ZOOZ 20-F

ZOOZ Strategy Ltd. (ZOOZ)

20-F 2026-03-27 For: 2025-12-31

View Original

Added on April 12, 2026

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, nominal value NIS 0.00286 per share	ZOOZ	Nasdaq Capital Market
Warrants to purchase ordinary shares	ZOOZW	Nasdaq Capital Market

☐ Large Accelerated Filer	☐ Accelerated Filer	☒ Non-Accelerated Filer
		☒ Emerging growth company

		PAGE

PART I

Item 1.	Identity of Directors, Senior Management and Advisers.	5
Item 2.	Offer Statistics and Expected Timetable.	5
Item 3.	Key Information.	5
Item 4.	Information on the Company.	50
Item 4A.	Unresolved Staff Comments	78
Item 5.	Operating and Financial Review and Prospects.	78
Item 6.	Directors, Senior Management and Employees	101
Item 7.	Major Shareholders and Related Party Transactions.	125
Item 8.	Financial Information.	130
Item 9.	The Offer and Listing.	130
Item 10.	Additional Information.	131
Item 11.	Quantitative and Qualitative Disclosures about Market Risk	144
Item 12.	Description of Securities Other than Equity Securities.	145

PART II

Item 13.	Defaults, Dividend Arrearages and Delinquencies.	146
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds.	146
Item 15.	Controls and Procedures.	146
Item 16A.	Audit Committee Financial Expert.	148
Item 16B.	Code of Ethics.	148
Item 16C.	Principal Accountant Fees and Services	149
Item 16D.	Exemption From the Listing Standards for Audit Committees	149
Item 16E.	Purchases of Equity Securities By the Issuer and Affiliated Purchasers	149
Item 16F.	Change in Registrant’s Certifying Accountant	149
Item 16G.	Corporate Governance	150
Item 16H.	Mine Safety Disclosure	150
Item 16I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	150
Item 16J.	Insider Trading Policies	150
Item 16K.	Cybersecurity	150

PART III

Item 17.	Financial Statements.	152
Item 18.	Financial Statements.	152
Item 19.	Exhibits.	152

	●	references to “ZOOZ Strategy,” “ZOOZ”, the “Company,” “us,” “we”, “our” and the “Registrant” refer to ZOOZ Strategy Ltd., an Israeli company, and its subsidiary (unless otherwise indicated);

	●	references to “ZOOZ ordinary shares,” “ordinary shares,” “our shares” and similar expressions refer to the Registrant’s ordinary shares, NIS 0.00286 nominal (par) value per share;

	●	references to “public warrants” refer to the warrants to acquire our shares, listed on the Nasdaq under the symbol “ZOOZW”;

	●	references to “dollars,” “U.S. Dollars”, “U.S. dollars”, “USD” and “$” are to United States Dollars;

	●	references to “shekels” and “NIS” are to New Israeli Shekels, the Israeli currency;

	●	references to the “Companies Law” are to the Israeli Companies Law, 5759-1999;

	●	references to the “Securities Law” are to the Israeli Securities Law, 5728-1968;

	●	references to the “SEC” are to the United States Securities and Exchange Commission; and

	●	references to the “Nasdaq Rules” are to rules of the Nasdaq Capital Market.

	●	Our bitcoin treasury strategy exposes us to various risks associated with bitcoin.

	●	Bitcoin is a highly volatile asset, and fluctuations in the price of bitcoin are likely to influence our financial results and the market price of our ordinary shares.

	●	Bitcoin and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty.
	●	Regulatory change reclassifying bitcoin as a security could lead to our classification as an “investment company” under the 1940 Act and could adversely affect the market price of bitcoin and the market price of our listed securities.

	●	Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to our bitcoin holdings.
	●	Our information technology systems, or those of the third parties with whom we work, including our cloud providers or other contractors or consultants, may fail, suffer security breaches or otherwise be compromised, which could result in a material disruption to our business, loss of assets, as well as to regulatory investigations or actions; litigation; fines and penalties; reputational harm; loss of revenue and other adverse consequences.

	●	Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin trading venues, bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in bitcoin trading venues and adversely affect the value of our bitcoin.
	●	Changes to tax laws or regulations in Israel, the United States and other jurisdictions expose ZOOZ to tax uncertainties and could adversely affect ZOOZ’s results of operations or financial condition.

	●	Future developments regarding the treatment of digital assets for U.S. federal income and applicable state, local and non-U.S. tax purposes could adversely impact our business.
	●	Conditions in Israel and in the Middle East may adversely affect our operations.
	●	If we are classified as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes, U.S. investors may suffer adverse tax consequences.
	●	We may not be able to meet the continued listing standards of Nasdaq, which require a minimum closing bid price of $1.00 per share, which could result in our delisting and negatively impact the price of our ordinary shares and ability to access the capital markets.
	●	If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our ordinary shares adversely, then the price and trading volume of our ordinary shares could decline.
	●	We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
	●	The exercise of ZOOZ warrants, RSUs and options for ZOOZ ordinary shares could increase the number of ZOOZ shares eligible for future resale in the public market and result in additional dilution to ZOOZ’s shareholders.

	●	Our bitcoin treasury strategy may adversely affect our ability to raise capital through public offerings in Israel.

	●	If we are unable to attract, retain, and motivate key employees and hire qualified management, our ability to compete and successfully grow our business would be harmed and could diminish anticipated benefits.

	●	Our business may be adversely affected if we are unable to protect our technology and intellectual property from unauthorized use by third parties.

	●	decreased user and investor confidence in bitcoin, including due to the various factors described herein;

	●	investment and trading activities such as (i) trading activities of highly active retail and institutional users, speculators, miners and investors, or of the U.S. or state governments, (ii) actual or expected significant dispositions of bitcoin by large holders, and (iii) actual or perceived manipulation of the spot or derivative markets for bitcoin or spot bitcoin exchange-traded products (“ETPs”);

	●	negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, bitcoin or the broader digital assets industry, for example, (i) public perception that bitcoin can be used as a vehicle to circumvent sanctions, including sanctions imposed on Russia or certain regions related to the ongoing conflict between Russia and Ukraine, or to fund criminal or terrorist activities, such as the purported use of digital assets by Hamas to fund its terrorist attack against Israel in October 2023; (ii) expected or pending civil, criminal, regulatory enforcement or other high-profile actions against major participants in the bitcoin ecosystem, including potential future SEC or DOJ enforcement actions; (iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates; and (iv) the actual or perceived environmental impact of bitcoin and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the bitcoin mining process;

	●	changes in consumer preferences and the perceived value or prospects of bitcoin;

	●	competition from other digital assets that exhibit better transaction speed, security, scalability, or energy efficiency, that feature other more favored characteristics, that are backed or held in large amounts by governments, including the U.S. government, or reserves of fiat currencies, or that represent ownership or security interests in physical assets;

	●	a decrease in the price of other digital assets, including stablecoins, or the crash or unavailability of stablecoins that are used as a medium of exchange for bitcoin purchase and sale transactions, such as the crash of the stablecoin Terra USD in 2022 and the depeg of stablecoin USDC in 2023, to the extent the decrease in the price of such other digital assets or the unavailability of such stablecoins may cause a decrease in the price of bitcoin or adversely affect investor confidence in digital assets generally;

	●	the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed bitcoin, or the transfer of substantial amounts of bitcoin from bitcoin wallets attributed to Mr. Nakamoto or other “whales” that hold significant amounts of bitcoin;

	●	disruptions, failures, unavailability, or interruptions in service of trading venues for bitcoin—including exchange or market-maker outages, denial-of-service attacks, insolvency events, trading halts, and order-book dislocations—such as, for example, the announcement by the digital asset exchange FTX Trading that it would freeze withdrawals and transfers from its accounts and subsequent filing for bankruptcy protection or an SEC enforcement action brought against an exchange or other trading venue, which seeks to freeze all of its assets during the pendency of the enforcement action;

	●	the filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians, trading venues, lending platforms, investment funds, or other digital asset industry participants, such as the filing for bankruptcy protection by digital asset trading venues FTX Trading and BlockFi and digital asset lending platforms Celsius Network and Voyager Digital Holdings in 2022, the ordered liquidation of the digital asset investment fund Three Arrows Capital in 2022, the announced liquidation of Silvergate Bank in 2023, the government-mandated closure and sale of Signature Bank in 2023, the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by the Nevada Department of Business and Industry in 2023, and the exit of Binance Holdings Ltd. from the U.S. market as part of its settlement with the Department of Justice and other federal regulatory agencies;

	●	regulatory, legislative, enforcement and judicial actions that adversely affect the price, ownership, transferability, trading volumes, legality or public perception of bitcoin, or that adversely affect the operations of or otherwise prevent digital asset custodians, trading venues, lending platforms or other digital assets industry participants from operating in a manner that allows them to continue to deliver services to the digital assets industry;

	●	further reductions in mining rewards of bitcoin, including block reward halving events, which are events that occur after a specific period of time that reduce the block reward earned by “miners” who validate bitcoin transactions, or increases in the costs associated with bitcoin mining, including increases in electricity costs and hardware and software used in mining, that may cause a decline in support for the Bitcoin network;

	●	transaction congestion and fees associated with processing transactions on the bitcoin network;

	●	macroeconomic changes, such as changes in the level of interest rates and inflation, fiscal and monetary policies of governments, trade restrictions, and fiat currency devaluations;

	●	developments in mathematics or technology, including in digital computing, algebraic geometry and quantum computing, that could result in the cryptography used by the bitcoin blockchain becoming insecure or ineffective; and

	●	changes in national and international economic and political conditions, including, without limitation, the recent developments between the U.S. and Venezuela, the adverse impact attributable to the economic and political instability caused by the current conflict between Russia and Ukraine and the economic sanctions adopted in response to the conflict, the collapse of the ceasefire in the Israel-Hamas conflict, the Israel-Hezbollah conflict, the Iran-United States and Israel conflict and the closing of Strait of Hormuz, leading to disruption of the global supply chain or the potential initiation of additional conflicts in the Middle East as well as expectations regarding changes to the regulatory environment, including for the U.S. and/or Israeli digital asset industry.

	●	difficulties in establishing, staffing and managing foreign operations in an environment of diverse culture, laws, and customers, and the increased travel, infrastructure, legal and compliance costs associated with international operations;

	●	products’ deliveries and installation challenges, including those associated with local licensing and permitting requirements;

	●	compliance with multiple, potentially conflicting and changing governmental laws, regulations, certifications, and permitting processes including environmental, banking, employment and tax laws and regulations;

	●	compliance with U.S. and foreign anti-bribery laws including the Foreign Corrupt Practices Act (“FCPA”);

	●	conforming products to various international regulatory and safety requirements;

	●	difficulties in collecting payments in foreign currencies and associated foreign currency exposure;

	●	restrictions on repatriation of earnings; and

	●	local or regional economic and political conditions.

	●	a partial or total loss of our bitcoin in a manner that may not be covered by insurance or the liability provisions of the custody agreements with the custodians who hold our bitcoin;

	●	harm to our reputation and brand;

	●	improper disclosure of data and violations of applicable data privacy and other laws; or

	●	significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure.

	●	In a highly concentrated business environment, ZOOZ may not be able to find other sources of revenue if particular customers do not place an order, delay or cancel an order.

	●	As a result of this concentrated customer base, single customers may represent a greater portion of ZOOZ’s sales and, consequently, may have greater commercial negotiation leverage.

	●	The highly concentrated business environment also increases ZOOZ’s exposure to risks related to its customers’ financial condition. If ZOOZ’s customers experience liquidity issues in the future, ZOOZ may be required to incur additional credit losses on receivables owed by them.

	●	negative economic developments in economies around the world and the instability of governments, currently for example the sovereign debt situation in certain European countries;

	●	social and political instability in a number of countries around the world, including the instability in the Middle East, and also including the threat of war, terrorist attacks in the United States or in Europe, the Middle East and Africa, epidemics or civil unrest;

	●	national and international environmental or other disasters, which may adversely affect ZOOZ’s workforce, as well as its local suppliers and customers;

	●	adverse changes in governmental policies, especially those affecting trade and investment;

	●	foreign currency exchange, in particular with respect to the U.S. dollar, and transfer restrictions; and

	●	threats that ZOOZ’s operations or property could be subject to nationalization and expropriation.

	●	Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers, or significant shareholders, and regulates other matters that may be relevant to such types of transactions. For example, a merger may not be consummated unless at least 50 days have passed from the date on which a merger proposal is filed by each merging company with the Israel Registrar of Companies and at least 30 days have passed from the date on which the shareholders of both merging companies have approved the merger. In addition, a majority of each class of securities of the target company must approve a merger. Moreover, a tender offer for all of a company’s issued and outstanding shares can only be completed if the acquirer receives positive responses from the holders of at least 95% of the issued share capital. Completion of the tender offer also requires approval of a majority of the offerees that do not have a personal interest in the tender offer, unless, following consummation of the tender offer, the acquirer would hold at least 98% of the Company’s outstanding shares. Furthermore, the shareholders, including those who indicated their acceptance of the tender offer, may, at any time within six months following the completion of the tender offer, claim that the consideration for the acquisition of the shares does not reflect their fair market value, and petition an Israeli court to alter the consideration for the acquisition accordingly, unless the acquirer stipulated in its tender offer that a shareholder that accepts the offer may not seek such appraisal rights, and the acquirer or the company published all required information with respect to the tender offer prior to the tender offer’s response date;

	●	Israeli corporate law requires special approvals for certain transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to these types of transactions;

	●	Israeli corporate law does not provide for shareholder action by written consent for public companies, thereby requiring all shareholder actions to be taken at a general meeting of shareholders.

	●	Royalty Payment Obligation. Under the Grant Agreement, ZOOZ is required to pay royalties to the State of Israel at rate of 5% from any income derived from the commercialization of the MOE Funded Know-How and the IP resulting from MOE Approved Program, directly or indirectly, including related services, up to the grant amount linked to the consumer price index plus the accountant general’s interest (whether such income is obtained by ZOOZ or by a corporation acting on its behalf, connected thereto or partnered therewith).

	●	MOE Funded Know-How Exploitation. Under the Grant Agreement, ZOOZ is required to take all reasonable measures to protect its rights in the MOE Funded Know-How and to act to an efficient exploitation thereof and will provide the MOE with details on the actions which it intends to take in this respect. The protection of the MOE Funded Know-How, its registration and grant of licenses with respect thereto shall be made in accordance with the Grant Agreement and in a manner which advances such know-how and enables its use for practical purposes, subject to the rights of the State of Israel and the MOE under the Grant Agreement. These obligations will survive for a period of five years following the completion of the project.

	●	License for National Needs. Under the Grant Agreement, the MOE is granted with a non-exclusive, non-transferable and irrevocable license (without bearing any consideration) to use the MOE Funded Know-How, directly or using a third party, for national purposes (certain Israeli ministers are authorized to determine whether a certain use is for national needs). ZOOZ is obligated to act for the fulfilment of the purposes and results of the MOE Approved Program and in case that, for any reason, ZOOZ shall fail to do so within reasonable time following the completion of the project, the MOE will be granted with a right to act for the fulfilment of such purposes and results, for national needs (as outlined above). For such purposes, ZOOZ will grant the State a license, under accepted commercial terms, to use all IP ZOOZ has accumulated outside the framework of the MOE Approved Program, which ZOOZ has used in the performance of such program. This obligation will survive for a period of five years following the completion of the project.

	●	MOE’S Approval for Additional Funding/Investments. Pursuant to the Grant Agreement, ZOOZ is required to inform the MOE of any additional funding/investment offered to it prior to the execution of the applicable investment/funding agreement, together with a certain notice issued by the relevant investor/funder under which it represents that it is aware of the MOE Agreement and the MOE’s rights under such agreement. The MOE will consider granting such approval if such approval would not, in the MOE’s opinion, adversely affect the rights of the State of Israel. The MOE will have sole discretion with respect to whether to approve the additional funding or to enter into negotiations with the potential investor, as the MOE finds suitable. The Company received an approval from the MOE in connection with its initial public offering on the Tel Aviv Stock Exchange (the “TASE”), according to this approval in the event of a change of control in the Company by virtue of which the Company has a new or additional “controlling shareholder” (as defined in the Securities Law) such controlling shareholder will be required to execute an undertaking towards the MOE under which they agree to adhere to the terms of the Grant Agreement.

	●	MOE Funded Know-How Transfer Limitation. Under the Grant Agreement, transferring the ownership of the MOE Funded Know- How and registering it under the name of a third party will require prior written approval of the MOE. The MOE may reject such request if in the MOE’s opinion there is a concern that such approval could adversely affect the rights of the State of Israel under the Grant Agreement, including the repayment of the grant amount and the exploitation of the MOE Approved Program’s accomplishments in favor of the Israeli market and the State of Israel. This obligation will survive for a period of five years following the completion of the project.

	●	MOE Funded Know-How Licensing Conditions. Under the Grant Agreement, ZOOZ are required to inform the MOE of any grant of license to a third party to use the MOE Funded Know-How, and several conditions should be incorporated under such a license, such as with respect to payment of the applicable royalties to the MOE and the MOE’s right to revoke such license in certain circumstances. ZOOZ are also obligated to will make best efforts to act for the benefit of the Israeli public interest in fulfilling the purposes and the results of the MOE Approved Program, considering the relevant market, when deciding on the scope of the license and level of exclusiveness. These obligations will survive for a period of five years following the completion of the project.

	●	the realization of any of the risk factors presented in this Annual Report;

	●	actual or anticipated differences in ZOOZ’s estimates, or in the estimates of analysts, for ZOOZ’s revenues, earnings, results of operations, level of indebtedness, liquidity or financial condition;

	●	additions and departures of key personnel;

	●	failure to comply with the continuing listing requirements of the Nasdaq;

	●	failure to comply with the continuing listing requirements of the TASE;

	●	failure to comply with the Sarbanes-Oxley Act or other laws or regulations;

	●	future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of ZOOZ’s securities;

	●	publication of research reports about ZOOZ;

	●	the performance and market valuations of other similar companies;

	●	failure of securities analysts to initiate or maintain coverage of ZOOZ, changes in financial estimates by any securities analysts who follow ZOOZ or ZOOZ’s failure to meet these estimates or the expectations of investors;

	●	new laws, regulations, subsidies, or credits or new interpretations of existing laws applicable to ZOOZ;

	●	commencement of, or involvement in, litigation involving ZOOZ;

	●	broad disruptions in the financial markets, including sudden disruptions in the credit markets;

	●	speculation in the press or investment community;

	●	actual, potential or perceived control, accounting or reporting problems; and

	●	other events or factors, including those resulting from infectious diseases, health epidemics and pandemics, natural disasters, war, acts of terrorism or responses to these events.

	●	the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q and current reports on Form 8-K;

	●	the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, including extensive disclosure of compensation paid or payable to certain of our highly compensated executives as well as disclosure of the compensation determination process;

	●	the provisions of Regulation Fair Disclosure, or Regulation FD, aimed at preventing issuers from making selective disclosures of material information; and

	●	the sections of the Exchange Act establishing insider liability for profits realized from any “short-swing” trading transaction (a purchase and sale, or sale and purchase, of the issuer’s equity securities within less than six months).

	●	ZOOZ’s existing shareholders’ proportionate ownership interest in ZOOZ will decrease;

	●	the amount of cash available per share, including for payment of dividends in the future, may decrease;

	●	the relative voting strength of each previously outstanding ZOOZ ordinary share may be diminished; and

	●	the market price of the ZOOZ ordinary shares may decline.

	●	fund the additional operations and capital expenditures;

	●	take advantage of favorable business opportunities, including acquisitions of complementary businesses or technologies;

	●	develop and upgrade ZOOZ’s technology beyond current plans;

	●	develop new product and service offerings;

	●	take advantage of favorable conditions in capital markets; or

	●	respond to competitive pressures.

	●	Vacuum operation, which causes the cooling of the motor to be challenging.

	●	In order to reduce the losses when the wheel is running at maximal speed of 17,000 Rounds Per Minute (RPM) and waiting for a car to come, motor losses are minimized by a special design, in standard motors this feature is less important because when the motor is at idle it is not rotating and therefore there are almost no energy losses.

	●	Concept of operation – a battery stores / discharge energy using chemical reactions, while flywheel-based energy storage relies on accelerating and decelerating a heavy mass and by that storing / rapidly discharging kinetic energy.

	●	Charging cycles – the charging cycles of batteries (usually defined as reaching 70%-80% of their initial capacity) is limited to approximately 1,000-5,000 charging / discharging cycles due to performance degradation, which is related to the fact that the energy storage is based on chemical reactions, according to a report issued by the ELB Energy Group². In contrast to that, flywheels, being based on more efficient physical storage mechanism, maintain performance and reliability during hundreds of thousands of cycles, allowing a lifespan which is typically over 15 years (see more details regarding lifespan below).

	●	C-Rate – the C-Rate refers to the power-to-energy ratio, denoting the duration necessary for discharging. A higher C-Rate facilitates expeditious response times and swift recovery for prompt readiness in subsequent sessions. While batteries conventionally exhibit C-Rates of 0.5 or lower and their lifespan is shortened (performance degradation intensified) with higher C-rates, in flywheel-based systems the capacity of the flywheel is determined by the size of the rotor while the output power is determined by the size of the motor, therefore the capacity is decoupled from the power output and the C-Rate is a design parameter and is not intrinsic to the technology. Typically, due to economic reasons, flywheels operate at C-Rates of four or more.

	●	Lifespan – the lifespan of batteries is usually up to 10 years. In demanding applications like power boosters and in cases when they operate at high C-rate, multiple / continuous high-power charge & discharge cycling and/or in harsh environment conditions, the battery lifespan is much shorter (can be reduced to a few years due to different reasons, including heavy-duty usage, which batteries are not designed for), while the lifespan of flywheels is longer and most flywheels have an expected lifespan of approximately 15 years.

	●	Environmental impact – because of batteries’ composition of rare metals and toxic materials, they are difficult to recycle and their recycling process is polluting by itself. In contrast to that, ZOOZ’s flywheels are made from steel which is easily recyclable and is considered to be a more environmentally friendly metal. In addition, steel is a common raw material with long lifespan and in many cases is reused (which by itself reduces the polluting effect of the metal).

	●	Safety – batteries are composed of several potentially harmful substances. The primary concern with battery technology revolves around the toxicity and flammability of the chemicals used in their construction. Lithium-ion batteries, for instance, use a flammable content that can potentially ignite under certain circumstances, such as when the battery is damaged or improperly handled. In some countries the installation and usage of batteries-based ESS is limited or prohibited in certain locations due to the flammability and fire hazard of those batteries. Moreover, the production of batteries involves complex chemical processes that can lead to the release of toxic substances into the environment. This could cause harm to the ecosystem and human health. Similarly, when batteries have reached the end of their life cycle, their disposal poses another significant environmental challenge. In contrast to that, Flywheels’ key advantage from a safety perspective is that flywheels do not involve hazardous chemicals, which minimizes the risk of fires or chemical leaks. In general, flywheel systems store kinetic energy via a rotating mass. The primary safety concern is the potential for this mass to rupture, releasing energy suddenly and causing damage or injury. Failures can arise from material defects or imbalances. Although modern designs include containment and monitoring and are tested and certified by the regulators.

	●	Vacuum operation, which make cooling the motor challenging.

	●	In order to reduce the losses when the wheel is running at maximal speed of 17,000 RPM and waiting for a car to come, motor losses are minimized by a special design, in standard motors this feature is less important because when the motor is at idle it’s not rotating and therefore there are no losses.

	●	The motor driver (sometimes referred to as inverter) which is the power electronics controlling the motor is based on state-of-the-art Silicon carbide transistors to minimize losses.

	●	First milestone (25% of the Earnout Rights) (i.e., 1,000,000 ZOOZ ordinary shares in the aggregate, subject to adjustment in accordance with the Business Combination Agreement): the VWAP of the ZOOZ ordinary shares equals or exceeds $12 per ZOOZ ordinary share (as adjusted for share splits, share dividends, combinations or exchange or readjustment of shares, reorganizations and recapitalizations, share sub-division (including share consolidation), split-up and the like) for any 20 “Trading Days” (i.e., any day on which ZOOZ ordinary shares are actually traded on the principal United States securities exchange or securities market on which the ZOOZ ordinary shares are then traded) within any 30 Trading Day period during the Earnout Period;

	●	Second milestone (35% of the Earnout Rights) (i.e., 1,400,000 ZOOZ ordinary shares in the aggregate, subject to adjustment in accordance with the Business Combination Agreement): the VWAP of the ZOOZ ordinary shares equals or exceeds $16 per ZOOZ ordinary share (as adjusted for share splits, share dividends, combinations or exchange or readjustment of shares, reorganizations and recapitalizations, share sub-division (including share consolidation), split-up and the like) for any 20 Trading Days within any 30 Trading Day period during the Earnout Period; and

	●	Third milestone (40% of the Earnout Rights) (i.e., 1,600,000 ZOOZ ordinary shares in the aggregate, subject to adjustment in accordance with the Business Combination Agreement): the VWAP of the ZOOZ ordinary shares equals or exceeds $23 per ZOOZ ordinary share (as adjusted for share splits, share dividends, combinations or exchange or readjustment of shares, reorganizations and recapitalizations, share sub-division (including share consolidation), split-up and the like) for any 20 Trading Days within any 30 Trading Day period during the Earnout Period.

	●	cash and cash equivalents and short-term investments (“Cash Assets”) held by us that exceed working capital requirements; and

	●	bitcoin held by us, with bitcoin serving as the primary treasury reserve asset on an ongoing basis, subject to market conditions and anticipated needs of the business for Cash Assets.

	(a)	The “Lowest Market Price Per Bitcoin During Year” represents the lowest market price for one bitcoin reported on the Coinbase exchange during the period applicable to us in 2025, without regard to when we purchased any of our bitcoin.

	(b)	The “Market Value of Bitcoin Held at End of Year Using Lowest Market Price” represents a mathematical calculation consisting of the lowest market price for one bitcoin reported on the Coinbase exchange during the period applicable to us in 2025 multiplied by the number of bitcoins held by us at the end of 2025.

	(c)	The “Highest Market Price Per Bitcoin During Year” represents the highest market price for one bitcoin reported on the Coinbase exchange during the period applicable to us in 2025, without regard to when we purchased any of our bitcoin.

	(d)	The “Market Value of Bitcoin Held at End of Year Using Highest Market Price” represents a mathematical calculation consisting of the highest market price for one bitcoin reported on the Coinbase exchange during the period applicable to us in 2025 multiplied by the number of bitcoins held by us at the end of 2025.

	(e)	The “Market Price Per Bitcoin at End of Year” represents the market price of one bitcoin per a statement issued by BitGo, our custodian, as of 23:59 p.m. Eastern Time on the last day of 2025.

	(f)	The “Market Value of Bitcoin Held at End of Year Using Ending Market Price” represents a mathematical calculation consisting of the market price of one bitcoin per a statement issued by BitGo, our custodian, as of 23:59 p.m. Eastern Time on the last day of 2025 multiplied by the number of bitcoins held by us at the end of 2025.

	●	Inventory write-off – the Company recorded a write-off of $2,888 thousand related to finished goods, work in process, and raw materials inventory.

	●	Loss on property, plant and equipment disposals – as the Company does not currently anticipate manufacturing additional systems in the foreseeable future, certain fixed assets were written off, resulting in a recognized loss on equipment disposals in the amount of $453 thousand.

	●	Reduction in payroll and related expenses – following the company-wide cost reduction and restructuring initiative, which included a significant headcount reduction implemented during the second half of 2025, the Company recognized a corresponding decrease in salary and related costs.

	Year ended December 31,
	2025			2024			2023
	(dollars in thousands)
Revenue		247			1,041			764
Cost of revenue		3,111			1,527			1,869
Gross loss		(2,864	)		(486	)		(1,105	)
Operating expenses:
Research and development, net		3,742			5,062			5,215
Sales and marketing		1,310			1,324			3,041
General and administrative		14,908			3,664			2,850
Unrealized loss on digital assets		30,307			-			-
Total operating expenses		50,267			10,050			11,106

Operating loss		(53,131	)		(10,536	)		(12,211	)

Interest expenses		160			171			-
Other finance expenses (income), net		2,298			283			(456	)
Net loss for the year		(55,589	)		(10,990	)		(11,755	)
Net loss per ordinary share attributable to shareholder – basic and diluted		(0.94	)		(1.09	)		(1.99	)
Weighted average ordinary shares outstanding – basic and diluted in thousands		59,291			10,070			5,912

Net Loss		(55,589	)		(10,990	)		(11,755	)
Other comprehensive loss
Reporting currency translation gain (loss)		885			267			(819	)
Total comprehensive loss		(54,705	)		(10,723	)		(12,574	)

	●	5,777,250 public warrants to purchase up to the same number of ZOOZ ordinary shares, with an exercise price of $11.50 per warrant;

	●	245,250 private warrants to purchase up to the same number of ZOOZ ordinary shares, with an exercise price of $11.50 per warrant;

	●	40,360,895 Sponsor Warrants, each to purchase one ZOOZ ordinary share. For additional information regarding the Sponsor Warrants, see “Item 7 – Major Shareholders and Related Party Transactions – Related Party Transactions – Investments Made by Related Parties in the Private Placement”;

	●	18,000,000 Subsequent Pre-Funded Warrants to purchase up to the same number of ZOOZ ordinary shares, with an exercise price of $0.001 per warrant;

	●	5,000,000 Ordinary Warrants to purchase up to the same number of ZOOZ ordinary shares, issued in the Initial Private Placement, with an exercise price of $3.06 per warrant;

	●	5,000,000 pre-funded warrants to purchase up to the same number of ZOOZ ordinary shares, issued to Chardan pursuant to the Engagement Letter (the “Chardan Pre-Funded Warrants”), with an exercise price of $0.001 per warrant;

	●	350,000 Chardan Ordinary Warrants to purchase up to the same number of ZOOZ ordinary shares, having the same purchase price as the Ordinary Warrants detailed above; and

	●	6,525,926 Sponsor Pre-Funded Warrants to purchase the same number of ZOOZ ordinary shares, with an exercise price of $0.001 per warrant.

	Year ended December 31, 2025
	Flywheel			Corporate & Other		Total
	U.S. dollars in thousands
Total revenues		247			-		247
Significant segment expenses
Inventory write-off		2,888			-		2,888
Research and development payroll		2,431			-		2,431
Research and development projects		354			-		354
Operating lease and maintenance		607			-		607
Professional Services		-			4,318		4,318
Directors Insurance		-			515		515
Investors relations expenses		-			1,019		1,019
Plant, property and equipment disposals		453			-		453
Share-based compensation expense		(29	)		6,730		6,701
Unrealized loss on digital asset		-			30,307		30,307
Digital asset custody and sponsor fees		-			152		152
Other segment items⁽¹⁾		3,699			2,392		6,091
Net loss		10,156			45,433		55,589

Total assets, as of December 31, 2025⁽²⁾		10,722			111,843		122,565

	Year ended December 31, 2024
	Flywheel		Corporate & Other		Total
	U.S. dollars in thousands
Total revenues		1,041		-		1,041
Significant segment expenses
Inventory write-off		457		-		457
Research and development payroll		2,955		-		2,955
Research and development projects		952		-		952
Operating lease and maintenance		647		-		647
Professional Services		-		1,520		1,520
Directors Insurance		-		734		734
Share-based compensation expense		286		83		369
Other segment items⁽¹⁾		4,104		293		4,397
Net loss		8,360		2,630		10,990
Total assets, as of December 31, 2025⁽²⁾		12,473		364		12,837