Nexera Technologies Ltd F-1, filed Jun 26, 2025
Nexera Technologies Ltd (NEXR)
As filed with the Securities and Exchange Commission on June 26, 2025
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM F-1
REGISTRATION
STATEMENT
UNDER THE SECURITIES ACT OF 1933
JEFFS’ BRANDS LTD
(Exact name of registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s Name into English)
| State of Israel | 5900 | Not Applicable | ||
| (State or other jurisdiction
of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
7 Mezada Street
Bnei Brak, 5126112
Israel
Tel: (+972) (3) 689-9124
(Address and telephone number of registrant’s principal executive offices)
Puglisi & Associates
850 Library Ave., Suite 204
Newark, DE 19711
Tel: (302) 738-6680
(Name, address, and telephone number of agent for service)
Copies to:
Dr. Shachar Hadar, Adv. Meitar | Law Offices 16 Abba Hillel Silver Rd. Ramat Gan 52506, Israel Tel: (+972) (3) 610-3100 |
Oded Har-Even, Esq. Angela Gomes, Esq. Sullivan & Worcester LLP 1251 Avenue of the Americas New York, NY 10020 Tel: (212) 660-3000 |
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.
If only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this 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, please 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 registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
| † | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
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 this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. The selling shareholder may not sell these securities until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
| PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION, DATED JUNE 26, 2025 |
JEFFS’ BRANDS LTD
Up to 52,477,760 Ordinary Shares
This prospectus relates to the resale, by the selling shareholder identified in the table on page 12 of this prospectus, or the Selling Shareholder, or his permitted assigns, of up to 52,477,760 ordinary shares, no par value, or the Ordinary Shares, of Jeffs’ Brands Ltd, issued or issuable upon the conversion of Promissory Notes (as defined below) in the principal amount of $50 million, including Ordinary Shares that may become issuable pursuant to certain anti-dilution adjustments described more fully in the Promissory Notes. The maximum amount of Ordinary Shares issuable under this prospectus is calculated based on a principal amount of $50 million and the accruing interest thereon in the amount of $3,976,517 and assuming a conversion price of $1.02856.
On June 26, 2025, we entered into a securities purchase agreement, or the SPA, with the Selling Shareholder. Pursuant to the SPA, we may issue and sell, from time to time to the Selling Shareholder, convertible promissory notes, or the Promissory Notes, in the aggregate principal amount of up to $100 million, or the Subscription Amount, for an aggregate purchase price of up to $90 million (90% of the Subscription Amount). Upon the signing of the SPA on June 26, 2025, or the Initial Closing, the Selling Shareholder purchased from us a Promissory Note in the principal amount of $5.0 million, for a purchase price of $4.5 million, or the Initial Promissory Note. Subject to the conditions in the SPA, beginning on December 1, 2025, we may request, at our sole discretion, that the Selling Shareholder purchase additional Promissory Notes, or the Additional Promissory Notes, each in the principal amount of up to $2.5 million, with a purchase price payable in cash and equal to 90% of such principal amount, during each subsequent three-month period, or a Quarter. Notwithstanding the foregoing, if at any time after the Initial Closing, the daily trading volume of the Company’s Ordinary Shares is at least 150% of the amount of Ordinary Shares then outstanding, then the Company may request, at its sole discretion, that the Selling Shareholder purchase Additional Promissory Notes, provided however that the aggregate principal amount of the all of the Promissory Notes purchased pursuant to the SPA shall not exceed $50,000,000 during the period commencing as of the Initial Closing and until December 1, 2025, or the Initial Period, and thereafter shall not exceed $25,000,000 during each subsequent three-month period, and provided further that the aggregate principal amount of all Promissory Notes purchased pursuant to the SPA shall not exceed the Subscription Amount.
We intend to use the net proceeds from the sale of the Promissory Notes for working capital and general corporate purposes, as well as for potential acquisitions to support our exploration of strategic opportunities. The Ordinary Shares underlying the Promissory Notes are referred to herein as the Note Shares.
No Ordinary Shares are being registered hereunder for sale by us. We may receive up to an additional of $85.5 million aggregate gross proceeds under the SPA from sales of Additional Promissory Notes that we elect to make to the Selling Shareholder pursuant to the SPA, from time to time in our sole discretion. We will not receive any proceeds from the sale of the Note Shares by the Selling Shareholder. See “Use of Proceeds” on page 10 of this prospectus for additional information. Pursuant to the terms of the Promissory Note, the conversion rate of each Note Share is the lower of (i) $6.80, or the Fixed Price, or (ii) 88% of the lowest daily volume weighted average price, or VWAP, during the 20 consecutive trading days immediately preceding the applicable date of conversion, or the Variable Price; provided that the Variable Price may not be lower than the floor price of $1.02856, which is equal to 20% of the VWAP of the Ordinary Shares during the 20 consecutive trading days immediately prior to the Initial Closing, or the Floor Price, subject to certain adjustments as provided in the Promissory Note. The Selling Shareholder may sell all or a portion of its Note Shares from time to time in market transactions through any market on which our Ordinary Shares are then traded, in negotiated transactions or otherwise, and at prices and on terms that will be determined by the then prevailing market price or at negotiated prices directly or through a broker or brokers, who may act as agent or as principal or by a combination of such methods of sale. See “Plan of Distribution” on page 16 of this prospectus.
The Selling Shareholder is a company owned by a family member of Mr. Vik Hacmon, our Chief Executive Officer and a director on our board of directors, or the Board.
Our Ordinary Shares and warrants issued as part of our initial public offering, or the Public Warrants, are listed on the Nasdaq Capital Market, or Nasdaq, under the symbol “JFBR” and “JFBRW,” respectively. On June 25, 2025, the last reported sale price of the Ordinary Shares and Public Warrants was $6.50 and $0.027, respectively. There is no established market for the Promissory Notes and we do not intend to apply to list the Promissory Notes on any securities exchange or other nationally recognized trading system.
AN INVESTMENT IN OUR SECURITIES INVOLVES RISKS. SEE THE SECTION ENTITLED “RISK FACTORS” BEGINNING ON PAGE 5 OF THIS PROSPECTUS AND IN OUR ANNUAL REPORT ON FORM 20-F FOR THE FISCAL YEAR ENDED DECEMBER 31, 2024, OR THE 2024 ANNUAL REPORT.
Neither the Securities and Exchange Commission nor any state or other securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2025
TABLE OF CONTENTS
You should rely only on the information contained in this prospectus, including information incorporated by reference herein, and any free writing prospectus prepared by or on behalf of us or to which we have referred you. Neither we nor the Selling Shareholder have authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this prospectus in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer or solicitation of an offer in such jurisdiction. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our securities.
We are incorporated under the laws of the State of Israel and our registered office and domicile is located in Bnei Brak, Israel. Moreover, none of our directors or senior management are residents of the United States, and all or a substantial portion of the assets of such persons are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon us or upon such persons or to enforce against them judgments obtained in U.S. courts, including judgments in actions predicated upon the civil liability provisions of the federal securities laws of the United States. We have been informed by our legal counsel in Israel, Meitar | Law Offices, that it may be difficult to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws because Israel is not the most appropriate forum to bring such a claim. See “Enforceability of Civil Liabilities” for additional information.
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For investors outside of the United States: We have not done anything 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.
In this prospectus, “we,” “us,” “our,” the “Company” and “Jeffs’ Brands” refer to Jeffs’ Brands Ltd.
Our reporting currency and functional currency is the U.S. dollar. Unless otherwise expressly stated or the context otherwise requires, references in this prospectus to “dollars” or “$” mean U.S. dollars.
Effective as of market open on June 16, 2025, we conducted a reverse share split of our issued and outstanding Ordinary Shares at a ratio of 1-for-17, or the June 2025 Reverse Split. All descriptions of our share capital, including share amounts and per share amounts in this prospectus are presented after giving effect to the June 2025 Reverse Split.
This prospectus incorporates by reference statistical, market and industry data and forecasts which we obtained from publicly available information and independent industry publications and reports that we believe to be reliable sources. These publicly available industry publications and reports generally state that they obtain their information from sources that they believe to be reliable, but they do not guarantee the accuracy or completeness of the information. Although we believe that these sources are reliable, we have not independently verified the information contained in such publications.
We report under generally accepted accounting principles in the United States, or U.S. GAAP, as issued by the Financial Accounting Standards Board, or the FASB.
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This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Ordinary Shares. Before you decide to invest in our Ordinary Shares, you should read the entire prospectus carefully, including the “Risk Factors” section, and the financial statements and related notes thereto and the other information incorporated by reference herein.
Our Company
We are an e-commerce consumer products goods company, operating primarily on the Amazon marketplace, or Amazon. We were incorporated in Israel in March 2021, under the name Jeffs’ Brands Ltd, to provide various services, such as management, operation and logistics, marketing and financial services to our subsidiaries that operate online stores for the sale of various consumer products on Amazon, utilizing the Fulfillment by Amazon, or FBA, model. As of the date on this prospectus, we have six wholly-owned subsidiaries, held directly by us or through our subsidiaries: Smart Repair Pro; Top Rank Ltd.; Fort Products Limited, or Fort Products; Jeffs’ Brands Holdings Inc.; Fort Products LLC; and Pure NJ Logistics LLC, or Pure Logistics. We also hold, through our subsidiary Jeffs’ Brands Holdings Inc., a minority interest in SciSparc Nutraceuticals Inc., or SNI, to whom we provide a variety of professional and business support services. In addition to executing the FBA business model, we utilize internal methodologies to analyze sales data and patterns on Amazon in order to identify existing stores, niches and products that have the potential for development and growth, and for maximizing sales of existing proprietary products. We also use our own skills, know-how and profound familiarity with Amazon’s algorithm and all the tools that the FBA platform has to offer. In some circumstances we scale the products and improve them.
Recent Developments
Convertible Notes Securities Purchase Agreement
On June 26, 2025, we entered into the SPA with the Selling Shareholder. The SPA provides that, upon the terms and subject to the conditions set forth therein, we may issue and sell to the Selling Shareholder, from time to time as provided therein, Promissory Notes for the Subscription Amount, which may be convertible into Ordinary Shares, for an aggregate purchase price of $90 million (90% of the Subscription Amount). On the Initial Closing, the Selling Shareholder purchased from us the Initial Promissory Note. Subject to the conditions in the SPA, beginning on December 1, 2025, we may request that the Selling Shareholder purchase Additional Promissory Notes, each in the principal amount of up to $2.5 million, during each Quarter. Notwithstanding the foregoing, if at any time after the Initial Closing, the daily trading volume of the Company’s Ordinary Shares is at least 150% of the amount of Ordinary Shares then outstanding, then the Company may request, at its sole discretion, that the Selling Shareholder purchase Additional Promissory Notes, provided however that the aggregate principal amount of the all of the Promissory Notes purchased pursuant to the SPA shall not exceed $50,000,000 during the Initial Period, and thereafter shall not exceed $25,000,000 during each subsequent three-month period, and provided further that the aggregate principal amount of all Promissory Notes purchased pursuant to the SPA shall not exceed the Subscription Amount. Any Additional Promissory Notes will be issued on the same terms.
The outstanding principal amount and accrued interest under the Promissory Notes are to be repaid in ten equal monthly installments beginning on the eighteenth month anniversary of the issuance date thereof, unless repaid earlier (partially or in full) at our option or if extended at the option of the Selling Shareholder. Thus, the Initial Promissory Note is to be repaid in ten equal monthly installments, commencing on December 26, 2026. The principal amount under the Promissory Notes bears an annual interest rate of 4% (which will increase to 14% upon an event of default, as defined in the Promissory Note).
The outstanding amount of the principal and any accrued interest due under the Promissory Notes is convertible (partially or in full) into Ordinary Shares, at the option of the Selling Shareholder at any time after the Issuance Date, at a conversion price equal to the lower of (i) the Fixed Price or (ii) the Variable Price, provided that the Variable Price may not be lower than the Floor Price. The Selling Shareholder’s option to convert the outstanding amount due is subject to the limitation that the conversion may not result in the Selling Shareholder’s beneficial ownership exceeding 4.99% of the Company’s outstanding Ordinary Shares.
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Advisory Agreement
In connection with the execution of the SPA, on June 26, 2025, the Company entered into a Strategic Advisory Agreement, or the Advisory Agreement with Aegis Capital Corp., or Aegis, under which Aegis shall provide to the Company with independent advisory services related to the transactions contemplated under the SPA. In consideration of the advisory services, upon the issuance of the Initial Promissory Note, the Company paid Aegis a commission fee of $150,000, which is equal to 3% of the principal amount of the Initial Promissory Note issued, and shall pay Aegis a commission fee for each Additional Promissory Note issued, equal to 3% of the principal amount of such Additional Promissory Note. The Advisory Agreement will terminate on June 26, 2026, unless terminated earlier by either party.
June 2025 Reverse Split
On May 29, 2025, our Board approved the June 2025 Reverse Split, which became effective as of market open on June 16, 2025, pursuant to which holders of our Ordinary Shares received one Ordinary Share for every 17 Ordinary Shares held as of such date. The June 2025 Reverse Split did not reduce the number of our authorized share capital, which as of the date hereof consists of 1,500,000 Ordinary Shares. Unless the context expressly dictates otherwise, all references to share and per share amounts referred to herein give effect to the June 2025 Reverse Split.
Registered Direct Offering
On May 28, 2025, we entered into a definitive securities purchase agreement, or the May 2025 SPA, with the Selling Shareholder, or the Purchaser, pursuant to which we issued and sold to the Purchaser in a registered direct offering, or the Registered Direct Offering, (i) 23,971 Ordinary Shares, at an offering price of $5.10 per Ordinary Share and (ii) pre-funded warrants to acquire up to 75,060 Ordinary Shares, or, at an offering price of $0.2999 per pre-funded warrant. As of the date hereof, all of the pre-funded warrants issued in the Registered Direct Offering were exercised in full. The Company raised aggregate gross proceeds of approximately $581 thousand from the Registered Direct Offering.
Smart Purchase Agreement
On April 30, 2025, we entered into a share purchase agreement, or the Smart Purchase Agreement, with Plantify Foods, Inc. (TSXV: PTFY) a Canadian public company, or Plantify, pursuant to which, on the terms and subject to the conditions of the Smart Purchase Agreement, we will sell to Plantify, and Plantify will purchase from us, all of the issued and outstanding equity interests of our wholly owned subsidiary, Smart Repair Pro, to Plantify, or the Proposed Smart Transaction.
Smart Repair Pro currently operates our stores on the Amazon U.S. Marketplace and owns Pure Logistics. Prior to the closing of the Proposed Smart Transaction, or the Closing, we will enter into a share transfer agreement with Smart Repair Pro, pursuant to which all of our shares of Jeffs’ Brands Holdings Inc., which holds an approximately 49.1% ownership interest in SNI, will be transferred to Smart Repair Pro in exchange for shares of common stock of Smart Repair Pro. As a result, Jeffs’ Brands Holdings Inc. will become a direct, wholly-owned subsidiary of Smart Repair Pro and Smart Repair Pro will own an approximately 49.1% ownership interest in SNI.
As consideration for the Proposed Smart Transaction, we will receive 40,375,000 common shares of Plantify at the Closing and up to an additional 129,000,000 common shares of Plantify, contingent upon the achievement of certain pre-determined milestones, or the Milestones, following the Closing, each at a deemed price per share of CAD 0.347, representing an approximately 75% (or up to 90% in the event of the full achievement of the Milestones) post-closing equity interest in Plantify. The Proposed Smart Transaction is based on a total valuation of Plantify of approximately CAD 4.85 million (approximately $3.39 million) (taking into account the full potential consideration and contingent on Plantify having a free cash position of at least CAD 300,000 (approximately $207,000), after transaction costs) for Plantify and a total combined valuation for Smart Repair (together with Pure Logistics and SNI) of approximately CAD 17.125 million (approximately $11.8 million). The Proposed Smart Transaction is expected to close by July 31, 2025, subject to customary closing conditions, and compliance with any regulatory approvals. There is no guarantee when or if the Proposed Smart Transaction will be completed.
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Pure Logistics Acquisition
On March 10, 2025, we entered into a purchase agreement, or the Pure Logistics Purchase Agreement, with Smart Repair Pro, Pure Logistics, and the current holders of the issued and outstanding equity interests and assets of Pure Logistics, L.I.A. Pure Capital Ltd., Eliyahu Yoresh and Tal Yoresh, or the Sellers, pursuant to which, on March 18, 2025, the Sellers sold to Smart Repair Pro, all of the issued and outstanding equity interests of Pure Logistics, in consideration for a base payment of $2,100,000, which was paid at the closing and a deferred payment of $500,000, or the Deferred Payment.
The Deferred Payment was made through issuance of promissory notes, or the March 2025 Promissory Notes, in the aggregate principal amount of $500,000 bearing an annual interest rate of 9%, at the closing and to be repaid by Smart Repair Pro in ten monthly installments of $50,000 each, pro-rated to each Seller’s percentage of ownership in Pure Logistics, starting after the sixth month anniversary of the date of the closing.
As security for the full repayment of the outstanding due amounts under the March 2025 Promissory Notes, at the closing, we issued to the Sellers warrants to purchase Ordinary Shares, or the March 2025 Warrants. The March 2025 Warrants have an exercise price of $5.10 per share and will only become exercisable upon the occurrence of an Event of Default (as defined in the March 2025 Promissory Notes).
Fort Purchase Agreement
On February 6, 2025, we entered into share purchase agreement, or as amended on May 31, 2025, the Fort Purchase Agreement, with Impact Acquisitions Corp, or Impact, pursuant to which, on the terms and subject to the conditions of the agreement, Fort Products will merge with and into Impact, with Impact as the surviving corporation, or the Proposed Fort Merger. Pursuant to the Fort Purchase Agreement, at the closing of the Proposed Fort Merger, we will sell to Impact, and Impact will purchase from us, all of the issued and outstanding shares of Fort Products, in consideration for 100,000,000 common shares of Impact and up to an additional 66,000,000 common shares of Impact, contingent upon the achievement of certain pre-determined milestones, or the Contingent Right Shares, each at a deemed price per share of CAD 0.171246, representing a post-closing equity interest in Impact of 75.02% (or up to 83.29% in the event of the full achievement of the milestones). The Proposed Fort Merger is based on a total value of Impact of approximately CAD 4.8 million (approximately $3.3 million) (considering its cash position of at least CAD 700,000 (approximately $486,330), after transaction costs) and a total valuation ascribed to Fort Products of approximately CAD 17.1 million (approximately $11.9 million).
The completion of the Proposed Fort Merger is subject to the satisfaction or waiver of certain conditions, including, but not limited to: (i) the fair market value of the equity interests of Fort Products being equal to at least CAD 14 million (approximately $9.7 million), based on a valuation report to be obtained; (ii) the receipt by us of a pre-ruling from the Israel Tax Authority approving the transaction; and (iii) the completion of due diligence by the parties and the receipt of corporate and regulatory approvals. On March 13, 2025, we announced that Impact obtained a valuation report from Evans & Evans, Inc., which indicates that in the opinion of Evans & Evans, Inc., the fair market value of the equity interests of Fort Products as of January 31, 2025, was between CAD 16.8 and 20.5 million (approximately $11.6 to $14.2 million), on a controlling, marketable basis, subject to the assumptions and qualifications specified therein.
Subject to the satisfaction or waiver of all conditions precedents to the Proposed Fort Merger, we expect that the transaction will be completed by July 7, 2025. However, there can be no assurance that the transaction will be completed on the agreed terms, if at all.
On, June 20, 2025 we announced that the TSX Venture Exchange, or TSXV, approved the Proposed Fort Merger and that Impact publicly filed a filing statement in respect of the Proposed Fort Merger dated June 19, 2025, with the TSVX, which is available on Impact’s SEDAR+ profile at www.sedarplus.ca.
January 2025 Convertible Promissory Note
On January 16, 2025, we issued a non-recourse convertible promissory note in the principal amount of $2,850,000 to the Selling Shareholder, or the January 2025 Promissory Note. The January 2025 Promissory Note was issued with a 10% original issue discount from the principal amount and is to be repaid on in one payment on the 18th month anniversary of the issuance date, or July 16, 2026, unless repaid earlier (partially or in full) at our option, or if extended at the option. or the holder. The current outstanding amount due under the January 2025 Promissory Note is $252,948 and convertible (partially or in full) into Ordinary Shares, at the option of the holder. In connection with the issuance of the January 2025 Promissory Note, we also issued to the holder a warrant to purchase up to 52,867 Ordinary Shares, or the January 2025 Warrant, an exercise price of $5.10 per Ordinary Share.
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| Ordinary Shares currently outstanding: | 553,486 Ordinary Shares. | |
| Ordinary Shares offered by the Selling Shareholder Hereby: | Up to 52,477,760 Ordinary Shares consisting of the Note Shares. | |
| Ordinary Shares to be outstanding assuming the full conversion of the Promissory Notes: | 53,031,246 Ordinary Shares. | |
| Use of proceeds: | As of the date of this prospectus, we have received $4.5 million in gross proceeds from the issuance of the Initial Promissory Note. We may receive up to additional $85.5 million aggregate gross proceeds under the SPA from sales of Additional Promissory Notes that we elect to make to the Selling Shareholder pursuant to the SPA, from time to time in our sole discretion. We will not receive any proceeds from the sale of the Note Shares by the Selling Shareholder. The Selling Shareholder will receive all of the proceeds from the sale of any Note Shares sold by it pursuant to this prospectus. We intend to use the net proceeds from the issuance of the Promissory Notes for working capital and other general corporate purposes, as well as for potential acquisitions to support our exploration of strategic opportunities. See “Use of Proceeds.” | |
| Risk factors: | Investing in our securities involves a high degree of risk. You should read the “Risk Factors” section starting on page 5 of this prospectus, and “Item 3. - Key Information – D. Risk Factors” in the 2024 Annual Report, incorporated by reference herein, and other information included in or incorporated by reference into this prospectus for a discussion of factors to consider carefully before deciding to invest in our securities. | |
| Nasdaq symbol: | Our Ordinary Shares and Public Warrants are listed on the Nasdaq under the symbol “JFBR” and “JFBRW”, respectively. We do not intend to apply to list the Promissory Notes on any securities exchange or other nationally recognized trading system. |
The number of Ordinary Shares to be outstanding prior to and immediately after this offering as shown above is based on 553,486 Ordinary Shares outstanding as of June 25, 2025. This number excludes:
| ● | 7,127 Ordinary Shares reserved for issuance and available for future grant under our 2024 Share Incentive Option Plan; | |
| ● | 116,859 Ordinary Shares issuable upon the exercise of certain Series A warrants, at an exercise price of $5.10 per Ordinary Share (subject to any further adjustment as provided therein), or the Series A Warrants; | |
| ● | 44,749 Ordinary Shares issuable upon the exercise of the January 2025 Warrant at an exercise price of $5.10 per Ordinary Share (subject to any further adjustment as provided therein); | |
| ● | 49,598 Ordinary Shares issued or issuable upon the conversion of the outstanding amount due under the January 2025 Promissory Note; | |
| ● | 10,696 Ordinary Shares issuable upon the exercise of the March 2025 Warrants, at an exercise price of $5.10 per Ordinary Share (subject to any further adjustment as provided therein); | |
| ● | 1,134 Ordinary Shares issuable upon the exercise of certain Series B warrants, or the Series B Warrants, at an exercise price of $0.00221 per Ordinary Share; and | |
| ● | 4,676 Ordinary Shares issuable upon the exercise of outstanding warrants (including the Public Warrants) to purchase Ordinary Shares, at a weighted average exercise price of $2.12 per Ordinary Share, or together with the Series A Warrants, the Series B Warrants, the January 2025 Warrant and the March 2025 Warrants, the Outstanding Warrants. |
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Investing in our securities involves risks. Please carefully consider the risk factors described below and those contained in our periodic reports filed with the Securities and Exchange Commission, or SEC, including those set forth under the caption “Item 3. Key Information - D. Risk Factors” in our 2024 Annual Report, which is incorporated by reference into this prospectus. Before making an investment decision, you should carefully consider these risks as well as other information we include or incorporate by reference in this prospectus. You should be able to bear a complete loss of your investment.
Risks Related to an Investment in our Securities and this Offering
Sales of a substantial number of our Ordinary Shares in the public market, including the resale of the Note Shares or the Warrant Shares issuable to the Selling Shareholder, or by our existing shareholders, could cause our share price to fall.
We are registering for resale up to 52,477,760 Ordinary Shares issuable to the Selling Shareholder upon the conversion in full of Promissory Notes in the aggregate principal amount of up to $50 million issued or issuable under the SPA. Sales of a substantial number of our Ordinary Shares in the public market, or the perception that these sales might occur, could depress the market price of our Ordinary Shares and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our Ordinary Shares.
Our management will have immediate and broad discretion as to the use of the net proceeds from the issuance and sale of the Promissory Notes, and may not use them effectively.
We currently intend to use the net proceeds from the issuance and sale of the Promissory Notes for working capital and general corporate purposes, as well as for potential acquisitions to support our exploration of strategic opportunities. See “Use of Proceeds.” However, our management will have broad discretion in the application of any such net proceeds. Our shareholders may not agree with the manner in which our management chooses to allocate the net proceeds from the issuance and sale of the Promissory Notes. The failure by our management to apply these funds effectively could have a material adverse effect on our business, financial condition and results of operation. Pending their use, we may invest the net proceeds from the exercise of the Warrant in a manner that does not produce income. The decisions made by our management may not result in positive returns on your investment and you will not have an opportunity to evaluate the economic, financial or other information upon which our management bases its decisions.
We cannot assure you that our Ordinary Shares and Public Warrants will remain listed on Nasdaq or any other securities exchange.
On April 25, 2024, we received a written notice, or the Notice, from Nasdaq indicating that we were not in compliance with the minimum bid price requirement for continued listing set forth in Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share. Under Nasdaq Listing Rule 5810(c)(3)(A), we were granted a period of 180 to regain compliance with the minimum bid price requirement, and thereafter on October 23, 2024 we were granted an additional 180 calendar day period. Although we have since cured this deficiency and have regained compliance with Nasdaq Listing Rule 5550(a)(2), there is a risk that we could be subject to additional notices of delisting for failure to comply with Nasdaq Listing Rule 5550(a)(2) or other Nasdaq Listing Rules.
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In addition, on January 17, 2025, the SEC approved an amendment to Nasdaq Listing Rule 5810(c)(3)(A)(iv), according to which, if a company fails to meet the minimum bid price requirement and the company has effected a reverse share split over the prior one-year period, the company would not be eligible for any compliance period and the Listing Qualifications Department will issue a Delisting Determination under Rule 5810 with respect to that company’s securities. This change will apply to a company even if the company was in compliance with the bid price requirement at the time of its prior reverse share split. In addition, if a company’s security fails to meet the bid price requirement and the company has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, then the company is not eligible for any compliance periods and Nasdaq must issue a Delisting Determination with respect to that security. Accordingly, there is a risk that if within one year of the June 2025 Reverse Split or any other future reverse share splits effected from time to time, our Ordinary Shares trade below $1.00 per share for 30 consecutive business days, we will not be eligible for any compliance period and the Listing Qualifications Department will issue a Delisting Determination for our Ordinary Shares by Nasdaq.
No assurance can be given that we will remain eligible to be listed on Nasdaq. In the event that our Ordinary Shares are delisted from Nasdaq due to our failure to continue to comply with the requirements for continued listing on Nasdaq, and are not eligible for listing on another exchange, trading in our Ordinary Shares and Public Warrants could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our Ordinary Shares and Public Warrants, and it would likely be more difficult to obtain coverage by securities analysts and the news media, which could cause the price of our Ordinary Shares to decline further. Also, it may be difficult for us to raise additional capital if we are not listed on a national exchange.
Risks Related to Our Incorporation, Location and Operations in Israel
Conditions in Israel, including Israel’s conflicts with Hamas and other parties in the region, as well as political and economic instability, may adversely affect our operations and limit our ability to market our products, which would lead to a decrease in revenues.
Our offices and management team are located in Israel, while our other facilities located overseas and are not exposed to war damage. Accordingly, political, economic, and military conditions in Israel and the surrounding region may directly affect our business and operations.
In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Israel declared war against Hamas and since then, Israel has been involved in military conflicts with Hamas, Hezbollah, a terrorist organization based in Lebanon, and Iran, both directly and through proxies like the Houthi movement in Yemen and armed groups in Iraq and other terrorist organizations. Additionally, following the fall of the Assad regime in Syria, Israel has conducted limited military operations targeting the Syrian army, Iranian military assets and infrastructure linked to Hezbollah and other Iran-supported groups. Although certain ceasefire agreements have been reached, these agreements failed to be upheld and military activity and hostilities continue to exist at varying levels of intensity, and the situation remains volatile, with the potential for escalation into a broader regional conflict involving additional terrorist organizations and possibly other countries. Also, the fall of the Assad regime in Syria may create geopolitical instability in the region.
As a result of numerous attacks on marine vessels traversing the Red Sea launched by the Houthi movement we have experienced delays in supplier deliveries, extended lead times, and increased cost of freight, increased insurance costs, purchased materials and manufacturing labor costs. We currently do not experience such delays and the cost of freight is nearly back to the prices prior to the attacks in October 2023, but there is no assurance that we will not experience in the future such delays. The risk of ongoing supply disruptions may further result in delayed deliveries of our products.
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On June 13, 2025, Israel launched a strike against Iran, aimed to disrupt Iran’s capacity to coordinate or launch hostilities against Israel. Iran has retaliated in response, firing missiles and drones at Israeli military and civilian infrastructure. As of the date hereof a ceasefire agreement has been reached with Iran, however there is no assurance that this agreement will be upheld and military activity and hostilities may continue to exist at varying levels of intensity.
The military hostilities have included and may include terror, missile and drone attacks. our offices have not been damaged during the current war, the hostilities with Hamas, Hezbollah, Iran and its proxies and others have caused and may continue to cause damage to private and public facilities, infrastructure, utilities, and telecommunication networks, and potentially disrupting our operations and supply chains. In addition, Israeli organizations, government agencies and companies have been subject to extensive cyber attacks. This could lead to increased costs, risks to employee safety, and challenges to business continuity, with potential financial losses.
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 such 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.
The global perception of Israel and Israeli companies, influenced by actions by international judicial bodies, may lead to increased sanctions and other negative measures against Israel, as well as Israeli companies and academic institutions. There is also a growing movement among countries, activists, and organizations to boycott Israeli goods, services and academic research or restrict business with Israel, which could affect business operations. If these efforts become widespread, along with any future rulings from international tribunals against Israel, they could significantly and negatively impact business operations.
Prior to the October 2023 war, the Israeli government pursued changes to Israel’s judicial system and has recently renewed its efforts to effect such changes. In response to the foregoing developments, certain individuals, organizations, and institutions, both within and outside of Israel, voiced concerns that such proposed changes, if adopted, may negatively impact the business environment in Israel. Such proposed changes may also lead to political instability or civil unrest. If such changes to Israel’s judicial system are pursued by the government and approved by the parliament, this may have an adverse effect on our business, results of operations, and ability to raise additional funds, if deemed necessary by our management and Board.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements made under “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” and elsewhere in this prospectus, including in our 2024 Annual Report incorporated by reference herein, and other information included or incorporated by reference in this prospectus, constitute forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” “intends” or “continue,” or the negative of these terms or other comparable terminology.
These forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections of results of operations or of financial condition, expected capital needs and expenses, statements relating to the research, development, completion and use of our products, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.
Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.
Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:
| ● | our ability to raise capital through the issuance of additional securities; |
| ● | our belief that our existing cash and cash equivalents as of December 31, 2024, will be sufficient to fund our operations through the next twelve months; | |
| ● | our ability to adapt to significant future alterations in Amazon’s policies; | |
| ● | our ability to sell our existing products and grow our brands and product offerings, including by acquiring new brands and expanding into new territories; | |
| ● | our ability to meet our expectations regarding the revenue growth and the demand for e-commerce; | |
| ● | our ability to successfully pursue, integrate, or execute upon the logistics center operations business of Pure Logistics, which we recently acquired in March 2025; | |
| ● | our proposed restructuring plan, including the Fort Proposed Merger and the Proposed Smart Transaction may not be completed in accordance with the expected plans or anticipated timeline, or at all, and may not achieve the expected results; | |
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| ● | the overall global economic environment; | |
| ● | the impact of competition and new e-commerce technologies; | |
| ● | projected capital expenditures and liquidity; |
| ● | our ability to retain key executive members; | |
| ● | the impact of possible changes in Amazon’s policies and terms of use; | |
| ● | projected capital expenditures and liquidity; | |
| ● | our expectations regarding our tax classifications; |
| ● | how long we will qualify as an emerging growth company or a foreign private issuer; |
| ● | interpretations of current laws and the passages of future laws; | |
| ● | changes in our strategy; | |
| ● | general market, political and economic conditions in the countries where our headquarters are located or in which we operate, including Israel’s conflicts with Hamas, Iran and other parties in the region, as well as political and economic instability, may adversely affect our operations and limit our ability to market our products, which would lead to a decrease in revenues; | |
| ● | litigation; and | |
| ● | those factors referred to in “Item 3. Key Information - D. Risk Factors,” “Item 4. Information on the Company,” and “Item 5. Operating and Financial Review and Prospects,” of our 2024 Annual Report as well other factors in the 2024 Annual Report. |
These statements are only current predictions and are subject to known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in this prospectus in greater detail under the heading “Risk Factors” and elsewhere in this prospectus and the documents incorporated herein by reference. You should not rely upon forward-looking statements as predictions of future events.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by law, we are under no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this prospectus.
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As of the date of this prospectus, we have received $4.5 million in gross proceeds from the issuance of the Initial Promissory Note. We may receive up to an additional $85.5 million aggregate gross proceeds under the SPA from sales of Additional Promissory Notes that we elect to make to the Selling Shareholder pursuant to the SPA, from time to time in our sole discretion.
We will not receive any proceeds from the sale of the Note Shares by the Selling Shareholder. All net proceeds from the sale of the Note Shares covered by this prospectus will go to the Selling Shareholder.
We intend to use the net proceeds received from the issuance of the Promissory Notes from time to time for working capital and general corporate purposes, as well as for potential acquisitions to support our exploration of strategic opportunities. Pending our use of the net proceeds from the issuance and sale of the Promissory Notes, we may invest the net proceeds in a variety of capital preservation investments, including short-term, investment grade, interest bearing instruments and U.S. government securities, as decided by our Board from time to time.
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The following table sets forth our cash and cash equivalents and our capitalization as of December 31, 2024:
| ● | on an actual basis; |
| ● | on a pro forma basis, to give effect to the issuance following December 31, 2024, of: (i) an aggregate of 32,660 Ordinary Shares upon the exercise of certain Series A Warrants; (ii) 30,797 Ordinary Shares as consideration to certain consultants; (iii) an aggregate of 274,938 Ordinary Shares upon the partial conversion of the January 2025 Promissory Note; (iv) 114,030 Ordinary Shares issued upon the closing of the Registered Direct Offering for aggregate gross proceeds of $581,000; and to give effect to the acquisition of Pure Logistics on March 10, 2025; and. |
| ● | on a pro forma as adjusted basis to give further effect to the issuance of an aggregate of 52,477,760 Ordinary Shares upon the full conversion of Promissory Notes in the aggregate principial amount of up to $50 million and including the accruing interest thereon, issued or issuable under the SPA, assuming a conversion price of $1.02856 (the Floor Price). |
You should read this table in conjunction with the section titled “Item 5. Operating and Financial Review and Prospects” of our 2024 Annual Report incorporated by reference herein.
| As of December 31, 2024 |
| U.S. dollars in thousands | Actual | Pro Forma | Pro Forma As Adjusted | |||||||||
| Cash and cash equivalent | $ | 2,564 | $ | 3,945 | $ | 48,945 | ||||||
| Other assets | $ | 11,160 | $ | 20,329 | $ | 20,329 | ||||||
| Other liabilities | 1,947 | 9,069 | 9,069 | |||||||||
| Warrant liabilities | 6,220 | 5,083 | 5,083 | |||||||||
| Shareholders’ equity: | ||||||||||||
| Share capital and premium | 21,637 | 27,207 | 77,207 | |||||||||
| Ordinary Shares, no par value: 90,000,000 Ordinary Shares authorized (actual) and 1,500,000,000 authorized (pro forma); 100,931 Ordinary Shares issued and outstanding (actual); 553,486 Ordinary Shares outstanding (pro forma); 53,031,246 Ordinary Shares outstanding (pro forma as adjusted) | ||||||||||||
| Accumulated deficit | (16,080 | ) | (17,085 | ) | (22,085 | ) | ||||||
| Total shareholders’ equity | 5,557 | 10,122 | 55,122 | |||||||||
| Total capitalization** | $ | 13,724 | $ | 24,274 | $ | 69,274 | ||||||
| ** | Total capitalization is the sum of liabilities, equity and warrant liabilities. |
The table above is based on 100,931 Ordinary Shares issued and outstanding as of December 31, 2024. This number excludes:
| ● | 7,127 Ordinary Shares reserved for issuance and available for future grant under our 2024 Share Incentive Option Plan; | |
| ● | 51,813 Ordinary Shares issuable upon the conversion of the January 2025 Promissory Note; and | |
| ● | 4,676 Ordinary Shares issuable upon the exercise of the Outstanding Warrants with a weighted average exercise price of $2.12. | |
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On June 26, 2025, we entered into the SPA with the Selling Shareholder. Pursuant to the SPA, we may issue and sell, from time to time, Promissory Notes, in the aggregate principal amount of up to $100 million, for an aggregate purchase price of $90 million (90% of the Subscription Amount). On the Initial Closing, the Selling Shareholder purchased the Initial Promissory Note. The Promissory Notes are to be repaid in ten equal monthly payments, commencing on the eighteenth month anniversary of its after each of the Promissory Notes’ issuance date, unless repaid earlier (partially or in full) at our option or if extended at the option of the Selling Shareholder. The principal amount under the Promissory Notes bears an annual interest rate of 4% (which will increase to 14% upon an event of default, as defined in the Promissory Note). The outstanding amount due under the Promissory Note is convertible (partially or in full) into Ordinary Shares, at the option of the Selling Shareholder at any time after the Issuance Date, at a conversion price equal to the lower of (i) the Fixed Price or (ii) the Variable Price, provided that the Variable Price may not be lower than the Floor Price. Any Additional Promissory Notes will be issued on the same terms.
The 52,477,760 Ordinary Shares being offered by the Selling Shareholder pursuant to this prospectus consist of the Note Shares, such number determined as if Promissory Notes in the aggregate principal amount of $50 million were issued under the SPA and were converted into Note Shares in full, without regard to any limitations on the issuance of Promissory Notes or on the conversion of the Promissory Notes.
We are registering the Note Shares in order to allow the Selling Shareholder to offer the maximum number of Ordinary Shares issuable pursuant to Promissory Notes in the aggregate principal amount of $50 million, for resale from time to time. The Selling Shareholder is a company owned by a family member of Mr. Vik Hacmon, our Chief Executive Officer and a director on our Board. The Selling Shareholder has not had any other material relationship with us within the past three years, except for providing us with consulting services, investing $500,000 in the private placement transaction we conducted in January 2024, purchasing the January 2025 Promissory Note for approximately $2.565 million, being a Seller under the Pure Logistics Purchase Agreement and investing $581,000 in the Registered Direct Offering we conducted in May 2025.
The table below presents information regarding the Selling Shareholder, the Note Shares that may be resold by the Selling Shareholder from time to time under this prospectus, and other information regarding the beneficial ownership of the Ordinary Shares of the Selling Shareholder.
The second column lists the number of Ordinary Shares beneficially owned by the Selling Shareholder, as of June 26, 2025, assuming the exercise of instruments exercisable into Ordinary Shares held by the Selling Shareholder on that date, taking into account any limitations on exercises.
The third column lists the Note Shares being offered by this prospectus by the Selling Shareholder.
The fourth column assumes the sale of all of the Note Shares offered by the Selling Shareholder pursuant to this prospectus.
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Under the terms of the SPA and the Promissory Notes, the Selling Shareholder may not convert the Promissory Notes into Ordinary Shares, to the extent such conversion, as applicable, would cause the Selling Shareholder, together with its affiliates, to beneficially own a number of Ordinary Shares which would exceed 4.99% of our then outstanding Ordinary Shares following such conversion, excluding for purposes of such determination, Ordinary Shares issuable upon conversion of the Promissory Notes which have not been converted. The number of Ordinary Shares in the second column and third column does not reflect this limitation. The Selling Shareholder may sell or has sold, all, some or none of the Note Shares. See “Plan of Distribution.”
| Name of Selling Shareholder | Number of Ordinary Shares Beneficially Owned Prior to Offering | Maximum Number of Note Shares to be Sold Pursuant to this Prospectus | Ordinary Shares Owned Immediately After Sale of Maximum Number of Note Shares in this Offering | Percentage of Ordinary Shares Owned After the Offering | ||||||||||||
| L.I.A. Pure Capital Ltd.(2) | 108,331 | (3) | 52,477,760 | 108,330 | 4.99 | %(4) | ||||||||||
| (1) | Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. Ordinary Shares subject to warrants currently exercisable, or exercisable within 60 days of June 25, 2025, are counted as outstanding for computing the percentage of the Selling Shareholder’s holding such options or warrants but are not counted as outstanding for other purposes. Percentage of shares beneficially owned is based on 553,486 Ordinary Shares outstanding on June 25, 2025. |
| (2) | Kfir Silberman is the control person for L.I.A. Pure Capital Ltd. with voting and dispositive power over the Ordinary Shares held by L.I.A. Pure Capital Ltd. The address for L.I.A. Pure Capital Ltd. is 20 Raoul Wallenberg Tel Aviv 6971917 Israel. |
| (3) | Consists of: (i) 5,965 Ordinary Shares issued to L.I.A Pure Capital Ltd. as consideration pursuant to its consulting agreement with us; (ii) 390 Ordinary Shares issuable pursuant to an option to purchase up to 390 Ordinary Shares, or the Call Option, exercisable within 60 days of June 25, 2025, granted to L.I.A. Pure Capital Ltd. pursuant to a Call Option Agreement with Viki Hakmon, dated November 14, 2021, as amended to be effective on January 29, 2024, or the Call Option Agreement; (iii) 49,598 Ordinary Shares issuable upon the conversion of the January 2025 Promissory Note (iv) 44,749 Ordinary Shares issuable upon the exercise of the January 2025 Warrant ) and (v) 7,629 Ordinary Shares issuable upon the exercise of the March 2025 Warrant. |
| (4) | Pursuant to the Call Option Agreement, the January 2025 Warrant, the January 2025 Promissory Note and the March 2025 Warrant,, L.I.A. Pure Capital Ltd. shall not have the right to exercise any portion of the Call Option or of the January 2025 Warrant and the March 2025 Warrant or conversion any portion of the January 2025 Promissory Note, to the extent that after giving effect to such issuance after exercise, L.I.A. Pure Capital Ltd., would beneficially own in excess of 4.99% of the number of Ordinary Shares outstanding. |
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The following description of our share capital and provisions of our amended and restated articles of association, or the Articles of Association are summaries and do not purport to be complete.
Registration number and purposes of the Company
Our registration number with the Israeli Registrar of Companies is 51-635676-3. Our purpose as set forth in our Articles is to engage in any lawful activity.
Type and class of securities
Our authorized share capital consists of 1,500,000,000 Ordinary shares. All of our outstanding Ordinary Shares have been validly issued, are fully paid and non-assessable.
Preemptive rights
Our Ordinary Shares are not redeemable and are not subject to any preemptive right.
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 the Nasdaq. The ownership or voting of 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, have been, or will be, in a state of war with Israel.
Election of directors
Under our Articles of Association, our Board must consist of not less than three but no more than twelve directors. Each of our directors, other than external directors (if any), for whom special election requirements apply under the Israeli Companies Law, 1999, or the Companies Law are appointed by a simple majority vote of holders of Ordinary Shares, participating and voting at an annual general meeting of our shareholders. Our directors are classified, with respect to the term for which they each severally hold office, into three classes, as nearly equal in number as practicable, and designated as Class I, Class II and Class III, with one class being elected each year at the annual general meeting of our shareholders, and serve on our Board until the third annual general meeting following such election or re-election or until they are removed by a vote of 70% of the total voting power of our shareholders at a general meeting of our shareholders or upon the occurrence of certain events in accordance with the Companies Law and our Articles of Association. The Board may assign members of the Board already in office to such classes at the time such classification becomes effective. If the number of directors is changed, any newly created directors or decrease in directors must be apportioned by the Board among the classes to make them equal in number. In addition, our Articles of Association allow our Board to appoint directors to fill vacancies and/or as an addition to the Board (subject to the maximum number of directors). A director so appointed will hold office until the next annual general meeting of our shareholders for the election of the class of directors in respect of which the vacancy was created, or in the case of a vacancy due to the number of directors being less than the maximum number of directors, until the next annual general meeting of our shareholders for the election of the class of directors to which such director was assigned by our Board. External directors, if any, are elected for an initial term of three years, may be elected for additional terms of three years each under certain circumstances, and may be removed from office pursuant to the terms of the Companies Law.
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Dividend and liquidation rights
We may declare a dividend to be paid to the holders of 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.
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 the Company’s most recently 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; as a company listed on an exchange outside of Israel, however, court approval is not required if the proposed distribution is in the form of an equity repurchase, provided that we notify our creditors of the proposed equity repurchase and allow such creditors an opportunity to initiate a court proceeding to review the repurchase. If within 30 days such creditors do not file an objection, then we may proceed with the repurchase without obtaining court approval. In each case, we are only permitted to distribute a dividend if our Board 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 the Company’s liquidation, after satisfaction of liabilities to creditors, its assets will be distributed to the holders of 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 which may be authorized in the future.
Exchange controls
There are currently no Israeli currency control restrictions on remittances of dividends on 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 at the time are, or have been, in a state of war with Israel.
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On June 26, 2025, we entered into the SPA with the Selling Shareholder. The SPA provides that, upon the terms and subject to the conditions set forth therein, we shall have the right to issue and sell to the Selling Shareholder, from time to time as provided therein, convertible notes in aggregate principal amount of up to the Subscription Amount, which may be convertible into our Ordinary Shares, at a purchase price equal to 90% of the Subscription Amount. On the Initial Closing, the Selling Shareholder purchased from us the Initial Promissory Note. Subject to the conditions in the SPA, we may request that the Selling Shareholder purchase Additional Promissory Notes, each in the principal amount of up to $2.5 million, during each Quarter, which subject to certain conditions may be increased to up to $25 million during each Quarter and up to $50,000,000 in the Initial Period.
We are registering up to 52,477,760 Ordinary Shares, issuable upon conversion of Promissory Notes in the aggregate principal amount of $50 million issued or issuable pursuant to the SPA, to permit the resale of the Note Shares by the Selling Shareholder from time to time after the date of this prospectus. We may receive up to an additional of $85.5 million aggregate gross proceeds under the SPA from sales of Additional Promissory Notes that we elect to make to the Selling Shareholder pursuant to the SPA, from time to time in our sole discretion. We will not receive any of the proceeds from the sale by the Selling Shareholder of the Note Shares. The Selling Shareholder will receive all of the proceeds from the sale of any Note Shares sold by it pursuant to this prospectus.
The Selling Shareholder may sell all or a portion of the Note Shares beneficially owned by it and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the Note Shares are sold through underwriters or broker-dealers, the Selling Shareholder will be responsible for underwriting discounts or commissions or agent’s commissions. The Note Shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions:
| ● | on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
| ● | in the over-the-counter market; |
| ● | in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
| ● | through the writing of options, whether such options are listed on an options exchange or otherwise; |
| ● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| ● | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| ● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| ● | an exchange distribution in accordance with the rules of the applicable exchange; |
| ● | privately negotiated transactions; |
| ● | short sales; |
| ● | sales pursuant to Rule 144; |
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| ● | broker-dealers may agree with the selling securityholders to sell a specified number of such shares at a stipulated price per share; |
| ● | a combination of any such methods of sale; and |
| ● | any other method permitted pursuant to applicable law. |
If the Selling Shareholder effects such transactions by selling the Note Shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the Selling Shareholder or commissions from purchasers of the Note Shares for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the Ordinary Shares or otherwise, the Selling Shareholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Note Shares in the course of hedging in positions they assume. The Selling Shareholder may also sell Ordinary Shares short and the Note Shares covered by this prospectus to close out short positions and to return borrowed Ordinary Shares in connection with such short sales. The Selling Shareholder may also loan or pledge the Note Shares to broker-dealers that in turn may sell such Note Shares.
The Selling Shareholder may pledge or grant a security interest in some or all of the Note Shares owned by it and, if it defaults in the performance of their secured obligations, the pledgees or secured parties may offer and sell the Ordinary Shares from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, amending, if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as a selling shareholder under this prospectus. The Selling Shareholder also may transfer and donate the Note Shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The Selling Shareholder and any broker-dealer participating in the distribution of the Note Shares may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the Note Shares is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of Note Shares being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the Selling Shareholder and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.
Under the securities laws of some states, the Note Shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the Note Shares may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
There can be no assurance that the Selling Shareholder will sell any or all of the Note Shares registered pursuant to the registration statement, of which this prospectus forms a part.
The Selling Shareholder and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the Note Shares by the Selling Shareholder and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the Note Shares to engage in market-making activities with respect to the Note Shares. All of the foregoing may affect the marketability of the Note Shares and the ability of any person or entity to engage in market-making activities with respect to the Note Shares.
We will pay all expenses of the registration of the Note Shares, estimated to be approximately $93,800 in total, including, without limitation, SEC filing fees and expenses of compliance with state securities or “blue sky” laws.
Once sold under the registration statement, of which this prospectus forms a part, the Note Shares will be freely tradable in the hands of persons other than our affiliates.
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Certain legal matters concerning this offering may be passed upon for us by Sullivan & Worcester LLP, New York, New York. Certain legal matters with respect to the legality of the issuance of the Ordinary Shares offered by this prospectus were passed upon for us by Meitar | Law Offices, Ramat Gan, Israel.
The consolidated financial statements of Jeffs’ Brands Ltd. as of December 31, 2024 and 2023, and for each of the three years in the period ended December 31, 2024, incorporated by reference in this prospectus by reference to Jeffs’ Brands Ltd.’s annual report on Form 20-F for the year ended December 31,2024, have been audited by Brightman Almagor Zohar & Co., Certified Public Accountants, a Firm in the Deloitte Global Network, an independent registered public accounting firm, as stated in their report. Such consolidated financial statements are incorporated by reference in reliance upon the report of such firm, given their authority as experts in accounting and auditing.
The financial statements of Pure NJ Logistics LLC for the year ended December 31, 2024, incorporated by reference in this prospectus, have been audited by Elkana Amitai CPA, independent registered public accounting firm, as set forth in their report thereon, included therein. Such financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
The following are the estimated expenses of this offering payable by us with respect to the Note Shares. With the exception of the SEC registration fee, all amounts are estimates and may change:
| SEC registration fee | $ | 51,300 | ||
| Legal fees and expenses | $ | 30,000 | ||
| Accounting fees and expenses | $ | 12,500 | ||
| Total | $ | 93,800 |
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ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of the State of Israel. Service of process upon us and upon our directors and officers and the Israeli experts named in the registration statement of which this prospectus forms a part, a substantial majority of whom reside outside of the United States, may be difficult to obtain within the United States. Furthermore, because substantially all of our assets and a substantial of our directors and officers are located outside of the United States, any judgment obtained in the United States against us or any of our directors and officers may not be collectible within the United States.
We have been informed by our legal counsel in Israel, Meitar | Law Offices, that it may be difficult to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning Israel is not the most appropriate forum to bring such a claim. In Israeli courts, the content of applicable U.S. law must be proved as a fact which can be a time-consuming and costly process and certain matters of procedure will also be governed by Israeli law.
Subject to specified 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 among other things:
| ● | the judgment was rendered by a court which was, according to the laws of the state of the court, competent to render the judgment; |
| ● | 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 |
| ● | the judgment is executory in the state in which it was given. |
Even if these conditions are met, an Israeli court will not declare a foreign civil judgment enforceable if:
| ● | the judgment was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases); |
| ● | the enforcement of the judgment is likely to prejudice the sovereignty or security of the State of Israel; |
| ● | the judgment was obtained by fraud; |
| ● | 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; |
| ● | 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; |
| ● | the judgment is contradictory to another judgment that was given in the same matter between the same parties and that is still valid; or |
| ● | 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.
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
This prospectus is part of a registration statement on Form F-1 that we filed with the SEC relating to the securities offered by this prospectus, which includes additional information. You should refer to the registration statement and its exhibits for additional information. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreements or other document.
We are subject to the informational requirements of the Exchange Act applicable to foreign private issuers. As a “foreign private issuer,” we are exempt from the rules under the Exchange Act prescribing certain disclosure and procedural requirements for proxy solicitations, and our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchases and sales of shares. In addition, we are not required to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we will file with the SEC, within 120 days after the end of each fiscal year, or such applicable time as required by the SEC, an annual report on Form 20-F containing financial statements audited by an independent registered public accounting firm, and may furnish to the SEC, on Report of Foreign Private Issuer on Form 6-K, unaudited interim financial information.
You can review our SEC filings and the registration statements by accessing the SEC’s internet site at http://www.sec.gov. We maintain a corporate website at https://www.jeffsbrands.com/. Information contained on, or that can be accessed through, our website does not constitute a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus and information we file later with the SEC will automatically update and supersede this information. The documents we are incorporating by reference as of their respective dates of filing are:
| ● | our Annual Report on Form 20-F for the year ended December 31, 2024, filed on March 31, 2025; |
| ● | our Reports of Foreign Private Issuer on Form 6-K filed on April 28, 2025, May 2, 2025, May 5, 2025, May 8, 2025, May 15, 2025, May 29, 2025, June 12, 2025, June 23, 2025 and June 26, 2025; and |
| ● | the description of our securities contained in our Form 8-A filed on August 25, 2022 (File No. 001-41482), including as amended by Exhibit 2.10 to our Annual Report on Form 20-F filed on March 31, 2025 and any further amendment or report filed for the purpose of updating such description. |
Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is incorporated or deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We will provide you without charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits to such documents which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests to us at: Jeffs’ Brands Ltd, 7 Mezada Street, Bnei Brak, 5126112 Israel. Attention: Viki Hakmon, Chief Executive Officer, telephone number: (+972) (3) 771-3520.
21
Jeffs’ Brands Ltd
Up to 52,477,760 Ordinary Shares
PRELIMINARY PROSPECTUS
, 2025
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 6. Indemnification of Directors and Officers
Under the Israeli Companies Law, or 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 contain 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:
| ● | a financial liability imposed on him or her in favor of another person pursuant to a judgment, including a 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 legal fees, incurred by the office holder (a) 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 (b) in connection with a monetary sanction; |
| ● | reasonable litigation expenses, including legal fees, incurred by the office holder or imposed by a court (i) in proceedings instituted against him or her by the company, on its behalf or by a third party, or (ii) in connection with criminal proceedings in which the office holder was acquitted, or (iii) as a result of a conviction for a crime that does not require proof of criminal intent; and |
| ● | 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. |
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; |
| ● | 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; |
| ● | 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. |
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; |
| ● | a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; |
| ● | an act or omission committed with intent to derive illegal personal benefit; or |
| ● | a fine, monetary sanction or forfeit levied against the office holder. |
Under the Companies Law, exculpation, indemnification and insurance of office holders must be approved by the compensation committee, the board of directors (and, with respect to directors and the chief executive officer, by the shareholders). However, under regulations promulgated under the Companies Law, the insurance of office holders shall not require shareholder approval and may be approved by only the compensation committee, if the engagement terms are determined in accordance with the company’s compensation policy and that policy was approved by the shareholders by the same special majority required to approve a compensation policy, provided that the insurance policy is on market terms and the insurance policy is not likely to materially impact the company’s profitability, assets or obligations.
Our Articles of Association allow us to exculpate, 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 directors and executive officers exculpating them in advance from liability to us for damages caused to us as a result of a breach of duty of care, and undertaking to indemnify them. This exculpation and indemnification is limited both in terms of amount and coverage and it covers certain amounts regarding administrative proceedings insurable or indemnifiable under the Companies Law and our Articles of Association.
In the opinion of the SEC, however, indemnification of directors and office holders for liabilities arising under the Securities Act, is against public policy and therefore unenforceable.
There is no pending litigation or proceeding against any of our office holders 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 any office holder.
Item 7. Recent Sales of Unregistered Securities
Set forth below are our sales of all securities since June 2022, or the Period, which were not registered under the Securities Act. We believe that each of such issuances was exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act, Rule 701 and/or Regulation S under the Securities Act. The conversions described below were exempt from registration under Securities Act in reliance on Section 3(a)(9) of the Securities Act.
On January 25, 2024, we entered into a private placement transaction pursuant to a securities purchase agreement with certain institutional investors, for aggregate gross proceeds of approximately $7.275 million, providing for the issuance, in a private placement of ordinary shares, no par value, or the Ordinary Shares, pre-funded warrants, Series A warrants and Series B warrants.
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On January 16, 2025, we issued a non-recourse convertible promissory note, or the January 2025 Promissory Note, in the principal amount of $2,850,000 to an institutional investor. In connection with the issuance of the January 2025 Promissory Note, we issued to the holder a warrant to purchase up to 44,749 Ordinary Shares, at an exercise price of $5.10 per Ordinary Share (subject to anti-dilution and share combination event protections) until July 16, 2030.
On March 10, 2025, in connection with the purchase agreement with Pure NJ Logistics LLC, or the Pure Logistics Purchase Agreement,, and as security for the full repayment of the outstanding due amounts under the Pure Logistics Purchase Agreement, we issued to the sellers warrants to purchase Ordinary Shares up to 10,696, at an exercise price per share equal to $5.10. The warrants will only become exercisable upon the occurrence of an Event of Default (as defined in the Pure Logistics Purchase Agreement).
During the Period, we issued 30,797 Ordinary Shares to certain consultants as compensation for consulting services.
Item 8. Exhibits and Financial Statement Schedules
| Exhibit No. | Exhibit Description | Form | File No. | Exhibit No. | Filing Date | Filed/ Furnished | ||||||
| 2.1^ | Share Purchase Agreement, dated February 6, 2025, by and between Jeffs’ Brands Ltd, Fort Products Ltd and Impact Acquisitions Corp. | 20-F | 001-41482 | 4.14 | March 31, 2025 | |||||||
| 2.2&^ | Share Purchase Agreement, dated April 29, 2025 by and between Jeffs’ Brands Ltd, Plantify Foods, Inc and Smart Repair Pro | |||||||||||
| 2.3^ | Purchase Agreement by and among Jeffs’ Brands Ltd, Smart Repair Pro and Pure NJ Logistics | 6-K | 001-41482 | 10.1 | March 11, 2025 | |||||||
| 3.1 | Amended and Restated Articles of Association of Jeffs’ Brands Ltd. | 6-K | 001-41482 | 3.1 | May 15, 2025 | |||||||
| 4.1 | Form of Warrant | F-1 | 333-262835 | 4.2 | May 5, 2022 | |||||||
| 4.2 | Form of Underwriter’s Warrant | F-1 | 333-262835 | 4.5 | May 5, 2022 | |||||||
| 4.3 | Form of Additional Warrant | F-1 | 333-262835 | 4.6 | August 16, 2022 | |||||||
| 4.4 | Form of Investor Warrant | F-1 | 333-262835 | 4.5 | November 28, 2022 | |||||||
| 4.5 | Form of Series A Warrant | 6-K | 001-41482 | 4.1 | January 29, 2024 |
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| & | Filed herewith. |
| ^ | Certain identified information in the exhibit has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to Jeffs’ Brands if publicly disclosed. |
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Item 9. Undertakings
| (a) | The undersigned Registrant hereby undertakes: |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| i. | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| ii. | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; |
| iii. | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment 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. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Item 8.A of Form 20-F if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3. |
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| (5) | That, for the purpose of determining liability under the Securities Act to any purchaser: |
| i. | If the registrant is relying on Rule 430B: |
| A. | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| B. | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness of the date of the first contract or sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date and underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or |
| ii. | If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
| (6) | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell securities to such purchaser: |
| i. | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| ii. | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| iii. | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| iv. | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
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| (b) | 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 hereof, or otherwise, the registrant has been advised that in the opinion of the SEC 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 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 Act and will be governed by the final adjudication of such issue. |
| (c) | The undersigned registrant hereby undertakes that: |
| (1) | That 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) | That 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. |
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SIGNATURES
Pursuant to the requirement 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 has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, the City of Bnei Brak, State of Israel on June 26, 2025.
| JEFFS’ BRANDS LTD | ||
| By: | /s/ Viki Hakmon | |
| Viki Hakmon | ||
| Chief Executive Officer | ||
The undersigned officers and directors of Jeffs’ Brands Ltd hereby constitute and appoint Viki Hakmon and Ronen Zalayet with full power of substitution, our true and lawful attorney-in-fact and agent to take any actions to enable the Company to comply with the Securities Act, and any rules, regulations and requirements of the SEC, in connection with this registration statement on Form F-1, including the power and authority to sign for us in our names in the capacities indicated below any and all further amendments to this registration statement and any other registration statement filed pursuant to the provisions of Rule 462 under the Securities Act.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by each of the following persons in the capacities and on the dates indicated:
| Signature | Title | Date | ||
| /s/ Viki Hakmon | Chief Executive Officer, Director | June 26, 2025 | ||
| Viki Hakmon | (Principal Executive Officer) | |||
| /s/ Ronen Zalayet | Chief Financial Officer | June 26, 2025 | ||
| Ronen Zalayet | (Principal Financial and Accounting Officer) | |||
| /s/ Oz Adler | Chairman of the Board of Directors | June 26, 2025 | ||
| Oz Adler | ||||
| /s/ Amitay Weiss | Director | June 26, 2025 | ||
| Amitay Weiss | ||||
| /s/ Liron Carmel | Director | June 26, 2025 | ||
| Liron Carmel | ||||
| /s/ Tali Dinar | Director | June 26, 2025 | ||
| Tali Dinar | ||||
| /s/ Moshe Revach | Director | June 26, 2025 | ||
| Moshe Revach | ||||
| /s/ Tomer Etyoni | Director | June 26, 2025 | ||
| Tomer Etyoni | ||||
| /s/ Israel Berenstein | Director | June 26, 2025 | ||
| Israel Berenstein |
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SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant to the Securities Act of 1933, as amended, the undersigned, Puglisi & Associates duly authorized representative in the United States of Jeffs’ Brands Ltd, has signed this registration statement on June 26, 2025.
| Puglisi & Associates | |
| /s/ Donald J. Puglisi | |
|
Donald J. Puglisi Managing Director |
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Exhibit 2.2
Certain identified information contained in this document, marked by brackets, has been redacted since disclosure of such information would constitute a clearly unwarranted invasion of personal privacy.”[***]” indicates where the information has been omitted from this exhibit.
PLANTIFY FOODS, INC.
and
JEFFS’ BRANDS LTD
and
SMART REPAIR PRO
SHARE PURCHASE AGREEMENT
APRIL 29, 2025
TABLE OF CONTENTS
| Part 1 INTERPRETATION | 1 | ||
| 1.1 | Definitions | 1 | |
| 1.2 | Schedules | 8 | |
| 1.3 | Interpretation | 8 | |
| 1.4 | Governing Law | 9 | |
| 1.5 | Severability | 9 | |
| 1.6 | Entire Agreement | 10 | |
| 1.7 | Waiver | 10 | |
| Part 2 Purchase and Sale AND RELATED TRANSACTIONS | 10 | ||
| 2.1 | Purchase | 10 | |
| 2.2 | Retention of Liabilities | 10 | |
| 2.3 | Consideration | 10 | |
| 2.4 | Reconstitution of Board and Management | 11 | |
| 2.5 | Name Change | 11 | |
| 2.6 | Finders’ Fees | 11 | |
| Part 3 Representations and Warranties of the Vendor | 12 | ||
| 3.1 | Representations and Warranties of the Vendor and the Target | 12 | |
| 3.2 | Fees | 17 | |
| 3.3 | Other Representations | 17 | |
| 3.4 | Survival of Representations and Warranties of the Vendor and Target | 17 | |
| 3.5 | Reliance | 18 | |
| Part 4 Representations and Warranties of The Purchaser | 18 | ||
| 4.1 | Representations and Warranties of the Purchaser | 18 | |
| 4.2 | Fees | 23 | |
| 4.3 | Other Representations | 23 | |
| 4.4 | Survival | 23 | |
| 4.5 | Reliance | 23 | |
| Part 5 Covenants | 24 | ||
| 5.1 | Covenants of the Vendor and Target | 24 | |
| 5.2 | Covenants of the Purchaser | 26 | |
| 5.3 | Mutual Covenants | 29 | |
| 5.4 | Alternative Transaction | 30 | |
| 5.5 | Facilitation of Transaction | 30 | |
| 5.6 | Confidentiality | 32 | |
| 5.7 | Public Announcements | 32 | |
| 5.8 | Notification of Certain Matters | 33 | |
| 5.9 | Consents | 33 | |
| 5.10 | Target Financial Statements | 33 | |
| Part 6 Closing | 34 | ||
| 6.1 | Closing Date and Location | 34 | |
| 6.2 | Closing | 34 | |
| 6.3 | Deliveries by Purchaser at Closing | 34 | |
| 6.4 | Deliveries by Vendor at Closing | 35 | |
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| Part 7 MUTUAL CONDITIONS PRECEDENT | 36 | ||
| 7.1 | Mutual Conditions Precedent | 36 | |
| 7.2 | Notice and Cure Provisions | 36 | |
| Part 8 PURCHASER’S Conditions Precedent | 37 | ||
| 8.1 | Purchaser’s Conditions | 37 | |
| 8.2 | Waiver | 38 | |
| Part 9 VENDOR’S Conditions Precedent | 38 | ||
| 9.1 | Target’s and Vendor’s Conditions | 38 | |
| 9.2 | Waiver | 38 | |
| Part 10 FURTHER ASSURANCES | 38 | ||
| 10.1 | Further Assurances | 38 | |
| Part 11 Indemnities | 39 | ||
| 11.1 | Indemnification of Purchaser by Vendor | 39 | |
| 11.2 | Claims Under Vendor’s Indemnities | 39 | |
| 11.3 | Indemnification Limitations | 40 | |
| 11.4 | Indemnification of Vendor by Purchaser | 41 | |
| 11.5 | Claims Under Purchaser’s Indemnities | 41 | |
| 11.6 | Survival of Indemnities | 42 | |
| 11.7 | Indemnification Limitations | 42 | |
| Part 12 TERMINATION, AMENDMENT AND WAIVER | 43 | ||
| 12.1 | Termination by the Purchaser | 43 | |
| 12.2 | Termination by the Vendor | 43 | |
| 12.3 | Effect of Termination | 43 | |
| 12.4 | Amendment | 43 | |
| 12.5 | Extension and Waiver | 44 | |
| Part 13 General | 44 | ||
| 13.1 | Potential Concurrent Financing | 44 | |
| 13.2 | Expenses | 44 | |
| 13.3 | Arbitration | 44 | |
| 13.4 | Time | 44 | |
| 13.5 | Notices | 45 | |
| 13.6 | Further Assurances | 46 | |
| 13.7 | Enurement | 46 | |
| 13.8 | Assignment | 46 | |
| 13.9 | Counterparts | 46 | |
| 13.10 | Severability | 46 | |
| 13.11 | Entire Understanding | 46 | |
| 13.12 | Binding Effect; No Third Party Beneficiaries | 46 | |
| 13.13 | Language | 46 | |
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| Schedule A | A-1 | ||
| Schedule B FORM OF CONTINGENT RIGHT CERTIFICATE | B-1 | ||
| 1. | INTERPRETATION | B-1 | |
| 1.1 | Definitions | B-1 | |
| 1.2 | Currency | B-2 | |
| 1.3 | Interpretation Not Affected by Headings, etc. | B-2 | |
| 1.4 | Number, etc. | B-2 | |
| 1.5 | Date for Any Action | B-2 | |
| 2. | CONTINGENT RIGHTS | B-2 | |
| 2.1 | Terms of Contingent Rights | B-2 | |
| 2.2 | Holder of Contingent Right not a Shareholder | B-3 | |
| 2.3 | Contingent Rights to Rank Pari Passu | B-3 | |
| 2.4 | Transfer and Ownership of Contingent Rights | B-3 | |
| 2.5 | Ownership of Rights | B-3 | |
| 2.6 | Issue in Substitution for Contingent Right Certificates Lost, etc. | B-3 | |
| 3. | ISSUANCE OF CONTINGENT RIGHT SHARES | B-4 | |
| 3.1 | Achievement Certificate | B-4 | |
| 3.2 | Payment Procedure | B-4 | |
| 3.3 | Payment Mechanism | B-4 | |
| 3.4 | Cancellation of Rights | B-5 | |
| 4. | WITHHOLDING TAX | B-5 | |
| 4.1 | Withholding Taxes | B-5 | |
| 5. | ADJUSTMENT OF NUMBER OF CONTINGENT RIGHT SHARES | B-6 | |
| 5.1 | Definitions | B-6 | |
| 5.2 | Adjustment | B-6 | |
| 5.3 | Adjustment Rules | B-7 | |
| 5.4 | Notice of Certain Events | B-8 | |
| 6. | RIGHTS OF THE COMPANY AND COVENANTS OF THE COMPANY | B-8 | |
| 6.1 | General Covenants | B-8 | |
| 6.2 | Enforceability of Certificate | B-9 | |
| 7. | DISPUTE MECHANISM | B-9 | |
| 7.1 | Disputed Matters | B-9 | |
| 8. | GENERAL | B-10 | |
| 8.1 | Notices | B-10 | |
| 8.2 | Provisions of this Agreement and Contingent Rights for the Sole Benefit of Parties and Holder | B-10 | |
| 8.3 | Governing Law | B-10 | |
| 8.4 | Entire Agreement | B-11 | |
| 8.5 | Further Assurances | B-11 | |
| 8.6 | Waiver | B-11 | |
| 8.7 | Enurement | B-11 | |
| 8.8 | Severability | B-11 | |
| Schedule C PURCHASER EMPLOYMENT AND CONSULTING AGREEMENTS | C-1 | ||
| Schedule D STATUS OF POB INSOLVENCY PROCEEDINGS | D-1 | ||
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SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 29th day of April, 2025
BETWEEN:
PLANTIFY FOODS, INC., a corporation existing under the laws of the Province of British Columbia
(the “Purchaser”)
AND:
JEFFS’ BRANDS LTD, a company existing under the laws of Israel
(the “Vendor”)
AND:
SMART REPAIR PRO, a company existing under the laws of the State of California
(the “Target”)
WHEREAS:
| A. | the Vendor owns the Target Shares (as defined herein); |
| B. | the Vendor wishes to sell, and the Purchaser wishes to purchase, all of the Vendor’s interest in Target Shares on the terms and conditions set forth herein (the “Transaction”); and |
| C. | the Parties acknowledge that the closing of the transaction contemplated by this Agreement will constitute a “Reverse Takeover” of the Purchaser pursuant to the policies of the TSXV (as defined herein). |
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and mutual agreements and covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties covenant and agree as follows:
Part
1
INTERPRETATION
1.1 Definitions
In this Agreement, the words defined above have the meanings ascribed thereto and the following words and phrases shall have the following meanings:
| (a) | “Affiliate” has the meaning ascribed thereto under the Securities Act (British Columbia); |
| (b) | “Agreement” shall mean this Share Purchase Agreement, together with the recitals above and the Schedules hereto, as amended, supplemented or otherwise modified from time to time; |
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| (c) | “Alternative Transaction” means, other than the transactions contemplated in this Agreement, any offer, proposal or inquiry relating to, or any Person’s indication of interest in: (i) the sale, license, disposition, or acquisition of any of the Target Shares or any material portion of the assets or undertaking of the Target; (ii) the issuance, disposition, or acquisition of (A) any capital stock or other equity security of the Purchaser or Target, (B) any subscription, option, call, warrant, pre-emptive rights, right of first refusal, or any other right (whether or not exercisable) to acquire any capital stock of other equity security of the Purchaser or Target, or (C) any security, instrument or obligation that is or may become convertible into or exchangeable for any capital stock or other equity security of the Purchaser or Target; or (iii) any merger, consolidation, business combination, reorganization, or similar transaction involving the Purchaser or Target or any material portion of their respective assets or undertakings; |
| (d) | “Authorizations” means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made) of any Government Authority, regulatory agency or self-regulatory organizations required by the Purchaser or the Vendor in connection with the completion of this Agreement; |
| (e) | “Books and Records” means: (i) the available books of account, including trial balances ledger and back-end documents, (ii) the available sales records from the Target’s sale platforms and (iii) the share registry and minute book of Target but excluding (i) Excluded Books and Records and (ii) information which is either protected under privacy laws or under attorney-client privilege; |
| (f) | “Business” means, collectively, the business carried on by the Target and its Subsidiaries (except for the Excluded Subsidiary), including the sale of different products primarily on the Amazon marketplace (https://www.amazon.com), currently through 2 stores, KnifePlanet and Whoobli and the operations of a logistics center located at 1200 Fuller RD, Building C2, Linden 07036, NJ, USA; |
| (g) | “Business Day” means any day when banks are open for business in the city of Vancouver, British Columbia, Canada, other than a Saturday, Sunday or any statutory holiday, or both days of Rosh Hashanah and Shavuoth, Yom Kippur, Tisha B’av, the first two days of Succoth, Shimini Atzeret and Simchat Torah, and the last two days of Passover and Purim; |
| (h) | “Control” means, in respect of a corporation, holding or beneficially owning, other than by way of security only, shares of the corporation, if the votes carried by such shares are sufficient, if exercised, to elect or appoint a majority of the directors of the corporation; and “Controlled” shall have the corresponding meaning; |
| (i) | “Closing” means the completion of the transactions contemplated in this Agreement; |
| (j) | “Closing Date” means such date as may be agreed to in writing by the Parties as the date on which the Closing shall take place, but in any event not later than the Termination Date; |
| (k) | “Closing Documents” means the documents required to be delivered pursuant to Section 6.2; |
| (l) | “Closing Time” means 10:00 a.m. (Vancouver time) on the Closing Date or such other time as may be agreed to in writing by the Parties; |
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| (m) | “Confidential Information” means, with respect to the Business, confidential or non-public information and trade secrets, including confidential or non-public: proprietary information, know how, technology, technical data, proprietary processes, specifications, formulations, formulae, materials or compositions of matter of any type or kind (patentable or otherwise), marketing reports, customer lists and supplier lists, study reports, regulatory submission summaries and regulatory submission documents, expertise, test data, analytical and quality control data, studies and procedures, schematics, test methodologies, simulation and development tools, prototypes and other devices; |
| (n) | “Consents and Notices” means: |
| (i) | all requirements of any Government Authorities; |
| (ii) | any approvals by any stock exchange, or other regulatory authority, including the TSXV; |
| (iii) | all consents, approvals or notices required to be given to or received from any Person pursuant to a Contract; |
| (iv) | all filings, registrations or notices to any Government Authority required under Law; and |
| (v) | the expiration of all notice periods established under Law, established by any Government Authority or established pursuant to any Contract, |
necessary to permit the consummation of the transactions contemplated by this Agreement;
| (o) | “Contingent Right Certificate” means a certificate representing the Purchaser Contingent Rights in the form attached hereto as Schedule B; |
| (p) | “Contingent Right Shares” means the Purchaser Common Shares issuable upon conversion of the Purchaser Contingent Rights upon the satisfaction of the applicable Milestone, on the terms and conditions set forth in the Contingent Right Certificate; |
| (q) | “Contracts” means those subsisting agreements, contracts, memorandum of understandings, instruments, leases, permits, licenses and other commitments, oral or written, entered into by the Target or by which the Target is bound, which are significant to the Business, as set out in Schedule A-2; |
| (r) | “Disclosure Document” means the information circular or filing statement prepared in accordance with TSXV Form 3D1/3D2; |
| (s) | “Employment Agreements” has the meaning ascribed thereto in section 3.1(u); |
| (t) | “Encumbrance” means any mortgage, easement, right-of-way, encroachment, covenant, condition, right of re-entry, right of possession, lease, license, lien, charge, pledge, assignment, option, claim, title defect, hypothecation, security interest, title retention right, including any agreement to give any of the foregoing, or other encumbrance of any nature or kind whatsoever; |
| (u) | “Escrow Agent” means Computershare Investor Services Inc.; |
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| (v) | “Escrowed Securities” means the Principal Securities (as defined in accordance with the policies of the TSXV) held by the Escrowed Securityholders and subject to the TSXV Escrow Agreement; |
| (w) | “Escrowed Securityholders” means the securityholders of the Purchaser that will be subject to escrow requirements of the TSXV pursuant to TSXV Policy 5.4 – Escrow, Vendor Consideration and Resale Restrictions; |
| (x) | “Excluded Books and Records” means all corporate, financial, taxation, Tax Returns and other books and records of the Vendor not related to the Business, the Target or the Target Shares; |
| (y) | “Excluded Subsidiary” means Fort Products LLC; |
| (z) | “Excluded Subsidiary Losses” has the meaning ascribed thereto in section 11.1(b) |
| (aa) | “Existing Convertible Debentures” has the meaning ascribed thereto in section 4.1(t); |
| (bb) | “Existing Options” has the meaning ascribed thereto in section 4.1(t); |
| (cc) | “Existing Warrants” has the meaning ascribed thereto in section 4.1(t); |
| (dd) | “Finders” means Capitalink Ltd. and LIA Pure Capital Ltd.; |
| (ee) | “Finders’ Shares” has the meaning ascribed thereto in section 2.6; |
| (ff) | “Government Authority” means: |
| (i) | any domestic or foreign, national, federal, provincial, state, regional, municipal, county or other local government; |
| (ii) | any body exercising any statutory, regulatory, expropriation or taxing authority on behalf or under the authority of any of the governments described in (i) above or any Laws, including any ministry, directorate, department, commission, bureau, board, administrative or other agency, regulatory body or instrumentality thereof; |
| (iii) | any quasi-governmental or private body exercising any statutory, regulatory, expropriation or taxing authority operating under the authority of any of the governments described in (i) above or any Laws; |
| (iv) | any domestic or foreign judicial, quasi-judicial or administrative court, tribunal, commission, board or panel acting under the authority of any of the governments described in (i) above or any Laws; and |
| (v) | the TSXV; |
| (gg) | “IFRS” means the International Financial Reporting Standards issued by the International Accounting Standards Board and interpretations of the International Financial Reporting Interpretations Committee; |
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| (hh) | “Indebtedness” of any Person means all obligations of such Person (a) for money borrowed, whether or not evidenced by bonds, debentures, notes or other similar instruments (including obligations to reimburse any other Person under any letter of credit, banker’s acceptance or related reimbursement agreement, to the extent drawn and not repaid, and any notes issued by such Person in connection with any acquisition undertaken by such Person); (b) relating to any lease that is required to be classified as a capital lease in accordance with generally accepted accounting principles; (c) for amounts owing or due under any interest rate protection agreement, derivative instrument, “swap” agreement or similar agreement (valued on a fair market value basis); (d) in respect of the deferred purchase price of property (other than trade accounts payable and other accrued current liabilities arising in the ordinary course of business); (e) to guarantee or be liable for obligations of the types described in clauses (a) to (d) above, of any Person; and (f) for any accrued interest, prepayment premium or penalty or other costs, fees or expenses related to the foregoing; |
| (ii) | “Indemnitees” has the meaning ascribed thereto in section 11.1(b); |
| (jj) | “Intellectual Property” means: (i) all works, including literary, artistic and graphic works, databases, and compilations thereof, including computer software, source code, object code, firmware, development tools, files, records and data, (the “Works”); (ii) all inventions, arts, processes, machines, manufactures, compositions of matter and developments, whether or not patentable, patented or the subject of applications for patents (the “Inventions”); (iii) all trade names, logos, trade dress, trademarks and service marks set out in Schedule A-3 hereto (“Marks”); (iv) all industrial designs, whether or not patentable or registrable, patented or registered or the subject of applications for design patent or registration (“Designs”); and (v) all Confidential Information; |
| (kk) | “Intellectual Property Rights” means any and all industrial and intellectual property and proprietary rights in the Intellectual Property, including, without limitation, the following: (i) all patents and applications therefor and rights to file applications for the Inventions and all reissues, divisions, renewals, extensions, re-examinations, reissues, provisionals, continuations and continuations-in-part thereof and other derivative applications and patents; (ii) all rights in the Confidential Information; (iii) all design patents, design registrations, pending patent and design applications and rights to file applications for the Designs, including all rights of priority and rights in continuations, continuations-in-part, divisions, re-examinations, reissues and other derivative applications and patents; (iv) all trademark and service mark registrations for the Marks, trademark and service mark applications for the Marks, any rights arising from the use, application for or registration of the Marks, and any and all goodwill associated with and symbolized by the Marks; and (v) all copyright and other rights and all registrations, pending applications for registration and rights to file applications for, and all moral rights and, where a Party is not the author, the benefits of such Party in all waivers of moral rights in, the Works; |
| (ll) | “Judgment” means, any judgment, decree, order, decision, injunction, award or ruling of any Government Authority; |
| (mm) | “Laws” means all domestic or foreign federal, national, provincial, state, regional, municipal, local or other constitutions, treaties, laws, statutes, codes, ordinances, decrees, rules, regulations, by-laws, communiqués, policies, voluntary restraints, guidelines, requirements, directives and any Judgments, including general principles of civil or common law, binding on or affecting the Person referred to in the context in which such word is used; |
| (nn) | “Liability” means any debt, liability or obligation (whether direct or indirect, known or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due), and including all costs and expenses relating thereto; |
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| (oo) | “Material Adverse Change” means, in respect of the Target or the Purchaser, any change in the business, operations, affairs, liabilities, capitalization, financial condition, prospects, licenses, permits, rights or privileges, of that Party which could reasonably be expected to materially and adversely affect the business, condition (financial or otherwise), properties, assets (tangible or intangible), liabilities (whether absolute, accrued, conditional, contingent or otherwise), operations, or results of operations of that Party and its Subsidiaries, taken as a whole, except that none of the following, either alone or in combination, shall be considered in determining whether there has been a “Material Adverse Change” or breach of a representation, warranty, covenant or agreement that is qualified by the term “Material Adverse Change”: (i) changes, effects, events or conditions affecting Israeli, Canadian or US or other financial or securities markets or general economic or political conditions, including changes in the credit, interest rate, commodity and currency markets or in the availability of financing, except to the extent any such change disproportionately impacts the business of that Party relative to other companies operating in the industries in which the business of that Party operates; (ii) changes, effects, events or conditions that result from the execution, announcement or performance of this Agreement or the identity of the Purchaser (which the Vendor unreasonably objects to) or the consummation of the transactions contemplated hereby; (iii) changes, effects, events or conditions that result from any action or omission required to be taken pursuant to this Agreement or at the request of or with the prior written consent of the Purchaser or the Vendor, as the case may be; (iv) changes, effects, events, or conditions arising from acts of war (whether or not declared), armed hostilities, terrorism, or other international or national calamity or crisis; and (v) changes, effects, events, or conditions arising from pandemics, epidemics, or other public health crises, including any significant increase in the effects of COVID-19 and any evolutions or mutations thereof; |
| (pp) | “material fact”, “material change” and “misrepresentation” have the meanings ascribed to such terms under the Securities Act; |
| (qq) | “Milestone” means the Purchaser (i) completing a transaction resulting in either the listing of the Purchaser on the New York Stock Exchange or the NASDAQ (each, a “US Exchange”) or other transaction resulting in the issuance of shares listed on a US Exchange to holders of Purchaser Common Shares in exchange for such Purchaser Common Shares (in either case, an “Uplisting Transaction”) if such Uplisting Transaction is completed within twenty four (24) months of the Closing Date; (ii) closing, within forty-eight (48) months of the Closing Date, one or more equity and/or debt financings, raising an aggregate of US$8,000,000 or more; and (iii) reaching annual revenues of a minimum of US$8,000,000 within thirty-six (36) months of the first January following the Closing Date, as shown on the audited financial statement for such periods which for greater certainty may be issued after thirty-six (36) months of the first January of the Closing Date (and in the case of (ii) and (iii), if applicable, converted into United States dollars using the applicable Bank of Canada conversion rate as of the relevant date(s)); |
| (rr) | “NASDAQ” means the Nasdaq Stock Market LLC; |
| (ss) | “Parties” means the Vendor, the Target and the Purchaser, and “Party” means any of them, as the case may be; |
| (tt) | “Payment Rights” has the meaning ascribed to it in Section 2.3(b) of this Agreement; |
| (uu) | “Payment Securities” has the meaning ascribed to it in Section 2.3(b) of this Agreement; |
| (vv) | “Payment Shares” has the meaning ascribed to it in Section 2.3(a) of this Agreement; |
| (ww) | “Person” includes an individual, corporation, body corporate, partnership, joint venture, association, trust or unincorporated organization or any trustee, executor, administrator or other legal Representative thereof or heirs, successors and assigns of such persons as the context may require; |
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| (xx) | “POB” means the Purchaser’s wholly owned Subsidiary, Peas of Bean Ltd. |
| (yy) | “Proceeding” means any action, cause of action, suit or proceeding, including appeals or applications for review, before or by any Government Authority, arbitrator or arbitration board or any investigation or inquiry by any Government Authority; |
| (zz) | “Purchaser Balance Sheet” has the meaning ascribed thereto in subsection 4.1(f)(i) hereof; |
| (aaa) | “Purchaser Common Shares” means the common shares in the capital of the Purchaser; |
| (bbb) | “Purchaser Contingent Rights” means the contingent value rights to be issued to the Vendor on the Closing Date, each of which entitles the holder thereof to acquire one Contingent Right Share for no additional consideration upon the satisfaction of the applicable Milestone, on the terms and conditions set forth in the Contingent Right Certificate; |
| (ccc) | “Purchaser Financial Statements” means the most recent financial statements of the Purchaser posted to the Purchaser Public Disclosure Record; |
| (ddd) | “Purchaser Public Disclosure Record” means all press releases, material change reports, material contracts, management proxy circulars, financial statements, management’s discussion and analysis, prospectuses and all other documents required to be filed under applicable Securities Laws by or on behalf of the Purchaser to its SEDAR+ profile; |
| (eee) | “Purchaser’s General Losses” has the meaning ascribed thereto in section 11.1(a); |
| (fff) | “Representative” means, as to any Person, such Person’s Affiliates and its Affiliates’ respective agents, directors, officers, employees, consultants, advisors (including, without limitation, financial, legal and accounting advisors) and representatives; |
| (ggg) | “Securities Laws” means the securities legislation and regulations of, and the instruments, policies, rules, orders, codes, notices and interpretation notes of the applicable securities regulatory authority or applicable securities regulatory authorities of, the applicable jurisdiction or jurisdictions collectively; |
| (hhh) | “Subsidiary” means, in respect of a corporation, any of the following, excluding with regards to the Target or Vendor, the Excluded Subsidiary: |
| (i) | a corporation Controlled by: |
| (A) | the first corporation; |
| (B) | the first corporation and one or more corporations Controlled by the first corporation; |
| (C) | two or more corporations controlled by the first corporation; and |
| (ii) | any Subsidiary of a Subsidiary of the first corporation. |
| (iii) | “Target Financial Statements” means the audited financial statements of Target as at and for the financial years ended December 31, 2024 and 2023; |
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| (jjj) | “Target Balance Sheet” has the meaning ascribed thereto in section 3.1(h); |
| (kkk) | “Target Shares” means 15,572 shares of common stock of the Target representing 100% of the issued and outstanding equity interests of the Target; |
| (lll) | “Tax” means all forms of direct or indirect taxation, duties, levies, charges, fees, withholding (including but not limited to health, welfare, social security, employment and similar payments) and imposts, whether payable directly or indirectly, including, corporate tax, partnership tax (or any other business tax), income tax, value added tax, stamp tax, banking and insurance transactions tax, municipality taxes, social security taxes, customs and other import duties, capital gains tax, withholding tax on securities trading transactions and service arrangements with foreign counterparts, expenses, penalties and interest relating to the foregoing or resulting from a failure to comply with any provisions of any enactment relating to any of the foregoing; |
| (mmm) | “Tax Return” means all returns, information returns, reports, declarations, elections, notices, filings, forms, statements and other documents and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto, made, prepared, filed or required to be made, prepared or filed by Law in respect of Taxes; |
| (nnn) | “Tax Ruling” has the meaning ascribed thereto in subsection 7.1(c) hereof; |
| (ooo) | “Termination Date” means July 31, 2025; |
| (ppp) | “TSXV” means the TSX Venture Exchange; |
| (qqq) | “TSXV Escrow Agreement” means the Value Security Escrow Agreement and/or the Surplus Security Escrow Agreement (each as defined in accordance with the policies of the TSXV), as applicable; |
| (rrr) | “United States” means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia; and |
| (sss) | “Vendor’s Authorizations” means the Authorizations, approvals and consents which are required by the Vendor to complete the transactions contemplated under this Agreement. |
1.2 Schedules
The following are the Schedules to this Agreement and are incorporated into and form an integral part of this Agreement:
| Schedule A |
1 - Subsidiaries 2 – Contracts 3 – Marks 4 – List of Debts |
| Schedule B | Form of Contingent Right Certificate |
| Schedule C | Exceptions to Section 4.1(p) |
| Schedule D |
1.3 Interpretation
For the purposes of this Agreement, except as otherwise expressly provided herein:
| (a) | “this Agreement” means this Agreement, including the recitals and Schedules hereto, as it may from time to time be supplemented or amended; |
| (b) | all references in this Agreement to a designated “Part”, “Section”, “Subsection”, or other subdivision, or to a “Schedule”, is to the designated Part, Section, Subsection or other subdivision of or Schedule to this Agreement unless otherwise specifically stated; |
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| (c) | the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Part, Section, Subsection or other subdivision or Schedule; |
| (d) | the singular of any term includes the plural and vice versa and the use of any term is equally applicable to any gender; |
| (e) | the word “or” is not exclusive and the word “including” is not limiting (whether or not non-limiting language such as “without limitation” or “but not limited to” or other words of similar import are used with reference thereto); |
| (f) | all accounting terms not otherwise defined in this Agreement have the meanings assigned to them in accordance with generally accepted accounting principles applicable in British Columbia and/or Canada, applied on a consistent basis with prior years; |
| (g) | except as otherwise provided, any reference to a statute includes and is a reference to such statute and to the regulations made pursuant thereto with all amendments made thereto and in force from time to time, and to any statute or regulations that may be passed which have the effect of supplementing or superseding such statute or regulations; |
| (h) | where the phrase “to the best of the knowledge of” or phrases of similar import are used in this Agreement, it shall be deemed to mean that the Person in respect of whom the phrase is used shall have made reasonable due enquiries; |
| (i) | the headings to the Parts, Sections and Subsections of this Agreement are inserted for convenience only and do not form a part of this Agreement and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof; |
| (j) | any reference to a corporate entity includes and is also a reference to any corporate entity that is a successor to such entity; |
| (k) | the representations, warranties, covenants and agreements contained in this Agreement shall not merge at Closing and shall continue in full force and effect from and after the Closing Date for the applicable period set out in this Agreement; |
| (l) | unless otherwise specifically noted, all references to money in this Agreement are or shall be to money in lawful money of Canada; and |
| (m) | if any action is required to be taken under this Agreement on a day that is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day. |
1.4 Governing Law
This Agreement shall be construed solely in accordance with the laws of British Columbia, without giving effect to the conflicts of laws principles thereof, and the federal laws of Canada applicable in British Columbia.
1.5 Severability
If an arbitrator, court or other tribunal of competent jurisdiction determines that any one or more of the provisions contained in this Agreement is invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of such provision or provisions shall not in any way be affected or impaired thereby in any other jurisdiction and the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless in either case as a result of such determination this Agreement would fail in its essential purpose.
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1.6 Entire Agreement
This Agreement constitutes the entire agreement between the Parties and supersedes all prior agreements and understandings, oral or written, by and between any of the Parties with respect to the subject matter hereof, including the letter of intent between the Parties dated January 21, 2025.
1.7 Waiver
If any Party breaches any provision of this Agreement, the failure of any other Party to require strict performance shall not constitute a waiver of such breach or otherwise prejudice the other Party from subsequently enforcing the provisions hereof as they relate to the breach in question or any similar or other breach. No waiver of any of the provisions of this Agreement shall be deemed to constitute a waiver of any other provision (whether or not similar) of this Agreement, nor shall such waiver constitute a continuing waiver unless otherwise expressly provided in writing duly executed by the Party to be bound thereby.
Part
2
Purchase and Sale AND RELATED TRANSACTIONS
2.1 Purchase
On and subject to the terms and conditions of this Agreement, including the representations, warranties and covenants contained herein, on the Closing Date the Vendor shall sell, assign, transfer and convey to the Purchaser, or an Affiliate of the Purchaser, all of the Vendor’s right, title and interest in and to the Target Shares, free and clear of all Encumbrances, and the Purchaser shall purchase, accept and receive, all right, title and interest in and to the Target Shares on the Closing Date.
2.2 Retention of Liabilities
The Purchaser will not assume, acquire or otherwise become subject to any Liability or Indebtedness of the Vendor hereunder or in connection with the Transaction.
2.3 Consideration
As consideration for the sale, assignment, transfer and conveyance by the Vendor to the Purchaser of the Target Shares pursuant to this Agreement, the Purchaser shall at the Closing:
| (a) | issue 40,375,000 Purchaser Common Shares (the “Payment Shares”) to the Vendor on a prospectus and registration exempt basis at a deemed price per share of C$0.347 as validly issued and fully paid and non-assessable shares, free and clear of any Encumbrances (other than pursuant to applicable statutory requirements or TSXV Escrow Agreement), and shall deliver or cause to be delivered to the Vendor a direct registration statement representing the Payment Shares unless, at least three Business Days before the Closing Date, the Vendor delivers written notice to the Purchaser that the Vendor wishes to receive a share certificate representing the Payment Shares; |
| (b) | issue 129,000,000 Purchaser Contingent Rights (the “Payment Rights” and together with the Payment Shares, the “Payment Securities”) to the Vendor, free and clear of any Encumbrances (other than pursuant to applicable statutory requirements or TSXV Escrow Agreement) on a prospectus and registration exempt basis, subject to the terms and conditions contained in the Contingent Right Certificate; |
| (c) | the Vendor and the Purchaser hereby agree and acknowledge that the Payment Securities shall only be issued pursuant to available exemptions under applicable Securities Laws on a prospectus exempt basis in Canada, including, without limitation, exemptions available under National Instrument 45-106 - Prospectus Exemptions. Accordingly, the Payment Securities will be subject to a four-month hold period and will bear the following legend: |
“UNLESS PERMITTED UNDER APPLICABLE SECURITIES LEGISLATION, THE HOLDER OF THESE SECURITIES MUST NOT TRADE THE SECURITIES BEFORE THE DATE THAT IS FOUR (4) MONTHS AND A DAY AFTER [THE CLOSING DATE]”;
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| (d) | the Vendor recognizes that the Escrowed Securities will be subject to a TSXV Escrow Agreement in accordance with the policies of the TSXV and may bear legends evidencing such escrow; and |
| (e) | the Vendor further agrees and acknowledges that the Escrowed Securities may be subject to additional escrow or resale restrictions in accordance with applicable Securities Laws of non-Canadian jurisdictions, including, but not limited to, the United States, and may bear legends evidencing such escrow or resale restrictions. |
2.4 Reconstitution of Board and Management
In connection with the Transaction, on the Closing Date the Purchaser will:
| (a) | nominate the following individual as a director of the Purchaser (the “New Director”): |
Oz Adler
| (b) | change the position held by Gabi Kabazo, the sole incumbent officer of the Purchaser, to that of chief executive officer; and |
| (c) | appoint Ronen Zalayet as the Purchaser’s chief financial officer and corporate secretary provided that he has delivered to the Purchaser a completed and executed consent to act as officer in the Purchaser’s form and further provided that his completed and executed personal information has been cleared by the TSXV. |
2.5 Name Change
As at the Closing, the Purchaser will be renamed “Smart online logistics Inc.” or such other name as the Vendor and Purchaser may determine, acting reasonably (the “Name Change”).
2.6 Finders’ Fees
A finder’s fee of 2,018,750 Purchaser Common Shares (the “Finders’ Shares”) will be issuable to the Finders on the Closing Date as set out in the table below, subject to TSXV approval and requirements, including any applicable hold periods, and applicable Laws:
| Finder | Number of Finders’ Shares | |||
| Capitalink Ltd. | 1,009,375 | |||
| L.I.A Pure Capital Ltd. | 1,009,375 | |||
2.7 Excluded Subsidiary
Notwithstanding anything to the contrary contained in this Agreement, the Parties hereby agree that the Excluded Subsidiary, shall be excluded from the Transaction. Vendor and Target shall be entitled to transfer or cause to be transferred all of the outstanding equity interests in the Excluded Subsidiary, and such transfer shall not constitute a breach of any representation, warranty, covenant or agreement of Seller contained in this Agreement. For the avoidance of doubt, no representations, warranties, covenants or agreements contained in this Agreement shall apply to the Excluded Subsidiary or its assets, liabilities, operations or business.
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Part
3
Representations and Warranties
of the Vendor
3.1 Representations and Warranties of the Vendor and the Target
To induce the Purchaser to enter into and complete the transactions contemplated by this Agreement, the Vendor and the Target represent and warrant to the Purchaser, as representations and warranties that are true and correct as at the date of this Agreement and that shall be true and correct on the date of this Agreement and the Closing Date as if such representations and warranties were made on each of the date of this Agreement and the Closing Date (except insofar as such representations and warranties are stated to be given as of a particular date or for a particular period and relate solely to such date or period), on a joint and several basis, as follows:
| (a) | Incorporation and Status of the Vendor, Target and the Target’s Subsidiaries – Each of the Vendor, the Target and the Subsidiaries of the Target is a company duly formed, organized and validly subsisting under the Laws of the jurisdiction of its incorporation or organization and is duly qualified to carry on business and in good standing in the jurisdictions in which it carries on business or owns assets; the Vendor is an ‘accredited investor’ as that term is defined in National Instrument 45-106 Prospectus Exemptions issued by the Canadian Securities Administrators; |
| (b) | Power and Authority – Each of the Vendor and the Target has all necessary corporate power and capacity to enter into this Agreement and all documents and agreements contemplated herein to which each of the Vendor and the Target is or may become a party, to perform its obligations hereunder and thereunder, and to transfer the legal and beneficial title to and ownership of the Target Shares to the Purchaser, free and clear of all Encumbrances. The execution and delivery of this Agreement by each of the Vendor and the Target has been duly authorized by all necessary corporate action on the part of each of the Vendor and the Target and no other corporate proceedings on the part of each of the Vendor and the Target are necessary to authorize this Agreement and the transactions contemplated hereunder; |
| (c) | Agreement Valid – This Agreement has been duly executed and delivered by each of the Vendor and the Target and constitutes a legal, valid and binding obligation of each of the Vendor and the Target, enforceable against each of the Vendor and the Target in accordance with its terms, subject to such limitations and prohibitions as may exist or may be enacted in applicable laws relating to bankruptcy, insolvency, liquidation, moratorium, reorganization, arrangement or winding-up and other laws, rules and regulations of general application affecting the rights, powers, privileges, remedies and/or interests of creditors generally; |
| (d) | No Violation – The execution and delivery by each of the Vendor and the Target of this Agreement and performance by each of the Vendor and the Target of its obligations hereunder and the transactions contemplated hereby, including, but not limited to transferring the legal and beneficial title to and ownership of the Target Shares to the Purchaser, will not result in: |
| (i) | a violation or breach of any provision of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, shot-gun, acceleration or cancellation of or under: |
| (A) | the Vendor’s or Target’s constating documents or any resolution of its directors, shareholders, managers and members, as applicable; |
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| (B) | to the best of the knowledge of the Vendor and the Target, any Judgment; or |
| (C) | any agreement, arrangement or understanding to which the Vendor and Target is a party or by which it is bound or affected that could reasonably be expected to have a Material Adverse Change on the Target Shares taken as a whole; or |
| (ii) | a contravention of any applicable corporate Law or Securities Law; |
| (e) | Target Shares – The Vendor owns the Target Shares free and clear of all Encumbrances. The Target Shares constitute 100% of the issued and outstanding equity interests of the Target. The Target Shares are validly issued, fully paid and are non-assessable and there are no outstanding subscriptions, options, warrants, calls, convertible securities or other similar rights, agreements or commitments relating to the issuance of shares or other equity interests in the Target to which Target or the Vendor is a party, obligating Target or the Vendor to compel the Target to (i) issue, transfer or sell any Target Shares or other equity interests of Target or securities convertible into or exchangeable or exercisable for such shares or equity interests, (ii) grant, extend or enter into such subscription, option, warrant, call, convertible securities or other similar right, agreement or arrangement, or (iii) redeem or otherwise acquire any such shares or other equity interests; |
| (f) | Target and Target’s Subsidiaries Corporate Records and Documentation – |
| (i) | True, complete and current copies of the constating documents of Target and each of its Subsidiaries have been delivered or made available to the Purchaser; |
| (ii) | True, complete and current copies of the share and shareholder register of Target and each of its Subsidiaries have been delivered or made available to the Purchaser; |
| (iii) | All corporate documentation of Target and each of its Subsidiaries, including minutes of the board meetings and shareholder meetings have been duly and properly recorded and stored and are accurate, correct and complete, except as would not be material. All such documentation has been provided to the Purchaser; |
| (iv) | All filings required by applicable Law to be delivered or made by the Vendor, the Target and each of the Subsidiaries of the Target to company registries, except as would not be material, have been duly delivered or made on a timely basis; and |
| (v) | No registration filings for the Target or any of its Subsidiaries, except as would not be material, are pending; |
| (g) | Consents and Approval – Other than the approval of the TSXV (if applicable) or as required under the Contracts that require consent/approval, there is no requirement for the Vendor or the Target to give or receive any Consents and Notices or obtain any Authorization in order for the Vendor or the Target, as applicable: |
| (i) | to consummate the transactions contemplated by this Agreement; |
| (ii) | to execute and deliver this Agreement and all of the documents and instruments to be delivered by the Vendor and the Target under this Agreement; or |
| (iii) | to render this Agreement legal, valid, binding and enforceable against either; |
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| (h) | Material Liabilities – Neither the Target nor any of its Subsidiaries is subject to material liabilities of any nature (matured or unmatured, fixed or contingent), other than: |
| (i) | those set forth or adequately provided for in the most recent balance sheet and associated notes thereto included in the Target Financial Statements (the “Target Balance Sheet”); |
| (ii) | those incurred in the ordinary course of business and not required to be set forth in the Target Balance Sheet under IFRS; and |
| (iii) | those incurred in the ordinary course of business since the date of the Target Balance Sheet and consistent with past practice; |
| (i) | Acts of Bankruptcy – Neither the Vendor, Target nor any of the Subsidiaries of the Target has proposed a compromise or arrangement to its creditors generally, has taken any Proceeding with respect to such a compromise or arrangement, has taken any Proceeding to have itself declared bankrupt or wound-up, has taken any Proceeding to have a receiver appointed in respect of any part of its assets and, at present, no encumbrancer or receiver has taken possession of any of its property and no execution or distress is enforceable or levied upon any of its property that is material to the Vendor, Target or the Subsidiaries of the Target and no petition for a receiving order in bankruptcy is filed against any of them; |
| (j) | Litigation – Neither the Vendor, the Target, nor any of the Subsidiaries of the Target is a party to any Proceedings that could materially affect the business, operations, financial condition of the Target or any of the Subsidiaries of the Target and, to the best of the knowledge of the Vendor and Target, no such Proceedings are contemplated or have been threatened; |
| (k) | Judgments – To the best of the knowledge of the Vendor and the Target, there are no Judgments against the Target, the Vendor, or any of the Subsidiaries of the Target that relate to the Target, any Subsidiaries of the Target or the Target Shares and that remain unsatisfied; |
| (l) | Compliance with Laws – Neither the Vendor, the Target nor any of the Subsidiaries of the Target is in breach of any Laws which may have a Material Adverse Change on the value of the Target Shares, the Business or the operations concerning the Target, any of the Subsidiaries of the Target or the Business, and neither the Vendor nor the Target has not received any notice or claim of any alleged breach or violation of any Laws; |
| (m) | Accuracy of Books and Records – All material transactions of the Vendor and the Target related to the Target Shares have been properly recorded in the Books and Records in all material respects; |
| (n) | Accounting Records – The Vendor and Target have maintained proper accounting records such that an audit can readily be completed on the financial statements of Target; |
| (o) | Title of Target Shares – The Vendor directly owns all interest in and to and has good and marketable title to the Target Shares, free and clear of all Encumbrances, adverse claims, interests of others and demands of any nature or kind whatsoever recorded or unrecorded, other than Permitted Encumbrances and as set out in their constating documents; |
| (p) | No Adverse Claims – There are no adverse claims or challenges to or against the Vendor’s ownership of interest in or title to the Target Shares or the validity thereof, nor, to the best of the knowledge of the Vendor and the Target, is there any basis therefor. Neither the Vendor nor the Target has received notice from any Person claiming rights or interests in or to the Target Shares or an Encumbrance on the Target Shares and, except as set out in their constating documents, there are no outstanding agreements or rights or options to acquire or purchase the Target Shares or any portion thereof and no Person, firm or corporation has any proprietary or possessory interest in the Target Shares other than the Vendor, and no Person is entitled to any royalty or other payment in the nature of rent or royalty on any of the material assets of the Target; |
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| (q) | Possession – No Person, other than the Vendor, is entitled to be in possession, including any mortgagee, of the whole or any part of the Target Shares as contemplated under applicable Laws; |
| (r) | Contracts – |
| (i) | Contracts – Except for the Contracts described in Schedule A-2, neither the Target nor any of its Subsidiaries is a party to any Contract related to the Business; and |
| (ii) | Copies of Agreements – True, correct and complete copies of all Contracts have been delivered to the Purchaser; |
| (s) | Insurance – |
| (i) | Coverage – The Vendor and/or the Target maintains insurance policies with respect to the Target and each of its Subsidiaries, including but not limited to the Business, with coverages customary to businesses similar in nature and size to the Business; |
| (ii) | Insurance – All policies of insurance related to the Target, any Subsidiaries of the Target or the Business maintained by the Vendor and Target are in good standing; and |
| (iii) | Outstanding Claims – To the best of the knowledge of the Vendor and the Target, no threatened or actual material claims against or under any insurance policies of the Vendor or Target providing coverage of the Target, any of the Subsidiaries of the Target and the Business have been made, except for claims that have been settled, satisfied or otherwise terminated, with no remaining liability to the Vendor or Target; |
| (t) | Filing of Reports and Returns – The Vendor, the Target and each of the Subsidiaries of the Target have duly filed or made all reports and returns required to be filed by it with any Government Authority and has obtained all permits, licenses, consents, approvals, certificates, registrations and Authorizations (whether from Government Authority or otherwise) which are required in connection with its continuing existence or the operations concerning the Business; |
| (u) | Employee – Except for as disclosed by Schedule A-2, neither the Vendor, the Target nor any of the Subsidiaries of the Target currently have any employment, consulting, severance pay, continuation pay, termination pay, change of control or indemnification agreements or other similar agreements of any nature whatsoever (collectively, “Employment Agreements”) between the Vendor, the Target and/or any of the Subsidiaries of the Target, on the one hand, and any current or former shareholder, officer or director of the Target or any of its Subsidiaries, or any other employee or consultant for which such employee or consultant receives an annual salary or fee of greater than US$50,000 or is entitled to any extraordinary, bonus, termination, change of control, indemnification or other payment as a result of or in connection with the transactions contemplated in this Agreement at any time, that are currently in effect; |
| (v) | Collective Bargaining – Neither the Target nor any of its Subsidiaries is party to any collective bargaining agreement or collective bargaining relationship with any labour union or employee Representative that would apply to the Target or any of its Subsidiaries or the operations concerning the Business. No trade union, council of trade unions, employee bargaining agency or affiliated bargaining agent holds bargaining rights with respect to any of the employees by way of certification, interim certification, voluntary recognition, or succession rights and no union organizing or decertification activities are underway or threatened, and no such activities have occurred in the last five years which would affect Target or any of its Subsidiaries or the operations concerning the Business. There are no pending nor, to the knowledge of the Vendor or the Target, threatened stoppages, strikes, lockouts, walkouts, or other material labour disputes with respect to the Target or any of its Subsidiaries, and no such dispute has occurred in the last five years which would affect Target or any of its Subsidiaries or the operations concerning the Business; |
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| (w) | Employment Law Compliance – The Target and each of its Subsidiaries has complied in all material respects with all Laws relating to the employment of employees, including provisions thereof relating to wages, hours, overtime, collective bargaining, immigration, vacations, occupational health and safety, workplace safety and the payment of social security and other Taxes and there are no outstanding claims, complaints, investigations or orders under any such Laws; |
| (x) | Material Events – At the Closing Time, there is no Material Adverse Change with respect to the Business, the Target or Target Shares; |
| (y) | Anti-Bribery and Corruption – Neither the Vendor, the Target, any of the Subsidiaries of the Target, nor any director, officer, employee, consultant, Representative or agent of the Vendor, the Target or any of the Subsidiaries of the Target has: |
| (i) | violated any anti-bribery or anti-corruption Laws applicable to the Vendor, the Target and/or any of the Subsidiaries of the Target, including but not limited to the U.S. Foreign Corrupt Practices Act and Canada’s Corruption of Foreign Public Officials Act; or |
| (ii) | offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value, that goes beyond what is reasonable and customary and/or of modest value: (a) to any government official, whether directly or through any other person, for the purpose of influencing any act or decision of a government official in his or her official capacity; inducing a government official to do or omit to do any act in violation of his or her lawful duties; securing any improper advantage; inducing a government official to influence or affect any act or decision of any Government Authority; or assisting any Representative of Vendor, Target or any of the Subsidiaries of the Target in obtaining or retaining business for or with, or directing business to, any person; or (b) to any person, in a manner which would constitute or have the purpose or effect of public or commercial bribery, or the acceptance of or acquiescence in extortion, kickbacks, or other unlawful or improper means of obtaining business or any improper advantage. Neither Vendor, Target nor any of the Subsidiaries of the Target nor to the knowledge of the Vendor or the Target, any director, officer, employee, consultant, Representative or agent of foregoing, has (i) conducted or initiated any review, audit, or internal investigation that concluded Vendor, Target or any of the Subsidiaries of the Target or any director, officer, employee, consultant, Representative or agent of the foregoing violated such Laws or committed any material wrongdoing, or (ii) made a voluntary, directed, or involuntary disclosure to any Government Authority responsible for enforcing anti-bribery or anti-corruption Laws, in each case with respect to any alleged act or omission arising under or relating to non-compliance with any such Laws, or received any notice, request, or citation from any person alleging non-compliance with any such Laws; |
| (z) | Intellectual Property – All trade names, logos, trade dress, trademarks and service marks used by the Target or in the Business are set out Schedule A-3 hereto. The Target owns all right, title and interest in and to, or has validly licensed (and are not in breach of such licenses) all material Intellectual Property Rights related to the Target or the Business. All such Intellectual Property Rights that are owned by or licensed to the Vendor or Target, as the case may be, are sufficient, in all material respects, for conducting the operations concerning the Business. All Intellectual Property Rights owned or leased by the Vendor or Target, as the case may be, are valid and enforceable and the carrying on of the operations concerning the Business and the use by the Vendor or Target of any such Intellectual Property Rights or Technology (as defined below) owned by or licensed by it does not breach, violate, infringe or interfere with any rights of any other Person. To the knowledge of the Vendor and the Target, no third party is infringing upon the Intellectual Property Rights owned or licensed by the Vendor or Target. All computer hardware and associated firmware and operating systems, application software, database engines and processed data, and technology infrastructure used in connection with the conduct of the Target or the Business (collectively, the “Technology”) are sufficient, in all material respects, for conducting the Business, as presently conducted, and the Vendor owns or has validly licensed or leased (and are not in breach of such licenses or leases) such Technology; |
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| (aa) | Representations Regarding Investment in the Payment Securities – The Payment Securities to be received by the Vendor will be issued to the Vendor as principal for its own account, not as a nominee or agent, and not with a view to distribution of any part thereof, and the Vendor has no present intention of selling, granting any participation in, or otherwise distributing the same. The Vendor does not currently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participation to such Person or to any third party, with respect to any of the Payment Securities; |
| (bb) | Taxes – The Target and each of its Subsidiaries has paid all Taxes shown as due and payable by it on all of its Tax returns and has paid all assessments and reassessments it has received in respect of Taxes. The Target and each of its Subsidiaries has paid all Tax installments due and payable by it. There are no assessments or reassessments of Taxes that have been issued and are outstanding. Neither the Target nor any of its Subsidiaries is negotiating any assessment or reassessment with any Governmental Authority. Neither the Target nor any of its Subsidiaries is aware of any liabilities for Taxes or any grounds for an assessment or reassessment, including any liability to pay Taxes in connection with this Agreement; |
| (cc) | Subsidiaries – Expect as set forth in Schedule A-1, and for the Excluded Subsidiary, the Target does not have any Subsidiaries; and |
| (dd) | Authorized Conduct – The Vendor has not engaged in an unlawful or unauthorized practice of medicine or other professionally licensed activities through any web sites sponsored or operated, or formerly sponsored or operated, by the Vendor or any other Person. |
| (ee) | United States Securities Law Matters - No Representative of the Vendor was physically present in the United States at any time during all discussions and negotiations of this Agreement and the Transaction, and, at the time of execution of this Agreement on behalf of the Vendor by its authorized signatory, such authorized signatory is not physically present in the United States. |
3.2 Fees
Other than the Finders, there is no investment banker, broker or other intermediary or advisor that has been retained by or is authorized to act on behalf of the Vendor or Target who might be entitled to any fee, commission or reimbursement of expenses on Closing.
3.3 Other Representations
All statements contained in any certificate or other instrument delivered by or on behalf of the Vendor pursuant hereto or in connection with the transactions contemplated by this Agreement shall be deemed to be representations and warranties of the Vendor hereunder.
3.4 Survival of Representations and Warranties of the Vendor and Target
The representations and warranties of the Vendor and Target hereunder shall survive the Closing and the payment of the Payment Securities, and, notwithstanding the Closing and the payment of the Payment Securities, shall continue in full force and effect for the benefit of the Purchaser for a period of eighteen (18) months from the Closing Date for all matters except a claim relating to Taxes or for breach of any of the representations and warranties by the Vendor or the Target in or pursuant to this Agreement involving fraud or fraudulent misrepresentation, subject only to applicable limitation periods imposed by Law.
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3.5 Reliance
The Vendor and the Target acknowledge and agree that the Purchaser has entered into this Agreement relying on the warranties and representations, covenants and other terms and conditions of this Agreement, provided that in no event will the Vendor or the Target have any liability to the Purchaser with respect to a breach of a representation, covenant or other term and condition of this Agreement that the Purchaser was aware of before the Closing Time.
Part
4
Representations and Warranties of The Purchaser
4.1 Representations and Warranties of the Purchaser
In order to induce the Vendor and the Target to enter into and to consummate the transactions contemplated by this Agreement, the Purchaser represents and warrants to the Vendor and the Target as representations and warranties that are true and correct as at the date of this Agreement and that will be true and correct on each of the date of this Agreement and the Closing Date as if such representations and warranties were made on each of the date of this Agreement and the Closing Date (except insofar as such representations and warranties are stated to be given as of a particular date or for a particular period and relate solely to such date or period), as follows:
| (a) | Incorporation and Status –The Purchaser is a body corporate duly formed, organized and validly subsisting under the Laws of the jurisdiction of its incorporation or organization and is duly qualified to carry on business and in good standing in the jurisdictions in which it carries on business; |
| (b) | Power and Authority –The Purchaser has all necessary corporate power and capacity to enter into this Agreement and all documents and agreements contemplated herein to which it is or becomes a party, to perform its obligations hereunder and thereunder, and to acquire legal and beneficial title to and ownership of the Target Shares from the Vendor. The execution and delivery of this Agreement by the Purchaser has been duly authorized by all necessary corporate action on the part of the Purchaser and no other corporate proceedings on the part of the Purchaser is necessary to authorize this Agreement and the transactions contemplated hereunder; |
| (c) | Agreement Valid – This Agreement has been duly executed and delivered by the Purchaser and constitutes a legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to such limitations and prohibitions as may exist or may be enacted in applicable laws relating to bankruptcy, insolvency, liquidation, moratorium, reorganization, arrangement or winding-up and other laws, rules and regulations of general application affecting the rights, powers, privileges, remedies and/or interests of creditors generally; |
| (d) | No Violation – The execution and delivery by the Purchaser of this Agreement and performance by the Purchaser of its obligations hereunder and the transactions contemplated hereby, including, but not limited to, acquiring the legal and beneficial title to and ownership of the Target Shares from the Vendor, will not result in: |
| (i) | a violation or breach of any provision of, constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, shot-gun, acceleration or cancellation of or under: |
| (A) | the Purchaser’s constating documents or any resolution of its directors, shareholders, managers and members, as applicable; |
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| (B) | to the best of the knowledge of the Purchaser, any Judgment; or |
| (C) | any agreement, arrangement or understanding to which the Purchaser is a party or by which it or its properties is bound or affected that, individually or in the aggregate, could reasonably be expected to have a Materially Adverse Effect on the Purchaser; or |
| (ii) | a material breach of any applicable corporate or Securities Law; |
| (e) | Consents and Approval – Other than the approval of the TSXV, there is no requirement for the Purchaser to give or receive any Consents and Notices or obtain any Authorization in order for the Purchaser: |
| (i) | to consummate the transactions contemplated by this Agreement; |
| (ii) | to execute and deliver this Agreement and all of the documents and instruments to be delivered by the Purchaser under this Agreement; or |
| (iii) | to render this Agreement legal, valid, binding and enforceable against it; |
| (f) | Material Liabilities – The Purchaser does not have material liabilities of any nature (matured or unmatured, fixed or contingent), other than: |
| (i) | those set forth or adequately provided for in the most recent balance sheet and associated notes thereto included in the Purchaser Financial Statements (the “Purchaser Balance Sheet”); |
| (ii) | those incurred in the ordinary course of business and not required to be set forth in the Purchaser Balance Sheet under IFRS; and |
those incurred in the ordinary course of business since the date of the Purchaser Balance Sheet and consistent with past practice;
| (g) | Debts - The Purchaser hereby represents and warrants that, as of the date of this Agreement, all of its existing debts and liabilities are fully and accurately listed in Schedule A-4 attached hereto and forming an integral part of this Agreement. The Purchaser further represents that it has no debts, liabilities, or guarantees other than those specified in Schedule A-4 that may affect its ability to fulfill its obligations under this Agreement or its financial capacity to complete the acquisition contemplated herein. The Purchaser undertakes to promptly notify the Seller in writing of any material change in its debt status up to the Closing Date. |
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| (h) | Acts of Bankruptcy – The Purchaser has not proposed a compromise or arrangement to its creditors generally, has not taken any Proceeding with respect to such a compromise or arrangement, has not taken any Proceeding to have itself declared bankrupt or wound-up, has not taken any Proceeding to have a receiver appointed of any part of its assets and, at present, no encumbrancer or receiver has taken possession of any of its property and no execution or distress is enforceable or levied upon any of its property that is material to the Purchaser and no petition for a receiving order in bankruptcy is filed against either, other than: |
| (i) | The Purchaser has no direct or indirect liability, obligation, or contingent exposure arising from or related to the insolvency proceedings of POB in Israel, whether as a guarantor, indemnitor or otherwise, and except for the ‘asset concealment’ claim which was disposed of in a hearing on March 10, 2025, no claims, demands or actions have been made or threatened against the Purchaser in connection with such proceedings, and the Purchaser is not aware that each of the trustee or one of the creditors has expressed an intention to raise such a claim. |
| (ii) | The Purchaser represents and warrants that, to the best of its knowledge, the insolvency proceedings of POB in Israel will not affect the financial or legal standing of each of the Vendor or the Target. The Purchaser represents and warrants that it has not provided a guarantee for one or more of POB’s obligations. The Purchaser confirms that each of the Vendor or the Target holds no direct or indirect liabilities arising from these proceedings. The Purchaser also commits to providing full disclosure of all relevant information regarding POB’s proceedings. |
| (iii) | The court document commencing the POB insolvency proceedings is attached as Schedule D and Schedule D includes a complete and accurate description of the material terms of the status insolvency proceedings against POB as of the date hereof. |
| (i) | Litigation – The Purchaser is not a party to any Proceedings that could materially affect its business, operations or financial condition, and, to the best of the knowledge of the Purchaser, no such Proceedings are contemplated or have been threatened; |
| (j) | Judgments – To the best of the knowledge of the Purchaser, there are no Judgments against the Purchaser that are unsatisfied; |
| (k) | Compliance with Laws – The Purchaser is in material compliance with all applicable Laws and has not received any notice of any alleged breach or violation of any such Laws; |
| (l) | Corporate Records and Documentation – |
| (i) | True, complete and current copies of the Notice of Articles and Articles of the Purchaser have been delivered to the Vendor; |
| (ii) | A certificate of the registrar and transfer agent of the Purchaser Common Shares, which certifies the number of Purchaser Common Shares issued and outstanding on the Business Day immediately prior to the Closing Date will have been delivered to the Vendor by Closing; |
| (iii) | All corporate documentation of the Purchaser, including minutes of the board meetings and shareholders’ meetings exists, is safely stored and is correct, except as would not be material. All such documentation has been provided to the Vendor; and |
| (iv) | All filings required by applicable Law to be delivered or made by the Purchaser to company registries, except as would not be material, have been duly delivered or made on a timely basis |
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| (m) | Accuracy of Books and Records – All material transactions of the Purchaser have been properly recorded in its books and records in all material respects; |
| (n) | Accounting Records – The Purchaser has maintained proper accounting records such that an audit can be readily completed on its financial statements; |
| (o) | Filing of Reports and Returns – The Purchaser has duly filed or made all reports and returns required to be filed by it with any Governmental Authorities and obtained all permits, licenses, consents, approvals, certificates, registrations and Authorizations (whether from Government Authority or otherwise) which are required in connection with its continued existence or business and operations; |
| (p) | Employees – The Purchaser does not currently have any Employment Agreements or consulting agreements between the Purchaser, on the one hand, and any current or former shareholder, officer or director of the Purchaser or any other employee or consultant except as set out in Schedule C; |
| (q) | Employment Law Compliance – The Purchaser has complied in all material respects with all Laws relating to the employment of employees, including provisions thereof relating to wages, hours, overtime, collective bargaining, immigration, vacation, occupational health and safety and the payment of social security and other Taxes and there are no outstanding claims, complaints, investigations or orders under any such Laws; |
| (r) | Material Events – Except as contemplated by this Agreement, at the Closing Time there is no Material Adverse Change with respect to its business or operations; |
| (s) | Capitalization – The authorized capital of the Purchaser consists of an unlimited number of Purchaser Common Shares, all of which are of a single class and have the same rights attached to them. As of the date hereof, 11,440,489 Purchaser Common Shares were issued and outstanding. All of the outstanding share capital of the Purchaser has been duly authorized and validly issued and are fully paid and non-assessable are free and clear of any pre-emptive rights or restrictions on transfer. |
| (t) | Options, Warrants and Convertible Debt – The Purchaser has issued (i) 28,608 incentive stock options (“Existing Options”) each exercisable to acquire one (1) Purchaser Common Share upon payment of an exercise price per Purchaser Common Share of C$7-$44 under the Purchaser’s Omnibus Equity Incentive Plan approved at its 2024 annual general meeting (the “Omnibus Plan”); (ii) 5,333,333 common share purchase warrants (the “Existing Warrants”), each exercisable to acquire one (1) Purchaser Common Share upon payment of an exercise price per Purchaser Common Share of C$0.25; and (iii) convertible debentures in the aggregate principal amount of $240,000, bearing interest at the rate of 12% per annum and maturing on August 29, 2025, each convertible, at the option of the holder, in full or in part, into units of the Company (the “Units”) at a price of $10 per Unit, with each Unit consisting of one Purchaser Common Share and one common share purchase warrant exercisable to purchase one Purchaser Common Share at a price of $10 for a period of 24 months from the date of issuance (the “Existing Convertible Debentures”). Except for the Existing Options, Existing Warrants and Existing Convertible Debentures, there are no outstanding subscriptions, options, warrants, calls, convertible securities or other similar rights, agreements or commitments relating to the issuance of shares or other equity interests in Purchaser to which Purchaser is a party, obligating Purchaser to (i) issue, transfer or sell any Purchaser Common Shares or other equity interests of Purchaser or securities convertible into or exchangeable or exercisable for such shares or equity interests, (ii) grant, extend or enter into such subscription, option, warrant, call, convertible securities or other similar right, agreement or arrangement, or (iii) redeem or otherwise acquire any such shares or other equity interests. The execution and delivery by the Purchaser of this Agreement and performance by the Purchaser of its obligations hereunder and the transactions contemplated hereby shall not trigger any automatic adjustment to the entitlements under the Existing Options, the Existing Warrants (e.g., each Existing Option shall continue to entitle the holder to acquire one (1) Purchaser Common Share up to an aggregate of 28,608 Purchaser Common Shares and each Existing Warrant shall continue to entitle the holder to acquire one (1) Purchaser Common Share up to an aggregate of 5,333,333 Purchaser Common Shares) or the Existing Convertible Debentures or trigger any automatic cash payments to holders thereunder, and the Purchaser has not and will not take any action to modify, accelerate or provide for any cash payments with respect to such entitlements before or at Closing, whether through its discretionary authority under Section 12 of the Omnibus Plan or by any other means. |
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| (u) | Listing of Payment Shares – The Purchaser Common Shares are listed and posted for trading on the TSXV and, to the knowledge of the Purchaser, other than in connection with the Transaction, no order ceasing or suspending trading in any securities of the Purchaser or prohibiting the sale or issuance of the Payment Securities or the trading of any of the Purchaser’s issued securities has been issued and no (formal or informal) Proceedings for such purposes have been threatened or, to the knowledge of the Purchaser, are pending except in connection with this Agreement; |
| (v) | Regulatory Matters – The Purchaser is a “reporting issuer” under the Securities Laws of each of the provinces of British Columbia, Alberta and Ontario and is not noted as being in default on the list of reporting issuers maintained under the securities legislation in such provinces, and in particular, without limiting the foregoing, the Purchaser is in material compliance with its disclosure obligations under Securities Laws and, except with respect to this Agreement and the transactions contemplated herein, there is no material change relating to the Purchaser which has occurred and with respect to which the requisite material change report has not been filed with the applicable securities regulators. All material filings and fees due and payable by the Purchaser pursuant to Securities Laws and general corporate law have been made and paid. The Purchaser has not taken any action to cease to be a reporting issuer in any jurisdiction in which it is a reporting issuer, and has not received any notification from a securities regulator seeking to revoke the reporting issuer status of the Purchaser; |
| (w) | Resale of Securities – The Payment Securities will be subject to a TSXV Escrow Agreement as required by the TSXV and a statutory hold period in accordance with Section 2.3(d) hereof and will bear a legend accordingly; |
| (x) | Issue of Payment Securities – The execution of this Agreement and the issue by the Purchaser to the Vendor of the Payment Securities will be exempt from the registration and prospectus requirements of Securities Laws in Canada provided that the Vendor is an ‘accredited investor’ as that term is defined in National Instrument 45-106 Prospectus Exemptions issued by the Canadian Securities Administrators; |
| (y) | Issue of Payment Securities is Valid – All necessary corporate action has been taken or will have been taken prior to Closing to authorize the issue and the delivery of the Payment Securities at Closing and the Payment Shares will be validly issued as fully paid and non-assessable shares. At the Closing Time, (i) the Payment Securities will be free and clear of all Encumbrances, other than the statutory hold period and the escrow requirements of the TSXV Escrow Agreement in accordance with Section 2.3(d) hereof, and (ii) all conditions required for the conditional listing of the Payment Securities on the TSXV will have been fulfilled (subject to standard post-Closing filings with the TSXV); |
| (z) | No Cease Trade Order – No order ceasing or suspending trading in the securities of the Purchaser nor prohibiting the sale of such securities has been issued to or in respect of the Purchaser or its directors, officers or promoters and to the best of the knowledge of the Purchaser, no investigations or Proceeding for such purposes are pending or threatened, other than the halting of the Purchaser Common Shares by the TSXV in connection with the Transaction; |
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| (aa) | Taxes – The Purchaser has paid all Taxes shown as due and payable by it on all of its Tax returns and has paid all assessments and reassessments it has received in respect of Taxes. The Purchaser has paid all Tax installments due and payable by it. There are no assessments or reassessments of Taxes that have been issued and are outstanding. The Purchaser is not negotiating any assessment or reassessment with any Governmental Authority. The Purchaser is not aware of any liabilities for Taxes or any grounds for an assessment or reassessment, including any liability to pay Taxes in connection with this Agreement; |
| (bb) | Subsidiaries – The Purchaser does not have any Subsidiaries, other than POB and Plantify International Trading Ltd; and |
| (cc) | Name Change – The Name Change does not require the approval of any third party other than the TSXV. |
4.2 Fees
Other than the Finders, there is no investment banker, broker or other intermediary or advisor that has been retained by or is authorized to act on behalf of the Purchaser, who might be entitled to any fee, commission or reimbursement of expenses on Closing.
4.3 Other Representations
All statements contained in any certificate or other instrument delivered by or on behalf of the Purchaser pursuant hereto or in connection with the transactions contemplated by this Agreement shall be deemed to be representations and warranties of the Purchaser hereunder.
4.4 Survival
The representations and warranties of the Purchaser hereunder shall survive the Closing and the purchase of the Target Shares, and, notwithstanding the Closing and the purchase of the Target Shares, the representations and warranties of the Purchaser shall continue in full force and effect for the benefit of the Vendor and Target for a period of eighteen (18) months from the Closing Date for all matters except a claim relating to Taxes or for breach of any of the representations and warranties by the Purchaser in or pursuant to this Agreement involving fraud or fraudulent misrepresentation, subject only to applicable limitation periods imposed by Law, and except for the representations specified in Section 4.1(h), which shall remain in full force and effect for the benefit of the Vendor and the Target for a period of seven (7) years from the date of commencement of the liquidation proceedings of POB, which was on January 14, 2025.
4.5 Reliance
The Purchaser acknowledges and agrees that the Vendor and Target have entered into this Agreement relying on the warranties and representations, covenants and other terms and conditions of this Agreement provided that in no event will the Purchaser have any liability to the Vendor with respect to a breach of a representation, covenant or other term and condition of this Agreement that the Vendor was aware of before the Closing Time.
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Part
5
Covenants
5.1 Covenants of the Vendor and Target
Each of the Vendor and the Target hereby covenants and agrees that, during the period from the date of this Agreement to the Closing Time, the Vendor and the Target will do, or cause to be done, the following:
| (a) | Access – Permit the Purchaser and each of its employees, agents, technical and professional advisors and other Representatives, between the date hereof and the Closing Date, upon reasonable advance notice to the Vendor or the Target of such proposed access, to have reasonable access during normal business hours, without interruption to the Business being carried out by the Vendor and/or the Target on the premises, to the premises and such employees, all as may be authorized by the Vendor and/or the Target, as applicable, for the purposes of accessing and reviewing the Books and Records, Confidential Information, other information regarding the Business and the Target and the assets of the Vendor or the Target as they pertain to the Business, and shall furnish, and require that the Vendor’s and Target’s principal bankers, independent auditors, counsel, technical advisors and other advisors furnish, to the Purchaser, such financial, technical and operating data and other information with respect to the Business and Target, as the Purchaser shall from time to time reasonably request to enable confirmation of the matters represented and warranted in Part 3; |
| (b) | Confer – Confer on a regular basis with the Purchaser with respect to operational matters concerning the Target and promptly advise the Purchaser, orally and in writing, of any materially adverse change in respect of the Target or the Business and of any material Proceedings (or communications indicating that Proceedings may be contemplated) with respect thereto; |
| (c) | Conduct Business in Ordinary and Usual Course – The Vendor and the Target shall, except as otherwise provided in this Agreement: |
| (i) | conduct its business relating to the Target and the Business in the ordinary and usual course consistent with past practices; |
| (ii) | not transfer, sell, consume or otherwise dispose of any part of the Target Shares or interest therein; |
| (iii) | not appoint or permit the appointment of a liquidator, receiver, trustee in bankruptcy, or similar official in respect of the Target Shares or the Target; |
| (iv) | not request an order by a Government Authority for the winding-up or dissolution of the Vendor or Target; |
| (v) | except in the ordinary course of business, not, without the prior written consent of the Purchaser, which shall not be unreasonably withheld, delayed or conditioned: |
| (A) | enter into, modify, amend or terminate any Contracts or Authorizations related to the Business or incur any liability, except in the ordinary course of business and which is not material; |
| (B) | issue or agree to issue any debt, equity or other securities in Target; |
| (C) | borrow money or incur any Indebtedness for money borrowed in Target, except in the ordinary course of business; |
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| (D) | make loans, advances or other payments which would affect the operations relating to the Target or the Business, other than as required in connection with this Agreement; |
| (E) | distribute, transfer, sell, assign or encumber in any way whatsoever any of the Target Shares; |
| (F) | alter or amend the articles or by-laws or any other constating documents of the Target in any manner, except as required to give effect to the matters contemplated by this Agreement; or |
| (G) | other than in connection with this Agreement, Target shall not enter into any transaction or material Contract or engage in any business enterprise or activity different from that currently carried on by the Target in the ordinary course of business; |
| (d) | Continue Insurance – Use its commercially reasonable efforts to maintain all existing policies of insurance on the Target; |
| (e) | Comply with Laws – Comply with all Laws and all Authorizations governing or affecting the Target and/or the Business; |
| (f) | Pay Liabilities – Pay and discharge all Liabilities or obligations of the Vendor (as they relate to the Target Shares) and Target in the ordinary and usual course of business consistent with past business practice, except for such liabilities or obligations as may be contested in good faith; |
| (g) | No Breach – Not take any action or omit to take any action which would, or would reasonably be expected to, result in a breach of or render untrue any representation, warranty, covenant, agreement, term or other obligation of the Vendor contained herein; |
| (h) | Consents, Notices and Authorizations – Use commercially reasonable efforts to ensure that all Consents and Notices have been received or given; and those Consents and Notices which have already been received or given be maintained effective, as the case may be, prior to the Closing Date and that all Authorizations required to permit the Purchaser to carry on the Business as currently carried on have been obtained prior to the Closing Date, all in form and substance satisfactory to the Purchaser, acting reasonably; |
| (i) | Preserve Business – Use commercially reasonable efforts to carry on the Business and operate Target as currently conducted, in each case in all material respects; |
| (j) | Maintenance of Books and Records – Maintain the Books and Records in the usual, regular and ordinary manner, consistent with accepted accounting practices; |
| (k) | Notice of Material Developments – Notify the Purchaser as soon as the Vendor or the Target has determined that a state of facts exists which results in, or can reasonably be expected to result in: |
| (i) | any representation or warranty of the Vendor or the Target set forth in this Agreement being untrue or incorrect in any material respect; |
| (ii) | the breach of any covenant of the Vendor or the Target set forth in this Agreement; |
| (iii) | the non-fulfillment of any condition for the benefit of the Purchaser set forth in this Agreement; |
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| (iv) | any material change in the operations, Business, Target, Target Shares, liabilities, ownership, capital or financial position or condition of the Target, or change in a material fact that has a Material Adverse Change on, or would reasonably be expected to have a Material Adverse Change on, the Business, Target or Target Shares, except for the transactions contemplated by this Agreement; |
| (v) | any notice or other communication from any Person alleging that the Consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person is required in connection with this Agreement or the Transaction (and contemporaneously provide a copy of any such notice or communication to the other Party); |
| (vi) | any notice or other communication from any Government Authority in connection with this Agreement or the Transaction (and contemporaneously provide a copy of any such notice or communication to the other Party); or |
| (vii) | any material legal or regulatory Proceedings commenced or, to its knowledge, threatened against, relating to or involving or otherwise affecting such Party, in each case, solely to the extent that it relates to this Agreement, or the Transaction; |
| (l) | Necessary Steps – Take all actions, steps and Proceedings that are necessary or desirable to approve or authorize, or to validly and effectively undertake, the execution and delivery of this Agreement and the completion of the transactions contemplated by this Agreement; |
| (m) | Pay Liabilities – Pay and discharge all Liabilities and obligations of the Target and the Business in the ordinary and usual course of business consistent with past business practice, except for liabilities or obligations as may be contested in good faith; |
| (n) | Maintenance of Books and Records – Maintain the books and records of the Target in the usual, regular and ordinary manner, consistent with accepted accounting practices; |
| (o) | Regulatory Approvals – Use commercially reasonable efforts to execute all undertakings and comply with all requirements of the applicable Securities Laws, the TSXV, and any other Persons or Government Authority, which may be necessary or reasonable to obtain the necessary approvals under applicable laws and stock exchange requirements to the transactions contemplated hereunder; |
| (p) | Representations and Warranties – Use commercially reasonable efforts to ensure that, immediately prior to the Closing Time, the representations and warranties of the Vendor and the Target set out in this Agreement will be true and correct in all material respects. |
Notwithstanding anything set out in this Section 5.1, the Vendor may refrain from taking any action required to be taken by, or take any action restricted by, this Section 5.1 with the prior written consent of the Purchaser provided that it seeks such consent and provides the Purchaser with all relevant information.
5.2 Covenants of the Purchaser
The Purchaser covenants and agrees with the Vendor and the Target that during the period from the date of this Agreement to the Closing Time, the Purchaser shall do the following:
| (a) | Access – Permit the Vendor, the Target and each of its respective employees, agents, technical and professional advisors and other Representatives, between the date hereof and the Closing Date, upon reasonable advance notice to the Purchaser of such proposed access, to have reasonable access during normal business hours, without interruption to any business being carried out by the Purchaser on the premises, to the premises and such employees, all as may be authorized by the Purchaser, for the purposes of accessing and reviewing the books and records of the Purchaser, and shall furnish, and require that the Purchaser’s principal bankers, independent auditors, counsel, technical advisors and other advisors furnish, to the Vendor, such financial, technical and operating data and other information as the Vendor shall from time to time reasonably request to enable confirmation of the matters represented and warranted in Part 4; |
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| (b) | Conduct of Business in Ordinary and Usual Course – Except as otherwise provided in this Agreement: |
| (i) | conduct its business in conformance with good practices, maintain its affairs in good standing, preserve its corporate existence and comply with all legal and contractual obligations; |
| (ii) | not, without the prior written consent of the Vendor: |
| (A) | dispose of any of its properties or assets out of the ordinary course of business; |
| (B) | appoint or permit the appointment of a liquidator, receiver, trustee in bankruptcy, or similar official in respect of the Purchaser; |
| (C) | request an order by a Government Authority for the winding-up or dissolution of the Purchaser; |
| (D) | issue any debt, equity or other securities in the Purchaser; |
| (E) | borrow money or incur any Indebtedness for money borrowed in Purchaser, except in the ordinary course of business or in connection with this Agreement; |
| (F) | make loans, advances or other payments, other than in the ordinary course of business or as required in connection with this Agreement; |
| (G) | pay any dividends, distribute, transfer, sell, assign or encumber in any way whatsoever any of its assets; |
| (H) | enter into any transaction or agreement with a “related party” (as defined in Multilateral Instrument 61-101) or “non-arm’s length party” (as defined in TSX-V policies) other than in connection with the Transaction; |
| (I) | alter or amend the articles or any other constating documents of the Purchaser in any manner, except as required to give effect to the matters contemplated by this Agreement; or |
| (J) | other than in connection with this Agreement, enter into any transaction or material Contract or engage in any business enterprise or activity different from that carried on by the Purchaser in the ordinary course of business; |
| (c) | Notice of Material Developments – Notify the Vendor and the Target as soon as the Purchaser or any of its directors, officers, employees, agents or technical and professional advisors have determined that a state of facts exist which results in, or will result in: |
| (i) | any representation or warranty of the Purchaser set forth in this Agreement being untrue or incorrect in any material respects; |
| (ii) | the breach of any covenant of the Purchaser set forth in this Agreement; |
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| (iii) | the non-fulfillment of any conditions for the benefit of the Vendor set forth in this Agreement; |
| (iv) | any material change in the business, operations, assets, liabilities, ownership, capital or financial position of the Purchaser, or change in a material fact that has a Material Adverse Change on, or would reasonably be expected to have a Material Adverse Change on, the Purchaser, except for the transactions contemplated by this Agreement; |
| (v) | any notice or other communication from any Person alleging that the Consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person is required in connection with this Agreement or the Transaction (and contemporaneously provide a copy of any such notice or communication to the other Party); |
| (vi) | any notice or other communication from any Government Authority in connection with this Agreement or the Transaction (and contemporaneously provide a copy of any such notice or communication to the other Party); or |
| (vii) | any material legal or regulatory Proceedings commenced or, to its knowledge, threatened against, relating to or involving or otherwise affecting such Party or that relate to this Agreement, or the Transaction; |
| (d) | Necessary Steps – Take all necessary actions, steps and Proceedings to approve or authorize, or to validly and effectively undertake, the execution and delivery of this Agreement and the completion of the transactions contemplated by this Agreement; |
| (e) | Comply with Laws – Comply with all Laws and all Authorizations, governing or affecting the business and operations of the Purchaser, except for failures to comply which in the aggregate would not have a Material Adverse Change on the business and operations of the Purchaser, as applicable; |
| (f) | Pay Liabilities – Pay and discharge all Liabilities and obligations of the Purchaser in the ordinary and usual course of business consistent with past business practice, except for liabilities or obligations as may be contested in good faith; |
| (g) | No Breach – Not take any action or omit to take any action which would, or would reasonably be expected to, result in a breach of or render untrue any representation, warranty, covenant, agreement, term or other obligation of the Purchaser contained herein; |
| (h) | Consents, Notices and Authorizations – Use commercially reasonable efforts to ensure that all Consents and Notices have been received or given; and those Consents and Notices which have already been received or given to be maintained effective, as the case may be, prior to the Closing Date; |
| (i) | Preserve Business – Use commercially reasonable efforts to carry on the business and operations of the Purchaser as currently conducted; |
| (j) | Maintenance of Books and Records – Maintain the books and records of the Purchaser in the usual, regular and ordinary manner, consistent with accepted accounting practices; |
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| (k) | Free Cash – As of immediately prior to the Closing Date, the Purchaser shall have no less than C$300,000 free cash (after deducting the Transaction expenses). For the purposes of this covenant and Section 6.3(e), “free cash” shall mean cash and cash equivalents that (a) are not subject to any Encumbrances, or restrictions on use, and are readily available for the Purchaser’s general corporate purposes, and (b) are net of any Liabilities of the Purchaser, including, but not limited to, the Purchaser’s debts as detailed in Section 4.1(g) and including for any professional or advisory services rendered to the Purchaser prior to or on the Closing Date. The Purchaser shall provide evidence satisfactory to the Vendor, at least three (3) Business Days prior to the Closing Date, demonstrating compliance with this covenant. Such evidence may include, but is not limited to, bank statements, financial statements, or a certificate from the Purchaser’s Chief Financial Officer; |
| (l) | Regulatory Approvals – Use commercially reasonable efforts to assist the Vendor to obtain and comply with all requirements of any Persons or Government Authority, which may be necessary or reasonable to obtain the necessary approvals under applicable Laws to the transactions contemplated hereunder; and |
| (m) | Representations and Warranties – Use commercially reasonable efforts to ensure that, immediately prior to Closing Time, the representations and warranties of the Purchaser set forth in this Agreement will be true and correct in all material respects. |
5.3 Mutual Covenants
Each of the Parties covenants and agrees that, as applicable, during the period from the date of this Agreement to Closing Time, such Party shall:
| (a) | Satisfy Conditions – Use all commercially reasonable efforts to satisfy or cause the satisfaction of the mutual conditions precedent that are set out in Part 7 (and in the case of the Vendor, the conditions precedent that are set out in Part 8, and in the case of the Purchaser, the conditions precedent that are set out in Part 9) and to take, or cause to be taken, all other actions and do, or cause to be done, all other things necessary, proper or advisable under applicable Laws to consummate the transactions contemplated by this Agreement, including using commercially reasonable efforts to: |
| (i) | ensure that all Consents and Notices are given or received; and those Consents and Notices which have already been received or given be maintained effective, as the case may be; |
| (ii) | there shall have been no action taken under any Law or by any government or Government Authority which makes it illegal or otherwise directly or indirectly restrains, enjoins or prohibits the completion of the transactions contemplated in this Agreement; |
| (b) | Valuation – The Purchaser will have obtained or requested the Vendor or Target to obtain and provide to the Purchaser, an independent valuation report (the “Valuation Report”) (in a form acceptable to the Parties acting reasonably), on a reliance basis, determining the fair market value of the Target Shares (the “Target FMV”). The Valuation Report will evidence that the Target FMV is equal or greater than C$14,010,000. |
| (c) | Cooperation – Use all commercially reasonable efforts to cooperate with each other Party in connection with the performance by the other Party of its obligations under this Part 5; |
| (d) | Other Actions – Use all commercially reasonable efforts to ensure compliance with all the conditions in Parts 7, 8 and 9; and |
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| (e) | Rectification of Corporate Records - The Parties and their respective officers and directors will, in consultation and cooperation with one another, rectify all material deficiencies and irregularities in the corporate records, record-keeping, resolutions, minutes, registers and other similar and related corporate documents customarily maintained in a body corporate’s minute books as such deficiencies and irregularities are identified by the other Party, as soon as practicable following the execution of this Agreement and, in any event, prior to the Closing Date, to the satisfaction of the other Party, acting reasonably. |
The foregoing conditions are for the mutual benefit of the Parties hereto and may be waived by mutual consent of the Vendor, the Target, and the Purchaser in writing at any time. If any of such conditions shall not be complied with or waived as aforesaid on or before the Closing Date or, if earlier, the date required for the performance thereof, then, subject to Section 13.4, any Party hereto may terminate this Agreement by written notice to the other in circumstances where the failure to satisfy any such condition is not the result, directly or indirectly, of a breach of this Agreement by such rescinding Party hereto.
5.4 Alternative Transaction
The Vendor, the Target, and the Purchaser each hereby covenant that, from the date hereof until the earlier of: (i) the Closing Time; (ii) this Agreement having been terminated pursuant to and in accordance with Part 12; and (iii) the Termination Date, it will:
| (a) | not directly or indirectly through any Representative take any action of any kind which could reasonably be construed to reduce the likelihood of success of consummating the Transaction, including but not limited to any action to continue, solicit, initiate, assist or encourage enquiries, submissions, proposals or offers from any other Person, entity or group relating to, and will not participate in any discussions or negotiations regarding or furnish to any other Person, entity or group any information with respect to, or otherwise cooperate in any way with or assist or participate in, or facilitate or encourage any effort or attempt with respect to an Alternative Transaction; |
| (b) | promptly notify the other Parties if it becomes aware that any proposal in respect of any Alternative Transaction has been made, or it or any of its Representatives has received any inquiry from or contact with any Person with respect thereto, and advise the Purchaser of the content of any such proposal and, if written, provide the Purchaser with copies; and |
| (c) | cease any and all negotiations with any third party in respect of any Alternative Transaction, and not release any such third party from its obligations under any confidentiality agreement or other similar agreement. |
| 5.5 | Facilitation of Transaction |
Without limiting Section 5.4, each of the Vendor, the Target, and the Purchaser will use commercially reasonable efforts to satisfy each of the conditions precedent to be satisfied by it and to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable under applicable Laws, including applicable Securities Laws, to permit the completion of the Transaction in accordance with the provisions of this Agreement and other applicable agreements and instruments, and to consummate and make effective all other transactions contemplated in and by this Agreement and other applicable agreements and instruments, and each will cooperate with each other, to the extent applicable, in connection with the foregoing, including:
| (a) | executing and delivering the applicable Closing Documents on or before the first Business Day preceding the Closing Date; |
| (b) | preparing the Disclosure Document; |
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| (c) | furnishing to one another, on a timely basis, all such information as may be required to prepare and submit the Disclosure Document to the TSXV and complete the other actions required under this Section 5.5, and each hereby covenants that no information so furnished by it in writing in connection with such actions or otherwise in connection with the consummation of this Agreement will contain any untrue statement of a material fact or omit to state a material fact required to be stated in order to make any information so furnished, in light of the circumstances in which they were made, not misleading; |
| (d) | ensuring that the information relating to it disclosed in the Disclosure Document will not contain any misrepresentation; |
| (e) | promptly notifying one another if at any time before or after the Closing Time either Party becomes aware that the Disclosure Document contains a misrepresentation or any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading in light of the circumstances under which they were made and cooperate in the preparation of a supplement or amendment to the Disclosure Document, as the case may be, that corrects any such misstatement or omission; |
| (f) | ensuring that the Disclosure Document is prepared in compliance with the applicable provisions of the rules of TSXV and applicable Securities Laws; |
| (g) | cooperate with each other in connection with the preparation of documentation for submission to TSXV and any other applicable regulatory authorities and keep each other informed of any requests or comments made by regulatory authorities in connection with such documentation; |
| (h) | using commercially reasonable efforts to provide notice to, and obtain all necessary Consents and Authorizations, the failure of which to obtain would prevent the Parties from effecting the Transaction or would result in a Material Adverse Change on the value of the Target Shares, the Business or the operations concerning the Purchaser; |
| (i) | using commercially reasonable efforts to effect or cause to be effected all necessary registrations and filings and submissions of information requested of it by any Government Authority, the failure of which to obtain would prevent the Parties hereto from effecting the Transaction or would result in a Material Adverse Change on the value of the Target Shares, the Business or the operations concerning the Target or the Purchaser; |
| (j) | using commercially reasonable efforts to lift or rescind any injunction or restraining order or other order which may be entered against it, which injunction or order would prevent the Parties hereto, as applicable, from completing the Transaction; |
| (k) | cooperating with each other in connection with any lawsuits or legal Proceedings brought against any party or any Affiliate thereof challenging this Agreement, the completion of the Transaction and keeping each other informed of any material information that becomes known to them in connection therewith; |
| (l) | complying promptly with all requirements imposed by Law on it or its Subsidiaries with respect to this Agreement; and |
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| (m) | not taking any action, or refraining from taking any commercially reasonable action, or permitting any action to be taken or not taken, which is inconsistent with this Agreement or which would reasonably be expected to prevent, delay or otherwise impede the consummation of the Transaction, as applicable. |
| 5.6 | Confidentiality |
| (a) | The Parties will, and will cause their Representatives to, treat any data and information obtained with respect to the Parties, or any of their Affiliates or associates, from any Representative, officer, director or employee of the Parties, or from any books or records of the Parties, confidentially and with commercially reasonable care and discretion, and will not disclose any such information to third parties; provided, however, that the foregoing shall not apply to: (i) information in the public domain or that becomes public through disclosure in accordance with applicable Law, (ii) information that is required to be disclosed by applicable Law or by the requirements of the TSXV or the NASDAQ, (iii) information that is disclosed by Parties or their Affiliates or associates, on a confidential basis, to any of their respective agents, accountants, attorneys and prospective lenders or investors in connection with or related to the consummation this Agreement, including the financing of this Agreement, or (iv) any information that is disclosed by the Parties after the Closing Time. |
| (b) | In the event that this Agreement is terminated, the Vendor and the Purchaser, upon the written request of the other, will, and will cause their Representatives to, promptly deliver to the other any and all documents or other materials furnished by the disclosing Party or their respective Affiliates in connection with this Agreement without retaining any copy thereof. In the event of such request, all other documents, whether analyses, compilations or studies, that contain or otherwise reflect the information furnished by the disclosing Party, shall be destroyed by the receiving Party or shall be returned and such receiving Party shall confirm in writing that all such materials have been returned or destroyed. Notwithstanding the foregoing, the receiving Party may retain such documents or other material as and to the extent required by any Law, automatic back-up archiving practice, or bona-fide records retention policy, provided that any such documents or other material so retained shall continue to be subject to the terms of this section. No failure or delay by the Parties in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder. |
| (c) | The Vendor and the Purchaser recognize and agree that in the event of a breach by either of this section, money damages would not be an adequate remedy for such breach and, even if money damages were adequate, it would be impossible to ascertain or measure with any degree of accuracy the damages sustained therefrom. Accordingly, if there should be a breach or threatened breach by the receiving Party of the provisions of this section, the disclosing Party, shall be entitled to an injunction restraining any breach without showing or proving actual damage sustained by such disclosing Party. Nothing in the preceding sentence shall limit or otherwise affect any remedies that the non-violating Party may otherwise have under applicable Law. |
5.7 Public Announcements
Neither the Purchaser nor the Vendor will (and each such Party will use commercially reasonable efforts to cause its Representatives not to) issue any press release, make any public announcement or public filing, conduct any interviews, or furnish any written statement to its employees or shareholders generally concerning the or the Transaction or this Agreement without the consent of the other Party (such consent not to be unreasonably withheld), except to the extent required by applicable Laws or the rules of the TSXV or the NASDAQ as applicable (and in any such case, the Purchaser or the Vendor, as applicable, will, to the extent consistent with timely compliance with such requirement, consult with the other Party prior to making the required release, announcement, filing or statement).
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5.8 Notification of Certain Matters
Between the date hereof and the Closing Time, the Parties will give prompt notice in writing to each other of:
| (a) | any information that indicates that any of its representations or warranties contained herein was not true and correct as of the date hereof or will not be true and correct at and as of the Closing Time with the same force and effect as if made at and as of the Closing Time (except for changes specifically permitted or contemplated by this Agreement), |
| (b) | the occurrence of any event that will result, or has a reasonable prospect of resulting, in the failure of any condition specified in Part 7, 8, or 9 hereof to be satisfied, and |
| (c) | any notice or other communication from any third party alleging that the Consent of such third party is or may be required in connection with the Transaction, or that the Transaction may otherwise violate the rights of or confer remedies upon such third party. |
5.9 Consents
Vendor and the Purchaser will use their commercially reasonable efforts to obtain all required third party Consents and Notices, Authorizations, permits, filings, assignments or waivers and amendments or terminations to any instrument or agreement and take such other measures as may be necessary to fulfil their obligations hereunder and to carry out the Transaction, including obtaining any shareholder approvals, Consents or agreements as may be required under applicable Laws the rules and policies of the TSXV and their constating documents to be able to fulfill their obligations hereunder and in connection with the delivery of all of the Closing Documents, as applicable.
5.10 Target Financial Statements
The Vendor hereby agrees that it will cause to be prepared and provide the Target Financial Statements in accordance with IFRS and ensure that:
| (a) | such Target Financial Statements present fairly in accordance with IFRS the consolidated financial position, results of operations and changes in financial position of the Target as of the date thereof and for the periods indicated therein; |
| (b) | such Target Financial Statements reflect appropriate and adequate reserves in respect of contingent liabilities (including Taxes), if any, of the Target; |
| (c) | with respect to the Target Financial Statements and any prior or subsequent financial reporting periods for which financial statements of the Target or Vendor will be required to be included in the Disclosure Document, ensure such annual financial statements are audited or, if subsequent interim financial statements are required, such subsequent interim financial statements are reviewed, as applicable pursuant to the TSXV Corporate Finance Manual, by an independent public accountant in accordance with the CPA Canada Handbook; |
| (d) | with respect to material Contracts to which the Target is a party and commitments for the sale of goods or the provision of services by the Target, such Target Financial Statements contain and reflect adequate reserves for all reasonably anticipated material losses and costs and expenses in excess of expected receipts; and |
| (e) | any Material Adverse Change in the financial position of the Target subsequent to the date of the Target Financial Statements will be adequately disclosed to the Purchaser and reflected in the subsequent Target Financial Statements, as necessary. |
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Part
6
Closing
6.1 Closing Date and Location
The transactions contemplated by this Agreement shall be completed at Closing Time on the Closing Date at the offices of Owen Bird Law Corporation, counsel to the Purchaser, at its offices located in Vancouver, British Columbia, or at such other time or at such other location as may be mutually agreed upon in writing by the Parties. In this regard the Parties shall use their commercially reasonable efforts to cause the Closing Date to occur on or before the Termination Date.
6.2 Closing
At the Closing:
| (a) | the Purchaser shall issue the Payment Securities to the Vendor and the Finders’ Shares to the Finders; |
| (b) | the Purchaser shall deliver to, or cause to be delivered to, the Vendor the documents set forth in Section 6.3; and |
| (c) | the Vendor and the Target will deliver, or cause to be delivered, to the Purchaser the documents set forth in Section 6.4. |
6.3 Deliveries by Purchaser at Closing
At or before Closing Time, the Vendor and/or the Vendor’s counsel shall have received from the Purchaser the following:
| (a) | a certificate of the Purchaser, duly executed by a senior officer of the Purchaser, on behalf of the Purchaser and not in such officer’s personal capacity, stating that, except as disclosed in such certificate, |
| (i) | the representations and warranties of Purchaser contained in this Agreement are true, accurate and complete in all material respects as at the Closing Time, |
| (ii) | the Purchaser’s covenants and obligations hereunder have been satisfied and performed, and |
| (iii) | each of the conditions for the benefit of the Purchaser set forth in Section 8.1 has been satisfied or waived; |
| (b) | a certificate of good standing of the Purchaser; |
| (c) | a duly executed Contingent Right Certificate representing 129,000,000 Purchaser Contingent Rights delivered to the Escrow Agent appointed under the TSXV Escrow Agreement; |
| (d) | a direct registration statement issued by Computershare Investor Services Inc. to each of the Finders representing the Finders’ Shares issuable to each Finder; |
| (e) | evidence satisfactory to the Vendor that as of three (3) Business Days prior to the Closing Date, the Purchaser has no less than C$300,000 in free cash; |
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| (f) | certified copies of the resolutions of the directors and shareholders of the Purchaser evidencing the approval of this Agreement and all of the transactions of the Purchaser contemplated hereunder; |
| (g) | a copy of the share certificates or direct registration statements representing the Payment Shares registered in the name of the Vendor and delivered to the Escrow Agent appointed under the TSXV Escrow Agreement; |
| (h) | certified copies of the resolutions of the Purchaser making the appointments contemplated in Section 2.4; |
| (i) | certified copies of the resolutions of the Purchaser changing its name to “Smart online logistics” or such other name as contemplated by Section 2.5; |
| (j) | all necessary Consents and Notices and Authorizations, including, if applicable, the approval of the TSXV, as the case may be, required to enable the transfer of the Target Shares to the Purchaser as provided for in this Agreement and to permit the Purchaser to carry on the Business as currently conducted, all in form and substance satisfactory to the Purchaser, acting reasonably; |
| (k) | the TSXV Escrow Agreement duly executed by the Purchaser; and |
| (l) | such other documents, certificates, opinions and deliveries as the Parties mutually consider reasonably necessary or desirable in connection with this Agreement. |
6.4 Deliveries by Vendor at Closing
At or before Closing Time, the Purchaser, and the Purchaser’s counsel shall have received from the Vendor the following:
| (a) | a certificate of the Vendor and the Target, duly executed by a senior officer of the Vendor and the Target, on behalf of the Vendor and the Target and not in such officer’s personal capacity, stating that, except as disclosed in such certificate, |
| (i) | the representations and warranties of each of the Vendor and the Target contained in this Agreement are true, accurate and complete in all material respects as at Closing Time, |
| (ii) | each of the Vendor’s and the Target’s covenants and obligations hereunder has been satisfied and performed, and |
| (iii) | each of the conditions for the benefit of the Vendor and the Target set forth in Section 9.1 has been satisfied or waived; |
| (b) | certified copies of resolutions of the directors of the Target authorizing the transfer of the Target Shares; |
| (c) | the TSXV Escrow Agreement duly executed by the Vendor and the Escrowed Securityholders; |
| (d) | certified copies of the resolutions of the board of directors of the Vendor and the Target evidencing that each of the Vendor and the Target has approved this Agreement and all of the transactions of the Vendor and the Target contemplated hereunder including the sale and transfer of the Target Shares to the Purchaser as provided for herein; |
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| (e) | consent in writing to act as a director of the Purchaser, in form satisfactory to the Purchaser, duly signed by Oz Adler; |
| (f) | all instruments of conveyance and transfer, in form and substance reasonably acceptable to the Purchaser, as may be necessary to transfer the Target Shares to the Purchaser or a permitted assignee of the Purchaser; |
| (g) | such other agreements and documents as Purchaser may reasonably require to give effect to the assignment and transfer to Purchaser of the Target Shares; |
| (h) | the Books and Records in the possession of the Vendor; and |
| (i) | such other documents, certificates, and deliveries as the Parties mutually consider reasonably necessary or desirable in connection with this Agreement. |
Part
7
MUTUAL CONDITIONS PRECEDENT
7.1 Mutual Conditions Precedent
The obligations of the Parties to complete the Transaction shall be subject to the satisfaction of, or compliance with, at or before Closing Time, each of the following conditions precedent:
| (a) | No Prohibitions – No Law or Judgment will have been enacted, entered, promulgated or enforced by any Government Authority which enjoins or prohibits the consummation of any of the transactions contemplated by this Agreement; |
| (b) | Satisfactory due diligence –The Vendor shall have completed due diligence to its satisfaction on the Purchaser, and the Purchaser shall have completed due diligence to its satisfaction on the Target and the Target Shares, such due diligence to be determined in each of the Vendor’s and Purchaser’s sole discretion; |
| (c) | Tax Ruling – The Vendor shall have obtained a “Pre Ruling” (“Tax Ruling”) approval for the Transaction from the Israeli Tax Authority in accordance with Section 103T of the Income Tax Ordinance (New Version),1961, which confirms that the Transaction complies with the conditions set forth in Section 103 and therefore, can be carried out as a tax free transaction; |
| (d) | No Proceedings – No Proceeding will have been instituted or be pending for an injunction to restrain, or a declaratory Judgment in respect of damages on account of or relating to, the transactions contemplated by this Agreement and, to the best of the knowledge of the Parties, no such Proceeding will have been threatened or announced; and |
| (e) | No Termination – This Agreement will not have been terminated pursuant to Part 12. |
7.2 Notice and Cure Provisions
Each of the Vendor, on the one hand, and the Purchaser, on the other hand, will give prompt notice to the other of the occurrence, or failure to occur, at any time from the date hereof until the Closing Time, of any event or state of facts which occurrence or failure would, or would reasonably be likely to:
| (a) | constitute a material breach of any of its representations or warranties contained herein or which would cause such representations and warranties to be untrue or incorrect in any material respect at the Closing Time; or |
| (b) | result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by the other hereunder prior to the Closing Date or Closing Time, as applicable. |
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Neither the Vendor, on the one hand, nor the Purchaser, on the other hand, may elect not to complete the transactions contemplated under this Agreement pursuant to any of the conditions precedent contained in Parts 7, 8, or 9, or exercise any termination right arising therefrom, unless forthwith and in any event prior to the Closing Time, the Vendor or the Purchaser, as the case may be, has delivered a written notice to the other specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Vendor or the Purchaser, as the case may be, is asserting as the basis for the non-fulfillment of the applicable condition precedent or the exercise of the termination right, as the case may be. If any such notice is delivered, provided that the Vendor or the Purchaser, as the case may be, is proceeding diligently to cure such matter, if such matter is capable of being cured, the other may not terminate this Agreement until the earlier of the Termination Date and the expiration of a period of 30 days from such notice.
Part
8
PURCHASER’S Conditions Precedent
8.1 Purchaser’s Conditions
The obligations of the Purchaser to complete the purchase of the transactions contemplated by this Agreement shall be subject to the satisfaction of, or compliance with, at or before Closing Time, each of the following conditions precedent:
| (a) | Truth and Accuracy of Representations of the Vendor at Closing – The representations and warranties of the Vendor and the Target made in Part 3 shall be true, correct in all material respects and not misleading at Closing and with the same effect as if made at and as of Closing, provided that any inaccuracies in the representations and warranties that are deemed to be immaterial to the overall transaction shall not be used by the Purchaser as a basis to delay Closing or adjust the Purchase Price; |
| (b) | Performance of Obligations – The Vendor and the Target shall have performed and complied with all of its respective obligations, covenants and agreements to be performed and complied with by it pursuant to this Agreement; |
| (c) | Valuation Report - The Valuation Report shall evidence that the Target FMV is equal or greater than C$14,010,000; |
| (d) | Absence of Material Adverse Change – No event shall have occurred or condition or situation shall have arisen or Law shall have been introduced which might reasonably be expected to have a Material Adverse Change upon on the value of the Target Shares, the Business or the operations concerning the Target; |
| (e) | Consents and Notices – All Consents and Notices, including the Vendor Authorizations and any such Authorizations necessary for the sale of the Target Shares, have been received or given, as the case may be, in form and substance satisfactory to the Purchaser, acting reasonably, other than Consents and Notices which are routinely delivered post-Closing; and |
| (f) | Authorizations – All Authorizations required to permit the Purchaser to carry on the Business as currently conducted after the Closing Time have been obtained, all in form and substance satisfactory to the Purchaser, acting reasonably. |
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8.2 Waiver
The conditions set forth in this Part 8 are for the exclusive benefit of the Purchaser and may be waived by the Purchaser in writing, in whole or in part, on or before the Closing Date. Notwithstanding any such waiver, the completion of the purchase and sale contemplated by this Agreement by the Purchaser shall not prejudice or affect in any way the rights of the Purchaser in respect of the warranties and representations of the Vendor in this Agreement.
Part
9
VENDOR’S Conditions Precedent
9.1 Vendor’s and Target’s Conditions
The obligations of the Vendor and the Target to complete the transactions contemplated by this Agreement shall be subject to the satisfaction of, or compliance with, at or before Closing Time, each of the following conditions precedent:
| (a) | Truth and Accuracy of Representations of the Purchaser at Closing – The representations and warranties of the Purchaser made in Part 4 shall be true, correct and not misleading at Closing and with the same effect as if made at and as of Closing, provided that any inaccuracies in the representations and warranties that are deemed to be immaterial to the overall transaction shall not be used by the Vendor as a basis to delay Closing or to adjust the Purchase Price; |
| (b) | Performance of Agreements – The Purchaser shall have performed and complied with all of the obligations, covenants and agreements to be performed and complied with by it pursuant to this Agreement; |
| (c) | Absence of Materially Adverse Change - No event shall have occurred or condition or situation shall have arisen or Law shall have been introduced which might reasonably be expected to have a Material Adverse Change upon the Purchaser; and |
| (d) | Consents and Notices – All Consents and Notices have been received or given, as the case may be, in form and substance satisfactory to the Vendor and the Target, acting reasonably. |
9.2 Waiver
The conditions set forth in this Part 9 are for the exclusive benefit of the Vendor and the Target may be waived by the Vendor and the Target in writing, in whole or in part, on or before the Closing Date. Notwithstanding any such waiver, completion of the purchase and sale contemplated by this Agreement by the Vendor and the Target shall not prejudice or affect in any way the rights of the Vendor and the Target in respect of the warranties and representations of the Purchaser set forth in this Agreement.
Part
10
FURTHER ASSURANCES
10.1 Further Assurances
The Vendor will from time to time upon reasonable notice after the Closing execute and deliver to the Purchaser all such conveyances, transfers, assignments and other instruments in writing and further assurances as the Purchaser may reasonably require from the Vendor, and the Purchaser will execute and deliver to the Vendor all such agreements of assumption and other instruments in writing and further assurances as the Vendor may reasonably require from the Purchaser, in order to give effect to the provisions hereof. Subject to prior written approval, all costs and expenses incurred by a Party at the request of the other in providing such conveyances, assignments, assumptions and other instruments and further assurances shall be for the account of the requesting Party.
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Part
11
Indemnities
11.1 Indemnification of Purchaser by Vendor
| (a) | The Vendor covenants and agrees with the Purchaser to indemnify the Purchaser and each of its officers, directors, managers, members, employees, agents, successors and assigns against all Proceedings, liabilities, obligations, claims, demands, damages, losses, costs and expenses (including reasonable legal fees) suffered or incurred by the Purchaser, directly or indirectly (the “Purchaser’s General Losses”), by reason of or arising out of any of the following: |
| (i) | any warranties or representations on the part of the Vendor and the Target hereunder being untrue; |
| (ii) | a breach of any agreement, term or covenant on the part of the Vendor and the Target made or to be observed or performed under this Agreement, except for breaches that are de minimis or that are remedied by the Vendor within ten (10) Business Days after notice thereof; or |
| (iii) | any Purchaser’s General Losses, legal causes of which arise prior to the Closing Date and arising from: |
| (A) | all Taxes of the Vendor and the Target and all interest and penalties thereon due and payable to all applicable Government Authorities; or |
| (B) | any Proceedings relating to events involving the Vendor or Target occurring on or prior to the Closing Date. |
| 11.2 | Claims Under Vendor’s Indemnities |
If any claim is made by any Person against an Indemnitee in respect of which the Indemnitee may incur or suffer damages, losses, costs or expenses, directly or indirectly, that might reasonably be considered to be subject to the indemnification obligations of the Vendor in Section 11.1, the Indemnitee shall notify the Vendor where indemnification is sought under Section 11.1 (in this Section 11.2, as applicable, the “Indemnitor”) as soon as reasonably practicable of the nature of such claim and the Indemnitor shall be entitled (but not required) to assume the defense of any suit brought to enforce such claim. The Indemnitee’s omission to so notify the Indemnitor shall not relieve the Indemnitor of any liability which the Indemnitor may have under the indemnity in Section 11.1, except only to the extent that any such delay in, or failure to give, notice as herein required materially prejudices the defense, settlement or mitigation of a claim or results in any material increase in the Purchaser’s Losses or the Excluded Subsidiary Losses, as applicable. The defense of any such claim (whether assumed by the Indemnitor or not) shall be through experienced and competent legal counsel, and shall be conducted in a manner acceptable to the Indemnitee, and the Indemnitor, acting reasonably, and no settlement may be made or permitted to be made, as applicable, by the Indemnitor or the Indemnitee without the prior written consent of the other. If the Indemnitor assumes the defense of any claim then:
| (a) | the Indemnitee and their counsel shall cooperate with the Indemnitor and its counsel in the course of the defense, such cooperation to include providing or making available to the Indemnitor and its counsel documents and information and witnesses for attendance at examinations for discovery and trials; |
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| (b) | the reasonable legal fees and disbursements and other costs of such defense shall, from and after such assumption, be borne by the Indemnitor on a solicitor and own client basis; and |
| (c) | if the Indemnitee retains additional counsel to act on its behalf, the Indemnitor and its counsel shall cooperate with the Indemnitee and their counsel, such cooperation to include providing or making available to the Indemnitee and their counsel documents and information and witnesses for attendance at examinations for discovery and trials; provided that all fees and disbursements of such additional counsel shall be paid by the Indemnitee on a solicitor and own client basis, unless: |
| (i) | the Indemnitor consents to the retention of such counsel by the Indemnitee at the Indemnitor’s expense; or |
| (ii) | the Indemnitor and the Indemnitee are or become parties to the same action, and the representation of all parties by the same counsel would be inappropriate due to a conflict of interest, |
in which case all fees and disbursements of the Indemnitee’s counsel shall be paid by the Indemnitor on a solicitor and own client basis.
If the Indemnitor has not assumed the defense of a claim and employed counsel therefor within 30 days of receiving notice of such claim, all reasonable fees and disbursements of the Indemnitee’s counsel in respect of such claim shall be paid by the Indemnitor on a solicitor and own client basis. If the Indemnitor, having elected to assume the defense of any claim, thereafter, fails to defend such claim within a reasonable time and with reasonable diligence, the Indemnitee shall be entitled to assume the defense of the claim and the Indemnitor shall be bound by the results obtained by the Indemnitee with respect to such claim.
In the event that any claim is of a nature such that the Indemnitee is required by applicable Law or any Judgment to make payment to any Person or Government Authority with respect to such claim before the completion of settlement negotiations or legal Proceedings, the Indemnitee may make such payment and the Indemnitor shall, forthwith after demand by the Indemnitee reimburse the Indemnitee for any such claim. If the amount of any liability of the Indemnitee under the claim in respect of which such a payment was made, as finally determined, is less than the amount which was paid by the Indemnitor to the Indemnitee, the Indemnitee shall promptly pay the amount of such difference to the Indemnitor. The Indemnitee shall not knowingly permit any right of appeal in respect of any claim to terminate without giving the Indemnitor reasonable notice thereof and a reasonable opportunity to contest such claim.
For avoidance of doubt, references in this Section 11.2 to the Indemnitee shall also include each of its respective officers, directors, managers, members, employees, agents, successors and assigns.
11.3 Indemnification Limitations
Notwithstanding the foregoing, (a) the Vendor shall not be liable for any indemnifiable claims unless and until the aggregate amount of such claims, excluding legal fees, exceeds C$100,000 (the “De Minimis Amount”), provided that once the aggregate amount of such claims exceeds the De Minimis Amount, the Vendor shall be liable for the entire payment, including the De Minimis Amount and reasonable legal fees, and (b) the total liability for the Vendor for all indemnifiable claims arising under this Agreement shall not exceed C$1,000,000, except for claims involving fraud or fraudulent misrepresentation, which shall not be subject to this limitation. The parties further acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims for fraud or fraudulent misrepresentation) for any breach or inaccuracy of any representation, warranty, covenant, agreement or obligation set forth in this Agreement or otherwise relating to the transactions contemplated in this Agreement shall be pursuant to the indemnification provisions set forth in this Part 11.
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11.4 Indemnification of Vendor by Purchaser
The Purchaser covenants and agrees with the Vendor to indemnify the Vendor and its respective officers, directors, managers, members, employees, agents, successors and assigns against all Proceedings, liabilities, obligations, claims, demands, damages, losses, costs and expenses (including legal fees on a solicitor and own client basis) suffered or incurred by the Vendor, directly or indirectly (the “Vendor’s Losses”), by reason of or arising out of any of the following:
| (a) | any warranties or representations on the part of the Purchaser hereunder being untrue; |
| (b) | a breach of any agreement, term or covenant on the part of the Purchaser made or to be observed or performed under this Agreement except for breaches that are de minimis or that are remedied by the Purchaser within ten (10) Business Days after notice thereof; |
| (c) | any Vendor’s Losses arising from any Proceedings commenced by third parties relating to events involving the Target occurring after the Closing Date; or |
| (d) | any proceeding Losses of the Vendor arising from the proceedings specified in Section 4.1 (h). |
11.5 Claims Under Purchaser’s Indemnities
If any claim is made by any Person against the Vendor in respect of which the Vendor may incur or suffer damages, losses, costs or expenses, directly or indirectly, that might reasonably be considered to be subject to the indemnification obligations of the Purchaser in Section 11.4, the Vendor shall notify the Purchaser, where indemnification is sought under Section 11.4 (in this Section 11.5, as applicable, the “Indemnitor”) as soon as reasonably practicable of the nature of such claim and the Indemnitor shall be entitled (but not required) to assume the defense of any suit brought to enforce such claim. The Vendor’s omission to so notify the Indemnitor shall not relieve the Indemnitor of any liability which the Indemnitor may have under the indemnity in Section 11.4, except only to the extent that any such delay in, or failure to give, notice as herein required materially prejudices the defense, settlement or mitigation of a claim or results in any material increase in the Vendor’s Losses. The defense of any such claim (whether assumed by the Indemnitor or not) shall be through experienced and competent legal counsel, and shall be conducted in a manner, acceptable to the Vendor and the Indemnitor, acting reasonably, and no settlement may be made or permitted to be made, as applicable, by the Indemnitor or the Vendor without the prior written consent of the other. If the Indemnitor assumes the defense of any claim then:
| (a) | the Vendor and their counsel shall cooperate with the Indemnitor and its counsel in the course of the defense, such cooperation to include providing or making available to the Indemnitor and their counsel documents and information and witnesses for attendance at examinations for discovery and trials; |
| (b) | the reasonable legal fees and disbursements and other costs of such defense shall, from and after such assumption, be borne by the Indemnitor on a solicitor and own client basis; and |
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| (c) | if the Vendor retains additional counsel to act on its behalf, the Indemnitor and its counsel shall cooperate with the Vendor and its counsel, such cooperation to include providing or making available to the Vendor and its counsel documents and information and witnesses for attendance at examinations for discovery and trials; provided that all fees and disbursements of such additional counsel shall be paid by the Vendor on a solicitor and own client basis, unless: |
| (i) | the Indemnitor consents to the retention of such counsel by the Vendor at the Indemnitor’s expense; or |
| (ii) | the Indemnitor and the Vendor are or become parties to the same action, and the representation of all parties by the same counsel would be inappropriate due to a conflict of interest, |
in which case all fees and disbursements of the Vendor’s counsel shall be paid by the Indemnitor on a solicitor and own client basis.
If the Indemnitor has not assumed the defense of a claim and employed counsel therefor within 30 days of receiving notice of such claim, all reasonable fees and disbursements of the Vendor’s counsel in respect of such claim shall be paid by the Indemnitor on a solicitor and own client basis. If the Indemnitor, having elected to assume the defense of any claim, thereafter, fails to defend such claim within a reasonable time and with reasonable diligence, the Vendor shall be entitled to assume the defense of the claim and the Indemnitor shall be bound by the results obtained by the Vendor with respect to such claim.
In the event that any claim is of a nature such that the Vendor is required by applicable Law or any Judgment to make payment to any Person or Government Authority with respect to such claim before the completion of settlement negotiations or legal Proceedings, the Vendor may make such payment and the Indemnitor shall, forthwith after demand by the Vendor reimburse the Vendor for any such claim. If the amount of any liability of the Vendor under the claim in respect of which such a payment was made, as finally determined, is less than the amount which was paid by the Indemnitor to the Vendor, the Vendor shall promptly pay the amount of such difference to the Indemnitor. The Vendor shall not knowingly permit any right of appeal in respect of any claim to terminate without giving the Indemnitor reasonable notice thereof and a reasonable opportunity to contest such claim.
For avoidance of doubt, references in this Section 11.5 to the Vendor shall also include each of their respective officers, directors, managers, members, employees, agents, successors and assigns.
11.6 Survival of Indemnities
The indemnities provided in this Part 11 will survive the Closing and shall continue in full force and effect for the benefit of the applicable Parties’; provided, that no claim may be made or brought by a Party pursuant to this Part 11 after the date that is eighteen (18) months following the Closing Date, except a claim relating to Taxes or for breach of any of the representations and warranties by the Vendor or the Purchaser in or pursuant to this Agreement involving fraud or fraudulent misrepresentation, and except for the representations specified in Section 4.1(h), which shall remain in full force and effect for the benefit of the Vendor and the Target for a period of seven (7) years from the date of commencement of the liquidation proceedings of POB, and not earlier than December 10, 2032, subject only to applicable limitation periods imposed by applicable Law.
11.7 Indemnification Limitations
Notwithstanding the foregoing, (a) the Purchaser shall not be liable for any indemnifiable claims unless and until the aggregate amount of such claims, excluding legal fees, exceeds the De Minimis Amount, provided that once the aggregate amount of such claims exceeds the De Minimis Amount, the Purchaser shall be liable for the entire payment, including the De Minimis Amount and reasonable legal fees, and (b) the total liability for the Purchaser for all indemnifiable claims arising under this Agreement shall not exceed C$1,000,000, except for claims involving fraud or fraudulent misrepresentation, which shall not be subject to this limitation. The parties further acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims for fraud or fraudulent misrepresentation) for any breach or inaccuracy of any representation, warranty, covenant, agreement or obligation set forth in this Agreement or otherwise relating to the transactions contemplated in this Agreement shall be pursuant to the indemnification provisions set forth in this Part 11.
42
Part
12
TERMINATION, AMENDMENT AND WAIVER
12.1 Termination by the Purchaser
Subject to compliance with Section 7.2, the Purchaser may, when not in default in the performance of any of its obligations under this Agreement, without prejudice to any other rights, terminate this Agreement by written notice to the Vendor if:
| (a) | not all of the conditions precedent in Part 7 and 8 will be or have been satisfied or waived by the Purchaser on or prior to the Termination Date; |
| (b) | the Purchaser is not satisfied, in its sole discretion, acting reasonably, with the results of its due diligence review and investigations; |
| (c) | this Agreement or any other material part of the transactions contemplated herein cannot be completed because the Vendor or the Target is in default under any of its covenants contained in Part 5; |
| (d) | the audit and/or review, as applicable, of the Target Financial Statements in accordance with IFRS is not completed by April 30, 2025, or such other date to be mutually agreed upon by the Parties, acting reasonably; or |
| (e) | the Vendor or the Target breaches this Agreement in any material respect. |
12.2 Termination by the Vendor
Subject to compliance with Section 7.2, the Vendor, when not in default in the performance of any of its obligations under this Agreement, may, without prejudice to any other rights, terminate this Agreement by written notice to the Purchaser if:
| (a) | not all of the conditions precedent in Part 7 and 9 will be or have been satisfied or waived by the Vendor on or prior to the Termination Date; |
| (b) | the Vendor is not satisfied, in its sole discretion, acting reasonably, with the results of its due diligence review and investigations; |
| (c) | this Agreement or any other material part of the transactions contemplated herein cannot be completed because the Purchaser is in default under any of its covenants contained in Part 5 on the Termination Date; or |
| (d) | the Purchaser breaches this Agreement in any material respect. |
12.3 Effect of Termination
In the case of any termination of this Agreement pursuant to this Part 12, this Agreement, except in respect to any obligation hereunder which expressly survives termination in accordance with its terms, will be of no further force or effect provided that nothing herein will relieve any Party from its liability for any breach of this Agreement prior to such termination.
12.4 Amendment
The Agreement may not be modified or amended except by an instrument in writing duly executed by or on behalf of all of the Parties.
43
12.5 Extension and Waiver
At or any time prior to Closing Time, the Purchaser, the Vendor or the Target may to the extent legally allowed:
| (a) | extend the time for the performance of any of the obligations or other acts of the other Parties; |
| (b) | waive any inaccuracies in the representations and warranties made by the other Parties; and/or |
| (c) | waive compliance with any of the agreements, covenants or conditions for the benefit of such Party contained herein. |
Any agreement on the part of the Purchaser, the Vendor or the Target to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on their behalf.
Part
13
General
13.1 Potential Concurrent Financing
The Vendor acknowledges that the Purchaser may conduct a concurrent brokered private placement to raise at least C$500,000 in order for the Purchaser to obtain an exemption from the sponsorship requirements of TSXV Policy 2.2.
13.2 Expenses
All costs and expenses incurred in connection with the preparation, negotiation, implementation and execution of this Agreement and the transactions contemplated by this Agreement and in obtaining any necessary Consents and Notices, shall be paid by the party incurring such expenses or required to obtain such Consents and Notices, as applicable.
13.3 Arbitration
Any disagreement among the parties as to the interpretation or enforcement of this Agreement shall be resolved, failing agreement, by binding arbitration in accordance with the provisions of the Arbitration Act (British Columbia). The subject of all such arbitrations will be subject to any statutes of limitation applicable that would be applicable if the claims were litigated. All arbitration hearings will be conducted in Vancouver, British Columbia by an arbitrator agreed upon by the parties to the arbitration or, failing agreement, an arbitrator appointed under the Arbitration Act (British Columbia) upon application by any party for that purpose. In addition to all other powers, the arbitrator shall have the exclusive right to determine all issues of arbitrability. Judgment on any arbitration award may be entered in any court with jurisdiction. The cost of arbitration (other than a party’s own costs) shall be borne equally by the parties.
13.4 Time
Time shall be of the essence hereof.
44
13.5 Notices
Any notice or other writing required or permitted to be given hereunder or for the purposes hereof shall be sufficiently given if delivered by courier or electronic transmission to the Party to whom it is given addressed to such Party at:
| (a) | If to the Purchaser: |
Plantify Foods, Inc.
2264 E11th Avenue
Vancouver, British Columbia
V5N 1Z6 Canada
| Attention: | Gabi Kabazo, Chief Financial Officer | |
| Email: | gabi@plantifyfoods.com |
with a copy (not to constitute notice) at:
Owen Bird Law Corporation
2900-733 Seymour Street
Vancouver, BC V6B 0S6
| Attention: | Ron Paton | |
| Email: | rpaton@owenbird.com |
| (b) | If to the Vendor or Target at: |
Jeffs Brands Ltd
7 Mezada Street
Bnei Brak
Tel Aviv 5126112
Israel
| Attention: | Ronen Zalayet, Chief Financial Officer | |
| Email: | ronen@jeffsbrands.com |
with a copy (not to constitute notice) at:
Meitar Law Offices
16 Abba Hillel Road
Ramat-Gan 5250608 Israel
Telephone:+972-3-6103766
| Attention: | Dr. Shachar Hadar, Adv. | |
| E-mail: | shacharh@meitar.com |
PAC Law
| Attention: | Peter Crawford | |
| Email: | peter@paclaw.ca |
or at such other address as the Party to whom such writing is to be given shall have last notified to the Party giving the same in the manner provided in this clause. Any notice delivered by courier or facsimile to the Party to whom it is addressed shall be deemed to have been given and received on the Business Day next following the day it was delivered or telecopied.
45
13.6 Further Assurances
The Parties shall with reasonable diligence, do all such things and provide all such reasonable assurances as may be required to consummate the transactions contemplated by this Agreement, and each Party shall provide such further documents or instruments required by the other Party as may be reasonably necessary or desirable to give effect to the purpose of this Agreement and carry out its provisions whether before or after the Closing Date.
13.7 Inurement
This Agreement and each of the terms and provisions hereof shall inure to the benefit of and be binding upon the Parties and their respective heirs, executors, administrators, personal Representatives, successors and permitted assigns.
13.8 Assignment
This Agreement and the rights, duties and obligations of any Party hereunder are not assignable without the prior written consent of the other Party hereto.
13.9 Counterparts
This Agreement may be executed in any number of counterparts and may be signed and delivered by facsimile or other means of electronic communication producing a printed copy, each of which so signed shall be deemed to be an original. Such counterparts shall together constitute one and the same instrument and, notwithstanding the date of execution, shall be deemed to bear the date first written above.
13.10 Severability
Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable Law. If any portion of this Agreement is declared invalid for any reason in any jurisdiction, such declaration shall have no effect upon the remaining portions of this Agreement which shall continue in full force and effect as if this Agreement had been executed with the invalid portions thereof deleted; provided, however, if such severability will negate in any material respect the monetary terms of this Agreement, then the Parties shall negotiate in good faith to amend the invalid terms in a manner so that such terms shall not be invalid and will not modify in any material respect the monetary terms of this Agreement unless otherwise agreed to by the Parties. Furthermore, the entirety of this Agreement shall continue in full force and effect in all other jurisdictions.
13.11 Entire Understanding
This Agreement, including the Schedules hereto, sets forth the entire agreement and understanding between the Parties with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, letters of intent or agreements in principle between them.
13.12 Binding Effect; No Third Party Beneficiaries
Except for the provisions of Part 11 relating to the officers, directors, managers, members, employees, agents, successors and assigns of each of the Vendor and the Purchaser (the “Permitted Third Parties”), this Agreement shall be binding upon and shall inure to the exclusive benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors and permitted assigns and nothing herein, express or implied, is intended to, nor shall it, confer on any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. The Parties agree that, for the purpose of giving enforceable rights under this Agreement to the Permitted Third Parties who are not party to this Agreement, the Vendor and the Purchaser, as the case may be, is contracting as agent of such Persons and will hold the rights of such Persons in trust for them.
13.13 Language
This Agreement has been negotiated and executed in the English language. The Parties agree and acknowledge that the English version of this Agreement shall prevail over any translation of the Agreement to the extent permitted by applicable Law.
[Remainder of page intentionally left blank. Signature page to follow.]
46
IN WITNESS WHEREOF the Parties have duly executed this Agreement as of the day and year first above written.
| PLANTIFY FOODS, INC. | ||
| Per: | /s/ Gabi Kabazo | |
| Authorized Signatory | ||
| JEFFS’ BRANDS LTD | ||
| Per: | /s/ Oz Adler | |
| Authorized Signatory | ||
| Per: | /s/ Ronen Zalayet | |
| Authorized Signatory |
| SMART REPAIR PRO | ||
| Per: | /s/ Ronen Zalayet | |
| Authorized Signatory | ||
[Signature Page to Share Purchase Agreement]
SCHEDULE A-1
SUBSIDIARIES
Jeffs’ Brands Holdings Inc.
SciSparc Nutraceuticals Inc
Pure NJ Logistics LLC
A-1
Schedule A-2
CONTRACTS
[***]
A-2
SCHEDULE A-3
LIST oF MARKS
SciSparc Nutraceuticals Inc
| 1. | Reg. No. 7,568,026 - Wellution (the registration pertains to the jurisdiction of the United States) |
A-3
SCHEDULE A-4
List of debts
[***]
A-4
Schedule B
FORM OF CONTINGENT RIGHT CERTIFICATE
CONTINGENT RIGHTS CERTIFICATE
Plantify Foods, Inc., a corporation existing under the laws of British Columbia
(the “Company”)
| CONTINGENT RIGHT CERTIFICATE NO. CVR-001 |
| 129,000,000 CONTINGENT RIGHTS, each entitling the holder thereof to acquire Common Shares. |
THIS IS TO CERTIFY THAT JEFFS’ BRANDS LTD (the “Holder”) is the registered holder of the number of Contingent Rights specified above (“Contingent Rights”). The Contingent Rights represented by this Certificate entitle the Holder to receive Common Shares of the Company, on the terms and conditions set forth in this Certificate.
This Certificate is issued pursuant to that share purchase agreement dated April 29, 2025 (the “Purchase Agreement”) among the Company and Jeffs Brands Ltd (a corporation existing under the laws of Israel) (“Jeffs Brands”). In the event of any conflict between the terms of this Certificate and the Purchase Agreement, the terms of this Certificate shall prevail.
1. INTERPRETATION
| 1.1 | Definitions. Capitalized terms used in this Certificate, to the extent not otherwise defined herein, shall have the same meaning as in the Purchase Agreement. The terms set forth below shall have the meanings ascribed to them below: |
| (a) | “Adjustment Period” means the period of time in which these Contingent Rights are outstanding; |
| (b) | “Common Shares” means the common shares in the capital of the Company; |
| (c) | “Contingent Right Shares” means, at any time, the Common Shares issuable pursuant to the Contingent Rights then represented by this Certificate; |
| (d) | “Exchange” means the TSX Venture Exchange; |
| (e) | “Expiry Date” means: (a) with respect to the achievement of Milestone B (as defined below), forty-eight (48) months from the closing of the Purchase Agreement (the “Closing Date”) and (b) with respect to the achievement of Milestone C (as defined below), thirty six months from the first January after the Closing Date, provided that the Expiry Date shall be extended until the date of issuance of the audited financial statements for such periods; |
| (f) | “Expiry Time” means 5:00 p.m. (Vancouver time) on the Expiry Date; |
| (g) | “Termination Date” means, the date that is the later of (i) the Expiry Time; (ii) the date all of the Contingent Right Shares issuable hereunder are issued in accordance with this Certificate; (iii) the expiration of the Dispute Period in respect of the General Non-Achievement Notice, without delivery of a Dispute Notice; and (iv) in the case of delivery of one or more Dispute Notices, the date agreed upon by the Holder and the Company or a court of competent jurisdiction in respect of the last Dispute Notice; and |
| (h) | “Unissued Shares” means, at any time, all of the Contingent Rights Shares that are then unissued. |
B-1
| 1.2 | Currency. All sums of money which are referred to as: (a) “C$” in this Certificate refer to lawful currency of Canada; and (b) “US$” in this Agreement refer to United States dollars, unless otherwise specified. |
| 1.3 | Interpretation Not Affected by Headings, etc.. The division of this Certificate into articles, sections and other portions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Certificate. Unless otherwise indicated, any reference in this Certificate to an Article, Section or a Schedule refers to the specified Article or Section of, or Schedule to, this Certificate. |
| 1.4 | Number, etc.. Unless the subject matter or context requires the contrary, words importing the singular number only shall include the plural and vice versa; words importing the use of any gender shall include all genders and words importing persons shall include natural persons, firms, trusts, partnerships and corporations. |
| 1.5 | Date for Any Action. In the event that any date on which any action is required or permitted to be taken hereunder by any person is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day. |
2. CONTINGENT RIGHTS
| 2.1 | Terms of Contingent Rights |
| (a) | Subject to adjustment in accordance with Sections 4, 5 and 6, the Contingent Rights shall entitle the Holder to acquire without any further act or formality or payment of additional consideration: |
| (i) | 43,000,000 Common Shares, upon the completion of a transaction resulting in the Company listing its securities on either the New York Stock Exchange or NASDAQ (each, a “US Exchange”), or other transaction resulting in the issuance of shares listed on a US Exchange to shareholders of the Company in exchange for their Common Shares (in either case, an “Uplisting Transaction”) if such Uplisting Transaction is completed within twenty-four (24) months from the Closing Date (“Milestone A”); |
| (ii) | 43,000,000 Common Shares, upon the Company (or a successor entity) closing, within forty-eight (48) months of the Closing Date, one or more equity and/or debt financings, raising an aggregate of US$8,000,000 or more (“Milestone B”); and |
| (iii) | 43,000,000 Common Shares, upon annual revenues of the Target reaching a minimum of US$8,000,000 within thirty-six (36) months after the first January following Closing Date, as shown on the audited financial statement for such periods which for greater certainty may be issued after thirty-six (36) months from the first January after the Closing Date (and in the case of (ii) and (iii), if applicable, converted into United States dollars using the applicable Bank of Canada conversion rate as of the relevant date(s)) (“Milestone C”), up to a maximum of 129,000,000 Common Shares upon the satisfaction of Milestone A, Milestone B and Milestone C (collectively, the “Milestones” and individually, a “Milestone”). |
| (b) | For the purposes of the Milestone, references to “Company” includes the Company and any Affiliate thereof. |
B-2
| (c) | Each Contingent Right shall entitle the Holder thereof to such other rights and privileges as are set forth in this Certificate. |
| (d) | The Company shall not have any obligation to deliver Common Shares pursuant to any Contingent Right if the Contingent Rights are transferred to any person who is a resident of a country or political subdivision thereof in which the Contingent Right Shares may not lawfully be issued pursuant to applicable securities legislation. The Company may require any such person to provide, at such person’s expense, proof acceptable to the Company of an applicable exemption from such securities legislation to the Company before Contingent Right Shares are delivered pursuant to any Contingent Right. |
| 2.2 | Holder of Contingent Right not a Shareholder. Nothing in this Agreement or in the holding of a Contingent Right Certificate, or otherwise, shall, in itself, confer or be construed as conferring upon a Holder any right or interest whatsoever as a shareholder of the Company, including, but not limited to, the right to vote at, to receive notice of, or to attend, meetings of shareholders of the Company or any other proceedings of the Company, or the right to dividends and other allocations. |
| 2.3 | Contingent Rights to Rank Pari Passu. All Contingent Rights shall rank equally and without preference over each other, whatever may be the actual date of issue thereof. |
| 2.4 | Transfer and Ownership of Contingent Rights. Neither this Certificate nor any right or interest hereunder shall be assignable by the Holder, his beneficiaries, dependents or legal representatives without the Company’s prior written consent; provided, however, that nothing in this Section 2.4 shall preclude (a) the Holder from designating a beneficiary to receive any benefit payable hereunder upon his death or (b) the executors, administrators or other legal representatives of the Holder or his estate from assigning any rights hereunder to the Person(s) entitled thereto. |
| 2.5 | Ownership of Rights. The Company may deem and treat the registered Holder of any Certificate as the absolute owner of the Contingent Right represented thereby for all purposes and the Company shall not be affected by any notice or knowledge to the contrary, except where the Company is required to take notice by statute or by order of a court of competent jurisdiction. |
| 2.6 | Issue in Substitution for Contingent Right Certificates Lost, etc. |
| (a) | If this Certificate becomes mutilated or is lost, destroyed or stolen, the Company, subject to applicable law, shall issue and deliver, a new Certificate of like tenor, and bearing the same legend, if applicable, as the one mutilated, lost, destroyed or stolen in exchange for and in place of and upon cancellation of such mutilated Certificate, or in lieu of and in substitution for such lost, destroyed or stolen Certificate, and the substituted Certificate shall be entitled to the benefits hereof and shall rank equally in accordance with its terms with all other Contingent Rights issued or to be issued hereunder. |
| (b) | The applicant for the issue of a new Certificate pursuant to this Section 2.6 shall bear the cost of the issue thereof and in case of loss, destruction or theft shall, as a condition precedent to the issuance thereof, furnish to the Company such evidence of ownership and of the loss, destruction or theft of the Certificate so lost, destroyed or stolen as shall be satisfactory to the Company, in its sole discretion, acting reasonably, and such applicant shall also be required to furnish an indemnity and surety bond in amount and form satisfactory to the Company, in its sole discretion, and shall pay the reasonable charges of the Company in connection therewith. |
B-3
| 2.9 | Cancellation of Contingent Value Rights. This Certificate shall be cancelled by the Company upon surrender, transfer or after the Termination Date. |
3. ISSUANCE OF CONTINGENT RIGHT SHARES
| 3.1 | Achievement Certificate |
| (a) | Upon the satisfaction of any Milestone in accordance with Section 2.1 prior to the Expiry Time, the Company will, as soon as practicable (and in any event not later than five Business Days after the date that the Milestone has been satisfied), deliver to the Holder: (i) a notice in writing (the “Achievement Certificate”) signed on behalf of the Company by one or more officers (without personal liability) certifying that the Milestone has been satisfied; and (ii) a new Certificate for the balance of the Contingent Rights and the remaining Milestones, which new Certificate will supersede and replace this one. |
| (b) | Within five (5) Business Days of the Expiry Time, the Company will deliver to the Holder a notice in writing (the “General Non-Achievement certificate”) signed on behalf of the Company by one or more officers (without personal liability) certifying that each applicable Milestone has not been satisfied by the Expiry Time, and that the Company has complied in all material respects with its obligations under this Agreement. |
| 3.2 | Payment Procedure. Upon satisfaction of a Milestone in accordance with Section 2.1, the Holder shall receive, at no additional cost or expense, the Contingent Right Shares to which the Contingent Rights is entitled pursuant to Section 2.1, less any applicable withholding taxes in accordance with Article 4. The aggregate number of Contingent Right Shares issued to the Holder shall be rounded down to the nearest whole share, as is appropriate in the circumstances. |
| 3.3 | Payment Mechanism |
| (a) | All Contingent Right Shares issuable in respect of the Contingent Rights will be deemed to be issued effective as of the date specified in the Achievement Certificate or the Agreed Issue Date (as defined below), as the case may be, for and on behalf of the Holder and the Holder shall, without payment of additional consideration or any further action on the part of the Holder (including the surrender of this Certificate), be deemed to have subscribed for the corresponding number of Contingent Right Shares issuable pursuant to such Contingent Rights and the Company hereby irrevocably authorizes the issuance and delivery of the Contingent Right Shares. |
| (b) | The Company or its registrar and transfer agent shall cause to be mailed to the address of the Holder set forth herein, Contingent Right Shares in the name of the Holder representing the number of Contingent Right Shares issuable to the Holder in respect of such Contingent Rights, as fully paid and non-assessable common shares of the Company, in accordance with this Section 3.3, if and when necessary. |
B-4
| 3.4 | Cancellation of Rights. At the Termination Date, this Certificate shall be cancelled and shall thereafter be null, void and of no effect. |
4. WITHHOLDING TAX
| 4.1 | Withholding Taxes |
| (a) | The Company shall be entitled to deduct and withhold from the Contingent Right Shares issuable hereunder such amounts as it is entitled or required (or otherwise reasonably determines) to deduct and withhold under the provision of any Applicable Laws, including but not limited to the Income Tax Ordinance 5721-1961 (Israel), or the administration or interpretation thereof in respect of Taxes. To the extent that any such amounts are so deducted and withheld and are remitted to the relevant Governmental Entity, such amounts shall be treated for all purposes of this Certificate as having been paid to the person to whom such amounts would otherwise have been paid. |
| (b) | Notwithstanding the foregoing, the Company and the Holder hereby agree that no withholding will be made under this Section 4.1 in respect of persons covered by an applicable Tax Ruling or a Valid Certificate provided to the Company at least five (5) Business Days prior to the time such payment of consideration is to be made. A “Valid Certificate” means a certificate, ruling, approval or any other written instructions issued by the applicable Governmental Entity indicating that no withholding (or reduced withholding or any other instructions regarding withholding) of Tax is required with respect to that person in form and substance satisfactory to the Company, acting reasonably. |
| (c) | For the avoidance of doubt, the Company shall not be required to issue any Contingent Right Shares to the Holder, unless either (i) an applicable Tax Ruling, (ii) a Valid Certificate is delivered to the Company; or (iii) the applicable amounts required to be withheld are paid by such Holder to the Company, as applicable. |
| (d) | In the event that a Holder has not provided the Company with any of items (c)(i), (ii) or (iii) above at the time of issue of the applicable Contingent Right Shares, Company shall have the right (but not the obligation), in its sole discretion, to sell a portion of the Contingent Right Shares otherwise issuable to the Holder in such amounts and in such manner as the Company deems necessary and practicable to pay such withholding taxes and the Company shall issue the balance of the Holder’s Contingent Right Shares. |
| (e) | The Holder shall and hereby agrees to indemnify the Company against and hold the Company harmless from and against any Taxes, interest, penalties and attorneys’ fees and disbursements arising or resulting from any failure of the Company to withhold Taxes from any payment made to the Holder at the applicable statutory rate, including any failure of the Company to withhold in reliance upon any representation, certificate, statement, document or instrument made or provided by the Holder, including the Tax Ruling, to the Company in connection with the obligation of the Company to withhold Taxes from payments made to the Holder, it being expressly understood and agreed that (i) the Company shall be absolutely and unconditionally entitled to accept any such representation, certificate, statement, document or instrument as being true and correct in all respects and to fully rely thereon without any obligation or responsibility to investigate or to make any inquiries with respect to the accuracy, veracity, correctness or validity of the same (and without diminution of the indemnities herein contained) and (ii) the Holder, upon request of the Company and at its sole cost and expense, shall defend any claim or action relating to the foregoing indemnification using counsel agreed upon by the Holder and the Company. |
B-5
5. ADJUSTMENT OF NUMBER OF CONTINGENT RIGHT SHARES
| 5.1 | Definitions. In this Article 5, references to “record date” refer to the particular time on such relevant date stipulated for such event and otherwise refer to 5:00 p.m. (Vancouver time) on such date. |
| 5.2 | Adjustment. The rights attached to the Contingent Rights are subject to adjustment from time to time in the events and in the manner provided as follows: |
| (a) | Share Reorganization. If at any time during the Adjustment Period, the Company: |
| (i) | subdivides, re-divides or changes its outstanding Common Shares into a greater number of Common Shares; |
| (ii) | reduces, combines, consolidates or changes its outstanding Common Shares into a lesser number of Common Shares; or |
| (iii) | issues to all or substantially all the holders of its Common Shares by way of a stock distribution, stock dividend or otherwise, Common Shares or convertible securities, (any of such events in Paragraphs 5.2(a)(i), 5.2(a)(ii) and 5.2(a)(iii) being herein called a “Share Reorganization”), then the Contingent Right Shares issuable pursuant to the Contingent Rights then outstanding will be adjusted as of the record date at which the holders of the Common Shares are determined for the purpose of the Share Reorganization by multiplying the number of Common Shares issuable pursuant to each Contingent Right theretofore obtainable immediately prior to such record date by a fraction, the numerator of which will be the number of Common Shares outstanding on the record date after giving effect to the Share Reorganization and the denominator of which will be the number of Common Shares outstanding on the record date before giving effect to the Share Reorganization. |
For the purposes of determining the number of Common Shares outstanding at any particular time for the purpose of this Subsection 5.2(a), there shall be included that number of Common Shares which would have resulted from the conversion at that time of any such convertible securities issued to all or substantially all the holders of the Common Shares.
| (b) | Capital Reorganization. If at any time during the Adjustment Period, there is a reclassification of the Common Shares or a change of the Common Shares (other than through a Share Reorganization) into other securities or property, or a consolidation, amalgamation, arrangement or merger of the Company (including a business combination or exchange of like effect) with or into any corporation or other entity (other than a consolidation, amalgamation, arrangement or merger which does not result in any reclassification of the outstanding Common Shares or a change of the Common Shares into other securities or property), or a transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another entity, or a record date for any of the foregoing events occurs (any of such events being herein called a “Capital Reorganization”), any Holder who is entitled to receive Contingent Right Shares under this Contingent Right Certificate after the record date or effective date of such Capital Reorganization will be entitled to receive, and will accept, in lieu of the number of Common Shares to which such holder was theretofore entitled, the aggregate number of securities or property of the Company, or the continuing, successor or purchasing person, as the case may be, under the Capital Reorganization which such holder would have been entitled to receive as a result of such Capital Reorganization if, on the effective date of such Capital Reorganization, the Holder had been the registered holder of the number of Common Shares to which such holder was then entitled pursuant to the Contingent Rights. No such Capital Reorganization shall be carried into effect unless all necessary steps shall have been taken so that the Holders shall thereafter be entitled to receive such number of Common Shares or other securities or property of the Company or of the continuing, successor or purchasing person, as the case may be, under the Capital Reorganization, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in this Section 5.2 and Section 5.3. If determined appropriate by the Company, acting reasonably, appropriate adjustments will be made as a result of any such Capital Reorganization in the application of the provisions set forth in this Article 5 with respect to the rights and interests thereafter of the Holder to the extent that the provisions set forth in this Article 5 will thereafter correspondingly be made applicable as nearly as may be reasonable in relation to any securities or property thereafter deliverable upon the satisfaction of any Milestone. Any such adjustments will be made by and set forth in terms and conditions supplemental hereto approved by the Company, acting reasonably, and, absent manifest error, will for all purposes be conclusively deemed to be the appropriate adjustment. |
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| (c) | Special Distributions. If at any time during the Adjustment Period, the Company issues or distributes to the holders of all or substantially all of the outstanding Common Shares, securities of the Company, including rights, options or warrants to acquire Common Shares or securities convertible into or exchangeable for Common Shares or property or assets, including evidences of indebtedness, other than dividends or distributions paid in the ordinary course and other than as a result of a Share Reorganization or a Capital Reorganization (any such events being herein called a “Special Distribution”), or a record date for any of the foregoing events occurs, subject to the receipt of the approval of the Exchange, there will be an appropriate adjustment in the number of Common Shares issuable upon satisfaction of each Milestone such that the Holder will be entitled to receive from the Company such securities, property or assets as if, on the record date at which holders of Common Shares are determined for the purpose thereof, such holder had been the registered holder of the number of Common Shares to which the Holder was then entitled. |
| (d) | Binding on Successors. The provisions of this Certificate will be binding upon and inure to the benefit of the corporation or other entity resulting from any Capital Reorganization or similar transaction. In the event of any such merger, consolidation or sale of assets, references to the Company in this Certificate shall unless the context suggests otherwise be deemed to include the entity resulting from such merger or consolidation or the acquirer of such assets of the Company. The Company shall require any successor or assignee to, expressly and unconditionally to assume and agree to perform the Company’s obligations under this Agreement, in the same manner and to the same extent that the Company would be required to perform if no such succession or assignment had taken place. |
| 5.3 | Adjustment Rules. The following rules and procedures shall be applicable to adjustments made pursuant to Section 5.2: |
| (a) | The adjustments provided for in this Article 5 are cumulative and, subject to Subsection 5.3(b), shall apply (without duplication) to successive issues, subdivisions, combinations, consolidations, changes, distributions and any other events that require adjustment of the Contingent Right Shares issuable pursuant to the Contingent Rights or the number or kind of securities or property issuable hereunder. |
| (b) | No adjustment in the Contingent Right Shares issuable pursuant to the Contingent Rights shall be required unless the adjustment would result in a change of at least 0.01% of the number of such Common Shares to be issued, provided, however, that any adjustments that, except for the provisions of this subsection would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment. |
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| (c) | Notwithstanding anything in this Article 5, no adjustment shall be made to the Contingent Right Shares issuable pursuant to the Contingent Rights if the issue of Common Shares is being made pursuant to this Agreement or pursuant to any stock option, stock purchase, restricted stock unit, deferred stock unit or other long term incentive plan in force from time to time for directors, officers, consultants or employees of the Company and any such issue shall be deemed not to be a Share Reorganization or a Special Distribution. |
| (d) | No adjustment in the Contingent Right Shares issuable pursuant to the Contingent Rights shall be made in respect of any events described in this Article 5 if the Holder is entitled to participate, subject to the receipt of the approval of the Exchange, in the events on the same terms, mutatis mutandis, as if their Contingent Rights had been converted immediately prior to the effective date or record date of the events. |
| (e) | If any questions, controversies or disputes shall at any time arise with respect to adjustments of the Contingent Right Shares issuable pursuant to the Contingent Rights, such questions, controversies or disputes shall be conclusively determined by the Company’s external auditors or, if they are unable or unwilling to act, in accordance with Article 9. |
| (f) | If the Company shall set a record date to determine the holders of Common Shares for the purpose of entitling them to receive any distribution or any subscription or purchase rights in accordance with this Article 5 and shall, thereafter, legally abandon its plans to pay or deliver the distribution or subscription or purchase rights, then no adjustment in the Contingent Right Shares issuable pursuant to the Contingent Rights shall be required by reason of the setting of the record date. |
| 5.4 | Notice of Certain Events |
| (a) | Promptly upon the occurrence of the earlier of the effective date of or the record date for any event referred to in Section 5.2 that requires an adjustment or readjustment to the Contingent Right Shares issuable pursuant to the Contingent Rights, the Company shall provide the Holder with a certificate of the Company specifying the particulars of the event and, if determinable, the amount of the adjustment or readjustment, and computation of the adjustment or readjustment and the Holder may act and rely absolutely on the certificate of the Company; and |
| (b) | If notice has been given under Subsection 5.4(a) and the adjustment is not then determinable, the Company shall promptly, after the adjustment is determinable provide the Holder with a computation of the adjustment. |
6. RIGHTS OF THE COMPANY AND COVENANTS OF THE COMPANY
| 6.1 | General Covenants. The Company covenants with the Holder that during the Adjustment Period, the Company will: |
| (a) | if the Company’s authorized share capital becomes limited to a maximum number of shares, reserve and keep available a sufficient number of Contingent Right Shares for the purpose of enabling it to satisfy its obligations to issue Contingent Right Shares upon satisfaction of the entire Milestones; |
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| (b) | cause the Contingent Right Shares from time to time acquired pursuant to the conversion of the Contingent Rights to be duly issued and delivered in accordance with the Contingent Rights and the terms hereof; |
| (c) | ensure all Contingent Right Shares which shall be issued upon conversion of the right to acquire provided for herein shall be fully paid and non-assessable; |
| (d) | use reasonable commercial efforts to maintain its existence and carry on its business in the ordinary course; |
| (e) | diligently pursue the satisfaction of the Milestones and in good faith and provide an Achievement Certificate, or Non-Achievement Certificate, in accordance with Section 3.1 as soon as practicable with respect thereto; |
| (f) | use reasonable commercial efforts to ensure that all Common Shares outstanding continue to be or are listed and posted for trading on the Exchange (or such other stock exchange acceptable to the Company), provided that this clause shall not be construed as limiting or restricting the Company to agree to a consolidation, amalgamation, arrangement, takeover bid, merger or like transaction that would result in the Common Shares ceasing to be listed and posted for trading on the Exchange; |
| (g) | make all requisite filings under applicable Canadian securities legislation including those necessary to remain a reporting issuer not in default in each of the provinces and other jurisdictions where it is or becomes a reporting issuer; and |
| (h) | in general, well and truly perform and carry out all of the acts or things to be done by it as provided in this Certificate. |
| 6.2 | Enforceability of Certificate. The Company represents and warrants that this Certificate is valid and enforceable against the Company in accordance with the provisions hereof. |
7. DISPUTE MECHANISM
| 7.1 | Disputed Matters |
| (a) | If the Holder, at any time but no later than sixty (60) days after the delivery of a General Non-Achievement Certificate (in either case, the “Dispute Period”) wishes to dispute the non-satisfaction of the Milestone, the Holder may provide the Company with written notice (the “Dispute Notice”) of such dispute in reasonable detail. |
| (b) | If the Holder does not deliver such a Dispute Notice on or prior to the expiry of the Dispute Period, the Holder will be deemed to have accepted the non-performance of any Milestone as of the Termination Date and the Company and its Affiliates will have no further obligation with respect to the Contingent Rights represented hereby. |
| (c) | If the Holder delivers a Dispute Notice during the Dispute Period, and it is finally determined by agreement of the Company and the Holder or by a court of competent jurisdiction that the disputed Milestone has been met, the Contingent Right Shares subject to the Dispute Notice will be issued on a date established by the Company that is as soon as possible (and in any event no later than five Business Days) after such agreement or determination (“Agreed Issue Date”). |
| (d) | The Holder and the Company shall work in good faith together to resolve the dispute set out therein on a mutually satisfactory basis for not less than thirty (30) days, following which the Holder may proceed with an action against the Company in the Courts of British Columbia, which shall have exclusive jurisdiction over any dispute under this Certificate or in connection with the Contingent Rights. |
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8. GENERAL
| 8.1 | Notices. Any notice, consent, waiver, direction or other communication required or permitted to be given under this Agreement (each, a “notice”) shall be in writing addressed as follows: |
| (a) | if to the Company: |
Plantify Foods, Inc.
2264 E11th Avenue
Vancouver, British Columbia
V5N 1Z6 Canada
| Attention: | Gabi Kabazo, Chief Executive Officer | |
| Email: | gabi@plantifyfoods.com |
| (b) | if to the Holder: |
Jeffs Brands
7 Mezada Street
Bnei Brak
Tel Aviv 5126112
Israel
| Attention: | Ronen Zalayet, Chief Financial Officer | |
| Email: | ronen@jeffsbrands.com |
or such other address as may be designated by notice given by either the Holder or the Company to the other in accordance with this Section 8.1. Each notice shall be personally delivered to the addressee or sent by e-mail to the addressee and a notice which is personally delivered or sent by email shall, if delivered or sent prior to 4:00 p.m. (local time of the recipient) on a Business Day, be deemed to be given and received on that day and, in any other case, be deemed to be given and received on the next Business Day.
| 8.2 | Provisions of this Agreement and Contingent Rights for the Sole Benefit of Parties and Holder. Nothing in this Certificate, expressed or implied, shall give or be construed to give to any person other than the Company and the Holder, as the case may be, any legal or equitable right, remedy or claim under this Certificate, or under any covenant or provision herein or therein contained, all such covenants and provisions being for the sole benefit of the Company and the Holder. |
| 8.3 | Governing Law. This Certificate shall be governed by and construed and interpreted in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein without giving effect to the conflicts of laws principles thereof and without reference to the laws of any other jurisdiction and is to be treated in all respects as a British Columbia contract. The Parties agree to submit to the exclusive jurisdiction of the courts of British Columbia, provided that nothing in this Certificate shall prevent either Party from seeking injunctive relief in the courts of any competent jurisdiction. |
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| 8.4 | Entire Agreement. Other than the Purchase Agreement, this Certificate, constitute the entire agreement among the Company and the Holder hereto pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written, between the Company and the Holder with respect to the subject matter hereof. |
| 8.5 | Further Assurances. Each Party will, upon request but without further consideration, from time to time promptly execute and deliver all further documents and instruments and take all further action necessary or appropriate to give effect to and perform the provisions and intent of this Agreement. |
| 8.6 | Waiver. No waiver of any provision of this Agreement will constitute a waiver of any other provision, nor will any waiver constitute a continuing waiver unless otherwise expressly provided. Any agreement as to the extension or waiver of any provision of this Agreement by any Party will be valid only if in writing and signed by such Party. No waiver of any breach of any provision of this Agreement will be effective or binding unless made in writing and signed by the Party purporting to give the same and, unless otherwise provided, will be limited to the specific breach waived. |
| 8.7 | Enurement. This Agreement shall enure to the benefit of and be binding upon the Parties hereto and their respective successors and permitted assigns. |
| 8.8 | Severability. In the event that any provision or part of this Certificate is determined by any court or other judicial or administrative body to be illegal, null, void, invalid or unenforceable, that provision shall be severed to the extent that it is so declared and the other provisions of this Certificate shall continue in full force and effect. |
| 8.9 | Counterparts. This Agreement may be executed and delivered in one or more counterparts and may be executed and delivered by any electronically communicated method, each of which when executed and delivered shall be deemed to be an original and all of which counterparts together shall be deemed to constitute one and the same instrument. |
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF the Company has caused this Certificate to be signed by its duly authorized officer as of April 29, 2025.
| PLANTIFY FOODS, INC. | |||
| The digital signature shall be deemed to constitute an original signature to this Certificate. | Per: | /s/ Gabi Kabazo | |
| Authorized Signatory | |||
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SCHEDULE C
PURCHASER EMPLOYMENT AND CONSULTING AGREEMENTS
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SCHEDULE D
STATUS OF POB INSOLVENCY PROCEEDINGS
| 1. | The Motion for an Insolvency Order on December 10, 2024, the Company filed a motion for an insolvency order according to the Law (Case number 28001/12/24). |
| 2. | The order was granted on January 14, 2025, and the court appointed Adv. Itzhak Rise as a trustee (the “Trustee”). |
| 3. | The Trustee is operating to sell the Company and/or its shares. |
| 4. | On March 16, 2025, the Trustee filed a motion to approve one of the offers to purchase the Company and to set a time limit for creditors to file debt demands. |
COURT DOCUMENT – COMMENCEMENT OF POB INSOLVENCY PROCEEDINGS
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D-1
Exhibit 5.1
June 26, 2025
Jeffs’ Brands Ltd
7 Mezada St.
Bnei Brak, 5126112
Israel
RE: Jeffs’ Brands Ltd
Ladies and Gentlemen:
We have acted as Israeli counsel to Jeffs’ Brands Ltd, a company organized under the laws of the State of Israel (the “Company”), in connection with the filing by the Company of a registration statement on Form F-1 (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), relating to the resale by the selling shareholder identified in the Registration Statement (the “Selling Shareholder”), of up to 52,478,000 ordinary shares, no par value, of the Company (the “Ordinary Shares”), issued or issuable upon the conversion of convertible promissory notes (the “Promissory Notes”), issued or issuable by the Company from time to time, to the Selling Shareholder, pursuant to the securities purchase agreement, dated June 16, 2025 by and between the Company and the Selling Shareholder (the “Securities Purchase Agreement”), as further described in the Registration Statement. The Ordinary Shares underlying the Promissory Notes are referred herein as the Note Shares.
In connection herewith, we have examined the originals, photocopies or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement to which this opinion is attached as an exhibit; (ii) the articles of association of the Company, as currently in effect (the “Articles”); (iii) resolutions of the board of directors (the “Board”) of the Company which have heretofore been approved and relate to the Company’s issuance and sale of the Promissory Notes, issuance and/or potential issuance of the Note Shares, filing of the Registration Statement and other actions to be taken in connection with such issuance and sale; (iv) copy of the form of the Promissory Note representing the Promissory Notes; (v) the Securities Purchase Agreement and (vi) such other corporate records, agreements, documents and other instruments, and such certificates or comparable documents of public officials and of officers of the Company as we have deemed relevant and necessary as a basis for the opinions hereafter set forth. We have also made inquiries of such officers as we have deemed relevant and necessary as a basis for the opinions hereafter set forth.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified copies or confirmed as photostatic copies, and the authenticity of the originals of such latter documents. We have also assumed the truth of all facts communicated to us by the Company and that all minutes of meetings of the Board and the shareholders of the Company that have been provided to us are true and accurate and have been properly prepared in accordance with the Articles and all applicable laws.
We have further assumed that at the time of issuance and to the extent any such issuance would exceed the maximum share capital of the Company currently authorized, the number of Ordinary Shares that the Company is authorized to issue shall have been increased in accordance with the Articles such that a sufficient number of Ordinary Shares are authorized and available for issuance under the Articles.
On the basis of the foregoing, and in reliance thereon, we are of the opinion that the Note Shares have been duly authorized, and when the Promissory Notes are converted by the Selling Shareholder pursuant to the terms thereof, the Note Shares issuable at that time by the Company to the Selling Shareholder will be validly issued, fully paid and non-assessable.
Members of our firm are admitted to the Bar in the State of Israel, and we do not express any opinion as to the laws of any other jurisdiction. This opinion is limited to the matters stated herein and no opinion is implied or may be inferred beyond the matters expressly stated.
We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our firm appearing under the caption “Legal Matters” and “Enforceability of Civil Liabilities” in the prospectus forming part of the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act, the rules and regulations of the SEC promulgated thereunder or Item 509 of the SEC’s Regulation S-K promulgated under the Securities Act.
This opinion letter is rendered as of the date hereof and we disclaim any obligation to advise you of facts, circumstances, events or developments that may be brought to our attention after the date of the Registration Statement that may alter, affect or modify the opinions expressed herein.
| Very truly yours, | |
| /s/ Meitar | Law Offices | |
| Meitar | Law Offices |
Exhibit 10.8
CONSULTING AGREEMENT
THIS AGREEMENT (the “Agreement”) is made on this 26 day of October 2022 between Jeffs Brands Ltd., whose address is at HaNechoshet St 3, Tel Aviv 6971068, Israel (the “Company”) and L.I.A. Pure Capital Ltd., whose address is at 20 Raoul Wallenberg Street, Tel Aviv 6971916, Israel (the “Consultant”). The Company and together with the Consultant, each a “Party” and collectively, the “Parties”.
| WHEREAS: | the Company wishes the Consultant to provide the Company with certain services and the Consultant wishes to render such services to the Company; and |
| WHEREAS: | the Consultant represents to the Company that it is ready, qualified, willing and able to carry out its obligations and undertakings towards the Company pursuant hereto; and |
| WHEREAS: | the Company and the Consultant desire to regulate their relationship in accordance to the terms and conditions set forth in this Agreement. |
NOW THEREFORE, the parties hereto agree as follows:
1. The Services
| 1.1. | The Company hereby engages the Consultant as an independent consultant and the Consultant hereby agrees to serve as a consultant to the Company and provide business development, Investors and public relations and strategic consulting services, including ongoing consulting to the Company, its management and its chief executive officer in the following fields: M&A, investment activities, Company’s position in the capital markets, as well as additional services as may be requested from time to time by the chief executive officer or chairman of the board of directors of the Company (the “Services”). The engagement hereunder shall commence effective as of 1 September, 2022 (the “Effective Date”). |
| 1.2. | The Consultant shall cooperate on an ongoing basis with such employees, consultants and contractors of the Company as determined by the Company from time to time; the person within the Company who shall be in charge of the engagement of the Consultant shall be the chairman of the board of directors of the Company or such other person as determined by the Company from time to time. The Company may require the Consultant to provide reports or other types of ongoing information concerning the Services as determined from time to time, whether or not set forth herein. |
| 1.3. | The Consultant undertakes that the Services shall be performed personally and exclusively by Kfir Zilberman (“Consultant’s Representative”). Each employee, consultant, manager or any other representative of the Consultant, including the Consultant’s Representative shall be deemed to be personally bound by all the obligations and liabilities of the Consultant as if he was the Consultant hereunder. All references to the term the Consultant hereunder shall be deemed to refer to the Consultant and the Consultant’s Representative jointly and severally. Any breach of this Agreement by the Consultant’s Representative or by any other employee, consultant, manager or representative of the Consultant shall be deemed a breach by the Consultant. |
| 1.4. | The Consultant’s Representative shall devote all the necessary time in performing its duties and responsibilities under this Agreement, as shall be reasonably required by the Company. |
| 1.5. | The Consultant agrees to perform its duties described herein in a faithful, diligent and professional manner. |
| 1.6. | The Consultant shall be responsible for maintaining, at the Consultant’s own expense, a place of work, any equipment and supplies necessary for the performance of the Services. |
| 1.7. | Nothing in this Agreement shall be interpreted as preventing or restricting the Company from obtaining or seeking from any other person services of the same nature as the Services, or otherwise from performing or seeking to perform any action or operation. Nothing in this Agreement shall be interpreted as preventing or restricting the Consultant from supplying services to any third party, as long as such services to third parties (i) do not conflict with any obligation or undertaking of the Consultant hereunder, and (ii) do not interfere with the performance of or restrict the ability of the Consultant to perform the Services hereunder. |
2. Term and Termination
| 2.1. | This Agreement shall commence upon the Effective Date and shall until terminated pursuant to Section 2.2 below. |
| 2.2. | Notwithstanding the above, this Agreement may be terminated at any time after the third (3) anniversary from the effective day by the Consultant or by the Company by giving the other party 30 days’ advance notice in writing (the “Notice Period”), provided that the Company may terminate this Agreement forthwith for Cause (as defined herein) without advance notice. A termination for “Cause” is a termination due to: (i) the Consultant’s Representative’s conviction or indictment of any felony; (ii) a material breach of any provision of this Agreement or its exhibits which is not cured (if deemed curable by the Company) within five (5) days of receipt of a written notice about such breach from the Company; (iii) the Consultant’s continuously disregarding of instructions of the Company with respect to the Consultant’s performance of the Services; (iv) a material breach of trust by the Consultant or embezzlement of funds of the Company or any Affiliate (as defined in Section 7.1 below) thereof; (v) involvement of the Consultant’s Representative in sexual harassment of any employee of the Company or other party in connection with the performance of the Services; or (vi) causing grave injury to the business, assets, operations or reputation of the Company or any Affiliate thereof. Nothing herein shall derogate from the Company’s rights with respect to such termination for Cause, including the right to set off damages against the Consultant’s Consulting Fees (as defined in Section 3.1 below). |
| 2.3. | In the event of termination other than for Cause, the Consultant shall be entitled to Consulting Fees only to the extent that it provides Services to the Company during the Notice Period. |
3. Consideration
| 3.1. | Consulting Fee |
| 3.1.1. | In consideration for the Services rendered by the Consultant pursuant to this Agreement, the Company shall pay the Consultant a monthly fee in the amount of NIS 57,750 (plus VAT, if required by law) (the “Consulting Fee”). |
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| 3.1.2. | All payments of Consulting Fee hereunder, subject to Section 3.1.1, shall be made on a monthly basis, within 10 days from, and subject to, receipt by the Company of a duly issued tax invoice(s) and receipt(s) by the Consultant for the amount due together with the required reports. |
| 3.1.3. | The Consulting Fees are inclusive of any and all taxes, and the Consultant shall bear full responsibility for all tax obligations of any kind or nature relating, directly or indirectly, to the Consulting Fee and otherwise to the Services hereunder. To the extent that any such taxes may be imposed upon the Company, the Company may deduct such amounts from any payments due to the Consultant. The Company shall be entitled to withhold and deduct from payments due hereunder any and all amounts as may be required from time to time under any applicable law. VAT shall be charged on all amounts payable hereunder, including any stock options, as required by law. |
| 3.1.4. | In addition to the monthly payments under Section 3.1.1, Consultant shall be entitled during the term of this Agreement to the following payment: (i) an amount equal to 7% of the gross proceeds paid to the Company in connection with any exercise of warrants, whether or not currently outstanding; and (ii) 8% of any purchase of a new brand, businesses, or similar events initiated or assisted by the Consultant and approved by the Chief Executive Officer based on agreement with the Consultant. Payments under this Section shall be authorized by the Chief Executive Officer and Chairman of the Board. VAT shall be added on all amounts payable hereunder. |
| 3.1.5. | As of the Effective Date, the consultant shall be entitled to a one-time bonus payment of NIS 425,000 (plus VAT, if required by law) for his services provided to the company from the day the company was established until the completion of the IPO process on the Nasdaq Stock Exchange and based on the company’s success in the IPO process. |
| 3.1.6. | Payments under this Section shall be authorized by the Chief Executive Officer and Chairman of the Board. VAT shall be added on all amounts payable hereunder. |
| 3.1.7. | In addition to the payments under Section 3.1.1, Consultant shall be entitled to warrants. The warrants are deemed earned upon issuance and are subject to board approval. |
| 3.1.8. |
| 3.2. | Reimbursement of Expenses |
The Company shall reimburse Consultant for necessary and customary business expenses incurred by Consultant, in accordance with the Company’s policy, as amended from time to time, up to $2,000 per month.
| 3.3. | Bonus |
Consultant shall be entitled to a special bonus upon the consummation of an offering of securities of the Company , according to the below distribution, which is based on gross proceeds: (i) between $5.0 million and $10.0 million, the Consultant shall be entitled to a bonus payment of $100,000; (ii) above $10.0 million, the Consultant shall be entitled to a bonus payment of $150,000. Payments under this Section shall be authorized by the Chief Executive Officer and Chairman of the Board. VAT will be added to the payments under this Section.
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| 3.4. | Full Consideration |
Other than the consideration specified in this Section 3, which consideration constitutes full consideration for the Services rendered hereunder, the Consultant will not be entitled to any other consideration for rendering the Services hereunder.
4. Confidentiality, Non-Competition and Invention Assignment Undertaking
Simultaneously with the execution of this Agreement, and a as condition hereto, the Consultant hereby executes the Undertaking attached hereto as Schedule A.
5. Relationship of Parties
| 5.1. | The parties hereto hereby declare and approve, that this Agreement is a Contractors Agreement within the meaning of the Israeli Contractors Law – 1974 (the “Contractors Law”), and that nothing in this Agreement that shall be interpreted or construed as creating or establishing any partnership, joint venture, employment relationship, franchise or agency or any other similar relationship between the Company or its Affiliates and the Consultant or the Consultant’s Representative, and it is specifically clarified that with respect to the Services, no employer-employee relationship will be formed between the Company or its Affiliates and the Consultant or the Consultant’s Representative, and the Consultant is not entitled to any social or other benefits resulting from employer-employee relationship. Notwithstanding the above, the Consultant hereby waives any right to a lien in accordance with Section 5 of the Contractors Law or any other law. The Consultant hereby acknowledges that the Company is relying upon the truthfulness and accuracy of the representations set forth in this Section 5.2 in engaging the Consultant. |
| 5.2. | The Consultant shell bear and/or will defend, indemnify and hold the Company, or any third party on its behalf, harmless from and against all claims, all damages, losses and expenses, including reasonable fees and expenses of attorneys and other professionals, upon receipt of demand (i) relating to any obligation, future or past, imposed upon the Company to pay any withholding tax payments regarding consulting services, social security, unemployment or disability insurance or similar terms in connection with compensation received by the Consultant or, or which are based upon a stipulation by a competent judicial authority that an employer - employee relationship was created between the Company or its Affiliates and the Consultant’s Representative; and (ii) resulting from any act, omission or negligence on the Consultant’s or any of its employees’ part in the performance or failure to perform the scope of work under this Agreement. |
| 5.3. | The Consultant acknowledges that the Consultant’s Representative has read and fully understood the terms of this structure of the relationship between the parties as an independent contractor and that the Consultant’s Representative has consulted and received advice of counsel regarding said structure of the relationship between the parties hereto and has had sufficient opportunity to do so. |
| 5.4. | It is hereby clarified that any right granted to the Company to instruct and/or oversee the Services by the Consultant is granted in order to ensure the performance of the Services in full and not to imply or justify an employer -employee relationship between the Company and the Consultant or the Consultant’s Representative. |
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| 5.5. | The Consultant shall be responsible to pay any and all payments, salary, taxes and all other benefits and any amounts due to any relevant social security or similar authority with respect to its employees and/or the Services provided by the Consultant’s Representative pursuant to this Agreement. The Consultant undertakes to acquire for the Consultant’s Representative pension coverage in a customary amount. The Consultant, hereby releases and forever discharges the Company and its Affiliates, from any and all claims, which it ever had, now has, or may claim to have against the Company and/or its Affiliates in connection with the existence of any employer - employee relationship between Company or its Affiliates and the Consultant or the Consultant’s Representative. |
| 5.6. | In light of the above, should it be held by any competent judicial authority that the relationship between the Consultant or the Consultant’s Representative, and the Company (or any of its Affiliates) in respect of the Services rendered by the Consultant pursuant to this Agreement is one of employer and employee, the parties agree that the “salary” that the Consultant would be entitled to as an “employee” (including for the purpose of social security and social benefits), for the provision of the Services within the framework of this Agreement, shall be 60% of the average monthly Consulting Fee (the “Agreed Employee Compensation”). |
| 5.7. | The Consultant will be obligated to return to the Company all surplus payments that the Company paid beyond the Agreed Employee Compensation (the “Surplus Sum”), on the day that a demand and/or claim which contradicts this Agreement is filed or on the day that a decision under Section 5.6 is made, pursuant to which it is claimed or decided that the Consultant’s Representative is a salaried employee of the Company. |
| 5.8. | Any Surplus Sum that the Consultant is obligated to return will be subject to interest linked to the last known Israeli Consumer Price Index on the date said Surplus Sum is to be returned to the Company. |
| 5.9. | The Company will be entitled to deduct from and set off against amounts due to the Consultant pursuant to this Agreement and/or pursuant to any other agreement, law, or otherwise, any amounts, which the Consultant is required to pay the Company pursuant to this Agreement (including the Surplus Sum), any other agreement, any law, or otherwise. |
6. Warranties
The Consultant represents and warrants that:
| 6.1. | The Consultant does not have currently and shall not have during the term of the provisions of the Services, any outstanding agreement or obligation that is or will be in conflict with any of the provisions of this Agreement, or that would preclude the Consultant from complying with the provisions hereof or otherwise restrict the Consultant in any way in performing the Services. |
| 6.2. | The execution and delivery of this Agreement, the performance of the Services and the fulfillment of the terms hereof will not: (a) constitute, in whole or in part, a default, violation or breach under or conflict in any way with any agreement, obligation, undertaking or commitment to which the Consultant is a party or by which it is bound, including without limitation, any confidentiality, invention assignment or non- competition agreement and (b) do not require the consent, permission or authorization of or notification to any person or entity. |
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| 6.3. | The Consultant shall comply with all Company disciplinary regulations, work rules, policies, procedures and objectives, which are relevant to the performance of the Services or otherwise to consultants of the Company. |
| 6.4. | The Company may monitor the Consultant’s use of its Systems (as defined below) and copy, transfer and disclose such electronic communications and content transmitted by or stored in such Systems, in pursuit of the Company’s legitimate business interests, all in accordance with the Company’s policies in place from time to time, and subject to applicable law. For the purposes of this Section, the term “Systems” includes all of the Company’s owned or leased computers (including laptops), mobile phones and other mobile devices, keys, PDAs, credit cards, printers, card access to any company building, files, e-mails, tapes, programs, records and software, computer access codes or disks, and other similar systems. |
| 6.5. | The Consultant shall not solicit or accept in connection with the performance of the Services or in connection with the Company, any gift, benefit, favor, loan, or any other thing of monetary value, from a person who is or is possibly connected, directly or indirectly, to either the business of the Company, a competitor of the Company or a potential competitor of the Company. |
| 6.6. | The Consultant shall not make any representations or warranties to anyone with respect to any contract or otherwise without the Company’s prior written authorization. |
| 6.7. | The Consultant shall at all times during the term of this Agreement continue to be wholly owned, exclusively by the Consultant’s Representative. |
| 6.8. | The Consultant shall take all necessary precautions to prevent the occurrence of any bodily injury or property damage, to the Company, its employees or any third party, arising out of or resulting from the performance of the Services and shall be solely responsible, and liable, for any such bodily injury or property damage. |
7. Miscellaneous
| 7.1. | In this Agreement the term “Affiliate” shall mean, any person or entity that directly or indirectly controls, is controlled by, or is under common control with, a party to this Agreement. For purposes hereof, the term “control” means the power to direct the management or affairs of a person or entity through the ownership of voting securities, by contract, or otherwise. |
| 7.2. | The preamble and the schedules hereto shall form an integral part of this Agreement. All headings of the Sections and Subsections of this Agreement are intended for convenience of reference and shall not be used in interpreting this Agreement. |
| 7.3. | Assignment. Neither this Agreement nor any interest herein may be assigned by the Consultant without the prior written consent of the Company. The Company may assign or transfer this Agreement or any of its rights and/or obligations under this Agreement without the Consultant’s consent. |
| 7.4. | Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the Consultant and the Company with respect to the subject matter hereof and supersedes any other arrangement, understanding or agreement, verbal or otherwise, including the Prior Agreement. No amendment of or waiver of, or modification of any obligation under this Agreement will be enforceable unless set forth in a writing signed by the parties hereto. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. |
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| 7.5. | Law; Jurisdiction. This Agreement shall be governed by the laws of the State of Israel (excluding its conflict of law principles) and the competent courts/tribunals of Tel-Aviv shall have exclusive jurisdiction over any disputes arising hereunder. |
| 7.6. | No Waiver. No failure or delay on the part of any party hereto in exercising any right, power or remedy thereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Any waiver granted thereunder must be in writing and shall be valid only in the specific instance in which given. |
| 7.7. | Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable under applicable law, then such provision shall be excluded from this Agreement and the remainder of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms; provided, however, that in such event this Agreement shall be interpreted so as to give effect, to the greatest extent consistent with and permitted by applicable law, to the meaning and intention of the excluded provision as determined by such court of competent jurisdiction. |
| 7.8. | Notices. Any notice or other communication in connection with this Agreement must be in writing to the address set forth in the preamble to this Agreement (or to such other address as shall be specified by like notice) and will be deemed given: (i) if sent by a delivery service, on the date confirmed as the actual date of delivery by such service; (ii) if sent by registered air mail, return receipt requested, within seven (7) days of mailing; or (iii) if sent by facsimile or email with electronic confirmation of transmission, on the next business day after transmission, if not transmitted on a business day, or on the day of transmission, if transmitted on a business day. |
| 7.9. | Survival. The provisions of Sections 4, 5, and 6 of this Agreement, including the provisions of Schedule A, shall continue and remain in full force and effect following the termination or expiration of this Agreement, for whatever reason. |
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date hereof.
| /s/ Viki Hackmon | /s/ Kfir Zilberman | |||
| Jeffs Brands Ltd. | L.I.A. Pure Capital Ltd. | |||
| By: | Viki Hackmon | By: | Kfir Zilberman | |
| Title: | Chief Executive Officer | Title: | Chairman and Chief Executive Officer | |
I have read the provisions of the above Consulting Agreement and I agree to be bound by and comply with such terms and perform the Services (as defined above) as if I was the Consultant. I will be responsible towards Jeffs Brands Ltd. (the “Company”) for the compliance by the Consultant with all its obligations under the Consulting Agreement and the Services and shall be further responsible and liable towards the Company for any breach by the Consultant of any of its obligations under the Consulting Agreement and for any other liability of the Consultant under the Consulting Agreement.
I hereby acknowledge that it is known to me that I am an employee of the Consultant and not of the Company. I hereby undertake not to make any claim asserting that I am an employee of the Company.
| /s/ Kfir Silberman | |
| Kfir Silberman, the Consultant’s Representative | |
| Date: 26 October, 2022 |
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SCHEDULE A
UNDERTAKING
THIS UNDERTAKING (“Undertaking”) is entered into as of the 1st day of September 2022 by L.I.A. Pure Capital Ltd., whose address is at 20 Raoul Wallenberg Street, Tel Aviv 6971916, Israel (the “Consultant”).
| WHEREAS, | the Consultant wishes to be engaged by Jeffs Brands Ltd., whose address is at HaNechoshet St 3, Tel Aviv 6971068, Israel (the “Company”); and |
| WHEREAS, | it is critical for the Company to preserve and protect its Confidential Information (as defined below) and its rights in Inventions (as defined below) and in all related intellectual property, and the Consultant is entering into this Undertaking as a condition to the Consultant’s engagement with the Company. |
NOW, THEREFORE, the Consultant undertakes and warrants towards the Company as follows:
References herein to the term “Company” shall include any of the Company’s direct or indirect parent, subsidiary and affiliated companies, and their respective successors and assigns.
1. Confidentiality.
| 1.1. | the Consultant acknowledges that the Consultant may have access to information that relates to the Company, its business, assets, financial condition, affairs, activities, plans and projections, customers, suppliers, partners, and other third parties with whom the Company agreed or agrees, from time to time, to hold information of such party in confidence (the “Confidential Information”). Confidential Information shall include, without limitation, information, whether or not marked or designated as confidential, concerning technology, products, research and development, patents, copyrights, inventions, trade secrets, test results, formulae, processes, data, know-how, marketing, promotion, business and financial plans, policies, practices, strategies, surveys, analyses and forecasts, financial information, customer lists, agreements, transactions, undertakings and data concerning employees, consultants, officers, directors, and shareholders. Confidential Information includes information in any form or media, whether documentary, written, oral, magnetic, electronically transmitted, through presentation or demonstration or computer generated. Confidential Information shall not include information that: (i) has become part of the public domain not as a result of a breach of any obligation owed by the Consultant to the Company; or (ii) is required to be disclosed by law or the binding rules of any governmental organization, provided, however, that the Consultant gives the Company prompt notice thereof so that the Company may seek a protective order or other appropriate remedy, and further provided, that in the event that such protective order or other remedy is not obtained, the Consultant shall furnish only that portion of the Confidential Information which is legally required, and shall exercise all reasonable efforts required to obtain confidential treatment for such information. |
| 1.2. | The Consultant acknowledges and understands that the engagement by the Company and the access to Confidential Information creates a relationship of confidence and trust with respect to such Confidential Information. |
| 1.3. | During the term of the Consultant’s engagement and at any time after termination or expiration thereof, for any reason, the Consultant shall keep in strict confidence and trust, shall safeguard, and shall not disclose to any person or entity, nor use for the benefit of any party other than the Company, any Confidential Information, other than with the prior express consent of the Company. |
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| 1.4. | All right, title and interest in and to Confidential Information are and shall remain the sole and exclusive property of the Company or of the third party providing such Confidential Information to the Company, as the case may be. Without limitation of the foregoing, the Consultant agrees and acknowledges that all memoranda, books, notes, records, email transmissions, charts, formulae, specifications, lists and other documents (contained on any media whatsoever) made, reproduced, compiled, received, held or used by the Consultant in connection with the engagement by the Company or that otherwise relates to any Confidential Information (the “Confidential Material”), shall be the Company’s sole and exclusive property and shall be deemed to be Confidential Information. All originals, copies, reproductions and summaries of the Confidential Material shall be delivered by the Consultant to the Company upon termination or expiration of the Consultant’s engagement for any reason, or at any earlier time at the request of the Company, without the Consultant retaining any copies thereof. |
| 1.5. | During the term of the Consultant’s engagement with the Company, the Consultant shall not remove from the Company’s offices or premises any Confidential Material unless and to the extent necessary in connection with the duties and responsibilities of the Consultant and permitted pursuant to then applicable policies and regulations of the Company. In the event that such Confidential Material is duly removed from the Company’s offices or premises, the Consultant shall take all actions necessary in order to secure the safekeeping and confidentiality of such Confidential Material and return the Confidential Material to their proper files or location as promptly as possible after such use. |
| 1.6. | During the term of the Consultant’s engagement with the Company, the Consultant will not improperly use or disclose any proprietary or confidential information or trade secrets, and will not bring onto the premises of the Company any unpublished documents or any property, belonging to any former employer or any other person to whom the Consultant has an obligation of confidentiality and/or non-use (including, without limitation, any academic institution or any entity related thereto), unless generally available to the public or consented to in writing by that person. |
2. Ownership of Inventions.
| 2.1. | The Consultant will notify and disclose in writing to the Company, or any persons designated by the Company from time to time, all information, improvements, inventions, trademarks, works of authorship, designs, trade secrets, formulae, processes, techniques, know-how, and data, whether or not patentable or registerable under copyright or any similar laws, made or conceived or reduced to practice or learned by the Consultant, either alone or jointly with others, during the Consultant’s engagement with the Company (all such information, improvements, inventions, trademarks, works, designs, trade secrets, formulae, processes, techniques, know- how, and data are hereinafter referred to as the “Invention(s)”) immediately upon discovery, receipt or invention as applicable. |
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| 2.2. | Consultant agrees that all the Inventions are, upon creation, Inventions of the Company, shall be the sole property of the Company and its assignees, and the Company and its assignees shall be the sole owner of all title, rights and interest in and to any patents, copyrights, trade secrets and all other rights of any kind or nature, including moral rights, in connection with such Inventions. the Consultant hereby irrevocably and unconditionally assigns to the Company all the following with respect to any and all Inventions: (i) all title, rights and interest in and to any patents, patent applications, and patent rights, including any and all continuations or extensions thereof; (ii) rights associated with works of authorship, including copyrights and copyright applications, Moral Rights (as defined below) and mask work rights; (iii) rights relating to the protection of trade secrets and confidential information; (iv) design rights and industrial property rights; (v) any other proprietary rights relating to intangible property including trademarks, service marks and applications thereof, trade names and packaging and all goodwill associated with the same; (vi) any and all title, rights and interest in and to any Invention; and (vii) all rights to sue for any infringement of any of the foregoing rights and the right to all income, royalties, damages and payments with respect to any of the foregoing rights. the Consultant also hereby forever waives and agrees never to assert any and all Moral Rights the Consultant may have in or with respect to any Inventions, even after termination of engagement on behalf of the Company. “Moral Rights” means any right to claim authorship of a work, any right to object to any distortion or other modification of a work, and any similar right, existing under the law of any country in the world, or under any treaty. |
| 2.3. | The Consultant further agrees to perform, during and after the term of the Consultant’s engagement with the Company, all acts deemed reasonably necessary or desirable by the Company to permit and assist it, at the Company’s expense, in obtaining, maintaining, defending and enforcing the Inventions in any and all countries. Such acts may include, but are not limited to, execution of documents and assistance or cooperation in legal proceedings. the Consultant hereby irrevocably designates and appoints the Company and its duly authorized officers and agents, as the Consultant’s agents and attorneys-in-fact to act for and on the Consultant’s behalf and instead of the Consultant, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by the Consultant. |
| 2.4. | The Consultant shall not be entitled to any monetary consideration or any other consideration except as explicitly set forth in the Consulting Agreement. Without limitation of the foregoing, the Consultant irrevocably confirms that the consideration explicitly set forth in the Consulting Agreement is in lieu of any rights for compensation that may arise in connection with the Inventions under applicable law and waives any right to claim royalties or other consideration with respect to any Invention, including under Section 134 of the Israeli Patent Law - 1967. Any oral understanding, communication or agreement with respect to the matters set forth herein, not memorialized in writing and duly signed by the Company, shall be void. |
3. General.
| 3.1. | The Consultant represents that the performance of all the terms of this Undertaking and the Consultant’s duties as a consultant of the Company does not and will not breach any invention assignment, proprietary information, non-compete, confidentiality or similar agreements with, or rules, regulations or policies of, any other party (including, without limitation, any academic institution or any entity related thereto). The Consultant acknowledges that the Company is relying upon the truthfulness and accuracy of such representations in its decision to engage with the Consultant. |
| 3.2. | The Consultant acknowledges that the provisions of this Undertaking serve as an integral part of the terms of the Consulting Agreement and reflect the reasonable requirements of the Company in order to protect its legitimate interests with respect to the subject matter hereof. |
| 3.3. | The Consultant recognizes and acknowledges that in the event of a breach or threatened breach of this Undertaking by the Consultant, the Company may suffer irreparable harm or damage and will, therefore, be entitled to injunctive relief to enforce this Undertaking (without limitation to any other remedy at law or in equity). This Undertaking is governed by and construed in accordance with the laws of the State of Israel, without giving effect to its laws pertaining to conflict of laws. Any and all disputes in connection with this Undertaking shall be submitted to the exclusive jurisdiction of the competent courts or tribunals, as relevant, located in the city of Tel-Aviv-Jaffa, Israel. |
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| 3.4. | If any provision of this Undertaking is determined by any court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, such provision shall be stricken from this Undertaking only with respect to such jurisdiction in which such clause or provision cannot be enforced, and the remainder of this Undertaking shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this Undertaking. In addition, if any particular provision contained in this Undertaking shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing the scope of such provision so that the provision is enforceable to the fullest extent compatible with applicable law. |
| 3.5. | The provisions of this Undertaking shall continue and remain in full force and effect following the termination or expiration of the engagement between the Company and the Consultant, for whatever reason. This Undertaking shall not serve in any manner so as to derogate from any of the Consultant’s obligations and liabilities under any applicable law. |
| 3.6. | This Undertaking constitutes the entire agreement between the Consultant and the Company with respect to the subject matter hereof and supersedes all prior agreements, proposals, understandings and arrangements, if any, whether oral or written, with respect to the subject matter hereof. No amendment, waiver or modification of any obligation under this Undertaking will be enforceable unless set forth in a writing signed by the Company. No delay or failure to require performance of any provision of this Undertaking shall constitute a waiver of that provision as to that or any other instance. No waiver granted under this Undertaking as to any one provision herein shall constitute a subsequent waiver of such provision or of any other provision herein, nor shall it constitute the waiver of any performance other than the actual performance specifically waived. |
| 3.7. | This Undertaking, the rights of the Company hereunder, and the obligations of the Consultant hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company may assign any of its rights under this Undertaking. The Consultant may not assign, whether voluntarily or by operation of law, any of the Consultant’s obligations under this Undertaking, except with the prior written consent of the Company. |
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IN WITNESS WHEREOF, the undersigned, has executed this Undertaking as of the date first mentioned above.
| Printed Name: | L.I.A. Pure Capital Ltd. | Signature: | /s/ Kfir Silberman |
I have read the provisions of the above Undertaking and I agree to be bound by such Undertaking and comply with such terms as if I was the Consultant. I will be responsible toward Jeffs Brands Ltd. (the “Company”) or any of the Company’s direct or indirect parent, subsidiary and affiliated companies, and their respective successors and assigns for the compliance by the Consultant of its obligations under the Undertaking and shall be further responsible and liable towards the Company for any breach by the Consultant of any of its obligations under the Undertaking and for any other liability of the Consultant under the Undertaking.
| /s/ Kfir Silberman | |
| Kfir Silberman, the Consultant’s Representative | |
| Date: 26 October, 2022 |
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Exhibit 10.14
CONSULTING AGREEMENT
THIS AGREEMENT (the “Agreement”) is made on this 30 day of April 2024 between Jeffs’ Brands Ltd. (the “Company”) and XYLO TECHNOLOGIES LTD. (the “Consultant”). The Company and together with the Consultant, each a “Party” and collectively, the “Parties”.
| WHEREAS: | the Company wishes the Consultant to provide the Company with certain services and the Consultant wishes to render such services to the Company; and |
| WHEREAS: | the Consultant represents to the Company that it is ready, qualified, willing and able to carry out its obligations and undertakings towards the Company pursuant hereto; and |
| WHEREAS: | the Company and the Consultant desire to regulate their relationship in accordance to the terms and conditions set forth in this Agreement. |
NOW THEREFORE, the parties hereto agree as follows:
1. The Services
| 1.1. | The Company hereby engages the Consultant as an independent consultant and the Consultant hereby agrees to serve as a consultant to the Company providing public markets business development and strategic consulting services, including ongoing consulting to the Company, its management and its chief executive officer, as well as additional services as may be requested from time to time by the chief executive officer or chairman of the board of directors of the Company (the “Services”). |
| 1.2. | The Consultant shall cooperate on an ongoing basis with such employees, consultants and contractors of the Company as determined by the Company from time to time; the person within the Company who shall be in charge of the engagement of the Consultant shall be the chairman of the board of directors of the Company or such other person as determined by the Company from time to time. The Company may require the Consultant to provide reports or other types of ongoing information concerning the Services as determined from time to time, whether or not set forth herein. |
| 1.3. | The Consultant undertakes that the Services shall be performed by its personnel (“Consultant’s Representative”). Each employee, consultant, manager or any other representative of the Consultant, including the Consultant’s Representative shall be deemed to be personally bound by all the obligations and liabilities of the Consultant as if he was the Consultant hereunder. All references to the term the Consultant hereunder shall be deemed to refer to the Consultant and the Consultant’s Representative jointly and severally. Any breach of this Agreement by the Consultant’s Representative or by any other employee, consultant, manager or representative of the Consultant shall be deemed a breach by the Consultant. |
| 1.4. | The Consultant’s Representative shall devote all the necessary time in performing its duties and responsibilities under this Agreement, as shall be reasonably required by the Company. |
| 1.5. | The Consultant agrees to perform its duties described herein in a faithful, diligent and professional manner. |
| 1.6. | The Consultant shall be responsible for maintaining, throughout the Term of this Agreement and at the Consultant’s own expense, any and all required licenses, permits, authorizations, personnel, resources, a place of work, any equipment and supplies necessary for the execution and performance of the Services. |
| 1.7. | Nothing in this Agreement shall be interpreted as preventing or restricting the Company from obtaining or seeking from any other person services of the same nature as the Services, or otherwise from performing or seeking to perform any action or operation. Nothing in this Agreement shall be interpreted as preventing or restricting the Consultant from supplying services to any third party, as long as such services to third parties (i) do not conflict with any obligation or undertaking of the Consultant hereunder, and (ii) do not interfere with the performance of or restrict the ability of the Consultant to perform the Services hereunder. To the extent Consultant becomes aware of any existing or potential conflict with Consultant’s obligations and undertaking hereunder, Consultant shall immediately inform Company of the same, and if Consultant cannot remedy or rectify such conflict within seven (7) days of becoming aware of such conflict or from receiving the Company’s notice concerning such conflict then Company shall be entitled to terminate this Agreement immediately without prejudice to any other remedy or relief it might have due to the same. A conflict of interest shall include, but shall not be limited to, providing similar Services to a competitor of the Company during the Term. |
2. Term
| 2.1. | This Agreement shall become effective as of January 1, 2024 (the “Effective Date”) for a period of 36 months from the Effective Date (the “Initial Term”). Upon expiration of the Initial Term, this Agreement shall automatically renew for successive 12 month periods (each, a “Renewal Term”) unless either party provides written notice of its intent not to renew at least 30 days prior to the expiration of the then-current term. The Initial Term and any Renewal Term(s) shall collectively be referred to as the “Term” of this Agreement. |
| 2.2. | Notwithstanding the provisions of Section 2.1, each Party may terminate this Agreement prior to its expiration for Cause (as defined herein) by giving the other party 30 days’ advance notice in writing (the “Notice Period”). A termination for “Cause” is a termination due to: (a) a breach by either Party of (i) the Agreement which cannot be cured, or, if curable, has not been cured within thirty (30) days from delivery of a notice of breach, or (ii) the provisions of Sections 4 and 5, and Schedule A; (severally and collectively, a “Material Breach”); (b) the other Party’s conviction or indictment of any felony; or (c) causing grave injury to the business, assets, operations or reputation of the Company. |
3. Consideration
| 3.1. | Consulting Fee |
| 3.1.1. | In consideration for the Services rendered by the Consultant pursuant to this Agreement, the Company shall pay the Consultant a monthly fee in the amount of US$20,000 (plus VAT, if required by law) (the “Consulting Fee”). |
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| 3.1.2. | All payments of Consulting Fee hereunder, subject to Section 3.1.1, shall be made on a monthly basis, within 10 days from, and subject to, receipt by the Company of a duly issued tax invoice(s) and receipt(s) by the Consultant for the amount due together with the required reports; provided, however, that such payment shall be made not later than the tenth (10th) day of each calendar month during the Term of this Agreement following the Consulting Commencement Date. |
| 3.1.3. | The Consulting Fees are inclusive of any and all taxes, and the Consultant shall bear full responsibility for all tax obligations of any kind or nature relating, directly or indirectly, to the Consulting Fee and otherwise to the Services hereunder. To the extent that any such taxes may be imposed upon or required to be deducted or withheld by the Company, the Company may deduct or withhold such amounts from any payments due to the Consultant. VAT shall be charged on all amounts payable hereunder. |
| 3.2. | Full Consideration |
Other than the consideration specified in this Section 3, which consideration constitutes full consideration for the Services rendered hereunder, the Consultant will not be entitled to any other consideration for rendering the Services hereunder. Consultant shall be entitled to any repayment or reimbursement of any costs and expenses in connection with its performance of the Services. Any and all expenses incurred by Consultant (or anyone on its behalf) shall be borne and paid exclusively by Company.
4. Confidentiality, Non-Competition and Invention Assignment Undertaking
Simultaneously with the execution of this Agreement, and a as condition hereto, the Consultant hereby executes the Undertaking attached hereto as Schedule A.
5. Relationship of Parties
| 5.1. | The parties hereto hereby declare and approve, that this Agreement is a Contractors Agreement within the meaning of the Israeli Contractors Law – 1974 (the “Contractors Law”), and that nothing in this Agreement that shall be interpreted or construed as creating or establishing any partnership, joint venture, employment relationship, franchise or agency or any other similar relationship between the Company or its Affiliates (as such term is defined below) and the Consultant or the Consultant’s Representative, and it is specifically clarified that with respect to the Services, no employer-employee relationship will be formed between the Company or its Affiliates and the Consultant or the Consultant’s Representative, and the Consultant is not entitled to any social or other benefits resulting from employer-employee relationship. Notwithstanding the above, the Consultant hereby waives any right to a lien in accordance with Section 5 of the Contractors Law or any other law. The Consultant hereby acknowledges that the Company is relying upon the truthfulness and accuracy of the representations set forth in this Section 5.1 in engaging the Consultant. |
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| 5.2. | The Consultant shall bear and/or will defend, indemnify and hold the Company, or any third party on its behalf, harmless from and against all claims, all damages, losses and expenses, including reasonable fees and expenses of attorneys and other professionals, upon receipt of demand (i) relating to any obligation, future or past, imposed upon the Company to pay any withholding tax payments regarding consulting services, social security, unemployment or disability insurance or similar terms in connection with compensation received by the Consultant or, or which are based upon a stipulation by a competent judicial authority that an employer - employee relationship was created between the Company or its Affiliates and the Consultant’s Representative; and (ii) resulting from any act, omission or negligence on the Consultant’s or any of its employees’ part in the performance or failure to perform the scope of work under this Agreement. |
| 5.3. | The Consultant acknowledges that the Consultant’s Representative has read and fully understood the terms of this structure of the relationship between the parties as an independent contractor and that the Consultant’s Representative has consulted and received advice of counsel regarding said structure of the relationship between the parties hereto and has had sufficient opportunity to do so. |
| 5.4. | It is hereby clarified that any right granted to the Company to instruct and/or oversee the Services by the Consultant is granted in order to ensure the performance of the Services in full and not to imply or justify an employer-employee relationship between the Company and the Consultant or the Consultant’s Representative. |
| 5.5. | The Consultant shall be responsible to pay any and all payments, salary, taxes and all other benefits and any amounts due to any relevant social security or similar authority with respect to its employees and/or the Services provided by the Consultant’s Representative pursuant to this Agreement. The Consultant undertakes to acquire for the Consultant’s Representative pension coverage in a customary amount. The Consultant, hereby releases and forever discharges the Company and its Affiliates, from any and all claims, which it ever had, now has, or may claim to have against the Company and/or its Affiliates in connection with the existence of any employer - employee relationship between Company or its Affiliates and the Consultant or the Consultant’s Representative. |
6. Miscellaneous
| 6.1. | In this Agreement the term “Affiliate” shall mean, any person or entity that directly or indirectly controls, is controlled by, or is under common control with, a party to this Agreement. For purposes hereof, the term “control” means the power to direct the management or affairs of a person or entity through the ownership of voting securities, by contract, or otherwise. |
| 6.2. | The preamble and the schedules hereto shall form an integral part of this Agreement. All headings of the Sections and Subsections of this Agreement are intended for convenience of reference and shall not be used in interpreting this Agreement. |
| 6.3. | Assignment. Neither this Agreement nor any interest herein may be assigned by the Parties without the prior written consent of the other Party. |
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| 6.4. | Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the Consultant and the Company with respect to the subject matter hereof and supersedes any other arrangement, understanding or agreement, verbal or otherwise, including the Prior Agreement. No amendment of or waiver of, or modification of any obligation under this Agreement will be enforceable unless set forth in a writing signed by the parties hereto. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. |
| 6.5. | Law; Jurisdiction. This Agreement shall be governed by the laws of the State of Israel (excluding its conflict of law principles) and the competent courts/tribunals of Tel-Aviv shall have exclusive jurisdiction over any disputes arising hereunder. |
| 6.6. | No Waiver. No failure or delay on the part of any party hereto in exercising any right, power or remedy thereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. Any waiver granted thereunder must be in writing and shall be valid only in the specific instance in which given. |
| 6.7. | Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable under applicable law, then such provision shall be excluded from this Agreement and the remainder of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms; provided, however, that in such event this Agreement shall be interpreted so as to give effect, to the greatest extent consistent with and permitted by applicable law, to the meaning and intention of the excluded provision as determined by such court of competent jurisdiction. |
| 6.8. | Notices. Any notice or other communication in connection with this Agreement must be in writing to the address set forth in the preamble to this Agreement (or to such other address as shall be specified by like notice) and will be deemed given: (i) if sent by a delivery service, on the date confirmed as the actual date of delivery by such service; (ii) if sent by registered air mail, return receipt requested, within seven (7) days of mailing; or (iii) if sent by facsimile or email with electronic confirmation of transmission, on the next business day after transmission, if not transmitted on a business day, or on the day of transmission, if transmitted on a business day. |
| 6.9. | Survival. The provisions of Sections 4, 5 and 56 of this Agreement, including the provisions of Schedule A, shall continue and remain in full force and effect following the termination or expiration of this Agreement, for whatever reason. |
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date hereof.
| Jeffs’ Brands Ltd | XYLO TECHNOLOGIES LTD. | |||
| /s/ Viki Hakmon | /s/ Liron Carmel | |||
| By: | Viki Hakmon | By: | Liron Carmel | |
| Title: | CEO | Title: | CEO | |
| /s/ Ronen Zalayet | /s/ Tali Dinar | |||
| By: | Ronen Zalayet | By: | Tali Dinar | |
| Title: | CFO | Title: | CFO | |
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SCHEDULE A
UNDERTAKING
THIS UNDERTAKING (“Undertaking”) is entered into as of the 03 day of April 2024 by XYLO TECHNOLOGIES LTD. (the “Consultant”).
| WHEREAS, | the Consultant wishes to be engaged by Jeff’s Brands Ltd., whose address is at 7 Mezada Street, Bnei Brak, 5126112, Israel (the “Company”); and |
| WHEREAS, | it is critical for the Company to preserve and protect its Confidential Information (as defined below) and its rights in Inventions (as defined below) and in all related intellectual property, and the Consultant is entering into this Undertaking as a condition to the Consultant’s engagement with the Company. |
NOW, THEREFORE, the Consultant undertakes and warrants towards the Company as follows:
References herein to the term “Company” shall include any of the Company’s direct or indirect parent, subsidiary and affiliated companies, and their respective successors and assigns.
1. Confidentiality.
| 1.1. | the Consultant acknowledges that the Consultant may have access to information that relates to the Company, its business, assets, financial condition, affairs, activities, plans and projections, customers, suppliers, partners, and other third parties with whom the Company agreed or agrees, from time to time, to hold information of such party in confidence (the “Confidential Information”). Confidential Information shall include, without limitation, information, whether or not marked or designated as confidential, concerning technology, products, research and development, patents, copyrights, inventions, trade secrets, test results, formulae, processes, data, know-how, marketing, promotion, business and financial plans, policies, practices, strategies, surveys, analyses and forecasts, financial information, customer lists, agreements, transactions, undertakings and data concerning employees, consultants, officers, directors, and shareholders. Confidential Information includes information in any form or media, whether documentary, written, oral, magnetic, electronically transmitted, through presentation or demonstration or computer generated. Confidential Information shall not include information that: (i) has become part of the public domain not as a result of a breach of any obligation owed by the Consultant to the Company; or (ii) is required to be disclosed by law or the binding rules of any governmental organization, provided, however, that the Consultant gives the Company prompt notice thereof so that the Company may seek a protective order or other appropriate remedy, and further provided, that in the event that such protective order or other remedy is not obtained, the Consultant shall furnish only that portion of the Confidential Information which is legally required, and shall exercise all reasonable efforts required to obtain confidential treatment for such information. |
| 1.2. | The Consultant acknowledges and understands that the engagement by the Company and the access to Confidential Information creates a relationship of confidence and trust with respect to such Confidential Information. |
| 1.3. | During the term of the Consultant’s engagement and at any time after termination or expiration thereof, for any reason, the Consultant shall keep in strict confidence and trust, shall safeguard, and shall not disclose to any person or entity, nor use for the benefit of any party other than the Company, any Confidential Information, other than with the prior express consent of the Company. |
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| 1.4. | All right, title and interest in and to Confidential Information are and shall remain the sole and exclusive property of the Company or of the third party providing such Confidential Information to the Company, as the case may be. Without limitation of the foregoing, the Consultant agrees and acknowledges that all memoranda, books, notes, records, email transmissions, charts, formulae, specifications, lists and other documents (contained on any media whatsoever) made, reproduced, compiled, received, held or used by the Consultant in connection with the engagement by the Company or that otherwise relates to any Confidential Information (the “Confidential Material”), shall be the Company’s sole and exclusive property and shall be deemed to be Confidential Information. All originals, copies, reproductions and summaries of the Confidential Material shall be delivered by the Consultant to the Company upon termination or expiration of the Consultant’s engagement for any reason, or at any earlier time at the request of the Company, without the Consultant retaining any copies thereof. |
| 1.5. | During the term of the Consultant’s engagement with the Company, the Consultant shall not remove from the Company’s offices or premises any Confidential Material unless and to the extent necessary in connection with the duties and responsibilities of the Consultant and permitted pursuant to then applicable policies and regulations of the Company. In the event that such Confidential Material is duly removed from the Company’s offices or premises, the Consultant shall take all actions necessary in order to secure the safekeeping and confidentiality of such Confidential Material and return the Confidential Material to their proper files or location as promptly as possible after such use. |
| 1.6. | During the term of the Consultant’s engagement with the Company, the Consultant will not improperly use or disclose any proprietary or confidential information or trade secrets, and will not bring onto the premises of the Company any unpublished documents or any property, belonging to any former employer or any other person to whom the Consultant has an obligation of confidentiality and/or non-use (including, without limitation, any academic institution or any entity related thereto), unless generally available to the public or consented to in writing by that person. |
2. Ownership of Inventions.
| 2.1. | The Consultant will notify and disclose in writing to the Company, or any persons designated by the Company from time to time, all information, improvements, inventions, trademarks, works of authorship, designs, trade secrets, formulae, processes, techniques, know-how, and data, whether or not patentable or registerable under copyright or any similar laws, made or conceived or reduced to practice or learned by the Consultant, either alone or jointly with others, during the Consultant’s engagement with the Company (all such information, improvements, inventions, trademarks, works, designs, trade secrets, formulae, processes, techniques, know-how, and data are hereinafter referred to as the “Invention(s)”) immediately upon discovery, receipt or invention as applicable. |
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| 2.2. | Consultant agrees that all the Inventions are, upon creation, Inventions of the Company, shall be the sole property of the Company and its assignees, and the Company and its assignees shall be the sole owner of all title, rights and interest in and to any patents, copyrights, trade secrets and all other rights of any kind or nature, including moral rights, in connection with such Inventions. the Consultant hereby irrevocably and unconditionally assigns to the Company all the following with respect to any and all Inventions: (i) all title, rights and interest in and to any patents, patent applications, and patent rights, including any and all continuations or extensions thereof; (ii) rights associated with works of authorship, including copyrights and copyright applications, Moral Rights (as defined below) and mask work rights; (iii) rights relating to the protection of trade secrets and confidential information; (iv) design rights and industrial property rights; (v) any other proprietary rights relating to intangible property including trademarks, service marks and applications thereof, trade names and packaging and all goodwill associated with the same; (vi) any and all title, rights and interest in and to any Invention; and (vii) all rights to sue for any infringement of any of the foregoing rights and the right to all income, royalties, damages and payments with respect to any of the foregoing rights. the Consultant also hereby forever waives and agrees never to assert any and all Moral Rights the Consultant may have in or with respect to any Inventions, even after termination of engagement on behalf of the Company. “Moral Rights” means any right to claim authorship of a work, any right to object to any distortion or other modification of a work, and any similar right, existing under the law of any country in the world, or under any treaty. |
| 2.3. | The Consultant further agrees to perform, during and after the term of the Consultant’s engagement with the Company, all acts deemed reasonably necessary or desirable by the Company to permit and assist it, at the Company’s expense, in obtaining, maintaining, defending and enforcing the Inventions in any and all countries. Such acts may include, but are not limited to, execution of documents and assistance or cooperation in legal proceedings. the Consultant hereby irrevocably designates and appoints the Company and its duly authorized officers and agents, as the Consultant’s agents and attorneys-in-fact to act for and on the Consultant’s behalf and instead of the Consultant, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by the Consultant. |
| 2.4. | The Consultant shall not be entitled to any monetary consideration or any other consideration except as explicitly set forth in the Consulting Agreement. Without limitation of the foregoing, the Consultant irrevocably confirms that the consideration explicitly set forth in the Consulting Agreement is in lieu of any rights for compensation that may arise in connection with the Inventions under applicable law and waives any right to claim royalties or other consideration with respect to any Invention, including under Section 134 of the Israeli Patent Law - 1967. Any oral understanding, communication or agreement with respect to the matters set forth herein, not memorialized in writing and duly signed by the Company, shall be void. |
3. General.
| 3.1. | The Consultant represents that the performance of all the terms of this Undertaking and the Consultant’s duties as a consultant of the Company does not and will not breach any invention assignment, proprietary information, non-compete, confidentiality or similar agreements with, or rules, regulations or policies of, any other party (including, without limitation, any academic institution or any entity related thereto). The Consultant acknowledges that the Company is relying upon the truthfulness and accuracy of such representations in its decision to engage with the Consultant. |
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| 3.2. | The Consultant acknowledges that the provisions of this Undertaking serve as an integral part of the terms of the Consulting Agreement and reflect the reasonable requirements of the Company in order to protect its legitimate interests with respect to the subject matter hereof. |
| 3.3. | The Consultant recognizes and acknowledges that in the event of a breach or threatened breach of this Undertaking by the Consultant, the Company may suffer irreparable harm or damage and will, therefore, be entitled to injunctive relief to enforce this Undertaking (without limitation to any other remedy at law or in equity). |
| 3.4. | This Undertaking is governed by and construed in accordance with the laws of the State of Israel, without giving effect to its laws pertaining to conflict of laws. Any and all disputes in connection with this Undertaking shall be submitted to the exclusive jurisdiction of the competent courts or tribunals, as relevant, located in the city of Tel-Aviv-Jaffa, Israel. |
| 3.5. | If any provision of this Undertaking is determined by any court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, such provision shall be stricken from this Undertaking only with respect to such jurisdiction in which such clause or provision cannot be enforced, and the remainder of this Undertaking shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this Undertaking. In addition, if any particular provision contained in this Undertaking shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing the scope of such provision so that the provision is enforceable to the fullest extent compatible with applicable law. |
| 3.6. | The provisions of this Undertaking shall continue and remain in full force and effect following the termination or expiration of the engagement between the Company and the Consultant, for whatever reason. This Undertaking shall not serve in any manner so as to derogate from any of the Consultant’s obligations and liabilities under any applicable law. |
| 3.7. | This Undertaking constitutes the entire agreement between the Consultant and the Company with respect to the subject matter hereof and supersedes all prior agreements, proposals, understandings and arrangements, if any, whether oral or written, with respect to the subject matter hereof. No amendment, waiver or modification of any obligation under this Undertaking will be enforceable unless set forth in a writing signed by the Company. No delay or failure to require performance of any provision of this Undertaking shall constitute a waiver of that provision as to that or any other instance. No waiver granted under this Undertaking as to any one provision herein shall constitute a subsequent waiver of such provision or of any other provision herein, nor shall it constitute the waiver of any performance other than the actual performance specifically waived. |
| 3.8. | This Undertaking, the rights of the Company hereunder, and the obligations of the Consultant hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company may assign any of its rights under this Undertaking. The Consultant may not assign, whether voluntarily or by operation of law, any of the Consultant’s obligations under this Undertaking, except with the prior written consent of the Company. |
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IN WITNESS WHEREOF, the undersigned, has executed this Undertaking as of the date first mentioned above.
| Printed Name: | XYLO ECHNOLOGIES LTD. | Signature: |
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AMENDMENT TO CONSULTING AGREEMENT
This Amendment (“Amendment”) is entered into as of April __, 2025, by and between Jeffs’ Brands Ltd., company number 516356763 (the “Company”) and XYLO Technologies Ltd. (the “Consultant”) (each, a “Party”, and collectively, the “Parties”).
WHEREAS, the Parties have previously entered into that certain Consulting Agreement, dated as of April 30, 2024 (the “Agreement”); and
WHEREAS, the Agreement includes certain provisions which the Parties mutually wish to amend, as of January 1, 2025 (the “Effective Date”), as set forth herein.
NOW, THEREFORE, the Parties hereby agree as follows:
Capitalized terms used but not defined herein shall have the meaning set forth in the Agreement.
1. The Amendments
| 1.1. | The reference to “36 months” in Section 2.1 of the Agreement shall be replaced with “60 months”. |
| 1.2. | The reference to the term “Consulting Fee” in Section 3 of the Agreement shall be amended to be defined as “US$10,000” (plus VAT, if required by law). |
2. Section 3.1.4. shall be added to read as follows:
“3.1.4 The Company shall advance the payment of the Consulting Fee for the last 9.5 months of the Initial Term, in the aggregate amount ofUS$93,635, which shall be converted into 76,126 ordinary shares, no, par value of the Company (the “Shares”), at a deemed issuance price of US $1.23 per Share. The Shares are deemed earned upon issuance and are subject to board approval. The Shares have not been and will not be registered under the Securities Act of 1933 (the “Securities Act”), as amended or any state securities law and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption form such registration requirements is available. The Consultant is aware that the Company is under no obligation to effect any such registration or to file for or comply with any exemption from registration. The Consultant understands and agrees that it shall be solely responsible for and shall bear all tax and/or other mandatory payment and/or consequences arising from the grant of the Shares and that the Company may withhold the amount of the tax and/or other mandatory payment of which is required with respect to the Shares and/or the exercised shares under any applicable law, in accordance with the tax withholdings approval provided by the Consultant from time to time, if provided and applicable law. In the event that the Company determines that it is required to withhold any tax as a result of the grant of the Shares, as a condition to each issuance of the Shares, Consultant shall make arrangements satisfactory to the Company to enable it to satisfy all withholding requirements. VAT shall be charged on all amounts paid in accordance with this Agreement, including the Shares. It is hereby clarified that upon a determination according to which the Company’s deductions were insufficient, Consultant will have to immediately provide with any payments required by the tax authorities, and shall indemnify the Company, at its first request, to the extent it had to bear any such payments.”
| 2.1. |
3. Miscellaneous
| 3.1. | This Amendment shall be deemed for all intents and purposes as an integral part of the Agreement and/or any amendment thereof. All capitalized terms used in this Amendment and not defined herein, shall have the meanings attributed to them in the Agreement. In the event of any inconsistency between the provisions of this Amendment and the provisions of the Agreement and/or any amendment thereof, this Amendment shall prevail. Except as provided explicitly hereto, all other provisions of the Agreement shall continue to be in full force and effect, mutatis mutandis. |
| 3.2. | This Amendment supersedes all prior agreements, written or oral, between the Parties relating to the subject matter of this Amendment. |
| 3.3. | Any provision of this Amendment may be amended, waived or modified only upon the written consent of both Parties. |
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IN WTNESS WHEREOF, the Parties have caused their duly authorized representatives to execute his Amendment as of the date first above written.
| Jeffs’ Brands Ltd | XYLO Technologies Ltd. | |
| By: | By: | |
| Title: | Title: | |
| Date: | Date: |
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form F-1 of our report dated March 31, 2025, relating to the consolidated financial statements of Jeffs’ Brands Ltd appearing in the Annual Report on Form 20-F of Jeffs’ Brands Ltd for the year ended December 31, 2024. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ Brightman Almagor Zohar & Co.
Certified Public Accountants
A Firm in the Deloitte Global Network
Tel Aviv, Israel
June 26, 2025
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the reference to us under the heading “Experts” in the Registration Statement on Form F-1 of Jeffs’ Brands Ltd and to the incorporation by reference therein of our report dated May 5, 2025, with respect to the financial statements of Pure NJ Logistics LLC for the year ended December 31, 2024, included in the Report of Foreign Private Issuer on Form 6-K filed by Jeffs’ Brands Ltd with the Securities and Exchange Commission on May 5, 2025.
/s/ Elkana Amitai CPA
June 26, 2025