UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, ~~2020~~2021

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

For the transition period from ________________ to ________________

Commission file number 000-49877

ON TRACK INNOVATIONS LTD.

(Exact name of registrant as specified in its charter)

Israel

N/A

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

Hatnufa 5, Yokneam Industrial Zone

Box 372, Yokneam, Israel

2069200

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: + 972-4-6868000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
None

Securities registered pursuant to Section 12(g) of the Act:

Ordinary Shares, par value NIS 0.10 per share

(Title of class)

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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked prices of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $1811,~~237~~596,~~849~~882. The number of shares of the registrant’s Ordinary Shares outstanding on ~~March~~April 254, ~~2021~~2022, was 5375,~~824~~775,~~377~~393.

TABLE OF CONTENTS

PART I
Item 1.	Business	1	1
Item 1A.	Risk Factors	6	5
Item 1B.	Unresolved Staff Comments	21	17
Item 2.	Properties	21	17
Item 3.	Legal Proceedings	21	17
Item 4.	Mine Safety Disclosures	21	17
PART II
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	22	18
Item 6.	~~Selected Financial Data~~[Reserved]	22	18
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22	18
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	32	27
Item 8.	Financial Statements and Supplementary Data	32	27
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	32	28
Item 9A.	Controls and Procedures	32	28
Item 9B.	Other Information	33	28
PART III
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	33
Item 10.	Directors, Executive Officers, and Corporate Governance		29
PART III
Item 11.	Executive Compensation		36
Item 10.	Directors, Executive Officers, and Corporate Governance	34
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters		40
Item 11.	Executive Compensation	41
Item 13.	Certain Relationships and Related Transactions, and Director Independence		42
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters	46
Item 14.	Principal Accounting Fees and Services		43
Item 13.	Certain Relationships and Related Transactions, and Director Independence	47
PART IV
Item 14.	Principal Accounting Fees and Services	47
Item 15.	Exhibits and Financial Statement Schedules		44
PART IV
Item 16.	Form 10-K Summary		45
Item 15.	Exhibits and Financial Statement Schedules	49
Item 16.	Form 10-K Summary	50

In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars. In Note 2B to our consolidated financial statements, we explain the method of exchange rate calculations which we use.

As used in this annual report, the terms “we”, “us”, “our”, “the Company”, and “OTI” mean On Track Innovations Ltd. and our subsidiaries and affiliates, unless otherwise indicated.

This Annual Report on Form 10-K includes the registered and unregistered trademarks of the Company and other persons, which are the property of their respective owners.

iii

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this Annual Report on Form 10-K, or Annual Report, that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as “believes,” “intends,” “plans” “expects,” “may,” “will,” “should,” “ "estimate,”" “"likely,~~” “~~" "foresee,”" or “anticipates” or the negative thereof or other variations thereon or comparable terminology, and similar expressions are intended to identify forward-looking statements. We remind readers that forward-looking statements are merely predictions and therefore are inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity, or our achievements, or industry results, to be materially different from any actual future results, performance, levels of activity, or our achievements, or industry results, expressed or implied by such forward-looking statements. Such forward-looking statements may appear in Item 1 – “Business” and Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as elsewhere in this Annual Report and include, among other statements, statements regarding the following:

●

the closing of the merger transaction we entered into with Nayax Ltd., or Nayax;

●

our ability to continue as a going concern and any efforts that we may undertake to support our future operations, service our debt obligations and to further execute our business plans;

●

any impact of the Corona Virus, or COVID-19, pandemic on our business and cash flow, including timing of receipt of orders and payment from our customers;

●

the impact of general economic, political, demographic and business conditions worldwide, including geopolitical uncertainty and instability, such as the Russia-Ukraine conflict, on general economic conditions and on our business in the short and long terms;

●

future sources of revenue, ongoing relationships with current and future business partners, distributors, suppliers, customers, end-user customers and resellers;

●

future costs and expenses and adequacy of capital resources;

●

our expectations regarding our short-term and long-term capital requirements and satisfaction thereof;

● ~~the~~interest ~~impact~~from ofcurrent ~~ongoing~~and ~~litigation~~new oncustomers ~~our~~and ~~business~~rate of orders;

● the ~~implications~~global ofshortage ~~the~~in ~~sale~~components ofand ~~part~~the related effects of ~~our~~an ~~business~~increase in ~~Poland~~components’ onprices, ~~our~~freight ~~business~~cost and longer lead-times;

●

our outlook for the coming months; and

●

information with respect to any other plans and strategies for our business.

The factors discussed herein, and in those risk factors described in Item ~~1A-~~“1A Risk Factors”, and those expressed from time to time in our press releases or filings with the Securities and Exchange Commission, or the SEC, could cause actual results and developments to be materially different from those expressed in or implied by such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak and are made only as of the date of this filing.

Our business and operations are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained in this Annual Report. Except as required by law, we undertake no obligation to release publicly the result of any revision to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

~~iii~~ii

PART I

Item 1. Business.

WeGeneral ~~are~~Overview a leading developer of contactless payment solutions, Near Field Communication (NFC) technology based, for the unattended market. We have been a technology leader since 1990, providing systems, devices and services to operators and integrators with solutions and components that are simple to implement.

ToWe ~~date,~~are wea ~~have~~leading ~~deployed~~developer of ~~over~~contactless ~~one million~~ payment solutions, toNear ~~our focused~~Field ~~unattended~~Communication ~~markets:~~(NFC) ~~self-service~~technology ~~kiosk~~based, ~~micro-markets~~for ~~and~~the ~~vending~~unattended ~~machines,~~market. ~~entertainment~~We ~~and~~have ~~gaming,~~been ~~automated~~a ~~teller~~technology leader ~~machines~~since 1990, or ~~ATM~~providing systems, ~~Mass~~devices ~~Transit~~and ~~Ticketing~~services ~~Validation,~~to operators and ~~fuel~~integrators ~~payments~~with solutions and components that are simple to implement.

WeTo ~~operate~~date, ~~through~~we ~~regional~~have ~~offices~~deployed over one million payment solutions to our focused unattended markets: self-service kiosk, ~~supporting clients~~micro-markets and ~~payment~~vending ~~industry~~machines, ~~partners~~entertainment and ~~with~~gaming, ~~its~~automated ~~unique~~teller ~~contactless~~machines, ~~payment~~or ~~solutions~~ATM, Mass Transit Ticketing Validation, and fuel payments.

OnWe ~~March~~operate ~~29,~~through ~~2021,~~regional ~~we entered into an agreement~~offices, ~~or the Sale Agreement,~~supporting ~~for~~clients ~~the sale of 100% of the issued~~ and ~~outstanding~~payment ~~share~~industry ~~capital~~partners ~~of our wholly owned Polish subsidiary, ASEC S.A., or ASEC,~~ with ~~Vector Software~~its ~~SP.~~unique Zcontactless ~~O.O.,~~payment ~~or the Buyer~~solutions. ASEC is headquartered in Krakow, Poland and has been conducting our Mass Transit Ticketing business in Europe. The consideration for ASEC is $3,000,000, of which approximately $2,100,000 shall be used to repay Polish banks loans at the closing date, as mentioned in the Sale Agreement, further offset by minor adjustments. The Sale Agreement contains customary representations and warranties, as well as covenants, including an undertaking we provided not to compete with the business of ASEC for a period of five years after the closing and an undertaking to indemnify ASEC and the Buyer for certain damages. Our liability is limited to the purchase price actually paid by the Buyer.

InOn ~~addition~~April 21, 2021, we ~~engaged~~sold anour Polish subsidiary, ASEC S.A., or ASEC, ~~investment~~including ~~bank~~our Mass Transit Ticketing activity in Poland. The consideration for the sale of ASEC was $3 million, of which approximately $2.1 million was used to ~~explore~~repay ~~strategic~~Polish ~~options~~bank loans, and ~~are~~which ~~investing~~was ~~resources~~reduced by an agreed amount of approximately $300,000 due to working capital adjustments. Following the sale of ASEC, we now operate in ~~this~~two ~~process~~segments: Retail and Petroleum.

WeOn ~~were~~January ~~incorporated~~10, ~~under the~~2022, ~~laws~~we offiled ~~the~~a ~~State of Israel on February 15~~petition, or ~~1990, under~~ the ~~name of De-Bug Innovations Ltd.~~Petition, with ~~unlimited~~the ~~duration.~~Israeli ~~Our~~county ~~name~~court ~~was changed~~of toNazareth, Onor ~~Track~~the ~~Innovations~~Court, ~~Ltd.~~seeking onprotections ~~July~~from 8,our ~~1991.~~creditors Wein ~~are~~accordance ~~registered~~ with the Israeli ~~Registrar~~Insolvency ofand ~~Companies,~~Economic ~~under~~Rehabilitation ~~registration number 52~~Law-~~004286-2~~2018, ~~and~~after our ~~Ordinary~~Board ~~Shares~~determined ~~are~~that ~~quoted~~we onare ~~the~~insolvent ~~OTCQX®~~from ~~market,~~a orcash ~~OTCQX,~~flow ~~under the symbol OTIVF~~perspective.

~~Our~~On ~~Markets~~January 19, 2022, we entered into a binding term sheet, or the Term Sheet, with Nayax. The Term Sheet provides that we and Nayax will enter into a two-step transaction relating to (i) Nayax extending to us a senior secured convertible loan, or the Nayax Loan; and (ii) the purchase by Nayax of 100% of our share capital in consideration for $4,500,000. Consequently to the entry into the Term Sheet, and at our request, the Court withdrew the Petition.

WeOn ~~plan~~January to27, ~~continue~~2022, towe ~~support~~entered into a definitive agreement and debenture ~~our~~relating ~~growing~~to ~~unattended~~the ~~markets~~Nayax ~~which~~Loan, ~~are~~or ~~self-service~~the ~~kiosks~~Nayax Loan Agreement. On March 17, ~~micro-markets~~2022, we entered into an Agreement and ~~vending~~Plan ~~machines~~of Merger, ~~entertainment~~or the Merger Agreement, with Nayax and ~~gaming~~OTI Merger Sub Ltd., ~~ATM~~an Israeli company, ~~mass transit~~wholly ~~ticketing~~owned ~~validation~~by Nayax, or Merger Sub, pursuant to which Merger Sub will merge with and ~~fuel~~into ~~payments~~our company, with our company surviving as a direct wholly-owned subsidiary of Nayax, in exchange for $4,500,000 in cash, or the Merger Consideration.

We ~~believe~~were ~~that~~incorporated ~~worldwide~~under ~~events~~the ~~including~~laws of the ~~COVID~~State of Israel on February 15, 1990, under the name of De-19Bug ~~pandemic~~Innovations Ltd., with unlimited duration. Our name was changed to On Track Innovations Ltd. on July 8, 1991. We are ~~accelerating~~registered with the ~~trend~~Israeli ~~towards~~Registrar ~~adoption~~ of ~~unattended~~Companies, ~~contactless~~under ~~payments~~registration innumber 52-004286-2 ~~these~~and ~~markets~~our Ordinary Shares are quoted on the OTCQX® market, or OTCQX, under the symbol OTIVF.

Our ~~Products~~ Markets

We ~~combine~~ aplan ~~unique~~to ~~radio~~continue ~~frequency,~~to orsupport our RFgrowing ~~technology~~unattended ~~with~~markets anwhich ~~“open~~are ~~garden”~~self-service ~~approach~~kiosks, micro-markets and wevending ~~enable~~machines, ~~our~~entertainment ~~customers~~ and ~~partners~~ togaming, ~~pick~~ATM, ~~and~~mass transit ~~choose~~ticketing ~~products~~validation, and ~~services~~fuel ~~from our wide offering~~payments.

~~Our~~We believe that worldwide ~~solutions~~events ~~include:~~including ~~Readers,~~the ~~Controllers~~COVID-19 ~~and~~pandemic ~~Terminals,~~are ~~Management~~accelerating ~~Software,~~the ~~Payment~~trend ~~Services,~~towards ~~and~~adoption aof ~~complete~~unattended ~~Payment~~contactless ~~System~~payments ~~as a~~in ~~Service~~these ~~(PSaaS)~~markets.

~~OTI Readers~~1

~~We supply NFC and contactless payment reader products and solutions.~~ Our ~~products~~Products and solutions are approved by Underwriters Laboratories, Inc., or UL, and the U.S. Federal Communications Commission, or FCC, and certified by MasterCard TQM (Terminal Quality Management). Our reliability and performance are based on more than a quarter of a century of experience with NFC and contactless solutions.

~~Our readers~~We ~~are~~combine ~~certified~~a byunique ~~the~~RF ~~leading card associations, including, among others, EMVCo, Visa, MasterCard, Amex, Discover and Interac,~~(radio ~~and~~frequency) ~~are~~technology ~~compatible as well for use~~ with ~~various~~an ~~NFC~~“open ~~mobile~~garden” ~~payments solutions such as Apple Pay™~~approach, ~~Google Pay™ (previously known as Android Pay), Samsung Pay™, MIFARE™, FeliCa™~~ and ~~others.~~we ~~EMVCo~~enable ~~modular~~our ~~meets~~customers ~~the requirements of different applications~~ and ~~platforms~~partners ~~and~~to ~~saves~~pick ~~certification implementation~~ and ~~reduces~~choose ~~the cost~~ products and ~~time~~services offrom ~~any~~our ~~EMVCo~~wide ~~project~~offering.

1Our solutions include: Readers, Controllers and Terminals, Management Software, Payment Services, and a complete Payment System as a Service (PSaaS).

~~Controllers and~~OTI ~~Terminals~~ Readers

~~Controllers and~~We ~~Terminals~~supply ~~are~~NFC ~~hardware~~and ~~devices~~contactless ~~that~~payment ~~manage~~reader ~~the~~products ~~flow~~and ofsolutions. Our ~~data~~products ~~between~~and ~~two~~solutions ~~machines~~are ~~and~~approved ~~are~~by ~~used~~Underwriters toLaboratories, ~~“control”~~Inc., aor ~~peripheral device~~UL, (eand the U.gS. Federal Communications Commission, aor FCC, ~~vending~~and ~~machine)~~certified by EMVCo, LLC., Weor ~~have~~EMVCo, aand ~~range~~by ofMasterCard ~~Controllers~~TQM ~~and~~(Terminal ~~Terminals~~Quality ~~that~~Management). ~~provide~~Our ~~secured~~reliability and ~~certified~~performance ~~access~~are tobased ~~payment~~on ~~service~~more ~~providers~~than ~~which~~a ~~enable~~quarter ~~contactless~~of ~~payment~~a ~~acceptance,~~century ~~connectivity,~~of ~~and~~experience ~~cloud-based~~with ~~management~~NFC ~~for~~and ~~machines~~contactless solutions.

~~Management~~Our readers are certified ~~software~~by the leading card associations, including, among others, EMVCo, Visa, MasterCard, Amex, Discover and Interac, and are compatible as well for use with various NFC mobile payments solutions such as Apple Pay™, Google Pay™ (previously known as Android Pay), Samsung Pay™, MIFARE™, FeliCa™ and others. Our readers are also certified for EMVCo modular architecture which saves certification implementation and reduces the cost and time of any EMVCo project.

~~We provide~~Controllers ~~a cloud-based software for Self-Service Kiosks, Micro-Markets, Vending~~ and ~~any~~Terminals ~~Pulse machines that provides real-time control and insights of each machine, enabling operators to remotely manage their terminal’s fleet.~~

~~Payment~~Controllers and Terminals are hardware devices ~~Services~~that manage the flow of data between two machines and are used to “control” a peripheral device (e.g., a vending machine). We have a range of Controllers and Terminals that provide secured and certified access to payment service providers which enable contactless payment acceptance, mobile payment acceptance, connectivity, and cloud-based management for machines.

~~Our payment~~Management ~~services~~software ~~include the following payment options:~~

●We ~~Payment~~provide ~~Service~~a ~~API~~ cloud-based asoftware for ~~simple~~Self-Service ~~and powerful application programming interface~~Kiosks, ~~or API~~Micro-Markets, toVending ~~our~~and ~~payment~~any ~~servers~~Pulse tomachines ~~provide~~that ~~our~~provides ~~customers~~real-time control and ~~partners~~insights ~~access~~of toeach ~~a certified Europay Mastercard Visa~~machine, orenabling operators ~~EMV, system~~ to ~~enable~~remotely amanage ~~fast~~their ~~and~~terminal's ~~secured integration to new processors~~fleet.

~~● Close Loop~~ Payment -Services ~~extending EMV payment, we offer support for close-loop payment cards with different technologies such as MIFARE and Mag-Stripe.~~

●Our ~~Mobile Payment - we provide APIs for effortless and smooth integration with mobile~~ payment ~~solutions,~~services ~~enabling~~include ~~mobile~~the ~~payments~~following ~~on our system.~~payment options:

~~A complete~~● Payment ~~System~~Service asAPI - a ~~Service~~simple ~~(PSaaS)~~and powerful application programming interface, or API, to our payment servers to provide our customers and partners access to a certified EMVCo system to enable a fast and secured integration to new processors.

~~Our~~● ~~system~~Close isLoop aPayment ~~modular, cost~~-~~effective~~ ~~solution~~extending ~~for~~EMV ~~self-service kiosks~~payment, ~~micro~~we offer support for close-~~markets,~~loop ~~vending~~payment ~~and~~cards ~~any~~with ~~pulse~~different ~~machines~~technologies ~~which~~such ~~enable~~as ~~contactless~~MIFARE ~~payments~~and Mag-Stripe.

~~The~~● ~~complete~~Mobile ~~PSaaS~~Payment ~~system incorporates~~- ~~telemetry,~~we ~~sales~~provide ~~and~~APIs ~~operations~~for ~~into~~effortless anand ~~all-inclusive~~smooth ~~solution~~integration ~~that~~with ~~makes~~mobile ~~any~~payment ~~kiosk~~solutions, ~~pulse~~enabling ormobile ~~vending~~payments ~~business~~on ~~connected and~~our ~~interactive, providing cloud control with real-time online management and alerts~~system.

~~Industry Background~~2

~~Under certain~~A ~~regulations~~complete ~~and~~Payment ~~credit~~System card anti-fraud legislations, the use of contactless payment technologies has become an essential requirement for both consumers and retailers. Various market sectors have begun to massively adopt contactless payments and are constantly looking for ways to make the adoption process as ~~convenient~~a asService ~~possible for both merchants and customers. Millions~~(PSaaS) of contactless debit and credit cards are issued annually by leading financial institutions to various consumers, and merchants are looking to install contactless payment readers that can be easily integrated into their existing unattended point of sale locations.

~~The world’s~~Our ~~leading~~system ~~smartphone manufacturers are either including or are expected to include NFC support in their upcoming handset upgrades, which will enhance the technology adoption lifecycle. Whether it~~ is a ~~standard contactless travel card~~modular, ~~or EMV contactless~~ ~~card,~~cost-effective orsolution anfor ~~NFC~~self-service ~~mobile phone~~kiosks, the main motive is to provide quick and efficient payment solutions. Leading smartphone manufacturers have also introduced and are actively pushing the use of their own contactless payment solutions such as Apple Pay™micro-markets, ~~Google Pay™~~vending and ~~Samsung~~any ~~Pay™,~~pulse ~~all~~machines of which ~~require~~enable a contactless ~~reader to be available at the merchant countertop~~payments.

InThe complete PSaaS system ~~addition~~incorporates telemetry, wesales ~~believe~~and ~~that~~operations ~~the~~into ~~COVID~~an all-19inclusive ~~pandemic~~solution ~~has~~that ~~accelerated~~makes ~~the~~any ~~trend~~kiosk, ~~towards~~pulse ~~adoption~~or ofvending ~~unattended~~business ~~contactless payments~~connected inand ~~these~~interactive, ~~markets~~providing cloud control with real-time online management and alerts.

2Industry Background

~~Strategy~~Under certain regulations and credit card anti-fraud legislations, the use of EMV contact and contactless payment technologies has become an essential requirement for both consumers and retailers. Various market sectors have begun to massively adopt contactless payments and are constantly looking for ways to make the adoption process as convenient as possible for both merchants and customers. Millions of contactless debit and credit cards are issued annually by leading financial institutions to various consumers, and merchants are looking to install contactless payment readers that can be easily integrated into their existing unattended point of sale locations.

~~Our goal~~The isworld's toleading ~~maintain~~smartphone ~~our~~manufacturers ~~status~~include asNFC asupport ~~leading~~in their ~~developer~~handsets, ofwhich ~~NFC~~enhances ~~and~~the ~~cashless~~technology ~~payment~~adoption ~~technologies~~lifecycle. ~~and~~Whether ~~our~~it ~~reputation~~is as a ~~manufacturer of~~standard ~~top-quality~~contactless ~~products~~travel ~~carrying~~card, ~~the~~or ~~highest~~EMV ~~certification~~contactless card, ~~standards.~~or Wean ~~have~~NFC ~~been~~mobile ~~working~~phone, ~~for~~ the ~~past~~main ~~few~~motive ~~months~~is onto ~~updating our~~provide ~~strategy~~quick ~~for~~and ~~the~~efficient ~~coming~~payment ~~years,~~solutions. ~~which~~Leading wesmartphone ~~believe~~manufacturers ~~will~~have also ~~enable~~introduced usand toare ~~realize~~actively ~~our~~pushing ~~potential~~the ~~and~~use ~~resume~~of ~~our~~their ~~growth,~~own ~~and~~contactless ~~ultimately create~~payment ~~shareholder~~solutions ~~value.~~such Inas ~~addition~~Apple Pay™, weGoogle ~~engaged~~Pay™ and anSamsung ~~investment~~Pay™, ~~bank~~all toof ~~explore~~which ~~strategic~~require ~~options~~a ~~and~~contactless ~~are~~reader ~~investing~~to ~~resources in~~be ~~this~~available ~~process~~at the merchant countertop.

~~Key~~In addition, we have seen ~~elements~~that ofthe ~~our~~COVID-19 ~~strategy~~pandemic ~~for~~has ~~achieving~~accelerated ~~this~~the ~~goal~~trend ~~include:~~towards adoption of unattended contactless payments in these markets.

●Strategy Expanding our global market presence. We market our products through regional offices in the United States, Europe, Africa and our headquarters in Israel. We are using our headquarters and regional offices to strengthen our presence in existing markets, penetrate new markets, provide local customer service and technical support, and adapt our products to our local customers’ specific needs. We continue to expand our market presence via strategic partners and distributors around the globe.

●Our ~~Increasing~~goal is to maintain our ~~focus~~status onas ~~generating~~a ~~high-margin,~~leading ~~recurring~~developer ~~revenues.~~of WeNFC ~~are~~and cashless ~~continuing~~payment technologies and our ~~strategy~~reputation toas ~~shift~~a ~~from~~manufacturer ~~hardware~~of ~~sales~~top-quality toproducts ~~SaaS~~carrying ~~and~~the inhighest ~~upgrading~~certification ~~our~~standards. We ~~hardware~~have tobeen ~~maintain~~continuously updating our ~~technological~~strategy ~~lead.~~for Wethe ~~intend~~coming toyears, ~~generate~~which ~~additional~~we ~~recurring~~believe ~~revenues~~will byenable ~~receiving~~us ~~service~~to ~~fees~~realize ~~for~~our ~~ongoing~~potential ~~customer~~and ~~services~~resume our growth, and ~~transaction~~ultimately ~~fees~~create ~~from~~shareholder ~~our customers~~value.

●Key ~~Enhancing~~elements ~~our technological position. We intend to continue to invest in research and development to develop new technologies, extend the functionality~~ of our ~~products~~strategy ~~and~~for ~~services,~~achieving ~~and~~this goal ~~offer innovative products and services to our customers and partners.~~include:

~~Customer Service~~● Expanding our global market presence. We market our products through regional offices in the United States, Europe, Africa and ~~Technical~~our ~~Support~~headquarters in Israel. We are using our headquarters and regional offices to strengthen our presence in existing markets, penetrate new markets, provide local customer service and technical support, and adapt our products to our local customers’ specific needs. We continue to expand our market presence via strategic partners and distributors around the globe.

~~We provide~~● Increasing our ~~customers~~focus ~~with~~on ~~training,~~generating ~~installation support~~high-margin, ~~ongoing~~recurring ~~customer~~revenues. ~~service~~We ~~and~~are ~~technical~~continuing ~~support through~~ our ~~regional offices,~~strategy ~~distributors~~to ~~and~~shift ~~local~~from ~~services~~hardware ~~providers,~~sales ~~including~~to ~~employees~~SaaS ~~located~~and in upgrading our ~~corporate~~hardware ~~headquarters~~to inmaintain ~~Yokneam, Israel, as well as employees located in~~ our ~~offices~~technological inlead. ~~Europe,~~We ~~South~~intend ~~Africa~~to ~~and~~generate ~~the~~additional ~~United~~recurring ~~States.~~revenues ~~Our~~by ~~customer~~receiving service ~~teams~~fees infor ~~Yokneam provide~~ongoing ~~central~~customer services ~~to our global network. Our offices, distributors~~ and ~~local~~transaction ~~providers,~~fees infrom ~~turn,~~our ~~provide customer service and technical support by telephone and email~~customers.

~~Sales~~ ● Enhancing our technological position. We intend to continue to invest in research and ~~Marketing~~development to develop new technologies, extend the functionality of our products and services, and offer innovative products and services to our customers and partners.

In addition to selling our products and solutions through our distributors, we sell and market our products directly and through our regional offices. We market and sell our products in the Americas through our U.S.-based subsidiary, OTI America. In Africa, our subsidiary in South Africa, OTI PetroSmart, and in Europe, our subsidiary in Poland, OTI Europe Sp.z.o.o. In Israel and in regions where we do not have local subsidiaries or representatives, we market and sell through our main headquarters in Yokneam, Israel. Our marketing and sales staff implement marketing campaigns and programs to promote our products and services to enhance our global brand recognition. Our current marketing efforts include participation in digital events, webinars, press releases, websites, social media and client / distributor meetings. We also conduct technical seminars to inform sales staff, customers, distributors, business partners and other industry contributors of our unique products and innovative technologies.3

~~Customers~~Customer Service and Technical Support

~~Our customer~~We ~~base~~provide ~~is concentrated among a limited number of large customers. The customers we consider to be~~ our ~~major~~ customers ~~and~~with ~~the~~training, ~~percentage~~installation ofsupport, ~~our~~ongoing ~~revenue~~customer ~~represented~~service byand ~~each~~technical ~~major~~support ~~customer~~through ~~vary~~our ~~from~~regional ~~period~~offices, todistributors ~~period. In 2020~~ and ~~2019~~local services providers, aincluding ~~customer~~employees located in ~~North America~~our ~~accounted~~corporate ~~for~~headquarters ~~19%~~in ~~and 20%~~Yokneam, ~~respectively~~Israel, ofas ~~our~~well ~~total~~as ~~revenues~~employees ~~for~~located ~~such periods. Another customer~~ in ~~Asia accounted for 14% and 6% of~~ our ~~total~~offices ~~revenues for 2020 and 2019, respectively. An additional customer~~ in Europe, ~~accounted~~South ~~for~~Africa ~~12%~~ and ~~13%~~the ~~of our~~United ~~total~~States. ~~revenues~~Our ~~for~~customer ~~2020~~service ~~and~~teams ~~2019,~~in ~~respectively.~~Yokneam Ifprovide wecentral ~~were~~services to ~~lose any one of~~ our ~~major~~global ~~customers,~~network. ~~or if any of our customers~~Our ~~were~~offices, todistributors ~~have~~and ~~difficulty~~local ~~meeting~~providers, ~~their~~in ~~financial obligations to us for any reason~~turn, ~~our~~provide ~~financial~~customer ~~condition~~service and ~~results~~technical ofsupport ~~operations would~~by betelephone ~~adversely~~and ~~affected~~email.

3Sales and Marketing

~~Manufacturing~~In addition to selling our products and solutions through our distributors, we sell and market our products directly and through our regional offices. We market and sell our products in the Americas through our U.S.-based subsidiary, OTI America, in Africa, our subsidiary in South Africa, OTI PetroSmart, and in Europe, our subsidiary in Poland, OTI Europa Sp.z.o.o. In Israel and in regions where we do not have local subsidiaries or representatives, we market and sell through our main headquarters in Yokneam, Israel. Our marketing and sales staff implement marketing campaigns and programs to promote our products and services to enhance our global brand recognition. Our current marketing efforts include participation in digital events, webinars, press releases, websites, social media and client / distributor meetings. We also conduct technical seminars to inform sales staff, customers, distributors, business partners and other industry contributors of our unique products and innovative technologies.

~~We outsource~~ all our manufacturing and product assemblies to third-party vendors. Whenever possible, our policy is to use more than one supplier and manufacturing subcontractor for each part of our production process in order to limit dependence on any one source.Customers

~~We are~~Our ~~ISO~~customer ~~9001:2015~~base ~~certified~~is concentrated into one large customer. WeThe ~~require~~customer we ~~that~~consider to be our ~~suppliers~~major customer and ~~subcontractors~~the bepercentage ~~ISO~~of ~~9001:2015~~our ~~certified.~~revenue ~~ISO~~represented ~~9001:2015~~by issuch ~~an international~~major ~~standard~~customer ~~promulgated~~vary byfrom ~~the~~period ~~International~~to ~~Standards~~period. In ~~Organization~~2021 and 2020, ~~which~~such ~~specifies~~customer ~~requirements~~in ~~for~~North aAmerica ~~quality~~accounted ~~management system~~for 22% and ~~provides~~19%, ~~guidance~~respectively, ~~and~~of ~~tools~~our total revenues for ~~companies~~such toperiods. ~~ensure~~If ~~that~~we were ~~their~~to ~~products~~lose ~~and~~our ~~services~~major ~~consistently~~customer, ~~meet~~or if our customer ~~and regulatory~~was ~~requirements.~~to ~~This~~have ~~standard~~difficulty ismeeting ~~updated~~its ~~from~~financial ~~time~~obligations to ~~time~~us ~~pursuant~~for toany ~~the~~reason, ~~international~~our financial ~~authorization~~condition ~~requirements~~and results of operations would be adversely affected.

~~Government Regulation~~Manufacturing

~~Most of~~We ~~our~~outsource ~~products~~all are subject to local electromagnetic compliance, or EMC/Radio regulations such as radiation, conducted emission and immunity, and safety regulations such as fire and electrical hazards, governed by low voltage standards for our ~~regular readers~~manufacturing and ~~hazardous~~product ~~areas~~assemblies ~~standards~~to ~~for~~third-party ~~our petroleum products~~vendors. InWhenever ~~the United States~~possible, ~~EMC/Radio~~our ~~testing~~policy ~~and~~is ~~certification~~to ~~for~~use ~~such~~more ~~products are~~than ~~governed~~one bysupplier ~~Federal Communications Commission, or FCC, Part 15 while safety testing~~ and ~~certification~~manufacturing ~~fall under the standards~~subcontractor ~~set~~for byeach ~~UL.~~part ~~In the rest~~ of ~~the world, where FCC and UL rules do not apply, we follow various international and local standards for EMC/Radio and safety. The compliance with these standards is assured by testing and certifying~~ our ~~products~~production atprocess ~~various accredited labs and/or notified bodies located both~~ in ~~Israel~~order ~~and~~to ~~other~~limit ~~countries~~dependence ~~(e.g.,~~on ~~United~~any ~~States,~~one ~~Germany, South Africa, India, China, Brazil and more)~~source. ~~Our products comply with the regulations in the markets in which we operate.~~

~~Research~~We are ISO 9001:2015 certified. We require that our suppliers and ~~Development~~subcontractors be ISO 9001:2015 certified. ISO 9001:2015 is an international standard promulgated by the International Standards Organization, which specifies requirements for a quality management system and provides guidance and tools for companies to ensure that their products and services consistently meet customer and regulatory requirements. This standard is updated from time to time pursuant to the international authorization requirements.

~~We believe~~Government ~~that~~Regulation our future success depends on, among other things, our ability to maintain our technological leadership, enhance our existing products and develop new products, technologies and solutions. Accordingly, we intend to continue devoting substantial resources to research and development.

~~Our~~Most of our products are subject ~~research~~to local electromagnetic compliance, or EMC/Radio regulations such as radiation, conducted emission and ~~development~~immunity, ~~activities~~and ~~focus~~safety onregulations such ~~two~~as ~~major~~fire and electrical hazards, governed by low voltage standards for our regular readers and hazardous areas: standards for our petroleum products. In the United States, EMC/Radio testing and certification for such products are governed by Federal Communications Commission, or FCC, Part 15 while safety testing and certification fall under the standards set by UL. In the rest of the world, where FCC and UL rules do not apply, we follow various international and local standards for EMC/Radio and safety. The compliance with these standards is assured by testing and certifying our products at various accredited labs and/or notified bodies located both in Israel and other countries (e.g., United States, Germany, South Africa, India, China, Brazil and more). Our products comply with the regulations in the markets in which we operate.

● developing new innovative technologies related to the contactless payment solutions market; and ● enhancing the functionality of our components and expanding the range of our products to serve new markets.4

~~Our main~~Research ~~research~~ and development facilities are located at our headquarters in Israel. We believe that our success is based on our experienced team of senior engineers and technicians who have extensive experience in their respective fields. Our research and development facilities are ISO 9001:2015 certified.Development

~~Proprietary~~We believe that our future ~~Technologies~~success depends on, among other things, our ability to maintain our technological leadership, enhance our existing products and ~~Intellectual~~develop new ~~Property~~products, technologies and solutions. Accordingly, we intend to continue devoting substantial resources to research and development.

Our ~~success~~ ~~and~~research ~~ability to compete depend in large part upon protecting our proprietary technology~~ and ~~IP.~~development activities Wefocus ~~rely~~ on atwo ~~combination of~~major patent, trademark, copyright and trade secret law, as well as know-how, confidentiality agreements and other contractual relationships with our customers, employees, affiliates, agents, consultants, distributors and others.areas:

~~Our IP~~● ~~portfolio~~developing ~~includes~~new ~~issued~~innovative ~~patents~~technologies ~~with~~related ~~respect~~ to ~~our~~the contactless ~~technology,~~payment assolutions ~~well~~market; ~~as trademarks~~ and ~~designs.~~● Asenhancing ~~part~~the functionality of ~~our~~ ~~efficiency program, we have reduced~~ our ~~investment~~components ~~in non-core patents~~ and ~~registrations.~~expanding ~~The~~the ~~expiration~~range ~~dates~~of ~~for~~ our ~~granted patents~~products ~~range~~to ~~between~~serve ~~2027~~new ~~to 2033~~markets.

~~We do~~Our ~~not~~main ~~know~~research ~~whether~~and ~~any~~development facilities ~~issued~~are ~~patents~~located ~~will~~at beour ~~enforceable~~headquarters ~~against~~in ~~alleged~~Israel. ~~infringers~~We orbelieve ~~will~~that beour ~~upheld~~success ~~if their validity~~ is ~~challenged. We~~based ~~generally~~on ~~enter into non-disclosure agreements with~~ our ~~customers,~~experienced ~~partners,~~team ~~employees,~~of ~~consultants,~~senior ~~suppliers and subcontractors,~~engineers and ~~generally~~technicians ~~control~~who ~~access~~have toextensive ~~the~~experience ~~distribution~~in oftheir ~~our~~respective ~~products,~~fields. ~~documentation~~Our research and ~~other~~development ~~proprietary~~facilities ~~information~~are ISO 9001:2015 certified.

4Proprietary Technologies and Intellectual Property

~~Competition~~Our success and ability to compete depend in large part upon protecting our proprietary technology and IP. We rely on a combination of patent, trademark, copyright and trade secret law, as well as know-how, confidentiality agreements and other contractual relationships with our customers, employees, affiliates, agents, consultants, distributors and others.

Our IP portfolio includes ~~competition~~issued ispatents with respect to our contactless technology, ~~vendors~~as ~~that~~well ~~provide~~as ~~contactless~~trademarks ~~payments~~and ~~solutions~~designs. ~~products~~As part of our efficiency program, we have reduced our investment in non-core patents and ~~technologies:~~registrations. The expiration dates for our granted patents range between 2027 to 2033.

●We Indo ~~the~~not ~~Kiosk,~~know ~~Micro~~whether ~~markets~~any issued ~~and~~patents ~~Vending~~will ~~markets,~~be enforceable against alleged infringers or will be upheld if their validity is challenged. We generally enter into non-disclosure agreements with our ~~competition~~customers, ~~includes~~partners, ~~unattended~~employees, ~~payment~~consultants, ~~solution~~suppliers and ~~technology~~subcontractors, ~~providers~~and ~~such~~generally ascontrol IDaccess to ~~Tech~~the distribution of our products, ~~Nayax~~documentation and ~~Ingenico~~other proprietary information.

● In the Petroleum Market, we compete with fueling and fleet management end-to-end solution vendors such as Orpak and Hectronic. As this domain has high entrance barriers, competition in this field is limited.Competition

~~Employees~~Our competition is with technology vendors that provide contactless payments solutions products and technologies:

As● ofIn ~~December~~the 31Kiosk, ~~2020,~~Micro wemarkets ~~had~~and ~~121~~Vending ~~employees.~~markets, ~~This~~our ~~number~~competition includes ~~approximately~~ 40unattended ~~employees~~payment ofsolution ~~ASEC~~and ~~that~~technology onproviders ~~March~~such ~~29,~~as ~~2021~~ID Tech, weNayax ~~entered~~and ~~into an agreement to sell~~Ingenico.

~~We operate~~● inIn ~~accordance with~~ the ~~applicable~~Petroleum ~~law and the provisions of the general extension orders applying to labor and employment relations in Israel. These provisions principally concern the length of the working day~~Market, minimum wages for employees, contributions to pension funds or managers’ insurance, contribution to work disability insurance, convalescence, travel expenses, holidays and other conditions of employment. We provide our employees with benefits and working conditions above the required minimum and which we ~~believe~~compete ~~are competitive~~ with ~~benefits~~fueling and ~~working~~fleet ~~conditions~~management ~~provided~~end-to-end bysolution ~~similar~~vendors ~~companies~~such inas ~~our~~Orpak industry in Israel. Our employees are not represented by a labor union. We have written employment agreements with substantially all of our employees. Competition for qualified personnel in our industry is intense, and ~~it may be difficult to attract or maintain qualified personnel to our offices~~Hectronic. WeAs ~~dedicate~~this ~~significant~~domain ~~resources~~has tohigh ~~employee~~entrance ~~retention and have never experienced work stoppages~~barriers, ~~and~~competition ~~we believe that our relations with our employees are good. Our subsidiaries located outside Israel operate~~ in ~~accordance~~this ~~with~~field ~~the~~is ~~local applicable labor laws and have written employment agreements with substantially all their employees~~limited.

~~SEC Filings~~Employees

~~The SEC~~As ~~maintains~~of anDecember ~~internet~~31, ~~website~~2021, ~~that contains reports and other information regarding issuers that file electronically with~~we ~~the~~had ~~SEC.~~82 ~~Our filings with the SEC are also available to the public through the SEC’s website at www~~employees.~~sec.gov.~~

We operate in accordance with ~~maintain~~the aapplicable ~~corporate~~law ~~website~~and ~~www~~the provisions of the general extension orders applying to labor and employment relations in Israel.~~otiglobal.com.~~ ~~Information~~These ~~contained~~provisions principally onconcern the length of the working day, minimum wages for employees, contributions to pension funds or ~~that~~managers’ ~~can~~insurance, contribution beto ~~accessed~~work ~~through~~disability insurance, convalescence, travel expenses, holidays and other conditions of employment. We provide our employees ~~website~~with benefits and working conditions above the required minimum and which we believe are competitive with benefits and working ~~other~~conditions ~~websites~~provided ~~referenced~~by ~~above~~similar docompanies in our industry in Israel. Our employees are not ~~constitute~~represented by a ~~part~~labor union. We have written employment agreements with substantially all of ~~this~~our ~~annual~~employees. ~~report~~Competition onfor ~~Form~~qualified ~~10-K~~personnel in our industry is intense, and it may be difficult to attract or maintain qualified personnel to our offices. We dedicate significant resources to employee retention and have ~~included~~never ~~these~~experienced ~~website~~work ~~addresses~~stoppages, and we believe that our relations with our employees are good. Our subsidiaries located outside Israel operate in ~~this~~accordance ~~annual~~with ~~report~~the onlocal ~~Form~~applicable ~~10-K~~labor ~~solely~~laws asand ~~inactive~~have ~~textual~~written ~~references~~employment agreements with substantially all their employees.

~~Item 1A. Risk Factors.~~5

The following risk factors, among others, could in the future affect our actual results of operations and could cause our actual results to differ materially from those expressed in forward-looking statements made by us in this Annual Report, press releases, SEC ~~filings~~ or elsewhere. Before you decide to buy, hold, or sell our Ordinary Shares, you should carefully consider the risks described below, in addition to the other information contained elsewhere in this Annual Report. The following risk factors are not the only risk factors facing our Company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business. Our business, financial condition and results of operations could be seriously harmed if any of the events underlying any of these risks or uncertainties actually occurs. In that event, the market price for our Ordinary Shares could decline, and you may lose all or part of your investment.Filings

5The SEC maintains an internet website that contains reports and other information regarding issuers that file electronically with the SEC. Our filings with the SEC are also available to the public through the SEC’s website at www.sec.gov.

~~Risks~~We maintain a corporate website ~~Related~~www.otiglobal.com. toInformation ~~Our~~contained ~~Business~~on, or that can be accessed through, our website and the other websites referenced above do not constitute a part of this annual report on Form 10-K. We have included these website addresses in this annual report on Form 10-K solely as inactive textual references.

~~We do~~Item ~~not~~1A. ~~have~~Risk enough existing cash resources to fund our operations for the next twelve months and if we are unable to secure additional capital, we may be required to seek strategic alternatives, including but not limited to reducing or ceasing our operationsFactors.

~~Our~~The ~~principal~~following ~~sources~~risk ~~of liquidity~~factors, ~~have~~among ~~been revenues~~others, ~~proceeds~~could ~~from~~in ~~sales~~the offuture ~~equity~~affect ~~securities,~~our ~~borrowings~~actual ~~from~~results ~~banks,~~of ~~government~~operations and ~~shareholders,~~could ~~cash~~cause ~~from~~our ~~the~~actual ~~exercise of~~results ~~options~~to ~~and~~differ ~~warrants~~materially asfrom those ~~well~~expressed asin ~~proceeds~~forward-looking ~~from~~statements ~~the~~made ~~divestiture~~by ofus ~~parts~~in ofthis ~~our~~Annual ~~businesses~~Report, ~~such~~press asreleases, ~~the~~SEC ~~recent~~filings ~~Sale~~or ~~Agreement of ASEC~~elsewhere. We ~~had~~Before ~~cash,~~you ~~cash~~decide to ~~equivalents and short-term investments representing bank deposits of $1~~buy,~~482,000~~ ~~(of which an amount of $105~~hold,~~000~~ ~~has been~~or ~~pledged~~sell asour ~~securities~~Ordinary ~~for certain items)~~Shares, ~~excluding~~you ~~cash~~should ~~and~~carefully ~~cash~~consider ~~equivalents~~the ~~held~~risks ~~for~~described ~~sale~~below, asin ofaddition ~~December~~to ~~31,~~the ~~2020.~~other ~~Based on the~~information ~~projected~~contained ~~cash~~elsewhere ~~flows~~in ~~and~~this ~~our~~Annual ~~cash~~Report. ~~balances~~The asfollowing ofrisk ~~December~~factors ~~31,~~are ~~2020,~~not ~~our management is of~~ the ~~opinion~~only ~~that~~risk ~~without~~factors ~~further~~facing ~~fund raising or other increase in~~ our ~~cash,~~Company. weAdditional ~~will~~risks and uncertainties not ~~have~~presently ~~sufficient~~known ~~resources~~ to ~~enable~~ us toor ~~continue~~that ~~our~~we ~~operations~~currently ~~for~~deem aimmaterial ~~period~~may ofalso ataffect ~~least the~~our ~~next 12 months~~business. AsOur ~~a result~~business, ~~there~~financial condition isand aresults ~~substantial~~of ~~doubt~~operations ~~about~~could ~~our~~be ~~ability~~seriously toharmed ~~continue~~if asany aof ~~going~~the ~~concern.~~events Weunderlying ~~are~~any ~~attempting~~of tothese ~~raise additional~~risks ~~funds~~or ~~and~~uncertainties toactually occurs. ~~increase~~In ~~our~~that ~~cash.~~event, ~~While~~the wemarket ~~believe~~price infor our ~~ability~~Ordinary toShares ~~raise~~could ~~additional~~decline, ~~funds~~ and ~~increase~~you ~~our~~may ~~cash,~~lose ~~there~~all ~~can be~~or nopart ~~assurances~~of toyour ~~that we will be successful in doing so~~investment.

~~If additional~~Risks ~~financing~~Related ~~is not available when required or is not available on acceptable terms, we may be unable~~ to ~~take~~Our ~~advantage of~~Pending business opportunities or respond to competitive pressures, which could have a material adverse effect on our revenue, results of operations and financial condition. To preserve our cash resources, we may be required to reorganize our operations. If we are unable to fund our operations without additional external financing and therefore cannot sustain future operations, we may be required to cease our operations and/or seek bankruptcy protection.Merger

~~We have~~Failure ~~a history of losses, and we expect~~ to ~~continue~~complete tothe ~~incur~~Merger ~~full-year~~could ~~losses~~results in ~~2021~~our ~~and may further incur losses in subsequent years~~bankruptcy.

WeAs discussed under “Item 1. Business – General Overview”, ~~have~~following ~~incurred~~the ~~losses~~determination inthat ~~each~~we ~~year~~are ~~since~~insolvent from a cash flow standpoint, we ~~commenced~~filed ~~operations~~a inpetition ~~1990~~with the Israeli court to receive protection from our creditors. WeConsidering ~~reported~~our ~~net~~state ~~losses~~of ~~attributable~~insolvency prior to ~~shareholders~~the signing of the Term Sheet with Nayax, and further considering our $5debts to Nayax (created,~~896~~ among other things,~~000~~ inby ~~2020~~the provision of the Nayax Loan, repayment of a $52.0 million bank loan with a full guarantee of Nayax and exposure to a risk of not being able to conduct our business due to the loss of the guarantees provided by Nayax to our suppliers and subcontractors),~~889~~ failure to complete the merger contemplated under the Merger Agreement,~~000~~ inor ~~2019~~the ~~and~~Merger, ~~$263~~is likely to lead to our inability to pay off our debts,~~000~~ in ~~2018.~~which Wecase ~~expect~~we tomay ~~continue~~be forced to ~~incur~~file ~~full~~a bankruptcy or winding-~~year~~up ~~losses~~petition with the Israeli court, or an involuntary bankruptcy petition will be filed against the Company by a creditor, in ~~2021~~accordance with the Israeli Insolvency and Economic Rehabilitation Law-2018. In the event such petition is not dismissed, such petition may ~~incur~~have an adverse effect on various ~~losses~~aspects ~~also~~including, inbut ~~subsequent~~not ~~years~~limited to, asour weability ~~invest~~to incontinue operating our business, the ~~expansion~~value of our ~~global~~ordinary ~~sales~~shares and ~~marketing~~our ~~network~~shareholders’ ability to sell their holdings. It should be noted, ~~shift~~that ~~our~~as ~~business~~part ~~model~~of the Nayax Loan and the Merger Agreement, until the termination of ~~away~~the ~~from~~Merger ~~product~~Agreement ~~sales~~in ~~towards~~accordance ~~services~~with ~~and~~the ~~transaction~~terms ~~fees~~set forth therein, ~~and~~we ~~enhance~~are not allowed to incur debt or sell our ~~research~~securities ~~and~~without ~~development~~the prior ~~capabilities~~written consent of Nayax, which will also impair our ability to ~~develop existing~~raise ~~and~~funds ~~new~~if ~~products~~needed.

~~We face~~Failure ~~risks~~to ~~resulting~~complete ~~from~~ the ~~outbreak~~Merger ~~of the COVID-19 pandemic, which~~ could ~~have~~negatively impact aour ~~material~~share ~~adverse~~price, ~~effect~~business, onfinancial ~~our~~condition, ~~business and~~ results of operations or prospects.

~~Our~~The ~~operations~~Merger and business could be materially adversely affected by the outbreak of COVID-19. Our revenues from Mass Transit Ticketing sales in the Polish market decreased since March 2020 compared to the year preceding the COVID-19 outbreak. On March 29, 2021, we entered into an agreement to sell ASEC, including its Mass Transit Ticketing activity, as mentioned above. Additionally, recently, as a result of COVID-19, some of our customers have delayed issuance of orders in our pipeline. In addition, the execution of sales transactions is ~~slow~~subject ~~due~~ to ~~COVID-19 and there is no assurance that we will close any of~~ the ~~potential transactions with customers and partners. Further, another impact of COVID-19 is on product delivery, where components’~~ ~~procurement~~satisfaction lead time is longer and a shortage in components has grown as the duration of the COVID-19 pandemic has continued. As long as the COVID-19 pandemic continues, the components’ lead time may be longer than normal and shortages in components may continue or ~~get~~waiver ~~worse. Although we maintain a comprehensive network~~ of ~~world-wide~~certain ~~suppliers~~closing ~~to handle such delays in delivery~~conditions, ~~we may still suffer delays. Additionally, some of our employees,~~ including ~~management members~~, ~~were~~among ~~in quarantine. Simultaneously, we are attempting to comply with rapidly changing restrictions, such as travel restrictions, curfews and~~ others~~. Currently travel to and from work is still permitted; however~~, the authorities may place additional, more restrictive measures on businesses and individuals. Though we may still operate under such regulations, any additional actions taken by the Israeli government could further limit that ability, which may have a material adverse effect on our operations and financial results. A significant reduction in our workforce and our compliance with instructions imposed by Israeli authorities may harm our ability to continue operating our business and materially and adversely affect our operations and financial condition. Further, we cannot assure you that we will be designated an “essential business”, as defined under regulatory instructions, and moreover, we cannot foresee whether the Israeli authorities will impose further restrictive instructions, which if implemented may lead to significant changes.following:

6● approval of the Merger Agreement by our shareholders;

~~Authorities around~~● ~~the~~receipt ~~world~~of ~~have~~regulatory ~~and~~approvals, ~~may~~including ~~continue~~receipt ~~implementing~~of ~~similar~~the ~~restrictions~~merger oncertificate ~~business~~from ~~and individuals in their jurisdictions. We continue to assess our business operations and system supports and~~ the ~~impact~~Israeli ~~COVID-19~~Companies ~~may~~Registrar ~~have on our results~~ and ~~financial condition. To date, we have taken action to reduce our operating expenses in~~ the ~~short~~expiration ~~term, but there can be no assurance that this analysis~~ or ~~remedial~~termination ~~measures will enable us to avoid part or all~~ of any ~~impact~~waiting ~~from~~period ~~the~~under ~~spread~~Israeli ~~of COVID-19 or its consequences.~~law;

~~We are~~● athere ~~party~~being tono ~~multiple~~statute, ~~litigation~~judgment, ~~matters which consume management attention~~injunction, ~~high~~order ~~costs~~or ~~and~~decree ~~expose~~prohibiting usconsummation toof ~~pay~~the ~~significant~~transactions ~~amounts to~~contemplated ~~third~~under ~~parties.~~the Merger Agreement;

~~We are~~● ~~party~~subject to ~~multiple~~specified ~~litigation~~materiality ~~and arbitration processes~~standards, including with Merwell, Inc., or Merwell, where we are being sued, and SuperCom Ltd., where we are suing SuperCom, both cases that relate to activities we conducted in Tanzania. We are also party to other litigation processes, as detailed in Note 10E to the ~~consolidated~~continuing ~~financial~~accuracy ~~statements contained in “Item 8. Financial Statements and Supplementary Data”~~ of ~~this~~certain ~~Annual~~representations ~~Report. These litigation~~ and ~~other~~warranties ~~proceedings consume much management, require us to retain legal representation that burdens our cash position and generally might expose us to payment~~ of ~~damage~~each ~~and other compensation if we are defendants and lose the matter, as well as legal fees of the other~~ party ~~if we lose in the proceeding in question.~~;

If the markets for our products do not grow, sales of our products may not grow and may even decline.

	●	we shall (a) have taken all actions necessary to be eligible to cause the cessation of quotation of our ordinary shares on the Over-the-Counter Market and the termination of the registration thereof under the Securities Exchange Act of 1934, as amended, or the Exchange Act, in each case as soon as permissible after the effective time of the Merger, and (b) be able to provide all necessary certifications on Form 15 as of immediately after the effective time of the Merger (including without limitation having filed all necessary filings and reports to be current with the SEC (without regard to any extension under Rule 12b-25 under the Exchange Act)); and

	●	continued compliance by each party in all material respects with its covenants.

~~The~~No assurance can be given ~~success~~that each of ~~our~~the ~~products~~conditions ~~depends~~will onbe ~~the~~satisfied. ~~continuing~~In ~~adoption~~addition, ofthe ~~cashless~~Merger ~~payment~~Agreement ~~solutions~~may ~~within~~be aterminated ~~broad~~under ~~spectrum~~the ofcircumstances. ~~industries~~If the conditions ~~including~~are ~~unattended~~not ~~retail,~~satisfied or waived in a timely manner and ~~fueling.~~the ~~Such~~Merger ~~adoption~~is delayed, payment of ~~cashless~~the ~~payment~~Merger ~~solutions~~Consideration ~~and~~will ~~technologies~~also ~~depends~~be ondelayed. Due to the ~~enactment and~~our ~~implementation~~inability ofto ~~regulations~~pay ~~and~~our ~~industry~~debts, ~~standards~~which ~~regarding~~led ~~secure~~to ~~cashless~~the ~~payment.~~Board’s ~~Should~~determination ~~such~~of ~~industries~~our ~~fail~~insolvency and our petitioning to the Israeli ~~adopt~~court ~~cashless~~prior ~~payment~~to ~~technologies~~entering orinto ~~solutions~~the orTerm ~~experience~~Sheet, ~~any~~such ~~economic~~delay ~~downturn,~~may orcause ~~should~~us ~~regulations~~to ~~fail~~return to ~~support~~court and re-file a petition in accordance with the ~~such~~Israeli ~~solutions~~Insolvency and Economic Rehabilitation Law-2018, or the ~~markets~~Insolvency ~~for~~Law. ~~our~~If ~~products~~the ~~may~~Merger is not ~~grow~~completed ~~and~~(including wein ~~may~~the ~~fail~~case the toMerger ~~achieve~~Agreement is terminated), our ongoing business ~~goals~~may be adversely affected.

~~Additionally, potential~~We ~~customers,~~also ~~may~~could ~~already~~be ~~have~~subject ~~installed systems that are based on technologies different from ours and therefore may be~~to ~~less~~litigation ~~willing~~related to ~~incur~~any ~~the~~failure ~~capital expenditures required~~ to ~~install~~complete orthe ~~upgrade~~Merger. toIf ~~our~~the ~~products.~~Merger Asis anot ~~result~~completed, wethese ~~cannot~~risks ~~assure~~may ~~that there~~materialize ~~will~~and bemay ~~sufficient~~adversely affect ~~market~~the ~~opportunities~~price ~~for~~of our ~~products.~~ordinary ~~New~~shares, ~~technologies~~our ~~for~~business, ~~payments~~financial ~~different~~condition, ~~from~~results ~~ours~~of ~~might~~operations beor ~~adopted by the markets and could reduce the need for our payment solutions~~prospects.

~~We depend on a small number of large customers and the loss of one or more of them would lower our revenues.~~6

~~Our customer base is concentrated among a limited number of large customers. Our revenues may continue to depend on a limited number of major customers.~~ The ~~customers~~fact wethat ~~consider~~there tois ~~be our major customers and the percentage of our revenue represented by each major customer vary from period to period. In 2020 and 2019,~~ a ~~customer~~Merger ~~in North America accounted for 19% and 20%, respectively,~~pending ofcould ~~our~~harm ~~total revenues for such periods. Another customer in Asia accounted for 14% and 6%, of~~ our ~~total~~business ~~revenues for 2020~~ and ~~2019,~~ respectively. Another customer in Europe accounted for 12% and 13% of our total revenues for 2020 and 2019, respectively. If we were to lose any one of our major customers, or if any of our customers were to have difficulty meeting their financial obligations to us for any reason, our financial condition and results of operations ~~would be adversely affected~~.

~~We face~~While ~~intense~~the ~~competition.~~Merger Ifis pending, we are ~~unable~~subject to ~~compete~~a ~~successfully,~~number of risks that may harm our business ~~prospects~~and ~~will~~results beof ~~impaired.~~operations, including:

~~We face~~● ~~intense competition from developers of contact and contactless payments products. We compete on~~ the ~~basis~~diversion of ~~a range of factors including price, compatibility with~~ the ~~products~~management ~~of other manufacturers,~~ and ~~the~~employee ~~ability~~attention tofrom ~~support new industry standards and introduce new reliable technologies. Many of~~ our ~~competitors~~ongoing ~~have~~business greater market recognition, larger customer bases, and substantially greater financial, technical, marketing, distribution, and other resources than we possess. As a result, they may be able to introduce new products, respond to customer requirements and adapt to evolving industry standards more quickly than we can.operations;

~~From time~~● ~~to time,~~ we ~~or our present or future competitors~~ may ~~announce new or enhanced products or technologies that~~ have ~~the~~difficulties ~~potential to~~retaining replace or shorten the life cycles of our existing products. The announcement of new or enhanced products may cause customers to delay or alter their purchasing decisions in anticipation of such products, and new products developed by our competitors may render our products obsolete or achieve greater market acceptance than our products.employees;

7● we have and will continue to incur expenses related to the Merger prior to its closing; ● the disruption of current plans and operations; ● we may be unable to respond effectively to competitive pressures, industry developments and future opportunities; and ● Nayax is a competitor of some of our customers, which may bring these customers to look for alternatives for the services we provide them.

~~If we~~Our ~~cannot~~current ~~compete~~employees ~~successfully~~may be ~~with~~uncertain ~~our~~about ~~existing~~their future roles and ~~future~~relationships ~~competitors,~~with weus ~~could~~following ~~experience~~completion ~~lower~~of ~~sales,~~the ~~price~~Merger. ~~reductions,~~This ~~loss of~~uncertainty ~~revenues,~~may ~~reduced~~adversely ~~gross~~affect our ~~margins~~ability to attract and ~~reduced~~retain ~~market~~key ~~share~~personnel.

~~If we~~Failure ~~fail~~ to ~~develop~~complete ~~new~~the ~~products~~Merger orwill ~~adapt~~require us ~~our~~to ~~existing~~repay ~~products~~the ~~for~~Nayax ~~use~~Loan inand ~~new~~the ~~markets,~~loan ~~our~~provided ~~revenue~~to ~~growth~~us ~~may~~by beU-Bank, ~~impeded~~supported ~~and~~by ~~we may~~a ~~incur~~guarantee ~~significant~~provided ~~losses~~by Nayax.

~~Although~~As contemplated by the Nayax weLoan ~~are~~Agreement, ~~devoting~~The ~~significant~~Nayax ~~resources~~Loan is subject to ~~develop~~10% ~~new~~interest ~~products~~per year, and ~~adapting~~the ~~our~~accumulated ~~existing~~interest ~~products~~and ~~for~~value ~~use~~added intax, ~~new~~if ~~markets~~any, ifis payable quarterly commencing on April 1, 2022. The Nayax Loan matures on the second anniversary of the closing of the Nayax Loan Agreement and we cannot prepay it. At any time after the earlier of (i) an Event of Default (as defined under the Nayax Loan Agreement) or (ii) the ~~fail~~completion of the Merger Agreement, and prior to ~~develop~~the ~~our~~repayment ~~new~~of ~~products~~the orNayax ~~adapt~~Loan, Nayax is entitled, at its sole discretion, to convert the Nayax Loan into our ~~existing~~ordinary ~~products~~shares ~~for~~at a price per share equals to $0.043. Failure to complete the Merger could either create dilution to the existing orshareholders ~~new~~due ~~markets~~to the Nayax’s conversion of the Nayax Loan into ordinary shares while Nayax will also become our controlling shareholder, weor, ~~may~~if not ~~recoup~~converted, will require the ~~expenses~~repayment ~~incurred~~of the Nayax Loan. In addition, on March 1, 2022, Nayax provided U-Bank by the First International Bank of Israel Ltd., or U-Bank, a guarantee for the repayment of a loan in an amount of $2 million, provided to us by U-Bank, or the U-Bank Loan. Failure to complete the Merger will lead to a requirement for the repayment of the U-Bank Loan. In any event where we will be required to repay the Nayax Loan or the U-Bank Loan, we will need to either raise additional funds, which may be difficult considering our ~~efforts~~inability to doraise sofunds without the prior written approval of Nayax unless the Merger Agreement is terminated, as stipulated under the Merger Agreement and the Nayax Loan Agreement, and further considering the circumstances. Failure to raise funds may lead to difficulties paying our ~~revenue~~suppliers ~~growth~~and service providers as well as may behamper ~~impeded~~the repayment of loans (including the Nayax Loan) and weany other debt incurred towards Nayax, and may, ~~incur~~eventually, ~~significant~~lead ~~losses~~to either a creditor approaching the Israeli court petitioning to declare us insolvent in accordance with the Insolvency Law, or require us to file such petition.

Our obligation to pay a termination fee ~~revenue~~or ~~growth~~reimburse ~~may~~Nayax’s beexpenses ~~impaired~~under ifcertain wecircumstances ~~are~~and ~~unable~~the torestrictions ~~maintain~~on our ~~current,~~ability ~~and~~to ~~establish~~solicit ~~new,~~or ~~strategic~~engage ~~relationships~~in negotiations with respect to other acquisition proposals may discourage other transactions that may be favorable to our shareholders.

~~The markets~~Until ~~for~~the ~~our~~Merger ~~products~~is ~~are usually specialized and may require us to enter into strategic relationships in order to facilitate~~completed or ~~accelerate~~the ~~our~~Merger ~~market~~Agreement ~~penetration.~~is Weterminated, ~~consider~~with alimited ~~relationship~~exceptions, tothe beMerger ~~strategic~~Agreement ~~when~~prohibits weus ~~integrate~~from ~~our~~entering ~~technology~~ into, ~~some~~soliciting ofor engaging ~~the~~in ~~product~~negotiations ~~offerings~~with ofrespect ato ~~business~~acquisition ~~partner~~proposals or ~~engage~~other abusiness ~~distributor~~combinations. ~~that~~In ~~has~~certain acircumstances, ~~significant~~we ~~position~~are inrequired ato ~~specified market. Failure~~pay ofNayax ~~our~~a ~~strategic~~termination ~~partners~~fee toof ~~perform~~$1,500,000. inFurthermore, anon-completion ~~satisfactory~~of ~~manner~~the orMerger towould ~~meet~~be ~~their~~considered ~~undertakings~~an in“event ~~the penetration~~ of ~~new markets,~~default” orunder the ~~termination~~Nayax ofLoan ~~any~~Agreement, ofwhich ~~our~~can ~~strategic~~result ~~relationships~~in oreither ~~our~~Nayax’s ~~failure~~requirement tofor ~~develop~~an ~~additional~~immediate ~~relationships~~repayment inof the ~~future~~Nayax ~~may~~Loan, or ~~limit~~an ~~our~~increase ~~ability~~of tothe ~~expand~~interest on the ~~markets~~Nayax inLoan ~~which~~amount ~~our~~to ~~products~~16% ~~are~~interest, ~~deployed~~at orthe toNayax’s ~~sell~~sole ~~particular products~~discretion.

~~We may~~If ~~desire~~the toMerger ~~exit~~is ~~certain~~not ~~product~~consummated ~~lines~~by orJuly 1, ~~businesses~~2022, orNayax may choose to ~~restructure~~terminate ~~our~~the ~~operations,~~transaction ~~but~~contemplated ~~may~~by ~~not~~the beMerger ~~successful~~Agreement inunder ~~doing~~certain socircumstances.

~~Our~~The ~~Board~~Merger ofis ~~Directors,~~subject ~~or the Board, has been identifying and assessing possible alternative strategies~~ to ~~maximize value for our shareholders. Such process may~~the ~~result~~satisfaction inor awaiver ~~decision~~of ~~to divest~~ certain ~~product~~closing ~~lines~~conditions ~~and~~set ~~businesses~~forth orin ~~restructure~~the ~~our~~Merger ~~current~~Agreement. ~~corporate~~The ~~structure~~fulfillment ~~or current operations, including, without limitation, through the contribution~~ of ~~assets~~certain ~~to joint ventures or sale~~ of ~~some~~these ~~assets to third parties. For example,~~conditions inis ~~March~~beyond ~~29, 2021, we entered into an agreement to sell~~ our ~~Mass Transit Ticketing operation in Poland. However~~control, ~~our~~such ~~ability~~as tothe ~~successfully exit~~receipt ~~product lines and businesses, or to close or consolidate operations, or to sell some~~ of ~~our~~the ~~assets~~approval ~~successfully, depends on a number~~ of ~~factors,~~the ~~many~~Merger ofby ~~which are outside of~~ our ~~control~~shareholders. ~~For~~If ~~example,~~the ifMerger wehas ~~are~~not ~~seeking~~been acompleted ~~buyer~~by July ~~for a particular business line~~1, ~~none may be available~~2022, orNayax we may ~~not~~terminate bethe ~~successful~~Merger inAgreement, ~~negotiating~~except ~~satisfactory~~that ~~terms with prospective buyers or a buyer may not meet its obligations under~~ the ~~applicable~~right ~~purchase agreement. If we are unable~~ to ~~exit~~terminate athe ~~product~~Merger ~~line~~Agreement ~~or business~~ in athis ~~properly~~circumstance orwill not ~~timely~~be ~~manner,~~available or to ~~restructure our~~Nayax ~~current~~if ~~corporate~~its ~~structure~~material orbreach ~~our~~of ~~operations~~the inMerger aAgreement ~~manner~~has webeen ~~deem~~the toprincipal because ~~advantageous,~~of or toresulted ~~enforce~~in ~~that~~the afailure ~~buyer meets its contractual~~of ~~obligations,~~the ~~this~~Merger ~~could~~to ~~have~~occur ~~a material adverse effect~~ on ~~our~~or ~~business,~~before ~~financial~~such ~~condition~~date and ~~results~~such ofaction ~~operations.~~or ~~Even~~failure ifconstitutes a ~~divestment is~~breach ~~successful,~~of ~~among others, we may face indemnity and other liability claims by~~ the ~~acquirer~~Merger ~~or other parties~~Agreement.

~~The terms~~If ofwe ~~certain~~experience ofsignificant ~~our~~delays ~~agreements~~in ~~may~~completing the ~~restrict~~Merger, ~~our~~we ~~ability~~may need to ~~take~~seek ~~actions~~additional ~~that~~capital ~~we believe~~ to befinance ~~desirable~~the business.

~~Certain agreements~~As ~~that~~agreed weunder ~~have~~the ~~entered~~Term ~~into~~Sheet, Nayax has provided the Company with ~~our~~the ~~distributors~~Nayax ~~provide~~Loan, ~~exclusivity~~while ~~for~~stating ~~different~~that ~~time~~additional ~~periods~~loans may be provided, ~~ranging~~provided ~~from~~a ~~several months~~guarantee to ~~several~~U-Bank for ~~years,~~the orU-Bank Loan and further assisted us by providing certain of our suppliers with ~~respect~~guarantees tofor ~~specific~~the ~~regions~~purpose ~~and/or~~of ~~products~~ensuring that we are able to operate our business. ~~For~~If ~~example,~~we experience significant delays in ~~certain~~completing ~~markets~~the Merger, we ~~sell~~may ~~our~~be ~~products~~in default under the Nayax Loan ~~through~~Agreement ~~distributors~~which ~~who,~~may inlead ~~certain~~to ~~cases,~~Nayax’s ~~have~~requirement ~~exclusive~~for ~~distribution~~an ~~rights~~immediate inrepayment ~~that~~of ~~market~~the orNayax ~~certain~~Loan ~~territories~~as ifwell ~~specified~~as its unwillingness to further ~~minimum~~support ~~volume~~us ~~commitments~~and ~~are~~therefore, ~~met.~~we ~~The~~may ~~foregoing~~need ~~could~~to ~~have~~seek aadditional ~~material~~capital ~~adverse~~to ~~effect~~finance our operations and for the possible repayment of the Nayax Loan, which additional capital may not be available when needed on ~~our~~acceptable ~~business~~terms, ~~operating~~or ~~results~~at ~~and financial~~all. ~~condition~~The iffailure ~~these~~to ~~partners~~obtain dosuch ~~not~~additional capital ~~perform~~may inhave a ~~satisfactory~~material ~~manner~~adverse effect on our ability to complete the Merger.

~~Our~~Some of our directors and officers have ~~products~~interests that may ~~have~~be ~~long~~perceived ~~development~~as ~~and~~different ~~sales~~from ~~cycles~~the interests of our shareholders, and wethese persons may ~~expend~~be ~~significant~~deemed ~~resources~~to have conflicts of interest in ~~relation~~recommending to aour ~~specific~~shareholders ~~project without~~to ~~realizing~~approve ~~any~~the ~~revenues~~Merger.

~~The development~~Some ~~and~~of ~~sales cycles for our products vary from project to project. Typically,~~ the ~~projects~~members inof ~~which we are involved are~~the ~~complex~~management and ~~require that we customize~~ our ~~products~~Board tomay ~~our~~have ~~customers’~~interests ~~needs~~that ~~and~~may ~~specifications.~~be Weperceived ~~then~~as ~~conduct~~different ~~evaluation~~from, ~~testing,~~ ~~implementation~~or ~~and~~in ~~acceptance~~addition ~~procedures and sometimes we are required~~ to, ~~perform~~their ainterests ~~long~~as ~~certification process for our products~~shareholders. These ~~Only~~interests ~~after~~could ~~successful~~cause ~~completion~~members of ~~these~~our ~~procedures~~Board ~~and~~or ~~certifications will customers place orders for~~ our ~~products in~~management ~~commercial~~to ~~quantities.~~be Inperceived ~~addition,~~as ~~our~~having ~~sales~~a ~~contracts~~conflict ~~sometimes~~of dointerest ~~not~~in ~~include~~recommending ~~minimum purchase commitments. We therefore~~approval ~~cannot~~of ~~always~~the ~~ensure that product development will result in commercial sales~~Merger. ~~Our~~The ~~average~~Board ~~development~~was ~~cycle~~aware isof ~~typically~~these ~~between six~~interests and 18considered ~~months~~them, ~~from~~among ~~initial~~other ~~contact~~things, ~~with~~in aevaluating ~~potential~~and ~~customer~~approving ~~until we deliver commercial quantities to~~ the ~~customer~~Merger Agreement and ~~recognize significant~~the ~~revenues.~~Merger ~~As a result, we may expend financial, management~~ and ~~other~~in ~~resources~~recommending tothat ~~develop~~the ~~customer~~OTI ~~relationships~~shareholders ~~before we~~adopt ~~recognize~~the ~~revenues,~~merger ~~if any~~agreement.

~~Defects in~~Risks ~~our~~Related ~~products could harm our reputation, result in loss of customers and revenues or subject us~~ to ~~product~~Our ~~liability claims.~~Business

~~Our products~~We ~~are~~do ~~highly~~not ~~technical~~have ~~and~~enough ~~deployed~~existing ascash ~~part~~resources ofto ~~large~~fund ~~and complex projects. As a result of the nature of~~ our ~~products, they~~operations ~~can~~for ~~only~~the benext ~~fully~~twelve ~~tested~~months ~~when~~and ~~fully~~if ~~deployed.~~we ~~Any~~are ~~defects~~unable ~~in our products could result in harm~~ to ~~our~~secure ~~reputation;~~additional ~~loss of~~capital, ~~or delay~~we ~~in,~~may ~~revenues;~~be ~~loss~~required ~~of customers and market share; failure~~ to ~~attract~~seek ~~new~~strategic ~~customers~~alternatives, ~~or achieve market acceptance for our~~including ~~products;~~but ~~unexpected~~not ~~expenses~~limited to ~~remedy~~reducing ~~such defects; and/~~or ~~exposure~~ceasing toour ~~potential product liability claims~~operations.

~~While~~Our principal sources of liquidity since our inception have been revenues, weproceeds ~~currently~~from ~~maintain~~sales ~~product~~of ~~liability~~equity ~~insurance~~securities, weborrowings ~~cannot~~from bebanks, ~~certain~~our ~~that~~shareholders ~~this~~and ~~insurance~~government, ~~will~~cash befrom ~~sufficient~~the toexercise ~~cover~~of ~~any~~options ~~successful~~and ~~product~~warrants ~~liability~~and ~~claim~~proceeds from the divestiture of parts of our businesses. ~~Any~~We ~~product~~had ~~liability~~cash, ~~claim~~cash ~~could~~equivalents ~~result~~and inshort-term ~~changes~~investments torepresenting bank ~~our~~deposits ~~insurance~~of ~~policies~~$815,000, ~~including~~as ~~premium~~of ~~increases or~~December 31, 2021. Based on the ~~imposition~~projected ofcash aflows ~~large~~and ~~deductible~~our orcash ~~co-insurance~~balances ~~requirements.~~as ~~Any~~of ~~product~~December ~~liability~~31, ~~claim~~2021, inour management ~~excess~~is of the opinion that without further fund raising or other increase in our ~~insurance~~cash, ~~coverage would~~we will not have sufficient resources to enable beus ~~paid~~to ~~out~~continue our operations for a period of ~~our~~at ~~cash~~least ~~reserves~~the next 12 months from the filing date of this Form 10-K. Furthermore, on ~~the~~January ~~assertion~~7, of2022, ~~product~~our ~~liability~~Board ~~claims~~determined that we are insolvent from a cash flow perspective, ~~regardless~~before ofwe received the ~~merits underlying~~Nayax ~~the~~Loan. ~~claim,~~As ~~could~~a result, there inis a substantial ~~costs~~doubt about our ability to ~~us,~~continue ~~divert~~as ~~management’s~~a ~~attention~~going ~~away~~concern. ~~from~~We have limitations on our ~~operations~~ability ~~and~~to raise additional ~~damage~~funds and to increase our ~~reputation~~cash under the Nayax Loan and the Merger Agreement.

~~Delays~~If additional financing is not available when required or ~~discontinuance~~is ofnot ~~the~~available ~~supply~~on acceptable terms, we may be unable to take advantage of ~~components~~business opportunities or ~~manufacturing~~respond to ~~and~~competitive ~~assembly~~pressures, ofwhich ~~our~~could ~~products~~have ~~may~~a ~~hamper~~material adverse effect on our ~~ability~~revenue, toresults ~~produce~~of operations and financial condition. If we are unable to fund our ~~products~~operations onwithout aadditional ~~timely~~external ~~basis~~financing and ~~cause~~therefore ~~short-term~~cannot ~~adverse~~sustain ~~effects~~future operations, we may be required to cease our operations and/or seek bankruptcy protection, as we have done in the past.

~~Most of~~We ~~the~~have ~~components we use in our products are supplied by third-party suppliers and manufacturers. Some of these suppliers are single source manufacturers. Termination of manufacturing of~~ a ~~certain~~history ~~product, provision~~ of ~~services or support (commonly referred to as “end of life”)~~losses, ~~allocations due to high demand, or delays or shortages could interrupt~~ and ~~delay~~we ~~the supply~~expect ofto ~~our~~continue ~~products~~ to ~~our~~incur ~~customers and may result in cancellation of orders for our products. Similarly, we do not always have long~~full-~~term supply~~year ~~contracts~~losses under which our suppliers are committed to supply us with components at fixed or defined prices. Suppliers sometimes may increase component prices significantly without advance warning or could discontinue the manufacturing or supply of components used in ~~our~~2022 ~~products. In addition, third party suppliers may face other challenges in fulfilling their contractual obligations with us which are beyond our control. Although we make efforts to identify~~ and ~~retain second source manufacturers and vendors, we~~ may ~~not~~further ~~always~~incur belosses able to develop alternative sources of supply and services. Even if we are able to identify such alternative sources, we may need to modify our products to render them compatible with other components. This may cause delays in ~~product shipments,~~subsequent ~~increase manufacturing costs and increase product prices~~years.

~~Some of~~We ~~our~~have ~~suppliers~~incurred ~~and~~losses ~~vendors~~in ~~are~~each ~~located~~year since we commenced operations in ~~different~~1990. ~~countries~~We ~~and,~~reported ~~therefore,~~net welosses ~~may~~attributable ~~experience~~to ~~logistical~~shareholders ~~difficulties~~of $11,659,000 in ~~our supply~~2021 ~~chain~~and $6,133,000 ~~including~~in ~~long~~2020. ~~lead~~We ~~times~~expect ~~for~~to ~~receipt~~continue ofto ~~products~~incur full-year orlosses ~~components~~in 2022 and ~~shipping~~may ~~delays.~~incur Inlosses ~~addition,~~also ~~our~~in ~~subcontractors may~~subsequent years, onas ~~occasion,~~we ~~feel~~invest in the ~~impact~~expansion of ~~potential~~our ~~economic~~global orsales ~~political~~and ~~instability~~marketing network, inshift ~~their~~our ~~regions,~~business ~~which~~model ~~could~~away ~~affect~~from ~~their~~product ~~ability to~~sales ~~supply~~towards usservices ~~with~~and ~~components~~transaction ~~for~~fees, and enhance our ~~products~~research inand adevelopment capabilities ~~timely~~to ~~manner~~develop existing and new products.

~~If we~~We ~~are~~face ~~unable~~risks toresulting ~~protect~~from ora ~~assert~~global shortage ~~our~~in ~~intellectual~~the ~~property~~components ~~rights,~~required ~~our~~for ~~business~~the ~~and~~supply ~~results~~ of ~~operations~~our ~~may be harmed~~products.

~~Our success~~As ~~and~~part ~~ability~~of tothe ~~compete~~different ~~depend~~impacts ~~considerably~~of onthe ~~using~~COVID ~~our~~19 IPpandemic, ~~and~~there ~~proprietary rights to protect our technology and products.~~has Webeen ~~rely on~~ a ~~combination~~global ofshortage ~~patent,~~in ~~trademark,~~various ~~design~~components, ~~copyright,~~including ~~and~~in ~~trade~~the ~~secret~~components ~~laws,~~required ~~confidentiality~~for ~~agreements~~the production and ~~other contractual~~supply ~~relationships~~of ~~with~~ our ~~employees~~products, ~~customers,~~which has ~~affiliates,~~led ~~distributors,~~to ~~suppliers~~an ~~and~~increase ~~others.~~in ~~While~~the ~~substantially~~prices ~~all~~ of ~~our~~such ~~employees~~components, ~~are~~freight ~~subject~~costs and to ~~non~~longer lead-~~compete~~times. ~~agreements,~~Such ~~these~~shortage ~~agreements~~has ~~may~~made beit ~~difficult~~harder for us to ~~enforce~~be asable ato ~~result~~supply oforders ~~Israeli~~made ~~law limiting~~by ~~the~~customers, ~~scope~~which ofimpacted ~~employee~~our ~~non-competition~~revenues ~~undertakings.~~and ~~We further note that~~ the ~~Israeli~~product ~~Supreme~~gross ~~Court~~margin, ~~noted~~mainly (in anthe ~~obiter~~retail segment. ~~dictum)~~In inorder ~~2012,~~to ~~without~~mitigate ~~making~~the ~~any decisive ruling~~risk, ~~that~~we anencouraged ~~employee~~our ~~who~~customers ~~contributes~~ to anprovide ~~invention~~a ~~during~~forecast ~~his employment could be allowed~~ to ~~seek compensation for it from~~ their ~~employer,~~demand ~~even~~and ifcontinue ~~the~~to ~~employee’s~~maintain ~~contract~~a ~~of employment specifically states~~comprehensive ~~otherwise~~network ~~and~~of ~~the~~worldwide ~~employee~~suppliers ~~has~~in ~~transferred~~order ~~all~~to ~~intellectual~~optimize ~~property~~our ~~rights~~access to ~~the~~critical ~~employer~~components. ~~The~~In ~~Israeli~~addition, ~~Supreme~~during ~~Court~~last ~~considered the~~few ~~possibility~~months ~~that~~we have purchased a ~~contract~~larger ~~that~~amount ~~revokes~~of ~~the~~such ~~employee’s~~components ~~right~~to ~~for~~be ~~royalties~~used ~~and~~for ~~compensation may not necessarily foreclose~~ the ~~right~~supply ofand ~~the~~sales ~~employee~~later tothis ~~claim a right for royalties~~year. ~~As a result~~However, ~~even~~these ifmeasures ~~the~~may ~~Company~~not ~~believes~~be ~~that none of its employees~~sufficient ~~has~~to ~~any~~mitigate ~~rights~~the inaforementioned ~~any~~risks, ofand if the ~~Company’s~~shortage ~~intellectual property~~continues, or toeven ~~receive royalties~~worsens, itthis ismay ~~unclear~~adversely ~~if,~~impact ~~and~~our tobusiness. ~~what~~As ~~extent,~~long ~~our~~as ~~employees~~the ~~may~~COVID-19 bepandemic ~~able~~continues, toand ~~claim~~possibly ~~compensation~~also ~~with~~thereafter, ~~respect~~the tocomponents’ ~~our~~lead-time ~~future~~may ~~revenue.~~be Aslonger athan ~~result,~~normal weand ~~may~~the ~~receive less revenue from~~shortage ~~future~~in ~~products~~components ifmay ~~such~~continue ~~claims are successful,~~ or ~~incur~~become ~~additional royalty expenses~~greater, which inwould ~~turn~~adversely ~~could~~affect ~~impact~~ our ~~future profitability~~business.

9If the markets for our products do not grow, sales of our products may not grow and may even decline.

~~Our patent~~The ~~portfolio~~success ~~includes~~of ~~registered~~our ~~patents and pending patents applications mainly in U.S. encompassing, among others, product~~products ~~applications,~~depends ~~system~~on ~~and~~the ~~product~~continuing ~~architecture~~adoption ~~and product concepts. We cannot be certain that patents will be issued with respect to any~~ of ~~our~~cashless ~~pending~~payment orsolutions ~~future~~within ~~patent~~a ~~applications~~broad orspectrum ~~that the scope~~ of ~~our~~industries ~~existing~~including ~~patents,~~unattended ~~or any future patents that are issued to us~~retail, ~~will provide us with adequate protection for our technology~~ and ~~products~~ fueling. ~~Others~~Such ~~may~~adoption ~~challenge~~of ~~our~~cashless ~~patents~~payment orsolutions ~~patent applications~~and astechnologies ~~well~~depends ason ~~our~~the ~~registered~~enactment ~~trademarks~~ and ~~other~~implementation ~~intellectual property rights. We do not know whether any~~ of ~~them~~regulations ~~will~~and beindustry ~~upheld~~standards asregarding ~~valid~~secure orcashless ~~will be enforceable against alleged infringers~~payment. ~~Thus,~~Should wesuch doindustries ~~not~~fail ~~know~~to ~~whether~~adopt ~~they~~cashless ~~will~~payment ~~enable~~technologies usor ~~to prevent~~solutions or ~~hinder~~experience ~~the~~any ~~development~~economic ofdownturn, ~~competing products~~ or ~~technologies.~~should ~~Moreover,~~regulations ~~patents~~fail ~~provide~~to ~~legal~~support ~~protection~~such ~~only~~solutions, in the ~~countries where~~markets ~~they~~for ~~are~~our ~~registered,~~products ~~and~~may ~~the~~not ~~extent~~grow and ofwe ~~the~~may ~~protection~~fail ~~granted~~to byachieve ~~patents~~our ~~varies~~business ~~from country to country~~goals.

~~The~~Additionally, potential customers, ~~measures~~may wealready have ~~taken~~installed tosystems ~~protect~~that ~~our~~are ~~technology~~based ~~and~~on ~~products~~technologies ~~may~~different ~~not~~from beours ~~sufficient~~and totherefore ~~prevent~~may ~~their~~be ~~misappropriation~~less bywilling ~~third parties~~to orincur ~~their~~the ~~independent~~capital expenditures ~~development~~required byto ~~others~~install ofor ~~similar~~upgrade ~~technologies~~to orour products. IfAs ~~our~~a ~~patents~~result, ~~and~~we ~~other~~cannot ~~intellectual property~~assure ~~rights~~that dothere ~~not~~will ~~adequately protect our technology, competitors may~~ be ~~able~~sufficient tomarket ~~offer~~opportunities for ~~products similar to~~ our products ~~more easily~~. ~~Our~~New ~~competitors~~technologies ~~may~~for ~~also~~payments ~~develop~~different ~~competing~~from ~~technology~~ours bymight ~~designing~~be ~~around~~adopted ~~our~~by ~~patents~~the ~~and~~markets ~~thereafter manufacturing~~ and ~~selling~~ ~~products~~could ~~that~~reduce ~~compete~~the ~~directly~~need ~~with~~for ~~ours, which would harm~~ our payment ~~business, financial position and results of operations~~solutions.

In order to protect our technology and products and enforce our patents and other proprietary rights, we may need to initiate, prosecute or defend litigation and other proceedings before courts and patent and trademark offices in multiple countries. Significant resources may be required to support such litigation.8

~~If we~~We ~~fail~~depend toon ~~adhere~~one tolarge ~~regulations~~customer and ~~security standards imposed by credit card networks, or if our products are not certified~~the orloss ~~otherwise fail to comply with~~ such ~~regulations~~customer ~~and~~would ~~security~~lower ~~standards (such as payment card industry standards, etc.) or if~~ our ~~customers fail to take proper protective measures and hold OTI liable for the consequences, our results of operations could be adversely affected~~revenues.

~~We are~~Our ~~required~~customer bybase ~~some~~is ofconcentrated ~~our~~into ~~customers~~one tolarge ~~meet~~customer. ~~industry~~Our ~~standards~~revenues may ~~imposed~~continue byto ~~payment~~depend ~~systems~~on ~~standards-setting~~a ~~organizations~~limited ~~such as~~number ~~EMV,~~of ~~credit~~major ~~card~~customers. ~~associations~~The ~~such~~customer aswe ~~Visa,~~consider ~~MasterCard,~~to ~~Discover~~be ~~and~~our ~~other~~major ~~credit~~customer ~~card associations~~ and ~~standard-setting organizations such as~~ the ~~Payment~~percentage ~~Card~~of our ~~Industry~~revenue ~~Security~~represented ~~Standards~~by ~~Council,~~such ~~and~~major ~~other~~customer ~~local~~vary ~~organizations.~~from ~~Furthermore,~~period ~~some of our offerings are subject~~ to ~~the~~period. ~~Payment~~In ~~Card~~2021 ~~Industry~~and ~~Data Security Standards~~2020, ~~which~~such ~~are~~customer ain ~~set~~North ofAmerica ~~multifaceted security standards that are~~accounted ~~designed~~for to22% ~~protect credit card~~ and ~~personal~~19%, ~~information~~respectively, asof ~~mandated~~our bytotal ~~payment~~revenues ~~card~~for ~~industry~~such ~~entities~~periods. ~~Even~~If ~~though~~ we ~~attempt~~ were to ~~protect~~lose our ~~company~~major ~~through~~customer, ~~our~~or ~~contracts~~if ~~with~~ our ~~customers,~~customer wewas to have ~~limited~~difficulty ~~oversight~~meeting orits ~~control~~financial ~~over~~obligations ~~the~~to ~~actions~~us ~~and~~for ~~practices of~~any reason, our ~~clients~~financial condition and ~~other~~results ~~third-party~~of ~~service~~operations ~~providers~~would be adversely affected.

~~New standards~~We ~~are~~face ~~continually~~intense being adopted or proposed as a result of worldwide anti-fraud initiatives, encryption of cardholder or personal information, the increasing need for system compatibility and technology developments such as wireless, optical fiber infrastructure, telecommunication, virtual private network, or VPN, VPN infrastructure, satellite-based communication and another wireline IP communicationcompetition. WeIf ~~cannot ensure that~~ we ~~will~~are ~~be able to design our solutions to comply with future standards or regulations~~unable on a timely basis, if at all. Compliance with these standards could increase the cost of developing or producing our products, while non-compliance may harm our reputation or result in customer and client claims. New products designed to ~~meet~~compete any new standards need to be introduced to the market and ordinarily need to be certified by the credit card associations and our customers before being purchased. The certification process is costly and time-consuming and increases the amount of time and resources it takes to sell our productssuccessfully, ~~as well as the product development cycle time and cost. Selling products that are non-compliant may result in fines against us or~~ our ~~customers,~~business ~~which~~prospects wewill ~~may~~ be ~~liable to pay~~impaired. ~~After selling and/or installation of a system or a product, the customer is responsible for any operational aspect of such system or product ensuring them from unexpected crashes.~~

InWe face intense competition ~~addition,~~from ~~even~~developers ifof ~~our~~contact ~~products~~and ~~are~~contactless ~~designed~~payments toproducts. beWe ~~compliant,~~compete ~~compliance~~on ~~with~~the ~~certain~~basis ~~security~~of ~~standards~~a isrange ~~determined~~of onfactors ~~the~~including ~~basis~~price, compatibility ofwith the ~~network~~products ~~environment~~of inother ~~which~~manufacturers, ~~our~~and ~~customers~~the ~~and~~ability ~~service~~to ~~providers~~support ~~install~~new ~~our~~industry ~~products.~~standards ~~Therefore,~~and ~~such~~introduce ~~compliance~~new ~~depends upon~~reliable ~~additional~~technologies. ~~factors~~Many of ~~such~~our ascompetitors ~~the~~have ~~proper~~greater ~~installation~~market ofrecognition, ~~the~~larger ~~components~~customer ofbases, ~~the~~and ~~environment~~substantially ~~(including~~greater ~~our~~financial, ~~systems~~technical, ~~compliance~~marketing, ofdistribution, ~~software~~ and ~~system~~other ~~components~~resources ~~provided~~than bywe ~~other~~possess. ~~vendors)~~As a result, ~~implementation~~they ofmay ~~compliant~~be ~~security~~able ~~processes~~to ~~and~~introduce ~~business~~new ~~practices~~products, respond to customer requirements and ~~adherence~~adapt to ~~such~~evolving ~~processes~~industry ~~and~~standards ~~practices~~more quickly than we can.

~~Our~~From time to time, we or our ~~business~~present ~~and~~or ~~financial~~future ~~condition~~competitors ~~could~~may beannounce ~~adversely~~new ~~affected~~or ifenhanced weproducts door ~~not~~technologies ~~comply~~that ~~with~~have ~~new~~the potential to replace or shorten the life cycles of our existing ~~industry~~products. ~~standards~~The ~~and~~announcement ~~regulations or~~of ~~obtain~~new or ~~retain~~enhanced ~~necessary~~products ~~regulatory~~may ~~approval~~cause customers to delay or ~~certifications~~alter their purchasing decisions in aanticipation ~~timely~~of ~~fashion~~such products, orand ifnew ~~compliance~~products ~~results~~developed inby ~~increasing~~our competitors may render our products obsolete or achieve ~~the~~greater ~~cost~~market ofacceptance than our products.

10If we cannot compete successfully with our existing and future competitors, we could experience lower sales, price reductions, loss of revenues, reduced gross margins and reduced market share.

~~Our~~If we fail to develop new products or adapt our existing products for use in new markets, our revenue growth may ~~infringe~~be onimpeded ~~the~~and IPwe ~~rights~~may ofincur ~~others~~significant losses.

~~It is~~Although ~~not~~we ~~always~~are ~~possible~~devoting significant resources to ~~know~~develop ~~with~~new ~~certainty~~products ~~whether or not the manufacture~~ and ~~sale~~adapting of our existing products orfor ~~the~~use ~~licenses~~in wenew ~~are~~markets, ~~granted from~~if ~~third~~we ~~parties~~fail ~~infringe~~to ~~patents~~develop orour ~~other~~new IPproducts ~~rights owned by third parties. Third parties may, from time to time, claim that~~or adapt our existing products ~~infringe~~for onexisting ~~their patent~~ or ~~other~~new IPmarkets, ~~rights.~~we Inmay ~~addition,~~not ifrecoup ~~third~~the ~~parties~~expenses ~~claim~~incurred ~~that~~in our ~~customers~~efforts ~~are~~to ~~violating their~~do ~~IP rights~~so, our ~~customers~~revenue growth may ~~seek~~be ~~indemnification~~impeded ~~from~~and uswe or may ~~terminate~~incur ~~their~~significant ~~relationships with us~~losses.

~~IP rights~~Our ~~litigation~~revenue isgrowth may ~~complex and costly, and we cannot~~ be ~~sure~~impaired ~~of the outcome of any litigation. Even~~ if we ~~prevail,~~are ~~the~~unable ~~cost of~~to ~~litigation~~maintain ~~could harm~~ our ~~results of operations. In addition~~current, ~~litigation is time-consuming~~ and ~~could~~establish ~~divert our management’s attention and resources away from our business. If we do not prevail in such litigation~~new, instrategic addition to any damages we might have to pay, we might be required to discontinue the use of certain processes, cease the manufacture, use and sale of infringing products and solutions, and expend significant resources to develop non-infringing technology or obtain licenses on unfavorable termsrelationships. ~~In addition, some licenses are non-exclusive and, therefore, our competitors may have access to the same technology licensed to us.~~

~~Our~~The markets for our products ~~international~~are ~~sales~~usually specialized and ~~operations~~may ~~are~~require ~~subject~~us to ~~complex~~enter ~~laws~~into ~~relating~~strategic relationships in order to ~~foreign~~facilitate ~~corrupt~~or ~~practices~~accelerate ~~and~~our ~~bribery,~~market ~~among~~penetration. We ~~many~~consider ~~other~~a relationship to be strategic when we integrate our technology into some of the product offerings of a business partner or ~~subjects.~~engage Aa ~~violation~~distributor that has a significant position in a specified market. Failure of, our strategic partners to perform in a satisfactory manner or ~~change~~to meet their undertakings in the penetration of new markets, ~~these~~or ~~laws~~the ~~could~~termination ~~adversely~~of ~~affect~~any of our ~~business,~~strategic ~~financial~~relationships ~~condition~~or our failure to develop additional relationships in the future may limit our ability to expand the markets in which our products are deployed or ~~results~~to ofsell ~~operations~~particular products.

~~Our operations~~The interms ~~countries outside the U.S. are subject, among others, to the Foreign Corrupt Practices Act~~ of ~~1977~~certain ~~as amended from time to time, or FCPA, which prohibits U.S. companies or foreign companies which their shares are traded on a U.S. stock exchange, or their agents and employees from providing anything~~ of value to a foreign public official as defined in the FCPA for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity, or obtain any unfair advantage. We have internal control policies and procedures with respect to the FCPA. However, we cannot assure that our ~~policies~~agreements ~~and procedures will always protect us from reckless or criminal acts that~~ may ~~be committed by our employees or agents. Violations of the FCPA may result in severe criminal or civil sanctions, and~~ werestrict ~~may be subject to other liabilities, which could have a material adverse effect on~~ our ~~business,~~ability consolidated results of operations and consolidated financial condition. In addition, investigations by governmental authorities as well as legal, social, economic, and political issues in countries where we operate could have a material adverse effect on our business and consolidated results of operations. We are also subject to ~~the~~take ~~risks~~actions that ~~our~~we ~~employees~~believe ~~or agents outside of the U.S. may fail~~ to ~~comply with other applicable laws. The costs of complying with these and similar laws may~~ be ~~significant and may require significant management time and focus~~desirable. ~~Any violation of these or similar laws, intentional or unintentional, could have a material adverse effect on our business, financial condition or results of operations.~~

WeCertain agreements that we ~~use~~have ~~third~~entered ~~parties’~~into ~~goods~~with ~~and~~our ~~services~~distributors ~~from~~provide exclusivity for different time periods, ranging from several months to ~~time~~several years, or with respect to specific regions and/or products. ~~Although~~For example, in certain markets, we ~~make~~sell ~~efforts~~our toproducts ~~ensure~~through ~~the~~distributors ~~service~~who, ~~quality~~in certain cases, wehave ~~cannot~~exclusive distribution rights in that market or certain territories if specified minimum volume commitments are met. ~~control~~The ~~the~~foregoing ~~actions~~could ofhave ~~such~~a ~~third~~material ~~parties~~adverse effect on our business, operating results and ~~therefore~~financial wecondition ~~may~~if bethese ~~subject~~partners todo ~~claims~~not perform ~~and~~in ~~risks~~a satisfactory manner.

We depend on third-party service providers, suppliers, and licensors to supply some of the services, hardware, software and operational support necessary to provide some of our services. If these vendors experience operating or financial difficulties or are otherwise unable to provide the equipment or services we need fully or in a timely manner, at our specifications and at reasonable prices, our ability to provide some services might be materially adversely affected, or the need to procure or develop alternative sources of the affected materials or services might delay our ability to serve our customers. These events could materially and adversely affect our ability to retain and attract customers, and have a material negative impact on our operations, business, financial results and financial condition.9

~~We may~~Our ~~have to adapt our~~ products inmay ~~order~~have long todevelopment ~~integrate~~and ~~them~~sales ~~into~~cycles ~~our~~and ~~customers’~~we ~~systems~~may ifexpend ~~new~~significant ~~government~~resources ~~regulations~~in orrelation ~~industry standards~~to ~~are~~a ~~adopted~~specific orproject ~~current~~without ~~regulations~~realizing orany ~~standards are changed~~revenues.

~~Some~~The development and sales ofcycles for our products ~~and/or~~vary ~~future~~from ~~products~~project ~~under~~to ~~development~~project. Typically, the projects in which we are orinvolved ~~may~~are becomplex ~~subject~~and require that we customize our products to ~~government~~our orcustomers’ ~~international~~needs ~~regulation~~and inspecifications. ~~the~~We then conduct evaluation, testing, implementation and acceptance ~~countries~~procedures inand ~~which~~sometimes ~~they~~we are ~~used~~required to perform a long certification process for our products. ~~Some~~Only after successful completion of these ~~our~~procedures ~~systems~~and ~~are~~certifications ~~also~~will ~~required~~customers toplace ~~meet~~orders ~~safety~~for ~~regulation~~our ~~standards~~products in commercial quantities. In addition, ~~governmental~~our sales contracts orsometimes ~~international~~do ~~certification~~not ~~for~~include ~~the~~minimum ~~systems~~purchase ~~into~~commitments. ~~which~~We ~~our~~therefore ~~products~~cannot ~~are~~always ~~integrated~~ensure ~~may~~that beproduct ~~required~~development will result in commercial sales. IfOur ~~there~~average development cycle is atypically ~~change~~between ~~in government~~six ~~regulations~~and or18 ~~industry~~months ~~standards,~~from weinitial ~~may~~contact ~~have~~with toa ~~make~~potential ~~significant~~customer ~~modifications~~until we deliver commercial quantities to ~~our~~the ~~products~~customer and, asrecognize significant revenues. As a result, ~~could~~ ~~incur~~we ~~significant~~may ~~costs~~expend ~~and~~financial, ~~may~~management beand ~~unable~~other resources to ~~deploy~~develop ~~our~~customer ~~products~~relationships inbefore awe ~~timely~~recognize ~~manner~~revenues, if any.

11Defects in our products could harm our reputation, result in loss of customers and revenues or subject us to product liability claims.

~~In addition,~~Our ~~prior~~products toare ~~purchasing~~highly ~~our~~technical and ~~products,~~deployed ~~some~~as ~~customers~~part ~~may~~of ~~require~~large usand tocomplex ~~receive~~projects. orAs ~~obtain~~ a ~~third-party~~result ~~certification,~~of ~~or occasionally~~the ~~certify~~nature of our products ~~by ourselves~~, ~~that~~they ~~our products~~ can only be ~~integrated~~fully ~~successfully~~tested ~~into~~when ~~their systems or comply~~fully ~~with applicable regulations~~deployed. InAny ~~some~~defects ~~cases,~~ in ~~order for~~ our products, orcould ~~for~~result ~~the~~in ~~system~~harm ~~into~~to ~~which~~our ~~they~~reputation; ~~are~~loss ~~integrated~~of, toor ~~be certified,~~delay ~~we may have to make significant product modifications. Furthermore~~in, ~~receipt~~revenues; loss of ~~third-party~~customers ~~certifications~~and ~~may not occur~~market inshare; afailure ~~timely manner or at all. Failure~~ to ~~receive~~attract ~~third-party~~new ~~certifications~~customers ~~could~~or ~~render~~achieve usmarket ~~unable~~acceptance tofor ~~deploy~~ our products; inunexpected ~~a timely~~expenses ~~manner~~to orremedy atsuch ~~all,~~defects; ~~which~~and/or exposure ~~may~~to ~~adversely~~potential ~~affect~~product ~~our~~liability ~~operations, business, financial results and financial condition~~claims.

WeWhile we currently maintain ~~have~~product ~~certain~~liability ~~operations~~insurance, inwe ~~countries~~cannot be certain that ~~may~~this insurance will be ~~adversely~~sufficient ~~affected~~to bycover ~~political~~any successful product liability claim. Any product liability claim could result in changes to our insurance policies, including premium increases or ~~economic~~the ~~instability~~imposition of a large deductible or co-insurance requirements. Any product liability claim in excess of our insurance coverage would have to be paid out of our cash reserves. Furthermore, the assertion of product liability claims, regardless of the merits underlying the claim, could result in substantial costs to us, divert management’s attention away from our operations and damage our reputation.

~~We are~~Delays aor ~~company~~discontinuance of ~~with~~the ~~worldwide~~supply ~~operations.~~of Incomponents ~~addition~~or tomanufacturing ~~being~~and ~~headquartered~~assembly ~~in Israel, we derive a certain portion~~ of our ~~sales and~~products ~~future~~may ~~growth~~hamper ~~from~~our ~~regions~~ability ~~such~~to asproduce ~~Latin~~our ~~America,~~products ~~Eastern~~on ~~Europe~~a timely basis and ~~Africa,~~cause ~~which~~short-term ~~may~~adverse ~~be more susceptible to political or economic instability~~effects.

~~Certain portions~~Most of the components we use in our ~~operations~~products are ~~conducted~~supplied ~~outside~~by ~~the~~third-party ~~markets~~suppliers inand ~~which~~manufacturers. ~~our~~Some ~~products~~of these suppliers are ~~sold,~~single ~~and~~source ~~accordingly,~~manufacturers. Termination weof ~~often~~manufacturing ~~import~~ of a ~~substantial~~certain ~~number~~product, provision of ~~products~~services ~~into~~or ~~such~~support ~~markets.~~(commonly Wereferred ~~may,~~to ~~therefore,~~as be“end ~~denied~~of ~~access~~life”), allocations due to ~~our~~high ~~customers~~demand, or ~~suppliers~~delays or ~~denied the~~shortages ~~ability~~could tointerrupt ~~ship~~and ~~products~~delay ~~from~~the ~~any~~supply of our ~~sites~~products asto aour customers and may result in cancellation of aorders ~~closing~~for ofour ~~the~~products. ~~borders~~Similarly, ofwe ~~the~~do ~~countries~~not inalways ~~which~~have welong-term ~~sell~~supply contracts under which our suppliers are committed to supply us with components at fixed or defined prices. Suppliers sometimes may increase component prices significantly without advance warning or could discontinue the manufacturing or supply of components used in our products. In addition, orthird party suppliers may face other challenges in fulfilling their contractual obligations with us which are beyond our ~~operations~~control. ~~are~~Although ~~located,~~we ~~due~~make efforts to identify ~~economic~~and retain second source manufacturers and vendors, ~~legislative~~we ormay ~~political~~not ~~conditions.~~always ~~This~~be ~~could~~able ~~have~~to adevelop ~~material~~alternative sources of supply and services. ~~negative~~Even ~~impact~~if onwe ~~our~~are ~~operations~~able to identify such alternative sources, ~~business~~we may need to modify our products to render them compatible with other components. This may cause delays in product shipments, ~~financial~~increase ~~results~~manufacturing costs and ~~financial~~increase ~~condition~~product prices.

~~We derive~~Some ~~a portion~~ of our ~~revenues~~suppliers ~~from~~and vendors ~~sales~~are tolocated ~~resellers~~in ~~that~~different ~~are~~countries ~~not~~and, ~~the~~therefore, ~~end-users~~we ofmay experience logistical difficulties in our supply chain, including long lead times for receipt of products. Weor ~~are~~components ~~dependent~~and shipping delays. In addition, toour asubcontractors ~~certain extent~~may, on ~~the~~occasion, ~~ability~~feel the impact of ~~these~~potential ~~resellers~~economic toor ~~maintain~~political instability in their ~~existing~~regions, ~~business~~which ~~and~~could ~~secure~~affect ~~new~~their ~~business~~ability to supply us with components for our products in a timely manner.

Some of our revenues are derived from sales to customers and distributors that incorporate our products into systems which they supply and install for use by their end-use customers. While we view such resellers as our final customers, our revenues may decline if the efforts of these resellers fail in their efforts to sell their products or to resell our products. Further, the faulty or negligent implementation and installation of our products by our customers or their end-use customers may harm our reputation and dilute our brand name. We are one step removed from the end-users of our products, and therefore it may be more difficult for us to rectify damage to our reputation caused by resellers that have direct contact with end-users. In addition, termination of agreements with resellers or revocation of exclusive distribution rights within certain countries might be difficult. If we are unable to maintain our current relationships with resellers or develop relationships with new resellers, we may not be able to sell our products, and our results of operations could be impaired.10

~~While~~ If we ~~also~~are ~~sell~~unable ~~directly~~ to protect ~~end-users,~~or assert our ~~future~~intellectual ~~success~~property ~~will~~rights, ~~depend~~our ~~upon~~business ~~the timing~~ and ~~size~~results of ~~future~~operations ~~purchases~~may bybe ~~resellers and the success of their products and services for which they use our products~~harmed.

WeOur success and ability to ~~are~~compete ~~exposed~~depend considerably on using our IP and proprietary rights to ~~credit~~protect ~~risk~~our ~~with~~technology ~~some~~and products. We rely on a combination of patent, trademark, design, copyright, and trade secret laws, confidentiality agreements and other contractual relationships with our employees, customers, affiliates, distributors, suppliers and others. While substantially all of our employees are subject to ~~credit~~non-compete ~~exposures~~agreements, these ~~and~~agreements ~~currency~~may ~~controls~~be difficult to enforce as a result of Israeli law limiting the scope of employee non-competition undertakings. We further note that the Israeli Supreme Court noted (in an obiter dictum) in 2012, ~~which~~without making any decisive ruling, that an employee who contributes to an invention during his employment could be allowed to seek compensation for it from their employer, even if the employee’s contract of employment specifically states otherwise and the employee has transferred all intellectual property rights to the employer. The Israeli Supreme Court considered the possibility that a contract that revokes the employee’s right for royalties and compensation may not necessarily foreclose the right of the employee to claim a right for royalties. As a result, even if the Company believes that none of its employees has any rights in ~~material~~any of the Company’s intellectual property, or to receive royalties, it is unclear if, and ~~losses~~to what extent, our employees may be able to claim compensation with respect to our future revenue. As a result, we may receive less revenue from future products if such claims are successful, or incur additional royalty expenses, which in turn could impact our future profitability.

AOur patent portfolio includes ~~significant~~registered ~~portion~~patents ofand ~~our~~pending ~~net~~patents ~~revenues~~applications ismainly onin anU.S. ~~open~~encompassing, ~~credit~~among ~~basis~~others, ~~that~~product weapplications, ~~provide~~system toand ~~our~~product architecture ~~customers~~and product concepts. ~~While~~We wecannot ~~assess~~be ~~collectability for~~certain ~~revenue~~that ~~recognition~~patents ~~purposes~~will onbe aissued ~~regular~~with ~~basis,~~respect ~~credit~~to ~~risks~~any ~~may~~of beour ~~higher~~pending ~~and~~or ~~collections~~future ~~may~~patent applications beor ~~more~~that ~~difficult~~the toscope ~~enforce~~of our existing patents, ~~and~~ or any future ~~losses~~patents ~~due~~that toare ~~inability~~issued to ~~collect~~us, ~~some~~will orprovide aus ~~major~~with ~~part~~adequate ofprotection for ~~future~~our ~~revenues,~~technology ifand ~~incurred,~~products. ~~could~~Others ~~harm~~may challenge our ~~business~~patents ~~and have~~or apatent ~~material~~applications ~~adverse~~as ~~effect~~well onas our ~~operating~~registered ~~results~~trademarks and ~~financial~~other intellectual ~~condition~~property rights. ~~Additionally,~~We todo ~~the~~not ~~extent~~know ~~that~~whether any ~~uncertainty in~~of ~~the~~them ~~global~~will ~~economy~~be ~~makes~~upheld itas ~~more~~valid ~~difficult~~or ~~for~~will ~~some~~be ~~customers~~enforceable toagainst ~~obtain~~alleged ~~financing~~infringers. Thus, ~~our~~we ~~customers’~~do ~~ability~~not toknow ~~pay~~whether ~~could be~~they ~~adversely~~will ~~impacted,~~enable ~~which~~us into ~~turn~~prevent ~~could~~or ~~have~~hinder athe ~~material~~development ~~adverse~~of ~~impact~~competing onproducts ~~our~~or ~~business~~technologies. Moreover, patents ~~cash~~provide ~~flows,~~legal ~~operating~~protection ~~results~~only in the countries where they are registered, and the extent of the protection granted by patents ~~financial~~varies ~~condition~~from country to country.

~~Risks~~The measures we have taken ~~Related~~to protect our technology and products may not be sufficient to prevent their misappropriation by third parties or their independent development by others of similar technologies or products. If our patents and other intellectual property rights do not adequately protect our technology, competitors may be able to offer products similar to our products more easily. Our ~~Ordinary~~competitors ~~Shares~~may also develop competing technology by designing around our patents and thereafter manufacturing and selling products that compete directly with ours, which would harm our business, financial position and results of operations.

~~Our share~~In ~~price~~order ~~has~~to ~~fluctuated~~protect inour ~~the~~technology and ~~past~~products and enforce our patents and other proprietary rights, we may ~~continue~~need to ~~fluctuate~~initiate, prosecute or defend litigation and other proceedings before courts and patent and trademark offices in ~~the~~multiple ~~future~~countries. Significant resources may be required to support such litigation.

~~The market~~If ~~price~~we offail ~~our~~to ~~Ordinary~~adhere ~~Shares has fluctuated significantly and may continue~~ to doregulations ~~so. The market price of our Ordinary Shares~~and ~~may~~security bestandards ~~significantly~~imposed ~~affected~~ by ~~factors~~credit ~~such~~card asnetworks, ~~the~~or ~~announcements~~if ofour ~~new~~ products orare ~~product~~not ~~enhancements~~certified ~~by us~~ or ~~our~~otherwise ~~competitors, technological~~fail ~~innovations~~to bycomply uswith orsuch ~~our~~regulations and ~~competitors~~security orstandards ~~periodic~~(such ~~variations~~as inpayment ~~our~~card ~~results~~industry ofstandards, ~~operations~~etc.) Inor ~~addition,~~if ~~any~~our ~~statements or~~customers ~~changes~~fail into ~~estimates~~take byproper ~~analysts~~protective ~~covering~~measures ~~our~~and hold ~~shares~~us orliable ~~relating~~for to the ~~industries~~consequences, inour ~~which~~results weof ~~operate~~operations could ~~result in an immediate effect that may~~ be ~~adverse~~adversely ~~to the market price of our shares~~affected.

12We are required by some of our customers to meet industry standards imposed by payment systems standards-setting organizations such as EMV, credit card associations such as Visa, MasterCard, Discover and other credit card associations and standard-setting organizations such as the Payment Card Industry Security Standards Council, and other local organizations. Furthermore, some of our offerings are subject to the Payment Card Industry Data Security Standards, which are a set of multifaceted security standards that are designed to protect credit card and personal information as mandated by payment card industry entities. Even though we attempt to protect our company through our contracts with our customers, we have limited oversight or control over the actions and practices of our clients and other third-party service providers.

~~Trading~~New standards are continually inbeing ~~shares~~adopted or proposed as a result of ~~companies~~worldwide ~~listed~~anti-fraud oninitiatives, ~~OTCQX~~encryption inof ~~general~~cardholder or personal information, ~~and~~the ~~trading~~increasing need infor ~~shares~~system ofcompatibility and technology ~~companies~~developments insuch ~~particular~~as wireless, ~~has~~optical ~~been~~fiber ~~subject~~infrastructure, telecommunication, virtual private tonetwork, ~~extreme~~or ~~price~~VPN, VPN infrastructure, satellite-based communication and ~~volume~~another ~~fluctuations~~wireline IP communication. We cannot ensure that ~~have~~we ~~been~~will be ~~unrelated~~able orto ~~disproportionate~~design our solutions to ~~operating~~comply ~~performance~~with future standards or regulations on a timely basis, if at all. ~~These~~Compliance ~~factors~~with these standards could increase the cost of developing or producing our products, while non-compliance may ~~depress~~harm our reputation or result in customer and client claims. New products designed to meet any new standards need to be introduced to the market ~~price~~and ordinarily need to be certified by the credit card associations and our customers before being purchased. The certification process is costly and time-consuming and increases the amount of time and resources it takes to sell our ~~Ordinary~~products, ~~Shares~~as well as the product development cycle time and cost. Selling products that are non-compliant may result in fines against us or our customers, ~~regardless~~which we may be liable to pay. After selling and/or installation of ~~our~~a ~~actual~~system ~~operating~~or ~~performance~~a product, the customer is responsible for any operational aspect of such system or product ensuring them from unexpected crashes.

Securities litigation has also often been brought against companies following periods of volatility in the market price of its securities. In the future, we may be the target of similar litigation that could result in substantial costs and diversion of our management’s attention and resources.11

~~There~~In addition, even if our products are designed to be compliant, compliance with certain security standards is adetermined ~~limited~~on ~~market~~the ~~for~~basis of the network environment in which our ~~Ordinary~~customers ~~Shares~~and service providers install our products. Therefore, ~~and~~such compliance depends upon additional factors such as the ~~trading~~proper installation ~~price~~of the components of the environment (including our ~~Ordinary~~systems, ~~Shares~~compliance isof ~~subject~~software and system components provided by other vendors), implementation of compliant security processes and business practices and adherence to ~~volatility~~such processes and practices.

Our ~~Ordinary~~ ~~Shares~~business ~~began~~and ~~trading on the OTCQX in October 2019, following the delisting of our Ordinary Shares from the Nasdaq Capital~~financial ~~Market.~~condition ~~Because~~could ~~our~~be ~~Ordinary~~adversely ~~Shares~~affected ~~are~~if ~~no longer listed on a registered national securities exchange,~~ we ~~are~~do ~~subject~~not tocomply ~~certain “blue~~with ~~sky”~~new ~~laws~~or ofexisting ~~the~~industry ~~various~~standards ~~states which impose restrictions on our ability to offer~~ and ~~sell~~regulations ~~our securities. These “blue sky” laws may make it more difficult for us to raise capital~~ or toobtain ~~issue our Ordinary Shares for equity compensation~~ or ~~other strategic purposes, which could adversely affect our ability to fund our operations or to attract and~~ retain ~~employees.~~ Innecessary ~~addition,~~regulatory ~~our~~approval ~~Ordinary~~or ~~Shares~~certifications ~~may~~in ~~be defined as~~ a ~~“penny~~timely ~~stock” under Rule 3a51-1 under the Exchange Act. “Penny stocks” are subject to Rule 15g-9~~fashion, ~~which~~or ~~imposes~~if ~~additional~~compliance ~~sales~~results ~~practice~~in ~~requirements~~increasing on broker-dealers that sell low-priced securities to persons other than established customers and institutional accredited investors. For transactions covered by this rule, a broker-dealer must make a special suitability determination for the ~~purchaser~~cost ~~and have received the purchaser’s written consent to the transaction prior to sale. Consequently, the rule may affect the ability~~ of ~~broker-dealers to sell~~ our ~~Ordinary~~ ~~Shares and affect the ability of holders to sell their Ordinary Shares in the secondary market~~products. ~~To the extent our share is subject to the penny stock regulations, the market liquidity for the Ordinary Shares will be adversely affected.~~

~~We may~~Our ~~need~~products ~~additional~~may ~~funds~~infringe inon the ~~future~~IP ~~and~~rights ~~our share price could be adversely affected by future sales~~ of ~~our Ordinary Shares~~others.

~~We have~~It ~~experienced~~is annot ~~immediate~~always ~~need~~ possible to ~~raise~~know ~~funds~~with ~~and~~certainty onwhether ~~December~~or 9,not ~~2020~~the wemanufacture ~~entered~~and ~~into~~sale aof ~~loan~~our ~~agreement,~~products or the ~~Loan~~licenses ~~Agreement, with~~we ~~Jerry~~are L.granted ~~Ivy,~~from ~~Jr.~~third ~~Descendants’~~parties ~~Trust,~~infringe patents or ~~Ivy,~~other ~~the~~IP ~~controlling~~rights ~~shareholder~~owned ofby ~~the~~third ~~company~~parties. ~~Under~~Third ~~the~~parties ~~Loan Agreement~~may, as ~~amended, we received~~ from ~~Ivy~~time ~~and~~to ~~another lender a loan in the aggregate amount of $1~~time,~~600,000.~~ ~~The~~claim ~~loan~~that ~~amount and interest thereon may be converted into~~ our ~~Ordinary~~products ~~Shares~~infringe aton atheir ~~price~~patent or ~~per~~other ~~share~~IP ~~that is substantially lower than the current price per share~~rights. WeIn ~~will~~addition, ~~likely need additional funding and~~ if ~~such~~third ~~funding~~parties isclaim ~~obtained~~that ~~by way of issuance of~~ our ~~equity~~customers ~~securities,~~are ~~including by~~violating ~~way~~their ofIP a rights ~~offering~~, ~~or if the loan amount is converted into~~ our ~~Ordinary~~customers ~~Shares,~~may ~~the~~seek ~~market price of our Ordinary Shares~~indemnification ~~could~~from drop. These factors could also make it more difficult to raise additional funds through future offerings of our Ordinary Shares or other securities. Also, if we are unable to obtain additional funds on terms favorable to us, or ~~at all, we~~ may beterminate ~~required to~~their ~~cease~~relationships orwith ~~reduce our operating activities~~us.

~~Our~~IP rights litigation is complex ~~shareholders~~and costly, and we cannot be sure of the outcome of any litigation. Even if we prevail, the cost of litigation could ~~experience~~harm ~~dilution~~our results of ~~their~~operations. ~~ownership~~In ~~interest~~addition, bylitigation ~~reason~~is time-consuming and could divert our management’s attention and resources away from our business. If we do not prevail in such litigation, in addition to any damages we might have to pay, we might be required to discontinue the use of certain processes, cease the manufacture, use and sale of infringing products and solutions, and expend significant resources to develop non-infringing technology or obtain licenses on unfavorable terms. In addition, some licenses are non-exclusive and, therefore, our ~~issuing~~competitors ~~more~~may ~~shares~~have access to the same technology licensed to us.

~~Under Israeli~~Our ~~law,~~international ~~shareholders~~sales and inoperations ~~public companies do not have preemptive rights unless those rights~~ are ~~provided~~subject ~~pursuant~~ to acomplex ~~contract. This~~laws ~~means~~relating ~~that generally our shareholders do not have the legal right~~ to ~~purchase~~foreign ~~shares~~corrupt inpractices aand ~~new~~bribery, ~~issue~~among ~~before~~many ~~they~~other ~~are offered to third parties~~subjects. ~~However,~~A ~~pursuant~~violation ~~to the terms and provisions~~ of ~~the share purchase agreement~~, or ~~the~~change ~~Share Purchase Agreement, dated December 23, 2019, Ivy has a right to purchase any future equity securities offered by us, except with respect to certain exempt issuances as set forth~~ in ~~the Share Purchase Agreement. As a result~~, ~~our~~these ~~shareholders~~laws could ~~experience~~adversely ~~dilution~~affect ~~of their ownership interest by reason of~~ our ~~raising~~business, ~~additional~~financial ~~funds~~condition ~~through~~or ~~the~~results ~~issuance~~ of ~~Ordinary Shares~~operations.

Our operations in countries outside the U.S. are subject, among others, to the Foreign Corrupt Practices Act of 1977 as amended from time to time, or FCPA, which prohibits U.S. companies or foreign companies which their shares are traded on a U.S. stock exchange, or their agents and employees from providing anything of value to a foreign public official as defined in the FCPA for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity, or obtain any unfair advantage. We have internal control policies and procedures with respect to the FCPA. However, we cannot assure that doour ~~not~~policies ~~anticipate~~and ~~paying~~procedures ~~cash~~will ~~dividends~~always protect us from reckless or criminal acts that may be committed by our employees or agents. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could have a material adverse effect on our business, consolidated results of operations and consolidated financial condition. In addition, investigations by governmental authorities as well as legal, social, economic, and political issues in countries where we operate could have a material adverse effect on our business and consolidated results of operations. We are also subject to the ~~foreseeable~~risks ~~future~~that our employees or agents outside of the U.S. may fail to comply with other applicable laws. The costs of complying with these and similar laws may be significant and may require significant management time and focus. Any violation of these or similar laws, intentional or unintentional, could have a material adverse effect on our business, financial condition or results of operations.

We have never declared or paid cash dividends on our Ordinary Shares, and we do not anticipate paying cash dividends in the foreseeable future. Any return to investors is expected to come, if at all, only from potential increases in the price of our Ordinary Shares. The payment of any dividends by the Company is solely at the discretion of our Board and based on the conditions set forth in the Israeli Companies Law, 1999, or the Companies Law.12

13We use third parties’ goods and services from time to time. Although we make efforts to ensure the service quality, we cannot control the actions of such third parties, and therefore we may be subject to claims and risks.

~~Risks~~We depend on third-party service ~~Related~~providers, suppliers, and licensors to ~~Conducting~~supply ~~Business~~some of the services, hardware, software and operational support necessary to provide some of our services. If these vendors experience operating or financial difficulties or are otherwise unable to provide the equipment or services we need fully or in ~~Israel~~a timely manner, at our specifications and at reasonable prices, our ability to provide some services might be materially adversely affected, or the need to procure or develop alternative sources of the affected materials or services might delay our ability to serve our customers. These events could materially and adversely affect our ability to retain and attract customers, and have a material negative impact on our operations, business, financial results and financial condition.

~~Provisions of~~We ~~Israeli law~~ may ~~make~~have itto ~~easy~~adapt our ~~for~~products ~~our~~in ~~shareholders~~order to ~~demand~~integrate ~~that~~them weinto ~~convene~~our acustomers’ ~~shareholders~~systems ~~meeting,~~if ~~and/or~~new ~~allow~~government ~~shareholders to~~regulations ~~convene~~or aindustry ~~shareholder~~standards ~~meeting~~are ~~without~~adopted or ~~the~~current ~~consent~~regulations ofor ~~our~~standards ~~management,~~are ~~which may disrupt our management’s ability to run our company~~changed.

~~Section 63(b)~~Some of ~~the~~our ~~Companies~~products ~~Law~~and/or future ~~may~~products ~~allow~~under ~~any~~development ~~one~~are or ~~more~~may ofbe ~~our~~subject ~~shareholders holding at least 5% of our voting rights~~ to ~~demand~~government ~~that we~~or ~~convene~~international anregulation ~~extraordinary shareholders meeting. Also,~~ in the ~~event~~countries ~~that~~in wewhich ~~choose~~they ~~not~~are ~~to convene an extraordinary shareholders~~used. ~~meeting~~Some ~~pursuant~~of toour ~~such~~systems aare ~~request,~~also ~~Sections~~required ~~64-65~~to ofmeet ~~the~~safety ~~Companies~~regulation ~~Law~~standards. ~~provide,~~In ~~among others~~addition, ~~that~~governmental ~~such~~or ~~shareholders~~international ~~may~~certification ~~independently~~for ~~convene~~the ansystems ~~extraordinary~~into ~~shareholders~~which ~~meeting~~our ~~within~~products ~~three~~are ~~months~~integrated ~~(or~~may ~~under~~be ~~court’s~~required. ~~ruling)~~If ~~and~~there ~~require~~is usa tochange ~~cover~~in ~~the costs,~~government ~~within~~regulations ~~reason,~~or ~~and~~industry ~~as a result thereof~~standards, we ~~our~~may ~~directors~~have ~~might be required~~ to ~~repay~~make ussignificant ~~such~~modifications ~~costs.~~to If our ~~shareholders~~products ~~decide to~~and, ~~exercise~~as ~~these rights in~~ a ~~way inconsistent with our management’s strategic plans~~result, ~~our~~could ~~management’s~~incur ~~ability~~significant ~~to run~~costs ~~our~~and ~~company~~ may be ~~disrupted,~~unable ~~and~~to ~~this~~deploy our ~~process~~products ~~may~~in ~~entail~~a ~~significant~~timely ~~costs to us~~manner.

~~Security~~In addition, prior to purchasing ~~political~~our ~~and~~products, ~~economic~~some ~~instability~~customers may require us to receive or obtain a third-party certification, or occasionally certify our products by ourselves, that our products can be integrated successfully into their systems or comply with applicable regulations. In some cases, in order for our products, or for the ~~Middle~~system ~~East~~into which they are integrated, to be certified, we may ~~harm~~have to make significant product modifications. Furthermore, receipt of third-party certifications may not occur in a timely manner or at all. Failure to receive third-party certifications could render us unable to deploy our products in a timely manner or at all, which may adversely affect our operations, business, financial results and financial condition.

We ~~are~~ ~~incorporated~~have ~~under~~certain ~~the laws of the State of Israel, and our principal offices and research and development facilities are~~operations ~~located~~ in ~~Northern~~countries ~~Israel.~~that ~~Accordingly, security, political and economic conditions in the Middle East in general, and in Israel in particular,~~ may ~~directly~~be affect our business. Any armed conflicts, political instability, terrorism, cyberattacks or any other hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could affect adversely ~~our~~affected ~~operations.~~by ~~Ongoing and revived hostilities in the Middle East or other Israeli~~ political or economic ~~factors, could harm our operations and solution development and cause any future sales to decrease~~instability.

~~Furthermore, some~~We ~~countries,~~are ~~as well as certain companies and organizations, participate in~~ a ~~boycott~~company ~~of Israeli firms and others doing business~~ with ~~Israel or with Israeli companies~~worldwide operations. ~~Restrictive~~In ~~laws,~~addition ~~policies~~to orbeing ~~practices~~headquartered ~~directed~~in ~~towards~~ Israel, orwe ~~Israeli~~derive ~~businesses~~a ~~could have~~certain anportion ~~adverse impact on the expansion~~ of our ~~business.~~sales Inand ~~addition,~~future wegrowth ~~could~~from beregions ~~adversely affected by the interruption or curtailment~~such ofas ~~trade~~Latin ~~between~~America, ~~Israel~~Eastern Europe and ~~its trading partners~~Africa, awhich ~~significant~~may ~~increase~~be inmore ~~the~~susceptible ~~rate~~to ofpolitical ~~inflation,~~ or ~~a significant downturn in the~~ economic ~~or financial condition of Israel~~instability.

~~In addition,~~Certain ~~Israel~~portions ~~is experiencing a level~~ of ~~unprecedented~~our ~~political~~operations are ~~instability.~~conducted ~~The~~outside ~~Israeli~~the ~~government~~markets ~~has been~~ in awhich ~~transitionary phase~~our ~~since~~products ~~December~~are ~~2018~~sold, ~~when~~and ~~the Israeli Parliament~~accordingly, orwe ~~the~~often ~~Knesset,~~import ~~first~~a ~~resolved~~substantial tonumber ~~dissolve~~of ~~itself~~products ~~and call for new general~~into ~~elections~~such markets. ~~Since~~We ~~then~~may, ~~Israel~~therefore, ~~held~~be ~~general~~denied ~~elections~~access ~~three~~to ~~times~~our –customers inor ~~April~~suppliers ~~and~~or ~~September~~denied ofthe ~~2019~~ability ~~and~~to inship ~~March~~products from any of ~~2020.~~our Asites ~~fourth~~as ~~election~~a ~~took~~result ~~place~~of ~~on March 23, 2021. The Knesset has not passed~~ a ~~budget~~closing ~~for~~of the ~~year~~borders ~~2021,~~of ~~and~~the ~~certain~~countries ~~government ministries,~~in which ~~may~~we besell ~~critical~~our toproducts, ~~the~~or ~~operation~~in ofwhich our ~~business,~~operations are ~~without~~located, due ~~necessary~~to ~~resources~~economic, ~~and~~legislative ~~may~~or ~~not~~political ~~receive sufficient funding moving forward~~conditions. InThis ~~the~~could ~~event~~have ~~that~~a ~~the~~material ~~current~~negative ~~political~~impact ~~stalemate~~on isour ~~not~~operations, ~~resolved during 2021~~business, ~~our ability to conduct~~financial ~~our~~results ~~business~~and ~~effectively~~financial ~~may be adversely affected~~condition.

~~Finally, many~~Due ~~Israeli~~to ~~citizens~~the ~~are~~conflict ~~obligated~~between Russia toand ~~perform several days~~Ukraine, and in ~~some~~light ~~cases more,~~ of ~~annual~~sanctions ~~military~~imposed ~~reserve~~by ~~duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have~~ certain ~~occupations)~~countries ~~and,~~on ~~in the event of a military conflict~~Russia, ~~may~~our beBoard ~~called~~guided toour ~~active~~management ~~duty. In response~~ to ~~increases~~halt insales ~~terrorist activity, there have been periods~~to ofRussian ~~significant call-ups of military reservists~~customers. ItAs isa ~~possible~~result, ~~that~~our ~~there~~revenues will be ~~military reserve duty call-ups in the future. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management. Such disruption could materially~~ adversely ~~affect our business, prospects, financial condition and results of operations.~~impacted

~~The~~We derive a portion ~~Israeli~~of ~~government~~our ~~programs~~revenues infrom ~~which~~sales weto ~~currently~~resellers ~~participate,~~that ~~and~~are not the ~~Israeli~~end-users ~~tax~~of ~~benefits~~our weproducts. We are ~~currently entitled to~~dependent, ~~require us~~ to ~~meet~~a ~~several~~certain ~~conditions~~extent, ~~and~~on ~~they~~the ~~may~~ability of bethese ~~terminated~~resellers orto ~~reduced~~maintain intheir ~~the~~existing ~~future.~~business ~~This could increase our costs~~ and~~/or~~ ~~our~~secure ~~taxes~~new business.

We Some of our revenues are ~~entitled~~derived from sales to ~~certain~~customers ~~tax~~and ~~benefits~~distributors ~~under~~that ~~Israeli~~incorporate ~~government~~our ~~programs,~~products ~~largely~~into assystems awhich ~~result~~they ofsupply ~~the~~and ~~“Approved~~install ~~Enterprise”~~for use by their end-use ~~status~~customers. ~~granted~~While towe ~~some~~view ofsuch resellers as our ~~capital~~final ~~investment~~customers, ~~programs~~our byrevenues ~~the~~may ~~Israeli~~decline ~~Ministry~~if the efforts of ~~Finance,~~these ~~and~~resellers ~~due~~fail in their efforts to ~~eligibility~~sell oftheir ~~tax~~products ~~benefits under~~or ~~the~~to ~~“Preferred~~resell ~~Enterprise”~~our ~~routes~~products. ~~These~~Further, ~~benefits~~the ~~include~~faulty ~~tax exemption~~ or ~~reduced~~negligent ~~tax~~implementation ~~rates.~~and ~~Without~~installation ~~such~~of ~~benefits,~~our products by our ~~taxable~~customers ~~income~~or ~~would~~their beend-use ~~taxed~~customers atmay ~~the~~harm ~~regular~~our ~~corporate~~reputation ~~tax~~and ~~rate~~dilute ~~(23%~~our inbrand ~~2020)~~name. ToWe ~~maintain~~are ~~our~~one ~~eligibility~~step ~~for~~removed ~~these~~from ~~tax~~the ~~benefits,~~end-users weof ~~must~~our ~~continue~~products, toand ~~meet~~therefore ~~conditions,~~it ~~including~~may ~~making~~be ~~specified~~more ~~investments~~difficult infor ~~property,~~us ~~plant,~~to ~~and~~rectify ~~equipment~~damage ~~and~~to ~~maintaining a~~our ~~certain~~reputation ~~minimum~~caused ~~level~~by ofresellers ~~export~~that ~~sales.~~have Wedirect contact ~~cannot~~with ~~assure~~end-users. ~~that~~In weaddition, ~~will~~termination ~~continue~~of toagreements bewith ~~eligible~~resellers ~~for~~or ~~these~~revocation ~~tax~~of ~~benefits~~exclusive atdistribution ~~the~~rights ~~same~~within certain ~~rate~~countries ormight atbe ~~all~~difficult. ~~The~~If ~~termination~~we orare ~~reduction~~unable ofto ~~these~~maintain ~~programs~~our ~~and~~current ~~tax~~relationships ~~benefits~~with ~~could~~resellers ~~increase~~or ~~our~~develop ~~taxes,~~relationships ~~once~~with new resellers, we ~~become~~may ~~profitable, and~~not ~~could~~be ~~have~~able ato ~~material~~sell ~~adverse~~our ~~effect~~products, onand our ~~business~~results of operations could be impaired.

14While we also sell directly to end-users, our future success will depend upon the timing and size of future purchases by resellers and the success of their products and services for which they use our products.

~~Because we received grants from the Israeli Innovation Authority, we are subject to ongoing restrictions relating to our business.~~13

In the past, we have received royalty-bearing grants from the Israeli Innovation Authority (formerly the Office of the Chief Scientist of the Israeli Ministry of Economy), or the IIA, for research and development of certain of our products. We are ~~obligated~~exposed to ~~pay~~ ~~royalties~~credit risk with ~~respect~~some ~~to the grants that we received. In addition, the terms~~ of ~~the IIA grants limit~~ our ~~ability~~customers to manufacture products or transfer technologies outside of Israel if such products or technologies were developed using know-how developed with or based upon IIA grants. Pursuant to the Israeli Encouragement of Research and ~~Development in the Industry Law, we and any non-Israeli~~ ~~who becomes a holder of 5% or more of our share capital are generally required~~ to ~~notify~~credit ~~the~~exposures ~~IIA~~ and ~~such~~currency ~~non-Israeli shareholder is required to undertake to observe the law governing the grant programs of the IIA~~controls, ~~the principal restrictions of~~ which ~~are~~could ~~the transferability~~result ~~limits~~in ~~described~~material ~~above~~losses.

~~The terms~~A significant portion of ~~grants~~our net revenues is on an open credit basis that we ~~received~~provide ~~from~~to ~~the~~our ~~Israeli~~customers. ~~government~~While we assess collectability for ~~certain~~revenue ofrecognition ~~our~~purposes on ~~research~~a ~~and~~regular ~~development~~basis, ~~activities~~credit risks may ~~require~~be ushigher and collections may be more difficult to enforce, in ~~addition~~and future losses due to ~~the~~inability ~~payment~~to collect some or a major part of ~~royalties~~future revenues, toif ~~satisfy~~incurred, ~~specified~~could ~~conditions~~harm inour ~~order~~business toand ~~manufacture~~have ~~products~~a ormaterial ~~transfer~~adverse ~~technologies~~effect on our operating ~~outside~~results ofand ~~Israel~~financial condition. WeAdditionally, ~~may~~to ~~also~~the beextent ~~required~~that any uncertainty in the global economy makes it more difficult for some customers to obtain financing, our customers’ ability to pay ~~penalties~~could be adversely impacted, which in ~~addition~~turn tocould ~~repayment~~have ofa ~~the~~material ~~grants~~adverse impact on our business, cash flows, operating results, and financial condition.

~~Our research~~Risks ~~and~~Related development efforts, during the period between 1999 and 2006, were financed in part through royalty-bearing grants that we received from the IIA. As of December 31, 2020, we received a total of approximately $7 million from the IIA. The total amount of grants received as of December 31, 2020, net of royalties paid, was approximately $3.4 million (including accrued interest). With respect to ~~such~~Our ~~grants, we are committed to pay the IIA royalties at a rate of 3.5%-3% from our sales, up to the total amount~~Ordinary of grants received, linked to the dollar and bearing interest at an annual rate of LIBOR applicable to dollar deposits. Even following full repayment of the IIA grants, we are required to comply with the requirements of the Israeli Encouragement of Industrial Research and Development Law, 5744-1984, and related regulations, or the Research Law. When a company develops know-how, technology or products using IIA grants, the terms of these grants and the Research Law restrict the transfer of such know-how, and the transfer of manufacturing or manufacturing rights of such products, technologies or know-how outside of Israel, without the prior approval of the IIA. Therefore, if aspects of our technologies are deemed to have been developed with IIA funding, the discretionary approval of an IIA committee would be required for any transfer to third parties outside of Israel of IIA-supported know-how or manufacturing or manufacturing rights related to those aspects of such technologies, and may result in payment of increased royalties (both increased royalty rates and increased royalties ceilings) and/or payment of additional amounts to the IIA. We may not receive such approvals. Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer technology or development out of Israel (including for the purpose of manufacturing). Licensing IIA-supported technologies may, under certain circumstances, be considered a transfer of know-how and therefore may require approval as aforementioned.Shares

~~The transfer~~Failure ofto ~~IIA-supported~~meet ~~technology,~~the ~~manufacturing~~Standards orfor ~~manufacturing~~Continued Qualification ~~rights~~for ~~or know-how outside of Israel may involve~~ the ~~payment of~~OTCQX ~~additional~~International ~~amounts~~Tier ~~depending~~as ~~upon~~per the ~~value~~OTCQX ofRules ~~the~~for ~~transferred~~International ~~technology~~Companies orcould ~~know-how,~~result ~~the~~in ~~amount~~moving ~~of IIA support,~~ the ~~time~~Company’s ofsecurities ~~completion~~to of the ~~IIA-supported~~OTC ~~research~~Pink ~~project~~ and ~~other~~eventually ~~factors~~cause uplimited toliquidity ~~a maximum of six times the amount of the grants received. These restrictions~~ and ~~requirements~~a ~~for~~lower ~~payment~~price ~~may~~per ~~impair our ability to sell our technology assets outside of Israel or to outsource or transfer development or manufacturing activities with respect to any product or technology outside of Israel~~share.

~~Furthermore~~On February 16, 2022, we received a notice from the ~~consideration~~OTC ~~available~~Markets toGroup ~~our~~stating ~~shareholders~~that inwe afailed ~~transaction~~to ~~involving~~meet the ~~transfer~~standards ~~outside~~for ofcontinued ~~Israel~~qualification offor ~~technology~~the orquotation ~~know-how~~of our ~~developed~~shares ~~with~~on ~~IIA~~the ~~funding~~OTC ~~(such~~Markets, as our per share minimum bid price was lower than $0.10 and our market capitalization has stayed below $5,000,000 for more than 30 consecutive days. We were given a ~~merger~~cure orperiod ~~similar~~of ~~transaction)~~180 ~~may~~days beduring ~~reduced~~which bywe ~~any~~must ~~amounts~~meet the applicable criteria for 10 consecutive trading days. In the event that wesuch criteria are ~~required~~not met during the cure period, our securities will be moved from the OTCQX International to ~~pay~~OTC Pink, which might result in a more limited liquidity and price of our securities, and might make it harder for you to sell your shares. You may be unable to ~~the~~sell ~~IIA~~your securities unless a market can be established or sustained.

Our ~~obligations~~ ~~and~~share ~~limitations~~price ~~pursuant~~has fluctuated toin the ~~Research~~past ~~Law are not limited in time~~ and may ~~not~~continue beto ~~terminated~~fluctuate byin usthe ~~at will~~future.

ItThe market price of our Ordinary Shares has fluctuated significantly and may continue to do so. The market price of our Ordinary Shares may be ~~difficult~~significantly toaffected ~~enforce~~by factors asuch ~~U.S.~~as ~~judgment~~the ~~against~~announcements of new products or product enhancements by us or our competitors, technological innovations by us or our ~~officers~~competitors ~~and~~or ~~directors~~periodic variations in our results of operations. In addition, any statements or changes in estimates by analysts covering our shares or relating to ~~assert~~the ~~U.S.~~industries ~~securities~~in ~~law~~which ~~claims~~we operate could result in an immediate effect that may be adverse to the market price ~~Israel~~of our shares.

~~We are~~Trading ~~incorporated~~ in ~~Israel.~~shares ~~Some~~ of ~~our~~companies listed ~~executive~~on ~~officers~~OTCQX ~~are~~in ~~not residents of the United States~~general, and atrading ~~substantial~~in ~~portion~~shares of ~~our~~ ~~assets~~technology iscompanies ~~located~~in ~~outside~~particular, ofhas ~~the~~been ~~United~~subject ~~States.~~to ~~Therefore,~~extreme itprice ~~may~~and bevolume fluctuations ~~difficult~~that ~~for~~have anbeen ~~investor,~~unrelated or ~~any~~disproportionate ~~other person or entity,~~ to ~~enforce~~operating ~~a U~~performance.S. ~~court~~These ~~judgment~~factors ~~based~~may ~~upon~~depress the ~~civil~~market ~~liability~~price ~~provisions~~ of ~~the U.S. federal securities laws in an Israeli court~~our ~~against~~Ordinary usShares, orregardless ~~any~~ of ~~these~~our ~~persons~~actual oroperating ~~to affect service of process upon these persons in the United States~~performance. ~~Additionally, it may be difficult for an investor, or any other person or entity, to enforce civil liabilities under U.S. federal securities laws in original actions instituted in Israel.~~

~~Provisions~~Securities litigation has also often been brought against companies following periods of ~~Israeli~~volatility ~~law~~in ~~may~~the ~~delay,~~market ~~prevent~~price orof ~~make~~its ~~undesirable~~securities. anIn ~~acquisition~~the future, we may be the target of ~~all~~similar orlitigation athat ~~significant~~could ~~portion~~result in substantial costs and diversion of our ~~shares~~management’s orattention ~~assets~~and resources.

~~The Companies~~There ~~Law~~is ~~regulates~~a ~~acquisitions~~limited ofmarket ~~shares through tender offers, requires special approvals~~ for ~~transactions~~our ~~involving shareholders~~Ordinary ~~holding 25% or more of a company’s capital~~Shares, and ~~regulates other matters that may be relevant to these types of transactions. These provisions of Israeli law could have~~ the ~~effect~~trading ~~of delaying or preventing a change in control and may make it more difficult for a third party to acquire us, even if doing so would be beneficial to our shareholders. These provisions may limit the~~ price ~~that~~ ~~investors~~of ~~may be willing to pay in the future for~~ our Ordinary Shares. ~~Furthermore,~~is ~~Israeli~~subject ~~tax considerations may make potential transactions undesirable~~ to ~~us or to some of our shareholders~~volatility.

15Our Ordinary Shares began trading on the OTCQX in October 2019, following the delisting of our Ordinary Shares from the Nasdaq Capital Market. Because our Ordinary Shares are no longer listed on a registered national securities exchange, we are subject to certain “blue sky” laws of the various states which impose restrictions on our ability to offer and sell our securities. These “blue sky” laws may make it more difficult for us to raise capital or to issue our Ordinary Shares for equity compensation or other strategic purposes, which could adversely affect our ability to fund our operations or to attract and retain employees. In addition, our Ordinary Shares may be defined as a “penny stock” under Rule 3a51-1 under the Exchange Act. “Penny stocks” are subject to Rule 15g-9, which imposes additional sales practice requirements on broker-dealers that sell low-priced securities to persons other than established customers and institutional accredited investors. For transactions covered by this rule, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. Consequently, the rule may affect the ability of broker-dealers to sell our Ordinary Shares and affect the ability of holders to sell their Ordinary Shares in the secondary market. To the extent our share is subject to the penny stock regulations, the market liquidity for the Ordinary Shares will be adversely affected.

~~General~~We may need additional ~~Risk~~funds ~~Factors~~in the future and our share price could be adversely affected by future sales of our Ordinary Shares.

~~If we~~We ~~fail~~experienced an immediate need to ~~hire,~~raise ~~train~~funds and ~~retain~~on ~~qualified~~January ~~research~~27, ~~and~~2022, ~~development~~we ~~personnel~~entered into the Nayax Loan, ~~our~~which, ~~ability~~according to ~~enhance~~the Merger Agreement, will, following the completion of the Merger, become our ~~existing~~parent ~~products~~company. Under the Loan Agreement we received from Nayax a loan in the amount of $5,500,000, ~~develop~~or ~~new~~the ~~products~~Nayax ~~and~~Loan ~~compete~~Amount. ~~successfully~~Non-completion ~~may~~of the Merger would be ~~materially~~considered an “event of default” under the Nayax Loan Agreement, which can result in Nayax’s requirement for an immediate repayment of the Nayax Loan Amount, or an increase of the annual interest on the Nayax Loan Amount from 10% to 16%, at Nayax’s sole discretion. At any time after the earlier of (i) an event of default, as contemplated in the Nayax Loan Agreement, or (ii) the completion of the Merger Agreement, and ~~adversely~~prior ~~affected~~to the repayment of the Nayax Loan Amount, Nayax is entitled, at its sole discretion, to convert the Nayax Loan Amount into ordinary shares of the Company at a price per share equal to $0.043. Failure to complete the Merger could create, among other things discussed above, dilution to the existing shareholders.

Our success depends, in part, on our ability to hire and train qualified research and development personnel. Individuals who have expertise in research and development in our industry are scarce. Competition for such personnel is intense, particularly in Israel. Consequently, hiring, training and retaining such personnel is time-consuming and expensive. If we fail to hire, train and retain employees with skills in research and development, we may not be able to enhance our existing products or develop new products.14

~~Security breaches~~Our ~~and~~shareholders ~~system failures~~ could experience ~~expose~~dilution usof totheir ~~liability,~~ownership ~~harm~~interest ~~our~~by ~~business~~reason orof ~~result~~our inissuing ~~the~~more ~~loss of customers~~shares.

~~We retain~~Under ~~sensitive~~Israeli ~~data~~law, ~~including~~shareholders in ~~intellectual~~public ~~property,~~companies ~~books~~do ofnot ~~record~~have ~~and~~preemptive ~~personally~~rights ~~identifiable~~unless ~~information,~~those onrights ~~our~~are ~~networks. It~~provided ispursuant ~~critical~~ to ~~our~~a ~~business~~contract. ~~strategy~~This means that generally our shareholders ~~infrastructure~~do ~~and~~not ~~other~~have ~~infrastructure~~the welegal ~~use~~right to ~~host~~purchase ~~our~~shares ~~solutions~~in ~~remain~~a ~~secure, do~~new ~~not~~issue ~~suffer~~before ~~system~~they ~~failures and~~ are ~~perceived~~offered byto ~~customers~~third ~~and~~parties. ~~partners~~However, pursuant to bethe ~~secure~~terms and ~~reliable.~~provisions ~~Despite~~of ~~our~~the ~~security~~share ~~measures~~purchase agreement, ~~our~~ ~~infrastructure~~or ~~and~~ the ~~third-party~~Share ~~infrastructure~~Purchase weAgreement, ~~use~~dated toDecember ~~host~~23, ~~our~~2019, ~~solutions~~Ivy ~~may~~has bea ~~vulnerable~~ right to ~~attacks~~purchase byany ~~hackers~~future ~~or other~~equity ~~disruptive~~securities ~~problems.~~offered ~~Any~~by ~~security~~us, ~~breach~~except orwith ~~system~~respect ~~failure~~to ~~may~~certain ~~compromise~~exempt ~~information~~issuances ~~stored~~as onset ~~our~~forth ~~networks.~~in ~~Such~~the anShare ~~occurrence~~Purchase ~~could~~Agreement. ~~negatively~~As ~~affect~~a result, our ~~reputation~~shareholders ascould aexperience ~~trusted~~dilution ~~provider~~of their ownership interest by reason of our raising additional funds through the ~~affected~~issuance ~~solutions~~of Ordinary Shares.

~~Changes in~~We ~~international~~do ~~markets~~not ~~and~~anticipate paying ~~difficulties~~cash ~~with~~dividends ~~international~~in ~~operations~~the ~~could~~foreseeable ~~harm our business~~future.

We have never declared or ~~derive~~paid ~~revenues~~cash ~~from~~dividends ~~different~~on ~~geographical~~our ~~areas.~~Ordinary ~~Our~~Shares, ~~ability~~and towe ~~maintain~~do ~~our~~not ~~position~~anticipate paying cash dividends in ~~existing~~the ~~markets~~foreseeable ~~and/or~~future. Any return to ~~penetrate~~investors ~~new,~~is ~~regional~~expected ~~and~~to ~~local~~come, ~~markets~~if isat ~~dependent~~all, inonly ~~part,~~from onpotential increases in the ~~stability~~price of ~~regional~~our ~~and~~Ordinary ~~local economies~~Shares. ~~Our~~The ~~regional~~payment ~~sales~~of ~~may~~any dividends by the ~~continue~~Company tois ~~fluctuate~~solely ~~widely~~at ~~and~~the ~~may~~discretion beof ~~adversely~~our ~~impacted~~Board byand ~~future~~based ~~political~~on orthe ~~economic~~conditions ~~instability~~set forth in ~~these~~the orIsraeli ~~other~~Companies ~~foreign countries~~Law, 1999, or ~~regions~~the Companies Law.

~~In addition,~~Risks ~~there~~Related ~~are~~to ~~inherent~~Conducting Business ~~risks~~ in ~~these international operations which include, among others:~~Israel

●Provisions ~~changes~~of inIsraeli ~~regulatory~~law ~~requirements~~may make it easy for our shareholders to demand that we convene a shareholders meeting, and/or ~~communications~~allow ~~standards;~~shareholders to convene a shareholder meeting without the consent of our management, which may disrupt our management’s ability to run our company.

●Section ~~changes~~63(b) of the Companies Law may allow any one or more of our shareholders holding at least 5% of our voting rights to demand that we convene an extraordinary shareholders meeting. Also, in ~~external~~the ~~political~~event ~~policies~~that we choose not to convene an extraordinary shareholders meeting pursuant to such a request, Sections 64-65 of the Companies Law provide, among others, that such shareholders may independently convene an extraordinary shareholders meeting within three months (or under court’s ruling) and require us to cover the costs, within reason, and as ~~embargos~~a ~~based~~result onthereof, our ~~manufacturing~~directors ~~origin;~~might be required to repay us such costs. If our shareholders decide to exercise these rights in a way inconsistent with our management’s strategic plans, our management’s ability to run our company may be disrupted, and this process may entail significant costs to us.

●Potential political, economic and ~~economic~~military instability; in the State of Israel, where our senior management and a majority of our facilities are located, may adversely affect our results of operations.

●Our ~~required~~headquarters ~~licenses~~and principal offices, ~~tariffs~~and a substantial portion of our operations, are located in the State of Israel. In addition, all of our officers are residents of Israel, Accordingly, political, economic and ~~other~~military ~~trade~~conditions ~~barriers;~~in Israel directly affect our business.

●Any ~~difficulties~~hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners, or a significant downturn in ~~enforcing~~the IPeconomic or ~~rights~~financial ~~across~~condition of Israel, could affect adversely our operations. Ongoing and revived hostilities or ~~having~~other toIsraeli ~~litigate~~political ~~disputes~~or economic infactors could harm our operations, ~~various~~product ~~jurisdictions;~~development and results of operations.

~~● difficulties in staffing and managing international operations;~~15

●Although Israel ~~potentially~~has ~~adverse~~entered ~~tax~~into ~~consequences~~various agreements with Egypt, Jordan, the Palestinian Authority and with various states in the Persian Gulf, there has been a continuous unrest and terrorist activity with varying levels of severity, the most recent of which was the armed conflict with Hamas in May 2021. In addition, Israel faces threats from more distant neighbors, in particular, Iran. Our insurance policies do not cover us for the damages incurred in connection with these conflicts or for any resulting disruption in our operations. The Israeli government, as a matter of law, provides coverage for the reinstatement value of direct damages that are caused by terrorist attacks or acts of war; however, the government may cease providing such coverage or the coverage might not be enough to cover potential damages. In the event that hostilities disrupt the ongoing operation of our facilities or the airports and seaports on which we depend to import and export our supplies and products, our operations may be materially adversely affected.

●Several countries, principally in the ~~burden~~Middle ofEast, ~~complying~~still restrict doing business with Israel and Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies, whether as a ~~wide~~result ~~variety~~of hostilities in the region or otherwise. In addition, there have been increased efforts by activists to cause companies, research institutions and consumers to boycott Israeli goods and cooperation with Israeli-related entities based on Israeli government policies. Such actions, particularly if they become more widespread, may adversely impact our ability to cooperate with research institutions and collaborate with other third parties. Any hostilities involving Israel, any interruption or curtailment of ~~complex~~trade ~~laws~~or scientific cooperation between Israel and ~~treaties~~its present partners, or a significant downturn in ~~various~~the ~~jurisdictions;~~economic or financial condition of Israel could adversely affect our business, financial condition and results of operations. We may also be targeted by cyber terrorists specifically because we are an Israeli-related company.

●Finally, many ~~business~~Israeli ~~interruptions~~citizens ~~resulting~~are ~~from~~obligated ~~geopolitical~~to ~~actions,~~perform ~~including~~several ~~war~~days, and ~~terrorism~~in some cases more, of annual military reserve duty each year until they reach the age of 40 (or ~~natural~~older, ~~disasters~~for ~~including~~reservists who are military officers or who have certain occupations) and, in the ~~recent~~event ~~spread~~of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. It is possible that there will be military reserve duty call-ups in the ~~coronavirus,~~future. ~~earthquakes~~Our operations could be disrupted by such call-ups, ~~typhoons~~which may include the call-up of members of our management. Such disruption could materially adversely affect our business, ~~floods~~prospects, financial condition and ~~fires~~results of operations.

IfThe weIsraeli ~~are~~government ~~unable~~programs toin ~~manage~~which we currently participate, and the ~~risks~~Israeli ~~associated~~tax ~~with~~benefits ~~our~~we ~~focus~~are oncurrently ~~international~~entitled ~~sales~~to, ~~our~~require ~~business~~us to meet several conditions, and they may be ~~harmed~~terminated or reduced in the future. This could increase our costs and/or our taxes.

~~Currency~~We ~~fluctuations~~are ~~could~~entitled ~~adversely~~to ~~affect~~certain tax benefits under Israeli government programs, largely as a result of the “Approved Enterprise” status granted to some of our ~~results~~capital investment programs by the Israeli Ministry of ~~operations~~Finance, and due to eligibility of tax benefits under the “Preferred Enterprise” routes. These benefits include tax exemption or reduced tax rates. Without such benefits, our taxable income would be taxed at the regular corporate tax rate (23% in 2021). To maintain our eligibility for these tax benefits, we must continue to meet conditions, including making specified investments in property, plant, and equipment and maintaining a certain minimum level of export sales. We cannot assure that we will continue to be eligible for these tax benefits at the same rate or at all. The termination or reduction of these programs and tax benefits could increase our taxes, once we become profitable, and could have a material adverse effect on our business.

~~We generate a significant~~Because ~~portion of our revenues in U.S. Dollars, but~~ we ~~incur~~received ~~some~~grants offrom ~~our~~the ~~expenses in other currencies. Our principal non-U.S. Dollar expenses are for~~ Israeli ~~employees’~~Innovation ~~salaries~~Authority, ~~which are in New Israeli Shekels, or NIS. Our subsidiary in Poland, ASEC, that on March 29, 2021,~~ we entered into an agreement to sell, incurs expenses in Polish Zloty and our subsidiary in South Africa, OTI PetroSmart, incurs expenses in South African Rand. To the extent that we and our subsidiaries conduct our business in different currencies, our revenues and expenses and, as a result, our assets and liabilities, are ~~not~~subject ~~necessarily accounted for in the same currency. We are therefore exposed~~ to ~~foreign~~ongoing ~~currency~~restrictions ~~exchange~~relating ~~rate fluctuations. These fluctuations may negatively affect our results of operations. Our operations could also be adversely affected if we are unable~~ to ~~limit~~ our ~~exposure to currency fluctuations in the future~~business.

16In the past, we have received royalty-bearing grants from the Israeli Innovation Authority (formerly the Office of the Chief Scientist of the Israeli Ministry of Economy), or the IIA, for research and development of certain of our products. We are obligated to pay royalties with respect to the grants that we received. In addition, the terms of the IIA grants limit our ability to manufacture products or transfer technologies outside of Israel if such products or technologies were developed using know-how developed with or based upon IIA grants. Pursuant to the Israeli Encouragement of Research and Development in the Industry Law, we and any non-Israeli who becomes a holder of 5% or more of our share capital are generally required to notify the IIA and such non-Israeli shareholder is required to undertake to observe the law governing the grant programs of the IIA, the principal restrictions of which are the transferability limits described above.

To mitigate the risk of financial exposure to fluctuations in the exchange rate of the U.S. Dollar against the NIS or other currencies, we may enter into currency hedging transactions. However, these measures may not adequately protect us from material adverse effects resulting from currency fluctuations. In addition, if we wish to maintain the U.S. Dollar-denominated value of sales made in other currencies, any devaluation of the other currencies relative to the U.S. Dollar would require us to increase our other currency denominated selling prices which could negatively affect our sales.16

The ~~general~~terms ~~economic~~of ~~outlook~~grants ~~may~~we ~~adversely~~received ~~affect~~from the Israeli government for certain of our ~~business~~research and development activities may require us, in addition to the payment of royalties, to satisfy specified conditions in order to manufacture products or transfer technologies outside of Israel. We may also be required to pay penalties in addition to repayment of the grants.

Our ~~operations~~research and ~~performance~~development ~~depend~~efforts, onduring ~~worldwide~~the ~~economic~~period ~~conditions~~between 1999 and ~~their~~2006, ~~impact~~were onfinanced ~~levels~~in part through royalty-bearing grants that we received from the IIA. As of ~~business~~December ~~and~~31, ~~public~~2021, ~~spending~~we received a total of approximately $7 million from the IIA. The total amount of ~~Fluctuations~~grants orreceived ~~downturns~~as inof ~~global~~December or31, ~~regional~~2021, ~~economies~~net ~~may~~of ~~adversely~~royalties ~~affect~~paid, was approximately $3.4 million (including accrued interest). With respect to such grants, we are committed to pay the ~~budgeting~~IIA ~~and~~royalties ~~purchasing~~at ~~behavior~~a rate of 3%-3.5% from our ~~customers~~sales, up to the total amount of grants received, linked to the dollar and ~~our~~bearing ~~potential~~interest ~~customers,~~at ~~including~~an ~~shifting~~annual ~~customers~~rate of LIBOR applicable to dollar deposits. The United Kingdom’s ~~purchasing~~Financial Conduct ~~patterns~~Authority, which regulates LIBOR, announced in July 2017 that it will no longer persuade or require banks to ~~lower-cost~~submit ~~options~~rates for LIBOR after 2021. In September 2021, the Bank of Israel, which ~~could~~determines ~~adversely~~annual interest rates, published a directive which stated that annual interest at a variable rate linked to the LIBOR rate for loans in U.S. dollars will be replaced by the Secured Overnight Financing Rate, or the SOFR, in June 2023. It is not clear as of yet whether the IIA will replace the LIBOR with SOFR and when. While it is not currently possible to determine precisely whether, or to what extent, the replacement of LIBOR with SOFR would affect us, the implementation of SOFR may increase our ~~product~~financial ~~sales~~liabilities to the IIA.

InEven following full repayment ~~addition~~of the IIA grants, ~~uncertainties~~we inare ~~financial~~required ~~and~~to ~~credit~~comply ~~markets~~with ~~may~~the ~~adversely~~requirements ~~affect~~of the ~~ability~~Israeli Encouragement of ~~our~~Industrial ~~customers~~Research and Development Law, ~~suppliers~~5744-1984, ~~distributors~~ and ~~resellers~~related toregulations, ~~obtain~~or ~~financing~~the ~~for~~Research ~~significant~~Law. ~~purchases~~When ~~and~~a ~~operations~~company develops know-how, technology or products using IIA grants, the terms of these grants and tothe ~~fulfill~~Research ~~their~~Law ~~contractual~~restrict ~~obligations~~the ~~with~~transfer ~~us.~~of such know-how, and the transfer of manufacturing or manufacturing Asrights aof ~~result~~such products, wetechnologies ~~could~~or ~~encounter~~know-how outside of Israel, ~~among~~without ~~other~~the ~~adverse~~prior ~~effects~~approval of the IIA. Therefore, aif ~~decrease~~aspects inof orour technologies ~~cancellation~~are deemed to have been developed with IIA funding, the discretionary approval of ~~orders~~an IIA committee would be required for any ~~our~~transfer ~~products~~to third parties outside of Israel of IIA-supported know-how or manufacturing or manufacturing rights related to those aspects of such technologies, and ~~an increase~~may result in payment of increased royalties (both increased royalty rates and increased royalty ceilings) and/or payment of additional ~~reserves~~amounts to the IIA. We may not receive such approvals. Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer technology or development out of Israel (including for ~~uncollectible~~the ~~accounts~~purpose ~~receivable~~of ~~being~~manufacturing). Licensing ~~required~~IIA-supported technologies may, under certain circumstances, be considered a transfer of know-how and therefore may require approval as aforementioned.

WeThe transfer of IIA-supported technology, manufacturing or manufacturing rights or know-how outside of Israel may ~~fail~~involve tothe ~~maintain~~payment ~~effective~~of additional ~~internal~~amounts ~~control~~depending inupon ~~accordance~~the ~~with~~value ~~Section~~of ~~404~~the transferred technology or know-how, the amount of IIA support, the ~~Sarbanes~~time of completion of the IIA-~~Oxley~~supported ~~Act~~research project and other factors up to a maximum of ~~2002~~six times the amount of the grants received. These restrictions and requirements for payment may impair our ability to sell our technology assets outside of Israel or to outsource or transfer development or manufacturing activities with respect to any product or technology outside of Israel.

~~The~~Furthermore, ~~Sarbanes-Oxley~~the ~~Act~~consideration ofavailable ~~2002~~to ~~imposes certain duties on us and~~ our ~~executives~~shareholders ~~and directors. Our efforts to comply with the requirements of the Sarbanes-Oxley Act, and~~ in ~~particular with Section 404, have resulted in increased general and administrative expenses and~~ a ~~diversion~~transaction ofinvolving ~~management time and attention, and we expect these efforts to require~~ the ~~continued~~transfer ~~commitment~~outside of ~~resources. If~~Israel ~~we fail to maintain the adequacy~~ of ~~our~~technology internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting. Although our management has determined that we had effective internal control over financial reporting as of December 31, 2020, we may identify material weaknesses or ~~significant~~know-how ~~deficiencies~~developed inwith ~~our~~IIA ~~future~~funding ~~internal~~(such ~~control over financial reporting. In addition,~~ as a ~~smaller~~merger ~~reporting~~or ~~company,~~similar ~~our~~transaction) ~~internal~~may ~~control over financial reporting is not required to~~ be ~~audited~~reduced by ~~our~~any ~~independent~~amounts ~~registered~~that ~~public~~we ~~accounting~~are ~~firm.~~required ~~Failure~~ to ~~maintain~~pay ~~effective internal~~to control over financial reporting could result in investigation or sanctions by regulatory authorities and could have a material adverse effect on our operating results, investor confidence in our reported financial information, and the ~~market price of our Ordinary Shares~~IIA.

~~Item~~Our ~~1B.~~obligations ~~Unresolved~~and ~~Staff~~limitations ~~Comments~~pursuant to the Research Law are not limited in time and may not be terminated by us at will.

~~None.~~17

~~Item~~It 2may be difficult to enforce a U.S. ~~Properties~~judgment against us, our officers and directors or to assert U.S. securities law claims in Israel.

We ~~lease~~are ~~700~~incorporated ~~square meters~~ in ~~Yokne’am,~~ Israel,. ~~which~~Some ~~serves~~of as our ~~headquarters.~~executive ~~This~~officers ~~lease~~are ~~expires~~not onresidents ~~January~~of 31the United States, ~~2025~~and ~~with~~a substantial portion of our assets anis ~~option~~located outside of athe ~~5-year~~United ~~extension~~States. ~~which~~Therefore, ~~shall~~it ~~begin~~may onbe ~~February~~difficult 1for an investor, ~~2025~~or ~~and~~any ~~ends~~other onperson ~~January~~or 31entity, ~~2030~~to enforce a U.S. Wecourt ~~also~~judgment ~~lease~~based ~~260~~upon ~~square~~the ~~meters~~ civil liability provisions of the U.S. federal securities laws in ~~Rosh~~an ~~Pina,~~Israeli ~~Israel,~~court ~~where~~against ~~our~~us ~~research~~or ~~and~~any of ~~development~~these ~~functions~~persons ~~are~~or ~~located.~~to ~~This~~affect ~~lease~~service ~~will~~of ~~expire~~process onupon ~~August~~these 30persons in the United States. Additionally, ~~2023~~it ~~subject~~may be difficult for an investor, or any other person or entity, to ~~three~~enforce ~~one-year~~civil ~~options~~liabilities ofunder ~~extension~~U.S. federal securities laws in original actions instituted in Israel.

WeProvisions ~~believe~~of ~~that~~Israeli ~~the~~law ~~current~~may ~~space~~delay, weprevent ~~have~~or ismake ~~adequate~~undesirable toan ~~meet~~acquisition ~~our~~of ~~current~~all ~~and~~or ~~near~~a ~~future~~significant ~~needs~~portion of our shares or assets.

~~Item~~The 3Companies Law regulates acquisitions of shares through tender offers, requires special approvals for transactions involving shareholders holding 25% or more of a company’s capital, and regulates other matters that may be relevant to these types of transactions. ~~Legal~~These provisions ~~Proceedings~~of Israeli law could have the effect of delaying or preventing a change in control and may make it more difficult for a third party to acquire us, even if doing so would be beneficial to our shareholders. These provisions may limit the price that investors may be willing to pay in the future for our Ordinary Shares. Furthermore, Israeli tax considerations may make potential transactions undesirable to us or to some of our shareholders.

~~For~~General ~~information~~Risk ~~with~~Factors respect to legal proceedings to be disclosed under this Item, see Note 10E to the consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data” of this Annual Report.

~~Item~~Our 4.Board ~~Mine~~and ~~Safety~~committees ~~Disclosures~~do not currently meet the requirements mandated under the Israeli Companies Law.

~~Not~~Due ~~Applicable~~to the resignation of three members of the Board during December of 2021, including the resignation of an external director on December 26, 2021, the resignation of the Board’s chairperson on December 28, 2021 and the resignation of an additional director on December 30, 2021, our Board’s composition does not meet the Companies Law’s requirements for a public company’s composition of the board of directors. Section 114 of the Companies Law mandates that a public company is required to appoint an audit committee, while Section 115 of the Companies Law provides that the audit committee should be comprised of a minimum of three members, including all acting external directors of the board and at least a majority of independent directors. Section 115 also mandates that the chairman of the board will not be a member of the audit committee. Section 118A of the Companies Law further mandates a requirement for public companies to appoint a compensation committee, while applying the same requirements as to the composition thereof. Following the resignation of three members of the Board, there are only three members remaining on our Board, one of which was appointed chairman in accordance with the requirements of Section 94(a) of the Companies Law. Due to the fact that a chairman may not serve as a member of the audit or compensation committees, and that such committees must include two members who are external directors, while we have one external director only, the Board does not meet the Companies Law’s requirements with respect to the structure of such committees.

17In addition, Section 239(b) of the Companies Law determines that external directors of a public company shall be appointed at a general meeting of shareholders. Due to this requirement of Section 239(b), we are currently unable to appoint a replacement to the external director who resigned in order to bring ourselves to be in compliance with the requirements of the Companies Law. An additional factor which prevents us from being able to comply with requirements of the Companies Law is the fact that due to our financial state, the acting directors receive minimal compensation while they deal with a greater exposure to complaints relating to their fiduciary duties, which are duties of directors set under the Companies Law and the Israeli case law.

~~PART~~Furthermore, IIour Articles of Association provide under Article 4.2 that the number of the directors on the Board shall not be fewer than five. Article 4.2.11 provides that if the number of directors falls below the minimum number, the remaining directors shall be entitled to act solely in order to (i) fill in the vacant position, (ii) in order to convene a general meeting of the Company’s shareholders or (iii) act to manage the Company’s affairs solely in matters that cannot be delayed.

~~Item~~Due 5.to ~~Market~~the ~~for~~structural ~~Registrant’s~~issues ~~Common~~described ~~Equity~~above, ~~Related~~we ~~Stockholder~~may ~~Matters~~not ~~and~~be ~~Issuer~~able ~~Purchases~~to ofpass ~~Equity~~certain ~~Securities~~resolutions that may be beneficial to us.

~~Our Ordinary Shares are quoted on the OTCQX Market under the symbol “OTIVF”.~~18

~~Record~~If ~~Holders~~we fail to hire, train and retain qualified research and development personnel, our ability to enhance our existing products, develop new products and compete successfully may be materially and adversely affected.

~~Based~~Our onsuccess adepends, ~~review~~in ofpart, ~~the~~on ~~information~~our ~~provided~~ability to ushire byand ~~our~~train ~~transfer~~qualified ~~agent,~~research asand ofdevelopment ~~March~~personnel. ~~25,~~Individuals ~~2021,~~who ~~there~~have ~~were~~expertise in 21research ~~holders~~and ofdevelopment ~~record~~in of our ~~Ordinary~~industry ~~Shares~~are scarce. ~~This~~Competition ~~number~~for ~~may~~such ~~not~~personnel beis ~~representative~~intense, ofparticularly ~~the~~in ~~actual~~Israel. ~~number~~Consequently, hiring, oftraining ~~beneficial~~and ~~holders~~retaining ofsuch ~~our~~personnel ~~shares~~is ~~since~~time-consuming ~~many~~and expensive. If we fail to hire, train and retain employees with skills ofin ~~our~~research ~~Ordinary~~and ~~Shares~~development, ~~are~~we ~~held~~may ofnot ~~record~~be byable ~~brokers~~to enhance our existing products or ~~other~~develop ~~nominees~~new products.

~~Item~~Security 6.breaches ~~Selected~~and ~~Financial~~system ~~Data~~failures could expose us to liability, harm our business or result in the loss of customers.

~~Not~~We ~~applicable~~retain sensitive data, including intellectual property, books of record and personally identifiable information, on our networks. It is critical to our business strategy that our infrastructure and other infrastructure we use to host our solutions remain secure, do not suffer system failures and are perceived by customers and partners to be secure and reliable. Despite our security measures, our infrastructure and the third-party infrastructure we use to host our solutions may be vulnerable to attacks by hackers or other disruptive problems. Any security breach or system failure may compromise information stored on our networks. Such an occurrence could negatively affect our reputation as a trusted provider of the affected solutions.

~~Item~~Changes 7.in ~~Management’s~~international ~~Discussion~~markets and ~~Analysis~~difficulties ofwith ~~Financial~~international ~~Condition~~operations ~~and~~could ~~Results~~harm ofour ~~Operations~~business.

~~This~~We ~~discussion~~derive ~~and~~revenues ~~analysis~~from ~~should~~different begeographical ~~read~~areas. inOur ~~conjunction~~ability ~~with~~to maintain our ~~consolidated~~position ~~financial~~in ~~statements~~existing markets and/or ~~notes~~to ~~thereto~~penetrate ~~contained~~new, regional and local markets is dependent, in ~~“Item~~ 8part, on the stability of regional and local economies. ~~Financial~~Our ~~Statements~~regional sales may continue to fluctuate widely and ~~Supplementary~~may ~~Data”~~be ofadversely ~~this~~impacted ~~Annual~~by ~~Report~~future political or economic instability in these or other foreign countries or regions.

~~Overview~~In addition, there are inherent risks in these international operations which include, among others:

We● ~~are~~changes ain ~~leading~~regulatory ~~developer of~~requirements ~~contactless payment solutions, Near Field Communication (NFC) technology based, for the unattended market. We have been a technology leader since 1990, providing systems, devices~~ and ~~services~~communications ~~to operators and integrators with solutions and components that are simple to implement.~~standards;

To● ~~date,~~changes wein ~~have~~external ~~deployed~~political ~~over one million payment solutions to our focused unattended markets: self-service kiosk~~policies, ~~micro-markets~~such ~~and~~as ~~vending~~embargos ~~machines,~~based ~~entertainment~~on ~~and~~manufacturing ~~gaming, ATM, Mass Transit Ticketing Validation, and fuel payments.~~origin;

We● ~~operate~~political ~~through regional offices, supporting clients~~ and ~~payment~~economic ~~industry partners with its unique contactless payment solutions.~~instability;

On● ~~March~~required 29licenses, ~~2021,~~tariffs ~~we entered into an agreement, or the Sale Agreement, for the sale of 100% of the issued~~ and ~~outstanding~~other ~~share~~trade capital of our wholly owned Polish subsidiary, ASEC S.A., or ASEC, with Vector Software SP. Z O.O., or the Buyer. ASEC is headquartered in Krakow, Poland and has been conducting our Mass Transit Ticketing business in Europe. The consideration for ASEC is $3,000,000, of which approximately $2,100,000 shall be used to repay Polish banks loans at the closing date, as mentioned in the Sale Agreement, further offset by minor adjustments. The Sale Agreement contains customary representations and warranties, as well as covenants, including an undertaking we provided not to compete with the business of ASEC for a period of five years after the closing and an undertaking to indemnify ASEC and the Buyer for certain damages. Our liability is limited to the purchase price actually paid by the Buyer.barriers;

In● ~~addition,~~difficulties wein ~~engaged~~enforcing ~~an investment~~IP ~~bank~~rights toacross, ~~explore~~or ~~strategic~~having ~~options~~to ~~and~~litigate ~~are~~disputes ~~investing resources~~ in, ~~this~~various ~~process.~~jurisdictions;

~~We were~~● ~~incorporated~~difficulties ~~under~~in ~~the~~staffing laws of the State of Israel on February 15, 1990, under the name of De-Bug Innovations Ltd., with unlimited duration. Our name was changed to On Track Innovations Ltd. on July 8, 1991. We are registered with the Israeli Registrar of Companies, under registration number 52-004286-2 and ~~our~~managing ~~Ordinary~~international ~~Shares are quoted on the OTCQX® market, or OTCQX, under the symbol OTIVF.~~operations;

~~Results of~~● ~~Operations~~potentially adverse tax consequences;

~~Discontinued~~● ~~operations. On March 29, 2021, we entered into an agreement, for~~ the ~~sale~~burden of ~~100%~~complying ofwith ~~the~~a ~~issued~~wide ~~and~~variety ~~outstanding share capital~~ of ~~our~~complex ~~wholly~~laws ~~owned Polish subsidiary, ASEC. ASEC is headquartered in Krakow, Poland~~ and ~~has~~treaties ~~been conducting our Mass Transit Ticketing business~~ in ~~Europe (which~~various ~~was~~jurisdictions; ~~attributed to our “Retail~~ and ~~Mass Transit Ticketing” segment).~~

18● business interruptions resulting from geopolitical actions, including war and terrorism (as well as the current conflict between Russia and Ukraine), or natural disasters including the recent spread of the coronavirus, earthquakes, typhoons, floods, and fires.

~~Year~~If ~~ended~~we ~~December~~are ~~31,~~unable ~~2020,~~to ~~compared~~manage tothe ~~year~~risks ~~ended~~associated ~~December~~with 31our focus on international sales, ~~2019~~our business may be harmed.

~~Sources~~Currency fluctuations could adversely affect our results of ~~Revenue~~operations.

We ~~have~~ ~~historically~~generate ~~derived~~ a ~~substantial~~significant ~~majority~~ portion of our revenues ~~from~~in ~~the~~U.S. ~~sale~~Dollars, but we incur some of our ~~products,~~expenses ~~including~~in ~~both~~other ~~complete~~currencies. ~~systems~~Our principal non-U.S. Dollar expenses are for ~~and~~Israeli ~~original~~employees’ ~~equipment~~salaries, ~~manufacturer~~which ~~components~~are in New Israeli Shekels, or NIS. InOur ~~addition~~subsidiary in Poland, weOTI ~~generate~~Europa ~~revenues~~Sp.z.o.o ~~from~~incurs ~~licensing~~expenses in Polish Zloty and ~~transaction~~our ~~fees~~subsidiary in South Africa, ~~and~~OTI ~~also~~PetroSmart, incurs expenses in South African Rand. To the extent that we and our ~~less~~subsidiaries ~~significantly~~conduct our business in different currencies, ~~from~~our ~~engineering~~revenues ~~services~~and expenses and, ~~customer~~as ~~services~~a result, our assets and ~~technical~~liabilities, ~~support.~~are not ~~During~~necessarily accounted for in the ~~past~~same ~~two~~currency. ~~years,~~We ~~the~~are ~~revenues~~therefore exposed to foreign currency exchange rate fluctuations. These fluctuations ~~that~~may wenegatively ~~have~~affect ~~derived~~our ~~from~~results ~~sales~~of ~~and~~operations. ~~from~~Our ~~licensing~~operations ~~and~~could ~~transaction~~also ~~fees~~be ~~have~~adversely ~~been~~affected asif ~~follows~~we (are unable to limit our exposure to currency fluctuations in ~~thousands):~~the future.

	Year ended December 31,
	2020		2019
Sales	$	11,191	$	9,144
Licensing and transaction fees	$	1,551	$	1,505
Total revenues	$	12,742	$	10,649

~~Sales.~~To ~~Sales~~mitigate ~~increased~~the byrisk $2of financial exposure to fluctuations in the exchange rate of the U.0S. ~~million,~~Dollar against the NIS or ~~22%~~other currencies, we inmay ~~2020~~enter ~~compared~~into tocurrency ~~2019~~hedging transactions. ~~The~~However, ~~increase~~these inmeasures ~~2020~~may ~~compared~~not toadequately ~~2019,~~protect isus ~~mainly~~from ~~attributed~~material adverse effects resulting from currency fluctuations. In addition, if we wish to anmaintain ~~increase~~the inU.S. ~~Retail~~Dollar-denominated value of sales made in ~~APAC~~other currencies, any devaluation of the ~~United~~other ~~States~~currencies ~~and~~relative ~~Europe,~~to ~~partially~~the ~~offset~~U.S. byDollar awould ~~decrease~~require inus ~~sales~~to ofincrease ~~Petroleum~~our ~~products~~other currency denominated selling inprices ~~Africa~~which could negatively affect our sales.

Licensing and transaction fees. Licensing and transaction fees include single and periodic payments for distribution rights for our products as well as licensing our intellectual property rights to third parties. Transaction fees are paid by customers based on the volume of transactions processed by systems that contain our products. The ~~increase of $46,000 in 2020, or 3%, compared~~ togeneral ~~2019,~~economic isoutlook ~~mainly~~may ~~attributed~~adversely toaffect ~~an increase in~~ our ~~licensing in Europe~~business.

WeOur ~~have~~operations ~~historically~~and ~~derived~~performance ~~revenues~~depend ~~from~~on ~~different~~worldwide ~~geographical~~economic ~~areas.~~conditions ~~The~~and ~~following~~their ~~table~~impact ~~sets~~on ~~forth~~levels ~~our~~of ~~revenues,~~business byand ~~dollar~~public ~~amount~~spending. Fluctuations (or downturns in ~~thousands)~~global ~~and~~or asregional aeconomies ~~percentage~~may adversely affect the budgeting and purchasing behavior of ~~annual~~our ~~revenues~~customers inand ~~different~~our ~~geographical~~potential customers, ~~areas~~including shifting customers’ purchasing patterns to lower-cost options, ~~during~~which ~~the~~could ~~past~~adversely ~~two~~affect ~~years:~~our product sales.

Year ended December 31,	Americas				Europe				Africa				APAC
2020	$	4,574	36	%	$	4,233	33	%	$	1,520	12	%	$	2,415	19	%
2019	$	3,625	34	%	$	3,863	36	%	$	2,087	20	%	$	1,074	10	%

In addition, uncertainties in financial and credit markets may adversely affect the ability of our customers, suppliers, distributors and resellers to obtain financing for significant purchases and operations and to fulfill their contractual obligations with us. As a result, we could encounter, among other adverse effects, a decrease in or cancellation of orders for our products, and an increase in additional reserves for uncollectible accounts receivable being required.

~~Our~~We ~~revenues~~may ~~from~~be ~~sales~~adversely inaffected ~~the Americas increased~~ by ~~$949,000, or 26%, in 2020 compared to 2019, mainly due to an increase in Retail sales to~~ the ~~United~~effects States market. Our revenues from sales in Europe increased by $370,000, or 10%, in 2020 compared to 2019, mainly due to an increase in Retail sales. Our revenues from sales in Africa decreased by $567,000, or 27%, in 2020 compared to 2019, mainly due to a decrease in sales of ~~Petroleum products~~inflation. ~~Our revenues from sales in APAC increased by $1.3 million, or 125%, in 2020 compared to 2019, mainly due to an increase in Retail sales.~~

~~Our~~Inflation ~~revenues~~has ~~derived~~the ~~from~~potential ~~territories~~to ~~outside~~adversely ~~the~~affect ~~United~~our ~~States~~business, ~~which~~results of operations, financial position and liquidity by increasing our overall cost structure, particularly if we are ~~primarily~~unable ~~received~~to inachieve ~~currencies~~commensurate ~~other~~increases ~~than~~in the Uprices we charge our customers.S. ~~Dollar,~~The existence ~~have~~of ainflation ~~varying~~in ~~impact~~the ~~upon~~economy ~~our~~has ~~total~~the ~~revenues~~potential to result in higher interest rates and capital costs, assupply shortages, increased costs of labor and other similar effects. As a result of ~~fluctuations~~inflation, we have experienced and may continue to experience, increases in our costs associated with operating our business including labor, equipment and other inputs. Although we may take measures to mitigate the impact of this inflation through pricing actions, if these measures are not effective our business, results of operations, financial position and liquidity could be materially adversely affected. Even if such ~~currencies’~~measures ~~exchange~~are ~~rates~~effective, ~~versus~~there could be a difference between the timing Uof when these beneficial actions impact our results of operations and when the cost inflation is incurred.S. ~~Dollar~~Additionally, the pricing actions we take could result in loss of customers or a decrease in sales.

~~The~~We ~~following~~may ~~table~~fail ~~sets~~to ~~forth~~maintain ~~our~~effective ~~revenues,~~internal bycontrol ~~dollar amount (~~in ~~thousands)~~accordance ~~and~~with asSection a404 ~~percentage~~ of ~~annual revenues by segments, during~~ the ~~past~~Sarbanes-Oxley ~~two~~Act ~~years:~~of 2002.

Year ended December 31,	Retail				Petroleum
2020	$	10,174	80	%	$	2,568	20	%
2019	$	7,407	70	%	$	3,242	30	%

The Sarbanes-Oxley Act of 2002 imposes certain duties on us and our executives and directors. Our efforts to comply with the requirements of the Sarbanes-Oxley Act, and in particular with Section 404, have resulted in increased general and administrative expenses and a diversion of management time and attention, and we expect these efforts to require the continued commitment of resources. If we fail to maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting. Although our management has determined that we had effective internal control over financial reporting as of December 31, 2021, we may identify material weaknesses or significant deficiencies in our future internal control over financial reporting. In addition, as a smaller reporting company, our internal control over financial reporting is not required to be audited by our independent registered public accounting firm. Failure to maintain effective internal control over financial reporting could result in investigation or sanctions by regulatory authorities and could have a material adverse effect on our operating results, investor confidence in our reported financial information, and the market price of our Ordinary Shares.

Revenues in 2020 from Retail segment increased by $2.8 million, or 37%, compared to 2019, mainly attributed to an increase in Retail sales in APAC, the United States and Europe. Revenues in 2020 from the Petroleum segment decreased by $674,000, or 21%, compared to 2019, mainly due to a decrease in Petroleum sales in Africa.20

19Item 1B. Unresolved Staff Comments.

~~Cost of Revenues and Gross Margin~~None.

~~Our~~Item ~~cost~~2. ofProperties. ~~revenues, presented by gross profit and gross margin percentage, for each of the past two years has been as follows (dollar amounts in thousands):~~

	Year ended December 31,
Cost of revenues	2020			2019
Cost of sales	$	7,641		$	6,402
Gross profit	$	5,101		$	4,247
Gross margin percentage		40	%		40	%

We lease approximately 700 square meters in Yokneam, Israel, which serves as our headquarters. This lease expires on January 31, 2025 with an option of a 5-year extension which shall begin on February 1, 2025 and ends on January 31, 2030. We also lease approximately 250 square meters in Rosh Pina, Israel, where our research and development functions are located. This lease will expire on August 30, 2023 subject to three one-year options of extension.

~~Cost~~We ofbelieve ~~sales.~~that ~~Cost~~the ofcurrent ~~sales~~space ~~consists~~we ~~primarily~~have ofis ~~materials,~~adequate ~~as well as salaries, fees~~ to ~~subcontractors~~meet ~~and related costs of~~ our ~~technical~~current ~~staff~~and ~~that~~near ~~assemble~~future ~~our products~~needs. ~~The cost of sales in 2020 compared to 2019 increased by $1.2 million, or 19%, resulted primarily from an increase in sales.~~

~~Gross~~Item ~~margin~~3. ~~Gross~~Legal ~~margin in 2020 compared to 2019 remained consistent~~Proceedings.

~~Operating~~For ~~expenses~~information with respect to legal proceedings to be disclosed under this Item, see Note 10E to the consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data” of this Annual Report.

~~Our~~Item ~~operating~~4. ~~expenses~~Mine ~~for~~Safety ~~each of the past two years have been as follows (in thousands):~~Disclosures.

	Year ended December 31,
Operating expenses	2020			2019
Research and development	$	3,531		$	3,287
Selling and marketing	$	3,233		$	2,934
General and administrative	$	3,028		$	3,449
Other income, net	$	(11	)	$	(326	)
Total operating expenses	$	9,781		$	9,344

Not Applicable.

Research and development. Our research and development expenses consist primarily of the salaries and related expenses of our research and development staff, as well as subcontracting expenses and depreciation of long-lived assets. The increase of $244,000, or 7%, in 2020 compared to 2019, is primarily attributed to an increase in expenses relating to employees.21

~~Selling~~PART and marketing. Our selling and marketing expenses consist primarily of salaries and substantially all the expenses of our sales and marketing and offices in the United States, South Africa, Europe and Israel, as well as expenses related to advertising, professional expenses and participation in exhibitions and tradeshows and doubtful accounts expenses. The increase of $299,000, or 10%, in 2020 compared to 2019, is primarily attributed to an increase in employment expenses and provision for doubtful accounts, partially offset by a decrease in exhibition and traveling expenses as a result of the impact of COVID-19.II

~~General~~Item ~~and administrative~~5. ~~Our~~Market ~~general~~for ~~and~~Registrant’s ~~administrative~~Common ~~expenses~~Equity, ~~consist~~Related ~~primarily~~Stockholder ofMatters ~~salaries~~ and ~~related~~Issuer ~~expenses~~Purchases of ~~our~~Equity ~~executive management and financial and administrative staff~~Securities. These expenses also include costs of our professional advisors (such as legal and accounting), office expenses and insurance. The decrease of $421,000, or 12%, in 2020 compared to 2019, is primarily attributed to a decrease in expenses relating to employees.

~~Other~~Our ~~(income)~~Ordinary ~~expenses,~~Shares ~~net~~are quoted on the OTCQX Market under the symbol “OTIVF”. InAs ~~2019,~~detailed ~~our~~under ~~other~~Item ~~(income)~~1 ~~expenses~~above, ~~net,~~we ~~consisted~~received ~~mainly~~a notice from the OTC Markets Group stating that we failed to meet the standards for continued qualification for the quotation of aour ~~capital~~shares ~~gain~~on the OTC Markets. If we fail to meet the OTC Market’s criteria within 180 days from the ~~sale~~date of athe ~~building by~~notice, our ~~South~~securities ~~African~~will ~~subsidiary~~be moved from the OTCQX International to OTC Pink.

20Record Holders

~~Financing~~Based on a review of the information ~~expenses~~provided to us by our transfer agent, ~~net~~as of April 4, 2022, there were 22 holders of record of our Ordinary Shares. This number may not be representative of the actual number of beneficial holders of our shares since many of our Ordinary Shares are held of record by brokers or other nominees.

~~Our~~Item ~~financing~~6. ~~expenses, net, for each of the past two years, have been as follows (in thousands):~~[Reserved].

	Year ended December 31,
	2020		2019
Financing expenses, net	$	370	$	353

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

~~Financing~~This ~~expenses,~~discussion ~~net,~~and ~~consist~~analysis ~~primarily~~should ofbe ~~financing~~read ~~expense~~in ~~related~~conjunction towith ~~interest~~our ~~payable~~consolidated onfinancial ~~bank~~statements ~~loans, bank commissions~~ and ~~foreign exchange~~notes ~~differentials,~~thereto ~~partially~~contained ~~offset by financing income related to interest earned on investments~~ in ~~short-term deposits.~~“Item ~~The~~8. ~~increase~~Financial inStatements ~~financing~~and ~~expenses,~~Supplementary ~~net,~~Data” of ~~$17,000,~~this orAnnual ~~5%, in 2020 compared to 2019 is mainly attributed to transaction expenses related to a convertible short-term loan received from shareholder partially offset by exchange rate differentials~~Report.

~~Income tax benefit, net~~Overview

~~Our~~We are a leading developer ~~income~~of ~~tax~~contactless ~~benefit~~payment solutions, ~~net~~NFC ~~for~~technology ~~each~~based, offor the ~~past~~unattended ~~two~~market. ~~years,~~We have been asa ~~follows~~technology ~~(in~~leader ~~thousands):~~since 1990, providing systems, devices and services to operators and integrators with solutions and components that are simple to implement.

	Year ended December 31,
	2020		2019
Income tax benefit, net	$	10	$	106

To date, we have deployed over one million payment solutions to our focused unattended markets: self-service kiosk, micro-markets and vending machines, entertainment and gaming, ATM, Mass Transit Ticketing Validation, and fuel payments.

~~The~~We ~~decrease~~operate inthrough ~~our~~regional ~~tax benefit~~offices, ~~net,~~supporting ofclients ~~$96,000,~~and orpayment ~~91%,~~industry inpartners ~~2020~~with ~~compared~~its tounique ~~2019~~contactless ispayment ~~mainly attributed to income tax benefit due to previous years as recognized by our South African subsidiary in 2019~~solutions.

~~Net~~On April 21, 2021, ~~loss~~we ~~from~~sold ~~continuing~~our ~~operations~~Polish subsidiary, ASEC S.A., or ASEC, including our Mass Transit Ticketing activity in Poland. The consideration for the sale of ASEC was equal to $3,000,000, of which approximately $2,100,000 was used to repay Polish bank loans, and which was reduced by an agreed amount of approximately $300,000 due to working capital adjustments. Following this sale of ASEC, we now operate in two segments (1) Retail, and (2) Petroleum.

~~Our~~On ~~net~~January ~~loss~~10, ~~from~~2022, ~~continuing~~we ~~operations~~filed ~~for~~a ~~each~~petition, ofor the ~~past~~Petition, ~~two~~with ~~years~~the ~~has~~Israeli ~~been~~county ascourt ~~follows~~of (Nazareth, or the Court, seeking protections from our creditors in ~~thousands):~~accordance with the Israeli Insolvency and Economic Rehabilitation Law-2018, after our Board determined that we are insolvent from a cash flow perspective.

	Year ended December 31,
	2020		2019
Net loss from continuing operations	$	5,040	$	5,344

On January 19, 2022 we entered into a binding term sheet, or the Term Sheet, with Nayax. The Term Sheet provides that we and Nayax will enter into a two-step transaction relating to (i) Nayax extending to us a senior secured convertible loan, or the Nayax Loan; and (ii) the purchase by Nayax of 100% of our share capital in consideration for $4,500,000. Consequently to the entry into the Term Sheet, and at our request, the Court dismissed the Petition.

The decrease of net loss from continuing operations of $304,000, or 6%, in 2020 compared to 2019 is primarily due to an increase in our sales and a decrease in general and administrative expenses, partially offset by an increase in our research and development expenses, an increase in selling and marketing expenses, a decrease in other operating income and a decrease in income tax benefit, net, as described above.22

~~Net~~On January 27, 2022, we entered into a definitive agreement and debenture ~~loss~~relating ~~from~~to ~~discontinued~~the ~~operations~~Nayax Loan. On March 17, 2022, we entered into an Agreement and Plan of Merger, or the Merger Agreement, with Nayax and OTI Merger Sub Ltd., an Israeli company, wholly owned by Nayax, or Merger Sub, pursuant to which Merger Sub will merge with and into our company, with our company surviving as a direct wholly-owned subsidiary of Nayax, in exchange for $4,500,000 in cash.

OnWe ~~March~~were ~~29,~~incorporated ~~2021,~~under ~~we entered~~the ~~into~~laws anof ~~agreement~~the toState ~~sell~~of ~~our~~Israel ~~Polish~~on ~~subsidiary~~February 15, ~~ASEC~~1990, ~~including~~under ~~its~~the IPname ~~relating~~of toDe-Bug ~~the~~Innovations ~~Mass~~Ltd., ~~Transit~~with ~~Ticketing~~unlimited ~~activity~~duration. InOur ~~December~~name ~~2013,~~was changed weto ~~completed~~On ~~the~~Track ~~sale~~Innovations ofLtd. ~~certain~~on ~~assets~~July 8, ~~certain~~1991. ~~subsidiaries~~We ~~and~~are IPregistered ~~directly~~with ~~related~~the toIsraeli ~~our~~Registrar ~~SmartID~~of ~~division.~~Companies, ~~The~~under ~~results~~registration ~~from~~number ~~such operations~~52-004286-2 and ~~the~~our ~~cash~~Ordinary ~~flows~~Shares ~~for the reporting periods~~ are ~~presented~~currently inquoted ~~the~~on ~~statements of operations and in~~ the ~~statements~~OTCQX® ofmarket, ~~cash~~or ~~flow~~OTCQX, ~~respectively, as~~under ~~discontinued~~the ~~operations~~symbol ~~separately from continuing operations~~OTIVF.

~~Our~~Year ~~net~~ended ~~loss~~December ~~from~~31, ~~discontinued~~2021, ~~operations~~compared ~~for~~to ~~each~~year ofended ~~the~~December ~~past~~31, ~~two~~2020 ~~years has been as follows (in thousands):~~

	Year ended December 31,
	2020		2019
Net loss from discontinued operations	$	1,093	$	545

Sources of Revenue

~~The~~We have ~~change~~historically inderived ~~net~~a ~~loss~~substantial majority of our revenues from ~~discontinued~~ ~~operations~~the sale of ~~$548~~our products,~~000,~~ orincluding ~~101%,~~both incomplete ~~2020~~systems ~~compared~~and tooriginal equipment ~~2019~~manufacturer iscomponents. ~~mainly~~In ~~attributed~~addition, towe agenerate ~~loss~~revenues from ~~the~~licensing ~~Mass~~and ~~Transit~~transaction ~~Ticketing operation~~fees, inand ~~2020~~also, asless asignificantly, from ~~result~~engineering ofservices, ~~the~~customer ~~impact~~services, ofand ~~COVID-19,~~technical ~~partially~~support. ~~offset~~During bythe ~~expenses~~past intwo years, the ~~amount~~revenues ofthat ~~$482,000~~we have derived from sales aand ~~legal proceeding~~from ~~with~~licensing ~~Harel,~~and antransaction ~~insurance~~fees ~~company,~~have been as follows (in ~~2019.~~thousands):

	Year ended December 31,
	2021		2020
Sales	$	13,278	$	11,392
Software as a Service (SaaS)	$	1,597	$	1,350
Total revenues	$	14,875	$	12,742

~~Net~~Sales. ~~loss~~Sales increased by $2.1 million, or 17%, in 2021 compared to 2020. The increase in 2021 compared to 2020, is mainly attributed to an increase in Retail sales in the Americas and Europe, partially offset by a decrease in sales of Retail products in APAC.

~~Our~~SaaS. Software as a service, ~~net~~or ~~loss~~SaaS, revenues include monthly payments for ~~each~~a set of different software applications such as Terminal Management Systems, Payment gateway, and other software applications for the ~~past~~Retail ~~two~~segment, ~~years~~and ~~has~~a ~~been~~separate asset ~~follows~~of (applications for fuel management systems supporting the Petroleum segment. The increase of $247,000 in ~~thousands):~~2021, or 18%, compared to 2020, is mainly attributed to an increase in our revenues in both segments, mainly in our Retail segment.

	Year ended December 31,
	2020			2019
Net loss	$	(6,133	)	$	(5,889	)

We have historically derived revenues from different geographical areas. The following table sets forth our revenues, by dollar amount (in thousands) and as a percentage of annual revenues in different geographical areas, during the past two years:

The increase of $244,000, or 4%, in net loss in 2020 compared to 2019, is primarily due to an increase in net loss from discontinued operations, partially offset by a decrease in net loss from continuing operations, as described above.

Year ended December 31,	Americas				Europe				Africa				APAC
2021	$	7,202	49	%	$	4,335	29	%	$	1,502	10	%	$	1,836	12	%
2020	$	4,574	36	%	$	4,233	33	%	$	1,520	12	%	$	2,415	19	%

~~Critical~~Our ~~Accounting~~revenues ~~Policies~~from ~~and~~sales ~~Estimates~~in the Americas increased by $2.6 million, or 57%, in 2021 compared to 2020, mainly due to an increase in Retail sales to the United States market. Our revenues from sales in Europe increased by $102,000, or 2%, in 2021 compared to 2020, mainly due to an increase in Retail sales. Our revenues from sales in Africa remained consistent. Our revenues from sales in APAC decreased by $579,000, or 24%, in 2021 compared to 2020, mainly due to a decrease in Retail sales.

WeOur ~~prepare~~revenues ~~our~~derived ~~consolidated~~from ~~financial~~territories ~~statements~~outside ~~in conformity with accounting principles generally accepted in~~ the United States~~. Accordingly~~, wewhich are ~~required~~primarily toreceived ~~make~~in ~~certain~~currencies ~~estimates,~~other ~~judgments~~than ~~and assumptions that we believe are reasonable based on~~ the ~~information~~ ~~available~~U. ~~These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and results of operations~~S. ~~To fully understand and evaluate our reported financial results~~Dollar, ~~we believe it~~have isa ~~important~~varying toimpact ~~understand~~upon our ~~revenue~~total ~~recognition policy~~revenues, ~~our~~as ~~policy~~a ~~with~~result ~~respect~~of tofluctuations ~~discontinued~~in ~~operations~~such ~~and~~currencies’ ~~our~~exchange ~~policy~~rates ~~with respect~~versus tothe ~~contingent~~U.S. ~~consideration~~Dollar.

Revenue recognition. We generate revenues from our product sales manufactured based on our technology. In addition, we generate revenues from the technology we developed through transaction fee arrangements and licensing agreements. Revenues are also generated from non-recurring engineering, customer services and technical support. Based on Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customer, we recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer.23

~~Our~~Due ~~cost~~to ofthe ~~warranty~~conflict ~~that~~between ~~the~~Russia ~~product~~and ~~will~~Ukraine, ~~perform~~and ~~according~~in tolight ~~certain~~of ~~specifications~~sanctions ~~and~~imposed ~~that~~by wecertain ~~will~~countries ~~repair~~on orRussia, ~~replace~~our ~~the~~Board ~~product if~~guided itour ~~ceases~~ management to ~~work~~halt ~~properly,~~sales isto ~~insignificant~~Russian ~~and~~customers. isAs ~~treated~~a ~~according~~result, toour ~~accounting~~revenues ~~guidance~~will ~~for~~be ~~contingencies~~adversely impacted.

~~Discontinued~~The ~~operations.~~following ~~Upon~~table ~~divestiture~~sets offorth aour ~~business~~revenues, ~~the~~by ~~Company~~dollar ~~classifies~~amount ~~such~~(in ~~business~~thousands) and as a ~~discontinued~~percentage ~~operation,~~of ifannual ~~the~~revenues ~~divested business~~by ~~represents~~segments, aduring ~~strategic~~the past ~~shift~~two ~~that has (or will have) a major effect on an entity’s operations and financial results.~~years:

For disposals other than by sale such as abandonment, the results of operations of business would not be recorded as a discontinued operation until the period in which the business is actually abandoned.

Year ended December 31,	Retail				Petroleum
2021	$	12,223	82	%	$	2,652	18	%
2020	$	10,174	80	%	$	2,568	20	%

WeRevenues in ~~have~~2021 ~~concluded~~from ~~that~~ the ~~divestiture~~ ofRetail ~~the~~segment ~~SmartID~~increased ~~division~~by $2.0 million, or 20%, compared to 2020, mainly attributed to an increase in Retail sales in APAC, the ~~MediSmart~~United ~~activity~~States and Europe. Revenues in 2021 from the ~~Mass~~Petroleum ~~Transit~~segment ~~Ticketing~~decreased ~~activity~~by ~~qualify~~$84,000, asor ~~discontinued~~3%, ~~operations~~compared to 2020, mainly ~~and~~due ~~therefore~~to ~~have~~a ~~been~~decrease ~~presented~~in asPetroleum ~~such~~sales in Africa.

~~The~~Cost ~~results~~ of ~~businesses~~Revenues ~~that have qualified as discontinued operations have been presented as such for all reporting periods. Results of discontinued operations include all revenues~~ and ~~expenses~~Gross ~~directly derived from such businesses; general corporate overhead is not allocated to discontinued operations.~~ Margin

~~Any~~Our ~~loss~~cost orof ~~gain~~revenues, ~~that~~presented ~~arose~~by ~~from~~gross ~~the~~profit ~~divestiture~~and ofgross amargin ~~business~~percentage, ~~that~~for ~~qualifies~~each asof ~~discontinued~~the ~~operations~~past ~~have~~two ~~been~~years ~~included~~has inbeen ~~the results~~as offollows ~~the~~(dollar ~~discontinued~~amounts in ~~operations.~~thousands):

We also present cash flows from discontinued operations separately from cash flows of continuing operations.

	Year ended December 31,
Cost of revenues	2021			2020
Cost of sales	$	10,848		$	7,641
Gross profit	$	4,027		$	5,101
Gross margin percentage		27	%		40	%

~~Assets~~Cost of sales. Cost of sales consists primarily of materials, as well as salaries, fees to subcontractors and ~~liabilities~~related costs of ~~discontinued~~our ~~operations~~technical staff that assemble ~~have~~our ~~not~~products. ~~yet~~The ~~been~~cost ~~actually~~of ~~sold~~sales ~~are~~in ~~presented~~2021 oncompared ~~the~~to ~~balance~~2020 ~~sheet~~increased inby ~~one~~$3.2 ~~line~~million, or 42%, that resulted primarily from an ~~item.~~increase ~~Assets~~in sales and ~~liabilities~~an ofincrease ~~such~~in ~~discontinued~~the ~~operations~~cost ~~are~~of ~~not~~components ~~offset~~due ~~and~~to ~~are~~a ~~presented~~global components shortage as ~~such~~a ~~only~~result ~~for~~of the ~~current~~COVID-19 ~~year balance sheet~~pandemic.

~~Contingent consideration~~Gross margin. ~~Certain~~The ~~sale~~decrease in ~~arrangements~~gross ~~consist~~margin ofin ~~contingent~~2021 ~~consideration~~compared ~~based~~to on2020, ~~the~~is ~~divested~~mainly ~~businesses~~attributed ~~future~~to ~~sales or~~an ~~profits.~~increase Weof ~~record~~cost ~~the~~of ~~contingent~~components ~~consideration~~due ~~portion~~to a global shortage of ~~the~~components as ~~arrangement~~part ~~when~~of the ~~consideration~~impact isof ~~determined~~the toCOVID-19 ~~be realizable~~pandemic.

22Operating expenses

~~Liquidity~~Our ~~and~~operating ~~Capital~~expenses ~~Resources~~for each of the past two years have been as follows (in thousands):

Since inception, our principal sources of liquidity have been revenues, proceeds from sales of equity securities, borrowings from banks, the Israeli government and shareholders, including convertible loans, proceeds from the exercise of options and warrants as well as proceeds from the divestiture of parts of our businesses. We had cash, cash equivalents and short-term investments representing bank deposits of $1,482,000 (of which an amount of $105,000 has been pledged as securities for certain items), excluding cash and cash equivalents held for sale, as of December 31, 2020. The deterioration due to the COVID-19 pandemic in Poland has led to an almost complete stop to our Mass Transit Ticketing sales business, negatively impacting our cash flow since March 2020. On March 29, 2021, we entered into an agreement to sell ASEC, including its Mass Transit Ticketing activity, as mentioned above. Further, in December 2020 and January 2021, we borrowed a loan, in two tranches aggregating $1,600,000, from our controlling shareholder and another shareholder that, if not converted, would mature in May 2021. Based on the projected cash flows and our cash balances as of December 31, 2020, our management is of the opinion that without further fund raising or other increase in our cash, we will not have sufficient resources to enable us to continue our operations for a period of at least the next 12 months. As a result, there is a substantial doubt regarding our ability to continue as a going concern. Our management has taken cost reduction steps, including material reductions in the salaries of our management and employees, and has been working for the past few months on updating our strategy for the coming years in order to realize our potential and resume our growth, and ultimately create shareholder value. We are attempting to raise additional funds and to increase our cash and are considering, among other options, conducting a rights offering. While we believe in our ability to raise additional funds and increase our cash, there can be no assurances to that effect. In addition, we engaged an investment bank to explore strategic options and are investing resources in this process.

	Year ended December 31,
Operating expenses	2021		2020
Research and development	$	3,718	$	3,531
Selling and marketing	$	2,893	$	3,233
General and administrative	$	3,383	$	3,017

Total operating expenses	$	9,994	$	9,781

InResearch ~~connection~~and ~~with~~development. ~~the~~Our ~~outbreak~~research ofand ~~COVID-19,~~development weexpenses ~~have~~consist ~~taken~~primarily ~~steps~~of tothe ~~protect~~salaries ~~our~~and ~~workforce~~related inexpenses ~~Israel,~~of ~~the~~our ~~United~~research ~~States,~~and development ~~Poland~~staff, ~~South Africa~~as ~~and~~well ~~elsewhere.~~as ~~Such~~subcontracting ~~steps~~expenses ~~include~~and ~~work~~depreciation ~~from~~of ~~home~~long-lived ~~where~~assets. ~~possible,~~The ~~minimizing~~increase ~~face-to-face~~of ~~meetings~~$187,000, ~~and~~or ~~utilizing~~5%, ~~video~~in ~~conferencing~~2021 ascompared ~~much~~to ~~as possible~~2020, ~~social~~is ~~distancing~~primarily atattributed ~~facilities~~to ~~and~~an ~~eliminating~~increase ~~all~~in ~~international~~expenses ~~travel~~relating to employees.

So far, the main direct impact of the COVID-19 pandemic has been a significant decrease in our revenues derived from Mass Transit Ticketing activity in the Polish market. Revenues from such activity, that were relatively stable during the year preceding the COVID-19 outbreak, decreased by approximately $1.3 million in 2020 compared to 2019, mainly due to the lockdown and other restrictions and consequences of the COVID-19 pandemic as started in March 2020. On March 29, 2021, we entered into an agreement to sell ASEC, including its Mass Transit Ticketing activity, as mentioned above. The consideration for ASEC is $3,000,000, of which approximately $2,100,000 shall be used to repay Polish banks loans at the closing date, as mentioned in the Sale Agreement, further offset by minor adjustments.24

AsSelling and ~~part~~marketing. Our selling and marketing expenses consist primarily of salaries and substantially all the ~~Polish~~expenses ~~regulations~~of our sales and marketing ~~government~~and ~~assistance~~offices ~~introduced~~ in ~~relation~~the toUnited ~~the~~States, ~~COVID-19~~South ~~pandemic~~Africa, ~~the~~Europe ~~Polish~~and ~~subsidiary~~Israel, ~~received~~as awell ~~long-term~~as ~~loan~~expenses related to advertising, professional expenses and aparticipation ~~consent~~in toexhibitions ~~postpone~~and ~~the~~tradeshows ~~maturity~~and ~~date~~doubtful accounts expenses. The decrease of a$340,000, or 11%, in 2021 compared ~~secured~~to ~~bank~~2020, ~~loan.~~is ~~Both~~primarily ~~loans~~attributed ~~have~~to ~~been~~a ~~disposed~~decrease ofin ~~through~~employment ~~the~~expenses ~~Mass~~and ~~Transit~~provision ~~divestiture~~for doubtful accounts.

~~In addition,~~General ~~recently,~~and asadministrative. Our ageneral ~~result~~and ofadministrative ~~COVID-19,~~expenses ~~some~~consist primarily of ~~our~~salaries ~~customers~~and ~~have~~related ~~delayed~~expenses ~~issuance~~ of ~~orders in~~ our ~~pipeline.~~executive Asmanagement aand ~~response~~financial and toadministrative ~~the~~staff. ~~effect~~These ofexpenses ~~COVID-19,~~also weinclude ~~have~~costs ~~taken~~of ~~steps~~our toprofessional ~~reduce~~advisors ~~some~~(such ~~costs~~as ~~that~~legal ~~are~~and ~~not~~accounting), ~~essential~~office ~~under~~expenses ~~the current circumstances~~ and ~~during~~insurance. ~~the~~The ~~fourth~~increase ~~quarter~~ of ~~2020~~$366,000, weor ~~took~~12%, ~~additional~~in ~~steps~~2021 compared to ~~reduce our cash expenses~~2020, ~~including~~is ~~voluntary~~primarily ~~reduction~~attributed ~~of salaries~~ to ~~our~~an ~~management~~increase ~~and~~in ~~employees~~professional expenses.

~~Another~~Financing ~~impact of COVID-19 has been on product delivery~~expenses, where components’ procurement lead time is longer and a shortage in components has grown as the duration of the COVID-19 pandemic has continued. As long as the COVID-19 pandemic continues, the components’ lead time may be longer than normal and shortage in components may continue or get worse. Therefore, we maintain a comprehensive network of world-wide suppliers.net

WeOur ~~have~~financing ~~seen~~expenses, anet, ~~higher~~for ~~interest~~each ~~from a growing number~~ of ~~potential customers and partners as they forecasted that~~ the ~~need~~past ~~for~~two ~~our products will grow~~years, ~~yet~~have ~~execution~~been ofas ~~closing~~follows is(in ~~still slow due to the current business environment.~~thousands):

It is difficult to predict what other impacts the COVID-19 pandemic may have on the Company.

	Year ended December 31,
	2021		2020
Financial expenses deriving from a convertible short-term loan from shareholders	$	3,748	$	90
Other financial expenses, net	$	387	$	280
Financing expenses, net	$	4,135	$	370

~~Our and~~Financing ~~certain~~expenses consist primarily of ~~our~~interest ~~subsidiaries’~~payable ~~manufacturing~~on ~~facilities~~loans, ~~and~~bank ~~certain~~commissions, ~~equipment~~foreign ~~have~~exchange ~~been~~losses ~~pledged~~and asfinancial ~~security~~expenses inderiving ~~respect of~~from a convertible short-term loan received from ~~a bank~~shareholders. ~~The~~Financing ~~Company’s~~income consists primarily of foreign exchange gains and interest earned on investments in short-term deposits. inThe ~~the~~increase ~~amount~~in offinancing ~~$105~~expenses,~~000~~ ~~have~~net, ~~been~~of ~~pledged~~$3.7 asmillion ~~security~~ in ~~respect~~2021 ofcompared ~~guarantees~~to ~~granted.~~2020 ~~Such~~is ~~deposits~~mainly ~~cannot~~attributed beto ~~pledged~~transaction expenses related to ~~others~~a orconvertible ~~withdrawn~~short-term ~~without~~loan ~~the~~received ~~consent~~from ofshareholders, ~~the~~partially ~~bank~~offset by exchange rate differentials.

23Income tax benefit, net

AsOur income oftax ~~December 31~~benefit, ~~2020,~~net ~~we granted~~for aeach ~~guarantee~~of to the ~~lessor~~past oftwo ~~our headquarters in Israel in amount of $109~~years,~~000~~ ~~whose~~have ~~expiration~~been ~~date is May 2024. In addition,~~ as offollows ~~December 31, 2020, our former Polish subsidiary granted performance guarantees~~ (in an aggregate amount of $417,000 related to the Mass Transit Ticketing activity. The expiration dates of those guarantees range from January 2021 to September 2021. Following the agreement to sell ASEC, we will be no longer subject to these guarantees.thousands):

For the years ended December 31, 2020 and December 31, 2019, we had a negative cash flow from continuing operations of $1.9 million and $3.0 million, respectively.

	Year ended December 31,
	2021		2020
Income tax benefit, net	$	13	$	10

~~On December 9, 2020, we entered~~The ~~into~~increase ain ~~loan~~our ~~financing~~tax ~~agreement~~benefit, ~~or the Loan Agreement~~net, ~~with~~of ~~Jerry L. Ivy~~$3, ~~Jr.~~000, ~~Descendants’ Trust,~~ or ~~Ivy~~30%, ~~our Controlling Shareholder (as such term is defined under the Companies Law), or the Lender. The Loan Agreement provides that the Lender will extend a loan to us~~ in ~~the~~2021 ~~amount~~compared ~~of up~~ to ~~$1,500,000, payable in two tranches: one of $625,000 at the initial closing that took place on December 17,~~ 2020~~, and~~ ~~the~~is ~~other~~mainly ofattributed ~~$875,000~~to atincome ~~the~~tax ~~second~~benefit ~~closing~~due ~~subject~~ to ~~the terms and conditions of the Loan Agreement that took place on January 28,~~previous ~~2021.~~years Weas ~~agreed~~recognized toby ~~use the proceeds of the Loan Agreement to fund~~ our ~~operations~~South ~~and~~African ~~working~~subsidiary ~~capital~~in ~~while we explore strategic options~~2020.

~~The~~Net ~~amount~~loss ~~lent~~from ~~under~~continuing the Loan Agreement is secured pursuant to a debenture, or the Debenture, by a first priority floating charge over all our tangible or intangible assets and other property we own, subject only to certain permitted security interests, as set forth in Loan Agreement, or the Floating Charge.operations

~~The~~Our ~~amount~~net ~~lent~~loss ~~under~~from ~~the~~continuing ~~Loan~~operations ~~Agreement~~for ~~and~~each ~~all accrued interest matures on June 17, 2021, or the Maturity Date, and will be payable in full on the Maturity Date, provided that the maturity date can be extended by six months at the sole option~~ of ~~Ivy. The amount lent bears interest on all outstanding principal at an interest rate of 8.0% per annum, or~~ the ~~Interest;~~past ~~provided,~~two ~~however,~~years that upon an extension of the maturity period beyond the Maturity Date, the Interest will automatically increase, effective as of the Maturity Date, to the rate of 10.0% per annum. Also, in case of an extension of the Maturity Date, the accrued interest for the first six months for which the Loan Amount has been outstanding will be payable by the Company to the Lender at the time of the extension, and the accrued Interest for the extension period will be payable by us on the extended maturity date. In addition, we may repay the amount lent, in whole and not in part, and any accrued Interest thereon, at any time prior to the Maturity Date (as itfollows ~~may be extended),~~ (in ~~our sole discretion.~~thousands):

We have obtained shareholders’ approval to the grant of a right to Ivy, pursuant to which, at any time prior to the repayment in full of the amount lent, together with Interest accrued and all other amounts outstanding under the Agreement, or the Secured Amount, Ivy will be entitled, at its sole discretion, to demand to convert, or the Conversion Right, the entire Secured Amount into our Ordinary Shares, at a price per share equal to the lower of (a) $0.20 per share (subject to adjustment in the event of any bonus shares, combinations or splits) and (b) a price per share reflecting a discount to the average closing bid price of an Ordinary Share over the 20 trading days preceding the Initial Closing, or the Benchmark Price ($0.248), as follows: (i) if conversion occurs until March 17, 2021 (no later than three months after the initial closing), the conversion price per share will be $0.1984 (reflects discount of 20% of the Benchmark Price); (ii) if conversion occurs between March 18, 2021, and June 17, 2021 (more than three months but no later than six months after the initial closing), the conversion price per share will be $0.1736 (reflects discount of 30% of the Benchmark Price); (iii) if conversion occurs after June 17, 2021 (more than six months after the initial closing (to the extent extended in accordance with the terms of the Loan Agreement)), the conversion price per share will be $0.124 (reflects discount of 50% of the Benchmark Price); and (iv) if conversion occurs upon an event of default, the conversion price per share will be $0.124 (reflects discount of 50% of the Benchmark Price).

	Year ended December 31,
	2021		2020
Net loss from continuing operations	$	10,089	$	5,040

Pursuant to the Loan Agreement, the Conversion Right will become effective only following the approval thereof by the shareholders of the Company in accordance with the requirements of the Companies Law, which approval applies to a controlling shareholder transaction that includes a private offering that may increase the holdings of a controlling shareholder to and above 45% of the share capital of the Company, and will be deemed of no force or effect at any time prior to obtaining such Shareholders’ Approval, if at all. We obtained such shareholders’ approval. 25

The ~~Agreement~~ ~~includes~~increase ~~customary~~of ~~events~~net loss from continuing operations of ~~default,~~$5.0 ~~including~~million , ~~among~~or ~~others~~200%, ~~failures~~in 2021 compared to ~~repay~~2020 ~~any~~is ~~amounts~~mainly due to ~~the~~an ~~Lender,~~increase ~~breaches or~~in ~~defaults~~non-cash ~~under~~financing expenses relating to the ~~terms~~loan ofprovided ~~the~~by ~~Agreement~~shareholders, ~~etc.~~and Ifto ana ~~event~~lesser ofdegree ~~default~~due ~~occurs,~~to ~~the~~a ~~Secured~~decrease ~~Amount~~in ~~shall~~gross ~~immediately~~profit ~~become~~that resulted primarily from an ~~due~~increase ~~and~~in ~~payable,~~components ~~without~~costs which derives from a global components shortage caused due to the ~~need~~impact ~~for~~of ~~any~~the ~~notice~~COVID-19 pandemic, partially offset by ~~the~~a ~~Lender~~decrease in operating expenses.

~~The Loan Agreement was subsequently~~Net ~~amended~~loss tofrom ~~allow~~discontinued for an additional lender to lend $100,000 under the same terms as Ivy. Accordingly, the aggregate gross amount we received under the Loan Agreement is $1,600,000, out of which $975,000 took place as part of the second closing on January 28, 2021.operations

24Our net loss from discontinued operations for each of the past two years has been as follows (in thousands):

Operating activities related to continuing operations

	Year ended December 31,
	2021		2020
Net loss from discontinued operations	$	(1,570)	$	(1,093)

~~For~~Our ~~the~~net ~~year~~loss ~~ended~~from ~~December~~discontinued ~~31,~~operations ~~2020,~~for ~~net~~the ~~cash~~reporting ~~used~~periods inare ~~continuing~~presented ~~operating~~in ~~activities~~the ~~was~~statements ~~$1.9~~of ~~million~~operations ~~primarily~~as ~~due~~discontinued tooperations aseparately ~~$5.0 million net loss~~ from ~~operating activities,~~continuing aoperations. ~~$212,000~~The ~~decrease~~increase in ~~other~~the ~~current~~net ~~liabilities~~loss ~~and~~from adiscontinued ~~$36,000~~operations of ~~deferred tax benefits~~$477, ~~net~~000, ~~partially~~or ~~offset~~44% ~~by a $1.0 million increase~~ in ~~trade payables~~2021, acompared ~~$989~~to 2020,~~000~~ ~~decrease~~is inmainly ~~trade~~due ~~receivables,~~ to a ~~$541,000~~re-classification ~~decrease~~of inan ~~inventories,~~amount of $~~419~~746,000 of ~~depreciation~~exchange ~~and~~differences ~~amortization, a~~on ~~$115,000~~translation ~~decrease~~from in other ~~receivables~~comprehensive ~~and~~loss ~~prepaid~~to ~~expenses,~~net aloss ~~$110,000~~from ~~change in accrued interest and linkage differences, net, $90,000~~discontinued ofoperations ~~transaction~~made ~~expenses~~due ~~related~~ to ~~convertible~~completion ~~short-term~~of ~~loan~~the ~~received~~sale ~~from~~of ~~Ivy~~ASEC, aand ~~$67,000~~net ~~non-cash~~expenses ~~expense~~relating ~~due~~ to ~~stock-based~~the ~~compensation issued~~settlement toof ~~employees~~the ~~and~~litigation ~~others~~with Merwell Inc. and aSuperCom ~~$65,000 change in accrued severance pay, net~~Ltd.

~~For~~Net ~~the year ended December 31, 2019, net cash used in continuing operating activities was $3.0 million primarily due to a $5.3 million net~~ loss from operating activities, a $336,000 decrease in other current liabilities, a $326,000 gain on sale of property and equipment and a $36,000 change in accrued interest and linkage differences, net, partially offset by a $1.7 million decrease in trade receivables, a $579,000 decrease in other receivables and prepaid expenses, $441,000 of depreciation and amortization, a $149,000 increase in trade payables, a $125,000 non-cash expense due to stock-based compensation issued to employees and others, a $29,000 decrease in inventories, a $23,000 change in accrued severance pay, net, and a $22,000 of deferred tax expenses, net.

~~Investing~~Our ~~and~~net ~~financing~~loss ~~activities~~for ~~related~~each toof ~~continuing~~the ~~operations~~past two years has been as follows (in thousands):

For the year ended December 31, 2020, net cash provided by continuing investing activities was $1.8 million, mainly due to a $2.2 million net change in short-term investments, partially offset by $407,000 of purchases of property and equipment and intangible assets.

	Year ended December 31,
	2021			2020
Net loss	$	(11,659	)	$	(6,133	)

~~For the~~The ~~year~~increase ~~ended~~of ~~December~~$5.5 31million, or ~~2019~~90%, in net ~~cash~~loss ~~used~~ in ~~continuing~~2021 ~~investing~~compared ~~activities~~to ~~was $901~~2020,~~000,~~ is mainly due to aan ~~$1.4~~increase ~~million~~in non-cash financing expenses derived from the loan provided ~~net~~by ~~change~~shareholders, an increase in ~~short-term~~loss ~~investments~~from discontinued operations and ~~$634,000~~to ofa ~~purchases~~lesser ofdegree ~~property~~due ~~and~~to ~~equipment~~a ~~and~~decrease ~~intangible~~in ~~assets,~~gross ~~partially~~profit ~~offset~~that resulted byprimarily ~~$1.1~~from ~~million~~an increase in ~~proceeds~~components costs derived from ~~the~~a ~~sale~~global ofcomponents anshortage ~~office~~as ~~property~~part inof ~~South~~the ~~Africa~~impact ~~and~~of ~~$10~~the COVID-19 pandemic,~~000~~ partially inoffset ~~proceeds~~by ~~from~~a ~~restricted~~decrease ~~deposit for~~in ~~employee~~operating ~~benefits~~expenses.

~~For the year ended December~~Critical ~~31,~~Accounting ~~2020,~~Policies ~~net cash provided by continuing financing activities was $1.7 million, mainly due to $1.4 million in proceeds from the issuance of Ordinary Shares, net of issuance costs,~~ and a $578,000 convertible short-term loan received from our controlling shareholder, net of transaction costs, partially offset by a $215,000 decrease in short-term bank credit, net, and $7,000 repayment of long-term bank loans.Estimates

~~For~~We prepare ~~the~~our ~~year~~consolidated ~~ended~~financial ~~December 31,~~statements ~~2019,~~in ~~net~~conformity ~~cash~~with ~~provided~~accounting byprinciples ~~continuing~~generally ~~financing~~accepted ~~activities~~in ~~was~~the $3United States.4 ~~million~~Accordingly, we ~~mainly~~are ~~due~~required to amake ~~$2.5~~certain ~~million~~estimates, ~~increase~~judgments inand ~~short-term~~assumptions ~~bank~~that we believe are reasonable based on the information available. ~~credit,~~These ~~net,~~estimates and ~~$981,000~~assumptions inaffect ~~proceeds~~the ~~from~~reported amounts of assets and liabilities at the ~~issuance~~date of ~~Ordinary~~the ~~Shares,~~financial ~~net~~statements and results of ~~issuance~~operations. ~~costs,~~To ~~partially~~fully ~~offset~~understand byand ~~$25~~evaluate our reported financial results,~~000~~ ~~repayment~~we believe it is important to understand our revenue ofrecognition ~~long-term~~policy, ~~bank~~our ~~loans~~policy with respect to discontinued operations and our policy with respect to contingent consideration.

~~Operating, Investing and financing activities related to discontinued operations~~26

~~For~~Revenue recognition. ~~the~~We ~~year~~generate ~~ended~~revenues ~~December 31,~~from ~~2020~~our product sales manufactured based on our technology. In addition, ~~net~~we ~~cash~~generate ~~used~~revenues from inthe ~~discontinued~~technology ~~operating~~we ~~activities~~developed ~~was~~through $2transaction fee arrangements and licensing agreements.1 ~~million~~Revenues are also generated from non-recurring engineering, ~~mainly~~customer ~~related~~services toand ~~the~~technical ~~Mass~~support. ~~Transit~~Based ~~Ticketing~~on ~~operation~~Accounting Standards Update, as ~~well~~or asASU, an2014-09, ~~amount~~Revenue offrom ~~$482~~Contracts with Customer,~~000~~ ~~derived~~we ~~from~~recognize arevenue ~~payment~~when towe ~~Harel,~~satisfy ana ~~insurance~~performance ~~company,~~obligation ~~due~~by totransferring control over a ~~legal~~product ~~proceeding~~or service to a customer.

~~For~~Our cost of warranty that the ~~year~~product ~~ended~~will ~~December 31,~~perform ~~2019,~~according ~~net~~to ~~cash~~certain ~~used~~specifications inand ~~discontinued~~that ~~operating~~we ~~activities~~will ~~was~~repair ~~$1.2~~or ~~million,~~replace ~~mainly~~the ~~related~~product if it ceases to ~~the~~work ~~dispute~~properly, ~~with~~is ~~Merwell~~insignificant ~~related~~and is treated according to ~~the SmartID~~accounting ~~division~~guidance for contingencies.

~~For~~Discontinued operations. ~~the~~Upon ~~year~~divestiture ~~ended~~of ~~December 31,~~a ~~2020~~business, ~~net~~the ~~cash~~Company ~~used~~classifies insuch ~~discontinued~~business ~~investing~~as ~~activities~~a ~~was~~discontinued ~~$948~~operation,~~000,~~ ~~mainly~~if ~~related~~the todivested ~~the~~business represents ~~purchase~~a ofstrategic ~~property~~shift ~~and~~that ~~equipment~~has ~~for the~~(or ~~Mass~~will ~~Transit~~have) ~~Ticketing~~a ~~activity~~major effect on an entity’s operations and financial results.

For disposals ~~the~~other ~~year~~than ~~ended~~by ~~December 31,~~sale ~~2019~~such as abandonment, ~~net~~the ~~cash~~results ~~used~~of inoperations ~~discontinued~~of ~~investing~~business ~~activities~~would ~~was~~not ~~$511,000,~~be ~~mainly~~recorded ~~related~~as toa ~~capitalized~~discontinued ~~internal~~operation until ~~use~~the ~~software~~period ~~development costs~~in ~~for~~which the ~~Mass~~business ~~Transit~~is ~~Ticketing~~actually ~~activity~~abandoned.

~~For~~We have ~~the~~concluded ~~year~~that ~~ended~~the ~~December 31,~~divestiture ~~2020,~~of ~~net~~the ~~cash~~SmartID ~~provided~~division byand ~~discontinued~~the ~~financing~~Mass ~~activities~~Transit ~~was~~Ticketing ~~$1.2~~activity ~~million,~~qualify ~~mainly~~as ~~related~~discontinued tooperations and ~~loans~~therefore ~~received~~have ~~for~~been ~~the~~presented ~~Mass~~as ~~Transit Ticketing activity~~such.

25The results of businesses that have qualified as discontinued operations have been presented as such for all reporting periods. Results of discontinued operations include all revenues and expenses directly derived from such businesses; general corporate overhead is not allocated to discontinued operations.

~~For the year ended December~~Any ~~31,~~loss ~~2019,~~or ~~net~~gain ~~cash~~that ~~used~~arose infrom ~~discontinued~~the ~~financing~~divestiture ~~activities~~of ~~was~~a ~~$245,000,~~business ~~mainly~~that ~~due~~qualifies toas ~~repayment~~discontinued ofoperations ~~long-term~~have ~~bank~~been ~~loan~~included ~~used~~in ~~for~~ the results ~~Mass~~of ~~Transit~~the ~~Ticketing~~discontinued ~~activity~~operations.

~~Market~~We ~~Risks~~also present cash flows from discontinued operations separately from cash flows of continuing operations.

~~Market~~Assets ~~risks~~and ~~relating~~liabilities toof ~~our~~discontinued operations ~~result~~that ~~primarily~~have ~~from~~not ~~changes~~yet inbeen ~~interest~~actually ~~rates~~sold ~~and~~are ~~currency~~presented ~~fluctuations.~~on Inthe ~~order~~balance tosheet ~~limit our~~in ~~exposure,~~one weline ~~may enter, from time to time, into various non-speculative derivative transactions~~item. ~~Our objective is to reduce~~ ~~exposure~~Assets and ~~fluctuations~~liabilities inof ~~earnings~~such ~~and~~discontinued ~~cash~~operations ~~flows~~are ~~associated~~not ~~with~~offset ~~changes in interest rates~~ and ~~foreign~~are ~~currency~~presented ~~rates.~~as ~~We do~~such ~~not~~only ~~use~~for ~~financial~~the ~~instruments~~current ~~for~~year ~~trading~~balance ~~purposes~~sheet.

~~Interest~~Contingent consideration. ~~Rate~~Certain ~~Risks~~sale arrangements consist of contingent consideration based on the divested business future sales or profits. We record the contingent consideration portion of the arrangement when the consideration is determined to be realizable.

WeLiquidity ~~are~~and ~~exposed~~Capital to market risks resulting from changes in interest rates, primarily in connection with our loan obligations to banks. We do not currently use derivative financial instruments to limit exposure to interest rate risk. As of December 31, 2020, we had long-term loan obligations of $15,000, the vast majority of which are subject to variable interest rates. The carrying values of the loans are equivalent to or approximate their fair market value as they bear interest at approximate market rates.Resources

~~Impact~~Since inception, our principal sources of ~~Inflation~~liquidity have been revenues, proceeds from sales of equity securities, borrowings from banks, the Israeli government and ~~Currency~~shareholders, including ~~Fluctuations~~convertible loans, proceeds from the exercise of options, and warrants as well as proceeds from the divestiture of parts of our businesses. We had cash, cash equivalents and short-term investments representing bank deposits of $815,000, as of December 31, 2021. As of December 31, 2021, we also have a payable balance on our short-term bank loan, that is due within the next 12 months of approximately $2.1 million and a convertible short-term loan from shareholders (including a controlling shareholder) including accrued interest, of approximately $1.7 million. On January 10, 2022, we filed the Petition with the Court seeking protections from our creditors in accordance with the Israeli Insolvency and Economic Rehabilitation Law-2018, after our Board determined that we are insolvent from a cash flow perspective. However, following the signing of the agreement relating to the Nayax Loan, such Petition was dismissed and all amounts due under the convertible loan from shareholders (including our controlling shareholder) and the bank loan, were paid in full. Subsequent to the balance sheet date, we received the new convertible loan from Nayax in the amount of $5.5 million. In addition, Nayax has provided us with a full guarantee for a $2.0 million short-term loan provided to us by a bank which bears an annual interest rate of SOFR plus 2.45%, which is being rolled over on a monthly basis (i.e., repaid and re-provided on a monthly basis), and additional guarantees to our suppliers and subcontractors to allow us to maintain our ongoing production and sale of our products.

Our functional and reporting currency is the U.S. Dollar. We generate a certain portion of our revenues, and we incur some of our expenses in other currencies. As a result, we are exposed to the risk that the rate of inflation in countries in which we are active other than the United States will exceed the rate of devaluation of such countries’ currencies in relation to the dollar or that the timing of any such devaluation will lag behind inflation in such countries. To date, we have been affected by changes in the rate of inflation or the exchange rates of other countries’ currencies compared to the dollar, and we cannot assure you that we will not be adversely affected in the future.27

~~There~~The ~~was~~situation ain ~~deflation~~Poland ofresulting ~~0.7%~~from inthe ~~2020~~COVID-19 inpandemic, ~~Israel.~~led ~~The~~to ~~annual~~an ~~rate~~almost ofcomplete ~~inflation~~stop into ~~Israel~~our ~~was~~Mass ~~0.6%~~Transit inTicketing ~~2019.~~sales ~~The~~business, which ~~NIS~~negatively ~~revaluated~~impacted ~~against the~~our Ucash flow.S. ~~Dollar~~On byApril ~~approximately~~21, ~~7.0%~~2021, ~~and~~we ~~7.8%~~completed inthe ~~2020~~sale ~~and~~of ~~2019~~ASEC, ~~respectively~~including our Mass Transit Ticketing activity.

~~The~~In the ~~functional~~event ~~currency~~where ~~of ASEC,~~the ~~that~~Merger onis ~~March~~not 29completed, ~~2021~~under certain circumstances, we ~~entered~~will ~~into~~be anrequired ~~agreement~~ to ~~sell~~pay Nayax a termination fee of $1.5 million. Furthermore, isnon-completion of the ~~Polish~~merger ~~Zloty.~~would Abe ~~significant~~considered ~~amount~~an “event of ~~this~~default” ~~subsidiary~~under the Nayax Loan Agreement, which can result in Nayax’s requirement for an immediate repayment of the Nayax Loan Amount, or an increase of the annual interest ~~revenues~~on isthe ~~earned~~Nayax Loan Amount from 10% to 16% interest, at Nayax’s sole discretion. We will also be required to repay the bank loan provided with Nayax’s guarantee and would be exposed to a ~~significant~~risk ~~amount~~of not being able to conduct our business due to the loss of ~~their~~the guarantees ~~expenses~~provided ~~are~~by ~~incurred,~~Nayax into ~~its~~our ~~functional~~suppliers ~~currency~~and subcontractors. ToBased on the ~~extent~~projected ~~that~~cash ~~there~~flows ~~are~~and our cash balances as of December ~~fluctuations~~31, ~~between~~2021, ~~the~~we ~~Polish~~believe ~~Zloty~~that ~~against~~without: (1) the ~~U.S.~~completion ~~Dollar,~~of the ~~translation~~Merger ~~adjustment~~and ~~will~~increase beof ~~included~~our incash ~~our~~by ~~consolidated~~receiving ~~statements~~additional loans from Nayax of(at ~~changes~~Nayax’s insole ~~equity~~discretion) asunder ~~other~~the ~~comprehensive~~terms ~~income~~set under the Nayax Loan Agreement; or ~~loss~~(2) ~~and~~other increase in our cash, we will not have ~~impact~~sufficient ~~the~~resources ~~consolidated~~to ~~statements~~enable ofus to continue our operations for a period of at least the next 12 months, and may need to commence insolvency proceedings. As a result, there is a substantial doubt regarding our ability to continue as a going concern.

~~Government~~In connection with the outbreak of COVID-19, we have taken steps to protect our workforce in Israel, ~~Support~~the ~~Programs~~United States, Poland, South Africa and elsewhere. Such steps include working from home where possible, minimizing face-to-face meetings, utilizing video conferencing as much as possible, social distancing at facilities and elimination of most international travel. We continue to comply with all local health directives.

~~Until~~The global ~~2005,~~shortage ~~we participated~~ in ~~programs~~components, ~~offered~~which bycaused ~~the~~an ~~IIA~~increase ~~that~~in ~~supports~~components ~~research~~prices, ~~and~~freight ~~development~~cost ~~activities.~~and ~~From~~longer ~~our~~lead-time, ~~inception~~created ~~through~~a ~~2007,~~delay wein ~~received grants~~fulfilling ~~totaling~~customers’ ~~approximately~~orders, ~~$7.0~~which ~~million~~impacted ~~(excluding~~our ~~accrued~~revenues ~~interest) from the IIA,~~ and asproduct ofgross ~~December 31~~margin, ~~2020,~~mainly ~~we repaid approximately $5.9 million~~ in ~~respect~~the ofRetail ~~refundable projects~~segment. ~~Under~~As ~~the~~a ~~terms~~response ofto ~~these~~this ~~programs~~business environment, awe ~~royalty~~encouraged ofour ~~3%-3.5%~~customers ofto ~~the~~provide ~~sales~~a offorecast ~~products~~for ~~must~~their bedemand. ~~paid to~~We ~~the~~continue ~~IIA,~~to ~~beginning~~maintain ~~with~~a ~~the~~comprehensive ~~commencement~~network of ~~sales~~world-wide suppliers ofin ~~products~~order ~~developed~~to ~~with~~optimize ~~grant~~our ~~funds~~access ~~and~~to ~~ending~~critical ~~when~~components. ~~the~~As ~~dollar~~long ~~value~~as of the ~~grant (including~~COVID-19 ~~interest~~pandemic ~~based~~continues, onand ~~annual~~possibly ~~rate~~also ofthereafter, the ~~LIBOR~~components’ ~~applicable~~lead-time tomay ~~dollar~~be ~~deposits)~~longer isthan ~~repaid.~~normal Inand ~~2006,~~the weshortage ~~decided~~in tocomponents ~~cease~~may ~~our~~continue ~~participation with~~or ~~the~~get ~~IIA~~worse.

~~Royalties payable~~It ~~with~~is ~~respect~~difficult to predict ~~grants~~with ~~received~~certainty ~~under~~what ~~programs~~other ~~approved~~impacts ~~after January 1, 1999, however, will be subject to interest on~~ the ~~dollar~~COVID-~~linked value~~19 ofpandemic ~~the~~may ~~total grants received at an annual rate of LIBOR applicable to dollar deposits. As of December 31, 2020, we~~ have ~~received a~~on ~~total of $3~~us.~~4 million from the IIA net of royalties paid to it (or accrued for).~~

~~Local~~As of ~~Manufacturing~~December ~~Obligation~~31, 2021, our and certain of our subsidiaries’ manufacturing facilities and certain equipment have been pledged as security in respect of a loan received from a bank. Our short-term deposits in the amount of $105,000 have been pledged as security in respect of guarantees granted. Such deposits cannot be pledged to others or withdrawn without the consent of the bank.

~~The terms of the Encouragement~~As of ~~Research,~~December ~~Development and Technological Innovation in the Industry Law~~31, ~~5744-1984 (formerly known as the Law for the Encouragement of Research and Development in Industry 5744-1984)~~2021, ~~and~~we the regulations, guidelines, rules, procedures and benefit tracks thereunder, collectively, the Innovation Law, also require that the manufacturing of products developed with government grants be performed in Israel unless the IIA has granted ~~special approval. Such approval is not required for the transfer of up to 10% of the manufacturing capacity in the aggregate, in which case~~ a ~~notice~~guarantee ~~must be provided~~ to the ~~IIA~~lessor ~~and not objected to by the IIA within 30 days~~ of ~~such~~our ~~notice.~~headquarters ~~If the~~in ~~IIA consents to the manufacture of the products outside of~~ Israel, wein ~~may be required to pay increased royalties, ranging from 120% to 300% of the~~ amount of ~~the IIA grant~~$112,540 ~~depending~~whose onexpiration ~~the~~date is ~~percentage~~May ~~of foreign manufacture~~2024.

~~These restrictions continue~~For ~~to apply even after we have paid~~ the ~~full~~years ~~amount~~ended ofDecember ~~royalties~~31, ~~payable~~2021 ~~with~~and ~~respect~~December of31, ~~the grants. Based upon the aggregate grants received to date~~2020, we ~~expect~~had ~~that~~a wenegative ~~will~~cash ~~continue~~flow tofrom ~~pay~~continuing ~~royalties~~operations ~~to the IIA to the extent~~ of ~~our~~$5.6 ~~sales~~million ~~of our products~~ and ~~related services for the foreseeable future~~$1. ~~Separate IIA consent is required to transfer to third-parties technologies developed through projects in which~~9 ~~the~~million, ~~government participates~~respectively. ~~These restrictions do not apply to exports from Israel of products developed with these technologies.~~

2628

~~Know-How~~Operating activities ~~Transfer~~related ~~Limitation~~to continuing operations

~~The~~For ~~Innovation~~the ~~Law~~year ~~restricts the~~ended ~~ability~~December to31, 2021, ~~transfer~~net ~~know-how~~cash ~~funded~~used byin ~~the~~continuing ~~IIA~~operating ~~outside~~activities ofwas ~~Israel~~$5.6 ~~Transfer~~million ofprimarily ~~IIA~~due ~~funded~~to ~~know-how~~a ~~outside~~$10.1 ofmillion ~~Israel~~net ~~requires~~loss ~~prior approval~~from ofoperating ~~the~~activities, a ~~IIA~~$2.3 ~~and~~increase ~~may~~in betrade ~~subject~~receivables, toa ~~payments~~$727,000 toincrease ~~the~~in ~~IIA~~inventories, ~~calculated~~a ~~according~~$438,000 toincrease ~~formulae~~in ~~provided~~other ~~under~~receivables ~~the~~and ~~Innovation~~prepaid ~~Law. The~~expenses, ~~redemption~~a ~~fee~~$61,000 ischange ~~subject~~in toaccrued ainterest ~~cap~~and oflinkage ~~six~~differences, ~~times~~net, ~~the~~$13,000 ~~total amount~~ of ~~the~~deferred ~~IIA~~tax ~~grants~~benefits, ~~plus~~net, ~~interest~~and ~~accrued~~a ~~thereon~~$13,000 ~~(i.e.~~change ~~the~~in ~~total liability~~accrued toseverance ~~the IIA~~pay, ~~including accrued interest~~net, ~~multiplied~~partially offset by ~~six)~~$3.7 Ifmillion weof ~~wish~~transaction toexpenses ~~transfer~~related ~~IIA~~to ~~funded~~a ~~know~~convertible short-~~how~~term loan received from shareholders, a ~~the~~$3.0 ~~terms~~million ~~for~~increase ~~approval~~in ~~will~~trade ~~be determined~~payables, ~~according~~a to$766,000 ~~the~~increase ~~nature~~in other current liabilities, $378,000 of ~~the~~depreciation ~~transaction~~and amortization, and ~~the~~a ~~consideration~~$100,000 ~~paid~~non-cash expense due to usstock-based incompensation ~~connection~~issued ~~with~~to ~~such~~employees ~~transfer~~and others.

~~Approval~~For the ofyear ~~transfer~~ended ofDecember ~~IIA funded~~31, ~~know-how~~2020, net cash used in continuing operating activities was $1.9 million primarily due to ~~another~~a ~~Israeli~~$5.0 ~~company~~million ~~may~~net loss befrom ~~granted~~operating ~~only~~activities, ifa ~~the~~$212,000 ~~recipient~~decrease ~~abides~~in other current liabilities and a $36,000 of deferred tax benefits, net, partially offset by ~~the~~a ~~provisions~~$1.0 million increase in trade payables, a $989,000 decrease in trade receivables, a $541,000 decrease in inventories, $419,000 of ~~the~~depreciation ~~Innovation~~and ~~law~~amortization, a $115,000 decrease in other receivables and ~~related regulations~~prepaid expenses, ~~including~~a ~~the~~$110,000 ~~restrictions~~change onin ~~the~~accrued ~~transfer~~interest and linkage differences, net, $90,000 of ~~know~~transaction expenses related to convertible short-~~how~~term loan received from Ivy, a $67,000 non-cash expense due to stock-based compensation issued to employees and ~~manufacturing~~others ~~rights~~and ~~outside~~a of$65,000 ~~Israel~~change in accrued severance pay, net.

~~Change~~Investing and offinancing ~~Control~~activities related to continuing operations

~~Any~~For ~~non-Israeli~~the ~~citizen,~~year ~~resident~~ended orDecember ~~entity that~~31, ~~among other things~~2021, ~~(i)~~net ~~becomes~~cash aused ~~holder~~in ofcontinuing 5%investing oractivities ~~more~~was ~~of our share capital or voting rights~~$247, ~~(ii)~~000, isdue ~~entitled~~ to ~~appoint~~purchases ~~our directors or our chief executive officer or (iii) serves as one~~ of ~~our~~property ~~directors~~and ~~or as our chief executive~~equipment ~~officer (including holders of 25% or more of the voting power, equity or the right to nominate directors in such direct holder, if applicable) is required to notify the IIA~~ and ~~undertake~~intangible ~~to comply with the rules and regulations applicable to the grant programs of the IIA, including the restrictions on transfer described above~~assets.

~~Approval~~For ~~to manufacture products outside of Israel or consent to~~ the ~~transfer~~year ofended ~~IIA~~December ~~funded~~31, ~~know-how~~2020, ifnet ~~requested,~~cash isprovided ~~within~~by ~~the~~continuing ~~discretion~~investing ~~of the~~activities ~~IIA~~was $1.8 ~~Furthermore~~million, ~~the~~mainly ~~IIA~~due ~~may~~to ~~impose~~a ~~certain~~$2.2 ~~conditions~~million net onchange ~~any~~in ~~arrangement~~short-term ~~under~~investments, ~~which~~partially itoffset ~~permits~~by us$407,000 toof ~~transfer~~purchases ~~IIA~~of ~~funded~~property ~~know-how or~~and ~~manufacturing~~equipment ~~out~~and ofintangible ~~Israel~~assets.

~~The~~For the year ended December 31, ~~consideration~~2021, ~~available~~net cash provided by continuing financing activities was $3.9 million, mainly due to ~~our~~$3.2 ~~shareholders~~million in aproceeds ~~future~~from ~~transaction~~the ~~involving~~issuance of ~~the~~ordinary ~~transfer~~shares ~~outside~~as part of ~~Israel~~a rights offering, net of ~~know~~issuance costs, a $923,000 convertible short-~~how~~term ~~developed~~loan ~~with~~received from our controlling ~~IIA~~shareholder, ~~funding~~net ~~(such~~of astransaction acosts, ~~merger~~and ora ~~similar~~$18,000 ~~transaction)~~long-term ~~may~~loan bereceived, ~~reduced~~partially offset by ~~any~~a ~~amounts~~$174,000 ~~that~~decrease wein ~~are~~short-term ~~required~~bank credit, tonet, ~~pay~~and toa ~~the~~$7,000 ~~IIA~~repayment of long-term bank loans.

~~Further~~For ~~Updates~~the ~~Relating~~year ended December 31, 2020, net cash provided by continuing financing activities was $1.7 million, mainly due to $1.4 million in proceeds from the ~~IIA~~issuance ~~Grants~~of Ordinary Shares, net of issuance costs, and a $578,000 convertible short-term loan received from our controlling shareholder, net of transaction costs, partially offset by a $215,000 decrease in short-term bank credit, net, and $7,000 repayment of long-term bank loans.

We raised additional funds and ~~have~~increased aour ~~dispute~~cash, ~~with~~cash ~~the~~equivalents ~~IIA~~and long-term investments in ~~the~~a gross amount of ~~approximately NIS~~ $3.63 million ~~($1.1~~by ~~million)~~closing ~~including~~a ~~accrued~~rights ~~interest~~offering, ~~(while~~or the ~~current~~Rights ~~debt~~Offering, toon ~~the~~May, ~~IIA~~19, as2021, ~~presented~~under inwhich ~~our~~we ~~financial~~offered ~~statements~~our ~~amounts~~existing toshareholders ~~approximately $180,000) due~~ to apurchase ~~claim~~additional ofordinary ~~the~~shares ~~IIA about miscalculations~~ in ~~the~~consideration for ~~amount~~a oflower ~~royalties~~exercise ~~paid~~price bythan ~~us and~~ the ~~revenues~~quoted onshare ~~which~~price wein ~~must~~the ~~pay~~active ~~royalties~~market. WeThe ~~have~~Rights ~~not~~Offering ~~yet~~was ~~completed our~~oversubscribed ~~discussions with the IIA~~ and ~~intend~~generated to$3.3 million ~~exhaust all options~~ in ~~order~~gross toproceeds. ~~resolve~~The ~~this~~issuance ~~matter~~costs inderived afor ~~favorable~~the ~~manner.~~Rights WeOffering ~~believe that,~~were atapproximately ~~the current stage~~$128,000. itAs ispart ~~more~~of ~~likely~~the ~~than~~Rights ~~not that a positive resolution will be applied to this dispute. Accordingly~~Offering, nowe ~~additional~~issued ~~accrual~~an ~~has~~aggregate ~~been~~of ~~recorded~~18,965,516 inordinary ~~the~~shares ~~financial~~for ~~statements~~$0.174 inper ~~respect of this matter~~share.

~~Off-Balance~~As contemplated by the Nayax Loan ~~Sheet~~Agreement, ~~Arrangements~~the Nayax Loan is subject to 10% interest per year, and the accumulated interest and value added tax, if any, is payable quarterly commencing on April 1, 2022. The Nayax Loan matures on the second anniversary of the closing of the Nayax Loan Agreement and we are not permitted to prepay it. At any time after the earlier of (i) an Event of Default (as defined under the Nayax Loan Agreement) or (ii) the completion of the Merger Agreement, and prior to the repayment of the Nayax Loan, Nayax is entitled, at its sole discretion, to convert the Nayax Loan into our ordinary shares at a price per share equal to $0.043.

~~Our~~On March 1, 2022, we received ~~Company~~the ~~has~~U-Bank noLoan ~~off~~in the amount of $2 million for which Nayax provided us with a full guarantee, which bears an annual interest rate of a SOFR plus 2.45%, which is being rolled over on a monthly basis (i.e., repaid and re-~~balance~~provided ~~sheet~~on ~~arrangements~~a monthly basis).

~~Item~~Operating, ~~7A.~~Investing ~~Quantitative~~ and ~~Qualitative~~financing ~~Disclosures~~activities ~~About~~related ~~Market~~to ~~Risk.~~discontinued operations

~~Not~~For the year ended December 31, ~~applicable~~2021, net cash used in discontinued operating activities was $2.1 million, mainly related to a payment of $2.0 million to Merwell Inc., as part of a settlement agreement.

~~Item~~For 8the year ended December 31, 2020, net cash used in discontinued operating activities was $2.1 ~~Financial~~million, ~~Statements~~mainly ~~and~~related ~~Supplementary~~to ~~Data~~the Mass Transit Ticketing operation, as well as an amount of $482,000 derived from a payment to Harel, an insurance company, due to a legal proceeding.

~~Our~~For ~~financial~~the ~~statements~~year ~~are~~ended ~~stated~~December in31, ~~thousands~~2021, ofnet ~~United~~cash ~~States~~provided ~~dollars~~by ~~and~~discontinued ~~are~~investing ~~prepared~~activities inwas ~~accordance~~$2.9 million, mainly related to $1.6 million derived from a settlement with USuperCom Ltd.S, including earn-out consideration, and $2.7 ~~GAAP~~million consideration for the sale of ASEC, partially offset by cash and cash equivalents as held by ASEC at the closing date of its sale.

~~The following audited consolidated financial statements are filed as part of this Annual Report on Form 10-K:~~29

Report of Independent Registered Public Accounting Firm, dated March 31, 2021.		F-3 – F-4
Consolidated Balance Sheets.		F-5 – F-6
Consolidated Statements of Operations.		F-7
Consolidated Statements of Comprehensive Loss.		F-8
Consolidated Statements of Changes in Equity.		F-9
Consolidated Statements of Cash Flows.		F-10 – F-11
Notes to the Consolidated Financial Statements.		F-12 – F-51

For the year ended December 31, 2020, net cash used in discontinued investing activities was $948,000, mainly related to the purchase of property and equipment for the Mass Transit Ticketing activity.

27For the year ended December 31, 2021, net cash used in discontinued financing activities was $380,000, related to repayment of a short-term bank loan for the Mass Transit Ticketing operations.

~~Item~~For 9the year ended December 31, 2020, net cash provided by discontinued financing activities was $1.2 ~~Changes~~million, inmainly ~~and~~related ~~Disagreements~~to ~~with~~loans ~~Accountants~~received for onthe ~~Accounting~~Mass ~~and~~Transit ~~Financial~~Ticketing ~~Disclosure~~activity.

~~Not~~Market ~~applicable.~~Risks

~~Item~~Market 9Arisks relating to our operations result primarily from changes in interest rates and currency fluctuations. ~~Controls~~In order to limit our exposure, we may enter, from time to time, into various non-speculative derivative transactions. Our objective is to reduce exposure and ~~Procedures~~fluctuations in earnings and cash flows associated with changes in interest rates and foreign currency rates. We do not use financial instruments for trading purposes.

~~Disclosure~~Interest ~~Controls~~Rate ~~and Procedures~~Risks

~~Our management,~~We ~~including~~are ~~our~~exposed ~~Chief~~to ~~Executive~~market risks ~~Officer,~~resulting orfrom ~~CEO,~~changes ~~and~~in ~~Chief~~interest ~~Financial Officer~~rates, orprimarily ~~CFO,~~in ~~are~~connection ~~responsible~~with ~~for establishing and maintaining~~ our ~~disclosure~~loan ~~controls~~obligations ~~and~~to ~~procedures~~banks. ~~(within~~We ~~the~~do ~~meaning~~not ofcurrently ~~Rule~~use ~~13a-15(e) of the Securities Exchange Act of~~derivative ~~1934,~~financial asinstruments ~~amended, or Exchange Act). These controls and procedures are designed~~ to ~~ensure~~limit ~~that~~exposure ~~information required~~ to beinterest ~~disclosed in~~rate ~~the~~risks. ~~reports~~As ~~that~~of weDecember ~~file under the Exchange Act is recorded~~31, ~~processed~~2021, ~~summarized~~we ~~and~~had ~~reported~~a ~~within~~short ~~the~~and ~~time~~long ~~periods~~term ~~specified in~~loan ~~the rules and forms~~ obligations of ~~the~~$2,090,000 ~~SEC~~ and ~~that such information was made known to our management~~$26,000, ~~including our CEO and CFO~~respectively, ~~by others within~~ the ~~Company,~~vast asmajority ~~appropriate~~of towhich ~~allow~~are ~~timely~~subject ~~decisions~~to ~~regarding~~variable ~~required~~interest ~~disclosure~~rates. WeThe ~~evaluated~~carrying ~~these~~values ~~disclosure~~of ~~controls~~the ~~and~~loans ~~procedures~~are ~~under~~equivalent ~~the~~to ~~supervision~~or ofapproximate ~~our~~their ~~CEO~~fair ~~and~~market ~~CFO~~value as ofthey ~~December~~bear ~~31,~~interest ~~2020.~~at ~~Based~~approximate onmarket ~~that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures are effective as of such date~~rates.

~~Management’s~~Impact ~~Annual~~of ~~Report~~Inflation onand ~~Internal~~Currency ~~Control over Financial Reporting~~Fluctuations

Our ~~management~~functional isand ~~responsible~~reporting ~~for~~currency ~~establishing~~is ~~and~~the ~~maintaining~~U.S. ~~adequate~~Dollar. ~~internal~~We ~~control~~generate ~~over~~a ~~financial~~certain ~~reporting,~~portion asof ~~such~~our ~~term~~revenues, ~~is defined~~and inwe ~~Rule~~incur ~~13a-15(f)~~some of ~~the~~our ~~Exchange~~expenses in ~~Act~~other currencies. ~~Our~~As ~~internal~~a ~~control~~result, ~~over~~we ~~financial~~are ~~reporting~~exposed ~~policies~~to ~~and~~the ~~procedures~~risk ~~are~~that ~~designed under~~ the ~~supervision~~rate of ~~the~~inflation ~~CEO~~in ~~and~~countries ~~CFO~~in towhich ~~provide~~we ~~reasonable~~are ~~assurance~~active ~~regarding~~other than the ~~reliability~~United ofStates ~~the~~will ~~financial~~exceed ~~reporting and~~the ~~preparation~~rate of ~~the~~devaluation ~~financial~~of ~~statements~~such ~~for~~countries’ ~~the~~currencies ~~external reporting purposes~~ in ~~accordance~~relation ~~with~~to ~~U.S.~~the ~~GAAP.~~dollar ~~Under~~or that the ~~supervision~~timing ~~and~~of ~~with~~any ~~the~~such ~~participation~~devaluation ofwill ~~our~~lag ~~management,~~behind ~~including~~inflation ~~our~~in ~~CEO~~such ~~and~~countries. ~~CFO~~To date, we ~~conducted~~have anbeen ~~evaluation~~affected ofby changes in the ~~effectiveness~~rate of ~~our~~inflation ~~internal~~or ~~control~~the ~~over~~exchange ~~financial~~rates ~~reporting~~of ~~based~~other oncountries’ currencies compared to the ~~framework~~dollar, inand ~~Internal~~we ~~Control—Integrated~~cannot ~~Framework~~assure ~~(2013) issued~~you bythat ~~the~~we ~~Committee~~will ofnot ~~Sponsoring~~be ~~Organizations~~adversely affected ofin the ~~Treadway Commission~~future.

~~Because~~The ofinflation ~~its~~was ~~inherent~~2.8% ~~limitations,~~in ~~internal~~2021 ~~control~~in ~~over financial reporting may not prevent or detect misstatements~~Israel. ~~Also,~~The ~~projections of~~annual ~~any~~rate ~~evaluation~~ of ~~effectiveness~~deflation toin ~~future~~Israel ~~periods~~was ~~are~~0.7% ~~subject~~in to2020. ~~the~~The ~~risk~~NIS ~~that~~revaluated ~~controls~~against ~~may~~the ~~become~~U.S. ~~inadequate because of changes~~Dollar inby ~~conditions,~~approximately or3.0% ~~that~~and ~~the~~7.0% ~~degree~~in of2021 ~~compliance~~and ~~with~~2020, ~~the policies or procedures may deteriorate~~respectively.

~~Based~~Government ~~on our evaluation under the framework in Internal Control—Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as~~ of ~~December~~Israel ~~31,~~Support ~~2020.~~Programs

~~This~~Until ~~Annual~~2005, ~~Report~~we ~~does~~participated ~~not~~in ~~include~~programs anoffered ~~attestation~~by ~~report~~the ofIIA ~~our~~that ~~independent~~supports ~~registered~~research ~~public~~and ~~accounting~~development ~~firm~~activities. ~~regarding~~From ~~internal~~our ~~control~~inception through 2007, ~~over~~we ~~financial~~received ~~reporting~~grants totaling approximately $7.0 ~~Management’s~~million ~~report~~(excluding ~~regarding~~accrued ~~internal~~interest) ~~control~~from ~~over~~the ~~financial~~IIA, ~~reporting~~and ~~was~~as ~~not~~of ~~subject~~December to31, ~~attestation~~2021, we repaid byapproximately ~~our~~$6.0 ~~registered~~million ~~public~~in ~~accounting~~respect ~~firm~~of ~~pursuant~~refundable projects. Under the terms of these programs, a royalty of 3%-3.5% of the sales of products must be paid to ~~rules~~the IIA, beginning with the commencement of sales of products developed with grant funds and ending when the dollar ~~SEC~~value ~~that~~of ~~permit~~the usgrant (including interest based on annual rate of LIBOR applicable to ~~provide~~dollar ~~only~~deposits) ~~management’s~~is ~~report~~repaid. In 2006, we decided into ~~this~~cease ~~Annual~~our ~~Report~~participation with the IIA.

~~Changes~~Royalties inpayable ~~Internal~~with ~~Control~~respect ~~over~~to ~~Financial~~grants ~~Reporting~~received under programs approved after January 1, 1999, however, will be subject to interest on the dollar-linked value of the total grants received at an annual rate of LIBOR applicable to dollar deposits. As of December 31, 2021, we have received a total of $3.4 million from the IIA net of royalties paid to it (or accrued for).

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.30

~~Item~~Local ~~9B.~~Manufacturing ~~Other Information.~~Obligation

~~Not~~The ~~applicable~~terms of the Encouragement of Research, Development and Technological Innovation in the Industry Law, 5744-1984 (formerly known as the Law for the Encouragement of Research and Development in Industry 5744-1984), and the regulations, guidelines, rules, procedures and benefit tracks thereunder, collectively, the Innovation Law, also require that the manufacturing of products developed with government grants be performed in Israel unless the IIA has granted special approval. Such approval is not required for the transfer of up to 10% of the manufacturing capacity in the aggregate, in which case a notice must be provided to the IIA and not objected to by the IIA within 30 days of such notice. If the IIA consents to the manufacture of the products outside of Israel, we may be required to pay increased royalties, ranging from 120% to 300% of the amount of the IIA grant, depending on the percentage of foreign manufacture.

28These restrictions continue to apply even after we have paid the full amount of royalties payable with respect of the grants. Based upon the aggregate grants received to date, we expect that we will continue to pay royalties to the IIA to the extent of our sales of our products and related services for the foreseeable future. Separate IIA consent is required to transfer to third-parties technologies developed through projects in which the government participates. These restrictions do not apply to exports from Israel of products developed with these technologies.

~~PART~~Know-How ~~III~~Transfer Limitation

~~Item~~The 10Innovation Law restricts the ability to transfer know-how funded by the IIA outside of Israel. ~~Directors~~Transfer of IIA funded know-how outside of Israel requires prior approval of the IIA and may be subject to payments to the IIA, ~~Executive~~calculated ~~Officers~~according to formulae provided under the Innovation Law. The redemption fee is subject to a cap of six times the total amount of the IIA grants, plus interest accrued thereon (i.e. the total liability to the IIA, including accrued interest, multiplied by six). If we wish to transfer IIA funded know-how, the terms for approval will be determined according to the nature of the transaction and ~~Corporate~~the ~~Governance~~consideration paid to us in connection with such transfer.

~~Our~~Approval ~~Directors~~of ~~and~~transfer ~~executive~~of ~~officers,~~IIA asfunded know-how to another Israeli company may be granted only if the recipient abides by the provisions of the ~~date~~Innovation law ~~hereof~~and related regulations, ~~together~~including ~~with~~the ~~their~~restrictions ~~ages~~on the transfer of know-how and ~~business~~manufacturing ~~backgrounds~~rights ~~are~~outside asof ~~follows:~~Israel.

Name	Age	Position(s) Held
Sandra B Hardardottir	46	Chairman of the Board of Directors
William C. Anderson III (1)(2)(3)	50	Director
Uri Arazy (1)	63	Director
Leonid Berkovitch (1)(2)(3)(4)	54	Director
Donna Marks (1)(2)(3)(4)	64	Director
Michael Shanahan (1)	66	Director
Yehuda Holtzman	60	Chief Executive Officer
Assaf Cohen	36	Chief Financial Officer

Change of Control

Any non-Israeli citizen, resident or entity that, among other things, (1i) ~~Independent~~becomes ~~Director~~a ~~under~~holder ~~Nasdaq~~of 5% or more of our share capital or voting rights, (ii) is entitled to appoint our directors or our chief executive officer or (iii) serves as one of our directors or as our chief executive officer (including holders of 25% or more of the voting power, equity or the right to nominate directors in such direct holder, if applicable) is required to notify the IIA and undertake to comply with the rules and regulations applicable to the grant programs of the IIA, including the restrictions on transfer described above.

~~(2)~~Approval to ~~Member~~manufacture products outside of ~~Compensation~~Israel ~~Committee~~or consent to the transfer of IIA funded know-how, if requested, is within the discretion of the IIA. Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer IIA funded know-how or manufacturing out of Israel.

(3)	Member of Audit Committee
(4)	External director under the Companies Law

The consideration available to our shareholders in a future transaction involving the transfer outside of Israel of know-how developed with IIA funding (such as a merger or similar transaction) may be reduced by any amounts that we are required to pay to the IIA.

~~Directors~~31

~~Sandra~~Further B.Updates ~~Hardardottir~~Relating ~~was appointed in May 2020 as a director and as Chairman of our Board. From 1994~~ to ~~2001, Ms. Hardardottir was~~ the ~~founder~~IIA and Managing Director of Premier Recruitment Ltd., a recruitment company specializing in the construction industry, and co-founder of Premier Electrical Ltd., an electrical contractor in the commercial and industrial sectors. From 2003 to 2008, Ms. Hardardottir served initially as a Senior Business Analyst and then was promoted to Senior Executive of a national U.S. management consulting firm. From 2008 to 2012, Ms. Hardardottir held interim roles such as President and Director of Operations of companies that required short term relief to shareholders and leadership teams that faced immediate challenges requiring a shift in strategic focus and rebuilding of core competencies to align with company goals. From 2014 to 2017, Ms. Hardardottir acted as a Senior Business/Executive Analyst for Cogent Analytics, LLC, performing holistic business analysis and providing recommendations to improve performance through organizational structuring, operational efficiencies, and profit engineering. Ms. Hardardottir completed an International Finance Reporting and Controls course and holds an M.B.A. with honors from Durham University Business School in England.Grants

~~William~~We have C.a ~~Anderson III~~dispute ~~has~~with ~~served~~the asIIA ain ~~director~~the ~~since~~amount ~~2014~~of approximately NIS 3.6 Mrmillion ($1.1 ~~Anderson~~million) isincluding ~~the~~accrued ~~founder~~interest of(while ~~AmpThink~~the ~~LLC,~~current debt ato ~~wireless~~the ~~solutions~~IIA ~~company~~as ~~focused~~presented ~~on building~~in ~~large,~~our ~~complex,~~financial ~~wireless~~statements ~~networks~~amounts ~~employing~~to ~~different~~approximately ~~technologies~~$180,000) ~~and~~due ~~has~~to ~~been~~a ~~acting~~claim asof the ~~President~~IIA about miscalculations in the amount of ~~AmpThink~~royalties ~~LLC~~paid ~~since its~~by ~~incorporation~~us inand ~~2011.~~the ~~Prior~~revenues toon ~~AmpThink,~~which Mrwe must pay royalties. ~~Anderson~~We ~~was~~have ~~co-founder~~not ofyet ~~Genesta,~~completed aour ~~wireless~~discussions ~~systems~~with the ~~integrator~~IIA ~~specializing~~and intend to exhaust all options in ~~the design~~order ~~and~~to ~~deployment~~resolve ofthis ~~warehouse~~matter ~~automation~~in ~~systems,~~a ~~where~~favorable Mrmanner. ~~Anderson~~We ~~from~~believe ~~2000~~that, toat ~~2011~~the ~~acted~~current asstage, it ~~Chief~~is ~~Technology~~more ~~Officer.~~likely ~~Mr.~~than ~~Anderson holds~~not that a ~~degree~~positive inresolution ~~Economics~~will ~~and~~be ~~Philosophy~~applied ~~from~~to ~~Boston~~this ~~College~~dispute. ~~and~~Accordingly, ano ~~Master’s~~additional ~~degree~~accrual has been recorded in ~~Management~~the ~~Science~~financial ~~from~~statements ~~The~~in ~~State~~respect ~~University~~ of ~~New~~this ~~York~~matter.

~~Uri Arazy has~~Item ~~served as a director since March 2021~~7A. HeQuantitative ~~served in a variety of positions in Intel Corporation between 1984~~ and ~~2019.~~Qualitative ~~Between~~Disclosures ~~2005~~About ~~and 2019,~~Market MrRisk. Arazy served as an Investment Director of Intel Capital Israel. In the past five years, Mr. Arazy invested and served on the board of directors of technology startups including WSC Sports Technologies, Interlude, Spotinst, Moovit, Velostrata, Cloudify and Gigaspaces. Mr. Arazy holds a B.A. in Computer Science from Queens College, NY, an M.Sc. in Computer Science from Columbia University, NY, an M.B.A. from Tel Aviv University and Northwestern University and an M.A. in Security and Diplomacy from the Tel Aviv University.

~~Leonid Berkovitch~~Not ~~has served as an External Director since April 2020~~applicable. Mr. Berkovitch has nearly 30 years of experience in the smart card industry, having worked in leading technology companies in areas including telecom, e-transactions and digital security. From 1996 to 2004, Mr. Berkovitch served as a Senior Vice President Sales EMEA, Marketing & Product lines Director in the Test & Transactions Division of Schlumberger Limited (NYSE: SLB). From 2004 to 2006, Mr. Berkovitch served as a Business Unit Director for Axalto. From 2006 to 2011, Mr. Berkovitch served as a Managing Director Emerging Businesses for Gemalto N.V. Mr. Berkovitch joined Orange Group at the end of 2011 and served as a Vice-President Product Marketing in Viaccess-Orca (an affiliate company of Orange) until 2018. Since 2018, he has been Director IoT, Connected Home at Orange’s Corporate Unit and since the end of 2020, has taken a position of Senior Director; Connectivity at Orange Business Services. Mr. Berkovitch holds a Master of Science degree in Telecommunication Engineering from the State University of Telecommunications of Saint-Petersburg.

29Item 8. Financial Statements and Supplementary Data.

~~Donna Marks~~Our ~~has~~financial ~~served~~statements asare astated ~~director since 2015, and currently qualifies as an External Director under the Companies Law. Ms. Marks is a Certified Public Accountant with a wide variety of experience serving clients~~ in ~~various~~thousands ~~industries over her 39 years in the practice~~ of ~~public accounting.~~United ~~Ms.~~States ~~Marks~~dollars ~~has served as a director, working at the Fuoco Group, LLC, an accounting firm between the years 2011~~ and ~~2014,~~are ~~while acting~~prepared asin aaccordance ~~consultant~~with ~~for Fuoco Group through 2018~~U. ~~Prior to joining the Fuoco Group, Mrs~~S. Marks was the managing partner of her own firm, Donna Seidenberg, PA and served as a Managing Director at American Express Tax and Business Services (which merged into the international accounting firm of RSM International)GAAP. Ms. Marks earned a B.A. in Business Administration degree in Accounting (magna cum laude) from the University of South Florida in 1978 and is a member of the Florida Institute of Certified Public Accountants.

~~Michael Shanahan~~The ~~has~~following ~~served~~audited asconsolidated afinancial ~~director~~statements ~~since~~are ~~January~~filed ~~2020. Mr. Shanahan has served~~ as ~~owner~~part and managing partner at Shanahan Law Firm since 2006. From 1988 to 1998, Mr. Shanahan served as an associate and then partner at the Seattle, Washington law firm, Bauer Moynihan & Johnson. From 1998 to 2003, Mr. Shanahan served as Vice President of ~~administration~~this ~~and~~Annual ~~general~~Report ~~counsel~~on ~~for~~Form Western Pioneer, Inc., and from 2003 to 2006, as Vice President of administration and general counsel for Blue North Fisheries, Inc., both companies in the fishing industry. In addition, since 1997, Mr. Shanahan has served as an adjunct professor at the Seattle University Law School. Mr. Shanahan holds a J.D. from the Seattle University School of Law and a B.A. from the University of Washington.10-K:

~~Executive~~Report ~~Officers~~of Independent Registered Public Accounting Firm, dated April 13, 2022.

~~Yehuda~~Consolidated ~~Holtzman~~Balance ~~was appointed as the Company’s Chief Executive Officer effective November 25, 2019~~Sheets. Mr. Holtzman served from 1998 to 2011 as president of MobileAccess Ltd., a cellular technology company he co-founded and sold to Corning in 2011. Following that, Mr. Holtzman co-founded and was the Chief Executive Officer of ExploreGate Ltd., a big data/AI company, and from 2016 until 2018, he was the Chief Executive Officer of Mobilogy Inc., a provider of mobile lifecycle solutions which was acquired in 2018.

~~Assaf~~Consolidated ~~Cohen~~Statements ~~was~~of ~~appointed as the Company’s Chief Financial Officer effective February 27, 2018 and served also as the Company’s Interim Chief Executive Officer from July 2019 to November 2019~~Operations. Prior to his appointment, Mr. Cohen served as the Company’s controller and deputy Chief Financial Officer from July 2015 and oversaw the Company’s finance department in this capacity. Prior to joining the Company, Mr. Cohen was a controller at a private company, Samgal Ltd., for a year and a half and prior to that he was a senior accountant at Ernst & Young. Mr. Cohen received a B.A. in economics and accounting from the Haifa University, and he is a Certified Public Accountant in Israel.

~~Board~~Consolidated ~~Practices~~Statements of Comprehensive Loss.

~~Election~~Consolidated Statements of ~~Directors;~~Changes ~~Appointment~~in ~~of Officers~~Equity.

~~Our~~Consolidated ~~Board~~Statements ~~currently consists~~ of ~~six~~Cash ~~directors~~Flows. Our non-External Directors are appointed, removed or replaced by a majority vote of our shareholders present in person or by proxy at a general meeting of our shareholders according to the Companies Law and our Articles of Association.

~~Once~~Notes ~~elected~~to ~~at a shareholders’ meeting, our directors, except for External Directors, hold office until~~ the ~~first~~Consolidated ~~general~~Financial ~~meeting of shareholders held at least three years after their election~~Statements. ~~Incumbent directors may be reelected at that meeting. A director may be elected for consecutive terms unless prohibited by law.~~

~~Under~~Item ~~the~~9. ~~Companies~~Changes ~~Law,~~in neither the Chief Executive Officer of a public company nor a family member thereof or any person directly or indirectly subordinate to the Chief Executive Officer, may serve as a Chairman of the Board, and ~~vice~~Disagreements ~~versa~~with ~~unless~~Accountants ~~authorized by~~on aAccounting ~~general meeting of the shareholders according to the required vote pursuant to the Companies Law~~ and ~~then~~Financial ~~only for a period of time that does not exceed three years~~Disclosure.

30Not applicable.

~~Our~~Item ~~Board appoints our Chief Executive Officer and his terms of employment are approved by the general shareholders meeting according to the provisions of the Companies Law~~9A. ~~With~~Controls ~~the exception of our Chief Executive Officer~~ and our directors, each of our executive officers serves at the discretion of our Chief Executive Officer, subject to the terms of any employment agreement, and holds office until his or her successor is elected or until his or her earlier resignation or removalProcedures.

~~Board~~Disclosure ~~Leadership~~Controls ~~Structure~~and Procedures

~~Mr. Holtzman~~Our ismanagement, ~~our~~including our Chief Executive Officer, or CEO, and MsChief Financial Officer, or CFO, are responsible for establishing and maintaining our disclosure controls and procedures (within the meaning of Rule 13a-15(e) of the Exchange Act). ~~Hardardottir~~These controls and procedures are designed to ensure that information required to be disclosed in the reports that we file under the Exchange Act is ~~Chairman~~recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information was made known to our ~~Board.~~management, Asincluding our ~~Chief~~CEO ~~Executive~~and ~~Officer~~CFO, ofby others within the Company, ~~Mr.~~ ~~Holtzman~~as ~~reports~~appropriate to ~~the~~allow ~~Board~~timely decisions regarding required disclosure. ~~None~~We evaluated these disclosure controls and procedures under the supervision of our ~~independent~~CEO ~~directors~~and ~~serves~~CFO as ~~the~~of ~~lead~~December ~~independent~~31, ~~director~~2021. WeBased ~~believe~~on that evaluation, our management, ~~this~~including ~~leadership~~our ~~structure~~CEO isand ~~appropriate~~CFO, ~~given~~concluded ~~the~~that ~~current~~our ~~size~~disclosure controls and ~~operations~~procedures are effective as of ~~the~~such ~~Company~~date.

~~Risk Oversight~~32

~~Our Board~~Management’s Annual ~~role~~Report inon ~~risk~~Internal ~~oversight~~Control ~~includes~~over ~~risk~~Financial ~~analysis and assessment in connection with each financial and business review, update and decision-making proposal and deliberations.~~Reporting

~~The~~Our ~~Board’s~~management ~~role~~is inresponsible ~~our~~for ~~risk~~establishing ~~oversight~~and ismaintaining ~~consistent~~adequate ~~with~~internal ~~our~~control ~~leadership~~over ~~structure~~financial reporting, ~~with~~as ~~our~~such ~~Chief~~term ~~Executive~~is ~~Officer, whose~~defined ~~performance~~in isRule ~~assessed~~13a-15(f) byof the ~~Board,~~Exchange Act. Our internal control over financial reporting policies and ~~other~~procedures ~~members~~are designed under the supervision of ~~senior~~the ~~management~~CEO ~~having~~and ~~responsibility~~CFO to provide reasonable assurance regarding the reliability of the financial reporting and preparation of the financial statements for ~~assessing~~the external reporting purposes in accordance with U.S. GAAP. Under the supervision and ~~managing~~with the participation of our management, including our ~~risk~~CEO ~~exposure~~and CFO, ~~and~~we conducted an evaluation of the ~~Board~~effectiveness ~~providing~~of ~~oversight~~our internal control over financial reporting based on the framework in ~~connection~~Internal ~~with~~Control—Integrated ~~those~~Framework ~~efforts~~(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

~~The~~Because ~~Board,~~of ~~including~~its ~~the~~inherent ~~Audit Committee and Compensation Committee~~limitations, ~~periodically~~internal ~~reviews~~control ~~and~~over ~~assesses~~financial ~~the~~reporting ~~significant~~may ~~risks~~not toprevent ~~the Company.~~or ~~Our~~detect ~~management is responsible for the Company’s risk management process and the day-to-day supervision and mitigation of risks~~misstatements. ~~These risks include strategic~~Also, ~~operational,~~projections ~~competitive,~~of any ~~financial,~~evaluation ~~legal~~of ~~and~~effectiveness ~~regulatory~~to ~~risks.~~future ~~Our~~periods ~~Board~~are ~~leadership structure,~~subject ~~together~~to ~~with~~ the ~~frequent~~risk ~~interaction~~that ~~between~~controls ~~our~~may ~~directors~~become ~~and~~inadequate ~~management,~~because ~~assists~~of changes in ~~this effort. Communication~~conditions, ~~between~~or ~~our~~that ~~Board~~the ~~and~~degree ~~management~~of ~~regarding~~compliance ~~long-term~~with ~~strategic~~the ~~planning~~policies ~~and~~or ~~short-term~~procedures ~~operational~~may ~~practices include matters of material risk inherent in our business~~deteriorate.

~~The~~Based ~~Board~~on ~~plays an active role, as a whole and at the committee level in overseeing management of the Company’s risks. Each of~~ our Board committees is focused on specific risks within their areas of responsibility, but the Board believes that the overall enterprise risk management process is more properly overseen by all of the members of the Board. The Audit Committee is responsible, among other things, for overseeing the management of financial and accounting risks, risks related to the Company’s compliance with legal and regulatory requirements, risks in regard to the independent auditor’s performance of its internal audit function, evaluation ofunder ~~any inadequacies in~~ the ~~business~~framework ~~management of the Company and risks~~ in ~~related-party~~Internal ~~transactions.~~Control—Integrated ~~The~~Framework ~~Compensation Committee is responsible~~(2013), ~~among~~our ~~other things, for overseeing the~~ management ofconcluded ~~risks~~that ~~relating to executive and employee compensation~~our ~~plans,~~internal ~~incentive~~control ~~awards~~over ~~and~~financial ~~other~~reporting ~~beneficial~~was ~~arrangements.~~effective ~~While~~as ~~each committee is responsible for the evaluation and management~~ of ~~such~~December ~~risks~~31, ~~the entire Board is regularly informed through committee reports~~2021. ~~The Board incorporates the insight provided by these reports into its overall risk management analysis.~~

~~The~~This ~~Board~~Annual ~~administers~~Report ~~its~~does ~~risk~~not ~~oversight~~include ~~responsibilities~~an ~~through~~attestation ~~the~~report ~~Chief~~of ~~Executive~~our ~~Officer~~independent ~~and~~registered ~~the~~public ~~Chief~~accounting ~~Financial~~firm ~~Officer,~~regarding ~~who,~~internal control ~~together~~over ~~with~~financial ~~management~~reporting. ~~representatives~~Management’s ofreport ~~the~~regarding ~~relevant~~internal ~~functional~~control ~~areas~~over ~~review~~financial ~~and~~reporting ~~assess~~was ~~the~~not ~~operations~~subject ofto ~~the~~attestation by ~~Company~~our asregistered ~~well as~~public ~~operating~~accounting ~~management’s~~firm ~~identification,~~pursuant ~~assessment~~to ~~and~~rules ~~mitigation~~ of the ~~material~~SEC ~~risks~~that ~~affecting~~permit ~~our~~us ~~operations~~to provide only management’s report in this Annual Report.

~~External~~Changes ~~Directors~~in Internal Control over Financial Reporting

~~Under~~There ~~the~~has ~~Companies~~been ~~Law,~~no ~~companies~~change ~~incorporated~~in ~~under~~our ~~the~~internal ~~laws~~control ofover ~~the~~financial ~~State~~reporting ~~of Israel whose shares were offered to and are traded by the public, such~~ (as ~~us,~~defined ~~must~~in ~~appoint~~Rules at13a-15(f) ~~least two External Directors, unless they qualify~~ and ~~choose~~15d-15(f) tounder ~~adopt~~ the ~~exemption~~Exchange ~~specified~~Act) inthat ~~Regulation~~occurred 5Dduring of the ~~Israeli~~quarter ~~Companies~~ended ~~Regulations~~December ~~(Relief~~31, ~~for~~2021, ~~Public~~that ~~Companies~~has ~~with~~materially ~~Shares Listed for Trading on a Stock Market Outside of Israel)~~affected, ~~5760-2000,~~ or ~~the~~is ~~Exemption~~reasonably ~~Regulations.~~likely Weto nomaterially ~~longer qualify for the Exemption Regulations and therefore on April 16~~affect, ~~2020~~ our ~~shareholders~~internal ~~elected~~control ~~Donna~~over ~~Marks~~financial ~~and Leonid Berkovitch as External Directors for a three years term~~reporting. ~~Based on the information provided to us, both Ms. Marks and Mr. Berkovitch qualify as External Directors under the Companies Law.~~

31Item 9B. Other Information.

~~The~~Not Companies Law provides that a person may not be appointed as an External Director if the person is a relative of the controlling shareholder of the company or if the person (or any of the person’s relatives, partners, employers or anyone to whom the person is directly or indirectly subjected to or any entity under the person’s control) has or had during the two years preceding the date of appointment any affiliation with the company, its controlling shareholder, any of the controlling shareholder’s relatives, any other entity under the control of the company or the company’s controlling shareholder, and, where there is no controlling shareholder and no shareholder holding 25% or more of the voting power of the company, any affiliation to the chairman of the board of directors of the company, the company’s chief executive officer, any beneficial owner of 5% or more of the issued shares or the voting power of the company or the most senior executive officer of the company in the finance fieldapplicable.

~~The~~Item ~~term~~9C. ~~affiliation~~Disclosure ~~includes:~~Regarding anForeign ~~employment~~Jurisdictions ~~relationship,~~that aPrevent business or professional relationship maintained on a regular basis, control, and service as an office holder, excluding service as a director in a private company prior to the first offering of its shares to the public, if such director was appointed as a director of the private company in order to serve as an External Director following the public offeringInspections.

~~“Office~~Not holder” is defined in the Companies Law as a chief executive officer, chief business manager, deputy general manager, vice general manager, any person who holds such position in the company, even if such person holds a different title, any director and other manager or officer who reports directly to the chief executive officerapplicable.

No person can serve as an External Director if his or her position or other business interests create, or may create, a conflict of interest with his or her responsibilities as an External Director or may otherwise interfere with his or her ability to serve as an External Director.33

NoPART person can serve as an External Director if the person (or any of the person’s relatives, partners, employers, anyone to whom the person is directly or indirectly subjected to or any entity under the person’s control) has business or professional relations with anyone the affiliation with whom is prohibited by the Companies Law, even if those affiliations are not of an ongoing nature, excluding negligible affiliations.III

~~Our~~Item ~~External Directors are required to possess professional qualifications as set out in regulations promulgated under the Companies Law~~10. ~~In addition, our Board is required to determine how many of our non-External~~ Directors ~~should be required to have financial and accounting expertise. In determining such number~~, ~~the~~Executive ~~Board~~Officers ~~must consider, among other things, the type~~ and ~~size~~Corporate ~~of the company and the scope and complexity of its operations~~Governance.

~~Under~~Our ~~the Companies Law, each of our External~~ Directors ~~must also serve on our Audit Committee~~ and ~~Compensation~~executive ~~Committee~~officers, ~~unless~~as ~~we qualify and choose to adopt the exemption specified in Regulation 5D~~ of the ~~Exemption~~date ~~Regulations.~~hereof, ~~Ms.~~together ~~Marks~~with ~~and~~their ~~Mr.~~ages ~~Berkovitch are both currently members of our Audit Committee~~ and ~~Compensation~~business ~~Committee.~~backgrounds ~~Ms.~~are ~~Marks serves~~ as ~~Chairman of our Audit Committee and Mr. Berkovitch serves as Chairman of our Compensation Committee.~~follows:

Under the Companies Law, until the lapse of two years from termination of office (and with respect to a relative of an External Director who is not the External Director’s spouse or child, one year from termination of office), we, our controlling shareholders and any corporation in their control, may not grant a person who served as an External Director of the company, or to its spouse or child, any benefit, directly or indirectly, and may not engage a person who served as an External Director of the company, or its spouse or child, as an office holder of the company or an entity under the control of the company’s controlling shareholder and cannot employ or receive services from that person, either directly or indirectly, including through a corporation controlled by that person.

Name	Age	Position(s) Held
William C. Anderson III (1)(3)	51	Chairman of the Board of Directors
Uri Arazy (1)(2)	64	Director
Leonid Berkovitch (1)(2)(3)(4)	55	Director
Amir Eilam	42	Chief Executive Officer
Assaf Cohen	37	Chief Financial Officer

~~None of~~(1) ~~the~~Independent ~~External~~Director ~~Directors~~under ~~has~~Nasdaq ~~any relationship with us besides serving on our Board.~~rules

~~If, at~~(2) ~~the~~Member ~~time an External Director is appointed, all current members~~ of ~~the~~Compensation Board, who are not controlling shareholders or family members thereof, are of the same gender, then that External Director must be of the other gender. The requirement of Israeli residency does not apply to the External Directors of companies whose shares are listed for trading outside of Israel.Committee

(3)

Member of Audit Committee

(4)

External director under the Companies Law

~~External~~ Directors are elected by a majority vote at a shareholders’ meeting at which either the majority of shares voted at the meeting, including at least a majority of the shares held by non-controlling shareholders disinterested with respect to the interests of controlling shareholders voted at the meeting, vote in favor of the election of the External Director, or the total number of shares held by non-controlling shareholders disinterested with respect to the interests of controlling shareholders voted against the election of the External Director does not exceed two percent of the aggregate voting rights in the company.

~~The initial~~William ~~term~~C. ofAnderson anIII has ~~External~~served ~~Director~~as isa ~~three~~director ~~years~~since ~~commencing~~2014, ~~from~~and ~~the~~as ~~date~~Chairman of ~~his~~our orBoard ~~her~~since ~~election~~December ~~and~~2021. ~~under~~Mr. ~~regulations~~Anderson ~~that apply~~is ~~to Israeli companies whose shares that have been offered to~~ the ~~public~~founder ~~outside~~ of ~~Israel~~AmpThink orLLC, ~~traded on~~ a ~~stock exchange outside~~ ofwireless ~~Israel,~~solutions ~~may~~company befocused ~~extended~~on ~~for~~building ~~consecutive~~large, ~~additional~~complex, ~~three~~wireless ~~year~~networks ~~periods~~employing ~~(unlike~~different ~~other public companies~~technologies, inand ~~which~~has ~~only~~been ~~two additional~~acting ~~three~~as ~~year periods are allowed). External Directors may only be removed by~~ the ~~same~~President ~~percentage~~ of ~~shareholders~~AmpThink asLLC issince ~~required for~~its ~~their~~incorporation ~~election,~~in or2011. byPrior ato ~~court~~AmpThink, ~~and~~Mr. ~~then~~Anderson ~~only~~was ifco-founder ~~the External Directors cease to meet the statutory qualifications for their appointment or if they violate their duty~~ of ~~loyalty to the company. If an External Directorship becomes vacant~~Genesta, ~~our Board is required under the Companies Law to call~~ a ~~shareholders’ meeting promptly to appoint a new External Director. Unless we~~wireless ~~qualify~~systems ~~and~~integrator ~~choose~~specializing toin ~~adopt~~ the ~~exemption~~design ~~specified~~and indeployment ~~Regulation 5D~~ of ~~the~~warehouse ~~Exemption~~automation ~~Regulations~~systems, ~~each~~where ~~committee~~Mr. ofAnderson ~~our~~from ~~Board that~~2000 ~~is required by law~~ to be2011 ~~formed must include at least one External Director and the Audit Committee and Compensation Committee~~acted ~~must~~as ~~include~~Chief ~~all~~Technology ofOfficer. ~~the External Directors~~Mr. AnAnderson ~~External~~holds ~~Director~~a isdegree ~~entitled to compensation as provided~~ in ~~regulations~~Economics ~~adopted under the Companies Law~~ and isPhilosophy ~~otherwise prohibited~~ from ~~receiving~~Boston ~~any~~College ~~other~~and ~~compensation,~~a ~~directly~~Master’s ordegree ~~indirectly,~~ in ~~connection~~ ~~with~~Management ~~services~~Science ~~provided~~from asThe anState ~~External~~University ~~Director~~of New York.

~~Alternate~~Uri ~~Directors~~Arazy has served as a director since March 2021. He served in a variety of positions in Intel Corporation between 1984 and 2019. Between 2005 and 2019, Mr. Arazy served as an Investment Director of Intel Capital Israel. In the past five years, Mr. Arazy invested and served on the board of directors of technology startups including WSC Sports Technologies, Interlude, Spotinst, Moovit, Velostrata, Cloudify and Gigaspaces. Mr. Arazy holds a B.A. in Computer Science from Queens College, NY, an M.Sc. in Computer Science from Columbia University, NY, an M.B.A. from Tel Aviv University and Northwestern University and an M.A. in Security and Diplomacy from the Tel Aviv University.

~~Under~~Leonid ~~our~~Berkovitch ~~articles~~has ofserved ~~association,~~as ~~each~~an ofExternal ~~our~~Director ~~directors~~since ~~may~~April ~~appoint,~~2020. ~~with~~Mr. ~~the~~Berkovitch ~~agreement~~has nearly 30 years of experience in the smart ~~Board~~card ~~and~~industry, ~~subject~~having toworked ~~the~~in ~~provisions of~~leading ~~the~~technology ~~Companies~~companies ~~Law~~in areas including telecom, bye-transactions ~~written~~and ~~notice~~digital security. From 1996 to us2004, ~~any~~Mr. ~~person~~Berkovitch toserved ~~serve~~ as ana ~~alternate~~Senior ~~director.~~Vice ~~Under~~President ~~the~~Sales ~~Companies Law~~EMEA, ~~neither a~~Marketing ~~currently~~& ~~serving~~Product ~~director~~lines ~~nor~~Director ain ~~currently-serving~~the ~~alternate~~Test & ~~director~~Transactions orDivision ~~any~~of ~~person~~Schlumberger ~~not~~Limited ~~eligible~~(NYSE: ~~under~~SLB). ~~the~~From ~~Companies~~2004 ~~Law~~ to be ~~appointed~~2006, Mr. Berkovitch served as a ~~director~~Business ~~may~~Unit Director befor ~~appointed~~Axalto. asFrom an2006 ~~alternate~~to ~~director~~2011, Mr. AnBerkovitch ~~alternate~~served ~~director~~as ~~has~~a ~~all~~Managing ~~the~~Director ~~rights~~Emerging ~~and~~Businesses ~~duties~~for ofGemalto ~~the~~N.V. Mr. ~~director~~Berkovitch ~~appointing~~joined ~~him,~~Orange ~~unless~~Group at the ~~appointment~~end of ~~the~~2011 ~~alternate~~and ~~provides~~served ~~otherwise,~~as ~~and~~a ~~the~~Vice-President ~~right~~Product toMarketing ~~remuneration.~~in ~~The~~Viaccess-Orca ~~alternate~~(an affiliate ~~director~~company ~~may~~of ~~not~~Orange) ~~act~~until at2018. ~~any~~Since ~~meeting~~2018, athe ~~which~~has ~~the~~been ~~appointing~~Director ~~director~~IoT, isConnected ~~present.~~Home ~~Unless~~at ~~the~~Orange’s ~~time~~Corporate ~~period~~Unit orand ~~scope~~since of the ~~appointment~~ isend ~~limited~~of by2020, ~~the~~he ~~appointing~~has ~~director,~~been ~~the~~a ~~appointment~~Senior isDirector; ~~effective~~Connectivity ~~for~~at ~~all~~Orange ~~purposes~~Business ~~but~~Services. ~~expires~~Mr. ~~upon~~Berkovitch ~~the~~holds ~~expiration~~a ofMaster ~~the appointing~~of ~~director’s~~Science ~~term.~~degree ~~Currently,~~in ~~none~~Telecommunication ofEngineering ~~our~~from ~~directors~~the ~~has~~State ~~appointed~~University ~~any~~of ~~alternate~~Telecommunications ~~directors~~of Saint-Petersburg.

~~Directors’ Service Contracts~~34

~~None~~Executive ~~of our directors has any services contracts either with us or with any of our subsidiaries, which provide for benefits upon termination of employment or service.~~Officers

~~Board~~Amir Eilam was appointed ~~Committees~~as the Company’s Chief Executive Officer effective November 3, 2021. Since 2012 and until his appointment as Chief Executive Officer, Mr. Eilam served as our VP of research and development. Before that Mr. Eilam started working in the embedded software department as a research and development engineer, then managed the Firmware and Petroleum departments, specializing in operating system design for embedded products since 2005. Mr. Eilam holds a B.Sc. in Electronics Engineering from Ort Braude College of Engineering in Israel.

~~Our~~Assaf ~~Board~~Cohen ~~has~~was ~~established~~appointed anas ~~Audit~~the ~~Committee~~Company’s Chief Financial Officer effective February 27, 2018 and served also as the Company’s Interim Chief Executive Officer from July 2019 to November 2019. Prior to his appointment, Mr. Cohen served as the Company’s controller and deputy Chief Financial Officer from July 2015 and oversaw the Company’s finance department in this capacity. Prior to joining the Company, Mr. Cohen was a ~~Compensation~~controller ~~Committee~~at a private company, Samgal Ltd., for a year and a half and prior to that he was a senior accountant at Ernst & Young. Mr. Cohen received a B.A. in economics and accounting from the Haifa University, and he is a Certified Public Accountant in Israel.

~~Audit~~Board ~~Committee~~Practices

~~The~~Election ~~current members~~ of ~~our~~Directors; ~~Audit~~Appointment ~~Committee are William C. Anderson III, Donna Marks and Leonid Berkovitch. Donna Marks serves as the Chairman~~ of the Audit Committee. Our Board has determined that all of the above are independent Audit Committee members within the meaning of Nasdaq and SEC rules. Our Board has also determined that Donna Marks is an “Audit Committee Financial Expert” as defined in Item 407(d)(5)(ii) of Regulation S-K under the Exchange Act and that he has the requisite experience under Nasdaq rules.Officers

Our ~~Audit~~Board ~~Committee~~currently ~~operates~~consists ~~under~~of athree ~~written~~directors. ~~charter~~Our ~~that~~non-External isDirectors ~~posted~~are onappointed, removed or replaced by a majority vote of our shareholders ~~website~~present in person or by proxy at ~~http://investors~~a general meeting of our shareholders according to the Companies Law and our Articles of Association.~~otiglobal.com.~~

~~Our~~Once ~~Audit~~elected ~~Committee~~at ~~provides~~a ~~assistance~~shareholders’ tomeeting, our ~~Board~~directors, inexcept ~~fulfilling~~for ~~its~~External ~~legal and fiduciary obligations in matters involving our accounting~~Directors, ~~auditing,~~ ~~financial~~hold ~~reporting,~~office ~~internal~~until ~~control and legal compliance functions by pre-approving~~ the ~~services~~first ~~performed~~general bymeeting ~~our~~of ~~independent~~shareholders ~~accountants~~held ~~and~~at ~~reviewing~~least ~~their~~three ~~reports~~years ~~regarding~~after ~~our~~their ~~accounting~~election. ~~practices~~Incumbent ~~and~~directors ~~systems~~may ofbe ~~internal~~reelected ~~control~~at ~~over~~that ~~financial reporting~~meeting. ~~Our~~A ~~Audit~~director ~~Committee~~may ~~also oversees the audit efforts of our independent accountants and takes those actions that it~~be ~~deems~~elected ~~necessary~~for toconsecutive ~~satisfy~~terms ~~itself~~unless ~~that~~prohibited ~~the~~by ~~accountants are independent of management~~law.

33Under the Companies Law, neither the Chief Executive Officer of a public company nor a family member thereof or any person directly or indirectly subordinate to the Chief Executive Officer, may serve as a Chairman of the Board, and vice versa unless authorized by a general meeting of the shareholders according to the required vote pursuant to the Companies Law and then only for a period of time that does not exceed three years.

~~Under~~Our ~~the~~Board ~~Companies~~appoints ~~Law and Nasdaq rules,~~ our ~~Audit~~Chief ~~Committee~~Executive isOfficer ~~responsible~~and ~~for~~his ~~(i)~~terms ~~determining~~of ~~whether~~employment ~~there~~ are ~~deficiencies~~approved inby the ~~business~~ ~~management~~general ~~practices~~shareholders ofmeeting ~~our~~according ~~Company, including in consultation with our internal auditor or the independent auditor, and making recommendations~~ to ~~the Board to improve such practices, (ii) determining whether to approve certain related party transactions~~ ~~(including transactions in which an office holder has a personal interest) and whether such transaction should be deemed as material or extraordinary, (iii) where~~ the ~~Board~~provisions ~~approves the working plan~~ of the ~~internal~~Companies ~~auditor,~~Law. toWith ~~examine such working plan before its submission to~~ the ~~Board~~exception ~~and~~of ~~propose amendments thereto, (iv) examining~~ our ~~internal~~Chief ~~controls~~Executive ~~and~~Officer ~~internal auditor’s performance, including whether the internal auditor has sufficient resources~~ and ~~tools~~our ~~to dispose of its responsibilities~~directors, ~~(v) examining~~each ~~the scope~~ of our ~~auditor’s~~executive ~~work and compensation and submitting a recommendation with respect thereto to our Board~~officers orserves ~~shareholders,~~at ~~depending on which of them is considering~~ the ~~appointment~~discretion of our ~~auditor,~~Chief ~~and~~Executive ~~(vi)~~Officer, ~~establishing~~subject ~~procedures for the handling of employee complaints as~~ to the ~~management~~terms of ~~our~~any ~~business~~employment agreement, and ~~the~~holds ~~protection~~office tountil ~~be provided to such employees.~~his Inor ~~compliance~~her ~~with~~successor ~~regulations~~is ~~promulgated~~elected ~~under~~or ~~the~~until ~~Companies~~his ~~Law,~~or ~~our~~her ~~Audit~~earlier ~~Committee~~resignation ~~also~~or ~~approves our financial statements, thereby fulfilling the requirement that a board committee provide such approval~~removal.

~~Our~~Board ~~Audit~~Leadership ~~Committee held seven meetings during the fiscal year ended December 31, 2020 (and two written resolutions in lieu of a meeting).~~Structure

~~Internal~~Mr. ~~Auditor~~Eilam is our Chief Executive Officer, and Mr. Anderson is Chairman of our Board. As Chief Executive Officer of the Company, Mr. Eilam reports to the Board. None of our independent directors serves as the lead independent director. We believe that this leadership structure is appropriate given the current size and operations of the Company.

~~Under~~Risk the Companies Law, the Board must appoint an internal auditor who is recommended by the Audit Committee. The role of the internal auditor is to examine, among other things, whether the company’s actions comply with the law and orderly business procedure. Under the Companies Law, the internal auditor may not be an office holder or an interested party, as defined below, or a relative of an office holder or an interested party, or the company’s independent accountant or the independent accountant’s representative. The Companies Law defines an “interested party” as a holder of 5% or more of the issued shares or voting rights of a company, a person or entity who has the right to designate at least one director or the general manager of the company, and a person who serves as a director or general manager. Since March 5, 2012, Mr. Gali Gana, CPA, of Rosenblum Holzman & Co., has served as our internal auditor.Oversight

~~Compensation~~Our ~~Committee~~Board’s role in risk oversight includes risk analysis and assessment in connection with each financial and business review, update and decision-making proposal and deliberations.

The current members of our Compensation Committee are William C. Anderson III, Donna Marks and Leonid Berkovitch. Mr. Berkovitch is the Compensation Committee’s Chairman. Our Board has determined that all Compensation Committee members are independent within the meaning of Nasdaq and SEC rules. 35

The ~~Compensation~~Board’s ~~Committee~~role ~~operates~~in ~~under~~our arisk ~~charter~~oversight ~~that~~is consistent with our leadership structure, with our Chief Executive Officer, whose performance is ~~posted~~assessed onby the Board, and other members of senior management having responsibility for assessing and managing our ~~website~~risk atexposure, and ~~http://investors~~the Board providing oversight in connection with those efforts.~~otiglobal.com.~~

~~Under~~The Board, including the ~~Companies~~Audit ~~Law~~Committee and ~~Nasdaq~~Compensation ~~rules~~Committee, ~~our~~periodically ~~Compensation~~reviews ~~Committee~~and assesses the significant risks to the Company. Our management is responsible for ~~(i)~~the ~~proposing~~Company’s ~~office~~risk ~~holder~~management ~~compensation~~process ~~policies to~~and the ~~Board,~~day-to-day ~~(ii)~~supervision ~~proposing~~and ~~necessary~~mitigation ~~revisions~~of torisks. These ~~any~~risks ~~compensation~~include ~~policy~~strategic, ~~and~~operational, ~~examining~~competitive, ~~its implementation~~financial, ~~(iii)~~legal ~~determining whether~~and toregulatory ~~approve~~risks. ~~transactions~~Our Board leadership structure, together with ~~respect~~the tofrequent ~~compensation~~interaction ofbetween ~~office~~our ~~holders,~~directors and ~~(iv) determining~~management, assists in ~~accordance~~this ~~with~~effort. ~~office holder~~Communication ~~compensation~~between ~~policies,~~our ~~whether~~Board toand ~~exempt~~management regarding anlong-term ~~engagement~~strategic ~~with~~planning anand ~~unaffiliated~~short-term ~~nominee~~operational ~~for~~practices ~~the~~include ~~position~~matters of ~~chief~~material ~~executive officer~~risk ~~from~~inherent ~~requiring~~in ~~shareholder~~our ~~approval~~business.

~~Subject~~The toBoard plays an active role, as a whole and at the ~~provisions~~committee level in overseeing management of the ~~Companies~~Company’s ~~Law,~~risks. ~~compensation~~Each of ~~executive~~our Board ~~officers~~committees is ~~generally~~focused ~~determined~~on ~~and~~specific ~~approved~~risks bywithin ~~our~~their ~~Compensation Committee~~areas ~~and~~of ~~our~~responsibility, but the Board~~. Shareholder~~ ~~approval~~believes isthat ~~generally~~the ~~required~~overall ~~when~~enterprise risk ~~(i)~~management ~~approval~~process is more properly overseen by ~~our~~all ~~Board~~of ~~and~~the ~~our~~members ~~Compensation~~of the Board. The Audit Committee is ~~not~~responsible, ~~consistent~~among ~~with~~other things, ~~our~~for ~~Amended~~overseeing ~~and~~the ~~Restated~~management ~~Executive~~of ~~Officers~~financial ~~Compensation~~and ~~Policy~~accounting risks, asrisks ~~amended~~related ~~from~~to ~~time~~the toCompany’s ~~time,~~compliance orwith ~~(ii)~~legal and ~~the~~regulatory ~~compensation~~requirements, isrisks ~~that~~in ofregard ~~our~~to ~~Chief~~the ~~Executive~~independent ~~Officer. In~~auditor’s ~~special~~performance ~~circumstances,~~of ~~our~~its ~~Compensation~~internal ~~Committee~~audit ~~and~~function, ~~Board~~evaluation ~~may~~of ~~approve~~any inadequacies in the ~~compensation~~business management of anthe ~~executive~~Company ~~officer~~and ~~(other~~risks ~~than~~in arelated-party ~~director,~~transactions. aThe ~~chief~~Compensation ~~executive~~Committee ~~officer~~is orresponsible, among aother ~~controlling~~things, ~~shareholder) or~~for ~~approve~~overseeing the ~~compensation~~management ~~policy~~of ~~despite~~risks ~~shareholder~~relating ~~objection.~~to ~~Additionally,~~executive ~~under~~and ~~certain~~employee ~~circumstances~~compensation plans, ~~our~~incentive ~~Compensation~~awards and ~~Committee~~other ~~may~~beneficial ~~exempt~~arrangements. anWhile ~~engagement~~each ~~with~~committee ais ~~nominee~~responsible for the ~~position~~evaluation ofand ~~chief~~management ~~executive~~of ~~officer~~such ~~from~~risks, ~~requiring~~the ~~shareholders’~~entire Board ~~approval~~is orregularly ~~may~~informed ~~otherwise~~through ~~postpone~~committee ~~such~~reports. ~~shareholders’~~The ~~approval~~Board incorporates the insight provided by these reports into its overall risk management analysis.

AThe ~~director~~Board oradministers ~~executive~~its ~~officer~~risk ~~may~~oversight ~~not~~responsibilities bethrough ~~present when~~ the ~~Board~~Chief ~~discusses~~Executive orOfficer ~~votes~~and ~~upon~~ the ~~terms~~Chief ofFinancial ~~his~~Officer, ~~or her compensation~~who, together ~~unless~~with ~~the~~management ~~chairman~~representatives of the ~~Board~~relevant ~~(as~~functional ~~applicable)~~areas ~~determines~~review ~~that~~and heassess orthe ~~she~~operations ~~should~~of bethe ~~present~~Company toas ~~present~~well ~~the~~as ~~transaction that is~~operating ~~subject~~management’s toidentification, ~~approval.~~assessment ~~The~~and ~~Chief~~mitigation ~~Executive~~of ~~Officer~~the ~~may~~material ~~not~~risks beaffecting ~~present~~our ~~during voting or deliberations regarding his or her compensation~~operations.

34As of December 31, 2021, following the resignation of three directors, our Audit and Compensation committees do not meet the requirements of the Companies Law.

WeExternal may from time to time engage the services of external compensation consultants on a case by case basis, though we did not engage any such compensation consultant for the fiscal year ended December 31, 2020.Directors

~~Our~~Under the Companies Law, companies incorporated under the laws of the ~~Compensation~~State ~~Committee~~of ~~held~~Israel ~~four~~whose ~~meetings~~shares ~~during~~were offered to and are traded by the ~~fiscal~~public, ~~year~~such ~~ended~~as us, must appoint at least two External Directors, unless they qualify and choose to adopt the exemption specified in Regulation 5D of the Israeli Companies Regulations (Relief for Public Companies with Shares Listed for Trading on a Stock Market Outside of Israel), 5760-2000, or the Exemption Regulations. We no longer qualify for the Exemption Regulations. As of December 31, ~~2020~~2021, (and ~~adopted~~following ~~certain~~the ~~resolutions~~resignation byof ~~way~~Mr. Zvi Atlas, who was elected to serve as an External Director on December 2, 2021, we only have one External Director serving, Mr. Leonid Berkovitch and therefore, we do not currently comply with the requirements of ~~two~~the ~~unanimous~~Company’s ~~written~~Law. ~~consents)~~In light of the contemplated Merger and taking into account our current financial state and the lack of interest of potential candidates, we do not plan to appoint or elect additional directors. Based on the information provided to us, Mr. Berkovitch qualifies as an External Director under the Companies Law.

~~Nominating~~The ~~Committee;~~Companies Law provides that a person may not be appointed as an External Director ~~Candidates~~if the person is a relative of the controlling shareholder of the company or if the person (or any of the person’s relatives, partners, employers or anyone to whom the person is directly or indirectly subjected to or any entity under the person’s control) has or had during the two years preceding the date of appointment any affiliation with the company, its controlling shareholder, any of the controlling shareholder’s relatives, any other entity under the control of the company or the company’s controlling shareholder, and, where there is no controlling shareholder and no shareholder holding 25% or more of the voting power of the company, any affiliation to the chairman of the board of directors of the company, the company’s chief executive officer, any beneficial owner of 5% or more of the issued shares or the voting power of the company or the most senior executive officer of the company in the finance field.

We do not have a Nominating Committee or any committees of a similar nature, nor any charter governing the nomination process. Our Board does not believe that such committees are needed for a company our size. Under the Companies Law, our directors are elected by the general meeting of shareholders, with the recommendation of the Board. There is no formal process or policy that governs the manner in which we identify potential candidates for the Board. Historically, however, the Board has considered several factors in evaluating candidates for nomination to the Board, including the candidate’s knowledge of the Company and its business, the candidate’s business experience and credentials, and whether the candidate would represent the interests of all the Company’s shareholders as opposed to a specific group of shareholders. Diversity is not considered material in identifying nominees for directors. We do not have a formal policy with respect to our consideration of Board nominees recommended by our shareholders because we are a small company. A shareholder who desires to recommend a candidate for nomination to the Board should do so by writing to us at Board of Directors, c/o Company Secretary, On Track Innovations Ltd., Hatnufa 5, Yokneam Industrial Zone, Yokneam, Israel.36

~~Code~~The term affiliation includes: an employment relationship, a business or professional relationship maintained on a regular basis, control, and service as an office holder, excluding service as a director in a private company prior to the first offering of ~~Ethics~~its shares to the public, if such director was appointed as a director of the private company in order to serve as an External Director following the public offering.

We“Office ~~have~~holder” ~~adopted~~is adefined ~~Code~~in ofthe ~~Business~~Companies ~~Conduct~~Law ~~and~~as ~~Ethics~~a ~~that~~chief ~~applies~~executive ~~to our directors~~officer, ~~executive~~chief ~~officers~~business ~~and~~manager, ~~all~~deputy ofgeneral ~~our~~manager, ~~employees.~~vice general ~~The~~manager, ~~Code~~any ofperson ~~Business~~who ~~Conduct~~holds ~~and~~such ~~Ethics~~position isin ~~publicly~~the ~~available on our website at http://investors.otiglobal.com/corporate-governance~~company, ~~and~~ weeven ~~will~~if ~~provide,~~such atperson noholds ~~charge, persons with~~ a ~~written~~different ~~copy~~title, ~~upon~~any ~~written~~director ~~request~~and ~~made~~other ~~to us. The information contained in,~~manager or ~~accessible~~officer ~~through,~~who ~~our~~reports ~~website~~directly ~~does~~to ~~not~~the ~~constitute~~chief ~~part~~executive ~~of this Annual Report~~officer.

~~Delinquent~~No ~~Section~~person ~~16(~~can serve as an External Director if his or her position or other business interests create, or may create, a) ~~Reports~~conflict of interest with his or her responsibilities as an External Director or may otherwise interfere with his or her ability to serve as an External Director.

~~Based~~No ~~solely~~person ~~upon~~can aserve ~~review~~as ofan ~~Forms~~External 3Director ~~and~~if 4,the ~~and~~person ~~amendments~~(or ~~thereto,~~any ~~submitted~~of to the ~~SEC~~person’s ~~during~~relatives, ~~the fiscal year ended December 31~~partners, ~~2020~~employers, ~~we believe~~anyone ~~that~~to ~~during~~whom ~~said~~the person ~~year,~~is ~~our~~directly ~~executive~~or ~~officers,~~indirectly ~~directors~~subjected ~~and~~to ~~all~~or ~~persons~~any ~~who~~entity ~~own~~under ~~more~~the ~~than~~person’s ~~ten~~control) ~~percent~~has ofbusiness aor ~~registered~~professional ~~class~~relations ofwith ~~our~~anyone ~~equity~~the ~~securities~~affiliation ~~complied~~ with ~~all~~whom ~~Section~~is ~~16(a)~~prohibited ~~filing~~by ~~requirements,~~the ~~except~~Companies ~~form~~Law, 4even ~~filed~~if bythose ~~Sandra~~affiliations ~~Hardardottir~~are ~~on May~~not 8,of ~~2020,~~an ~~which~~ongoing ~~was due May 7~~nature, ~~2020~~excluding negligible affiliations.

35Our External Director is required to possess professional qualifications as set out in regulations promulgated under the Companies Law. In addition, our Board is required to determine how many of our non-External Directors should be required to have financial and accounting expertise. In determining such number, the Board must consider, among other things, the type and size of the company and the scope and complexity of its operations.

~~Item~~Under ~~11.~~the ~~Executive~~Companies Law, each of our External Directors must also serve on our Audit Committee and Compensation Committee, unless we qualify and choose to adopt the exemption specified in Regulation 5D of the Exemption Regulations. Due to the resignation of three of our directors, and due to having only one acting External Director, our Audit and Compensation Committees do not meet the requirements of the Companies Law.

~~Summary~~Under the ~~Compensation~~Companies ~~Table~~Law, until the lapse of two years from termination of office (and with respect to a relative of an External Director who is not the External Director’s spouse or child, one year from termination of office), we, our controlling shareholders and any corporation in their control, may not grant a person who served as an External Director of the company, or to its spouse or child, any benefit, directly or indirectly, and may not engage a person who served as an External Director of the company, or its spouse or child, as an office holder of the company or an entity under the control of the company’s controlling shareholder and cannot employ or receive services from that person, either directly or indirectly, including through a corporation controlled by that person.

~~The following table sets forth the compensation earned during the years~~Mr. ~~ended~~Berkovitch ~~December~~has ~~31,~~no ~~2020~~relationship ~~and~~with ~~2019~~us bybesides ~~(i)~~serving ~~our~~on ~~Chief Executive Officer; (ii)~~ our ~~Chief Financial Officer; (iii) our VP of Hardware Engineering; (iv) our VP, Research and Development and (v) our VP Operations~~Board. We refer to the persons listed in (i) and (ii) collectively as the Named Executive Officers, which includes additional officers not required under SEC rules, in accordance with the requirements of Israeli law.

Name and		Salary		Bonus		Stock-based Awards		Non-equity Incentive Plan Compensation		All other Compensation		Total
Principal Position	Year	($)(1)		($)		($)(2)		($)		($)(3)		($)
Yehuda Holtzman	2020		273,844		-		67,612		-		79,811		421,268
Chief Executive Officer (4)	2019		28,194		-		-		-		7,873		36,067
Assaf Cohen	2020		173,155		-		-		-		43,639		216,794
Chief Financial Officer (5)	2019		152,018		-		13,650		28,054		44,799		238,521
Nehemia Itay	2020		169,683		-		1,022		-		42,988		213,693
VP of Hardware Engineering (6)	2019		167,129		-		-		-		44,052		211,182
Amir Eilam	2020		154,042		-		1,022		-		46,306		201,370
VP, Research & Development (7)	2019		150,688		-		-		-		48,213		198,901
Sagi Nataf	2020		112,348		-		1,022		-		38,316		151,687
VP Operations (8)	2019		103,774		-		-		-		39,747		143,521

If, at the time an External Director is appointed, all current members of the Board, who are not controlling shareholders or family members thereof, are of the same gender, then that External Director must be of the other gender. The requirement of Israeli residency does not apply to the External Directors of companies whose shares are listed for trading outside of Israel.

~~(1)~~External Directors ~~Salary~~are ~~payments~~elected by a majority vote at a shareholders’ meeting at which ~~were~~either inthe ~~NIS~~majority ~~were~~of ~~translated~~shares ~~into~~voted ~~U.S.~~at ~~Dollars~~the ~~according~~meeting, including toat least a majority of the ~~annual~~shares ~~average~~held ~~exchange~~by ~~rate~~non-controlling shareholders disinterested with respect to the interests of ~~NIS~~controlling shareholders ~~3.44~~voted ~~per~~at ~~U.S.~~the ~~Dollar~~meeting, vote in ~~2020~~favor ~~and~~of ~~NIS~~the ~~3.56~~election ~~per~~of ~~U.S.~~the ~~Dollar~~External Director, or the total number of shares held by non-controlling shareholders disinterested with respect to the interests of controlling shareholders voted against the election of the External Director does not exceed two percent of the aggregate voting rights in ~~2019~~the company.

~~(2)~~ The initial ~~fair~~term ~~value~~of ~~recognized~~an ~~for~~External ~~the~~Director ~~2020~~is ~~option~~three ~~awards~~years ~~was~~commencing ~~determined~~from asthe date of ~~the~~his ~~grant~~or ~~date~~her inelection ~~accordance~~and ~~with~~under ~~FASB~~regulations ~~ASC~~that ~~Topic~~apply to ~~718~~Israeli ~~(see~~companies ~~Note~~whose ~~12C~~shares that have been offered to ~~our~~the ~~consolidated~~public ~~financial~~outside ~~statements~~of ~~included~~Israel or traded on a stock exchange outside of Israel, may be extended for consecutive additional three year periods (unlike other public companies, in ~~this~~which ~~Annual~~only ~~Report~~two additional three year periods are allowed). ~~The~~External ~~fair~~Directors ~~value~~may ~~recognized~~only be removed by the same percentage of shareholders as is required for their election, or by a court, and then only if the ~~2020~~External ~~option~~Directors ~~awards~~cease ~~was~~to ~~determined~~meet asthe statutory qualifications for their appointment or if they violate their duty of ~~the~~loyalty ~~grant~~to ~~date~~the incompany. ~~accordance~~If ~~with~~an ~~FASB~~External ~~ASC~~Directorship ~~Topic~~becomes ~~718~~vacant, ~~based~~our onBoard is required under the ~~following~~Companies ~~assumptions:~~Law ~~expected~~to ~~dividend~~call a ~~yield~~shareholders’ meeting promptly to appoint a new External Director. Unless we qualify and choose to adopt the exemption specified in Regulation 5D of 0%the Exemption Regulations, ~~expected~~each ~~volatility~~committee of ~~78%~~our Board that is required by law to ~~109%,~~be ~~risk-free~~formed ~~interest~~must ~~rate~~include ofat ~~0.26%~~least one toExternal ~~1.63%~~Director and ~~expected~~the ~~life~~Audit Committee and Compensation Committee must include all of 2the External Directors.44 An External Director is entitled to ~~2.50~~compensation ~~years~~as provided in regulations adopted under the Companies Law and is otherwise prohibited from receiving any other compensation, directly or indirectly, in connection with services provided as an External Director.

~~(3) This cost reflects social benefits (as required under applicable Israeli law) and car expenses.~~37

(4) The 2020 “All Other Compensation” of Mr. Holtzman, as shown in the table above, is comprised of $22,920 of car expenses and $56,891 of social benefits. The 2019 “All Other Compensation” of Mr. Holtzman, as shown in the table above, is comprised of $1,788 of car expenses and $6,085 of social benefits.Alternate Directors

~~(5)~~Under our ~~The~~articles ~~2020~~of ~~“All~~association, ~~Other~~each ~~Compensation”~~of our directors may appoint, with the agreement of ~~Mr.~~the ~~Cohen~~Board and subject to the provisions of the Companies Law, by written notice to us, any person to serve as ~~shown~~an inalternate director. Under the ~~table~~Companies ~~above~~Law, isneither ~~comprised~~a currently serving director nor a currently-serving alternate director or any person not eligible under the Companies Law to be appointed as a director may be appointed as an alternate director. An alternate director has all the rights and duties of ~~$14~~the director appointing him,~~931~~ unless the appointment of ~~car~~the ~~expenses~~alternate ~~and~~provides ~~$28~~otherwise,~~708~~ ofand ~~social~~the ~~benefits~~right to remuneration. The ~~2019~~alternate ~~“All~~director ~~Other~~may ~~Compensation”~~not ofact Mrat any meeting at which the appointing director is present. ~~Cohen,~~Unless asthe ~~shown~~time inperiod or scope of the ~~table~~appointment ~~above~~is limited by the appointing director, the appointment is ~~comprised~~effective offor ~~$17,169~~all purposes but expires upon the expiration of ~~car~~the ~~expenses~~appointing ~~and~~director’s ~~$27~~term. Currently,~~630~~ none of ~~social~~our ~~benefits~~directors has appointed any alternate directors.

(6)	The 2020 “All Other Compensation” of Mr. Itay, as shown in the table above, is comprised of $15,745 of car expenses and $27,243 of social benefits. The 2019 “All Other Compensation” of Mr. Itay, as shown in the table above, is comprised of $17,169 of car expenses and $26,883 of social benefits.
(7)	The 2020 “All Other Compensation” of Mr. Eilam, as shown in the table above, is comprised of $14,902 of car expenses and $31,404 of social benefits. The 2019 “All Other Compensation” of Mr. Eilam, as shown in the table above, is comprised of $17,169 of car expenses and $31,044 of social benefits.
(8)	The 2020 “All Other Compensation” of Mr. Nataf, as shown in the table above, is comprised of $13,828 of car expenses and $24,488 of social benefits. The 2019 “All Other Compensation” of Mr. Eilam, as shown in the table above, is comprised of $17,169 of car expenses and $22,578 of social benefits.

Directors’ Service Contracts

36None of our directors has any services contracts either with us or with any of our subsidiaries, which provide for benefits upon termination of employment or service.

~~All~~Board of the incumbent Named Executive Officers mentioned in the table above and our directors are entitled to acceleration of the vesting of any unvested share options and restricted shares in the event of a change of control of the Company.Committees

~~Pension,~~As ~~Retirement~~of orDecember ~~Similar~~31, ~~Benefit~~2021, ~~Plans~~following the resignation of three directors. our Audit and a Compensation committee do not meet the requirements of the Companies Law.

~~Except~~Audit ~~as required by applicable law (relating to severance payments to Israeli employees), none of our current officers or employees are entitled to receive any payments upon termination of employment.~~Committee

~~Executive~~Due ~~Officers~~to ~~Compensation~~the ~~Policy~~resignation of three members of the Board during December of 2021, including the resignation of an External Director on December 26, 2021, the resignation of the Board’s chairperson on December 28, 2021 and the resignation of an additional director on December 30, 2021, our Board’s composition does not meet the Companies Law’s requirements for a public company’s composition of the board of directors. Section 114 of the Companies Law mandates that a public company is required to appoint an audit committee, while Section 115 of the Companies Law provides that the audit committee should be comprised of a minimum of three members, including all acting external directors of the board and at least a majority of independent directors. Section 115 also mandates that the chairman of the board will not be a member of the Audit Committee. Following the resignation of three members of the Board, we only have three members remaining on the Board, one of which was appointed chairman in accordance with the requirements of Section 94(a) of the Companies Law. Due to the fact that a chairman may not serve as a member of the audit or compensation committees, and that such committees must include two members who are external directors, while we have one external director only, the board cannot meet the Companies Law’s requirements with respect to the structure of such committees.

In addition, ~~accordance~~Section ~~with~~239(b) of the Companies Law, wedetermines ~~adopted~~that an external directors of a ~~Compensation~~public ~~Policy in~~company ~~2013,~~shall ~~which~~be ~~was~~appointed ~~thereafter~~at ~~amended~~a bygeneral meeting ~~our~~of ~~Compensation~~shareholders. ~~Committee,~~Due ~~approved~~to bythis ~~our~~requirement ~~Board~~of ~~and~~Section ~~recommended~~239(b), we are currently unable to ~~our~~appoint ~~shareholders~~an ~~and~~alternate ~~approved~~external director ~~thereby~~in atorder ~~our~~to ~~annual~~bring ~~general~~ourselves ~~meeting~~to ~~held~~be onin ~~December~~compliance ~~15,~~with ~~2016~~the requirements of the Companies Law. An ~~updated~~additional ~~compensation~~factor ~~policy~~which ~~was~~prevents ~~not~~us ~~approved~~from being byable to comply with requirements of the Companies Law is the fact that due to our ~~shareholders~~financial atstate, the acting directors receive ~~our~~minimal ~~meeting~~compensation onwhile ~~September~~they ~~27,~~deal ~~2019.~~with ~~However~~a greater exposure to complaints relating to their fiduciary duties, ~~our~~which ~~Board~~are ~~approved~~duties itof ~~notwithstanding~~directors set ~~such~~under ~~shareholders~~the ~~vote~~Companies Law and the Israeli case law.

~~The Compensation Policy sets~~Our ~~rules~~Audit ~~and~~Committee ~~guidelines~~operates ~~with~~under ~~respect~~a towritten ~~our~~charter ~~compensation~~that ~~strategy for executive officers and directors, and~~ is ~~designed~~posted toon ~~provide for the retention of, and to attract, highly qualified executives. The Compensation Policy is designed to balance competitive compensation of executive officers with~~ our ~~financial~~website ~~resources,~~at while creating appropriate incentives considering, inter alia, risk management factors arising from our business, executive compensation benchmarks used in the industry, our size (including without limitation, sales volume and number of employees), the nature of our business and our then-current cash flow situation, in order to promote our long-term goals, work plan, policies and the interests of our shareholdershttp://investors.otiglobal.com.

The Compensation Policy is designed to allow us to create a full compensation package for each of our executive officers based on common principles. With respect to variable compensation components, the Compensation Policy is designed to allow us to consider each executive officer’s contribution in achieving our short-term and long-term strategic goals and in maximizing its profits from a long-term perspective and in accordance with the executive officer’s position.38

~~The~~Our Audit ~~Compensation~~Committee ~~Policy further~~ provides ~~for~~assistance anto ~~annual~~our ~~performance~~Board ~~bonus~~in ~~payable~~fulfilling toits ~~executive~~legal ~~officers.~~and ~~The~~fiduciary ~~payment~~obligations ofin ~~such~~matters ~~bonus~~involving isour ~~tied~~accounting, auditing, tofinancial ~~long-term corporate performance~~reporting, ~~rather~~ ~~than~~internal ~~short-term~~control ~~stock~~and ~~market~~legal ~~performance.~~compliance ~~Bonuses~~functions ~~are~~by ~~paid~~pre-approving inthe ~~accordance~~services ~~with~~performed ~~specific~~by ~~performance~~our ~~targets~~independent accountants and ~~based,~~reviewing ~~among~~their ~~others, upon~~reports ~~the~~regarding ~~following~~our ~~factors:~~accounting ~~(i)~~practices ~~the~~and ~~Company’s~~systems ~~achievement~~ of ~~certain~~internal ~~financial~~control ~~performance~~over ~~metrics,~~financial ~~consisting of annual revenue~~reporting. ~~targets,~~Our ~~EBITDA~~Audit ~~target,~~Committee ~~each~~also ~~based~~oversees ~~on our annual budget; (ii) achievement by~~ the ~~respective~~audit ~~executive~~efforts of ~~certain~~our ~~predetermined~~independent ~~objectives;~~ accountants and ~~(iii)~~takes ~~other~~those ~~discretionary~~actions ~~considerations,~~that ~~taking~~it ~~into~~deems ~~account~~necessary ~~tangible~~to satisfy ~~and~~itself ~~intangible~~that ~~performance factors, including~~ the ~~executive’s relative~~accountants ~~contribution~~are toindependent ~~the~~of ~~Company~~management.

~~Bonus~~Under the ~~payments~~Companies ~~shall~~Law ~~not~~and ~~exceed~~Nasdaq rules, our Audit Committee is responsible for (i) determining whether there are deficiencies in the ~~case~~business management practices of aour ~~Chief~~Company, ~~Executive~~including ~~Officer~~in consultation with our internal auditor or the independent auditor, and making recommendations to the Board to improve such practices, (ii) determining whether to approve certain related party transactions (including transactions in which an ~~aggregate~~office ~~amount~~holder ~~equivalent~~has a personal interest) and whether such transaction should be deemed as material or extraordinary, (iii) where the Board approves the working plan of the internal auditor, to ~~twelve~~examine ~~months’~~such ~~base~~working ~~salary~~plan before its submission to the Board and propose amendments thereto, (iv) examining our internal controls and ~~for~~internal ~~other~~auditor’s ~~executive officers~~performance, anincluding ~~aggregate~~whether ~~amount~~the ~~equivalent~~internal auditor has sufficient resources and tools to ~~nine~~dispose ~~months~~of its responsibilities, (v) examining the scope of our auditor’s ~~base~~work ~~salary~~and compensation and submitting a recommendation with respect thereto to our Board or shareholders, depending on which of them is considering the ~~respective~~appointment ~~executive~~of our auditor, and (vi) establishing procedures for the handling of employee complaints as to the management of our business and the protection to be provided to such employees. In compliance with regulations promulgated under the Companies Law, our Audit Committee also approves our financial statements, thereby fulfilling the requirement that a board committee provide such approval.

~~Employment~~Prior ~~Agreements~~to the resignation of three members of our Board, our Audit Committee held five meetings during the fiscal year ended December 31, 2021 (and four written resolutions in lieu of a meeting).

~~We maintain~~OTI ~~written~~is ~~employment~~not ~~and~~required ~~related~~under SEC ~~agreements~~rules ~~with~~to ~~all~~have ofits ~~our~~financial ~~current~~statements ~~executive~~reviewed ~~officers.~~or ~~These~~approved ~~agreements provide for monthly salaries and contributions~~ by usa toseparate ~~executive~~Audit ~~insurance and vocational studies funds~~Committee. ~~The~~OTI’s ~~employment~~financial ~~agreements~~statements ~~of certain executive officers provide~~ for ~~the achievement of an annual bonus, as described above. In addition, we may decide to grant our executive~~fiscal ~~officers~~year ~~share~~2021 ~~options~~were ~~from~~reviewed ~~time to time. All of our executive officers’ employment~~ and ~~related~~approved ~~agreements~~by ~~contain~~the ~~provisions regarding noncompetition~~Board, ~~confidentiality~~as ofrequired ~~information~~under ~~and~~applicable ~~assignment~~Israeli ~~of inventions~~law. ~~The enforceability of covenants not to compete in Israel is unclear.~~

WeInternal ~~have the following written agreements and other arrangements concerning compensation with our current executive officers:~~Auditor

~~Agreement with Yehuda~~Under ~~Holtzman.~~the WeCompanies ~~have~~Law, anthe ~~employment~~Board ~~agreement~~must ~~with~~appoint ~~Mr.~~an ~~Holtzman,~~internal ~~which~~auditor ~~provides~~who ~~that~~is ~~Mr.~~recommended ~~Holtzman~~by ~~will~~the ~~serve~~Audit asCommittee. ~~Chief~~The ~~Executive Officer~~ role of the ~~Company~~internal ~~and~~auditor is ~~our~~to ~~subsidiaries~~examine, inamong ~~consideration~~other ofthings, awhether ~~monthly~~the ~~gross~~company’s ~~salary~~actions ~~(effective~~comply ~~December~~with 1,the ~~2019~~law and asorderly ~~described~~business ~~below~~procedure. ~~NIS~~Under the 76Companies Law,~~000)~~ ~~and~~the ~~other~~internal ~~standard~~auditor ~~benefits.~~may ~~Mr.~~not ~~Holtzman~~be ~~also~~an ~~receives~~office ~~grants~~holder ofor ~~options on~~ an ~~annual~~interested ~~basis~~party, ~~to promote retention and~~ as andefined ~~incentive~~below, ~~subject~~ toor ~~vesting~~a ~~requirements.~~relative ~~The issuance~~ of ~~such~~an ~~options~~office holder isor ~~subject~~an tointerested ~~the~~party, ~~discretion~~or ~~and approval of both~~ the ~~Company~~company’s ~~Compensation Committee~~independent ~~and~~accountant ~~the~~or ~~Board. According to~~ the ~~employment~~independent ~~agreement,~~accountant’s Mrrepresentative. ~~Holtzman~~The Companies isLaw ~~eligible~~defines ~~to receive~~ an ~~annual~~“interested ~~bonus~~party” inas ana ~~amount~~holder upof ~~to 10~~5% ~~months’~~or ~~gross~~more ~~base~~of ~~salary.~~the ~~The~~issued ~~employment~~shares ~~agreement~~or isvoting ~~for~~rights anof ~~unlimited~~a ~~duration~~company, a ~~provided~~person ~~that~~or ~~each~~entity ~~party~~who ~~may~~has ~~terminate it without cause upon serving~~ the ~~other~~right ~~party~~to adesignate ~~written~~at ~~notice~~least ofone ~~three~~director ~~months,~~or ~~prior~~the togeneral ~~termination.~~manager ~~On November 22, 2020, as part~~ of the ~~cost reduction steps taken by our management~~company, ~~our~~and ~~Board~~a ofperson ~~Directors~~who ~~and~~serves as ~~Compensation~~a ~~Committee~~director ~~approved~~or ~~that~~general ~~effective~~manager. ~~November~~Since 1March 5, ~~2020~~2012, Mr. ~~Holtzman’s monthly~~Gali ~~gross~~Gana, ~~salary~~CPA, ~~is decreased for a period~~ of ~~one~~Rosenblum ~~year~~Holzman ~~from~~& ~~NIS 76~~Co.,~~000~~ tohas ~~NIS~~served ~~58,520~~as our internal auditor.

37Compensation Committee

~~Agreement with Assaf~~As ~~Cohen.~~described ~~We have an employment agreement with Mr. Cohen~~above, ~~which~~due ~~provides~~to ~~that~~the ~~Mr.~~resignation ~~Cohen~~of ~~will~~three ~~serve as Chief Financial Officer~~ of ~~the~~ ~~Company and~~ our ~~subsidiaries~~directors, ~~in consideration of a monthly gross salary (effective August 1, 2019~~ and asdue described below NIS 45,000; between January 1, 2019 and July 31, 2019 NIS 35,000; between March 1, 2018 and December 31, 2018 NIS 30,000) and other standard benefits. Mr. Cohen also receives grants of options on an annual basis to ~~promote~~the ~~retention and as an incentive, subject to vesting~~ requirements~~. The~~ ~~issuance~~ of ~~such~~Section ~~options~~118A ~~is subject to the discretion and approval~~ of ~~both~~ the ~~Company’s~~Companies ~~Compensation Committee and the Board. According to the employment agreement~~Law, ~~Mr. Cohen is eligible to receive an annual bonus in an amount up to 4 months’ gross base~~ ~~salary.~~which ~~The~~mandates ~~employment~~a ~~agreement~~requirement is for anpublic ~~unlimited~~companies ~~duration,~~to ~~provided~~appoint ~~that each party may terminate it without cause upon serving the other party~~ a ~~written~~compensation ~~notice of six months (formerly was three months)~~committee, ~~prior~~while toapplying ~~termination. Effective August 1, 2019, as approved by our Board and Compensation Committee, and pursuant to~~ the ~~amendment~~same torequirements ~~Mr.~~that ~~Cohen’s employment agreement dated September 30, 2019,~~apply ~~Mr. Cohen’s monthly gross salary is NIS 45,000 and the abovementioned written notice for termination is six months. In addition, pursuant~~ to the ~~amendment~~composition ~~to Mr. Cohen’s employment agreement, as also approved by the Company’s shareholders, Mr. Cohen received a lump sum bonus, in the amount~~ of ~~NIS 100,000, for his services as~~ the ~~Interim~~Audit ~~Chief Executive Officer of the Company. On March 17, 2020, our Board and Compensation~~ Committee ~~approved an increase in Mr. Cohen’s 2020 maximum annual bonus from 4 months’ to 6 months’ gross base salary. On November 22~~, ~~2020,~~ as ~~part~~further ofdetailed ~~the cost reduction steps taken by our management~~above, ~~our~~we ~~Board~~currently ofdo ~~Directors~~not ~~and~~have a Compensation Committee ~~approved~~ that ~~effective~~meets ~~November~~the requirements ~~1, 2020, Mr. Cohen’s monthly gross salary is decreased for a period~~ of ~~one~~the ~~year~~Companies ~~from NIS 45,000 to NIS 34,650~~Law.

~~Outstanding~~The ~~Equity~~Compensation ~~Awards~~Committee atoperates ~~Fiscal~~under ~~Year-End~~a charter that is posted on our website at http://investors.otiglobal.com.

~~The~~Under ~~following~~the ~~table~~Companies ~~shows~~Law ~~options~~and toNasdaq ~~purchase~~rules, our ~~Ordinary~~Compensation ~~Shares~~Committee ~~outstanding~~is onresponsible ~~December~~for 31(i) proposing office holder compensation policies to the Board, ~~2020~~(ii) proposing necessary revisions to any compensation policy and examining its implementation, ~~held~~(iii) bydetermining ~~each~~whether to approve transactions with respect to compensation of ~~our~~office ~~Named~~holders, ~~Executive~~and (iv) determining, in accordance with office holder compensation ~~Officers~~policies, whether to exempt an engagement with an unaffiliated nominee for the position of chief executive officer from requiring shareholder approval.

Number of Securities Underlying Unexercised
	Option Awards
Name	Number of securities underlying unexercised options (#) exercisable		Number of securities underlying unexercised options (#) unexercisable		Option exercise price($)		Option expiration date
Yehuda Holtzman (1)		150,000		300,000	$	0.20	04/14/2025
		-		100,000		0.35	04/14/2025
Assaf Cohen (2)		15,000		-	$	1.07	11/30/2021
		15,000		-	$	1.21	11/28/2022
		13,333		6,667	$	0.84	11/27/2023
		33,333		66,667	$	0.38	08/13/2024
Nehemia Itay (3)		15,000		-	$	1.07	11/30/2021
				10,000		0.28	03/17/2025
Amir Eilam (4)		20,000		-	$	1.07	11/30/2021
		-		10,000	$	0.28	03/17/2025
Sagi Nataf (5)		10,000		5,000	$	0.84	11/27/2023
		-		10,000	$	0.28	03/17/2025

~~(1)~~Subject to Onthe ~~April~~provisions ~~14,~~of ~~2020,~~the ~~450~~Companies Law,~~000~~ ~~options~~compensation ~~were~~of ~~granted~~executive toofficers Mris generally determined and approved by our Compensation Committee and our Board. Shareholder ~~Holtzman~~approval ~~under~~is ~~the~~generally ~~OTI~~required ~~2001~~when ~~Stock~~(i) ~~Option~~approval ~~Plan~~by our Board and our Compensation Committee is not consistent with our Amended and Restated Executive Officers Compensation Policy, as amended from time to time, or (ii) the ~~2001~~compensation ~~Plan~~is that of our Chief Executive Officer. In ~~The~~special ~~options~~circumstances, ~~vest~~our inCompensation ~~three~~Committee ~~equal~~and ~~annual~~Board ~~installments,~~may ~~commencing~~approve ~~November~~the ~~25,~~compensation ~~2020.~~of Onan executive ~~April~~officer ~~14,~~(other ~~2020,~~than ~~100~~a director,~~000~~ ~~options~~a ~~were~~chief ~~granted~~executive toofficer Mror a controlling shareholder) or approve the compensation policy despite shareholder objection. ~~Holtzman~~Additionally, under certain circumstances, our Compensation Committee may exempt an engagement with a nominee for the ~~2001~~position ~~Plan.~~of ~~The~~chief ~~options~~executive ~~vest~~officer infrom ~~three~~requiring ~~equal~~shareholders’ ~~annual~~approval ~~installments,~~or ~~commencing~~may ~~January~~otherwise 1,postpone ~~2021~~such shareholders’ approval.

~~(2)~~A director Onor ~~November~~executive ~~30,~~officer ~~2016,~~may ~~15,000~~not ~~options~~be ~~were~~present ~~granted~~when ~~to Mr. Cohen under~~ the ~~2001~~Board ~~Plan.~~discusses ~~The~~or ~~options~~votes ~~vest~~upon inthe ~~three~~terms ~~equal~~of ~~annual~~his ~~installments,~~or ~~commencing~~her ~~November 30~~compensation, ~~2017.~~unless the Onchairman ~~November~~of ~~28, 2017, 15,000 options were granted to Mr. Cohen under~~ the ~~2001~~Board ~~Plan.~~(as ~~The~~applicable) ~~options~~determines ~~vest~~that inhe ~~three~~or ~~equal~~she ~~annual~~should ~~installments,~~be ~~commencing~~present ~~November 28, 2018. On November 27, 2018, 20,000 options were granted~~ to ~~Mr.~~present ~~Cohen under~~ the ~~2001~~transaction ~~Plan.~~that ~~The~~is ~~options~~subject ~~vest in three equal annual installments, commencing November 27, 2019. On August 13, 2019, 100,000 options were granted~~ to Mrapproval. The ~~Cohen~~Chief ~~under~~Executive ~~the~~Officer ~~2001~~may ~~Plan.~~not ~~The~~be ~~options~~present ~~vest~~during invoting ~~three~~or ~~equal~~deliberations ~~annual~~regarding ~~installments,~~his ~~commencing~~or ~~August~~her ~~13, 2020~~compensation.

38We may from time to time engage the services of external compensation consultants on a case by case basis, though we did not engage any such compensation consultant for the fiscal year ended December 31, 2021.

~~(3)~~Our Compensation OnCommittee ~~December~~held ~~15,~~seven ~~2016,~~meetings ~~15,000~~during ~~options were granted to Mr. Itay under~~ the ~~2001~~fiscal ~~Plan.~~year ~~The~~ended ~~options~~December ~~vest in three equal annual installments~~31, ~~commencing~~2021 ~~November~~(and ~~30,~~adopted ~~2017.~~certain Onresolutions ~~March~~by ~~17,~~way ~~2020,~~of one ~~10,000~~unanimous ~~options~~written ~~were granted to Mr~~consent). ~~Itay under the 2001 Plan. The options vest in three equal annual installments, commencing March 17, 2021.~~

(4)	On December 15, 2016, 20,000 options were granted to Mr. Eilam under the 2001 Plan. The options vest in three equal annual installments, commencing November 30, 2017. On March 17, 2020, 10,000 options were granted to Mr. Eilam under the 2001 Plan. The options vest in three equal annual installments, commencing March 17, 2021.
(5)	On November 27, 2018, 15,000 options were granted to Mr. Nataf under the Plan. The options vest in three equal annual installments, commencing November 27, 2019. On March 17, 2020, 10,000 options were granted to Mr. Nataf under the 2001 Plan. The options vest in three equal annual installments, commencing March 17, 2021.

Nominating Committee; Director Candidates

~~Director~~We ~~Compensation~~do not have a Nominating Committee or any committees of a similar nature, nor any charter governing the nomination process. Our Board does not believe that such committees are needed for ~~2020~~a company our size. Under the Companies Law, our directors are elected by the general meeting of shareholders, with the recommendation of the Board. There is no formal process or policy that governs the manner in which we identify potential candidates for the Board. Historically, however, the Board has considered several factors in evaluating candidates for nomination to the Board, including the candidate’s knowledge of the Company and its business, the candidate’s business experience and credentials, and whether the candidate would represent the interests of all the Company’s shareholders as opposed to a specific group of shareholders. Diversity is not considered material in identifying nominees for directors. We do not have a formal policy with respect to our consideration of Board nominees recommended by our shareholders because we are a small company. A shareholder who desires to recommend a candidate for nomination to the Board should do so by writing to us at Board of Directors, c/o Company Secretary, On Track Innovations Ltd., Hatnufa 5, Yokneam Industrial Zone, Yokneam, Israel.

~~The~~Code ~~following~~of table provides information regarding compensation earned by, awarded or paid to each person for serving as a director who was not a Named Executive Officer during the fiscal year ended December 31, 2020:Ethics

Name	Fees Earned or Paid in Cash ($) (1)			Option Awards ($)		Total ($)
Sandra Hardardottir		13,442	(3)		5,097		18,539
William C. Anderson III		24,112			-		24,112
Leonid Berkovitch		19,747	(3)		3,813		23,560
Donna Marks		28,602			-		28,602
Michael Shanahan		19,338	(3)		4,008		23,346
Eran Gilad (2)		12,406			-		12,406
Scott Medford (2)		10,617			-		10,617
Michael Soluri (2)		13,805			-		13,805

We have adopted a Code of Business Conduct and Ethics that applies to our directors, executive officers and all of our employees. The Code of Business Conduct and Ethics is publicly available on our website at http://investors.otiglobal.com/corporate-governance, and we will provide, at no charge, persons with a written copy upon written request made to us. The information contained in, or accessible through, our website does not constitute part of this Annual Report.

(1)	This column represents the sums that our non-executive directors received according to the Israeli regulations as an annual fee as well as for attending Board and Board committee meetings.
(2)	Former director.

Delinquent Section 16(a) Reports

~~(3)~~Based solely ~~The~~upon ~~fair~~a ~~value~~review of ~~each~~Forms ~~option~~3 ~~granted~~and to4, ~~directors~~and ~~during~~amendments ~~2020~~thereto, ~~was~~submitted ~~estimated~~to on the ~~date~~SEC ofduring ~~grant, using~~ the ~~Black-Scholes~~fiscal ~~model~~year ~~and~~ended ~~the~~December ~~following~~31, ~~assumptions:~~2021, ·we believe ~~Expected~~that ~~dividend~~during ~~yield:~~said ~~0%.~~year, ·our ~~Expected~~executive ~~volatility:~~officers, ~~97%-109%~~directors ·and ~~Risk-free~~all ~~interest~~persons ~~rate:~~who ~~0.22%-1.53%~~own ·more ~~Expected~~than ~~life:~~ten ~~Years~~percent ~~2.49 1. Dividend yield~~ of ~~zero percent. 2. Expected average volatility represents~~ a ~~weighted~~registered ~~average standard deviation rate for the price~~ class of ~~the~~our ~~Company's~~equity ~~ordinary~~securities ~~shares~~complied onwith ~~the~~all ~~OTCQX~~Section ~~market.~~16(a) 3.filing ~~Risk-free~~requirements, ~~interest~~except ~~rate is based on~~ the ~~U.S. Treasury yield curve in effect at the time of grant. 4. Estimated expected lives are based on historical grants data.~~following:

AsForm of4 ~~December~~filed ~~31,~~by ~~2020,~~Sandra ~~our~~Hardardottir ~~directors~~on ~~held~~May ~~options~~28, to2021, ~~purchase~~which ~~our~~was ~~Ordinary~~due ~~Shares~~May as19, ~~follows:~~2021.

Name	Aggregate number of shares Underlying stock options
Sandra Hardardottir		30,000
William C. Anderson III		30,000
Leonid Berkovitch		30,000
Donna Marks		30,000
Michael Shanahan		30,000

Form 4 filed by Jerry Ivy on May 28, 2021, which was due May 19, 2021.

39Form 4 filed by William Anderson on May 28, 2021, which was due May 19, 2021.

~~From January 1, 2020, until~~Form ~~November~~4 ~~22,~~filed ~~2020,~~by weJerry ~~reimbursed~~Ivy ~~our~~on ~~directors~~March ~~for expenses incurred in connection with attending Board meetings and committee meetings and provided the following compensation for directors: annual compensation of NIS 49~~10,~~110~~ ~~(approximately $15~~2021,~~280);~~ ~~meeting~~which ~~participation fees~~was ofdue ~~NIS~~March 34,~~283~~ ~~(approximately $1,020) per in-person meeting; meeting participation by telephone of NIS 1,971 (approximately $610) per meeting; and NIS 1,642 (approximately $510) per written resolution~~2021.

On November 22, 2020, as part of our management's efforts to reduce costs, four of our board members, Ms. Sandra Bjork Hardardottir, Mr. Leonid Berkovitch, Ms. Donna Seidenberg Marks and Michael Shanahan, volunteered to reduce their compensation by 25%, such that the cash compensation paid to each of these directors effective November 22, 2020, shall be as follows: Annual compensation of NIS 36,833 (approximately $11,500), meeting participation fees of NIS 2,462 (approximately $770) per in-person meeting, meeting participation by telephone fees of NIS 1,478 (approximately $460) per meeting and NIS 1,232 (approximately $380) per written resolution. In addition, on November 22, 2020, our fifth director, William C. Anderson, volunteered to receive no compensation from the Company effective November 22, 2020. Our directors agreed to revisit the voluntary reduction in the directors fees in six months from the time the reduction took place.40

~~Our executive directors do~~Item ~~not receive additional separate compensation for their service on the Board or any committee of the Board~~11. ~~During~~Executive 2020, our non-executive directors were reimbursed for their expenses for each board meeting, and committee meeting attended and in addition received the foregoing compensation with respect to attendance at such meetingsCompensation. ~~The aggregate amount paid by us to our non-executive directors for their service during 2020 was $142,471.~~

~~Under the Companies Law,~~Summary anCompensation External Director is entitled to compensation as provided in regulations adopted under the Companies Law and is otherwise prohibited from receiving any other compensation, directly or indirectly, in connection with services provided as an External Director. Table

~~Item~~The ~~12.~~following ~~Security~~table ~~Ownership~~sets offorth ~~Certain~~the ~~Beneficial~~compensation ~~Owners~~earned during the years ended December 31, 2021 and ~~Management~~2020 by (i) our Chief Executive Officer; (ii) our Chief Financial Officer; (iii) our Former Executive Officer; (iv) our VP of Hardware Engineering and ~~Related~~(v) ~~Stockholders~~our ~~Matters~~VP Operations. We refer to the persons listed in (i) and (ii) collectively as the Named Executive Officers, which includes additional officers not required under SEC rules, in accordance with the requirements of Israeli law.

The following table sets forth certain information, to the best knowledge and belief of the Company, as of March 25, 2021 (unless provided herein otherwise), with respect to holdings of our Ordinary Shares by (1) each person known by us to be the beneficial owner of more than 5% of the total number of shares of our Ordinary Shares outstanding as of such date; (2) each of our current directors; (3) each of our Named Executive Officers; and (4) all of our current directors and executive officers as a group.

		Salary		Bonus		Stock-based Awards		Non-equity Incentive Plan Compensation		All other Compensation		Total
Name and Principal Position	Year	($) ⁽¹⁾		($)		($) ⁽²⁾		($)		($) ⁽³⁾		($)
Amir Eilam	2021		159,847		-		33,150		-		50,921		243,918
Chief Executive Officer ⁽⁴⁾	2020		154,042		-		1,022		-		46,306		201,370
Assaf Cohen	2021		175,462		-		52,000		-		51,204		278,666
Chief Financial Officer ⁽⁵⁾	2020		173,155		-		-		-		43,639		216,794
Yehuda Holtzman	2021		276,822		-		19,500		-		82,730		379,052
Former Chief Executive Officer ⁽⁶⁾	2020		273,844		-		67,612		-		79,811		421,268
Nehemia Itay	2021		172,756		-		10,406		-		45,916		229,078
VP & CSc of Hardware Engineering ⁽⁷⁾	2020		169,683		-		1,022		-		42,988		213,693
Sagi Nataf	2021		123,319		-		19,500		-		43,686		186,505
VP Operations ⁽⁸⁾	2020		112,348		-		1,022		-		38,316		151,687
Nir Gazit	2021		117,199		-		16,770		-		41,339		175,309
VP of Product ⁽⁹⁾	2020		112,495		-		511		-		39,832		152,838

~~Unless~~(1) ~~otherwise~~Salary ~~indicated~~payments ~~below, all~~which ~~information~~were ~~with~~made ~~respect to the ownership of any of the below shareholders has been furnished by such shareholder and we believe that the persons named~~ in ~~the~~NIS ~~table~~were ~~have~~translated ~~sole~~into ~~voting and sole investment power with respect to all of the shares shown as owned, subject to community property laws, where applicable~~U. The shares owned by our current directors and executive officers include the shares owned by their family members to which such nominees, directors and executive officers disclaim beneficial ownership, as provided for belowS. ~~If a~~Dollars ~~shareholder~~according ~~has the right~~ to ~~acquire shares by exercising options currently exercisable or exercisable within 60 days of~~ the ~~date of~~annual ~~this~~average ~~table,~~exchange ~~these~~rate ~~shares are deemed outstanding for the purpose~~ of ~~computing~~NIS ~~the~~3.23 ~~percentage~~per ~~owned~~U.S. byDollar ~~the specific shareholder (that is, they are included~~ in ~~both~~2021 ~~the numerator~~ and ~~the~~NIS ~~denominator),~~3.44 ~~but~~per ~~they~~U.S. ~~are~~Dollar ~~disregarded~~in ~~for the purpose of computing the percentage owned by any other shareholder~~2020.

(2) The ~~information~~fair invalue ~~the~~recognized ~~table below~~for isthe ~~based~~2021 onoption ~~53,824,377~~awards ~~Ordinary~~was ~~Shares~~determined ~~outstanding~~ as of ~~March~~the ~~25,~~grant ~~2021~~date ~~and~~in ~~reflects~~accordance ~~number~~with ofFASB ~~shares~~ASC ~~owned~~Topic 718 (see Note 12C to our consolidated financial statements included in this Annual Report). ~~Unless~~The ~~otherwise~~fair ~~indicated,~~ value recognized for the ~~address~~2021 ofoption ~~each~~awards was determined as of the ~~individuals~~grant ~~named~~date ~~below~~in ~~is:~~accordance ~~c/o~~with OnFASB ~~Track~~ASC ~~Innovations~~Topic ~~Inc.~~718, ~~Hatnufa~~based 5,on ~~Yokneam~~the ~~Industrial~~following ~~Zone,~~assumptions: ~~Yokneam~~expected dividend yield of 0%, ~~Israel~~expected volatility of 97% to 130%, ~~2069200~~ risk-free interest rate of 0.17% to 1.53% and expected life of 2.49 to 2.50 years. The fair value recognized for the 2021 restricted shares was determined as of the grant date.

40(3) This cost reflects social benefits (as required under applicable Israeli law) and car expenses.

Name of beneficial owner	Position	Number of Ordinary Shares Beneficially Owned		% of Class of Ordinary Shares
William C. Anderson III(1)	Director		2,090,000		3.9	%
Leonid Berkovitch(2)	External Director		10,000		*
Sandra Bjork Hardardottir(3)	Director		1,521,203		2.8	%
Donna Marks(4)	External Director		20,000		*
Michael Shanahan(5)	Director		10,000		*
Uri Arazy	Director		—		*
Yehuda Holtzman(6)	Chief Executive Officer		183,333		*
Assaf Cohen(7)	Chief Financial Officer		76,666		*
Nehemia Itay(8)	VP Hardware Engineering		18,333		*
Amir Eilam(9)	VP Research & Development		23,333		*
Sagi Nataf(10)	VP Operations		13,333		*
All current directors and executive officers as a group persons)			3,911,202		7.2	%
5% Shareholders			3,911,202		7.2	%
Jerry L. Ivy, Jr.(11)	Shareholder		24,050,174		38.4	%

(*4) ~~Less~~The ~~than~~2021 1%“All Other Compensation” of Mr. Eilam, as shown in the table above, is comprised of $18,699 of car expenses and $32,222 of social benefits. The 2020 “All Other Compensation” of Mr. Eilam, as shown in the table above, is comprised of $14,902 of car expenses and $31,404 of social benefits.

(15) ~~Includes~~The ~~2,060,000~~2021 ~~Ordinary~~“All ~~Shares~~Other ~~held~~Compensation” byof Mr. ~~Anderson~~Cohen, as shown in the table above, is comprised of $17,584 of car expenses and ~~includes~~$33,620 ~~options~~of ~~held~~social bybenefits. The 2020 “All Other Compensation” of Mr. ~~Anderson~~Cohen, toas ~~purchase~~shown 30in the table above,~~000~~ ~~Ordinary~~is ~~Shares~~comprised ~~currently~~of ~~exercisable~~$14,931 orof ~~exercisable~~car ~~within~~expenses 60and ~~days~~$28,708 of ~~this~~social ~~table~~benefits.

(2) Consists of options held by Mr. Berkovitch to purchase 10,000 Ordinary Shares currently exercisable or exercisable within 60 days of this table.

(6)	The 2021 “All Other Compensation” of Mr. Holtzman, as shown in the table above, is comprised of $25,726 of car expenses and $57,004 of social benefits. The 2020 “All Other Compensation” of Mr. Holtzman, as shown in the table above, is comprised of $22,920 of car expenses and $56,891 of social benefits.
(7)	The 2021 “All Other Compensation” of Mr. Itay, as shown in the table above, is comprised of $17,832 of car expenses and $28,084 of social benefits. The 2020 “All Other Compensation” of Mr. Itay, as shown in the table above, is comprised of $15,745 of car expenses and $27,243 of social benefits.
(8)	The 2021 “All Other Compensation” of Mr. Nataf, as shown in the table above, is comprised of $17,894 of car expenses and $25,792 of social benefits. The 2020 “All Other Compensation” of Mr. Nataf, as shown in the table above, is comprised of $13,828 of car expenses and $24,488 of social benefits.
(9)	The 2021 “All Other Compensation” of Mr. Gazit, as shown in the table above, is comprised of $15,603 of car expenses and $25,736 of social benefits. The 2020 “All Other Compensation” of Mr. Gazit, as shown in the table above, is comprised of $14,641 of car expenses and $25,191 of social benefits.

~~(3)~~All of ~~Includes~~the ~~1,511,203~~incumbent ~~Ordinary~~Named ~~Shares~~Executive ~~held~~Officers bymentioned ~~Ms. Hardardottir. Such shares are also included~~ in the ~~Ordinary~~table ~~Shares~~above ~~held~~and byour ~~Mr.~~directors ~~Jerry~~are L.entitled ~~Ivy,~~to ~~Jr.,~~acceleration asof ~~detailed~~the investing of ~~footnote~~any 11unvested ~~below~~share ~~and includes~~ options ~~held~~and byrestricted ~~Ms.~~shares ~~Hardardottir~~in tothe ~~purchase~~event ~~10,000~~of ~~Ordinary~~a ~~Shares~~change ~~currently~~of ~~exercisable~~control orof ~~exercisable~~the ~~within~~Company, 60including ~~days~~in ofconnection ~~this~~with ~~table~~the Merger.

~~(4) Consists of options held by Ms. Marks to purchase 20~~Pension,~~000~~ Retirement ~~Ordinary Shares currently exercisable~~ or ~~exercisable~~Similar ~~within~~Benefit ~~60 days of this table.~~Plans

~~(5)~~Except as ~~Consists~~required ofby ~~options~~applicable ~~held~~law by(relating ~~Mr.~~to ~~Shanahan~~severance payments to ~~purchase~~Israeli 10employees),~~000~~ ~~Ordinary~~none ~~Shares~~of ~~currently~~our ~~exercisable~~current officers or ~~exercisable~~employees ~~within~~are 60entitled to ~~days~~receive ofany ~~this~~payments ~~table~~upon termination of employment.

~~(6)~~Executive Officers ~~Consists~~Compensation ~~of options held by Mr. Holtzman to purchase 183,333 Ordinary Shares currently exercisable or exercisable within 60 days of this table.~~Policy

~~(7)~~In accordance ~~Consists~~with ofthe ~~options~~Companies ~~held~~Law, we adopted a Compensation Policy in 2013, which was thereafter amended by ~~Mr.~~our ~~Cohen~~Compensation Committee, approved by our Board and recommended to ~~purchase~~our 76shareholders and approved thereby at our annual general meeting held on December 15,~~666~~ ~~Ordinary~~2016. An ~~Shares~~updated ~~currently~~compensation ~~exercisable~~policy orwas ~~exercisable~~not ~~within~~approved 60by ~~days~~our ofshareholders ~~this~~at ~~table~~our meeting on September 27, 2019. However, our Board approved it notwithstanding such shareholders vote.

~~(8)~~The Compensation ~~Consists~~Policy sets rules and guidelines with respect to our compensation strategy for executive officers and directors, and is designed to provide for the retention of, ~~options~~and ~~held~~to byattract, Mrhighly qualified executives. ~~Itay~~The Compensation Policy is designed to ~~purchase~~balance competitive 18compensation of executive officers with our financial resources,~~333~~ ~~Ordinary~~while ~~Shares~~creating ~~currently~~appropriate ~~exercisable~~incentives orconsidering, ~~exercisable~~inter alia, ~~within~~risk 60management ~~days~~factors arising from our business, executive compensation benchmarks used in the industry, our size (including without limitation, sales volume and number of ~~this~~employees), ~~table~~the nature of our business and our then-current cash flow situation, in order to promote our long-term goals, work plan, policies and the interests of our shareholders.

~~(9)~~The Compensation ~~Consists~~Policy is designed to allow us to create a full compensation package for each of ~~options~~our ~~held~~executive byofficers Mrbased on common principles. ~~Eilam~~With respect to ~~purchase~~variable 23compensation components,~~333~~ ~~Ordinary~~the ~~Shares~~Compensation ~~currently~~Policy ~~exercisable~~is ordesigned ~~exercisable~~to ~~within~~allow 60us ~~days~~to ofconsider ~~this~~each ~~table~~executive officer’s contribution in achieving our short-term and long-term strategic goals and in maximizing its profits from a long-term perspective and in accordance with the executive officer’s position.

The Compensation Policy further provides for an annual performance bonus payable to executive officers. The payment of such bonus is tied to long-term corporate performance, rather than short-term stock market performance. Bonuses are paid in accordance with specific performance targets and based, among others, upon the following factors: (10i) ~~Consists~~the Company’s achievement of ~~options~~certain ~~held~~financial byperformance ~~Mr.~~metrics, consisting ~~Nataf~~of toannual ~~purchase~~revenue 13targets,~~333~~ ~~Ordinary~~EBITDA ~~Shares~~target, ~~currently~~each ~~exercisable~~based oron ~~exercisable~~our ~~within~~annual 60budget; ~~days~~(ii) achievement by the respective executive of certain ~~this~~predetermined ~~table~~objectives; and (iii) other discretionary considerations, taking into account tangible and intangible performance factors, including the executive’s relative contribution to the Company.

(11) Information is based solely on Schedule 13D/A filed by Mr. Jerry L. Ivy, Jr. with the SEC on March 17, 2021, and consists of 22,538,971 Ordinary Shares held by Mr. Ivy and 1,511,203 Ordinary Shares held by Ms. Hardardottir. The calculation is based on a total of 62,585,871 Ordinary Shares, par value NIS 0.10 per share, which includes (i) 53,824,377 shares outstanding as of January 22, 2021, as reported by us in our Proxy Statement filed with the Securities and Exchange Commission on January 26, 2021, plus (ii) 8,761,494 shares that would be issued pursuant to the terms of a convertible loan if converted on March 17, 2021.Mr. Ivy’s address is 1003 Lake St. #301, Kirkland, WA 98033.42

~~All~~Bonus payments ofshall ~~the~~not ~~Named~~exceed, ~~Executive~~in ~~Officers~~the ~~mentioned~~case ~~in the~~of ~~table~~a ~~above~~Chief ~~and~~Executive ~~our~~Officer, ~~directors~~an ~~are~~aggregate ~~entitled~~amount equivalent to ~~acceleration~~twelve ofmonths’ ~~the~~base ~~vesting~~salary, and offor ~~any~~other ~~unvested~~executive ~~share~~officers, ~~options~~an ~~and~~aggregate ~~restricted~~amount ~~shares~~equivalent into ~~the event~~nine ofmonths’ abase ~~change~~salary of ~~control of~~ the ~~Company~~respective executive.

41Employment Agreements

~~The~~We ~~following~~maintain ~~table~~written ~~summarizes~~employment ~~certain~~and ~~information~~related ~~regarding~~agreements with all of our ~~equity~~current ~~compensation~~executive ~~plan~~officers. These agreements provide for monthly salaries and contributions by us to executive insurance and vocational studies funds. The employment agreements of certain executive officers provide for the achievement of an annual bonus, as described above. In addition, we may decide to grant our executive officers share options from time to time. All of ~~December~~our 31executive officers’ employment and related agreements contain provisions regarding noncompetition, confidentiality ~~2020:~~of information and assignment of inventions. The enforceability of covenants not to compete in Israel is unclear.

Plan Category	Number of securities to be issued upon exercise of outstanding options		Weighted- average exercise price of outstanding options		Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plan approved by security holders		1,443,333	$	0.54		635,167
Equity compensation plan not approved by security holders		-		-		-
Total		1,443,333	$	0.54		635,167

We have the following written agreements and other arrangements concerning compensation with our current executive officers:

~~2001~~Agreement ~~Stock~~with ~~Option~~Amir ~~Plan~~Eilam. We have an employment agreement with Mr. Eilam, which provides that Mr. Eilam will serve as Chief Executive Officer of the Company and our subsidiaries, in consideration of a monthly gross salary (effective November 3, 2021 and as described below NIS 55,000) and other standard benefits. Mr. Eilam also receives grants of restricted shares on an annual basis to promote retention and as an incentive, subject to vesting requirements. The issuance of such restricted shares is subject to the discretion and approval of both the Company’s Compensation Committee and the Board. According to the employment agreement, Mr. Eilam is eligible to receive an annual bonus in an amount up to 7 months’ gross base salary. The employment agreement is for an unlimited duration, provided that each party may terminate it without cause upon serving the other party a written notice of three months, prior to termination.

Agreement with Assaf Cohen. We have an employment agreement with Mr. Cohen, which provides that Mr. Cohen will serve as Chief Financial ~~established~~Officer ~~our~~of ~~2001~~the ~~Plan~~Company and our subsidiaries, in ~~February~~consideration ~~2001~~of a monthly gross salary (effective August 1, 2019 and as ~~amended~~described below NIS 45,000; between January 1, 2019 and ~~restated~~July on31, 2019 NIS 35,000; between March 1, 2018 and December ~~November~~31, 2018 NIS 30, ~~2011~~000), and ~~have~~other ~~amended~~standard benefits. itMr. ~~several~~Cohen also receives grants of options on an annual basis to promote retention and as an incentive, subject to vesting requirements. ~~times~~The upissuance of such options is subject to the ~~latest~~discretion ~~amendment~~and onapproval ~~November~~of 21both the Company’s Compensation Committee and the Board. According to the employment agreement, ~~2017~~Mr. Cohen is eligible to receive an annual bonus in an amount up to 4 months’ gross base salary. The ~~2001~~employment ~~Plan~~agreement ~~provides~~is for an unlimited duration, provided that each party may terminate it without cause upon serving the other ~~grant~~party a written notice of ~~options~~six months (formerly was three months), prior to termination. Effective August 1, 2019, as approved by our ~~employees~~Board and Compensation Committee, ~~directors~~and pursuant to the amendment to Mr. Cohen’s employment agreement dated September 30, 2019, Mr. Cohen’s monthly gross salary is NIS 45,000 and ~~consultants~~the abovementioned written notice for termination is six months. In addition, pursuant to the amendment to Mr. Cohen’s employment agreement, as also approved by the Company’s shareholders, Mr. Cohen received a lump sum bonus, in the amount of NIS 100,000, for his services as the Interim Chief Executive Officer of the Company. On March 17, 2020, our Board and ~~those~~Compensation Committee approved an increase in Mr. Cohen’s 2020 maximum annual bonus from 4 months’ to 6 months’ gross base salary. On November 22, 2020, as part of the cost reduction steps taken by our ~~subsidiaries~~management, our Board of Directors and ~~affiliates~~Compensation ~~until~~Committee ~~December~~approved that 31effective November 1, 2020, Mr. Cohen’s monthly gross salary is decreased for a period of one year from NIS 45,000 to NIS 34,650. Following the approval of our Board of Directors and Compensation Committee, as of June 1, 2021, the reduction was cancelled and Mr. Cohen’s monthly gross salary was reinstated to NIS 45,000.

Under the 2001 Plan, as of March 25, 2021, options for 14,371,500 Ordinary Shares had been exercised, and options for 1,982,500 Ordinary Shares are outstanding, including vested options with respect to 705,014 Ordinary Shares. Of the options that are outstanding, as of March 25, 2021, 1,030,000 options are held by our directors and officers and have a weighted average exercise price of $0.32 per share.43

~~Item~~Outstanding ~~13.~~Equity ~~Certain~~Awards ~~Relationships~~at ~~and~~Fiscal ~~Related Transactions, and Director Independence.~~Year-End

~~Our~~The ~~policy~~following istable toshows ~~enter~~options ~~into~~to ~~transactions~~purchase ~~with~~our ~~related~~Ordinary ~~parties~~Shares onoutstanding ~~terms that are~~ on ~~the~~December ~~whole~~31, no2021, ~~less~~held ~~favorable~~by toeach usof ~~than~~our ~~those~~Named ~~that would~~Executive ~~be available from unaffiliated parties at arm’s length~~Officers.

We have entered into employment agreements with all of our executive officers as mentioned above and indemnification agreements with all of our executive officers and directors. In addition, we have granted options to purchase our Ordinary Shares to our directors and executive officers, as mentioned elsewhere in this Annual Report.

	Number of Securities Underlying Unexercised
		Equity Awards
Name	Security Type	Number of securities underlying unexercised (#) exercisable		Number of securities underlying unexercised (#) unexercisable		Purchase exercise price($)		Expiration date
Amir Eilam ⁽¹⁾	RSA		3,334		506,666	$	0.03		-
Assaf Cohen ⁽²⁾	RSA		-		400,000	$	0.03		-
Yehuda Hotltzman ⁽³⁾	RSA		-		-		-		-
Nehemia Itay ⁽⁴⁾	Options		3,333		6,667	$	0.22		01/06/2026
	Options		6,667		3,333	$	0.28		03/07/2028
	RSA		3,334		66,666	$	0.03		-
Sagi Nataf ⁽⁵⁾	RSA		3,334		146,666	$	0.03		-
Nir Gazit ⁽⁶⁾	RSA		1,668		127,332	$	0.03		-

~~Other than~~(1) ~~described~~On ~~above~~December 2, ~~and~~2021, ~~except~~255,000 ~~for~~restricted ~~the~~shares ~~Loan~~were ~~Agreement,~~granted ~~the~~to ~~Share~~Mr. ~~Purchase~~Eilam ~~Agreement,~~under ~~and~~ the ~~Chairman~~2021 ofEquity ~~the~~Incentive ~~Board~~Plan, ~~Ms.~~or ~~Hardardottir~~the 2021 Plan, and ~~the~~on ~~Director,~~March ~~Mr.~~7 ~~Shanahan~~2022, ~~who~~255,000 restricted shares were ~~designated~~granted byto ~~Ivy~~Mr. ~~pursuant~~Eilam tounder the ~~Share~~2021 ~~Purchase~~Plan. ~~Agreement,~~The ~~none~~restricted ofshares ~~our~~vest ~~directors~~as follow: (i) 3,334 ~~executive officers~~shares orvested ~~shareholders~~on ~~holding~~12/02/2021; ~~more~~(ii) ~~than~~31,666 5%shares ofwill ~~our~~vest ~~outstanding~~in ~~Ordinary~~two ~~Shares,~~equal orinstalments ~~members~~on each of ~~any~~12/02/2022 ~~such~~and ~~person’s~~12/02/2023; ~~immediate family~~and (iii) 475,000 ~~has~~shares ~~any~~will ~~relationship~~vest ~~with~~in ~~the~~three ~~Company~~equal ~~besides~~instalments ~~serving~~on aseach ~~directors~~of or12/02/2022, ~~executive~~12/02/2023 ~~officers~~and 12/02/2024.

42(2) On December 2, 2021, 400,000 restricted shares were granted to Mr. Cohen under the 2021 Plan. The restricted shares vest as follow: (i) 50,000 shares will vest in two equal instalment on each 12/02/2022 and 12/2023; (ii) 350,000 shares will vest in three equal instalments on each of 12/02/2022, 12/02/2023 and 12/02/2024.

Item 14. Principal Accounting Fees and Services.

(3)	Mr. Holtzman waived his right to receive 150,000 restricted shares.
(4)	On March 17, 2020, 10,000 options were granted to Mr. Itay under the OTI 2001 Stock Option Plan, or the 2001 Plan. The options vest in three equal annual installments, commencing March 17, 2021. On December 2, 2021, 70,000 restricted shares were granted to Mr. Itay under the 2021 Plan. The restricted shares vest as follow: (i) 3,334 shares vested on 12/02/2021; (ii) 16,666 shares will vest in two equal instalments on each of 12/02/2022 and 12/02/2023; and (iii) 50,000 shares will vest in three equal instalments on each of 12/02/2022, 12/02/2023 and 12/02/2024.
(5)	On December 2, 2021, 150,000 restricted shares were granted to Mr. Nataf under the 2021 Plan. The restricted shares vest as follow: (i) 3,334 shares vested on 12/02/2021; (ii) 31,666 shares will vest in two equal instalments on each of 12/02/2022 and 12/02/2023; and (iii) 115,000 shares will vest in three equal instalments on each of 12/02/2022, 12/02/2023 and 12/02/2024.

~~Independent Registered~~(6) ~~Public~~On ~~Accounting~~December ~~Firm~~2, 2021, 129,000 restricted shares were granted to Mr. Gazit under the 2021 Plan. The restricted shares vest as follow: (i) 1,668 shares vested on 12/02/2021; (ii) 23,332 shares will vest in two equal instalments on each of 12/02/2022 and 12/02/2023; and (iii) 104,000 shares will vest in three equal instalments on each of 12/02/2022, 12/02/2023 and 12/02/2024.

The Company has engaged Kesselman and Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited, or PWC Israel, as its principal independent registered public accounting firm for the fiscal year ended December 31, 2020.44

~~Policy~~Director onCompensation ~~Pre-Approval~~for ~~of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm~~2021

~~Our Audit Committee is generally responsible for the oversight of our independent auditors’ work.~~ The ~~Audit Committee’s~~ ~~policy~~following istable toprovides ~~pre-approve~~information ~~all~~regarding ~~audit~~compensation ~~and~~earned ~~non-audit services provided~~ by ~~PWC Israel. These services may include audit services~~, ~~audit-related services,~~awarded ~~tax~~or ~~services~~paid ~~and~~to ~~other~~each ~~services,~~person ~~as further described below. The Audit Committee sets forth the basis~~ for ~~its~~serving ~~preapproval in~~as ~~detail, listing the particular services which are pre-approved, and setting forth~~ a ~~specific~~director ~~budget~~who ~~for such services. Additional~~was ~~services~~not ~~may~~a beNamed ~~pre-approved~~Executive byOfficer ~~the~~during ~~Audit Committee on an individual basis. Once services have been pre-approved, PWC Israel and our management then report to~~ the ~~Audit~~fiscal ~~Committee~~year onended aDecember ~~periodic basis regarding the extent of services actually provided in accordance with the applicable pre-approval~~31, ~~and regarding the fees for the services performed.~~2021:

Our Audit Committee pre-approved all audit and non-audit services provided to us and to our subsidiaries during the periods listed below. The Audit Committee approves discrete projects on a case-by-case basis that may have a material effect on our operations and also considers whether proposed services are compatible with the independence of the independent auditors.

Name

Fees Earned or Paid in Cash
($) ⁽¹⁾

Option Awards
($)

Total
($)

William C. Anderson III ⁽³⁾

23,750

4,141

27,891

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