Form 8-K12B
8-K12B — Xtend AI Robotics, Inc.
Accession: 0001193125-26-381857
Filed: 2026-09-03
Period: 2026-09-03
CIK: 0002111860
SIC: 3760 (GUIDED MISSILES & SPACE VEHICLES & PARTS)
Item: Completion of Acquisition or Disposition of Assets
Item: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item: Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
Item: Material Modifications to Rights of Security Holders
Item: Changes in Control of Registrant
Item: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
Item: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Item: Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics
Item: Other Events
Item: Financial Statements and Exhibits
Documents
8-K12B — d230933d8k12b.htm (Primary)
EX-3.1 (d230933dex31.htm)
EX-3.2 (d230933dex32.htm)
EX-10.1 (d230933dex101.htm)
EX-10.4 (d230933dex104.htm)
EX-10.5 (d230933dex105.htm)
EX-10.6 (d230933dex106.htm)
EX-10.7 (d230933dex107.htm)
EX-10.8 (d230933dex108.htm)
EX-10.9 (d230933dex109.htm)
EX-10.15 (d230933dex1015.htm)
EX-10.16 (d230933dex1016.htm)
EX-10.17 (d230933dex1017.htm)
EX-99.2 (d230933dex992.htm)
EX-99.5 (d230933dex995.htm)
EX-99.6 (d230933dex996.htm)
EX-99.7 (d230933dex997.htm)
EX-99.8 (d230933dex998.htm)
EX-99.9 (d230933dex999.htm)
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8-K12B
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8-K12B false 0002111860 --12-31 0002111860 2026-09-03 2026-09-03 0002111860 dei:FormerAddressMember 2026-09-03 2026-09-03
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 3, 2026
Xtend AI Robotics, Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware
001-42538
38-4385227
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
5247 Crossroads Park Drive
Tampa, Florida
33610
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s Telephone Number, Including Area Code: (813) 621-8965
JFB Construction Holdings
1300 S. Dixie Highway, Suite B
Lantana, Florida 33462
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Common Stock, par value $0.0001 per share
XTND
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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. ☐
EXPLANATORY NOTE
On September 3, 2026 (the “Closing Date”), pursuant to the Agreement and Plan of Merger, dated as of February 13, 2026, as amended on March 21, 2026 and July 16, 2026 and as amended and restated to date, (the “Merger Agreement”), by and among Xtend AI Robotics, Inc., a Delaware corporation (the “Company”), JFB Construction Holdings, a Nevada corporation (“JFB”), XT Merger Sub 2, Inc., a Nevada corporation and a direct, wholly-owned subsidiary of the Company (“Merger Sub II”), and Xtend Reality Expansion Ltd., a company organized under the laws of the State of Israel (“Xtend”), (i) XOS Robotics Ltd, an Israeli shell company formed by the Company under the laws of the State of Israel as a direct, wholly-owned subsidiary of the Company merged with and into Xtend (the “Xtend Merger”) with Xtend surviving as a direct, wholly-owned subsidiary of the Company and (ii) immediately after the Xtend Merger, Merger Sub II merged with and into JFB (the “Redomestication” and together with the Xtend Merger, the “Mergers”) with JFB surviving as a direct, wholly-owned subsidiary of the Company.
The Merger Agreement and the transactions contemplated thereby, including the Mergers, were previously described in the Registration Statement on Form S-4, as amended, filed by the Company, which was declared effective by the United States Securities and Exchange Commission (the “SEC”) on August 11, 2026, and in the information statement/prospectus of the Company, dated August 11, 2026 (the “Information Statement/Prospectus”).
Item 2.01
Completion of Acquisition or Disposition of Assets.
On the Closing Date, as a result of the Mergers, the Company became the parent of JFB and Xtend. All defined terms used in this summary of the Merger Agreement that are not otherwise defined herein have the meanings ascribed to such terms in the Merger Agreement.
As a result of the Redomestication, each outstanding share of JFB Class A common stock, par value $0.0001 per share, and JFB Class B common stock, par value $0.0001 per share, issued and outstanding immediately prior to the effective time of the Redomestication (the “Redomestication Effective Time”), except for certain specified shares of JFB Class A or Class B common stock owned by any direct or indirect subsidiary of JFB or owned or held in the treasury by JFB, converted automatically into the right to receive one share of common stock, par value $0.0001 per share, of the Company (“Company Common Stock”). Each share of JFB Series C preferred stock, par value $0.0001 per share, outstanding immediately prior to the Redomestication converted into 3.676 shares of JFB Class A common stock, each of which then converted into the right to receive one share of Company Common Stock, subject to certain limitations. Former holders of JFB Series C preferred stock and JFB common stock purchase warrants may not acquire more than 4.99% of the outstanding shares of Company Common Stock. To the extent a holder of JFB Series C preferred stock or JFB common stock purchase warrants would have otherwise acquired a greater percentage of Company Common Stock, such holder instead received pre-funded warrants exercisable for Company Common Stock which are subject to a 4.99% beneficial ownership cap. A total of 27,544,248 pre-funded warrants to purchase Company Common Stock were issued as a result of the Redomestication. A copy of the Form of Pre-Funded Warrant is filed as Exhibit 4.1 hereto.
As a result of the Xtend Merger, each outstanding Xtend ordinary share, par value NIS 0.01 per share (the “Xtend Ordinary Shares”) (including the outstanding Xtend preferred shares and simple agreements for future equity (other than those owned by JFB), which converted into Xtend Ordinary Shares immediately prior to the closing of the Xtend Merger) that was issued and outstanding immediately prior to the effective time of the Xtend Merger (the “Xtend Merger Effective Time”), but excluding certain specified Xtend Ordinary Shares owned by any direct or indirect subsidiary of Xtend or owned or held in the treasury by Xtend, converted automatically into the right to receive 1.36324 shares of Company Common Stock.
In addition, at the Redomestication Effective Time, each JFB option that was outstanding and unexercised immediately prior to the Redomestication Effective Time and each restricted stock unit award that was outstanding immediately prior to the Redomestication Effective Time was converted into an equivalent equity award of the Company, on the same terms and conditions as were applicable under the JFB equity award immediately prior to the Redomestication Effective Time (including status of vesting and vesting schedule), with respect to a number of shares of Company Common Stock equal to the number of shares of JFB common stock subject to such JFB equity award immediately prior to the Redomestication Effective Time.
Immediately prior to the Xtend Merger Effective Time, certain options to purchase shares of Xtend granted under the XTEND 2019 Share Option Plan and the U.S. and Singapore sub-plans that were outstanding and unexercised immediately prior to the Xtend Merger Effective Time (the “Xtend Options”) were fully accelerated (the “Accelerated Xtend Option”) and converted into a stock option of the Company to purchase a number of shares of Company Common Stock equal to the number of Xtend Ordinary Shares underlying the Xtend Options immediately prior to the Xtend Merger Effective Time multiplied by the exchange ratio of 1.36324 (and rounded down to the nearest whole share), in the same tax track and at a per-share exercise price equal to the per-share exercise price applied to such Xtend Option immediately prior to the Xtend Merger Effective Time divided by the exchange ratio (rounded up to the nearest whole cent).
At the Xtend Merger Effective Time, each unvested Xtend Option that is not an Accelerated Xtend Option and each vested Xtend Option (taking into account any acceleration of vesting as a result of the consummation of the Xtend Merger) ceased to represent a right to acquire Xtend Ordinary Shares and was assumed by the Company and converted into a stock option of the Company to purchase a number of shares of Company Common Stock equal to the number of Xtend Ordinary Shares underlying the Xtend Option immediately prior to the Xtend Merger Effective Time multiplied by the exchange ratio (rounded down to the nearest whole share), in the same tax track and at a per-share exercise price equal to the per-share exercise price applied to such Xtend Option immediately prior to the Xtend Merger Effective Time divided by the exchange ratio (rounded up to the nearest whole cent).
Immediately following the consummation of the Mergers, former shareholders of Xtend own 87.41% of the fully-diluted voting power of the Company and 79.61% of the fully-diluted economic ownership of the Company, and former stockholders of JFB own 12.59% of the fully-diluted voting power of the Company and 20.39% of the fully-diluted economic ownership of the Company.
The foregoing description of the Merger Agreement and the Mergers is qualified in its entirety by reference to the full text of the Merger Agreement, Amendment No. 1 to the Merger Agreement and Amendment No. 2 to the Merger Agreement, copies of which are filed as Exhibits 2.1, 2.2 and 2.3, respectively, of this Current Report on Form 8-K and are incorporated by reference herein.
The information set forth in the “Explanatory Note” of this Current Report on Form 8-K is incorporated herein by reference.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On the Closing Date, as a result of the Mergers, the Company became the parent of JFB and Xtend as well as a guarantor of Xtend’s obligations under the Amended and Restated Facility Agreement, dated as of April 26, 2026, by and between Xtend and Bank Hapoalim B.M. A summary of the principal terms of the credit facility with Bank Hapoalim B.M. is set forth in the section titled “Management Discussion and Analysis of Xtend” contained in the Information Statement/Prospectus, which summary is incorporated herein by reference. Such summary is qualified in its entirety by reference to the full text of the Amended and Restated Facility Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
The information set forth in the “Explanatory Note” and Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 3.01
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
The information set forth in the “Explanatory Note” of this Current Report on Form 8-K is incorporated herein by reference.
On September 1, 2026, JFB notified the Nasdaq Stock Market LLC (“Nasdaq”) of the anticipated consummation of the Mergers and requested that Nasdaq halt trading of the shares of JFB common stock (the “JFB Shares”), effective as of 4:00 p.m. Eastern Time, on September 3, 2026. On September 3, 2026,
JFB (i) notified Nasdaq of the consummation of the Mergers and its intent to remove all JFB Shares from listing on The Nasdaq Capital Market and (ii) requested that Nasdaq (A) suspend trading of the JFB Shares and (B) file with the SEC a Form 25 to remove the JFB Shares from listing on The Nasdaq Capital Market and deregister the JFB Shares pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The JFB Shares ceased trading on The Nasdaq Capital Market effective prior to the opening of trading on September 4, 2026. After effectiveness of the Form 25, JFB intends to file with the SEC a certification and notice of termination on Form 15 to terminate the registration of the JFB Shares under the Exchange Act and suspend JFB’s reporting obligations under Section 13 and Section 15(d) of the Exchange Act. Following the consummation of the Mergers, shares of Company Common Stock is expected to begin trading on The New York Stock Exchange (the “NYSE”) under the ticker symbol “XTND” on September 4, 2026.
Item 3.03
Material Modification to Rights of Security Holders.
A summary of the principal changes to the rights of holders of Company Common Stock following the Closing Date is set forth in the section titled “Comparison of Stockholders Rights” of the Information Statement/Prospectus, which summary is incorporated herein by reference. Such summary is qualified in its entirety by reference to the full text of the Amended and Restated Charter (as defined below) and Amended and Restated Bylaws (as defined below), which are filed as Exhibits 3.1 and 3.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
The information set forth in the “Explanatory Note” and Items 2.01 and 5.03 of this Current Report on Form 8-K is incorporated herein by reference.
Item 5.01
Changes in Control of Registrant.
The information set forth in the “Explanatory Note” and Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Directors
Effective as of the Closing Date, the following individuals were appointed to serve on the Company board of directors (“Board”):
•
Aviv Shapira;
•
Reuven Liani;
•
Peter Kash;
•
Austin Miller; and
•
Erez Simha.
Effective as of the Closing Date, the following committees of the Board were established and constituted as follows:
•
Audit Committee: Erez Simha (Chair), Peter Kash, Austin Miller;
•
Compensation Committee: Erez Simha (Chair), Austin Miller, Peter Kash; and
•
Nominating and Corporate Governance Committee: Peter Kash (Chair), Austin Miller, Erez Simha.
Appointment of Officers
In connection with the Mergers, effective as of the Closing Date, Joseph F. Basile III was appointed as the Company’s Executive Vice President of Construction Operations; Reuven Liani was appointed as the Company’s Chief Technology Officer; Amir Ofri was appointed as the Company’s Chief Operating Officer; Matteo Shapira was appointed as the Company’s Chief AI Officer; and Mor Swiel was appointed as the Company’s Chief Legal Counsel, in each case pursuant to the terms of the Merger Agreement.
Matteo Shapira is the brother of Aviv Shapira, the Chief Executive Officer of the Company. There are no other family relationships between any members or nominees of the Board and any of the Company’s executive officers.
Biographical information and business experience required by Item 5.02(d) with respect to the directors of the Company following the consummation of the Mergers and of Messrs. A. Shapira, Horesh (the Chief Financial Officer), Basile, Liani, Ofri, M. Shapira and Swiel required by Item 5.02(c) are described under the sections “Management and Directors of New PubCo After the Mergers – Board of Directors” and “Management and Directors of New PubCo After the Mergers – Management” of the Information Statement/Prospectus and are incorporated herein by reference.
The Company’s directors and the foregoing named officers have entered into customary indemnification agreements that provide them, in general, with customary indemnification in connection with their service to the Company or on its behalf. The foregoing description of the indemnification agreements is qualified in its entirety by reference to the full text of each indemnification agreement, forms of which are filed as Exhibits 10.2 and 10.3 hereto and are incorporated herein by reference.
Director Compensation
Following the consummation of the Mergers, the Company implemented a policy pursuant to which each non-employee director receives an annual director fee of $60,000 as well as an additional annual fee of $20,000 for service as the chair of the audit committee and an additional annual fee of $10,000 for service (excluding as chair) on the audit committee. The policy provides for an additional annual fee of $15,000 for service as the chair of the compensation committee and an additional annual fee of $7,500 for service (excluding as chair) on the compensation committee and an annual fee of $10,000 for service as the chair of the nominating and corporate governance committee and an additional annual fee of $5,000 for service (excluding as chair) on the nominating and corporate governance committee. The Non-Executive Chair of the Board will receive an additional $30,000 per year, effective upon the commencement of the third fiscal year following the date on which the Company Common Stock first listed on the NYSE. For the avoidance of doubt, the Non-Executive Chair shall receive no compensation for serving as Non-Executive Chair during the first two fiscal years following the date on which the Company Common Stock first listed on the NYSE. The Lead Independent Director, if any, will receive $22,500 per year.
In addition, in recognition of the increased director availability expected during the Company’s initial period as a public company, each director will also receive a supplemental cash retainer of $25,000 per fiscal quarter for eight fiscal quarters, beginning with the fiscal quarter in which the Company Common Stock is first listed on the NYSE, paid quarterly in arrears and pro-rated for partial service (including for the initial quarter based on the listing date). Total annual cash compensation paid to any director under this policy will not exceed $160,000 in any fiscal year, and any excess will reduce the supplemental retainer. The supplemental retainer terminates automatically after the eighth such quarter.
Effective as of the Closing Date, each non-employee director who is serving and will continue to serve on the Board was granted a restricted stock unit award with a grant date value of $300,000, calculated based on the product of the average closing market price on the NYSE of one share of Company Common Stock on the Closing Date and the aggregate number of shares of Company Common Stock underlying the award. These restricted stock unit awards will vest in equal annual installments over a period of three years.
Each non-employee director will also receive an annual restricted stock unit award with a grant date value of $150,000, calculated based on the product of the average closing market price on the NYSE of one share of Company Common Stock on the date of grant and the aggregate number of shares of Company Common Stock underlying the award. Each annual equity grant will vest in full on the earlier of one year from the date of grant or the date prior to the Company’s next annual meeting date.
Officer Compensation
Employment Agreements
On the Closing Date, Xtend entered into employment agreements with each of Messrs. A. Shapira, Horesh, Liani, Ofri, M. Shapira and Swiel (the “Employment Agreements”). A summary of the principal terms of the Employment Agreements is set forth in the section titled “Management and Directors of New PubCo After the Mergers” contained in the Information Statement/Prospectus, which summary is incorporated herein by reference. Such summary is qualified in its entirety by reference to the full text of the Employment Agreements, copies of which are filed as Exhibits 10.4, 10.5, 10.6, 10.7, 10.8 and 10.9 hereto, respectively, and are incorporated herein by reference.
Equity Awards
Following the consummation of the Mergers, Mr. Horesh received an initial grant of 300,000 restricted stock units, subject to the terms and conditions of the Restricted Stock Unit Award Agreement, which will vest monthly over 36 months. Subject to Mr. Horesh’s continued employment, Mr. Horesh’s employment agreement provides that the Board or its compensation committee will make similar grants on the first and second anniversaries of the initial grant, and he also received a one-time grant of 3,000,000 restricted stock units which will be subject to the terms and conditions of the Restricted Stock Unit Award Agreement and vest monthly over 36 months. The vesting schedule also includes an acceleration provision pursuant to which 100% of the then outstanding and unvested restricted stock units granted thereunder shall become fully vested immediately upon the termination of Mr. Horesh’s employment without Cause or by Mr. Horesh for Good Reason (each as defined in his employment agreement).
Following the consummation of the Mergers, Mr. Liani was awarded an initial grant of 300,000 restricted stock units, subject to the terms and conditions of the Restricted Stock Unit Award Agreement, which will vest monthly over 36 months. However, this award is conditioned on the occurrence of an increase of shares available for issuance under the 2026 Plan expected to occur on January 1, 2027 (the “Contingency”). Subject to Mr. Liani’s continued employment, Mr. Liani’s employment agreement provides that the Board or its compensation committee will make similar grants on the first and second anniversaries of the initial grant. It awarded a one-time grant of 5,000,000 restricted stock units which will be subject to the terms and conditions of the Restricted Stock Unit Award Agreement and vest monthly over 36 months. The one-time grant is conditioned on the Contingency. The vesting schedule also includes an acceleration provision pursuant to which 100% of the then outstanding and unvested restricted stock units granted thereunder will become fully vested immediately upon the termination of Mr. Liani’s employment without Cause or by Mr. Liani for Good Reason (each as defined in his employment agreement).
Following the consummation of the Mergers, Mr. Ofri received an initial grant of 160,000 restricted stock units, subject to the terms and conditions of the Restricted Stock Unit Award Agreement, which will vest monthly over 36 months. Subject to Mr. Ofri’s continued employment, Mr. Ofri’s employment agreement provides that the Board or its compensation committee will make similar grants on the first and second anniversaries of the initial grant.
Following the consummation of the Mergers, Mr. A. Shapira received an initial grant of 450,000 restricted stock units, subject to the terms and conditions of the Restricted Stock Unit Award Agreement, which will vest monthly over 36 months. Subject to Mr. A. Shapira’s continued employment, Mr. A. Shapira’s employment agreement provides that the Board or its compensation committee will make similar grants on the first and second anniversaries of the initial grant, and he also received a one-time grant of 5,000,000 restricted stock units which will be subject to the terms and conditions of the Restricted Stock Unit Award Agreement and vest monthly over 36 months. The vesting schedule also includes an acceleration provision pursuant to which 100% of the then outstanding and unvested restricted stock units granted thereunder will become fully vested immediately upon the termination of Mr. A. Shapira’s employment without Cause or by Mr. A. Shapira for Good Reason (each as defined in his employment agreement).
Following the consummation of the Mergers, Mr. M. Shapira was awarded an initial grant of 300,000 restricted stock units, subject to the terms and conditions of the Restricted Stock Unit Award Agreement, which will vest monthly over 36 months. However, this award is conditioned on the occurrence of the Contingency. Subject to Mr. M. Shapira’s continued employment, Mr. M. Shapira’s employment agreement provides that the Board or its compensation committee will make similar grants on the first and second anniversaries of the initial grant, and he was also awarded a one-time grant of 5,000,000 restricted stock units which will be subject to the terms and conditions of the Restricted Stock Unit Award Agreement and vest monthly over 36 months. The one-time grant is conditioned on the Contingency. The vesting schedule also includes an acceleration provision pursuant to which 100% of the then outstanding and unvested restricted stock units granted thereunder will become fully vested immediately upon the termination of Mr. M. Shapira’s employment without Cause or by Mr. M. Shapira for Good Reason (each as defined in his employment agreement).
Following the consummation of the Mergers, Mr. Swiel received an initial grant of 180,000 restricted stock units, subject to the terms and conditions of the Restricted Stock Unit Award Agreement, which will vest monthly over 36 months. Subject to Mr. Swiel’s continued employment, Mr. Swiel’s employment agreement provides that the Board or its compensation committee will make similar grants on the first and second anniversaries of the initial grant, and he also received a one-time grant of 250,000 restricted stock units which will be subject to the terms and conditions of the Restricted Stock Unit Award Agreement and vest monthly over 36 months. The vesting schedule also includes an acceleration provision pursuant to which 100% of the then outstanding and unvested restricted stock units granted thereunder will become fully vested immediately upon the termination of Mr. Swiel’s employment without Cause or by Mr. Swiel for Good Reason (each as defined in his employment agreement).
Each of the foregoing awards of restricted stock units was granted under the Company’s 2026 Equity Incentive Plan (the “Incentive Plan”) and the sub-plan thereunder for participants who are residents of the State of Israel (the “Israeli Sub-Plan”). The awards granted to Messrs. Horesh, Ofri, A. Shapira, M. Shapira R. Liani and Swiel, each of whom is an Israeli resident employed by the Company’s Israeli subsidiary, Xtend Reality Expansion Ltd., are intended to qualify as “trustee” awards under the capital gains track of Section 102 of the Israeli Income Tax Ordinance, 5721 - 1961, and the rules and regulations promulgated thereunder (“Section 102”). Accordingly, such awards, together with any shares of common stock issued upon settlement thereof and any rights distributed in respect thereof, will be issued to, and held by or subject to the control of, a trustee approved by the Israel Tax Authority (the “ITA”) for the benefit of the applicable grantee for at least the minimum holding period prescribed by Section 102, and the availability of the capital gains tax treatment under Section 102 is subject to the satisfaction of the conditions thereof, including such holding period. The grant of such awards is subject to, and conditioned upon, and will enter into force only after the filing of the Incentive Plan and the Israeli Sub-Plan with, and the approval thereof by, the ITA in accordance with Section 102 and the lapse of 30 days from the filing of such documents with the ITA and therefore , and no such award will be granted, or be deemed to have been granted, for purposes of Section 102 prior to the expiration of 30 days following such filing.
2026 Equity Incentive Plan
On February 13, 2026, the Company adopted, and stockholders of the Company approved, the 2026 Equity Incentive Plan (the “2026 Plan”), effective as of the Closing Date, and the forms of award agreements thereunder. A summary of the principal terms of the 2026 Plan is set forth in the section titled “Compensation Programs of New PubCo After the Mergers” contained in the Information Statement/Prospectus, which summary is incorporated herein by reference. Such summary is qualified in its entirety by reference to the full text of the 2026 Plan, a copy of which is filed as Exhibit 10.10 hereto and is incorporated herein by reference. Copies of forms of award agreements under the 2026 Plan are filed as Exhibits 10.11 and 10.12 hereto and are incorporated herein by reference.
2026 Employee Stock Purchase Plan
On February 13, 2026, the Company adopted, and stockholders of the Company approved, the 2026 Employee Stock Purchase Plan (the “2026 ESPP”), effective as of the Closing Date. A summary of the principal terms of the 2026 ESPP is set forth in the section titled “Compensation Programs of New PubCo After the Mergers” contained in the Information Statement/Prospectus, which summary is incorporated herein by reference. Such summary is qualified in its entirety by reference to the full text of the 2026 ESPP, a copy of which is filed as Exhibit 10.13 hereto and is incorporated herein by reference.
Item 5.03
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On the Closing Date, in connection with the Mergers, the Company amended and restated its Certificate of Incorporation (the “Amended and Restated Charter”) and Bylaws (the “Amended and Restated Bylaws”), the terms of which are described under the sections “Description of New PubCo’s Capital Stock” and “Comparison of Stockholder Rights” of the Information Statement/Prospectus and are incorporated herein by reference. Copies of the Amended and Restated Charter and Amended and Restated Bylaws are filed as Exhibits 3.1 and 3.2, respectively, hereto and are incorporated herein by reference.
Item 5.05
Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.
On the Closing Date, the Company adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions and that relates to elements of the code of ethics definition enumerated in Item 406(b) of Regulation S-K, a copy of which is available on the Company’s website at https://www.xtend.me/ir. The information on the Company’s website does not constitute part of this Current Report on Form 8-K and is not incorporated herein by reference.
Item 8.01
Other Events
At the Redomestication Effective Time, the Company became the successor issuer to JFB pursuant to Rule 12g-3(a). Pursuant to Rule 12g-3(a), shares of Company Common Stock, as the common stock of the successor issuer, were deemed registered under Section 12(b) of the Exchange Act. The Company hereby reports this succession in accordance with Rule 12g-3(f) under the Exchange Act.
Item 9.01
Financial Statements and Exhibits.
(a) Financial Statements of the Business Acquired
The audited consolidated balance sheets of Xtend as of December 31, 2025 and 2024, the related consolidated statements of comprehensive loss, convertible preferred shares and shareholders’ deficit, and cash flows for each of the two years ended December 31, 2025 and the related notes are filed as Exhibit 99.1 hereto and are incorporated herein by reference.
The unaudited condensed consolidated balance sheets of Xtend as of June 30, 2026 and December 31, 2025, the related condensed consolidated statements of comprehensive loss, convertible preferred shares and shareholders’ deficit, and cash flows for the six months ended June 30, 2026 and 2025 and the related notes are filed as Exhibit 99.2 hereto and are incorporated herein by reference.
The audited balance sheet of Atlas Aerospace SIA. as of December 31, 2024, the related statements of comprehensive loss, shareholders’ deficit, and cash flows for the year ended December 31, 2024 and the related notes are filed as Exhibit 99.3 hereto and are incorporated herein by reference.
The unaudited condensed balance sheet of Atlas Aerospace SIA. as of September 30, 2025, the related condensed statements of comprehensive loss, shareholders’ deficit, and cash flows for the nine months ended September 30, 2025 and the related notes are filed as Exhibit 99.4 hereto and are incorporated herein by reference.
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined balance sheet as of June 30, 2026, and the unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2026 and the year ended December 31, 2025 are filed as Exhibit 99.5 hereto and are incorporated herein by reference.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No.
Description
2.1+
Agreement and Plan of Merger, dated February 13, 2026, by and among JFB Construction Holdings, Xtend AI Robotics, Inc., XT Merger Sub 2, Inc., and Xtend Reality Expansion Ltd. (incorporated by reference to Exhibit 2.1 of the Company’s registration statement on Form S-4 filed with the SEC on April 28, 2026).
2.2+
Amendment No. 1 to Agreement and Plan of Merger, dated March 21, 2026, by and among JFB Construction Holdings, Xtend AI Robotics, Inc., XT Merger Sub 2, Inc., and Xtend Reality Expansion Ltd. (incorporated by reference to Exhibit 2.2 of the Company’s registration statement on Form S-4 filed with the SEC on April 28, 2026).
2.3+
Amendment No. 2 to Agreement and Plan of Merger, dated July 16, 2026, by and among JFB Construction Holdings, Xtend AI Robotics, Inc., XT Merger Sub 2, Inc., and Xtend Reality Expansion Ltd. (incorporated by reference to Exhibit 2.3 of the Company’s registration statement on Form S-4 filed with the SEC on July 16, 2026).
3.1
Amended and Restated Certificate of Incorporation of Xtend AI Robotics, Inc.
3.2
Amended and Restated Bylaws of Xtend AI Robotics, Inc.
4.1
Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 of the Company’s registration statement on Form S-4 filed with the SEC on April 28, 2026).
10.1
Amended and Restated Facility Agreement, dated as of April 26, 2026, by and between Xtend Reality Expansion Ltd. and Bank Hapoalim B.M.
10.2#
Form of Officer Indemnification Agreement (incorporated by reference to Exhibit 10.17 of Amendment No. 1 to the Company’s registration statement on Form S-4 filed with the SEC on June 16, 2026).
10.3#
Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.18 of Amendment No. 1 to the Company’s registration statement on Form S-4 filed with the SEC on June 16, 2026).
10.4#+
Employment Agreement, dated as of September 3, 2026, by and between the Xtend Reality Expansion Ltd. and Aviv Shapira.
10.5#+
Employment Agreement, dated as of September 3, 2026, by and between the Xtend Reality Expansion Ltd. and Tal Horesh.
10.6#+
Employment Agreement, dated as of September 3, 2026, by and between the Xtend Reality Expansion Ltd. and Reuven Liani.
10.7#+
Employment Agreement, dated as of September 3, 2026, by and between the Xtend Reality Expansion Ltd. and Amir Ofri.
10.8#+
Employment Agreement, dated as of September 3, 2026, by and between the Xtend Reality Expansion Ltd. and Matteo Shapira.
10.9#+
Employment Agreement, dated as of September 3, 2026, by and between the Xtend Reality Expansion Ltd. and Mor Swiel.
10.10#
Form of 2026 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 of the Company’s registration statement on Form S-4 filed with the SEC on April 28, 2026).
10.11#
2026 Equity Incentive Plan Form of Stock Option Agreement (incorporated by reference to Exhibit 10.9 of the Company’s registration statement on Form S-4 filed with the SEC on April 28, 2026).
10.12#
2026 Equity Incentive Plan Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.10 of the Company’s registration statement on Form S-4 filed with the SEC on April 28, 2026).
10.13#
Form of 2026 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.8 of the Company’s registration statement on Form S-4 filed with the SEC on April 28, 2026).
10.14
Amended and Restated Support Agreement, dated as of July 16, 2026, by and among XTEND Reality Expansion Ltd., American Ventures LLC, Series XIV JFB and, solely with respect to Section 4.4, JFB Construction Holdings (incorporated by reference to Annex D-2 of the Company’s registration statement on Form S-4 filed with the SEC on July 16, 2026).
10.15
First Amendment to Amended and Restated Facility Agreement, dated as of August 31, 2026, by and between Xtend Reality Expansion Ltd. and Bank Hapoalim B.M.
10.16
Letter of Guarantee and Indemnity, dated as of August 31, 2026, between Xtend AI Robotics, Inc. and Bank Hapoalim B.M.
10.17
Xtend Reality Expansion Ltd. 2019 Option Plan.
99.1
Audited consolidated financial statements of Xtend Reality Expansion Ltd. as of December 31, 2025 and 2024 and for the two years ended December 31, 2025 and auditor reports thereon (incorporated by reference to Amendment No. 1 to the Company’s registration statement on Form S-4 filed with the SEC on June 16, 2026).
99.2
Unaudited condensed consolidated financial statements of Xtend Reality Expansion Ltd. as of June 30, 2026 and December 31, 2025 and the six months ended June 30, 2026.
99.3
Audited financial statements of Atlas Aerospace SIA. as of December 31, 2024 and for the year ended December 31, 2024 and auditor reports thereon (incorporated by reference to Amendment No. 1 to the Company’s registration statement on Form S-4 filed with the SEC on June 16, 2026).
99.4
Unaudited condensed financial statements of Atlas Aerospace SIA. as of September 30, 2025 and for the nine months ended September 30, 2025 (incorporated by reference to Amendment No. 1 to the Company’s registration statement on Form S-4 filed with the SEC on June 16, 2026).
99.5
Unaudited pro forma condensed combined financial information as of June 30, 2026, for the year ended December 31, 2025 and for the six months ended June 30, 2026.
99.6
Consent of Ernst & Young LLP.
99.7
Consent of Ernst & Young LLP.
99.8
Consent of M&K CPAS, PLLC.
99.9
Risk Factors of the Company.
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).
+
Certain schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.
#
Indicates a management contract or compensatory plan.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
XTEND AI ROBOTICS, INC.
By:
/s/ Aviv Shapira
Name:
Aviv Shapira
Title:
Chief Executive Officer
Date: September 3, 2026
EX-3.1
EX-3.1
Filename: d230933dex31.htm · Sequence: 2
EX-3.1
Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
XTEND AI ROBOTICS,
INC.
SECTION 1.
The name
of this corporation is Xtend AI Robotics, Inc. (the “Corporation”).
SECTION 2.
The address of the registered office of the Corporation in the State of Delaware is 850 New Burton Road, Suite 201, City of Dover, County of
Kent, 19904 and the name of the registered agent of the Corporation in the State of Delaware at such address is Cogency Global Inc.
SECTION 3.
The
purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).
SECTION 4.
Section 4.1 The Corporation is authorized to issue two classes of stock to be designated, respectively, “Common
Stock” and “Preferred Stock.” The total number of shares that the Corporation is authorized to issue is 810,000,000 shares, consisting of 800,000,000 shares of Common Stock, par value $0.0001 per share, and
10,000,000 shares of Preferred Stock, par value $0.0001 per share.
Section 4.2 The Preferred Stock may be issued from time to
time in one or more series. The Board of Directors of the Corporation (the “Board”) is hereby expressly authorized to provide for the issue of all or any of the unissued and undesignated shares of the Preferred Stock, in
one or more series, and to fix the number of shares of such series and to determine for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other
rights and such qualifications, limitations, or restrictions thereof, as shall be set forth in a certificate of designation adopted by the Board and filed in accordance with the DGCL.
Section 4.3 The number of authorized shares of Preferred Stock and Common Stock may be increased or decreased (but not below the
number of shares thereof then outstanding plus, if applicable, the number of shares of such class or series reserved for issuance) by the affirmative vote of the holders of a majority of the voting power of all of the outstanding shares of stock of
the Corporation entitled to vote thereon unless a lesser vote is permitted by the DGCL in which case such lesser vote shall suffice, without a separate vote of the holders of the Preferred Stock or the Common Stock, respectively, unless a vote of
any such holders is required pursuant to the terms of any certificate of designation filed with respect to any series of Preferred Stock.
Section 4.4 Each outstanding share of Common Stock shall entitle the holder
thereof to one vote on each matter properly submitted to the stockholders of the Corporation for their vote; provided, however, that, except as otherwise required by applicable law, holders of Common Stock shall not be entitled to vote on any
amendment to this amended and restated certificate of incorporation (as amended from time to time, the “Certificate of Incorporation”) (including any certificate of designation filed with respect to any series of Preferred
Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series of Preferred Stock are entitled, either separately or together as a class with the holders of one or more other
affected series of Preferred Stock, to vote thereon pursuant to applicable law or the Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock).
SECTION 5.
For the
management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation and regulation of the powers of the Corporation, of its directors and stockholders, or any class thereof, as the case may be, it
is further provided that:
Section 5.1 MANAGEMENT OF THE
BUSINESS.
Except as otherwise provided by the DGCL or the Certificate of Incorporation, the business
and affairs of the Corporation shall be managed by or under the direction of the Board. Subject to any rights of the holders of shares of any one or more series of Preferred Stock then outstanding to elect additional directors under specified
circumstances, the number of directors that shall constitute the Board shall be fixed exclusively by the Board.
Section 5.2 BOARD
OF DIRECTORS
Subject to the rights of the holders of any one or more series of Preferred Stock to elect
additional directors under specified circumstances, directors shall be elected at each annual meeting of stockholders for a term of one year. Each director shall serve until such director’s successor is duly elected and qualified or until such
director’s earlier death, resignation or removal. No decrease in the number of directors constituting the Board shall remove or shorten the term of any incumbent director.
SECTION 5.3 REMOVAL OF DIRECTORS
Subject to the rights of the holders of any one or more series of Preferred Stock to remove directors elected by such series of Preferred
Stock, any individual director or the entire Board may be removed from office at any time (a) with cause by the affirmative vote of the holders of a majority of the voting power of all the then-outstanding shares of capital stock of the
Corporation entitled to vote generally at an election of directors or (b) without cause by the affirmative vote of the holders of at least 66 2/3% of the voting power of all the then-outstanding shares of the capital stock of the Corporation entitled to vote generally at an election of directors.
Section 5.4 VACANCIES.
Subject to any limitations imposed by applicable law and subject to the rights of the holders of any one or more series of Preferred Stock to
elect additional directors or fill vacancies in respect of such directors, any vacancies on the Board resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the
number of directors, shall be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board, or by a sole remaining director, and not by the stockholders. Any director elected to fill
a newly created directorship or vacancy in accordance with the preceding sentence shall hold office until the next annual meeting of stockholders and until such director’s successor shall have been elected and qualified or such
director’s earlier death, resignation or removal.
2
Section 5.5 PREFERRED STOCKHOLDERS
ELECTION RIGHTS.
Whenever the holders of any one or more series of Preferred Stock shall
have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal and other features of such
directorships shall be governed by the terms of the Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) applicable thereto. The number of directors that may be elected by the holders of
any such series of Preferred Stock shall be in addition to the number fixed pursuant to Section 5.1 hereof, and the total number of directors constituting the whole Board shall be automatically adjusted accordingly. Except as otherwise provided
by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the
terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate (in
which case each such director thereupon shall cease to be qualified as, and shall cease to be, a director) and the total authorized number of directors of the Corporation shall automatically be reduced accordingly.
Section 5.6 BYLAW AMENDMENTS.
The Board is expressly authorized and empowered to adopt, amend or repeal any provisions of the bylaws of the Corporation (as amended from
time to time, the “Bylaws”) without the assent or vote of the stockholders in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation. The stockholders shall also have power to
adopt, amend or repeal the Bylaws; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by the Certificate of Incorporation, such action by stockholders
shall require the affirmative vote of the holders of at least 66 2/3 % of the voting power of all of the then-outstanding shares of the
capital stock of the Corporation entitled to vote thereon, voting together as a single class.
Section 5.7
STOCKHOLDER ACTIONS.
a. The directors of the Corporation need not be elected by
written ballot unless the Bylaws so provide.
b. Subject to any rights of the holders of shares of any one or more series of
Preferred Stock then outstanding, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of the stockholders and may not be effected by consent in lieu of a meeting.
c. Subject to any rights of the holders of shares of any series of Preferred Stock then outstanding, special meetings of stockholders of
the Corporation may be called only by the Chairperson of the Board, the Chief Executive Officer, the President or the Board, but a special meeting may not be called by any other person or persons and any power of stockholders to call a special
meeting of stockholders is specifically denied. Only such business shall be considered at a special meeting of stockholders as shall have been stated in the notice for such meeting.
3
d. An annual meeting of stockholders for the purpose of election of directors and for
such other business as may properly come before the meeting, shall be held on such date, time and place, if any, as may be determined from time to time by the Board.
SECTION 6.
No
director or officer of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not
permitted under the DGCL, as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director or officer of the Corporation hereunder in
respect of any act or omission occurring prior to the time of such amendment, modification or repeal.
SECTION 7.
Section 7.1 Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State
of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the
federal district court for the District of Delaware) and any appellate court therefrom shall be the sole and exclusive forum for the following claims or causes of action under Delaware statutory or common law: (A) any derivative claim or cause
of action brought on behalf of the Corporation; (B) any claim or cause of action for breach of a fiduciary duty owed by any current or former director, officer or other employee or stockholder of the Corporation, to the Corporation or the
Corporation’s stockholders; (C) any claim or cause of action against the Corporation or any current or former director, officer or other employee of the Corporation, arising out of or pursuant to any provision of the DGCL, the Certificate
of Incorporation or the Bylaws; (D) any claim or cause of action seeking to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or the Bylaws (including any right, obligation, or remedy thereunder);
(E) any claim or cause of action as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; and (F) any claim or cause of action against the Corporation or any current or former director, officer or other
employee of the Corporation, governed by the internal-affairs doctrine or otherwise related to the Corporation’s internal affairs, in all cases to the fullest extent permitted by applicable law and subject to the court having personal
jurisdiction over the indispensable parties named as defendants. This Section 7.1 shall not apply to claims or causes of action brought to enforce a duty or liability created by the Securities Act of 1933, as amended (the
“Securities Act”), or the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction.
Section 7.2 Unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by
applicable law, the federal district courts of the United States of America shall be the exclusive form for the resolution of any complaint asserting a cause of action arising under the Securities Act, including all causes of action asserted against
any defendant named in such complaint. For the avoidance of doubt, this provision is intended to benefit and may be enforced by the Corporation, its officers and directors, the underwriters for any offering giving rise to such complaint, and any
other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
SECTION 8.
Section 8.1 Any person or entity holding, owning, or otherwise acquiring any interest in any security of the Corporation shall be
deemed to have notice of and consented to the provisions of the Certificate of Incorporation.
4
Section 8.2 The Corporation reserves the right to amend, alter, change or repeal,
at any time and from time to time, any provision contained in the Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights, preferences and privileges of whatsoever nature conferred upon the stockholders,
directors or any other persons whomsoever by and pursuant to the Certificate of Incorporation are granted subject to this reservation.
SECTION 9.
Section 9.1 If any provision or provisions of the Certificate of Incorporation shall be held to be invalid, illegal or unenforceable
as applied to any circumstance for any reason whatsoever, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of the Certificate of Incorporation (including, without limitation, each
portion of any paragraph of the Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not, to the fullest extent permitted by
applicable law, in any way be affected or impaired thereby.
The Corporation has caused this amended and restated certificate of
incorporation to be signed by a duly authorized officer of the Corporation on September 3, 2026.
XTEND AI ROBOTICS, INC.
By:
/s/ Aviv Shapira
Name: Aviv Shapira
Title: Chief Executive Officer
5
EX-3.2
EX-3.2
Filename: d230933dex32.htm · Sequence: 3
EX-3.2
Exhibit 3.2
AMENDED AND RESTATED BYLAWS
OF
XTEND AI ROBOTICS,
INC.
(A DELAWARE CORPORATION)
SECTION 1.
OFFICES
Section 1.1 Registered Office. The registered office of Xtend AI Robotics, Inc. (the “Corporation”) in the
State of Delaware and the name of the Corporation’s registered agent at such address shall be as set forth in the amended and restated certificate of incorporation of the Corporation (as the same may be amended and/or restated from time to
time, the “Certificate of Incorporation”).
Section 1.2 Other Offices. The Corporation may at any time establish
other offices both within and without the State of Delaware.
SECTION 2.
CORPORATE SEAL
Section 2.1 Corporate Seal. The Board of Directors of the Corporation (the “Board”) may adopt a corporate seal. Said
seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 3.
STOCKHOLDERS’ MEETINGS
Section 3.1 Place of Meetings. Meetings of the stockholders of the Corporation may be held at such place, if any, either within or
without the State of Delaware, as may be determined from time to time by the Board. The Board may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as
provided under the General Corporation Law of the State of Delaware (“DGCL”) and Section 3.9 below.
Section 3.2 Annual Meetings.
(a) The annual meeting of the stockholders of the Corporation, for the purpose of election of directors and for such other business as may properly
come before it, shall be held on such date and time as may be determined from time to time by the Board. Any annual meeting of stockholders previously scheduled by the Board may be postponed, rescheduled or cancelled by the Board, or any director or
officer of the Corporation to whom the Board delegates such authority, at any time before or after notice of such meeting has been given to stockholders. Nominations of persons for election to the Board and proposals of other business to be
considered by the stockholders may be made at an annual meeting of stockholders: (i) pursuant to the Corporation’s notice of meeting of stockholders (or any supplement thereto); (ii) by or at the direction of the Board or a duly
authorized committee thereof; or (iii) by any stockholder of the Corporation who was a stockholder of record at the time of giving the stockholder’s notice provided for in Section 3.2(b) of these amended and restated bylaws (as may
be
amended and/or restated from time to time, the “Bylaws”) and who is a stockholder of record at the time of the annual meeting of stockholders, who is entitled to vote at the meeting
and who complied with the notice procedures set forth in this Section 3.2. For the avoidance of doubt, clause (iii) above shall be the exclusive means for a stockholder to make nominations and submit other business before an annual meeting
of stockholders.
(b) At an annual meeting of the stockholders, only such business shall be conducted as is a proper matter for stockholder action under
the DGCL, the Certificate of Incorporation and the Bylaws, and only such nominations shall be made and such business shall be conducted as shall have been properly brought before the meeting in accordance with the procedures below.
(1) For nominations for the election to the Board to be properly brought before an annual meeting by a stockholder pursuant to clause
(iii) of Section 3.2(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the Corporation on a timely basis as set forth in Section 3.2(b)(3) and must update and supplement the
information contained in such written notice on a timely basis as set forth in Section 3.2(c). Such stockholder’s notice shall include: (A) as to each nominee such stockholder proposes to nominate at the meeting: (1) the name,
age, business address and residence address of such nominee, (2) the principal occupation or employment of such nominee, (3) the class or series and number of shares of each class or series of capital stock of the Corporation that are
owned of record and beneficially by such nominee and a list of any pledge of or encumbrances on such shares, (4) the date or dates on which such shares were acquired and the investment intent of such acquisition, (5) the questionnaire,
representation and agreement required by Section 3.2(e), completed and signed by such nominee, and (6) all other information concerning such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the
election of such nominee as a director in an election contest (even if an election contest is not involved and whether or not proxies are being or will be solicited), or that is otherwise required to be disclosed or provided to the Corporation
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including such person’s written consent to being named in a proxy statement, associated proxy card and other filings as a nominee
and to serving as a director if elected); and (B) all of the information required by Section 3.2(b)(4). The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the
eligibility of such proposed nominee to serve as a director of the Corporation and to determine the independence (as such term is used in any applicable stock exchange listing requirements or applicable law) of such proposed nominee or to determine
the eligibility of such proposed nominee to serve on any committee or sub-committee of the Board under any applicable stock exchange listing requirements or applicable law, or that the Board determines could
be material to a reasonable stockholder’s understanding of the background, qualifications, experience, independence, or lack thereof, of such proposed nominee. The number of nominees a stockholder may nominate for election at an annual meeting
on its own behalf (or in the case of a stockholder giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at an annual meeting on behalf of such beneficial owner) shall not exceed the number
of directors to be elected at such annual meeting. A stockholder may not designate any substitute nominees unless the stockholder provides timely notice of such substitute nominee(s) in accordance with this Section 3.2, in the case of an annual
meeting, or Section 3.3, in the case of a special meeting (and such notice contains all of the information, representations, questionnaires and certifications with respect to such substitute nominee(s) that are required by the Bylaws with
respect to nominees for director).
(2) For business other than nominations for election to the Board to be properly brought before an
annual meeting by a stockholder pursuant to clause (iii) of Section 3.2(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the Corporation on a timely basis as set forth in
Section 3.2(b)(3), and must update and supplement the information contained in such written notice on a timely basis as set forth in Section 3.2(c). Such stockholder’s notice shall include: (A) as to each matter such stockholder
proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such
business includes a proposal to amend the Bylaws, the language of the proposed amendment), the reasons for conducting such business at the meeting, and any material interest (including any anticipated benefit of such business to any Proponent (as
defined below) other than solely as
C-2
a result of its ownership of the Corporation’s capital stock, that is material to any Proponent individually, or to the Proponents in the aggregate) in such business of any Proponent; and
(B) all of the information required by Section 3.2(b)(4).
(3) To be timely, the written notice required by
Section 3.2(b)(1) or 3.2(b)(2) must be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day, nor earlier than the 120th day, prior to the first anniversary of the
immediately preceding year’s annual meeting (for purposes of notice required for action to be taken at the Corporation’s first annual meeting of stockholders after its initial public offering of common stock, the date of the immediately
preceding year’s annual meeting shall be deemed to have occurred on June 15 in such immediately preceding calendar year); provided, however, that, subject to the last sentence of this Section 3.2(b)(3), in the event that the date of
the annual meeting is advanced more than 30 days prior to or delayed by more than 70 days after the anniversary of the preceding year’s annual meeting, or if no annual meeting was held (or deemed to have been held), notice by the stockholder
to be timely must be so received not earlier than the 120th day prior to such annual meeting and not later than the later of the close of business on (i) the 90th day prior to such annual meeting or (ii) the tenth day following the day on
which public announcement of the date of such meeting is first made by the Corporation. In no event shall an adjournment or postponement of an annual meeting (or the public announcement thereof) for which notice has been given, or for which a public
announcement of the date of the meeting has been made by the Corporation, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(4) The written notice required by Sections 3.2(b)(1) or 3.2(b)(2) shall also include, as of the date of the notice and as to the
stockholder giving the notice, the beneficial owner, if any, on whose behalf the nomination or proposal is made and any affiliate who controls either of the foregoing stockholder or beneficial owner, directly or indirectly (each, a
“Proponent” and collectively, the “Proponents”): (A) the name and address of each Proponent, including, if applicable, such name and address as they appear on the Corporation’s books and records; (B) the class,
series and number of shares of each class or series of the capital stock of the Corporation that are, directly or indirectly, owned of record or beneficially (within the meaning of Rule 13d-3 under the
Exchange Act) by each Proponent (provided, that for purposes of this Section 3.2(b)(4), such Proponent shall in all events be deemed to beneficially own all shares of any class or series of capital stock of the Corporation as to which such
Proponent or any of its affiliates or associates has a right to acquire beneficial ownership at any time in the future); (C) a description of any agreement, arrangement or understanding (whether oral or in writing) with respect to such nomination or
proposal (and/or the voting of shares of any class or series of capital stock of the Corporation) between or among any Proponent and any of its affiliates or associates, and/or any other persons (including their names) including without limitation,
any agreements, arrangements or understandings required to be disclosed pursuant to Item 5 or Item 6 of Exchange Act Schedule 13D, regardless of whether the requirement to file a Schedule 13D is applicable; (D) a representation that the
stockholder is a holder of record of shares of the Corporation at the time of giving notice, will be entitled to vote at the meeting, and that such stockholder (or a qualified representative thereof) intends to appear at the meeting to nominate the
person or persons specified in the notice (with respect to a notice under Section 3.2(b)(1)) or to propose the business that is specified in the notice (with respect to a notice under Section 3.2(b)(2)); (E) a representation whether any
Proponent or any other participant (as defined in Item 4 of Schedule 14A under the Exchange Act) will engage in a solicitation with respect to such nomination or proposal and, if so, the name of each participant in such solicitation and the amount
of the cost of solicitation that has been and will be borne, directly or indirectly, by each participant in such solicitation, and a representation as to whether the Proponents intend or are part of a group which intends (x) to deliver, or make
available, a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s voting shares required to approve or adopt the proposal or elect the nominee, (y) to otherwise solicit proxies or votes from
stockholders in support of such proposal or nomination and/or (z) to solicit proxies in support of any proposed nominee in accordance with Rule 14a-19 promulgated under the Exchange Act; (F) to the
extent known by any Proponent, the name and address of any other stockholder supporting the proposal on the date of such stockholder’s notice; (G) a description of all Derivative Transactions (as defined below) by each Proponent during
the previous 12-month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic or voting terms of, such Derivative Transactions;
(H) a certification regarding whether each Proponent has complied with all applicable federal, state and other
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legal requirements in connection with such Proponent’s acquisition of shares of capital stock or other securities of the Corporation and/or such Proponent’s acts or omissions as a
stockholder or beneficial owner of the Corporation; and (I) any other information relating to each Proponents required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as
applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14 of the Exchange Act and the rules and regulations promulgated thereunder.
(c) A stockholder providing the written notice required by Section 3.2(b)(1) or (2) shall update and supplement such notice in writing, if
necessary, so that the information (other than the representations required by Section 3.2(b)(4)(E)) provided or required to be provided in such notice is true and correct in all material respects as of (i) the record date for the
determination of stockholders entitled to notice of the meeting and (ii) the date that is five Business Days (as defined below) prior to the meeting and, in the event of any adjournment or postponement thereof, five Business Days prior to such
adjourned or postponed meeting; provided, that no such update or supplement shall cure or affect the accuracy (or inaccuracy) of any representations made by any Proponent, any of its affiliates or associates or a nominee, or the validity (or
invalidity) of any nomination or proposal that failed to comply with this Section 3.2 or is rendered invalid as a result of any inaccuracy therein. In the case of an update and supplement pursuant to clause (i) of this Section 3.2(c),
such update and supplement must be received by the Secretary at the principal executive offices of the Corporation not later than five Business Days after the later of the record date for the determination of stockholders entitled to notice of the
meeting or the public announcement of such record date. In the case of an update and supplement pursuant to clause (ii) of this Section 3.2(c), such update and supplement shall be received by the Secretary at the principal executive
offices of the Corporation not later than two Business Days prior to the date for the meeting, and, in the event of any adjournment or postponement thereof, two Business Days prior to such adjourned or postponed meeting.
(d) Notwithstanding anything in Section 3.2(b)(3) to the contrary, in the event that the number of directors to be elected to the Board at an annual
meeting is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board at least 10 days before the last day a stockholder may deliver a notice of nomination
in accordance with Section 3.2(b)(3), a stockholder’s notice required by this Section 3.2 and that complies with the requirements in Section 3.2(b)(1), other than the timing requirements in Section 3.2(b)(3), shall also be
considered timely, but only with respect to nominees for the new positions created by such increase, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day
following the day on which such public announcement is first made by the Corporation.
(e) To be eligible to be a nominee for election or re-election as a director of the Corporation pursuant to a nomination under clause (iii) of Section 3.2(a) or clause (ii) of Section 3.3(c), each Proponent must deliver (in accordance with the
time periods prescribed for delivery of notice under Sections 3.2(b) (3), 3.2(d) or 3.3(c), as applicable) to the Secretary at the principal executive offices of the Corporation a written questionnaire with respect to the background, qualifications,
stock ownership and independence of such proposed nominee and the background of any other person or entity on whose behalf the nomination is being made (in the form provided by the Secretary within 10 days following a written request therefor by a
stockholder of record) and a written representation and agreement (in the form provided by the Secretary within 10 days following written request therefor by a stockholder of record) that such person (i) is not and will not become a party to
(A) any agreement, arrangement or understanding (whether oral or in writing) with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on
any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation in the questionnaire or (B) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a
director of the Corporation, with such person’s fiduciary duties under applicable law; (ii) is not and will not become a party to any agreement, arrangement or understanding (whether oral or in writing) with any person or entity other
than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director of the Corporation or a nominee that has not been disclosed in such questionnaire;
(iii) would be in compliance, if elected as a director of the Corporation, and will comply with, all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and
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stock ownership and trading policies and guidelines of the Corporation; and (iv) if elected as a director of the Corporation, intends to serve the entire term until the next meeting at which
such candidate would face re-election.
(f) A person shall not be eligible for election or re-election as a director, unless the person is nominated, in the case of an annual meeting, in accordance with clause (ii) or (iii) of Section 3.2(a) and in accordance with the procedures set forth in
Section 3.2(b), Section 3.2(c), Section 3.2(d), Section 3.2(e) and Section 3.2(f), as applicable, or in the case of a special meeting, in accordance with Section 3.3(c) and the requirements thereof. Only such business
shall be conducted at any annual meeting of the stockholders of the Corporation as shall have been brought before the meeting in accordance with Section 3.2(a) and in accordance with the procedures set forth in Section 3.2(b),
Section 3.2(c) and Section 3(f), as applicable. Notwithstanding anything to the contrary in the Bylaws, unless otherwise required by applicable law, in the event that any Proponent (i) provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act with respect to one or more proposed nominees and (ii) subsequently (x) fails to comply with the requirements of Rule 14a-19
promulgated under the Exchange Act (or fails to timely provide reasonable evidence sufficient to satisfy the Corporation that such Proponent has met the requirements of Rule 14a-19(a)(3) promulgated under the
Exchange Act in accordance with the next sentence) or (y) fails to inform the Corporation that they no longer plan to solicit proxies in accordance with the requirements of Rule 14a-19 under the Exchange
Act by delivering a written notice to the Secretary at the principal executive offices of the Corporation within two (2) Business Days after the occurrence of such change, then the nomination of each such proposed nominee shall be disregarded
(and such nominee disqualified from standing for election or re-election), notwithstanding that the nominee is included (as applicable) as a nominee in the Corporation’s proxy statement, notice of
meeting or other proxy materials for any stockholder meeting (or any supplement thereto) and notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received by the Corporation (which proxies and
votes shall be disregarded). If any Proponent provides notice pursuant to Rule 14a-19(b) promulgated under the Exchange Act, such Proponent shall deliver to the Corporation, no later than five
(5) Business Days prior to the applicable meeting, reasonable evidence that it has met the requirements of Rule 14a-19(a)(3) promulgated under the Exchange Act. Notwithstanding anything to the contrary
set forth herein, and for the avoidance of doubt, the nomination of any person whose name is included (as applicable) as a nominee in the Corporation’s proxy statement, notice of meeting or other proxy materials for any stockholder meeting (or
any supplement thereto) as a result of any notice provided by any Proponent pursuant to Rule 14a-19(b) promulgated under the Exchange Act with respect to such proposed nominee and whose nomination is not made
by or at the direction of the Board or any authorized committee thereof shall not be deemed (for purposes of clause (i) of Section 3.2(a) or otherwise) to have been made pursuant to the Corporation’s notice of meeting (or any
supplement thereto) and any such nominee may only be nominated by a Proponent pursuant to clause (iii) of Section 3.2(a) and, in the case of a special meeting of stockholders, pursuant to and to the extent permitted under
Section 3.3(c) of these Bylaws. Except as otherwise required by applicable law, the chairperson of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made,
or proposed, as the case may be, in accordance with the procedures and requirements set forth in the Bylaws (including, without limitation, compliance with Rule 14a-19 promulgated under the Exchange Act) and,
if any proposed nomination or business is not in compliance with the Bylaws, or the Proponent does not act in accordance with the representations required in this Section 3.2, to declare that such proposal or nomination shall not be presented
for stockholder action at the meeting and shall be disregarded (and such nominee disqualified from standing for election or re-election), or that such business shall not be transacted, notwithstanding that
such proposal or nomination is set forth in (as applicable) the Corporation’s proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such nomination or such business may have been
solicited or received. Notwithstanding the foregoing provisions of this Section 3.2, unless otherwise required by applicable law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of
stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded (and such nominee disqualified from standing for election or re-election) and such proposed
business shall not be transacted, notwithstanding that such nomination or proposed business is set forth in (as applicable) the Corporation’s proxy statement, notice of meeting or other proxy materials and
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notwithstanding that proxies or votes in respect of such vote may have been solicited or received by the Corporation. For purposes of this Section 3.2, to be considered a qualified
representative of the stockholder, a person must be a duly authorized officer, manager, trustee or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such
stockholder to act for such stockholder as proxy at the meeting of stockholders, writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, shall be provided to the Secretary at least five Business Days
prior to the meeting of stockholders.
(g) For purposes of Sections 3.2 and 3.3, (1) “affiliates” and “associates” shall have the
meanings set forth in Rule 405 under the Securities Act of 1933, as amended;
(2) “Business Day” means any day other than
Saturday, Sunday or a day on which banks are closed in New York City, New York;
(3) “close of business” means 6:00 p.m.
local time at the principal executive offices of the Corporation on any calendar day, whether or not the day is a Business Day;
(4)
“Derivative Transaction” means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proponent or any of its affiliates or associates, whether record or beneficial: (A) the
value of which is derived in whole or in part from the value of any class or series of shares or other securities of the Corporation; (B) that otherwise provides any direct or indirect opportunity to gain or share in any gain derived from a
change in the value of securities of the Corporation; (C) the effect or intent of which is to mitigate loss, manage risk or benefit from changes in value or price with respect to any securities of the Corporation; or (D) that provides the
right to vote or increase or decrease the voting power of, such Proponent, or any of its affiliates or associates, directly or indirectly, with respect to any securities of the Corporation, which agreement, arrangement, interest or understanding may
include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, stock appreciation or similar right, short position, profit interest, hedge, right to dividends, voting agreement, performance-related fee or
arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proponent in the securities of the Corporation held by any general or
limited partnership, or any limited liability company, of which such Proponent is, directly or indirectly, a general partner or managing member; and
(5) “public announcement” means disclosure in a press release reported by the Dow Jones News Service, Associated Press, Business
Wire, GlobeNewswire or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act or by such other means reasonably
designed to inform the public or security holders in general of such information, including, without limitation, posting on the Corporation’s investor relations website.
Section 3.3 Special Meetings.
(a) Special meetings
of the stockholders of the Corporation may only be called in the manner provided in the Certificate of Incorporation. Any special meeting of stockholders previously scheduled by the Board may be postponed, rescheduled or cancelled by the Board, or
any director or officer to whom the Board has delegated such authority, at any time before or after notice of such meeting has been given to stockholders.
(b) The Board shall determine the date and time of such special meeting. Upon determination of the date, time and place, if any, of the meeting, the Secretary
shall cause a notice of meeting to be given to the stockholders entitled to vote, in accordance with the provisions of Section 3.4.
(c) Only such
business (including the election of specific individuals to fill vacancies or newly created directorships on the Board) shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the
Corporation’s notice of meeting. Nominations of persons for election to the
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Board may be made at a special meeting of stockholders at which directors are to be elected (i) by or at the direction of the Board or a duly authorized committee thereof or (ii) by any
stockholder of the Corporation who is a stockholder of record at the time of giving notice provided for in this paragraph and who is a stockholder of record at the time of the special meeting, who is entitled to vote at the meeting and who complies
with Sections 3.2(b)(1), 3.2(b)(4), 3.2(c), 3.2(e) and 3.2(f). The number of nominees a stockholder may nominate for election at a special meeting on its own behalf (or in the case of a stockholder giving the notice on behalf of a beneficial owner,
the number of nominees a stockholder may nominate for election at a special meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such special meeting. In the event the Corporation calls a special
meeting of stockholders for the purpose of submitting a proposal to stockholders for the election of one or more directors, any such stockholder of record entitled to vote in such election of directors may nominate a person or persons (as the case
may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if written notice setting forth the information required by Sections 3.2(b) (1) and 3.2(b)(4) shall be received by the Secretary at the
principal executive offices of the Corporation not earlier than the 120th day prior to such special meeting and not later than the close of business on the later of (i) the 90th day prior to such meeting or (ii) the tenth day following the
day on which the Corporation first makes a public announcement of the date of the special meeting at which directors are to be elected. The stockholder shall also update and supplement such information as required under Section 3.2(c). In no
event shall an adjournment or a postponement of a special meeting for which notice has been given, or the public announcement thereof has been made, commence a new time period (or extend any time period) for the giving of a stockholder’s
notice as described above.
(d) A person shall not be eligible for election or re-election as a director at the
special meeting unless the person is nominated either in accordance with clause (i) or clause (ii) of Section 3.3(c). Except as otherwise required by applicable law, the chairperson of the meeting shall have the power and duty to
determine whether a nomination was made in accordance with the procedures and requirements set forth in the Bylaws and, if any proposed nomination is not in compliance with the Bylaws (including, without limitation, compliance with Rule 14a-19 under the Exchange Act), or if the Proponent does not act in accordance with the representations required in Section 3.2, to declare that such nomination shall not be presented for stockholder action at
the meeting and shall be disregarded (and such nominee disqualified from standing for election or re-election), notwithstanding that such nomination is set forth in (as applicable) the Corporation’s
proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such nomination may have been solicited or received. Notwithstanding the foregoing provisions of this Section 3.3, unless
otherwise required by applicable law, if the stockholder (or a qualified representative of the stockholder (meeting the requirements specified in Section 3.2(f)) does not appear at the special meeting of stockholders of the Corporation to
present a nomination, such nomination shall be disregarded (and such nominee disqualified from standing for election or re-election), notwithstanding that the nomination is set forth (as applicable) in the
Corporation’s proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such nomination may have been solicited or received by the Corporation.
(e) Notwithstanding the foregoing provisions of Sections 3.2 and 3.3, a stockholder must also comply with all applicable requirements of the Exchange Act and
the rules and regulations promulgated thereunder with respect to the matters set forth in Sections 3.2 and 3.3, and any failure to comply with such requirements shall be deemed a failure to comply with Section 3.2 or 3.3, as applicable;
provided, however, that, to the fullest extent not prohibited by applicable law, any references in the Bylaws to the Exchange Act or the rules and regulations promulgated thereunder arc not intended to and shall not limit the requirements applicable
to proposals and/or nominations to be considered pursuant to Sections 3.2(a)(iii) and 3.3(c). Nothing in the Bylaws shall be deemed to affect any rights of holders of any class or series of preferred stock to nominate and elect directors pursuant to
and to the extent provided in any applicable provision of the Certificate of Incorporation.
Section 3.4 Notice of Meetings.
Except as otherwise provided by applicable law, the Certificate of Incorporation or the Bylaws, notice of each meeting of stockholders shall be given not less than ten nor more than 60 days before the date of the meeting to each stockholder entitled
to vote at such meeting as of the record date for determining the stockholders entitled to notice of such meeting. Such notice shall specify the date, time, and place, if any, of the
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meeting, the record date for determining stockholders entitled to vote at the meeting, if such record date is different from the record date for determining stockholders entitled to notice of the
meeting, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at any such meeting, and, in the case of special meetings, the purpose or purposes of the meeting.
Section 3.5 Quorum and Vote Required. At all meetings of stockholders, except where otherwise required by law or by the Certificate
of Incorporation, or by the Bylaws, the presence, in person, by remote communication, if applicable, or by proxy, of the holders of a majority of the voting power of the outstanding shares of stock entitled to vote at the meeting shall constitute a
quorum for the transaction of business. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave
less than a quorum.
Unless a different or minimum vote is required by law or by applicable stock exchange rules, or by the Certificate of Incorporation
or the Bylaws, in which case such different or minimum vote shall be the applicable vote on the matter, in all matters other than the election of directors, the affirmative vote of a majority of the votes cast on such matter, voting affirmatively or
negatively (excluding abstentions and broker non-votes) shall be the act of the stockholders. Except as otherwise required by law, the Certificate of Incorporation or the Bylaws, directors shall be elected by
a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote in the election of directors. Where a separate vote by a class or classes or series is
required, except as required by law or by the Certificate of Incorporation or the Bylaws, the holders of one-third of the voting power of the outstanding shares of such class or classes or series, present in
person, by remote communication, if applicable, or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter. Unless a different or minimum vote is required by law or by the Certificate of
Incorporation or the Bylaws or any applicable stock exchange rules, in which case such different or minimum vote shall be the applicable vote on the matter, the affirmative vote of the holders of a majority (or plurality, in the case of the election
of directors) of the votes cast on such matter, voting affirmatively or negatively (excluding abstentions and broker non-votes) shall be the act of such class or classes or series.
Section 3.6 Adjournment and Notice of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned
from time to time either by the chairperson of the meeting or by the stockholders by the affirmative vote of a majority of the votes cast, voting affirmatively or negatively (excluding abstentions and broker
non-votes). When a meeting is adjourned to another time or place, if any, (including an adjournment taken to address a technical failure to convene or continue a meeting using remote communication) notice need
not be given of the adjourned meeting if the time and place, if any, thereof and the means of remote communication, if any, by which stockholders and proxyholders may be deemed present in person and may vote at such meeting are announced at the
meeting at which the adjournment is taken or are (i) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote
communication or (ii) set forth in the notice of meeting given in accordance with Section 3.4. At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting. If the adjournment
is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the
adjourned meeting, the Board shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned
meeting, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date so fixed for notice of such adjourned meeting.
Section 3.7 Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders or
adjournment thereof, except as otherwise provided by applicable law, only persons in whose names shares stand on the stock records of the Corporation on the record date shall be entitled to vote at any meeting of stockholders. Each stockholder
entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy. No proxy shall be voted after three years from its date of creation unless the proxy provides for a longer period. Voting at
meetings of stockholders need not be by written
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ballot. Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board.
Section 3.8 List of Stockholders. The corporation shall prepare, no later than the tenth day before each meeting of
stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder; provided, however, if
the record date for determining the stockholders entitled to vote is less than ten days before the meeting date, the list shall reflect all of the stockholders entitled to vote as of the tenth day before the meeting date. Nothing in this
Section 3.8 shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a
period of ten days ending on the day before the meeting date: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during
ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such
information is available only to stockholders of the Corporation.
Section 3.9 Remote Communication; Delivery to the Corporation.
(a) If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, stockholders and proxyholders not
physically present at a stockholder meeting may, by means of remote communication:
(1) participate in a meeting of stockholders; and
(2) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or
solely by means of remote communication, provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or
proxyholder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an
opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of
such vote or other action shall be maintained by the Corporation.
(b) Whenever Section 3.2 or 3.3 requires one or more persons (including a record
or beneficial owner of capital stock) to deliver a document or information to the Corporation or any officer, employee or agent thereof (including any notice, request, questionnaire, revocation, representation or other document or agreement), such
document or information shall be in writing exclusively (and not in an electronic transmission) and shall be delivered exclusively by hand (including, without limitation, overnight courier service) or by certified or registered mail, return receipt
requested and the Corporation shall not be required to accept delivery of any document not in such written form or so delivered.
Section 3.10
Organization.
(a) At every meeting of stockholders, a person designated by the Board shall act as chairperson of the meeting of stockholders. If no
chairperson of the meeting of stockholders is so designated, then the Chairperson of the Board, or if no Chairperson has been appointed, is absent or refuses to act, the Chief Executive Officer, or if no Chief Executive Officer is then serving or
the Chief Executive Officer is absent or refuses to act, the President, or, if the President is absent or refuses to act, a chairperson of the meeting chosen by the stockholders by the affirmative vote of a majority of the votes cast, voting
affirmatively or negatively (excluding abstentions and broker non-votes), shall act as chairperson of the meeting of stockholders. A person designated by the Board shall act as secretary of the meeting. If no
secretary of the meeting is designated, then the Secretary, or, in the Secretary’s absence, an Assistant Secretary or other officer or other person directed to do so by the chairperson of the meeting, shall act as secretary of the meeting.
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(b) The Board shall be entitled to make such rules or regulations for the conduct of meetings of
stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board, if any, the chairperson of the meeting shall have the right and authority to convene and (for any or no reason) to recess and/or
adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation,
establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the Corporation and
their duly authorized and constituted proxies and such other persons as the chairperson shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments
by participants and regulation of the opening and closing of the polls for balloting on matters that are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the
meeting shall be announced at the meeting. Unless and to the extent determined by the Board or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.
(c) The Corporation may and shall, if required by applicable law, in advance of any meeting of stockholders, appoint one or more inspectors to act at the
meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chairperson
of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of such inspector’s ability. The inspectors shall: (1) ascertain the number of shares outstanding and the voting power of each; (2) determine the shares represented at a meeting and the validity
of proxies and ballots; (3) count all votes and ballots; (4) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and (5) certify their determination
of the number of shares represented at the meeting, and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors. In determining
the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in accordance with Sections 211(e) or 212(c)(2) of the DGCL, or
any information provided pursuant to Sections 211 (a)(2)b.(i) or (iii) of the DGCL, ballots and the regular books and records of the Corporation, except that the inspectors may consider other reliable information for the limited purpose of
reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast, or more votes than the stockholder holds
of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification pursuant to Section 231(b)(5) of the DGCL shall specify the precise information
considered by them including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors’ belief that such information is
accurate and reliable.
SECTION 4.
DIRECTORS
Section 4.1 Number. The authorized number of directors of the Corporation shall be fixed in accordance with the Certificate of
Incorporation.
Section 4.2 Powers. The business and affairs of the Corporation shall be managed by or under the direction of
the Board, except as may be otherwise provided by the Certificate of Incorporation or the DGCL.
Section 4.3 Terms. The terms of
directors shall be as set forth in the Certificate of Incorporation.
Section 4.4 Vacancies; Newly Created Directorships.
Vacancies and newly created directorships on the Board shall be filled as set forth in the Certificate of Incorporation, except as otherwise required by applicable law.
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Section 4.5 Resignation. Any director may resign at any time by delivering such
director’s notice in writing or by electronic transmission to the Board or the Secretary. Such resignation shall take effect at the time of delivery of the notice or at any later time specified therein. Acceptance of such resignation shall not
be necessary to make it effective. When one or more directors shall resign from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office for the unexpired portion of the term of the director whose place shall be vacated and until such
director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal.
Section 4.6 Removal. Directors shall be removed as set forth in the Certificate of Incorporation.
Section 4.7 Meetings.
(a) Regular Meetings.
Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board may be held at any time or date and at any place, if any, within or without the State of Delaware that has been designated by the Board and publicized
among all directors, either orally or in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, facsimile or by electronic mail or other electronic means. No further notice shall be
required for regular meetings of the Board.
(b) Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special
meetings of the Board may be held at any time and place, if any, within or without the State of Delaware as designated and called by the Chairperson of the Board, the Chief Executive Officer or the Board.
(c) Meetings by Electronic Communications Equipment. Any member of the Board, or of any committee thereof, may participate in a meeting by means of
conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
(d) Notice of Special Meetings. Notice of the time and place, if any, of all special meetings of the Board shall be given orally or in writing, by
telephone, including a voice messaging system or other system or technology designed to record and communicate messages, or by electronic mail or other means of electronic transmission at least 24 hours before the date and time of the meeting. If
notice is sent by U.S. mail, it shall be sent by first class mail, postage prepaid, at least three days before the date of the meeting.
Section 4.8 Quorum and Voting.
(a) Except as
otherwise required by the DGCL, the Certificate of Incorporation or the Bylaws, a quorum of the Board shall consist of a majority of the authorized number of directors fixed from time to time by the Board in accordance with the Certificate of
Incorporation; provided, however, at any meeting, whether a quorum is present or otherwise, a majority of the directors present may adjourn the meeting to another time, without notice other than by announcement at the meeting.
(b) At each meeting of the Board at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the
directors present, unless a different vote be required by applicable law, the Certificate of Incorporation or the Bylaws.
Section 4.9 Action without Meeting. Unless otherwise restricted by the Certificate of Incorporation or the Bylaws, any action
required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission. After
an action is taken, such consent or consents shall be filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are
maintained in electronic form.
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Section 4.10 Fees and Compensation. Unless otherwise restricted by the Certificate
of Incorporation or the Bylaws, the Board, or any duly authorized committee thereof, shall have the authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity.
Section 4.11 Committees.
(a) Committees. The
Board may, from time to time, appoint such committees as may be permitted by applicable law. Such committees appointed by the Board shall consist of one or more members of the Board, and to the extent permitted by applicable law and provided in the
resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may
require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the
DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any Bylaw of the Corporation.
(b) Term. The Board,
subject to any requirements of any outstanding series of preferred stock and the provisions of subsection (a) of this Section 4.11, may at any time increase or decrease the number of members of a committee or terminate the existence of a
committee. The membership of a committee member shall terminate on the date of such committee member’s death, such person’s resignation from the committee or on such date that the committee member, for any reason, is no longer a member
of the Board. The Board may at any time for any reason remove any individual committee member and the Board may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board may
designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member
or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or
disqualified member.
(c) Meetings. Unless the Board shall otherwise provide, regular meetings of any committee appointed pursuant to this
Section 4.11 shall be held at such times and places, if any, as are determined by the Board, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be
given thereafter. Special meetings of any such committee may be held at such place, if any, that has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon notice to the members
of such committee of the time and place, if any, of such special meeting given in the manner provided for the giving of notice to members of the Board of the time and place, if any, of special meetings of the Board. Unless otherwise provided by the
Board in the resolutions authorizing the creation of the committee, the presence of at least a majority of the members of the committee then serving shall be necessary to constitute a quorum unless the committee shall consist of one or two members,
in which event one member shall constitute a quorum; and all matters shall be determined by the affirmative vote of a majority of the members present at a meeting of the committee at which a quorum is present.
Section 4.12 Duties of Chairperson of the Board. The Board shall elect from its ranks a Chairperson of the Board. The Chairperson of
the Board shall perform such other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board shall designate from time to time. The Chairperson of the Board, when present, shall
preside at all meetings of the Board in accordance with Section 4.13.
Section 4.13 Organization. At every meeting of the
directors, the Chairperson of the Board shall act as chairperson of the meeting. If a Chairperson has not been appointed or is absent, the Chief Executive Officer (if a director), or, if a Chief Executive Officer is absent, the President (if a
director), or, in the absence of any such person, a chairperson of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in the Secretary’s absence, any Assistant Secretary or other
officer, director or other person directed to do so by the person presiding over the meeting, shall act as secretary of the meeting.
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SECTION 5.
OFFICERS
Section 5.1 Officers Designated. The officers of the Corporation shall include, if and when designated by the Board, the Chief
Executive Officer, the President, the Secretary and the Treasurer. The Board may also appoint one or more Assistant Secretaries and Assistant Treasurers and such other officers and agents with such powers and duties as it shall deem appropriate or
necessary. The Board may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the Corporation at any one time unless specifically prohibited therefrom by
applicable law, the Certificate of Incorporation or the Bylaws.
Section 5.2 Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure of the Board and until their successors shall have been duly elected and qualified, subject
to such officer’s earlier death, resignation or removal. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board or by a committee thereof to which the Board has delegated such responsibility or, if
so authorized by the Board, by the Chief Executive Officer or another officer of the Corporation.
(b) Duties of Chief Executive Officer. The Chief
Executive Officer shall preside, if a director, at all meetings of the Board, unless a Chairperson of the Board has been appointed and is present. The Chief Executive Officer shall be the chief executive officer of the Corporation and, subject to
the supervision, direction and control of the Board, shall have the general powers and duties of supervision, direction, management and control of the business and officers of the Corporation as arc customarily associated with the position of Chief
Executive Officer. To the extent that a Chief Executive Officer has been appointed and no President has been appointed, all references in the Bylaws to the President shall be deemed references to the Chief Executive Officer. The Chief Executive
Officer shall perform other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board shall designate from time to time.
(c) Duties of President. The President shall preside, if a director, at all meetings of the Board, unless a Chairperson of the Board or Chief Executive
Officer has been appointed and is present. Unless another officer has been appointed Chief Executive Officer of the Corporation, the President shall be the chief executive officer of the Corporation and, subject to the supervision, direction and
control of the Board, shall have the general powers and duties of supervision, direction, management and control of the business and officers of the Corporation as are customarily associated with the position of President. The President shall
perform other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board (or the Chief Executive Officer, if the Chief Executive Officer and President are not the same person and
the Board has delegated the designation of the President’s duties to the Chief Executive Officer) shall designate from time to time.
(d) Duties
of Secretary and Assistant Secretary. The Secretary shall attend all meetings of the stockholders and of the Board and shall record all acts, votes and proceedings thereof in the minute books of the Corporation. The Secretary shall give, or
cause to be given, notice in conformity with the Bylaws of all meetings of the stockholders and of all meetings of the Board and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in the Bylaws and
other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate
from time to time. The Chief Executive Officer, or if no Chief Executive Officer is then serving, the President may direct any Assistant Secretary or other officer to assume and perform the duties of the Secretary in the absence or disability of the
Secretary, and each Assistant Secretary shall perform other duties customarily associated with the office and shall also perform such other duties and have such other powers as the Board or the Chief Executive Officer, or if no Chief Executive
Officer is then serving, the President shall designate from time to time.
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(e) Duties of Treasurer and Assistant Treasurer. The Treasurer shall keep or cause to be kept the
books of account of the Corporation in a thorough and proper manner and shall render statements of the financial affairs of the Corporation in such form and as often as required by the Board, the Chief Executive Officer or the President. The
Treasurer, subject to the order of the Board, shall have the custody of all funds and securities of the Corporation. The Treasurer shall perform other duties customarily associated with the office and shall also perform such other duties and have
such other powers as the Board or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time. The Chief Executive Officer, or if no Chief Executive Officer is then serving, the
President may direct any Assistant Treasurer or other officer to assume and perform the duties of the Treasurer in the absence or disability of the Treasurer, and each Assistant Treasurer shall perform other duties commonly incident to the office
and shall also perform such other duties and have such other powers as the Board or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time.
Section 5.3 Delegation of Authority. The Board may from time to time delegate the powers or duties of any officer to any other
officer or agent, notwithstanding any provision hereof.
Section 5.4 Resignations. Any officer may resign at any time by giving
notice in writing or by electronic transmission to the Board, the Chairperson of the Board, the Chief Executive Officer, the President or the Secretary. Any such resignation shall be effective when received by the person or persons to whom such
notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it
effective. Any resignation shall be without prejudice to the rights, if any, of the Corporation under any contract with the resigning officer.
Section 5.5 Contracts and Other Documents. The Chief Executive Officer and the Secretary, or such other officer or officers as may
from time to time be authorized by the Board or any other committee given specific authority in the premises by the Board during the intervals between the meetings of the Board, shall have power to sign and execute on behalf of the Corporation
deeds, conveyances and contracts, and any and all other documents requiring execution by the Corporation.
Section 5.6 Removal.
Any officer may be removed from office at any time, either with or without cause, by the Board, or by any duly authorized committee thereof or any officer upon whom such power of removal may have been conferred by the Board.
SECTION 6. EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED BY THE CORPORATION
Section 6.1 Execution of Corporate Instruments. The Board may, in its discretion, determine the method and designate the signatory
officer or officers, or other person or persons, to execute, sign or endorse on behalf of the Corporation any corporate instrument or document, or to sign on behalf of the Corporation the corporate name without limitation, or to enter into contracts
on behalf of the Corporation, except where otherwise provided by applicable law or the Bylaws, and such execution or signature shall be binding upon the Corporation.
(a) All checks and drafts drawn on banks or other depositaries on funds to the credit of the Corporation or in special accounts of the Corporation shall be
signed by such person or persons as the Board shall from time to time authorize so to do.
(b) Unless otherwise specifically determined by the Board or
otherwise required by applicable law, the execution, signing or endorsement of any corporate instrument or document by or on behalf of the Corporation may be effected manually, by facsimile or (to the extent not prohibited by applicable law and
subject to such policies and procedures as the Corporation may have in effect from time to time) by electronic signature.
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(c) Unless authorized or ratified by the Board or within the agency power of an officer, no officer, agent
or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
Section 6.2 Voting of Securities Owned by the Corporation. All stock and other securities of or interests in other corporations or
entities owned or held by the Corporation for itself, or for other parties in any capacity, shall be voted, and all proxies and consents with respect thereto shall be executed, by the person authorized to do so by resolution of the Board, or, in the
absence of such authorization, by the Chairperson of the Board, the Chief Executive Officer, or the President.
SECTION 7.
SHARES OF STOCK
Section 7.1 Form and Execution of Certificates. The shares of the Corporation shall be represented by certificates, or shall be
uncertificated if so provided by resolution or resolutions of the Board. Certificates for the shares of stock of the Corporation, if any, shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder
of stock in the Corporation represented by certificates shall be entitled to have a certificate signed by or in the name of the Corporation by any two authorized officers of the Corporation (including, without limitation, the Chairperson of the
Board, the Chief Executive Officer, the President, the Treasurer, any Assistant Treasurer, the Secretary and any Assistant Secretary), certifying the number, and the class or series, of shares owned by such holder in the Corporation in certificated
form. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer
agent, or registrar before such certificate is issued, it may be issued with the same effect as if he or she were such officer, transfer agent, or registrar at the date of issue.
Section 7.2 Lost Certificates. The Corporation may issue a new certificate or certificates or uncertificated shares in place of any
certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The
Corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to give the Corporation a
bond (or other adequate security) sufficient to indemnify the Corporation against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen, or destroyed or the issuance of such new
certificate(s) or uncertificated shares.
Section 7.3 Transfers.
(a) Transfers of record of shares of stock of the Corporation shall be made only upon its books by the holders thereof, in person or by attorney duly
authorized, and, in the case of stock represented by certificate, upon the surrender of a properly endorsed certificate or certificates for a like number of shares.
(b) The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes or series of stock of
the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes or series owned by such stockholders in any manner not prohibited by the DGCL.
Section 7.4 Fixing Record Dates.
(a) In order that
the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon
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which the resolution fixing the record date is adopted by the Board, and which record date shall, subject to applicable law, not be more than 60 nor less than ten days before the date of such
meeting. If the Board so fixes a record date for determining the stockholders entitled to notice of any meeting of stockholders, such date shall also be the record date for determining the stockholders entitled to vote at such meeting, unless the
Board determines, at the time it fixes the record date for determining the stockholders entitled to notice of such meeting, that a later date on or before the date of the meeting shall be the record date for determining the stockholders entitled to
vote at such meeting. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which
notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board may fix a new record date for determining the stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to
notice of such adjourned meeting the same or an earlier date as that fixed for determining the stockholders entitled to vote in accordance with the provisions of this Section 7.4(a).
(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights
or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the Board adopts the resolution relating to such action.
Section 7.5 Registered
Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
Section 7.6 Additional Powers of the Board. In addition to, and without limiting, the powers set forth in the Bylaws, the Board
shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of
stock, subject to the provisions of the DGCL, other applicable law, the Certificate of Incorporation and the Bylaws. The Board may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the
signature of any such transfer agent and/or any such registrar of transfers.
Section 7.7 Lock-Up.
(a) Transfer Restriction. Subject to Sections 7.7(b) and 7.7(c), during the Lock-up Period no Locked-up Holder may Transfer any Lock-up Shares. From and
after the expiration of the Lock-up Period, the Lock-up Shares shall cease to be subject to the restrictions set forth in this Section 7.7. The restrictions on Transfer imposed by this Section 7.7 are imposed pursuant to Section 202 of the DGCL, and
the Lock-up Shares shall carry appropriate legends (or, in the case of uncertificated shares, appropriate notations in the notice contemplated by Section 151(f) of the DGCL) indicating such restrictions.
(b) Permitted Transfers. Notwithstanding Section 7.7(a), a Locked-up Holder or its Permitted Transferee may Transfer Lock-up Shares during the Lock-up
Period (i) in the case of an individual, (A) by gift to an immediate family member, a charitable organization or a trust or other entity formed for estate planning purposes for the benefit of an immediate family member, (B) by will, intestacy or the
laws of descent and distribution upon the death of such individual, or (C) pursuant to a qualified domestic relations order; (ii) in the case of a corporation,
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limited liability company, partnership, trust or other entity, to any stockholder, member, partner or trust beneficiary as part of a distribution, or to any affiliate (as defined in Rule 405
under the Securities Act of 1933, as amended) of such Locked-up Holder; (iii) in the event of a liquidation, merger, stock exchange or other similar transaction that results in all of the Corporation’s stockholders having the right to exchange
their shares of capital stock of the Corporation for cash, securities or other property; (iv) to the Corporation in connection with the “net” or “cashless” exercise of options or other rights to purchase shares of capital
stock of the Corporation, or in satisfaction of any tax withholding obligations upon exercise, vesting or settlement thereof; (v) pursuant to a bona fide offer to purchase or exchange shares of Common Stock that is made to all holders of Common
Stock and approved by the Board, including any tender or exchange of Lock-up Shares into, and any Transfer pursuant to, such offer (whether made by a third-party or the Corporation) or (vi) in a negotiated secondary transaction with the prior
approval of the Board; provided, however, that, in the case of clauses (X) (i) and (ii), such Transfer shall not involve a disposition for value; and (Y) (i), (ii) and (vi) it shall be a condition to such Transfer that the transferee execute and
deliver to the Corporation a written agreement, in form and substance reasonably satisfactory to the Corporation, to be bound by the restrictions set forth in this Section 7.7 as a Locked-up Holder prior to such Transfer.
(c) Coordinated Sale Process. Notwithstanding Section 7.7(a), during the Coordinated Sale Period a Locked-up Holder may sell Lock-up Shares, subject to
each of the following conditions.
(i) Coordinating Broker. All such sales shall be effected solely through a Coordinating Broker,
which shall use commercially reasonable efforts to (A) aggregate the sell orders of participating Locked-up Holders into a common pool, (B) offer the pooled Lock-up Shares to the market, and (C) allocate the resulting proceeds pro rata among the
participating Locked-up Holders by reference to each such holder’s specified minimum sale price (if any), such that a holder shall participate in a sale, and receive proceeds therefrom, only to the extent the price achieved equals or exceeds
any minimum price so specified by such holder.
(ii) Periodic Sales Limitation. The number of Lock-up Shares which may be sold by a
Locked-up Holder pursuant to this Section 7.7(c) during any Measurement Period shall not exceed 25% of such Locked-up Holder’s Base Holdings (the “Periodic Sales Limitation”). The Periodic Sales Limitation shall apply separately to
each Measurement Period, and any unused portion of the Periodic Sales Limitation for a Measurement Period shall expire on the last day thereof and shall not increase the Periodic Sales Limitation for any subsequent Measurement Period.
For the avoidance of doubt, no Lock-up Shares may be sold pursuant to this Section 7.7(c) during the Initial Lock-up Period.
(d) Board Authority. The Board may (i) waive, amend, or repeal, in whole or in part, any of the restrictions set forth in this Section 7.7, or
otherwise release Lock-up Shares from this Section 7.7 prior to the expiration of the Lock-up Period, provided that any such waiver, amendment, repeal, or release shall be applied on a pro rata or such other uniform basis determined by the Board
among all Locked-up Holders, so that no Locked-up Holder is disproportionately released (whether adversely or beneficially) relative to the other Locked-up Holders; (ii) designate, approve, replace or remove one or more Coordinating Brokers;
(iii) determine any equitable adjustment contemplated by this Section 7.7; and (iv) interpret and administer this Section 7.7 and resolve any ambiguity herein, in each case acting in good faith ; provided that, nothing herein shall (i) modify
the fiduciary duties of directors to the Corporation and its stockholders, (ii) alter the standard of review a court of competent jurisdiction may apply to review determinations or calculations (or any omission with respect to the foregoing) by the
Board (or a committee thereof, as applicable) for compliance with the directors’ fiduciary duties to the Corporation and its stockholders or (iii) provide for an elimination or limitation of the personal liability of directors to the
Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director to the extent not permitted by Section 102(b)(7) of the DGCL, as amended from time to time; provided further that, notwithstanding the foregoing, and for
the avoidance of doubt, for purposes of applying this Section 7.7(d) to any contract authorized by Section 122(18) of the DGCL, a restriction, prohibition, or covenant in any such contract that relates to any specified action shall not be deemed
contrary to this Section 7.7(d) by reason of a provision hereof that authorizes or empowers, or exclusively authorizes or empowers, the Board to take such action.
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(e) Non-Permitted Transfers. any transfer in violation or breach of this Section 7.7 shall be null
and void, and the Corporation, and any duly appointed transfer agent for the registration or transfer of the Corporation’s securities, shall decline to register, recognize or make any Transfer of securities if such Transfer would constitute a
violation or breach of this Section 7.7.
(f) Contractual Arrangements. Nothing in this Section 7.7 shall modify any contractual obligations
between the Corporation and any stockholder that imposes more restrictive transfer restrictions on Lock-Up Shares, including under any lock-up agreement, support agreement or similar instrument. If a Locked-up Holder is party to any such contractual
arrangement imposing transfer restrictions on Lock-up Shares, then, as between this Section 7.7 and such contractual arrangement, the more restrictive provision shall control with respect to such Locked-up Holder. For the avoidance of doubt, this
Section 7.7 shall not apply to any shares of Common Stock held by American Ventures LLC, Series XIV JFB or any of its affiliates or transferees, whose transfer arrangements are governed exclusively by the Amended and Restated Support agreement and
shall apply to the Xtend Supporting Shareholders.
(g) Definitions. For purposes of this Section 7.7 only:
(i) “Amended and Restated Support Agreement” means that certain Pubco Amended and Restated Support Agreement by and among American
Ventures LLC, Series XIV JFB, XTEND Reality Expansion Ltd. and JFB Construction Holdings dated as of July 16, 2026, as the same may be amended, restated or supplemented from time to time.
(ii) “Base Holdings” means, with respect to a Locked-up Holder, the aggregate number of Lock-up Shares held by such
Locked-up Holder (including Lock-up Shares underlying options, warrants, convertible securities or other equity-linked instruments held by such Locked-up Holder) as of the expiration of the Initial Lock-up Period, subject to equitable adjustment for
any stock split, reverse stock split, stock dividend, combination, recapitalization or similar event. A Permitted Transferee’s Base Holdings shall be determined by reference to the transferring Locked-up Holder’s Base Holdings, allocated
between transferor and transferee in proportion to the Lock-up Shares transferred, such that no Transfer to a Permitted Transferee increases the aggregate Periodic Sales Limitation applicable to the transferor and transferee taken together.
(iii) “Closing” and “Closing Date” have the respective meanings given to such terms in the Merger
Agreement.
(iv) “Common Stock” means the common stock, par value $0.0001 per share, of the Corporation.
(v) “Coordinated Sale Period” means the period beginning immediately upon the expiration of the Initial Lock-up
Period and ending upon the expiration of the Lock-up Period, comprising the three Measurement Periods.
(vi) “Coordinating
Broker” means any registered broker-dealer designated or approved by the Board from time to time to coordinate sales of Lock-up Shares pursuant to Section 7.7(c), and, if more than one broker-dealer is so designated or approved, each
such broker-dealer with respect to the sales coordinated by it.
(vii) “Exempted PIPE Shares” means
all shares of common stock of JFB Construction Holdings issued pursuant to those certain Securities Purchase Agreements issued by JFB Construction Holdings on February 13, 2026 to the holders identified therein.
(viii) “Exempted SAFE Shares” means all shares of Common Stock issued at or in connection with the
Closing in exchange for ordinary share issued pursuant to the Simple Agreements for Future Equity (SAFEs) issued by Xtend Reality Expansion Ltd. on or about February 10, 2026 and February 13, 2026 to the holders identified therein, as such
SAFEs were amended and restated in March 2026.
(ix) “Initial Lock-up Period” means the period beginning on the
Closing Date and ending at 11:59 p.m., New York City time, on the date that is 180 days after the Closing Date.
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(x) “Lock-up Period” means the period beginning on the Closing
Date and ending at 11:59 p.m., New York City time, on the date that is 270 days after the Closing Date.
(xi) “Lock-up
Shares” means all shares of Common Stock issued at or in connection with the Closing, including (A) shares of Common Stock issued as consideration in the Mergers (as defined in the Merger Agreement) in respect of share capital of XTEND
Reality Expansion Ltd. (including share capital issued upon conversion of simple agreements for future equity of XTEND Reality Expansion Ltd.) or shares of common stock of JFB Construction Holdings (including, for the avoidance of doubt, any shares
of Common Stock underlying options, warrants, convertible securities or other equity-linked instruments assumed or issued in connection with the Mergers) and excluding (w) Exempted SAFE Shares and Exempted PIPE Shares, (x) the Public JFB Shares, (y)
any shares of Common Stock held by American Ventures LLC, Series XIV JFB or any of its affiliates or transferees, which are governed by the contractual lock-up restrictions set forth in the Amended and Restated Support Agreement, and (z) any
shares of Common Stock acquired in open market transactions not in violation or breach of this Section 7.7 after the Closing.
(xii)
“Locked-up Holders” means the holders of Lock-up Shares, together with their Permitted Transferees holding Lock-up Shares; provided that, for the avoidance of doubt, none of American Ventures LLC, Series XIV JFB or any
of its affiliates or transferees shall be deemed a Locked-up Holder.
(xiii) “Measurement Period” means each of
the three successive periods of 30 calendar days comprising the Coordinated Sale Period, the first such period commencing immediately upon the expiration of the Initial Lock-up Period.
(xiv) “Merger Agreement” means that certain Agreement and Plan of Merger, dated as of February 13, 2026, by and among
JFB Construction Holdings, the Corporation, XT Merger Sub 2, Inc. and XTEND Reality Expansion Ltd., as the same may be amended, restated or supplemented from time to time.
(xv) “Permitted Transferee” means any transferee receiving Lock-up Shares in a Transfer permitted by Section 7.7(b).
(xvi) “Public JFB Shares” means the shares of Common Stock issued at or in connection with the Closing in
respect of shares of common stock of JFB Construction Holdings that, immediately prior to the Closing, (A) did not constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act of 1933, as amended, and
(B) were not held by any affiliate (as defined in Rule 405 under the Securities Act of 1933, as amended) of JFB Construction Holdings, including any director or executive officer of JFB Construction Holdings, any person party to a support agreement
entered into in connection with the Merger Agreement, and any affiliate of any of the foregoing.
(xvii)
“Transfer” means (A) to lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Lock-up Shares, (B) to enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of
any Lock-up Shares, or (C) to publicly disclose the intention to do any of the foregoing, whether any such transaction described in clause (A), (B) or (C) is to be settled by delivery of Lock-up Shares or other securities, in cash or otherwise.
(xviii) “Xtend Supporting Shareholders” means the directors, officers and certain major shareholders of XTEND Reality
Expansion Ltd. holding a sufficient number of the issued and outstanding share capital of XTEND Reality Expansion Ltd. required to approve the merger agreement and transactions contemplated thereby.
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SECTION 8.
OTHER SECURITIES OF THE CORPORATION
Section 8.1 Execution of Other Securities. All bonds, debentures and other corporate securities of the Corporation, other than stock
certificates (covered in Section 7.1), may be signed by the Chairperson of the Board, the Chief Executive Officer, or the President, or such other person as may be authorized by the Board; provided, however, that where any such bond, debenture
or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures
of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other
corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the Corporation or such other person as may be authorized by the Board, or bear imprinted thereon the facsimile signature of
such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the
bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the Corporation and issued and delivered as though the person who signed the
same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the Corporation.
SECTION 9.
DIVIDENDS
Section 9.1 Declaration of Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the
Certificate of Incorporation and applicable law, if any, may be declared by the Board. Dividends may be paid in cash, in property, or in shares of capital stock or other securities of the Corporation, subject to the provisions of the Certificate of
Incorporation and applicable law.
Section 9.2 Dividend Reserve. Before payment of any dividend, there may be set aside out of
any funds of the Corporation available for dividends such sum or sums as the Board from time to time, in its absolute discretion, determines proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other purpose or purposes as the Board shall determine to be conducive to the interests of the Corporation, and the Board may modify or abolish any such reserve in the manner in which it was
created.
SECTION 10.
FISCAL YEAR
Section 10.1 Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board and may be changed by the
Board.
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SECTION 11.
INDEMNIFICATIONS
Section 11.1
Indemnification of Directors, Executive Officers, Other Officers, Employees and Other Agents.
(a) Directors and Executive Officers. The
Corporation shall indemnify to the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior to such amendment), any person who was or is made or is threatened to be made a party or is otherwise involved in a Proceeding, by reason of the fact that such person is
or was a director or executive officer (for the purposes of this Section 11.1, “executive officer” has the meaning defined in Rule 3b-7 promulgated under the Exchange Act) of the Corporation,
or while serving as a director or executive officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, whether the basis of such Proceeding is alleged action in an official capacity as a director or executive officer or in any other capacity while serving as a director or executive officer, against all expense, liability and loss
(including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such person in connection therewith; provided, however, that the Corporation will not be required
to indemnify or advance expenses to any director or executive officer in connection with any Proceeding (or part thereof) initiated by such person unless (i) the Proceeding (or part thereof) was authorized by the Board or (ii) the
Proceeding (or part thereof) is initiated to enforce rights to indemnification or advancement of expenses as provided under subsection (d) of this Section 11.1 or is a compulsory counterclaim brought by such person.
(b) Other Officers, Employees and Other Agents. The Corporation shall have power to indemnify and advance expenses to its other officers, employees and
other agents to the fullest extent permitted by the DGCL.
(c) Expenses. The Corporation shall advance to any current or former director or
executive officer of the Corporation, or to any person, who while serving as a director or executive officer of the Corporation, is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, prior to the final disposition of the Proceeding, promptly following request therefor, all expenses incurred by such person in defending (or participating as a witness in) any Proceeding
referred to in Section 11.1(a), or in connection with a Proceeding brought to establish or enforce a right to indemnification or advancement of expenses under subsection (d) of this Section 11.1, provided, however, that, if the DGCL
requires, or in the case of an advance made in a Proceeding brought to establish or enforce a right to indemnification or advancement, an advancement of expenses incurred by a current or former director or executive officer in such director’s
or executive officer’s capacity as a director or executive officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) will be made only
upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it is ultimately determined by final judicial decision from which there is no further right to appeal that such indemnitee is
not entitled to be indemnified or entitled to advancement for such expenses under this Section 11.1 or otherwise.
(d) Enforcement. Without
the necessity of entering into an express contract, all rights to indemnification and advances to directors and executive officers under this Section 11.1 will be deemed to be contractual rights and be effective to the same extent and as if
provided for in a contract between the Corporation and the director or executive officer. Any right to indemnification or advancement of expenses granted by this Section 11.1 to a current or former director or executive officer will be
enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advancement of expenses is denied, in whole or in part, (ii) no disposition of a claim for
indemnification is made within 60 days of request therefor, or (iii) no disposition of a claim for an advance is made within 30 days of request therefor. The claimant
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in such enforcement action, if successful in whole or in part, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, will be
entitled to be paid also the expense of prosecuting or defending the claim to the fullest extent permitted by the DGCL. In (i) any suit brought to enforce a right to indemnification hereunder (but not in a suit brought to enforce a right to an
advancement of expenses), it shall be a defense that, and (ii) any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a
final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its Board, independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because such person has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the
Corporation (including its Board, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, will be a defense to the action or create a presumption that claimant has not met the applicable
standard of conduct. In any suit brought by a current or former director or executive officer to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that the director or executive officer is not entitled to be indemnified, or to such advancement of expenses, under this Section 11.1 or otherwise is on the Corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any person by this Section 11.1 are not exclusive
of any other right that such person may have or hereafter acquire under any applicable law, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such
person’s official capacity and as to action in another capacity while holding office. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting
indemnification and advances, to the fullest extent not prohibited by the DGCL.
(f) Survival of Rights. The rights conferred on any person by this
Section 11.1 will continue as to a person who has ceased to be a director or executive officer and will inure to the benefit of the heirs, executors and administrators of such person.
(g) Insurance. To the fullest extent permitted by the DGCL, the Corporation may purchase insurance on behalf of any person required or permitted to be
indemnified pursuant to this Section 11.1.
(h) Amendments. Any repeal or modification of this Section 11.1 is only prospective and does
not affect the rights under these Bylaws in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any Proceeding against any current or former director or executive officer of the Corporation.
(i) Saving Clause. If this Section 11 or any portion hereof is invalidated on any ground by any court of competent jurisdiction, then the
Corporation will nevertheless indemnify and advance expenses to each director and executive officer to the fullest extent not prohibited by any applicable portion of this Section 11 that has not been invalidated, or by any. If this
Section 11 is invalid due to the application of the indemnification and advancement provisions of another jurisdiction, then the Corporation will indemnify and advance expenses to each director and executive officer to the fullest extent under
applicable law.
(j) Certain Definitions. For the purposes of this Section 11, the following definitions apply:
(1) The term “Proceeding” is to be broadly construed and includes, without limitation, the investigation, preparation,
prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.
(2) The term “expenses” is to be broadly construed and includes, without limitation, court costs, attorneys’ fees,
witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.
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(3) The term the “Corporation” includes, in addition to the resulting
corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, stands in the same position under the provisions of this Section 11 with respect to the resulting or surviving corporation as such person would have with
respect to such constituent corporation if its separate existence had continued.
(4) References to “fines” include any
excise taxes assessed on a person with respect to an employee benefit plan.
SECTION 12.
NOTICES
Section 12.1 Notices.
(a) Notice to Stockholders. Notice to stockholders of stockholder meetings shall be given as provided in Section 3.4. Without limiting the
manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by applicable law, written notice to stockholders for purposes other than stockholder
meetings may be sent by U.S. mail or courier service, facsimile or by electronic mail or other means of electronic transmission in accordance with Section 232 of the DGCL.
(b) Notice to Directors. Any notice required to be given to any director may be given by the method stated in subsection (a) or as otherwise
provided in the Bylaws, with notice other than one that is delivered personally to be sent to such address or electronic mail address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last
known address or electronic mail address of such director.
(c) Affidavit of Mailing. An affidavit of notice, executed by a duly authorized and
competent employee of the Corporation or its transfer agent appointed with respect to the class of stock affected, or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or
directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.
(d) Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one
permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.
(e) Notice to Person with Whom Communication is Unlawful. Whenever notice is required to be given, under applicable law or any provision of the
Certificate of Incorporation or Bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or
permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the
event that the action taken by the Corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons
entitled to receive notice except such persons with whom communication is unlawful.
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(f) Notice to Stockholders Sharing an Address. Except as otherwise prohibited under the DGCL, any
notice given under the provisions of the DGCL, the Certificate of Incorporation or the Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom
such notice is given. Such consent shall be deemed to have been given if such stockholder fails to object in writing to the Corporation within 60 days of having been given notice by the Corporation of its intention to send the single notice. Any
consent shall be revocable by the stockholder by written notice to the Corporation.
(g) Waiver. Whenever notice is required to be given under any
provision of the DGCL, the Certificate of Incorporation or the Bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of
directors need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or the Bylaws.
SECTION 13.
AMENDMENTS
Section 13.1 Amendments. Subject to the limitations set forth in Section 11.1(h) or the Certificate of Incorporation,
the Board is expressly empowered to adopt, amend or repeal the Bylaws of the Corporation. The stockholders also shall have power to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that, in addition to any vote of the holders
of any class or series of stock of the Corporation required by applicable law or by the Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock (as defined in the Certificate of
Incorporation)), such action by stockholders shall require the affirmative vote of the holders of at least 66 2/3 % of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote thereon,
voting together as a single class.
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EX-10.1
EX-10.1
Filename: d230933dex101.htm · Sequence: 4
EX-10.1
Exhibit 10.1
Amended and Restated Facility Agreement
Made and signed on April 26, 2026 (the “Agreement”)
Between:
Bank Hapoalim B.M.
(Hereinafter: the “Bank”)
As the first party;
And:
Xtend Reality Expansion Ltd.
Private company no. 51-587186-1
(Hereinafter: the “Company”)
As the second party;
Further to documents signed by the Company for and in connection with the management of the Company’s Account (as
defined below), and any other document signed and/or to be signed by the Company in connection with loans, credit, guarantees and/or financial services that the Company received and/or shall receive from the Bank according to this Agreement, and
with respect to the Company’s request to receive loan/s, it is agreed that the Facility (as this term is defined below) shall also be subject to, in addition to the Facility Documents, all terms detailed in this Agreement below, which shall
constitute an integral part of the Facility Documents.
1.
Definitions
Unless explicitly stated otherwise, the terms included in this Agreement shall have the meaning ascribed thereto hereunder:
1.1
“Accounting Rules” - The accounting rules applying to the Company by law, in whatever form
they may be in from time to time.
1.2
“Affiliate” – With respect to any person, any person that controls it, that is
controlled by it or that is controlled by a person that controls it and a relative of any of the foregoing. For the purpose of this paragraph: the term “control” is as defined in the Securities Law and the terms
“controls,” “to control,” “controlled” or similar will be interpreted accordingly; the term “person” or “Person” includes a body of persons, whether or not it is a
corporation.
1.3
“Asset” - Any asset or right of a Person, whether owned by it, in its
possession or otherwise held by it, including land, chattels and rights of any sort, whether actual or contingent, any right to receive money from any third party, including invoices, the goodwill of the company and, in the case of a company, the
unissued share capital of the company.
1.4
“Banking Services” - credit, documentary credit, various loans,
overdrafts in a current account, in a current loan account or another account, any letters of undertaking and guarantees for the Company or for others at the request of the Company, factoring, grants of various banking grace periods and reliefs and
other various banking services that the Bank customarily provides to its customers from time to time. For avoidance of doubt, the Banking Services will include, without limitation, the Facility provided by the Bank to the Company hereunder.
1
1.5
“Change of Control” –if the Bank considers, at its sole discretion, that there has
been a change in the ownership or control of the corporation relative to the situation at the date of signature of this Agreement.
For the purpose of this paragraph, the term “control” is as defined in the Securities Law, 5728-1968, and the terms
“control,” “to control,” “controlled” or similar will be interpreted accordingly.
For the avoidance of doubt, under circumstances where the holder of a Means of Control in the form of voting rights or rights to appoint a
director does not have independent discretion, but rather is dependent on others, for example where a trustee or other officer is appointed who intervenes in the exercise of such rights, then, for the above purposes, the holding by that entity of
such Means of Control will not be assessed separately, but rather in concert with such others.
1.6
“Companies Law” - The Companies Law, 5759-1999 and the Companies Ordinance, 5743-1983, to
the extent in force.
1.7
“Company’s Account” - Account no. 10540 opened in
the Company’s name at the Bank’s branch no. 174 including and in addition to all consideration accounts, related accounts, auxiliary accounts, secondary accounts, attached accounts, monies, securities, deposits and more, as these may
from time to time and at any time according to the Bank’s records and determination on this matter.
1.8
“Distribution” - With respect to any corporation, any of the following: (a) a
Distribution, as defined in the Companies Law, including any declaration or undertaking to perform such a Distribution (and with respect to a buyback of shares, a redemption or return of shares or the financing of any of these, including the
provision of a guarantee in respect of finance that will be made available to perform them) and any similar transaction by a corporation that is not subject to the Companies Law; and (b) any other similar payment (whether in money or money
equivalents) with respect to the share capital of a company or other securities forming part of the equity of a corporation, including a Distribution of bonus shares or any other shares or rights that are issued or distributed in respect of, in
connection with or in lieu of shares or rights in such corporation; and (c) an undertaking to perform any of the foregoing transactions, in each case whether directly or indirectly.
1.9
“Entity Within the Affiliated Group” - (a) With respect to any company: any shareholder or
Affiliate of such shareholder or an Interested Party of such shareholder or Affiliate or a relative of any of them (in case of individual); (b) with respect to any partnership: any partner (limited or general) or Affiliate of such partner an
Interested Party of such partner or Affiliate or a relative of any of them (in case of individual); and (c) with respect to any other corporation: a person holding any Means of Control or an Affiliate of such party holding a Means of Control or
an Interested Party of such party holding the Means of Control or Affiliate or a relative of any of them (in case of individual).
1.10
“Event of Default” - Any event upon the occurrence of which the Bank may accelerate all or
some of the Loan Amounts pursuant to this Agreement or to any of the Facility Documents.
2
1.11
“Facility Documents”—This Agreement, the First Warrant, the Second Warrant (as both
terms are defined below), the Security Documents (as defined below), the application to open the Company’s Account including, without limitation, the account opening terms booklet, and all Bank`s documents regarding the Company’s
Account, the Facility, the Loan Amounts, the Credit Line Documents (as defined below), any collaterals in connection therewith, letters of undertaking, collaterals and guarantees as required and/or shall be required by the Bank at the Bank’s
discretion from time to time and at any time, with appropriate signatures, forms and terms according to the Bank’s demands and determinations, pursuant and subject to the practiced and customary procedures and rules of the Bank, and also
pursuant to the Bank’s reasonable decisions as these may be from time to time and at any time—which the Company shall deliver to the Bank and/or sign and/or cause to be signed and/or registered lawfully and in timely, according to the
Bank’s reasonable demands, all at the Company’s expenses, under its responsibility and at its expense.
1.12
“Financial Statements” - The annual or quarterly financial statements of the Company (on a
consolidated basis), in accordance with the Accounting Rules (which shall include the applicable auditor/reviewer CPA’s opinion (in relation to annual statements), a balance sheet (statement of financial position), a profit and loss statement
(statement of total income), cash flow, a statement of changes in equity, and notes for each of the statements and any other statement or note that must be prepared/published in accordance with the Accounting Rules). The annual statements shall be
audited by an auditor belonging to one of the “big four” accounting firms, or another reputable accountancy firm that has been given prior written approval by the Bank.
1.13
“First Runway Milestone” – On the date of the first withdraw on account of the First
Loan, the Company having sufficient cash (excluding the cash derived from the Loans provided and/or to be provided under this Agreement) to allow it to make all expected expenses and honor all expected obligations, both in the ordinary course of
business and as known to the Company as of the date of the applicable withdrawal, as they become due, during a period of at least six (6) months, such anticipated expenses to be calculated based on the higher of: (i) the average monthly
burn rate of the last three (3) months preceding each withdrawal, and (ii) the Company’s average monthly expected burn rate for the following six (6) months .
1.14
“Interested Party” - As defined in the Securities Law.
1.15
“Loan Amounts” - The total amount of the unpaid balance of the
principal amounts arising from any Banking Service plus interest of any type, linkage differentials, expenses, (including exercise and collection expenses), commissions and any other payments of any sort that the Company owes or will owe the Bank
with respect to any of the Banking Services or any part of such amount on the terms that have been, or will be, agreed upon from time to time with respect to any Banking Service.
1.16
“Management Fees” – Management fees (excluding directors’ salaries paid in
accordance with the law), remuneration (excluding salaries including invoice salaries), consultation fees (excluding ordinary course monthly payments to consultants and Chartered Holdings Limited banking fees under approved agreements),
participation fees, commissions (except ordinary course commissions paid to un-affiliated agents/distributors) , amounts of money and payments of any sort that are paid by any corporation (whether in money or
money equivalents or by way of the transfer of Assets or rights or the grant of any benefit) out of its profits or out of any other source in connection with the provision of management, consultancy or similar services, however they may be defined
but excluding Excluded Payment/Transfer as defined below.
3
1.17
“Means of Control” - As defined in the Banking (Licensing) Law, 5741-1981.
1.18
“Merger” – is the transaction under which which(i) the Company will merge with XOS
Robotics Ltd., an Israeli company and wholly-owned subsidiary of Xtend AI Robotics, Inc., a Delaware corporation (the “Parent” or “New PubCo”), with the Company surviving the merger as a direct, wholly-owned subsidiary of the
Parent (the “Xtend Merger”), and (ii) immediately after the Xtend Merger, XT Merger Sub 2, Inc., a Nevada corporation and wholly-owned subsidiary of the Parent, will merge with and into JFB Construction Holdings, a Nevada
corporation (“JFB”), with JFB surviving as a direct, wholly-owned subsidiary of the Parent, in each case pursuant to an Agreement and Plan of Merger, dated February 13, 2026, by and among JFB, the Company, the Parent and XT Merger
Sub 2, Inc.
1.19
“On a Fully Diluted Basis”—On the basis of the assumption that all options,
convertible promissory notes, convertible loans, convertible securities and any security for such securities of any sort have been exercised or (as the case may be) been fully converted into shares.
1.20
“Inter Group Transaction” - With respect to any corporation, any
of the following not being in the ordinary course of business and on market terms and not being a Distribution or payment of Management Fees or a specific “Excluded Payment/Transfer” as defined below, and not being a repayment or refund
or provision of a Shareholder Loan to an Entity Within the Affiliated Group: (a) Any payment (whether in money or money equivalents) to an Entity Within the Affiliated Group, including a loan by the Company to an Entity within the Affiliated
Group; (b) a transfer of assets or rights or grant of any benefit to an Entity Within the Affiliated Group; or (c) a purchase of assets or rights from an Entity Within the Affiliated Group; and (d) an undertaking to perform any such
operation, all whether directly or indirectly, but excluding the below list which shall not be considered an Inter Group Transaction nor require Lender approval—”Excluded Payment/Transfer” – which term shall include
(i) Ordinary course payments under the Company’s budget as shall be agreed upon by the Bank and the Company, (ii) Fees paid to Chartered Holding Limited under those certain banking services arrangements dated March 20, 2023, and
(iii) Patent Transfer from MKM Holding a Singapore based subsidiary to the Company.
1.21
“Quarter” - A calendar quarter, being: January 1 to March 31
(inclusive); April 1 to June 30 (inclusive); July 1 to September 30 (inclusive); and October 1 to December 31 (inclusive).
1.22
“Restructuring”—With respect to any corporation, any of the following: (a) a
merger or demerger (as these terms are defined in Part E2 of the Income Tax Ordinance [New Version] or the Companies Law), including a consolidation and reorganization (all whether performed in accordance with Part 8 or Part 9 of the Companies Law
or in any other manner) or any operation with a similar outcome with respect to a partnership or corporation outside of Israel; (b) an operation that results in the acquisition, transfer or receipt of Assets that are material for the
corporation in scope or nature or an acquisition or receipt of such a material undertaking; (c) a receipt of Assets in consideration of shares or other securities or other rights of the corporation where the Assets that are relevant to the
operation are material for the corporation in scope or nature, all whether in one transaction or a series of transactions.
4
1.23
“Sanctioned Person” – An entity or a person that: (a) is listed on any Sanctions
list maintained by OFAC, and/or OFSI, and/or EU and/or UN, or any similar Sanctions list maintained by any other governmental authority in the State of Israel or the United States of America, or the United Kingdom, or the EU, or the UN, or any other
governmental authority having jurisdiction over the Company; (b) is located, organized, or resident in any country, territory, or region that is the subject or target of Sanctions; or (c) is owned or controlled by an entity or person
described in clauses (a) and (b) hereof.
1.24
“Sanctions” – The economic sanctions laws, regulations, embargoes or restrictive
measures administered, enacted or enforced by Israeli government and/or the United States government, and/or the UK government, and any of their agencies, including, without limitation, OFAC, and/or OFSI, and/or EU, and/or UN, and the U.S. State
Department, or any other governmental authority having jurisdiction over the Company.
1.25
“Second Runway Milestone” – On the date of the withdraw on account of the Second Loan,
the Company having sufficient cash (including the cash derived from the Loans and/or Credit provided and/or to be provided under this Agreement) to allow it to make all expected expenses and honor all expected obligations, both in the ordinary
course of business and as known to the Company as of the date of the applicable withdrawal, as they become due, during a period of at least six (6) months, such anticipated expenses to be calculated based on the higher of: (i) the average
monthly burn rate of the last three (3) months preceding each withdrawal, and (ii) the Company’s average monthly expected burn rate for the following six (6) months .
1.26
“Securities Law” - The Securities Law, 5728-1968.
1.27
“Shareholder Loans” - Any payment that is directly or indirectly made or credited to any
corporation by an Entity Within the Affiliated Group (whether in money or money equivalents or by way of set-off or the transfer of money or rights or any benefit or in any other way) where it has a right to
receive it back from the Company (whether as a principal amount or plus linkage differentials or interest, whether now or in the future) other than as a residual right following liquidation, however such payment may be described, including:
(a) a loan (including any convertible loan) that is made or credited to the Company by the Entity Within the Affiliated Group; and (b) any payment made or credited to the Company by the Entity Within the Affiliated Group through a capital
note or bond (including any convertible note) that the Company has issued to, or made to the order of, the Entity; and (c) any payment that the Company must make to the Entity Within the Affiliated Group in connection with bonds issued by the
Company; and (d) an undertaking to perform any of the foregoing transactions but except for loans detailed above under Excluded Payment/Transfer.
1.28
“Subsidiary” - As such term is defined in the Companies Law, 5729-1999.
2.
Representations and Warranties
The Company hereby represents and warrants to the Bank as follows:
2.1
The Company is a private company lawfully incorporated and registered in Israel, and it is active and in
existence.
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2.2
The Company possesses the legal powers, authorities and rights necessary in order to engage in this Agreement
and comply with all of its provisions and terms, and it has no (and shall have no) impediment by contract and/or any law and/or directive of the Bank of Israel, including pursuant to its constitutional documents, from engaging in this Agreement and
perform all of its obligations pursuant to it.
2.3
The Company received all agreements, authorizations, waivers and approvals required pursuant to its
constitutional documents in connection with signing this Agreement, and also for the purpose of performing its obligations pursuant to it, and there is no need to receive any additional agreements, waivers and/or approvals for this purpose.
2.4
All of the Company’s obligations pursuant to and/or in the framework of and/or in connection with this
Agreement are legal, valid, effective, binding and enforceable for the Company, pursuant to their terms.
2.5
Signing this Agreement and performing the Company’s obligations pursuant thereto shall not contradict
and/or violate any agreement that the Company is a party to and/or any obligations of the Company to any third parties, and/or grant any person or factor any right and/or cause to demand the immediate payment of the Company’s debts and
obligations.
2.6
No bank has ever denied Company’s request to open a bank account. No bank has ever refused to provide the
Company with any services, and no bank has terminated its commercial relations with the Company (at such bank’s initiative) the above excluding applications for venture lending facilities.
2.7
Except as set forth in Annex 2.6(i), the Company and or any of its
Subsidiaries did not (and will not, without giving the Bank prior written notice) receive any grants, funds or benefits (including, but not limited to, tax benefits) from the Israel Innovation Authority (the “Innovation
Authority”) or from the investment center or from Binational Industrial Research and Development Foundation (“Bird Foundation”), or from any other government authority or similar authority. Except as
set forth in Annex 2.6(ii), the Company and or any of its Subsidiaries are not (and will not, without giving the Bank prior written notice) obligated to pay royalties or other payments to the Innovation Authority or to the investment
center or to the Bird Foundation or any other government authority or similar authority. Except for the Innovation Authority’s approval attached as Annex 2.6(iii), the transactions planned in the framework of this Agreement and
the other Facility Documents (including exercise of the collaterals provided to the Bank in the framework of the Facility Documents) are not subject to any right and do not require the approval of the Innovation Authority or the Investment Center or
Bird Foundation or any other government authority or similar authority.
2.8
The Company and to the best of its knowledge, all of its employees, representatives and consultants (in their
capacity as such), are acting and in compliance with any applicable law, including, inter alia, all applicable privacy and data protection laws and regulations, in all relevant jurisdictions.
2.9
The Company is in compliance with its internal privacy policies and terms of services.
2.10
The Company hereby represents that neither the Company nor any of its Subsidiaries nor any Entity within the
Affiliated Group is in violation of any Sanctions or a Sanctioned Person.
3.
Covenants
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3.1
Negative Pledge; Assets
3.1.1
The Company has not created any charge of any sort over its Assets other than “Permitted Liens” as
shall refer to: charge number 2, as registered in favor of Leumi Bank and appear under the Corporation’s Israeli Registrar of Companies Extract dated August 13, 2024—and has not given any guarantee in favor of any third party, nor
has it undertaken to create any such charge or give any such guarantee. The Company hereby represents that the Permitted Liens have been created in order to secure certain bank guarantees provided by Bank Leumi and in order to secure certain credit
card facilities. The Company hereby undertakes that it will remove the Permitted Liens within 90 business days from signing of this Agreement.
3.1.2
(1) Except as set forth in Annex 3.1.2(1), no guarantee or security (whether in
personam or in rem) or indemnification undertaking has been given to any third party by any Entity Within the Affiliated Group or by any other party to secure any debts or undertakings of the Company; and (2) neither the Company nor
any Entity Within the Affiliated Group nor any other party have undertaken to provide any third party with any such guarantee or security or indemnification undertaking.
3.1.3
The Company and any of its Subsidiaries, will not create (or commit to create) and/or permit to subsist a
charge, mortgage, pledge, encumbrance, attachment, lien, assignment, hypothecation, security interest, title retention, preferential right, trust arrangement, other agreement or arrangement or other third party and/or legal entity right the effect
of any of which is the creation of security, over the whole or any part of any of its existing or future Assets (each a “Lien”) (including, inter alia, money, revenues, accounts receivable, bank accounts, and any other
rights (including intellectual rights) of any Subsidiary of the Company) in any manner or form, for any purpose or reason, in favor of any third party, and the Company will not give any guarantee in favor of any third party (or an indemnification
undertaking to an entity that provides any such guarantee), nor will the Company in any way undertake to do any of the foregoing, all unless the Company has received the prior written consent of the Bank. For the avoidance of doubt, the Company
shall not be restricted from obtaining: (i) unsecured equity financing (including by way of equity financing, SAFEs or convertible loans without repayment option, other than in case of insolvency provided that such agreements will include
specific and customary liquidation priority provisions under which any payments to the participants thereof are subordinated to all payments to the Bank); or (ii) other unsecured financing or financing secured by subordinated debt, all subject
to the execution of a subordination agreement to the Bank’s sole satisfaction.
The term
“charge” includes a pledge (as defined in the Pledges Law, 5727-1967), an assignment of a right by way of charge and pledge and a grant of right of set-off, liens, reservation of
ownership arrangements or a contingent sale, provided that they constitute security for an asset or right, and any other transaction that has identical implications.
3.1.4
Without the prior written consent of the Bank, the Company will not wholly or partially sell, transfer,
deliver, lease or rent any of its existing or future Assets to another, including an Entity Within the Affiliated Group, and the Company will not undertake to do so, except in the ordinary course of business and on market terms.
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3.1.5
The Company shall open and maintain a bank account in the Bank (the “Account”) and shall:
(i) sign any compliance documents required in connection therewith, and (ii) provide the Bank with any and all necessary regulatory approvals. The Company shall instruct all its customers (on any invoices issued) and partners to make all
payments to the Account.
3.1.6
The Company will exercise all of the voting power that it has and will have, in the Subsidiaries, such that,
and the Company undertakes that:
3.1.6.1
The Subsidiaries will not create and/or permit to subsist a charge mortgage, pledge, encumbrance, attachment,
lien, assignment, hypothecation, security interest, title retention, preferential right, trust arrangement, other agreement or arrangement or other third party and/or legal entity right the effect of any of which is the creation of security, over
the whole or any part of any of their existing or future Assets in any manner or form, for any purpose or reason, in favor of any third party, and will not give any guarantee in favor of any third party (or an indemnification undertaking to an
entity that provides any such guarantee) and will also not in any way undertake to do any of the foregoing, all unless the Company has received the prior written consent of the Bank.
3.1.6.2
The Company shall cause its Israeli Subsidiaries to open and maintain a bank account in the Bank.
3.1.6.3
Any and all amounts received by an Israeli Subsidiary of the Company shall be received in a bank account in the
Bank.
3.1.6.4
In the event that more than thirty percent (30%) of the Company’s and its Subsidiaries’ joint
income will be received by any of Company’s Subsidiary, then the Bank shall be entitled, in its sole discretion, to receive: (a) a guaranty from such Subsidiary (the “Guaranty”), and (b) a legal opinion regarding
the legality, authority, validity and enforceability of such Guaranty (the “Guaranty Legal Opinion”). All of the Bank’s costs relating to the Guaranty and the Guaranty Legal Opinion shall be borne by the Company.
3.2
Holdings
3.2.1
The direct and indirect shareholders and the direct and indirect holders of the Company’s Means of
Control, the proportion of their holdings of the Company’s shares and Means of Control (On an issued basis, and on a Fully Diluted Basis) and a description of how they hold their holdings (if they do not do so directly) (“Structure
Chart”) is as set forth in Annex 3.3 to this Agreement.
3.2.2
The Company will not undergo a Restructuring without the prior written consent of the Bank.
3.2.3
A Change of Control in the Company without the prior written consent of the Bank will constitute an Event of
Default.
8
Union Investments & Development Ltd.’s shareholdings in the Company shall at
all times remain above 5% of the Company’s shares or New PubCo shares post merger closing as detailed above (on an issued and outstanding basis). Failure to comply with such a requirement shall be deemed an Event of Default provided however
that in an event of a secondary sale of shares by Union that will lower its holding below 5% the Bank shall first be introduced to the purchaser replacing Union and will consider based on its merits whether to trigger this right.
3.3
Delivery of Reports and Information
3.3.1
The Company is aware that a condition of obtaining the Facility and/or any other credit hereunder, and/or of
obtaining new credit and/or obtaining a variation to, additional approval or refinancing of, existing credit at the Bank, is the ongoing provision of Financial Statements to the Bank, inter alia, as required pursuant to the directives of the
Bank of Israel or any other competent authority or in accordance with any applicable law.
3.3.2
Without derogating from the provisions of Section 3.4.1 above, the Company undertakes, on an ongoing
basis, and until the repayment of the entire Loan Amount, to act as follows:
3.3.2.1
Financial Statements
3.3.2.1.1
The Company hereby undertakes to provide the Bank, immediately upon their signature but, in any event, no later
than September 30th of every calendar year (or earlier – if will be required by the Bank of Israel), all of its annual Financial Statements as at that date as required under the Accounting
Rules, audited by one of the “big four” accountancy firms or another reputable accountancy firm that has been approved in writing by the Bank. Should the Company publish additional consolidated or other Financial Statements in Israel or
abroad, audited or unaudited, the Company shall provide the Bank with copies thereof as soon as possible after their publication, but, in any event, no later than 10 days following their approval.
3.3.2.1.2
Furthermore, by and no later than 30 days after the end of every Quarter, the Company shall provide the Bank
with internal P&L, cash flow report and balance sheet.
3.3.2.2
Annual Budget, Projections, and Capitalization table
The Company hereby undertakes that, within 60 days of December 31 every year, or from time to time if they are updated, the Company will
provide the Bank with a statement of its annual operating budget and work plan, annual projections (forecasts) and any amendments made thereto, and with an updated capitalization table of the Company, on an issued and on a Fully Diluted Basis, all
approved by the Company’s board of directors.
9
3.3.2.3
Po’s/ Invoices Report
With respect to the Credit Line, in the event the Company notifies the Bank of its intention to utilize the Credit, then, from the date of
such notice and for so long as the Company utilizes the Credit and any amounts thereunder remain outstanding, the Company shall provide the Bank, no later than thirty (30) days following the end of each month, with a monthly report of the
Company’s PO’s/Invoices, according to the form to be agreed upon by the Company to the Bank, duly certified and signed by the Chief Financial Officer or Chief Executive Officer of the Corporation. In addition, the Company shall provide
copies of such invoices and/or purchase orders upon the Bank’s request, together with Annexes CC and BBC.
3.3.3
In addition, the Company will provide the Bank from time to time, at its request, with additional information
and documents regarding its Assets, its business, holdings in the Company and its Subsidiaries Financial Statements, in written reports in reporting format and according to the details required by the Bank, and approved by the CEO/CFO—all
within 10 days from the date of any reporting requirement on the part of the Bank.
3.3.4
The Company undertakes to deliver to the Bank a copy of any approval, notice or report or any other document
that the Company must deliver to the Registrar of Companies and/or the Israel Securities Authority pursuant to any law, simultaneously with its delivery to the Registrar of Companies and/or Israel Securities Authority, as foregoing (excluding share
issuance to employees under ESOP). The Company undertakes to deliver to the Bank a copy of any commercial and financial information sent to the Company’ Board members (other than R&D confidential information), at the same time as such
information is delivered to the Company’s Board members.
3.3.5
Notwithstanding anything contained in Section 3.11 hereunder to the contrary, the Company shall provide
the Bank with any information and documents requested by the Bank in connection with any regulatory filings or requirements arising from the Committee on Foreign Investment in the United States (“CFIUS”) and other Cross-Border
regulations – Company is currently under CFIUS process to be completed by no later than the earlier of: (i) December 31, 2026, or (ii) the completion of the Merger – company to update BNHP on major events in the process.
3.3.6
In addition, the Company will provide the Bank from time to time, at its request, with additional information
and documents regarding its Assets, its business, holdings in the Company and its Subsidiaries Financial Statements, in written reports in reporting format and according to the details required by the Bank, and approved by the CEO/CFO—all
within a reasonable period of any reporting requirement on the part of the Bank; Company shall further provide the Bank with any other reports and information as customary for venture lending financing transactions.
3.4
Shareholder Loans
10
The Company hereby undertakes not to make or to decide to make or to undertake to make any
Shareholder Loans to any Entity Within the Affiliated Group or to repay any (existing or future) Shareholder Loans in any way (whether with money or money equivalents or by way of set-off or transfer of any
money, rights or benefit or in any other way or manner) to any Entity Within the Affiliated Group without the prior written consent of the Bank.
Furthermore, if any Shareholder Loans are made to the Company (with the consent of the Bank) by an Entity Within the Affiliated Group, and as
a condition thereto, the Company will provide the Bank with an undertaking by the party that made such Shareholder Loan in the form at Annex 3.4i to this Agreement no later than the date on which such loan is made to the Company.
Furthermore, if an investment is made in the Company (or if an investment is made in the future) by a party that is not an Entity Within the
Affiliated Group (for example in the framework of a SAFE mechanism), the Company will provide the Bank with an undertaking from the investor in the form at Annex 3.4ii to this Agreement no later than the date of signature of this
Agreement (or, in the case of a future investment, no later than the date on which such investment is made).
3.5
Subordination
The Company shall not allow, shall object to and shall even prevent the performance of the following acts, as being at present and/or in the
future, at any time whatever the case or the circumstances: all loans, monies and/or financial investments that are and/or shall be owing by the Company, and/or that have been lent and/or shall be lent and/or have invested and/or shall invest in the
Company, and/or obligations and/or debts and/or any liabilities of the Company at any time – shall always be subordinated and deferred after the Loan Amounts and/or debts to the Bank as specified above and/or in the Facility Documents, and
shall neither be paid nor repaid to, nor discharged, unless and until the Bank’s prior written approval therefor is received; provided, however, that the above shall not apply with respect to (i) payment of ongoing salaries in the
ordinary course of business, (ii) payments to third parties for commercial obligations of the Company pursuant to commercial agreements entered into in the ordinary course of business, and (iii) liabilities which cannot be subordinated by
applicable laws;
The Company will add similar provisions to any future investment or funding documents (it being agreed that SAFEs,
advance investment agreements and other similar forms of investments, will include subordination provisions).
For avoidance of doubt, and
without derogating from the above, all amounts owed by the Company to shareholders, directors and other Affiliates shall be fully subordinated to all amounts owed by the Company to the Bank, and the Company shall execute a subordination letter to
the extent required by the Bank.
3.6
Management Fees; Distributions and Other receipts
3.6.1
The Company will not make any payment, any decision to make a payment, and any undertaking to make a payment of
Management Fees to Interested Parties (as defined in the Israeli Securities Law, 1968), without the prior written consent of the Bank.
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3.6.2
The Company will neither make any Distribution nor enter into any Inter Group Transaction, make a decision,
announcement or undertaking to make such Distribution or enter into any Inter Group Transaction, without the prior written consent of the Bank.
3.7
Transactions with Controlling Parties
3.7.1
The Company (and it will act such that corporations under its control that are not public companies, as defined
in the Companies Law): (a) will not enter into an Exceptional Transaction with any party controlling it or an Exceptional Transaction with another person in which such controlling party has a personal interest (in each case excluding participation
of the Company’s shareholders in the Company’s equity funding rounds); and (b) will not directly or indirectly enter into a contract with any party controlling or with any relative thereof for the receipt of services, including
through a corporation under its control and, if he/she is an officer or employee of the Company, as to the terms of his/her office and employment, as the case may be, all with the exception of Permitted Transactions and Permitted Contracts, as
defined below.
3.7.2
In this Section –
“Controlling Party” and “Control” are as defined in the Securities Laws and
regulations.
“Exceptional Transaction” is as defined in Section 1 of the Companies Law
(עסקה חריגה).
“Permitted Transactions”—as defined as
Excluded Payment/Transfer;
“Permitted Contracts”: contracts included in the definition of Excluded
Payment/Transfer transactions.
3.8
Transactions and Investments Not in the Ordinary Course of Business
3.8.1
The Company will not merge or consolidate or permit a Subsidiary of the Company to merge or consolidate, with
any other person. Without derogating from generality of the foregoing, a Subsidiary of the Company may merge or consolidate with another Subsidiary that is wholly-owned by the Company or into the Company itself, provided that all such Subsidiaries
are debt free.
3.8.2
The Company will not purchase, or permit a Subsidiary of the Company to purchase, all or a significant part of
the share capital or Assets of another (including the establishment of a new Subsidiary) without the prior written consent of the Bank, nothing herein derogating from the right to transfer a patent from MKM Holding, a Singapore based subsidiary, to
the Company, as per subsection 1.20(v).
3.8.3
On the occurrence of an Event of Default, and for as long as it is continuing, the Company will not perform any
transactions or make any investments other than in the ordinary course of business.
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3.9
Change of Key management or Sphere of Activity
3.9.1
Without the prior written consent of the Bank, the Company will not make (a) a material change to the
nature of its business which is defined as operating system for robotics in both defense and civil applications; (b) commencing direct activity or business relationship in the countries and/or with any entities set forth in the following
Sanctions Lists: (i) the list declared by the Israeli Ministry of Defense; (ii) The European Union; (iii) The United States of America (OFAC); (iv) The United Nations; (v) The United Kingdom;
3.9.2
The Company obligates that the current CEO will remain in his position during the term of the Loans.
3.9.3
The Company will notify the Bank about any key manager (including CEO, CTO and chairman) that leaves the
Company or whose employment with the Company terminates, such notice to be given within ten (10) days of the date on which such key manager leaves the Company.
3.10
Legal Proceedings
3.10.1
The Company will notify the Bank in writing regarding any claim or legal proceeding of any sort that is filed
or commenced against it or any of its Subsidiaries or that pertains to the personal liability of its or any of its Subsidiaries officers with respect to events related to its business, and regarding any investigation of any sort by any governmental
or public authority that is commenced against it, in all cases whether in a court, tribunal or any judicial forum or before a governmental or public authority, including arbitration or quasi-arbitration, in Israel or abroad (as the case may be).
3.10.2
The date for reporting to the Bank for the purpose of this Section is five business days from the date on which
the claim is filed or the proceeding is commenced or from the date that the Company becomes aware of the investigation, as the case may be.
3.10.3
Claims will not be reported if they are below a NIS 500K scope.
3.11
CFIUS
3.11.1
(A) The Company is fully and solely responsible for ensuring compliance with the regulation relating to U.S.
Committee on Foreign Investment in the United States (“CFIUS”); and (B) by no later than the earlier of: (i) December 31, 2026, or (ii) the completion of the Merger, the Company shall provide the Bank with
written confirmation from an experienced CFIUS counsel, to the Banks’ satisfaction, whether the Company’s business activity (or its group’s business activity) in the United States (the “Relevant Activity”)
constitutes “TID Business” under the CFIUS regulation;
3.11.2
During the term of the Facility, the Company shall (and shall cause the holders of direct and/or indirect,
legal and/or beneficial interests in the Company to) (a) within five (5) days of receipt of the same, notify the Bank and provide the Bank with a copy of, any inquiry received from CFIUS or any other governmental authority related to the
Facility or to the Relevant Activity, (b) make any filing requested by CFIUS related to the Facility or to the Relevant Activity, (c) cooperate with, and fully respond to any inquiries received from CFIUS or any governmental authority
related to CFIUS’s
13
review and/or investigation related to the Facility or to the Relevant Activity, in each case within the time permitted by CFIUS or such governmental authority, as applicable, and
(d) subject to the terms and conditions hereof, take any mitigation measures requested by CFIUS and/or any governmental authority in connection with the CFIUS Review.
3.12
Foreign Corrupt Practices Act
(“FCPA”).
3.12.1
Company has not taken any action which would cause it to be in violation of the Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder. There is not now, nor has there ever been, any employment by the Company of, or any beneficial ownership in the Company by, any governmental or political official in any country in the
world.
3.12.2
Company shall not take any action that violates the FCPA, as amended, and the rules and regulations thereunder
in any manner and/or which would breach the Israeli Penal Code or other similar legislation or regulations. Furthermore, Company undertakes to comply with the FCPA, and with any anti-corruption and/or anti-money-laundering laws in any applicable
jurisdiction, including, without limitation, the State of Israel and the United States of America.
3.12.3
Without derogating from the above, none of the Company or any director or officer of the Company will take any
action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any government official (including any officer or
employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate
for political office) to improperly influence official action or secure an improper advantage; or laws applicable in the State of Israel and/or in the United States of America, that prohibit bribery, corrupt practices or money laundering.
4.
The Facility
4.1
It is agreed that subject to the cumulative performance of and the Company’s compliance with all terms
detailed in this Agreement and in the Facility Documents, the Bank shall provide the Company with the Facility as detailed below:
4.1.1
The Facility: Commencing from January 1, 2026 and by no later than the end of the Draw Period, a
facility in the amount of up to US$ 15,000,000 (Fifteen Million US Dollars), or the equivalent thereof in New Israeli Shekels (ILS) (the “Aggregate Loan Amount”), shall be available for withdrawal by the Company (as
loans in the Company’s Account), in two installments, as follows:
4.1.2
First Installment: An amount of up to US$ 8,000,000 (Eight Million US Dollars), as a loan in the
Company’s Account (the “First Loan”), conditional upon the following cumulative conditions:
4.1.2.1
the Company’s U.S. Subsidiary Xtend Reality Inc., (the “U.S. Subsidiary”) shall
provide the Bank with a secured guaranty relating to the Company’s Banking Services (the “US Guaranty”).
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4.1.2.2
the Company shall provide the Bank with (i) a pledge and assignment of bank account and (ii) a
deposit account control agreement (DACA) over the US Subsidiaries’ bank accounts (clauses (i)-(ii) together shall hereafter be referred to as the “US Pledges”).
4.1.2.3
to the extent the Company has Intellectual Property registered in the United States (the “US
IP”), Company shall enter into an Intellectual Property Security Agreement and pledge all such US IP by way of first ranking fixed charge and pledge in favor of the Bank (the “IPSA”), including, without limitation,
registering such pledge with the USPTO.
4.1.2.4
The Company shall provide the Bank with legal opinions regarding the legality, authority, validity and
enforceability of the US Guaranty, US Pledges, and IPSA (the “Legal Opinions”).
4.1.2.5
All debentures set forth in the Security Documents (as defined below) and in the US Pledges (and the IPSA, if
applicable), on the assets of the Company and its Subsidiaries, have been properly registered in all applicable registrations, in order to perfect the security interests set forth therein, to the Bank’s full satisfaction. For avoidance of
doubt, registration of certain security interests may require additional signatures, in the event that certain time periods may pass between the signing of this Agreement, and the removal of any of the existing registered Liens.
4.1.2.6
Within 60 days from the date hereof, the Company shall provide Bank with an approval from the Innovation
Authority, as required under Section 2.7 above.
4.1.2.7
The Company achieving the First Runway Milestone.
Subsection 4.1.2.1-4.1.2.6 shall hereafter be referred to as the “First Loan Conditions
Precedent”.
4.1.3
Second Installment: an amount of up US$ 7,000,000 (Seven Million US Dollars) as a loan in the
Company’s Account (the “Second Loan”), conditional upon the following cumulative conditions:
4.1.3.1
The Company meeting the First Loan Conditions Precedent, for the avoidance of doubt, not including the First
Runway Milestone.
4.1.3.2
The Company achieving the Second Runway Milestone.
4.1.3.3
The Company shall show an aggregate income of at least US $30,000,000 (Thirty Million US Dollars) during the
calendar year 2026.
The First Loan and the Second Loan shall hereafter be referred to each as a
“Loan”, and collectively the “Facility.
4.1.4
The Company shall be able to withdraw the Loans (subject to the applicable conditions for withdrawal) until no
later than the earlier of: (i) January 31, 2027, or (ii) an Event of Default. The period commencing from the date of signing this Agreement and ending on the earliest of the above, shall be deemed the “Draw Period”.
15
After such dates, the Bank shall no longer be obligated to continue to provide the Facility
or any Loan by its virtue, in whole or part.
4.1.5
The Loans will only be transferred by the Bank into the Company’s Account.
4.2
Terms of the Loans
1.1.1
Loans currency: USD and/or ILS (based on the USD / ILS “representative” conversion rate on
the day of each withdrawal of any Loan), as the Company may elect upon each withdrawal of each Loan.
1.1.2
Facility Loan Interest: Solely with respect to the Facility, each Loan shall bear interest as
follows:
1.1.2.1
With respect to Loans denominated in USD: at the “SOFR TERM” rate plus a rate of 4.95% per annum in
excess of SOFR TERM (in accordance with the Base Rate Publication Screen) (the “USD Loan Interest”).
1.1.2.2
With respect to Loans denominated in ILS: at the “Prime” rate determined by the Bank of Israel,
plus a rate of 2.40% per annum in excess of the Prime (the “ILS Loan Interest”).
1.1.2.3
For the purpose of this Agreement:
1.1.2.3.1
The applicable interest rate with respect to each Loan (i.e. USD Loan Interest of ILS Loan Interest) shall be
deemed the “Loan Interest”.
1.1.2.3.2
The applicable base rate with respect to each Loan (i.e. the SOFR TERM or the Prime) shall be considered as the
“Base Rate”.
1.1.3
Repayment of the Loans:
Repayment of the Loans: The principal amount of each Loan shall be paid in 36 (thirty-six)
equal monthly payments, starting immediately following the expiration of the Draw Period. The entire Loan Amounts shall in any event be paid to the Bank no later than January 31, 2030.
Interest Period: Loan Interest of each Loan shall be payable in arrears monthly. The first Interest Period of each Loan shall begin on
the consecutive month the relevant Loan was made to the Company, and each additional interest period shall begin upon the end of the previous Interest Period.
1.1.4
Prepayment: The Company shall be entitled to prepay the Loans, together with all accrued interest
thereon and all outstanding obligations related thereto, at any time, by providing a thirty (30) days’ prior written notice to the Bank to that effect, together with payment of a prepayment fee in accordance with the Bank’s general
terms and conditions at the time of such prepayment of the principal, and signing any required documents.
1.1.5
Fees, prices, costs and expenses:
16
1.1.5.1
General - The Company shall pay the Bank all expenses, fees and charges as detailed in the general terms
for managing the Company’s Account and the other Facility Documents.
1.1.5.2
Handling Fee - For processing the Facility Documents, the Bank shall be paid a one time
“credit and collateral handling fee – documents preparation” in the amount of US$ 31,000 (Thirty One Thousand US Dollars), and in any event shall not be less than NIS 105,000 (One Hundred and Five Thousand New Israeli Shekels)
which will be paid no later than the date of signing this Agreement. The Company hereby delivers to the Bank an irrevocable order and authorization to charge the Company’s Account at the foregoing amount. In the event the Bank decides not to
conclude the Facility Documents for whatever reason, the Company shall be refunded the handling fee.
1.1.5.3
Non Utilization Fee – in respect of the allocation of the Facility and the Credit Line for the
term commencing from such time that any part of the Facility is made available to the Company, until the earlier of (i) entire Facility amount is withdrawn and (ii) the expiry or termination of the Draw Period, the Company will pay the
Bank a “non-utilization” fee (the “Non-Utilization Fee”). The Non-Utilization Fee will be
calculated as an annual amount of 0.35% of the un-utilized amounts of the Aggregate Loan Amount (on the date of each applicable payment), which shall be paid commencing January 1, 2026.
1.1.5.4
Legal Fees – With respect to the First Loan, the Second Loan and the Credit Line, for processing
the Facility Documents, whether the Facility Documents are executed or not, the Bank shall be reimbursed for its legal expenses actually incurred thereby up to an amount equal to NIS 50,000 (Fifty Thousand New Israeli Shekel) plus VAT, and out of
pocket expenses, and US$ 5,000 (Five Thousand US Dollars) plus VAT, and out of pocket expenses (the “Legal Fees”).
1.2
All other terms of the Loans shall be in accordance with the relevant Facility Documents and the provisions of
the Facility Documents shall be additional to the provisions of this Agreement and shall form an integral part thereof, so that they shall be read together, as one whole, further to each other and continuously, the same as their conditions, as
additional to each other and as complementary to each other (nothing herein derogating from the provisions of section 8.2 below).
5.
The Credit Line
5.1
The Bank will make available to the Company, in addition to the Facility, a credit line in the amount of up to
USD 10,000,000 (Ten Million US Dollars), all subject to the terms detailed under the Application for Allocation form (מש(70)) and any other related documents, attached hereto as Annex 5 and any other related documents (the
“Credit Line” and the “Credit Line Documents”, respectively). All representations, warranties, securities, obligations and covenants included in this Agreement will secure, guarantee and be applicable to
the Facility, the Credit Line and any other Banking Services.
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5.2
The provision of the Credit is conditioned upon the following conditions:
5.2.1
the Company shall provide to the Bank, and shall have caused each relevant Subsidiary to provide, with such
guarantees, undertakings, pledges, debentures, assignments and other security interests, as may be requested by to the Bank in its sole discretion, in each case in form and substance satisfactory to the Bank in its sole discretion, with respect to
any Subsidiary in which invoices and/or purchase orders are financed by the Bank.
5.3
Liquidity Covenant. Upon the first withdraw on account of the Credit, the Company shall maintain, at all
times, unsecured and unrestricted cash or cash equivalents in the Corporation’s bank account held with the Bank in an amount equal to at least 20% of the utilized Credit provided by the Bank.
6.
Additional Terms
6.1
The provision of the Facility and the Credit Line is subject to the Company signing all documents required by
the Bank at its discretion for the purpose of their extension.
6.2
In addition, providing each Loan under the Facility and the Credit Line is subject to meeting all of the
following conditions, to the Bank’s full satisfaction:
6.2.1
All Facility Documents have been signed;
6.2.2
The Bank was paid all expenses and fees pursuant to the Facility Documents;
6.2.3
The creation, to the benefit of the Bank, in forms acceptable by Bank, of:
6.2.3.1
A first ranking and sole floating charge, unlimited in amount, on all Company’s property, Assets and
rights, and a fixed charge on the Company’s registered and unissued capital, reputation and goodwill (which shall not restrict the issuance of shares in consideration for future investments, nor the grant of options under the Company’s
share option plan, and the issuance of shares upon exercise of such options) (the “Floating Debenture”);
6.2.3.2
A guaranty relating to the Company’s Banking Services from ______________, Ltd. (the “Israeli
Subsidiary”).
6.2.3.3
A first ranking and sole floating charge, unlimited in amount, on all the Israeli Subsidiary’s property,
Assets and rights, and a fixed charge on the Israeli Subsidiary’s share capital, reputation, and goodwill.
6.2.3.4
Without derogating from the above, and in order to give effect to the abovementioned debentures, Company shall
execute in favor of the Bank a share transfer deed in respect of all of Company’s shareholdings in the US subsidiary Xtend Reality Inc, and provide the Bank with the executed share transfer deed, and the original share
certificate(s).
18
6.2.3.5
A first ranking and sole fixed charge, unlimited in amount, on all of the Company’s intellectual property
(the “Fixed Debenture”).
6.2.3.6
Without derogating from the above, and in order to give effect to the abovementioned fixed charge, Company
shall execute an IP Security Agreement, to be filed by the Company with the United States Patent and Trademark Office (USPTO).
6.2.3.7
A UCC Financing Statement, to be filed in Washington DC.
All documents referred to in this section 6.2.3 above, and any other guarantees and/or security documents provided by the Company and/or by
any Affiliate thereof—shall collectively be referred to as the “Security Documents”).
6.2.4
The Company has delivered to the Bank the warrant to purchase shares of the Company, in a form acceptable to
Bank (the “First Warrant”), plus an up-to-date capital table attached hereto as Annex 6.2.4;
6.2.5
The Company has delivered to the Bank an additional warrant to purchase shares of the Company, in a form
acceptable to Bank (the “Second Warrant”), including an up-to-date capital table attached hereto as Annex 5.2.5;
6.2.6
The opening of the Company’s Account was completed, and all relevant documents have been signed by the
Company. The Company undertakes to sign any document that will be required by the Bank in connection with the Company’s Account.
6.2.7
A copy of all required approvals from the Company’s relevant organs and third parties in connection with
the Company entering this Agreement and any other Facility Documents and Company’s Account documents, the allocation of the First Warrant and the Second Warrant as foregoing, as well as the provision of the Security Documents;
6.2.8
The Company is not in violation of any of the terms of the Facility Documents;
6.2.9
No other event has occurred that would allow the Bank pursuant to the Facility Documents to call for the
immediate payment of the Company’s debts and obligations to the Bank pursuant to the Facility Documents, in whole or part;
6.2.10
All of the Facility Documents are valid, bind the Company toward the Bank, and are enforceable and exercisable
pursuant to their terms;
6.2.11
No adverse material change in the local or international monetary market, or any change in any Legal Provisions
and/or in any other circumstances shall occur, in the Bank’s opinion, that would prevent, prohibit, restrict or limit the Bank’s ability or legal right to provide the Facility and/or the Credit Line, in whole or part, including any
change arising from any demand, provision or request granted or sent by the Bank of Israel or by any other competent authority, whether such instruction, demand or request arises from a change in law or arises from an agreement made or to be made
from time to time between the Bank and the Bank of Israel or other competent authority, and also in the Bank’s opinion, no legal impediment from providing the relevant Facility and/or the Credit Line, in whole or part, is created pursuant to
any Legal Provision.
19
“Legal Provision” in this Agreement shall mean—any provision of
law or legislation, as well as the directives of the Bank of Israel and any other competent authority in the State of Israel or abroad, , including understandings with the Bank of Israel or any other competent authority, as foregoing.
6.3
For the avoidance of doubt, it is agreed that the further operation and/or execution of the Facility and the
Credit Line are subject to all of the Bank’s rights and subject to all of the Company’s obligations pursuant to the Facility Documents and/or pursuant to any law, and that the provisions of this Agreement shall not derogate in any way
from the Bank’s rights and/or the Company’s obligations pursuant to any other document.
6.4
Sanctions
The Company undertakes that:
6.4.1
Neither the Company nor any of its Subsidiaries nor any Entity within the Affiliated Group will: (a) be in
violation of any Sanctions; or (b) be a Sanctioned Person.
6.4.2
The Company shall deliver to the Bank any certification or other evidence requested from time to time by the
Bank in its reasonable discretion, confirming each such entity or person’s compliance with this Section 6.4.
7.
Acceleration / Immediate Repayment
7.1
The Bank shall be entitled to cancel/reduce/accelerate to immediate repayment and/or not provide the Facility
and/or any part thereof if any event occurs that constitutes cause for accelerating to immediate repayment of the Company’s debts and/or obligations to the Bank, in whole or part, pursuant to the Facility Documents, and/or in case an event
occurs or condition applies that constitutes a violation pursuant to any of the Company’s obligations (whether or not the Bank utilizes its legal rights pursuant to any of the Facility Documents).
7.2
If the Company breaches any of its undertakings towards the Bank under any Facility Document, or if it
transpires that any warranty, representation or confirmation included in this Agreement or any other Facility Document is incorrect or incomplete, this will be deemed an Event of Default.
Notwithstanding the above, Bank undertakes that it will not accelerate the repayment of outstanding Credit in the event that the Company shall
cure the following breaches or incorrectness or incompleteness within ten (10) days after the occurrence thereof: 3.1.5, 3.3, 3.6, 3.7, 3.9.3 and 3.11. In any event in which a grace / cure period was agreed upon as per this section 6.2, if
circumstances arise under which there is a real concern that damage will be caused to the Bank’s ability to collect any of the secured sums / Credit as a result of such delay, the Bank will be entitled to act and exercise all of its
rights immediately and without any delays and without providing any grace / cure period, and even without giving a warning, notwithstanding anything else stated herein.
7.3
Events of Default under this Agreement will be in addition to the events upon whose occurrence the Bank may,
under the Facility Documents, inter alia, accelerate all or some of the Facility and take any measures it deems fit to collect them and upon whose occurrence the Bank will be able to exercise all of the rights and remedies that are available
to it under the provisions of the Facility Documents in such cases.
20
8.
Transfer and Disclosure of Information
8.1
In this Clause 8, the following terms shall have the meaning as set out next to them:
8.1.1
“Advisers” – advisers on behalf of the Bank or on behalf of any Potential Transferee
and companies engaging in credit rating who may be employed for the purpose of rating the rights and obligations of the Bank in connection with the Loan Amounts and/or the Facility Documents, and a revaluing company on which may rely bodies under
the supervision of the Capital Markets, Insurance and Savings Division of the Ministry of Finance for the purpose of quoting prices of their non-tradable debt assets.
8.1.2
“Information” – any information which is presently held by the Bank or which may be
held by it in the future (including information communicated to the Bank by the Company and/or any company affiliated therewith or information about it them, which in the discretion of the Bank it is necessary or desirable to communicate in
connection with the Transfer of the rights set forth in this Agreement;
8.1.3
“Potential Transferee” – a Transferee with whom the Bank is conducting or may conduct
negotiations for the purpose of the Transfer of the rights hereunder;
8.1.4
“Transfer” – any sale, transfer, assignment or any other mode of transfer, in whole or
in part, directly or by means of a special purpose company, in full or by means of the sale of rights to participate (participations) and in any other way which the Bank deems appropriate. The Transfer may be made to one or more Transferees, at the
same time or from time to time;
8.1.5
“Transferee” – any person or corporation, whether from Israel or outside Israel, that
is not an operating company which is a direct competitor of Borrower;
8.2
The Bank, at any time, at its discretion and without having to obtain the consent therefor of the Company
(subject to any Law), may effect a Transfer of the rights and obligations hereunder, in whole or in part (provided that the Company does not bear any expense or cost arising from the Transfer or in connection therewith and which is known at the time
of the Transfer):
8.2.1
To any Transferee that is a body among the following bodies: A joint investment trust fund within the meaning
thereof in the Joint Investment Trust Fund Law, 5754-1994, or a company that manages such a fund; a provident fund or a managing company as defined in the Supervision of Financial Services (Provident Funds) Law, 5765- 2005; an insurer within the
meaning thereof in the Supervision of Financial Services (Insurance) Law, 5741-1981; a banking corporation and an auxiliary corporation within the meaning thereof in the Banking (Licensing) Law, 5741-1981 and a corporation from the group of
companies to which a banking corporation belongs as aforesaid: an investment fund, as defined in the Supervision of Financial Services (Provident Funds) (Direct Expenses on Account of the Execution of Transactions) Regulations, 5768-2008 or any
corporation under the Control of the bodies specified above, and to bodies outside Israel that correspond to the bodies specified above (that are supervised by the relevant authority in the country of their incorporation or in the countries where
they operate); or –
21
8.2.2
As part of a securitization transaction (or a similar transaction as part of which the rights and obligations
hereunder are transferred to a designated issuing corporation) or as part of any other transaction of transferring risk or exposure or the hedging thereof; or-
8.2.3
To any person (even if not among the Transferees specified above), at the discretion of the Bank and without
limitation (except if and in as much as such limitation is imposed by Law) – if an event occurs which confers upon the Bank the right to render the Loan Amount and / or any other debts immediately payable, as set forth in Clause 6
above.
8.2.4
For the removal of any doubt, whenever the rights and obligations hereunder are transferred, the Bank shall not
be precluded from acting as credit manager, as trustee of collaterals or in any other capacity in connection with the rights and obligations hereunder.
8.3
The Company undertakes to act in cooperation for the purpose of effecting a Transfer of the rights and
obligations hereunder, and this includes the signing of any document which may be required for that purpose and for the performance of any action which may be required by the Bank, for the purpose of effecting a Transfer of the rights and
obligations hereunder (to the extent relevant) provided that they will not be required to bear any costs and expenses for such purpose.
8.4
The Bank may, at any time, disclose Information to any Potential Transferee, to any Transferee to whom a
Transfer has been made, to any Advisers or relevant parties, the disclosure of such Information shall be subject to the recipients of the Information as aforesaid signing a letter of undertaking for the preservation of secrecy as shall be acceptable
to the Bank, except if the recipients of the Information as aforesaid are bound by Law to the preservation of secrecy.
8.5
Furthermore, the Bank may, at any time, disclose Information to Advisers or to relevant parties, for the
purpose of entering into a potential securitization transaction (or similar transaction as part of which the rights and obligations hereunder are transferred to a designated issuing corporation) or into any other transaction of transferring risk or
exposure or the hedging thereof or for the purpose of effecting same. The disclosure of such Information shall be subject to the recipients of the Information as aforesaid signing a letter of undertaking for the preservation of secrecy as shall be
acceptable to the Bank, except if the recipients of the Information as aforesaid are bound by Law to the preservation of secrecy.
8.6
The Company undertakes not to affect a Transfer to anyone else of any of its rights and obligations hereunder
without first obtaining the written approval of the Bank.
9.
General
9.1
This Agreement constitutes and shall always constitute an integral part of the Facility Documents, so that they
shall be read together, as one whole, further to each other and continuously, the same as their conditions, as additional to each other and as complementary to each other.
22
9.2
It is hereby clarified that in case of any explicit contradiction between the provisions of the Facility
Documents, including without limitation, the account opening terms booklet, and the provisions of this Agreement, the provisions of this Agreement shall prevail, and it is also agreed that on the matters explicitly discussed in this Agreement, the
provisions of this Agreement are exhaustive.
9.3
The Company shall not breach any of its undertakings towards the Bank, under any Facility Document and it shall
not be the case that any of the Company’s confirmations and/or declarations made hereunder and under any of the Facility Documents are incorrect and/or incomplete (provided that with respect to confirmations and/or declarations made under the
account opening terms booklet, which are not repeated herein, they shall not be incorrect and/or incomplete). Any violation of this Agreement shall constitute and be considered also a violation of the Facility Documents and shall constitute another
default event which shall entitle the Bank to the right to call the credit for immediate payment, on all that this implies.
9.4
The Bank’s waiver regarding any violation by the Company or the Company’s failure to fulfill one or
more obligations towards the Bank, whether or not such obligation is included in any other document, shall not be deemed a justification or pretext for an additional violation or for an additional failure in fulfilling any such condition or
obligation, and the Bank avoiding to use any right granted to the Bank according to this document and/or any other document and/or pursuant to any law, shall not be interpreted as waiving that right.
9.5
The rights of the Bank in connection with this Agreement may be transferred, assigned, endorsed, sold or
conveyed. The Company’s rights hereunder are not in any way assignable or transferable.
9.6
The parties’ addresses for the purposes of this Agreement shall be as detailed in the Facility Documents,
as long as none of the parties receives notice from the other party determining another address in Israel, and the Bank shall approve the receipt of such notice in writing.
9.7
This Agreement shall be governed by the laws of the State of Israel, without the rules of private international
law, and shall be interpreted and implemented under the laws of the State of Israel.
9.8
The sole and exclusive jurisdiction for purposes of this Agreement shall vest in the competent courts of Tel
Aviv-Yafo, Israel.
9.9
The appendices and Annexes to this Agreement form an integral part hereof.
In witness hereof we have signed:
/s/ Tal Horesh
/s/ Moran Giladi and /s/ Erez Arusi
Xtend Reality Expansion Ltd.
Bank Hapoalim B.M.
Name: Tal Horesh
Title: CFO
23
Date April 26, 2026
To:
Bank Hapoalim B.M.
Dear Sir/Madam,
In the board of directors meeting of Xtend
Reality Expansion Ltd., company no. 51-587186-1(hereinafter—the “Company”), held at its registered office on 7 HaBarzel St Tel Aviv Israel the following resolutions
were adopted:-
1) The Company may enter into an agreement with the Bank on the terms of the Agreement and the Facility Documents and may act as provided
therein and subject to its terms.
2) The Agreement was signed on behalf of the Company by (the “Authorized Signatories”): Name
__________________, Identification No. ______________ and Name ______________________, Identification No. _________________ whose signatures, together with the Company’s stamp or printed name are binding upon the Company.
3) We hereby confirm that the foregoing resolutions were adopted pursuant to the Company’s up-to-date constitutional documents, were registered in the book of minutes and were signed by the chairman or archived in the Company’s records as a unanimous written resolution and signed by all board
members, and that all resolutions and approvals required for the purpose of this transaction were received.
/s/ Tal Horesh
Name and signature of the Company’s Authorized Signatory
24
To:
Bank
Hapoalim B.M.
Tel Aviv
Dear Sir/Madam,
I, the undersigned, serving in the position of legal counsel for the aforementioned Company, hereby confirm to Bank Hapoalim B.M. (hereinafter—the
“Bank”) that:
1)
The above minutes of Xtend Reality Expansion Ltd., company no. 51-587186-1 (hereinafter—the “Company”) are a certified copy.
2)
The Company is a private limited liability company duly organized and validly existing under the laws of the
State of Israel.
3)
The resolutions adopted and mentioned in the foregoing minutes were made pursuant to the Company’s
constitutional documents, its memorandum and Articles of Association, were recorded in the book of protocols, and were signed by the chairman.
4)
All approvals were obtained, and all resolutions were adopted, and all actions legally required were performed,
including by the Company’s competent organs, so that the foregoing resolutions bind the Company for all intents and purposes toward the Bank.
5)
The Company has the requisite corporate power and authority to execute and deliver the Facility Documents and
to incur and perform its obligations thereunder, including without limitations, to grant the First Warrant and the Second Warrant to the Bank, and to issue and sell the shares under the First Warrant and the Second Warrant, in accordance with the
provisions of the Facility Documents. The Company has taken all necessary corporate action to authorize its execution, delivery and performance of the Facility Documents.
6)
There is no impediment and/or restriction by any law and/or agreement from adopting, performing and
implementing the foregoing resolutions, for the Company. Furthermore, no authorization, consent or approval, or any other action by notice to or filing with, any Israeli governmental agency, is or will be required for execution, delivery and
performance by the Company of the Facility Documents. The foregoing is qualified by the filings with the Israeli Registrar of Companies in respect of the Debentures.
7)
Upon filing with the Israeli Registrar of Companies, the debentures create a valid and perfected first ranking
floating charge and a valid and perfected first raking fixed charge, as applicable, under the laws of the State of Israel over the assets described in the respective Debenture in favor of Bank, subject only to the Permitted Liens.
8)
The execution, delivery and the performance by the Company of the Facility Documents and the grant of charges
regarding Company assets pursuant to the Debentures and the issuance of the First Warrant and the Second Warrant to Bank and the Shares as a result of the exercise thereof do not and will not (A) conflict with, violate or constitute a default
under (i) the in-effect Articles of Association of the Company, (ii) any provision of law applicable to the Company, (iii) any document, agreement or undertaking by which the Company or any of
its assets are bound, or (B) grant any third party any preemptive rights, rights of first refusal or similar rights, except for rights which were previously waived.
25
9)
The First Warrant and the Second Warrant, when issued in compliance with the provisions of this Agreement, will
be duly authorized and validly issued, and free and clear of any preemptive rights or rights of first refusal with respect to the issuance thereof, and free and clear of any liens, claims, encumbrances or rights of any kind of the Company. The First
Warrant and the Second Warrant Shares (as defined under the First Warrant and the Second Warrant) issuable upon exercise of the First Warrant and the Second Warrant in accordance with its terms (including, the payment of the applicable exercise
price thereof), shall be, when issued, validly issued, fully paid and non-assessable shares of the Company, and free and clear of any preemptive rights or rights of first refusal with respect to their issuance
and, free and clear of any liens, claims, encumbrances or rights of any kind of the Company.
10)
Mr. Tal Horesh is/are an executive/s in the Company, and his/her/their signature/s next to the
Company’s stamp bind/s the Company for all intents and purposes. Therefore, the Facility Documents have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws of general application affecting the rights and remedies of creditors, and to general principles
of equity (regardless of whether enforcement is sought in a proceeding at law or in equity) and the discretion of the court before which any proceeding therefor may be brought.
11)
In addition, I hereby confirm to you that as of the date recorded on this document, there is no
pending—motion for appointment of a temporary or permanent receiver against the Company, and also no order for the appointment of a temporary or permanent receiver was handed against it, and/or any motion for a temporary or permanent
liquidation order, and also no temporary or permanent liquidation order was handed against the Company, and also there is no claim or legal proceeding pending against the Company, including in the execution office, and there is no ruling or order
against the Company that was not performed and paid in full as written therein. In addition, on the Company’s assets, in whole or part, there is no pledge and/or charge (other than the Permitted Liens), and the Company’s assets are free
of any debt, charge, right or obligation to any third party, other than the Permitted Liens.
Date ______________________
Adv. _______________
26
Annex 5
The Credit Documents
27
Annes 5.2.25
The Second Warrant
28
EX-10.4
EX-10.4
Filename: d230933dex104.htm · Sequence: 5
EX-10.4
Exhibit 10.4
Employment Agreement
This Employment
Agreement is made by and between XTEND REALITY EXPANSION LTD., an Israeli company, registration number 515871861, with its offices at 7 Habarzel St., Tel Aviv (the “Company”), and Aviv Shapira (the
“Employee”).
Prior to entering into this Employment Agreement, the Employee was engaged by the Company as an independent service
provider pursuant to an engagement agreement executed between the parties. The Employee represents and warrants that he requested this form of engagement and that he has received from the Company all compensation due and owing to him in connection
with such engagement. The Company and the Employee now wish to enter into this Employment Agreement, effective as of the Effective Date, as defined below.
Below is a table summarizing the specific terms of Employee’s employment with the Company (the “Specific Terms”). The general terms
and conditions of Employee’s employment with the Company are included in the pages following this table (the “General Terms”).
Specific Terms, General Terms, and the Exhibits attached hereto are collectively deemed as the “Employment Agreement”, Employee’s
execution of these documents constitutes the agreement to the Specific Terms, the General Terms, and all the Exhibits attached hereto.
In this Employment
Agreement, words referring to a male employee are also intended for a female employee.
Employee’s Details
Full Name: Aviv Shapira
Position: CEO
I.D. Number: [***]
Manager: Board of directors
Effective Date: August 1, 2026
Scope of Work: Full-Time
Annual Salary
US$ 500,000 (gross), payable in twelve (12) equal monthly installments (each installment shall be referred to herein as the “Monthly Salary”). Payment shall be made in NIS, with the applicable
exchange rate to be determined by the Company on an annual basis at the commencement of each calendar year (i.e., the January salary cycle), in accordance with the Company’s internal practices in this regard. For the year 2026, the applicable
exchange rate shall be NIS 3 per US$1.
Notice Period
Three (3) calendar months.
Annual Cash Bonus
The Employee shall be eligible to receive an annual cash bonus with a target annual bonus opportunity of US$ 250,000 (gross) for 100% achievement of the applicable annual goals and targets, payable in NIS according to
the U.S. dollar/NIS exchange rate in effect on the payment date. The annual bonus shall be based on the achievement of annual goals and targets of the Employee and the Company, as determined by the Board of Directors of the Company’s parent
company, Xtend AI Robotics, Inc. (the “Board”, and the “Parent”, respectively), or a duly authorized committee designated by the Board on its behalf. The terms and conditions of the annual bonus, including the
applicable performance criteria, measurement methodology, approval process, threshold and maximum achievement levels, and all other related terms, shall be as set forth in the applicable executive compensation plan for
C-level executives of the Company or the Parent, as applicable, to be adopted and as may be amended from time to time by the Board or such committee. Any annual bonus earned for a given year shall be paid
within ninety (90) days following the completion and closing of the financial reports for such year by the applicable independent accountants. If the Company terminates the Employee’s employment after the end of the applicable bonus year
but before the applicable payment date, other than for Cause, the Employee shall remain eligible to receive the annual bonus for such completed year, subject to the applicable terms and conditions and actual achievement of the relevant goals and
targets, and such bonus, if earned, shall be paid following such termination at the same time annual bonuses for such year are paid to the other executives.
Termination Grant
In the event that this Employment Agreement is terminated by either party for any reason other than for Cause, the Company shall pay to the Employee a one-time lump-sum cash payment in an amount equal to three (3) times the Employee’s then-current Monthly Salary (the “Termination Grant”), subject to and conditioned upon the Employee’s
execution and non-revocation (if applicable) of the Company’s standard waiver and release of claims document.
Pension Plan
The Employee shall be insured under a Pension Plan (as defined below), all in accordance with the General Approval of Section 14 Arrangement and the General Terms.
Keren Hishtalmut (“Education Fund”)
Company’s Contribution: 7.5% of the Monthly Salary.
Employee’s Contribution: 2.5% of the Monthly Salary, which will be deducted
from the Monthly Salary.
Notwithstanding the above, the amounts contributed to the
Education Fund will not exceed the tax-exempt limit recognized by the Income Tax Authority from time to time.
Vacation Days
Annual Entitlement: 20 business days per calendar year.
Maximum Amount: The Employee shall be entitled to carry forward from one calendar
year to the next any unused vacation days, up to an amount equal to one (1) Annual Entitlement.
Sick Days
Per applicable law. However, the Employee shall be entitled to receive the full compensation as of the first sick day.
Recreation Days
(“Dmey
Havraa”)
Per applicable law.
Travel Expenses
The Employee shall be entitled to either: (i) use a Company Car for the purpose of fulfilling Employee duties to the Company (the “Company Car”) in accordance with the Company’s policies as
shall be modified from time to time, subject to signing the Company’s car policy and any other required agreement, including with the leasing company. The Company Car monthly cost shall be up to NIS 5,000 (excluding VAT), which shall be
covered by the Company. The Company will cover all of the operating expenses of the car, excluding parking expenses, tickets, fines, and other costs related to noncompliance by the Employee with any applicable law. The Company shall bear all
applicable taxes related to the Employee’s use of the Company Car; or (ii) receive from the Company a fixed monthly amount of NIS 5,000 (gross) as reimbursement for expenses related to travel, car maintenance, insurance and other related
costs. Either options, as shall be agreed upon between the parties shall be instead of Employee’s entitlement for reimbursement of his travel expenses per law
Equity Incentives
RSU Grant. Subject to the approval of the Parent’s Board, the Employee shall be granted 450,000 Restricted Stock
Units (“RSUs” and “Initial RSU Grant” respectively), in accordance with and subject to the terms and provisions of the Parent’s applicable equity incentive plan and its applicable sub-plan for Israeli participants, if any, as may be adopted from time to time (collectively, the “Plan”) and in accordance with the requirements of Section 102(b)(3) of the Israeli Tax
Ordinance. Each RSU shall represent the right to receive one share of a Common Stock of the Parent (“Common Stock”), subject to the terms, conditions and restrictions of the Plan and of an RSU award agreement to be entered into
between the Employee and the Parent, in the form customarily used by the Parent and as approved by the Board.
The RSUs shall vest over a period of thirty-six (36) months, in thirty-six
(36) equal monthly installments, with no cliff, such that 1/36 of the RSUs shall vest on each monthly anniversary of the Vesting Commencement Date (as shall be determined in the RSU award agreement), provided that the Employee remains
continuously employed by the Company or any of its affiliates, or continues to provide services thereto, through each applicable vesting date.
The grant of the RSUs shall be subject to the Employee’s execution of the applicable RSU award agreement and such other
documents, undertakings and instruments as may be required by the Parent and/or the Company.
Subject to the approval of the Board (or the applicable compensation committee, if required), the Employee shall be eligible to receive, on each of the first
and second anniversaries of the Initial RSU Grant’s grant date, an additional RSU grant on substantially the same terms and conditions as the initial RSU grant and covering the same number of RSUs as granted pursuant thereto.
Any tax liability arising in connection with the grant, vesting, settlement or the RSUs
and/or the sale of the Common Stock issued thereunder shall be borne solely by the Employee, and the Employee acknowledges that neither the Company nor the Parent shall bear any responsibility in connection therewith, except for any mandatory
withholding or reporting obligations required by applicable law. The Employee further acknowledges that no representation or undertaking has been made by the Company, the Parent or any of their representatives regarding the tax consequences of the
grant or the disposition of any securities issued thereunder.
In the event of any
contradiction or inconsistency between the provisions of this Employment Agreement and the provisions of the RSU award agreement, the provisions of the RSU award agreement shall prevail.
Recognition One Time RSU Grant. Subject to the approval of the Board of Directors
of the Parent (the “Board”), the Employee shall be granted 5,000,000 Restricted Stock Units (the “Recognition RSUs”), in accordance with and subject to the terms and provisions of the Plan and in accordance with
the requirements of Section 102(b)(3) of the Israeli Tax Ordinance. Each RSU shall represent the right to receive one share of a Common Stock of the Parent (“Common Stock”), subject to the terms, conditions and restrictions
of the Plan and of an RSU award agreement to be entered into between the Employee and the Parent, in the form customarily used by the Parent and as approved by the Board.
The Recognition RSUs shall vest over a period of thirty-six (36) months, in
thirty-six (36) equal monthly installments, with no cliff, such that 1/36 of the Recognition RSUs shall vest on each monthly anniversary of the Vesting Commencement Date (as shall be determined in the RSU
award agreement), provided that the Employee remains continuously employed by the Company or any of its affiliates, or continues to provide services thereto, through each applicable vesting date.
The vesting schedule shall include an acceleration provision, applicable to each and
every RSU grant made to the Employee under this Agreement, pursuant to which 100% of the then-outstanding and unvested RSUs then held by the Employee (including the Initial RSU Grant, each additional RSU grant referred to above and the Recognition
RSUs) shall become fully vested immediately upon the termination of the Employee’s employment by the Parent or the Company without Cause or by the Employee for Good Reason. The grant of the RSUs shall be subject to the Employee’s
execution of the applicable RSU award agreement and such other documents, undertakings and instruments as may be required by the Parent and/or the Company.
Any tax liability arising in connection with the grant, vesting, settlement or the RSUs and/or the sale of the Common Stock
issued thereunder shall be borne solely by the Employee, and the Employee acknowledges that neither the Company nor the Parent shall bear any responsibility in connection therewith, except for any mandatory withholding or reporting obligations
required by applicable law. The Employee further acknowledges that no representation or undertaking has been made by the Company, the Parent or any of their representatives regarding the tax consequences of the grant or the disposition of any
securities issued thereunder.
In the event of any contradiction or inconsistency
between the provisions of this Employment Agreement and the provisions of the RSU award agreement, the provisions of the RSU award agreement shall prevail.
Air Business Travel
The Employee shall be entitled to flight bookings based on the total travel time to the destination, calculated from the scheduled departure time of the first flight segment until the scheduled arrival time at the
final destination, including layovers and connecting time, as follows: if the total travel time is up to two (2) hours, the Employee shall be booked in Economy Plus class; if the total travel time exceeds two (2) hours, the Employee shall
be booked in Business Class. If the applicable class of travel is unavailable at the time of booking, the Employee shall be booked in the closest available class in terms of service level and conditions to the class to which the Employee is entitled
under this Section.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Tal Horesh
Signature:
/s/ Aviv Shapira
By:
Tal Horesh
By:
Aviv Shapira
Title:
Chief Financial Officer
Date:
9/3/2026
General Terms and Conditions of Employment with the Company
1.
Employment Position
1.1. The Employee’s employment relationship with the Company shall commence on the Effective Date and shall continue for an indefinite
term, unless and until terminated in accordance with the provisions of this Employment Agreement.
1.2. Employee shall be employed by the
Company in the Position indicated in the Specific Terms, and shall report to the person indicated in the Specific Terms as the Manager or any other person as determined by the Company.
1.3. Employee shall devote Employee’s entire working time, know-how, expertise, talent,
experience and best efforts to the business and affairs of the Company and perform his duties and functions diligently and skillfully with the utmost expertise and devotion.
1.4. During Employee’s employment, Employee will not engage in or be associated with, directly or indirectly, any other employment,
consulting, or other business activity (with or without consideration), without the Company’s prior written approval. Prior to signing this Employment Agreement, the Employee will inform the Company of any employment, occupation, engagement,
or activity in which the Employee is involved, and that would require the Company’s written consent per this paragraph.
1.5.
Employee shall be based in Israel, but he understands and agrees that the Position may require him to travel internationally from time to time.
2.
Working Hours
2.1. Work for the Company shall be performed on Sunday through Thursday, unless determined and instructed otherwise by the Company.
2.2. A regular workweek for a full-time position consists of 42 working hours, not including Employee’s daily break.
2.3. Saturday, as observed by the Jewish religious, shall be the Employee’s recognized and official rest day.
2.4. Employee shall cooperate with the Company in maintaining a record of the number of hours of work performed, in accordance with the
Company’s policy.
3.
Termination
3.1. Employee’s employment with the Company may be terminated at any time at the option of either Employee or the Company, upon delivery
to the other party of a written notice pursuant to the Specific Terms (the “Notice Period”).
3.2. During the
Notice Period Employee shall continue work and perform all regular duties unless otherwise instructed by the Company. Employee will cooperate with the Company and use Employee’s best efforts to assist the integration into the Company
organization of the person or persons who will assume Employee’s responsibilities hereunder.
3.3. Notwithstanding the foregoing,
Company shall be entitled to terminate Employee’s employment at any time prior to the expiration of the Notice Period and pay the Employee the applicable payment in lieu of notice period, per applicable law.
3.4. In case of termination of Employee’s employment by the Company for Cause, the Company may terminate Employee’s employment
immediately (with no Notice Period).
3.5. “Cause” means (i) a material breach of the PIIA (as
defined below and attached hereto as Exhibit A), or any other material breach of this Employment Agreement, which, if capable of cure, was not cured within five (5) calendar days of receipt by the Employee of written notice;
(ii) fraud, theft, embezzlement, dishonesty, or misappropriation of funds of the Company or any of its affiliates; (iii) conviction of, or a
plea of “guilty” or “no contest” to a felony or other lesser crime that would require removal from Employee’s position at the Company; (iv) any willful or
intentional act of the Employee that injures, or is reasonably likely to injure, the reputation, business, products or practices of the Company, or any of its directors, officers, agents, representatives, shareholders or affiliates; or
(v) other cause justifying termination or dismissal without severance payment under applicable law. The determination that a termination is for Cause shall be made by the Company in its sole judgment and discretion.
3.6. “Good Reason” means the occurrence of any of the following without the Employee’s prior written consent:
(i) a material reduction of more than 15% in the Employee’s base salary, which is not applied on a broad basis to other C-Level employees of the Company; (ii) a material diminution in the
Employee’s title, authority, duties, or responsibilities; (iii) a requirement that the Employee relocate their principal place of work to a location more than 50 kilometers from the Employee’s then-current work location; or
(iv) a material breach of this Agreement by the Company; provided, however, that no resignation shall constitute a resignation for Good Reason unless: (A) the Employee has provided the Company with written notice of the grounds for Good
Reason within sixty (60) days of the initial occurrence of the applicable condition; (B) the Company has failed to cure such condition within thirty (30) days following receipt of such notice; and (C) the Employee’s
resignation occurs within thirty (30) days following the expiration of such cure period.
4.
Salary
4.1. Employee shall be entitled to a Monthly Salary in the amount specified in the Specific Terms.
4.2. Employee agrees and acknowledges that due to the Employee’s senior managerial position in the Company, the special personal trust
involved in the position in which the Employee shall be employed, and the inability to monitor the Employee’s actual work hours, the Hours of Work and Rest Law, 1951 (the “Hours of Work and Rest Law”) shall not apply to the
Employee. The Employee acknowledges that the set amount of the Monthly Salary, as well as all other compensation and benefits provided to the Employee by the Company, as agreed upon between the Employee and the Company, reflect the requirements of
the position to work additional and irregular hours and days. Accordingly, the Employee shall not be entitled to claim or receive payments or any additional pay for work performed at overtime hours, nights, weekends, or at any other times in which
the Hours of Work and Rest Law requires payment of special payments (to employees who are not in a position such as the position of the Employee).
4.3. The Monthly Salary shall be paid no later than the 9th day of the following month.
4.4. An amount equal to 10% of the Monthly Salary shall be considered to be a special payment for the Employee’s obligation for non-competition under the PIIA (the “Special Compensation”). Employee shall be obligated to return to the Company all Special Compensation amounts Employee received from the Company upon violation
of any of the obligations set forth in the PIIA. The Company maintains the right to withhold any amounts due to Employee following such violation. All the above shall not derogate from any of the Company’s rights with respect to any violation
of the provisions of the PIIA.
5.
Pension Plan
5.1. The Employee shall be insured under a managers insurance, a pension fund, or a combination of both, pursuant to the Employee’s
choice and preference (the “Pension Plan”).
5.2. The monthly contributions to the Pension Plan shall be made on the
basis of the Monthly Salary, as follows: (i) Company’s contributions: 8.33% towards the severance pay component, and 6.5% towards the pension component; and (ii) Employee’s contributions: 6% towards the pension
component, which will be deducted from the Monthly Salary each month.
5.3. Notwithstanding the said contributions, if the Pension Plan is a managers insurance
policy or a provident fund that is not a pension fund, Company’s contributions towards the pension component shall include the cost of acquiring a loss of working capacity insurance (the “Disability Insurance”), which shall
be equal to lower of the following: (i) 2.5% of the Monthly Salary or the applicable portion thereof, or (ii) a rate ensuring loss of earning payment of 75% of the Monthly Salary or the applicable portion thereof. Notwithstanding the foregoing,
the Company’s contributions towards the pension component must be at least 5%. Therefore, the Company’s contributions towards the pension component shall be no less than 6.5% and up to 7.5% of the Monthly Salary or the applicable portion
thereof.
5.4. It is agreed and warranted between the parties that the Company’s contributions to the severance component are in lieu
of severance pay, in accordance with the provisions of the General Approval regarding Employers’ Payments to a Pension Fund and Insurance Fund in lieu of Severance Pay issued by virtue of Section 14 of the Severance Pay Law 5723-1963 by
the Labor Minister, dated June 30, 1998 (as amended and as may be amended from time to time), which its Hebrew and English copies are attached hereto as Exhibit B (the “General Approval”). By signing this
Employment Agreement, the parties acknowledge their consent to the applicability of the provisions of the General Approval. In so far as amendments to the General Approval shall be necessary, according and subject to any law or regulations, the
provisions of the amended General Approval shall prevail and replace the General Approval attached.
5.5. The parties acknowledge and agree
that the amounts accrued in the Pension Plan on account of the Company’s contributions shall be in lieu of and will constitute the full and final settlement of any severance pay Employee may become entitled to under any applicable law or
contract. Notwithstanding the foregoing, the parties acknowledge and agree that the Company waives all rights for refunds from its contributions payments, unless a judgment determined that Employee is not entitled to severance pay under
Section 16 and/or Section 17 of the Severance Pay Law, or if Employee withdrew funds contributed to the Pension Plan prior to an “Entitling Event” as such is defined in section 2(b) in the General Approval.
6.
Vacation Days
6.1. Employee is obliged to take at least five (5) paid vacation days during a calendar year, as prescribed by law. Furthermore, Employee
will make every effort to exercise his full annual vacation by the end of a calendar year.
6.2. In the event the Employee was unable to
utilize all his vacation days by the end of a calendar year, Employee shall be entitled to carry forward from one calendar year to the next an accumulated unused balance of vacation days standing to his credit up to the Maximum Amount detailed in
the Specific Terms. For the avoidance of doubt, at the end of each calendar year, any unused vacation days in excess of the Maximum Amount shall be canceled, nulled, and shall not be redeemable in any event.
7.
Education Fund
7.1. Employee and Company shall open and maintain an education fund under the terms specified in Specific Terms (“Keren
Hishtalmut”) (the “Education Fund”).
7.2. Employee hereby authorizes the Company to transfer to the Education
Fund the amount of Employee’s contribution and the Company’s contribution from the Monthly Salary, on a monthly basis, subject to the terms specified in the Specific Terms.
8.
Reimbursement for Expenses:
8.1. The Company shall reimburse the Employee for all reasonable and necessary
out-of-pocket business expenses incurred by the Employee in connection with the performance of his duties under this Employment Agreement, subject to and in accordance
with the Company’s expense reimbursement policy (as shall be determined by the Company from time to time(, but only with respect to expenses that have been approved by the Company in advance, and for which the Employee has provided receipts
and/or other appropriate documentation.
9.
PIIA
9.1. Employee shall be required, as a condition to Employee’s employment with the Company, to sign the
Non-Competition, Proprietary Information and Inventions Agreement attached hereto as Exhibit A (the “PIIA”).
9.2. Employee’s compensation under this Employment Agreement has been calculated to include special consideration for the commitments
under the PIIA and the Employee will not be entitled to any further consideration for such commitments, expressly including no entitlement to royalties for any Service Inventions as defined in Section 132 of the Patent Law, 1967 (the
“Patent Law”). This clause constitutes an express waiver of the Employee’s rights under Section 134 of the Patent Law.
10.
Representations
10.1. The Employee confirms and undertakes: (i) that the Employee has all right and authority to enter into this Employment Agreement and
to perform the Employee’s obligations hereunder; (ii) that the Employee’s employment with the Company does not conflict with, or result in a breach of, any agreement or other commitment to which the Employee is a party or by which
the Employee is bound; (iii) to comply with all applicable laws relating to the Employee’s employment, including, without limitation, the Company’s Rules for Prevention of Sexual Harassment at the Workplace; (iv) to comply with
all of the Company’s work rules, policies, procedures and objectives, as shall be in effect from time to time; (v) not to disclose this Employment Agreement or any part thereof to any third party (other than the Employee’s spouse,
attorney, or tax advisor), including, without limitation, to any other employee of the Company; (vi) not to receive, at any time, whether during the term of this Employment Agreement or at any time thereafter, directly or indirectly, any
payment, benefit or other consideration from any third party in connection with the Employee’s employment with the Company, without the Company’s prior written authorization; (vii) to immediately and without delay inform the Company
in writing of any affairs or matters in which the Employee or any member of the Employee’s immediate family has a personal interest that might create a conflict with the Employee’s duties, responsibilities or obligations to the Company,
the Position, employment with the Company (including its affiliates), or the interests of the Company (including its affiliates); (viii) not, without the Company’s prior written consent, to undertake or accept any other paid or unpaid
employment or occupation, or engage in or be associated with, directly or indirectly, any other business, duty or pursuit, except for de minimis non-commercial activities; and (ix) not to disparage the
Company or its affiliates, their reputation, business, products or practices, or any of their respective directors, officers, agents, representatives or shareholders, whether orally or in writing.
10.2. The Employee agrees to the collection, storage, processing, and use by the Company of any information concerning the Employee, including
the transfer thereof to databases (in Israel or abroad and to any other person or entity, as the Company shall deem necessary and reasonable for business purposes or to pursue the Company’s business interests, all, in accordance with
applicable law and as is reasonable for the Company’s business purposes and interests. Without derogating from the generality of the above, such purposes may include human resources management.
11.
Use of the Company’s Computer Systems
11.1. The Employee hereby agrees and acknowledges that he has read, understands, and consents to the Company Computer Policy attached hereto as
Exhibit C and incorporated herein by reference, and agrees to, concurrently with the execution of this Employment Agreement, to sign on Exhibit C.
12.
Miscellaneous
12.1. This Employment Agreement, together with its exhibits, constitute the entire understanding and agreement between the parties and
supersedes any and all agreements (written or oral) concerning the subject matter hereof.
12.2. This Employment Agreement may only be amended by a document signed by both parties.
12.3. This Employment Agreement will be governed by and construed in accordance with the laws of the State of Israel, without regard to
the choice of law provisions thereof. Employee hereby expressly consents to the exclusive personal jurisdiction of the courts located in Tel-Aviv-Jaffa, for any lawsuit arising from or relating to this
Agreement.
12.4. All taxes, levies, and compulsory payments that the Company is liable to deduct, pursuant to any law, at the
Employee’s expense, shall be deducted at source from all the payments, rights, and benefits to which the Employee is entitled, pursuant to this Employment Agreement or its appendices, unless expressly provided otherwise in this Employment
Agreement.
12.5. Employee’s rights and obligations under this Employment Agreement may not be assigned or delegated, in whole or in
part, by operation of law or otherwise, without the Company’s prior written consent.
12.6. This Employment Agreement includes the
terms to be contained in, and constitutes, the written notice to be delivered to the Employee pursuant to the Notice to Employee and Job Candidate Law (Employment Conditions and Candidate Screening and Selection), 5762-2002. This Employment
Agreement does not derogate from any right vested to the Employee by virtue of any law, extension order, or collective bargaining agreement, to the extent such apply to the Employee.
12.7. All notices given or made pursuant to this Employment Agreement shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, or (b) when sent by electronic mail if sent during regular business hours of the recipient; if not, then on the next business day. All notices shall be sent to the respective parties at the
addresses set forth on the Specific Terms (or at such other addresses as shall be specified by notice given in accordance with this Section).
***
IN WITNESS WHEREOF, the parties have
executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Tal Horesh
Signature:
/s/ Aviv Shapira
By:
Tal Horesh
By:
Aviv Shapira
Title:
Chief Financial Officer
Date:
9/3/2026
Exhibit A
NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT
THIS NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT (the “Agreement”) is
effective as of the first day of the Employee’s engagement with the Company, including without limitation, prior to his employment with the Company (the “Effective Date”) and made by and between XTEND REALITY
EXPANSION LTD. (including, at its sole discretion, any or all of the Company’s affiliates, hereafter the “Company”) and Aviv Shapira (I.D. No. [***]) (the “Employee”).
In consideration for, as a condition and part of the Employee’s engagement with the Company (for no additional consideration or compensation), it is
hereby agreed as follows:
1.
Confidential Information.
1.1. Definition.
1.1.1.
“Confidential Information” means any proprietary or confidential data and/or information, in any form or media, that Employee receives, obtains, or otherwise acquires or gains access to during or in connection with
Employee’s engagement with the Company (whether before or after the date of this Agreement), which pertains to the Company or any of its businesses, clients, customers, employees, shareholders, business partners, licensees, licensors, vendors
or affiliates. Confidential Information includes without limitation Company Intellectual Property (as defined below), or any part thereof, as well as any data and/or information that, given the nature of such data and/or information or the
circumstances of its disclosure or receipt, is or should reasonably be considered as confidential.
1.1.2. Confidential Information shall
not include any information that (i) is in the public domain at the time of disclosure, (ii) subsequently has entered the public domain other than by breach of Employee’s obligations hereunder or by breach of another person’s
or entity’s confidentiality obligations, or (iii) is shown by written dated evidence to have been known by Employee prior to disclosure to Employee in connection with his engagement with the Company, not as a result of a breach of any
obligation owed to the Company or any other third party.
1.2. Confidentiality. Except as herein provided, Employee agrees
that during and after termination of Employee’s engagement with the Company, Employee (i) shall keep Confidential Information confidential and shall not directly or indirectly, use, divulge, publish, or otherwise disclose or allow to be
disclosed any aspect of Confidential Information without the Company’s prior written consent (except in order to fulfill Employee’s employment tasks and obligations); (ii) shall refrain from any action or conduct which might compromise
the confidentiality or proprietary nature of the Confidential Information; and (iii) shall follow Company’s instructions provided from time to time regarding the use and handling of Confidential Information. The Employee will take all
reasonable precautions to prevent any unauthorized use of disclosure of the Confidential Information.
1.3. Ownership. Employee
acknowledges and agrees that all right, title, and interest in and to Confidential Information and all materials containing Confidential Information are and shall remain, at all times, the sole and exclusive property of the Company.
1.4. Proprietary Information of Third Parties.
1.4.1. Employee agrees that he/she has not and will not, during the term of the employment, improperly use, disclose or bring onto the premises
or systems of the Company any proprietary information or trade secrets of any former employer or other person or entity with which Employee has an agreement or duty to keep in confidence information acquired by Employee, if any, unless with the
prior written approval of the Company and such employer, person or entity.
1.4.2. Employee recognizes that the Company may have received, and in the future may
receive, from third parties their confidential or proprietary information subject to the Company’s undertaking to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee agrees that he/she
owes the Company and such third parties, during Employee’s employment with the Company and anytime thereafter, a duty to hold all such third party confidential or proprietary information at least in accordance with the provisions set forth
hereunder in connection with Confidential Information of the Company, and to use such third party confidential or proprietary information strictly for the limited purposes and in the manner permitted hereunder.
1.5. Return of Confidential Material. Upon Company’s request or upon termination of the Employee’s employment with the
Company for any reason, Employee agrees to promptly surrender and deliver to Company all materials and data of any nature or media pertaining to any Confidential Information or to the Employee’s employment. Employee will not retain or take any
tangible or electronical materials or data, containing or pertaining to any Confidential Information. If required by the Company, Employee will certify in writing that he/she complied with the requirements of this Section.
2.
Ownership of Intellectual Property.
2.1. Definitions.
2.1.1.
“Intellectual Property” means proprietary or intellectual property rights, including without limitation copyrights, inventions, discoveries, patents, designs, trademarks, whether or not registered or capable of being
registered, original ideas, trade secrets, source and object code, algorithms, formulae, materials, methods, processes, procedures, any derivatives, improvements, and enhancements of the foregoing, and all rights corresponding to the foregoing
throughout the world including all rights to sue for and receive remedies against past, present and future infringements of any and all of the foregoing;
2.1.2. “Prior Inventions” means the Intellectual Property made or conceived by or belonging to Employee that are
listed on Schedule A attached hereto that (i) were developed by Employee prior to Employee’s employment with the Company, (ii) relate to Company’s actual or proposed business, operations, products or research and
development, and (iii) are not assigned to Company hereunder; and
2.1.3. “Open Source” means any software
or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution model (including but not limited to the GNU General Public License (GPL), GNU Lesser General Public
License (LGPL), Mozilla Public License (MPL), BSD licenses, MIT Licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL) the Sun Industry Standards License (SISL), materials licensed under any Creative
Commons license and the Apache License).
2.2. Assignment of Intellectual Property. Employee hereby irrevocably assigns and
transfers to Company, for no additional consideration, Employee’s entire right, title, and interest in and to all the Intellectual Property authored, developed, created, made, conceived, or reduced to practice by Employee, whether solely or
jointly with others, during the period of Employee’s engagement with Company (including prior to the date of this Agreement, after hours, on weekends or during vacation time), that either (i) relate in any manner to the actual or
demonstrably anticipated business or proposed business, work, or research and development of Company; or (ii) is developed in whole or in part on Company’s time or using Company’s equipment, supplies, facilities or Confidential
Information; or (iii) result from or are suggested by any task assigned to Employee or any work performed by Employee for or on behalf of Company or in connection with Employee’s duties and responsibilities in the scope of his/her
engagement with Company (the “Company Intellectual Property”). Employee agrees that this assignment includes a present assignment to Company of ownership with respect to Company Intellectual Property that is not yet in existence.
2.3. Employee hereby explicitly and irrevocably waives (i) any interest, claim, or demand with respect to any consideration,
compensation, or royalty payment in connection with Company Intellectual Property and/or the assignment thereof, including, but not limited to any payments pursuant to Section 134 to the Israeli Patent Law – 1967 (the “Patent
Law”); (ii) any moral rights, artists’ rights, or any other similar rights worldwide (“Moral Rights”) that he/she has at any time with respect to Company Intellectual Property.
2.4. Prior Inventions. If no Prior Inventions are listed in Schedule A of this
Agreement, Employee warrants that there are no Prior Inventions. Employee hereby acknowledges that, if in the course of Employee’s employment with Company, Employee incorporates into a Company product, process, service, or software a Prior
Invention owned by Employee or in which Employee has an interest, Company is hereby granted and shall have a fully paid, nonexclusive, royalty-free, unlimited, irrevocable, perpetual, worldwide, transferable and
sub-licensable right and license to make, have made, modify, create derivative works, reproduce, use, offer to sell use, sell, sublicense and otherwise distribute such Prior Invention (as may be improved or
enhanced by or for Company) and in the event of copyrightable materials, copy, distribute, publicly perform, publicly display, make derivative works thereof, and sublicense such copyrightable materials, as part of or in connection with such Company
product, process, service or software.
2.5. Disclosure of Intellectual Property. Employee agrees that in connection with
Intellectual Property and/or which Employee, solely or jointly with others, conceives, develops, or reduces to practice during the period of Employee’s employment with the Company (including after hours, on weekends, or during vacation time)
whether or not Employee believes that such Intellectual Property is Company Intellectual Property, Employee shall, as customary or required by the Company, keep and maintain adequate and accurate records, and shall promptly disclose such
Intellectual Property to Company, through Employee’s immediate supervisor at Company or another Company designee (and if requested by the Company shall also reduce to writing and adequately describe all such Intellectual Property), in order to
permit Company to claim its rights under this Agreement.
2.6. Employee’s Assistance.
2.6.1. Employee agrees to assist Company, or its designee, at Company expense, in every proper way to secure Company rights in the Company
Intellectual Property and in any and all countries, including (a) the disclosure to Company of all pertinent information and data with respect thereto; (b) the execution of all assignments, applications, specifications, oaths, and other
instruments that Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Company
Intellectual Property.
2.6.2. Employee’s obligations hereunder, to the extent that it is in Employee’s power to do so, shall
continue after the termination of Employee’s employment with Company for any reason. If Company is unable because of Employee’s mental or physical incapacity or for any other reason to secure Employee’s signature on any instrument,
required at Company’s discretion in order to apply for, pursue or maintain any application for Intellectual Property rights (including patents or copyright registrations) covering and embodying any Company Intellectual Property, then Employee
hereby irrevocably designates and appoints Company and its duly authorized officers and agents (at its discretion) as Employee’s agent and attorney-in-fact, to act
for and in Employee’s behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and/or protection or maintenance.
2.7. Other Obligations.
2.7.1. Employee acknowledges that the Company from time to time may have agreements with other persons or with the government authorities, or
agencies thereof, that impose obligations or restrictions on Company regarding Intellectual Property made during the course of work thereunder or regarding the confidential nature of such work. Employee agrees to be bound by the Company’s
instructions or policies, and take necessary actions to assist Company in complying with its obligations thereunder.
2.7.2. Employee
further agrees and undertakes that any and all work performed by him shall not infringe upon, misappropriate or use in an unauthorized manner any copyright, patent, trademark, trade secret, or other confidential or proprietary information or
intellectual property of any third party, including, without limitation, any current or former employer of Employee.
2.8. Open Source
Software.
2.8.1. To the extent Intellectual Property or any other work product provided or generated by Employee includes any
software, computer code, and/or firmware, any such Intellectual Property or work product shall not incorporate or include any Open Source, unless explicitly permitted under the Company’s Open Source policy and/or instructions. Further, all
other use of Open Source materials in connection with Employee’s employment shall be in accordance with the Company’s Open Source policy.
2.8.2. Intellectual Property and any other work product provided or generated by Employee
shall on delivery be free of viruses, malicious code, time bombs, Trojan horses, back doors, drop dead devices, worms, or other code of any kind that may disable, erase, display any unauthorized message, permit unauthorized access, automatically or
remotely stop software, code and/or firmware from operating, or otherwise impair the services, deliverables, inventions or work product or the Company network or any part thereof.
3.
Non-Competition and
Non-Solicitation
During the term of Employee’s employment
with the Company and for a period of twelve (12) months thereafter, Employee will not, directly or indirectly, (i) engage whether as an employee, independent contractor, partner, joint venture, shareholder, investor,
director, consultant or otherwise, in any business or activity, all over the world, which is competitive with the technology, products, and/or services of the Company, or the business in which it is currently engaged or in which it may be engaged
in, during the time of the Employee’s employment with the Company, (ii) solicit, induce, recruit or encourage any of the Company’s personnel to leave their employment, or take away such personnel, or attempt to solicit, induce,
recruit, encourage or take away personnel of the Company, and/or their affiliates, either for the Employee or for any other person or entity; nor (iii) offer, solicit, interfere with and/or endeavor to entice away from Company, and/or any of
its affiliates, any person, firm or company with whom Company and/or any of its affiliates shall have any contractual and/or commercial relationship as, consultant, licenser, joint venture, supplier, customer, distributor, agent or contractor
of whatsoever nature, existing or under negotiation on or twelve (12) months prior to the termination of his/her employment with the Company.
4.
Breach of Obligations
Employee is aware that a breach of his/her obligations as detailed under this Agreement, or part of them, will cause the Company or the
Company’s affiliates serious and irreparable damage, and that no financial compensation can be an appropriate remedy to such damage. Therefore, in addition to the return of the Special Compensation pursuant to the terms of the Employment
Agreement to which this Agreement is attached, Employee agrees, that if such a breach occurs, the Company, any of the Company’s affiliates or any of their designee(s) shall be entitled (without limiting other remedies if available under the
law or hereunder) to take all legal means necessary and any injunctive relief as is necessary to restrain any continuing or further breach of this Agreement.
5.
Acknowledgements and Declarations
Employee hereby declares and acknowledges that:
5.1. Employee’s confidentiality and non-competition obligations under this Agreement are fair,
reasonable, and proportional, especially in light of the Special Compensation Employee receives under the employment agreement to which this Agreement is attached, and are designed to protect the Company’s and the Company affiliates’
secrets and their confidential information, which constitute the essence of their protected business and commercial advantage in which significant capital investments were made.
5.2. Any breach of Employee’s obligations under this Agreement shall contradict the nature of the special trust and loyalty between
Employee and the Company, the fair and proper business practices and the duty of good faith and fairness between the parties. Any such breach shall harm the Company and/or the Company affiliates and shall constitute a material breach of this
Agreement and the employment agreement to which this Agreement is attached.
5.3. Employee’s obligations under this Agreement and the restricted period of time and
geographical area specified herein are reasonable and proportional, and do not prevent Employee from developing his/her general knowledge and professional expertise in the area of his/her business, without infringing on or breaching any of the
Company’s rights.
6.
Miscellaneous
6.1. Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the State of Israel, without regard
to the choice of law provisions thereof. Employee hereby expressly consents to the personal jurisdiction of the courts located in Tel-Aviv-Jaffa district, Israel, for any lawsuit arising from or relating to
this Agreement.
6.2. Assignment. The undertakings set forth herein may be assigned by the Company. Employee may not assign or
delegate his/her duties under this Agreement without the Company’s prior written approval. This Agreement shall be binding upon Employee’s heirs, successors, and permitted assignees.
6.3. Counterparts. This Agreement may be signed in two counterparts, each of which shall be deemed an original and both of which shall
together constitute one and the same instrument.
6.4. Entire Agreement. This Agreement constitutes the full and complete agreement
between the parties and supersedes any and all agreements or understandings, whether written or oral, concerning the subject matter of this Agreement, and may only be amended by a document signed by both parties.
6.5. Severability. If any provision of this Agreement is found to be invalid or unenforceable by a court of competent jurisdiction, such
provision shall be automatically adjusted to the minimum extent necessary for validity or enforceability. In any event, the remaining terms and provisions of this Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
/s/ Tal Horesh
/s/ Aviv Shapira
XTEND REALITY EXPANSION.
Employee
By:
Tal Horesh
By:
Aviv Shapira
Date:
9/3/2026
Date:
9/3/2026
Schedule A
TO THE NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS
AGREEMENT
Prior
Inventions
Follows a list of Prior Inventions of the Employee:
1.
__________________________________________________________
2.
__________________________________________________________
3.
__________________________________________________________
4.
__________________________________________________________
If nothing is listed, I will be regarded as having declared that I have no Prior Inventions.
/s/ Aviv Shapira
Employee (Signature)
9/3/2026
Date
Exhibit B
GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND AND INSURANCE FUND IN LIEU OF SEVERANCE PAY
By virtue of my power under section 14 of the Severance Pay Law, 1963 (hereinafter: the “Law”), I certify that payments made by an employer
commencing from the date of the publication of this approval on behalf of his employees to a comprehensive pension benefit fund that is not an insurance fund within the meaning thereof in the Income Tax (Rules for the Approval and Conduct of Benefit
Funds) Regulations, 1964 (hereinafter: the “Pension Fund”) or to managers’ insurance including the possibility of an insurance pension fund or a combination of payments to an annuity fund and to a non-annuity fund (hereinafter: the “Insurance Fund), including payments made by him by a combination of payments to a Pension Fund and an Insurance Fund, whether or not the Insurance Fund has an annuity
fund (hereinafter: the “Employer’s Payments), shall be made in lieu of the severance pay due to the said employee in respect of the salary from which the said payments were made and for the period they were paid (hereinafter: the
“Exempt Salary”), provided that all the following conditions are fulfilled:
(1)
The Employer’s Payments
(a)
To the Pension Fund are not less than 141/3% of the Exempt Salary or 12% of the Exempt Salary if the employer
pays for his employee in addition thereto additional payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary. In the event that the
employer has not paid an addition to the said 12%, his payments shall be only in lieu of 72% of the employee’s severance pay;
(b)
To the Insurance Fund are not less than one of the following:
(1)
131/3% of the Exempt Salary, if the employer pays for his employee in addition thereto also payments to secure
monthly income in the event of disability, in a plan approved by the Commissioner of the Capital Market, Insurance and Savings Department of the Ministry of Finance, in an amount required to secure at least 75% of the Exempt Salary or in an amount
of 21/2% of the Exempt Salary, the lower of the two (hereinafter: “Disability Insurance”); or
(2)
11% of the Exempt Salary, if the employer paid, in addition, a payment to the Disability Insurance, and in such
case, the Employer’s Payments shall only replace 72% of the Employee’s severance pay; In the event that the employer has paid, in addition to the foregoing payments to supplement severance pay, to a benefit fund for severance pay or to
an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary, the Employer’s Payments shall replace 100% of the employee’s severance pay.
(2)
No later than three months from the commencement of the Employer’s Payments, a written agreement is
executed between the employer and the employee in which:
(a)
The employee has agreed to the arrangement pursuant to this approval in a text specifying the Employer’s
Payments, the Pension Fund, and Insurance Fund, as the case may be; the said agreement shall also include the text of this approval; and
(b)
The employer waives in advance any right, which he may have to a refund of monies from his payments, unless the
employee’s right to severance pay has been revoked by a judgment by virtue of Sections 16 and 17 of the Law, and to the extent so revoked and/or the employee has withdrawn monies from the Pension Fund or Insurance Fund other than by reason of
an entitling event; in such regard “Entitling Event” means death, disability or retirement after the age of 60.
(3)
This approval does not derogate from the employee’s right to severance pay pursuant to any law,
collective agreement, extension order, or employment agreement, in respect of salary over and above the Exempt Salary.
Exhibit C
COMPANY COMPUTER POLICY CONSENT
XTEND
REALITY EXPANSION LTD. (the “Company”) has a policy regarding the use of the Company’s computer systems (the “Company’s Computers Policy”), as follows:
1.
The Company has provided you, for the purpose of the performance of your duties, various types of computer
related devices, including a computer, hardware, software, Company e-mail account, phone, etc. (the “Computer Devices”). The Computer Devices are the exclusive property of the
Company, and in order to protect the Computer Devices, and the information which they contain, you are hereby required to adhere to the following instructions:
1.1. Hardware – it is prohibited to install hardware on, and/or to, Computer Devices without the prior authorization of your
supervisor or the Company’s IT team. In this regard, you are not allowed to connect to a Computer Device an external hard – drive, disk on key (also known as memory stick and/or flash memory), camera, cell phone or any other type of
hardware for purposes which are illegal, inappropriate, or transferring of material that belongs to the Company, its clients, employees, or any other third party without the prior authorization of your supervisor or the Company’s IT team.
1.2. Software – it is prohibited to install software on Computer Devices, except for reasonable bounds, without the prior
authorization of your supervisor or the Company’s IT team.
1.3. Files – it is prohibited to save on Computer Devices
any files, photos, or videos that are not related to the Company. In particular, and without limitation, it is prohibited to save on Computer Device any file that its access and/or saving by you constitute infringement of protected Intellectual
Property rights, and any file that contains obscene, pornographic, or abusive content.
Notwithstanding the above, you are permitted to
save personal files that you or your immediate family members have created, which are not related to the Company or to the performance of your duties, and have no commercial content, as long as such files are saved under a folder labeled
“Private” located at the root directory of the Computer Device.
1.4. If any of the above instructions is not clear or if you
have a question regarding the use of Computer Devices, please contact your supervisor.
2.
Notwithstanding the above, the Company does allow private use of the Computer Devices made available to you for
work purpose, within reasonable bounds, subject to Section 1 above and Section 4 below.
3.
During work hours and/or while at the Company’s offices you may access the internet for your own private
use provided that such access is done for a reasonable period of time, and in accordance with the Company’s Computers Policy. For the removal of doubt, and without limitation, it is prohibited to access any website that contains obscene,
pornographic, or abusive content, and/or includes content that infringes on protected Intellectual Property rights, and /or involves gambling.
4.
The Company’s e-mail account –
4.1. Which was assigned to you is provided to you only for the purpose of work related use. You are not allowed to use
the Company’s e-mail account for private purposes that are not related to the Company’s activities, such prohibited private use of your e-mail account
includes correspondence with friends and family.
4.2. In the event, you wish to send private
e-mails during work hours and/or while at Company’s offices, you can do so through your private external web based e-mail account (Gmail, Hotmail, etc.). As noted
above, you are prohibited from saving to Computer Devices any files received through your external web based e-mail account, unless such files are saved per the terms of the exclusive exception detailed above.
4.3. In order to maintain the security of the Computer Devices and the protection of the Company’s legitimate interests, the Company
is using various monitoring technologies, as well as blocking technologies, in the scope further detailed in the Computer Policy. These technologies enable the Company to monitor and review content and information which is present on Computer
Devices or exchanged through Computer Devices, including through the Company’s e-mail account assigned to Company’s employees.
5.
Said monitoring is not intended to infringe your privacy, and as a general rule the Company is not interested
in reviewing correspondence which is exchanged through the Company’s e-mail account assigned to you. However, the Company may review the professional correspondence and will act within the boundaries of
applicable law, and when circumstances so require, necessitate, and obligate, in order to protect the Company’s legitimate interests.
6.
In the event that private correspondence exists in the Computer Devices and/or the Company e-mail account assigned to you, this, despite the clear instructions detailed hereinabove, the Company may review such correspondence, if special and unique circumstances exist in which there is a serious suspicion
that you are carrying out harmful or illegal activity through Computer Devices, and subject to your consent.
7.
It is further clarified that as part of the Company’s administration of its affairs, it may become
necessary for another employee of the Company to access the Computer Devices that were assigned to you, in order to review professional information on the Computer Devices that were assigned to you. Such access by other employees may occur during
your employment or after the termination of your employment. In this respect, upon request from your supervisors or upon the termination of employment, you are required to provide your supervisors with all access passwords that are necessary to
access Computer Devices which were assigned to you, and materials that are saved on them.
8.
Any material or file that is saved on Company’s Computer Devices is deemed to be the Company’s
property.
As a sign of your consent to the Computer Policy and the foregoing instructions, you are required to sign below.
EMPLOYEE ACKNOWLEDGEMENT AND CONSENT:
I, the undersigned, hereby acknowledge and approve that I have read all the above mentioned, received any and all clarifications which I required, and agree
to it.
Aviv Shapira
[***]
/s/ Aviv Shapira
9/3/2026
Name
ID number
Signature
Date
EX-10.5
EX-10.5
Filename: d230933dex105.htm · Sequence: 6
EX-10.5
Exhibit 10.5
Employment Agreement
This Employment
Agreement is made by and between XTEND REALITY EXPANSION LTD., an Israeli company, registration number 515871861, with its offices at 7 Habarzel St., Tel Aviv (the “Company”), and Tal Horesh (the
“Employee”).
The Employee has been employed by the Company since April 18, 2024 (the “Commencement Date”)
pursuant to the employment agreement executed on or about the same date (the “Prior Employment Agreement”), and the Company and the Employee wish to amend, restate and replace the Prior Employment Agreement in its entirety by
entering into this Employment Agreement, effective as of the Effective Date (as such term defined below).
Below is a table summarizing the specific terms
of Employee’s employment with the Company (the “Specific Terms”). The general terms and conditions of Employee’s employment with the Company are included in the pages following this table (the “General
Terms”).
Specific Terms, General Terms, and the Exhibits attached hereto are collectively deemed as the “Employment
Agreement”, Employee’s execution of these documents constitutes the agreement to the Specific Terms, the General Terms, and all the Exhibits attached hereto.
In this Employment Agreement, words referring to a male employee are also intended for a female employee.
Employee’s
Details
Full Name: Tal Horesh
Position: CFO
I.D. Number: [***]
Manager: CEO
Effective Date: August 1, 2026
Scope of Work: Full-Time
Annual Salary
US$ 400,000 (gross), payable in twelve (12) equal monthly installments (each installment shall be referred to herein as the “Monthly Salary”). Payment shall be made in NIS, with the
applicable exchange rate to be determined by the Company on an annual basis at the commencement of each calendar year (i.e., the January salary cycle), in accordance with the Company’s internal practices in this regard. For the year 2026, the
applicable exchange rate shall be NIS 3 per US$1.
Notice Period
Three (3) calendar months.
Annual Cash Bonus
The Employee shall be eligible to receive an annual cash bonus with a target annual bonus opportunity of US$ 200,000 (gross) for 100% achievement of the applicable annual goals and targets, payable in NIS
according to the U.S. dollar/NIS exchange rate in effect on the payment date. The annual bonus shall be based on the achievement of annual goals and targets of the Employee and the Company, as determined by the Board of Directors of the
Company’s parent company, Xtend AI Robotics, Inc. (the “Board”, and the “Parent”, respectively), or a duly authorized committee designated by the Board on its behalf. The terms and conditions of the annual
bonus, including the applicable performance criteria, measurement methodology, approval process, threshold and maximum achievement levels, and all other related terms, shall be as set forth in the applicable executive compensation plan for C-level executives of the Company or the Parent, as applicable, to be adopted and as may be amended from time to time by the Board or such committee. Any annual bonus earned for a given year shall be paid within
ninety (90) days following the completion and closing of the financial reports for such year by the applicable independent accountants. If the Company terminates the Employee’s employment after the end of the applicable bonus year but
before the applicable payment date, other than for Cause, the Employee shall remain eligible to receive the annual bonus for such completed year, subject to the applicable terms and conditions and actual achievement of the relevant goals and
targets, and such bonus, if earned, shall be paid following such termination at the same time annual bonuses for such year are paid to the other executives.
Termination
Grant
In the event that this Employment Agreement is terminated by either party for any reason other than for Cause, the Company shall pay to the Employee a one-time
lump-sum cash payment in an amount equal to three (3) times the Employee’s then-current Monthly Salary (the “Termination Grant”), subject to and conditioned upon the
Employee’s execution and non-revocation (if applicable) of the Company’s standard waiver and release of claims document.
Pension Plan
The Employee shall be insured under a Pension Plan (as defined below), all in accordance with the General Approval of Section 14 Arrangement and the General Terms.
Keren Hishtalmut (“Education Fund”)
Company’s Contribution: 7.5% of the Monthly Salary.
Employee’s Contribution: 2.5% of the Monthly Salary, which will be deducted from the Monthly Salary.
Notwithstanding the above, the amounts contributed to the Education Fund will not exceed
the tax-exempt limit recognized by the Income Tax Authority from time to time.
Vacation Days
Annual Entitlement: 20 business days per calendar year.
Maximum Amount: The Employee shall be entitled to carry forward from one calendar year to the next any unused vacation days, up to an amount equal to
one (1) Annual Entitlement.
Sick Days
Per applicable law. However, the Employee shall be entitled to receive the full compensation as of the first sick day.
Recreation Days
(“Dmey
Havraa”)
Per applicable law.
Travel Expenses
The Employee shall be entitled to either: (i) use a Company Car for the purpose of fulfilling Employee duties to the Company (the “Company Car”) in accordance with the Company’s policies as shall be
modified from time to time, subject to signing the Company’s car policy and any other required agreement, including with the leasing company. The Company Car monthly cost shall be up to NIS 5,000 (excluding VAT), which shall be covered by the
Company. The Company will cover all of the operating expenses of the car, excluding parking expenses, tickets, fines, and other costs related to noncompliance by the Employee with any applicable law. The Company shall bear all applicable taxes
related to the Employee’s use of the Company Car; or (ii) receive from the Company a fixed monthly amount of NIS 5,000 (gross) as reimbursement for expenses related to travel, car maintenance, insurance and other related costs. Either
options, as shall be agreed upon between the parties shall be instead of Employee’s entitlement for reimbursement of his travel expenses per law
Equity
Incentives
RSU Grant. Subject to the approval of the Parent’s Board, the Employee shall be granted 300,000 Restricted Stock Units
(“RSUs” and “Initial RSU Grant” respectively), in accordance with and subject to the terms and provisions of the Parent’s applicable equity incentive plan and its applicable sub-plan for Israeli participants, if any, as may be adopted from time to time (collectively, the “Plan”) and in accordance with the requirements of Section 102(b)(3) of the Israeli Tax
Ordinance. Each RSU shall represent the right to receive one share of a Common Stock of the Parent (“Common Stock”), subject to the terms, conditions and restrictions of the Plan and of an RSU award agreement to be entered into
between the Employee and the Parent, in the form customarily used by the Parent and as approved by the Board.
The RSUs shall vest over a period of thirty-six (36) months, in thirty-six
(36) equal monthly installments, with no cliff, such that 1/36 of the RSUs shall vest on each monthly anniversary of the Vesting Commencement Date (as shall be determined in the RSU award agreement), provided that the Employee remains
continuously employed by the Company or any of its affiliates, or continues to provide services thereto, through each applicable vesting date.
The grant of the RSUs shall be subject to the Employee’s execution of the applicable RSU award agreement and such other documents,
undertakings and instruments as may be required by the Parent and/or the Company.
Subject to the approval of the Board (or the applicable compensation committee, if required), the Employee shall be eligible to receive, on each of the first
and second anniversaries of the Initial RSU Grant’s grant date, an additional RSU grant on substantially the same terms and conditions as the initial RSU grant and covering the same number of RSUs as granted pursuant thereto.
Any tax liability arising in connection with the grant, vesting, settlement or the RSUs
and/or the sale of the Common Stock issued thereunder shall be borne solely by the Employee, and the Employee acknowledges that neither the Company nor the Parent shall bear any responsibility in connection therewith, except for any mandatory
withholding or reporting obligations required by applicable law. The Employee further acknowledges that no representation or undertaking has been made by the Company, the Parent or any of their representatives regarding the tax consequences of the
grant or the disposition of any securities issued thereunder.
In the event of any
contradiction or inconsistency between the provisions of this Employment Agreement and the provisions of the RSU award agreement, the provisions of the RSU award agreement shall prevail.
Recognition One Time RSU Grant. Subject to the approval of the Board of Directors
of the Parent (the “Board”), the Employee shall be granted 2,000,000 Restricted Stock Units (the “Recognition RSUs”), in accordance with and subject to the terms and provisions of the Plan and in
accordance with the requirements of Section 102(b)(3) of the Israeli Tax Ordinance. Each RSU shall represent the right to receive one share of a Common Stock of the Parent (“Common Stock”), subject to the terms, conditions
and restrictions of the Plan and of an RSU award agreement to be entered into between the Employee and the Parent, in the form customarily used by the Parent and as approved by the Board.
The Recognition RSUs shall vest over a period of
thirty-six (36) months, in thirty-six (36) equal monthly installments, with no cliff, such that 1/36 of the Recognition RSUs shall vest on each monthly
anniversary of the Vesting Commencement Date (as shall be determined in the RSU award agreement), provided that the Employee remains continuously employed by the Company or any of its affiliates, or continues to provide services thereto, through
each applicable vesting date.
The vesting schedule shall include an acceleration
provision, applicable to each and every RSU grant made to the Employee under this Agreement, pursuant to which 100% of the then-outstanding and unvested RSUs then held by the Employee (including the Initial RSU Grant, each additional RSU grant
referred to above and the Recognition RSUs) shall become fully vested immediately upon the termination of the Employee’s employment by the Parent or the Company without Cause or by the Employee for Good Reason. The grant of the RSUs shall be
subject to the Employee’s execution of the applicable RSU award agreement and such other documents, undertakings and instruments as may be required by the Parent and/or the Company.
Any tax liability arising in connection with the grant, vesting, settlement or the RSUs and/or the sale of the Common Stock issued thereunder
shall be borne solely by the Employee, and the Employee acknowledges that neither the Company nor the Parent shall bear any responsibility in connection therewith, except for any mandatory withholding or reporting obligations required by applicable
law. The Employee further acknowledges that no representation or undertaking has been made by the Company, the Parent or any of their representatives regarding the tax consequences of the grant or the disposition of any securities issued
thereunder.
In the event of any contradiction or inconsistency between the
provisions of this Employment Agreement and the provisions of the RSU award agreement, the provisions of the RSU award agreement shall prevail.
Air Business
Travel
The Employee shall be entitled to flight bookings based on the total travel time to the destination, calculated from the scheduled departure time of the first flight segment until the scheduled arrival time at the final destination,
including layovers and connecting time, as follows: if the total travel time is up to two (2) hours, the Employee shall be booked in Economy Plus class; if the total travel time exceeds two (2) hours, the Employee shall be booked in
Business Class. If the applicable class of travel is unavailable at the time of booking, the Employee shall be booked in the closest available class in terms of service level and conditions to the class to which the Employee is entitled under this
Section.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Aviv Shapira
Signature:
/s/ Tal Horesh
By:
Aviv Shapira
By:
Tal Horesh
Title:
Chief Executive Officer
Date:
9/3/2026
General Terms and Conditions of Employment with the Company
1.
Employment Position
1.1. The Employee’s employment relationship with the Company commenced as of the Commencement Date, and the Employee’s employment
by the Company pursuant to, and in accordance with, the terms and conditions of this Employment Agreement shall commence on the Effective Date and shall continue for an indefinite term, unless and until terminated in accordance with the provisions
of this Employment Agreement.
1.2. Employee shall be employed by the Company in the Position indicated in the Specific Terms, and shall
report to the person indicated in the Specific Terms as the Manager or any other person as determined by the Company.
1.3. Employee shall
devote Employee’s entire working time, know-how, expertise, talent, experience and best efforts to the business and affairs of the Company and perform his duties and functions diligently and skillfully
with the utmost expertise and devotion.
1.4. During Employee’s employment, Employee will not engage in or be associated with,
directly or indirectly, any other employment, consulting, or other business activity (with or without consideration), without the Company’s prior written approval. Prior to signing this Employment Agreement, the Employee will inform the
Company of any employment, occupation, engagement, or activity in which the Employee is involved, and that would require the Company’s written consent per this paragraph.
1.5. Employee shall be based in Israel, but he understands and agrees that the Position may require him to travel internationally from time to
time.
2.
Working Hours
2.1. Work for the Company shall be performed on Sunday through Thursday, unless determined and instructed otherwise by the Company.
2.2. A regular workweek for a full-time position consists of 42 working hours, not including Employee’s daily break.
2.3. Saturday, as observed by the Jewish religious, shall be the Employee’s recognized and official rest day.
2.4. Employee shall cooperate with the Company in maintaining a record of the number of hours of work performed, in accordance with the
Company’s policy.
3.
Termination
3.1. Employee’s employment with the Company may be terminated at any time at the option of either Employee or the Company, upon delivery
to the other party of a written notice pursuant to the Specific Terms (the “Notice Period”).
3.2. During the
Notice Period Employee shall continue work and perform all regular duties unless otherwise instructed by the Company. Employee will cooperate with the Company and use Employee’s best efforts to assist the integration into the Company
organization of the person or persons who will assume Employee’s responsibilities hereunder.
3.3. Notwithstanding the foregoing,
Company shall be entitled to terminate Employee’s employment at any time prior to the expiration of the Notice Period and pay the Employee the applicable payment in lieu of notice period, per applicable law.
3.4. In case of termination of Employee’s employment by the Company for Cause, the Company may terminate Employee’s employment
immediately (with no Notice Period).
3.5. “Cause” means (i) a material breach of the
PIIA (as defined below and attached hereto as Exhibit A), or any other material breach of this Employment Agreement, which, if capable of cure, was not cured within five (5) calendar days of receipt by the Employee of written
notice; (ii) fraud, theft, embezzlement, dishonesty, or misappropriation of funds of the Company or any of its affiliates; (iii) conviction of, or a plea of “guilty” or “no contest” to a felony or other lesser
crime that would require removal from Employee’s position at the Company; (iv) any willful or intentional act of the Employee that injures, or is reasonably likely to injure, the reputation, business, products or practices of the Company,
or any of its directors, officers, agents, representatives, shareholders or affiliates; or (v) other cause justifying termination or dismissal without severance payment under applicable law. The determination that a termination is for Cause
shall be made by the Company in its sole judgment and discretion.
3.6. “Good Reason” means the occurrence of any of the
following without the Employee’s prior written consent: (i) a material reduction of more than 15% in the Employee’s base salary, which is not applied on a broad basis to other C-Level
employees of the Company; (ii) a material diminution in the Employee’s title, authority, duties, or responsibilities; (iii) a requirement that the Employee relocate their principal place of work to a location more than 50 kilometers
from the Employee’s then-current work location; or (iv) a material breach of this Agreement by the Company; provided, however, that no resignation shall constitute a resignation for Good Reason unless: (A) the Employee has provided
the Company with written notice of the grounds for Good Reason within sixty (60) days of the initial occurrence of the applicable condition; (B) the Company has failed to cure such condition within thirty (30) days following receipt
of such notice; and (C) the Employee’s resignation occurs within thirty (30) days following the expiration of such cure period.
4.
Salary
4.1. Employee shall be entitled to a Monthly Salary in the amount specified in the Specific Terms.
4.2. Employee agrees and acknowledges that due to the Employee’s senior managerial position in the Company, the special personal trust
involved in the position in which the Employee shall be employed, and the inability to monitor the Employee’s actual work hours, the Hours of Work and Rest Law, 1951 (the “Hours of Work and Rest Law”) shall not apply to the
Employee. The Employee acknowledges that the set amount of the Monthly Salary, as well as all other compensation and benefits provided to the Employee by the Company, as agreed upon between the Employee and the Company, reflect the requirements of
the position to work additional and irregular hours and days. Accordingly, the Employee shall not be entitled to claim or receive payments or any additional pay for work performed at overtime hours, nights, weekends, or at any other times in which
the Hours of Work and Rest Law requires payment of special payments (to employees who are not in a position such as the position of the Employee).
4.3. The Monthly Salary shall be paid no later than the 9th day of the following month.
4.4. An amount equal to 10% of the Monthly Salary shall be considered to be a special payment for the Employee’s obligation for non-competition under the PIIA (the “Special Compensation”). Employee shall be obligated to return to the Company all Special Compensation amounts Employee received from the Company upon violation
of any of the obligations set forth in the PIIA. The Company maintains the right to withhold any amounts due to Employee following such violation. All the above shall not derogate from any of the Company’s rights with respect to any violation
of the provisions of the PIIA.
5.
Pension Plan
5.1. The Employee shall be insured under a managers insurance, a pension fund, or a combination of both, pursuant to the Employee’s
choice and preference (the “Pension Plan”).
5.2. The monthly contributions to the Pension Plan shall be made on the
basis of the Monthly Salary, as follows: (i) Company’s contributions: 8.33% towards the severance pay component, and 6.5% towards the pension component; and (ii) Employee’s contributions: 6% towards the pension
component, which will be deducted from the Monthly Salary each month.
5.3. Notwithstanding the said contributions, if the Pension Plan is a managers insurance
policy or a provident fund that is not a pension fund, Company’s contributions towards the pension component shall include the cost of acquiring a loss of working capacity insurance (the “Disability Insurance”), which shall
be equal to lower of the following: (i) 2.5% of the Monthly Salary or the applicable portion thereof, or (ii) a rate ensuring loss of earning payment of 75% of the Monthly Salary or the applicable portion thereof. Notwithstanding the foregoing,
the Company’s contributions towards the pension component must be at least 5%. Therefore, the Company’s contributions towards the pension component shall be no less than 6.5% and up to 7.5% of the Monthly Salary or the applicable portion
thereof.
5.4. It is agreed and warranted between the parties that the Company’s contributions to the severance component are in lieu
of severance pay, in accordance with the provisions of the General Approval regarding Employers’ Payments to a Pension Fund and Insurance Fund in lieu of Severance Pay issued by virtue of Section 14 of the Severance Pay Law 5723-1963 by
the Labor Minister, dated June 30, 1998 (as amended and as may be amended from time to time), which its Hebrew and English copies are attached hereto as Exhibit B (the “General Approval”). By signing this
Employment Agreement, the parties acknowledge their consent to the applicability of the provisions of the General Approval. In so far as amendments to the General Approval shall be necessary, according and subject to any law or regulations, the
provisions of the amended General Approval shall prevail and replace the General Approval attached.
5.5. The parties acknowledge and agree
that the amounts accrued in the Pension Plan on account of the Company’s contributions shall be in lieu of and will constitute the full and final settlement of any severance pay Employee may become entitled to under any applicable law or
contract. Notwithstanding the foregoing, the parties acknowledge and agree that the Company waives all rights for refunds from its contributions payments, unless a judgment determined that Employee is not entitled to severance pay under
Section 16 and/or Section 17 of the Severance Pay Law, or if Employee withdrew funds contributed to the Pension Plan prior to an “Entitling Event” as such is defined in section 2(b) in the General Approval.
6.
Vacation Days
6.1. Employee is obliged to take at least five (5) paid vacation days during a calendar year, as prescribed by law. Furthermore, Employee
will make every effort to exercise his full annual vacation by the end of a calendar year.
6.2. In the event the Employee was unable to
utilize all his vacation days by the end of a calendar year, Employee shall be entitled to carry forward from one calendar year to the next an accumulated unused balance of vacation days standing to his credit up to the Maximum Amount detailed in
the Specific Terms. For the avoidance of doubt, at the end of each calendar year, any unused vacation days in excess of the Maximum Amount shall be canceled, nulled, and shall not be redeemable in any event.
7.
Education Fund
7.1. Employee and Company shall open and maintain an education fund under the terms specified in Specific Terms (“Keren
Hishtalmut”) (the “Education Fund”).
7.2. Employee hereby authorizes the Company to transfer to the Education
Fund the amount of Employee’s contribution and the Company’s contribution from the Monthly Salary, on a monthly basis, subject to the terms specified in the Specific Terms.
8.
Reimbursement for Expenses:
8.1. The Company shall reimburse the Employee for all reasonable and necessary
out-of-pocket business expenses incurred by the Employee in connection with the performance of his duties under this Employment Agreement, subject to and in accordance
with the Company’s expense reimbursement policy (as shall be determined by the Company from time to time(, but only with respect to expenses that have been approved by the Company in advance, and for which the Employee has provided receipts
and/or other appropriate documentation.
9.
PIIA
9.1. Employee shall be required, as a condition to Employee’s employment with the Company, to sign the
Non-Competition, Proprietary Information and Inventions Agreement attached hereto as Exhibit A (the “PIIA”).
9.2. Employee’s compensation under this Employment Agreement has been calculated to include special consideration for the commitments
under the PIIA and the Employee will not be entitled to any further consideration for such commitments, expressly including no entitlement to royalties for any Service Inventions as defined in Section 132 of the Patent Law, 1967 (the
“Patent Law”). This clause constitutes an express waiver of the Employee’s rights under Section 134 of the Patent Law.
10.
Representations
10.1. The Employee confirms and undertakes: (i) that the Employee has all right and authority to enter into this Employment Agreement and
to perform the Employee’s obligations hereunder; (ii) that the Employee’s employment with the Company does not conflict with, or result in a breach of, any agreement or other commitment to which the Employee is a party or by which
the Employee is bound; (iii) to comply with all applicable laws relating to the Employee’s employment, including, without limitation, the Company’s Rules for Prevention of Sexual Harassment at the Workplace; (iv) to comply with
all of the Company’s work rules, policies, procedures and objectives, as shall be in effect from time to time; (v) not to disclose this Employment Agreement or any part thereof to any third party (other than the Employee’s spouse,
attorney, or tax advisor), including, without limitation, to any other employee of the Company; (vi) not to receive, at any time, whether during the term of this Employment Agreement or at any time thereafter, directly or indirectly, any
payment, benefit or other consideration from any third party in connection with the Employee’s employment with the Company, without the Company’s prior written authorization; (vii) to immediately and without delay inform the Company
in writing of any affairs or matters in which the Employee or any member of the Employee’s immediate family has a personal interest that might create a conflict with the Employee’s duties, responsibilities or obligations to the Company,
the Position, employment with the Company (including its affiliates), or the interests of the Company (including its affiliates); (viii) not, without the Company’s prior written consent, to undertake or accept any other paid or unpaid
employment or occupation, or engage in or be associated with, directly or indirectly, any other business, duty or pursuit, except for de minimis non-commercial activities; and (ix) not to disparage the
Company or its affiliates, their reputation, business, products or practices, or any of their respective directors, officers, agents, representatives or shareholders, whether orally or in writing.
10.2. The Employee agrees to the collection, storage, processing, and use by the Company of any information concerning the Employee, including
the transfer thereof to databases (in Israel or abroad and to any other person or entity, as the Company shall deem necessary and reasonable for business purposes or to pursue the Company’s business interests, all, in accordance with
applicable law and as is reasonable for the Company’s business purposes and interests. Without derogating from the generality of the above, such purposes may include human resources management.
11.
Use of the Company’s Computer Systems
11.1. The Employee hereby agrees and acknowledges that he has read, understands, and consents to the Company Computer Policy attached hereto as
Exhibit C and incorporated herein by reference, and agrees to, concurrently with the execution of this Employment Agreement, to sign on Exhibit C.
12.
Miscellaneous
12.1. This Employment Agreement, together with its exhibits, constitute the entire understanding and agreement between the parties and
supersedes any and all agreements (written or oral) concerning the subject matter hereof.
12.2. This Employment Agreement may only be amended by a document signed by both parties.
12.3. This Employment Agreement will be governed by and construed in accordance with the laws of the State of Israel, without regard to
the choice of law provisions thereof. Employee hereby expressly consents to the exclusive personal jurisdiction of the courts located in Tel-Aviv-Jaffa, for any lawsuit arising from or relating to this
Agreement.
12.4. All taxes, levies, and compulsory payments that the Company is liable to deduct, pursuant to any law, at the
Employee’s expense, shall be deducted at source from all the payments, rights, and benefits to which the Employee is entitled, pursuant to this Employment Agreement or its appendices, unless expressly provided otherwise in this Employment
Agreement.
12.5. Employee’s rights and obligations under this Employment Agreement may not be assigned or delegated, in whole or in
part, by operation of law or otherwise, without the Company’s prior written consent.
12.6. This Employment Agreement includes the
terms to be contained in, and constitutes, the written notice to be delivered to the Employee pursuant to the Notice to Employee and Job Candidate Law (Employment Conditions and Candidate Screening and Selection), 5762-2002. This Employment
Agreement does not derogate from any right vested to the Employee by virtue of any law, extension order, or collective bargaining agreement, to the extent such apply to the Employee.
12.7. All notices given or made pursuant to this Employment Agreement shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, or (b) when sent by electronic mail if sent during regular business hours of the recipient; if not, then on the next business day. All notices shall be sent to the respective parties at the
addresses set forth on the Specific Terms (or at such other addresses as shall be specified by notice given in accordance with this Section).
***
IN WITNESS WHEREOF, the parties have
executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Aviv Shapira
Signature:
/s/ Tal Horesh
By:
Aviv Shapira
By:
Tal Horesh
Title:
Chief Executive Officer
Date:
9/3/2026
Exhibit A
NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT
THIS NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT (the “Agreement”) is
effective as of the first day of the Employee’s engagement with the Company, including without limitation, prior to his employment with the Company (the “Effective Date”) and made by and between XTEND REALITY
EXPANSION LTD. (including, at its sole discretion, any or all of the Company’s affiliates, hereafter the “Company”) and Tal Horesh (I.D. No. [***]) (the “Employee”).
In consideration for, as a condition and part of the Employee’s engagement with the Company (for no additional consideration or compensation), it is
hereby agreed as follows:
1.
Confidential Information.
1.1.
Definition.
1.1.1. “Confidential Information” means any proprietary or confidential data and/or information, in any form or
media, that Employee receives, obtains, or otherwise acquires or gains access to during or in connection with Employee’s engagement with the Company (whether before or after the date of this Agreement), which pertains to the Company or any of
its businesses, clients, customers, employees, shareholders, business partners, licensees, licensors, vendors or affiliates. Confidential Information includes without limitation Company Intellectual Property (as defined below), or any part thereof,
as well as any data and/or information that, given the nature of such data and/or information or the circumstances of its disclosure or receipt, is or should reasonably be considered as confidential.
1.1.2. Confidential Information shall not include any information that (i) is in the public domain at the time of disclosure,
(ii) subsequently has entered the public domain other than by breach of Employee’s obligations hereunder or by breach of another person’s or entity’s confidentiality obligations, or (iii) is shown by written dated
evidence to have been known by Employee prior to disclosure to Employee in connection with his engagement with the Company, not as a result of a breach of any obligation owed to the Company or any other third party.
1.2. Confidentiality. Except as herein provided, Employee agrees that during and after termination of Employee’s engagement
with the Company, Employee (i) shall keep Confidential Information confidential and shall not directly or indirectly, use, divulge, publish, or otherwise disclose or allow to be disclosed any aspect of Confidential Information without the
Company’s prior written consent (except in order to fulfill Employee’s employment tasks and obligations); (ii) shall refrain from any action or conduct which might compromise the confidentiality or proprietary nature of the Confidential
Information; and (iii) shall follow Company’s instructions provided from time to time regarding the use and handling of Confidential Information. The Employee will take all reasonable precautions to prevent any unauthorized use of
disclosure of the Confidential Information.
1.3. Ownership. Employee acknowledges and agrees that all right, title, and interest in
and to Confidential Information and all materials containing Confidential Information are and shall remain, at all times, the sole and exclusive property of the Company.
1.4.
Proprietary Information of Third Parties.
1.4.1. Employee agrees that he/she has not and will not, during the term of the employment, improperly use, disclose or bring onto the premises
or systems of the Company any proprietary information or trade secrets of any former employer or other person or entity with which Employee has an agreement or duty to keep in confidence information acquired by Employee, if any, unless with the
prior written approval of the Company and such employer, person or entity.
1.4.2. Employee recognizes that the Company may have received, and in the future may
receive, from third parties their confidential or proprietary information subject to the Company’s undertaking to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee agrees that he/she
owes the Company and such third parties, during Employee’s employment with the Company and anytime thereafter, a duty to hold all such third party confidential or proprietary information at least in accordance with the provisions set forth
hereunder in connection with Confidential Information of the Company, and to use such third party confidential or proprietary information strictly for the limited purposes and in the manner permitted hereunder.
1.5. Return of Confidential Material. Upon Company’s request or upon termination of the Employee’s employment with the
Company for any reason, Employee agrees to promptly surrender and deliver to Company all materials and data of any nature or media pertaining to any Confidential Information or to the Employee’s employment. Employee will not retain or take any
tangible or electronical materials or data, containing or pertaining to any Confidential Information. If required by the Company, Employee will certify in writing that he/she complied with the requirements of this Section.
2.
Ownership of Intellectual Property.
2.1.
Definitions.
2.1.1. “Intellectual Property” means proprietary or intellectual property rights, including without limitation
copyrights, inventions, discoveries, patents, designs, trademarks, whether or not registered or capable of being registered, original ideas, trade secrets, source and object code, algorithms, formulae, materials, methods, processes, procedures, any
derivatives, improvements, and enhancements of the foregoing, and all rights corresponding to the foregoing throughout the world including all rights to sue for and receive remedies against past, present and future infringements of any and all of
the foregoing;
2.1.2. “Prior Inventions” means the Intellectual Property made or conceived by or belonging to
Employee that are listed on Schedule A attached hereto that (i) were developed by Employee prior to Employee’s employment with the Company, (ii) relate to Company’s actual or proposed business, operations, products or
research and development, and (iii) are not assigned to Company hereunder; and
2.1.3. “Open Source” means
any software or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution model (including but not limited to the GNU General Public License (GPL), GNU Lesser
General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, MIT Licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL) the Sun Industry Standards License (SISL), materials licensed under
any Creative Commons license and the Apache License).
2.2. Assignment of Intellectual Property. Employee hereby irrevocably
assigns and transfers to Company, for no additional consideration, Employee’s entire right, title, and interest in and to all the Intellectual Property authored, developed, created, made, conceived, or reduced to practice by Employee, whether
solely or jointly with others, during the period of Employee’s engagement with Company (including prior to the date of this Agreement, after hours, on weekends or during vacation time), that either (i) relate in any manner to the actual
or demonstrably anticipated business or proposed business, work, or research and development of Company; or (ii) is developed in whole or in part on Company’s time or using Company’s equipment, supplies, facilities or Confidential
Information; or (iii) result from or are suggested by any task assigned to Employee or any work performed by Employee for or on behalf of Company or in connection with Employee’s duties and responsibilities in the scope of his/her
engagement with Company (the “Company Intellectual Property”). Employee agrees that this assignment includes a present assignment to Company of ownership with respect to Company Intellectual Property that is not yet in existence.
2.3. Employee hereby explicitly and irrevocably waives (i) any interest, claim, or demand with respect to any consideration,
compensation, or royalty payment in connection with Company Intellectual Property and/or the assignment thereof, including, but not limited to any payments pursuant to Section 134 to the Israeli Patent Law – 1967 (the “Patent
Law”); (ii) any moral rights, artists’ rights, or any other similar rights worldwide (“Moral Rights”) that he/she has at any time with respect to Company Intellectual Property.
2.4. Prior Inventions. If no Prior Inventions are listed in Schedule A of this
Agreement, Employee warrants that there are no Prior Inventions. Employee hereby acknowledges that, if in the course of Employee’s employment with Company, Employee incorporates into a Company product, process, service, or software a Prior
Invention owned by Employee or in which Employee has an interest, Company is hereby granted and shall have a fully paid, nonexclusive, royalty-free, unlimited, irrevocable, perpetual, worldwide, transferable and
sub-licensable right and license to make, have made, modify, create derivative works, reproduce, use, offer to sell use, sell, sublicense and otherwise distribute such Prior Invention (as may be improved or
enhanced by or for Company) and in the event of copyrightable materials, copy, distribute, publicly perform, publicly display, make derivative works thereof, and sublicense such copyrightable materials, as part of or in connection with such Company
product, process, service or software.
2.5. Disclosure of Intellectual Property. Employee agrees that in connection with
Intellectual Property and/or which Employee, solely or jointly with others, conceives, develops, or reduces to practice during the period of Employee’s employment with the Company (including after hours, on weekends, or during vacation time)
whether or not Employee believes that such Intellectual Property is Company Intellectual Property, Employee shall, as customary or required by the Company, keep and maintain adequate and accurate records, and shall promptly disclose such
Intellectual Property to Company, through Employee’s immediate supervisor at Company or another Company designee (and if requested by the Company shall also reduce to writing and adequately describe all such Intellectual Property), in order to
permit Company to claim its rights under this Agreement.
2.6.
Employee’s Assistance.
2.6.1. Employee agrees to assist Company, or its designee, at Company expense, in every proper way to secure Company rights in the Company
Intellectual Property and in any and all countries, including (a) the disclosure to Company of all pertinent information and data with respect thereto; (b) the execution of all assignments, applications, specifications, oaths, and other
instruments that Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Company
Intellectual Property.
2.6.2. Employee’s obligations hereunder, to the extent that it is in Employee’s power to do so, shall
continue after the termination of Employee’s employment with Company for any reason. If Company is unable because of Employee’s mental or physical incapacity or for any other reason to secure Employee’s signature on any instrument,
required at Company’s discretion in order to apply for, pursue or maintain any application for Intellectual Property rights (including patents or copyright registrations) covering and embodying any Company Intellectual Property, then Employee
hereby irrevocably designates and appoints Company and its duly authorized officers and agents (at its discretion) as Employee’s agent and attorney-in-fact, to act
for and in Employee’s behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and/or protection or maintenance.
2.7.
Other Obligations.
2.7.1. Employee acknowledges that the Company from time to time may have agreements with other persons or with the government authorities, or
agencies thereof, that impose obligations or restrictions on Company regarding Intellectual Property made during the course of work thereunder or regarding the confidential nature of such work. Employee agrees to be bound by the Company’s
instructions or policies, and take necessary actions to assist Company in complying with its obligations thereunder.
2.7.2. Employee
further agrees and undertakes that any and all work performed by him shall not infringe upon, misappropriate or use in an unauthorized manner any copyright, patent, trademark, trade secret, or other confidential or proprietary information or
intellectual property of any third party, including, without limitation, any current or former employer of Employee.
2.8.
Open Source Software.
2.8.1. To the extent Intellectual Property or any other work product provided or generated by Employee includes any software, computer code,
and/or firmware, any such Intellectual Property or work product shall not incorporate or include any Open Source, unless explicitly permitted under the Company’s Open Source policy and/or instructions. Further, all other use of Open Source
materials in connection with Employee’s employment shall be in accordance with the Company’s Open Source policy.
2.8.2.
Intellectual Property and any other work product provided or generated by Employee shall on delivery be free of viruses, malicious code, time bombs, Trojan horses, back doors, drop dead devices, worms, or other code of any kind that may disable,
erase, display any unauthorized message, permit unauthorized access, automatically or remotely stop software, code and/or firmware from operating, or otherwise impair the services, deliverables, inventions or work product or the Company network or
any part thereof.
3.
Non-Competition and
Non-Solicitation
During the term of Employee’s employment
with the Company and for a period of twelve (12) months thereafter, Employee will not, directly or indirectly, (i) engage whether as an employee, independent contractor, partner, joint venture, shareholder, investor,
director, consultant or otherwise, in any business or activity, all over the world, which is competitive with the technology, products, and/or services of the Company, or the business in which it is currently engaged or in which it may be engaged
in, during the time of the Employee’s employment with the Company, (ii) solicit, induce, recruit or encourage any of the Company’s personnel to leave their employment, or take away such personnel, or attempt to solicit, induce,
recruit, encourage or take away personnel of the Company, and/or their affiliates, either for the Employee or for any other person or entity; nor (iii) offer, solicit, interfere with and/or endeavor to entice away from Company, and/or any of
its affiliates, any person, firm or company with whom Company and/or any of its affiliates shall have any contractual and/or commercial relationship as, consultant, licenser, joint venture, supplier, customer, distributor, agent or contractor
of whatsoever nature, existing or under negotiation on or twelve (12) months prior to the termination of his/her employment with the Company.
4.
Breach of Obligations
Employee is aware that a breach of his/her obligations as detailed under this Agreement, or part of them, will cause the Company or the
Company’s affiliates serious and irreparable damage, and that no financial compensation can be an appropriate remedy to such damage. Therefore, in addition to the return of the Special Compensation pursuant to the terms of the Employment
Agreement to which this Agreement is attached, Employee agrees, that if such a breach occurs, the Company, any of the Company’s affiliates or any of their designee(s) shall be entitled (without limiting other remedies if available under the
law or hereunder) to take all legal means necessary and any injunctive relief as is necessary to restrain any continuing or further breach of this Agreement.
5.
Acknowledgements and Declarations
Employee hereby declares and acknowledges that:
5.1. Employee’s confidentiality and non-competition obligations under this Agreement are fair,
reasonable, and proportional, especially in light of the Special Compensation Employee receives under the employment agreement to which this Agreement is attached, and are designed to protect the Company’s and the Company affiliates’
secrets and their confidential information, which constitute the essence of their protected business and commercial advantage in which significant capital investments were made.
5.2. Any breach of Employee’s obligations under this Agreement shall contradict the nature of the special trust and loyalty between
Employee and the Company, the fair and proper business practices and the duty of good faith and fairness between the parties. Any such breach shall harm the Company and/or the Company affiliates and shall constitute a material breach of this
Agreement and the employment agreement to which this Agreement is attached.
5.3. Employee’s obligations under this Agreement and the restricted period of time and
geographical area specified herein are reasonable and proportional, and do not prevent Employee from developing his/her general knowledge and professional expertise in the area of his/her business, without infringing on or breaching any of the
Company’s rights.
6.
Miscellaneous
6.1. Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the State of Israel, without regard
to the choice of law provisions thereof. Employee hereby expressly consents to the personal jurisdiction of the courts located in Tel-Aviv-Jaffa district, Israel, for any lawsuit arising from or relating to
this Agreement.
6.2. Assignment. The undertakings set forth herein may be assigned by the Company. Employee may not assign or
delegate his/her duties under this Agreement without the Company’s prior written approval. This Agreement shall be binding upon Employee’s heirs, successors, and permitted assignees.
6.3. Counterparts. This Agreement may be signed in two counterparts, each of which shall be deemed an original and both of which shall
together constitute one and the same instrument.
6.4. Entire Agreement. This Agreement constitutes the full and complete agreement
between the parties and supersedes any and all agreements or understandings, whether written or oral, concerning the subject matter of this Agreement, and may only be amended by a document signed by both parties.
6.5. Severability. If any provision of this Agreement is found to be invalid or unenforceable by a court of competent jurisdiction, such
provision shall be automatically adjusted to the minimum extent necessary for validity or enforceability. In any event, the remaining terms and provisions of this Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
/s/ Aviv Shapira
/s/ Tal Horesh
XTEND REALITY EXPANSION LTD.
Employee
By:
Aviv Shapira
By:
Tal Horesh
Date:
9/3/2026
Date:
9/3/2026
Schedule A
TO THE NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS
AGREEMENT
Prior
Inventions
Follows a list of Prior Inventions of the Employee:
1.
__________________________________________________________
2.
__________________________________________________________
3.
__________________________________________________________
4.
__________________________________________________________
If nothing is listed, I will be regarded as having declared that I have no Prior Inventions.
/s/ Tal Horesh
9/3/2026
Employee (Signature)
Date
Exhibit B
GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND
AND INSURANCE FUND IN LIEU OF SEVERANCE PAY
By virtue of my power under section 14 of the Severance Pay Law, 1963 (hereinafter: the “Law”), I certify that payments made by an employer
commencing from the date of the publication of this approval on behalf of his employees to a comprehensive pension benefit fund that is not an insurance fund within the meaning thereof in the Income Tax (Rules for the Approval and Conduct of Benefit
Funds) Regulations, 1964 (hereinafter: the “Pension Fund”) or to managers’ insurance including the possibility of an insurance pension fund or a combination of payments to an annuity fund and to a non-annuity fund (hereinafter: the “Insurance Fund), including payments made by him by a combination of payments to a Pension Fund and an Insurance Fund, whether or not the Insurance Fund has an annuity
fund (hereinafter: the “Employer’s Payments), shall be made in lieu of the severance pay due to the said employee in respect of the salary from which the said payments were made and for the period they were paid (hereinafter: the
“Exempt Salary”), provided that all the following conditions are fulfilled:
(1)
The Employer’s Payments
(a)
To the Pension Fund are not less than 141/3% of the Exempt Salary or 12% of the Exempt Salary if the employer
pays for his employee in addition thereto additional payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary. In the event that the
employer has not paid an addition to the said 12%, his payments shall be only in lieu of 72% of the employee’s severance pay;
(b)
To the Insurance Fund are not less than one of the following:
(1)
131/3% of the Exempt Salary, if the employer pays for his employee in addition thereto also payments to secure
monthly income in the event of disability, in a plan approved by the Commissioner of the Capital Market, Insurance and Savings Department of the Ministry of Finance, in an amount required to secure at least 75% of the Exempt Salary or in an amount
of 21/2% of the Exempt Salary, the lower of the two (hereinafter: “Disability Insurance”); or
(2)
11% of the Exempt Salary, if the employer paid, in addition, a payment to the Disability Insurance, and in such
case, the Employer’s Payments shall only replace 72% of the Employee’s severance pay; In the event that the employer has paid, in addition to the foregoing payments to supplement severance pay, to a benefit fund for severance pay or to
an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary, the Employer’s Payments shall replace 100% of the employee’s severance pay.
(2)
No later than three months from the commencement of the Employer’s Payments, a written agreement is
executed between the employer and the employee in which:
(a)
The employee has agreed to the arrangement pursuant to this approval in a text specifying the Employer’s
Payments, the Pension Fund, and Insurance Fund, as the case may be; the said agreement shall also include the text of this approval; and
(b)
The employer waives in advance any right, which he may have to a refund of monies from his payments, unless the
employee’s right to severance pay has been revoked by a judgment by virtue of Sections 16 and 17 of the Law, and to the extent so revoked and/or the employee has withdrawn monies from the Pension Fund or Insurance Fund other than by reason of
an entitling event; in such regard “Entitling Event” means death, disability or retirement after the age of 60.
(3)
This approval does not derogate from the employee’s right to severance pay pursuant to any law,
collective agreement, extension order, or employment agreement, in respect of salary over and above the Exempt Salary.
Exhibit C
COMPANY COMPUTER POLICY CONSENT
XTEND
REALITY EXPANSION LTD. (the “Company”) has a policy regarding the use of the Company’s computer systems (the “Company’s Computers Policy”), as follows:
1.
The Company has provided you, for the purpose of the performance of your duties, various types of computer
related devices, including a computer, hardware, software, Company e-mail account, phone, etc. (the “Computer Devices”). The Computer Devices are the exclusive property of the
Company, and in order to protect the Computer Devices, and the information which they contain, you are hereby required to adhere to the following instructions:
1.1. Hardware – it is prohibited to install hardware on, and/or to, Computer Devices without the prior authorization of your
supervisor or the Company’s IT team. In this regard, you are not allowed to connect to a Computer Device an external hard – drive, disk on key (also known as memory stick and/or flash memory), camera, cell phone or any other type of
hardware for purposes which are illegal, inappropriate, or transferring of material that belongs to the Company, its clients, employees, or any other third party without the prior authorization of your supervisor or the Company’s IT team.
1.2. Software – it is prohibited to install software on Computer Devices, except for reasonable bounds, without the prior
authorization of your supervisor or the Company’s IT team.
1.3. Files – it is prohibited to save on Computer Devices
any files, photos, or videos that are not related to the Company. In particular, and without limitation, it is prohibited to save on Computer Device any file that its access and/or saving by you constitute infringement of protected Intellectual
Property rights, and any file that contains obscene, pornographic, or abusive content.
Notwithstanding the above, you are permitted to
save personal files that you or your immediate family members have created, which are not related to the Company or to the performance of your duties, and have no commercial content, as long as such files are saved under a folder labeled
“Private” located at the root directory of the Computer Device.
1.4. If any of the above instructions is not clear or if you
have a question regarding the use of Computer Devices, please contact your supervisor.
2.
Notwithstanding the above, the Company does allow private use of the Computer Devices made available to you for
work purpose, within reasonable bounds, subject to Section 1 above and Section 4 below.
3.
During work hours and/or while at the Company’s offices you may access the internet for your own private
use provided that such access is done for a reasonable period of time, and in accordance with the Company’s Computers Policy. For the removal of doubt, and without limitation, it is prohibited to access any website that contains obscene,
pornographic, or abusive content, and/or includes content that infringes on protected Intellectual Property rights, and /or involves gambling.
4.
The Company’s e-mail account –
4.1. Which was assigned to you is provided to you only for the purpose of work related use. You are not allowed to use
the Company’s e-mail account for private purposes that are not related to the Company’s activities, such prohibited private use of your e-mail account
includes correspondence with friends and family.
4.2. In the event, you wish to send private
e-mails during work hours and/or while at Company’s offices, you can do so through your private external web based e-mail account (Gmail, Hotmail, etc.). As noted
above, you are prohibited from saving to Computer Devices any files received through your external web based e-mail account, unless such files are saved per the terms of the exclusive exception detailed above.
4.3. In order to maintain the security of the Computer Devices and the protection of the Company’s legitimate interests, the Company
is using various monitoring technologies, as well as blocking technologies, in the scope further detailed in the Computer Policy. These technologies enable the Company to monitor and review content and information which is present on Computer
Devices or exchanged through Computer Devices, including through the Company’s e-mail account assigned to Company’s employees.
5.
Said monitoring is not intended to infringe your privacy, and as a general rule the Company is not interested
in reviewing correspondence which is exchanged through the Company’s e-mail account assigned to you. However, the Company may review the professional correspondence and will act within the boundaries of
applicable law, and when circumstances so require, necessitate, and obligate, in order to protect the Company’s legitimate interests.
6.
In the event that private correspondence exists in the Computer Devices and/or the Company e-mail account assigned to you, this, despite the clear instructions detailed hereinabove, the Company may review such correspondence, if special and unique circumstances exist in which there is a serious suspicion
that you are carrying out harmful or illegal activity through Computer Devices, and subject to your consent.
7.
It is further clarified that as part of the Company’s administration of its affairs, it may become
necessary for another employee of the Company to access the Computer Devices that were assigned to you, in order to review professional information on the Computer Devices that were assigned to you. Such access by other employees may occur during
your employment or after the termination of your employment. In this respect, upon request from your supervisors or upon the termination of employment, you are required to provide your supervisors with all access passwords that are necessary to
access Computer Devices which were assigned to you, and materials that are saved on them.
8.
Any material or file that is saved on Company’s Computer Devices is deemed to be the Company’s
property.
As a sign of your consent to the Computer Policy and the foregoing instructions, you are required to sign below.
EMPLOYEE ACKNOWLEDGEMENT AND CONSENT:
I, the undersigned, hereby acknowledge and approve that I have read all the above mentioned, received any and all clarifications which I required, and agree
to it.
Tal Horesh
[***]
/s/ Tal Horesh
9/3/2026
Name
ID number
Signature
Date
EX-10.6
EX-10.6
Filename: d230933dex106.htm · Sequence: 7
EX-10.6
Exhibit 10.6
Employment Agreement
This Employment
Agreement is made by and between XTEND REALITY EXPANSION LTD., an Israeli company, registration number 515871861, with its offices at 7 Habarzel St., Tel Aviv (the “Company”), and Reuven Liani (the
“Employee”).
The Employee has been employed by the Company since January 1, 2019 (the “Commencement Date”)
pursuant to the employment agreement executed by the parties, on or about, the same date (the “Prior Employment Agreement”), and the Company and the Employee wish to amend, restate and replace the Prior Employment Agreement in its
entirety by entering into this Employment Agreement, effective as of the Effective Date (as such term defined below).
Below is a table summarizing the
specific terms of Employee’s employment with the Company (the “Specific Terms”). The general terms and conditions of Employee’s employment with the Company are included in the pages following this table (the
“General Terms”).
Specific Terms, General Terms, and the Exhibits attached hereto are collectively deemed as the “Employment
Agreement”, Employee’s execution of these documents constitutes the agreement to the Specific Terms, the General Terms, and all the Exhibits attached hereto.
In this Employment Agreement, words referring to a male employee are also intended for a female employee.
Employee’s Details
Full Name: Reuven Liani
Position: CTO
I.D. Number: [***]
Manager: CEO
Effective Date: August 1, 2026
Scope of Work: Full-Time
Annual Salary
US$ 385,000 (gross), payable in twelve (12) equal monthly installments (each installment shall be referred to herein as the “Monthly Salary”). Payment shall be made in NIS, with the applicable
exchange rate to be determined by the Company on an annual basis at the commencement of each calendar year (i.e., the January salary cycle), in accordance with the Company’s internal practices in this regard. For the year 2026, the applicable
exchange rate shall be NIS 3 per US$1.
Notice Period
Three (3) calendar months.
Annual Cash Bonus
The Employee shall be eligible to receive an annual cash bonus with a target annual bonus opportunity of US$ 195,000 (gross) for 100% achievement of the applicable annual goals and targets, payable in NIS according to
the U.S. dollar/NIS exchange rate in effect on the payment date. The annual bonus shall be based on the achievement of annual goals and targets of the Employee and the Company, as determined by the Board of Directors of the of the Company’s
parent company, Xtend AI Robotics, Inc. (the “Board”, and the “Parent”, respectively), or a duly authorized committee designated by the Board on its behalf. The terms and conditions of the annual bonus,
including the applicable performance criteria, measurement methodology, approval process, threshold and maximum achievement levels, and all other related terms, shall be as set forth in the applicable executive compensation plan for C-level executives of the Company or the Parent, as applicable, to be adopted and as may be amended from time to time by the Board or such committee. Any annual bonus earned for a given year shall be paid within
ninety (90) days following the completion and closing of the financial reports for such year by the applicable independent accountants. If the Company terminates the Employee’s employment after the end of the applicable bonus year but
before the applicable payment date, other than for Cause, the Employee shall remain eligible to receive the annual bonus for such completed year, subject to the applicable terms and conditions and actual achievement of the relevant goals and
targets, and such bonus, if earned, shall be paid following such termination at the same time annual bonuses for such year are paid to the other executives.
Termination Grant
In the event that this Employment Agreement is terminated by either party for any reason other than for Cause, the Company shall pay to the Employee a one-time
lump-sum cash payment in an amount equal to three (3) times the Employee’s then-current Monthly Salary (the “Termination Grant”), subject to and conditioned upon the
Employee’s execution and non-revocation (if applicable) of the Company’s standard waiver and release of claims document.
Pension Plan
The Employee shall be insured under a Pension Plan (as defined below), all in accordance with the General Approval of Section 14 Arrangement and the General Terms.
Keren Hishtalmut (“Education Fund”)
Company’s Contribution: 7.5% of the Monthly Salary.
Employee’s Contribution: 2.5% of the Monthly Salary, which will be deducted from the Monthly Salary.
Notwithstanding the above, the amounts contributed to the Education Fund will not exceed
the tax-exempt limit recognized by the Income Tax Authority from time to time.
Vacation Days
Annual Entitlement: 20 business days per calendar year.
Maximum Amount: The Employee shall be entitled to carry forward from one calendar year to the next any unused vacation days, up to an amount equal to
one (1) Annual Entitlement.
Sick Days
Per applicable law. However, the Employee shall be entitled to receive the full compensation as of the first sick day.
Recreation Days
(“Dmey Havraa”)
Per applicable law.
Travel Expenses
The Employee shall be entitled to either: (i) use a Company Car for the purpose of fulfilling Employee duties to the Company (the “Company Car”) in accordance with the Company’s policies as shall be
modified from time to time, subject to signing the Company’s car policy and any other required agreement, including with the leasing company. The Company Car monthly cost shall be up to NIS 5,000 (excluding VAT), which shall be covered by the
Company. The Company will cover all of the operating expenses of the car, excluding parking expenses, tickets, fines, and other costs related to noncompliance by the Employee with any applicable law. The Company shall bear all applicable taxes
related to the Employee’s use of the Company Car; or (ii) receive from the Company a fixed monthly amount of NIS 5,000 (gross) as reimbursement for expenses related to travel, car maintenance, insurance and other related costs. Either
options, as shall be agreed upon between the parties shall be instead of Employee’s entitlement for reimbursement of his travel expenses per law
Equity Incentives
RSU Grant. Subject to the approval of the Parent’s Board, the Employee shall be granted 300,000 Restricted Stock Units
(“RSUs” and “Initial RSU Grant” respectively), in accordance with and subject to the terms and provisions of the Parent’s applicable equity incentive plan and its applicable sub-plan for Israeli participants, if any, as may be adopted from time to time (collectively, the “Plan”) and in accordance with the requirements of Section 102(b)(3) of the Israeli Tax
Ordinance. Each RSU shall represent the right to receive one share of a Common Stock of the Parent (“Common Stock”), subject to the terms, conditions and restrictions of the Plan and of an RSU award agreement to be entered into
between the Employee and the Parent, in the form customarily used by the Parent and as approved by the Board.
The RSUs shall vest over a period of thirty-six (36) months, in thirty-six
(36) equal monthly installments, with no cliff, such that 1/36 of the RSUs shall vest on each monthly anniversary of the Vesting Commencement Date (as shall be determined in the RSU award agreement), provided that the Employee remains
continuously employed by the Company or any of its affiliates, or continues to provide services thereto, through each applicable vesting date.
The grant of the RSUs shall be subject to the Employee’s execution of the applicable RSU award agreement and such other documents,
undertakings and instruments as may be required by the Parent and/or the Company.
Subject to the approval of the Board (or the applicable compensation committee, if required), the Employee shall be eligible to receive, on each of the first
and second anniversaries of the Initial RSU Grant’s grant date, an additional RSU grant on substantially the same terms and conditions as the initial RSU grant and covering the same number of RSUs as granted pursuant thereto.
Any tax liability arising in connection with the grant, vesting, settlement or the RSUs
and/or the sale of the Common Stock issued thereunder shall be borne solely by the Employee, and the Employee acknowledges that neither the Company nor the Parent shall bear any responsibility in connection therewith, except for any mandatory
withholding or reporting obligations required by applicable law. The Employee further acknowledges that no representation or undertaking has been made by the Company, the Parent or any of their representatives regarding the tax consequences of the
grant or the disposition of any securities issued thereunder.
In the event of any
contradiction or inconsistency between the provisions of this Employment Agreement and the provisions of the RSU award agreement, the provisions of the RSU award agreement shall prevail.
Recognition One Time RSU Grant. Subject to the approval of the Board of Directors
of the Parent (the “Board”), the Employee shall be granted 5,000,000 Restricted Stock Units (the “Recognition RSUs”), in accordance with and subject to the terms and provisions of the Plan and in
accordance with the requirements of Section 102(b)(3) of the Israeli Tax Ordinance. Each RSU shall represent the right to receive one share of a Common Stock of the Parent (“Common Stock”), subject to the terms, conditions
and restrictions of the Plan and of an RSU award agreement to be entered into between the Employee and the Parent, in the form customarily used by the Parent and as approved by the Board.
The Recognition RSUs shall vest over a period of
thirty-six (36) months, in thirty-six (36) equal monthly installments, with no cliff, such that 1/36 of the Recognition RSUs shall vest on each monthly
anniversary of the Vesting Commencement Date (as shall be determined in the RSU award agreement), provided that the Employee remains continuously employed by the Company or any of its affiliates, or continues to provide services thereto, through
each applicable vesting date.
The vesting schedule shall include an acceleration
provision, applicable to each and every RSU grant made to the Employee under this Agreement, pursuant to which 100% of the then-outstanding and unvested RSUs then held by the Employee (including the Initial RSU Grant, each additional RSU grant
referred to above and the Recognition RSUs) shall become fully vested immediately upon the termination of the Employee’s employment by the Parent or the Company without Cause or by the Employee for Good Reason. The grant of the RSUs shall be
subject to the Employee’s execution of the applicable RSU award agreement and such other documents, undertakings and instruments as may be required by the Parent and/or the Company.
Any tax liability arising in connection with the grant, vesting, settlement or the RSUs and/or the sale of the Common Stock issued thereunder
shall be borne solely by the Employee, and the Employee acknowledges that neither the Company nor the Parent shall bear any responsibility in connection therewith, except for any mandatory withholding or reporting obligations required by applicable
law. The Employee further acknowledges that no representation or undertaking has been made by the Company, the Parent or any of their representatives regarding the tax consequences of the grant or the disposition of any securities issued
thereunder.
In the event of any contradiction or inconsistency between the
provisions of this Employment Agreement and the provisions of the RSU award agreement, the provisions of the RSU award agreement shall prevail.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Aviv Shapira
Signature:
/s/ Reuven Liani
By:
Aviv Shapira
By:
Reuven Liani
Title:
Chief Executive Officer
Date:
9/3/2026
General Terms and Conditions of Employment with the Company
1.
Employment Position
1.1. The Employee’s employment relationship with the Company commenced as of the Commencement Date, and the Employee’s employment
by the Company pursuant to, and in accordance with, the terms and conditions of this Employment Agreement shall commence on the Effective Date and shall continue for an indefinite term, unless and until terminated in accordance with the provisions
of this Employment Agreement.
1.2. Employee shall be employed by the Company in the Position indicated in the Specific Terms, and shall
report to the person indicated in the Specific Terms as the Manager or any other person as determined by the Company.
1.3. Employee shall
devote Employee’s entire working time, know-how, expertise, talent, experience and best efforts to the business and affairs of the Company and perform his duties and functions diligently and skillfully
with the utmost expertise and devotion.
1.4. During Employee’s employment, Employee will not engage in or be associated with,
directly or indirectly, any other employment, consulting, or other business activity (with or without consideration), without the Company’s prior written approval. Prior to signing this Employment Agreement, the Employee will inform the
Company of any employment, occupation, engagement, or activity in which the Employee is involved, and that would require the Company’s written consent per this paragraph.
1.5. Employee shall be based in Israel, but he understands and agrees that the Position may require him to travel internationally from time to
time.
2.
Working Hours
2.1. Work for the Company shall be performed on Sunday through Thursday, unless determined and instructed otherwise by the Company.
2.2. A regular workweek for a full-time position consists of 42 working hours, not including Employee’s daily break.
2.3. Saturday, as observed by the Jewish religious, shall be the Employee’s recognized and official rest day.
2.4. Employee shall cooperate with the Company in maintaining a record of the number of hours of work performed, in accordance with the
Company’s policy.
3.
Termination
3.1. Employee’s employment with the Company may be terminated at any time at the option of either Employee or the Company, upon delivery
to the other party of a written notice pursuant to the Specific Terms (the “Notice Period”).
3.2. During the
Notice Period Employee shall continue work and perform all regular duties unless otherwise instructed by the Company. Employee will cooperate with the Company and use Employee’s best efforts to assist the integration into the Company
organization of the person or persons who will assume Employee’s responsibilities hereunder.
3.3. Notwithstanding the foregoing,
Company shall be entitled to terminate Employee’s employment at any time prior to the expiration of the Notice Period and pay the Employee the applicable payment in lieu of notice period, per applicable law.
3.4. In case of termination of Employee’s employment by the Company for Cause, the Company may terminate Employee’s employment
immediately (with no Notice Period).
3.5. “Cause” means (i) a material breach of the
PIIA (as defined below and attached hereto as Exhibit A), or any other material breach of this Employment Agreement, which, if capable of cure, was not cured within five (5) calendar days of receipt by the Employee of written
notice; (ii) fraud, theft, embezzlement, dishonesty, or misappropriation of funds of the Company or any of its affiliates; (iii) conviction of, or a plea of “guilty” or “no contest” to a felony or other lesser
crime that would require removal from Employee’s position at the Company; (iv) any willful or intentional act of the Employee that injures, or is reasonably likely to injure, the reputation, business, products or practices of the Company,
or any of its directors, officers, agents, representatives, shareholders or affiliates; or (v) other cause justifying termination or dismissal without severance payment under applicable law. The determination that a termination is for Cause
shall be made by the Company in its sole judgment and discretion.
3.6. “Good Reason” means the occurrence of any of the
following without the Employee’s prior written consent: (i) a material reduction of more than 15% in the Employee’s base salary, which is not applied on a broad basis to other C-Level
employees of the Company; (ii) a material diminution in the Employee’s title, authority, duties, or responsibilities; (iii) a requirement that the Employee relocate their principal place of work to a location more than 50 kilometers
from the Employee’s then-current work location; or (iv) a material breach of this Agreement by the Company; provided, however, that no resignation shall constitute a resignation for Good Reason unless: (A) the Employee has provided
the Company with written notice of the grounds for Good Reason within sixty (60) days of the initial occurrence of the applicable condition; (B) the Company has failed to cure such condition within thirty (30) days following receipt
of such notice; and (C) the Employee’s resignation occurs within thirty (30) days following the expiration of such cure period.
4.
Salary
4.1. Employee shall be entitled to a Monthly Salary in the amount specified in the Specific Terms.
4.2. Employee agrees and acknowledges that due to the Employee’s senior managerial position in the Company, the special personal trust
involved in the position in which the Employee shall be employed, and the inability to monitor the Employee’s actual work hours, the Hours of Work and Rest Law, 1951 (the “Hours of Work and Rest Law”) shall not apply to the
Employee. The Employee acknowledges that the set amount of the Monthly Salary, as well as all other compensation and benefits provided to the Employee by the Company, as agreed upon between the Employee and the Company, reflect the requirements of
the position to work additional and irregular hours and days. Accordingly, the Employee shall not be entitled to claim or receive payments or any additional pay for work performed at overtime hours, nights, weekends, or at any other times in which
the Hours of Work and Rest Law requires payment of special payments (to employees who are not in a position such as the position of the Employee).
4.3. The Monthly Salary shall be paid no later than the 9th day of the following month.
4.4. An amount equal to 10% of the Monthly Salary shall be considered to be a special payment for the Employee’s obligation for non-competition under the PIIA (the “Special Compensation”). Employee shall be obligated to return to the Company all Special Compensation amounts Employee received from the Company upon violation
of any of the obligations set forth in the PIIA. The Company maintains the right to withhold any amounts due to Employee following such violation. All the above shall not derogate from any of the Company’s rights with respect to any violation
of the provisions of the PIIA.
5.
Pension Plan
5.1. The Employee shall be insured under a managers insurance, a pension fund, or a combination of both, pursuant to the Employee’s
choice and preference (the “Pension Plan”).
5.2. The monthly contributions to the Pension Plan shall be made on the
basis of the Monthly Salary, as follows: (i) Company’s contributions: 8.33% towards the severance pay component, and 6.5% towards the pension component; and (ii) Employee’s contributions: 6% towards the pension
component, which will be deducted from the Monthly Salary each month.
5.3. Notwithstanding the said contributions, if the Pension Plan is a managers insurance
policy or a provident fund that is not a pension fund, Company’s contributions towards the pension component shall include the cost of acquiring a loss of working capacity insurance (the “Disability Insurance”), which shall
be equal to lower of the following: (i) 2.5% of the Monthly Salary or the applicable portion thereof, or (ii) a rate ensuring loss of earning payment of 75% of the Monthly Salary or the applicable portion thereof. Notwithstanding the foregoing,
the Company’s contributions towards the pension component must be at least 5%. Therefore, the Company’s contributions towards the pension component shall be no less than 6.5% and up to 7.5% of the Monthly Salary or the applicable portion
thereof.
5.4. It is agreed and warranted between the parties that the Company’s contributions to the severance component are in lieu
of severance pay, in accordance with the provisions of the General Approval regarding Employers’ Payments to a Pension Fund and Insurance Fund in lieu of Severance Pay issued by virtue of Section 14 of the Severance Pay Law 5723-1963 by
the Labor Minister, dated June 30, 1998 (as amended and as may be amended from time to time), which its Hebrew and English copies are attached hereto as Exhibit B (the “General Approval”). By signing this
Employment Agreement, the parties acknowledge their consent to the applicability of the provisions of the General Approval. In so far as amendments to the General Approval shall be necessary, according and subject to any law or regulations, the
provisions of the amended General Approval shall prevail and replace the General Approval attached.
5.5. The parties acknowledge and agree
that the amounts accrued in the Pension Plan on account of the Company’s contributions shall be in lieu of and will constitute the full and final settlement of any severance pay Employee may become entitled to under any applicable law or
contract. Notwithstanding the foregoing, the parties acknowledge and agree that the Company waives all rights for refunds from its contributions payments, unless a judgment determined that Employee is not entitled to severance pay under
Section 16 and/or Section 17 of the Severance Pay Law, or if Employee withdrew funds contributed to the Pension Plan prior to an “Entitling Event” as such is defined in section 2(b) in the General Approval.
6.
Vacation Days
6.1. Employee is obliged to take at least five (5) paid vacation days during a calendar year, as prescribed by law. Furthermore, Employee
will make every effort to exercise his full annual vacation by the end of a calendar year.
6.2. In the event the Employee was unable to
utilize all his vacation days by the end of a calendar year, Employee shall be entitled to carry forward from one calendar year to the next an accumulated unused balance of vacation days standing to his credit up to the Maximum Amount detailed in
the Specific Terms. For the avoidance of doubt, at the end of each calendar year, any unused vacation days in excess of the Maximum Amount shall be canceled, nulled, and shall not be redeemable in any event.
7.
Education Fund
7.1. Employee and Company shall open and maintain an education fund under the terms specified in Specific Terms (“Keren
Hishtalmut”) (the “Education Fund”).
7.2. Employee hereby authorizes the Company to transfer to the Education
Fund the amount of Employee’s contribution and the Company’s contribution from the Monthly Salary, on a monthly basis, subject to the terms specified in the Specific Terms.
8.
Reimbursement for Expenses:
8.1. The Company shall reimburse the Employee for all reasonable and necessary
out-of-pocket business expenses incurred by the Employee in connection with the performance of his duties under this Employment Agreement, subject to and in accordance
with the Company’s expense reimbursement policy (as shall be determined by the Company from time to time(, but only with respect to expenses that have been approved by the Company in advance, and for which the Employee has provided receipts
and/or other appropriate documentation.
9.
PIIA
9.1. Employee shall be required, as a condition to Employee’s employment with the Company, to sign the
Non-Competition, Proprietary Information and Inventions Agreement attached hereto as Exhibit A (the “PIIA”).
9.2. Employee’s compensation under this Employment Agreement has been calculated to include special consideration for the commitments
under the PIIA and the Employee will not be entitled to any further consideration for such commitments, expressly including no entitlement to royalties for any Service Inventions as defined in Section 132 of the Patent Law, 1967 (the
“Patent Law”). This clause constitutes an express waiver of the Employee’s rights under Section 134 of the Patent Law.
10.
Representations
10.1. The Employee confirms and undertakes: (i) that the Employee has all right and authority to enter into this Employment Agreement and
to perform the Employee’s obligations hereunder; (ii) that the Employee’s employment with the Company does not conflict with, or result in a breach of, any agreement or other commitment to which the Employee is a party or by which
the Employee is bound; (iii) to comply with all applicable laws relating to the Employee’s employment, including, without limitation, the Company’s Rules for Prevention of Sexual Harassment at the Workplace; (iv) to comply with
all of the Company’s work rules, policies, procedures and objectives, as shall be in effect from time to time; (v) not to disclose this Employment Agreement or any part thereof to any third party (other than the Employee’s spouse,
attorney, or tax advisor), including, without limitation, to any other employee of the Company; (vi) not to receive, at any time, whether during the term of this Employment Agreement or at any time thereafter, directly or indirectly, any
payment, benefit or other consideration from any third party in connection with the Employee’s employment with the Company, without the Company’s prior written authorization; (vii) to immediately and without delay inform the Company
in writing of any affairs or matters in which the Employee or any member of the Employee’s immediate family has a personal interest that might create a conflict with the Employee’s duties, responsibilities or obligations to the Company,
the Position, employment with the Company (including its affiliates), or the interests of the Company (including its affiliates); (viii) not, without the Company’s prior written consent, to undertake or accept any other paid or unpaid
employment or occupation, or engage in or be associated with, directly or indirectly, any other business, duty or pursuit, except for de minimis non-commercial activities; and (ix) not to disparage the
Company or its affiliates, their reputation, business, products or practices, or any of their respective directors, officers, agents, representatives or shareholders, whether orally or in writing.
10.2. The Employee agrees to the collection, storage, processing, and use by the Company of any information concerning the Employee, including
the transfer thereof to databases (in Israel or abroad and to any other person or entity, as the Company shall deem necessary and reasonable for business purposes or to pursue the Company’s business interests, all, in accordance with
applicable law and as is reasonable for the Company’s business purposes and interests. Without derogating from the generality of the above, such purposes may include human resources management.
11.
Use of the Company’s Computer Systems
11.1. The Employee hereby agrees and acknowledges that he has read, understands, and consents to the Company Computer Policy attached hereto as
Exhibit C and incorporated herein by reference, and agrees to, concurrently with the execution of this Employment Agreement, to sign on Exhibit C.
12.
Miscellaneous
12.1. This Employment Agreement, together with its exhibits, constitute the entire understanding and agreement between the parties and
supersedes any and all agreements (written or oral) concerning the subject matter hereof.
12.2. This Employment Agreement may only be amended by a document signed by both parties.
12.3. This Employment Agreement will be governed by and construed in accordance with the laws of the State of Israel, without regard to
the choice of law provisions thereof. Employee hereby expressly consents to the exclusive personal jurisdiction of the courts located in Tel-Aviv-Jaffa, for any lawsuit arising from or relating to this
Agreement.
12.4. All taxes, levies, and compulsory payments that the Company is liable to deduct, pursuant to any law, at the
Employee’s expense, shall be deducted at source from all the payments, rights, and benefits to which the Employee is entitled, pursuant to this Employment Agreement or its appendices, unless expressly provided otherwise in this Employment
Agreement.
12.5. Employee’s rights and obligations under this Employment Agreement may not be assigned or delegated, in whole or in
part, by operation of law or otherwise, without the Company’s prior written consent.
12.6. This Employment Agreement includes the
terms to be contained in, and constitutes, the written notice to be delivered to the Employee pursuant to the Notice to Employee and Job Candidate Law (Employment Conditions and Candidate Screening and Selection), 5762-2002. This Employment
Agreement does not derogate from any right vested to the Employee by virtue of any law, extension order, or collective bargaining agreement, to the extent such apply to the Employee.
12.7. All notices given or made pursuant to this Employment Agreement shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, or (b) when sent by electronic mail if sent during regular business hours of the recipient; if not, then on the next business day. All notices shall be sent to the respective parties at the
addresses set forth on the Specific Terms (or at such other addresses as shall be specified by notice given in accordance with this Section).
***
IN WITNESS WHEREOF, the parties have
executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Aviv Shapira
Signature:
/s/ Reuven Liani
By:
Aviv Shapira
By:
Reuven Liani
Title:
Chief Executive Officer
Date:
9/3/2026
Exhibit A
NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT
THIS NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT (the “Agreement”) is
effective as of the first day of the Employee’s engagement with the Company, including without limitation, prior to his employment with the Company (the “Effective Date”) and made by and between XTEND REALITY
EXPANSION LTD. (including, at its sole discretion, any or all of the Company’s affiliates, hereafter the “Company”) and Reuven Liani (I.D. No. [***]) (the “Employee”).
In consideration for, as a condition and part of the Employee’s engagement with the Company (for no additional consideration or compensation), it is
hereby agreed as follows:
1.
Confidential Information.
1.1. Definition.
1.1.1.
“Confidential Information” means any proprietary or confidential data and/or information, in any form or media, that Employee receives, obtains, or otherwise acquires or gains access to during or in connection with
Employee’s engagement with the Company (whether before or after the date of this Agreement), which pertains to the Company or any of its businesses, clients, customers, employees, shareholders, business partners, licensees, licensors, vendors
or affiliates. Confidential Information includes without limitation Company Intellectual Property (as defined below), or any part thereof, as well as any data and/or information that, given the nature of such data and/or information or the
circumstances of its disclosure or receipt, is or should reasonably be considered as confidential.
1.1.2. Confidential Information shall
not include any information that (i) is in the public domain at the time of disclosure, (ii) subsequently has entered the public domain other than by breach of Employee’s obligations hereunder or by breach of another person’s
or entity’s confidentiality obligations, or (iii) is shown by written dated evidence to have been known by Employee prior to disclosure to Employee in connection with his engagement with the Company, not as a result of a breach of any
obligation owed to the Company or any other third party.
1.2. Confidentiality. Except as herein provided, Employee agrees
that during and after termination of Employee’s engagement with the Company, Employee (i) shall keep Confidential Information confidential and shall not directly or indirectly, use, divulge, publish, or otherwise disclose or allow to be
disclosed any aspect of Confidential Information without the Company’s prior written consent (except in order to fulfill Employee’s employment tasks and obligations); (ii) shall refrain from any action or conduct which might compromise
the confidentiality or proprietary nature of the Confidential Information; and (iii) shall follow Company’s instructions provided from time to time regarding the use and handling of Confidential Information. The Employee will take all
reasonable precautions to prevent any unauthorized use of disclosure of the Confidential Information.
1.3. Ownership. Employee
acknowledges and agrees that all right, title, and interest in and to Confidential Information and all materials containing Confidential Information are and shall remain, at all times, the sole and exclusive property of the Company.
1.4. Proprietary Information of Third Parties.
1.4.1. Employee agrees that he/she has not and will not, during the term of the employment, improperly use, disclose or bring onto the premises
or systems of the Company any proprietary information or trade secrets of any former employer or other person or entity with which Employee has an agreement or duty to keep in confidence information acquired by Employee, if any, unless with the
prior written approval of the Company and such employer, person or entity.
1.4.2. Employee recognizes that the Company may have received, and in the future may
receive, from third parties their confidential or proprietary information subject to the Company’s undertaking to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee agrees that he/she
owes the Company and such third parties, during Employee’s employment with the Company and anytime thereafter, a duty to hold all such third party confidential or proprietary information at least in accordance with the provisions set forth
hereunder in connection with Confidential Information of the Company, and to use such third party confidential or proprietary information strictly for the limited purposes and in the manner permitted hereunder.
1.5. Return of Confidential Material. Upon Company’s request or upon termination of the Employee’s employment with the
Company for any reason, Employee agrees to promptly surrender and deliver to Company all materials and data of any nature or media pertaining to any Confidential Information or to the Employee’s employment. Employee will not retain or take any
tangible or electronical materials or data, containing or pertaining to any Confidential Information. If required by the Company, Employee will certify in writing that he/she complied with the requirements of this Section.
2.
Ownership of Intellectual Property.
2.1. Definitions.
2.1.1.
“Intellectual Property” means proprietary or intellectual property rights, including without limitation copyrights, inventions, discoveries, patents, designs, trademarks, whether or not registered or capable of being
registered, original ideas, trade secrets, source and object code, algorithms, formulae, materials, methods, processes, procedures, any derivatives, improvements, and enhancements of the foregoing, and all rights corresponding to the foregoing
throughout the world including all rights to sue for and receive remedies against past, present and future infringements of any and all of the foregoing;
2.1.2. “Prior Inventions” means the Intellectual Property made or conceived by or belonging to Employee that are
listed on Schedule A attached hereto that (i) were developed by Employee prior to Employee’s employment with the Company, (ii) relate to Company’s actual or proposed business, operations, products or research and
development, and (iii) are not assigned to Company hereunder; and
2.1.3. “Open Source” means any software
or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution model (including but not limited to the GNU General Public License (GPL), GNU Lesser General Public
License (LGPL), Mozilla Public License (MPL), BSD licenses, MIT Licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL) the Sun Industry Standards License (SISL), materials licensed under any Creative
Commons license and the Apache License).
2.2. Assignment of Intellectual Property. Employee hereby irrevocably assigns and
transfers to Company, for no additional consideration, Employee’s entire right, title, and interest in and to all the Intellectual Property authored, developed, created, made, conceived, or reduced to practice by Employee, whether solely or
jointly with others, during the period of Employee’s engagement with Company (including prior to the date of this Agreement, after hours, on weekends or during vacation time), that either (i) relate in any manner to the actual or
demonstrably anticipated business or proposed business, work, or research and development of Company; or (ii) is developed in whole or in part on Company’s time or using Company’s equipment, supplies, facilities or Confidential
Information; or (iii) result from or are suggested by any task assigned to Employee or any work performed by Employee for or on behalf of Company or in connection with Employee’s duties and responsibilities in the scope of his/her
engagement with Company (the “Company Intellectual Property”). Employee agrees that this assignment includes a present assignment to Company of ownership with respect to Company Intellectual Property that is not yet in existence.
2.3. Employee hereby explicitly and irrevocably waives (i) any interest, claim, or demand with respect to any consideration,
compensation, or royalty payment in connection with Company Intellectual Property and/or the assignment thereof, including, but not limited to any payments pursuant to Section 134 to the Israeli Patent Law – 1967 (the “Patent
Law”); (ii) any moral rights, artists’ rights, or any other similar rights worldwide (“Moral Rights”) that he/she has at any time with respect to Company Intellectual Property.
2.4. Prior Inventions. If no Prior Inventions are listed in Schedule A of this
Agreement, Employee warrants that there are no Prior Inventions. Employee hereby acknowledges that, if in the course of Employee’s employment with Company, Employee incorporates into a Company product, process, service, or software a Prior
Invention owned by Employee or in which Employee has an interest, Company is hereby granted and shall have a fully paid, nonexclusive, royalty-free, unlimited, irrevocable, perpetual, worldwide, transferable and
sub-licensable right and license to make, have made, modify, create derivative works, reproduce, use, offer to sell use, sell, sublicense and otherwise distribute such Prior Invention (as may be improved or
enhanced by or for Company) and in the event of copyrightable materials, copy, distribute, publicly perform, publicly display, make derivative works thereof, and sublicense such copyrightable materials, as part of or in connection with such Company
product, process, service or software.
2.5. Disclosure of Intellectual Property. Employee agrees that in connection with
Intellectual Property and/or which Employee, solely or jointly with others, conceives, develops, or reduces to practice during the period of Employee’s employment with the Company (including after hours, on weekends, or during vacation time)
whether or not Employee believes that such Intellectual Property is Company Intellectual Property, Employee shall, as customary or required by the Company, keep and maintain adequate and accurate records, and shall promptly disclose such
Intellectual Property to Company, through Employee’s immediate supervisor at Company or another Company designee (and if requested by the Company shall also reduce to writing and adequately describe all such Intellectual Property), in order to
permit Company to claim its rights under this Agreement.
2.6. Employee’s Assistance.
2.6.1. Employee agrees to assist Company, or its designee, at Company expense, in every proper way to secure Company rights in the Company
Intellectual Property and in any and all countries, including (a) the disclosure to Company of all pertinent information and data with respect thereto; (b) the execution of all assignments, applications, specifications, oaths, and other
instruments that Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Company
Intellectual Property.
2.6.2. Employee’s obligations hereunder, to the extent that it is in Employee’s power to do so, shall
continue after the termination of Employee’s employment with Company for any reason. If Company is unable because of Employee’s mental or physical incapacity or for any other reason to secure Employee’s signature on any instrument,
required at Company’s discretion in order to apply for, pursue or maintain any application for Intellectual Property rights (including patents or copyright registrations) covering and embodying any Company Intellectual Property, then Employee
hereby irrevocably designates and appoints Company and its duly authorized officers and agents (at its discretion) as Employee’s agent and attorney-in-fact, to act
for and in Employee’s behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and/or protection or maintenance.
2.7. Other Obligations.
2.7.1. Employee acknowledges that the Company from time to time may have agreements with other persons or with the government authorities, or
agencies thereof, that impose obligations or restrictions on Company regarding Intellectual Property made during the course of work thereunder or regarding the confidential nature of such work. Employee agrees to be bound by the Company’s
instructions or policies, and take necessary actions to assist Company in complying with its obligations thereunder.
2.7.2. Employee
further agrees and undertakes that any and all work performed by him shall not infringe upon, misappropriate or use in an unauthorized manner any copyright, patent, trademark, trade secret, or other confidential or proprietary information or
intellectual property of any third party, including, without limitation, any current or former employer of Employee.
2.8. Open Source Software.
2.8.1. To the extent Intellectual Property or any other work product provided or generated by Employee includes any software, computer code,
and/or firmware, any such Intellectual Property or work product shall not incorporate or include any Open Source, unless explicitly permitted under the Company’s Open Source policy and/or instructions. Further, all other use of Open Source
materials in connection with Employee’s employment shall be in accordance with the Company’s Open Source policy.
2.8.2.
Intellectual Property and any other work product provided or generated by Employee shall on delivery be free of viruses, malicious code, time bombs, Trojan horses, back doors, drop dead devices, worms, or other code of any kind that may disable,
erase, display any unauthorized message, permit unauthorized access, automatically or remotely stop software, code and/or firmware from operating, or otherwise impair the services, deliverables, inventions or work product or the Company network or
any part thereof.
3.
Non-Competition and
Non-Solicitation
During the term of Employee’s employment
with the Company and for a period of twelve (12) months thereafter, Employee will not, directly or indirectly, (i) engage whether as an employee, independent contractor, partner, joint venture, shareholder, investor,
director, consultant or otherwise, in any business or activity, all over the world, which is competitive with the technology, products, and/or services of the Company, or the business in which it is currently engaged or in which it may be engaged
in, during the time of the Employee’s employment with the Company, (ii) solicit, induce, recruit or encourage any of the Company’s personnel to leave their employment, or take away such personnel, or attempt to solicit, induce,
recruit, encourage or take away personnel of the Company, and/or their affiliates, either for the Employee or for any other person or entity; nor (iii) offer, solicit, interfere with and/or endeavor to entice away from Company, and/or any of
its affiliates, any person, firm or company with whom Company and/or any of its affiliates shall have any contractual and/or commercial relationship as, consultant, licenser, joint venture, supplier, customer, distributor, agent or contractor
of whatsoever nature, existing or under negotiation on or twelve (12) months prior to the termination of his/her employment with the Company.
4.
Breach of Obligations
Employee is aware that a breach of his/her obligations as detailed under this Agreement, or part of them, will cause the Company or the
Company’s affiliates serious and irreparable damage, and that no financial compensation can be an appropriate remedy to such damage. Therefore, in addition to the return of the Special Compensation pursuant to the terms of the Employment
Agreement to which this Agreement is attached, Employee agrees, that if such a breach occurs, the Company, any of the Company’s affiliates or any of their designee(s) shall be entitled (without limiting other remedies if available under the
law or hereunder) to take all legal means necessary and any injunctive relief as is necessary to restrain any continuing or further breach of this Agreement.
5.
Acknowledgements and Declarations
Employee hereby declares and acknowledges that:
5.1. Employee’s confidentiality and non-competition obligations under this Agreement are fair,
reasonable, and proportional, especially in light of the Special Compensation Employee receives under the employment agreement to which this Agreement is attached, and are designed to protect the Company’s and the Company affiliates’
secrets and their confidential information, which constitute the essence of their protected business and commercial advantage in which significant capital investments were made.
5.2. Any breach of Employee’s obligations under this Agreement shall contradict the nature of the special trust and loyalty between
Employee and the Company, the fair and proper business practices and the duty of good faith and fairness between the parties. Any such breach shall harm the Company and/or the Company affiliates and shall constitute a material breach of this
Agreement and the employment agreement to which this Agreement is attached.
5.3. Employee’s obligations under this Agreement and the restricted period of time and
geographical area specified herein are reasonable and proportional, and do not prevent Employee from developing his/her general knowledge and professional expertise in the area of his/her business, without infringing on or breaching any of the
Company’s rights.
6.
Miscellaneous
6.1. Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the State of Israel, without regard
to the choice of law provisions thereof. Employee hereby expressly consents to the personal jurisdiction of the courts located in Tel-Aviv-Jaffa district, Israel, for any lawsuit arising from or relating to
this Agreement.
6.2. Assignment. The undertakings set forth herein may be assigned by the Company. Employee may not assign or
delegate his/her duties under this Agreement without the Company’s prior written approval. This Agreement shall be binding upon Employee’s heirs, successors, and permitted assignees.
6.3. Counterparts. This Agreement may be signed in two counterparts, each of which shall be deemed an original and both of which shall
together constitute one and the same instrument.
6.4. Entire Agreement. This Agreement constitutes the full and complete agreement
between the parties and supersedes any and all agreements or understandings, whether written or oral, concerning the subject matter of this Agreement, and may only be amended by a document signed by both parties.
6.5. Severability. If any provision of this Agreement is found to be invalid or unenforceable by a court of competent jurisdiction, such
provision shall be automatically adjusted to the minimum extent necessary for validity or enforceability. In any event, the remaining terms and provisions of this Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
/s/ Aviv Shapira
/s/ Reuven Liani
XTEND REALITY EXPANSION LTD.
Employee
By:
Aviv Shapira
By:
Reuven Liani
Date:
9/3/2026
Date:
9/3/2026
Schedule A
TO THE NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT
Prior Inventions
Follows a list of Prior
Inventions of the Employee:
1.
2.
3.
4.
If nothing is listed, I will be regarded as having declared that I have no Prior Inventions.
/s/ Reuven Liani
9/3/2026
Employee
(Signature)
Date
Exhibit B
GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND AND INSURANCE FUND IN LIEU OF SEVERANCE PAY
By virtue of my power under section 14 of the Severance Pay Law, 1963 (hereinafter: the “Law”), I certify that payments made by an employer
commencing from the date of the publication of this approval on behalf of his employees to a comprehensive pension benefit fund that is not an insurance fund within the meaning thereof in the Income Tax (Rules for the Approval and Conduct of Benefit
Funds) Regulations, 1964 (hereinafter: the “Pension Fund”) or to managers’ insurance including the possibility of an insurance pension fund or a combination of payments to an annuity fund and to a non-annuity fund (hereinafter: the “Insurance Fund), including payments made by him by a combination of payments to a Pension Fund and an Insurance Fund, whether or not the Insurance Fund has an annuity
fund (hereinafter: the “Employer’s Payments), shall be made in lieu of the severance pay due to the said employee in respect of the salary from which the said payments were made and for the period they were paid (hereinafter: the
“Exempt Salary”), provided that all the following conditions are fulfilled:
(1)
The Employer’s Payments
(a)
To the Pension Fund are not less than 141/3% of the Exempt Salary or 12% of the Exempt Salary if the employer
pays for his employee in addition thereto additional payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary. In the event that the
employer has not paid an addition to the said 12%, his payments shall be only in lieu of 72% of the employee’s severance pay;
(b)
To the Insurance Fund are not less than one of the following:
(1)
131/3% of the Exempt Salary, if the employer pays for his employee in addition thereto also payments to secure
monthly income in the event of disability, in a plan approved by the Commissioner of the Capital Market, Insurance and Savings Department of the Ministry of Finance, in an amount required to secure at least 75% of the Exempt Salary or in an amount
of 21/2% of the Exempt Salary, the lower of the two (hereinafter: “Disability Insurance”); or
(2)
11% of the Exempt Salary, if the employer paid, in addition, a payment to the Disability Insurance, and in such
case, the Employer’s Payments shall only replace 72% of the Employee’s severance pay; In the event that the employer has paid, in addition to the foregoing payments to supplement severance pay, to a benefit fund for severance pay or to
an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary, the Employer’s Payments shall replace 100% of the employee’s severance pay.
(2)
No later than three months from the commencement of the Employer’s Payments, a written agreement is
executed between the employer and the employee in which:
(a)
The employee has agreed to the arrangement pursuant to this approval in a text specifying the Employer’s
Payments, the Pension Fund, and Insurance Fund, as the case may be; the said agreement shall also include the text of this approval; and
(b)
The employer waives in advance any right, which he may have to a refund of monies from his payments, unless the
employee’s right to severance pay has been revoked by a judgment by virtue of Sections 16 and 17 of the Law, and to the extent so revoked and/or the employee has withdrawn monies from the Pension Fund or Insurance Fund other than by reason of
an entitling event; in such regard “Entitling Event” means death, disability or retirement after the age of 60.
(3)
This approval does not derogate from the employee’s right to severance pay pursuant to any law,
collective agreement, extension order, or employment agreement, in respect of salary over and above the Exempt Salary.
Exhibit C
COMPANY COMPUTER POLICY CONSENT
XTEND
REALITY EXPANSION LTD. (the “Company”) has a policy regarding the use of the Company’s computer systems (the “Company’s Computers Policy”), as follows:
1.
The Company has provided you, for the purpose of the performance of your duties, various types of computer
related devices, including a computer, hardware, software, Company e-mail account, phone, etc. (the “Computer Devices”). The Computer Devices are the exclusive property of the
Company, and in order to protect the Computer Devices, and the information which they contain, you are hereby required to adhere to the following instructions:
1.1. Hardware – it is prohibited to install hardware on, and/or to, Computer Devices without the prior authorization of your
supervisor or the Company’s IT team. In this regard, you are not allowed to connect to a Computer Device an external hard – drive, disk on key (also known as memory stick and/or flash memory), camera, cell phone or any other type of
hardware for purposes which are illegal, inappropriate, or transferring of material that belongs to the Company, its clients, employees, or any other third party without the prior authorization of your supervisor or the Company’s IT team.
1.2. Software – it is prohibited to install software on Computer Devices, except for reasonable bounds, without the prior
authorization of your supervisor or the Company’s IT team.
1.3. Files – it is prohibited to save on Computer Devices
any files, photos, or videos that are not related to the Company. In particular, and without limitation, it is prohibited to save on Computer Device any file that its access and/or saving by you constitute infringement of protected Intellectual
Property rights, and any file that contains obscene, pornographic, or abusive content.
Notwithstanding the above, you are permitted to
save personal files that you or your immediate family members have created, which are not related to the Company or to the performance of your duties, and have no commercial content, as long as such files are saved under a folder labeled
“Private” located at the root directory of the Computer Device.
1.4. If any of the above instructions is not clear or if you
have a question regarding the use of Computer Devices, please contact your supervisor.
2.
Notwithstanding the above, the Company does allow private use of the Computer Devices made available to you for
work purpose, within reasonable bounds, subject to Section 1 above and Section 4 below.
3.
During work hours and/or while at the Company’s offices you may access the internet for your own private
use provided that such access is done for a reasonable period of time, and in accordance with the Company’s Computers Policy. For the removal of doubt, and without limitation, it is prohibited to access any website that contains obscene,
pornographic, or abusive content, and/or includes content that infringes on protected Intellectual Property rights, and /or involves gambling.
4.
The Company’s e-mail account –
4.1. Which was assigned to you is provided to you only for the purpose of work related use. You are not allowed to use
the Company’s e-mail account for private purposes that are not related to the Company’s activities, such prohibited private use of your e-mail account
includes correspondence with friends and family.
4.2. In the event, you wish to send private
e-mails during work hours and/or while at Company’s offices, you can do so through your private external web based e-mail account (Gmail, Hotmail, etc.). As noted
above, you are prohibited from saving to Computer Devices any files received through your external web based e-mail account, unless such files are saved per the terms of the exclusive exception detailed above.
4.3. In order to maintain the security of the Computer Devices and the protection of the Company’s legitimate interests, the Company
is using various monitoring technologies, as well as blocking technologies, in the scope further detailed in the Computer Policy. These technologies enable the Company to monitor and review content and information which is present on Computer
Devices or exchanged through Computer Devices, including through the Company’s e-mail account assigned to Company’s employees.
5.
Said monitoring is not intended to infringe your privacy, and as a general rule the Company is not interested
in reviewing correspondence which is exchanged through the Company’s e-mail account assigned to you. However, the Company may review the professional correspondence and will act within the boundaries of
applicable law, and when circumstances so require, necessitate, and obligate, in order to protect the Company’s legitimate interests.
6.
In the event that private correspondence exists in the Computer Devices and/or the Company e-mail account assigned to you, this, despite the clear instructions detailed hereinabove, the Company may review such correspondence, if special and unique circumstances exist in which there is a serious suspicion
that you are carrying out harmful or illegal activity through Computer Devices, and subject to your consent.
7.
It is further clarified that as part of the Company’s administration of its affairs, it may become
necessary for another employee of the Company to access the Computer Devices that were assigned to you, in order to review professional information on the Computer Devices that were assigned to you. Such access by other employees may occur during
your employment or after the termination of your employment. In this respect, upon request from your supervisors or upon the termination of employment, you are required to provide your supervisors with all access passwords that are necessary to
access Computer Devices which were assigned to you, and materials that are saved on them.
8.
Any material or file that is saved on Company’s Computer Devices is deemed to be the Company’s
property.
As a sign of your consent to the Computer Policy and the foregoing instructions, you are required to sign below.
EMPLOYEE ACKNOWLEDGEMENT AND CONSENT:
I, the undersigned, hereby acknowledge and approve that I have read all the above mentioned, received any and all clarifications which I required, and agree
to it.
Reuven Liani
[***]
/s/ Reuven Liani
9/3/2026
Name
ID number
Signature
Date
EX-10.7
EX-10.7
Filename: d230933dex107.htm · Sequence: 8
EX-10.7
Exhibit 10.7
Employment Agreement
This Employment
Agreement is made by and between XTEND REALITY EXPANSION LTD., an Israeli company, registration number 515871861, with its offices at 7 Habarzel St., Tel Aviv (the “Company”), and Amir Ofri (the
“Employee”).
The Employee has been employed by the Company since November 2, 2025 (the “Commencement Date”)
pursuant to the employment agreement excuted by the parties, on or about the same date (the “Prior Employment Agreement”), and the Company and the Employee wish to amend, restate and replace the Prior Employment Agreement in its
entirety by entering into this Employment Agreement, effective as of the Effective Date (as such term defined below).
Below is a table summarizing the
specific terms of Employee’s employment with the Company (the “Specific Terms”). The general terms and conditions of Employee’s employment with the Company are included in the pages following this table (the
“General Terms”).
Specific Terms, General Terms, and the Exhibits attached hereto are collectively deemed as the “Employment
Agreement”, Employee’s execution of these documents constitutes the agreement to the Specific Terms, the General Terms, and all the Exhibits attached hereto.
In this Employment Agreement, words referring to a male employee are also intended for a female employee.
Employee’s
Details
Full Name: Amir Ofri
Position: COO
I.D. Number: [***]
Manager: CEO
Effective Date: August 1, 2026
Scope of Work: Full-Time
Annual Salary
US$ 220,000 (gross), payable in twelve (12) equal monthly installments (each installment shall be referred to herein as the “Monthly Salary”). Payment shall be made in NIS, with the applicable
exchange rate to be determined by the Company on an annual basis at the commencement of each calendar year (i.e., the January salary cycle), in accordance with the Company’s internal practices in this regard. For the year 2026, the applicable
exchange rate shall be NIS 3 per US$1.
Notice Period
Three (3) calendar months.
Annual Cash Bonus
The Employee shall be eligible to receive an annual cash bonus with a target annual bonus opportunity of US$ 10,000 (gross) for 100% achievement of the applicable annual goals and targets, payable in NIS according to the
U.S. dollar/NIS exchange rate in effect on the payment date. The annual bonus shall be based on the achievement of annual goals and targets of the Employee and the Company, as determined by the Board of Directors of the Company’s parent
company, Xtend AI Robotics, Inc. (the “Board”, and the “Parent”, respectively), or a duly authorized committee designated by the Board on its behalf. The terms and conditions of the annual bonus, including the
applicable performance criteria, measurement methodology, approval process, threshold and maximum achievement levels, and all other related terms, shall be as set forth in the applicable executive compensation plan for
C-level executives of the Company or the Parent, as applicable, to be adopted and as may be amended from time to time by the Board or such committee. Any annual bonus earned for a given year shall be paid
within ninety (90) days following the completion and closing of the financial reports for such year by the applicable independent accountants. If the Company terminates the Employee’s employment after the end of the applicable bonus year
but before the applicable payment date, other than for Cause, the Employee shall remain eligible to receive the annual bonus for such completed year, subject to the applicable terms and conditions and actual achievement of the relevant goals and
targets, and such bonus, if earned, shall be paid following such termination at the same time annual bonuses for such year are paid to the other executives.
Termination
Grant
In the event that this Employment Agreement is terminated by either party for any reason other than for Cause, the Company shall pay to the Employee a one-time
lump-sum cash payment in an amount equal to three (3) time the Employee’s then-current Monthly Salary (the “Termination Grant”), subject to and conditioned upon the
Employee’s execution and non-revocation (if applicable) of the Company’s standard waiver and release of claims document.
Pension Plan
The Employee shall be insured under a Pension Plan (as defined below), all in accordance with the General Approval of Section 14 Arrangement and the General Terms.
Keren Hishtalmut (“Education Fund”)
Company’s Contribution: 7.5% of the Monthly Salary.
Employee’s Contribution: 2.5% of the Monthly Salary, which will be deducted from the Monthly Salary.
Notwithstanding the above, the amounts contributed to the Education Fund will not exceed
the tax-exempt limit recognized by the Income Tax Authority from time to time.
Vacation Days
Annual Entitlement: 20 business days per calendar year.
Maximum Amount: The Employee shall be entitled to carry forward from one calendar year to the next any unused vacation days, up to an amount equal to
one (1) Annual Entitlement.
Sick Days
Per applicable law. However, the Employee shall be entitled to receive the full compensation as of the first sick day.
Recreation Days
(“Dmey Havraa”)
Per applicable law.
Travel Expenses
The Employee shall be entitled to either: (i) use a Company Car for the purpose of fulfilling Employee duties to the Company (the “Company Car”) in accordance with the Company’s policies as shall be
modified from time to time, subject to signing the Company’s car policy and any other required agreement, including with the leasing company. The Company Car monthly cost shall be up to NIS 5,000 (excluding VAT), which shall be covered by the
Company. The Company will cover all of the operating expenses of the car, excluding parking expenses, tickets, fines, and other costs related to noncompliance by the Employee with any applicable law. The Company shall bear all applicable taxes
related to the Employee’s use of the Company Car; or (ii) receive from the Company a fixed monthly amount of NIS 5,000 (gross) as reimbursement for expenses related to travel, car maintenance, insurance and other related costs. Either
options, as shall be agreed upon between the parties shall be instead of Employee’s entitlement for reimbursement of his travel expenses per law.
Equity Incentives
RSU Grant. Subject to the approval of the Parent’s Board, the Employee shall be granted 160,000 Restricted Stock Units
(“RSUs” and “Initial RSU Grant” respectively), in accordance with and subject to the terms and provisions of the Parent’s applicable equity incentive plan and its applicable sub-plan for Israeli participants, if any, as may be adopted from time to time (collectively, the “Plan”) and in accordance with the requirements of Section 102(b)(3) of the Israeli Tax
Ordinance. Each RSU shall represent the right to receive one share of a Common Stock of the Parent (“Common Stock”), subject to the terms, conditions and restrictions of the Plan and of an RSU award agreement to be entered into
between the Employee and the Parent, in the form customarily used by the Parent and as approved by the Board.
The RSUs shall vest over a period of thirty-six (36) months, in thirty-six
(36) equal monthly installments, with no cliff, such that 1/36 of the RSUs shall vest on each monthly anniversary of the Vesting Commencement Date (as shall be determined in the RSU award agreement), provided that the Employee remains
continuously employed by the Company or any of its affiliates, or continues to provide services thereto, through each applicable vesting date.
The grant of the RSUs shall be subject to the Employee’s execution of the applicable RSU award agreement and such other documents,
undertakings and instruments as may be required by the Parent and/or the Company.
Subject to the approval of the Board (or the applicable compensation committee, if required), the Employee shall be eligible to receive, on each of the first
and second anniversaries of the Initial RSU Grant’s grant date, an additional RSU grant on substantially the same terms and conditions as the initial RSU grant and covering the same number of RSUs as granted pursuant thereto on.
Any tax liability arising in connection with the grant, vesting, settlement or the RSUs
and/or the sale of the Common Stock issued thereunder shall be borne solely by the Employee, and the Employee acknowledges that neither the Company nor the Parent shall bear any responsibility in connection therewith, except for any mandatory
withholding or reporting obligations required by applicable law. The Employee further acknowledges that no representation or undertaking has been made by the Company, the Parent or any of their representatives regarding the tax consequences of the
grant or the disposition of any securities issued thereunder.
In the event of any
contradiction or inconsistency between the provisions of this Employment Agreement and the provisions of the RSU award agreement, the provisions of the RSU award agreement shall prevail.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Aviv Shapira
Signature:
/s/ Amir Ofri
By:
Aviv Shapira
By:
Amir Ofri
Title:
Chief Executive Officer
Date:
9/3/2026
General Terms and Conditions of Employment with the Company
1.
Employment Position
1.1. The Employee’s employment relationship with the Company commenced as of the Commencement Date, and the Employee’s employment
by the Company pursuant to, and in accordance with, the terms and conditions of this Employment Agreement shall commence on the Effective Date and shall continue for an indefinite term, unless and until terminated in accordance with the provisions
of this Employment Agreement.
1.2. Employee shall be employed by the Company in the Position indicated in the Specific Terms, and shall
report to the person indicated in the Specific Terms as the Manager or any other person as determined by the Company.
1.3. Employee shall
devote Employee’s entire working time, know-how, expertise, talent, experience and best efforts to the business and affairs of the Company and perform his duties and functions diligently and skillfully
with the utmost expertise and devotion.
1.4. During Employee’s employment, Employee will not engage in or be associated with,
directly or indirectly, any other employment, consulting, or other business activity (with or without consideration), without the Company’s prior written approval. Prior to signing this Employment Agreement, the Employee will inform the
Company of any employment, occupation, engagement, or activity in which the Employee is involved, and that would require the Company’s written consent per this paragraph.
1.5. Employee shall be based in Israel, but he understands and agrees that the Position may require him to travel internationally from time to
time.
2.
Working Hours
2.1. Work for the Company shall be performed on Sunday through Thursday, unless determined and instructed otherwise by the Company.
2.2. A regular workweek for a full-time position consists of 42 working hours, not including Employee’s daily break.
2.3. Saturday, as observed by the Jewish religious, shall be the Employee’s recognized and official rest day.
2.4. Employee shall cooperate with the Company in maintaining a record of the number of hours of work performed, in accordance with the
Company’s policy.
3.
Termination
3.1. Employee’s employment with the Company may be terminated at any time at the option of either Employee or the Company, upon delivery
to the other party of a written notice pursuant to the Specific Terms (the “Notice Period”).
3.2. During the
Notice Period Employee shall continue work and perform all regular duties unless otherwise instructed by the Company. Employee will cooperate with the Company and use Employee’s best efforts to assist the integration into the Company
organization of the person or persons who will assume Employee’s responsibilities hereunder.
3.3. Notwithstanding the foregoing,
Company shall be entitled to terminate Employee’s employment at any time prior to the expiration of the Notice Period and pay the Employee the applicable payment in lieu of notice period, per applicable law.
3.4. In case of termination of Employee’s employment by the Company for Cause, the Company may terminate Employee’s employment
immediately (with no Notice Period).
3.5. “Cause” means (i) a material breach of the
PIIA (as defined below and attached hereto as Exhibit A), or any other material breach of this Employment Agreement, which, if capable of cure, was not cured within five (5) calendar days of receipt by the Employee of written
notice; (ii) fraud, theft, embezzlement, dishonesty, or misappropriation of funds of the Company or any of its affiliates; (iii) conviction of, or a plea of “guilty” or “no contest” to a felony or other lesser
crime that would require removal from Employee’s position at the Company; (iv) any willful or intentional act of the Employee that injures, or is reasonably likely to injure, the reputation, business, products or practices of the Company,
or any of its directors, officers, agents, representatives, shareholders or affiliates; or (v) other cause justifying termination or dismissal without severance payment under applicable law. The determination that a termination is for Cause
shall be made by the Company in its sole judgment and discretion.
4.
Salary
4.1. Employee shall be entitled to a Monthly Salary in the amount specified in the Specific Terms.
4.2. Employee agrees and acknowledges that due to the Employee’s senior managerial position in the Company, the special personal trust
involved in the position in which the Employee shall be employed, and the inability to monitor the Employee’s actual work hours, the Hours of Work and Rest Law, 1951 (the “Hours of Work and Rest Law”) shall not apply to the
Employee. The Employee acknowledges that the set amount of the Monthly Salary, as well as all other compensation and benefits provided to the Employee by the Company, as agreed upon between the Employee and the Company, reflect the requirements of
the position to work additional and irregular hours and days. Accordingly, the Employee shall not be entitled to claim or receive payments or any additional pay for work performed at overtime hours, nights, weekends, or at any other times in which
the Hours of Work and Rest Law requires payment of special payments (to employees who are not in a position such as the position of the Employee).
4.3. The Monthly Salary shall be paid no later than the 9th day of the following month.
4.4. An amount equal to 10% of the Monthly Salary shall be considered to be a special payment for the Employee’s obligation for non-competition under the PIIA (the “Special Compensation”). Employee shall be obligated to return to the Company all Special Compensation amounts Employee received from the Company upon violation
of any of the obligations set forth in the PIIA. The Company maintains the right to withhold any amounts due to Employee following such violation. All the above shall not derogate from any of the Company’s rights with respect to any violation
of the provisions of the PIIA.
5.
Pension Plan
5.1. The Employee shall be insured under a managers insurance, a pension fund, or a combination of both, pursuant to the Employee’s
choice and preference (the “Pension Plan”).
5.2. The monthly contributions to the Pension Plan shall be made on the
basis of the Monthly Salary, as follows: (i) Company’s contributions: 8.33% towards the severance pay component, and 6.5% towards the pension component; and (ii) Employee’s contributions: 6% towards the pension
component, which will be deducted from the Monthly Salary each month.
5.3. Notwithstanding the said contributions, if the Pension Plan is
a managers insurance policy or a provident fund that is not a pension fund, Company’s contributions towards the pension component shall include the cost of acquiring a loss of working capacity insurance (the “Disability
Insurance”), which shall be equal to lower of the following: (i) 2.5% of the Monthly Salary or the applicable portion thereof, or (ii) a rate ensuring loss of earning payment of 75% of the Monthly Salary or the applicable portion
thereof. Notwithstanding the foregoing, the Company’s contributions towards the pension component must be at least 5%. Therefore, the Company’s contributions towards the pension component shall be no less than 6.5% and up to 7.5% of the
Monthly Salary or the applicable portion thereof.
5.4. It is agreed and warranted between the parties that the Company’s contributions
to the severance component are in lieu of severance pay, in accordance with the provisions of the General Approval regarding Employers’ Payments to a Pension Fund and Insurance Fund in lieu of Severance Pay issued by virtue of Section 14
of the Severance Pay Law 5723-1963 by the Labor Minister, dated June 30, 1998 (as amended and as may be amended from time to time), which its Hebrew and English copies are attached hereto as Exhibit B (the “General
Approval”). By signing this Employment Agreement, the parties acknowledge their consent to the applicability of the provisions of the General Approval. In so far as amendments to the General Approval shall be necessary, according and
subject to any law or regulations, the provisions of the amended General Approval shall prevail and replace the General Approval attached.
5.5. The parties acknowledge and agree that the amounts accrued in the Pension Plan on account of the Company’s contributions shall be in
lieu of and will constitute the full and final settlement of any severance pay Employee may become entitled to under any applicable law or contract. Notwithstanding the foregoing, the parties acknowledge and agree that the Company waives all rights
for refunds from its contributions payments, unless a judgment determined that Employee is not entitled to severance pay under Section 16 and/or Section 17 of the Severance Pay Law, or if Employee withdrew funds contributed to the Pension
Plan prior to an “Entitling Event” as such is defined in section 2(b) in the General Approval.
6.
Vacation Days
6.1. Employee is obliged to take at least five (5) paid vacation days during a calendar year, as prescribed by law. Furthermore, Employee
will make every effort to exercise his full annual vacation by the end of a calendar year.
6.2. In the event the Employee was unable to
utilize all his vacation days by the end of a calendar year, Employee shall be entitled to carry forward from one calendar year to the next an accumulated unused balance of vacation days standing to his credit up to the Maximum Amount detailed in
the Specific Terms. For the avoidance of doubt, at the end of each calendar year, any unused vacation days in excess of the Maximum Amount shall be canceled, nulled, and shall not be redeemable in any event.
7.
Education Fund
7.1. Employee and Company shall open and maintain an education fund under the terms specified in Specific Terms (“Keren
Hishtalmut”) (the “Education Fund”).
7.2. Employee hereby authorizes the Company to transfer to the Education
Fund the amount of Employee’s contribution and the Company’s contribution from the Monthly Salary, on a monthly basis, subject to the terms specified in the Specific Terms.
8. Reimbursement for Expenses:
8.1. The
Company shall reimburse the Employee for all reasonable and necessary out-of-pocket business expenses incurred by the Employee in connection with the performance of his
duties under this Employment Agreement, subject to and in accordance with the Company’s expense reimbursement policy (as shall be determined by the Company from time to time(, but only with respect to expenses that have been approved by the
Company in advance, and for which the Employee has provided receipts and/or other appropriate documentation.
9.
PIIA
9.1. Employee shall be required, as a condition to Employee’s employment with the Company, to sign the
Non-Competition, Proprietary Information and Inventions Agreement attached hereto as Exhibit A (the “PIIA”).
9.2. Employee’s compensation under this Employment Agreement has been calculated to include special consideration for the commitments
under the PIIA and the Employee will not be entitled to any further consideration for such commitments, expressly including no entitlement to royalties for any Service Inventions as defined in Section 132 of the Patent Law, 1967 (the
“Patent Law”). This clause constitutes an express waiver of the Employee’s rights under Section 134 of the Patent Law.
10.
Representations
10.1. The Employee confirms and undertakes: (i) that the Employee has all right and authority to enter into this Employment Agreement and
to perform the Employee’s obligations hereunder; (ii) that the Employee’s employment with the Company does not conflict with, or result in a breach of, any agreement or other commitment to which the Employee is a party or by which
the Employee is bound; (iii) to comply with all applicable laws relating to the Employee’s employment, including, without limitation, the Company’s Rules for Prevention of Sexual Harassment at the Workplace; (iv) to comply with
all of the Company’s work rules, policies, procedures and objectives, as shall be in effect from time to time; (v) not to disclose this Employment Agreement or any part thereof to any third party (other than the Employee’s spouse,
attorney, or tax advisor), including, without limitation, to any other employee of the Company; (vi) not to receive, at any time, whether during the term of this Employment Agreement or at any time thereafter, directly or indirectly, any
payment, benefit or other consideration from any third party in connection with the Employee’s employment with the Company, without the Company’s prior written authorization; (vii) to immediately and without delay inform the Company
in writing of any affairs or matters in which the Employee or any member of the Employee’s immediate family has a personal interest that might create a conflict with the Employee’s duties, responsibilities or obligations to the Company,
the Position, employment with the Company (including its affiliates), or the interests of the Company (including its affiliates); (viii) not, without the Company’s prior written consent, to undertake or accept any other paid or unpaid
employment or occupation, or engage in or be associated with, directly or indirectly, any other business, duty or pursuit, except for de minimis non-commercial activities; and (ix) not to disparage the
Company or its affiliates, their reputation, business, products or practices, or any of their respective directors, officers, agents, representatives or shareholders, whether orally or in writing.
10.2. The Employee agrees to the collection, storage, processing, and use by the Company of any information concerning the Employee, including
the transfer thereof to databases (in Israel or abroad and to any other person or entity, as the Company shall deem necessary and reasonable for business purposes or to pursue the Company’s business interests, all, in accordance with
applicable law and as is reasonable for the Company’s business purposes and interests. Without derogating from the generality of the above, such purposes may include human resources management.
11.
Use of the Company’s Computer Systems
11.1. The Employee hereby agrees and acknowledges that he has read, understands, and consents to the Company Computer Policy attached hereto as
Exhibit C and incorporated herein by reference, and agrees to, concurrently with the execution of this Employment Agreement, to sign on Exhibit C.
12.
Miscellaneous
12.1. This Employment Agreement, together with its exhibits, constitute the entire understanding and agreement between the parties and
supersedes any and all agreements (written or oral) concerning the subject matter hereof.
12.2. This Employment Agreement may only be
amended by a document signed by both parties.
12.3. This Employment Agreement will be governed by and construed in accordance with the
laws of the State of Israel, without regard to the choice of law provisions thereof. Employee hereby expressly consents to the exclusive personal jurisdiction of the courts located in Tel-Aviv-Jaffa, for any
lawsuit arising from or relating to this Agreement.
12.4. All taxes, levies, and compulsory payments that the Company is liable to deduct,
pursuant to any law, at the Employee’s expense, shall be deducted at source from all the payments, rights, and benefits to which the Employee is entitled, pursuant to this Employment Agreement or its appendices, unless expressly provided
otherwise in this Employment Agreement.
12.5. Employee’s rights and obligations under this Employment Agreement may not be
assigned or delegated, in whole or in part, by operation of law or otherwise, without the Company’s prior written consent.
12.6.
This Employment Agreement includes the terms to be contained in, and constitutes, the written notice to be delivered to the Employee pursuant to the Notice to Employee and Job Candidate Law (Employment Conditions and Candidate Screening and
Selection), 5762-2002. This Employment Agreement does not derogate from any right vested to the Employee by virtue of any law, extension order, or collective bargaining agreement, to the extent such apply to the Employee.
12.7. All notices given or made pursuant to this Employment Agreement shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, or (b) when sent by electronic mail if sent during regular business hours of the recipient; if not, then on the next business day. All notices shall be sent to the respective parties at the
addresses set forth on the Specific Terms (or at such other addresses as shall be specified by notice given in accordance with this Section).
***
IN WITNESS WHEREOF, the parties have
executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Aviv Shapira
Signature:
/s/ Amir Ofri
By:
Aviv Shapira
By:
Amir Ofri
Title:
Chief Executive Officer
Date:
9/3/2026
Exhibit A
NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT
THIS NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT (the “Agreement”) is
effective as of the first day of the Employee’s engagement with the Company, including without limitation, prior to his employment with the Company (the “Effective Date”) and made by and between XTEND REALITY
EXPANSION LTD. (including, at its sole discretion, any or all of the Company’s affiliates, hereafter the “Company”) and Amir Ofri (I.D. No. [***]) (the “Employee”).
In consideration for, as a condition and part of the Employee’s engagement with the Company (for no additional consideration or compensation), it is
hereby agreed as follows:
1.
Confidential Information.
1.1.
Definition.
1.1.1. “Confidential Information” means any proprietary or confidential data and/or information, in any form or
media, that Employee receives, obtains, or otherwise acquires or gains access to during or in connection with Employee’s engagement with the Company (whether before or after the date of this Agreement), which pertains to the Company or any of
its businesses, clients, customers, employees, shareholders, business partners, licensees, licensors, vendors or affiliates. Confidential Information includes without limitation Company Intellectual Property (as defined below), or any part thereof,
as well as any data and/or information that, given the nature of such data and/or information or the circumstances of its disclosure or receipt, is or should reasonably be considered as confidential.
1.1.2. Confidential Information shall not include any information that (i) is in the public domain at the time of disclosure,
(ii) subsequently has entered the public domain other than by breach of Employee’s obligations hereunder or by breach of another person’s or entity’s confidentiality obligations, or (iii) is shown by written dated
evidence to have been known by Employee prior to disclosure to Employee in connection with his engagement with the Company, not as a result of a breach of any obligation owed to the Company or any other third party.
1.2. Confidentiality. Except as herein provided, Employee agrees that during and after termination of Employee’s engagement
with the Company, Employee (i) shall keep Confidential Information confidential and shall not directly or indirectly, use, divulge, publish, or otherwise disclose or allow to be disclosed any aspect of Confidential Information without the
Company’s prior written consent (except in order to fulfill Employee’s employment tasks and obligations); (ii) shall refrain from any action or conduct which might compromise the confidentiality or proprietary nature of the Confidential
Information; and (iii) shall follow Company’s instructions provided from time to time regarding the use and handling of Confidential Information. The Employee will take all reasonable precautions to prevent any unauthorized use of
disclosure of the Confidential Information.
1.3. Ownership. Employee acknowledges and agrees that all right, title, and interest in
and to Confidential Information and all materials containing Confidential Information are and shall remain, at all times, the sole and exclusive property of the Company.
1.4.
Proprietary Information of Third Parties.
1.4.1. Employee agrees that he/she has not and will not, during the term of the employment, improperly use, disclose or bring onto the premises
or systems of the Company any proprietary information or trade secrets of any former employer or other person or entity with which Employee has an agreement or duty to keep in confidence information acquired by Employee, if any, unless with the
prior written approval of the Company and such employer, person or entity.
1.4.2. Employee recognizes that the Company may have received, and in the future may
receive, from third parties their confidential or proprietary information subject to the Company’s undertaking to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee agrees that he/she
owes the Company and such third parties, during Employee’s employment with the Company and anytime thereafter, a duty to hold all such third party confidential or proprietary information at least in accordance with the provisions set forth
hereunder in connection with Confidential Information of the Company, and to use such third party confidential or proprietary information strictly for the limited purposes and in the manner permitted hereunder.
1.5. Return of Confidential Material. Upon Company’s request or upon termination of the Employee’s employment with the
Company for any reason, Employee agrees to promptly surrender and deliver to Company all materials and data of any nature or media pertaining to any Confidential Information or to the Employee’s employment. Employee will not retain or take any
tangible or electronical materials or data, containing or pertaining to any Confidential Information. If required by the Company, Employee will certify in writing that he/she complied with the requirements of this Section.
2.
Ownership of Intellectual Property.
2.1.
Definitions.
2.1.1. “Intellectual Property” means proprietary or intellectual property rights, including without limitation
copyrights, inventions, discoveries, patents, designs, trademarks, whether or not registered or capable of being registered, original ideas, trade secrets, source and object code, algorithms, formulae, materials, methods, processes, procedures, any
derivatives, improvements, and enhancements of the foregoing, and all rights corresponding to the foregoing throughout the world including all rights to sue for and receive remedies against past, present and future infringements of any and all of
the foregoing;
2.1.2. “Prior Inventions” means the Intellectual Property made or conceived by or belonging to
Employee that are listed on Schedule A attached hereto that (i) were developed by Employee prior to Employee’s employment with the Company, (ii) relate to Company’s actual or proposed business, operations, products or
research and development, and (iii) are not assigned to Company hereunder; and
2.1.3. “Open Source” means
any software or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution model (including but not limited to the GNU General Public License (GPL), GNU Lesser
General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, MIT Licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL) the Sun Industry Standards License (SISL), materials licensed under
any Creative Commons license and the Apache License).
2.2. Assignment of Intellectual Property. Employee hereby irrevocably
assigns and transfers to Company, for no additional consideration, Employee’s entire right, title, and interest in and to all the Intellectual Property authored, developed, created, made, conceived, or reduced to practice by Employee, whether
solely or jointly with others, during the period of Employee’s engagement with Company (including prior to the date of this Agreement, after hours, on weekends or during vacation time), that either (i) relate in any manner to the actual
or demonstrably anticipated business or proposed business, work, or research and development of Company; or (ii) is developed in whole or in part on Company’s time or using Company’s equipment, supplies, facilities or Confidential
Information; or (iii) result from or are suggested by any task assigned to Employee or any work performed by Employee for or on behalf of Company or in connection with Employee’s duties and responsibilities in the scope of his/her
engagement with Company (the “Company Intellectual Property”). Employee agrees that this assignment includes a present assignment to Company of ownership with respect to Company Intellectual Property that is not yet in existence.
2.3. Employee hereby explicitly and irrevocably waives (i) any interest, claim, or demand with respect to any consideration,
compensation, or royalty payment in connection with Company Intellectual Property and/or the assignment thereof, including, but not limited to any payments pursuant to Section 134 to the Israeli Patent Law – 1967 (the “Patent
Law”); (ii) any moral rights, artists’ rights, or any other similar rights worldwide (“Moral Rights”) that he/she has at any time with respect to Company Intellectual Property.
2.4. Prior Inventions. If no Prior Inventions are listed in Schedule A of this
Agreement, Employee warrants that there are no Prior Inventions. Employee hereby acknowledges that, if in the course of Employee’s employment with Company, Employee incorporates into a Company product, process, service, or software a Prior
Invention owned by Employee or in which Employee has an interest, Company is hereby granted and shall have a fully paid, nonexclusive, royalty-free, unlimited, irrevocable, perpetual, worldwide, transferable and
sub-licensable right and license to make, have made, modify, create derivative works, reproduce, use, offer to sell use, sell, sublicense and otherwise distribute such Prior Invention (as may be improved or
enhanced by or for Company) and in the event of copyrightable materials, copy, distribute, publicly perform, publicly display, make derivative works thereof, and sublicense such copyrightable materials, as part of or in connection with such Company
product, process, service or software.
2.5. Disclosure of Intellectual Property. Employee agrees that in connection with
Intellectual Property and/or which Employee, solely or jointly with others, conceives, develops, or reduces to practice during the period of Employee’s employment with the Company (including after hours, on weekends, or during vacation time)
whether or not Employee believes that such Intellectual Property is Company Intellectual Property, Employee shall, as customary or required by the Company, keep and maintain adequate and accurate records, and shall promptly disclose such
Intellectual Property to Company, through Employee’s immediate supervisor at Company or another Company designee (and if requested by the Company shall also reduce to writing and adequately describe all such Intellectual Property), in order to
permit Company to claim its rights under this Agreement.
2.6.
Employee’s Assistance.
2.6.1. Employee agrees to assist Company, or its designee, at Company expense, in every proper way to secure Company rights in the Company
Intellectual Property and in any and all countries, including (a) the disclosure to Company of all pertinent information and data with respect thereto; (b) the execution of all assignments, applications, specifications, oaths, and other
instruments that Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Company
Intellectual Property.
2.6.2. Employee’s obligations hereunder, to the extent that it is in Employee’s power to do so, shall
continue after the termination of Employee’s employment with Company for any reason. If Company is unable because of Employee’s mental or physical incapacity or for any other reason to secure Employee’s signature on any instrument,
required at Company’s discretion in order to apply for, pursue or maintain any application for Intellectual Property rights (including patents or copyright registrations) covering and embodying any Company Intellectual Property, then Employee
hereby irrevocably designates and appoints Company and its duly authorized officers and agents (at its discretion) as Employee’s agent and attorney-in-fact, to act
for and in Employee’s behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and/or protection or maintenance.
2.7.
Other Obligations.
2.7.1. Employee acknowledges that the Company from time to time may have agreements with other persons or with the government authorities, or
agencies thereof, that impose obligations or restrictions on Company regarding Intellectual Property made during the course of work thereunder or regarding the confidential nature of such work. Employee agrees to be bound by the Company’s
instructions or policies, and take necessary actions to assist Company in complying with its obligations thereunder.
2.7.2. Employee
further agrees and undertakes that any and all work performed by him shall not infringe upon, misappropriate or use in an unauthorized manner any copyright, patent, trademark, trade secret, or other confidential or proprietary information or
intellectual property of any third party, including, without limitation, any current or former employer of Employee.
2.8.
Open Source Software.
2.8.1. To the extent Intellectual Property or any other work product provided or generated by Employee includes any software, computer code,
and/or firmware, any such Intellectual Property or work product shall not incorporate or include any Open Source, unless explicitly permitted under the Company’s Open Source policy and/or instructions. Further, all other use of Open Source
materials in connection with Employee’s employment shall be in accordance with the Company’s Open Source policy.
2.8.2.
Intellectual Property and any other work product provided or generated by Employee shall on delivery be free of viruses, malicious code, time bombs, Trojan horses, back doors, drop dead devices, worms, or other code of any kind that may disable,
erase, display any unauthorized message, permit unauthorized access, automatically or remotely stop software, code and/or firmware from operating, or otherwise impair the services, deliverables, inventions or work product or the Company network or
any part thereof.
3.
Non-Competition and
Non-Solicitation
During the term of Employee’s employment
with the Company and for a period of twelve (12) months thereafter, Employee will not, directly or indirectly, (i) engage whether as an employee, independent contractor, partner, joint venture, shareholder, investor,
director, consultant or otherwise, in any business or activity, all over the world, which is competitive with the technology, products, and/or services of the Company, or the business in which it is currently engaged or in which it may be engaged
in, during the time of the Employee’s employment with the Company, (ii) solicit, induce, recruit or encourage any of the Company’s personnel to leave their employment, or take away such personnel, or attempt to solicit, induce,
recruit, encourage or take away personnel of the Company, and/or their affiliates, either for the Employee or for any other person or entity; nor (iii) offer, solicit, interfere with and/or endeavor to entice away from Company, and/or any of
its affiliates, any person, firm or company with whom Company and/or any of its affiliates shall have any contractual and/or commercial relationship as, consultant, licenser, joint venture, supplier, customer, distributor, agent or contractor
of whatsoever nature, existing or under negotiation on or twelve (12) months prior to the termination of his/her employment with the Company.
4.
Breach of Obligations
Employee is aware that a breach of his/her obligations as detailed under this Agreement, or part of them, will cause the Company or the
Company’s affiliates serious and irreparable damage, and that no financial compensation can be an appropriate remedy to such damage. Therefore, in addition to the return of the Special Compensation pursuant to the terms of the Employment
Agreement to which this Agreement is attached, Employee agrees, that if such a breach occurs, the Company, any of the Company’s affiliates or any of their designee(s) shall be entitled (without limiting other remedies if available under the
law or hereunder) to take all legal means necessary and any injunctive relief as is necessary to restrain any continuing or further breach of this Agreement.
5.
Acknowledgements and Declarations
Employee hereby declares and acknowledges that:
5.1. Employee’s confidentiality and non-competition obligations under this Agreement are fair,
reasonable, and proportional, especially in light of the Special Compensation Employee receives under the employment agreement to which this Agreement is attached, and are designed to protect the Company’s and the Company affiliates’
secrets and their confidential information, which constitute the essence of their protected business and commercial advantage in which significant capital investments were made.
5.2. Any breach of Employee’s obligations under this Agreement shall contradict the nature of the special trust and loyalty between
Employee and the Company, the fair and proper business practices and the duty of good faith and fairness between the parties. Any such breach shall harm the Company and/or the Company affiliates and shall constitute a material breach of this
Agreement and the employment agreement to which this Agreement is attached.
5.3. Employee’s obligations under this Agreement and the restricted period of time and
geographical area specified herein are reasonable and proportional, and do not prevent Employee from developing his/her general knowledge and professional expertise in the area of his/her business, without infringing on or breaching any of the
Company’s rights.
6.
Miscellaneous
6.1. Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the State of Israel, without regard
to the choice of law provisions thereof. Employee hereby expressly consents to the personal jurisdiction of the courts located in Tel-Aviv-Jaffa district, Israel, for any lawsuit arising from or relating to
this Agreement.
6.2. Assignment. The undertakings set forth herein may be assigned by the Company. Employee may not assign or
delegate his/her duties under this Agreement without the Company’s prior written approval. This Agreement shall be binding upon Employee’s heirs, successors, and permitted assignees.
6.3. Counterparts. This Agreement may be signed in two counterparts, each of which shall be deemed an original and both of which shall
together constitute one and the same instrument.
6.4. Entire Agreement. This Agreement constitutes the full and complete agreement
between the parties and supersedes any and all agreements or understandings, whether written or oral, concerning the subject matter of this Agreement, and may only be amended by a document signed by both parties.
6.5. Severability. If any provision of this Agreement is found to be invalid or unenforceable by a court of competent jurisdiction, such
provision shall be automatically adjusted to the minimum extent necessary for validity or enforceability. In any event, the remaining terms and provisions of this Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
/s/ Aviv Shapira
/s/ Amir Ofri
XTEND REALITY EXPANSION LTD.
Employee
By:
Aviv Shapira
By:
Amir Ofri
Date:
9/3/2026
Date:
9/3/2026
Schedule A
TO THE NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS
AGREEMENT
Prior
Inventions
Follows a list of Prior Inventions of the Employee:
1.
__________________________________________________________
2.
__________________________________________________________
3.
__________________________________________________________
4.
__________________________________________________________
If nothing is listed, I will be regarded as having declared that I have no Prior Inventions.
/s/ Amir Ofri
9/3/2026
Employee (Signature)
Date
Exhibit B
GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND
AND INSURANCE FUND IN LIEU OF SEVERANCE PAY
By virtue of my power under section 14 of the Severance Pay Law, 1963 (hereinafter: the “Law”), I certify that payments made by an employer
commencing from the date of the publication of this approval on behalf of his employees to a comprehensive pension benefit fund that is not an insurance fund within the meaning thereof in the Income Tax (Rules for the Approval and Conduct of Benefit
Funds) Regulations, 1964 (hereinafter: the “Pension Fund”) or to managers’ insurance including the possibility of an insurance pension fund or a combination of payments to an annuity fund and to a non-annuity fund (hereinafter: the “Insurance Fund), including payments made by him by a combination of payments to a Pension Fund and an Insurance Fund, whether or not the Insurance Fund has an annuity
fund (hereinafter: the “Employer’s Payments), shall be made in lieu of the severance pay due to the said employee in respect of the salary from which the said payments were made and for the period they were paid (hereinafter: the
“Exempt Salary”), provided that all the following conditions are fulfilled:
(1)
The Employer’s Payments
(a)
To the Pension Fund are not less than 141/3% of the Exempt Salary or 12% of the Exempt Salary if the employer
pays for his employee in addition thereto additional payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary. In the event that the
employer has not paid an addition to the said 12%, his payments shall be only in lieu of 72% of the employee’s severance pay;
(b)
To the Insurance Fund are not less than one of the following:
(1)
131/3% of the Exempt Salary, if the employer pays for his employee in addition thereto also payments to secure
monthly income in the event of disability, in a plan approved by the Commissioner of the Capital Market, Insurance and Savings Department of the Ministry of Finance, in an amount required to secure at least 75% of the Exempt Salary or in an amount
of 21/2% of the Exempt Salary, the lower of the two (hereinafter: “Disability Insurance”); or
(2)
11% of the Exempt Salary, if the employer paid, in addition, a payment to the Disability Insurance, and in such
case, the Employer’s Payments shall only replace 72% of the Employee’s severance pay; In the event that the employer has paid, in addition to the foregoing payments to supplement severance pay, to a benefit fund for severance pay or to
an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary, the Employer’s Payments shall replace 100% of the employee’s severance pay.
(2)
No later than three months from the commencement of the Employer’s Payments, a written agreement is
executed between the employer and the employee in which:
(a)
The employee has agreed to the arrangement pursuant to this approval in a text specifying the Employer’s
Payments, the Pension Fund, and Insurance Fund, as the case may be; the said agreement shall also include the text of this approval; and
(b)
The employer waives in advance any right, which he may have to a refund of monies from his payments, unless the
employee’s right to severance pay has been revoked by a judgment by virtue of Sections 16 and 17 of the Law, and to the extent so revoked and/or the employee has withdrawn monies from the Pension Fund or Insurance Fund other than by reason of
an entitling event; in such regard “Entitling Event” means death, disability or retirement after the age of 60.
(3)
This approval does not derogate from the employee’s right to severance pay pursuant to any law,
collective agreement, extension order, or employment agreement, in respect of salary over and above the Exempt Salary.
Exhibit C
COMPANY COMPUTER POLICY CONSENT
XTEND
REALITY EXPANSION LTD. (the “Company”) has a policy regarding the use of the Company’s computer systems (the “Company’s Computers Policy”), as follows:
1.
The Company has provided you, for the purpose of the performance of your duties, various types of computer
related devices, including a computer, hardware, software, Company e-mail account, phone, etc. (the “Computer Devices”). The Computer Devices are the exclusive property of the
Company, and in order to protect the Computer Devices, and the information which they contain, you are hereby required to adhere to the following instructions:
1.1. Hardware – it is prohibited to install hardware on, and/or to, Computer Devices without the prior authorization of your
supervisor or the Company’s IT team. In this regard, you are not allowed to connect to a Computer Device an external hard – drive, disk on key (also known as memory stick and/or flash memory), camera, cell phone or any other type of
hardware for purposes which are illegal, inappropriate, or transferring of material that belongs to the Company, its clients, employees, or any other third party without the prior authorization of your supervisor or the Company’s IT team.
1.2. Software – it is prohibited to install software on Computer Devices, except for reasonable bounds, without the prior
authorization of your supervisor or the Company’s IT team.
1.3. Files – it is prohibited to save on Computer Devices
any files, photos, or videos that are not related to the Company. In particular, and without limitation, it is prohibited to save on Computer Device any file that its access and/or saving by you constitute infringement of protected Intellectual
Property rights, and any file that contains obscene, pornographic, or abusive content.
Notwithstanding the above, you are permitted to
save personal files that you or your immediate family members have created, which are not related to the Company or to the performance of your duties, and have no commercial content, as long as such files are saved under a folder labeled
“Private” located at the root directory of the Computer Device.
1.4. If any of the above instructions is not clear or if you
have a question regarding the use of Computer Devices, please contact your supervisor.
2.
Notwithstanding the above, the Company does allow private use of the Computer Devices made available to you for
work purpose, within reasonable bounds, subject to Section 1 above and Section 4 below.
3.
During work hours and/or while at the Company’s offices you may access the internet for your own private
use provided that such access is done for a reasonable period of time, and in accordance with the Company’s Computers Policy. For the removal of doubt, and without limitation, it is prohibited to access any website that contains obscene,
pornographic, or abusive content, and/or includes content that infringes on protected Intellectual Property rights, and /or involves gambling.
4.
The Company’s e-mail account –
4.1. Which was assigned to you is provided to you only for the purpose of work related use. You are not allowed to use
the Company’s e-mail account for private purposes that are not related to the Company’s activities, such prohibited private use of your e-mail account
includes correspondence with friends and family.
4.2. In the event, you wish to send private
e-mails during work hours and/or while at Company’s offices, you can do so through your private external web based e-mail account (Gmail, Hotmail, etc.). As noted
above, you are prohibited from saving to Computer Devices any files received through your external web based e-mail account, unless such files are saved per the terms of the exclusive exception detailed above.
4.3. In order to maintain the security of the Computer Devices and the protection of the Company’s legitimate interests, the Company
is using various monitoring technologies, as well as blocking technologies, in the scope further detailed in the Computer Policy. These technologies enable the Company to monitor and review content and information which is present on Computer
Devices or exchanged through Computer Devices, including through the Company’s e-mail account assigned to Company’s employees.
5.
Said monitoring is not intended to infringe your privacy, and as a general rule the Company is not interested
in reviewing correspondence which is exchanged through the Company’s e-mail account assigned to you. However, the Company may review the professional correspondence and will act within the boundaries of
applicable law, and when circumstances so require, necessitate, and obligate, in order to protect the Company’s legitimate interests.
6.
In the event that private correspondence exists in the Computer Devices and/or the Company e-mail account assigned to you, this, despite the clear instructions detailed hereinabove, the Company may review such correspondence, if special and unique circumstances exist in which there is a serious suspicion
that you are carrying out harmful or illegal activity through Computer Devices, and subject to your consent.
7.
It is further clarified that as part of the Company’s administration of its affairs, it may become
necessary for another employee of the Company to access the Computer Devices that were assigned to you, in order to review professional information on the Computer Devices that were assigned to you. Such access by other employees may occur during
your employment or after the termination of your employment. In this respect, upon request from your supervisors or upon the termination of employment, you are required to provide your supervisors with all access passwords that are necessary to
access Computer Devices which were assigned to you, and materials that are saved on them.
8.
Any material or file that is saved on Company’s Computer Devices is deemed to be the Company’s
property.
As a sign of your consent to the Computer Policy and the foregoing instructions, you are required to sign below.
EMPLOYEE ACKNOWLEDGEMENT AND CONSENT:
I, the undersigned, hereby acknowledge and approve that I have read all the above mentioned, received any and all clarifications which I required, and agree
to it.
Amir Ofri
[***]
/s/ Amir Ofri
9/3/2026
Name
ID number
Signature
Date
EX-10.8
EX-10.8
Filename: d230933dex108.htm · Sequence: 9
EX-10.8
Exhibit 10.8
Employment Agreement
This Employment
Agreement is made by and between XTEND REALITY EXPANSION LTD., an Israeli company, registration number 515871861, with its offices at 7 Habarzel St., Tel Aviv (the “Company”), and Matteo Shapira (the
“Employee”).
Prior to entering into this Employment Agreement, the Employee was engaged by the Company as an independent service
provider under an engagement agreement executed between the parties. The Employee represents and warrants that he requested this form of engagement and has received from the Company all compensation due and owing to him in connection with that
engagement.
The Company and the Employee now wish to enter into this Employment Agreement, effective as of the Effective Date, as defined below.
Below is a table summarizing the specific terms of Employee’s employment with the Company (the “Specific Terms”). The general terms
and conditions of Employee’s employment with the Company are included in the pages following this table (the “General Terms”).
Specific Terms, General Terms, and the Exhibits attached hereto are collectively deemed as the “Employment Agreement”, Employee’s
execution of these documents constitutes the agreement to the Specific Terms, the General Terms, and all the Exhibits attached hereto.
In this Employment
Agreement, words referring to a male employee are also intended for a female employee.
Employee’s Details
Full Name: Matteo Shapira
Position: CAIO
I.D. Number: [***]
Manager: CEO
Effective Date: August 1, 2026
Scope of Work: Full-Time
Annual Salary
US$ 385,000 (gross), payable in twelve (12) equal monthly installments (each installment shall be referred to herein as the “Monthly Salary”). Payment shall be made in NIS, with the applicable
exchange rate to be determined by the Company on an annual basis at the commencement of each calendar year (i.e., the January salary cycle), in accordance with the Company’s internal practices in this regard. For the year 2026, the applicable
exchange rate shall be NIS 3 per US$1.
Notice Period
Three (3) calendar months.
Annual Cash Bonus
The Employee shall be eligible to receive an annual cash bonus with a target annual bonus opportunity of US$ 195,000 (gross) for 100% achievement of the applicable annual goals and targets, payable in NIS according to
the U.S. dollar/NIS exchange rate in effect on the payment date. The annual bonus shall be based on the achievement of annual goals and targets of the Employee and the Company, as determined by the Board of Directors of the Company’s parent
company, Xtend AI Robotics, Inc. (the “Board”, and the “Parent”, respectively), or a duly authorized committee designated by the Board on its behalf. The terms and conditions of the annual bonus, including the
applicable performance criteria, measurement methodology, approval process, threshold and maximum achievement levels, and all other related terms, shall be as set forth in the applicable executive compensation plan for
C-level executives of the Company or the Parent, as applicable, to be adopted and as may be amended from time to time by the Board or such committee. Any annual bonus earned for a given year shall be paid
within ninety (90) days following the completion and closing of the financial reports for such year by the applicable independent accountants. If the Company terminates the Employee’s employment after the end of the applicable bonus year
but before the applicable payment date, other than for Cause, the Employee shall remain eligible to receive the annual bonus for such completed year, subject to the applicable terms and conditions and actual achievement of the relevant goals and
targets, and such bonus, if earned, shall be paid following such termination at the same time annual bonuses for such year are paid to the other executives.
Termination Grant
In the event that this Employment Agreement is terminated by either party for any reason other than for Cause, the Company shall pay to the Employee a one-time
lump-sum cash payment in an amount equal to three (3) times the Employee’s then-current Monthly Salary (the “Termination Grant”), subject to and conditioned upon the
Employee’s execution and non-revocation (if applicable) of the Company’s standard waiver and release of claims document.
Pension Plan
The Employee shall be insured under a Pension Plan (as defined below), all in accordance with the General Approval of Section 14 Arrangement and the General Terms.
Keren Hishtalmut (“Education Fund”)
Company’s Contribution: 7.5% of the Monthly Salary.
Employee’s Contribution: 2.5% of the Monthly Salary, which will be deducted from the Monthly Salary.
Notwithstanding the above, the amounts contributed to the Education Fund will not exceed
the tax-exempt limit recognized by the Income Tax Authority from time to time.
Vacation Days
Annual Entitlement: 20 business days per calendar year.
Maximum Amount: The Employee shall be entitled to carry forward from one calendar year to the next any unused vacation days, up to an amount equal to
one (1) Annual Entitlement.
Sick Days
Per applicable law. However, the Employee shall be entitled to receive the full compensation as of the first sick day.
Recreation Days
(“Dmey Havraa”)
Per applicable law.
Travel Expenses
The Employee shall be entitled to either: (i) use a Company Car for the purpose of fulfilling Employee duties to the Company (the “Company Car”) in accordance with the Company’s policies as shall be
modified from time to time, subject to signing the Company’s car policy and any other required agreement, including with the leasing company. The Company Car monthly cost shall be up to NIS 5,000 (excluding VAT), which shall be covered by the
Company. The Company will cover all of the operating expenses of the car, excluding parking expenses, tickets, fines, and other costs related to noncompliance by the Employee with any applicable law. The Company shall bear all applicable taxes
related to the Employee’s use of the Company Car; or (ii) receive from the Company a fixed monthly amount of NIS 5,000 (gross) as reimbursement for expenses related to travel, car maintenance, insurance and other related costs. Either
options, as shall be agreed upon between the parties shall be instead of Employee’s entitlement for reimbursement of his travel expenses per law
Equity Incentives
RSU Grant. Subject to the approval of the Parent’s Board the Employee shall be granted 300,000 Restricted Stock Units
(“RSUs” and “Initial RSU Grant” respectively), in accordance with and subject to the terms and provisions of the Parent’s applicable equity incentive plan and its applicable sub-plan for Israeli participants, if any, as may be adopted from time to time (collectively, the “Plan”) and in accordance with the requirements of Section 102(b)(3) of the Israeli Tax
Ordinance. Each RSU shall represent the right to receive one share of a Common Stock of the Parent (“Common Stock”), subject to the terms, conditions and restrictions of the Plan and of an RSU award agreement to be entered into
between the Employee and the Parent, in the form customarily used by the Parent and as approved by the Board.
The RSUs shall vest over a period of thirty-six (36) months, in thirty-six
(36) equal monthly installments, with no cliff, such that 1/36 of the RSUs shall vest on each monthly anniversary of the Vesting Commencement Date (as shall be determined in the RSU award agreement), provided that the Employee remains
continuously employed by the Company or any of its affiliates, or continues to provide services thereto, through each applicable vesting date.
The grant of the RSUs shall be subject to the Employee’s execution of the applicable RSU award agreement and such other documents,
undertakings and instruments as may be required by the Parent and/or the Company.
Subject to the approval of the Board (or the applicable compensation committee, if required), the Employee shall be eligible to receive, on each of the first
and second anniversaries of the Initial RSU Grant’s grant date, an additional RSU grant on substantially the same terms and conditions as the initial RSU grant and covering the same number of RSUs as granted pursuant thereto.
Any tax liability arising in connection with the grant, vesting, settlement or the RSUs
and/or the sale of the Common Stock issued thereunder shall be borne solely by the Employee, and the Employee acknowledges that neither the Company nor the Parent shall bear any responsibility in connection therewith, except for any mandatory
withholding or reporting obligations required by applicable law. The Employee further acknowledges that no representation or undertaking has been made by the Company, the Parent or any of their representatives regarding the tax consequences of the
grant or the disposition of any securities issued thereunder.
In the event of any
contradiction or inconsistency between the provisions of this Employment Agreement and the provisions of the RSU award agreement, the provisions of the RSU award agreement shall prevail.
Recognition One Time RSU Grant. Subject to the approval of the Board of Directors
of the Parent (the “Board”), the Employee shall be granted 5,000,000 Restricted Stock Units (the “Recognition RSUs”), in accordance with and subject to the terms and provisions of the Plan and in
accordance with the requirements of Section 102(b)(3) of the Israeli Tax Ordinance. Each RSU shall represent the right to receive one share of a Common Stock of the Parent (“Common Stock”), subject to the terms, conditions
and restrictions of the Plan and of an RSU award agreement to be entered into between the Employee and the Parent, in the form customarily used by the Parent and as approved by the Board.
The Recognition RSUs shall vest over a period of
thirty-six (36) months, in thirty-six (36) equal monthly installments, with no cliff such that 1/36 of the Recognition RSUs shall vest on each monthly
anniversary of the Vesting Commencement Date (as shall be determined in the RSU award agreement), provided that the Employee remains continuously employed by the Company or any of its affiliates, or continues to provide services thereto, through
each applicable vesting date.
The vesting schedule shall include an acceleration
provision, applicable to each and every RSU grant made to the Employee under this Agreement, pursuant to which 100% of the then-outstanding and unvested RSUs then held by the Employee (including the Initial RSU Grant, each additional RSU grant
referred to above and the Recognition RSUs) shall become fully vested immediately upon the termination of the Employee’s employment by the Parent or the Company without Cause or by the Employee for Good Reason.
The grant of the RSUs shall be subject to the Employee’s execution of the
applicable RSU award agreement and such other documents, undertakings and instruments as may be required by the Parent and/or the Company.
Any tax liability arising in connection with the grant, vesting, settlement or the RSUs and/or the sale of the Common Stock issued thereunder
shall be borne solely by the Employee, and the Employee acknowledges that neither the Company nor the Parent shall bear any responsibility in connection therewith, except for any mandatory withholding or reporting obligations required by applicable
law. The Employee further acknowledges that no representation or undertaking has been made by the Company, the Parent or any of their representatives regarding the tax consequences of the grant or the disposition of any securities issued
thereunder.
In the event of any contradiction or inconsistency between the
provisions of this Employment Agreement and the provisions of the RSU award agreement, the provisions of the RSU award agreement shall prevail.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Aviv Shapira
Signature:
/s/ Matteo Shapira
By:
Aviv Shapira
By:
Matteo Shapira
Title:
Chief Executive Officer
Date:
9/3/2026
General Terms and Conditions of Employment with the Company
1.
Employment Position
1.1. The Employee’s employment relationship with the Company shall commence on the Effective Date and shall continue for an indefinite
term, unless and until terminated in accordance with the provisions of this Employment Agreement.
1.2. Employee shall be employed by the
Company in the Position indicated in the Specific Terms, and shall report to the person indicated in the Specific Terms as the Manager or any other person as determined by the Company.
1.3. Employee shall devote Employee’s entire working time, know-how, expertise, talent,
experience and best efforts to the business and affairs of the Company and perform his duties and functions diligently and skillfully with the utmost expertise and devotion.
1.4. During Employee’s employment, Employee will not engage in or be associated with, directly or indirectly, any other employment,
consulting, or other business activity (with or without consideration), without the Company’s prior written approval. Prior to signing this Employment Agreement, the Employee will inform the Company of any employment, occupation, engagement,
or activity in which the Employee is involved, and that would require the Company’s written consent per this paragraph.
1.5.
Employee shall be based in Israel, but he understands and agrees that the Position may require him to travel internationally from time to time.
2.
Working Hours
2.1. Work for the Company shall be performed on Sunday through Thursday, unless determined and instructed otherwise by the Company.
2.2. A regular workweek for a full-time position consists of 42 working hours, not including Employee’s daily break.
2.3. Saturday, as observed by the Jewish religious, shall be the Employee’s recognized and official rest day.
2.4. Employee shall cooperate with the Company in maintaining a record of the number of hours of work performed, in accordance with the
Company’s policy.
3.
Termination
3.1. Employee’s employment with the Company may be terminated at any time at the option of either Employee or the Company, upon delivery
to the other party of a written notice pursuant to the Specific Terms (the “Notice Period”).
3.2. During the
Notice Period Employee shall continue work and perform all regular duties unless otherwise instructed by the Company. Employee will cooperate with the Company and use Employee’s best efforts to assist the integration into the Company
organization of the person or persons who will assume Employee’s responsibilities hereunder.
3.3. Notwithstanding the foregoing,
Company shall be entitled to terminate Employee’s employment at any time prior to the expiration of the Notice Period and pay the Employee the applicable payment in lieu of notice period, per applicable law.
3.4. In case of termination of Employee’s employment by the Company for Cause, the Company may terminate Employee’s employment
immediately (with no Notice Period).
3.5. “Cause” means (i) a material breach of the PIIA (as
defined below and attached hereto as Exhibit A), or any other material breach of this Employment Agreement, which, if capable of cure, was not cured within five (5) calendar days of receipt by the Employee of written notice;
(ii) fraud, theft, embezzlement, dishonesty, or misappropriation of funds of the Company or any of its affiliates; (iii) conviction of, or a
plea of “guilty” or “no contest” to a felony or other lesser crime that would require removal from Employee’s position at the Company; (iv) any willful or
intentional act of the Employee that injures, or is reasonably likely to injure, the reputation, business, products or practices of the Company, or any of its directors, officers, agents, representatives, shareholders or affiliates; or
(v) other cause justifying termination or dismissal without severance payment under applicable law. The determination that a termination is for Cause shall be made by the Company in its sole judgment and discretion.
3.6. “Good Reason” means the occurrence of any of the following without the Employee’s prior written consent:
(i) a material reduction of more than 15% in the Employee’s base salary, which is not applied on a broad basis to other C-Level employees of the Company; (ii) a material diminution in the
Employee’s title, authority, duties, or responsibilities (for the avoidance of doubt, a lateral change to another C-level position that does not entail a reduction in salary or benefits shall not
constitute Good Reason); (iii) a requirement that the Employee relocate their principal place of work to a location more than 50 kilometers from the Employee’s then-current work location; or (iv) a material breach of this Agreement by the
Company; provided, however, that no resignation shall constitute a resignation for Good Reason unless: (A) the Employee has provided the Company with written notice of the grounds for Good Reason within sixty (60) days of the initial
occurrence of the applicable condition; (B) the Company has failed to cure such condition within thirty (30) days following receipt of such notice; and (C) the Employee’s resignation occurs within thirty (30) days following
the expiration of such cure period.
4.
Salary
4.1. Employee shall be entitled to a Monthly Salary in the amount specified in the Specific Terms.
4.2. Employee agrees and acknowledges that due to the Employee’s senior managerial position in the Company, the special personal trust
involved in the position in which the Employee shall be employed, and the inability to monitor the Employee’s actual work hours, the Hours of Work and Rest Law, 1951 (the “Hours of Work and Rest Law”) shall not apply to the
Employee. The Employee acknowledges that the set amount of the Monthly Salary, as well as all other compensation and benefits provided to the Employee by the Company, as agreed upon between the Employee and the Company, reflect the requirements of
the position to work additional and irregular hours and days. Accordingly, the Employee shall not be entitled to claim or receive payments or any additional pay for work performed at overtime hours, nights, weekends, or at any other times in which
the Hours of Work and Rest Law requires payment of special payments (to employees who are not in a position such as the position of the Employee).
4.3. The Monthly Salary shall be paid no later than the 9th day of the following month.
4.4. An amount equal to 10% of the Monthly Salary shall be considered to be a special payment for the Employee’s obligation for non-competition under the PIIA (the “Special Compensation”). Employee shall be obligated to return to the Company all Special Compensation amounts Employee received from the Company upon violation
of any of the obligations set forth in the PIIA. The Company maintains the right to withhold any amounts due to Employee following such violation. All the above shall not derogate from any of the Company’s rights with respect to any violation
of the provisions of the PIIA.
5.
Pension Plan
5.1. The Employee shall be insured under a managers insurance, a pension fund, or a combination of both, pursuant to the Employee’s
choice and preference (the “Pension Plan”).
5.2. The monthly contributions to the Pension Plan shall be made on the
basis of the Monthly Salary, as follows: (i) Company’s contributions: 8.33% towards the severance pay component, and 6.5% towards the pension component; and (ii) Employee’s contributions: 6% towards the pension
component, which will be deducted from the Monthly Salary each month.
5.3. Notwithstanding the said contributions, if the Pension Plan is a managers insurance
policy or a provident fund that is not a pension fund, Company’s contributions towards the pension component shall include the cost of acquiring a loss of working capacity insurance (the “Disability Insurance”), which shall
be equal to lower of the following: (i) 2.5% of the Monthly Salary or the applicable portion thereof, or (ii) a rate ensuring loss of earning payment of 75% of the Monthly Salary or the applicable portion thereof. Notwithstanding the foregoing,
the Company’s contributions towards the pension component must be at least 5%. Therefore, the Company’s contributions towards the pension component shall be no less than 6.5% and up to 7.5% of the Monthly Salary or the applicable portion
thereof.
5.4. It is agreed and warranted between the parties that the Company’s contributions to the severance component are in lieu
of severance pay, in accordance with the provisions of the General Approval regarding Employers’ Payments to a Pension Fund and Insurance Fund in lieu of Severance Pay issued by virtue of Section 14 of the Severance Pay Law 5723-1963 by
the Labor Minister, dated June 30, 1998 (as amended and as may be amended from time to time), which its Hebrew and English copies are attached hereto as Exhibit B (the “General Approval”). By signing this
Employment Agreement, the parties acknowledge their consent to the applicability of the provisions of the General Approval. In so far as amendments to the General Approval shall be necessary, according and subject to any law or regulations, the
provisions of the amended General Approval shall prevail and replace the General Approval attached.
5.5. The parties acknowledge and agree
that the amounts accrued in the Pension Plan on account of the Company’s contributions shall be in lieu of and will constitute the full and final settlement of any severance pay Employee may become entitled to under any applicable law or
contract. Notwithstanding the foregoing, the parties acknowledge and agree that the Company waives all rights for refunds from its contributions payments, unless a judgment determined that Employee is not entitled to severance pay under
Section 16 and/or Section 17 of the Severance Pay Law, or if Employee withdrew funds contributed to the Pension Plan prior to an “Entitling Event” as such is defined in section 2(b) in the General Approval.
6.
Vacation Days
6.1. Employee is obliged to take at least five (5) paid vacation days during a calendar year, as prescribed by law. Furthermore, Employee
will make every effort to exercise his full annual vacation by the end of a calendar year.
6.2. In the event the Employee was unable to
utilize all his vacation days by the end of a calendar year, Employee shall be entitled to carry forward from one calendar year to the next an accumulated unused balance of vacation days standing to his credit up to the Maximum Amount detailed in
the Specific Terms. For the avoidance of doubt, at the end of each calendar year, any unused vacation days in excess of the Maximum Amount shall be canceled, nulled, and shall not be redeemable in any event.
7.
Education Fund
7.1. Employee and Company shall open and maintain an education fund under the terms specified in Specific Terms (“Keren
Hishtalmut”) (the “Education Fund”).
7.2. Employee hereby authorizes the Company to transfer to the Education
Fund the amount of Employee’s contribution and the Company’s contribution from the Monthly Salary, on a monthly basis, subject to the terms specified in the Specific Terms.
8.
Reimbursement for Expenses:
8.1. The Company shall reimburse the Employee for all reasonable and necessary
out-of-pocket business expenses incurred by the Employee in connection with the performance of his duties under this Employment Agreement, subject to and in accordance
with the Company’s expense reimbursement policy (as shall be determined by the Company from time to time(, but only with respect to expenses that have been approved by the Company in advance, and for which the Employee has provided receipts
and/or other appropriate documentation.
9.
PIIA
9.1. Employee shall be required, as a condition to Employee’s employment with the Company, to sign the
Non-Competition, Proprietary Information and Inventions Agreement attached hereto as Exhibit A (the “PIIA”).
9.2. Employee’s compensation under this Employment Agreement has been calculated to include special consideration for the commitments
under the PIIA and the Employee will not be entitled to any further consideration for such commitments, expressly including no entitlement to royalties for any Service Inventions as defined in Section 132 of the Patent Law, 1967 (the
“Patent Law”). This clause constitutes an express waiver of the Employee’s rights under Section 134 of the Patent Law.
10.
Representations
10.1. The Employee confirms and undertakes: (i) that the Employee has all right and authority to enter into this Employment Agreement and
to perform the Employee’s obligations hereunder; (ii) that the Employee’s employment with the Company does not conflict with, or result in a breach of, any agreement or other commitment to which the Employee is a party or by which
the Employee is bound; (iii) to comply with all applicable laws relating to the Employee’s employment, including, without limitation, the Company’s Rules for Prevention of Sexual Harassment at the Workplace; (iv) to comply with
all of the Company’s work rules, policies, procedures and objectives, as shall be in effect from time to time; (v) not to disclose this Employment Agreement or any part thereof to any third party (other than the Employee’s spouse,
attorney, or tax advisor), including, without limitation, to any other employee of the Company; (vi) not to receive, at any time, whether during the term of this Employment Agreement or at any time thereafter, directly or indirectly, any
payment, benefit or other consideration from any third party in connection with the Employee’s employment with the Company, without the Company’s prior written authorization; (vii) to immediately and without delay inform the Company
in writing of any affairs or matters in which the Employee or any member of the Employee’s immediate family has a personal interest that might create a conflict with the Employee’s duties, responsibilities or obligations to the Company,
the Position, employment with the Company (including its affiliates), or the interests of the Company (including its affiliates); (viii) not, without the Company’s prior written consent, to undertake or accept any other paid or unpaid
employment or occupation, or engage in or be associated with, directly or indirectly, any other business, duty or pursuit, except for de minimis non-commercial activities; and (ix) not to disparage the
Company or its affiliates, their reputation, business, products or practices, or any of their respective directors, officers, agents, representatives or shareholders, whether orally or in writing.
10.2. The Employee agrees to the collection, storage, processing, and use by the Company of any information concerning the Employee, including
the transfer thereof to databases (in Israel or abroad and to any other person or entity, as the Company shall deem necessary and reasonable for business purposes or to pursue the Company’s business interests, all, in accordance with
applicable law and as is reasonable for the Company’s business purposes and interests. Without derogating from the generality of the above, such purposes may include human resources management.
11.
Use of the Company’s Computer Systems
11.1. The Employee hereby agrees and acknowledges that he has read, understands, and consents to the Company Computer Policy attached hereto as
Exhibit C and incorporated herein by reference, and agrees to, concurrently with the execution of this Employment Agreement, to sign on Exhibit C.
12.
Miscellaneous
12.1. This Employment Agreement, together with its exhibits, constitute the entire understanding and agreement between the parties and
supersedes any and all agreements (written or oral) concerning the subject matter hereof.
12.2. This Employment Agreement may only be
amended by a document signed by both parties.
12.3. This Employment Agreement will be governed by and construed in accordance with the
laws of the State of Israel, without regard to the choice of law provisions thereof. Employee hereby expressly consents to the exclusive personal jurisdiction of the courts located in Tel-Aviv-Jaffa, for any
lawsuit arising from or relating to this Agreement.
12.4. All taxes, levies, and compulsory payments that the Company is liable to deduct,
pursuant to any law, at the Employee’s expense, shall be deducted at source from all the payments, rights, and benefits to which the Employee is entitled, pursuant to this Employment Agreement or its appendices, unless expressly provided
otherwise in this Employment Agreement.
12.5. Employee’s rights and obligations under this Employment Agreement may not be assigned
or delegated, in whole or in part, by operation of law or otherwise, without the Company’s prior written consent.
12.6. This
Employment Agreement includes the terms to be contained in, and constitutes, the written notice to be delivered to the Employee pursuant to the Notice to Employee and Job Candidate Law (Employment Conditions and Candidate Screening and Selection),
5762-2002. This Employment Agreement does not derogate from any right vested to the Employee by virtue of any law, extension order, or collective bargaining agreement, to the extent such apply to the Employee.
12.7. All notices given or made pursuant to this Employment Agreement shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, or (b) when sent by electronic mail if sent during regular business hours of the recipient; if not, then on the next business day. All notices shall be sent to the respective parties at the
addresses set forth on the Specific Terms (or at such other addresses as shall be specified by notice given in accordance with this Section).
***
IN WITNESS WHEREOF, the parties have
executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Aviv Shapira
Signature:
/s/ Matteo Shapira
By:
Aviv Shapira
By:
Matteo Shapira
Title:
Chief Executive Officer
Date:
9/3/2026
Exhibit A
NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT
THIS NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT (the “Agreement”) is
effective as of the first day of the Employee’s engagement with the Company, including without limitation, prior to his employment with the Company (the “Effective Date”) and made by and between XTEND REALITY
EXPANSION LTD. (including, at its sole discretion, any or all of the Company’s affiliates, hereafter the “Company”) and Matteo Shapira (I.D. No. [***]) (the “Employee”).
In consideration for, as a condition and part of the Employee’s engagement with the Company (for no additional consideration or compensation), it is
hereby agreed as follows:
1.
Confidential Information.
1.1. Definition.
1.1.1.
“Confidential Information” means any proprietary or confidential data and/or information, in any form or media, that Employee receives, obtains, or otherwise acquires or gains access to during or in connection with
Employee’s engagement with the Company (whether before or after the date of this Agreement), which pertains to the Company or any of its businesses, clients, customers, employees, shareholders, business partners, licensees, licensors, vendors
or affiliates. Confidential Information includes without limitation Company Intellectual Property (as defined below), or any part thereof, as well as any data and/or information that, given the nature of such data and/or information or the
circumstances of its disclosure or receipt, is or should reasonably be considered as confidential.
1.1.2. Confidential Information shall
not include any information that (i) is in the public domain at the time of disclosure, (ii) subsequently has entered the public domain other than by breach of Employee’s obligations hereunder or by breach of another person’s
or entity’s confidentiality obligations, or (iii) is shown by written dated evidence to have been known by Employee prior to disclosure to Employee in connection with his engagement with the Company, not as a result of a breach of any
obligation owed to the Company or any other third party.
1.2. Confidentiality. Except as herein provided, Employee agrees
that during and after termination of Employee’s engagement with the Company, Employee (i) shall keep Confidential Information confidential and shall not directly or indirectly, use, divulge, publish, or otherwise disclose or allow to be
disclosed any aspect of Confidential Information without the Company’s prior written consent (except in order to fulfill Employee’s employment tasks and obligations); (ii) shall refrain from any action or conduct which might compromise
the confidentiality or proprietary nature of the Confidential Information; and (iii) shall follow Company’s instructions provided from time to time regarding the use and handling of Confidential Information. The Employee will take all
reasonable precautions to prevent any unauthorized use of disclosure of the Confidential Information.
1.3. Ownership. Employee
acknowledges and agrees that all right, title, and interest in and to Confidential Information and all materials containing Confidential Information are and shall remain, at all times, the sole and exclusive property of the Company.
1.4. Proprietary Information of Third Parties.
1.4.1. Employee agrees that he/she has not and will not, during the term of the employment, improperly use, disclose or bring onto the premises
or systems of the Company any proprietary information or trade secrets of any former employer or other person or entity with which Employee has an agreement or duty to keep in confidence information acquired by Employee, if any, unless with the
prior written approval of the Company and such employer, person or entity.
1.4.2. Employee recognizes that the Company may have received, and in the future may
receive, from third parties their confidential or proprietary information subject to the Company’s undertaking to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee agrees that he/she
owes the Company and such third parties, during Employee’s employment with the Company and anytime thereafter, a duty to hold all such third party confidential or proprietary information at least in accordance with the provisions set forth
hereunder in connection with Confidential Information of the Company, and to use such third party confidential or proprietary information strictly for the limited purposes and in the manner permitted hereunder.
1.5. Return of Confidential Material. Upon Company’s request or upon termination of the Employee’s employment with the
Company for any reason, Employee agrees to promptly surrender and deliver to Company all materials and data of any nature or media pertaining to any Confidential Information or to the Employee’s employment. Employee will not retain or take any
tangible or electronical materials or data, containing or pertaining to any Confidential Information. If required by the Company, Employee will certify in writing that he/she complied with the requirements of this Section.
2.
Ownership of Intellectual Property.
2.1. Definitions.
2.1.1.
“Intellectual Property” means proprietary or intellectual property rights, including without limitation copyrights, inventions, discoveries, patents, designs, trademarks, whether or not registered or capable of being
registered, original ideas, trade secrets, source and object code, algorithms, formulae, materials, methods, processes, procedures, any derivatives, improvements, and enhancements of the foregoing, and all rights corresponding to the foregoing
throughout the world including all rights to sue for and receive remedies against past, present and future infringements of any and all of the foregoing;
2.1.2. “Prior Inventions” means the Intellectual Property made or conceived by or belonging to Employee that are
listed on Schedule A attached hereto that (i) were developed by Employee prior to Employee’s employment with the Company, (ii) relate to Company’s actual or proposed business, operations, products or research and
development, and (iii) are not assigned to Company hereunder; and
2.1.3. “Open Source” means any software
or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution model (including but not limited to the GNU General Public License (GPL), GNU Lesser General Public
License (LGPL), Mozilla Public License (MPL), BSD licenses, MIT Licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL) the Sun Industry Standards License (SISL), materials licensed under any Creative
Commons license and the Apache License).
2.2. Assignment of Intellectual Property. Employee hereby irrevocably assigns and
transfers to Company, for no additional consideration, Employee’s entire right, title, and interest in and to all the Intellectual Property authored, developed, created, made, conceived, or reduced to practice by Employee, whether solely or
jointly with others, during the period of Employee’s engagement with Company (including prior to the date of this Agreement, after hours, on weekends or during vacation time), that either (i) relate in any manner to the actual or
demonstrably anticipated business or proposed business, work, or research and development of Company; or (ii) is developed in whole or in part on Company’s time or using Company’s equipment, supplies, facilities or Confidential
Information; or (iii) result from or are suggested by any task assigned to Employee or any work performed by Employee for or on behalf of Company or in connection with Employee’s duties and responsibilities in the scope of his/her
engagement with Company (the “Company Intellectual Property”). Employee agrees that this assignment includes a present assignment to Company of ownership with respect to Company Intellectual Property that is not yet in existence.
2.3. Employee hereby explicitly and irrevocably waives (i) any interest, claim, or demand with respect to any consideration,
compensation, or royalty payment in connection with Company Intellectual Property and/or the assignment thereof, including, but not limited to any payments pursuant to Section 134 to the Israeli Patent Law – 1967 (the “Patent
Law”); (ii) any moral rights, artists’ rights, or any other similar rights worldwide (“Moral Rights”) that he/she has at any time with respect to Company Intellectual Property.
2.4. Prior Inventions. If no Prior Inventions are listed in Schedule A of this
Agreement, Employee warrants that there are no Prior Inventions. Employee hereby acknowledges that, if in the course of Employee’s employment with Company, Employee incorporates into a Company product, process, service, or software a Prior
Invention owned by Employee or in which Employee has an interest, Company is hereby granted and shall have a fully paid, nonexclusive, royalty-free, unlimited, irrevocable, perpetual, worldwide, transferable and
sub-licensable right and license to make, have made, modify, create derivative works, reproduce, use, offer to sell use, sell, sublicense and otherwise distribute such Prior Invention (as may be improved or
enhanced by or for Company) and in the event of copyrightable materials, copy, distribute, publicly perform, publicly display, make derivative works thereof, and sublicense such copyrightable materials, as part of or in connection with such Company
product, process, service or software.
2.5. Disclosure of Intellectual Property. Employee agrees that in connection with
Intellectual Property and/or which Employee, solely or jointly with others, conceives, develops, or reduces to practice during the period of Employee’s employment with the Company (including after hours, on weekends, or during vacation time)
whether or not Employee believes that such Intellectual Property is Company Intellectual Property, Employee shall, as customary or required by the Company, keep and maintain adequate and accurate records, and shall promptly disclose such
Intellectual Property to Company, through Employee’s immediate supervisor at Company or another Company designee (and if requested by the Company shall also reduce to writing and adequately describe all such Intellectual Property), in order to
permit Company to claim its rights under this Agreement.
2.6. Employee’s Assistance.
2.6.1. Employee agrees to assist Company, or its designee, at Company expense, in every proper way to secure Company rights in the Company
Intellectual Property and in any and all countries, including (a) the disclosure to Company of all pertinent information and data with respect thereto; (b) the execution of all assignments, applications, specifications, oaths, and other
instruments that Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Company
Intellectual Property.
2.6.2. Employee’s obligations hereunder, to the extent that it is in Employee’s power to do so, shall
continue after the termination of Employee’s employment with Company for any reason. If Company is unable because of Employee’s mental or physical incapacity or for any other reason to secure Employee’s signature on any instrument,
required at Company’s discretion in order to apply for, pursue or maintain any application for Intellectual Property rights (including patents or copyright registrations) covering and embodying any Company Intellectual Property, then Employee
hereby irrevocably designates and appoints Company and its duly authorized officers and agents (at its discretion) as Employee’s agent and attorney-in-fact, to act
for and in Employee’s behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and/or protection or maintenance.
2.7. Other Obligations.
2.7.1. Employee acknowledges that the Company from time to time may have agreements with other persons or with the government authorities, or
agencies thereof, that impose obligations or restrictions on Company regarding Intellectual Property made during the course of work thereunder or regarding the confidential nature of such work. Employee agrees to be bound by the Company’s
instructions or policies, and take necessary actions to assist Company in complying with its obligations thereunder.
2.7.2. Employee
further agrees and undertakes that any and all work performed by him shall not infringe upon, misappropriate or use in an unauthorized manner any copyright, patent, trademark, trade secret, or other confidential or proprietary information or
intellectual property of any third party, including, without limitation, any current or former employer of Employee.
2.8. Open Source Software.
2.8.1. To the extent Intellectual Property or any other work product provided or generated by Employee includes any software, computer code,
and/or firmware, any such Intellectual Property or work product shall not incorporate or include any Open Source, unless explicitly permitted under the Company’s Open Source policy and/or instructions. Further, all other use of Open Source
materials in connection with Employee’s employment shall be in accordance with the Company’s Open Source policy.
2.8.2.
Intellectual Property and any other work product provided or generated by Employee shall on delivery be free of viruses, malicious code, time bombs, Trojan horses, back doors, drop dead devices, worms, or other code of any kind that may disable,
erase, display any unauthorized message, permit unauthorized access, automatically or remotely stop software, code and/or firmware from operating, or otherwise impair the services, deliverables, inventions or work product or the Company network or
any part thereof.
3.
Non-Competition and
Non-Solicitation
During the term of Employee’s employment
with the Company and for a period of twelve (12) months thereafter, Employee will not, directly or indirectly, (i) engage whether as an employee, independent contractor, partner, joint venture, shareholder, investor,
director, consultant or otherwise, in any business or activity, all over the world, which is competitive with the technology, products, and/or services of the Company, or the business in which it is currently engaged or in which it may be engaged
in, during the time of the Employee’s employment with the Company, (ii) solicit, induce, recruit or encourage any of the Company’s personnel to leave their employment, or take away such personnel, or attempt to solicit, induce,
recruit, encourage or take away personnel of the Company, and/or their affiliates, either for the Employee or for any other person or entity; nor (iii) offer, solicit, interfere with and/or endeavor to entice away from Company, and/or any of
its affiliates, any person, firm or company with whom Company and/or any of its affiliates shall have any contractual and/or commercial relationship as, consultant, licenser, joint venture, supplier, customer, distributor, agent or contractor
of whatsoever nature, existing or under negotiation on or twelve (12) months prior to the termination of his/her employment with the Company.
4.
Breach of Obligations
Employee is aware that a breach of his/her obligations as detailed under this Agreement, or part of them, will cause the Company or the
Company’s affiliates serious and irreparable damage, and that no financial compensation can be an appropriate remedy to such damage. Therefore, in addition to the return of the Special Compensation pursuant to the terms of the Employment
Agreement to which this Agreement is attached, Employee agrees, that if such a breach occurs, the Company, any of the Company’s affiliates or any of their designee(s) shall be entitled (without limiting other remedies if available under the
law or hereunder) to take all legal means necessary and any injunctive relief as is necessary to restrain any continuing or further breach of this Agreement.
5.
Acknowledgements and Declarations
Employee hereby declares and acknowledges that:
5.1. Employee’s confidentiality and non-competition obligations under this Agreement are fair,
reasonable, and proportional, especially in light of the Special Compensation Employee receives under the employment agreement to which this Agreement is attached, and are designed to protect the Company’s and the Company affiliates’
secrets and their confidential information, which constitute the essence of their protected business and commercial advantage in which significant capital investments were made.
5.2. Any breach of Employee’s obligations under this Agreement shall contradict the nature of the special trust and loyalty between
Employee and the Company, the fair and proper business practices and the duty of good faith and fairness between the parties. Any such breach shall harm the Company and/or the Company affiliates and shall constitute a material breach of this
Agreement and the employment agreement to which this Agreement is attached.
5.3. Employee’s obligations under this Agreement and the restricted period of time and
geographical area specified herein are reasonable and proportional, and do not prevent Employee from developing his/her general knowledge and professional expertise in the area of his/her business, without infringing on or breaching any of the
Company’s rights.
6.
Miscellaneous
6.1. Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the State of Israel, without regard
to the choice of law provisions thereof. Employee hereby expressly consents to the personal jurisdiction of the courts located in Tel-Aviv-Jaffa district, Israel, for any lawsuit arising from or relating to
this Agreement.
6.2. Assignment. The undertakings set forth herein may be assigned by the Company. Employee may not assign or
delegate his/her duties under this Agreement without the Company’s prior written approval. This Agreement shall be binding upon Employee’s heirs, successors, and permitted assignees.
6.3. Counterparts. This Agreement may be signed in two counterparts, each of which shall be deemed an original and both of which shall
together constitute one and the same instrument.
6.4. Entire Agreement. This Agreement constitutes the full and complete agreement
between the parties and supersedes any and all agreements or understandings, whether written or oral, concerning the subject matter of this Agreement, and may only be amended by a document signed by both parties.
6.5. Severability. If any provision of this Agreement is found to be invalid or unenforceable by a court of competent jurisdiction, such
provision shall be automatically adjusted to the minimum extent necessary for validity or enforceability. In any event, the remaining terms and provisions of this Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
/s/ Aviv Shapira
/s/ Matteo Shapira
XTEND REALITY EXPANSION LTD.
Employee
By:
Aviv Shapira
By:
Matteo Shapira
Date:
9/3/2026
Date:
9/3/2026
Schedule A
TO THE NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT
Prior Inventions
Follows a list of Prior
Inventions of the Employee:
1.
2.
3.
4.
If nothing is listed, I will be regarded as having declared that I have no Prior Inventions.
/s/ Matteo Shapira
9/3/2026
Employee
(Signature)
Date
Exhibit B
GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND AND INSURANCE FUND IN LIEU OF SEVERANCE PAY
By virtue of my power under section 14 of the Severance Pay Law, 1963 (hereinafter: the “Law”), I certify that payments made by an employer
commencing from the date of the publication of this approval on behalf of his employees to a comprehensive pension benefit fund that is not an insurance fund within the meaning thereof in the Income Tax (Rules for the Approval and Conduct of Benefit
Funds) Regulations, 1964 (hereinafter: the “Pension Fund”) or to managers’ insurance including the possibility of an insurance pension fund or a combination of payments to an annuity fund and to a non-annuity fund (hereinafter: the “Insurance Fund), including payments made by him by a combination of payments to a Pension Fund and an Insurance Fund, whether or not the Insurance Fund has an annuity
fund (hereinafter: the “Employer’s Payments), shall be made in lieu of the severance pay due to the said employee in respect of the salary from which the said payments were made and for the period they were paid (hereinafter: the
“Exempt Salary”), provided that all the following conditions are fulfilled:
(1)
The Employer’s Payments
(a)
To the Pension Fund are not less than 141/3% of the Exempt Salary or 12% of the Exempt Salary if the employer
pays for his employee in addition thereto additional payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary. In the event that the
employer has not paid an addition to the said 12%, his payments shall be only in lieu of 72% of the employee’s severance pay;
(b)
To the Insurance Fund are not less than one of the following:
(1)
131/3% of the Exempt Salary, if the employer pays for his employee in addition thereto also payments to secure
monthly income in the event of disability, in a plan approved by the Commissioner of the Capital Market, Insurance and Savings Department of the Ministry of Finance, in an amount required to secure at least 75% of the Exempt Salary or in an amount
of 21/2% of the Exempt Salary, the lower of the two (hereinafter: “Disability Insurance”); or
(2)
11% of the Exempt Salary, if the employer paid, in addition, a payment to the Disability Insurance, and in such
case, the Employer’s Payments shall only replace 72% of the Employee’s severance pay; In the event that the employer has paid, in addition to the foregoing payments to supplement severance pay, to a benefit fund for severance pay or to
an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary, the Employer’s Payments shall replace 100% of the employee’s severance pay.
(2)
No later than three months from the commencement of the Employer’s Payments, a written agreement is
executed between the employer and the employee in which:
(a)
The employee has agreed to the arrangement pursuant to this approval in a text specifying the Employer’s
Payments, the Pension Fund, and Insurance Fund, as the case may be; the said agreement shall also include the text of this approval; and
(b)
The employer waives in advance any right, which he may have to a refund of monies from his payments, unless the
employee’s right to severance pay has been revoked by a judgment by virtue of Sections 16 and 17 of the Law, and to the extent so revoked and/or the employee has withdrawn monies from the Pension Fund or Insurance Fund other than by reason of
an entitling event; in such regard “Entitling Event” means death, disability or retirement after the age of 60.
(3)
This approval does not derogate from the employee’s right to severance pay pursuant to any law,
collective agreement, extension order, or employment agreement, in respect of salary over and above the Exempt Salary.
Exhibit C
COMPANY COMPUTER POLICY CONSENT
XTEND
REALITY EXPANSION LTD. (the “Company”) has a policy regarding the use of the Company’s computer systems (the “Company’s Computers Policy”), as follows:
1.
The Company has provided you, for the purpose of the performance of your duties, various types of computer
related devices, including a computer, hardware, software, Company e-mail account, phone, etc. (the “Computer Devices”). The Computer Devices are the exclusive property of the
Company, and in order to protect the Computer Devices, and the information which they contain, you are hereby required to adhere to the following instructions:
1.1. Hardware – it is prohibited to install hardware on, and/or to, Computer Devices without the prior authorization of your
supervisor or the Company’s IT team. In this regard, you are not allowed to connect to a Computer Device an external hard – drive, disk on key (also known as memory stick and/or flash memory), camera, cell phone or any other type of
hardware for purposes which are illegal, inappropriate, or transferring of material that belongs to the Company, its clients, employees, or any other third party without the prior authorization of your supervisor or the Company’s IT team.
1.2. Software – it is prohibited to install software on Computer Devices, except for reasonable bounds, without the prior
authorization of your supervisor or the Company’s IT team.
1.3. Files – it is prohibited to save on Computer Devices
any files, photos, or videos that are not related to the Company. In particular, and without limitation, it is prohibited to save on Computer Device any file that its access and/or saving by you constitute infringement of protected Intellectual
Property rights, and any file that contains obscene, pornographic, or abusive content.
Notwithstanding the above, you are permitted to
save personal files that you or your immediate family members have created, which are not related to the Company or to the performance of your duties, and have no commercial content, as long as such files are saved under a folder labeled
“Private” located at the root directory of the Computer Device.
1.4. If any of the above instructions is not clear or if you
have a question regarding the use of Computer Devices, please contact your supervisor.
2.
Notwithstanding the above, the Company does allow private use of the Computer Devices made available to you for
work purpose, within reasonable bounds, subject to Section 1 above and Section 4 below.
3.
During work hours and/or while at the Company’s offices you may access the internet for your own private
use provided that such access is done for a reasonable period of time, and in accordance with the Company’s Computers Policy. For the removal of doubt, and without limitation, it is prohibited to access any website that contains obscene,
pornographic, or abusive content, and/or includes content that infringes on protected Intellectual Property rights, and /or involves gambling.
4.
The Company’s e-mail account –
4.1. Which was assigned to you is provided to you only for the purpose of work related use. You are not allowed to use
the Company’s e-mail account for private purposes that are not related to the Company’s activities, such prohibited private use of your e-mail account
includes correspondence with friends and family.
4.2. In the event, you wish to send private
e-mails during work hours and/or while at Company’s offices, you can do so through your private external web based e-mail account (Gmail, Hotmail, etc.). As noted
above, you are prohibited from saving to Computer Devices any files received through your external web based e-mail account, unless such files are saved per the terms of the exclusive exception detailed above.
4.3. In order to maintain the security of the Computer Devices and the protection of the Company’s legitimate interests, the Company
is using various monitoring technologies, as well as blocking technologies, in the scope further detailed in the Computer Policy. These technologies enable the Company to monitor and review content and information which is present on Computer
Devices or exchanged through Computer Devices, including through the Company’s e-mail account assigned to Company’s employees.
5.
Said monitoring is not intended to infringe your privacy, and as a general rule the Company is not interested
in reviewing correspondence which is exchanged through the Company’s e-mail account assigned to you. However, the Company may review the professional correspondence and will act within the boundaries of
applicable law, and when circumstances so require, necessitate, and obligate, in order to protect the Company’s legitimate interests.
6.
In the event that private correspondence exists in the Computer Devices and/or the Company e-mail account assigned to you, this, despite the clear instructions detailed hereinabove, the Company may review such correspondence, if special and unique circumstances exist in which there is a serious suspicion
that you are carrying out harmful or illegal activity through Computer Devices, and subject to your consent.
7.
It is further clarified that as part of the Company’s administration of its affairs, it may become
necessary for another employee of the Company to access the Computer Devices that were assigned to you, in order to review professional information on the Computer Devices that were assigned to you. Such access by other employees may occur during
your employment or after the termination of your employment. In this respect, upon request from your supervisors or upon the termination of employment, you are required to provide your supervisors with all access passwords that are necessary to
access Computer Devices which were assigned to you, and materials that are saved on them.
8.
Any material or file that is saved on Company’s Computer Devices is deemed to be the Company’s
property.
As a sign of your consent to the Computer Policy and the foregoing instructions, you are required to sign below.
EMPLOYEE ACKNOWLEDGEMENT AND CONSENT:
I, the undersigned, hereby acknowledge and approve that I have read all the above mentioned, received any and all clarifications which I required, and agree
to it.
Matteo Shapira
[***]
/s/ Matteo Shapira
9/3/2026
Name
ID number
Signature
Date
EX-10.9
EX-10.9
Filename: d230933dex109.htm · Sequence: 10
EX-10.9
Exhibit 10.9
Employment Agreement
This Employment
Agreement is made by and between XTEND REALITY EXPANSION LTD., an Israeli company, registration number 515871861, with its offices at 7 Habarzel St., Tel Aviv (the “Company”), and Mor Swiel (the
“Employee”).
The Employee has been employed by the Company since September 1st,
2025 (the “Commencement Date”) pursuant to the employment agreement signed on or about the same date (the “Prior Employment Agreement”), and the Company and the Employee wish to amend, restate and replace the
Prior Employment Agreement in its entirety by entering into this Employment Agreement, effective as of the Effective Date (as such term defined below).
Below is a table summarizing the specific terms of Employee’s employment with the Company (the “Specific Terms”). The general terms
and conditions of Employee’s employment with the Company are included in the pages following this table (the “General Terms”).
Specific Terms, General Terms, and the Exhibits attached hereto are collectively deemed as the “Employment Agreement”, Employee’s
execution of these documents constitutes the agreement to the Specific Terms, the General Terms, and all the Exhibits attached hereto.
In this Employment
Agreement, words referring to a male employee are also intended for a female employee.
Employee’s Details
Full Name: Mor Swiel
Position: Chief Legal Counsel
I.D. Number: [***]
Manager: CEO
Effective Date: August 1, 2026
Scope of Work: Full-Time
Annual Salary
US$ 250,000 (gross), payable in twelve (12) equal monthly installments (each installment shall be referred to herein as the “Monthly Salary”). Payment shall be made in NIS, with the applicable
exchange rate to be determined by the Company on an annual basis at the commencement of each calendar year (i.e., the January salary cycle), in accordance with the Company’s internal practices in this regard. For the year 2026, the applicable
exchange rate shall be NIS 3 per US$1.
Notice Period
Three (3) calendar months.
Annual Cash Bonus
The Employee shall be eligible to receive an annual cash bonus with a target annual bonus opportunity of US$ 80,000 (gross) for 100% achievement of the applicable annual goals and targets, payable in NIS according to the
U.S. dollar/NIS exchange rate in effect on the payment date. The annual bonus shall be based on the achievement of annual goals and targets of the Employee and the Company, as determined by the Board of Directors of the Company’s parent
company, Xtend AI Robotics, Inc. (the “Board”, and the “Parent”, respectively), or a duly authorized committee designated by the Board on its behalf. The terms and conditions of the annual bonus, including the
applicable performance criteria, measurement methodology, approval process, threshold and maximum achievement levels, and all other related terms, shall be as set forth in the applicable executive compensation plan for
C-level executives of the Company or the Parent, as applicable, to be adopted and as may be amended from time to time by the Board or such committee. Any annual bonus earned for a given year shall be paid
within ninety (90) days following the completion and closing of the financial reports for such year by the applicable independent accountants. If the Company terminates the Employee’s employment after the end of the applicable bonus year
but before the applicable payment date, other than for Cause, the Employee shall remain eligible to receive the annual bonus for such completed year, subject to the applicable terms and conditions and actual achievement of the relevant goals and
targets, and such bonus, if earned, shall be paid following such termination at the same time annual bonuses for such year are paid to the other executives.
Termination Grant
In the event that this Employment Agreement is terminated by either party for any reason other than for Cause, the Company shall pay to the Employee a one-time
lump-sum cash payment in an amount equal to three (3) times the Employee’s then-current Monthly Salary (the “Termination Grant”), subject to and conditioned upon the
Employee’s execution and non-revocation (if applicable) of the Company’s standard waiver and release of claims document.
Pension Plan
The Employee shall be insured under a Pension Plan (as defined below), all in accordance with the General Approval of Section 14 Arrangement and the General Terms.
Keren Hishtalmut (“Education Fund”)
Company’s Contribution: 7.5% of the Monthly Salary.
Employee’s Contribution: 2.5% of the Monthly Salary, which will be deducted from the Monthly Salary.
Notwithstanding the above, the amounts contributed to the Education Fund will not exceed
the tax-exempt limit recognized by the Income Tax Authority from time to time.
Vacation Days
Annual Entitlement: 20 business days per calendar year.
Maximum Amount: The Employee shall be entitled to carry forward from one calendar year to the next any unused vacation days, up to an amount equal to
one (1) Annual Entitlement.
Sick Days
Per applicable law. However, the Employee shall be entitled to receive the full compensation as of the first sick day.
Recreation Days
(“Dmey Havraa”)
Per applicable law.
Travel Expenses
The Employee shall be entitled to either: (i) use a Company Car for the purpose of fulfilling Employee duties to the Company (the “Company Car”) in accordance with the Company’s policies as shall be
modified from time to time, subject to signing the Company’s car policy and any other required agreement, including with the leasing company. The Company Car monthly cost shall be up to NIS 5,000 (excluding VAT), which shall be covered by the
Company. The Company will cover all of the operating expenses of the car, excluding parking expenses, tickets, fines, and other costs related to noncompliance by the Employee with any applicable law. The Company shall bear all applicable taxes
related to the Employee’s use of the Company Car; or (ii) receive from the Company a fixed monthly amount of NIS 5,000 (gross) as reimbursement for expenses related to travel, car maintenance, insurance and other related costs. Either
options, as shall be agreed upon between the parties shall be instead of Employee’s entitlement for reimbursement of his travel expenses per law
Equity Incentives
RSU Grant. Subject to the approval of the Parent’s Board, the Employee shall be granted 180,000 Restricted Stock Units
(“RSUs” and “Initial RSU Grant” respectively), in accordance with and subject to the terms and provisions of the Parent’s applicable equity incentive plan and its applicable sub-plan for Israeli participants, if any, as may be adopted from time to time (collectively, the “Plan”) and in accordance with the requirements of Section 102(b)(3) of the Israeli Tax
Ordinance. Each RSU shall represent the right to receive one share of a Common Stock of the Parent (“Common Stock”), subject to the terms, conditions and restrictions of the Plan and of an RSU award agreement to be entered into
between the Employee and the Parent, in the form customarily used by the Parent and as approved by the Board.
The RSUs shall vest over a period of thirty-six (36) months, in thirty-six
(36) equal monthly installments, with no cliff, such that 1/36 of the RSUs shall vest on each monthly anniversary of the Vesting Commencement Date (as shall be determined in the RSU award agreement), provided that the Employee remains
continuously employed by the Company or any of its affiliates, or continues to provide services thereto, through each applicable vesting date.
The grant of the RSUs shall be subject to the Employee’s execution of the applicable RSU award agreement and such other documents,
undertakings and instruments as may be required by the Parent and/or the Company.
Subject to the approval of the Board (or the applicable compensation committee, if required), the Employee shall be eligible to receive, on each of the first
and second anniversaries of the Initial RSU Grant’s grant date, an additional RSU grant on substantially the same terms and conditions as the initial RSU grant and covering the same number of RSUs as granted pursuant thereto.
Any tax liability arising in connection with the grant, vesting, settlement or the RSUs
and/or the sale of the Common Stock issued thereunder shall be borne solely by the Employee, and the Employee acknowledges that neither the Company nor the Parent shall bear any responsibility in connection therewith, except for any mandatory
withholding or reporting obligations required by applicable law. The Employee further acknowledges that no representation or undertaking has been made by the Company, the Parent or any of their representatives regarding the tax consequences of the
grant or the disposition of any securities issued thereunder.
In the event of any
contradiction or inconsistency between the provisions of this Employment Agreement and the provisions of the RSU award agreement, the provisions of the RSU award agreement shall prevail.
Recognition One Time RSU Grant. Subject to the approval of the Board of Directors
of the Parent (the “Board”), the Employee shall be granted 250,000 Restricted Stock Units (the “Recognition RSUs”), in accordance with and subject to the terms and provisions of the Plan and in accordance with
the requirements of Section 102(b)(3) of the Israeli Tax Ordinance. Each RSU shall represent the right to receive one share of a Common Stock of the Parent (“Common Stock”), subject to the terms, conditions and restrictions
of the Plan and of an RSU award agreement to be entered into between the Employee and the Parent, in the form customarily used by the Parent and as approved by the Board.
The Recognition RSUs shall vest over a period of thirty-six (36) months, in
thirty-six (36) equal monthly installments, with no cliff, such that 1/36 of the Recognition RSUs shall vest on each monthly anniversary of the Vesting Commencement Date (as shall be determined in the RSU
award agreement), provided that the Employee remains continuously employed by the Company or any of its affiliates, or continues to provide services thereto, through each applicable vesting date.
The vesting schedule shall include an acceleration provision, applicable to each and
every RSU grant made to the Employee under this Agreement, pursuant to which 100% of the then-outstanding and unvested RSUs then held by the Employee (including the Initial RSU Grant, each additional RSU grant referred to above and the Recognition
RSUs) shall become fully vested immediately upon the termination of the Employee’s employment by the Parent or the Company without Cause or by the Employee for Good Reason. The grant of the RSUs shall be subject to the Employee’s
execution of the applicable RSU award agreement and such other documents, undertakings and instruments as may be required by the Parent and/or the Company.
Any tax liability arising in connection with the grant, vesting, settlement or the RSUs and/or the sale of the Common Stock issued thereunder
shall be borne solely by the Employee, and the Employee acknowledges that neither the Company nor the Parent shall bear any responsibility in connection therewith, except for any mandatory withholding or reporting obligations required by applicable
law. The Employee further acknowledges that no representation or undertaking has been made by the Company, the Parent or any of their representatives regarding the tax consequences of the grant or the disposition of any securities issued
thereunder.
In the event of any contradiction or inconsistency between the
provisions of this Employment Agreement and the provisions of the RSU award agreement, the provisions of the RSU award agreement shall prevail.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Aviv Shapira
Signature:
/s/ Mor Swiel
By:
Aviv Shapira
By:
Mor Swiel
Title:
Chief Executive Officer
Date:
9/3/2026
General Terms and Conditions of Employment with the Company
1.
Employment Position
1.1. The Employee’s employment relationship with the Company commenced as of the Commencement Date, and the Employee’s employment
by the Company pursuant to, and in accordance with, the terms and conditions of this Employment Agreement shall commence on the Effective Date and shall continue for an indefinite term, unless and until terminated in accordance with the provisions
of this Employment Agreement.
1.2. Employee shall be employed by the Company in the Position indicated in the Specific Terms, and shall
report to the person indicated in the Specific Terms as the Manager or any other person as determined by the Company.
1.3. Employee shall
devote Employee’s entire working time, know-how, expertise, talent, experience and best efforts to the business and affairs of the Company and perform his duties and functions diligently and skillfully
with the utmost expertise and devotion.
1.4. During Employee’s employment, Employee will not engage in or be associated with,
directly or indirectly, any other employment, consulting, or other business activity (with or without consideration), without the Company’s prior written approval. Prior to signing this Employment Agreement, the Employee will inform the
Company of any employment, occupation, engagement, or activity in which the Employee is involved, and that would require the Company’s written consent per this paragraph.
1.5. Employee shall be based in Israel, but he understands and agrees that the Position may require him to travel internationally from time to
time.
2.
Working Hours
2.1. Work for the Company shall be performed on Sunday through Thursday, unless determined and instructed otherwise by the Company.
2.2. A regular workweek for a full-time position consists of 42 working hours, not including Employee’s daily break.
2.3. Saturday, as observed by the Jewish religious, shall be the Employee’s recognized and official rest day.
2.4. Employee shall cooperate with the Company in maintaining a record of the number of hours of work performed, in accordance with the
Company’s policy.
3.
Termination
3.1. Employee’s employment with the Company may be terminated at any time at the option of either Employee or the Company, upon delivery
to the other party of a written notice pursuant to the Specific Terms (the “Notice Period”).
3.2. During the
Notice Period Employee shall continue work and perform all regular duties unless otherwise instructed by the Company. Employee will cooperate with the Company and use Employee’s best efforts to assist the integration into the Company
organization of the person or persons who will assume Employee’s responsibilities hereunder.
3.3. Notwithstanding the foregoing,
Company shall be entitled to terminate Employee’s employment at any time prior to the expiration of the Notice Period and pay the Employee the applicable payment in lieu of notice period, per applicable law.
3.4. In case of termination of Employee’s employment by the Company for Cause, the Company may terminate Employee’s employment
immediately (with no Notice Period).
3.5. “Cause” means (i) a material breach of the
PIIA (as defined below and attached hereto as Exhibit A), or any other material breach of this Employment Agreement, which, if capable of cure, was not cured within five (5) calendar days of receipt by the Employee of written
notice; (ii) fraud, theft, embezzlement, dishonesty, or misappropriation of funds of the Company or any of its affiliates; (iii) conviction of, or a plea of “guilty” or “no contest” to a felony or other lesser
crime that would require removal from Employee’s position at the Company; (iv) any willful or intentional act of the Employee that injures, or is reasonably likely to injure, the reputation, business, products or practices of the Company,
or any of its directors, officers, agents, representatives, shareholders or affiliates; or (v) other cause justifying termination or dismissal without severance payment under applicable law. The determination that a termination is for Cause
shall be made by the Company in its sole judgment and discretion.
3.6. “Good Reason” means the occurrence of any of the
following without the Employee’s prior written consent: (i) a material reduction of more than 15% in the Employee’s base salary, which is not applied on a broad basis to other C-Level
employees of the Company; (ii) a material diminution in the Employee’s title, authority, duties, or responsibilities; (iii) a requirement that the Employee relocate their principal place of work to a location more than 50 kilometers
from the Employee’s then-current work location; or (iv) a material breach of this Agreement by the Company; provided, however, that no resignation shall constitute a resignation for Good Reason unless: (A) the Employee has provided
the Company with written notice of the grounds for Good Reason within sixty (60) days of the initial occurrence of the applicable condition; (B) the Company has failed to cure such condition within thirty (30) days following receipt
of such notice; and (C) the Employee’s resignation occurs within thirty (30) days following the expiration of such cure period.
4.
Salary
4.1. Employee shall be entitled to a Monthly Salary in the amount specified in the Specific Terms.
4.2. Employee agrees and acknowledges that due to the Employee’s senior managerial position in the Company, the special personal trust
involved in the position in which the Employee shall be employed, and the inability to monitor the Employee’s actual work hours, the Hours of Work and Rest Law, 1951 (the “Hours of Work and Rest Law”) shall not apply to the
Employee. The Employee acknowledges that the set amount of the Monthly Salary, as well as all other compensation and benefits provided to the Employee by the Company, as agreed upon between the Employee and the Company, reflect the requirements of
the position to work additional and irregular hours and days. Accordingly, the Employee shall not be entitled to claim or receive payments or any additional pay for work performed at overtime hours, nights, weekends, or at any other times in which
the Hours of Work and Rest Law requires payment of special payments (to employees who are not in a position such as the position of the Employee).
4.3. The Monthly Salary shall be paid no later than the 9th day of the following month.
4.4. An amount equal to 10% of the Monthly Salary shall be considered to be a special payment for the Employee’s obligation for non-competition under the PIIA (the “Special Compensation”). Employee shall be obligated to return to the Company all Special Compensation amounts Employee received from the Company upon violation
of any of the obligations set forth in the PIIA. The Company maintains the right to withhold any amounts due to Employee following such violation. All the above shall not derogate from any of the Company’s rights with respect to any violation
of the provisions of the PIIA.
5.
Pension Plan
5.1. The Employee shall be insured under a managers insurance, a pension fund, or a combination of both, pursuant to the Employee’s
choice and preference (the “Pension Plan”).
5.2. The monthly contributions to the Pension Plan shall be made on the
basis of the Monthly Salary, as follows: (i) Company’s contributions: 8.33% towards the severance pay component, and 6.5% towards the pension component; and (ii) Employee’s contributions: 6% towards the pension
component, which will be deducted from the Monthly Salary each month.
5.3. Notwithstanding the said contributions, if the Pension Plan is a managers insurance
policy or a provident fund that is not a pension fund, Company’s contributions towards the pension component shall include the cost of acquiring a loss of working capacity insurance (the “Disability Insurance”), which shall
be equal to lower of the following: (i) 2.5% of the Monthly Salary or the applicable portion thereof, or (ii) a rate ensuring loss of earning payment of 75% of the Monthly Salary or the applicable portion thereof. Notwithstanding the foregoing,
the Company’s contributions towards the pension component must be at least 5%. Therefore, the Company’s contributions towards the pension component shall be no less than 6.5% and up to 7.5% of the Monthly Salary or the applicable portion
thereof.
5.4. It is agreed and warranted between the parties that the Company’s contributions to the severance component are in lieu
of severance pay, in accordance with the provisions of the General Approval regarding Employers’ Payments to a Pension Fund and Insurance Fund in lieu of Severance Pay issued by virtue of Section 14 of the Severance Pay Law 5723-1963 by
the Labor Minister, dated June 30, 1998 (as amended and as may be amended from time to time), which its Hebrew and English copies are attached hereto as Exhibit B (the “General Approval”). By signing this
Employment Agreement, the parties acknowledge their consent to the applicability of the provisions of the General Approval. In so far as amendments to the General Approval shall be necessary, according and subject to any law or regulations, the
provisions of the amended General Approval shall prevail and replace the General Approval attached.
5.5. The parties acknowledge and agree
that the amounts accrued in the Pension Plan on account of the Company’s contributions shall be in lieu of and will constitute the full and final settlement of any severance pay Employee may become entitled to under any applicable law or
contract. Notwithstanding the foregoing, the parties acknowledge and agree that the Company waives all rights for refunds from its contributions payments, unless a judgment determined that Employee is not entitled to severance pay under
Section 16 and/or Section 17 of the Severance Pay Law, or if Employee withdrew funds contributed to the Pension Plan prior to an “Entitling Event” as such is defined in section 2(b) in the General Approval.
6.
Vacation Days
6.1. Employee is obliged to take at least five (5) paid vacation days during a calendar year, as prescribed by law. Furthermore, Employee
will make every effort to exercise his full annual vacation by the end of a calendar year.
6.2. In the event the Employee was unable to
utilize all his vacation days by the end of a calendar year, Employee shall be entitled to carry forward from one calendar year to the next an accumulated unused balance of vacation days standing to his credit up to the Maximum Amount detailed in
the Specific Terms. For the avoidance of doubt, at the end of each calendar year, any unused vacation days in excess of the Maximum Amount shall be canceled, nulled, and shall not be redeemable in any event.
7.
Education Fund
7.1. Employee and Company shall open and maintain an education fund under the terms specified in Specific Terms (“Keren
Hishtalmut”) (the “Education Fund”).
7.2. Employee hereby authorizes the Company to transfer to the Education
Fund the amount of Employee’s contribution and the Company’s contribution from the Monthly Salary, on a monthly basis, subject to the terms specified in the Specific Terms.
8.
Reimbursement for Expenses:
8.1. The Company shall reimburse the Employee for all reasonable and necessary
out-of-pocket business expenses incurred by the Employee in connection with the performance of his duties under this Employment Agreement, subject to and in accordance
with the Company’s expense reimbursement policy (as shall be determined by the Company from time to time(, but only with respect to expenses that have been approved by the Company in advance, and for which the Employee has provided receipts
and/or other appropriate documentation.
9.
PIIA
9.1. Employee shall be required, as a condition to Employee’s employment with the Company, to sign the
Non-Competition, Proprietary Information and Inventions Agreement attached hereto as Exhibit A (the “PIIA”).
9.2. Employee’s compensation under this Employment Agreement has been calculated to include special consideration for the commitments
under the PIIA and the Employee will not be entitled to any further consideration for such commitments, expressly including no entitlement to royalties for any Service Inventions as defined in Section 132 of the Patent Law, 1967 (the
“Patent Law”). This clause constitutes an express waiver of the Employee’s rights under Section 134 of the Patent Law.
10.
Representations
10.1. The Employee confirms and undertakes: (i) that the Employee has all right and authority to enter into this Employment Agreement and
to perform the Employee’s obligations hereunder; (ii) that the Employee’s employment with the Company does not conflict with, or result in a breach of, any agreement or other commitment to which the Employee is a party or by which
the Employee is bound; (iii) to comply with all applicable laws relating to the Employee’s employment, including, without limitation, the Company’s Rules for Prevention of Sexual Harassment at the Workplace; (iv) to comply with
all of the Company’s work rules, policies, procedures and objectives, as shall be in effect from time to time; (v) not to disclose this Employment Agreement or any part thereof to any third party (other than the Employee’s spouse,
attorney, or tax advisor), including, without limitation, to any other employee of the Company; (vi) not to receive, at any time, whether during the term of this Employment Agreement or at any time thereafter, directly or indirectly, any
payment, benefit or other consideration from any third party in connection with the Employee’s employment with the Company, without the Company’s prior written authorization; (vii) to immediately and without delay inform the Company
in writing of any affairs or matters in which the Employee or any member of the Employee’s immediate family has a personal interest that might create a conflict with the Employee’s duties, responsibilities or obligations to the Company,
the Position, employment with the Company (including its affiliates), or the interests of the Company (including its affiliates); (viii) not, without the Company’s prior written consent, to undertake or accept any other paid or unpaid
employment or occupation, or engage in or be associated with, directly or indirectly, any other business, duty or pursuit, except for de minimis non-commercial activities; and (ix) not to disparage the
Company or its affiliates, their reputation, business, products or practices, or any of their respective directors, officers, agents, representatives or shareholders, whether orally or in writing.
10.2. The Employee agrees to the collection, storage, processing, and use by the Company of any information concerning the Employee, including
the transfer thereof to databases (in Israel or abroad and to any other person or entity, as the Company shall deem necessary and reasonable for business purposes or to pursue the Company’s business interests, all, in accordance with
applicable law and as is reasonable for the Company’s business purposes and interests. Without derogating from the generality of the above, such purposes may include human resources management.
11.
Use of the Company’s Computer Systems
11.1. The Employee hereby agrees and acknowledges that he has read, understands, and consents to the Company Computer Policy attached hereto as
Exhibit C and incorporated herein by reference, and agrees to, concurrently with the execution of this Employment Agreement, to sign on Exhibit C.
12.
Miscellaneous
12.1. This Employment Agreement, together with its exhibits, constitute the entire understanding and agreement between the parties and
supersedes any and all agreements (written or oral) concerning the subject matter hereof.
12.2. This Employment Agreement may only be amended by a document signed by both parties.
12.3. This Employment Agreement will be governed by and construed in accordance with the laws of the State of Israel, without regard to
the choice of law provisions thereof. Employee hereby expressly consents to the exclusive personal jurisdiction of the courts located in Tel-Aviv-Jaffa, for any lawsuit arising from or relating to this
Agreement.
12.4. All taxes, levies, and compulsory payments that the Company is liable to deduct, pursuant to any law, at the
Employee’s expense, shall be deducted at source from all the payments, rights, and benefits to which the Employee is entitled, pursuant to this Employment Agreement or its appendices, unless expressly provided otherwise in this Employment
Agreement.
12.5. Employee’s rights and obligations under this Employment Agreement may not be assigned or delegated, in whole or in
part, by operation of law or otherwise, without the Company’s prior written consent.
12.6. This Employment Agreement includes the
terms to be contained in, and constitutes, the written notice to be delivered to the Employee pursuant to the Notice to Employee and Job Candidate Law (Employment Conditions and Candidate Screening and Selection), 5762-2002. This Employment
Agreement does not derogate from any right vested to the Employee by virtue of any law, extension order, or collective bargaining agreement, to the extent such apply to the Employee.
12.7. All notices given or made pursuant to this Employment Agreement shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, or (b) when sent by electronic mail if sent during regular business hours of the recipient; if not, then on the next business day. All notices shall be sent to the respective parties at the
addresses set forth on the Specific Terms (or at such other addresses as shall be specified by notice given in accordance with this Section).
***
IN WITNESS WHEREOF, the parties have
executed this Employment Agreement as of the Effective Date.
XTEND REALITY EXPANSION LTD.
Employee
Signature:
/s/ Aviv Shapira
Signature:
/s/ Mor Swiel
By:
Aviv Shapira
By:
Mor Swiel
Title:
Chief Executive Officer
Date:
9/3/2026
Exhibit A
NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT
THIS NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT (the “Agreement”) is
effective as of the first day of the Employee’s engagement with the Company, including without limitation, prior to his employment with the Company (the “Effective Date”) and made by and between XTEND REALITY
EXPANSION LTD. (including, at its sole discretion, any or all of the Company’s affiliates, hereafter the “Company”) and Mor Swiel (I.D. No. [***]) (the “Employee”).
In consideration for, as a condition and part of the Employee’s engagement with the Company (for no additional consideration or compensation), it is
hereby agreed as follows:
1.
Confidential Information.
1.1. Definition.
1.1.1.
“Confidential Information” means any proprietary or confidential data and/or information, in any form or media, that Employee receives, obtains, or otherwise acquires or gains access to during or in connection with
Employee’s engagement with the Company (whether before or after the date of this Agreement), which pertains to the Company or any of its businesses, clients, customers, employees, shareholders, business partners, licensees, licensors, vendors
or affiliates. Confidential Information includes without limitation Company Intellectual Property (as defined below), or any part thereof, as well as any data and/or information that, given the nature of such data and/or information or the
circumstances of its disclosure or receipt, is or should reasonably be considered as confidential.
1.1.2. Confidential Information shall
not include any information that (i) is in the public domain at the time of disclosure, (ii) subsequently has entered the public domain other than by breach of Employee’s obligations hereunder or by breach of another person’s
or entity’s confidentiality obligations, or (iii) is shown by written dated evidence to have been known by Employee prior to disclosure to Employee in connection with his engagement with the Company, not as a result of a breach of any
obligation owed to the Company or any other third party.
1.2. Confidentiality. Except as herein provided, Employee agrees
that during and after termination of Employee’s engagement with the Company, Employee (i) shall keep Confidential Information confidential and shall not directly or indirectly, use, divulge, publish, or otherwise disclose or allow to be
disclosed any aspect of Confidential Information without the Company’s prior written consent (except in order to fulfill Employee’s employment tasks and obligations); (ii) shall refrain from any action or conduct which might compromise
the confidentiality or proprietary nature of the Confidential Information; and (iii) shall follow Company’s instructions provided from time to time regarding the use and handling of Confidential Information. The Employee will take all
reasonable precautions to prevent any unauthorized use of disclosure of the Confidential Information.
1.3. Ownership. Employee
acknowledges and agrees that all right, title, and interest in and to Confidential Information and all materials containing Confidential Information are and shall remain, at all times, the sole and exclusive property of the Company.
1.4. Proprietary Information of Third Parties.
1.4.1. Employee agrees that he/she has not and will not, during the term of the employment, improperly use, disclose or bring onto the premises
or systems of the Company any proprietary information or trade secrets of any former employer or other person or entity with which Employee has an agreement or duty to keep in confidence information acquired by Employee, if any, unless with the
prior written approval of the Company and such employer, person or entity.
1.4.2. Employee recognizes that the Company may have received, and in the future may
receive, from third parties their confidential or proprietary information subject to the Company’s undertaking to maintain the confidentiality of such information and to use it only for certain limited purposes. Employee agrees that he/she
owes the Company and such third parties, during Employee’s employment with the Company and anytime thereafter, a duty to hold all such third party confidential or proprietary information at least in accordance with the provisions set forth
hereunder in connection with Confidential Information of the Company, and to use such third party confidential or proprietary information strictly for the limited purposes and in the manner permitted hereunder.
1.5. Return of Confidential Material. Upon Company’s request or upon termination of the Employee’s employment with the
Company for any reason, Employee agrees to promptly surrender and deliver to Company all materials and data of any nature or media pertaining to any Confidential Information or to the Employee’s employment. Employee will not retain or take any
tangible or electronical materials or data, containing or pertaining to any Confidential Information. If required by the Company, Employee will certify in writing that he/she complied with the requirements of this Section.
2.
Ownership of Intellectual Property.
2.1. Definitions.
2.1.1.
“Intellectual Property” means proprietary or intellectual property rights, including without limitation copyrights, inventions, discoveries, patents, designs, trademarks, whether or not registered or capable of being
registered, original ideas, trade secrets, source and object code, algorithms, formulae, materials, methods, processes, procedures, any derivatives, improvements, and enhancements of the foregoing, and all rights corresponding to the foregoing
throughout the world including all rights to sue for and receive remedies against past, present and future infringements of any and all of the foregoing;
2.1.2. “Prior Inventions” means the Intellectual Property made or conceived by or belonging to Employee that are
listed on Schedule A attached hereto that (i) were developed by Employee prior to Employee’s employment with the Company, (ii) relate to Company’s actual or proposed business, operations, products or research and
development, and (iii) are not assigned to Company hereunder; and
2.1.3. “Open Source” means any software
or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution model (including but not limited to the GNU General Public License (GPL), GNU Lesser General Public
License (LGPL), Mozilla Public License (MPL), BSD licenses, MIT Licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL) the Sun Industry Standards License (SISL), materials licensed under any Creative
Commons license and the Apache License).
2.2. Assignment of Intellectual Property. Employee hereby irrevocably assigns and
transfers to Company, for no additional consideration, Employee’s entire right, title, and interest in and to all the Intellectual Property authored, developed, created, made, conceived, or reduced to practice by Employee, whether solely or
jointly with others, during the period of Employee’s engagement with Company (including prior to the date of this Agreement, after hours, on weekends or during vacation time), that either (i) relate in any manner to the actual or
demonstrably anticipated business or proposed business, work, or research and development of Company; or (ii) is developed in whole or in part on Company’s time or using Company’s equipment, supplies, facilities or Confidential
Information; or (iii) result from or are suggested by any task assigned to Employee or any work performed by Employee for or on behalf of Company or in connection with Employee’s duties and responsibilities in the scope of his/her
engagement with Company (the “Company Intellectual Property”). Employee agrees that this assignment includes a present assignment to Company of ownership with respect to Company Intellectual Property that is not yet in existence.
2.3. Employee hereby explicitly and irrevocably waives (i) any interest, claim, or demand with respect to any consideration,
compensation, or royalty payment in connection with Company Intellectual Property and/or the assignment thereof, including, but not limited to any payments pursuant to Section 134 to the Israeli Patent Law – 1967 (the “Patent
Law”); (ii) any moral rights, artists’ rights, or any other similar rights worldwide (“Moral Rights”) that he/she has at any time with respect to Company Intellectual Property.
2.4. Prior Inventions. If no Prior Inventions are listed in Schedule A of this
Agreement, Employee warrants that there are no Prior Inventions. Employee hereby acknowledges that, if in the course of Employee’s employment with Company, Employee incorporates into a Company product, process, service, or software a Prior
Invention owned by Employee or in which Employee has an interest, Company is hereby granted and shall have a fully paid, nonexclusive, royalty-free, unlimited, irrevocable, perpetual, worldwide, transferable and
sub-licensable right and license to make, have made, modify, create derivative works, reproduce, use, offer to sell use, sell, sublicense and otherwise distribute such Prior Invention (as may be improved or
enhanced by or for Company) and in the event of copyrightable materials, copy, distribute, publicly perform, publicly display, make derivative works thereof, and sublicense such copyrightable materials, as part of or in connection with such Company
product, process, service or software.
2.5. Disclosure of Intellectual Property. Employee agrees that in connection with
Intellectual Property and/or which Employee, solely or jointly with others, conceives, develops, or reduces to practice during the period of Employee’s employment with the Company (including after hours, on weekends, or during vacation time)
whether or not Employee believes that such Intellectual Property is Company Intellectual Property, Employee shall, as customary or required by the Company, keep and maintain adequate and accurate records, and shall promptly disclose such
Intellectual Property to Company, through Employee’s immediate supervisor at Company or another Company designee (and if requested by the Company shall also reduce to writing and adequately describe all such Intellectual Property), in order to
permit Company to claim its rights under this Agreement.
2.6. Employee’s Assistance.
2.6.1. Employee agrees to assist Company, or its designee, at Company expense, in every proper way to secure Company rights in the Company
Intellectual Property and in any and all countries, including (a) the disclosure to Company of all pertinent information and data with respect thereto; (b) the execution of all assignments, applications, specifications, oaths, and other
instruments that Company shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to Company, its successors, assigns, and nominees the sole and exclusive rights, title and interest in and to such Company
Intellectual Property.
2.6.2. Employee’s obligations hereunder, to the extent that it is in Employee’s power to do so, shall
continue after the termination of Employee’s employment with Company for any reason. If Company is unable because of Employee’s mental or physical incapacity or for any other reason to secure Employee’s signature on any instrument,
required at Company’s discretion in order to apply for, pursue or maintain any application for Intellectual Property rights (including patents or copyright registrations) covering and embodying any Company Intellectual Property, then Employee
hereby irrevocably designates and appoints Company and its duly authorized officers and agents (at its discretion) as Employee’s agent and attorney-in-fact, to act
for and in Employee’s behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and/or protection or maintenance.
2.7. Other Obligations.
2.7.1. Employee acknowledges that the Company from time to time may have agreements with other persons or with the government authorities, or
agencies thereof, that impose obligations or restrictions on Company regarding Intellectual Property made during the course of work thereunder or regarding the confidential nature of such work. Employee agrees to be bound by the Company’s
instructions or policies, and take necessary actions to assist Company in complying with its obligations thereunder.
2.7.2. Employee
further agrees and undertakes that any and all work performed by him shall not infringe upon, misappropriate or use in an unauthorized manner any copyright, patent, trademark, trade secret, or other confidential or proprietary information or
intellectual property of any third party, including, without limitation, any current or former employer of Employee.
2.8. Open Source Software.
2.8.1. To the extent Intellectual Property or any other work product provided or generated by Employee includes any software, computer code,
and/or firmware, any such Intellectual Property or work product shall not incorporate or include any Open Source, unless explicitly permitted under the Company’s Open Source policy and/or instructions. Further, all other use of Open Source
materials in connection with Employee’s employment shall be in accordance with the Company’s Open Source policy.
2.8.2.
Intellectual Property and any other work product provided or generated by Employee shall on delivery be free of viruses, malicious code, time bombs, Trojan horses, back doors, drop dead devices, worms, or other code of any kind that may disable,
erase, display any unauthorized message, permit unauthorized access, automatically or remotely stop software, code and/or firmware from operating, or otherwise impair the services, deliverables, inventions or work product or the Company network or
any part thereof.
3.
Non-Competition and
Non-Solicitation
During the term of Employee’s employment
with the Company and for a period of twelve (12) months thereafter, Employee will not, directly or indirectly, (i) engage whether as an employee, independent contractor, partner, joint venture, shareholder, investor,
director, consultant or otherwise, in any business or activity, all over the world, which is competitive with the technology, products, and/or services of the Company, or the business in which it is currently engaged or in which it may be engaged
in, during the time of the Employee’s employment with the Company, (ii) solicit, induce, recruit or encourage any of the Company’s personnel to leave their employment, or take away such personnel, or attempt to solicit, induce,
recruit, encourage or take away personnel of the Company, and/or their affiliates, either for the Employee or for any other person or entity; nor (iii) offer, solicit, interfere with and/or endeavor to entice away from Company, and/or any of
its affiliates, any person, firm or company with whom Company and/or any of its affiliates shall have any contractual and/or commercial relationship as, consultant, licenser, joint venture, supplier, customer, distributor, agent or contractor
of whatsoever nature, existing or under negotiation on or twelve (12) months prior to the termination of his/her employment with the Company.
4.
Breach of Obligations
Employee is aware that a breach of his/her obligations as detailed under this Agreement, or part of them, will cause the Company or the
Company’s affiliates serious and irreparable damage, and that no financial compensation can be an appropriate remedy to such damage. Therefore, in addition to the return of the Special Compensation pursuant to the terms of the Employment
Agreement to which this Agreement is attached, Employee agrees, that if such a breach occurs, the Company, any of the Company’s affiliates or any of their designee(s) shall be entitled (without limiting other remedies if available under the
law or hereunder) to take all legal means necessary and any injunctive relief as is necessary to restrain any continuing or further breach of this Agreement.
5.
Acknowledgements and Declarations
Employee hereby declares and acknowledges that:
5.1. Employee’s confidentiality and non-competition obligations under this Agreement are fair,
reasonable, and proportional, especially in light of the Special Compensation Employee receives under the employment agreement to which this Agreement is attached, and are designed to protect the Company’s and the Company affiliates’
secrets and their confidential information, which constitute the essence of their protected business and commercial advantage in which significant capital investments were made.
5.2. Any breach of Employee’s obligations under this Agreement shall contradict the nature of the special trust and loyalty between
Employee and the Company, the fair and proper business practices and the duty of good faith and fairness between the parties. Any such breach shall harm the Company and/or the Company affiliates and shall constitute a material breach of this
Agreement and the employment agreement to which this Agreement is attached.
5.3. Employee’s obligations under this Agreement and the restricted period of time and
geographical area specified herein are reasonable and proportional, and do not prevent Employee from developing his/her general knowledge and professional expertise in the area of his/her business, without infringing on or breaching any of the
Company’s rights.
6.
Miscellaneous
6.1. Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the State of Israel, without regard
to the choice of law provisions thereof. Employee hereby expressly consents to the personal jurisdiction of the courts located in Tel-Aviv-Jaffa district, Israel, for any lawsuit arising from or relating to
this Agreement.
6.2. Assignment. The undertakings set forth herein may be assigned by the Company. Employee may not assign or
delegate his/her duties under this Agreement without the Company’s prior written approval. This Agreement shall be binding upon Employee’s heirs, successors, and permitted assignees.
6.3. Counterparts. This Agreement may be signed in two counterparts, each of which shall be deemed an original and both of which shall
together constitute one and the same instrument.
6.4. Entire Agreement. This Agreement constitutes the full and complete agreement
between the parties and supersedes any and all agreements or understandings, whether written or oral, concerning the subject matter of this Agreement, and may only be amended by a document signed by both parties.
6.5. Severability. If any provision of this Agreement is found to be invalid or unenforceable by a court of competent jurisdiction, such
provision shall be automatically adjusted to the minimum extent necessary for validity or enforceability. In any event, the remaining terms and provisions of this Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
/s/ Aviv Shapira
/s/ Mor Swiel
XTEND REALITY EXPANSION LTD.
Employee
By:
Aviv Shapira
By:
Mor Swiel
Date:
9/3/2026
Date:
9/3/2026
Schedule A
TO THE NON-COMPETITION, PROPRIETARY INFORMATION, AND INVENTIONS AGREEMENT
Prior Inventions
Follows a list of Prior
Inventions of the Employee:
1.
2.
3.
4.
If nothing is listed, I will be regarded as having declared that I have no Prior Inventions.
/s/ Mor Swiel
9/3/2026
Employee
(Signature)
Date
Exhibit B
GENERAL APPROVAL REGARDING PAYMENTS BY EMPLOYERS TO A PENSION FUND AND INSURANCE FUND IN LIEU OF SEVERANCE PAY
By virtue of my power under section 14 of the Severance Pay Law, 1963 (hereinafter: the “Law”), I certify that payments made by an employer
commencing from the date of the publication of this approval on behalf of his employees to a comprehensive pension benefit fund that is not an insurance fund within the meaning thereof in the Income Tax (Rules for the Approval and Conduct of Benefit
Funds) Regulations, 1964 (hereinafter: the “Pension Fund”) or to managers’ insurance including the possibility of an insurance pension fund or a combination of payments to an annuity fund and to a non-annuity fund (hereinafter: the “Insurance Fund), including payments made by him by a combination of payments to a Pension Fund and an Insurance Fund, whether or not the Insurance Fund has an annuity
fund (hereinafter: the “Employer’s Payments), shall be made in lieu of the severance pay due to the said employee in respect of the salary from which the said payments were made and for the period they were paid (hereinafter: the
“Exempt Salary”), provided that all the following conditions are fulfilled:
(1)
The Employer’s Payments
(a)
To the Pension Fund are not less than 141/3% of the Exempt Salary or 12% of the Exempt Salary if the employer
pays for his employee in addition thereto additional payments to supplement severance pay to a benefit fund for severance pay or to an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary. In the event that the
employer has not paid an addition to the said 12%, his payments shall be only in lieu of 72% of the employee’s severance pay;
(b)
To the Insurance Fund are not less than one of the following:
(1)
131/3% of the Exempt Salary, if the employer pays for his employee in addition thereto also payments to secure
monthly income in the event of disability, in a plan approved by the Commissioner of the Capital Market, Insurance and Savings Department of the Ministry of Finance, in an amount required to secure at least 75% of the Exempt Salary or in an amount
of 21/2% of the Exempt Salary, the lower of the two (hereinafter: “Disability Insurance”); or
(2)
11% of the Exempt Salary, if the employer paid, in addition, a payment to the Disability Insurance, and in such
case, the Employer’s Payments shall only replace 72% of the Employee’s severance pay; In the event that the employer has paid, in addition to the foregoing payments to supplement severance pay, to a benefit fund for severance pay or to
an Insurance Fund in the employee’s name in an amount of 21/3% of the Exempt Salary, the Employer’s Payments shall replace 100% of the employee’s severance pay.
(2)
No later than three months from the commencement of the Employer’s Payments, a written agreement is
executed between the employer and the employee in which:
(a)
The employee has agreed to the arrangement pursuant to this approval in a text specifying the Employer’s
Payments, the Pension Fund, and Insurance Fund, as the case may be; the said agreement shall also include the text of this approval; and
(b)
The employer waives in advance any right, which he may have to a refund of monies from his payments, unless the
employee’s right to severance pay has been revoked by a judgment by virtue of Sections 16 and 17 of the Law, and to the extent so revoked and/or the employee has withdrawn monies from the Pension Fund or Insurance Fund other than by reason of
an entitling event; in such regard “Entitling Event” means death, disability or retirement after the age of 60.
(3)
This approval does not derogate from the employee’s right to severance pay pursuant to any law,
collective agreement, extension order, or employment agreement, in respect of salary over and above the Exempt Salary.
Exhibit C
COMPANY COMPUTER POLICY CONSENT
XTEND
REALITY EXPANSION LTD. (the “Company”) has a policy regarding the use of the Company’s computer systems (the “Company’s Computers Policy”), as follows:
1.
The Company has provided you, for the purpose of the performance of your duties, various types of computer
related devices, including a computer, hardware, software, Company e-mail account, phone, etc. (the “Computer Devices”). The Computer Devices are the exclusive property of the
Company, and in order to protect the Computer Devices, and the information which they contain, you are hereby required to adhere to the following instructions:
1.1. Hardware – it is prohibited to install hardware on, and/or to, Computer Devices without the prior authorization of your
supervisor or the Company’s IT team. In this regard, you are not allowed to connect to a Computer Device an external hard – drive, disk on key (also known as memory stick and/or flash memory), camera, cell phone or any other type of
hardware for purposes which are illegal, inappropriate, or transferring of material that belongs to the Company, its clients, employees, or any other third party without the prior authorization of your supervisor or the Company’s IT team.
1.2. Software – it is prohibited to install software on Computer Devices, except for reasonable bounds, without the prior
authorization of your supervisor or the Company’s IT team.
1.3. Files – it is prohibited to save on Computer Devices
any files, photos, or videos that are not related to the Company. In particular, and without limitation, it is prohibited to save on Computer Device any file that its access and/or saving by you constitute infringement of protected Intellectual
Property rights, and any file that contains obscene, pornographic, or abusive content.
Notwithstanding the above, you are permitted to
save personal files that you or your immediate family members have created, which are not related to the Company or to the performance of your duties, and have no commercial content, as long as such files are saved under a folder labeled
“Private” located at the root directory of the Computer Device.
1.4. If any of the above instructions is not clear or if you
have a question regarding the use of Computer Devices, please contact your supervisor.
2.
Notwithstanding the above, the Company does allow private use of the Computer Devices made available to you for
work purpose, within reasonable bounds, subject to Section 1 above and Section 4 below.
3.
During work hours and/or while at the Company’s offices you may access the internet for your own private
use provided that such access is done for a reasonable period of time, and in accordance with the Company’s Computers Policy. For the removal of doubt, and without limitation, it is prohibited to access any website that contains obscene,
pornographic, or abusive content, and/or includes content that infringes on protected Intellectual Property rights, and /or involves gambling.
4.
The Company’s e-mail account –
4.1. Which was assigned to you is provided to you only for the purpose of work related use. You are not allowed to use
the Company’s e-mail account for private purposes that are not related to the Company’s activities, such prohibited private use of your e-mail account
includes correspondence with friends and family.
4.2. In the event, you wish to send private
e-mails during work hours and/or while at Company’s offices, you can do so through your private external web based e-mail account (Gmail, Hotmail, etc.). As noted
above, you are prohibited from saving to Computer Devices any files received through your external web based e-mail account, unless such files are saved per the terms of the exclusive exception detailed above.
4.3. In order to maintain the security of the Computer Devices and the protection of the Company’s legitimate interests, the Company
is using various monitoring technologies, as well as blocking technologies, in the scope further detailed in the Computer Policy. These technologies enable the Company to monitor and review content and information which is present on Computer
Devices or exchanged through Computer Devices, including through the Company’s e-mail account assigned to Company’s employees.
5.
Said monitoring is not intended to infringe your privacy, and as a general rule the Company is not interested
in reviewing correspondence which is exchanged through the Company’s e-mail account assigned to you. However, the Company may review the professional correspondence and will act within the boundaries of
applicable law, and when circumstances so require, necessitate, and obligate, in order to protect the Company’s legitimate interests.
6.
In the event that private correspondence exists in the Computer Devices and/or the Company e-mail account assigned to you, this, despite the clear instructions detailed hereinabove, the Company may review such correspondence, if special and unique circumstances exist in which there is a serious suspicion
that you are carrying out harmful or illegal activity through Computer Devices, and subject to your consent.
7.
It is further clarified that as part of the Company’s administration of its affairs, it may become
necessary for another employee of the Company to access the Computer Devices that were assigned to you, in order to review professional information on the Computer Devices that were assigned to you. Such access by other employees may occur during
your employment or after the termination of your employment. In this respect, upon request from your supervisors or upon the termination of employment, you are required to provide your supervisors with all access passwords that are necessary to
access Computer Devices which were assigned to you, and materials that are saved on them.
8.
Any material or file that is saved on Company’s Computer Devices is deemed to be the Company’s
property.
As a sign of your consent to the Computer Policy and the foregoing instructions, you are required to sign below.
EMPLOYEE ACKNOWLEDGEMENT AND CONSENT:
I, the undersigned, hereby acknowledge and approve that I have read all the above mentioned, received any and all clarifications which I required, and agree
to it.
Mor Swiel
[***]
/s/ Mor Swiel
9/3/2026
Name
ID number
Signature
Date
EX-10.15
EX-10.15
Filename: d230933dex1015.htm · Sequence: 11
EX-10.15
Exhibit 10.15
Date: August 31, 2026
To: Bank Hapoalim
B.M.
First Amendment to Amended and Restated Facility Agreement
This first amendment to the Amended and Restated Facility Agreement, dated as of April 23, 2026, as shall be amended, replaced or modified from time to
time (the “Facility Agreement”), is entered into by Xtend Reality Expansion Ltd, Registration No. 515871861 (the “Borrower”) and Bank Hapoalim B.M. (the “Bank”) (Borrower and the Bank
shall be collectively referred to as the “Parties”).
Witnesseth:
WHEREAS
the Parties wish to amend the Facility Agreement as hereinafter described by this First Amendment to the
Facility Agreement (the “First Amendment”);
NOW, THEREFORE, THE PARTIES HEREBY HAVE AGREED AS FOLLOWS:
1.
The preamble hereto forms an integral part hereof.
2.
All capitalized terms used but not otherwise defined herein shall have the meaning ascribed thereto in the
Facility Agreement.
3.
The Facility Agreement shall be amended as follows, effective as of the date hereof:
3.1
Following Section 4.1.2.6 of the Facility Agreement, a new
Section 4.1.2.7 shall be inserted as follows, and the existing Section 4.1.2.7 shall be renumbered as Section 4.1.2.8:
“4.1.2.7. Following the consummation of the Merger the Parent shall have duly issued to the Bank, and the Bank shall have received, a
warrant, in form and substance acceptable to the Bank to its full satisfaction, to purchase shares of common stock, par value $0.0001 per share, of the Parent, in an amount equal to the number of shares subject to the portion of the First
Warrant and the Second Warrant that had not vested as of immediately prior to the consummation of the Merger (the “Replacement Warrant”) with an exercise price per share equal to the closing sale price of a share of common stock
of the Parent on the New York Stock Exchange on the first day of trading following the Company’s first drawdown under the Facility Agreement, as reported by Bloomberg, all in the terms and conditions to be agreed upon in the form of the
Replacement Warrant, consistent with the foregoing, to Bank’s full satisfaction in its sole discretion. For the avoidance of doubt, any shares issued upon exercise of the Replacement Warrant shall be unregistered shares subject to transfer
restrictions under applicable U.S. securities laws.”
3.2
The text appearing at the end of Section 4.1.2 of the Facility Agreement shall be deleted
in its entirety and replaced with the following:
“Subsections
4.1.2.1-4.1.2.7 shall hereafter be referred to as the “First Loan Conditions Precedent”.”
3.3
Following Section 4.2 of the Facility Agreement, a new Section 4.3
shall be inserted as follows:
“4.3. Termination. Notwithstanding anything to the contrary in this Agreement or
in any other Facility Document, upon the earlier of: (i) upon the delivery by the Company to the Bank of a 14 business days’ prior written notice, the prepayment or repayment in full of the entire Loan Amounts, together with all accrued
interest, linkage differentials, exchange rate differences, prepayment fees and any other amounts then due and outstanding to the Bank under the Facility Documents (in each case, if applicable), reflecting the full amount thereof upon the actual
repayment date in connection thereto; or (ii) the delivery by the Company to the Bank of a 14 business days’ prior written notice stating that the Company will not withdraw any Loan under the Facility, provided that no Loan Amounts are
then due and outstanding to the Bank and subject, in each case, to the execution by the Company of the documents of cancellation and/or repayment of
the Facility, all to the Bank’s full satisfaction - then, no later than five (5) business days following such prepayment or notice, as applicable: (a) this Agreement shall
automatically terminate and be of no further force or effect; (b) the Bank’s commitment to provide the Facility and the Credit Line shall be cancelled; and (c) any guarantee and any Security Document granted to the Bank in connection
with the Facility Documents shall automatically terminate and be of no further force or effect, and all charges and Liens created thereunder shall be released and removed from registration, and the Bank shall promptly execute and deliver any
document and take any action reasonably required in order to evidence and effect such termination, release and removal, provided however, that any such termination, release, removal and cancellation shall be subject to the full repayment of
the Facility (other than any obligations related to the Banking Services that are cash collateralized, if any, which shall be negotiated by the Parties during a 14 business days’ period) and shall be effected only to the Bank’s full
satisfaction.”
4.
Except as expressly set forth in this First Amendment, all terms and provisions of the Facility Agreement shall
continue in full force and effect, unamended and unaffected hereby.
5.
This First Amendment shall be read and construed together with the Facility Agreement and save as expressly
amended by this First Amendment.
In Witness Whereof we have signed:
/s/ Tal Horesh
/s/ Hila Dahan and /s/ Irit Oz
Xtend Reality Expansion Ltd
Bank Hapoalim B.M.
By: Tal Horesh
By: Hila Dahan and Irit Oz
Title: CFO
Title: Customer Relationship Manager
Legal Confirmation
I, the
undersigned, Mor Swiel Adv., as legal counsel to Xtend Reality Expansion Ltd., Co. number 515871861 (the “Borrower”) hereby confirm that the above document was duly signed by the Borrower’s authorized
signatories, Mr. Tal Horesh in accordance with the Borrower’s relevant resolution and its constituting documents and that the said signatures are binding upon the Borrower for any purpose.
Date
stamp + signature
EX-10.16
EX-10.16
Filename: d230933dex1016.htm · Sequence: 12
EX-10.16
Exhibit 10.16
Letter of Guarantee and Indemnity
Dated August 31, 2026
In
favor of:
Bank Hapoalim B.M.
By:
Name:
Xtend
Robotics, Inc.
AI Identity No.: 119696394
Address:
5247 Crossroads Park Drive
Tampa, FL
33610, USA
(hereinafter: the “Guarantor”)
The Guaranteed Party for the purposes of this Letter is:
Name:
Identity No.:
Address:
Name:
Identity No.:
Address:
Name:
Identity No.:
Address:
Name:
Identity No.:
Address:
(hereinafter, jointly and severally, the “Guaranteed Party”)
1.
The Guaranteed Amounts
Capitalized terms used and not defined in this Letter of Guarantee and Indemnity (the “Letter”) herein shall have the
meanings set forth in that certain Amended and Restated Facility Agreement dated April 23, 2026, executed by the Guaranteed Party and the Bank (the “Facility Agreement”). The Guarantee that is created by the Guarantor in
favor of the Bank under this Letter (the “Guarantee”) is given as a security for the full and exact repayment of all of the amounts that are due or will be due to the Bank from the Guaranteed Party (choose one of the following):
1.1 ☒
All of the debts and obligations of the Guaranteed Party
without limitation of amount
In connection with the provision of Banking Services to the
Guaranteed Party or in connection with other Obligations of the Guaranteed Party to the Bank (including in connection with the Obligations in Respect of Third Party Guarantees) or in any other way, whether such amounts are due or will be due from
the Guaranteed Party alone or together with others, whether the Guaranteed Party has undertaken to pay them or will undertake to pay them in the future as a debtor, guarantor, assignor or in any other way, that are repayable before or after the
exercise of the Guarantee under this Letter, that are due absolutely or contingently, directly or indirectly, whether at scheduled maturity or by acceleration, demand or otherwise, including amounts of principal, interest of any sort (including
default interest) fees and expense of any sort exercise, expenses, attorneys’ fees, indemnification fees, insurance fees, stamping, plus linkage differentials and rate differentials of any sort that are due or will be due from the Guaranteed
Party to the Bank in any manner or way in respect of the aforementioned amounts (hereinafter, in whole or in part: the “Guaranteed Amounts”), in every case without limitation of amount.
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1.2 ☐
All of the debts and obligations of the Guaranteed Party in a limited amount linked to the Consumer Price
Index
In connection with the provision of Banking Services to the Guaranteed Party or in connection with other
Obligations of the Guaranteed Party to the Bank (including in connection with the Obligations in Respect of Third Party Guarantees) or in any other way, whether such amounts are due or will be due from the Guaranteed Party alone or together with
others, whether the Guaranteed Party has undertaken to pay them or will undertake to pay them in the future as a debtor, guarantor, assignor or in any other way, that are repayable before or after the exercise of the Guarantee under this Letter,
that are due absolutely or contingently, directly or indirectly, whether at scheduled maturity or by acceleration, demand or otherwise, including amounts of principal, interest of any sort (including default interest) fees and expenses of any sort,
exercise expenses, attorneys’ fees, indemnification fees, insurance fees, stamping, plus linkage differentials and rate differentials of any sort that are due or will be due from the Guaranteed Party to the Bank in any manner or way in respect
of the aforementioned amounts (hereinafter, in whole or in part: the “Guaranteed Amounts”), limited to an amount of NIS , whereby this amount is linked to the Index, as follows:
If it transpires that the New Index has increased or decreased in comparison to the last Index that was prevailing on the date of the
signature of this Letter by the Guarantor, being points (hereinafter: the “Base Index”), the aforementioned amount will be multiplied by the New Index and divided by the Base Index; if it transpires
that the New Index has not increased or decreased in comparison to the Base Index, the aforementioned amount will remain without any linkage.
If, before the relevant date of actual repayment, a New Index that was supposed to be published before that date is not published, for the
purpose of calculating the linkage differentials, as aforesaid, the “New Index” will be the last Index that was published before that date.
1.3 ☐
All of the debts and obligations of the Guaranteed Party in a limited amount linked to a Foreign Currency
exchange rate
In connection with the provision of Banking Services to the Guaranteed Party or in connection
with other Obligations of the Guaranteed Party to the Bank (including in connection with the Obligations in Respect of Third Party Guarantees) or in any other way, whether such amounts are due or will be due from the Guaranteed Party alone or
together with others, whether the Guaranteed Party has undertaken to pay them or will undertake to pay them in the future as a debtor, guarantor, assignor or in any other way, that are repayable before or after the exercise of the Guarantee under
this Letter, that are due absolutely or contingently, directly or indirectly, whether at scheduled maturity or by acceleration, demand or otherwise, including amounts of principal, interest of any sort (including default interest) fees and expenses
of any sort, exercise expenses, attorneys’ fees, indemnification fees, insurance fees, stamping, plus linkage differentials and rate differentials of any sort that are due or will be due from the Guaranteed Party to the Bank in any manner or
way in respect of the aforementioned amounts (hereinafter, in whole or in part: the “Guaranteed Amounts”),limited to an amount of NIS , _, whereby this amount is linked to the
Representative Rate of 1 (hereinafter: the “Foreign Currency”, as follows:
1
Fill in the type of foreign currency to which the amount is linked.
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If it transpires that the New Rate has increased or decreased in comparison to the last
Representative Rate for the Foreign Currency that was prevailing on the date of the signature of this Letter by the Guarantor, being NIS for 2
3 (hereinafter: the “Base Rate”), the aforementioned amount will be multiplied by the New Rate and divided by the Base Rate.
If it transpires that the New Rate has not increased or decreased in comparison to the Base Rate, the aforementioned amount will remain
without any linkage.
1.4 ☐
Debts and obligations of the Guaranteed Party in connection with particular credit
In connection with 4 credit in
the principal amount of 5 (hereinafter: the “Credit Principal Amount”) (choose one of the following):
☐
which was advanced, or will be advanced, to the Guaranteed Party by the Bank under Serial No.
☐
which was advanced to the Guaranteed Party by the Bank on
☐
which was advanced to the Guaranteed Party by the Bank
into Account No. at the branch of the Bank (hereinafter: the
“Credit”) in accordance with the Credit Documents and in connection with every liability in the account of the Guaranteed Party (including in the current account that is managed in the accounts of the Guaranteed
Party) and stemming from the Credit or from the Credit Documents (hereinafter, collectively: the “Credit Amounts”), whether the Credit Amounts are due or will be due from the Guaranteed Party alone or together with
others, whether the Guaranteed Party has undertaken to pay them or will undertake to pay them in the future, that are repayable before or after the exercise of the Guarantee under this Letter, that are due absolutely or contingently, directly or
indirectly, whether at scheduled maturity or by acceleration, demand or otherwise, including amounts of principal, interest of any sort (including default interest) fees and expenses of any sort, exercise expenses, attorneys’ fees,
indemnification fees, insurance fees, stamping, plus linkage differentials and rate differentials of any sort that are due or will be due from the Guaranteed Party to the Bank in any manner or way in respect of the aforementioned amounts, in every
case in relation to the Credit and the Credit Documents, and limited to an amount equal to double the Credit Principal Amount (hereinafter, in whole or in part: the “Guaranteed Amounts”).
2.
Satisfaction of the Guarantee
2.1
The Bank may, from time to time, demand that the Guarantor satisfy the Guarantee, in whole or in part and repay
all or part of the Guaranteed Amounts (hereinafter in this Section, the “Demanded Amounts”) and the Guarantor undertakes to pay to the Bank such Demanded Amounts in accordance with the demand of the Bank. The Bank shall only
demand the Guarantor satisfy the Guarantee to the extent the Guaranteed Amounts are due and payable under the Facility Agreement.
3
Fill in the type of foreign currency to which the amount is linked.
4
Fill in the type of credit (for example: loan, overdraft line, bank guarantee, documentary credit).
5
Fill in the amount of the principal of the credit and the currency type of the credit (for example: 500 New
Israeli Shekels, 100 U.S. dollars).
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2.2
If the Bank only demands some of the Guaranteed Amounts, the Guarantee will remain valid with respect to the
balance of the Guaranteed Amounts that has not yet been demanded.
2.3
Demanded Amounts will bear default interest at such rate and on such conditions as have been agreed or will be
agreed in writing between the Bank and the Guaranteed Party in accordance with the terms of the Facility Agreement (but without duplication of default interest accruing thereunder).
2.4
Before exercising its rights under this Letter or under any applicable law, the Bank will not be required to
first demand payment of the Guaranteed Amounts from the Guaranteed Party (or from any other person) or to take any steps against the Guaranteed Party (or any other person) or to exercise (or to take action to exercise) any other Security that has
been given as a security for the Guaranteed Amounts. The Guarantor waives any right that it may have under applicable law (that can be waived or made subject to conditions) to demand that the Bank perform any of the aforementioned acts as a
condition to exercising the rights of the Bank.
3.
Validity of the Guarantee
3.1
This Letter, the Guarantee, its validity, the rights, powers and remedies that are granted under this Letter to
the Bank and the obligations of the Guarantor to the Bank hereunder:
3.1.1
will not be dependent upon, affected or prejudiced by the validity or legality of any other Security to which
the Bank is entitled or will be entitled in connection with the repayment of the Guaranteed Amounts, and will also not be affected or prejudiced by any defect in the creation or registration of such other Security; and
3.1.2
will not be dependent upon the validity or legality of any Credit Document or other document; and
3.1.3
will not be affected in any way, will not be diminished in their validity, will not be limited and will not be
changed and will not be deemed to have been waived in any way, including by virtue of any of the acts, omissions, circumstances, matters or other things that are set forth below:
3.1.3.1
The incompetence or lack of authority of the Guaranteed Party or any other guarantor of the Guaranteed Amounts.
3.1.3.2
A “change of control”, a change in ownership, activity, partners in a partnership or status of the
Guarantor, the Guaranteed Party or any other guarantor of the Guaranteed Amounts (including by virtue of a merger or other restructuring).
3.1.3.3
The unenforceability, illegality or invalidity of any of the obligations of the Guaranteed Party, the Guarantor
or any other guarantor of the Guaranteed Amounts under any Credit Document or other relevant document.
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3.1.3.4
The non-performance by the Guarantor of any of its obligations under
any Credit Document or other document relevant to the Guarantee.
3.1.3.5
Insolvency proceedings, debt arrangements, a recovery, bankruptcy, liquidation or death (as the case may be) of
the Guarantor or the Guaranteed Party or any other guarantor of the Guaranteed Amounts, a court compromise or arrangement or another compromise or arrangement of the Guarantor or Guaranteed Party (and, in these cases, the Bank may claim all or some
of the Guaranteed Amounts as a creditor or agree to, and receive, any payment in the compromise without taking into account any payment that has been paid or will be paid to the Bank under this Letter).
3.1.3.6
A postponement or delay in the submission of demands against the Guarantor or the Guaranteed Party under this
Letter, without this being deemed to be a precedent, waiver, expiry of a limitation period, the expiry of rights or negligence on the part of the Bank.
3.2
In addition, the validity of the Guarantee will not be prejudiced or changed, its amount will not be reduced
and all of the obligations of the Guarantor will remain unchanged and, insofar as applies to it, the Guaranteed Amounts will be deemed for the purposes of this Letter to be legitimate, without defect, fully valid and unable to be contested or the
subject of a claim, in every case even if any of the following acts are taken or any of the following circumstances apply (and even if the Guarantor is caused any damage as a result of this), provided that the Bank has acted in good faith and
otherwise than with the objective of injuring the Guarantor or that the acts occurred under circumstances that are not under the control of the Bank:
3.2.1
The termination, change, reduction, increase or renewal in or of the Guaranteed Amounts or in or of credit, or
any other Banking Service to the Guaranteed Party or other contract with it;
3.2.2
Provision of an extension of time or various reliefs to the Guaranteed Party or any other guarantor of the
Guaranteed Amounts.
3.2.3
The replacement, renewal, amendment, cancellation, release, waiver, expropriation, exercise, or non-exercise of Security that the Bank received or will receive as security for repayment of the Guaranteed Amounts from the Guarantor or the Guaranteed Party or any other guarantor of the Guaranteed Amounts.
3.2.4
The receipt or non-receipt of any Security from the Guarantor or the
Guaranteed Party or any third party as security for repayment of any of the Guaranteed Amounts or the due registration or non-registration of such Security.
3.2.5
A compromise, waiver or formation of any arrangement with the Guaranteed Party or another guarantor of the
Guaranteed Amounts, other than a validly executed amendment to this Guarantee.
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3.2.6
The inducement of non-compliance with or a change in any obligation
that is incumbent on the Guaranteed Party in connection with the provision of the Banking Services that are relevant to the Guaranteed Amounts or non-compliance with or a change in any obligation that the
Guarantor or any other guarantor of the Guaranteed Amounts is guaranteeing for it.
3.2.7
Where an obligation of the Guaranteed Party or of another guarantor of the Guaranteed Amounts in favor of the
Bank is defective or absolutely invalid for any reason, including if it was incompetent or unauthorized to enter into a contract to receive the Banking Services that are relevant to the Guaranteed Amounts or to undertake to repay the Guaranteed
Amounts or it is found that any of the obligations of the Guaranteed Party to the Bank is void ab initio or claims are made against the Bank with respect to the Obligation of the Guaranteed Party, including claims with respect to the
aforementioned defects, except where the Bank knew or ought to have known through reasonable means available to it about the defect while the Guarantor did not know about the defect.
3.2.8
Even if the limitation period on the right of the Bank to claim payment of the Guaranteed Amounts from the
Guaranteed Party has lapsed or will lapse or where the Guaranteed Party denies its Obligation to the Bank or if it has any claims against the Bank.
For the avoidance of doubt, the Bank may, from time to time, perform any of the acts that are set forth in Section 3.2 above without
being required to give prior notice.
3.3
The performance of any of the acts or the occurrence of any of the events that are set forth in Sections 3.1 or
3.2 above will not confer on the Guarantor any right of option or right to cancel the Guarantee or any other of the rights that are stated in the Guarantee Law or any other provision of law that replaces the Guarantee Law or any similar applicable
law and the Guarantor waives any such right.
3.4
The Guarantee will bind the Guarantor until the date upon which the Guaranteed Amounts have been paid in full
and the Facility Agreement has been terminated (the “Termination Date”). For the avoidance of doubt, it is clarified that, if the Guarantee under this Letter is as security for particular credit, as set forth in Section 1.4
above, the Guarantor may not terminate its Guarantee by providing a Notice to the Bank, as aforesaid. For the avoidance of doubt, upon the occurrence of the Termination Date (including upon termination of the Facility Agreement pursuant to
Section 4.3 thereof), this Letter and all of the Guarantor’s undertakings hereunder (including under Section 5) shall terminate and be of no further force or effect, subject to the full repayment of the Facility, provided
however, that the Borrower has given the Bank not less than fourteen (14) business days’ prior written notice of the termination of the Facility Agreement( during which time the Parties will negotiate such replacement guarantee
supporting the remaining Banking Services and provided the Bank with such replacement guarantee as negotiated and agreed, and subject further to the execution of all documents of cancellation and/or repayment, all to the Bank’s full
satisfaction, and the Bank’s confirmation thereof.
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4.
Right of subrogation and Security
4.1
The Guarantor warrants that it has not received any Security from the Guaranteed Party in connection with the
Guarantee under this Letter and, until the Termination Date, undertakes that it will not receive such Security without receiving the prior written consent of the Bank.
4.2
The Guarantor will not, by virtue of an exercise of the Guarantee, a payment that has been made, a Security
that has been exercised or money that has been received for, or on account of, the obligation of any person, be entitled to, until the Termination Date:
4.2.1
A right of subrogation or to receive any other benefit in respect of a right, guarantee, Security or amounts
that have been received or that will be received by the Bank under any of the documents that have been signed or will be signed between the Bank and the Guaranteed Party, or a right of participation or indemnification.
4.2.2
To receive, claim or to have any benefit in any payment, distribution, guarantee or Security from any person or
on account of any person or to exercise any right of offset against any person or to hold any other benefit with respect to such a payment, distribution or Security.
4.2.3
The Guarantor hereby waives any such right, undertakes not to take action to obtain it and will also hold in
trust for the Bank, and will immediately pay or transfer to the Bank, any payment, distribution, benefit or Security that has been received by it in contravention of the above provisions (and, for this purpose, this Letter constitutes a trust
agreement in connection with the foregoing), without prejudice to the rights of the Bank to any other or additional remedy or relief in connection with such breach. If it exercises any right of offset in contravention of the foregoing, an amount
equal to the amount so offset will be immediately paid to the Bank.
5.
Negative Pledge
5.1
Except for Permitted Charges (as defined below), Guarantor will not create any mortgage, pledge, encumbrance,
charge, or other lien (a “Charge”) of any sort over any of its assets, and will not give any guarantee in favor of any third party, nor will it undertake to create any such charge or give any such guarantee, other than for
Permitted Investments (as defined below).
5.2
Except for Permitted Charges and Permitted Investments, the Guarantor hereby represents that no guarantee or
security (whether in personam or in rem) or indemnification undertaking has been given to any third party by any Affiliate or by any other party to secure any debts or undertakings of the Guarantor; and (2) neither Guarantor nor
any Affiliate nor any other party have undertaken to provide any third party with any such guarantee or security or indemnification undertaking.
5.3
Except for Permitted Charges and Permitted Investments (as defined below), the Guarantor will not create a
Charge over the whole or any part of any of its existing or future assets, in any manner or form, for any purpose or reason, in favor of any third party and the Guarantor will not give any guarantee in favor of any third party (or an indemnification
undertaking to an entity that provides any such guarantee) and the Guarantor will not in any way undertake to do any of the foregoing, without a prior written consent of the Bank.
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5.4
For purposes of this Section 5, the definitions of “Permitted Charges” and “Permitted
Investments” are as follows:
5.4.1
“Permitted Charges” means:
5.4.1.1
Charges for taxes, fees, assessments or other government charges or levies, except to the extent (i) not
due and payable, (ii) securing sums less than $500,000 in the aggregate or (iii) being contested in good faith and for which Guarantor maintains adequate reserves on Guarantor’s books;
5.4.1.2
purchase money Charges on fixed assets, including equipment, acquired or held by Guarantor incurred for
financing the acquisition thereof securing no more than $500,000 in the aggregate outstanding;
5.4.1.3
Charges of carriers, warehousemen, mechanics, landlords, repairmen and materialmen and other similar Charges
imposed by law or contract for sums not overdue by more than thirty (30) days or being diligently contested in good faith by appropriate proceedings and not involving any deposits or advances collectively in excess of $750,000 or borrowed money
or the deferred purchase price of property or services and, in each case, for which it maintains adequate reserves on Guarantor’s books;
5.4.1.4
Charges to secure payment of workers’ compensation, employment insurance,
old-age pensions, social security and other like obligations incurred in the ordinary course of business;
5.4.1.5
Charges incurred in the extension, renewal or refinancing of the obligations secured by Charges described in
the foregoing clauses, but any extension, renewal or replacement Charge must be limited to the property encumbered by the existing Charge and the principal amount of the obligations may not increase (except for fees, expenses and capitalized
interest);
5.4.1.6
leases or subleases of real property granted in the ordinary course of Guarantor’s business, and leases,
subleases, non-exclusive licenses or sublicenses of personal property (other than intellectual property) granted in the ordinary course of Guarantor’s business;
5.4.1.7
non-exclusive licenses of intellectual property granted to third
parties in the ordinary course of business and licenses that could not result in a legal transfer of title of the licensed property;
5.4.1.8
Charges arising from attachments or judgments, orders, or decrees in circumstances not constituting an
“Event of Default”;
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5.4.1.9
Charges in favor of collecting banks arising under Section 4-210
of the Uniform Commercial Code and other banker’s Charges arising by operation of law;
5.4.1.10
Charges on the proceeds of insurance policies, to the extent the premiums thereof are financed;
5.4.1.11
Charges in favor of customs or revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods;
5.4.1.12
easements, rights-of-way,
restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with
the ordinary conduct of the business of the applicable Person;
5.4.1.13
Charges arising from the filing of any precautionary financing statement on operating leases covering the
leased property;
5.4.1.14
customary Charges of any bank in connection with statutory, common law and contractual rights of setoff and
recoupment;
5.4.1.15
Charges in favor of Bank; and
5.4.1.16
Charges which secure obligations not exceeding $500,000 in the aggregate outstanding.
5.4.2
“Permitted Investments” means:
5.4.2.1
investments (including, without limitation, investments in subsidiaries) existing on the date hereof;
5.4.2.2
(i) investments consisting of cash and cash equivalents and (ii) any investments permitted by
Guarantor’s investment policy, as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved by the board of the Guarantor;
5.4.2.3
investments consisting of the endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of Guarantor;
5.4.2.4
investments consisting of deposit accounts and securities accounts;
5.4.2.5
investments in subsidiaries after the date hereof;
5.4.2.6
investments consisting of (i) travel advances and employee relocation loans and other employee loans and
advances in the ordinary course of business, (ii) loans to employees, officers, directors, partners, managers and members relating to the purchase of equity securities of Guarantor or its subsidiaries pursuant to employee equity purchase plans
or similar agreements approved by the board or (iii) investments consisting of non-cash loans made to (or the acquisition of the obligations of) officers, directors, employees and members of management of
the Guarantor or its Subsidiaries which are used by such Persons to purchase simultaneously equity interests of the Guarantor;
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5.4.2.7
investments (including debt obligations) received in connection with the bankruptcy or reorganization of
customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business;
5.4.2.8
investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers
and suppliers in the ordinary course of business;
5.4.2.9
investments in prepaid expenses, utility and workers’ compensation, performance and other similar
deposits, each as entered into in the ordinary course of business;
5.4.2.10
investments received as the non-cash portion of consideration received
in connection with disposition transactions;
5.4.2.11
this Agreement and other investments in favor of Bank;
5.4.2.12
investments arising in connection with the transactions described in Section 20.3; and
5.4.2.13
other investments; provided that the aggregate amount does not exceed $500,000 in the aggregate amount
outstanding at any time.
6.
Competition between rights
In any case in which an amount that has been given or will be given to the Bank, including by the Guarantor, was used in repayment of any of
the Guaranteed Amounts or if the Guarantor is required to pay any of the Guaranteed Amounts to the Bank or may be required to pay them, the Guarantor undertakes:
6.1
Not to claim from the Bank any amount that was so given or will be so given;
6.2
Not to make a claim in competition with the Bank from the Guaranteed Party or any third party that is a
guarantor to the Bank of any of the Obligations of the Guaranteed Party to the Bank, including a claim in respect of any of the Guaranteed Amounts;
6.3
Not claim and not to prove in a bankruptcy, liquidation, compromise or other payment arrangement in connection
with the Guaranteed Party or any third party that is a guarantor to the Bank any of the Obligations of the Guaranteed Party to the Bank, including any of the Guaranteed Amounts, except for the purpose of preserving a right to claim its debt,
provided that any payment, distribution or any
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benefit that is received by virtue of, or in connection with, such a claim will be immediately paid or transferred to the Bank and, for as long as they have not been so paid or transferred, they
will be held in trust by the Guarantor for the Bank (and, for this purpose, this Letter constitutes a trust agreement in connection with the foregoing until the Termination Date.
7.
Restitution of amounts
If the Bank is required by a court to refund to any person or entity an amount of money that has been paid to the Bank as repayment of the
Guaranteed Amounts or on account thereof (whether because such amount was paid to the Bank in error or because of a fraudulent preference or for any other reason), even if the obligation of the Guarantor to the Bank under this Letter was cancelled
or terminated for any reason before this or if the Bank confirmed to the Guarantor that its liability that is set forth in this Letter has ended, the Guarantor undertakes to compensate and indemnify the Bank for any payment that the Bank is required
to refund to it, as aforementioned, together with all of the expenses and payments that the Bank is obligated to pay or that it bears in connection with this up to the Guaranteed Amounts.
8.
Reserved
9.
Indemnification
9.1
Until the Termination Date, the obligations of the Guarantor under this Letter constitute both a guarantee by
the Guarantor in favor of the Bank for the full and exact repayment of all of the Guaranteed Amounts and an indemnification undertaking given by the Guarantor to the Bank in connection with them and the Guarantor hereby undertakes to indemnify or
compensate the Bank for any damage, expenses and loss of money that may be incurred by the Bank in respect of, or in connection with, the Guaranteed Amounts, in every case in accordance with the terms of this Letter, mutatis mutandis,
provided that Guarantor shall not be liable for the payment to the Bank of any portion of such damage, expenses and loss of money resulting from such Bank’s gross negligence or willful misconduct, as determined by a final, non-appealable judgment of a court of competent jurisdiction.
9.2
For the avoidance of doubt, it is hereby clarified that the Obligation of the Guarantor, as guarantor for
repayment of the Guaranteed Amounts in accordance with the terms of this Letter is more comprehensive than the scope of the ordinary obligation of a guarantor under the Guarantee Law.
10.
Delay
10.1
The Bank’s right to delay
Subject to any applicable law, the Bank may defer the date on which the Guarantor may withdraw or receive any of the Assets until the date of
satisfaction of all of its Obligations under the Documents (contingent or non-contingent), including against an existing Obligation and a future Obligation, and any Obligation of the Guaranteed Party
(contingent or non-contingent), including against an existing Obligation and a future Obligation. These rights of the Bank to delay are general rights and will apply to all or some of the Assets even if the
Assets are not in the currency in which any of the aforementioned Obligations of the Guarantor or any of the Obligations of the Guaranteed Party is denominated. If any of the Assets in respect of which the Bank has exercised the right to delay
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can be divided, the right to delay of the Bank will be exercised in such manner as to preserve a reasonable ratio between the value of such Assets and the amount of the relevant Obligation. The
Bank may withhold such Assets until the aforementioned Obligations are satisfied or repaid in full and, until that date, the Guarantor may not receive such Assets, dispose of them or act with them in any other way other than with the prior written
consent of the Bank. The Bank will notify the Guarantor of the exercise of the right to delay after it has exercised it.
10.2
Reserved
11.
Reserved
12.
Payment method and taxation
12.1
In this Section, the following terms will have the meaning set forth against them below:
12.1.1
“Tax” – All of the taxes, levies, fees and other obligatory payments of any type and
sort, including in respect of income, capital gain, or profits, value added tax, deductions and withholding that, by their nature, constitute, or are paid on account of, such taxes, fees, levies or obligatory payments, including interest and fines
in connection with such taxes, levies and obligatory payments (including stamp tax, if any) in connection with this Letter and in connection with any transaction that may be performed in accordance or subject to it, and the term
“taxation” will be interpreted accordingly.
12.1.2
“Withholding Amount” – Any amount of withholding in respect of tax.
12.1.3
“Withholding Confirmations” – Any receipts, confirmations or other proofs that may be
required by the Bank in connection with the payment of a Withholding Amount to the relevant tax authority and that will be to its full satisfaction.
12.2
Any Tax that must be paid in connection with the transactions and acts under this Letter (except income tax to
the tax authorities in Israel in respect of the income of the Bank from interest and fees that the Guarantor is required to pay to the Bank under this Letter) will apply to the Guarantor alone and will be paid by the Guarantor. The Bank may charge
any account of the Guarantor for any tax that must be withheld and transfer it to the relevant tax authorities unless the Guarantor produces to the Bank in advance an appropriate certificate from the competent authorities of exemption from, or a
reduction in, withholding tax.
12.3
All of the payments that will be paid by the Guarantor to the Bank in accordance with, or arising from, this
Letter will be paid to the Bank free from any Tax and withholding, without offset or counterclaim and without deductions in respect of, or on account of, any offset or counterclaim.
12.4
Any payment that is due to the Bank in accordance with this Letter (hereinafter, the “Agreed
Amount”) from which, under any law, the Guarantor is required to deduct a relevant Withholding Amount, will be paid by the Guarantor to the Bank in an increased amount, such that, following the deduction of such Withholding Amount, the
Bank will receive on the date of such payment a net amount that is equal to the Agreed Amount (hereinafter, the “Full Amount”). The Guarantor will indemnify the Bank in respect of any actual loss or cost to
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the Bank by virtue of any omission or breach by the Guarantor in deducting the Withholding Amount or by virtue of non-payment of the Full Amount. The
Guarantor will pay to the relevant tax authority the full Withholding Amount within the period prescribed for that purpose under applicable law, and will immediately deliver to the Bank the Withholding Confirmations. Where, following payment of the
Withholding Amount by the Guarantor to the relevant tax authority, the Bank actually receives a tax refund or a tax credit, then, subject to the production of the Withholding Confirmations to the Bank, the Bank will pay to the Guarantor the amount
of the refund or credit that it received, as aforesaid, up to the Withholding Amount that was paid by the Guarantor to the tax authority, as aforesaid. The foregoing does not prevent the Bank from managing its tax affairs at its discretion.
12.5
Without derogating from the other provisions of this Letter, a condition to the performance of acts in
connection with this Letter is that the Bank will determine, at its discretion, that their performance complies with the requirements of the law and the directives given by the competent authorities, and that all of the provisions of the law have
been fulfilled to the extent that these are incumbent on the Bank in connection with payments of Tax. The foregoing does not impose an obligation on the Bank to act as aforesaid, or impose liability on it with respect to such an act or liability for
not acting as aforesaid.
12.6
Immediately upon its first demand, the Guarantor will produce to the Bank any information, certificate,
document or exemption (including a certificate about the rate of withholding tax or an exemption therefrom) if this is necessary in connection with the provisions of this Section above, including documents connected with a foreign law that may be
demanded by the Bank, and it will inform the Bank of any change that may apply from time to time in the tax status of the Guarantor, including in the countries of citizenship or domicile of the Guarantor for tax purposes.
12.7
For the purpose of the performance of the provisions of this Section 12, the Bank may charge any account
of the Guarantor at the Bank.
13.
Reserved
14.
Transfer and disclosure of information
14.1
In this Section, the following terms will have the meaning set forth against them below:
14.1.1
“Transfer” – A sale, endorsement, assignment or any other method of transfer, in whole
or in part, directly or through a special purpose company, fully or through the sale of participations and in any other way that the Bank deems fit. The Transfer may be made to one Transferee or a number of Transferees, on the same date or from time
to time.
14.1.2
“Information” – Information that is presently in the possession of the Bank or that
will be in its possession in the future, including information that has been provided to the Bank by the Guarantor or information about it, which, at the discretion of the Bank, is necessary or desirable to be transferred to it in connection with
the Transfer of the Rights and Obligations in Connection with this Letter, including information about the Guarantee.
14.1.3
“Transferee” – Any person or corporation whether from Israel or from outside of
Israel.
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14.1.4
The “Rights and Obligations in Connection with this Letter” – The rights and
obligations of the Bank in connection with the Guarantee and under this Letter.
14.1.5
“Prospective Counterparty” – A Transferee with which the Bank is conducting, or may
conduct, negotiations for the purpose of a Transfer of the Rights and Obligations in Connection with this Letter.
14.1.6
“Advisors” – Advisors of the Bank or of any Prospective Counterparty and credit rating
companies who may be engaged to rate the rights and obligations of the Bank in connection with the Guaranteed Amounts and the Rights and Obligations in Connection with this Letter and a revaluation company on which entities that are supervised by
the Capital Market, Insurance and Savings Department at the Ministry of Finance may rely for the purpose of quotations of the prices of their non-negotiable debt assets.
14.2
Solely to the extent permitted under the Facility Agreement, the Bank may, at any time, at its discretion and
without being required to obtain the consent of the Guarantor or the Guaranteed Party (subject to any applicable law) perform a Transfer of all of some of the Rights and Obligations in Connection with this Letter (provided that the Guarantor or the
Guaranteed Party will not bear any expense or cost arising from, or in connection with, the Transfer and that is known on the date of the Transfer):
14.2.1
To any Transferee that is one of the following entities: A joint investment trust fund, as defined under the
Joint Investment Trust Fund Law, 5754-1994 or a management company of such a fund; a provident fund or a management company, as defined under the Supervision of Financial Services Law (Provident Funds), 5765-2005; an insurer, as defined under the
Financial Services Law (Insurance), 5741-1981; a banking corporation and an auxiliary corporation, as defined under the Banking Law (Licensing), 5741-1981 and a corporation from the group of companies to which such an Israeli banking corporation
belongs; an investment fund, as defined under the Supervision of Financial Services Regulations (Provident Funds) (Direct Transaction Costs), 5768-2008, or any corporation that is under the Control of the entities listed above and entities outside
of Israel that are equivalent to the entities listed above (that are supervised by the relevant authority in the country of their incorporation or in the countries in which they operate); or
14.2.2
In the framework of a securitization transaction (or a similar transaction in the framework of which the Rights
and Obligations in Connection with this Letter are transferred to a special purpose issuing corporation) or in the framework of any other transaction for the transfer of their risk or exposure or hedging; or
14.2.3
To any person (even if it is not one of the Transferees listed above) at the discretion of the Bank and without
limitation (except to the extent that such limitation is prescribed by law) if an event has occurred that confers a right on the Bank to accelerate the Guaranteed Amounts under the documents that have been signed or will be signed in favor of the
Bank in respect of, or in connection with, the Guaranteed Amounts.
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14.3
For the avoidance of doubt, in any case of a Transfer of the Rights and Obligations in Connection with this
Letter, the Bank will not be barred from serving as a credit manager, a security trustee or in any other position in connection with such Rights and Obligations in Connection with this Letter.
14.4
The Guarantor undertakes to cooperate with the Bank for purposes of effecting a Transfer of the Right and
Obligations in Connection with this Letter, including by signing any document that may be required for this purpose and by performing any act that may be required by the Bank for the purpose of a Transfer of the Rights and Obligations in Connection
with this Letter, provided that it will not be required to bear expenses for this purpose.
14.5
The Bank may, at any time, disclose Information to any Prospective Counterparty, Transferee to which a Transfer
has been made, Advisors or relevant parties. In addition, the Bank may, at any time, disclose Information to Advisors or relevant parties for the purpose of the prospective entry into a securitization transaction (or a similar transaction in the
framework of which the Rights and Obligations in Connection with this Letter are transferred to a special purpose issuing corporation), or any other transfer of their risk or exposure or hedging or for the purpose of their performance. The
disclosure of such Information will be subject to signature by the recipients of such Information of a confidentiality letter in a form acceptable to the Bank, unless the recipients of such Information have a duty of confidentiality by law.
14.6
The Guarantor undertakes not to transfer to another any of its rights or Obligations under this Letter without
receiving the prior written consent of the Bank.
15.
Expenses
15.1
The Guarantor will pay to the Bank expenses incurred by Bank in connection with or under this Letter to the
extent such expenses are reimbursable by the Guaranteed Party under the Facility Agreement.
15.2
Expenses that are connected with legal proceedings will be collected subject to the provisions of any law. The
amount of attorneys’ fees will be as determined in decisions of the court or the Execution Office and, if there are no such decisions, as will be agreed with the Guarantor in writing.
15.3
Expenses that do not appear in this Letter or whose amount is not determined in this Letter will be paid by the
Guarantor in their actual amount.
15.4
All of the aforementioned expenses will be paid by the Guarantor to the Bank upon its first demand in writing.
However, with respect to an operation or act that the Guarantor is required to perform, the Obligation will arise at the demand of the Bank or at the time of the performance of the operation or act, whichever is earlier.
15.5
Without derogating from any of the rights of the Bank under this Letter, the Guarantor will repay to the Bank
any Obligation that it owes to the Bank in respect of expenses together with interest at the Maximum Interest Rate from the date of its creation or from the date of its demand, as the case may be, until its actual satisfaction in full, in every case
as set forth in this Letter.
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15.6
The aforementioned expenses will be paid by the Guarantor to the Bank promptly upon demand, and any Obligation
that the Guarantor owes to the Bank in respect of expenses shall bear interest at the Maximum Interest Rate from the date of its creation or from the date of its demand, as the case may be, until its actual satisfaction in full, in every case as set
forth in this Letter.
15.7
For avoidance of doubt, all of the expenses, together with interest at the Maximum Interest Rate, as set forth
in this Section above, will be part of the Guaranteed Amounts and will be secured by the Guarantee.
16.
Books of the Bank
The Books of the Bank and its accounts will serve as admissible evidence in proof of the veracity of their content, including all of the
details thereof, inter alia, with respect to calculating the balance of the Guaranteed Amounts, the details of the Bills and Security that have been given as security for the Guaranteed Amounts and for any other purpose connected with this
Letter or the Guaranteed Amounts or documents that may be signed further to or in connection with any of the foregoing. Copies of the Books of the Bank or any excerpts from them or from the final page of the Books of the Bank which have been
certified by an official of the Bank or in another document will serve as admissible evidence in proof of the veracity of their content and the accuracy of all of the details stated in them.
17.
Delivery and use of information
Information that the Bank has requested or may request from the Guarantor from time to time, as set forth in this Letter and which is delivered
by the Guarantor to the Bank may also be added to information that has been received by the Bank from others. The terms that will apply, subject to any law, with respect to any such information and its use are set forth as follows:
17.1
Unless stated otherwise in this Letter, no legal obligation applies to the Guarantor to deliver information
that may be requested from it and the delivery of the information is dependent upon its will and consent. Nevertheless, if the complete details that are requested and that are required for the purposes that are set forth below are not received, it
is possible that the Bank will not provide Banking Services to the Guarantor and the Guaranteed Party. There may be details that the Guarantor has an obligation to deliver or that the Bank has an obligation to receive under provisions of the law or
directives of the Bank of Israel. That stated above and below constitutes a notice from the Bank in accordance with Section 11 of the Privacy Protection Law, 5741-1981 and/or any other applicable law.
17.2
Together with the information about the Guarantor that is received from the Guarantor, information may also be
collected in the course of the provision of the Banking Services to which the Guarantor or the Guaranteed Party is party and, in addition, information may be received from third parties, such as authorities, external databases and open sources.
17.3
All of the details that the Guarantor has delivered or will deliver to the Bank or that may be in the
possession of the Bank (including information about accounts of the Guarantor at the Bank) may be used by the Bank for the purpose of ordinary activity and may be stored in accordance with the needs of the Bank in databases of the Bank or of parties
on its behalf or in the databases of any party that provides computer services or data processing or information security services or any other service to the Bank for the purpose of the provision of Banking Services or for the purpose of managing
the relationship between the Guarantor or the Guaranteed Party and the Bank.
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17.4
The Bank may use information about the Guarantor for the purpose of its ordinary activity. As part of such use,
the Bank may use the information that is collected from any of the activities in any of the accounts of the Guarantor and the Guaranteed Party at the Bank.
17.5
In the framework of its ordinary activity, the Bank may collect, process and use information about the
Guarantor, inter alia, for the following purposes:
17.5.1
The examination of applications to receive Banking Services and to make decisions in connection with the
Banking Services to the Guarantor and the Guaranteed Party, their scope and manner of provision.
17.5.2
The management of credit risks, including the analysis and scoring of credit risk, and the management of other
risks, for example, the identification and prevention of fraud or the prevention of the abuse of the services, the monitoring of activities in accordance with the law, including any foreign law and the like.
17.5.3
The improvement of the service to customers of the Bank, including the development of new products and services
and their offer to customers of the Bank.
17.5.4
The analysis of the information, segmentation, characterization of usage habits with respect to the services
and consumption habits and focusing of advertising information.
17.5.5
Marketing and advertising through various means, in accordance with the law.
17.6
The Bank may regularly or from time to time transfer information about the Guarantor if required in order to
realize the aforementioned objectives of the use of the information to any of the following entities in Israel or outside of Israel:
17.6.1
To third parties that provide services to the Bank, including computing, operations and communications services
for the purpose of receiving the services (hereinafter: the “Service Providers”).
17.6.2
To a party to which, by law, including a foreign law and directives of the Bank of Israel, the Bank is required
to deliver the information, including to third parties with which the Guaranteed Party may, from time to time, jointly sign applications and other documents in connection with credit that, in whole or in part, is, or could be, part of the Guaranteed
Amounts.
17.6.3
To clearing systems for means of payment, financial assets and information.
17.6.4
To counterparties to operations or transactions, whether they are a middle party or an end party.
17.6.5
To a new or other corporation if the Bank or any other company in the group of the Bank organizes its activity
into another corporate framework and if it merges with another entity or merges its activity with the activity of a third party.
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17.6.6
To assignee entities in the case of an assignment or pledge by the Bank or for the purpose of the execution of
such assignment or pledge.
17.6.7
In addition, the Bank may, with respect to foreign Securities, deliver any information that is required to be
provided under foreign law to the appointed authority under that foreign law.
17.7
The Service Providers will be entitled to hold, store and use the information for the purpose of their
provision of the services.
18.
Liability of the Guarantor
If the Guarantor is an incorporated or unincorporated legal entity, a limited liability company, partnership or a trustee or the executor of an
estate or the holder of a joint account at the Bank, or an organization or any body that constitutes a combination of bodies, the obligations of the Guarantor under this Letter will not be prejudiced by any change in the name or “change of
control” of the Guarantor, ownership or restructuring.
19.
Notices and warnings
19.1
The Bank shall only send notices to the Guarantor in connection with this Letter if they are required in
accordance with this Letter, another Credit Document, other express written agreement between the Bank and the Guarantor or applicable law.
19.2
The Guarantor undertakes to immediately notify the Bank of the taking of any steps by or against it with
respect to recovery or insolvency proceedings and collection activities by other creditors against it, including liquidation, bankruptcy, an arrangement or compromise in connection with debts, a recovery or automatic stay of proceedings, a
receivership, encumbrance or other execution operation pertaining to all of its assets or any of the assets that it owns that are material in nature or scope or any Security that it has provided in favor of the Bank.
19.3
In addition, the Guarantor will notify the Bank in writing as soon as possible of:
19.3.1
A change in its name, address, jurisdiction of organization or Delaware corporate identity number;
19.3.2
Reserved;
19.3.3
Reserved;
19.3.4
The dissolution, winding up, or termination of the business or cessation of operations of the Guarantor
(including any transaction or series of related transactions deemed to be a liquidation, dissolution or winding up of the Guarantor pursuant to the provisions of the Guarantor’s charter documents);
19.3.5
The commencement by the Guarantor of any insolvency proceeding with respect to itself, the filing of an
involuntary insolvency proceeding against the Guarantor or the appointment of a custodian, receiver, trustee, assignee for the benefit of creditors, or other similar official, to take possession, custody or control of the properties of the
Guarantor;
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19.3.6
Any protest or objection that it has, if any, in connection with any account, account summary, certificate or
notice that it may receive from the Bank in connection with this Letter through any channel of communication, including the receipt of information by mail, an automatic device or a computer terminal.
19.3.7
Reserved; and
19.3.8
Reserved.
19.4
Any notice that is sent by mail by the Bank to the Guarantor by registered or ordinary mail to the most current
address of the Guarantor that appears in this Letter or in the Account Opening Documents or to any other address that appears in the population register or to the address of the registered office of the Guarantor or to another address that the
Guarantor notifies to the Bank in writing shall be deemed to be a legal notice and shall be deemed to have been received by the Guarantor within 72 hours of the date that the mail containing the notice was sent. Any notice that is sent by mail by
the Guarantor to the Bank by registered or ordinary mail to the most current address of the Bank that appears in this Letter or to any other address that appears in the population register or to the address of the registered office of the Bank or to
another address that the Bank notifies to the Guarantor in writing shall be deemed to be a legal notice and shall be deemed to have been received by the Bank within 72 hours of the date that the mail containing the notice was sent.
19.5
A confirmation in writing from a nationally recognized overnight mail delivery service as to the deposit of any
notice with such service shall serve as prima facie proof of the transmission by the Bank or the Guarantor, as applicable, of such notice, and such notice shall be deemed to have been received by the addressee on the next business day following
the date of deposit of such notice with such service.
20.
Replacement Warrant
20.1
The Guarantor agrees that, as a condition precedent to the Guaranteed Party’s first drawdown under the
Facility Agreement (the date of such draw, the “Drawdown Date”), it shall issue to the Bank a warrant to purchase shares of common stock, par value $0.0001 per share, of the Guarantor in an amount equal to the portion of the First
Warrant and the Second Warrant that has not vested as of the Closing (the “Unvested Portion”) (such warrant, the “Replacement Warrant”), with an exercise price per share equal to the closing sale price of a
share of common stock of the Guarantor on the New York Stock Exchange on the first day of trading following the Drawdown Date, as reported by Bloomberg.
20.2
For the avoidance of doubt, any shares issued upon exercise of the Replacement Warrant will be unregistered
shares subject to transfer restrictions as a matter of applicable U.S. securities laws.
20.3
For the purposes of this Section: the “Xtend Merger” means the merger of the Guaranteed Party with
XOS Robotics Ltd., an Israeli company and wholly-owned subsidiary of the Guarantor, with the Guaranteed Party surviving such merger as a wholly-owned subsidiary of the Guarantor; the “Reorganization” means the business combination
pursuant to which the foregoing is effected; the “Reorganization Transaction” means the transactions contemplated by that certain Agreement and Plan of Merger, dated February 13, 2026, by and among JFB Construction Holdings, the
Guaranteed Party, the Guarantor and XT Merger Sub 2, Inc.; and the “Closing” means the date upon which the Reorganization, the Xtend Merger and the Reorganization Transaction have all been consummated.
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21.
Substantive law and jurisdiction
21.1
This Letter will be governed by and construed in accordance with the laws of the State of Delaware, without
regard to principles of conflicts of law. Guarantor and Bank each submit to the exclusive jurisdiction of the state and federal courts, or equivalent, in the jurisdiction of Bank’s choice, within the United States or outside it. Nothing in
this Letter shall be deemed to operate to preclude Bank from bringing suit or taking legal action in any jurisdiction of Bank’s choice to realize on the Collateral or any other security for the Guaranteed Amounts, or to enforce a judgment or
other court order in favor of Bank. Guarantor expressly submits and consents in advance to Bank’s choice of jurisdiction in any action or suit commenced in any court chosen by Bank, and Guarantor hereby waives any objection that it may have
based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Guarantor hereby waives personal service of the summons,
complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Guarantor at the address set forth on the signature page
hereto and that service so made shall be deemed completed upon the earlier to occur of Guarantor’s actual receipt thereof or three (3) days after deposit in the U.S. mail, proper postage prepaid.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, GUARANTOR AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING
OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH
PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
22.
General
22.1
All of the warranties, representations, undertakings, provisions and authorizations of the Guarantor that are
stated in this Letter are irrevocable and are in addition to, and do not derogate from, any other warranty, representation, undertaking, provision or authorization of the Guarantor to the Bank under this Letter or under any of the documents that
have been signed or will be signed by the Guarantor and the Bank in connection with the Guaranteed Amounts and the Security used to secure them, including but not limited to any document signed or to be signed by the Guarantor in connection with
Banking Services or any other Credit Document.
22.2
Any cancellation or change in the Obligations of the Guarantor to the Bank under this Letter, including a
waiver or compromise, requires the prior written consent of the Bank. Any waiver, extension, discount, silence, abstention from acting on the part of one of the parties with respect to the non-compliance or
partial compliance or incorrect compliance with any undertaking of the other party under this Letter will not be deemed to be a waiver by the waiving party of any right, but rather as a consent limited to the particular occasion on which it was
given.
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22.3
This Guarantee is a continuing guarantee and shall be binding upon the Guarantor and the Guarantor’s
successors, permitted transferees and assigns, and inure to the benefit of and be enforceable by the Bank and its successors, transferees and assigns until the Termination Date. Any transfer or assignment of the Guarantor’s rights hereunder or
any interest herein without the prior written consent of the Bank without the Bank’s consent shall be null and void. This Letter shall remain in full force and effect until the Termination Date.
22.4
Reserved.
22.5
The rights of the Bank under this Letter are independent and are not dependent on each other and are in
addition to and do not derogate from any right that the Bank has or will have by law or under any other document that has been signed or will be signed by the Guarantor or the Guaranteed Party or on behalf of any of them. Nothing stated in this
Letter exempts the Guaranteed Party or any other guarantor of the Guaranteed Amounts from any of Obligation it owes to the Bank. The Bank may insist on its rights and take all measures against such parties that are granted to the Bank under any of
the documents that have been signed or that will be signed by them the Bank and under any law.
22.6
Subject to applicable law, nothing stated in this Letter creates rights in favor of any third party.
22.7
In any case in which the Bank may perform any act under this Letter, it is not required to do so.
22.8
In any case in which the Bank may perform any act under this Letter without prior notice, such right of the
Bank will be subject to applicable laws.
22.9
For the avoidance of doubt, the Guarantee will remain valid with respect to its full amount, including in cases
in which the Bank charges any account of the Guaranteed Party or the Guarantor or of any third party for any amount for the purpose of repayment of the Guaranteed Amounts and, thereafter, subject to any law, the Bank cancels such charge for any
reason – and the Guaranteed Amounts will also include any amounts whose charge was cancelled, as aforesaid.
22.10
Any provision of this Letter which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Letter or affecting the validity or enforceability of such provision in any other jurisdiction.
22.11
No amendment or waiver of any provision of this Letter and no consent to any departure by the Guarantor
therefrom shall in any event be effective unless the same shall be in writing and signed by the Guarantor and the Bank, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
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22.12
Delivery of an executed signature page to this Letter by electronic means shall have the same legal effect as
delivery of a manually executed original signature page to this Letter.
23.
Individual guarantor and protected guarantor
23.1
If the Guarantor is an “individual guarantor,” as this term is defined under the Guarantee Law, it
is clarified that the provisions of this Letter will be subject to the provisions of Chapter B of the Guarantee Law – “Guarantee of Individual Guarantor.”
23.2
If the Guarantor is a “protected guarantor,” as this term is defined under the Guarantee Law, it is
clarified that the provisions of this Letter in connection with the limitation period, as defined under the Limitation Law, 5718-1958, will be subject to the provisions of Section 27 of the Guarantee Law.
24.
Interpretation and definitions
24.1
The section headings are intended for use as references only and may not be used in the interpretation of this
Letter.
24.2
The singular includes the plural and vice versa; the masculine includes the feminine and vice
versa.
24.3
Unless expressly stated otherwise, wherever any law is mentioned in this Letter, the intention is to the law in
such form as it may exist from time to time at each relevant date.
24.4
Wherever the Guarantor or the Guaranteed Party, as the case may be, is mentioned, the intention is to the
Guarantor or the Guaranteed Party, as the case may be, including its heirs, its estate, the executors of its will, its guardians, its liquidator, its trustees and anyone acting on its behalf or in its stead.
24.5
Unless expressly stated otherwise, the terms included in this Letter will have the meaning set forth against
them below:
24.5.1
“Affiliate” – With respect to any person, any person that controls it, that is
controlled by it or that is controlled by a person that controls it and a relative of any of the foregoing.
24.5.2
“Security” – Guarantees, pledges, collateral and other security of any type and sort.
24.5.3
The “Bank” – Bank Hapoalim B.M., including each of its branches or offices in Israel,
and anyone acting in its stead or on its behalf and any of its transferees.
24.5.4
“Financial Statements” – Periodic financial statements that are prepared in a format
prescribed under applicable law and in accordance with generally accepted accounting principles that the Guarantor or any subsidiary of the Guarantor is required or will be required to prepare under any law.
24.5.5
The “Exposure” and the “Approved Risk Framework” – As these terms
are defined in the Derivative Transaction Documents.
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24.5.6
The “Scenario Exposure,” the “Approved Framework” and the
“Maximum Possible Exposure” – As these terms are defined in the Futures Documents.
24.5.7
The “Index” – The Consumer Price Index (also known as the Cost of Living Index),
including fruits and vegetables, which is published by the Israel Central Bureau of Statistics (hereinafter: the “CBS”), including the same index even if it is published by any other governmental institution and including any
official index that may replace it, whether or not constructed upon the same data as the existing index is constructed. If another index replaces the existing index, the CBS will determine the ratio between them and, if the CBS does not determine
the ratio within six months of the publication of the other index, the Bank will determine it in consultation with economic experts.
24.5.8
The “New Index” – means the last index that was prevailing on the date of the actual
repayment of any of the Guaranteed Amounts through any payment that may be made to the Bank under this Letter.
24.5.9
The “Documents” – Any of the following, as the case may be: The Account Opening
Documents, any agreement or document in connection with any of the Assets that are deposited with the Bank, and any other agreement or document that has been or will be signed by the Guarantor vis-à-vis the Bank.
24.5.10
The “Assets” – Any money that the Guarantor is entitled to receive from the
Bank, subject to any law, including an obligation of the Bank to the Guarantor that has not yet materialized, such as a monetary deposit of any sort whose date of repayment has not yet arrived in accordance with the terms of its deposit with the
Bank, and any other rights and assets of the Guarantor that the Guarantor is entitled to receive from the Bank, including securities, negotiable and non-negotiable documents, chattels, commodities documents,
insurance policies, Bills, assignments of obligations and deposits that may be in the possession or control of the Bank at any time in favor of or for the Guarantor, including those that have been delivered to the Bank for collection, security,
custody or otherwise.
24.5.11
The “Guarantee” – The guarantee of the Guarantor in favor of the Bank and its
obligation to indemnify the Bank under this Letter.
24.5.12
The “Guarantee Law” – the Guarantee Law, 5727-1967.
24.5.13
The “New Rate” – The last Representative Rate that was prevailing on the date
of actual repayment of any of the Guaranteed Amounts through any payment that may be made to the Bank under this Letter.
24.5.14
The “Representative Rate” – The rate that is published by the Bank of Israel as
the representative exchange rate for a relevant Foreign Currency or, if the Bank of Israel does not publish the representative exchange rate for that Foreign Currency on the customary date, another exchange rate for that Foreign Currency that is
published by a competent authority and that is determined by the Bank to be a representative rate for that Foreign Currency for all of the customers of the Bank. If the Bank does not determine another representative rate, as aforesaid, the
representative rate will be the Average Rate.
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24.5.15
The “Average Rate” – The accounting average between the Selling Rate Prevailing
at the Bank (excluding any discounts and benefits and without adding exchange fees, any tax, levy, obligatory payments or other payments and the like) of a relevant Foreign Currency and the Buying Rate Prevailing at the Bank (excluding any discounts
and benefits and without deducting exchange fees, any tax, levy, obligatory payments or other payments and the like) for that Foreign Currency.
24.5.16
“Obligation” – A debt, obligation or liability to the Bank of any sort
(existing and future, direct or indirect, contingent and non-contingent, including as guarantors in favor of the Bank) and for any cause, in every case as they may be from time to time, including any such
obligation to the Bank in any account and even if such account is a jointly owned account.
24.5.17
“Obligations in Respect of Third Party Guarantees” – Any existing Obligation or
future Obligation of the Guaranteed Party to the Bank in connection with, or in respect of, a guarantee that the Guaranteed Party has given or will give to the Bank to secure an Obligation of any third party to the Bank, including a guarantee that
the Guaranteed Party has given or will give to the Bank to secure any Obligation of the Guarantor.
24.5.18
“Obligation of the Guaranteed Party” – Any Obligation of the Guaranteed Party
in connection with the Guaranteed Amounts.
24.5.19
“This Letter” – This letter of guarantee and indemnity, as may be amended from
time to time.
24.5.20
“Branch Board” – A screen or board that has been put on display at a branch of
the Bank and an information board that has been placed on the counter at a branch of the Bank at which relevant transactions are performed and, at an office of the Bank or a branch of the Bank at which there are no over-the-counter services, also a voice mail.
24.5.21
“Foreign Currency” – Any foreign currency that is freely convertible.
24.5.22
The “Derivative Transaction Documents” – General
terms for the performance of derivative transactions and the addenda to the general terms for the performance of derivative transactions – VAR customers, VAR customers with deposits or scenario customers and the special terms
that are relevant to the performance of derivative transactions and the other documents that have been or will be signed by the Guaranteed Party in favor of the Bank in respect of, and in connection with, such derivative transactions and any other
document amending or replacing any of the aforementioned documents or containing an express provision that it constitutes part of any of them.
24.5.23
“Account Opening Documents” – The “Application to Open an Account and
General Terms for the Management of an Account” that was signed by the Guarantor in connection with any account that is managed for it at the Bank, any other document amending or replacing such application or containing an express provision
that it constitutes part thereof, and all of
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the documents containing general terms regarding areas of activity or channels of service (including those that are attached or that will be attached to such application and will be signed
further to it), and all of the documents containing authorizations on an account (including powers of attorney), a list of signatures, exemplary signatures, method of receipt of voting papers, notices of position and certificates of ownership or
updates to any of the foregoing that were delivered to the Bank on the date of the signature of such application or on a later date.
24.5.24
The “Books of the Bank” – includes, Records of the Bank and also any book,
ledger, account statement, contract, letter, obligation, Bill signed by the Guarantor or the Guaranteed Party, an index card, a spreadsheet of the Bank that has been generated by the Bank, a reel containing records of the Bank, copies of all of the
foregoing that have been certified by the Bank or submitted by it as part of its books, and anything that can be generated from any of the foregoing using means of data storage or retrieval, electronic imaging and other technology, which were made
during the ordinary course of business of the Bank.
24.5.25
“Maximum Interest Rate” – With respect to Israeli currency – the maximum
interest rate, whatever it may be from time to time, that applies at the Bank on debit balances in current accounts in Israeli currency not containing a valid overdraft line. With respect to Foreign Currency, the maximum interest rate, whatever it
may be from time to time, that applies at the Bank on debit balances in current accounts in the relevant Foreign Currency not containing a valid overdraft line.
24.5.26
“Records” – Any record or copy of a record that preserves information about
activities in an account at the Bank or the data and details of an account at the Bank, whether recorded or copied by way of printing, duplication, electronic imaging, photography (including on microfilm), and whether recorded or copied using any
mechanical, electrical or electronic device, or any technology that preserves information about, or in connection with, activities in an account at the Bank and an output, computer material that constitutes information and an electronic message that
includes data about an account at the Bank or notices of the Bank in connection with an account at the Bank that were created using computerized means of registration of the Bank, as “output” “computer information” (that
constitutes information) and “computer” as defined under the Computers Law, 5755-1995, and a printout of the content of a computer file on paper or any record on any other means of the Bank, or a display of words or numbers or any other
marks that the Bank customarily uses or is assisted by in its records.
24.5.27
Reserved.
24.5.28
“Bill or Bills” – Any promissory note, bill of exchange, check, obligation,
guarantee, security, assignment, bill of lading, bill of deposit, withdrawal, payment order and any other negotiable document of any sort.
24.5.29
“Banking Services” – All of the services the Bank customarily provides to its
customers, as prevailing there from time to time.
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24.5.30
The “Selling Rate Prevailing at the Bank” – The “transfers/assignments
– sale” rate of exchange that is published from time to time by the Bank on a Branch Board and that relates, as the case may be, to the purchase of Foreign Currency by us from the Bank at any relevant date plus exchange fees, any tax,
levy, obligatory payments or other payments and the like.
24.5.31
The “Securities Act” – the U.S. Securities Act of 1933, as amended.
24.5.32
The “Buying Rate Prevailing at the Bank” – The “transfers/assignments
– purchase” rate of exchange that is published from time to time by the Bank on a Branch Board and that relates, as the case may be, to the sale of Foreign Currency by us to the Bank at any relevant date less exchange fees, any tax,
levy, obligatory payments or other payments and the like.
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IN WITNESS WHEREOF, the undersigned Guarantor has executed this Letter as of the date
first set forth above.
Xtend AI Robotics, Inc.
a Delaware corporation
By:
/s/ Tal Horesh
Name: Tal Horesh
Title: Chief Financial Officer
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EX-10.17
EX-10.17
Filename: d230933dex1017.htm · Sequence: 13
EX-10.17
Exhibit 10.17
XTEND REALITY EXPANSION LTD.
CN# 515871861
2019 Option Plan
1. Name. This plan, as adopted by the Board of Directors of XTEND Reality Expansion Ltd., (the “Company”) on June
19, 2019, and as amended from time to time, shall be known as the “XTEND 2019 Global Option Plan” (the “Plan”).
2. Purpose of the Plan. The purposes of this Plan are to enable the Company to link the compensation and benefits of individuals and
entities providing services to the Company and/or its Affiliates with the success of the Company and with long-term shareholder value.
3.
Headings and Definitions
3.1. The section headings are intended solely for the reader’s convenience and in no event shall
they constitute a basis for the interpretation of the Plan.
3.2. In this Plan, the following terms shall have the meanings set forth
beside them:
“Structural Change”
Any re-domestication of the Company, share flip, creation of a holding company for the Company which will hold substantially all of the shares of the Company or any other transaction involving
the Company in which the shares of the Company outstanding immediately prior to such transaction continue to represent, or are converted into or exchanged for shares that represent, immediately following such transaction, at least a majority, by
voting power, of the share capital of the surviving, acquiring or resulting corporation;
“Affiliate”
Corporate entities who are related to the Company by way of common ownership or control, as such term is defined in section 32(9) of the Ordinance, either directly or indirectly, either partially or entirely, including but not
limited to any “employing company” and “employer” as defined in Section 102(a) of the Ordinance;
“Applicable Law”
The legal requirements applicable to the administration of option plans, any applicable laws, rules and regulations of any country or jurisdiction where Options are granted under the Plan, as such laws, rules, regulations and
requirements shall be in place from time to time including any Stock Exchange rules or regulations;
“Approved Option”
An Option granted under Section 102(b)(2) of the Ordinance, in accordance with the “capital gain tax route”, and other rights granted with respect to such Option;
“Board”
The Company’s Board of Directors, or, subject to Applicable Law and the Company’s incorporation documents, including the Articles of Association, any committee empowered by the Board for the purpose of implementation of
this Plan (or any aspect thereof);
“Cause”
Irrespective of any definition included in any other document held by a Participant and unless otherwise determined by the Board in the Participant’s Option Agreement, the term Cause shall include any of the
following-
(a) A breach of any material provision of the employment or engagement agreement between the Company or an Affiliate and a Participant, including but not limited to, a breach of any confidentiality duty of a Participant (including
in regards to the confidentiality of this Plan and any grant made thereunder), inappropriate use of confidential information of the Company or an Affiliate or an event of breach of trust or breach of any
non-competition obligation of a Participant;
(b) Any act which constitutes a breach of a Participant’s fiduciary duty towards the Company or an Affiliate, including without limitation disclosure of confidential information of the Company or an Affiliate and acceptance or
solicitation to receive unauthorized or undisclosed benefits, irrespective of their nature, or funds or promises to receive either, from individuals, Consultants or corporate entities that the Company or an Affiliate does business with;
(c) Any act of fraud by a Participant or embezzlement of funds of the Company or an Affiliate;
(d) Any conduct or omission by, or state of affairs related to, the Participant reasonably determined by the Board to be materially detrimental to, or against the interests of, the Company or an Affiliate;
(e) Any conviction of any felony involving moral turpitude of affecting the Company or an Affiliate;
(f) Circumstances justifying the revocation and/or reduction of a Participant’s entitlement to severance pay under Applicable Law, including where relevant, pursuant to Sections 16 or 17 of the Severance Pay Law, 1963;
or
(g) Any other reason which is defined as Cause in the Participant’s personal employment contract;
For the avoidance of doubt it is clarified that the determination as to whether a Participant is being terminated for Cause shall be made in good faith by the Board and shall be final and binding on the Participant;
“Company”
XTEND Reality Expansion Ltd., a company incorporated under the laws of the state of Israel, or any Successor Company resulting from the merger or consolidation of the Company in which the Company is not the surviving entity, or any
company which assumes the Plan within any M&A Transaction or Structural Change;
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“Consultant”
Shall mean any person or entity, except an Employee, engaged by the Company or an Affiliate, in order to render services to such company, including any individual engaged by an entity providing services to the Company or an
Affiliate as aforementioned;
“Controlling Shareholder” “Employee”
A controlling shareholder of the Company as defined in section 32(9) of the Ordinance, as amended from time to time; Shall mean any person, who has signed an employment agreement and has commenced employment with the Company or any
Affiliate, or anyone who is on the payroll of such company and specifically excluding anyone who may under Applicable Law be deemed an employee of the Company or an Affiliate if an employment agreement was not signed and he is not on the payroll of
such company. Solely in respect of Approved Options, this term shall include any officer or a member of the board of directors of such company all in accordance with Section 102;
“Exercise Price”
Shall mean the consideration required to be paid by a Participant in order to exercise an Option and to purchase one Share;
“Expiration Date”
With respect to an Option, the earlier of (i) the time such Option is fully exercised, or (ii) ten (10) years from the Grant Date of such Option, or (ii) the time on which such Option expires in accordance with
Sections 9 and 12 below;
“Fair Market Value”
Shall mean, as of any date, the value of an ordinary share of the Company determined as follows:
(i) If the ordinary shares are listed on any recognized Stock Exchange, the Fair Market Value shall be the closing sales price for such ordinary shares (or the closing bid, if no sales were reported), as quoted on such Stock
Exchange for the last market trading day prior to the time of determination;
(ii) If the ordinary shares are regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value shall be the mean between the high bid and low asked prices for the ordinary shares on the
last market trading day prior to the day of determination, or;
(iii) In the absence of any of the above, the Fair Market Value thereof shall be as determined in good faith by the Board of Directors of the Company.
For the avoidance of doubt, and where applicable, the above definition of Fair Market Value shall not apply for the purpose of determining the tax liability pursuant to Section 102(b)(3) of the
Ordinance;
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“Grant Date”
The date of the Board resolution approving the grant of the Options, unless otherwise determined by the Board;
“Holding Period”
The holding period provided under Section 102 in respect of’ the “capital gain tax route” or under a tax ruling by the Israeli Tax Authority;
“Israeli Employee”
An Employee of the Company or of an Israeli resident Affiliate, who is an Israeli tax resident and who is not a Controlling Shareholder at the time of grant, or as a consequence of the grant, as stated in Section 102;
“Ordinance”
The Israeli Income Tax Ordinance [New Version], 1961, as amended from time to time;
“Option”
An option to purchase one Share, granted to a Participant, subject to the provisions of this Plan and the applicable Option Agreement;
“Option Agreement”
A written agreement between the Company and a Participant or a notice provided by the Company setting forth the terms and conditions under which Options are granted to a Participant;
“Participant”
Shall mean anyone to which an Option was granted in accordance with section 5 of the Plan;
“Plan”
Shall mean this XTEND 2019 Global Option Plan, including any amendments thereto;
“Section 102”
Section 102 of the Ordinance and the Israeli Income Tax Rules (Tax Relief in Issuance of Shares to Employees) 2003, as amended from time to time;
“Share”
An ordinary share of the Company, nominal value 0.01 NIS, which is issued or issuable to a Participant upon exercise of an Option;
“Spin-off Transaction”
Any transaction in which assets of the Company are transferred or sold to a company or corporate entity in which the shareholders of the Company hold the same respective ownership stakes they are then holding in the Company [i.e. -
transfer of assets to a ‘sister company’ of the Company];
“Stock Exchange”
Any stock exchange, on which ordinary shares of the Company are listed, or such other market or a national market system, on which the Company’s ordinary shares’ prices are regularly
quoted;
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“M&A Transaction”
Any Deemed Liquidation Event and/or any other similar or equivalent definition as defined in and determined pursuant to the Articles of Association of the Company as amended from time to time, excluding any Structural Change or Spin-off Transaction, and including, for the avoidance of doubt (yet excluding any Structural Change or Spin-off Transaction):
(a) A sale of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Company if substantially all of
the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries;
(b) A merger of the Company with or into another entity, including a reverse triangular merger; or
(c) A sale of all or substantially all of the share capital of the Company to a third party unrelated to the current shareholders of the Company, whether by a single transaction or a series of related transactions or within the
scope of the same acquisition agreement;
Subject to specific confirmation from the Board the definition may also include any purchase by a current shareholder of the Company (whether directly or indirectly) of all of the share capital of the Company not owned by such
shareholder immediately prior to the acquisition.
“Successor Company”
Shall mean any entity with or into which the Company was merged or consolidated, or to which certain operations on certain assets of the Company were transferred, or which purchased substantially all the Company’s assets or
shares including any parent of such entity;
“Tax”
Any applicable tax and other compulsory payments such as social security and health tax contributions required to be paid under any applicable law in relation to the Options or the rights deriving there-from;
“Termination”
For an Employee, the termination of employment, and for a Consultant, the expiration, or termination of such person’s consulting or advisory relationship with the Company or an Affiliate, or the occurrence of any termination
event as set forth in such person’s Option Agreement;
For the purpose of this plan the following shall not be considered as Termination (i) for an Employee - paid vacation, sick leave, paid maternity leave, infant care leave, medical emergency leave, military reserve duty, or any
other leave of absence authorized in writing by the Board; and (ii) for a Consultant- any temporary interruption in such person’s availability to provide services to the Company and/or an Affiliate, which has been authorized in writing by
Board;
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Termination shall not include any transfer of a Participant between the Company and any Affiliate or between Affiliates nor shall it include any change in a Participant’s engagement status between an “Employee” and
“Consultant” and vice versa (without derogating the different tax implications that may result from such change of status);
“Termination Date”
With regard to any Employee, the first date following the Date of Grant on which there are no longer employment relations between such
Employee and the Company or an Affiliate, for any reason whatsoever; however for the purpose of Termination for Cause, the Termination Date is the date on which a notice regarding such termination was sent by the Company or an Affiliate to the
Employee;
With regard to any Consultant, the earlier of (i) the date of
termination of the agreement between the Consultant and the Company or an Affiliate; or (ii) the date on which a notice regarding such termination of agreement was sent by the Company or an Affiliate, or by the Consultant, to the other
party;
“Transfer”
With respect of any Option or Share - the sale, assignment, transfer, pledge, mortgage or other disposition thereof or the grant of any right to a third party thereto;
“Trustee”
Any trustee appointed by the Company in accordance with Section 102 and approved by the Israeli Tax Authority;
“Non-Approved 102 Option”
An Option which is governed by Section 102(c) of the Ordinance;
“Vesting Date”
The date upon which the Option becomes exercisable, as determined in accordance with this Plan and set forth in the Option Agreement.
4. Administration of the Plan
4.1. The Board shall have the power to administer the Plan.
4.2. Subject to the provisions of the Plan, applicable law and the Company’s incorporation documents, the Board shall have the sole and
full discretion and authority, at its discretion, without the need to submit its determinations or actions to the shareholders of the Company for their approval or authorization to administer the plan and all actions related thereto, including
without limitation the performance, at any time and from time to time, of any and all of the following: (i) to grant Options to Participants; (ii) to determine the terms and provisions of each Option granted (which need not be identical),
including, but not limited to, the number of Options to be granted to each Participant, provisions concerning the time and the extent to which the Options may be exercised, the underlying Shares sold and the nature and duration of restrictions as to
the Transferability of Options and/or Shares; (iii) to amend, modify or supplement (with the consent of the applicable Participant, if such amendments adversely affect the terms of his Options) the terms of each outstanding Option, unless
included otherwise under the terms of the Plan; (iv) to interpret the Plan; (v) to prescribe, amend, and rescind rules and regulations relating to the Plan, including the form of Option Agreements and rules governing the grant of Options
in jurisdictions in which the Company or any Affiliate operate; (vi) to authorize conversion or substitution under the Plan of any or all Options or Shares and to cancel
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or suspend Options, as necessary, provided that, unless consent is received from the Participants, the interests of the Participants are not materially harmed; (vii) to accelerate or defer
(with the consent of the Participant) the right of a Participant to exercise in whole or in part, any previously granted Options; (viii) to determine the effect of any increase or decrease of scope of engagement of a Participant on the vesting
schedule of previously granted Options; (ix) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option previously granted by the Board; (x) to make all other determinations
deemed necessary or advisable for the administration of the Plan; (xi) the appointment of a Trustee.
4.3. This Plan shall apply to
grants of Options made following the adoption of this Plan by the Board.
4.4. All decisions, determinations, and interpretations of the
Board shall be final and binding on all Participants unless otherwise determined by the Board.
4.5. The Board may, without
shareholders’ approval, amend, modify (including by adding new terms and rules), and/or cancel or terminate this Plan and any Options granted under this Plan, any of their terms, and/or any rules, guidelines or policies relating thereto.
Notwithstanding the foregoing (a) material amendments to the Plan (but not the exercise of discretion under the Plan) shall be subject to shareholders’ approval to the extent so required by applicable mandatory law and the Company’s
Articles of Association; and (b) no termination or amendment of the Plan shall affect any then outstanding Options nor the Board’s ability to exercise its powers with respect to such outstanding Options granted prior to the date of such
termination, unless expressly provided by the Board.
4.6. The termination or cancelation of this Plan will not affect the ability of the
Board to exercise its powers with respect to any then outstanding Options granted prior to the date of such termination.
5.
Eligibility. Options may be granted to Employees or Consultants, provided that if services have not commenced, the grant will be made subject to commencement of actual services; An Approved Option and a
Non-Approved Option may only be granted to Israeli Employees.
6. Shares Reserved for the
Plan. The Company during the term of this Plan will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the vested portion of Options granted under the Plan and any other share and option plans which
may be adopted by the Company in the future, subject to any adjustment made to the share capital of the Company by way of share split, reverse share split, distribution of share dividend or similar recapitalization events, at any time hereafter. The
Shares may be authorized but unissued ordinary shares, or reacquired ordinary shares of the Company. If an Option should expire or become un-exercisable for any reason without having been exercised in full,
the Shares that were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan. Shares issued under the Plan and later repurchased by the Company pursuant to any repurchase right which the
Company may have, shall be available for future grant under the Plan.
7. Options
7.1. Grant
7.1.1. The
Board may grant Options from time to time at their sole discretion. The Options granted pursuant to the Plan, shall be evidenced by a written Option Agreement. Each Option Agreement shall state, among other matters, the number of Options granted,
the Vesting Dates, the Exercise Price, the tax route and such other terms and conditions as the Board at its discretion may prescribe, provided that they are consistent with this Plan.
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7.1.2. Options which are Approved Options, as determined in the Option Agreement, and any
Shares issued in respect of such Approved Option shall be subject to the Trustee’s trusteeship, as provided in Section 11 below. Any grant of an Approved Option shall be subject to compliance with the conditions of Section 102 and shall
be granted only 30 days or more after the submission of the Plan for approval by the Israeli Tax Authority.
7.2. Vesting.
7.2.1 The Board shall set vesting criteria in its discretion, which, depending or the extent to which the criteria are met, will determine the
number of Options that will vest and become exercisable. The Board may set vesting criteria based upon continued engagement with the Company or any Affiliate or based upon both continued engagement and the achievement of Company-wide, business unit,
or individual goals, or any other condition as determined by the Board in its discretion. Unless otherwise determined by the Board, all Options granted under this Plan shall vest over a 4-year period, with 25%
thereof vesting on the end of a 12-month period following the date of grant, and the remaining 75% thereof vesting in 12 equal portions at the end of each 3-month period
thereafter. The vesting conditions and schedule shall be set in the applicable Option Agreement. No Option shall be exercised after the Expiration Date. The vesting provisions of individual Options may vary.
7.2.2 Unless determined otherwise by the Board, the vesting of the Options shall be postponed during any
un-paid leave of absence. Upon return to service, the vesting shall continue and each of the remaining Vesting Dates shall be postponed by the number of days of such period of unpaid leave (i.e. shifting the
entire remaining vesting schedule and extending it by the number of unpaid leave days). Despite the aforementioned, the following shall not postpone the vesting of the Options: paid vacation, sick leave, paid maternity leave, infant care leave,
medical emergency leave, military reserve duty.
7.2.3 The vesting of the options shall continue upon any transfer of a Participant
between the Company and any Affiliate or between Affiliates.
7.3. An Option may be subject to such other terms and conditions, not
inconsistent with the Plan, on the time or times when it may be exercised as the Board may deem appropriate.
7.4. Exercise of
Options
7.4.1. An Option shall be exercised by submission to the Company of a notice of exercise, in a form set by the Company,
accompanied by payment as hereinafter described. The exercise of an Option shall occur upon receipt of a notice of exercise by the Company accompanied by payment in full of the Exercise Price payable for each of the Shares being purchased pursuant
to such exercise, and as soon as practicable thereafter, and subject to the provisions of section 8.3 below, the Company will issue the Share(s) underlying such exercised Option, provided that the Shares so issued shall not be delivered to the
Participant or any third party (other than the Trustee, if applicable) unless and until all applicable Tax was paid to the Trustee’s (if applicable) and the Company’s full satisfaction and subject to compliance with Applicable Law.
7.4.2. Except as otherwise provided in the Plan or in an Option Agreement, an Option may be exercised in full or in part, subject to the
Expiration Date, provided it is not exercised for a fraction of a Share, as further detailed in section 8.3 below.
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7.4.3. Notices of exercise of Options, which are submitted after the Expiration Date, or
which relate to Options that have not yet vested, or which do not contain all of the details required by the exercise form, shall not be accepted and shall have no force whatsoever.
7.4.4. The Participant shall sign any document required under any Applicable Law or by the Company or the Trustee for the purposes of issuance
of the Shares.
7.4.5. As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion or counsel for the Company, such a representation is
required.
7.5. Consideration.
7.5.1. The Exercise Price of each Share subject to an Option shall be determined by the Board in its sole and absolute discretion in
accordance with Applicable Law, subject to any guidelines as may be determined by the Board from time to time. Each Option Agreement will Contain the Exercise Price determined for each Option covered thereby. The Exercise Price may or may not be
equal to the Fair Market Value of the ordinary Shares of the Company, and any evaluation executed in relation to such shares shall not obligate the Company when determining the Exercise Price of any Option.
7.5.2. The Exercise Price shall be paid in cash or cheque at the time the Option is exercised, or by any other means as determined by the
Board. Should the Company’s ordinary shares be listed for trade on a Stock Exchange the Board may consider allowing a cashless exercise, or any other exercise method, subject to the provisions of Applicable Law. If, as of the date of exercise
of an Option the Company is then permitting cashless exercises, the Participants will be able to engage in a “same-day sale” cashless brokered exercise program, involving one or more brokers,
through such a program that complies with the Applicable Laws and that ensures prompt delivery to the Company of the amount required to pay the Exercise Price and any Tax.
7.5.3. The Exercise Price shall be denominated in the currency of the primary economic environment of, at the Board’s discretion, either
the Company or the Participant (that is the functional currency of the Company or the currency in which the Participant is paid).
8.
Terms and Conditions of the Options. Options granted under the Plan shall be evidenced by the related Option Agreement and shall be subject to the following terms and conditions and to such other terms and conditions included in the Option
Agreement not inconsistent therewith, as the Board shall determine:
8.1. Non Transferability of Options. Unless otherwise
determined by the Board, an Option shall not be Transferable by the Participant other than in accordance with section 9.2.1.2 below. Options or rights arising therefrom shall not be subject to mortgage, attachment or other willful encumbrance, and
no power of attorney shall be issued in respect thereof, whether such enter into force immediately or at a future date.
8.2. One Time
Benefit. The Options and underlying Shares are extraordinary, one-time benefits granted to the Participants, and are not and shall not be deemed a salary component for any purpose whatsoever, including in
connection with calculating severance compensation under any Applicable Law.
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8.3. Fractions. An Option may not be converted into a fraction of a Share. In lieu of
issuing fractional Shares, on the vesting of a fraction of an Option, the Company shall convert any such fraction of an Option, which represents a right to receive 0.5 or more of a Share, to one Share and shall extinguish any such fraction of an
Option, which represents a right to receive less than 0.5 of a Share without issuing any Shares.
8.4. Term. No full or partial
exercise of an Option shall be carried out following the Expiration Date of such Option.
9. Termination of Employment or
Engagement.
9.1. Unvested Options. Unless otherwise determined by the Board, in the case of Termination, any Option or portion
thereof that was not vested as of the Termination Date shall immediately expire on the Termination Date.
9.2. Vested Options.
9.2.1. Termination other than for Cause.
9.2.1.1. Unless otherwise determined by the Board, in the case of Termination other than for Cause, any Option or portion thereof that is
vested as of the Termination Date may be exercised but only within such period (subject, however, to the provisions of section 12 below concerning early expiration or other treatment upon certain events) of time ending on the earlier of
(i) ninety (90) days following the Termination Date, or (ii) the Expiration Date, but only to the extent to which such Option was exercisable at the time of the Termination Date. If, after the Termination Date, the Participant does not
exercise his or her Option within the time specified above or in the Option Agreement, the Option shall expire.
9.2.1.2. Unless otherwise
determined by the Board, in the event of (i) Termination as a result of the Participant’s death or disability or (ii) the Participant dies within the period stated in section 9.2.1.1, then the Option may be exercised (to the extent
exercisable as of the date of death) by the Participant in the event of disability, the Participant’s legal guardian the Participant’s estate, or by a person who acquired the right to exercise the Option by bequest or inheritance (the
“Assignees”), but only within the period (subject, however, to the provisions of section 12 below concerning early expiration or other treatment upon certain events) ending on the earlier of (1) the date twelve
(12) months following the date of death or the Termination Date due to disability (as the case may be) (or such longer or shorter period specified in the Option Agreement) or (2) the Expiration Date. If, after death or termination due to
disability (as the case may be), the Option is not exercised within the time specified herein, the Option shall expire. The Transfer of Options to any Assignee shall he subject to the provision of a written notice to the Company and to the execution
by the Assignee of any documents required by the Company. All of the terms of any Option, whether in this Plan, the Option Agreement and/or any other document in respect of such Option, shall be binding upon the Assignees.
9.2.1.3. If the exercise of an Option following the Termination Date or death would be prohibited at any time solely because the issuance of
Shares would violate requirements of any Applicable Law, then the Option shall expire: (i) in the event of a Termination - at the end of a period of ninety (90) days in the aggregate, or (ii) in the event of death - at the end of a
period of twelve (12) months in the aggregate, during which the exercise of the Option would not be in violation of such requirements.
10
9.2.1.4. It is clarified that during such periods following the Termination Date the
Participant’s entitlement to Options shall not continue to vest.
9.2.1.5. The Board shall have the sole authority to extend the
exercise periods detailed in sections 9.2.1.1 - 9.2.1.3 above at its sole discretion.
9.2.2. Termination for Cause. If a
Participant’s employment or engagement with the Company is terminated for Cause, any Option or portion thereof that has not been exercised as of the Termination Date shall immediately expire on the Termination Date.
9.3. No Participant shall be entitled to claim against the Company that he or she was prevented from continuing to vest Options as of the
Termination Date. Such Participant shall not be entitled to any compensation in respect of the Options which would have vested in his favor had such Participant’s employment or engagement with the Company not been terminated.
10. No Right to Employment, Service, Options or Shares. The grant of an Option, the vesting of any Option or the issuance of a Share
under the Plan shall impose no obligation on the Company or an Affiliate to continue the employment of any Employee or the engagement with any Consultant and shall not lessen or affect the Company’s or an Affiliate’s right to terminate
the employment or service relationship of such Participant at any time and/or for any or no reason with or without Cause, even if such Termination is immediately prior to the vesting of any Option. No Participant or other person shall have any claim
to be granted any Options or to the vesting of any Options, whether expired immediately following grant or prior to vesting. There is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Options and the terms and
conditions of Options and the Board’s determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated).
Nothing contained in the Plan shall prevent the Company from adopting, adjusting or continuing in effect compensation arrangements, which may,
but need not, provide for the grant of Options or Shares.
11. Trust
11.1. Approved Options and any Shares issued in connection with such Approved Options shall be held by the Trustee for the benefit of the
Participant, in accordance with the provisions of Section 102 in the “capital gain tax route”. Any grant and any exercise of an Option or sale or transfer of a Share shall be notified to the Trustee.
11.2. The validity of any order given to the Trustee by a Participant shall be subject to approval or such order by the Company. The Company
does not undertake to approve orders given by any Participant to the Trustee within any period of time.
11.3. Subject to the provisions of
this Plan, the Approved Options and any Shares issued in connection with such Approved Options shall not be released from the control of the Trustee nor shall they be Transferred unless the Company and the Trustee are satisfied that the full amounts
of Tax due by the applicable Participant have been paid or will be paid.
11.4. Subject to the provisions of Section 102, a
Participant shall not Transfer or release from the control of the Trustee any Approved Option or any Share issued in connection with such Approved Options, until the lapse of the Holding Period. Notwithstanding the above, if any such release or
Transfer occurs during the Holding Period, the sanctions under Section 102 shall apply to and shall be borne by such Participant.
11
11.5. As long as the Approved Options and any Shares issued in connection with such Approved
Options are held by the Trustee for the benefit of the Participant, all rights of the Participant over the Approved Options and Shares cannot be Transferred other than by will or laws of descent and distribution.
11.6. Without derogating from the aforementioned, the Board shall have the authority to determine the specific procedures and conditions of the
trusteeship with the Trustee in a separate agreement between the Company and the Trustee, all subject to Section 102.
11.7. Should
the Approved Options or any Shares issued in connection with such Approved Options be transferred by power of a last will or under laws of decent, the provisions of Section 102 shall apply to the legal heirs or transferees by law of the
deceased Participant.
11.8. Approved Options that do not comply with the requirements of Section 102 shall be considered Non-Approved 102 Options or Options subject to tax under Section 3(i) of the Ordinance.
12.
Adjustments to the Shares subject to the Plan
12.1. Adjustment Due to Change in Capital. If the ordinary shares of the
Company shall at any time be changed or exchanged by distribution of a share dividend (bonus shares), share split, combination or exchange of shares, recapitalization, or any other like event by or of the Company, and as often as the same shall
occur, then the number and class of the Shares underlying the Options subject to the Plan and the Exercise Price of the Options shall be appropriately and equitably adjusted so as to maintain through such an event the proportionate equity portion
represented by the Options and the total Exercise Price of the Options, provided, however, that no adjustment shall be made by reason of the distribution of subscription rights (rights offering) on outstanding ordinary shares or other
issuance of shares by the Company. Fractions of shares shall be dealt with in accordance with the provisions of section 8.3 above. Except as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into
shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares underlying an Option.
12.2. Adjustment Due to a Structural Change. In the event of a Structural Change, the Shares underlying the Options subject to the Plan
shall be exchanged or converted into shares of the Company or Successor Company in accordance with the exchange effectuated in relation to the ordinary shares of the Company, and the Exercise Price and quantity of shares underlying the Options shall
be adjusted in accordance with the terms of the Structural Change. The adjustments required shall be determined in good faith solely by the Board and shall be subject to the receipt of any approval required, including any tax ruling, if necessary.
12.3. Adjustment Due to a Spin-Off Transaction. In the event of a Spin-Off Transaction, the Board may determine that the holders of Options shall be entitled to receive equity in the new company formed as a result of the Spin-Off
Transaction, in accordance with equity granted to the ordinary shareholders of the Company within the Spin-Off Transaction, taking into account the terms of the Options, including the vesting schedule and
Exercise Price. The determination regarding the Participant’s entitlement within the scope of a Spin-Off Transaction shall be in the sole and absolute discretion of the Board.
12
12.4. M&A Transaction.
12.4.1 Without derogating from the Board’s general power under the Plan, in the event of any M&A Transaction, the Board shall be
entitled (but not obliged), at its sole discretion to determine any of the following: (i) provide for an assumption or exchange of Options and/or Shares for options and/or shares and/or other securities or rights of the Successor Company
or parent or affiliate thereof; and/or (ii) provide for an exchange of Options or Shares for a monetary compensation (including for avoidance of doubt a cash-out of the Options for the net value); and/or
(iii) determine that all unvested Options and un-exercised vested Options shall expire on the date of such M&A Transaction; and/or (iv) determine that the exchange, assumption, conversion or
purchase detailed above will be made subject to any payment or escrow arrangement, or any other arrangement determined within the scope of the M&A Transaction in relation to the ordinary shares of the Company. In the case of assumption and/or
substitution of Options, appropriate adjustments shall be made so as to reflect such action and all other terms and conditions of the Option Agreements shall remain substantially unchanged, including but not limited to the vesting schedule, all
subject to the determination of the Board, which determination shall be at its sole discretion and final. The grant of any substitutes for the Options and/or Shares to Participants further to a M&A Transaction, as provided in this section, shall
be considered as full compliance with the terms of this Plan. The value of the exchanged Options and/or Shares pursuant to this section 12.4 shall be determined in good faith solely by the Board, based among others on the Fair Market Value, and its
decision shall be final and binding on all the Participants.
Unless determined otherwise by the Board of Directors, and without
derogating from the aforementioned, any Options not assumed or exchanged for options and/or shares and/or other securities or rights or not cashed-out, shall expire immediately prior to the consummation of the
M&A Transaction.
12.4.2 For the purposes of this section 12.4, the mechanism for determining the assumption or exchange as
aforementioned shall be as may be agreed upon between the Board and the Successor Company.
12.4.3 Without derogating from the above, in
the event of a M&A Transaction the Board shall be entitled, at its sole discretion, to require the Participants to exercise all vested Options within a set time period and sell all of their Shares on the same terms and conditions as applicable
to the other shareholders selling their Company’s ordinary shares as part of the M&A Transaction. Each Participant acknowledges and agrees that the Board shall be entitled to authorize any one of its members to sign share transfer deeds in
customary form in respect of the Shares held by such Participant and that such share transfer deed shall bind the Participant.
12.4.4
Despite the aforementioned, if and when the method of treatment of Options within the scope of an M&A Transaction determined according to the above will in the sole opinion of the Board prevent the M&A Transaction from occurring, or
materially risk the M&A Transaction, the Board may determine different treatment for different Options held by Participants such that not all Options will be treated equally within the scope of the M&A Transaction.
12.4.5 In the event in which the exercise price of the Options is higher than the per-share value of
the shares of the Company in such an M&A Transaction (“out-of-the-money options”), the Board shall be entitled to
cancel and terminate such Options effective upon consummation of the M&A Transaction without consideration.
12.4.6 In the event in
which the Options shall be cancelled upon the M&A Transaction, the Company shall provide notice to such Participants in such manner as notice is provided regarding the M&A Transaction to any other shareholders of the Company not represented
in the Board. Such notice shall be sent to the last known address of the Participants according to the records of the Company. The Company shall not be under any obligation to ensure that such notice was actually received by the Participants.
13
12.5. Liquidation. In the event of the proposed dissolution or liquidation of the
Company, all Options will expire immediately prior to the consummation of such proposed action, unless otherwise provided by the Board.
12.6. The Participants shall execute any documents required by the Company or any Successor Company or parent of affiliate thereof in order to
affect any of the actions determined within the scope of this section 12. The failure to execute any such document may cause the expiration and cancellation or any Option held by such Participant, as determined by the Board in its sole and absolute
discretion.
12.7. Any adjustment according to this section shall be subject to the receipt of a tax ruling or approval from the tax
authorities, if and as necessary.
13. Taxes and Withholding Tax
13.1. Approved Options and Non-Approved 102 Options shall be taxed in accordance with Section 102. For
the avoidance of doubt it is clarified that any Option granted to a Consultant or a Controlling Shareholder or any Option granted to a Participant who is not an Israeli tax resident, shall not be subject to the provisions of Section 102 and
shall be taxed in accordance with Applicable Law.
13.2. Any Tax imposed in respect of the Options and/or Shares, including, but not
limited to, in respect of the grant of Options, and/or the exercise of Options into Shares, and/or the Transfer, waiver, or expiration of Options and/or Shares, and/or the sale of Shares, shall be borne solely by the Participants, and in the event
of death by their heirs or transferees. The Company, the Affiliates, the Trustee (if applicable) or anyone on their behalf shall not be required to bear the aforementioned Taxes, directly or indirectly, nor shall they be required to gross up such
Tax in the Participants’ salaries or remuneration and the Employee shall indemnify the Company, any applicable affiliated company and the trustee, or any one thereof, and hold them harmless from and against any and all liability in relation
with any such tax and/or other mandatory payments or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld any such tax and/or other mandatory payments from any payment made
to the Employee, unless said liability is a result of default by the Company. The applicable Tax shall be deducted from the precedes of sale of Shares or shall be paid to the Company, an Affiliate or the Trustee (if applicable) by the Participants.
Without derogating from the aforementioned, the Company, an Affiliate and the Trustee (if applicable) shall be entitled to withhold Taxes according to the requirements of any Applicable Laws, rules, and regulations, and to deduct any Taxes from
payments otherwise due to the Participant from the Company or an Affiliate (if applicable).
13.3. The Company’s or Trustee’s
(if applicable) obligation to deliver Shares upon exercise of an Option or to sell or transfer Shares is subject to payment (or provision for payment satisfactory to the Board and the Trustee (if applicable)) by the Participant of all Taxes due by
him under any Applicable Law.
13.4. The Participants shall indemnify the Company and/or the applicable Affiliate and/or the Trustee (if
applicable), immediately upon request, for any Tax (including interest and/or fines of any type and/or linkage differentials in respect of Tax and/or withheld Tax) for which the Participant is liable under any Applicable Law or under the Plan, and
which was paid by the Company, the Affiliate or the Trustee (if applicable), or which the Company, the Affiliate or the Trustee (if applicable) are required to pay. The Company, the Affiliate and the Trustee (if applicable) may exercise such
indemnification by deducting the amount subject to indemnification from the Participants’ salaries or remunerations.
14
13.5. In respect to Non-Approved 102 Options, if
there occurs a Termination of the Participant’s service to or employment with the Company or an Affiliate, the Participant shall extend to the Company or the applicable Affiliate a security or guarantee for the payment of Tax due in respect of
such Option as required under Section 102.
13.6. For avoidance of doubt it is clarified that the tax treatment of any Option granted under
this Plan is not guaranteed and although Options may be granted under a certain tax route, they may become subject to a different tax route in the future.
14. Registration of the Shares on a Stock Exchange
14.1. Should reorganization or certain other arrangements regarding the Company’s share capital be necessary prior to the registration of
the Company’s ordinary shares or their respective depositary receipts on a Stock Exchange, such arrangements or reorganization may be also carried out in respect of the Participants and their Options and/or Shares.
14.2. The Participant acknowledges that in the event that the Company’s ordinary shares or their respective depositary receipts shall be
registered for trading in any Stock Exchange, or in the event of a private offering of shares, the Participant’s rights to exercise their Options or sell the Shares may be subject to certain limitations (including a lock-up period), as will be requested by the Company or its underwriters, and the Participant unconditionally agrees and accepts any such limitations.
14.3. The Company does not undertake to cause the ordinary shares or the Shares to be listed on a Stock Exchange, or that the registration of
the ordinary shares or the Shares for trade, if at all, shall take place within a certain period of time.
15. The Rights Attached to
the Shares
15.1. Equal Rights. The Shares constitute part of the ordinary shares of the Company, and they shall have equal
rights for all intents and purposes as the rights attached to the ordinary shares of the Company, subject to the provisions of this Plan and any Option Agreement. The Shares, being part of the ordinary shares of the Company, shall not be protected
against dilution in any manner whatsoever, unless otherwise determined by the Board. It is hereby clarified that the Shares shall not constitute a separate class of shares, but shall be an integral part of the Company’s ordinary shares.
Any change of the Company’s Articles of Association or any other incorporation document, which may change the rights attached to the
Company’s ordinary shares, shall also apply to the Shares, and the provisions hereof shall apply with the necessary modifications arising from any such change.
The grant of Options and issuance of Shares under this Plan shall not restrict the Company in any way regarding future creation of additional
and/or other classes of shares, including classes of shares, which may in any manner be preferred over the currently existing ordinary shares which are offered to Participants under this Plan. Subject to section 12.1 above, the grant of Options and
Shares under this Plan shall not entitle any Participant to receive any compensation in the event of any change of the Company’s capital.
15
15.2. Dividend Rights. No Participant shall have any rights to receive dividends in
respect of the Shares underlying any outstanding Options, until such Options are exercised into Shares and these Shares are issued to the Participant or the Trustee. Following the issuance of such Shares by the Company, such Shares will entitle the
Participant to receive any dividend, to which other holders of ordinary shares in the Company are entitled.
15.3. Transfer and Sale of
Shares. Shares shall not be sold or transferred, unless as per the Articles of Association of the Company.
15.4. Bring Along.
For the avoidance of doubt it is clarified that as part of the ordinary shares of the Company, Shares issued upon exercise of Options or in connection thereto shall be subject to any bring-along provision included in the incorporation documents of
the Company or any shareholders agreement or similar agreement(s) by which some or all holders of ordinary shares of the Company are bound.
15.5. Voting Rights. No Participant shall have any rights to vote in the Company’s meetings in respect of underlying Shares, until
such Shares are issued to the Participant or the Trustee. Following the issuance of such Shares by the Company, the Participant shall have the same voting rights as other holders of ordinary shares in the Company. Notwithstanding the aforesaid, and
unless determined otherwise by the Board, as long as the Company’s ordinary shares are not traded on a Stock Exchange, any Shares issued upon the exercise of an Option shall be voted by an irrevocable proxy, such proxy to be assigned to the
person or persons designated by the Board. The Participants will be required, as a condition to the receipt of the Options granted pursuant to this Plan and as a condition to the issuance of any Shares, to sign such a proxy. Unless otherwise
determined by the Board, the proxy will be transferred upon any transfer of Shares unless such transfer occurs upon a M&A Transaction or upon or after an IPO of the Company.
16. Changes to the Plan. The Board shall be entitled, from time to time, to update and/or change the terms of this Plan, in whole or in
part, at its sole discretion, provided that in the Board’s opinion such a change shall not materially derogate from the rights attached to the Options and/or Shares already granted under this Plan, unless mutually agreed otherwise between the
Participant and the Company. The Board shall be entitled to terminate this Plan at any time, provided that such termination shall not materially affect the rights of Participants, to whom Options have already been granted.
17. Effective Date and Duration of the Plan
17.1. The Plan shall be effective as of the day it was adopted by the Board and shall terminate at the end of ten (10) years from such day
of adoption.
17.2. The Company shall obtain the approval of the Company’s shareholders for the adoption of this Plan or for any
amendment to this Plan, if shareholders’ approval is necessary or desirable to comply with any Applicable Law, including without limitation the securities laws of jurisdictions applicable to Options granted to Participants under this Plan, or
if shareholders’ approval is required by any authority or by any governmental agency or by any national securities exchange, including without limitation the US Securities and Exchange Commission.
17.3. Termination of the Plan shall not affect the Board’s ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.
16
18. Successors and Assigns. The Plan and any Option granted thereafter shall be
binding on all successors and assignees of the Company and a Participant, including, without limitation, the estate of such Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or
representative of the Participant’s creditors.
19. Miscellaneous
19.1. Notices. Notices and requests regarding this Plan shall be sent in writing by registered mail or by courier to the addresses of
the Company and the Participant or by facsimile transmission (provided that written confirmation of receipt is provided) with a copy by mail, as follows: if to the Company: at its principal offices; if to the Participant - to the Participant’s
address, as registered in the Company’s registries. Such notices shall be deemed received at the addressee as follows: if sent by registered mail - within three (3) business days following their deposit for mailing at a post office
located in the country of addressee, or seven (7) business days following their deposit for mailing at a post office located outside the country of addressee, and if hand-delivered or sent by facsimile with confirmation of receipt - on the day
of delivery (or refusal to receive).
19.2. This Plan (together with the applicable Option Agreement(s) entered into with any Participant)
constitutes the entire agreement and understanding between the Company and such Participant in connection with the grant of Options to the Participant. Any representation and/or promise and/or undertaking made and/or given by the Company or by
whosoever on its behalf, which has not been explicitly expressed herein or in an Option Agreement, shall have no force and effect.
20.
Governing Law. The Plan shall be governed by, construed and enforced in accordance with the laws of the State of Israel, without giving effect to principles of conflicts of law. The competent courts of Jerusalem shall have exclusive
jurisdiction to hear all disputes arising in connection with this Plan.
* * * * *
17
EX-99.2
EX-99.2
Filename: d230933dex992.htm · Sequence: 14
EX-99.2
Exhibit 99.2
XTEND REALITY EXPANSION LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands, except share and per share data
As of
June 30,
2026
December 31,
2025
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
34,808
$
26,496
Short-term restricted deposit
680
642
Trade receivables
13,846
8,573
Contract assets
404
384
Other accounts receivable and prepaid expenses
7,663
2,402
Inventory
9,795
4,621
Total current assets
67,196
43,118
Non-current assets:
Other long-term assets
256
176
Operating lease
right-of-use assets
3,024
4,420
Property and equipment, net
1,750
1,250
Intangible assets, net
8,595
9,340
Goodwill
12,965
13,311
Total non-current assets
26,590
28,497
Total assets
$
93,786
$
71,615
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade payables
$
2,302
$
1,387
Accrued liabilities and other payables
9,029
8,048
Short-term operating lease liabilities
1,485
1,548
Deferred revenues
4,940
1,940
Total current liabilities
17,756
12,923
Non-current liabilities:
Holdback liability
—
2,973
Long-term operating lease liabilities
1,616
2,775
Deferred tax liability
1,464
1,587
SAFE liability
35,027
—
Warrants liability
1,510
1,057
Total non-current liabilities
39,617
8,392
Total liabilities
57,373
21,315
Commitments and contingencies (Note 8)
Convertible Preferred Shares
Preferred Shares — of NIS 0.01 par value, Authorized: 123,640,377 on June 30, 2026, and
117,720,975 on December 31, 2025, respectively. Issued and outstanding: 118,742,019 on June 30, 2026, and 117,720,975 on December 31, 2025, respectively
137,762
135,309
Total Convertible Preferred Shares
137,762
135,309
Shareholders’ Deficit:
Ordinary shares of NIS 0.01 par value, Authorized: 226,359,623 on June 30, 2026 and 78,354,454
on December 31, 2025. Issued and outstanding 17,645,106 on June 30, 2026, and 16,784,374 on December 31, 2025, respectively
53
48
Additional paid-in capital
7,334
3,932
Accumulated other comprehensive (loss) income
(258
)
125
Accumulated deficit
(108,478
)
(89,114
)
Total shareholders’ deficit
(101,349
)
(85,009
)
Total liabilities and equity
$
93,786
$
71,615
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial
statements.
F-1
XTEND REALITY EXPANSION LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
U.S. dollars in thousands, except share and per share data
Three months ended
June 30,
Six months ended
June 30,
2026
2025
2026
2025
Unaudited
Revenues
$
4,826
$
3,673
$
10,578
$
5,393
Cost of revenues
4,380
4,195
9,662
6,894
Gross profit (loss)
446
(522
)
916
(1,501
)
Operating expenses:
Research and development
4,643
2,064
8,798
4,071
Sales and marketing
3,627
2,294
6,688
3,968
General and administrative
7,032
1,167
11,466
2,075
Total operating expenses
15,302
5,525
26,952
10,114
Total operating loss
(14,856
)
(6,047
)
(26,036
)
(11,615
)
Financial (income) expenses, net
(7,065
)
4,200
(6,613
)
4,272
Loss before income tax expense
(7,791
)
(10,247
)
(19,423
)
(15,887
)
Income (benefit) tax expense
(20
)
9
(59
)
96
Net loss
$
(7,771
)
$
(10,256
)
$
(19,364
)
$
(15,983
)
Other comprehensive loss:
Adjustments arising from translating financial statements of foreign operations
$
(77
)
$
—
$
(383
)
$
—
Other comprehensive loss
$
(77
)
$
—
$
(383
)
$
—
Total comprehensive loss
$
(7,848
)
$
(10,256
)
$
(19,747
)
$
(15,983
)
Net loss per share, basic and diluted
$
(0.46
)
$
(0.86
)
$
(1.16
)
$
(1.35
)
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial
statements.
F-2
XTEND REALITY EXPANSION LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES
AND SHAREHOLDERS’ DEFICIT
U.S. dollars in thousands, except share and per share data
Convertible Preferred
Shares
Ordinary Shares
Shares
Amount
Shares
Amount
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
deficit
Total
Shareholders’
Deficit
Balance as of March 31, 2026 (unaudited)
117,720,975
$
135,551
16,797,394
$
48
$
4,992
$
(181
)
$
(100,707
)
$
(95,848
)
Net loss
—
—
—
—
—
—
(7,771
)
(7,771
)
Foreign currency translation adjustments
—
—
—
—
—
(77
)
—
(77
)
Exercise of options
—
—
12,312
—
5
—
—
5
Share based compensation
—
—
—
—
1,033
—
—
1,033
Deemed dividend preferred A shares
—
244
—
—
(244
)
—
—
(244
)
Issuance of holdback shares in connection with business combination
1,021,044
1,967
835,400
5
1,548
—
—
1,553
Balance as of June 30, 2026 (unaudited)
118,742,019
$
137,762
17,645,106
$
53
$
7,334
$
(258
)
$
(108,478
)
$
(101,349
)
Convertible Preferred
Shares
Ordinary Shares
Shares
Amount
Shares
Amount
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
deficit
Total
Shareholders’
Deficit
Balance as of March 31, 2025 (unaudited)
75,921,039
$
80,065
12,203,866
$
34
$
—
$
—
$
(68,067
)
$
(68,033
)
Net loss
—
—
—
—
—
—
(10,256
)
(10,256
)
Exercise of options
—
—
146,750
—
6
—
—
6
Share based compensation
—
—
—
—
183
—
—
183
Deemed dividend preferred A shares
—
244
—
—
(189
)
—
(55
)
(244
)
Balance as of June 30, 2025 (unaudited)
75,921,039
$
80,309
12,350,616
$
34
$
—
$
—
$
(78,378
)
$
(78,344
)
F-3
XTEND REALITY EXPANSION LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES
AND SHAREHOLDERS’ DEFICIT
U.S. dollars in thousands, except share and per share data
Convertible Preferred
Shares
Ordinary Shares
Shares
Amount
Shares
Amount
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
deficit
Total
Shareholders’
Deficit
Balance as of December 31, 2025
117,720,975
$
135,309
16,784,374
$
48
$
3,932
$
125
$
(89,114
)
$
(85,009
)
Net loss
—
—
—
—
—
—
(19,364
)
(19,364
)
Foreign currency translation adjustments
—
—
—
—
—
(383
)
—
(383
)
Exercise of options
25,332
—
11
—
—
11
Share based compensation
—
—
—
—
2,089
—
—
2,089
Deemed dividend preferred A shares
—
486
—
—
(486
)
—
—
(486
)
Founder’s loan forgiveness
—
—
—
—
240
—
—
240
Issuance of holdback shares in connection with business combination
1,021,044
1,967
835,400
5
1,548
—
—
1,553
Balance as of June 30, 2026 (unaudited)
118,742,019
$
137,762
17,645,106
$
53
$
7,334
$
(258
)
$
(108,478
)
$
(101,349
)
Convertible Preferred
Shares
Ordinary Shares
Shares
Amount
Shares
Amount
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
deficit
Total
Shareholders’
Deficit
Balance as of December 31, 2024
71,245,072
$
75,823
12,183,971
$
34
$
—
—
$
(62,286
)
$
(62,252
)
Net loss
—
—
—
—
—
—
(15,983
)
(15,983
)
Share based compensation
—
—
—
—
362
—
—
362
Issuance of series B-2 preferred shares, net of issuance
costs
4,675,967
4,000
—
—
—
—
—
—
Exercise of options
—
—
166,645
—
15
—
—
15
Deemed dividend preferred A shares
—
486
—
—
(377
)
—
(109
)
(486
)
Balance as of June 30, 2025 (unaudited)
75,921,039
$
80,309
12,350,616
$
34
$
—
$
—
$
(78,378
)
$
(78,344
)
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial
statements.
F-4
XTEND REALITY EXPANSION LTD.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands, except share and per share data
Six months ended
June 30,
2026
2025
Unaudited
Cash Flows from Operating Activities:
Net loss
$
(19,364
)
$
(15,983
)
Reconciliation of net loss to net cash provided by operating activities:
Non-cash financial expenses
21
112
Depreciation and amortization
833
325
Founder’s loan forgiveness
240
—
Share-based compensation
2,089
362
Remeasurement of warrants liabilities
343
4,377
Remeasurement of SAFE liability
(8,396
)
—
Remeasurement of business combination holdback liability
547
—
Net changes in operating assets and liabilities, net of amounts acquired:
Trade receivable
(5,278
)
8,573
Contract assets
(20
)
(909
)
Other accounts receivables and prepaid expenses
(5,183
)
(2,677
)
Long term assets
(80
)
11
Inventory
(5,227
)
1,815
Trade payables
926
(1,304
)
Accrued expenses and other current liabilities
1,124
(395
)
Operating lease
right-of-use assets
1,387
729
Operating lease liabilities
(1,208
)
(463
)
Deferred income taxes, net
(79
)
—
Interest paid
—
94
Deferred revenues
3,000
(2,746
)
Net cash used in operating activities
$
(34,325
)
$
(8,079
)
Cash Flows from Investing Activities:
Investment in short-term restricted deposits
(74
)
(2,566
)
Proceeds from short-term restricted deposits
457
2,478
Purchase of property and equipment, net
(847
)
(233
)
Net cash used in investing activities
$
(464
)
$
(321
)
Cash Flows from Financing Activities:
Issuance of Preferred Shares, net
—
4,000
Exercise of options
11
15
Proceeds from SAFE
43,423
—
Net cash provided by financing activities
$
43,434
$
4,015
Effect of exchange rate changes on cash and cash equivalents
87
(112
)
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
8,645
(4,385
)
Cash and cash equivalents and restricted cash at beginning of period
26,496
9,717
Cash, Cash Equivalents and Restricted cash at End of Period
$
35,228
$
5,220
Supplemental Disclosure
of Non-Cash Activities:
Settlement of holdback liability in connection with business combination
$
3,520
Issuance of warrants
$
110
Supplementary Cash Flow Information:
Cash paid for:
Income taxes, net of refunds
$
—
$
87
Interest Paid
$
—
$
94
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents
$
34,808
$
5,220
Restricted cash included in short-term restricted deposits
420
—
Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statements
of Cash Flows
$
35,228
$
5,220
F-5
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 1 - OVERVIEW
a.
Xtend Reality Expansion Ltd. (together with its subsidiaries, the “Company” or “Xtend”)
was incorporated in July 2018 under the laws of the State of Israel. The Company is a leader in software systems and artificial intelligence-powered robotics, deployed in high-threat, complex operational environments where human exposure carries
significant risk. The Company develops integrated solutions that enable operators to interact with drones and other unmanned systems with precision in dynamic and complex physical environments.
Powered by its proprietary XTEND Operating System (“XOS”), the Company’s integrated software and advanced robotic hardware
solutions are designed to provide autonomy at the edge. The Company operates across defense, law enforcement and private security missions through a platform of robots, drones and robotic subsystems. Its open architecture platform facilitates
scalability and interoperability across partners and third-party applications, supporting a wide range of operational use cases and deployment environments.
b.
As of June 30, 2026, the Company operates through wholly owned subsidiaries located in Israel, the United
States, Singapore, Malaysia, Latvia and the United Kingdom. These subsidiaries support the Company’s global operations, including research and development, manufacturing, sales and business development activities.
c.
For the six months ended June 30, 2026, the Company incurred a net loss of $19,364 and had an accumulated
deficit of $108,478 as of June 30, 2026. Net cash used in operating activities for the six months ended June 30, 2026, was $34,325. As June 30, 2026, the Company’s cash and cash equivalents totaled $34,808. Based on its current
operating plan, existing cash resources, and contracted customer demand, the Company believes it has sufficient funds to support its operations for at least twelve months following the issuance of its interim condensed consolidated financial
statements for the six months ended June 30, 2026. The Company has generated revenue to date and maintains an order backlog and customer pipeline that supports continued revenue growth. However, the Company expects to incur net losses in the
near term, and the achievement of profitability is dependent on various factors, including continued growth in revenues, expansion of distribution channels, and the Company’s ability to manage its cost structure. Until the Company achieves
sustained profitability or positive cash flows from operations, it may continue to require additional funding. The Company intends to finance its future operations through a combination of cash on hand, current line of credit, loans, offerings of
equity or debt securities, and adjustments to operating expenses to align with available cash resources.
d.
On February 13, 2026, The Company entered into a definitive agreement and plan of merger (“the
Agreement” or the “Merger”) with JFB Construction Holdings, a Nevada corporation (“JFB”) and Xtend AI Robotics, Inc., a Delaware corporation (the “Parent”), pursuant to which a series of merger transactions
were effected resulting in the Parent becoming the publicly traded holding company of the combined group, and both the Company and JFB becoming wholly-owned subsidiaries of the Parent. Under the terms of the agreement, the Company issued shares to
the existing shareholders of the Company immediately prior to closing (the “Target shareholders”).
As a
result of the Merger, outstanding shares of JFB Class A and Class B common stock converted into one share of Parent common stock. Each share of JFB Series C preferred stock outstanding immediately prior to the merger converted into 3.676
shares of JFB Class A common stock, each of which then converted into the right to receive one share of Parent common stock, subject to certain limitations. All outstanding JFB common stock purchase warrants were exercised immediately prior to
the Merger, with the underlying shares converting into one share of Parent common stock. Ownership of Parent common stock by holders of JFB Series C preferred shares and warrants is capped at 4.99%, with any excess consideration issued in the form
of pre-funded warrants subject to the same beneficial ownership limitation.
F-6
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
Following the Closing, Parent will issue additional shares of Parent common stock, to the
Target shareholders, on a pro rata basis as follows: (i) if the Company and its subsidiaries achieve revenues of at least $75,000 for the fiscal year ending December 31, 2026, the Target shareholders will receive their pro rata share of
10,000,000 shares of Parent common stock; and (ii) if the Company and its subsidiaries achieve revenues of at least $150,000 for the fiscal year ending December 31, 2027, the Target shareholders will receive their pro rata share of
10,000,000 shares of shares of Parent common stock. Eligibility for earnout consideration is determined separately for each fiscal year and is not cumulative.
The Merger is subject to customary closing conditions, including minimum cash requirements, and includes a termination fee of $15,000. Upon
closing, the Target shareholders are expected to assume control of the combined company and appoint the board of directors. As part of the Merger, the Company entered into Simple Agreements for Future Equity (“SAFE”) arrangements with
JFB (see to Note 10). For more details about the Closing, please refer to Note 18 “Subsequent Events”.
NOTE 2 - SIGNIFICANT ACCOUNTING
POLICIES
Basis of presentation of the financial statements
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
The unaudited interim condensed consolidated balance sheet as of June 30, 2026 was derived from the audited consolidated
financial statements as of that date, but does not include all of the disclosures, including certain notes required by GAAP on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared
in accordance with GAAP have been condensed. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for
the year ended December 31, 2025.
In management’s opinion, the unaudited interim condensed consolidated
financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair presentation of the Company’s
financial position as of June 30, 2026 and the Company’s interim condensed consolidated results of operations, shareholders’ equity for the three and six months ended June 30, 2026 and 2025, and cash flows for the six months
ended June 30, 2026 and 2025. The results of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year ending December 31, 2026 or any other future interim or annual
period.
F-7
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
Use of estimates
The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires
management to make estimates, judgments and assumptions that affect the amounts reported in the unaudited interim condensed consolidated financial statements and accompanying notes. The accounting estimates that require management’s subjective
judgments include, but are not limited to, those related to: (1) estimates used in applying the Company’s revenue recognition policies, (2) allowances for credit losses, (3) operating lease assets and liabilities, including the
incremental borrowing rate, (4) the useful lives of long-lived assets, (5) acquired intangible assets and goodwill (6) income taxes, including valuation allowance (7) assumptions used in the option pricing models to determine the
fair value of share-based compensation (8) the fair value of financial assets and liabilities (9) impairment of long-lived assets and goodwill. The Company evaluates its estimates and judgments on an ongoing basis and revises them when
necessary. Actual results may differ from the original or revised estimates.
Significant Accounting Policies
The Company’s significant accounting policies are discussed in Note 2, Significant Accounting Policies, in the
Company’s notes to consolidated financial statements for the year ended December 31, 2025, which are included in the final prospectus to our Registration Statement on Form S-4 filed with the
Securities and Exchange Commission on August 11, 2026. There have been no significant changes to these policies during the six months ended June 30, 2026, except as noted herein.
Restricted cash and short-term restricted deposits
The Company’s restricted cash and short-term restricted deposits are used as collateral related to the Company’s
lease contracts and credit cards.
Concentrations of credit risks
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and
cash equivalents, and restricted cash, short-term restricted deposit, trade receivables and contract assets.
As of
June 30, 2026 and December 31, 2025, the majority of the Company’s cash and cash equivalents and restricted cash, short-term restricted deposit are invested in dollars with major banks in Israel and the United States. Generally,
these cash and cash equivalents may be redeemed upon demand and therefore, management believes that they bear low risk.
Trade receivables and contract assets of the Company are mainly derived from sales to major customers located in the United
States, Israel, Europe and Asia. The Company performs ongoing credit evaluations of its customers and obtains letters of credit and bank guarantees for certain receivables.
The Company estimates expected credit losses based upon its assessment of various factors, including historical experience, the
age of the accounts receivable balances, the credit quality of its customers, current economic conditions and other factors. The allowance for credit losses was immaterial for as of June 30, 2026 and December 31, 2025.
As of June 30, 2026 the Company had four major customers with accounts receivable balances of more than 10% of total
accounts receivable, amounting to 77%. As of December 31, 2025 the Company had three major customers with accounts receivable balances of more than 10% of total accounts receivable, amounting to 70%.
F-8
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
Major customer (above 10%) data as a percentage of total trade receivables:
June 30,
2026
December 31,
2025
Unaudited
Customer A
33
%
39
%
Customer B
18
%
—
Customer C
—
17
%
Customer D
15
%
—
Customer E
—
14
%
Customer F
11
%
—
Total
77
%
70
%
Fair value of financial instruments:
In accordance with ASC 820, “Fair Value Measurements and Disclosures”, fair value is an exit price, representing
the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market
participants would use in pricing an asset or a liability.
A three-tier fair value hierarchy is established as a basis for
considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:
Level 1
– Quoted prices in active markets for identical assets or liabilities.
Level 2 – Inputs other than
Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market
data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs that are
supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The
carrying amounts of cash and cash equivalents, restricted cash, trade receivables, contract assets, other current assets, trade payables, accrued expenses and other current liabilities approximate their fair value due to the short-term maturity of
such instruments.
The Company’s warrant liability, holdback liability and SAFE liability were measured at fair value
using Level 3 unobservable inputs (see Note 12). The Company utilized a Black and sholes model for the initial and subsequent valuations of the SAFE liability and the warrant’s liability. The Company utilized the fair value of ordinary
shares and preferred shares in the subsequent valuation of the holdback liability.
Cost to Obtain a Contract
The Company capitalizes certain sales commission as costs of obtaining a contract when they are incremental and if they are
expected to be recovered. Capitalized contract costs are amortized on a systematic basis that is consistent with the transfer to the customer of goods or services to which the asset relates. For costs that the Company would have capitalized and
amortized over one year or less, the Company has elected to apply the practical expedient and expense these contract costs as incurred. As of June 30, 2026, capitalized contract costs were immaterial.
F-9
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
Impairment of long-lived assets
The Company assesses the recoverability of its long-lived assets, including finite-lived intangible assets and ROU assets,
whenever events or changes in circumstances indicate that their carrying value may not be recoverable, in accordance with ASC 360, “Property, Plant and Equipment”. The determination of whether any impairment exists includes a comparison
of estimated undiscounted future cash flows anticipated to be generated over the remaining life of an asset or asset group to their net carrying amount. If such assets or asset group are impaired, the impairment loss to be recognized is measured by
the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. The Company did not record impairment charges during any of the periods presented.
Goodwill
Goodwill has been recorded in the Company’s financial statements as a result of acquisitions.
Goodwill represents the excess of the purchase price over the estimated fair value of net assets of a business acquired in a
business combination. Under ASC Topic 350, Intangibles—Goodwill and Other (“ASC 350”), goodwill is not amortized but rather is subject to impairment test at least annually. The Company elected to perform an annual
impairment test of goodwill during the fourth quarter, each year, or more frequently if events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is tested for impairment at the reporting unit level, by first
performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than it carrying amount. If the reporting unit does not pass the qualitative assessment, the Company carries out a
quantitative test for impairment of goodwill, by comparing the fair value of the reporting unit with the carrying amount of the reporting unit that includes goodwill. The Company may bypass the qualitative assessment and proceed directly to
performing the quantitative goodwill impairment test. The Company has determined that it has one operating segment and one reporting unit. The Company did not record goodwill impairment charges during any of the periods presented.
Warranty costs
The Company maintains reserves to cover the expected costs that could result from its assurance type warranty. The warranty
liability is in the form of product replacement and associated costs. Warranty reserves are based on the Company’s best estimate of such costs and are included in cost of revenues. The reserve for the related warranty expenses is based on
various factors including assumptions about the frequency of warranty claims on product failures, derived from results of field monitoring and analysis of the history of product field failures, and the Company’s reliability estimates.
Warranty provision requires management to estimate expected product failure rates, the cost of replacement units, and
associated remediation costs over the warranty period. These estimates are based on historical field return data, internal quality assurance testing, and reliability analyses. Due to the nature of the Company’s products and the environment in
which they operate, actual warranty costs may differ from the amounts estimated.
The provision rate is reviewed
periodically and adjusted as additional field performance data becomes available.
Warranty provisions amounted to $124 and
$182 as of June 30, 2026 (unaudited), and December 31, 2025, respectively.
F-10
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
Equity linked instruments
The Company accounts for equity-linked instruments (i.e., Warrants and SAFEs) as either equity-classified or
liability-classified instruments based on an assessment of the instrument’s specific terms and applicable authoritative guidance. The assessment considers whether the instruments are freestanding financial instruments, meet the definition of a
liability under ASC 480, and meet all of the requirements for equity classification under ASC 815-40, including whether the instruments are indexed to the Company’s own stock and whether the conditions
for equity classification are met. This assessment, which requires the use of professional judgment, is conducted at the time of issuance and as of each subsequent reporting period end date while the instruments are outstanding.
Instruments that meet all the criteria for equity classification are required to be recorded as a component of additional paid-in capital. Instruments that do not meet all the criteria for equity classification, are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value
at each balance sheet date thereafter. Changes in the estimated fair value are recognized in financial income (expenses) in the unaudited interim condensed consolidated statements of comprehensive loss.
Comprehensive income (loss)
The Company accounts for comprehensive income (loss) in accordance with ASC 220, “Comprehensive Income”. The
Company’s items of other comprehensive income (loss) relate to foreign currency translation adjustments.
The
following table shows the components of accumulated other comprehensive loss, as of June 30, 2026 :
Unaudited
Foreign
currency
translation
adjustments
Total
January 1, 2026
$
125
$
125
Change in foreign currency translation adjustment
(383
)
(383
)
June 30, 2026
$
(258
)
$
(258
)
F-11
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
Employee related benefits
Severance pay:
The Israeli Severance Pay Law-1963 (the “Severance Pay Law”) generally
requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain circumstances. The Company makes ongoing deposits into Israeli employees’ pension plans to fund their severance liabilities. Pursuant
to Section 14 of the Severance Pay Law, the Company’s deposits on behalf of its employees are made in lieu of its severance liability, and accordingly neither the severance liability nor the related deposits are recorded in the financial
statements.
Severance pay expenses for the six months ended June 30, 2026 (unaudited), and 2025 amounted to $650 and
$366, respectively.
401(k) profit sharing plans:
The Company has a 401(K) defined contribution plan covering certain employees in the U.S. The Company matches 100% of
employee contributions to the plan up to a limit of 4% of their eligible compensation. The Company’s matching contribution to the plan were immaterial for the six months ended June 30, 2026 and 2025 respectively.
Recently Adopted Accounting Pronouncement
In July 2025, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update
(“ASU”) 2025-05, “Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which provides a practical
expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue from Contracts with Customers. The practical expedient assumes that
current conditions as of the balance sheet date do not change for the remaining life of the assets. The Company adopted this guidance on January 1, 2026 on a prospective basis and elected the practical expedient. The adoption did not have a
material impact on its unaudited interim condensed consolidated financial statements.
F-12
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income
Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosure (Subtopic 220-40), Disaggregation of Income Statement Expenses”, which requires disclosure of disaggregated
information about certain expense captions presented in the Consolidated Statements of Operations as well as disclosure about selling expense. The ASU will be effective for the Company for annual periods beginning January 1, 2027 and interim
periods beginning January 1, 2028, with early adoption permitted and could be applied either prospectively or retrospectively. The Company is currently evaluating the impact of the adoption on its consolidated financial statement disclosure.
In September 2025, the FASB issued ASU 2025-06,
“Intangible—Goodwill and Other Internal-Use Software (Subtopic 350-40), Targeted Improvements to the Accounting for
Internal-Use Software”, which modernizes the accounting guidance for costs to develop software for internal use. It removes the previous development stage model and introduces a more judgment-based
approach. The ASU will be effective for the Company for the first quarter beginning January 1, 2028, with early adoption permitted. The Company is currently evaluating the impact of the adoption on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832):
“Accounting for Government Grants Received by Business Entities”. The update establishes guidance on the recognition, measurement, presentation, and disclosure of government grants, including grants related to an asset and grants related
to income. The ASU is effective for public business entities beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact of the adoption on its
consolidated financial statements.
F-13
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 3 – REVENUE
Contract Balances
Revenue recognized
during the three and six months ended June 30, 2026 (unaudited), which was included in deferred revenue (current) as of December 31, 2025 was $130 and $843. Revenue recognized during the three and six months ended June 30, 2025, which
was included in deferred revenue (current) as of December 31, 2024 was $2,212 and $2,681, respectively.
Remaining Performance Obligation
The Company’s remaining performance obligations (“RPO”) represents the aggregate amount of total contract transaction price
that is unsatisfied or partially unsatisfied at year’s end. Total RPO was $45,372 as of June 30, 2026. Of the total RPO as of June 30, 2026, we expect $36,786 will be recognized as revenue over the next 12 months, and $ 8,586
thereafter.
NOTE 4 – OTHER ACCOUNTS RECEIVABLE AND PREPAID EXPENSES
a.
Other accounts receivable and prepaid expenses is comprised of the following:
As of
June 30,
2026
December 31,
2025
Government institutions
$
1,083
$
353
Advances to suppliers
4,665
1,325
Prepaid expenses
1,336
515
Other current asset
579
209
$
7,663
$
2,402
F-14
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 5 – INVENTORIES
Inventories are comprised of the following:
As of
June 30,
2026
Unaudited
December 31,
2025
Raw materials (*)
$
7,201
$
2,908
Work in Process
1,666
113
Finished products
928
1,600
$
9,795
$
4,621
(*)
During the six months ended June 30, 2026, the Company recorded inventory
write-off of $167.
NOTE 6 – GOODWILL
The following table represents the changes in goodwill:
Goodwill
Balance as of December 31, 2025
$
13,311
Foreign currency translation adjustments
(346
)
Balance as of June 30, 2026 (unaudited)
$
12,965
NOTE 7 – ACCRUED LIABILITIES AND OTHER PAYABLE
a.
Accrued liabilities and other payables are comprised of the following:
June 30,
2026
December 31,
2025
Unaudited
Employees and related benefits
$
4,347
$
2,878
Claim payable
2,705
2,518
Government institutions
148
960
Warranty liability
124
182
Accrued expenses
1,633
1,422
Other current liabilities
72
88
9,029
8,048
F-15
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 8 – COMMITMENTS AND CONTINGENCIES
a.
Royalty commitments:
In 2019, the Company received approval for a research and development participation grant from the IIA. Since 2019, the Company obtained grants
from the IIA in an aggregating amount of $540 (the “Total Grant”) and in return undertook to pay royalties at a rate of 3% plus interest at TLBOR, out of any income generated through the technology developed as part of the project
supported by such grant. During 2024, the Company fully repaid the Total Grant and all related accrued interest.
Under the Israeli
Innovation Law, the transfer of know-how or other intellectual property rights developed with IIA funding outside of Israel requires the prior approval of the IIA. Approval may be granted only if the recipient
assumes all obligations under the Innovation Law, including restrictions on the transfer of IIA-funded know-how and limitations on transferring manufacturing outside of
Israel, as well as compliance with the applicable royalty payment obligations. In the event the Company transfers IIA-funded know-how, the Company would be required to
pay royalties to the IIA from the consideration received in such transaction. There can be no assurance that the IIA would approve any such transfer, if requested.
b.
Litigation:
In the ordinary course of business, the Company may be subject from time to time to various proceedings, lawsuits, disputes, or claims. The
Company investigates these claims as they arise and record a provision, as necessary. Provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and
events pertaining to a particular matter. Although claims are inherently unpredictable, the Company is currently not aware of any matters that, it believes would individually, or in the aggregate, have a material adverse effect on its business,
financial position, results of operations, or cash flow, except as noted below.
In July 2023, the Ministry of Defense of Ukraine
(“MoD”) issued a formal penalty notice against Atlas Aerospace SIA (“Atlas”), a subsidiary of the Company, in connection with delayed delivery of goods under a supply contract. Following partial payments made by Atlas, the
outstanding balance subject to debt recovery proceedings as of the reporting date is EUR 625 (approximately $712), excluding accrued interest and legal costs. In July 2026, the Company paid EUR 313 and expects to settle the remaining balance by the
end of 2026. The provision is presented within accrued expenses and other current liabilities in the Company’s interim condensed consolidated balance sheets.
c.
Claim payable
In 2022, the Ukrainian charitable organization “Come Back Alive” has asserted a claim against Atlas in connection with advance
payments made for products that were not fully delivered within the agreed timeframe. The claimed amount is approximately EUR 2,000. On May 8, 2023, the parties entered into a First Agreement on Mutual Settlement of Obligations in relation to
this dispute; however, due to financial constraints on the part of Atlas, that agreement was only partially fulfilled. As of June 30, 2026, the Company recorded a liability of $2,636, representing the amount payable under the agreement. The
liability is presented within accrued liabilities and other payables in the Company’s unaudited interim condensed consolidated balance sheets.
For other claims, where an unfavorable outcome is not considered probable or the amount of potential loss cannot be reasonably estimated, the
Company did not record a provision.
F-16
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 9 – WARRANTS LIABILITY
The following warrants were issued in connection with the Company’s equity financing activities and certain loan arrangements:
a.
SVB Warrants
On January 21, 2021, the Company entered into a series of agreements establishing a credit facility with a financial institution, Silicon
Valley Bank (“SVB”). In connection with the credit facility, the Company granted the lender a warrant to purchase the Company’s preferred shares, subject to the terms and conditions set forth in the related warrant agreement. As of
June 30, 2026, the warrants are exercisable into 226,326, Series A-2 preferred shares with an exercise price of $0.7479 per share.
b.
Union Warrants
On July 6, 2022, in connection with a $10 million SAFE agreement, the Company issued a warrant to Union Investments &
Development Ltd. (“Union”). The warrants are exercisable into B-1 preferred shares and include net-issue exercise, automatic exercise if in-the-money at expiration, comprehensive anti-dilution protections, and alignment with rights of other preferred shareholders upon conversion. In July 2025, Union warrants
were exercised into an aggregate of approximately 10,874,323 Series B-1 preferred shares, consisting of (i) 7,306,207 Series B-1 preferred shares issued for aggregate
cash proceeds of $5,000, and (ii) 3,568,116 Series B-1 preferred shares issued on a cashless basis.
c.
Bank Hapoalim Warrants:
On October 9, 2024, the Company issued a warrant to Bank Hapoalim B.M. (“Hapoalim” or “BHI”) in connection with a
financing facility agreement executed on the same date (see Note 11). The warrant entitles Hapoalim to purchase shares having the rights and preferences of the Company’s Preferred B-2 shares or, if
applicable, the securities issued in the Company’s subsequent qualifying equity financing round. The warrants are exercisable into 561,116, Series B-2 preferred shares with an exercise price of $0.855
per share.
On April 20, 2026, the Company issued a warrant to Hapoalim in connection with an Amended and Restated Facility Agreement
executed on the same date (see also Note 11). The warrant has an aggregate exercise amount of $175 and is exercisable immediately from the issue date, and an additional $175 exercise amount that is contingent upon the first drawdown under the second
tranche of the term loan. The warrant entitles the bank, at its sole discretion, to purchase either (i) Series B-3 preferred share of the Company at an exercise price of $1.3369 per share, or
(ii) shares of the most senior class issued in the Company’s next qualifying equity financing round at the lowest price per share paid in such round. In addition, the holder may choose a cashless exercise, whereby the exercise price is
settled through a reduction in the number of warrant shares issued rather than a cash payment. The number of shares issuable upon exercise is determined by dividing the applicable exercise amount by the exercise price. The warrant expires on the
tenth anniversary of its issue date, provided that if not exercised in full prior to expiration, it will be deemed automatically exercised on a cashless basis, unless waived by the bank. The exercise price and number of shares are subject to
customary anti-dilution adjustments for stock splits, dividends, reclassifications and future down-round financings.
Each warrant was
determined to be a freestanding financial instrument since each warrant is legally detachable and separately exercisable.
The warrants
were classified as liabilities, as they are exercisable into the Company’s contingently redeemable preferred shares and therefore embody an obligation that is indexed to an obligation to repurchase the Company’s shares by transferring
assets.
F-17
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
As the Company’s warrants were classified as liabilities, the warrants were initially
and subsequently measured at fair value, with changes in fair value recognized in earnings.
NOTE 10 – SAFE LIABILITY
In February 2026, in connection with the Merger with JFB, the Company entered into SAFE arrangements with JFB and several additional investors,
for aggregate proceeds of $43,423, of which $30,223 was invested by JFB. The SAFEs do not bear interest and have no maturity date.
Pursuant to their terms, the SAFEs will automatically convert immediately prior to the closing of the merger. For the investors other than JFB,
the SAFEs will convert into shares at a fixed price of $10.00 per share. The SAFE entered into with JFB will convert into ordinary shares at a price per share equal to the price defined in the merger agreement.
In addition, under the SAFE agreement with JFB, in the event that a JFB breach (as defined in the Agreement) which result in the termination of
the Agreement, an amount of $25,000 will be deducted from the SAFE value for purposes of determining the number of securities issued upon conversion of the SAFE.
In the event the mergers do not close, the SAFEs contain certain conversion triggers which provide for the conversion of the SAFE into
preferred shares in the event of: (i) an Equity Financing or (ii) either a change of control transaction, direct listing, or an initial public offering, which in each case is referred to as a Liquidity Event. In the event of a conversion,
the number of shares is calculated as either: (i) in the case of an Equity Financing, the purchase amount divided by the lower of (x) the price per share equal to the Pre-Money Valuation Cap (as
defined in the terms of the SAFE) divided by the Company Capitalization and (y) the price per share sold in the equity financing multiplied by 70%; (ii) in the case of a Liquidity Event, each SAFE holder will be entitled to receive (immediately
prior to or concurrent with the consummation of such Liquidity Event), a portion of the Proceeds equal to the greater of (x) the SAFE purchase amount or (y) the amount such holder would actually receive if the holder converted SAFEs at the
Pre-Money Valuation Cap immediately prior to such Liquidity Event. For purposes of the SAFEs, the Pre-Money Valuation Cap is equal to $1,000,000 and a 30% discount on
the price per share in a future qualifying equity financing.
Each SAFE was determined to be a freestanding financial instrument since each
SAFE is legally detachable and separately exercisable. Given that the SAFE could be settled in cash or a variable number of shares, the Company concluded that the SAFE should be accounted for as a liability, initially and subsequently measured at
fair value, with changes in fair value recognized in earnings.
F-18
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 11 – FINANCING ARRANGEMENTS
a.
Poalim Credit Line:
On October 9, 2024, the Company entered into a venture-lending facility with Hapoalim, under which Hapoalim agreed to make available a
credit facility of up to $8,000, drawable in two installments, subject to satisfaction of various conditions precedent, including completion of an equity financing of at least $14,000, delivery of U.S. subsidiary guarantees, deposit-account control
agreements, registration of security interests, and the provision of legal opinions. The Company was permitted to draw down the loans in U.S. Dollars or New Israeli Shekels during the access period which ended on the earlier of January 31,
2026, or an event of default.
As part of the facility, the Company issued a warrant to Hapoalim (see Note 9).
The Company concluded that the warrant issued to Hapoalim was effectively a commitment fee in exchange for access to the funds without current
intention to draw down the funds, and as a result capitalized and, amortized the deferred cost on a straight-line basis over the access period. The credit line expired undrawn in January 2026.
On April 20, 2026, the Company entered into an Amended and Restated Facility Agreement with Hapoalim providing aggregate credit facilities
of up to $25,000. The facilities consist of (i) a term loan of up to $15,000, available in two tranches of $8,000 and $7,000, drawable through January 31, 2027, bearing interest at Term SOFR plus 4.95% per annum, repayable in 36 equal
monthly installments with a final maturity of January 31, 2030, and (ii) a revolving credit line of up to $10,000 for purchase order and invoice financing. The facilities are secured by first-ranking floating and fixed charges over all of
the Company’s assets and intellectual property, as well as guarantees and pledges from the Company’s Israeli and U.S. subsidiaries. The Amended and Restated Facility Agreement contains customary covenants, including restrictions on
liens, distributions, change of control, and material changes to the Company’s business. As part of the facility, the Company issued a warrant to Hapoalim (see Note 9). As of June 30, 2026, no amounts were drawn under the facility. The
Company concluded that the warrant issued to the bank was effectively a commitment fee in exchange for access to the funds, and as a result capitalized and amortizes the deferred cost on a straight-line basis over the access period.
b.
Vopak Ventures Loan
On May 30, 2023, in connection with a business combination, the Company assumed a loan liability. As of December 31, 2024, the
outstanding balance of the loan amounted to $1,405. The loan carried fixed interest at a rate of 3% and was repayable in a single bullet payment, including accrued interest, on October 31, 2025. The Company’s interest expenses related to
the loan amounted to $17 in the six months ended June 30, 2025, respectively. The loan was repaid in full on October 31, 2025, and no amounts were outstanding as of December 31, 2025.
F-19
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 12 – FAIR VALUE MEASUREMENTS
The Company evaluates assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level to
classify them for each reporting period. The Company did not have any transfers between fair value measurements levels in the six months ended June 30, 2026, and the year ended December 31, 2025, respectively.
The Company measures the fair value of the warrants liability, the holdback liability and SAFE using valuation techniques that are classified
as Level 3 due to the use of unobservable inputs. Specifically, the Company applies a Black-Scholes simulation model for the warrants liability and SAFE, and utilizes the fair value of ordinary shares and preferred shares expected to be issued
in the valuation of the holdback liability.
June 30, 2026 (unaudited)
Fair value measurements using input type
Level 1
Level 2
Level 3
Total
Liabilities:
Warrants liability
—
—
1,510
1,510
SAFE
—
—
35,027
35,027
Total financial liabilities
$
—
$
—
$
36,537
$
36,537
December 31, 2025
Fair value measurements using input type
Level 1
Level 2
Level 3
Total
Liabilities:
Warrants liability
—
—
1,057
1,057
Hold-back liability
—
—
2,973
2,973
Total financial liabilities
$
—
$
—
$
4,030
$
4,030
The following table presents the changes in the fair value of warrants liability:
Warrants liability
Fair value as of December 31, 2025
$
1,057
Change in fair value
136
Fair value as of March 31, 2026
1,193
Issuance of warrant
110
Change in fair value
207
Fair value as of June 30, 2026
$
1,510
F-20
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
The key inputs into the Black-Scholes model for the warrants liability as of June 30,
2026 and December 31, 2025, were as follows:
Input
June 30,
2026
December 31,
2025
Risk-free interest rate
4.06
%
3.47
%
Expected term (years)
1.5
3
Expected volatility
81.2
%
79.2
%
The Company’s use of a Black-Scholes model required the use of subjective assumptions:
•
The risk-free interest rate assumption was interpolated based on constant maturity U.S. Treasury rates over a
term commensurate with the expected term of the warrants.
•
The expected term was based on the maturity of the warrants following the inception date.
•
The expected share volatility assumption was based on the implied volatility from a set of comparable publicly-
traded companies as determined based on size and proximity.
The following table presents the changes in the fair value
of SAFE:
SAFE
Fair value as of December 31, 2025
$
—
Issuance of SAFE
43,423
Changes in fair value
(1,108
)
Balance as of March 31, 2026
$
42,315
Changes in fair value
(7,288
)
Balance as of June 30, 2026
$
35,027
The key inputs into the Black-Scholes model for the SAFE as of June 30, 2026, were as follows:
June 30,
Input
2026
Risk-free interest rate
4.06
%
Expected term (years)
0.75
Expected volatility
78
%
The following table presents the changes in the fair value of Hold-back liabilities:
Hold-back
Fair value as of December 31, 2025
$
2,973
Change in fair value
652
Balance as of March 31, 2026
3,625
Changes in fair value
(105
)
Settlement
(3,520
)
Balance as of June 30, 2026
$
—
During the three months ended June 30, 2026, the Company settled the holdback liability recognized in
connection with the acquisition of Atlas. The Company issued ordinary shares and Series B-2 Preferred Shares to the former shareholders of Atlas.
F-21
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 13 – CONVERTIBLE PREFERRED SHARES
a.
Convertible preferred shares consisted of the following:
Authorized
Issued and Outstanding
Number of shares
Carrying amount
Liquidation Preference
As of
June 30,
2026
December 31,
2025
June 30,
2026
December 31,
2025
June 30,
2026
December 31,
2025
June 30,
2026
December 31,
2025
Unaudited
Unaudited
Unaudited
Unaudited
Share no par value:
Series Seed 1
3,328,245
3,328,245
3,328,245
3,328,245
2,916
2,916
2,180
2,180
Series Seed 2
2,081,110
2,081,110
2,081,110
2,081,110
1,811
1,811
975
975
Series Seed 3
1,851,147
1,851,147
1,851,147
1,851,147
1,614
1,614
970
970
Series A-1
8,144,594
8,144,594
8,144,594
8,144,594
21,056
20,724
19,932
19,599
Series A-2
4,300,193
4,073,867
4,073,867
4,073,867
5,641
5,551
5,364
5,274
Series A-3
1,940,257
1,940,257
1,940,257
1,940,257
4,013
3,949
3,816
3,752
Series B-1
35,734,255
34,962,872
34,962,872
34,962,872
33,696
33,696
26,759
26,759
Series B-2
39,923,901
36,199,184
37,220,228
36,199,184
34,008
32,041
26,015
26,015
Series B-3
26,336,675
25,139,699
25,139,699
25,139,699
33,007
33,007
33,663
33,663
123,640,377
117,720,975
118,742,019
117,720,975
$
137,762
$
135,309
$
119,674
$
119,187
F-22
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
The holders of the preferred shares have the following rights, preferences and privileges:
a.
Voting Rights—Each holder of convertible preferred shares is entitled to the number of votes equal
to the number of ordinary shares into which such shares of convertible preferred shares could be converted at the record date.
b.
Redemption—The convertible preferred shares do not contain any date-certain redemption features.
c.
Conversion Rights – Each preferred share is convertible, at the option of the holder, into
Ordinary Shares at any time after issuance. The number of Ordinary Shares into which each preferred share is convertible is determined based on the applicable original issue price and the conversion price of such preferred share, as adjusted from
time to time for customary anti-dilution and capital adjustments, including share splits, combinations, recapitalizations and similar events.
All preferred share are automatically convertible into Ordinary Shares upon the earlier of (i) the closing of a qualified initial public
offering (“Qualified IPO”), or (ii) the written consent of the holders of a majority of the Preferred Shares (Preferred Majority).
d.
Liquidation Preference and dividend distribution —In the event of any liquidation, deemed
liquidation (including certain change of control transactions) and/or any distribution of dividends by the Company any and all assets and funds available for distribution to the Shareholders or being received by or payable to the Shareholders in the
framework of a Deemed Liquidation and/ or a Distribution shall be distributed to the Shareholders in the following order and preference:
1.
Preferred B and A Shares (First Distribution):
Holders of preferred B and A Shares are entitled to receive an amount equal to the greater of: their Original Issue Price plus any unpaid
dividends, or the amount they would have received if their shares were converted into Ordinary Shares. If the assets available are insufficient, the distribution is made pro rata among these shareholders. Pari-passu between Series B and A alike.
2.
Preferred A Shares Coupon (Second Distribution):
After the first distribution, holders of Preferred A Shares receive an additional 4% per annum (up to 5 years) on their Original Issue Price
as a coupon, if applicable. If assets are insufficient, they are distributed pro rata among these shareholders. Pari-passu between Series A holders.
3.
Series Seed Preferred Shares (Third Distribution):
After payments to Preferred A shareholders (Second distribution), holders of Series Seed preferred share receive either: their Original Issue
Price plus unpaid dividends, or the amount they would have received if their shares were converted into Ordinary Shares. If assets are insufficient, this amount is distributed pro rata among these shareholders. Pari-passu between Series Seed
holders.
4.
Ordinary Shares (Fourth Distribution):
After all preferences are satisfied, any remaining assets are distributed to holders of Ordinary Shares on a pro rata basis, excluding holders
of Preferred B, A, and Series Seed shares who have already received their full entitlements
F-23
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
e.
Classification and measurement of Convertible Preferred Shares—The deemed liquidation preference
provisions of the convertible preferred shares are considered contingent redemption provisions that are not solely within the Company’s control. Accordingly, the convertible preferred shares have been presented outside of permanent equity in
the mezzanine section of the unaudited interim condensed consolidated balance sheets. As of June 30, 2026 and December 31, 2025, the Company did not adjust the carrying values of the shares to the redemption values of such shares since a
redemption was not probable.
As class A preferred shareholders are entitled to a paid
in-kind dividend that increases the liquidation preference by 4% per annum, for the three and six months ended June 30, 2026 and 2025, the Company recorded deemed dividend equal to the increase in the
liquidation preference. As there are no retained earnings, the dividend for the three and six months ended June 30, 2026 was charged against additional paid in capital. The dividend for the three and six months ended June 30, 2025 was
charged against additional paid in capital and accumulated deficit, since the Company does not believe additional paid in capital can be recorded as a negative amount.
NOTE 14 – SHAREHOLDERS’ DEFICIT
a.
Share capital:
Ordinary shares shall confer on their shareholders all rights in the Company, including the right to vote on any matter at any general meeting,
with each ordinary share having voting power of one vote for one ordinary share, the right to receive notice of any General Meeting, the right to receive dividends and to participate in any distribution of surplus assets and funds in the Company.
Pursuant to the terms of the Bank Hapoalim B.M. financing arrangement, the Company is restricted from paying cash dividends to its shareholders without initial approval from the bank.
b.
Stock Options plan:
Description of plan:
In
2019, the Company adopted employee share incentive plan named the “XTEND 2019 Share Option Plan” (the “Plan”). Under the Plan, employees, directors, and consultants of the Company may be granted options to acquire Ordinary
Shares of the Company.
The vesting schedule is generally over four years, such that no portion of the options vest prior to the completion
of the first full year of continuous service. Each option granted under the Plan is exercisable until the earlier of the 10th anniversary from the date of the grant date of such option or the expiration dates of the respective option, subject to the
terms of the Plan and each applicable option agreement.
F-24
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
Valuation assumptions:
The Company selected the Black-Scholes-Merton option-pricing model as the most appropriate fair value method for its stock options awards. The
option-pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term.
A summary of employees’ and directors’ option balances under the 2019 Plan as of June 30, 2026 and changes during the year
then ended are as follows:
Number of
Stock
Options
Weighted Average
Exercise Price
Weighted
Average
Remaining
contractual
terms (in
years)
Aggregate
intrinsic value (in
thousands)
Outstanding as of January 1, 2026
25,081,159
$
0.44
7.2
$
5,518
Granted
1,541,630
1.48
9.7
423
Exercised
(25,332
)
0.48
7.7
(32
)
Forfeited
(352,794
)
0.51
9.0
(439
)
Outstanding as of June 30, 2026
26,244,663
0.54
8.8
31,884
Exercisable as of June 30, 2026
9,241,984
0.48
8.2
11,850
The aggregate intrinsic value in the table above represents the total intrinsic value the difference between
the Company’s closing stock price and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had
all option holders exercised their options on that date. These amounts changed based on the fair market value of the Company’s stock. Total intrinsic value of options exercised for the six months ended June 30, 2026, and June 30,
2025 was $32, $61, respectively.
As of June 30, 2026, there was $9,230 of unrecognized compensation expense related to unvested stock
options which is expected to be recognized over a weighted average period of approximately 2.39 years, based on the vesting periods of the grants.
The total share base compensation expense recognized for the six months ended June 30, 2026 and 2025, was as follows:
Three months ended
June 30,
Six months ended
June 30,
2026
2025
2026
2025
Cost of revenues
50
3
80
6
Research and development
369
90
818
179
Sales and marketing
88
13
155
24
General and administrative
526
77
1,036
153
Total share-based compensation expense
$
1,033
$
183
$
2,089
$
362
F-25
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
Repricing:
In September 2024, the Board of Directors approved the repricing of the exercise price of an aggregate of 983,369 outstanding incentive share
options with exercise prices ranging from $0.66 and $0.7 per ordinary share to $0.47 per ordinary share. The modification resulted in $73 of incremental compensation costs, which was fully recognized as of June 30, 2026.
NOTE 15 – RELATED PARTIES
In 2024,
the Company entered into loan agreements with two of its founders, under which the founders received an aggregate loan amount of $240 from the Company. The loans bear interest at the rate prescribed under Section 3(i) of the Israeli Tax
Authority, which amounted to 6.69% and 6.91% in 2025 and 2024, respectively.
The loans are secured by all outstanding ordinary shares held
by the founders and mature in 36 months from the date of issuance. The loans may be repaid in cash or by the delivery of a variable number of ordinary shares (up to the total number of outstanding shares held by the founders), such that the
aggregate fair value of the shares delivered equals the outstanding principal balance and accrued interest at the time of the repayment. The Company evaluated the terms of the loans and concluded that the compensatory component within the loans was
immaterial as of the issuance date. Accordingly, the loans were recorded as a reduction of the Company’s shareholders equity.
In
February 2026, the Company’s board of directors approved the full forgiveness of the loans, and as a result, the Company recognized compensation expenses for the full loan amount.
NOTE 16 – SEGMENT INFORMATION
The
Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the CODM, which is the Company’s chief executive officer, in deciding
how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis. There is no expense or asset
information that is supplemental to those disclosed in these unaudited interim condensed consolidated financial statements, that are regularly provided to the CODM. The allocation of resources and assessment of performance of the operating segment
is based on consolidated net loss as shown in the Company’s unaudited interim condensed consolidated statements of comprehensive loss. The CODM considers net loss in the annual forecasting process and reviews actual results when making
decisions about allocating resources. Since the Company operates as one operating segment, financial segment information, including profit or loss and asset information, can be found in the unaudited interim condensed consolidated financial
statements.
F-26
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
The following table represents total revenue by geographic area based on the customers’ shipping
address:
Three months
ended June 30,
Six months ended
June 30,
2026
2025
2026
2025
ISRAEL
$
2,580
$
529
$
5,146
$
1,062
UNITED KINGDOM
—
—
1,560
—
EMEA
341
—
416
333
LATVIA
302
—
615
—
USA
583
2,654
662
3,114
INDIA
517
—
1,559
—
APAC
503
490
620
884
Total
$
4,826
$
3,673
$
10,578
$
5,393
The Company’s long-lived assets, including ROU assets by geographic area are summarized as follows:
As of
June 30,
2026
December 31,
2025
Unaudited
ISRAEL
1,665
1,899
LATVIA
572
1,163
USA
1,071
1,147
SINGAPORE
1,466
1,461
Total
4,774
5,670
F-27
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 17 – NET LOSS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS
The following table sets forth the computation of basic and diluted net loss per share attributable to ordinary shareholders for the periods
presented:
Three months ended
June 30,
Six months ended
June 30,
2026
2025
2026
2025
Numerator:
Net loss
$
(7,771
)
$
(10,256
)
$
(19,364
)
$
(15,983
)
Deemed dividend on Series A preferred shares
(244
)
(244
)
(486
)
(486
)
Net loss attributable to ordinary shares – basic and diluted
$
(8,015
)
$
(10,500
)
$
(19,850
)
$
(16,469
)
Denominator:
Weighted-average shares used in computing net loss per share attributable to ordinary
shareholders, basic and diluted
17,502,305
12,263,473
17,148,002
12,229,407
Net loss per share attributable to ordinary shareholders, basic and diluted
$
(0.46
)
$
(0.86
)
$
(1.16
)
$
(1.35
)
The potential shares of ordinary shares that were excluded from the computation of diluted net loss per share
attributable to ordinary shareholders for the periods presented because including them would have been anti-dilutive are as follows:
Three months ended June 30,
Six months ended June 30,
2026 and 2025
2026 and 2025
Unaudited
Unaudited
Convertible preferred shares
118,573,715
75,921,039
118,152,082
74,726,070
Warrants
2,371,233
16,865,597
2,322,869
16,867,395
Outstanding share options
25,895,707
8,950,043
25,813,577
8,981,629
SAFE
7,475,680
—
5,689,823
—
Total
154,316,335
101,736,679
151,978,351
100,575,094
F-28
XTEND REALITY EXPANSION LTD.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 18 – SUBSEQUENT EVENTS
a.
The Company has evaluated subsequent events from the balance sheet date through September 3, 2026, the
date on which these unaudited interim condensed consolidated financial statements were available to be issued.
On
July 16, 2026, the Company, JFB, the Parent and XT Merger Sub 2, Inc., a Nevada corporation and a direct, wholly-owned subsidiary of the Parent (“Merger Sub II”), entered into a second amendment to the Agreement, which, among other
things, reduced the minimum amount of cash that JFB was required to have available at the closing of the Merger from $110,000 to $60,000. On the same date, the Company, JFB and an existing stockholder and warrant holder of JFB entered into an
amended and restated support agreement, which modified the terms of the JFB common stock purchase warrants held by such stockholder and committed such stockholder to exercise certain of its warrants upon the closing of the Merger
On September 3, 2026, the transactions contemplated by the Agreement, as amended, were consummated, and Parent became the publicly traded
holding company of the Company and JFB.
In connection with the closing of the transactions, all outstanding Company ordinary shares,
including shares issued upon the conversion of the Company’s preferred shares and SAFEs (other than SAFEs held by JFB), were converted into the right to receive shares of Parent common stock in accordance with the exchange ratio determined
pursuant to the Agreement. In addition, outstanding shares of JFB Class A and Class B common stock each converted into one share of Parent common stock. Each share of JFB Series C preferred stock outstanding immediately prior to the merger
converted into 3.676 shares of JFB Class A common stock, each of which then converted into the right to receive one share of Parent common stock, subject to certain limitations. All outstanding JFB common stock purchase warrants were exercised
immediately prior to the Merger, with the underlying shares converting into one share of Parent common stock. Ownership of Parent common stock by holders of JFB Series C preferred shares and warrants is capped at 4.99%, with any excess consideration
issued in the form of pre-funded warrants subject to the same beneficial ownership limitation.
At
the effective time of the merger, the Company’s outstanding employee share options were assumed by Parent and converted into employee share options of Parent in accordance with the terms of the Agreement. In connection with the transaction,
vesting of certain awards was accelerated immediately prior to closing.
Immediately following the closing of the transaction, former
Company shareholders held approximately 87.41% of the voting power and 79.61% of the economic interests of Parent, while former JFB securityholders held approximately 12.59% of the voting power and 20.39% of the economic interests of
Parent.
F-29
EX-99.5
EX-99.5
Filename: d230933dex995.htm · Sequence: 15
EX-99.5
Exhibit 99.5
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
On February 13, 2026, JFB Construction Holdings, a Nevada corporation, or JFB, Xtend Reality Expansion Ltd., a company organized under the
laws of the State of Israel, or Xtend, Xtend AI Robotics, Inc., a Delaware corporation, or New PubCo, and XT Merger Sub 2, Inc., a Nevada corporation and a direct, wholly owned subsidiary of New PubCo, or Merger Sub II, entered into an agreement and
plan of merger, which, as the same may be and was amended from time to time, we refer to as the “Merger Agreement.” On September 3, 2026, subject to the terms and conditions set forth in the Merger Agreement, (i) XOS Robotics
Ltd, an Israeli shell company formed by New PubCo under the laws of the State of Israel as a direct, wholly-owned subsidiary of New PubCo, or Merger Sub I, merged with and into Xtend, or the Xtend Merger, with Xtend surviving as a direct,
wholly-owned subsidiary of New PubCo and (ii) immediately after the Xtend Merger, Merger Sub II merged with and into JFB, or the Redomestication, and together with the Xtend Merger, the Mergers, with JFB surviving as a direct, wholly-owned
subsidiary of New PubCo. Xtend and JFB are owned and managed by New PubCo.
The registration statement on Form S-4 was declared effective on August 11, 2026.
On July 16, 2026, Xtend, JFB, Merger Sub II
and New PubCo entered into a second amendment to the Merger Agreement, which amended, among other things, the amount of cash JFB was required to have available at the closing of the Mergers, or the Second Merger Agreement Amendment. On the same
date, Xtend, JFB and an existing shareholder of JFB entered into an amended and restated support agreement which, among other things, modified the terms of the warrants held by the shareholder and committed the shareholder to exercise certain of its
warrants upon the closing of the Mergers, or the Amended and Restated Support Agreement. On September 3, 2026, under the terms of the Merger Agreement, as amended, and the Amended and Restated Support Agreement, (i) each outstanding share
of JFB Class A common stock and JFB Class B common stock issued and outstanding immediately prior to the effective time of the Redomestication, except for any cancelled JFB shares, converted automatically, in each case, into the right to
receive one share of New PubCo common stock; (ii) each share of JFB Series C preferred stock outstanding immediately prior to the Redomestication converted into 3.676 shares of JFB Class A common stock, each of which then converted into
the right to receive an equal number of shares of New PubCo common stock, (iii) JFB common stock purchase warrants to purchase (x) 3,328,407 shares of JFB Class A common stock at a purchase price of $2.875 per share and (y) 16,137,866
shares of JFB Class A common stock at a purchase price of $3.125 per share were cash exercised immediately prior to the Redomestication with each of the underlying shares of JFB Class A common stock converting into one share of New PubCo
common stock and (iv) the remaining JFB common stock purchase warrants to purchase shares of JFB Class A common stock were deemed cashless exercised at a value of $6.3391 per share immediately prior to the Redomestication resulting in the
issuance of 6,999,928 shares of JFB Class A common stock converting into one share of New PubCo common stock. Holders of JFB Series C preferred stock and JFB common stock purchase warrants may not acquire more than 4.99% of the outstanding
shares of New PubCo common stock. To the extent a holder of JFB Series C preferred stock or JFB common stock purchase warrants would have otherwise acquired a greater percentage of New PubCo common stock, such holder instead received pre-funded warrants exercisable for New PubCo common stock which are subject to a 4.99% beneficial ownership cap.
As a result of the Xtend Merger, each outstanding Xtend ordinary share (including the outstanding Xtend preferred shares, Xtend warrants and
Xtend Simple Agreements for Future Equity, or SAFEs, which converted into Xtend ordinary shares immediately prior to the closing of the Xtend Merger) that were issued and outstanding immediately prior to the effective time of the Xtend Merger, but
excluding any cancelled Xtend shares, converted automatically, in each case, into the right to receive 1.36324 shares of New PubCo common stock.
Upon consummation of the Mergers, shareholders of Xtend collectively beneficially owned approximately 87.41% of the voting power of New PubCo
and 79.61% of the economic interests in New PubCo and stockholders of JFB are beneficially owned approximately 12.59% of the voting power of New PubCo and 20.39% of the economic interests in New PubCo, in each case, on a fully diluted basis,
excluding amounts reserved under the New PubCo equity incentive plan.
The Mergers closed on September 3, 2026.
Following the closing of the Mergers, New PubCo will issue additional shares of New PubCo
common stock, or the Earnout, to the holders of Xtend ordinary shares or Xtend options, or the Closing Xtend Equityholders, on a pro rata basis as follows: (i) if Xtend and its subsidiaries achieve revenues of at least $75,000,000 for the
fiscal year ending December 31, 2026, the Closing Xtend Equityholders will receive their pro rata share of 10,000,000 shares of New PubCo common stock; and (ii) if Xtend and its subsidiaries achieve revenues of at least $150,000,000 for
the fiscal year ending December 31, 2027, the Closing Xtend Equityholders will receive their pro rata share of 10,000,000 shares of New PubCo common stock. For purposes of this Unaudited Pro Forma Condensed Combined Financial Information, the
impact of the Earnout is reflected in shareholders’ equity (deficit) in the unaudited pro forma condensed combined balance sheet.
The Mergers were accounted for as a business combination in accordance with U.S. GAAP (pursuant to Accounting Standards Codification Topic
805, Business Combinations, or ASC 805), with Xtend treated as the “acquirer” and JFB treated as the “acquired” company for financial reporting purposes. Upon consummation of the Mergers, shareholders of Xtend control New
PubCo as they beneficially own 87.41% of the voting power of New PubCo and 79.61% of the economic interests in New PubCo. As a result, Xtend is deemed the acquirer, as it is the business contributed by and still controlled by Xtend shareholders. The
unaudited pro forma condensed combined financial statements were prepared using the acquisition method of accounting.
Under the
acquisition method of accounting, the purchase price is allocated to the identifiable tangible and intangible assets acquired and liabilities assumed of JFB based on their respective estimated fair values with any excess purchase price allocated to
goodwill. Significant estimates and assumptions were used in determining the preliminary purchase price and the preliminary purchase price allocation reflected in the unaudited pro forma condensed combined financial statements. The process of
valuing the net assets of JFB immediately prior to the Mergers for purposes of presentation within this unaudited pro forma condensed combined financial information is preliminary. As the unaudited pro forma condensed combined financial statements
have been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.
The unaudited pro forma condensed combined financial statements give effect to the Mergers and other events contemplated by the Merger
Agreement as below:
•
The unaudited pro forma condensed combined balance sheet as of June 30, 2026 combines the historical balance
sheets of Xtend and JFB on a pro forma basis assuming the Mergers and related transactions had been consummated on June 30, 2026.
•
The unaudited pro forma condensed combined statements of income for the six months ended June 30, 2026 and
for the year ended December 31, 2025 combines the historical statements of income of Xtend and JFB, and historical statement of income for the period ended November 13, 2025 of Atlas Aerospace SIA on a pro forma basis assuming the Mergers and
related transactions had been consummated on January 1, 2025 (i.e., the beginning of the earliest period presented).
The unaudited pro forma condensed combined financial statements have been prepared using the unaudited interim financial statements of Xtend
as of and for the six months ended June 30, 2026, and the audited financial statements of Xtend as of December 31, 2025 and based on unaudited interim financial statement of Atlas Aerospace SIA for the nine month period ended
September 30, 2025 and from JFB’s unaudited interim financial statements as of and for the six months ended June 30, 2026, and the consolidated audited financial statements as of December 31, 2025 included in JFB’s Quarterly
Report on Form 10-Q filed with the Securities and Exchange Commission, or SEC, on August 13, 2026, and the Annual Report on Form 10-K for the year ended December
31, 2025, as amended, filed with the SEC on July 2, 2026.
The following unaudited pro forma condensed combined financial information has
been prepared in accordance with Article 11 of Regulation S-X, as amended by the final rule, Release 33-10786 “Amendments to Financial Disclosures about Acquired
and Disposed Businesses”, or Article 11 of Regulation S-X. Article 11 of Regulation S-X provides requirements to depict the accounting for the merger, or Merger
Accounting Adjustments, and other transaction effects that have occurred or are reasonably expected to occur, or Management’s Adjustments. New PubCo has elected not to present Management’s Adjustments in the unaudited pro forma condensed
combined financial statements. Based on management’s assessment, no autonomous entity adjustments were required for the purposes of preparing the unaudited pro forma condensed combined financial information. The results set forth in the
unaudited pro forma condensed combined financial information include adjustments that give effect to events that are directly attributable to the Mergers.
The unaudited pro forma condensed combined financial statements should be read in
conjunction with Xtend’s and JFB’s historical financial statements described above, and the accompanying notes to the unaudited pro forma condensed combined financial statements, which describe the assumptions and estimates underlying
the adjustments set forth therein. The pro forma adjustments, which management believes are reasonable under the circumstances, are preliminary and are based upon available information and certain assumptions described in the accompanying notes to
the unaudited pro forma condensed combined financial information. Accordingly, the actual financial condition or performance of New PubCo following completion of the Mergers in subsequent periods may differ materially from that which is reflected in
the unaudited pro forma condensed combined financial statements. Transactions in subsequent periods may differ materially from that which is reflected in the unaudited pro forma condensed combined financial statements.
The unaudited pro forma condensed combined financial information presented is for informational purposes only and is not necessarily
indicative of the financial position or results of earnings that would have been realized if the Mergers had been completed on the dates set forth above, nor is it indicative of future results or financial position. The unaudited pro forma condensed
combined financial statements do not include the realization of any cost savings from operating efficiencies, synergies or other activities, or the recognition of any cost increases or dis-synergies that might
result from the Mergers.
UNAUDITED PRO FORMA CONDENSED COMBINED
BALANCE SHEET AS OF JUNE 30, 2026
JFB
6/30/2026
(USDk)
Xtend
6/30/2026
(USDk)
Adjusting
journal
entries
Consolidated
06/30/2026
(USDk)
Note
Cash and cash equivalents
4,971
34,808
—
39,779
PIPE cash
—
—
60,000
60,000
5A
Restricted cash
3,000
—
—
3,000
Restricted cash deposits
680
680
Trade receivables
7,537
13,846
—
21,383
Contract assets
4,395
404
—
4,799
Other receivables and prepaid expenses
193
7,663
—
7,856
Inventory
—
9,795
—
9,795
Total current assets
20,096
67,196
60,000
147,292
Property and equipment, net
1,129
1,750
—
2,879
ROU assets
1,861
3,024
—
4,885
Intangible assets
—
8,595
1,012
9,607
5B
Prepaid Acquisition Cost
30,223
—
(30,223
)
—
5C
Goodwill
—
12,965
102,745
115,710
5D
Other assets / investments
1,000
256
1,256
Total non-current assets
34,213
26,590
73,534
134,337
Total assets
54,309
93,786
133,534
281,629
Trade payables
2,746
2,302
—
5,048
Accrued liabilities and other payables
312
9,029
15,520
24,861
5E
Short-term lease liabilities
1,897
1,485
—
3,382
Deferred revenues
1,590
4,940
—
6,530
Total current liabilities
6,545
17,756
15,520
39,821
Long-term lease liabilities
—
1,616
—
1,616
Deferred Tax liability
—
1,464
1,464
Warrants liability
—
1,510
(1,510
)
—
5F
SAFE Liability
—
35,027
(35,027
)
—
5G
Total non-current liabilities
—
39,617
(36,537
)
3,080
Total liabilities
6,545
57,373
(21,017
)
42,901
Convertible Preferred Shares
—
—
—
—
Preferred shares
—
137,762
(137,762
)
—
Total Convertible Preferred Shares
—
137,762
(137,762
)
—
Common stock / ordinary shares
2
53
(27
)
28
5H
Additional paid-in capital
54,394
7,334
301,229
362,957
5I
Accumulated deficit
(6,632
)
(108,478
)
(8,889
)
(123,999
)
5J
Accumulated OCI
—
(258
)
—
(258
)
Equity
47,764
(101,349
)
292,313
238,728
Total liabilities and equity
54,309
93,786
133,534
281,629
UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE SIX MONTHS ENDED JUNE 30, 2026
JFB
(USDk)
Xtend
(USDk)
Adjusting
journal
entries
Consolidated
(USDk)
Note
Revenues
21,755
10,578
32,333
Cost of revenues
19,127
9,662
337
29,126
6A
Gross profit
2,628
916
(337
)
3,207
Research and development
—
8,798
8,798
Sales and marketing
3,223
6,688
—
9,911
General and administrative
6,917
11,466
580
18,963
6B
—
—
—
Total operating expenses
10,140
26,952
580
37,672
Operating loss
(7,512
)
(26,036
)
(917
)
(34,465
)
Net financial income (expense)
248
6,613
6,861
Pre-tax loss
(7,264
)
(19,423
)
(917
)
(27,604
)
Income tax benefit
—
59
59
Net loss
(7,264
)
(19,364
)
(917
)
(27,545
)
Number of shares
Earnings Per Share
Weighted Average number of shares, basic and diluted
15,563,966
17,148,002
244,730,632
277,442,600
6C
Net loss per share attributable to ordinary shareholders, basic and diluted
(0.47
)
(1.16
)
(0.10
)
UNAUDITED PRO FORMA CONDENSED COMBINED
INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2025
JFB FY25
(USDk)
Xtend FY25
(USDk)
Atlas*
FY25
(USDk)
Adjusting
journal
entries
Consolidated
FY25
(USDk)
Note
Revenues
30,541
19,714
857
—
51,112
Cost of revenues
27,391
15,828
1,919
733
45,871
7A
Gross profit
3,150
3,886
(1,062
)
(733
)
5,241
Research and development
—
10,097
955
—
11,052
Sales and marketing
1,011
9,279
587
—
10,877
General and administrative
7,794
5,842
1,893
16,670
32,199
7B
Total operating expenses
8,805
25,218
3,435
16,670
54,178
Operating loss
(5,655
)
(21,332
)
(4,497
)
(17,403
)
(48,887
)
Net financial income (expense)
382
(5,362
)
(2,375
)
—
(7,355
)
Pre-tax loss
(5,273
)
(26,694
)
(6,872
)
(17,403
)
(56,242
)
Income tax expense (benefit)
—
134
(159
)
(25
)
Net loss
(5,273
)
(26,828
)
(6,713
)
(17,403
)
(55,217
)
Earnings Per Share
Weighted average number of shares, basic and diluted
16,968,640
12,899,982
247,573,978
277,442,600
7C
Net loss per share attributable to ordinary shareholders, basic and diluted
(0.31
)
(2.16
)
(0.20
)
*
Atlas Aerospace SIA include historical results representing amounts from January 1, 2025 to November 13, 2025,
the date of the acquisition.
Note 1. Basis of Presentation
The accompanying unaudited pro forma condensed combined financial information and related notes were prepared in accordance with Article 11 of
Regulation S-X.
Certain reclassifications were made to align Xtend’s and JFB’s
financial statement presentation. The accounting policies of both Xtend and JFB are in the process of being reviewed in detail. Upon completion of such review, additional conforming adjustments or financial statement reclassification may be
necessary.
The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting in
accordance with ASC 805, with Xtend as the accounting acquirer. Under ASC 805, all assets acquired and liabilities assumed in a business combination are recognized and measured at their fair values as of the closing date, while transaction costs
associated with the business combination are expensed as incurred. The excess of purchase consideration over the estimated fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.
The allocation of the aggregate purchase consideration depends upon certain estimates and assumptions, all of which are preliminary. As of the
date of this registration statement, Xtend has not completed the valuation analysis and calculations in sufficient detail necessary to arrive at the required estimates of the fair market value of JFB assets to be acquired or liabilities to be
assumed, other than a preliminary estimate for intangible assets and certain financial assets and financial liabilities. Accordingly, apart from the aforementioned, certain JFB assets and liabilities are presented at their respective carrying
amounts and should therefore be treated as preliminary. A final determination of the fair value of JFB’s assets and liabilities will be based on JFB’s actual assets and liabilities as of the Closing Date of the mergers and, therefore,
cannot be made prior to the consummation of the mergers. The allocation of the aggregate purchase consideration has been made for the purpose of developing the unaudited pro forma condensed combined financial information. The final determination of
fair values of assets acquired and liabilities assumed relating to the mergers could differ materially from the preliminary allocation of aggregate purchase consideration. The final valuation will be based on the actual net tangible and intangible
assets of JFB existing at the Closing Date of the mergers.
The unaudited pro forma condensed combined income statements for the six
months ended June 30, 2026, and for the year ended December 31, 2025 combine the historical consolidated income statements of Xtend and JFB, giving effect to the mergers as if they had been completed on January 1, 2025. The accompanying
unaudited pro forma condensed combined balance sheet as of June 30, 2026 combines the historical consolidated balance sheets of Xtend and JFB, giving effect to the mergers as if they had been completed on June 30, 2026.
The unaudited pro forma condensed combined financial information does not reflect any anticipated synergies or
dis-synergies, operating efficiencies or cost savings that may result from the mergers or any acquisition and integration costs that may be incurred. The pro forma adjustments represent management’s best
estimates and are based upon currently available information and certain assumptions that Xtend believes are reasonable under the circumstances.
Note
2. Reclassification Adjustments
During the preparation of the unaudited pro forma condensed combined financial information, Xtend
management performed a preliminary analysis of JFB’s financial information to identify differences in accounting policies and differences in balance sheet and income statement presentation as compared to the presentation of Xtend. At the time
of preparing the unaudited pro forma condensed combined financial information, Xtend had not identified all adjustments necessary to conform JFB’s accounting policies to Xtend’s accounting policies. Xtend had also not identified all
adjustments necessary to conform JFB’s financial statement presentation classification and Xtend’s financial statement presentation classification.
Certain changes to financial statement presentation have been made to conform Xtend’s
and JFB’s historical financial statement presentation. Following the completion of the mergers, or as more information becomes available, Xtend will finalize the review of accounting policies and reclassifications, which could be materially
different from the amounts set forth in the unaudited pro forma condensed combined financial information presented herein.
Additionally,
certain financial statement captions have been combined for purposes of presenting in condensed form in accordance with Article 11 of Regulation S-X.
Note 3. Estimated purchase price
The
estimated preliminary purchase price, which represents the consideration transferred to JFB’s security holders in this business combination is calculated based on the New PubCo common stock that JFB stockholders will own as of the Closing Date
of the mergers. The accompanying unaudited pro forma condensed combined financial information reflects an estimated purchase price of approximately 181,298 thousand, which consists of the following (in thousands except for number of shares and
per share amounts):
USD thousands
100%
Shares consideration
99,141
Warrants value
68,802
C shares
43,578
Settlement of pre-existing relationship(*)
(30,223
)
Total consideration
181,298
(*)
The pre-existing relationship included the settlement of the SAFE
liability issued by Xtend to JFB prior to the business combination.
The preliminary value of the consideration does not
purport to represent the actual value of the total consideration that will be received by the JFB shareholders when the mergers are completed. The market price of JFB on September 1, 2026 was used to estimate the consideration. Such amount
represents management’s most current estimate of the purchase consideration for purposes of the unaudited pro forma condensed combined financial information. Because the market price of JFB common stock may fluctuate prior to Closing, the
actual purchase consideration and in turn, goodwill may differ materially from the amounts reflected in the pro forma financial information.
Note 4.
Preliminary Purchase Price Allocation
The allocation of the preliminary estimated purchase price with respect to the mergers is based
upon management’s estimates of and assumptions related to the fair values of assets to be acquired and liabilities to be assumed as of June 30, 2026, using currently available information. Due to the fact that the unaudited pro forma
condensed combined financial statements have been prepared based on these preliminary estimates, the estimated fair value of the purchase consideration and the final purchase price allocation and the resulting effect on New PubCo’s financial
position and results of operations may differ materially from the pro forma amounts included herein.
USD thousands
100%
Shares consideration
99,141
Warrants value
68,802
C shares
43,578
Settlement of pre-existing relationship(*)
(30,223
)
Total Consideration
181,298
Net book value
17,541
Excess to allocation
163,757
Paid in cash
60,000
Backlog
1,012
Goodwill (P.N.)
102,745
(*)
The pre-existing relationship included the settlement of the SAFE
liability issued by Xtend to JFB prior to the business combination.
Note 5. Adjustments to the Unaudited Pro Forma Condensed
Combined Balance Sheet
The following pro forma adjustments have been reflected in the Pro Forma Adjustments column in the accompanying
unaudited pro forma condensed combined balance sheet. All adjustments are based on preliminary assumptions and valuations, which are subject to change once further analyses are performed.
A.
Under the modified terms of the Merger Agreement, JFB was required to deliver at least $60.0 million in
cash at the closing date. As of the June 30, 2026, JFB’s cash balance amounted to $5.0 million. In addition, pursuant to the amended and restated support agreement between Xtend and American Ventures LLC, Series XIV JFB
(“American Ventures”), at least ten business days prior to the closing, American Ventures was required to deliver to JFB (a) a duly executed copy of a notice of exercise warrants to purchase (i) 3,328,407 JFB Shares at a purchase
price of $2.875 per share and (ii) 16,137,866 JFB Shares at a purchase price of $3.125 per share (collectively, the “Exercised JFB Warrants”) and (b) the aggregate exercise price for the JFB Shares underlying such Exercised Pubco
Warrants. The remaining JFB common stock purchase warrants to purchase shares of JFB Class A common stock were required to be cashless exercised at a value of $6.3391 per share immediately prior to the redomestication resulting in the issuance
of 6,999,928 shares of JFB Class A common stock converting into one share of New PubCo common stock. Accordingly, the pro forma adjustments reflect an additional cash contribution of $60.0 million to be funded by American Ventures, which
would allow JFB to satisfy the minimum cash condition as required in the merger agreement.
B.
Reflects the adjustment of intangible assets acquired by Xtend to their estimated fair values. As part of the
preliminary valuation analysis, Xtend identified backlog intangible asset. The fair value of identifiable intangible assets is determined primarily using the “income approach,” which requires a forecast of all of the expected future cash
flows. Since all information required to perform a detailed valuation analysis of JFB’s intangible assets could not be obtained as of the date of this filing, for purposes of these unaudited pro forma condensed combined financial statements,
Xtend used certain assumptions based on publicly available data. The following table summarizes the estimated fair values of JFB’s identifiable intangible assets and their estimated useful lives and uses an accelerated method of amortization.
USD thousands
100%
Backlog
1,012
C.
Represents adjustment of JFB’s SAFE in Xtend which will be converted into shares of New PubCo common
stock at the Closing.
D.
For pro forma purposes, it has been assumed that the mergers were completed on June 30, 2026. Accordingly,
solely for pro forma presentation, the goodwill as reflected in the Purchase Price Allocation (PPA) performed on JFB was used. Estimated goodwill associated with the mergers is USD 102,745
E.
Represents adjustments to the combined company’s accrued liabilities balance for (i) bonuses of
$3.7 million payable upon closing of the mergers, (ii) transaction costs of $11.8 million payable in connection with completing the mergers.
F.
Represents the assumed exercise of Xtend’s warrants into shares at the closing of the mergers.
G.
Represents the conversion of the SAFE amount into shares of New PubCo common stock on the closing date.
H.
The adjustment reflects the number of shares of the combined company at the Closing Date of the mergers in
accordance with the terms of the merger agreement and also includes the conversion of the preferred shares of both companies into ordinary shares of the combined company. The par value is USD 0.0001 per share.
I.
The additional paid in capital was calculated as follow:
Item
Value
Preferred Share Conversion
137,762
SAFE conversion
35,027
Warrants Exercise
1,510
Equity consideration transferred
181,298
Common shares par value adjustment
27
Less
JFB Additional paid in Capital
(54,394
)
Total
301,229
J.
Represents the elimination of the historical JFB’s retained earnings and adjustments of $15,520
transaction costs.
Note 6. Adjustments to the Unaudited Pro Forma Condensed Combined Statement of Income for the six months ended
June 30, 2026
The following pro forma adjustments have been included in the Pro Forma Adjustments column to give effect as if the
mergers had been completed on January 1, 2025 in the accompanying unaudited pro forma condensed combined statements of income for the six months ended June 30, 2026.
All adjustments are based on preliminary assumptions and valuations, which are subject to change once further analyses are performed and as
additional information becomes available.
A.
Reflects the amortization of the backlog on the accelerated method. Accordingly, assuming a backlog value of
USD 1,012 thousand, the resulting six months amortization amounts to approximately USD 337 thousand.
B.
Represents the new compensation arrangements executed with several employees in connection with the business
combination.
C.
As the business combination is being reflected as it was consummated on January 1, 2025, the calculation
of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares outstanding as of June 30, 2026 and issuable with respect to the business combination, have been outstanding for the entirety of the period
presented.
Pro-Forma weighted-average
shares
June 30,
2026
Historical Xtend Reality Expansion LTD weighted average shares outstanding, basic
17,645,106
Conversion adjustment of Xtend ordinary shares outstanding
6,328,962
Conversion of preferred shares, warrants and SAFE’s
196,725,338
Shares of New PubCo common stock to be issued to holders of JFB securities
56,743,194
Pro forma weighted average shares, basic and diluted
277,442,600
Note 7. Adjustments to the Unaudited Pro Forma Condensed Combined Statement of Income for the year ended December 31,
2025
The following pro forma adjustments have been included in the Pro Forma Adjustments column to give effect as if the mergers had
been completed on January 1, 2025 in the accompanying unaudited pro forma condensed combined statements of income for the year ended December 31, 2025. All adjustments are based on preliminary assumptions and valuations, which are subject to
change once further analyses are performed and as additional information becomes available.
A.
Reflects the amortization of the backlog on the accelerated method. Accordingly, assuming a backlog value of
USD 1,100 thousand, the resulting amortization amounts to approximately USD 733 thousand.
B.
Represents the accrual of additional transaction costs of approximately $15.5 million incurred subsequent
to June 30, 2026, out of which bonus of $3.7 million upon closing of the mergers, and transaction costs of
$11.8 million in connection with completing the mergers which primarily consist of fees for investment banking, legal and accounting
services. In addition, new compensation arrangements executed with several employees in connection with the business combination of $1.1 million.
C.
As the business combination is being reflected as it was consummated on January 1, 2025, the calculation of
weighted average shares outstanding for basic and diluted net loss per share assumes that the shares outstanding as of June 30, 2026 and issuable with respect to the business combination, have been outstanding for the entirety of the period
presented.
Pro-Forma weighted-average
shares
December 31,
2025
Historical Xtend Reality Expansion LTD weighted average shares outstanding, basic and
diluted
17,645,106
Conversion adjustment of Xtend ordinary shares outstanding
6,328,962
Conversion of preferred shares, warrants and SAFE’s
196,725,338
Shares of New PubCo common stock to be issued to holders of JFB securities
56,743,194
Pro forma weighted average shares, basic and diluted
277,442,600
EX-99.6
EX-99.6
Filename: d230933dex996.htm · Sequence: 16
EX-99.6
Exhibit 99.6
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road, Building A
Tel-Aviv 6492102, Israel
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Form 8-K of Xtend AI Robotics Inc. of our report dated
April 28, 2026, with respect to the consolidated financial statements of Xtend Reality Expansion Ltd. included in the Amendment No. 3 to Form S-4
(No. 333-295380) and related Prospectus of Xtend AI Robotics Inc., filed with the Securities and Exchange Commission.
/s/ Kost Forer Gabbay & Kasierer
A Member of EY Global
Tel Aviv, Israel
September 3, 2026
EX-99.7
EX-99.7
Filename: d230933dex997.htm · Sequence: 17
EX-99.7
Exhibit 99.7
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road, Building A
Tel-Aviv 6492102, Israel
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Form 8-K of Xtend AI Robotics Inc. of our report dated
June 16, 2026, with respect to the financial statements of Atlas Aerospace SIA. included in the Amendment No. 3 to Form S-4 (No. 333-295380) and related
Prospectus of Xtend AI Robotics Inc., filed with the Securities and Exchange Commission.
/s/ Kost Forer Gabbay & Kasierer
A Member of EY Global
Tel Aviv, Israel
September 3, 2026
EX-99.8
EX-99.8
Filename: d230933dex998.htm · Sequence: 18
EX-99.8
Exhibit 99.8
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Current Report on Form 8-K of Xtend AI Robotics, Inc. of
our report dated March 31, 2026, which appeared in the JFB Construction Holdings Annual Report on Form 10-K relating to the audits of the consolidated financial statements as of December 31, 2025 and
2024 and for the years then ended.
/s/ M&K CPA’s, PLLC
The Woodlands, TX
September 3, 2026
EX-99.9
EX-99.9
Filename: d230933dex999.htm · Sequence: 19
EX-99.9
Exhibit 99.9
Risk Factors
Investing
in our common stock involves substantial risks. You should carefully consider the following factors, together with all of the other information included in this Current Report on Form 8-K, including our
consolidated financial statements and the related notes filed as Exhibits 99.1 to 99.4 to this Current Report on Form 8-K before investing in our common stock. Any of the risk factors we describe below could
adversely affect our business, financial condition or results of operations. The market price of our common stock could decline if one or more of these risks or uncertainties develop into actual events, causing you to lose all or part of your
investment. We cannot assure you that any of the events discussed below will not occur. While we believe these risks and uncertainties are especially important for you to consider, we may face other risks and uncertainties that could adversely
affect our business.
Risks Relating to our Business
We have incurred significant operating losses since inception and cannot assure you that we will ever achieve or sustain profitability.
Since our inception, we have incurred significant net losses. Our net losses were $7.8 million and $10.2 million for the
three months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of approximately $108.5 million. To date, we have financed our operations primarily through sales of our equity securities and
borrowings under our credit facilities.
We expect our operating expenses to increase significantly as we pursue our growth strategy,
including expending substantial resources for research, development and marketing. The extent of our future operating losses and the timing of profitability are highly uncertain, and we expect to continue incurring significant expenses over the next
several years. Any additional operating losses may have an adverse effect on our stockholders’ equity and the price of our common stock, and we cannot assure you that we will ever be able to achieve profitability.
Even if we achieve profitability, we may not be able to sustain or increase such profitability. Additionally, our costs may increase in future
periods and we may expend substantial financial and other resources on, among other things, sales and marketing, the hiring of additional officers, employees, contractors and other service providers, and general administration, which may include a
significant increase in legal and accounting expenses related to public company compliance, continued compliance and various regulations applicable to our business or arising from the growth and maturity of our company. Our failure to become and
remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our development efforts, obtain regulatory approvals, diversify our product and service offerings or continue our
operations, and may cause the price of our common stock to decline.
We depend on the U.S. and Israeli Governments for substantially
all of our business. Changes in the U.S. or Israeli Government’s priorities, strategies, spending, or other risks associated with conducting business with the U.S. and Israeli Government could have a material adverse effect on our financial
position, results of operations, or cash flows.
We conduct most of our business with the U.S. and Israeli Governments, primarily
the U.S. Department of War, or DoW, and the Israeli Defense Force. Substantially all of our revenue in 2025 was derived from products and services sold to these customers. We expect our customer base to continue to be primarily government-focused,
with the majority of our future revenues generated from the United States and the remainder derived from a combination of EMEA and APAC regions. We operate in a heavily regulated environment and are overseen and routinely audited by the U.S.,
Israeli and Singapore Governments and their respective agencies, including the DoW, Directorate of Defense Research & Development, Ministry of Defence, Israel Aerospace Industries, and Defence Science and Technology Agency. Our U.S. and
Israeli Governments contracts are subject to various risks. We cannot predict the impact on our existing or future contracts due to changes in the global geopolitical and economic environment, including inflationary pressures, defense spending
levels and priorities, government efficiency and other budgetary priorities, customer procurement practices and processes, and other factors that may impact our customer’s short- and long-term plans and priorities or our ability to compete,
capture, and perform successfully on such contracts. Any of these factors could materially adversely affect our business with the U.S. and Israeli Governments and our financial position, results of operations, or cash flows.
The U.S. and Israeli Governments generally have the ability to terminate contracts, in whole
or in part, with little or no prior notice, for convenience or for default based upon performance. In the event of termination for convenience, a contractor generally is able to recover costs incurred and profit on costs up to the amount authorized
under the contract, but not the profit that would have been earned had the contract been completed. However, the U.S. and Israeli Governments may assert that they are not required to provide additional funding for such costs if sufficient funding
has not been appropriated to cover them. Any termination also could result in the cancellation of future work. A termination resulting from our default can expose us to various liabilities, including excess
re-procurement costs, and could negatively affect our ability to compete for future contracts. Any contract termination (including a termination of a prime contract for which we are a subcontractor) could have
a material adverse effect on our financial condition, results of operations, or cash flows.
The U.S. and Israeli Governments also can
stop work under a contract for a limited period of time for their convenience. In the event of a stop work order, contracts typically are protected by provisions covering reimbursement for costs incurred to date and for costs associated with the
temporary stoppage of work plus a reasonable fee. However, such temporary stoppages may result in financial or other damages for which contractors may not be able to recover fully. In some cases, they could result in termination of a contract for
convenience or reduced future orders.
Significant delays or reductions in appropriations for our products and/or changes in
customer priorities could have a material adverse effect on our financial position, results of operations, or cash flows.
As a
government contractor, we depend on government funding for our products. Government programs are subject to budget authorization and appropriation processes even though program performance may extend over several years. These programs may be funded
initially on a partial basis with additional funds committed only as further appropriations are made. If we or our subcontractors incur costs in excess of existing funding on a contract, we are generally at risk for reimbursement and may not recover
those costs unless and until additional funds are appropriated. We cannot predict the extent to which total funding or funding for individual programs will be included, increased, or reduced as part of the annual budget process or through continuing
resolutions or individual supplemental appropriations.
If an appropriations bill is not passed before the beginning of a fiscal year, a
temporary spending measure can be enacted to provide stopgap funding for a specified period of time at a specified rate, often the prior year’s appropriations level. When a government operates under a continuing resolution, limitations can be
placed on production increases, multi-year procurements, and new program starts, which may result in delays or cancellation of new contract awards. When a government fails to enact annual appropriations or a temporary spending measure, a full or
partial federal government shutdown may occur, as occurred in the United States in October 2025. A federal government shutdown could, in turn, result in the delay or cancellation of government programs, or the delay of payments by our customers,
which could have a negative effect on our cash flows and adversely affect our future results of operations.
In addition, pressures on, as
well as laws and plans relating to, the federal budget, potential changes in the threat environment, priorities and defense spending, government efficiency efforts, the timing and substance of the annual budget process, use of temporary funding
measures, and federal debt limits, have impacted and could continue to impact the amount and timing of funding for individual programs and delay purchasing or payments by our customers. Current government spending levels for defense-related or other
programs may not be sustained, and future spending and program authorizations may not increase or may decrease or shift to programs in areas in which we do not provide products or services or are less likely to be awarded contracts. Such changes in
spending authorizations and budgetary priorities may occur as a result of uncertainty surrounding the federal budget, increasing political pressure and legislation, shifts in spending priorities from defense, federal civilian, or other programs as a
result of competing demands for federal funds and government efficiency efforts, changes in the threat environment, including the number and intensity of military conflicts, or other factors. We have experienced price adjustments and renegotiations
of certain of these contracts and may in the future continue to experience such impacts which could have an adverse impact on the programs in which we participate and, ultimately, our results.
Demand for our products and services also can be affected by shifts in customer priorities
resulting from changes in military strategy and planning. In response to the need for less expensive alternatives and the increasing proliferation of advanced weapons, future strategy reassessments by the DoW may result in decreased demand for our
products. We cannot predict the impact of changes to customer priorities on existing, follow-on, replacement, or future programs. A shift of priorities to programs in which we do not participate and related
reductions in funding for, or the termination of programs in which we do participate could have a material adverse effect on our financial position, results of operations, or cash flows.
If the unmanned systems markets do not experience significant growth, if we cannot expand our customer base or if our software and
systems do not achieve broad acceptance, then we may not be able to achieve our anticipated level of growth.
We cannot accurately
predict the future growth rates or sizes of the markets for our software and systems. Demand for our software and systems may not increase, or may decrease, either generally or in specific markets, for particular types of software and systems or
during particular time periods. We believe the market for commercial unmanned systems is nascent and the expansion of the market for our software and systems in particular, depends on a number of factors, including the following:
•
customer satisfaction with these types of systems as solutions;
•
the cost, performance and reliability of our products and products offered by our competitors;
•
customer perceptions regarding the effectiveness and value of these types of systems;
•
obtaining timely regulatory approvals for new customer deployments; and
•
marketing efforts and publicity regarding these types of systems and services.
Even if commercial unmanned systems gain wide market acceptance, our software and systems may not adequately address market requirements and
may not continue to gain market acceptance. If these types of systems generally, or our software and systems specifically, do not gain wide market acceptance, then we may not be able to achieve our anticipated level of growth and our revenue and
results of operations would decline.
Our ability to market and sell our products is subject to existing government laws,
regulations and standards, including by the Israeli Defense Export Control Agency within the Israeli Ministry of Defense, or DECA, and the U.S. State Department’s Directorate of Defense Trade Controls, or DDTC. Changes in such laws,
regulations and standards (in the State of Israel and in the United States) or our failure to comply with them could materially and adversely affect our results of operations.
Changes in laws and regulations could reduce the demand for our products or require us to re-engineer
our products, thereby creating opportunities for our competitors. Regulatory approvals for our products may be delayed or denied for a variety of reasons that are outside of our control. Additionally, market anticipation of significant new standards
can cause customers to accelerate or delay buying decisions.
In particular, our operations are subject to U.S. and foreign
anti-corruption and trade control laws and regulations, such as the Foreign Corrupt Practices Act, or FCPA, export controls and economic sanctions programs, including those administered by the U.S. Treasury Department’s Office of Foreign
Assets Control, or OFAC, the State Department’s Directorate of Defense Trade Controls, or DDTC, and the Bureau of Industry and Security, or BIS, of the Department of Commerce. As a result of doing business in foreign countries and with foreign
customers, we are exposed to a heightened risk of violating anti-corruption and trade control laws and sanctions regulations.
As part of
our business, we may deal with state-owned business enterprises, the employees of which are considered foreign officials for purposes of the FCPA’s prohibition on providing anything of value to foreign officials for the purposes of obtaining
or retaining business or securing any improper business advantage. In addition, the provisions of anti-bribery and anti-corruption laws in some jurisdictions extend beyond bribery of foreign public officials and also apply to transactions with
individuals that a government does not employ. Some of the international locations in which we may operate lack a developed legal system and have higher than normal levels of corruption. Our continued expansion worldwide could increase the risk of
FCPA, OFAC or other similar violations in the future.
We may be subject, both directly and indirectly, to the adverse impact of existing and
potential future government regulation of our products, technology, operations and markets. For example, the marketing and export of defense related equipment, services, ‘know-how’ are subject to
DECA’s regulation under the Defense Export Act, collectively, Israeli Trade Control Laws, which impact our operations, for example by limiting our ability to sell, export, or otherwise transfer our products or technology, or to release
controlled technology to non-Israeli companies.
In the U.S., these laws include the International
Traffic in Arms Regulations, or ITAR, administered by the DDTC, the Export Administration Regulations, or EAR, administered by the BIS and trade sanctions against embargoed countries and destinations administered by OFAC and collectively, American
Trade Control Laws. The EAR governs products, parts, technology and software which present military or weapons proliferation concerns, so-called “dual use” items, and ITAR governs military items
listed on the United States Munitions List, or USML. Prior to shipping certain items, we must obtain an export license or verify that license exemptions are available. Any failures to comply with these laws and regulations could result in fines,
adverse publicity and restrictions on our ability to export our parts, and repeat failures could carry more significant penalties.
We may
not be able to retain licenses and other authorizations required under the applicable American Trade Control Laws and Israeli Trade Control Laws. The failure to satisfy the requirements under the American Trade Control Laws and Israeli Trade Control
Laws, including the failure or inability to obtain necessary licenses or qualify for license exceptions, could delay or prevent the development, production, export, import, and/or in-country transfer of our
products and technology, which could adversely affect our revenues and profitability.
Changes to the procurement, contracting, or
other processes and practices of our government customers could adversely affect our current programs and potential new awards.
Our industry has experienced, and we expect will continue to experience, changes to business practices resulting from, among other things, a
greater focus on affordability, efficiencies, business systems, recovery of costs, and a reprioritization of available customer funding. Initiatives and changes to procurement practices by our government customers may change the way government
contracts are solicited, negotiated, and managed, and may impact whether and how we pursue opportunities to provide our products and services to our government customers, which may have an adverse impact on our business, financial condition, results
of operations, or cash flows. Changes in procurement practices favoring incentive-based fee arrangements, different award criteria, non-traditional contract provisions, and cost mandates from the government
may affect our profitability and the predictability of our profit rates.
For example, the U.S. Government also is pursuing alternatives
to shift additional responsibility and performance risks to contractors. The DoW in particular is accelerating the development and acquisition of new technologies through the use of rapid acquisition alternatives and procedures, including through
other transaction authority agreements, or OTAs, and Commercial Solutions Openings, or CSOs. We have seen, and expect to continue to see, OTAs and CSOs used as an alternative to traditional procurement methods. These contracting methods are not
subject to all of the procurement requirements that typically apply to Department contracts, including the Federal Acquisition Regulation, or FAR, and may be used, subject to certain conditions, for research, prototype development, and follow-on production for a successful prototype. OTA awards generally require a significant portion of the work to be performed by a non-traditional defense contractor or to
be funded by non-governmental sources. Moreover, these solicitations typically have significantly shorter acquisition times as compared to traditional procurements. If we cannot adapt successfully to changing
acquisition processes or if the Department significantly favors privately funded, non-traditional defense contractors or increases cost sharing mandates, we may lose new business opportunities, including in
high-growth or strategic areas, and our future performance and results of operations could be adversely affected.
In addition to changes
in procurement practices, we have seen our government customers implement cost recovery/cost savings initiatives to prioritize cost recovery/savings. As a result, we may experience a higher number of audits and/or lengthened periods of time required
to close audits. These audits may result in costs being challenged, debated, and in certain cases, withheld or modified, and could adversely affect our financial position, results of operations, or cash flows.
Our pipeline metrics may not be indicative of future revenue, and a significant
portion of our pipeline opportunities may not result in signed contracts or recognized revenue.
We regularly track our sales
pipeline consisting of opportunities at various stages of development, from early customer engagement through executed contracts. Our pipeline metrics reflect management’s estimates of the value and probability-weighted likelihood of closure
of identified opportunities based on information available at the time of measurement. These metrics are subject to significant uncertainty and should not be relied upon as an indicator of future revenue or business performance.
Pipeline opportunities may fail to progress, stall, or be lost at any stage of our sales process for reasons outside our control, including
changes in a prospective customer’s budget, procurement priorities, or organizational structure; the selection of a competing solution; shifts in government defense or procurement spending; geopolitical developments affecting our target
markets; or the failure to satisfy technical, regulatory, or contractual requirements. The conversion of pipeline opportunities to signed contracts, and of signed contracts to recognized revenue, depends on numerous factors that are difficult to
predict, and our historical conversion rates, to the extent disclosed, may not be predictive of future results.
Our pipeline stage
assignments and probability weightings reflect the judgment of our management team and are not derived from a standardized industry methodology. Different companies may define pipeline stages differently, and our metrics may not be comparable to
similar metrics reported by other companies. In addition, a signed contract does not constitute a purchase order and does not by itself result in revenue recognition. Contracts may be subject to conditions precedent, funding approvals, or other
requirements before they give rise to a binding purchase obligation, and such conditions may not be satisfied.
Failure of our pipeline
opportunities to convert into revenue at the rates or on the timelines we anticipate could materially and adversely affect our results of operations, financial condition, and prospects. Given the early stage of our commercial development, our
near-term revenue trajectory is meaningfully dependent on the conversion of current pipeline opportunities, and any material shortfall in conversion could have a disproportionate impact on our business relative to more established companies.
Competition within our markets and bid protests may affect our ability to win new contracts and result in reduced revenues or market
share.
We operate in a highly competitive environment and many of our competitors have more financial capacity or other resource
or capabilities. The competition for our products is heightened due to changes in budgetary pressures and priorities. We expect competition for autonomous robotic systems to continue to be intense.
We compete domestically and internationally against mid to large aerospace and defense companies and
non-traditional defense companies many of which have more financial resources or capabilities. The success of our business in competing depends, in part, on our ability to remain cost-competitive, respond to
changes in customer acquisition strategies, accurately anticipate our customers’ needs, and differentiate our products and services offerings from other market participants.
Our competitive environment also is affected by bid protests from unsuccessful bidders on new program awards. As the competitive environment
intensifies, the number of bid protests may increase. Bid protests can result in an award decision being overturned, requiring a re-bid of the contract. Even when a bid protest does not result in a re-bid, resolution of the matter typically extends the time until contract performance can begin, which can reduce our earnings in the period in which the contract would otherwise be performed.
We have classified contracts with the U.S. and Israeli Governments, which limits
investor insight into portions of our business.
We derive a portion of our revenues from programs with the U.S. and Israeli
Governments that are subject to security restrictions that preclude the dissemination of information, including Israeli classified programs. In general, access to classified information, technology, facilities or programs requires appropriate
personnel security clearances, is subject to additional contract oversight and potential liability and may also require appropriate facility clearances and other specialized infrastructure. We are limited in our ability to provide information about
these classified programs, their risks or any disputes or claims relating to such programs. As a result, investors have less insight into our classified business and our business overall. However, historically the business risks associated with our
classified programs have not differed materially from those of our other government contracts.
Our technology, software and systems
have only been developed in the last several years and we have had only limited opportunities to deploy and assess their performance in the field at full scale.
The current generation of our XTEND Operating System, or XOS, platform has only been developed in the last several years and will continue to
evolve. Deploying and operating our technology is complex and, is done primarily by a small number of customers. As the number, size and complexity of our deployments grow, we may encounter unforeseen operational, technical and other challenges,
some of which could cause significant delays, trigger contractual penalties, result in unanticipated expenses, and/or damage to our reputation, each of which could materially and adversely affect our business, financial condition and results of
operations.
We depend on our ability to develop new products, expand the adoption of our XOS software platform and enhance and
sustain the quality of existing products.
Our growth and future success will depend, in significant part, on our ability to
continue to design and develop new competitive products, expand the adoption of our XOS software platform and enhance and sustain the quality and marketability of our existing products. As such, we have made, and expect to continue to make,
substantial investments in technology development. In the future, we may not have the necessary capital, or access to capital on acceptable terms, to fund necessary levels of research and development. Even with adequate capital resources, we may
nonetheless experience unforeseen problems in the development or performance of our technologies or products. In addition, we may not meet our product development schedules and, even if we do, we may not develop new products fast enough to provide
sufficient differentiation from our competitors’ products, which may be more successful.
We expect to incur substantial
research and development costs and devote significant resources to identifying and commercializing new software and systems, which could significantly reduce our profitability and may never result in revenue to us.
Our future growth depends on penetrating new markets, adapting existing products to new applications and new environments, and introducing new
software and systems that achieve market acceptance. We plan to incur substantial research and development costs as part of our efforts to design, develop and commercialize new software and systems and enhance existing products. Further, our
research and development programs may not produce successful results, and our new software and systems may not achieve market acceptance, create additional revenue or become profitable, which could materially harm our business, prospects, financial
results and liquidity.
If our products do not interoperate with our customers’ other systems, the purchase or deployment of
our software and systems may be delayed or cancelled.
Our products are designed to interface with our customers’ other
systems, each of which may have different specifications and utilize multiple protocol standards and products from other vendors. Our products will be required to interoperate with many or all of these products as well as future products in order to
meet our customers’ requirements. If we find errors in the existing software or defects in the hardware used in our customers’ systems, we may need to modify our products or services to fix or overcome these errors so that our products
will interoperate with the existing software and hardware, which could be costly and negatively affect our business, financial condition, and results of operations. In addition, if our software and systems do not interoperate with our
customers’ systems, customers may seek to hold us liable, demand for our products could be adversely affected or orders for our products could be delayed or cancelled. This could hurt our operating results, damage our reputation or brand, and
seriously harm our prospects, business, financial condition or results of operations.
Cost growth on flexibly priced contracts that does not result in higher contract
prices reduces our profit and exposes us to the potential loss of future business.
Our operating income is adversely affected when
we incur certain contract costs or certain increases in contract costs that cannot be billed to customers. Contract cost growth has occurred and may occur in the future when expenses to complete a contract increase and/or differ materially from our
initial estimates. Factors that have caused, and may in the future cause, contract cost growth include, but are not limited to, inflation, changes in trade policy (including tariffs), technical challenges, manufacturing difficulties, delays,
workforce-related issues, including labor shortages and reduced productivity, changes in the nature and complexity of the work performed, the timeliness, availability and cost of materials or equipment, subcontractor performance or product quality
issues, performance delays, availability and timing of customer funding, changes in trade policy, and natural disasters. A significant increase in contract costs from our original cost estimates on one or more contracts could have a material adverse
effect on our financial position, results of operations, or cash flows.
Our risk and ability to recover costs vary with the type of
contract under which we are performing: firm fixed-price, fixed-price incentive, cost-type, or time and material.
Substantially all of
our revenue in 2025 was generated under firm fixed-price contracts and no revenues generated under fixed-price incentive or cost-type contracts. Fixed-price contracts generally tend to have more financial risk than cost-type contracts, including as
a result of inflationary pressures, wage pressures and labor shortages, and supplier challenges. These contracts increase the risk that we may not recover our costs or will generate less profit or a loss if our costs exceed initial estimates. With
cost-type contracts, allowable costs are generally subject to reimbursement plus an award or incentive fee, which is uncertain and may be earned over time. Under each type of contract, our operating results could be adversely affected if we are
unable to control costs, particularly if we are unable to negotiate an increase in contract price, or recover increased costs, with our customers.
U.S. Government contracts often extend for years, and unforeseen events, such as technology difficulties, fluctuations in the price of raw
materials, a significant increase in or sustained period of higher inflation, new or increased tariffs, supplier issues, including equipment delays, challenging labor market conditions, unexpected rework, and cost overruns, have in the past
resulted, and may in the future result, in contract prices becoming less favorable or even unprofitable to us over time. Higher interest rates resulting from inflationary pressures can also impact the fair values of our contracts. Moreover, if we
fail to meet contract deadlines or specifications, we may be required to renegotiate contracts on less favorable terms, be forced to pay penalties or liquidated damages, or suffer major losses if the customer exercises its right to terminate.
Cost overruns have adversely impacted, and may continue to impact, our results of operations, which are dependent on our ability to maximize
our earnings from our contracts. This risk would be greater if our contracts shifted toward a greater percentage of fixed-price contracts, particularly firm fixed-price contracts. Cost overruns or the failure to perform on existing programs also may
adversely affect our ability to retain existing programs and win future contract awards. In addition, changes in contract financing policy for fixed-price contracts, such as changes in performance and progress payments policies, could significantly
affect the timing of our cash flows.
From time to time, we may begin performance under an undefinitized contract action with a not-to-exceed price prior to completing contract negotiations, in order to support our customer’s priorities. Uncertainties relating to final contract price,
specifications and terms, or loss of negotiating leverage associated with contract definitization, may negatively affect our profitability.
Our business may be adversely affected if we are unable to attract, train, and retain qualified personnel.
Our performance and growth is dependent upon our ability to identify, attract, train, and retain sufficient qualified personnel with the
requisite skills in multiple areas, including: engineering, nuclear, trades and crafts, manufacturing, information technology, and cybersecurity, and who share our values and culture. We also must be able to attract and retain personnel who can
obtain and maintain required security clearances. It can be difficult to replace personnel with the required skills, experience, and/or clearances if we experience unplanned attrition.
If we lose experienced personnel and are unable to hire new qualified personnel, develop and
train inexperienced employees, and successfully manage the short and long-term transfer of critical knowledge and skills our business could be adversely affected. Our ability to overcome these challenges in the short and long term will have a
significant impact on our results of operations, financial condition, and cash flows.
Many of our officers and employees in the State of
Israel are obligated to perform annual reserve duty in the Israeli Defense Forces and may be called to active duty at any time, including under emergency circumstances. The absence of employees due to such military service, particularly if it
involves key personnel or a significant number of employees, could disrupt our operations. Any such disruption could materially adversely affect our business, operating results and financial condition, and may impair our ability to meet our
contractual obligations.
Notwithstanding the foregoing, we may be classified as an “essential enterprise” under applicable
law, which in certain circumstances may allow us to require employees to continue working during periods of emergency. However, there can be no assurance that such classification or measures will fully mitigate the impact of employee absences,
particularly in the event of widespread or prolonged military service.
We have experienced, and may continue to experience, significant
challenges hiring and retaining personnel with relevant qualifications and experience, which has negatively impacted, and may continue to negatively impact, our results of operations, financial condition, and cash flows, and could impact our ability
to perform under our contracts and compete for new contracts. Competition for talent is intense, and this has affected, and may continue to affect, our ability to successfully attract or retain personnel with the requisite skills or clearances. We
continue to face increased competition for talent, both with traditional defense companies and commercial companies, and with increasing wage rates. We also compete with commercial technology companies outside of the aerospace and defense industry
for qualified technical positions. These companies may be able to offer more attractive compensation and other benefits to candidates, including in the recruitment of our existing employees. In addition, we may be limited in the amount and terms of
compensation we are able to offer our executive officers or other employees as a U.S. defense contractor under certain circumstances. We have also experienced higher labor, recruiting, and training costs to attract and retain such employees, which
has impacted our results of operations, financial condition, and cash flows. A shortage of skilled employees has and may continue to impact our ability to perform our contracts and may impact our ability to compete for new contracts.
Our earnings and profitability depend, in part, upon subcontractor performance and raw material and component availability and pricing.
We rely on third parties to provide raw materials, major components and sub-systems,
hardware elements, and sub-assemblies for our products and to perform certain services we provide to our customers, in compliance with applicable laws and regulations, including applicable Department
cybersecurity requirements. For example, our U.S. Government contracts require us to procure certain materials, components, and parts from supply sources approved by the customer and/or are restricted from procuring products or services from certain
sources. Disruptions and performance issues from our suppliers and subcontractors, unanticipated cost growth for the products and services they provide, or inconsistencies between our contractual obligations to our customers and our agreements with
our subcontractors and suppliers, have adversely impacted and may in the future impact our ability to meet our commitments to customers. Our ability to satisfy our obligations on a timely basis are adversely affected if one or more of our suppliers
or subcontractors are unable to provide agreed-upon products, materials, or services in a timely, compliant, and cost-effective manner, or they otherwise fail to satisfy contractual requirements. The inability of our suppliers or subcontractors to
meet expectations could also result in our need to transition to alternate parties, if available, which could result in significant incremental cost and delay, or the need for us to provide other supplemental support to our existing suppliers and
subcontractors.
Our costs to manufacture our products can increase over the terms of our contracts, including as a result of increases in
material costs and wages. Although we may be protected from increases in material costs through cost escalation provisions, the difference in basis between our actual material costs and industry indices may expose us to cost recovery risk. Our bids
for longer-term firm fixed-price contracts typically include assumptions for labor and other contract costs that historically have been sufficient to cover cost increases over the period of performance. Our profitability may be adversely affected if
these cost assumptions are not sufficient to cover potential contract cost growth. In addition, significant delays in deliveries of key raw materials, which may occur due to material shortage or pricing, could have a material adverse effect on our
financial position, results of operations, or cash flows.
In some cases, only one supplier may exist for certain components and parts required to
manufacture our products. The inability of a sole source supplier to provide a necessary component or part on a timely, compliant, and cost-effective basis could increase our contract cost and affect our ability to satisfy our contract obligations.
Our procurement practices are intended to provide materials, components, parts, and services that meet contract specifications and reduce
the likelihood of our procurement of unauthorized, non-compliant, or deficient goods and services. We rely on our subcontractors and suppliers to comply with applicable laws, regulations and through
representations and certifications from our subcontractors and suppliers regarding such compliance. We also conduct technical assessments, inspections, and audits, as necessary, with subcontractors and suppliers. Notwithstanding the actions we take
to mitigate the risk of receiving non-compliant materials, components, parts, and services, subcontractors and suppliers sometimes provide us with unauthorized,
non-compliant, or deficient goods and services, which can increase our contract costs and impact our ability to satisfy our contract obligations to our customers.
Our success depends, in part, on our ability to increase our current and future manufacturing capacity. If we are unable to do so, or to
do so in a cost-effective manner, our business could be materially adversely affected.
We expect that we will need to increase our
manufacturing capacity to meet current and future production demands. We are utilizing and may in the future utilize one or more strategies to increase such capacity including, among others, increasing investment in our current localized
manufacturing facilities, or XFABs, identifying and retaining additional qualified personnel, utilizing third parties to support production needs, and identifying efficiencies in our current production process to support increased production. We
also may seek to increase our capacity through acquisitions, partnerships, or other arrangements. Our ability to increase capacity is subject to risks and uncertainties. We cannot provide any assurances that we will be able to successfully expand
production capacity, or to do so on a cost-effective basis. In addition, our ability to expand our manufacturing capacity will also depend greatly on our ability to hire, train, and retain an adequate number of personnel, in particular personnel
with the appropriate level of knowledge, background and skills. If we are unable to hire such personnel, our business and financial results would be negatively impacted.
Many of our contracts include performance obligations that incorporate innovative designs, state-of-the-art manufacturing expertise, or new technologies, or otherwise are dependent upon factors not wholly within our control, and failure to meet performance
expectations could adversely affect our profitability and future prospects.
We design, develop, and manufacture products and
perform services that often involve innovative designs, new technologies, and complex manufacturing processes. Delays and issues with product development, technology implementation, manufacturing, or subcontractor components or services can impact
our contract performance.
Problems associated with development or implementation of these new technologies or design changes in the
manufacturing process can lead to delays in the design and manufacturing schedule. The risks associated with new technologies or design changes during construction can both increase the cost of a ship and delay delivery.
Our products cannot always be tested and proven and are otherwise subject to unforeseen problems, including premature failure of elements that
cannot be accessed for repair or replacement, substandard quality or workmanship, and unexpected degradation of product performance. These failures could result in loss of life or property and could negatively affect our results of operations as a
result of unanticipated expenses that we don’t recover, diversion of management attention, loss of follow-on work, and, in the case of certain contracts, reimbursement to the customer of contract costs
and fee payments previously received.
We periodically experience quality issues with respect to products and services that we sell to our
customers. These issues can and have required significant resources to determine the source of the deficiencies and implement corrective actions. We may discover quality issues in the future related to our products and services that require analysis
and corrective action. Such issues and our responses and corrective actions could have a material adverse effect on our financial position, results of operations, or cash flows.
We could be negatively impacted by security threats, including cybersecurity threats,
and related disruptions.
As a defense contractor, we face significant cyber and other security threats. These threats include,
among others, threats to our information technology infrastructure, including attempts to gain unauthorized access to classified, proprietary or other sensitive information or otherwise compromise the integrity, confidentiality and/or availability
of our systems, hardware and networks or those of our suppliers and subcontractors; insider threats; ransomware; threats to the safety of our directors, officers and employees; threats to our facilities, infrastructure, products (we produce and
use), and subcontractors or other suppliers; and threats from terrorist acts, espionage, civil unrest and other acts of aggression.
Our
information technology infrastructure is critical to the efficient operation of our business and essential to our ability to perform day-to-day operations. We rely on
this infrastructure to process, transmit, and store electronic information, including classified and other sensitive information of the U.S. and Israeli Governments. We face substantial cybersecurity threats, including threats to our and the U.S.
and Israeli Governments’ proprietary and classified information from advanced nation state threat actors and non-state actors, sophisticated cybercrime syndicates, hacktivists, and insiders. These
cybersecurity threats are continuously evolving and include security breaches (whether through cyber attack, cyber intrusion, or insider threat) via the internet; malicious software, including ransomware; computer viruses; attachments to emails;
persons inside our organization or with access to systems inside our organization; subcontractors or suppliers; or other significant disruptions of our information technology networks and related systems or those of our suppliers or subcontractors,
including through the use of new and emerging technologies like artificial intelligence. Some of these threats are zero-day attacks associated with previously unknown vulnerabilities in third party software
products we utilize in our business.
We have experienced cybersecurity attacks and expect we will continue to experience additional
attacks in the future. Cybersecurity attacks or other incidents can lead to the loss or misuse of sensitive information or capabilities; theft or corruption of data; harm to personnel, infrastructure or products; financial costs and liabilities;
protracted interruptions of our operations and performance; significant recovery and restoration expenses; degraded performance on existing contracts; and misuse of our products. They also can harm our reputation, result in the loss of current or
future contracts, including work on sensitive or classified systems for the U.S. and Israeli Governments, and cause us to incur significant costs or other potential liabilities, any of which could have a material adverse effect on our operations,
financial position, results of operations, or cash flows. Given the persistence, sophistication, volume, and novelty of threats we face, we may not be successful in preventing or mitigating an attack that could have a material adverse effect on us,
and the costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means.
While we
use robust countermeasures to mitigate the risks posed by cybersecurity threats, external and internal threat actors continuously seek to evade our cybersecurity countermeasures to gain unauthorized and unlawful access to our information technology
infrastructure, assets, and data, both on premises and in the cloud. Even the most well-protected information, networks, systems, and facilities remain potentially vulnerable because attempted security breaches, particularly cybersecurity attacks
and cyber intrusions or disruptions, regularly occur and will continue to occur in the future and the techniques used in such attempts are constantly evolving and generally are not recognized until launched against a target. As a result, we are not
always able to anticipate techniques or to implement adequate security barriers or other preventative measures.
Our customers, suppliers,
subcontractors, and other business partners also face cyber and other security threats. Although we undertake cooperative efforts with our customers, suppliers, subcontractors, and other business partners to facilitate their understanding of
cybersecurity threats they face and potential cybersecurity countermeasures to mitigate potential cyber attacks and other security threats, we rely substantially on the safeguards implemented by these organizations, which affects the security of our
information. These organizations have varying levels of cybersecurity expertise and safeguards, and their relationships with government contractors increases the likelihood that they are or will be impacted by the same cybersecurity threats we face.
We are also subject to disclosure and reporting obligations related to cybersecurity events.
Despite rigorous processes, we may be unable to meet existing or future disclosure obligations and risk potentially having our disclosures when made misinterpreted. National security or public safety considerations may further affect, or in some
instances prevent, our public disclosure of a cybersecurity incident in certain circumstances.
We could also encounter threats to our
physical security, including our facilities and personnel, and threats from workplace violence, civil unrest, acts of sabotage or terrorism, and other local security issues, any of which could disrupt our business. Our customers and suppliers face
similar risks that, if realized, could also adversely impact our operations. Any such events could cause delays or disruption or otherwise impact our business, and may require us to incur greater costs for security or to shut down operations for a
period of time.
The occurrence and impact of these various risks are difficult to predict, but one or more of them could have a material
adverse effect on our financial position, results of operations, or cash flows.
During the preparation of Xtend’s
consolidated financial statements as of December 31, 2025 and 2024, a material weakness was identified in its internal control over financial reporting. Failure to establish and maintain effective internal control over financial reporting in
accordance with the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and remediate this material weakness could have an adverse effect on our business and results of operation.
In connection with the preparation and audit of Xtend’s consolidated financial statements as of December 31, 2025 and 2024, our
management identified certain control deficiencies in the design and implementation of its internal control over financial reporting that constituted a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in
internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected on a timely basis.
The material weakness was driven by failure to design and maintain formal accounting policies, processes, and controls to analyze, and account
for complex transactions as well as a need for additional accounting personnel who have the requisite experience in SEC reporting regulation. This material weakness did not result in any material misstatements to our consolidated financial
statements.
Management is developing a plan to remediate the material weakness identified, including hiring additional accounting staff
with the requisite background and knowledge, engaging third parties to assist in complying with the accounting and financial reporting requirements related to significant and complex transactions as well as adding personnel to assist with
formalizing our business processes, accounting policies and internal control documentation, strengthening supervisory reviews by our management, and evaluating the effectiveness of our internal controls in accordance with the framework established
by Internal Control - Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission. While our efforts are ongoing, we plan to continue to take additional steps to remediate the material weakness,
improve our financial reporting systems, and implement new policies, procedures, and controls; however, we cannot guarantee those measures will prevent or detect material weakness in the future.
Neither management nor an independent registered public accounting firm has performed an evaluation of Xtend’s internal control over
financial reporting in accordance with the provision of the Sarbanes-Oxley Act because no such evaluation has been required. However, as Xtend is now part of a public company, management will be required to certify the effectiveness of the
Company’s internal controls over financial reporting pursuant to Section 404(a) of the Sarbanes-Oxley Act, beginning with the filing of the Company’s Annual Report on Form 10-K for the year
ended December 31, 2026.
Management cannot assure that they will be successful in remediating the material weakness identified in
the internal controls over financial reporting as of December 31, 2025. The failure to correct the material weakness or the failure to discover and address any other material weakness or deficiencies could result in inaccuracies in the
financial statements and impair the ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis.
We utilize artificial intelligence, which could expose us to liability, as well as
regulatory, competition, reputational, or other risks, or otherwise adversely affect our business.
We utilize artificial
intelligence, including generative artificial intelligence, machine learning, and similar tools and technologies that collect, aggregate, analyze, or generate data or other materials or content, or collectively, AI, in connection with our business,
including in our products, to enhance productivity and operational efficiency and optimize processes utilized in our business. There is inherent risk and uncertainty involved in using AI and we cannot provide assurances that our use of AI will
enhance our products or services, produce the intended results, or keep pace with our competitors. If the AI that we implement in our products or the tools we use are deficient, incomplete, inaccurate, biased, controversial, or otherwise flawed, we
could incur competitive harm, legal liability, brand or reputational harm, or other adverse impacts on our business and financial results. For example, generative AI has been known to produce false or “hallucinatory” inferences or
output, and certain generative AI uses machine learning and predictive analytics, which can create inaccurate, incomplete, or misleading content, unintended biases, and other discriminatory or unexpected results, errors, or inadequacies, any of
which may not be easily detectable by us or any of our related service providers. In addition, the degraded or flawed performance of the AI we utilize may not be easily detectable and may result from adversarial attacks that include data poisoning,
malware risks, and evasion techniques which are not readily detectable. In the context of our autonomous or semi-autonomous unmanned aerial vehicle, or UAV, operations, any such inaccuracy or error or degradation in
AI-driven decision-making could have severe consequences, including mission failure, property damage, or loss of life.
Our autonomous AI systems may not perform as intended, and the failure of such systems could result in serious harm, significant
liability, and reputational damage.
Our products rely on AI and machine learning to enable autonomous or semi-autonomous
operations. These autonomous capabilities involve complex, rapidly evolving technologies that may not perform as expected in all operating environments or conditions, particularly in dynamic, contested, or degraded environments. Autonomous systems
may make decisions or take actions that produce unintended, erroneous, or harmful results. Any malfunction, error, or unintended action by our autonomous AI systems could result in property damage, bodily injury, or loss of life, and could expose us
to significant legal liability, regulatory action, and reputational harm.
AI presents risks and challenges that can impact our
business, including by posing security risks to our confidential information, proprietary information and personal data.
If any of
our employees, contractors, consultants, vendors, or service providers use any third-party AI-powered tools or solutions in connection with our business or the services they provide to us, it may lead to the
inadvertent disclosure or incorporation of our confidential information or the confidential or proprietary data of our customers or other third parties into publicly available training sets, which may impact our ability to realize the benefit of, or
adequately maintain, protect, and enforce our intellectual property or confidential information, harming our competitive position and business. Our ability to mitigate risks associated with disclosure of our confidential information, including in
connection with AI systems, will depend on our implementation, maintenance, monitoring, and enforcement of appropriate technical and administrative safeguards, policies, and procedures governing the use of AI in our business.
In addition, the use of AI has resulted in, and may in the future result in, cybersecurity breaches, incidents, or disruptions that implicate
the personal information of clients of AI systems. Further, bad actors around the world use increasingly sophisticated methods, including the use of AI, to engage in illegal activities involving the theft and misuse of personal information,
confidential information, and intellectual property. AI-driven capabilities also allow threat actors to drastically increase the volume of their attacks and produce persuasive content in multiple languages,
expanding the geographic reach of attacks. To the extent that we do not have sufficient rights to use the data or other material or content used in or produced by the AI tools used in our business, or if we or our contractors, consultants, vendors,
or service providers experience cybersecurity incidents in connection with our use of AI, it could adversely affect our reputation and expose us to legal liability or regulatory risk, including with respect to third-party intellectual property,
privacy, data protection and cybersecurity, publicity, contractual, or other rights.
We may be unable to enhance our existing solutions to incorporate advanced AI
capabilities, which could impair our ability to compete effectively and adversely affect our business, results of operations and financial condition.
If we do not adopt and integrate AI tools as rapidly as our competitors, our ability to maintain or improve our competitive position may be
adversely affected. Failure to keep pace with industry-wide advancements in AI-driven efficiency could result in operational inefficiencies and adversely impact our results of operations. AI technology may
lower barriers to entry in our industry, and we may be unable to effectively compete with the products or services offered by new competitors. The effort to gain technological expertise and develop new technologies in our business requires us to
incur significant expenses. Some of our existing and future competitors have or will have greater financial, human, and other resources.
Concerns relating to the responsible use of AI, including ethical issues associated with autonomous systems, may result in reputational
or financial harm and liability.
Concerns relating to the responsible use of AI in our solutions may also result in reputational
or financial harm and liability and may cause us to incur costs to resolve such issues. If we enable or offer solutions that draw controversy due to their perceived or actual impact on society, such as AI solutions that have unintended consequences,
or are controversial because of their impact on human rights, privacy, employment or other social, economic or political issues, or if we are unable to develop effective internal policies and frameworks relating to the responsible development and
use of AI models and systems offered through our sales channels, we may experience brand or reputational harm, competitive harm or legal liability.
Autonomous AI systems raise significant and evolving questions regarding liability, accountability, and the allocation of responsibility for
actions taken without direct human oversight. It is currently unclear, and may remain uncertain for the foreseeable future, how courts, regulators, and government procurement authorities will allocate liability among the manufacturer of an
autonomous system, the operator, and other parties when autonomous AI-driven actions result in unintended harm. In addition, AI regulation is rapidly evolving worldwide as legislators and regulators
increasingly focus on these powerful emerging technologies. The technologies underlying AI and its uses are subject to a variety of laws and regulations, and are expected to be subject to increased regulation and new laws or new applications of
existing laws and regulations. AI is the subject of ongoing review by various U.S. governmental and regulatory agencies, and various U.S. states and other foreign jurisdictions are applying, or are considering applying, their platform moderation,
data privacy, and security laws and regulations to AI or are considering general legal frameworks for AI. We may not be able to anticipate how to respond to these rapidly evolving frameworks, and we may need to expend resources to adjust our
operations or offerings in certain jurisdictions if the applicable legal frameworks are inconsistent across jurisdictions. Furthermore, because AI technology itself is highly complex and rapidly developing, it is not possible to predict all of the
legal, operational, or technological risks that may arise relating to the use of AI.
Regulatory and legislative developments
related to the use of AI could adversely affect our use of such technologies in our solutions and business.
For example, in August
2024, the EU AI Act, or the AI Act, which establishes broad obligations for the development and use of AI-based technologies in the EU based on their potential risks and level of impact, came into force. This
framework categorizes AI systems, based on the risks associated with such AI systems’ intended purposes, as creating unacceptable or high risks, with all other AI systems being considered low risk. Furthermore, the AI Act includes requirements
around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, general purpose AI, and foundation models, and provides for fines of up to the greater of €35 million or 7% of worldwide
annual turnover for violations. There is a risk that our current or future AI-powered solutions may obligate us to comply with the applicable requirements of the AI Act, which may impose additional costs on
us, increase our risk of liability, or adversely affect our business.
In the U.S., the federal regulatory landscape is evolving rapidly,
including recent actions by the Trump Administration, such as the AI Action Plan and related executive orders. These developments may result in changes to governmental priorities, enforcement approaches, and compliance expectations applicable to the
development, deployment, and use of AI technologies. Regulatory frameworks governing the use of autonomous AI in defense
and other applications are still developing, and new laws, regulations, or government procurement requirements may impose constraints on the degree of autonomy permitted in our products, mandate
specific human oversight or intervention requirements, or impose other conditions that could increase our development costs, delay product deployment, or limit the markets in which we can sell our solutions. As a result, we may need to develop and
implement AI governance and compliance measures, which may require changes to our operations and processes, result in increased compliance costs and potential increases in enforcement claims against us, and could adversely affect our business,
results of operations and financial condition.
There may be difficulty in retaining experts in artificial intelligence and other
related areas.
To successfully develop and deploy AI in our products, we must attract and retain highly qualified personnel with
expertise in artificial intelligence, machine learning, and data science. Competition for hiring these employees is intense, and many of the companies with which we compete for experienced employees have greater resources than we have. If we fail to
attract new technical personnel or fail to retain and motivate our current employees, our business and future growth prospects could be harmed.
As the utilization of AI becomes more prevalent, we anticipate that it will continue to present new or unanticipated ethical, reputational,
technical, operational, legal, competitive, and regulatory issues, among others. We expect that our incorporation of AI in our business will require additional resources, including the incurrence of additional costs, to develop and maintain our
solutions to minimize potentially harmful or unintended consequences, to comply with applicable and emerging laws and regulations, to maintain or extend our competitive position and to address any ethical, reputational, technical, operational,
legal, competitive, or regulatory issues which may arise as a result of any of the foregoing. As a result, the challenges presented with our use of AI could adversely affect our business, results of operations and financial condition.
Our business is subject to significant disruption from armed conflict, natural disasters, environmental disasters, and other events
outside of our control that could have a material adverse effect on our financial position, results of operations, or cash flows.
We have been, and may in the future be, exposed to damaging storms and other extreme weather conditions, such as hurricanes and floods (which
may be exacerbated by changing weather patterns or environmental conditions), rising sea waters, environmental disasters such as oil spills, armed conflicts, acts of terrorism, and health epidemics, pandemics, and similar outbreaks. We also may
experience disruptions to electrical and other power distribution networks, information technology, and other critical infrastructure needed for normal business operations and our performance. We anticipate that our facilities and operations,
particularly in regions prone to military conflict, natural disasters and extreme weather events, will continue to be at risk of unexpected work stoppages.
Natural disasters, environmental disasters, and other events outside of our control can result in significant adverse impacts to our business,
including by adversely impacting our workforce and supply chain, resulting in increased costs or other financial impacts, causing schedule or production delays or temporary closures of our facilities or facilities of our customers or suppliers, or
other impacts. These events also may impact our suppliers’ and subcontractors’ ability to perform and may disrupt the availability of raw materials and supplies needed for our performance.
Although we endeavor to mitigate the risk associated with these events, if insurance or other means of recovery or risk mitigation are
unavailable or insufficient, or if we experience delays in such recovery, the damage and adverse impacts caused by such events may be significant, and our financial position, results of operations, or cash flows could be materially adversely
affected.
In particular, as a company with substantial operations, employees, and facilities located in the State of Israel, we are
exposed to risks arising from Israel’s ongoing military conflicts and regional instability, including the potential for escalation of hostilities with neighboring countries and Palestinian territories. The security situation in the State of
Israel, including acts of terrorism, armed conflict, missile attacks, and civil unrest, could directly impact our Israeli facilities, personnel, and supply chain. Additionally, Israeli employees are subject to mandatory military reserve duty, which
may disrupt our operations if a significant number of employees are called to active service during periods of heightened conflict. Political and economic instability in the State of Israel, or changes in the relationship between the State of Israel
and other countries, could also adversely affect our business.
Because we have significant operations in the State of Israel, we may be subject to
political, economic and other conditions affecting Israel (including war and hostilities in the Middle East) that could materially affect our business.
Our principal executive offices and a significant portion of our research and development operations and personnel are located in the State of
Israel. As a result, political, economic and military conditions in Israel and the surrounding region may directly affect our business and operations. Any major hostilities involving Israel, a full or partial mobilization of reserve forces of the
Israeli army, the interruption or curtailment of trade between Israel and its present trading partners, or a significant downturn in the economic or financial condition of Israel could have a material adverse effect on our business, financial
condition and results of operations.
Since its establishment in 1948, Israel and its neighbors have engaged in a number of armed
conflicts. A state of hostility, varying from time to time in intensity and degree, has led to security and economic challenges for Israel. Major hostilities between Israel and its neighbors may hinder Israel’s international trade and lead to
economic downturn. This, in turn, could have a material adverse effect on our operations and business.
In addition, Israel faces threats
from more distant neighbors, in particular, Iran which attacked Israel during 2024 and 2025, and may be developing nuclear weapons and has targeted cyber-attacks against Israeli entities, and terrorist groups in Yemen, which attacked Israel and
limited the movement of marine shipments to Israel through the Red Sea.
On February 28, 2026, Israel and the United States launched
a joint attack on Iran, targeting key officials, military commanders and facilities, resulting in the death of Iran’s Supreme Leader and other key officials and military commanders. In retaliation, Iran launched hundreds of ballistic missiles
and drones against civilian targets in Israel and against U.S. military bases, civilian aviation facilities and other civilian targets in several countries in the Persian Gulf, including Jordan, Kuwait, Bahrain, Qatar, Iraq, Saudi Arabia and United
Arab Emirates. The war has also led to widespread airspace closures in the region.
Currently, we continue our business and operations but
the intensity and duration of Israel’s current war is difficult to predict, as are such war’s economic implications on our business and operations and on Israel’s economy in general.
Furthermore, there are a number of countries that restrict or frown upon business with Israel or Israeli companies, and we are precluded from
marketing our products to these countries. Restrictive laws or policies directed towards Israel or Israeli companies may have an adverse impact on our operations, our financial results or the expansion of our business. These events may be
intertwined with wider macroeconomic indications of a deterioration of Israel’s economic standing, that may involve an additional downgrade in Israel’s credit rating by rating agencies (such as the downgrade of the credit rating of
Israel by Moody’s, S&P and Fitch), which may have a material adverse effect on our company and our ability to effectively conduct our operations.
Finally, the current elected government in Israel is pursuing extensive reforms to Israel’s judicial system and has recently renewed its
efforts to effect such changes. Certain financial, legal and commercial organizations and entities have claimed that such changes, if adopted, could adversely affect the macroeconomic condition in which we operate. At this stage, the proposed
legislation has not become effective, and its scope has not been fully determined; we cannot assess the potential impacts of these changes and their likelihood on our business, prospects, financial condition, and results of operation.
Legal and Regulatory Risk Factors
As a government contractor, we are heavily regulated and could be adversely affected by changes in regulations or negative findings from
a government audit or investigation.
As a government contractor, we are subject to significant legal regulatory requirements.
Government contracting requirements increase our contract performance costs and compliance costs and risks, and change on a routine basis. New laws, regulations, or procurement requirements, or changes to existing ones (including, for example,
regulations related to cybersecurity, information and data protection, environment, cost accounting, taxes, pensions, counterfeit parts, specialty metals, and use of certain foreign equipment, among others), can increase our performance costs and
compliance costs and risks, and reduce our profitability. In addition, if we are found to have engaged in illegal activities, or are found to not be presently responsible we may be subject to reductions in contract values, contract modifications or
terminations, penalties, fines, repayments, compensatory, treble, or other damages, or suspension or debarment.
We operate in a heavily
regulated environment and are overseen and routinely audited by the U.S., Israeli and Singapore Governments and their respective agencies, including the DoW, Directorate of Defense Research & Development, Ministry of Defence, Israel
Aerospace Industries, and Defence Science and Technology Agency. These agencies evaluate our performance, cost structures, and compliance, as well as the adequacy of our business systems and processes. If an audit uncovers improper or illegal
activities, we may be subject to administrative, civil, or criminal proceedings, which could result in fines, penalties, repayments, sanctions, compensatory, treble, or other damages. Allegations of impropriety can also cause significant
reputational damage.
Certain government customers, including the U.S. Government, also has the ability to decrease or withhold contract
payments if it determines significant deficiencies exist in one or more of our business systems. In response to audits, investigations, and inquiries, we may be required to adjust our contract prices and costs allocated to our government contracts.
Such audits, investigations, and inquiries may result in reductions of our contract prices, which could be substantial. Costs we incur that are determined to be unallowable or improperly allocated to a specific contract will not be recovered or must
be refunded to the customer if previously reimbursed.
If we or those with whom we do business do not comply with the laws, regulations,
rules, contract terms, and processes to which we are subject or if customer business practices or requirements change significantly, including with respect to allowable costs, it could affect our ability to compete, have a significant adverse impact
on our reputation, and have a material adverse effect on our financial position, results of operations and/or cash flows.
We are
subject to investigations, claims, litigation, disputes and other legal proceedings that could ultimately be resolved against us.
The size, nature, and complexity of our business make us highly susceptible to investigations, claims, litigation, disputes, and other legal
proceedings. We are and may become subject to various legal proceedings across a broad array of matters, including but not limited to, administrative, civil, and criminal litigation, class actions, environmental claims, income tax proceedings,
antitrust claims, compliance proceedings, customer claims, enforcement actions, audits, investigations and other legal proceedings, which can divert financial and management resources and result in fines, penalties, compensatory, treble, or other
damages, or nonmonetary sanctions. Government regulations also provide that certain allegations against a contractor may lead to suspension or debarment from government contracts or suspension of export privileges. Suspension or debarment or
criminal resolutions in particular could have a material adverse effect on our business because of our reliance on government contracts and authorizations. Any litigation, claim, dispute, audit, or investigation, even if pending or not ultimately
substantiated or if fully indemnified or insured, could negatively impact our reputation among our customers and the public and make it more difficult for us to compete effectively or acquire adequate insurance in the future. The negative resolution
of investigations, claims, litigation, disputes or other legal proceedings could have a material adverse effect on our financial position, results of operations, or cash flows. See Note 10: Commitments and Contingencies.
Environmental costs could have a material adverse effect on our financial position, results of operations, or cash flows.
Our operations are subject to and affected by federal, state, local, and foreign environmental laws and regulations relating to the discharge,
storage, treatment, handling, disposal, and remediation of certain materials, substances, and wastes used in our operations. Future environmental laws or regulations could also impact us. Environmental laws and regulations may require the
installation of costly pollution control equipment or operational
changes to limit emissions or discharges and/or to decrease the likelihood of accidental hazardous material releases. We expect to incur future capital and operating costs to comply with current
and future laws and regulations for environmental protection and remediation, and such costs could be substantial, depending on the future proliferation of environmental requirements and the extent to which we discover currently unknown
environmental conditions.
Certain of our manufacturing operations require the use of hazardous materials. To manage these materials, we
are required to maintain above ground and underground storage tanks, which may leak and require remediation.
Various federal, state, and
local environmental laws and regulations impose restrictions on the discharge of pollutants into the environment and establish standards for the transportation, storage, and disposal of toxic and hazardous wastes. Substantial fines, penalties, and
criminal sanctions may be imposed for noncompliance, and certain environmental laws impose joint and several “strict liability” for remediation of spills and releases of oil and hazardous substances. Such laws and regulations impose
liability upon a party for environmental cleanup and remediation costs and damage without regard to the negligence or fault of such party and could expose us to liability for the conduct of or conditions caused by third parties. Moreover, if we
violate the Clean Air Act or the Clean Water Act, the facility or facilities involved in the violation could be placed by the U.S. Environmental Protection Agency, or the EPA, on a list of facilities that generally cannot be used in performing on
U.S. Government contracts until the violation is corrected.
Our business may be affected by environmental impacts, including changing
weather patterns or environmental conditions and evolving legal and regulatory requirements and stakeholder sentiment. Changes in environmental laws or regulations, including regulations on greenhouse gas emissions, carbon pricing, energy taxes,
product efficiency standards, mandatory disclosure obligations, and other requirements, could increase our operational and compliance expenditures and those of our suppliers, including increased energy and raw materials costs and costs associated
with manufacturing changes. We also may be impacted by evolving stockholders or other stakeholder sentiment regarding environmental matters.
The adoption of new environmental laws and regulations, stricter enforcement of existing laws and regulations, imposition of new cleanup
requirements, discovery of previously unknown or more extensive contamination, litigation involving environmental matters, our inability to recover related costs under our government contracts, or the financial insolvency of other responsible
parties could cause us to incur costs that could have a material adverse effect on our financial position, results of operations, or cash flows.
Our business and reputation may be adversely affected by the improper conduct of employees, agents, suppliers, subcontractors, business
partners, or joint ventures in which we participate.
We may be liable for the misconduct of employees, agents, or others working
with us or for us, including subcontractors and suppliers, due to their violations of applicable laws or regulations, including laws governing improper payments to government officials, the protection of export controlled or classified information,
false claims, procurement integrity cost accounting and billing, antitrust and competition, information security and data privacy, and contract terms. We have implemented a compliance program that is designed to prevent and detect misconduct.
However, we cannot ensure that we will prevent all such misconduct. We have been, and may in the future be, impacted by such misconduct. Any improper conduct by our employees, agents, or others with whom we do business or who are working on our
behalf could subject us to administrative, civil, or criminal investigations and enforcement actions, monetary and non-monetary penalties, liabilities, and the loss of privileges or other sanctions including
suspension or debarment, which could have a material adverse effect on our financial position, results of operations, or cash flows.
The
risk of improper conduct may increase as we expand our operations globally, including as we pursue opportunities with new partners. We may be unable to prevent misconduct or violations of applicable laws by these joint ventures (including their
officers, directors and employees) or our business partners. Moreover, actions that are inconsistent with our culture and values, including with respect to product safety or quality, legal or regulatory compliance, financial reporting, or people
management, may cause us significant reputational damage.
Changes in tax laws and regulations or exposure to additional tax liabilities could
adversely affect our financial results.
We are subject to income and other taxes in the U.S. (federal and state) and foreign
jurisdictions. Changes in applicable tax laws and regulations or their interpretation and application, including those with retroactive effect, have affected and could affect our tax expense and profitability and cash flows. On July 4, 2025,
Public Law 119-21, or the Act, was signed into law. The Act provides for significant changes to the Internal Revenue Code of 1986, as amended, or the Code, that impacts corporations, including making certain
business deductions permanent, such as bonus depreciation and immediate expensing of domestic research and development expenditures.
In
addition to future changes in tax laws, the amount of net deferred tax liabilities will change periodically as a result of a number of factors, including the measurement of our defined benefit pension plans, actual cash contributions to our defined
benefit pension plans, changes in the timing of contract taxable income, and changes in the amount and timing of depreciation and amortization deductions. We are also regularly under audit or examination by taxing authorities, including foreign tax
authorities. The final determination of tax liabilities and any related litigation could similarly result in unanticipated increases in our tax expense and affect profitability and cash flows.
We may be unable to adequately protect our intellectual property rights, and certain of our intellectual property may be subject to
Israeli government restrictions, which could affect our ability to compete.
We own trademarks, copyrights, and other forms of
intellectual property related to our business, and we license intellectual property rights to and from third parties. Intellectual property protection in the field of artificial intelligence and machine learning is currently under development, and
there is uncertainty in different jurisdictions as to the degree and extent of protection warranted for inventions involving artificial intelligence and machine learning. If we fail to obtain protection for the intellectual property rights
concerning our artificial intelligence and machine learning technologies, or later have our intellectual property rights invalidated or otherwise diminished, our competitors may be able to take advantage of our research and development efforts to
develop competing products. In order to protect our proprietary technology and processes, we rely in part on confidentiality and intellectual property assignment agreements with our employees, consultants, and other advisors. These agreements may
not effectively prevent disclosure of confidential information nor result in the effective assignment to us of intellectual property and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information or other
breaches of the agreements.
Any output created by us using AI tools may not be subject to copyright protection, which may adversely
affect our intellectual property rights in, or ability to commercialize or use, any such content. The output produced by AI tools may include information subject to certain privacy or right of publicity laws or constitute an unauthorized derivative
work of the copyrighted material used in training the underlying AI model, any of which could also create a risk of liability for us, or adversely affect our business, results of operations or financial condition.
Furthermore, any output created by us using AI tools may not be subject to copyright protection, which may adversely affect our intellectual
property rights in, or ability to commercialize or use, any such content. The output produced by AI tools may include information subject to certain privacy or right of publicity laws or constitute an unauthorized derivative work of the copyrighted
material used in training the underlying AI model, any of which could also create a risk of liability for us, or adversely affect our business, results of operations or financial condition. AI-related lawsuits
to date have generally focused on AI service providers, which may increase our risks of liability.
To the extent any of our intellectual
property has been developed with funding or grants from the Israeli Innovation Authority, or the IIA (formerly known as the Office of the Chief Scientist), such intellectual property, together with any later developments derived from, based on, or
constituting improvements or modifications of such know-how, or collectively, the IIA Funded Know-How, will be subject to restrictions under the Israeli Encouragement of
Industrial Research, Development and Technological Innovation Law, 5744-1984, or the Innovation Law, including restrictions on the transfer or license of such technology inside or outside of the State of Israel without prior IIA committee approval
(which is discretionary and may not be granted, or may be subject to conditions imposed by the IIA), mandatory royalty payments to the IIA on product sales (typically ranging from 3% to 6% of sales until the total grant amount plus interest is
repaid), and requirements to manufacture products in the State of Israel unless IIA approval is obtained. These restrictions could limit our strategic and operational flexibility,
require us to pay substantial redemption fees (potentially ranging from the amount of grants received up to six times such amount, depending on various factors including whether we retain
research and development operations in the State of Israel) to obtain approval to transfer technology outside of the State of Israel, reduce the net consideration available to our shareholders in a merger or similar change of control transaction,
and impose ongoing financial obligations that could adversely affect our profitability. The restrictions under the Innovation Law continue to apply even after payment of the full amount of royalties payable pursuant to the grants. In addition, any
change of control or change of ownership that would make a non-Israeli citizen or resident an “interested party” as defined in the Innovation Law requires prior written notice to the IIA. Failure
to comply with IIA requirements could result in the loss of benefits, penalties, the obligation to refund grants previously received together with interest and penalties, criminal charges, and financial sanctions. In addition, the government of the
State of Israel may from time-to-time audit sales of products which it claims incorporate IIA Funded Know-How, which may lead to
additional royalties being payable and may subject such products to additional IIA restrictions and obligations. The Israeli government does not, however, own intellectual property rights in technology developed using IIA funding.
Intellectual property discovered through government funded programs may be subject to federal regulations such as “march-in” rights, certain reporting requirements and a preference for U.S.-based companies. Compliance with such regulations may limit our exclusive rights and limit our ability to contract with non-U.S. manufacturers.
We may acquire or license in the future intellectual property rights
that have been generated through the use of U.S. government funding or grants. Pursuant to the Bayh-Dole Act of 1980, the U.S. government has certain rights in inventions developed with government funding. These U.S. government rights include
a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose. In addition, the U.S. government has the right, under
certain limited circumstances, to require us to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third-party if it determines that: (1) adequate steps have
not been taken to commercialize the invention; (2) government action is necessary to meet public health or safety needs; or (3) government action is necessary to meet requirements for public use under federal regulations, or also referred
to as march-in rights. If the U.S. government exercised its march-in rights in our future intellectual property rights that are generated through the use of U.S.
government funding or grants, we could be forced to license or sublicense intellectual property developed by us or that we license on terms unfavorable to us, and there can be no assurance that we would receive compensation from the U.S. government
for the exercise of such rights. The U.S. government also has the right to take title to these inventions if the grant recipient fails to disclose the invention to the government or fails to file an application to register the intellectual property
within specified time limits. Intellectual property generated under a government funded program is also subject to certain reporting requirements, compliance with which may require us to expend substantial resources. In addition, the U.S. government
requires that any products embodying any of these inventions or produced through the use of any of these inventions be manufactured substantially in the United States. This preference for U.S. industry may be waived by the federal agency that
provided the funding if the owner or assignee of the intellectual property can show that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially
in the United States or that under the circumstances domestic manufacture is not commercially feasible. This preference for U.S. industry may limit our ability to contract with non-U.S. product manufacturers
for products covered by such intellectual property.
If we are unable to protect the confidentiality of our trade secrets, our
business and competitive position would be harmed.
We also rely upon proprietary technology, information, processes, and know-how that are not protected by patents. We seek to protect this information through trade secret or confidentiality agreements with our employees, consultants, subcontractors, and other parties, as well as
through other measures. These agreements and other measures may not, however, adequately protect the trade secrets on which we depend. In addition, trade secrets may be independently developed by competitors. Competitors may hire our former
employees or consultants who may misappropriate our intellectual property or proprietary technology or misuse our confidential information. Further, we cannot guarantee that we have entered into confidentiality agreements with each party that has or
may have had access to our trade secrets, confidential information, software, or other proprietary technology.
Our success depends on our ability to protect our intellectual property and our
proprietary technologies.
Our intellectual property may also be subject to challenge, invalidation, infringement,
misappropriation, or circumvention by third parties. In the event of infringement, misappropriation, breach of a confidentiality agreement, or unauthorized disclosure of proprietary information, we may not have adequate legal remedies to protect our
intellectual property. Litigation to determine the scope of our rights or to protect our rights, even if successful, could be costly and a diversion of management’s attention. If we are unable to protect our intellectual property rights
adequately, our business could be adversely affected.
Third parties claiming that we infringe their intellectual property rights
could cause us to incur significant legal expenses and prevent us from selling our solutions.
Companies and individuals in our
industries, including some of our current and potential competitors, own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of infringement, misappropriation or other
violations of intellectual property rights. Claims have been threatened under both U.S. and foreign laws for trademark infringement and other theories based on our use of the trade name “Xtend” and derivatives and combinations thereof.
We may receive additional notices that claim we have infringed, misappropriated or otherwise violated other parties’ intellectual property rights. Any intellectual property infringement or misappropriation claims, with or without merit, could
be very time consuming, could be expensive to settle or litigate and could divert our management’s attention and other resources. These claims could also subject us to significant liability for damages, potentially including treble damages if
we are found to have willfully infringed patents or copyrights, or result in an injunction requiring us to stop using the challenged technology. Further, resolution of claims may require us to redesign or rebrand our products, license rights from
third parties on potentially unfavorable terms, cease using certain brand names (including Xtend and derivatives thereof) or other intellectual property rights altogether, or make substantial payments for royalty or license fees, all of which could
adversely affect our ability to maintain and protect our brands, increase costs, confuse customers and users, and adversely affect our growth.
In addition, the use of AI tools by us, our employees, or third parties may generate output that incorporates or is derived from third-party
intellectual property in ways that are difficult to detect, potentially exposing us to infringement claims or limiting our ability to assert proprietary rights in AI-generated work product. Any output created
by us using AI tools may not be subject to copyright protection, which may adversely affect our intellectual property rights in, or ability to commercialize or use, any such content.
We also use certain intellectual property licensed to us by third parties. In the case of such licensed intellectual property, we may be
unable in the future to secure the necessary licenses to use such intellectual property, or to secure the licenses on commercially reasonable terms. If we cannot license or develop around third-party intellectual property for any infringing aspect
of our business, we would be forced to limit or stop sales of one or more of our solutions or features of our solutions and may be unable to compete effectively. Any of these results would harm our business, financial condition and operating
results.
In addition, our agreements with customers and channel partners may include indemnification provisions under which we agree to
indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement based on our technology and solutions. We could be subject to large indemnity payments which could harm our business, financial condition and
operating results.
Our reliance on open source software may impair the commercialization of our solutions and expose us to
potential litigation.
Certain aspects of our solutions are built using open source software, and we expect to continue using open
source software in the future. While open source software is generally freely accessible and usable, certain open source licenses may, under specific circumstances, require us to offer our solutions that incorporate the open source software at no
cost, make available the source code for modifications or derivative works we create based on the open source software, and/or license such modifications or derivative works under the terms of the applicable open source license or on otherwise
unfavorable terms. While we monitor our compliance with open source licenses and take steps to protect our proprietary source code, we may inadvertently use open source software in ways we did not intend, potentially exposing us to claims of breach
of contract or intellectual property infringement. Moreover, the terms of certain open source licenses have not yet been interpreted by U.S. or foreign courts, and there is a risk that such licenses could be construed in a manner that imposes
unexpected conditions or restrictions on our ability to
commercialize our solutions. Additionally, use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not
provide warranties or controls on the origin of software and, thus, may contain security vulnerabilities or broken code. There is typically no support available for open source software, and we cannot ensure that the authors will implement updates
to address security risks or will not abandon further development and maintenance. Further, our use of any AI tools that use, incorporate, or output any open source software may heighten the foregoing risks. Any of these risks could be difficult to
eliminate or manage, and if not addressed, could harm our business, financial condition and operating results.
Our insurance
coverage may be inadequate to cover all of our significant risks or our insurers may deny coverage of material losses we incur, which could adversely affect our profitability and financial position.
We seek to insure our significant risks and potential liabilities that are insurable, including, among others, property loss from natural
disasters, product liability, and business interruption resulting from an insured property loss. In some circumstances, we may be indemnified for losses by our government customers, subject to the availability of appropriated funds. Not every risk
or liability can be protected by insurance, and, for insurable risks, the limits of coverage we can reasonably purchase may not be sufficient to cover the full amount of our actual losses or liabilities, including, for example, in the case of a
catastrophic hurricane. In addition, the nature of our business can make it difficult to quantify the disruptive impact and loss resulting from such events. Limitations on the availability of insurance coverage may result in substantial uninsured
losses, which could have a material adverse effect on our financial position, results of operations, or cash flows. Even in cases for which we have insurance coverage, disputes with insurance carriers over coverage may affect the timing of cash
flows and cause us to incur significant expense to pursue insurance claims. In addition, an unfavorable outcome in the event of litigation with an insurance carrier may have a material adverse effect on our financial position, results of operations,
or cash flows.
If we fail to manage acquisitions, joint ventures, equity investments, and other transactions successfully or if
acquired businesses or equity investments fail to perform as expected, our financial results, business, and future prospects could be harmed.
As part of our business strategy, we regularly review, identify, and evaluate potential investments, acquisitions, joint ventures, strategic
partnerships and teaming or other collaborative arrangements. We aim to pursue opportunities that align with and complement our business and growth objectives. When evaluating potential opportunities, we make significant judgments regarding the
value of the opportunity, potential costs, and other liabilities associated with opportunity. These transactions often involve other risks and uncertainties and require substantial management resources and can divert management’s attention
from our existing business. Unidentified or identified but un-indemnified or uninsured pre-closing liabilities could affect our future financial results, particularly
through successor liability under procurement laws and regulations, anti-corruption, environmental, tax, import export, and technology transfer laws, which provide for civil and criminal penalties and the potential for debarment. We also may incur
unanticipated costs or expenses, including post-closing asset impairment charges, expenses associated with eliminating duplicate facilities, employee retention, transaction-related or other litigation, and other liabilities. Any of the foregoing
could adversely affect our business and results of operations.
Joint ventures, partnerships, and other
non-controlling investments operate under shared control with other parties. These arrangements typically include many of the same risks and uncertainties, but may also expose us to additional risks not
present if we retained full control. A joint venture partner may have economic or other business interests that are inconsistent with our interests, and we may be unable to prevent strategic decisions that may adversely affect our business,
financial condition, and results of operations. We also could be adversely affected by, or liable for, actions taken by joint ventures that we do not control, or actions taken by members of the joint ventures, including violations of
anti-corruption, import and export, taxation, and anti-boycott laws.
We are also exposed to risks associated with restrictions on currency exchange and
significant currency fluctuations.
A substantial portion of our operating expenses, particularly personnel costs in Israel
($11.4 million in labor) and Singapore ($1.4 million in labor), are denominated in local currencies including the New Israeli Shekel, or NIS, the Singapore dollar, the Euro and the British pound sterling. Xtend’s functional and
reporting currency is the U.S. dollar. As a result, we are exposed to the risk that such foreign currencies may appreciate relative to the dollar, or, if such currencies instead devalue relative to the dollar, that the inflation rate in the
respective country may exceed such rate of devaluation of its respective currency, or that the timing of such devaluation may lag behind inflation in the respective country. In any such event, the dollar cost of Xtend’s operations outside of
the U.S. would increase and our dollar-denominated results of operations would be adversely affected. We cannot predict any future trends in the rate of inflation or the rate of devaluation (if any) of foreign currencies against the dollar, and any
significant inflation or devaluation could have a material adverse effect on us.
Combining the businesses of Xtend and JFB may be
more difficult, time-consuming or costly than expected and the actual benefits of combining the businesses of Xtend and JFB may be less than expected, either or both of which may adversely affect the Company’s future results.
The anticipated benefits from the completion of the Mergers may not be achieved if the businesses of Xtend and JFB are not successfully
combined. Xtend and JFB have been operated as independent businesses, and our management may face significant challenges in integrating the technologies, organizations, systems, procedures, policies and operations, as well as addressing the
different business cultures at Xtend and JFB, managing the increased scale and scope of the combined businesses, identifying and eliminating duplicative programs, and retaining key personnel. If Xtend AI Robotics, Inc. as a combined company is not
successfully integrated, the anticipated benefits of the Mergers, may not be realized fully or at all or may take longer to realize than expected. Actual synergies, if achieved, may be less than expected and may take longer to achieve than
anticipated.
The integration of the businesses of Xtend and JFB may also be complex and time consuming and require substantial resources
and effort. In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized as a result. The integration process and other disruptions resulting from the
Mergers, may also disrupt Xtend’s or JFB’s ongoing businesses operations and/or adversely affect Xtend’s or JFB’s relationships with employees, customers, clients, partners, regulators and others with whom Xtend and JFB have
business or other dealings. Such consequences of the integration process may adversely affect our business and results of operations.
We will share control in joint venture projects, other investments, and strategic alliances, which will limit our ability to manage
third-party risks associated with these projects.
We may participate in joint ventures,
other non-controlling investments, and strategic alliances in the future. In these joint ventures, investments, and strategic alliances, we may have shared control over the operation of the assets
and businesses. As a result, such investments and strategic alliances may involve risks such as the possibility that a partner in an investment might become bankrupt, be unable to meet its capital contribution obligations, have economic or business
interests or goals that are inconsistent with our business interests or goals, or take actions that are contrary to our instructions or to applicable laws and regulations. In addition, we may be unable to take action without the approval of our
partners, or our partners could take binding actions without our consent. Consequently, actions by a partner or other third party could expose us to claims for damages, financial penalties, additional capital contributions, and reputational harm,
any of which could have an adverse effect on our business, financial condition, and results of operations.
Preparing our financial
statements will require us to have access to information regarding the results of operations, financial position, and cash flows of our joint ventures and other investments. Any deficiencies in our internal controls over financial reporting may
affect our ability to report our financial results accurately or prevent or detect fraud. Such deficiencies also could result in restatements of, or other adjustments to, our previously reported or announced operating results, which could diminish
investor confidence and reduce the market price for our common stock. Additionally, if our joint ventures and other investments are unable to provide this information for any meaningful period or fail to meet expected deadlines, we may be unable to
satisfy our financial reporting obligations or timely file our periodic reports.
Once we are no longer an emerging growth company, a smaller reporting company or
otherwise no longer qualify for applicable exemptions, we will be subject to additional laws and regulations affecting public companies that will increase our costs and the demands on management and could harm our operating results.
We are subject to the reporting requirements of the Exchange Act, which requires, among other things, that we file with the SEC, annual,
quarterly and current reports with respect to our business and financial condition as well as other disclosure and corporate governance requirements. However, as an emerging growth company, we may take advantage of exemptions from various
requirements, such as an exemption from the requirement to have our independent auditors attest to our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act as well as an exemption from the “say on
pay” voting requirements pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Even after we no longer qualify as an emerging growth company, we expect to still qualify as a “smaller reporting company,”
as such term is defined in Rule 12b-2 under the Exchange Act, in at least the near term, which may allow us to take advantage of many of the same exemptions from disclosure requirements, including not being
required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation and in our periodic reports and proxy statements. Once we are no longer an
emerging growth company, a smaller reporting company or otherwise qualify for these exemptions, we will be required to comply with these additional legal and regulatory requirements applicable to public companies and will incur significant legal,
accounting and other expenses to do so. If we are not able to comply with the requirements in a timely manner or at all, our financial condition or the market price of our common stock may be harmed. For example, if we or our independent auditor
identifies deficiencies in our internal control over financial reporting that are deemed to be a material weakness, we could face additional costs to remedy those deficiencies, the market price of our common stock could decline or we could be
subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.
Provisions in our organizational documents and certain rules imposed by regulatory authorities may delay or prevent acquisition by a
third party.
Our amended and restated certificate of incorporation and bylaws contain several provisions that may make it more
difficult or expensive for a third party to acquire control of us without the approval of our Board. These provisions, which may delay, prevent, or deter a merger, acquisition, tender offer, proxy contest or other transaction that stockholders may
consider favorable, include the following:
•
advance notice requirements for stockholder proposals and director nominations;
•
provisions limiting stockholders’ ability to call special meetings of stockholders, to require special
meetings of stockholders to be called and to take action by written consent; and
•
the ability of our Board to designate the terms of and issue new series of preferred stock without stockholder
approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our
Board.
These provisions of our certificate of incorporation and bylaws could discourage potential takeover attempts and
reduce the price that investors might be willing to pay for shares of our common stock in the future, which could reduce the market price of our common stock.
The provisions of our amended and restated certificate of incorporation requiring exclusive venue in the Court of Chancery in the State
of Delaware for certain types of lawsuits and the federal district courts of the United States for the resolution of any complaint asserting a cause of action under the Securities Act may have the effect of discouraging lawsuits against our
directors and officers.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to the
selection of an alternative forum, (A) the Court of Chancery of the State of Delaware and any appellate court therefrom be the sole and exclusive forum for (1) any derivative claim or cause of action brought on our behalf, (2) any
claim or cause of action for breach of a fiduciary duty owed by any of our current or former directors, officers or other employees or stockholders, to us or our stockholders, (3) any claim or cause of action against us or any of our current or
former director, officer or other employee, arising out of or pursuant to any provision of the DGCL, the amended and restated certificate of incorporation or the amended and restated bylaws; (4) any claim or cause of action seeking to
interpret, apply, enforce or determine the validity of the
amended and restated certificate of incorporation or the amended and restated bylaws (including any right, obligation, or remedy thereunder); (5) any claim or cause of action as to which the DGCL
confers jurisdiction on the Court of Chancery of the State of Delaware; and (6) any claim or cause of action against us or any of our current or former director, officer or other employee, governed by the internal-affairs doctrine or otherwise
related to our internal affairs, in all cases to the fullest extent permitted by applicable law and subject to the court having personal jurisdiction over the indispensable parties named as defendants; and (B) the federal district courts of the
United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Notwithstanding the foregoing, the exclusive forum provision shall not apply to claims or causes of action
brought to enforce a duty or liability created by the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits
to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers. It is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions
contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in such action. If a court were to find the choice of forum provisions contained in our amended and restated certificate of incorporation to be
inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition, or results of operations.
As a public company, our costs may be significant, and the regular operations of our business may be disrupted.
We expect to incur in the future significant additional legal, accounting, reporting, and other expenses as a result of having publicly traded
common stock, including, but not limited to, increased costs related to auditor fees, legal fees, directors’ fees, directors and officers insurance, investor relations, and various other costs. We also expect to incur incremental costs
associated with corporate governance requirements, including requirements under the Exchange Act, the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as well as rules implemented by the SEC and the
Public Company Accounting Oversight Board. Compliance with these rules and regulations will make some activities more difficult, time-consuming, or costly, and increase demand, and, as a result, may place a strain on our systems and resources.
Moreover, the additional demands associated with being a public company may disrupt regular operations of our business by diverting the attention of some of our senior management team away from revenue producing activities.
In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for
public companies, increasing legal and financial compliance costs, and making some activities more time consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as
a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions
to disclosure and governance practices. We intend to continue to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of
management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to
ambiguities related to practice, regulatory authorities may initiate legal proceedings against us, which could have an adverse effect on our business, financial condition, and results of operations.
Tax matters may cause significant variability in our financial results.
Our businesses will be subject to income taxation in the United States, as well as in many tax jurisdictions throughout the world. Tax rates in
these jurisdictions may be subject to significant change. If our effective tax rate increases, our operating results and cash flow could be adversely affected. Our effective income tax rate may vary significantly between periods due to a number of
complex factors including, but not limited to, projected levels of taxable income, pre-tax income being lower than anticipated in countries with lower statutory rates or higher than anticipated in
countries with higher statutory rates, increases or decreases to valuation allowances that need to be recorded against deferred tax assets, tax audits conducted and settled by various tax authorities, adjustments to income taxes upon finalization of
income tax returns, the ability to claim foreign tax credits and changes in tax laws and their interpretations in countries in which we will be subject to taxation.
In addition, the G20, the OECD, the U.S. Congress and Treasury Department and other
government agencies in jurisdictions where we and our affiliates will do business have had an extended focus on issues related to the taxation of multinational corporations, including, but not limited to, transfer pricing, country-by-country reporting and base erosion. As a result, the tax laws in the United States and other countries in which we and our affiliates will do business could change on a
prospective or retroactive basis, and any such changes could have an adverse effect on our worldwide tax liabilities, business, financial condition and results of operations.
Risks Relating to our Common Stock
An active trading market for our common stock may not develop and you may not be able to sell your shares of our common stock.
Although we have listed our common stock on the NYSE, an active trading market may never develop or be sustained. If an active
market for our common stock does not develop or is not sustained, it may be difficult for you to sell shares at an attractive price or at all.
The market price of our common stock may be volatile, and holders of our common stock may be unable to resell their common stock at or
above their purchase price or at all.
The market price for our common stock may fluctuate significantly in response to a number of
factors, most of which we cannot control, including, among others:
•
trends and changes in consumer preferences in the industries in which we operate;
•
changes in general economic or market conditions or trends in our industry or the economy as a whole and, in
particular, in the consumer and advertising marketplaces;
•
changes in key personnel;
•
our entry into new markets;
•
changes in our operating performance;
•
investors’ perceptions of our prospects and the prospects of the businesses in which we participate;
•
fluctuations in quarterly revenue and operating results, as well as differences between our actual financial and
operating results and those expected by investors;
•
the public’s response to our press releases or other public announcements or third parties, including our
filings with the SEC;
•
announcements relating to litigation;
•
guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such
guidance;
•
changes in financial estimates or ratings by any securities analysts who follow our common stock, our failure to
meet such estimates or failure of those analysts to initiate or maintain coverage of our common stock;
•
the development and sustainability of an active trading market for our common stock;
•
investor perceptions of the investment opportunity associated with our common stock relative to other investment
alternatives;
•
the inclusion, exclusion, or deletion of our common stock from any trading indices;
•
future sales of our common stock by our officers, directors, and significant stockholders;
•
other events or factors, including those resulting from system failures and disruptions, hurricanes, pandemics,
wars, acts of terrorism, other natural disasters, or responses to such events;
•
changes in financial markets or general economic conditions, including, for example, due to the effects of
recession or slow economic growth in the U.S. and abroad, interest rates, fuel prices, international currency fluctuations, corruption, political instability, acts of war, including conflicts in Eastern Europe and the Middle East, acts of terrorism,
and pandemics or other public health crises;
•
price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a
whole; and
•
changes in accounting principles.
The market price also may decline if we do not achieve the perceived benefits of the Mergers as rapidly or to the extent anticipated by
financial or industry analysts or if the effect of the Mergers on our financial position, results of operations or cash flows is not consistent with the expectations of financial or industry analysts. These and other factors may lower the market
price of our common stock, regardless of our actual operating performance. As a result, our common stock may trade at prices significantly below the price at which shares were purchased.
In addition, the stock markets, including the NYSE, have experienced extreme price and volume fluctuations that have affected and continue to
affect the market prices of equity securities of many companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, we could
incur substantial costs and our resources and the attention of management could be diverted from our business.
Because we do not
anticipate paying any dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.
We have never declared nor paid dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance
the growth and development, operation and expansion of our business and we do not anticipate declaring or paying any dividends in the foreseeable future. In addition, any future debt agreements may preclude us from paying dividends. As a result,
capital appreciation of our common stock, which may never occur, will be your sole source of gain on your investment for the foreseeable future.
Sales, or the perception of substantial amounts of sales, of our common stock by us or our existing stockholders in the public market
could cause the market price of our common stock to decline.
The sale of substantial amounts of shares of our common stock in the
public market, or the perception that such sales could occur, could harm the prevailing market price of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities
in the future at a time and at a price that we deem appropriate.
Although our shareholders are subject to restrictions on the transfer of
our securities for a period of 270 days following the closing date of the Mergers (which occurred on September 3, 2026), these shares may be sold after the expiration or early termination of the lock-up
period under our amended and restated bylaws, and in the case of American Ventures, under the Amended and Restated Support Agreement, dated as of July 16, 2026, by and among Xtend, American Ventures and, solely with respect to Section 4.4,
JFB. In addition, certain of the lock-up arrangements permit limited transfers during the lock-up period and subject to volume limitations, individual trading limits,
and minimum price thresholds. As restrictions on sale end, or permitted transfers occur in the 270 days following the closing date of the Mergers, the market price of our common stock could drop significantly if the holders of these shares sell them
or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our common stock or other securities.
In addition, the shares of our common stock reserved for future issuance under our 2026 Equity Incentive Plan will become eligible for sale in
the public market once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements and, in some cases, limitations on volume and manner of sale by affiliates under
Rule 144, as applicable. The number of shares initially reserved and available for future issuance under our 2026 Equity Incentive Plan is approximately 45,000,000 shares of our common stock. We have filed a registration statement on Form S-8 under the Securities Act to register shares of our common stock issued pursuant to our 2026 Equity Incentive Plan. Shares registered under the Form S-8 are available for
sale in the open market, subject to applicable vesting and lock-up restrictions.
In the future, we may also issue our securities in connection with investments or
acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of the then-outstanding shares of our common stock. Any issuance of additional securities in connection
with investments or acquisitions may result in additional dilution to our stockholders.
The provisions of our amended and restated
bylaws requiring holders of our securities to effect sales under the applicable lock-up period through a coordinating broker may not be feasible under the conditions and in the time frames desired.
Our amended and restated bylaws provide that substantially all shares of our common stock issued at or in connection with the closing of the
Mergers are locked up for 270 days. During the Coordinated Sale Period (as defined in the amended and restated bylaws), a holder may sell shares only through a coordinated sale process administered by one or more coordinating brokers designated by
our Board. There can be no assurances that sales by the coordinating broker will be made at the price or in the quantities desired by the holder.
General Risk Factors
We may face
labor shortages that could slow our growth.
The successful operation of our business depends upon our ability to attract,
motivate, and retain a sufficient number of qualified employees. Shortages of labor may make it increasingly difficult and expensive to attract, train, and retain the services of a satisfactory number of qualified employees and could adversely
impact our events and productions. Competition for qualified employees could require us to pay higher wages, which could result in higher labor costs and could have an adverse effect on our business, financial condition, and results of operations.
We also will rely on contingent workers and volunteers in order to staff our events and productions, and our failure to manage our use of
such workers effectively could adversely affect our business, financial condition, and results of operations. We could potentially face various legal claims from contingent workers and volunteers in the future, including claims based on new laws or
stemming from allegations that contingent workers, volunteers or employees are misclassified. We may be subject to shortages, oversupply, or fixed contractual terms relating to contingent workers. Our ability to manage the size of, and costs
associated with, the contingent workforce may be subject to additional constraints imposed by local laws.
Costs associated with,
and our ability to, obtain insurance could adversely affect our business.
Heightened concerns and challenges regarding property,
casualty, liability, business interruption, cancellation, and other insurance coverage have resulted from terrorist and related security incidents along with varying weather-related conditions and incidents. We may experience increased difficulty
obtaining high policy limits of coverage at a reasonable cost and with reasonable deductibles. We will not be able to assure you that future increases in insurance costs and difficulties obtaining high policy limits and reasonable deductibles will
not adversely impact our profitability, thereby possibly impacting our operating results and growth.
We will not be able to assure you
that our insurance policy coverage limits, including insurance coverage for property, casualty, liability and business interruption losses, and acts of terrorism, would be adequate should one or multiple adverse events occur, or that our insurers
would have adequate financial resources to sufficiently or fully pay our related claims or damages. We will not be able to assure you that adequate coverage limits will be available, offered at a reasonable cost, or offered by insurers with
sufficient financial soundness. The occurrence of such an incident or incidents affecting any one or more of our venues could have an adverse effect on our financial position and future results of operations if asset damage or company liability were
to exceed insurance coverage limits, or if an insurer were unable to sufficiently or fully pay our related claims or damages.
If securities or industry analysis publish inaccurate or unfavorable research about us
or our business, the price of our common stock and trading volume could decline.
The trading market for our common stock depends
in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrades our common stock or publishes inaccurate or unfavorable research about us or our
business, our share price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which could cause our stock price and trading volume to
decline. In addition, if our operating results fail to meet the expectations of securities analysts, our stock price would likely decline.
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-Section 425
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