
(generally determined on the basis of a quarterly average) produce or are held for the production of passive income (the "asset test"). Passive income for this purpose generally includes dividends, interest, royalties, rents, gains from commodities
and securities transactions and the excess of gains over losses from the disposition of assets which produce passive income. For these purposes, cash and other assets readily convertible into cash are considered passive assets, and goodwill and
other unbooked intangibles are generally taken into account. In making this determination, the non-U.S. corporation is treated as earning its proportionate share of any income and owning its proportionate share of any assets of any corporation in
which it directly or indirectly holds 25% or more (by value) of the stock.
We will not be classified as a controlled foreign corporation (“CFC”) for our 2020 taxable year. In general, we will be classified as a CFC for a taxable year if more than 50% of the total combined
voting power or the total value of our ordinary shares is owned by "United States shareholders" (generally, United States persons who are treated as owning (directly, indirectly, or constructively, using certain attribution rules) at least 10% of
the total combined voting power or the total value of our ordinary shares). The PFIC asset test for a CFC is applied based on the adjusted tax bases of its assets as determined for the purposes of computing earnings and profits under U.S. federal
income tax principles, unless it is a "publicly traded corporation" for the taxable year, in which case the PFIC asset test is based on the fair market value of its assets. The determination is generally made on the basis of a quarterly average.
Recently proposed U.S. Treasury regulations provide relief from the application of the aforementioned attribution rules enacted in December 2017 for the purpose of determining a foreign corporation's PFIC status, and clarify the application of the
asset test to CFCs in the year in which such CFC becomes publicly traded. Under the rules set forth in these proposed Treasury regulations, we believe that we would not be classified as a PFIC in respect of our 2020 taxable year. However, it is not
clear to what extent we or our shareholders can rely on these proposed Treasury regulations. U.S. Holders should consult their own tax advisors regarding the application of these rules and the potential applicability of these proposed Treasury
regulations.
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Based on the current and anticipated composition of our income and assets, operations and the value of our assets (including the value of our goodwill, going-concern value or any other unbooked
intangibles which may be determined based on the price of the ordinary shares), we do not expect to be treated as a PFIC for the current taxable year or in the foreseeable future. Because PFIC status is based on our income, assets and activities
for the entire taxable year, it is not possible to determine whether we will be characterized as a PFIC for our current taxable year or future taxable years until after the close of the applicable taxable year. Moreover, we must determine our
PFIC status annually based on tests that are factual in nature, and our status in the current year and future years will depend on our income, assets and activities in each of those years and, as a result, cannot be predicted with certainty as of
the date hereof. Furthermore, fluctuations in the market price of our ordinary shares may cause our classification as a PFIC for the current or future taxable years to change because the value of our assets for purposes of the asset test,
including the value of our goodwill and unbooked intangibles, generally will be determined by reference to the market price of our shares from time to time (which may be volatile). Accordingly, if our market capitalization declines significantly,
it may make our classification as a PFIC more likely for the current or future taxable years. The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in any equity
offering. The IRS or a court may disagree with our determinations, including the manner in which we determine the value of our assets and the percentage of our assets that are passive assets under the PFIC rules. Therefore there can be no
assurance that we will not be a PFIC for the current taxable year or for any future taxable year.
Under the PFIC rules, if we were considered a PFIC at any time that you hold our ordinary shares, we would continue to be treated as a PFIC with respect to your investment in all succeeding years
during which you own our ordinary shares (regardless of whether we continue to meet the tests described above) unless (i) we have ceased to be a PFIC and (ii) you have made a "deemed sale" election under the PFIC rules. If such election is made,
you will be deemed to have sold your ordinary shares at their fair market value on the last day of the last taxable year in which we were a PFIC, and any gain from the deemed sale would be subject to the rules described in the following paragraph.
After the deemed sale election, so long as we do not become a PFIC in a subsequent taxable year, the ordinary shares with respect to which such election was made will not be treated as shares in a PFIC. You should consult your own tax advisor as to
the possibility and consequences of making a deemed sale election.
If we are considered a PFIC at any time that you hold ordinary shares, unless (i) we have ceased to be a PFIC and you have previously made the deemed sale election described above or (ii) you make
one of the elections described below, any gain recognized by you on a sale or other disposition of the ordinary shares, as well as the amount of any "excess distribution" (defined below) received by you, would be allocated ratably over your holding
period for the ordinary shares. The amounts allocated to the taxable year of the sale or other disposition (or the taxable year of receipt, in the case of an excess distribution) and to any year before we became a PFIC would be taxed as ordinary
income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed. For purposes of these
rules, an excess distribution is the amount by which any distribution received by you on your ordinary shares in a taxable year exceeds 125% of the average of the annual distributions on the ordinary shares during the preceding three taxable years
or your holding period, whichever is shorter. Distributions below the 125% threshold are treated as dividends taxable in the year of receipt and are not subject to prior highest tax rates or the interest charge.
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If we are treated as a PFIC with respect to you for any taxable year, you will be deemed to own shares in any of our subsidiaries that are also PFICs, and you may be subject to the tax consequences
described above with respect to the shares of such lower-tier PFIC you would be deemed to own.
Mark-to-market elections
If we are a PFIC for any taxable year during which you hold ordinary shares, then in lieu of being subject to the tax and interest charge rules discussed above, you may make an election to include
gain on the ordinary shares as ordinary income under a mark-to-market method, provided that such ordinary shares are "marketable." The ordinary shares will be marketable if they are "regularly traded" on a qualified exchange or other market, as
defined in applicable U.S. Treasury regulations, such as the New York Stock Exchange (or on a foreign stock exchange that meets certain conditions). For these purposes, the ordinary shares will be considered regularly traded during any calendar
year during which they are traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded. However, because a
mark-to-market election cannot be made for any lower-tier PFICs that we may own, you will generally continue to be subject to the PFIC rules discussed above with respect to your indirect interest in any investments we hold that are treated as an
equity interest in a PFIC for U.S. federal income tax purposes. As a result, it is possible that any mark-to-market election will be of limited benefit.
If you make an effective mark-to-market election, in each year that we are a PFIC, you will include in ordinary income the excess of the fair market value of your ordinary shares at the end of the
year over your adjusted tax basis in the ordinary shares. You will be entitled to deduct as an ordinary loss in each such year the excess of your adjusted tax basis in the ordinary shares over their fair market value at the end of the year, but
only to the extent of the net amount previously included in income as a result of the mark-to-market election. If you make an effective mark-to-market election, in each year that we are a PFIC, any gain that you recognize upon the sale or other
disposition of your ordinary shares will be treated as ordinary income and any loss will be treated as ordinary loss, but only to the extent of the net amount of previously included income as a result of the mark-to-market election.
Your adjusted tax basis in the ordinary shares will be increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules discussed above.
If you make an effective mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years unless the ordinary shares are no longer regularly traded on a qualified exchange or the IRS
consents to the revocation of the election. You should consult your tax advisor about the availability of the mark-to-market election, and whether making the election would be advisable in your particular circumstances.
Qualified electing fund elections
In certain circumstances, a U.S. equity holder in a PFIC may avoid the adverse tax and interest-charge regime described above by making a "qualified electing fund" election to include in income its
share of the corporation's income on a current basis. However, you may make a qualified electing fund election with respect to the ordinary shares only if we agree to furnish you annually with a PFIC annual information statement as specified in the
applicable U.S. Treasury regulations. We do not intend to provide the information necessary for you to make a qualified electing fund election if we are classified as a PFIC. Therefore, you should assume that you will not receive such information
from us and would therefore be unable to make a qualified electing fund election with respect to any of our ordinary shares were we to be or become a PFIC.
87
Tax reporting
If you own ordinary shares during any year in which we are a PFIC and you recognize gain on a disposition of such ordinary shares or receive distributions with respect to such ordinary shares, you
generally will be required to file an IRS Form 8621 with respect to us, generally with your federal income tax return for that year. If we are a PFIC for a given taxable year, then you should consult your tax advisor concerning your annual filing
requirements.
You should consult your tax advisor regarding whether we are a PFIC as well as the potential U.S. federal income tax consequences of holding and disposing of our ordinary shares if we are or become
classified as a PFIC, including the possibility of making a mark-to-market election in your particular circumstances.
Backup withholding tax and information reporting requirements
Dividend payments on and proceeds paid from the sale or other taxable disposition of the ordinary shares may be subject to information reporting to the IRS. In addition, a U.S. Holder may be
subject to backup withholding on cash payments received in connection with dividend payments and proceeds from the sale or other taxable disposition of ordinary shares made within the United States or through certain U.S. related financial
intermediaries.
Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number, provides other required certification and otherwise complies with the applicable
requirements of the backup withholding rules or who is otherwise exempt from backup withholding (and, when required, demonstrates such exemption). Backup withholding is not an additional tax. Rather, any amount withheld under the backup withholding
rules will be creditable or refundable against the U.S. Holder's U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
Foreign asset reporting
Certain U.S. Holders are required to report their holdings of certain foreign financial assets, including equity of foreign entities, if the aggregate value of all of these assets exceeds certain
threshold amounts, by filing IRS Form 8938 with their federal income tax return. Our ordinary shares are expected to constitute foreign financial assets subject to these requirements unless the ordinary shares are held in an account at certain
financial institutions. U.S. Holders are urged to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition of our ordinary shares and the significant penalties for
non-compliance.
The above description is not intended to constitute a complete analysis of all tax consequences relating to acquisition, ownership and disposition of our ordinary shares. You should consult your
tax advisor concerning the tax consequences of your particular situation.
Government legislation and regulation
Actions of our users
In many jurisdictions, including the United States and countries in Europe, laws relating to the liability of providers of online services for activities of their users and other third parties are
currently being tested by a number of claims, including actions based on defamation, breach of data protection and privacy rights and other torts, unfair competition, copyright and trademark infringement and other theories based on the nature and
content of the materials searched, the ads posted, or the content uploaded by users. Any court ruling or other governmental action that imposes liability on providers of online services for the activities of their users and other third parties
could harm our business. In addition, rising concern about the use of the Internet for illegal conduct, such as the unauthorized dissemination of national security information, money laundering or supporting terrorist activities may in the future
produce legislation or other governmental action that could require changes to our products or services, restrict or impose additional costs upon the conduct of our business or cause users to abandon material aspects of our service.
88
Data protection
We hold certain personal data of our users, including their username, email address, IP address, device identifiers, address, telephone number, photo, transactional data, consumption habits (such
as purchase history), profession and education, location, social media account log in details and username and additional information regarding the use of our Marketplace (such as published portfolio, Gig information, purchases, ratings and
additional information the user decides to upload and share with us or other users of our marketplace), and may hold certain personal data of the visitors to our users' websites. In addition, we hold certain personal data of our employees and
contractors. We operate in accordance with the terms of our privacy policies, which describe our practices concerning the collection, use, transmission and disclosure of personal data. As a "database owner" pursuant to the Privacy Law, we are
subject to certain obligations and restrictions, such as the obligation to register databases containing personal data, the requirement to properly notify the data subjects regarding the nature of the collection and use of their personal data prior
to their collection, the requirement to obtain valid informed consents from the data subjects prior to using their personal data, conditions with respect to transfer of personal data outside Israeli borders, conditions and restrictions regarding
the use of any personal data for direct mailing, obligations to meet certain data subject rights (such as access, rectification and deletion rights) as well as data security obligations. In this respect, the new Israeli Privacy Protection
Regulations (Data Security) 2017 ("Data Security Regulations"), which entered into effect in Israel in May 2018, impose obligations with respect to the manner personal data is processed, maintained, transferred, disclosed, accessed and secured. The
Data Security Regulations may require us to adjust our data protection and data security practices, information security measures, certain organizational procedures, applicable positions (such as an information security manager) and other technical
and organizational security measures. The Israeli Privacy Protection Authority may initiate administrative inspection proceedings, from time to time, without any suspicion of any particular breach of the Privacy Law, as the Authority has done in
the past with respect to dozens of Israeli companies in various business sectors. In addition, to the extent that any administrative supervision procedure is initiated by the Israeli Privacy Protection Authority that reveals certain irregularities
with respect to our compliance with the Privacy Law, in addition to our exposure to administrative fines, civil claims (including class actions) and in certain cases criminal liability, we may also need to take certain remedial actions to rectify
such irregularities, which may increase our costs.
While it is generally the laws of the jurisdiction in which a business is located that apply, there is a risk that data protection regulators of other countries may seek jurisdiction over our
activities in locations in which we process data or have users but do not have an operating entity. Where the local data protection and privacy laws of a jurisdiction apply, we may be required to register our operations in that jurisdiction or make
changes to our business so that user data is only collected and processed in accordance with applicable local law. In addition, because our services are accessible worldwide, certain foreign jurisdictions may claim that we are required to comply
with their privacy and data protection laws, including in jurisdictions where we have no local entity, employees, or infrastructure. In such cases, we may require additional legal review and resources to ensure compliance with any applicable
privacy or data protections laws and regulations. In addition, in many jurisdictions there is new legislation that may affect our business and require additional legal review.
89
United States
A number of legislative proposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection could affect us. For example, in June 2018,
California passed the California Consumer Privacy Act ("CCPA"), which entered into effect on January 1, 2020 and provides new data privacy rights for consumers and new operational requirements for companies. Additionally, some other states have
passed proactive, rather than reactive, information security legislation. These state laws require that certain minimum protections and security measures be taken to protect personal data. The costs of compliance with these laws may increase in the
future as a result of changes in interpretation.
Europe
European legislators adopted the GDPR, repealing the 1995 European Data Protection Directive (Directive 95/46/EC). We are defined as a "Data Controller" with respect to the personal data of our
users that we collect and are therefore subject to a number of key legal obligations under the GDPR. In addition to reflecting existing requirements that already existed under the old data protection regime, such as, among other things,
requirements to provide users with a "fair processing notice" if we process their data, ensure that inaccurate data is corrected, only retain data for so long as is necessary and not transfer data outside the European Economic Area to jurisdictions
which do not ensure an adequate level of protection of personal data without taking certain safeguards, the GDPR also implemented new, more stringent operational and procedural requirements for our use of personal data. These include expanded prior
information requirements in light of the transparency principle to tell our users how we may use their personal data, increased controls on profiling users, increased rights for users to access, control and delete their personal data and mandatory
data breach notification requirements. In addition, there are significantly increased administrative fines of the greater of €20 million and 4% of global turnover (as well as the right to compensation for financial or non-financial damages claimed
by any individuals under Article 82 of the GDPR).
The European ePrivacy Directive (Directive 2002/58/EC as amended by Directive 2009/136/EC) obliges the EU member states to introduce certain national laws regulating privacy or data protection in
the electronic communications sector. Pursuant to the requirements of the ePrivacy Directive, companies must, among other things, obtain consent to store information or access information already stored, on a user's terminal equipment
(e.g., computer or mobile device). These requirements predominantly regulate the use by companies of cookies and similar technologies. Prior to providing such consent, users must receive clear and comprehensive information, both in accordance with
the more stringent requirements under the GDPR. Certain exemptions to these requirements on which we rely are available for technical storage or access for the sole purpose of carrying out the transmission of a communication over an electronic
communications network or as strictly necessary to provide a service explicitly requested by the user.
90
In recent years, U.S. and European lawmakers and regulators have expressed concern over the use of third-party cookies and similar technologies for online behavioral advertising, and laws in this
area are also under reform. In the European Union, current national laws that implement the ePrivacy Directive will soon be replaced by an EU regulation known as the ePrivacy Regulation. In the European Union, informed consent is required for the
placement of a cookie on a user's device and for direct electronic marketing, and the GDPR also imposes additional conditions in order to satisfy such consent, such as a prohibition on pre-checked consents and on bundled consents thereby requiring
users to affirmatively consent for a given purpose through separate tick boxes. The draft ePrivacy Regulation retains these additional consent conditions and also imposes the strict opt-in marketing rules on direct marketing that is "presented" on
a web page rather than sent by email, alters rules on third-party cookies and similar technology and significantly increases penalties for breach of the rules. Regulation of cookies and similar technologies may lead to broader restrictions on our
marketing and personalization activities and may negatively impact our efforts to understand users' internet usage, as well as the effectiveness of our marketing and our business generally. Such regulations may have a negative effect on businesses,
including ours, that collect and use online usage information for consumer acquisition and marketing, it may increase the cost of operating a business that collects or uses such information and undertakes online marketing, it may also increase
regulatory scrutiny and increase potential civil liability under data protection or consumer protection laws. In response to marketplace concerns about the usage of third-party cookies and web beacons to track user behaviors, providers of major
browsers have included features that allow users to limit the collection of certain data generally or from specified websites, and the ePrivacy Regulation draft also advocates the development of browsers that block cookies by default. These
developments could impair our ability to collect user information, including personal data and usage information, that helps us provide more targeted advertising to our current and prospective consumers, which could adversely affect our business,
given our use of cookies and similar technologies to target our marketing and personalize the consumer experience.
As the text of the ePrivacy Regulation is still under development and currently in draft form, and as further guidance is issued and interpretation of both the ePrivacy Regulation and the GDPR
develop, it is difficult to assess the impact of the ePrivacy Regulation on our business or operations, but it may require us to modify our data practices and policies and we could incur substantial costs as a result.
The estimated costs of this offering are as follows:
|
Selling Commissions
|
$
|
0
|
||
|
Securities and Exchange Commission registration fee
|
$
|
207.29
|
||
|
Edgar Fees (estimate)
|
2,000
|
|||
|
Translation Fees
|
$
|
3,000
|
||
|
Transfer Agent Fees
|
$
|
2,500
|
||
|
Accounting fees and expenses
|
$
|
16,200
|
||
|
Legal fees and expenses
|
$
|
36,093
|
||
|
Total
|
$
|
60,000.29
|
All amounts are estimates, other than the Commission's registration fee.
91
Crone Law Group, P.C., our legal counsel in the United States, is our lead counsel with regard to this Registration Statement. The validity of the ordinary shares offered in this
offering will be passed upon for us by Yigal Arnon & Co., our independent legal counsel in the State of Israel.
EXPERTS
The consolidated financial statements as of December 31, 2020 and 2019 included in this prospectus have been audited by BF Borgers CPA PC, an independent registered public
accounting firm. BF Borgers has presented their report with respect to our audited financial statements. The report of BF Borgers is included in reliance upon their authority as experts in accounting and auditing. The offices of BF Borgers are
located at Lakewood, Colorado.
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of the State of Israel. Service of process upon us and upon our director and officer who resides outside the United States, may be difficult to obtain within the
United States. Furthermore, because all of our assets and our director and officer is located outside the United States, any judgment obtained in the United States against us or our director and officer may not be collectible within the United
States.
We have irrevocably appointed The Crone Law Group, P.C. as our agent to receive service of process in any action against us in any U.S. federal or state court arising out of this offering or any
purchase or sale of securities in connection with this offering. The address of our agent is 500 Fifth Avenue, Suite 938, New York, NY 10110.
We have been informed by our legal counsel in Israel, Yigal Arnon & Co., that it may be difficult to initiate an action with respect to U.S. securities law in Israel. Israeli courts may refuse
to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not the most appropriate forum to hear 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 proved as a fact by expert witnesses which can be a time-consuming and costly process. Certain matters of procedure may also
be governed by Israeli law.
92
Subject to certain time limitations and legal procedures, Israeli courts may enforce a U.S. judgment in a civil matter which, subject to certain exceptions, is non-appealable, including judgments
based upon the civil liability provisions of the Securities Act and the Exchange Act and including a monetary or compensatory judgment in a non-civil matter, provided that:
| • |
the judgment was rendered by a court which was, according to the laws of the state of the court, and the rules of private international law currently prevailing in Israel competent to render the judgment;
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| • |
the obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in Israel and the substance of the judgment is not contrary to public policy; and
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| • |
the judgment is executory in the state in which it was given.
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Even if these conditions are met, an Israeli court may not declare a foreign civil judgment enforceable if:
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the judgment was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases);
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| • |
the enforcement of the judgment is likely to prejudice the sovereignty or security of the State of Israel;
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| • |
the judgment was obtained by fraud;
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| • |
the opportunity given to the defendant to bring its arguments and evidence before the court was not reasonable in the opinion of the Israeli court;
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| • |
the judgment was rendered by a court not competent to render it according to the laws of private international law as they apply in Israel;
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| • |
the judgment is contradictory to another judgment that was given in the same matter between the same parties and that is still valid; or
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| • |
at the time the action was brought in the foreign court, a lawsuit in the same matter and between the same parties was pending before a court or tribunal in Israel.
|
If a foreign judgment is enforced by an Israeli court, it generally will be payable in Israeli currency, which can then be converted into non-Israeli currency and transferred out of Israel. The
usual practice in an action before an Israeli court to recover an amount in a non-Israeli currency is for the Israeli court to issue a judgment for the equivalent amount in Israeli currency at the rate of exchange in force on the date of the
judgment, but the judgment debtor may make payment in foreign currency. Pending collection, the amount of the judgment of an Israeli court stated in Israeli currency ordinarily will be linked to the Israeli consumer price index plus interest at the
annual statutory rate set by Israeli regulations prevailing at the time. Judgment creditors must bear the risk of unfavorable exchange rates.
93
We have filed a registration statement, including relevant exhibits, with the SEC on Form F-1 under the Securities Act with respect to the ordinary shares to be sold in this
offering. This prospectus, which constitutes a part of the registration statement on Form F-1, does not contain all of the information contained in the registration statement. You should read our registration statement and its exhibits and schedules
for further information with respect to us and our ordinary shares.
We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file
reports, including annual reports on Form 20-F, and other information with the SEC. All information filed with the SEC can be obtained over the internet at the SEC’s website at www.sec.gov or inspected and copied at the public reference facilities
maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of documents, upon payment of a duplicating fee, by writing to the SEC.
94
Part II – Information Not Required In Prospectus
Item 6. Indemnification of Officers and Directors
Under the Companies Law, a company may not exculpate an office holder from liability for a breach of the duty of loyalty. An Israeli company may exculpate an office holder in advance from liability
to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care but only if a provision authorizing such exculpation is included in its articles of association. Our articles of association include such
a provision. An Israeli company may not exculpate a director from liability arising out of a prohibited dividend or distribution to shareholders.
An Israeli company may indemnify an office holder in respect of the following liabilities and expenses incurred for acts performed as an office holder, either in advance of an event or following an
event, provided a provision authorizing such indemnification is contained in its articles of association:
| • |
financial liability imposed on him or her in favor of another person pursuant to a judgment, settlement or arbitrator's award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is
provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company's activities when the undertaking to indemnify is given, and to an amount or
according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned events and amount or criteria;
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| • |
reasonable litigation expenses, including attorneys' fees, incurred by the office holder (1) 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 (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for
the criminal proceeding 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 and (2) in connection with a
monetary sanction;
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reasonable litigation expenses, including attorneys' fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third-party or in connection with criminal
proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent; and
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expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party
imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law, 1968 (the "Israeli Securities Law").
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II - 1
An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company's articles of
association:
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a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
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| • |
a breach of the duty of care to the company or to a third-party, including a breach arising out of the negligent conduct of the office holder;
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| • |
a financial liability imposed on the office holder in favor of a third-party;
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| • |
a financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding; and expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a
result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law.
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An Israeli company may not indemnify or insure an office holder against any of the following:
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a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
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| • |
a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;
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an act or omission committed with intent to derive illegal personal benefit; or
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a fine, monetary sanction or forfeit levied against the office holder.
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Under the Companies Law, exculpation, indemnification and insurance of office holders must be approved by the compensation committee and the board of directors (and, with respect to directors and
the Chief Executive Officer, by shareholders
Our articles of association allow us to indemnify and insure our office holders for any liability imposed on them as a consequence of an act (including any omission) which was performed by virtue
of being an office holder.
We have entered into an agreement with our director and executive officer exculpating him, to the fullest extent permitted by law, from liability to us for damages caused to us as a result of a
breach of duty of care, and undertaking to indemnify him to the fullest extent permitted by law. This indemnification is limited to events determined as foreseeable by the board of directors based on our activities, and to an amount or according to
criteria determined by the board of directors as reasonable under the circumstances.
There is no pending litigation or proceeding against any of our office holder as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result
in claims for indemnification by such office holder.
II - 2
Disclosure of Commission Position on Indemnification for Securities Act Liabilities
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to our directors, officers and controlling persons pursuant to the foregoing
provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of us in the successful defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Item 7. Recent Sales of Unregistered Securities
During the past three years, we have issued the following ordinary shares in connection with the incorporation of the Company without registering the securities under the Securities Act. We believe
that each of the following issuances was exempt from registration under the Securities Act in reliance on Regulation D under the Securities Act or pursuant to Section 4(2) of the Securities Act regarding transactions not involving a public offering
or in reliance on Regulation S under the Securities Act regarding sales by an issuer in offshore transactions. No underwriter or underwriting discount or commission was involved in any of these issuances of shares.
In April 2021, the Company issued 1,999,700 ordinary shares for an aggregate purchase price of NIS 19,997 to Menachem Shalom. In addition, we issued 10,000,000 preferred shares for an aggregate
purchase price of NIS 100,000 to Menachem Shalom.
Exhibits and Financial Statement Schedules
|
(a)
|
Exhibits
The Exhibit Index is hereby incorporated herein by reference. |
|
(b)
|
Financial Statement Schedules
Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the Consolidated
Financial Statements or the Notes thereto.
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II - 3
Item 9. Undertakings
The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as
required by the underwriter to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in
Item 6, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II - 4
EXHIBITS INDEX
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Exhibit Number
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Description
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||
|
5.1***
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|
Opinion of Yigal Arnon & Co. regarding the validity of the ordinary shares being registered and certain State of Israel matters
|
| |
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| |
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||
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|
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||
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|
|
|
| |
||
| 10.6** | |
Amazon Cloud Agreement |
|
|
||
| 23.2 |
Consent of Yigal Arnon & Co. (included in Exhibit 5.1) | |
| |
* Incorporated by reference to Registration Statement on Form F-1 filed April 23, 2021
** Filed herewith
*** To be filed by amendment
II - 5
In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and authorized this
registration statement to be signed on its behalf by the undersigned, in the State of Israel, on May 26, 2021.
|
HOLD ME LTD.
|
|
|
|
|
|
|
|
By:
|
/s/ Menachem Shalom
|
|
|
|
Menachem Shalom
|
|
|
|
Chief Executive Officer, Chief Financial Officer and Director
|
|
|
|
(Principal Executive Officer and Principal Financial and Accounting Officer)
|
|
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
|
By:
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/s/ Menachem Shalom
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|
Menachem Shalom
|
|
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|
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Chief Executive Officer, Chief Financial Officer and Director
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(Principal Executive Officer and Principal Financial and Accounting Officer)
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|
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SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant to the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of Hold Me Ltd. has signed this registration statement or amendment
thereto in New York, New York, on May 26, 2021.
|
|
The Crone Law Group P.C.
|
|
|
|
|
|
|
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By:
|
/s/ Mark Crone
|
|
|
Name:
|
Mark Crone
|
|
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Title:
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Managing Partner
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II - 6
Exhibit 3.2
HOLD ME LTD.
Priv. Co. No. 513933218
Part A of the Company's Articles
1. Name of the Company:
Company's Name: Hold Me Ltd.
2. Purposes of the Company:
Pursuant to Section 32(1) of the Law - to engage in any legal occupation.
3. Registered Share Capital of the Company:
The Company's registered share capital is NIS 10,000,000, divided as follows:
A. 990,000,000
Ordinary Shares, par value NIS 0.01 each, as well as:
| B. |
10,000,000 Preferred Shares, par value NIS 0.01 each, convertible to Ordinary Shares at a ratio of 1:100.
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Limited Liability
The liability of the shareholders is limited by payment of the amount of the unpaid-up share capital in their
possession.
All the rights and obligations attached to the shares, the rights and obligations of the shareholders and the arrangements among the
shareholders themselves and between them and the Company shall comply with the provisions of Part B of these Articles, which constitute an
integral part hereof, and shall be viewed as provisions of the Articles in all respects. Nothing in the aforesaid shall detract from the rights and obligations of the shareholders and the Company under any law or agreement.
Exhibit 10.5
Shareholders’ Loan Agreement
Made and signed in Nes Ziona
On 01.02.2018
Between:
Menachem Shalom, ID 031912595
Of 30b, Golomb Street Nes Ziona
(Hereinafter:
“the Lender”) The
first party
And:
Hold Me Ltd. private company no.: 513933218
Of 30b, Golomb Street Nes Ziona
(Hereinafter: “the Company”) The second party
| Whereas |
the Lender is a shareowner in the Company;
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| And whereas |
the Company requested from the Lender to lend it a sum detailed in this agreement for the aforementioned purpose, and the Lender agreed to provide the Company with the
requested loan, as detailed in this agreement below;
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| And whereas |
the parties wish to determine all loan provision conditions and the dates, rates and redemption terms as detailed in this agreement;
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Therefore, the following was declared, stipulated and agreed upon by the parties:
| 1. |
Introduction
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| 1.1. |
The preface to this agreement constitutes an inseparable part thereof and is binding as the remainder of its provisions.
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| 1.2. |
The paragraph titles are for convenience only and shall not serve to interpret any of this agreement’s terms.
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| 2. |
Declarations of the parties
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| 2.1. |
The parties to this agreement hereby declare that they are not prevented in any way according to law and/or agreement and/or other from entering into this agreement.
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| 2.2. |
The Lender hereby declares that he intends to use sums from his private savings for the provision of loans and/or credit frame which will be provided to the Company
from time to time upon necessity - both by transferring money to the Company’s bank accounts and by paying the Company’s debts to third parties.
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| 2.3. |
The Company hereby undertakes that it will use the loan sums it received from the Lender for its routine business activity and the coverage of mandatory balance due in
its accounts, insofar as they will exist, to meet its obligations to suppliers and third parties, insofar as they will exist.
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| 2.4. |
The Company hereby declares that according to its articles of association, the authority to lend and ensure loan redemption is of the Company’s CEO and that the
decision regarding taking the aforementioned loan and its approval was made at the Company’s shareholders assembly according to law and in accordance with its articles of association.
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| 3. |
Provision of the loan and its redemption
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| 3.1. |
The Lender hereby undertakes and declares that he will lend to the Company, and the
Company hereby requests to receive from the Lender a loan frame that will be provided from time to time according to the Company’s needs (hereinafter: “the Loan”).
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| 3.2. |
The Loan will bear interest at a rate determined from time to time according to paragraph 3I of the Income Tax Ordinance.
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| 3.3. |
-
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| 4. |
Immediate Loan redemption
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| 4.1. |
The sum of the Loan balance, as it may be from time the time, shall be redeemed immediately in each one of the following cases, unless otherwise agreed by the Lender
in advance and in writing:
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| 4.1.1. |
The Company violated an obligation according to this agreement and did not amend the violation within 5 days after the day on which it was requested in writing to
amend it by the Lender and/or anyone on its behalf.
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| 4.1.2. |
A liquidator and/or temporary liquidator and/or special manager and/or receiver was appointed for the Company for all its assets.
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| 4.1.3. |
A request for liquidation was submitted against the Company and/or the Company made a decision to liquidate willingly and/or liquidation processes commenced against
the Company.
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| 4.1.4. |
Expropriation was applied to the Company’s assets and the expropriation was not removed within 10 days after the day of its application.
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2
| 4.1.5. |
The Company carried out an activity that minimizes its business activity in a manner that may harm its ability to meet its obligations according to this agreement
and/or the Company’s financial capability was compromised in a manner that the Lender reasonably believes can harm its ability to fulfill its obligations according to this agreement.
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| 4.1.6. |
A situation evolves due to which the Lender is reasonably concerned that the chances for Loan redemption are at stake and/or the Company’s assets’ value has decreased
significantly, and/or the Company assets may be damaged and/or the Company’s rights to its assets may be harmed for any reasons whatsoever, and all at the Lender’s discretion.
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| 4.1.7. |
The Lender finds, at his sole discretion, that due to the law’s provisions, the future existence and/or force of this agreement may become illegal or unfeasable.
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| 4.1.8. |
The Lender finds that any of the Company’s declarations in this agreement is incorrect.
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| 4.2. |
The Company undertakes to notify the Lender in the event of one of the above cases within 48 hours after its occurence.
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| 4.3. |
In the event of one of the aforementioned, the Lender may immediately take all steps he deems fit, to ensure the redemption of all or part of the Loan balance, in any
manner he deems fit or efficient at his sole discretion.
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| 4.4. |
In each one of the aforementioned cases, the Company will return the Lender the full Loan balance, as detailed above, unless the Lender notifies at his sole discretion
that he agrees to relinquish immediate redemption and that he agrees to continue the Loan according to the terms of this agreement.
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| 4.5. |
No relinquishment of the Lender as mentioned above shall oblige him to additional relinquishments in the future.
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| 4.6. |
It is hereby clarified that the aforementioned in this paragraph does not compromise the Lender’s rights to any relief whatsoever, and it shall be deemed as an
addition only.
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| 5. |
Bills
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| 5.1. |
The parties to this agreement hereby agree and declare that the Company’s accounting books will be accepted by the parties regarding anything related to the obligations
according to this agreement, and that any written approval based on the aforementioned accounting books, signed by the accounted, shall be deemed as a prima facie evidence of the sums of obligations between the parties according to this
agreement.
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3
| 6. |
Miscellaneous
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| 6.1. |
No relinquishment and/or discount and/or receipt of any payment whatsoever and/or avoidance of action and provision of extension by the Lender shall be deemed as
relinquishment of his rights and shall not serve as an impediment to filing a lawsuit, unless the Lender explicitly relinquishes his rights in writing.
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| 6.2. |
This agreement summarizes all that was agreed between the parties and terminates any previous agreement, representation, and/or other obligation.
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| 7. |
Changes
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| 7.1. |
Any change or addition to this agreement shall be valid only if made in writing and signed by all parties to the agreement.
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| 8. |
Notifications:
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| 8.1. |
A notice sent to the addresses of the parties indicated in the preface to this agreement in registered mail shall be deemed as if reached the addressee and brought to
his knowledge within 3 days after its delivery via registered mail in the Israel Post Office, and if delivered by hand - upon its delivery, and if delivered via fax - within 24 hours after the time of its delivery.
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In witness whereof the parties have affixed their signatures at the place and on the date stipulated above:
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/s/ Menachem Shalom
The Lender
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/s/ Menachem Shalom
the Company
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4
Exhibit 10.6
AWS Service Terms
Last Updated: May 10, 2021
The Service Terms below govern your use of the Services.
Capitalized terms used in these Service Terms but not defined below are defined in the AWS Customer Agreement or other agreement with us governing your use of the Services (the “Agreement”). For purposes of these Service Terms, “Your Content” includes any “Company Content” and any “Customer Content,” and “AWS
Content” includes “Amazon Properties.”
1. Universal Service Terms (Applicable to All Services)
1.1. You may not transfer outside the Services any software (including related documentation) you obtain from us or third party licensors
in connection with the Services without specific authorization to do so.
1.2. You must comply with current technical documentation applicable to the Services (including applicable developer guides) posted on the
AWS Site.
1.3. You will provide information or other materials related to Your Content (including copies of any client-side applications) as
reasonably requested by us to verify your compliance with the Agreement. You will reasonably cooperate with us to identify the source of any problem with the Services that we reasonably believe may be attributable to Your Content or any end user
materials that you control.
1.4. In connection with your use of the Services, you are responsible for maintaining licenses and adhering to the license terms of any
software you run. If we reasonably believe any of Your Content violates the law, infringes or misappropriates the rights of any third party, or otherwise violates a material term of the Agreement (including the documentation, the Service Terms, or
the Acceptable Use Policy) (“Prohibited Content”), we will notify you of the Prohibited Content and may request that such content be removed from the Services or access to it be disabled. If you do not remove or disable access to the Prohibited
Content within 2 business days of our notice, we may remove or disable access to the Prohibited Content or suspend the Services to the extent we are not able to remove or disable access to the Prohibited Content. Notwithstanding the foregoing, we may
remove or disable access to any Prohibited Content without prior notice in connection with illegal content, where the content may disrupt or threaten the Services or in accordance with applicable law or any judicial, regulatory or other governmental
order or request. In the event that we remove Your Content without prior notice, we will provide prompt notice to you unless prohibited by law. We terminate the accounts of repeat infringers in appropriate circumstances.
1.5. You will ensure that all information you provide to us via the AWS Site (e.g., information provided in connection with your
registration for the Services, requests for increased usage limits) is accurate, complete, and not misleading.
1.6. From time to time, we may apply upgrades, patches, bug fixes, or other maintenance to the Services and AWS Content (“Maintenance”). We
agree to use reasonable efforts to provide you with prior notice of any scheduled Maintenance (except for emergency Maintenance), and you agree to use reasonable efforts to comply with any Maintenance requirements that we notify you about.
1.7. If your Agreement does not include a provision on AWS Confidential Information, and you and AWS do not have an effective
non-disclosure agreement in place, then you agree that you will not disclose AWS Confidential Information (as defined in the AWS Customer Agreement), except as required by law.
1.8. You may perform benchmarks or comparative tests or evaluations (each, a “Benchmark”) of the Services. If you perform or disclose, or
direct or permit any third party to perform or disclose, any Benchmark of any of the Services, you (i) will include in any disclosure, and will disclose to us, all information necessary to replicate such Benchmark, and (ii) agree that we may perform
and disclose the results of Benchmarks of your products or services, irrespective of any restrictions on Benchmarks in the terms governing your products or services.
1.9. Only the applicable AWS Contracting Party (as defined in the AWS Customer Agreement) will have obligations with respect to each AWS
account, and no other AWS Contracting Party has any obligation with respect to such account. The AWS Contracting Party for an account may change as described in the Agreement. Invoices for each account will reflect the AWS Contracting Party that is
responsible for that account during the applicable billing period.
If, as of the time of a change of the AWS Contracting Party responsible for your account, you have made an up-front payment for any
Services under such account, then the AWS Contracting Party you paid such up-front payment to may remain the AWS Contracting Party for the applicable account only with respect to the Services related to such up-front payment.
1.10. When you use a Service, you may be able to use or be required to use one or more other Services (each, an “Associated Service”), and
when you use an Associated Service, you are subject to the terms and fees that apply to that Associated Service.
1.11. If you process the personal data of End Users or other identifiable individuals in your use of a Service, you are responsible for
providing legally adequate privacy notices and obtaining necessary consents for the processing of such data. You represent to us that you have provided all necessary privacy notices and obtained all necessary consents. You are responsible for
processing such data in accordance with applicable law.
1.12. If you have been charged for a Service for a period when that Service was unavailable (as defined in the applicable Service Level
Agreement for each Service), you may request a Service credit equal to any charged amounts for such period.
1.13. If you are a customer that is subject to the French Politique générale de sécurité des systems d’information de santé (PGSSI-S), you
agree that your use of the Services complies with the PGSSI-S.
1.14. Data Protection.
1.14.1 These Service Terms incorporate the AWS GDPR Data Processing Addendum (“DPA”), when the GDPR applies to your use of the
AWS Services to process Customer Data (as defined in the DPA).The DPA is effective as of 25 May 2018 and replaces and supersedes any previously agreed data processing addendum between you and AWS relating to the Directive 95/46/EC.
1.14.2 These Service Terms incorporate the AWS Supplementary Addendum to the DPA, when the GDPR applies to your use of the AWS
Services to process Customer Data.
1.14.3 These Service Terms incorporate the AWS CCPA Terms (“CCPA Terms”), when the CCPA applies to your use of the AWS Services
to process Personal Information (as defined in the CCPA Terms).
1.15. Following closure of your AWS account, we will delete Your Content in accordance with the Documentation.
1.16. Your receipt and use of any Promotional Credits is
subject to the AWS Promotional Credit Terms & Conditions.
1.17. Payment Currency
1.17.1 AWS provides a Service that enables payment in certain currencies (“Payment Currency”) other than United States dollars when you
purchase certain Services from AWS (the “Currency Service”). When you purchase Services in certain countries outside of the United States, we may require you, because of currency controls or other factors, to use the Currency Service. When using the
Currency Service you are not tendering payment in one currency and receiving from us another currency.
1.17.2 When you use the Currency Service, Service fees and charges will automatically be invoiced in the Payment Currency. You must pay
invoices in the currency specified on each invoice, but, for credit card or debit card purchases, you may only make payments in currencies supported by the issuer of your card. If the issuer of your credit card or debit card does not support the
required Payment Currency, you must use a different payment method that does support paying in the Payment Currency.
1.17.3 Our fees and charges for your use of the Currency Service, if any, are included in the exchange rate applied to your invoice (the
“Applicable Exchange Rate”). Third-parties, such as your bank, credit card issuer, debit card issuer, or card network, may charge you additional fees. The Applicable Exchange Rate is determined at the time your invoice is generated and, for invoices
covering usage of Services over a period of time, will apply to all usage and Service charges listed on that invoice.
1.17.4 All refunds processed against an invoice will be provided in the currency in which the invoice was generated and reflected as a
credit memo or a payment in your Payment Currency.
1.17.5 You agree that by using the Currency Service, information related to your payment, including your name and address, may be used by
our banking partners to process your payments in jurisdictions other than the United States.
2. Betas and Previews
2.1. This Section describes the additional terms and conditions under which you may (a) access and use certain features, technologies, and
services made available to you by AWS that are not yet generally available, including, but not limited to, any products, services, or features labeled “beta”, “preview”, “pre-release”, or “experimental”, and any related AWS Content (each, a “Beta
Service”) or (b) access and use Services and any related AWS Content available in AWS regions that are not generally available, including, but not limited to, any AWS regions identified by AWS as “beta”, “preview”, “pre-release”, or “experimental”
(each, a “Beta Region”).
2.2. You must comply with all terms related to any Beta Service or Beta Region as posted on the AWS Site or otherwise made available to
you. AWS may add or modify terms, including lowering or raising any usage limits, related to access to or use of any Beta Services or Beta Regions at any time. Service Level Agreements do not apply to Beta Services or Beta Regions.
2.3. You may provide AWS with information relating to your access, use, testing, or evaluation of Beta Services or Beta Regions, including
observations or information regarding the performance, features, and functionality of Beta Services or Beta Regions (“Test Observations”). AWS will own and may use and evaluate all Test Observations for its own purposes. You will not use any Test
Observations except for your internal evaluation purposes of any Beta Service or Beta Region.
2.4. AWS may suspend or terminate your access to or use of any Beta Service or Beta Region at any time. Your access to and use of each Beta
Service and Beta Region will automatically terminate upon the release of a generally available version of the applicable Beta Service or Beta Region or upon notice of termination by AWS. Notwithstanding anything to the contrary in the Agreement,
after suspension or termination of your access to or use of any Beta Service or Beta Region for any reason, (a) you will not have any further right to access or use the applicable Beta Service or Beta Region, and (b) Your Content used in the
applicable Beta Service or Beta Region may be deleted or inaccessible.
2.5. Test Observations, Suggestions concerning a Beta Service or Beta Region, and any other information about or involving (including the
existence of) any Beta Service or Beta Region are considered AWS Confidential Information.
2.6. WITHOUT LIMITING ANY DISCLAIMERS IN THE AGREEMENT OR THE SERVICE TERMS, BETA SERVICES AND BETA REGIONS ARE NOT READY FOR GENERAL
COMMERCIAL RELEASE AND MAY CONTAIN BUGS, ERRORS, DEFECTS, OR HARMFUL COMPONENTS. ACCORDINGLY, AND NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE AGREEMENT OR THESE SERVICES TERMS, AWS IS PROVIDING BETA SERVICES AND BETA REGIONS TO YOU “AS IS.” AWS
AND ITS AFFILIATES AND LICENSORS MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE REGARDING BETA SERVICES AND BETA REGIONS, INCLUDING ANY WARRANTY THAT THE BETA SERVICES AND BETA REGIONS WILL BECOME
GENERALLY AVAILABLE, BE UNINTERRUPTED, ERROR FREE, OR FREE OF HARMFUL COMPONENTS, OR THAT ANY CONTENT, INCLUDING YOUR CONTENT, WILL BE SECURE OR NOT OTHERWISE LOST OR DAMAGED. EXCEPT TO THE EXTENT PROHIBITED BY LAW, AWS AND ITS AFFILIATES AND
LICENSORS DISCLAIM ALL WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR QUIET ENJOYMENT, AND ANY WARRANTIES ARISING OUT OF ANY COURSE OF DEALING OR USAGE OF
TRADE. AWS’S AND ITS AFFILIATES’ AND LICENSORS’ AGGREGATE LIABILITY FOR ANY BETA SERVICES AND BETA REGIONS WILL BE LIMITED TO THE AMOUNT YOU ACTUALLY PAY US UNDER THIS AGREEMENT FOR THE SERVICES THAT GAVE RISE TO THE CLAIM DURING THE 12 MONTHS
PRECEDING THE CLAIM.
3. Amazon CloudFront
You must own or have all necessary rights to use any domain name or SSL certificate that you use in conjunction with Amazon CloudFront. You
are solely responsible for the renewal, security, and proper configuration of any SSL certificates that you provide for use with Amazon CloudFront, including any disclosure of your SSL certificates to third parties.
4. AWS Outposts
4.1. Outposts Equipment. AWS will make equipment available to you to support your use of the AWS Outposts Service (the “Outposts
Equipment”). AWS or its affiliates maintain all rights in the Outposts Equipment and is not selling, renting, leasing, or transferring any ownership, intellectual or other rights in the Outposts Equipment to you. You will not, and will not purport
to, assign, grant, or transfer the Outposts Equipment or any interest in the Outposts Equipment to any individual or entity, and any such purported assignment, grant or transfer is void.
4.2. Facility Assessment. You will ensure that, at all times,
the facility at which the Outposts Equipment is located (the “Designated Facility”) meets the minimum requirements necessary to support the installation, maintenance, use, and removal of the Outposts Equipment as described here and otherwise as described in the Outposts Documentation or provided to you
during the ordering and installation process.
4.3. Delivery and Use. You will ensure that you have all necessary rights, certifications, and licenses for the delivery, installation,
maintenance, use, and removal of the Outposts Equipment at the Designated Facility. You are responsible for any damage to the Outposts Equipment while it is at the Designated Facility, unless caused by AWS. AWS may terminate your use of Outposts and
remove the Outposts Equipment if you breach these terms or the terms of the Agreement with respect to Outposts.
4.4. Access to Outposts Equipment. You will give personnel designated by AWS prompt and reasonable access to the Designated Facility as
necessary to deliver, install, inspect, maintain, and remove the Outposts Equipment. You will not require AWS personnel to sign, accept, or otherwise agree to any documentation as a condition of accessing the Designated Facility, and you agree that
the terms of any such documentation are void even if signed by AWS personnel. You will ensure that no one accesses, moves, or repairs the Outposts Equipment other than (i) personnel designated by AWS, (ii) as permitted in writing by AWS in connection
with the maintenance of Outposts Equipment, or (iii) as necessary due to a situation involving imminent injury, damage to property, or an active fire alarm system. You will ensure that no one modifies, alters, reverse engineers, or tampers with the
Outposts Equipment. You acknowledge that the Outposts Equipment may be equipped with tamper monitoring.
4.5. Enterprise Support. You will remain enrolled in AWS Support at the Enterprise level during the entire period of your use of Outposts.
4.6. Services/SLAs/Security. The Service Terms for any Services that run locally on Outposts also apply to your use of those Services on
Outposts. There are inherent differences between Services running locally on Outposts from those Services running at AWS operated facilities because the Outposts Equipment is physically located at the Designated Facility where you are responsible for
physical security and access controls, as well as all power, networking, and environmental conditions. Due to these differences:
a. The Service Level Agreements for any Services that run locally on Outposts do not apply to your use of those Services
on Outposts.
b. Any AWS commitments in the Agreement that depend on AWS’s operation of such physical security and access controls, or
power, networking, and environmental conditions, do not apply to Outposts or any Services running locally on Outposts.
c. The security and compliance standards,
certifications, audits, reports and attestations held by AWS do not apply to Outposts or any Services running locally on Outposts. You can find more information about Outposts security compliance and features here.
5. Amazon Elastic Compute Cloud
5.1. In conjunction with the Services, you may be allowed to use certain software (including related documentation) developed and owned by
Microsoft Corporation or its licensors (collectively, the “Microsoft Software”).
5.1.1. If you use the Microsoft Software, Microsoft and its licensors require that you agree to these additional terms and conditions:
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The Microsoft Software is neither sold nor distributed to you, and you may use it solely in conjunction with the Services.
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You may not transfer or use the Microsoft Software outside the Services.
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You may not remove, modify, or obscure any copyright, trademark, or other proprietary rights notices that are contained in or on the Microsoft Software.
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You may not reverse engineer, decompile, or disassemble the Microsoft Software, except to the extent expressly permitted by applicable law.
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Microsoft disclaims, to the extent permitted by applicable law, all warranties by Microsoft and any liability by Microsoft or its suppliers for any damages, whether
direct, indirect, or consequential, arising from the Services.
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Microsoft is not responsible for providing any support in connection with the Services. Do not contact Microsoft for support.
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You are not granted any right to use the Microsoft Software in any application controlling aircraft or other modes of human mass transportation, nuclear or chemical
facilities, life support systems, implantable medical equipment, motor vehicles, weaponry systems, or any similar scenario (collectively, “High Risk Use”). Microsoft and its suppliers disclaim any express or implied warranty of fitness for
High Risk Use. High Risk Use does not include utilization of the Microsoft Software for administrative purposes, to store configuration data, engineering and/or configuration tools, or other non-control applications, the failure of which
would not result in death, personal injury, or severe physical or environmental damage. These non-controlling applications may communicate with the applications that perform the control, but must not be directly or indirectly responsible for
the control function.
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Microsoft is an intended third-party beneficiary of this Section 5.1.1, with the right to enforce its provisions.
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5.1.2. For any instance running Microsoft Software (each, a “Microsoft Instance”), you may not use nesting, container, or similar
technologies to sell or resell multiple instances, portions of an instance, or containers running within the Microsoft Instance, unless (a) you are the ultimate end user of the Microsoft Instance, (b) you have supplemented the Microsoft Instance with
your own applications, or (c) you have added primary and significant functionality to the Microsoft Instance.
5.2. In conjunction with the Services, you may be allowed to use certain software (including related support, maintenance, and
documentation) developed, owned, or provided by third parties or their licensors. Use of third party software is subject to these additional terms and conditions:
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By using NVIDIA Corporation’s GRID Software, you agree to be bound by the terms and
conditions of the NVIDIA GRID Cloud End User License Agreement.
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By using NVIDIA Corporation’s Tesla Driver, CUDA Toolkit, cuDNN, NVENC, NVCUVID, NVM:,
nvidia-smi, and NCCL Library Software, toolkits, and drivers, you agree to be bound by the terms and conditions of the NVIDIA Cloud End User License
Agreement and NVIDIA Third Party Materials Notices.
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By using Red Hat, Inc.’s software, you agree to be bound by the terms and conditions of
the Red Hat Cloud Software Subscription Agreement. Red Hat also
disclaims any (i) warranties with respect to Red Hat, Inc. software; and (ii) liability for any damages, whether direct, indirect, incidental, special, punitive or consequential, and any loss of profits, revenue, data or data use, arising
from use of Red Hat, Inc. software.
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By using SUSE LLC’s software, you agree to be bound by the terms and conditions of the SUSE End User License Agreement and the SUSE Terms and Conditions.
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By using Apple Inc.’s software, you agree to be bound by the terms and conditions of the
applicable Apple Software License Agreement.
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5.3. Unless you specify a termination date, your Spot Instance request will remain active until the earlier of the following: (1) seven
days have passed, (2) we fulfill it, or (3) you cancel it. We may terminate, stop, or hibernate Spot Instances at any time and without any notice to you if the current price for the applicable Spot Instance (the “Spot Price”) equals or exceeds the
price you specified you were willing to pay for the Spot Instance (“Your Maximum Price”). Spot Instances purchased for a fixed duration (“Spot Blocks”) will not be terminated because the Spot Price equals or exceeds Your Maximum Price (if specified),
but will terminate at the conclusion of the fixed duration. Spot Instances and Spot Blocks may also be terminated for AWS capacity requirements. If a Spot Block is terminated due to AWS capacity requirements, you will not be charged for that Spot
Block. Spot Instances may not be used with certain Services, features, and third-party software we specify, including IBM software packages or Microsoft SQL Server. You may not, directly, indirectly, alone, or in cooperation with any third party,
attempt to control, influence, or manipulate the price for Spot Instances. You may not submit requests for Spot Instances through any third party (e.g., “proxy bidding”) or share information with any third party regarding Your Maximum Price specified
in your Spot Instance Requests.
5.4. EC2 Reserved Instances and Dedicated Hosts.
5.4.1. We may change Savings Plans, EC2 Reserved Instance and EC2 Dedicated Host Reservation pricing at any time, but price changes will
not apply to previously designated Savings Plans, EC2 Reserved Instances or EC2 Dedicated Host Reservations, except as described in this Section 5.4. If Microsoft increases the license fees it charges for Windows, or if Red Hat increases the license
fees it charges for Red Hat Enterprise Linux (“RHEL”), we may make a corresponding increase to the per-hour usage rate (or institute a corresponding per-hour usage rate) for Savings Plans for, or EC2 Reserved Instances with, Windows or RHEL. Any
increase in (or institution of) the per-hour usage rate for Savings Plans for, or EC2 Reserved Instances with, Windows will be made between December 1 and January 31, and we will provide 30 days’ notice. For any increase in (or institution of) the
per-hour usage rate for Savings Plans for, or EC2 Reserved Instances with, RHEL, we will provide 30 days’ advance notice. If this happens, you may: (a) continue to use your EC2 Reserved Instances with Windows or RHEL with the new per-hour usage
price; (b) convert your EC2 Reserved Instances with Windows or RHEL to comparable EC2 Reserved Instances with Linux; or (c) terminate your EC2 Reserved Instances with Windows or RHEL and receive a pro rata refund of the up-front fee you paid for the
terminated EC2 Reserved Instances with Windows or RHEL.
5.4.2. We may terminate the Savings Plans, EC2 Reserved Instance or EC2 Dedicated Host Reservation pricing programs at any time. Savings
Plans and EC2 Dedicated Hosts are nontransferable, and EC2 Reserved Instances are only transferrable in accordance with the requirements of the RI Marketplace provided on the AWS Site. Scheduled Instances and Convertible Reserved Instances are not
eligible for the RI Marketplace. Savings Plans, EC2 Reserved Instances and EC2 Dedicated Host Reservations are noncancellable, and EC2 Dedicated Hosts associated with an active EC2 Dedicated Host Reservation cannot be removed from your account, so
you will be charged for the duration of the term you selected, even if you terminate the Agreement. All amounts paid in connection with Savings Plans, EC2 Reserved Instances and EC2 Dedicated Host Reservations are nonrefundable, except that if we
terminate the Agreement other than for cause, terminate an individual EC2 Reserved Instance or EC2 Dedicated Host Reservation type, or terminate the Savings Plans, EC2 Reserved Instance or EC2 Dedicated Host pricing program(s), we will refund you a
pro rata portion of any up-front fee paid in connection with any previously designated Savings Plans, EC2 Reserved Instances or EC2 Dedicated Hosts. You may not purchase EC2 Reserved Instances for the purpose of reselling them in the RI Marketplace,
and we reserve the right to refuse or cancel your purchase if we suspect you are doing so. Upon expiration or termination of the term of Savings Plans, EC2 Reserved Instances or EC2 Dedicated Host Reservations, the reserved pricing will expire and
standard on-demand usage prices will apply. You are responsible for determining if you are subject to any limitations arising from the purchase or Savings Plans, EC2 Reserved Instances or EC2 Dedicated Host Reservations. For example, you are
responsible for complying with any applicable laws, policies, terms or conditions governing your payment of up-front fees or the expiration of reserved resources, including any fiscal or appropriation laws, or other policies or restrictions governing
up-front payments for goods or services.
5.5. EC2 Reserved Instance (RI) Marketplace.
5.5.1. The rights to an active EC2 Reserved Instance can be offered for sale through the RI Marketplace as long as (1) the remaining term
on the Reserved Instance is greater than 1 month and (2) your payment of the upfront charge for it has been received and processed (for credit card purchases, 30 days after you have paid the upfront fee, and for invoice purchases, after you have paid
the applicable invoice) (a “Marketable EC2 Reserved Instance”). You can be a “Seller” if you are a current AWS customer in good standing, you have a Marketable EC2 Reserved Instance associated with your AWS account, and you complete the registration
process through your AWS account. You can be a “Buyer” if you are a current AWS customer in good standing. Non-U.S.-based entities may not be Sellers without providing the Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United
States Tax Withholding) to establish that you are not a U.S. person. You can resell an EC2 Reserved Instance that you previously purchased through the RI Marketplace. You may not resell an EC2 Reserved Instance that you purchased through a discount
program (Reserved Instance Volume Discounts or otherwise) without obtaining our prior approval.
5.5.2. As a Seller, you will be the seller of record of your rights to a Marketable EC2 Reserved Instance. Except as expressly set forth in
these Service Terms, we are not involved in any underlying transaction between you and any Buyer. We or our affiliates may also participate in the RI Marketplace as a Seller or a Buyer. We may remove any Marketable EC2 Reserved Instance from the RI
Marketplace at any time. Once sold and transferred to a Buyer, a Seller will have no rights to that Marketable EC2 Reserved Instance.
5.5.3. On Seller’s behalf, we will process all payments for Transactions and collect the applicable Transaction Proceeds. “Transaction”
means any sale of a Marketable EC2 Reserved Instance through the RI Marketplace. “Transaction Proceeds” means the gross sales proceeds received by us from any Transaction. You will ensure that all fees and charges payable by Buyers for Marketable EC2
Reserved Instance are billed and collected through us and you will not offer or establish any alternative means of payment. We may impose transaction limits on some or all Buyers and Sellers relating to the value of any Transaction or disbursement,
the cumulative value of all Transactions or disbursements during a period of time, or the number of Transactions that we will process over a period of time. We may withhold for investigation, or refuse to process, any Transaction that we suspect is
fraudulent, unlawful, or otherwise violates these Service Terms, the Agreement, or the Acceptable Use Policy. For each Transaction, we will not remit Transaction Proceeds to a Seller, and the Marketable EC2 Reserved Instance will not be available to
the Buyer, until after we have successfully processed payments for that Transaction from the Buyer.
5.5.4. You will not receive any funds collected from payments associated with the hourly prices of your Marketable EC2 Reserved Instance.
At the end of each business day, we will pay to you all due and payable Transaction Proceeds that we have collected as of the date that is 2 business days prior to that date. We will deduct from each payment any applicable fees and charges due to us
related to Marketable EC2 Reserved Instances. We may withhold, deduct, or setoff any amounts payable by you to us or our affiliates against any Transaction Proceeds. Payments will be made only to an ACH-enabled bank account located in the United
States that you register with us. If there is an error in the processing of any Transaction, you authorize us to initiate debit or credit entries to your designated bank account, to correct such error, provided that any such correction is made in
accordance with applicable laws and regulations. If we are unable to debit your designated bank account for any reason, you authorize us to resubmit the debit, plus any applicable fees, to any other bank account or payment instrument that you have on
file with us or to deduct the debit and applicable fees from future Transaction Proceeds.
5.5.5. Sellers are responsible for the calculation, validation, and payment of any and all sales, use, excise, import, export, value added,
withholding, and other taxes and duties assessed, incurred, or required to be collected or paid (“Taxes”) for any reason in connection with any Transaction and with any Marketable EC2 Reserved Instance. We are not responsible for determining whether
any Taxes apply to any Transaction or remitting Taxes to any taxing authority with respect to any Transaction, or for reporting any information (including the payment of Taxes) with respect to any Transaction. Each Seller will indemnify us and our
affiliates against any claim or demand for payment of any Taxes imposed in connection with any Transaction, and for any fines, penalties, or similar charges imposed as a result of the Seller’s failure to collect, remit, or report any Taxes in
connection with any Transaction.
5.5.6. For each Seller, we will collect the necessary data and tax forms to enable compliance with applicable tax laws. For example, for
U.S.-based Sellers, we will collect and retain Seller name and address, and may collect the tax identification number and other data as needed to comply with Form 1099K reporting requirements; for non-U.S.-based Sellers, we will collect and retain a
Form W-8BEN tax form (which includes name, address, and a signature) as proof that you are exempt from Form 1099K reporting. For each Buyer, we will collect and retain the Buyer’s name and address. Buyers and Sellers will not know the name of the
other party to the Transaction until the Transaction is completed. Upon completion of the Transaction, we will share the applicable Buyer’s city, state, and zip with the Seller so that the Seller can calculate the appropriate tax (if any) to remit to
the appropriate government entity. We will share the Seller’s legal name on the Buyer’s invoice. Buyers and Sellers may not use information about the Transaction or about the other party gained in connection with a Transaction (“Transaction
Information”) for any purpose that is not related to the Transaction. For example, you may not, directly or indirectly: (1) disclose any Transaction Information to any third party, except as necessary for you to perform your tax obligations or other
obligations under these Service Terms and only if you ensure that every recipient uses the information only for that purpose and complies with these restrictions; (2) use any Transaction Information for any marketing or promotional purposes
whatsoever; (3) use any Transaction Information in any way inconsistent with applicable law; (4) contact a party to influence them to make an alternative sale or purchase; or (5) target communications of any kind on the basis of the intended
recipient being an RI Marketplace Buyer or Seller.
5.6. Amazon EC2 enables you to provision Amazon EC2 instances
using your Microsoft Software and Microsoft Licenses (the “BYOL Program”). Unless otherwise specified in your agreement(s) with Microsoft, you can participate in the BYOL Program only if you comply with the requirements here, and you (a) use Dedicated Instances or Dedicated Hosts; and (b) launch from
Virtual Machines (VMs) sourced from software binaries provided by you.
You must be eligible to use the BYOL Program for the applicable Microsoft Software under your agreements with Microsoft. You are solely
responsible for obtaining all required licenses and for complying with all applicable Microsoft licensing requirements, including the Product Use Rights/Product Terms. By using the Microsoft Software under the BYOL Program, you agree to Microsoft's
End User License Agreement.
You agree that you have determined that your use of the BYOL Program will comply with the applicable Microsoft licensing requirements.
Usage of the Services in violation of your agreement(s) with Microsoft is not authorized or permitted.
5.7. As part of using Amazon EC2, you agree that your Amazon EC2 resources may be terminated or replaced due to failure, retirement or
other AWS requirements. THE USE OF AMAZON EC2 DOES NOT GRANT YOU, AND YOU HEREBY WAIVE, ANY RIGHT OF PHYSICAL ACCESS TO, OR PHYSICAL POSSESSION OF, ANY AWS SERVERS, EQUIPMENT, REAL OR PERSONAL PROPERTY, OR OTHER ASSETS.
6. Alexa Web Services
You may use data you receive from the Alexa Services Web Information Service and Alexa Top Sites (collectively “Alexa Web Services”), such
as web site traffic data, to enhance your application or website, but may not use it in any application whose primary purpose is to display the same or related data or to compete with www.alexa.com. You may not display data you receive via the Alexa
Web Services that has been cached for more than 24 hours. You may not resell or redistribute the Alexa Web Services or data you access via the Alexa Web Services.
7. Amazon SimpleDB Service (Amazon SimpleDB)
If during the previous 6 months you have incurred no fees for Amazon SimpleDB and have registered no usage of Your Content stored in Amazon
SimpleDB, we may delete Your Content that is stored in Simple DB upon 30 days prior notice to you.
8. Amazon CloudWatch and Autoscaling
Amazon CloudWatch collects and stores certain information for the Services you are monitoring, including CPU utilization, data transfer,
and disk usage and activity (collectively, “CloudWatch Metric Data”). CloudWatch Metric Data may be used by AWS to maintain and provide the Services (including development and improvement of the Services).
9. AWS Import/Export Disk, AWS Snowball, AWS Snowcone and AWS Snowmobile
9.1. “AWS Import/Export” includes: AWS Import/Export Disk, AWS Snowball, AWS Snowcone and AWS Snowmobile.
9.2. We may return physical storage that you send to us in connection with your use of AWS Import/Export Disk (“Media”) to you for any
reason. Media shipped to us for import into or export from supported AWS Services in the EU (Ireland) Region must originate from and be returned to an address within the European Union or the European Economic Area. We may refuse, return, or dispose
of Media that is damaged, defective, unreadable, or not shipped via Amazon-approved means in accordance with the Documentation (collectively, “Unsuitable Media”). We may erase any data on such Unsuitable Media. If you request and we return Unsuitable
Media to you, you agree that we will select the shipping carrier and handling standards for return of such Unsuitable Media, and the carrier and standards may not be the same as (and may cost more than) those we use for shipping media in connection
with AWS Import/Export Disk generally. You will reimburse us for any expenses we incur in connection with any Unsuitable Media. If we are unable to return Media to you due to any issue with your address or Media, we will attempt to notify you, and
you will have 30 days from the date we provide notification to resolve the issue. If the issue is not resolved, the Media will be deemed Unsuitable Media.
9.3. As part of AWS Snowball and AWS Snowcone, we will ship you an agreed upon number of “Snowball” or "Snowcone" hardware appliances (each
an “Appliance”) and provide you with access to the applicable AWS Snowball Client or AWS Snowcone client software (together with the software contained on the Appliance, and any updates or upgrades to the foregoing, the “Appliance Software”). You
agree that you will not allow any Appliance to leave the country to which the Appliance is shipped until you provide it (in the same country) to a carrier for redelivery to us. Upon our request for any reason, you will promptly return any appliance
to us. Appliances collect and provide us with metrics regarding the use of Appliances, including boot times, size of transferred files, duration of transfers, and errors or timeouts. These metrics may be associated with your account ID, and we may
use these metrics to maintain and provide the Services (including development and improvement of the Services).
9.4. As part of AWS Snowmobile, we will transport a containerized data center and networking equipment (collectively, “Snowmobile”), and
other materials, equipment, and software necessary for operation of the Snowmobile (collectively with the Snowmobile, the “Snowmobile Materials”). You will ensure that, at all times, the designated transfer location for delivery of the Snowmobile
Materials (the “Transfer Site") meets the minimum requirements necessary to support the delivery, setup, maintenance, use, and removal of the Snowmobile Materials as described on the AWS Site and otherwise as described in the Snowmobile Documentation
or provided to you during the ordering and delivery process. You will ensure that you have all necessary rights, certifications, and licenses for the delivery, setup, maintenance, use, and removal of the Snowmobile Materials at the Transfer Site. You
are responsible for any damage to the Snowmobile Materials while at the Transfer Site, unless caused by AWS. You may not allow Snowmobile Materials to leave the Transfer Site other than under the supervision of personnel designated by AWS. You will
give personnel designated by AWS prompt and reasonable access to the Transfer Site as necessary to deliver, setup, inspect, maintain, and remove the Snowmobile Materials. You will not require AWS personnel to sign, accept, or otherwise agree to any
documentation as a condition of accessing the Transfer Site, and you agree that the terms of any such documentation are void even if signed by AWS personnel. You will ensure that no one accesses, moves, or repairs the Snowmobile Materials other than
(i) personnel designated by AWS, (ii) as permitted in writing by AWS in connection with the maintenance of Snowmobile Materials, or (iii) as necessary due to a situation involving imminent injury, damage to property, or an active fire alarm system.
AWS may terminate your use of Snowmobile Materials and remove the Snowmobile Materials if you breach these terms or the terms of the Agreement with respect to Snowmobile Materials.
9.5. Once AWS Import/Export services are complete, we will return the Media to you, and delete data from the Appliances or Snowmobiles, as
applicable.
9.6. You are responsible for payment of all customs, duties, taxes, and other charges in connection with Media and Appliances being shipped
to or from us.
9.7. For AWS Import/Export Disk, you will bear the entire risk of loss of, or damage to, any Media while in transit. For AWS Snowball and
AWS Snowcone, you are responsible for any damage to, or loss of, an Appliance after delivery to you until the carrier accepts the Appliance for delivery back to us. In addition to other rights and remedies we may have under the Agreement, we may
charge you the applicable lost device fee specified on the AWS Snowball or AWS Snowcone pricing pages if: (a) an Appliance is lost or irreparably damaged after it has been provided to you until the carrier accepts the Appliance for delivery back to
us; or (b) unless otherwise contemplated by the Documentation or agreed by us, you do not provide the Appliance to the carrier for return to us within 90 days of the date it was delivered to you.
9.8. YOU ARE SOLELY RESPONSIBLE FOR APPLYING APPROPRIATE SECURITY MEASURES TO YOUR DATA AND YOUR USE OF MEDIA, APPLIANCES AND SNOWMOBILE
MATERIALS, INCLUDING ENCRYPTING SENSITIVE DATA AND NOT ALLOWING UNAUTHORIZED ACCESS TO ANY MEDIA, APPLIANCE OR SNOWMOBILE MATERIALS.
9.9. AWS or its affiliates maintain all rights in the Appliances, Appliance Software, and Snowmobile Materials and is not selling, renting,
leasing, or transferring any ownership, intellectual or other rights in the Appliances, Appliance Software, or Snowmobile Materials to you. You will not, and will not purport to, assign, grant, or transfer the Appliances, Appliance Software, or
Snowmobile Materials or any interest in the Appliances, Appliance Software, or Snowmobile Materials to any individual or entity, and any such purported assignment, grant or transfer is void. Without limiting the foregoing, you will not (or attempt
to), and will not permit or authorize third parties to (or attempt to), (a) scan, x-ray, open, modify, alter, disassemble, or otherwise attempt to view the inside of or tamper with the Appliance or Snowmobile Materials; or (b) circumvent or disable
any features or measures in the Appliance, Appliance Software, or Snowmobile Materials. You acknowledge that the Appliances and Snowmobile Materials may be equipped with tamper monitoring.
9.10. You will return all Appliances to us for assessment and to enable us to determine how they can be reused and which components must be
recycled in an environmentally sound manner, regardless of the external condition of the Appliance and even if you believe the Appliance may be damaged or non-functional. You will not, under any circumstance, treat or dispose of an Appliance (or any
component thereof, including internal batteries) as waste. Shipments of used Appliances must be conducted in a manner consistent with applicable laws relating to used electronic equipment, including where applicable the Basel Convention Technical
Guidelines on Transboundary Movement of Used Electrical and Electronic Equipment.
9.11. You are responsible for complying with all applicable data protection, import, re-import, export, and re-export control laws,
including any applicable license requirements, and country-specific sanctions programs. You are responsible for serving as the exporter and importer of record (as applicable) for your Media, data, software, or technology, and you accept that AWS will
not participate in the export or import procedure. If you are using Appliances, Media, Appliance Software, or Snowmobile Materials for dual use items in the European Union, you represent that you, or the legal entity you represent, are “established”
in the European Union; or, if you are not “established” in the European Union, that you will not upload, request that we download, or export such dual-use items outside the European Union. If you are using Appliances, Media, Appliance Software, or
Snowmobile Materials in the European Union for military items, you represent that you, or the legal entity you represent, are permitted by the Member State of your incorporation to upload, request that we download or export any such military items
from that Member State, and it is a condition of this Agreement and your use of AWS Import/Export that you are so permitted.
10. Amazon Relational Database Service (Amazon RDS)
10.1. You may store snapshots of Your Amazon RDS Content for later use in Amazon RDS, but snapshots cannot be downloaded outside the
Services.
10.2. The Reserved DB Instance program allows you to designate Amazon RDS database instances as subject to the reserved pricing and payment
terms set forth on the Amazon RDS detail page on the AWS Site (each designated instance, a “Reserved DB Instance”). We may terminate the Reserved DB Instance program at any time. We may change pricing for the Reserved DB Instance program at any time,
but price changes will not apply to previously designated Reserved DB Instances. Reserved DB Instances are noncancellable, and you will owe the amount charged for the Reserved DB Instance for the duration of the term you selected, even if the
Agreement is terminated. Reserved DB Instances are nontransferable and all amounts paid in connection with the Reserved DB Instances are nonrefundable, except that if we terminate the Agreement other than for cause, terminate an individual Reserved
DB Instance type, or terminate the Reserved DB Instance program, we will refund you a pro rata portion of any up-front fee paid in connection with any previously designated Reserved DB Instances. Upon expiration or termination of the term of a
Reserved DB Instance, the Reserved DB Instance pricing will expire and standard on-demand usage prices will apply to the database instance.
10.3. Using Oracle Software.
10.3.1. “License Included”. As part of the Services, you may be allowed to use certain software (including related documentation) described
on the AWS Site developed and owned by Oracle America, Inc. or its affiliates (“Oracle”) and Oracle’s licensors (collectively, the “Oracle Software”). If you choose to use the Oracle Software and do not already have a license from Oracle for that
Oracle Software, Oracle and its licensors require that you agree to these additional terms and conditions:
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Oracle or its licensors retains all ownership and intellectual property rights in the Oracle Software, and title to the Oracle Software does not transfer to you or any
third party by virtue of this Agreement.
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The Oracle Software is subject to a restricted license and may only be used in connection with the Services, and only by the individual or legal entity that entered
into the Agreement.
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You may only use the Oracle Software for your internal business operations and in accordance with the Agreement. You may permit agents or contractors (including
outsourcers) to use the Oracle Software on your behalf for the purposes set forth in, and subject to, the Agreement, provided you are responsible for the agent’s, contractor’s and outsourcer’s compliance with the Agreement in connection with
such use.
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You may not:
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assign, grant, or transfer the Oracle Software or any interest in the Oracle Software to another individual or entity, and if you purport to grant a security interest
in the Oracle Software, the secured party will have no right to use or transfer the Oracle Software;
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use the Oracle Software for rental, timesharing, subscription services, hosting, or outsourcing;
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remove or modify any notice of Oracle’s or its licensors’ proprietary rights;
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make the Oracle Software available in any manner to any third party for use in the third party’s business operations;
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duplicate, reverse engineer (unless required by law for interoperability), disassemble or decompile the Oracle Software (including by reviewing data structures or
similar materials produced by the Oracle Software); or
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publish any results of benchmark tests run on the Oracle Software.
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Third party technology that may be appropriate or necessary for use with some Oracle Software is specified in the related documentation, and that third party technology
is licensed to you only for use with the Services and under the terms of the third party license agreement specified in the documentation, not this Agreement.
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To the extent permitted by applicable law, Oracle disclaims any liability for any damages, whether direct, indirect, incidental, special, punitive or consequential, and
any loss of profits, revenue, data or data use, arising from your use of the Oracle Software.
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Notwithstanding anything to the contrary elsewhere in the Agreement, Oracle is an intended third party beneficiary of the Agreement, but solely with respect to this
Section 10.3.1 of these Service Terms.
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The Uniform Computer Information Transactions Act does not apply to your use of the Oracle Software.
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Upon any termination of the Agreement, you must discontinue use of the Oracle Software and any related documentation.
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10.3.2. “Bring-Your-Own-License” (BYOL). Under the BYOL option, Amazon RDS enables you to provision Oracle Software to Amazon EC2 instances
and use the management capabilities of Amazon RDS for the Oracle Software. You can use the Oracle Software with Amazon RDS if you meet the following conditions:
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You must have a valid license with “Software Update License & Support” for the Oracle Software you wish to run. The terms of your existing license and support
agreement(s) with Oracle continue to apply to your use of the Oracle Software; and
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You must follow Oracle’s current policies for licensing Oracle Database software in the cloud computing environment. The database instances using the Oracle Software
with Amazon RDS reside in the Amazon EC2 environment.
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10.4. Using Microsoft Software. “License Included.” Use of Microsoft Software on Amazon RDS is subject to Section 5.1 above and these
additional terms and conditions:
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SQL Server Web Edition may be used only to support public and Internet accessible Web pages, Web sites, Web applications, or Web services. It may not be used to support
line of business applications (e.g., Customer Relationship Management, Enterprise Resource Management, and other similar applications).
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Microsoft is an intended third-party beneficiary of this Section 10.4, with the right to enforce its provisions.
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11. Amazon Simple Notification Service (Amazon SNS)
11.1. Portions of Amazon SNS in Japan are sold and provided by AMCS LLC, an affiliate of AWS, and not AWS, but are otherwise subject to the
terms of the Agreement.
11.2 Portions of Amazon SNS in Singapore are sold and provided by AMCS SG PRIVATE LIMITED (“AMCS SG”), an affiliate of AWS, and not AWS,
but are otherwise subject to the terms of the Agreement.
11.3. Fees for Amazon SNS will apply regardless of whether delivery of your notifications is prevented, delayed, or blocked due to reasons
outside of our control.
11.4. You may not use Amazon SNS to send SMS messages that include Premium Content (as defined in the Mobile Marketing Association
Guidelines). You may not charge recipients for receiving Amazon SNS notifications by SMS unless you have obtained the recipient’s express consent. You must advise recipients receiving Amazon SNS notification by SMS that telecommunications providers
may charge the recipient to receive Amazon SNS notifications by SMS. You are responsible for ensuring you have all necessary terms in place with push notification service providers, including terms necessary to comply with data protection laws.
You must obtain our prior written consent before using Amazon SNS to send SMS messages for:
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financial transactions or payment services (e.g., mobile banking, bill presentment, bill payment, money transfer, peer-to-peer payment or lending credit, debit or
stored value payment services);
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charitable programs (e.g., soliciting donations for a non-profit organization);
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sweepstakes or contests;
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advertisements or promotions for commercial products, goods, or services; or
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location-based services (e.g., where a recipient receives messages based on the geographical location of the recipient’s wireless device).
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11.5. We may change, discontinue, or deprecate support for a third party push notification platform at any time.
11.6. Through your use of Amazon SNS you will not:
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Transmit any material that contains viruses, Trojan horses, worms, or any other malicious or harmful programs.
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Offer or purport to offer any Emergency Services. “Emergency Services” means services that allow a user to connect with emergency services personnel or public safety
answering points, such as 911 or E911 services.
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Materially violate or facilitate the material violation of any local or foreign law, rule, regulation, or order, including laws regarding the transmission of data or
software.
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Transmit material that is sexually explicit, relates to “adult services”, or contains sensitive financial or identifying information (such as social security numbers)
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Resell, sublicense, or timeshare the Services, or use them on behalf of anonymous or other third parties.
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Use the Services in hazardous environments (such as operation of nuclear facilities, aircraft navigation, or any other use that may result in foreseeable risk of
injury, death, or destruction of property).
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12. AWS Identity and Access Management (IAM)
12.1. We may change user credentials created by you using IAM if we determine in our reasonable discretion that a change is necessary for
the protection of your AWS account and resources, and we will promptly notify you of any such change.
12.2. We may change, discontinue, or deprecate support for any third-party identity provider at any time without prior notice.
13. Amazon Route 53
13.1. You may not create a hosted zone for a domain that you do not own or have authority over.
13.2. All Domain Name System (DNS) records (other than Private DNS records) used in connection with Amazon Route 53 will be publicly
available, and AWS will have no liability for disclosure of those DNS records.
13.3. Domain name registration services are provided under
the Amazon Route 53 Domain Name Registration Agreement.
14. AWS Elastic Beanstalk
14.1. AWS may reject or modify any URL used in connection with an AWS Elastic Beanstalk environment that violates the intellectual property
rights any third-party or violates the Acceptable Use Policy.
14.2. If you stop running your AWS Elastic Beanstalk environment at any time, the [myapp] portion of the URL used in connection with the
environment will no longer be available to you and may be used by another AWS customer.
15. Amazon Simple Email Service (SES)
15.1 Portions of Amazon SES in Singapore are sold and provided by AMCS SG PRIVATE LIMITED (“AMCS SG”), an affiliate of AWS, and not AWS,
but are otherwise subject to the terms of the Agreement.
15.2 Portions of Amazon SES in Japan are sold and provided by AMCS LLC (“AMCS”), an affiliate of AWS, and not AWS, but are otherwise
subject to the terms of the Agreement.
15.3. Like many email service providers, to increase the security and reliability of email you send, attempt to send, or receive using SES
(“SES Email”), we (or our third-party providers) may store and scan your SES Email and Your Content included in SES Email to protect you and SES by preventing and blocking “spam” e-mails, viruses and spyware, and other harmful or unwanted items from
being sent and received over SES.
15.4. We may suspend or terminate your access to SES, or block or decline to send or receive any SES Email, if we determine that:
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our scan of SES Email or Your Content included in SES Email reveals abusive or low quality email (such as “spam”),
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SES Email bounces back to us or we receive abuse complaints (including complaints from third parties) in connection with your SES Email, or
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the source or ReturnPath email address you have provided us for “address bounces” or complaints is not successfully receiving email.
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15.5. If your SES Emails are blocked, delayed, or prevented from delivery by reasons outside of our control, your payment obligations
continue.
15.6. AWS is not the “sender” as defined in the CAN-SPAM Act or similar applicable law.
16. AWS Direct Connect
16.1. You are responsible for protecting your AWS Direct Connect connections, including using physical security, firewalls, and other
network security tools as appropriate.
16.2. AWS will permit data center operators or other service providers to connect your hardware to AWS’s hardware at the AWS Direct Connect
location(s) that you select. AWS will provide the necessary information to enable the data center operator or other service provider to establish and monitor this connection, including your name, email address, network configuration, activity
information, and AWS account number.
16.3. You are responsible for your separate relationship with the data center operator or other service provider, including compliance with
your agreement with, and the policies and procedures of, the data center operator or other service provider, and payment of applicable fees to the data center operator or other service provider. You are responsible for providing or procuring (and AWS
will not own or be responsible for) any equipment or cabling necessary to establish this dedicated connection.
16.4. If the connection you establish as part of AWS Direct Connect is temporarily unavailable or terminated, AWS will route traffic bound
for your AWS resources over the public Internet and AWS’s standard data transfer charges will apply. However, if you are using Amazon Virtual Private Cloud (VPC), traffic bound for your Amazon VPC resources will be routed through an IPsec VPN
connection. If an IPsec VPN connection is unavailable, traffic bound for your Amazon VPC resources will not be delivered.
17. Amazon ElastiCache
17.1. You may not access or tamper with any software we install on the cache nodes as part of Amazon ElastiCache.
17.2. The Reserved Cache Node program allows you to purchase reserved Amazon ElastiCache cache nodes subject to the reserved pricing and
payment terms set forth on the Amazon ElastiCache detail page on the AWS Site (each designated instance, a “Reserved Cache Node”). We may terminate the Reserved Cache Node program at any time. We may change the pricing for Reserved Cache Nodes at any
time, but price changes will not apply to previously designated Reserved Cache Nodes. Reserved Cache Nodes are nontransferable, and all amounts paid in connection with Reserved Cache Nodes are nonrefundable, except that if we terminate the Agreement
other than for cause, terminate an individual Reserved Cache Node type, or terminate the Reserved Cache Node program, we will refund you a pro rata portion of any up-front fee paid in connection with any previously designated Reserved Cache Nodes.
Upon expiration or termination of the term of a Reserved Cache Node, standard on-demand usage prices will apply to the cache nodes you use.
18. AWS GovCloud (US) Service Terms
18.1. Use of the Services in the AWS GovCloud (US) Regions is subject to the AWS GovCloud (US) Terms and Conditions available via AWS
Artifact in the AWS GovCloud (US) management console.
18.2. You are responsible for satisfying any applicable eligibility requirements for using the AWS GovCloud (US) Regions, including
providing accurate and current registration information. We may make, directly or through third parties, any inquiries we consider necessary to validate information that you provide to us, including checking commercial and governmental databases.
While we may take steps to verify the identity of our Customers, we cannot and do not guarantee any Customer's identity.
18.3. AWS makes no representation or warranty related to the US Persons status of any Customer or End User that may be granted access to
the AWS GovCloud (US) Regions.
18.4. You are responsible for verifying the adequacy of the AWS GovCloud (US) Regions for the processing and storage of Your Content and
that your use of AWS Services will comply with the laws and regulations that may govern Your Content.
19. Amazon DynamoDB
19.1. The Amazon DynamoDB Reserved Capacity program allows you to purchase reserved throughput capacity (reads and writes) subject to the
pricing and payment terms set forth on the Amazon DynamoDB detail page on the AWS Site (“Amazon DynamoDB Reserved Capacity”). We may terminate the Amazon DynamoDB Reserved Capacity program at any time. We may change the pricing for Amazon DynamoDB
Reserved Capacity at any time, but price changes will not apply to previously purchased Amazon DynamoDB Reserved Capacity. Amazon DynamoDB Reserved Capacity is nontransferable and all amounts paid in connection with the Amazon DynamoDB Reserved
Capacity are nonrefundable, except that if we terminate the Agreement (other than for cause) or the Amazon DynamoDB Reserved Capacity program, we will refund you a pro rata portion of any up-front fee paid in connection with any previously purchased
Amazon DynamoDB Reserved Capacity. Upon expiration or termination of the term of any Amazon DynamoDB Reserved Capacity, standard on-demand usage prices will apply to your use of Amazon DynamoDB.
19.2. Your use of DynamoDB Local is governed by the Amazon DynamoDB Local License Agreement.
20. AWS Marketplace
20.1. Except to the extent Content made available through AWS Marketplace is provided to you under a separate license that expressly states
otherwise, neither you nor any End User may, or may attempt to, (a) modify, alter, tamper with, repair, or otherwise create derivative works of any Content, (b) reverse engineer, disassemble, or decompile the Content or apply any other process or
procedure to derive the source code of any software included in the Content, (c) resell or sublicense the Content, (d) transfer Content outside the Services without specific authorization to do so, or (e) tamper with or circumvent any controls or
make unauthorized copies of the Content.
20.2. AWS may stop providing AWS Marketplace (or any features of or listings within AWS Marketplace), without prior notice to you. In
addition, AWS may disable or remove Content you have purchased on AWS Marketplace, if AWS determines that the Content may violate any Policies or any other regulations, policies, or laws.
20.3. To the extent authorized by the respective third party provider on AWS Marketplace, AWS may disable access to or remove any Third
Party Content you purchased or subscribed to on AWS Marketplace in the event of overdue and uncollected payments, upon AWS providing you with at least 30 days’ advance written notice.
20.4 Professional services offered on AWS Marketplace by third parties are subject to separate terms and conditions specified by the
respective third party. AWS has no control over and makes no guarantees about such services.
21. AWS Data Pipeline
Your use of the AWS Data Pipeline Task Runner is governed by
the AWS Data Pipeline License Agreement.
22. Amazon Elastic Transcoder
The distribution of files created by Amazon Elastic Transcoder may require that you obtain license rights from third parties, including
owners or licensors of certain third party audio and video formats. You are solely responsible for obtaining these licenses and paying any necessary royalties or fees.
23. AWS OpsWorks
Your use of the AWS OpsWorks agent is governed by the AWS
OpsWorks Client License Agreement. Your use of AWS OpsWorks for Chef Automate is subject to Chef Software Inc.’s end user license agreement. Your use of AWS OpsWorks for Puppet Enterprise is subject to Puppet, Inc.’s Puppet
Enterprise License Agreement.
24. AWS CloudHSM
In conjunction with your use of AWS CloudHSM, you may be
allowed to use certain software (including related documentation) developed and owned by SafeNet, Inc. or its licensors (collectively, the “SafeNet Software”). If you use the SafeNet Software, you agree to the additional terms and conditions
located here.
25. Amazon AppStream 2.0
25.1. NVIDIA Software. If your application uses the NVIDIA
graphics processing unit (GPU) on an Amazon AppStream 2.0 instance, you agree to be bound by the terms and conditions of the NVIDIA Cloud End User License
Agreement.
25.2. If you use the Amazon AppStream 2.0 User Pool feature to enable End Users to access applications, you agree that we may store and
process these End Users’ email addresses in AWS Regions outside the AWS Regions where you are using Amazon AppStream 2.0. We will only use these email addresses to send the End Users email notifications to enable them to access Amazon AppStream 2.0.
26. Amazon WorkSpaces
26.1. Any Content that you or any End User run on, cause to interface with, or upload to your WorkSpaces is Your Content. You are
responsible for maintaining licenses and adhering to the license terms of any of Your Content on your WorkSpaces.
26.2. Use of Microsoft Software on Amazon WorkSpaces is subject to Section 5.1 above. Microsoft is an intended third-party beneficiary of
this Section 26.2, with the right to enforce its provisions.
26.3. Amazon WorkSpaces is designed to serve as a cloud desktop service. WorkSpaces may not be used to accept inbound network connections,
as server instances, or to serve web traffic or your network traffic, and you may not reconfigure the inbound network connections of your WorkSpaces.
26.4. You and End Users may only use the WorkSpaces client
software on computer equipment owned or controlled by you or your End Users. Your use of the WorkSpaces client software is governed by the Amazon WorkSpaces
Application License Agreement.
26.5. To perform configurations, health checks, and diagnostics on Amazon WorkSpaces, we may collect and use performance and log
information tied to the operation and management of the Service.
26.6. Software installed by us on your WorkSpaces may connect to a license activation server hosted by AWS. You may not attempt to prevent
any license activation function.
26.7. As part of regular operation of Amazon WorkSpaces, WorkSpaces may be updated with operating system and software upgrades, patches,
and bug fixes. During these updates, only software, documents, and settings that are part of the operating system image used for the WorkSpace or part of a user’s profile (D: drive in the WorkSpace) will persist.
26.8. Microsoft BYOL Licensing. Under this option, Amazon WorkSpaces enables you to provision WorkSpaces using your Microsoft Software and
Microsoft Licenses (the “WorkSpaces BYOL Program”). You must be eligible to use the WorkSpaces BYOL Program for the applicable Microsoft software under your agreement(s) with Microsoft. You are solely responsible for obtaining all required licenses
and for complying with all applicable Microsoft licensing requirements, including the Product Use Rights/Product Terms. Further, you must have accepted Microsoft's End User License Agreement (Microsoft EULA), and by using Microsoft Software under the
WorkSpaces BYOL Program, you agree to the Microsoft EULA. You agree that you have determined that your use of the WorkSpaces BYOL Program will comply with the applicable Microsoft licensing requirements. Usage of the Services in violation of your
agreement(s) with Microsoft is not authorized or permitted.
27. Amazon Cognito
27.1. We may change, discontinue, or deprecate support for any third-party identity provider at any time without prior notice.
27.2. In the event a particular Cognito User Pool has no active users within a 12 month period, we may delete the Cognito User Pool upon 30
days’ prior notice to you.
28. Amazon WorkDocs
28.1. Portions of Amazon WorkDocs in Japan are sold and provided by AMCS LLC, an affiliate of AWS, and not AWS, but is otherwise subject to
the terms of the Agreement.
28.2. We may delete any of your End Users’ Content uploaded to Amazon WorkDocs if the End User is marked “Inactive” in the Amazon WorkDocs’
Administrator Dashboard and you have not been billed for more than 30 days for this End User’s usage. We may also delete your Amazon WorkDocs site and Your Content when you have no End Users marked “Active” within the Amazon WorkDocs Administrator
Dashboard for more than 30 days.
28.3. If no End User accounts associated with your AWS account have registered any usage of the Services for several months, then we may
delete the inactive End Users’ accounts after providing 30 days’ notice.
28.4. Your use of the Amazon WorkDocs Sync Software is
governed by the Amazon WorkDocs Sync License Agreement.
28.5. Your use of the Amazon WorkDocs Application is governed
by the Amazon WorkDocs Application License Agreement.
28.6. Your use of the Amazon WorkDocs Web Clipper is governed
by the Amazon WorkDocs Web Clipper License Agreement.
28.7. Open with Office 365 is Third-Party Content provided by
Microsoft. By using Open with Office 365, you are subject to Microsoft’s terms of use and privacy policy. You are solely responsible for
obtaining all required licenses from Microsoft to use Open with Office 365 and for complying with all applicable Microsoft licensing requirements.
28.8. The Hancom document editing service is Third-Party
Content. Your use of the Hancom document editing service through Amazon WorkDocs is subject to the Hancom Terms of Service. If you do not accept the Hancom Terms of Service applicable to the Hancom document editing service, then do not enable and use the Hancom document editing service. If you enable and use the
Hancom document editing service, Hancom will have access to the contents of the document being edited and the End User’s user name and profile picture. Hancom is only authorized by AWS to access the above information for the purpose of providing
the Hancom document editing service and only for the duration of the editing session.
28.9. AWS is the registrant of, and controls the DNS records
for, all [name].workdocs.aws domain names (“Domain Names”). Customer does not acquire any rights in any such domain. Termination or suspension of Customer’s AWS account may result in the termination or suspension of Customer’s ability to use its
previously assigned Domain Names. In order to use a Domain Name, Customer must comply with all guidelines included in the Amazon WorkDocs Site Naming Policy.
29. Amazon Pinpoint
29.1. Portions of Amazon Pinpoint in Japan are sold and provided by AMCS LLC (“AMCS”), an affiliate of AWS, and not AWS, but are otherwise
subject to the terms of the Agreement.
29.2. Portions of Amazon Pinpoint in Singapore are sold and provided by AMCS SG PRIVATE LIMITED (“AMCS SG”), an affiliate of AWS, and not
AWS, but are otherwise subject to the terms of the Agreement.
29.3. Amazon Pinpoint utilizes underlying functionality from the Amazon Simple Notification Service (Amazon SNS) and Amazon Simple Email
Service (SES), and your use of Amazon Pinpoint is subject to the terms that govern those Services.
29.4. You acknowledge that Amazon Pinpoint:
a. Is not an Integrated Public Alert and Warning System (IPAWS) eligible system.
b. Is not intended for use in, or in association with, the operation of any hazardous environments or critical systems.
You are solely responsible for liability that may arise in association with such use.
c. Does not support or carry emergency calling or messaging to any emergency services personnel or public safety
answering points (“Emergency Services”), such as calls or texts to 911, and may not determine the physical location of your devices or your End Users, which may be required when contacting Emergency Services. You understand and agree that it is your
responsibility to: (i) contact and access Emergency Services independently of Amazon Pinpoint and (ii) inform all End Users of these limitations.
d. Is not a replacement for traditional telephone or mobile phone services, including but not limited to calling,
texting, or contacting Emergency Services, and does not function as such.
30. AWS Lambda
We may delete, upon 30 days’ notice to you, any of Your Content uploaded to AWS Lambda if it has not been run for more than 3 months. You
may only use Lambda’s storage resources to store function code (compiled or uncompiled), dependencies (e.g. layers), and related configuration and meta-data, as necessary to execute your code on Lambda (per the Documentation). Any other use,
including but not limited to, using Lambda’s storage for the purpose of hosting generally accessible content for download or storage, is not permitted and may result in us deleting Your Content.
31. Amazon WorkMail
31.1. When you use Amazon WorkMail, you also use AWS Key Management Service, AWS IAM, and Amazon SES, and your use of Amazon WorkMail is
subject to the terms that govern those Services.
31.2. Amazon WorkMail provides a filtering service designed to filter unwanted emails, such as spam, phishing emails, and email infected
with viruses. You acknowledge that the technological limitations of the filtering service will likely result in the capture of some legitimate email and the failure to capture some unwanted email, including email infected with viruses.
31.3. Your mail domain and End Users’ accounts may be blocked, delayed, or prevented from being delivered by destination email servers and
other reasons outside of our control. Your payment obligations continue regardless of whether delivery of your emails is prevented, delayed, or blocked.
31.4. You agree not to use Amazon WorkMail for sending:
| • |
Bulk emails, such as mass marketing emails
|
| • |
Unsolicited and unwanted emails
|
| • |
Phishing emails
|
31.5. You are solely responsible for ensuring any emails you or your End Users send using Amazon WorkMail comply with the CAN-SPAM Act and
all other applicable law. You agree that AWS is not the “sender” of any emails you or your End Users send using Amazon WorkMail as defined in the CAN-SPAM Act and all other applicable laws.
31.6. Amazon WorkMail may log and use information such as server hostnames, IP addresses, timestamps, mail queue file identifiers, and spam
filtering information for the purpose of troubleshooting or improving Amazon WorkMail.
31.7. If your use of Amazon WorkMail is terminated, we may delete your data and your End Users’ mailboxes.
32. Amazon WorkSpaces Application Manager (Amazon WAM)
32.1. When you use Amazon WAM, you also use Amazon WorkSpaces, and your use is subject to the terms that govern Amazon WorkSpaces.
32.2. You may use the Amazon WAM Admin Studio only to package applications, and the Amazon WAM Admin Player only to validate applications,
that will be delivered via Amazon WAM to your WorkSpaces.
32.3. As part of regular operation of Amazon WAM, we may update your Amazon WAM desktop applications with software upgrades, patches, and
bug fixes.
33. AWS Marketplace for Desktop Apps
33.1. Except to the extent Content made available through AWS Marketplace for Desktop Apps is provided to you under a separate license that
expressly states otherwise, neither you nor any End User may, or may attempt to, (a) modify, alter, tamper with, repair, or otherwise create derivative works of any Content, (b) reverse engineer, disassemble, or decompile the Content or apply any
other process or procedure to derive the source code of any software included in the Content, (c) resell or sublicense the Content, (d) transfer Content outside the Services without specific authorization to do so, or (e) tamper with or circumvent
any controls or make unauthorized copies of the Content.
33.2. AWS may stop providing AWS Marketplace for Desktop Apps (or any features of or listings within AWS Marketplace for Desktop Apps),
without prior notice to you. In addition, AWS may disable or remove Content you have purchased on AWS Marketplace for Desktop Apps, if AWS determines that the Content may violate any Policies or any other regulations, policies, or laws.
34. AWS Directory Service
Use of Microsoft Software on AWS Directory Service is subject to Section 5.1 above. Microsoft is an intended third-party beneficiary of
this Section 34, with the right to enforce its provisions.
35. AWS Device Farm
35.1. For any test run on an Apple device (each, an “Apple Test”), you represent and warrant that you have an active and valid registered
Apple Developer Account under your iOS Developer Program License Agreement with Apple at the time any such Apple Test is run. You appoint us as your Authorized Developer (as defined in the Apple Developer Program License Agreement) for the duration
of all Apple Tests and understand that you are responsible to Apple for all actions we undertake in connection with each Apple Test.
35.2. You agree not to and not to attempt to:
(i) perform any network discovery inside the AWS Device Farm or otherwise in connection with the test;
(ii) generate any internet traffic from within the EC2 instances of AWS Device Farm, unless approved by us; internet traffic should be
limited to devices only;
(iii) root, unlock, or jailbreak any Device Farm device;
(iv) install persistent software on devices or EC2 instances; or
(v) factory reset or change settings on devices, or call or access third-party servers in a manner that would interfere with any Services.
35.3. You acknowledge and agree that we may disclose application packages, test packages (pre- compiled), test script source code,
application extension files, or auxiliary data files to third parties solely for purposes of conducting automated security verification.
36. Amazon Elasticsearch Service
Amazon Elasticsearch Service creates daily automated snapshots of your Amazon Elasticsearch Service domains. We will maintain these
automated snapshots for a period of at least 14 days after they are created. We may delete automated snapshots at any time after 14 days.
37. AWS Database Migration Service and AWS Schema Conversion Tool
The AWS Database Migration Service (which includes the AWS
Schema Conversion Tool) is AWS Content, and you may install and/or use it solely for the purpose of migrating data, provided (i) at least one of the source data store and target data store resides in AWS; and (ii) the source and target data stores
are both listed in the Documentation as AWS Database Migration Service sources and targets. You and all End Users may only use the AWS Database
Migration Service to migrate data, directly or indirectly, from a source that is a DMS Supported Service to a destination that is also a DMS Supported Service.
38. AWS Amplify
You must have all necessary rights to use any domain name that you use in conjunction with AWS Amplify.
39. AWS IoT
39.1. Device Shadow data for an individual device may be deleted if you do not update the Device Shadow data for an individual device
within any given 12-month period. Device Registry data for an individual device may be deleted if you do not update the Registry data for an individual device within any given 7-year period. Once Device Shadow or Registry data has been updated for an
individual device the data restriction time frame for that individual device resets, and the Device Shadow and Registry data storage time frame for an individual device starts over.
39.2. You are responsible for the creation, distribution, and security (including enabling of access) of any IoT devices connected to or
enabled by your AWS account.
40. Amazon QuickSight
40.1. You may enable End Users to use Amazon QuickSight under your account. If you choose to enable End Users under your account, it is
your responsibility to inform each End User that our termination of your use of Amazon QuickSight will also terminate their use of Amazon QuickSight. It is also your responsibility to inform them that you are acting as an “Amazon QuickSight
Administrator” and can perform the following actions: (a) activate and deactivate End Users’ Amazon QuickSight accounts; (b) control End User access to data sets and certain functionality of Amazon QuickSight; and (c) access information about End
Users’ use of Amazon QuickSight.
40.2. Amazon QuickSight may use Your Content that you select as a data source for Amazon QuickSight to make personalized recommendations to
you, such as suggested visualizations based on your query history and suggested insights.
41. AWS Certificate Manager
41.1. By using AWS Certificate Manager (“ACM”) you authorize
us, Amazon Trust Services, LLC (“ATS”), or our affiliates (collectively, “Amazon CA”) to apply for and obtain publicly trusted SSL/TLS certificates (each, a “Certificate”) from certification authorities located in the United States, some of whom
may be third parties, for the domain name you provide to us. By submitting a request for a Certificate, you certify that (1) you are the Domain Name Registrant (as defined in the then current CA/Browser Forum Baseline Requirements Certificate
Policy for the Issuance and Management of Publicly-Trusted Certificates (the “CA/B Forum Requirements” located here); (2) you have control over the Fully-Qualified Domain Name (as defined in the CA/B Forum Requirements); or (3) you have been granted authority by the Domain Name Registrant to authorize Amazon CA to
apply for and obtain each Certificate. You acknowledge that, solely for purposes of obtaining the Certificate and for no other purposes, you are giving Amazon CA control over the Fully-Qualified Domain Name, and you approve of Amazon CA requesting
the Certificate for the domain name. We may decline to provide you with a Certificate for any reason.
41.2. You agree that:
(i) All information you provide in connection with your use of Certificates is and will be accurate and complete information at all times
(and you will promptly notify us if your information changes);
(ii) You will review and verify the Certificate for accuracy;
(iii) You may use a Certificate we provide to you solely on servers that are accessible at the subjectAltName(s) listed in the Certificate
and will use the Certificate solely in compliance with all applicable laws;
(iv) You will promptly cease using a Certificate, and promptly notify us, in the event that any information in the Certificate is incorrect
or inaccurate;
(v) You will promptly cease using a Certificate, and promptly notify us, if the private key associated with the Certificate is subject to a
Key Compromise (as defined in the CA/B Forum Requirements) or the Certificate is otherwise subject to misuse;
(vi) You will promptly respond to Amazon CA’s instructions concerning Key Compromise or Certificate misuse;
(vii) You will not modify, sublicense, or create a derivative work of any Certificate (except as required to use the Certificate for its
intended purpose) or Private Key;
(viii) You will not, in connection with use of the Certificate, upload or distribute any files or software that may damage the operation of
another’s computer;
(ix) You will not make representations about or use a
Certificate except as may be allowed in ATS’s CPS;
(x) You will not, in connection with use of the Certificate, impersonate or misrepresent your affiliation with any entity;
(xi) You will not permit an entity other than Amazon CA to control the Private Key matching the Public Key in the Certificate (where
“Private Key” and “Public Key” are defined by the CA/B Forum Requirements);
(xii) You will not use a Certificate to breach the confidence of a third party or to send or receive unsolicited bulk correspondence; and
(xiii) You acknowledge that Amazon CA (or our applicable third-party contractor) may revoke a Certificate at any time, and you agree that
you will cease using the Certificate immediately upon our notice of such revocation.
42. Amazon Lumberyard Engine
42.1. Lumberyard Materials. Amazon Lumberyard consists of an
engine, integrated development environment, related assets, and tools we make available here or otherwise designate as Lumberyard materials (collectively, “Lumberyard Materials”). The Lumberyard Materials include the “Lumberyard
Redistributables”. Lumberyard Materials are AWS Content. The term “Lumberyard Materials” does not include Content distributed with the Lumberyard Materials
under separate license terms (such as code licensed under an open source license).
42.2. License. In addition to the rights granted to AWS Content under the Agreement, we also grant you a limited, non-exclusive,
non-sublicensable (except to End Users as provided below), non-transferrable license to do the following during the Term:
(a) Development: You may use, reproduce, modify, and create derivative works of the Lumberyard Materials to develop and
support video games, software, audio-visual works, and other content (each work created through use of the Lumberyard Materials is a “Lumberyard Project”). Lumberyard Projects, excluding any AWS Content and Third Party Content included therein, are
Your Content.
(b) Distribution to End Users: You may use, reproduce, modify, create derivative works of, publicly display, publicly
perform, and distribute (including via third party distributors) to End Users the Lumberyard Redistributables (including any permitted modifications and derivatives) as part of a Lumberyard Project. However, you may do so only if (i) the Lumberyard
Project provides material content or functionality beyond that provided by the Lumberyard Redistributables themselves, (ii) the Lumberyard Redistributables are integrated into the Lumberyard Project so they are not separately usable by End Users,
(iii) you do not distribute in source code form Lumberyard Redistributables that we make available in file formats that are commonly compiled (e.g., C, C++) or for which we make a compiler available, and (iv) you ensure End Users are subject to terms
no less protective of the Lumberyard Materials than these Service Terms, including this Section and Sections 42.4 and 42.5 below. You may sublicense these rights, subject to the restrictions in these terms, to your End Users to allow them to use,
modify, create new content for, and redistribute your Lumberyard Project (e.g., create new items or levels for a game).
(c) Collaboration with other AWS customers. You may reproduce and distribute (but not sublicense) the Lumberyard
Materials (including any permitted modifications and derivatives): (i) to other AWS customers that are contractors of yours solely for the purpose of allowing those AWS customers to perform work on your behalf, (ii) to other AWS customers in
connection with work you perform for them as a contractor, and (iii) to up to 5 other AWS customers who you authorize to distribute a Lumberyard Project in connection with your sale or licensing of that Lumberyard Project (e.g., publishers of a game
you develop). Those other AWS customers’ rights to the Lumberyard Materials are governed by their agreement(s) with us.
(d) Lumberyard Git Repository. We may make
available certain Lumberyard Materials on the “Lumberyard Git Repository”.
You may reproduce and distribute to other AWS customers, via the Lumberyard Git Repository, your modified version(s) of those Lumberyard Materials (your “LM Fork(s)”), subject to any policies we may establish for the Lumberyard Git Repository. Your
LM Fork must comply with the Agreement (including these terms); for example, it may not enable Lumberyard Projects to use, or read or write data to or from, Alternate Web Services. You must include a notice stating that the LM Fork is subject to
these terms (such as a copy of the License.txt file from the root directory of the Lumberyard Materials). If you obtain an LM Fork from the Lumberyard Git Repository, you are responsible for ensuring that any Lumberyard Project you create with it
complies with these terms. If your LM Fork violates the Agreement, then it infringes our copyright in the Lumberyard Materials and we may remove it from the Lumberyard Git Repository and take other actions, including terminating your license to the
Lumberyard Materials. “Alternate Web Service” means any non-AWS web service that is similar to or can act as a replacement for the services listed here.
42.3. No License Fee. There is no fee for the licenses granted in Section 42.2. Other AWS Services, AWS Content and Third Party Content
made available in connection with the Lumberyard Materials may be subject to separate charges and governed by additional terms.
42.4. Operating Restrictions. Without our prior written consent, (a) the Lumberyard Materials (including any permitted modifications and
derivatives) may only be run on computer equipment owned and operated by you or your End Users, or on AWS Services, and may not be run on any Alternate Web Service and (b) your Lumberyard Project may not read data from or write data to any Alternate
Web Service.
42.5. Other Restrictions. Without limiting the license restrictions set out in the Agreement, you may not (a) distribute the Lumberyard
Materials in source code form, except as expressly permitted by Section 42.2(b) and (c), (b) use or exploit the Lumberyard Materials or any portion thereof to develop, maintain, participate in the development of, or support any competing engine,
development tool, or software framework, (c) use the Lumberyard Materials or any portion thereof as part of a logo or trademark, (d) remove, obscure, or alter any proprietary rights notices (including copyright and trademark notices) contained in the
Lumberyard Materials, (e) take any action that would require us or you to license, distribute, or otherwise make available to anyone the Lumberyard Materials under different terms (e.g., combining Lumberyard Materials with software subject to
“copyleft” open source licenses), or (f) use or exploit the Lumberyard Materials or any portion thereof in any manner or for any purpose other than as expressly permitted by these terms.
42.6. Registration; Release. Before distributing your
Lumberyard Project to End Users, you must register here. You must obtain
our prior written consent if the initial public or commercial release of your Lumberyard Project is based on a version of the Lumberyard Materials more than 5 years old.
42.7. Credit. You must credit us in Lumberyard Projects in
accordance with these guidelines. AWS Marks included in the Lumberyard
Materials may only be used in accordance with the Trademark Use Guidelines. We may use excerpts of publicly released promotional material from your Lumberyard Projects and related trademarks, service marks, trade names, and logos in connection with
our marketing, advertisement, and promotion of Lumberyard.
42.8. Forums; Submissions. In addition to your rights to distribute LM Forks on the Lumberyard Git Repository set out above, when
discussing Lumberyard Materials in our forums or elsewhere, you may include up to 50 lines of source code from the Lumberyard Materials for the sole purpose of discussing that code. You must identify us as the source of the code. “Lumberyard
Submissions” are content relating to Lumberyard Materials (including LM Forks) that you post or otherwise submit to developer discussion sites, sample code repositories, or other AWS or public forums. You grant (i) us a non-exclusive, worldwide,
perpetual, irrevocable, transferrable, sublicensable, royalty-free, and fully paid up license under all intellectual property rights to your Lumberyard Submissions, and (ii) other AWS customers the same rights to your Lumberyard Submissions as these
Service Terms provide to the Lumberyard Materials. You represent and warrant that you have all necessary rights to grant the license above, and that your Lumberyard Submissions do not infringe the intellectual property rights of any third party or
violate this Agreement.
42.9. Data Collection. The Lumberyard Materials may provide us with information about the use of the Lumberyard Materials, including
information about system and server resources, features used in the integrated development environment, frequency and duration of use, geographic and network locations, and error and information messages.
42.10. Acceptable Use; Safety-Critical Systems. Your use of the Lumberyard Materials must comply with the AWS Acceptable Use Policy. The
Lumberyard Materials are not intended for use with life-critical or safety-critical systems, such as use in operation of medical equipment, automated transportation systems, autonomous vehicles, aircraft or air traffic control, nuclear facilities,
manned spacecraft, or military use in connection with live combat. However, this restriction will not apply in the event of the occurrence (certified by the United States Centers for Disease Control or successor body) of a widespread viral infection
transmitted via bites or contact with bodily fluids that causes human corpses to reanimate and seek to consume living human flesh, blood, brain or nerve tissue and is likely to result in the fall of organized civilization.
42.11. Termination. Your rights in the Lumberyard Materials automatically terminate if the Agreement terminates or you breach the Agreement
(including these Service Terms). However, if we terminate the Agreement for convenience, your rights in Lumberyard Materials then in your possession survive termination with respect to any previously registered Lumberyard Project. Otherwise, upon
termination, you must cease all use, distribution, and other exploitation of the Lumberyard Materials (and any modifications and derivatives).
43. Amazon GameLift
43.1. You may only access or use Amazon GameLift for video game server hosting; provided however, that this restriction does not apply to
your use of the FlexMatch feature independent of other Amazon GameLift features.
43.2. We or our affiliates may delete, upon 30 days' notice to you, any of Your Content uploaded to Amazon GameLift if it has not been run
in more than 3 months.
43.3. Your use of Amazon GameLift Local is governed by the Amazon GameLift Local License Agreement.
43.4. The Amazon GameLift Spot Instance program allows you request that certain Amazon GameLift instances run pursuant to the Amazon
GameLift Spot instance pricing and payment terms set forth on the Amazon GameLift product detail page on the Site (each requested instance, a “GL Spot Instance”). We may terminate the Amazon GameLift Spot Instance program at any time. We may
terminate, stop, or hibernate GL Spot Instances at any time and without any notice to you for AWS capacity requirements. You should configure your game to ensure it is fault tolerant and will correctly handle interruptions. GL Spot Instances may not
be used with certain Services, features and third-party software we specify, including those listed in Section 5.3, above.
44. AWS Application Discovery Service
When you use AWS Application Discovery Service, data that is scanned by AWS Application Discovery Service in your on-premises computing
resources will be deemed Your Content.
45. AWS Professional Services
45.1. “AWS Professional Services” are advisory and consulting services that AWS provides under a statement of work (“SOW”) to help you use
the other Services. AWS Professional Services are “Services” for purposes of the Agreement.
45.2. AWS or any of its affiliates may enter into a SOW or an addendum to the Agreement with you to provide AWS Professional Services. For
the purposes of each SOW or addendum, the term “AWS” in the SOW, the addendum and the Agreement refers to the AWS entity that executes the SOW or addendum, and no other AWS entity has any obligations under that SOW or addendum. Each SOW or addendum
(together with the Agreement) is intended by the parties as the final, complete, and exclusive terms of their agreement and supersedes all prior agreements and understandings (whether oral or written) between the parties with respect to the subject
matter of that SOW or addendum.
45.3. AWS will invoice you monthly for the AWS Professional Services. Payments for AWS Professional Services are not refundable.
45.4. AWS does not provide legal or compliance advice. You are responsible for making your own assessment of whether your use of the
Services meets applicable legal and regulatory requirements.
45.5. Other than Third Party Content, Content that AWS provides as part of the AWS Professional Services is AWS Content. You are solely
responsible for testing, deploying, maintaining and supporting Content provided or recommended by AWS.
45.6. AWS may develop Content consisting of either (a) documents and diagrams (“Documents”) or (b) software (in source or object code
form), sample code, or scripts (“Software”) for you as part of the AWS Professional Services (such Documents and Software, “Developed Content”). Subject to any non- Disclosure agreement in effect between you and AWS, AWS is not precluded from
developing, using, or selling products or services that are similar to or related to the Developed Content. Any Developed Content provided to you by AWS as part of the AWS Professional Services under a SOW is licensed under the following terms:
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AWS licenses any Documents to you under the Creative Commons Attribution 4.0 International License (CC-BY 4.0); and
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AWS licenses any Software to you under the Apache License, Version 2.0.
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45.7. Some Developed Content may include AWS Content or Third Party Content provided under a separate license. In the event of a conflict
between Section 45.6 above and any separate license, the separate license will control with respect to such AWS Content or Third Party Content.
45.8. Any materials or information that you own or license from a third party and provide to AWS for the purposes of the AWS Professional
Services are Your Content. If you choose to provide access to Your Content to AWS, then you will ensure that you have adequate rights and permissions to do so.
45.9. If there is a conflict between this Section 45 and any AWS Implementation Services Addendum between you and AWS, the terms of the AWS
Implementation Services Addendum will control, and references to “Implementation Services” in that addendum include AWS Professional Services.
45.10. AWS and its affiliates will handle any personal data
relating to your personnel (“Personnel”) that is provided to AWS or its affiliates in connection with a SOW in accordance with the handling practices described in the AWS Privacy Notice (available at https://aws.amazon.com/privacy/). You will make the AWS Privacy Notice available to any Personnel whose
personal data you provide to AWS or its affiliates.
46. Amazon Redshift
The Reserved Node program allows you to designate Amazon Redshift nodes as subject to the reserved pricing and payment terms set forth on
the Amazon Redshift pricing page on the AWS Site (each designated node, a “Reserved Node”). We may terminate the Reserved Node program at any time. We may change pricing for the Reserved Node Program at any time, but price changes will not apply to
previously designated Reserved Nodes. Reserved Nodes are noncancellable, and you will owe the amount charged for the Reserved Node for the duration of the term you selected, even if the Agreement is terminated. Reserved Nodes are nontransferable, and
all amounts paid in connection with Reserved Nodes are nonrefundable, except that if we terminate the Agreement other than for cause, terminate an individual Reserved Node type, or terminate the Reserved Node program, we will refund you a pro rata
portion of any up-front fee paid in connection with any previously designated Reserved Node. Upon expiration or termination of the term of a Reserved Node, the Reserved Node pricing will expire and standard on-demand usage prices will apply to the
Amazon Redshift node.
47. AWS Server Migration Service.
47.1. When you use AWS Server Migration Service, data that is scanned by AWS Server Migration Service in your on-premises computing
resources will be deemed Your Content.
47.2. We may terminate the migration of any image that remains in a migration queue for 90 days or more.
48. AWS Organizations
48.1. AWS Organizations enables you to create an “Organization” by joining a single AWS account (the “Management Account,” previously
called the “Master Account”) with one or more AWS accounts (each, a “Member Account”). Except as authorized by AWS, only AWS accounts used by you, your affiliates, your employees, or your subcontractors currently doing work on your behalf may be
joined in an Organization. By joining an Organization as a Member Account, you agree: (a) to disclose billing, account activity, and account information of the Member Account to the Management Account; and (b) that the Management Account may purchase
EC2 Reserved Instances on a Member Account’s behalf.
48.2. If you enable consolidated billing, the Management Account and Member Account will be jointly and severally liable for all charges
accrued by the Member Accounts while joined in an Organization, but the Management Account will be billed for all such charges in accordance with the Management Account’s Agreement. If a Management Account is suspended for non-payment, then all
Member Accounts in the Organization will be suspended.
48.3. We may enable, with at least 14 days’ prior notice to you, all features in your Organization if requested by the Organization’s
Management Account. If your Organization has all features enabled: (i) the consolidated billing terms as described in Section 48.2 will apply to your Organization; (ii) the Management Account will have full access to and control over its Member
Accounts; and (iii) the Management Account is jointly and severally liable for any actions taken by its Member Accounts.
48.4. When a Management Account uses AWS Organizations or the CreateLinkedAccount API to create an account (“Created Account”): (i) the
Created Account will be a Member Account of the Management Account’s Organization with the AWS Organizations features that the Management Account enables from time to time; (ii) the Created Account is governed by the terms of the Management Account’s
Agreement; (iii) the Management Account is jointly and severally liable for any actions taken by the Created Account; and (iv) an IAM role is created in the Created Account that grants the Management Account full administrative access to the Created
Account.
49. Amazon Athena
Notwithstanding any other provision of the Agreement, you may incorporate into your programs or applications, and distribute as
incorporated in such programs or applications, the Amazon Athena JDBC Driver or the Amazon Athena ODBC Driver, in each case solely for use with Amazon Athena.
50. AWS Machine Learning and Artificial Intelligence Services
50.1. “AI Services” means, collectively, Amazon CodeGuru Profiler, Amazon CodeGuru Reviewer, Amazon Comprehend, Amazon Comprehend Medical,
Amazon DevOps Guru, Amazon Forecast, Amazon HealthLake, Amazon Kendra, Amazon Lex, Amazon Lookout for Metrics, Amazon Personalize, Amazon Polly, Amazon Rekognition, Amazon Textract, Amazon Transcribe, Amazon Transcribe Medical and Amazon Translate.
“AI Content” means Your Content that is processed by an AI Service.
50.2. You and your End Users are responsible for all decisions made, advice given, actions taken, and failures to take action based on your
use of AI Services. AI Services use machine learning models that generate predictions based on patterns in data. Output generated by a machine learning model is probabilistic and should be evaluated for accuracy as appropriate for your use case,
including by employing human review of such output.
50.3. You agree and instruct that for Amazon CodeGuru Profiler, Amazon Comprehend, Amazon Lex, Amazon Polly, Amazon Rekognition, Amazon
Textract, Amazon Transcribe, and Amazon Translate: (a) we may use and store AI Content that is processed by each of the foregoing AI Services to maintain and provide the applicable AI Service (including development and improvement of such AI Service)
and to develop and improve AWS and affiliate machine-learning and artificial-intelligence technologies; and (b) solely in connection with the development and improvement described in clause (a), we may store such AI Content in an AWS region outside
of the AWS region where you are using such AI Service. This Section does not apply to Amazon Comprehend Medical or Amazon Transcribe Medical. You may instruct AWS not to use and store AI Content processed by an AI Service to develop and improve that
Service or technologies of AWS or its affiliates by configuring an AI services opt out policy using AWS Organizations.
50.4. You are responsible for providing legally adequate privacy notices to End Users of your products or services that use any AI Service
and obtaining any necessary consent from such End Users for the processing of AI Content and the storage, use, and transfer of AI Content as described under this Section 50, including providing any required notices and obtaining any required
verifiable parental consent under the Children’s Online Privacy Protection Act (COPPA) or similar laws and obtaining any required consent of individuals appearing in any images or videos processed by an AI Service. You represent to us that you have
provided all necessary privacy notices and obtained all necessary consents. You are responsible for notifying us in the event that any AI Content stored by an AI Service must be deleted under applicable law. If you use Amazon Lex in connection with
websites, programs or other applications that are directed or targeted, in whole or in part, to children under age 13 and subject to COPPA or similar laws you must: (a) provide all required notices and obtain all required verifiable parental consent
under COPPA or similar laws; and (b) notify AWS during the Amazon Lex set-up process using the appropriate (i) check box in the AWS console or (ii) Boolean parameter in the applicable Amazon Lex Model Building Service API request or response as
specified by the Amazon Lex Documentation. Amazon Lex does not store or retain voice or text utterance information from websites, programs, or other applications that you identify in accordance with this Section as being directed or targeted, in
whole or in part, to children under age 13 and subject to COPPA or similar laws.
50.5. You will not, and will not allow any third-party to, use the AI Services to, directly or indirectly, develop or improve a similar or
competing product or service. The foregoing does not apply to Amazon Forecast and Amazon Personalize.
50.6. AI Services are not intended for use in, or in association with, the operation of any hazardous environments or critical systems that
may lead to serious bodily injury or death or cause environmental or property damage. The foregoing does not apply to the use of Amazon HealthLake in connection with providing or supporting healthcare services. You are solely responsible for
liability that may arise in connection with any such use.
50.7. Notwithstanding any other provision of the Agreement, you may incorporate into your programs or applications, and distribute as
incorporated in such programs or applications, the binary code that we distribute for AI Services with the AWS Mobile SDKs.
50.8. Law Enforcement Use of Amazon Rekognition. Amazon Rekognition’s face comparison feature uses machine learning to detect similarities
between faces in different images and generate predictions of the likelihood the same person appears in both images; it does not provide definitive identifications of any person. Given the nature of machine learning systems, the following terms apply
when Law Enforcement Agencies use Amazon Rekognition’s face comparison feature in connection with criminal investigations. “Law Enforcement Agency” means a government entity whose primary purpose and responsibilities are criminal investigation,
apprehension and prosecution.
50.8.1. If Amazon Rekognition is used to assist in identifying a person, and actions will be taken based on the identification that could
impact that person’s civil liberties or equivalent human rights, the decision to take action must be made by an appropriately trained person based on their independent examination of the identification evidence.
50.8.2. Law Enforcement Agencies that use Amazon Rekognition
to assist personnel in making decisions that could impact civil liberties or equivalent human rights must ensure such personnel receive appropriate training on responsible use of facial recognition systems, including how to properly operate the
system and interpret its results. For an example of how to implement such training, see the Facial Recognition Policy Development Template published by the U.S Department of Justice’s Bureau of Justice Assistance.
50.8.3. Amazon Rekognition may not be used for sustained surveillance of a specific person without following an independent review process
that is designed to protect civil liberties or equivalent human rights (such as obtaining a court order, warrant, or other authorization), unless the use is to address exigent circumstances involving a threat of death or serious harm to a person.
50.8.4. Law Enforcement Agencies that use Amazon Rekognition
for criminal investigations must provide a public disclosure describing their use of facial recognition systems. The method and content of the disclosure is at the reasonable discretion of the agency, but should be easily accessible to the public
(such as a posting on a website), describe how the facial recognition system is used, and summarize safeguards in place to prevent violations of civil liberties or equivalent human rights. For examples, see statements and privacy
assessments from the FBI and the Facial Recognition Policy Development
Template published by the U.S Department of Justice’s Bureau of Justice Assistance.
51. Amazon Lightsail
51.1. You authorize AWS to peer your Amazon Lightsail VPCs and your Amazon VPCs when using Amazon Lightsail VPC peering.
51.2. Amazon Machine Images from the AWS Marketplace are offered or sold under the terms of the AWS Marketplace and any separate terms and
conditions and privacy policies specified by the party offering or selling the Amazon Machine Image. Use of Microsoft Software on Amazon Lightsail is subject to Section 5.1 above. Microsoft is an intended third-party beneficiary of this Section 51.2,
with the right to enforce its provisions.
51.3. You may not use Amazon Lightsail in a manner intended to
avoid incurring data fees from other Services (e.g., proxying network traffic from Services to the public internet or other destinations or excessive data processing through load balancing or content delivery network (CDN) Services as described in
the Documentation), and if you do, we may throttle or suspend your data
services or suspend your account.
52. AWS Systems Manager
52.1 Systems Manager may collect and transmit to AWS information regarding your use of the Services, including inventory items (e.g.,
application inventory and custom inventory items); parameters; configuration data (e.g., network and state configuration); telemetry and diagnostics data; update history and registry keys; resource groups; and patch metadata (“Systems Information”).
Systems Information may be used by AWS to operate and maintain (including to improve) the Service.
52.2 Certain features of this Service include functionality that allows notifications to be sent to a contact channel (e.g., telephone
number, email address). Your use of these features instructs us to send notifications (e.g., SMS/voice messages/emails) to the contact channels entered in the applicable workflows and confirms that you are authorized to send such notifications.
Carriers may charge for notifications sent or received in connection with these features.
53. Amazon Chime
53.1. End Users.
53.1.1. You may enable End Users to use Amazon Chime under your account. Termination of your account’s use of Amazon Chime will also
terminate such End Users’ paid features, Voice Connector features, and Business Calling features associated with your account or organization, and all such End Users will be converted to the free features of Amazon Chime.
53.1.2. Amazon Chime End Users can be managed by End Users with administrative privileges (“Amazon Chime Administrators”). Amazon Chime
Administrators can (a) upgrade or downgrade End Users’ Amazon Chime tier and feature set; (b) suspend End User’s access to Amazon Chime; and (c) access information about their End Users’ use of Amazon Chime, including call details.
53.2. Chime PSTN Service.
53.2.1. The term “Chime PSTN Service” as used in these Terms means the ability for you to integrate Public Switched Telephone Network
(PSTN) calling and text messaging features into your Amazon Chime experience. The Chime PSTN Service includes (a) dial in access to meetings from the PSTN via standard toll numbers and toll-free numbers; (b) dial out access from meetings to PSTN
numbers via standard toll or toll-free numbers; (c) dial in access to Amazon Chime softphones from the PSTN via standard toll or toll-free numbers; (d) dial out access from the Amazon Chime softphone to the PSTN via standard toll or toll-free
numbers; (e) receiving text and multi-media messages in Amazon Chime messaging or to APIs via standard toll or toll-free numbers; (f) sending text and multi-media messages from Amazon Chime messaging or from APIs via standard toll or toll-free
numbers; (g) dial in access to Amazon Chime Voice Connector from the PSTN via standard toll or toll-free numbers; (h) dial out access from the Amazon Chime Voice Connector to the PSTN via standard toll or toll-free numbers; (i) dial in access to APIs
from PSTN via toll or toll-free phone numbers; and (j) dial out access from APIs to the PSTN via standard toll or toll-free numbers.
53.2.2. Portions of the Chime PSTN Service, specifically Business Calling, Voice Connector, and SMS Text, are sold and provided by AMCS LLC
(“AMCS”), an affiliate of AWS, and not AWS, but are otherwise subject to the terms of the Agreement. Your invoice will state which Services that you have used are sold to you by AMCS and which are sold by AWS. Invoicing for the Chime PSTN Service is
performed by AWS on behalf of AMCS for administrative convenience. You do not have to purchase any services sold by AMCS or the Chime PSTN Service to use Amazon Chime, and you may purchase the Chime PSTN Service calling features (such as inbound or
outbound calling) separately, together, or not at all from AMCS. AWS is not a telecommunications provider and does not provide any telecommunications-related services.
53.2.3. In using the Chime PSTN Service, you will not: (a) call or text PSTN telephone numbers (whether singly, sequentially or
automatically) to generate income for you or others as a result of placing the call or texting, other than for your or your End Users’ individual business communications; or (b) engage in unusual calling patterns inconsistent with normal, individual
use.
53.3. If, as a part of Amazon Chime, AMCS provides you or your End Users with any telephone number (whether toll or toll-free), you
understand and agree that you do not own the number and you do not have the right to keep that number indefinitely. AMCS reserves the right to change, cancel, or move telephone numbers.
53.4. You and your End Users have the option to use Amazon Chime to record the applicable audio or video session along with chat and other
types of recordings (collectively, “Recording”). If you or your End Users request that an audio or video session or other communication be recorded, Amazon Chime will attempt to notify you and your End Users of the Recording by providing a brief
audio or visual notice at the time you and your End Users sign in to participate in the applicable session or communication. You and your End Users acknowledge that such notice or attempted notice followed by continued participation in the session or
communication constitutes your effective consent to the Recording. You and your End Users understand that use of any Recording may be subject to laws or regulations regarding the recording of telephone calls and other electronic communications, and
that it is your and your End Users’ responsibility to comply with all applicable laws regarding the Recording, including properly notifying all participants in a recorded session or to a recorded communication that the session or communication is
being recorded and obtain their consent. Neither AWS nor its affiliates will be liable for your or your End Users’ unlawful Recording, including failure to provide notice or obtain consent. Any notice provided by AWS to alert participants that a
session or communication is being recorded may not be relied upon by you or your End Users as definitive disclosure for your or your End Users compliance with applicable laws regarding the Recording.
53.5. Unless stated otherwise, your or your End Users’ subscription to any of Amazon Chime’s free features does not require the payment of
a subscription fee. Amazon Chime’s free features are not guaranteed for any period of time, and AWS may restrict, change, limit, or terminate the use of "free" or "basic" features of Amazon Chime by any individual, entity, or group of entities. If
you or your End Users sign up for and use paid features of Amazon Chime and then for any reason, including non-payment or breach, your or your End Users’ access to the paid services is terminated, you and your End Users may be reverted to the free
features of Amazon Chime and may no longer have access to data and other material that you or your End Users may have stored in connection with Amazon Chime, and that data and material may be deleted by AWS.
53.6. Amazon Chime, including Voice Connector features and Business Calling features, is not a traditional telephone service or a
replacement for traditional telephone service. Amazon Chime does not provide emergency calling to any emergency services personnel or public safety answering points ("Emergency Services"), such as 911, may not know the physical location of End Users,
and cannot be used to make calls if the End User experiences a power outage, cannot access the Internet, or their device has no power. You are solely responsible for any arrangements with third parties to provide your End Users with access to
Emergency Services, and AWS makes no representations or warranties regarding the use of any such arrangements with Amazon Chime. You agree to inform your End Users that may use Amazon Chime of these limitations and how they may access Emergency
Services via other means, including the alternative arrangements that you have made available. Neither AWS nor its affiliates are liable for any damages resulting from any Emergency Services call or any inability to place or complete an Emergency
Services call using Amazon Chime. You agree to indemnify and hold AWS harmless for any claims related to your or your End Users’ accounts referring or relating to any Emergency Services call or any inability to place or complete an Emergency Services
call using Amazon Chime, including related to the use of any arrangements with third parties.
53.7. Amazon Chime in Japan is sold and provided by AMCS, but is otherwise subject to the terms of the Agreement.
53.8. Amazon Chime in Singapore is sold and provided by AMCS SG PRIVATE LIMITED, an affiliate of AWS, but is otherwise subject to the terms
of the Agreement.
53.9. You understand and agree that we store all user information (including chat messages, contacts, calendar, and meeting recordings) in
the United States region(s) where the Amazon Chime service is hosted.
53.10. The Chime PSTN Service in the European Economic Area (EEA), the United Kingdom and Switzerland is sold and provided by AMCS, but is
otherwise subject to the terms of the Agreement.
54. Amazon Connect
54.1. Connect PSTN Service.
54.1.1. The term “Connect PSTN Service” as used in these Service Terms means the inbound and outbound Public Switched Telephone Network
(PSTN) calling features that you may optionally purchase to use with Amazon Connect. The Connect PSTN Service includes dial in access to Amazon Connect from the PSTN via standard toll numbers and toll-free numbers.
54.1.2. The Connect PSTN Service is sold and provided by AMCS LLC (“AMCS”), an affiliate of AWS, and not AWS, but is otherwise subject to
the terms of the Agreement. The Connect PSTN Service for Singapore is sold and provided by AMCS SG PRIVATE LIMITED (“AMCS SG”), an affiliate of AWS, and not AWS, but is otherwise subject to the terms of the Agreement. Invoicing for the Connect PSTN
Service is performed by AWS on behalf of AMCS and AMCS SG for administrative convenience. You do not have to purchase any service sold by AMCS, AMCS SG, or the Connect PSTN Service to use Amazon Connect, and you may purchase the Connect PSTN Service
calling features (such as inbound or outbound calling) separately, together, or not at all from AMCS or AMCS SG. AWS is not a telecommunications provider and does not provide any telecommunications-related services.
54.1.3. In using the Connect PSTN Service, you will not: (a) call PSTN telephone numbers (whether singly, sequentially or automatically) to
generate income for you or others as a result of placing the call, other than for your or your End Users’ individual business communications; or (b) engage in unusual calling patterns inconsistent with normal, individual use.
54.1.4. If as a part of the Amazon Connect service, AMCS or AMCS SG provides you with an inbound calling number (whether toll-free or
other), you understand and agree that you do not own the number and you do not have the right to keep that number indefinitely. AMCS and AMCS SG reserve the right to change, cancel, or move telephone numbers.
54.2. Amazon Connect is not a replacement for traditional telephone services. Amazon Connect does not support or carry emergency calling to
any emergency services personnel or public safety answering points (“Emergency Services”), such as 911, and may not determine the physical location of call agents and other End Users. You understand and agree that it is your responsibility to (a)
make alternative arrangements for you, your call agents, and your other End Users that may use Amazon Connect to access Emergency Services and (b) inform all call agents and other End Users that may use Amazon Connect of these limitations and how
they may access Emergency Services via other means, including the alternative arrangements that you have made available. Neither AWS nor its affiliates will be liable for any damages resulting from any Emergency Services call or any inability to
place an Emergency Services call using Amazon Connect. You agree to indemnify and hold AWS and its affiliates harmless for any claims referring or relating to any Emergency Services call or any inability to place an Emergency Services call using
Amazon Connect.
54.3. There are important service limitations with Amazon Connect. You must carefully review and comply with the applicable Documentation
at all times, including limitations related to call rates and frequency, automated calling, calls to certain regions and others. If you believe you will exceed any limitations for legitimate reasons, you must contact customer service ahead of time to
request applicable exceptions, which we may or may not make in our reasonable discretion. Amazon Connect does not support calls to or from facsimile machines or modems. Any caller identification service provided as a part of Amazon Connect is not
guaranteed to function at all times.
54.4. It is your responsibility to use Amazon Connect in compliance with the laws and regulations of the countries where you and your call
agents are located, including any regulations governing the use of the internet for voice communications and messaging. In India, you agree that you will not allow your call agents or other End Users located in India to use Amazon Connect to place
calls to Indian telephone numbers or otherwise to third parties located in India.
54.5. You and your End Users have the option to request that Amazon Connect record an applicable audio session along with chat and other
types of recordings (collectively, “Recording”). You and your End Users understand that the making of or use of any Recording may be subject to laws or regulations regarding the recording of telephone calls and other electronic communications or of
communications generally, and that it is your and your End Users’ responsibility to comply with all applicable laws regarding any Recording, including properly notifying all participants in a recorded session or to a recorded communication that the
session or communication is being recorded and obtain their consent. Neither AWS nor its affiliates will be liable for your or your End Users’ unlawful Recording, including failure to provide notice or obtain consent.
54.6. Amazon Connect Machine Learning Services. “Amazon Connect ML Services” means, collectively, Contact Lens for Amazon Connect and
Amazon Connect Customer Profiles Identity Resolution (Preview). “Amazon Connect ML Content” means Your Content that is processed by an Amazon Connect ML Service. The following terms apply to your use of Amazon Connect ML Services:
(a) You agree and instruct that: (i) we may use and store Amazon Connect ML Content to maintain and provide Amazon
Connect ML Services (including development and improvement of Amazon Connect ML Services) and to develop and improve AWS and affiliate machine-learning and artificial intelligence technologies; and (ii) solely in connection with the development and
improvement described in clause (i), we may store your Amazon Connect ML Content in AWS regions outside the AWS regions where you are using Amazon Connect ML Services. By contacting AWS Support and following the process provided to you, you may
instruct AWS not to use or store Amazon Connect ML Content to develop and improve Amazon Connect ML Services or technologies of AWS and affiliates.
(b) You are responsible for providing legally adequate privacy notices to End Users of your products or services that
use Amazon Connect ML Services and obtaining any necessary consent from such End Users for the processing of Amazon Connect ML Content and the storage, use, and transfer of Amazon Connect ML Content as described under this Section. You represent to
us that you have provided all necessary privacy notices and obtained all necessary consents. You are responsible for notifying us in the event that any Amazon Connect ML Content stored by Amazon Connect ML Services must be deleted under applicable
law.
(c) You will not, and will not allow any third-party to, use Amazon Connect ML Services to, directly or indirectly,
develop or improve a similar or competing product or service.
54.7. Amazon Connect Voice ID
54.7.1. If you use Amazon Connect Voice ID in a jurisdiction that has legal requirements related to the collection, possession, processing,
use, disclosure, storage of any biometric information or identifiers (“biometric data”), including without limitation the Illinois Biometric Information Privacy Act, the Texas Capture or Use of Biometric Identifier Act, the Washington Biometric
Identifier statute, the California Consumer Privacy Act, and the EU General Data Protection Regulation or any other similar privacy or biometric laws, then in addition to complying with all applicable legal requirements you must obtain all necessary
rights, consents (including informed written consents and explicit consents, as required by law), and releases in advance for AWS to collect, possess, process, use, and store biometric data on your behalf.
If your caller is a resident of or located in Illinois, and you are subject to the Illinois Biometric Information Privacy Act (“BIPA”), the
following terms and requirements also apply when you use the service:
(a) Written policy and retention schedule. Except as required or permitted by applicable law. AWS will permanently destroy biometric data
when the initial purpose for collecting or obtaining such data has been satisfied, within three years after the caller's last interaction with the Services, or after being informed by you that the biometric data should be destroyed, whichever occurs
first.
(b) Written notice and release. You must provide the following information in writing to, and obtain an executed written release as
required by BIPA from, each caller in Illinois: “[Your company name (“Company”)] uses Amazon Web Services as a service provider for voice verification services. Biometric identifiers and biometric information (“biometric data”) may be collected,
stored, and used by Amazon Web Services on behalf of [Company] for the purpose of comparing the voice of a caller with a voice that has been previously recorded, for fraud and security purposes. Biometric information that is generated as part of this
process will be retained for up to three years after your last interaction with [Company], or longer only if allowed or required by applicable law, and thereafter destroyed. Except as required or permitted by applicable law, Amazon Web Services will
permanently destroy biometric data that is stored on [Company’s] behalf when the initial purpose for collecting or obtaining such data has been satisfied, within three years after your last interaction with the services, or after being informed by
[Company] that such data should be destroyed, whichever comes first. Biometric information may be disclosed between [Company] and Amazon Web Services as necessary to provide and receive this service. You hereby provide your express, informed, written
release and consent for [Company] and Amazon Web Services to collect, use, and store your biometric data as described herein.”
If you do not comply with these requirements or otherwise comply with all applicable laws, you may not use the service. You agree to
cooperate with AWS to confirm compliance with all applicable laws and these requirements upon AWS’s request, including by providing AWS with verification that you have obtained the required written release under BIPA from end users. You will defend
and indemnify AWS for any and all damages, liabilities, penalties, fines, costs, and expenses (including reasonable attorney fee’s) arising out of or in any way related to your direct or indirect failure to meet the requirements of this section or
comply with applicable laws, and will promptly provide AWS with proof of insurance coverage upon request. You hereby release all AWS from all damages, liabilities, penalties, fines, costs, and expenses (including reasonable attorneys’ fees) in
connection with any claim, action, audit, suit, investigation, or other proceedings related to your failure to meet such requirements or to otherwise comply with applicable law.
54.7.2. You will not, and will not allow any third-party to, use Amazon Connect Voice ID to, directly or indirectly, develop or improve a
similar or competing product or service.
54.7.3. Amazon Connect Voice ID uses machine learning models that generate predictions based on patterns in data. Output generated by
Amazon Connect Voice ID is probabilistic and should be evaluated for accuracy as appropriate for your use case, including by employing human review of the output or combining it with other verification factors. You and your End Users are responsible
for all decisions made, advice given, actions taken, and failures to take action based on your use of Amazon Connect Voice ID.
55. AWS Greengrass
Your use of the AWS Greengrass Core is governed by the AWS Greengrass Core Software License.
56. AWS Migration Hub
When you use AWS Migration Hub, data that is scanned by AWS Migration Hub in your on-premises computing resources will be deemed Your
Content.
57. Amazon MQ (AMQ)
If your messages sent through Amazon MQ are blocked, delayed, or prevented from delivery by reasons outside of our control, your payment
obligations continue.
58. AWS Media Services
58.1. The distribution of files created by AWS Media Services may require that you obtain license rights from third parties, including
owners or licensors of certain third party audio and video formats. You are solely responsible for obtaining such licenses and paying any necessary royalties or fees.
58.2. AWS Elemental MediaConnect in Japan is sold and provided by AMCS LLC, an affiliate of AWS, and not AWS, but is otherwise subject to
the terms of the Agreement.
59. Alexa for Business
59.1. “Alexa for Business” means the Alexa for Business
Service as described in the Documentation and is subject to the terms of the Agreement. If you use an Amazon device with Alexa for Business, you are also subject to and agree to the Amazon Device Terms of Use, except terms for Alexa voice services, which are subject to the terms of the Agreement.
59.2. You agree and instruct that: (a) we may use and store Your Content that is processed by Alexa for Business (“Alexa Content”) to
maintain and provide Alexa for Business (including development and improvement of Alexa for Business) and to develop and improve AWS and affiliate machine learning and artificial intelligence technologies; and (b) solely in connection with the usage
and storage described in clause (a), we may store your Alexa Content in AWS regions outside the AWS regions where you are using Alexa for Business.
59.3. You are responsible for protecting your Alexa for Business devices, including using physical and logical security, firewalls, and
other network security tools as appropriate.
59.4. Alexa for Business may include services or applications provided by a third party. If you utilize third party services with Alexa for
Business, you agree that we may exchange related information with that third party service. Your or your End Users’ use of any third party service is subject to the Agreement and any third party terms applicable to such third party service. When
using a third party service, you are responsible for any information you or your End Users provide to the third party, and AWS has no responsibility or liability for third party services. Providers of third party services may change or discontinue
the functionality or features of their service. Alexa for Business may allow you or your End Users to interact with or operate other products, such as lights, appliances, or video conferencing equipment, and AWS has no responsibility or liability for
such products.
59.5. Alexa for Business is not intended for use in, or in association with, the operation of any hazardous environments or critical
systems that may lead to serious bodily injury or death or cause environmental or property damage, and you are solely responsible for liability that may arise in association with such use.
59.6. You may not market, advertise, or direct Alexa for Business towards anyone under the age of 18.
59.7. Certain Alexa-related communication services, such as
the ability to send and receive messages, calls, and connect with other users (collectively, “Alexa Communication”), are sold and provided by AMCS LLC ("AMCS"), an affiliate of AWS, not AWS, but are otherwise subject to the terms of the Agreement.
Your use of Alexa Communication is also subject to the Alexa Communication Usage Guidelines, which are part of these terms. You, your End Users, or other call participants may be able to ask Alexa for Business to help with certain functions during a call, such as “Alexa, volume up” and “Alexa, hang up.” Certain
Alexa Communication services are provided by our third party service providers, and we may provide them with information, such as telephone numbers, to provide those services.
59.8. Alexa Calling and Messaging are not a replacement for traditional two-way telephone or mobile phone service, and do not function as
such. You acknowledge that Alexa Calling and Messaging do not support or carry emergency calling to any emergency services personnel or public safety answering points (“Emergency Services”), such as 911, and cannot determine the physical location of
your devices or your End Users. Alexa Calling and Messaging are not designed or intended to be used to send or receive emergency communications to any police, fire department, hospital, or any other service that connects a user to a public safety
answering point. You should ensure you can contact your relevant emergency services providers through a mobile, landline telephone, or other service acceptable to your local 911 provider. You understand and agree that it is your responsibility to:
(a) make alternative arrangements for you and your End Users that may use Alexa Calling and Messaging to access Emergency Services and (b) inform all End Users that may use Alexa Calling and Messaging and Alexa for Business of these limitations and
how they may access Emergency Services via other means, including the alternative arrangements that you have made available. Neither AWS nor its affiliates will be liable for any damages resulting from any Emergency Services call or any inability to
place an Emergency Services call using Alexa Calling and Messaging and Alexa for Business. You agree to indemnify and hold AWS and its affiliates harmless for any claims referring or relating to any Emergency Services call or any inability to place
an Emergency Services call using Alexa Calling and Messaging and Alexa for Business.
59.9. You and recipients of your or your End Users’ calls or messages may be required to pay carrier fees for data usage. AMCS has no
responsibility for such fees.
60. Amazon SageMaker
60.1. You are responsible for providing legally adequate privacy notices to End Users of your products or services that use Amazon
SageMaker (including End Users in your private workforce when using Amazon SageMaker Ground Truth) and obtaining all necessary consents from such End Users.
60.2. By using NVIDIA Corporation’s software, toolkits and
drivers, you agree to be bound by the terms and conditions of the NVIDIA Cloud End User License Agreement.
60.3. Amazon SageMaker is not intended for use in, or in association with, the operation of any hazardous environments or critical systems
that may lead to serious body injury or death or cause environmental or property damage, and you are solely responsible for liability that may arise in connection with any such use.
60.4. When using the public workforce of Amazon SageMaker Ground Truth: (a) you may not provide datasets that contain protected health
information, personally identifying information, or other personal data, (b) you may not provide datasets that contain adult content without marking it as containing adult content, and (c) you acknowledge and agree that Your Content provided to the
public workforce may be moved outside of the AWS region where you are using Amazon SageMaker Ground Truth.
60.5. Amazon Sagemaker Clarify uses statistical analysis techniques to generate metrics that can be used to evaluate statistical bias in
data and machine learning models, and to explain how models generate predictions. The output provided by Amazon SageMaker Clarify is not determinative of the existence or absence of statistical bias, or a comprehensive answer for how a model
generates predictions. Such output is not legal advice and should be independently evaluated as appropriate for your use case.
60.6 Amazon SageMaker Edge Manager collects performance and usage metrics and data regarding your use of the Service, including model
version, inference and upload times, and diagnostic data. We may use these metrics and data to provide, maintain, and improve the quality and feature sets of the Services and AWS Content.
60.7 We may change SageMaker Savings Plan (“SM Savings Plan”) pricing or terminate the program at any time. Any price changes will not
apply to previously purchased SM Savings Plans. All amounts paid in connection with SM Savings Plans are nonrefundable, except that if we terminate the Agreement other than for cause, or terminate the SM Savings Plan program, we will refund you a pro
rata portion of any up-front fee paid. SM Savings Plans are nontransferable and noncancellable, so you will be charged for the duration of the term you selected, even if you terminate the Agreement. Upon expiration or termination of the term of SM
Savings Plans, the reserved pricing will expire and standard on-demand usage prices will apply. You are responsible for determining if you are subject to any limitations arising from the purchase or use of the SM Savings Plan and for complying with
any applicable laws, policies, terms or conditions governing your payment of up-front fees, including any fiscal or appropriation laws, or other policies or restrictions governing up-front payments for goods or services.
61. AWS AppSync
You agree not to and will not attempt to perform any network discovery or load testing of Your Content inside AWS AppSync unless expressly
authorized by us in writing.
62. Amazon Sumerian
62.1. Amazon Sumerian consists of an integrated development
environment and related assets and tools we make available here (collectively,
“Sumerian Materials”).
62.2. In addition to the rights granted to AWS Content under the Agreement, we also grant you a limited, revocable, non-exclusive,
non-sublicensable (except to End Users as provided below), non-transferrable license to do the following during the Term:
(a) Use, reproduce, modify, and create derivative works of the Sumerian Materials to develop and support 3D, augmented reality (“AR”) and
virtual reality (“VR”) applications that run on AR- or VR- enabled (or compatible) platforms, mobile devices and web browsers (each such work, a “Sumerian Scene”);
(b) Use, reproduce, modify, create derivative works of, publicly display, publicly perform, and distribute (including via third party
distributors as long as such distribution is done through the applicable Sumerian Scenes’ published URL) to End Users the Sumerian Materials (including any permitted modifications and derivatives) as part of a Sumerian Scene; and
(c) Sublicense the rights set forth in this Section 62.2 to your End Users solely for the purpose of enabling your End Users to use and
modify your Sumerian Scene.
62.3. Each Sumerian Scene must provide material content or functionality beyond that provided by the Sumerian Materials, and the Sumerian
Materials must be integrated into each Sumerian Scene such that they are not separately usable by End Users.
63. AWS RoboMaker
63.1. AWS RoboMaker includes an integrated development and
simulation environment and related assets and tools we make available here (collectively,
“RoboMaker Materials”).
63.2. In addition to the rights granted to AWS Content under the Agreement, we also grant you a limited, revocable, non-exclusive,
non-sublicensable (except to End Users as provided below), non-transferrable license to do the following during the Term:
(a) You may use, reproduce, modify, and create derivative works of the RoboMaker Materials to develop and support AWS RoboMaker test and
simulation environments that run only on your AWS or your on-premises computing resources (each such simulation environment, a “RoboMaker Simulation”).
(b) You may use, reproduce, modify, create derivative works of, publicly display, publicly perform, and distribute to End Users the
RoboMaker Materials (including any permitted modifications and derivatives) as part of a RoboMaker Simulation.
(c) You may sublicense the rights set forth in this Section 63.2 to your End Users solely for the purpose of enabling your End Users to use
and modify your RoboMaker Simulation.
63.3. Each RoboMaker Simulation must provide material content or functionality beyond that provided by the RoboMaker Materials, and the
RoboMaker Materials may not be distributed to End Users except as part of a RoboMaker Simulation.
64. Amazon FSx
Use of Microsoft Software on Amazon FSx for Windows File Server is subject to Section 5.1 above. Microsoft is an intended third-party
beneficiary of this Section 64, with the right to enforce its provisions.
65. AWS Security Assurance Services
65.1. “AWS Security Assurance Services” are advisory and consulting services that AWS provides under a statement of work (“SOW”) to help
you run regulated data workloads using other Services. AWS Security Assurance Services are provided by AWS Security Assurance Services LLC (“SAS”) or certain of its affiliates. SAS is an affiliate of AWS. AWS Security Assurances Services are
“Services” for the purposes of the Agreement.
65.2. SAS or any of its affiliates may enter into a SOW with you to provide AWS Security Assurance Services. For the purposes of each SOW,
the term “SAS” in the SOW and the term “AWS” or “SAS” in the Agreement refer only to the SAS entity that executes the SOW, and no other AWS or SAS entity has any obligations under such SOW. Each SOW (together with the Agreement as amended by such
SOW) is intended by the parties as a final, complete and exclusive expression of the terms of their agreement and supersedes all prior agreements and understandings (whether oral or written) between the parties with respect to the subject matter of
that SOW.
65.3. SAS, or one of its affiliates on behalf of SAS, will invoice you monthly for the AWS Security Assurances Services. Payments for AWS
Security Assurances Services are not refundable.
65.4. SAS does not provide legal advice. You are responsible for making your own assessment of whether your use of the Services meets
applicable legal and regulatory requirements.
65.5. Other than Third Party Content, Content that SAS provides as part of the AWS Security Assurance Services is AWS Content. You are
solely responsible for testing, deploying, maintaining and supporting Content provided or recommended by SAS.
65.6. SAS may develop Content consisting of either (a) documents and diagrams (“Documents”) or (b) software (in source or object code
form), sample code, or scripts (“Software”) for you as part of the AWS Security Assurance Services (such Documents and Software, “Developed Content”). Subject to any non- disclosure agreement in effect between you and SAS, SAS is not precluded from
developing, using, or selling products or services that are similar to or related to the Developed Content. Any Developed Content provided to you by SAS as part of the AWS Security Assurance Services under a SOW is licensed under the following
terms:
SAS licenses any Documents to you under the Creative Commons Attribution 4.0 International License (CC-BY 4.0); and
SAS licenses any Software to you under the Apache License, Version 2.0.
65.7. Some Developed Content may include AWS Content or Third Party Content provided under a separate license. In the event of a conflict
between Section 65.6 above and any separate license, the separate license will control with respect to such AWS Content or Third Party Content.
65.8. Any materials or information that you own or license from a third party and provide to SAS for the purposes of the AWS Security
Assurance Services are Your Content.
66. Amazon WorkLink
66.1. You and your End Users may only use the Amazon WorkLink client software on devices owned or controlled by you or your End Users and
solely to access Your Content for internal business purposes. Each End User may be permitted to use a limited number of devices or sessions in any calendar month.
66.2. As part of regular operations, Amazon WorkLink may access your End Users’ devices that are provisioned as part of the Amazon WorkLink
setup to perform configurations, health checks, and diagnostics on a regular basis. During the performance of these tasks, Amazon WorkLink will only retrieve performance, log data, and other information related to the operation and management of the
Service.
67. AWS Training
67.1. “AWS Training” means the training programs that AWS provides in connection with the Services, and includes instructor-led and
self-paced digital classes, labs, and other training sessions and materials. AWS Training is a “Service” for purposes of the Agreement. To arrange private instructor-led AWS Training for your employees or others, AWS or any of its affiliates may
enter into a training order with you (a “Training Order”). References to “AWS” in each Training Order mean the AWS entity that executes it, and no other AWS entity will have any obligations under such Training Order. To the extent there is a conflict
between the Agreement and a Training Order, the Training Order controls.
67.2. The additional terms and conditions here apply to AWS Training provided in the applicable jurisdictions.
68. AWS Certification
“AWS Certification Program” means the program through which
AWS makes available professional certifications and other credentials in connection with the Services. The AWS Certification Program is a “Service” for purposes of the Agreement. To participate in the AWS Certification Program, you must agree to
the Certification Program Agreement (“CPA”). To the extent there is a
conflict between the Agreement and the CPA, the CPA controls.
69. Migration Evaluator
Migration Evaluator collects performance and usage metrics and data about your virtual machine image(s) and IT infrastructure; software
packages and applications; system, equipment, and application configuration, processes and performance; network configurations, communications and dependencies; and the installation and operation of Migration Evaluator and its components. We may use
these metrics and data to provide, maintain, and improve the quality and feature sets of the Services and AWS Content.
70. AWS IQ
70.1. AWS IQ Experts (“Providers”) offer their services (“Provider Services”) as independent contractors, and are not employees of you or
us. AWS is not a party to the agreement between you and any Providers for their Provider Services, is not responsible or liable for Provider Services, and does not guarantee the quality or accuracy of Provider Services. For avoidance of doubt, any
certification that a Provider obtains from us only certifies that the Provider has passed a test intended to evaluate the Provider’s proficiency and understanding of a particular AWS Service or area of knowledge to which that certification relates,
and is not a guarantee that the Provider Services will be performed at any particular level of quality, speed, or to your specific requirements.
70.2. AWS charges service fees for transactions between you and Providers on the AWS IQ marketplace. AWS only collects these service fees
if you and a Provider pay and receive payment through the AWS IQ marketplace. Therefore, for 24 months from the time you identify a Provider through AWS IQ, you agree to use AWS IQ as your exclusive method to pay for Provider Services. For avoidance
of doubt, if you did not identify a Provider through use of AWS IQ, such as if you worked with a Provider prior to connecting with that Provider on AWS IQ, then this section does not apply.
70.3. You acknowledge and agree that we may use information from AWS IQ listings, proposals, chat communications, and additional terms
proposed or agreed to between you and Providers on AWS IQ to develop and improve the quality and feature set of AWS IQ.
70.4. If you choose to grant Providers access to your AWS account, you are solely responsible and liable for (a) any actions taken by the
Provider in your account; (b) the Provider’s use of Your Content or use of the Services or AWS Content; (c) ensuring the Provider complies with your obligations under the Agreement, the Acceptable Use Policy, any other Policies, and applicable laws;
(d) ensuring the Provider does not use the Services or AWS Content in any manner or for any purpose other than as expressly permitted by the Agreement; and (e) ensuring Provider does not attempt to (i) modify, distribute, alter, tamper with, repair,
or otherwise create derivative works of any AWS Content or other Content included in the Services (except to the extent Content included in the Services is provided to you under a separate license that expressly permits the creation of derivative
works), (ii) reverse engineer, disassemble, or decompile the Services or AWS Content or apply any other process or procedure to derive the source code of any software included in the Services or AWS Content (except to the extent applicable law
doesn’t allow this restriction), (iii) access or use the Services in a way intended to avoid incurring fees or exceeding usage limits or quotas, or (iv) resell or sublicense the Services or AWS Content. You will immediately revoke Provider’s access
to your AWS account if you become aware of any violation of your obligations under the Agreement caused by a Provider with access to your AWS account. If you use AWS IQ’s feature that allows you to grant a Provider access to your account, AWS may,
but is not obligated to, review activities in your account for security purposes, and may revoke the Provider’s access at any time.
70.5. You release us (and our agents and employees) from claims, demands, and damages (actual or consequential) of any and every kind and
nature, known or unknown, suspected or unsuspected, disclosed and undisclosed, arising out of or in any way connected with your use of the AWS IQ marketplace.
71. RDS on VMware
The RDS on VMware Service is an AWS managed service offering
enabling Customers to use RDS on a variety of customer-provided hardware and software configurations. To provide you with managed services outside of the AWS Network, AWS needs access to the virtual machines you select for use with RDS on VMware.
AWS will not access the virtual machines that you select to use with RDS on VMware except as necessary to maintain and provide the Service. Such access will be secured, logged and limited. You consent to AWS’s ability to access and manage these
virtual machines. RDS on VMware Software licensed by AWS is AWS Content. Software licensed by VMware is Third Party Content. Your use of VMware software is governed by the VMware End User Terms and Conditions. AWS may share Account Information, logs or other Service Attributes with VMware in order to provide support and
other services initiated by you or investigate fraud, abuse or violations of the Agreement. You agree to remain enrolled in AWS Support at the Business or Enterprise level (or its successor or higher level) during the entire period of your use of
the RDS on VMware Service. You are responsible for obtaining all required on-premises licenses and complying with all applicable licensing requirements for software that you install.
72. AWS CodeStar Notifications
AWS CodeStar Notifications utilizes one or more of the following: Amazon Simple Notification Service (Amazon SNS), Amazon Simple Email
Service (SES), and/or AWS Chatbot. If utilized, your use of AWS CodeStar Notifications is also subject to the terms that govern those Services.
73. AWS Data Exchange
73.1. The AWS Marketplace Service Terms apply to your use of AWS Data Exchange. Your use of Content obtained through AWS Data Exchange
remains subject to the AWS Acceptable Use Policy, even if used outside of our Services.
73.2. You may not use any Content obtained through AWS Data Exchange that was anonymized, de-identified, or otherwise disassociated from an
identifiable person in any manner that would attempt to re-identify, de-anonymize, or otherwise associate such Content with an identifiable person.
74. AWS End of Support Migration Program for Windows Server
74.1. The AWS End of Support Migration Program (EMP) for Windows Server Service, including any tools provided for the EMP Service (which
are AWS Content), may be used solely for the purpose of migrating Your applications or other Content to Amazon EC2 or other AWS Services.
74.2. You acknowledge that the EMP Service is designed to migrate your applications and other Content to AWS Services and you may not use
the EMP Service, including any tools provided for the EMP Service, for ongoing use outside of the AWS Services (e.g., on your on-premises systems), except that you may temporarily run your applications or other Content on your on-premises systems
utilizing the EMP Service for up to 30 days to verify functionality prior to migration.
74.3. You consent to the collection and provision of the data collected by the EMP Service and its associated software and components, including information about your virtual machine image(s); software packages; system, equipment, and application configuration, processes and performance; network configurations, communications and dependencies; relationships between the foregoing; and information about the installation and operation of the EMP Service and its associated software and components (“Migration Information”). Migration Information may be used to operate, maintain, and improve the quality and feature set of the Services.
74.3. You consent to the collection and provision of the data collected by the EMP Service and its associated software and components, including information about your virtual machine image(s); software packages; system, equipment, and application configuration, processes and performance; network configurations, communications and dependencies; relationships between the foregoing; and information about the installation and operation of the EMP Service and its associated software and components (“Migration Information”). Migration Information may be used to operate, maintain, and improve the quality and feature set of the Services.
75. Amazon Fraud Detector
75.1. AWS is not a consumer reporting agency as defined by the Fair Credit Reporting Act, 15 U.S.C. §1681 et seq. (“FCRA”), or the
equivalent under similar laws, and Amazon Fraud Detector does not include or provide “consumer reports” as defined in the FCRA. You may not use Amazon Fraud Detector to determine any person’s financial status, financial history, creditworthiness, or
eligibility for insurance, housing, or employment.
75.2. You will not, and will not allow any third-party to, use Amazon Fraud Detector to, directly or indirectly, develop or improve a similar or competing product or service.
75.3. You agree and instruct that: (a) we may use, and store Your Content that is processed with Amazon Fraud Detector to maintain and provide the Service (including development and improvement of the Service) and to develop and improve other AWS fraud prevention services; and (b) solely in connection with the usage and storage described in clause (a), we may store such Content in an AWS region outside of the AWS region where you are using Amazon Fraud Detector. By following a process we provide you, you may instruct AWS not to use or store Your Content processed by Amazon Fraud Detector to develop and improve Amazon Fraud Detector or other AWS fraud prevention services.
75.2. You will not, and will not allow any third-party to, use Amazon Fraud Detector to, directly or indirectly, develop or improve a similar or competing product or service.
75.3. You agree and instruct that: (a) we may use, and store Your Content that is processed with Amazon Fraud Detector to maintain and provide the Service (including development and improvement of the Service) and to develop and improve other AWS fraud prevention services; and (b) solely in connection with the usage and storage described in clause (a), we may store such Content in an AWS region outside of the AWS region where you are using Amazon Fraud Detector. By following a process we provide you, you may instruct AWS not to use or store Your Content processed by Amazon Fraud Detector to develop and improve Amazon Fraud Detector or other AWS fraud prevention services.
76. Amazon Augmented AI
76.1. You are responsible for providing legally adequate privacy notices to End Users of your products or services that use Amazon
Augmented AI (including End Users in your private workforce) and obtaining all necessary consents from such End Users. You represent to us that you have provided all necessary privacy notices and obtained all necessary consents.
76.2. When using the Amazon Mechanical Turk workforce of Amazon Augmented AI: (a) you may not provide data or content that contains protected health information or other information that is identifiable to a specific person, and (b) you acknowledge and agree that Your Content provided to the Amazon Mechanical Turk workforce may be moved outside of the AWS region where you are using Amazon Augmented AI.
76.2. When using the Amazon Mechanical Turk workforce of Amazon Augmented AI: (a) you may not provide data or content that contains protected health information or other information that is identifiable to a specific person, and (b) you acknowledge and agree that Your Content provided to the Amazon Mechanical Turk workforce may be moved outside of the AWS region where you are using Amazon Augmented AI.
76.3. When using the third party vendor workforce option of Amazon Augmented AI, you are responsible for ensuring that the vendor meets any
compliance requirements applicable to any personal data or confidential information in your data or content. You may not share data or content that contains protected health information with the third party vendor workforce.
77. Amazon Honeycode
77.1. End User Permissions. When you access a Honeycode Team established under another Amazon Honeycode account, you will be an End User
for purposes of Honeycode.
77.1.1. Honeycode allows you to collaborate with other End Users by inviting them to a team that you establish under
your Honeycode account (“Honeycode Team”). You may invite and enable End Users to access certain Honeycode features under your Honeycode Team(s). You may grant these End Users permissions to create, edit, and share your Honeycode workbooks, apps,
automations, and other Honeycode assets; and permissions to invite additional End Users to do the same. You are responsible for the conduct of End Users on your Honeycode Team(s), including the content they create, and for maintaining all End User
permissions for purposes of data security and access. You are responsible for all fees you and End Users on your Honeycode Team(s) may accrue for using Honeycode or any affiliated service.
77.1.2. You or End Users you delegate with administrative privileges over certain Honeycode features (“Honeycode Team
Administrators”) may manage access, use, and permissions within your Honeycode Team. Honeycode Team Administrators may also control End User access to certain administrative functionality, including changing, adding, or removing permissions, or
changing billable tiers.
77.1.3. Unless you delegate your permissions of your Honeycode Team, you agree that termination of your Honeycode
account or deletion of any of your Content in Honeycode, whether by you or by us, may also terminate your End Users’ access to your Content and may delete any associated End User Content.
77.2. Nonuse. If during the previous 3 months you have registered no usage of your Honeycode account, we may delete, without liability of
any kind, your account and any associated Content, upon 30 days prior notice to you.
77.3. Workbooks for Data Storage. You may only use Honeycode for its intended purpose as set forth herein and in the Documentation. Any
other use, including but not limited to, creating and maintaining multiple workbooks for the primary purpose of storing and accessing data, is not permitted and may result in us deleting your Content.
78. Wavelength Zones/Local Zones
For the Service Level Agreements applicable to any Services or Service workloads that you run in Wavelength Zones or Local Zones, Service
Credits are calculated as a percentage of the total charges paid by you (excluding one-time payments such as upfront payments made for Reserved Instances) for the individual Service that runs in the affected Wavelength Zones or Local Zones,
respectively, for the monthly billing cycle in which the unavailability occurred.
79. Amazon Braket
79.1. If you use Amazon Braket to access quantum computing
hardware operated by one of the third-party hardware providers listed here (each
a “Hardware Provider”), you: (1) acknowledge that the Content you provide in connection with your use of Amazon Braket may be processed by the Hardware Provider outside of facilities operated by AWS; and (2) authorize AWS to transfer such Content
to the Hardware Provider for processing.
79.2. We may change, deprecate or discontinue any Service Offering that relates to services offered by any Hardware Provider at any time
without prior notice to you.
80. Amazon Elastic Container Registry Public
80.1 Amazon Elastic Container Registry Public (Amazon ECR Public) is a public registry that allows you to upload and share Content that
anyone with or without an AWS account (“Registry Users”) can download and use. In order for you to upload and share Content through Amazon ECR Public, you must grant AWS and Registry Users a license to the Content in accordance with Sections 80.2 and
80.3 below.
80.2 By uploading Content to Amazon ECR Public, you hereby grant AWS and its Affiliates a worldwide, non-exclusive, fully paid-up,
royalty-free license to store, parse, copy, reproduce (including by making mechanical reproductions), reformat, transmit, display, and perform the Content in connection with providing Amazon ECR Public, and, with respect to any Third-Party Content
you upload that is subject to an open source or Third-Party Content license, you represent and warrant that the terms for such Third-Party Content permit AWS and its Affiliates to store, parse, copy, reproduce (including by making mechanical
reproductions), reformat, transmit, display, and perform the Content in connection with providing Amazon ECR Public.
80.3 You may specify the terms under which you license Your Content to Registry Users. If you do not specify such terms when you upload
Your Content, you hereby grant to any other Registry User a non-exclusive license to access, download, use, modify or otherwise exploit Your Content for any personal or business purposes. If you upload and share any Third-Party Content to Amazon ECR
Public, you are responsible for ensuring that you have the rights and licenses necessary to do so.
81. Industrial AI Services
81.1 “Industrial AI Services” means, collectively, Amazon Lookout for Vision, Amazon Lookout for Equipment, Amazon Monitron, and AWS
Panorama. “Industrial AI Content” means Your Content that is processed by an Industrial AI Service.
81.2 Industrial AI Services use machine learning models that generate predictions based on patterns in data. Output generated by a machine
learning model is probabilistic and should be evaluated for accuracy as appropriate for your use case, including by employing human review of such output. Output provided by Amazon Lookout for Equipment and Amazon Monitron should not be used as a
substitute for regular, scheduled maintenance on machinery and equipment. You and your End Users are responsible for all decisions made, advice given, actions taken, and failures to take action based on your use of Industrial AI Services.
81.3 You agree and instruct that for Amazon Lookout for Vision, Amazon Lookout for Equipment and Amazon Monitron: (a) we may use and store
Industrial AI Content that is processed by each of the foregoing Industrial AI Services to maintain and provide the applicable Industrial AI Service (including development and improvement of such Industrial AI Service) and to develop and improve AWS
and affiliate machine-learning and artificial-intelligence technologies; and (b) solely in connection with the development and improvement described in clause (a), we may store such Industrial AI Content in an AWS region outside of the AWS region
where you are using such Industrial AI Service. You may instruct AWS not to use and store Industrial AI Content processed by an Industrial AI Service to develop and improve that Service or technologies of AWS or its affiliates by (i) for Amazon
Monitron, contacting AWS Support and following the process provided to you, and (ii) for Amazon Lookout for Vision and Amazon Lookout for Equipment, by configuring an AI services opt-out policy using AWS Organizations.
81.4 You are responsible for providing legally adequate privacy notices to End Users of your products or services that use any Industrial
AI Service and obtaining any necessary consent from such End Users for the processing of Industrial AI Content and the storage, use, and transfer of Industrial AI Content as described under this Section.
81.5 You will not, and will not allow any third-party to, use Industrial AI Services to, directly or indirectly, develop or improve a
similar or competing product or service. The foregoing does not apply to AWS Panorama to the extent you are developing hardware appliances that integrate with AWS Panorama, to Amazon Lookout for Equipment, or to Amazon Monitron.
81.6 Industrial AI Services are not intended for use in, or in association with, the operation of any hazardous environments or critical
systems that may lead to serious bodily injury or death or cause environmental or property damage, and you are solely responsible for liability that may arise in connection with any such use.
81.7 Notwithstanding any other provision of the Agreement, you may incorporate into your programs or applications, and distribute as
incorporated in such programs or applications, the binary code that we distribute for Industrial AI Services with the AWS Mobile SDKs.
82. Amazon Location Service (Preview)
82.1 When you use a feature of Amazon Location Service that is
identified to you as being provided by a third-party geolocation service provider listed here (each such feature, including Maps, Places, and Routing (when available), a “Geolocation Provider Feature,” and each such provider, a "Geolocation Provider”), you authorize AWS to transmit your request parameters (e.g.,
location searches) to the Geolocation Provider for processing which may be outside of the AWS region in which your request was made.
82.2 AWS may change, deprecate, or discontinue any Geolocation Provider or Geolocation Provider Feature at any time upon notice to you.
82.3 You may not:
a. Scrape, systematically collect, or duplicate the data provided to you from Amazon Location Service (e.g., map tiles,
forward and reverse geocodes, routes, drive times/isochrones, and other data) (collectively, “Location Data”), including for the purpose of avoiding use of Amazon Location Service.
b. Use Location Data to create or offer a product or service with features that are similar to the services of the
Geolocation Providers, where such product or service does not contain substantial, independent value and features beyond the services of the Geolocation Providers.
c. Incorporate Amazon Location Service, including any Location Data, into any integrated in-vehicle infotainment system,
any systems for autonomous control of the vehicle, or any real-time dynamic routing or route optimization applications installed on in-vehicle hardware. In-vehicle mobile device applications, including ones mirroring onto a vehicle’s onboard display
system, are permitted.
d. Use, incorporate, modify, distribute, provide access to, or combine any Location Data in a manner that would subject
the Location Data to open-source or open-database license terms that require any part of the Location Data to be disclosed to third parties, licensed to third parties for the purpose of making derivative works, or redistributed to third parties at no
charge.
e. Store or cache Location Data, except (i) for geocoding and reverse-geocoding results (other than as prohibited in
Section 82.4.a) when you indicate the result will be stored in the API parameter or (ii) to comply with legal, regulatory, or reasonable internal record-keeping requirements.
f. Use Amazon Location Service for any hazardous, unsafe, or illegal activities, including any use in, or association
with, any hazardous environments or critical systems that may lead to serious bodily injury or death or cause environmental or property damage. You are solely responsible for liability that may arise in connection with any such use.
g. Use Location Data to develop paper maps or an atlas (digital or otherwise) for purposes of sale or distribution to
others.
h. Place your company name or marks, or any third-party advertisements, on or in the Location Data (e.g., on a map
display).
82.4 In addition to the restrictions in Section 82.3, if you use HERE as your Geolocation Provider, you may not:
a. Store or cache any Location Data for Japan, including any geocoding or reverse-geocoding results.
b. Layer routes from HERE on top of a map from another third-party provider, or layer routes from another third-party
provider on top of maps from HERE.
82.5 If you use Amazon Location Service without any Geolocation Provider Feature, you may use any pricing plan. If you use a Geolocation
Provider Feature for Mobile Asset Management or Mobile Asset Tracking, (a) you may only use Mobile Asset Management and Mobile Asset Tracking (as applicable) pricing plans for such usage and (b) you will ensure each of your Mobile Assets uses Amazon
Location Service’s Tracking feature with a distinct device ID at least once in any month that you are using Amazon Location Service to track or manage such Mobile Asset. If you use a Geolocation Provider Feature for a use case that is not Mobile
Asset Management or Mobile Asset Tracking, you may only use a request-based pricing plan for such usage. “Mobile Asset” means any vehicle, cargo, employee, or other mobile object that has a mobile or tracking device used by a company in support of
its business (excluding any consumer devices used by consumers for personal, non-business purposes). “Mobile Asset Tracking” means, for any company, using Amazon Location Service solely to locate or display its Mobile Assets on a map. “Mobile Asset
Management” means, for any company, using Amazon Location Service to track and manage its Mobile Assets for purposes of providing route calculations for such Mobile Assets or optimizing or calculating the order of destinations or routes for such
Mobile Assets. If we determine you are using Amazon Location Service in a manner intended to avoid incurring appropriate usage fees, we may suspend or terminate your access to, or limit your use of, Amazon Location Service.
82.6 Attribution for Location Data can be found here. You must pass through attribution for Location Data that you make available to
others via your application or its product documentation. If any Location Data has attribution details attached or incorporated, you may not remove, modify, or obscure (or permit any End Users to remove, modify, or obscure) any copyright, trademark
notice, restrictive legend, or other proprietary right notices supplied to you.
82.7 Section 2 (Betas and Previews) applies to Amazon Location Service while it is in preview.
83. AWS Managed Services
83.1. If you request that AWS Managed Services be provided for any software or service that is not expressly identified as supported in the
AWS Managed Services user guides posted on the AWS Site (“Customer-Requested Configuration”), any AWS Managed Services provided for such Customer-Requested Configuration will be treated as a “Beta Service” under these Service Terms.
83.2. You represent and warrant to AWS that the person requesting any of your AWS accounts to be an AWS Managed Services Account (as
defined in the AWS Managed Services user guides posted on the AWS Site) is authorized to make such requests and procure AWS Managed Services on your behalf and with respect to such AWS accounts.
83.3. AWS and its affiliates will not be liable to you for any damages arising from (a) AWS’s actions taken pursuant to any instructions or
requests that you provide or approve, or (b) any change by you to your Managed Environment (as defined in the AWS Managed Services user guides posted on the AWS Site).
84. Amazon FinSpace
Amazon FinSpace is a tool to help you analyze data for investment and business decisions. It is not a substitute for the judgment and
experience of the user when making investment and business decisions. Amazon FinSpace does not provide investment advice, make investment recommendations or evaluate the suitability of any investment or investment strategy.
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation in this Registration Statement on Form F-1 of our report dated April 22, 2021, relating to the financial statements of Hold Me Ltd., as of December 31, 2020 and
2019 and to all references to our firm included in this Registration Statement.
Certified Public Accountants
Lakewood, CO
May 25, 2021