Financial Performance - Revenues for the year ended December 31, 2024, amounted to 5.3 million, or 20%, compared to 9.4 million, compared to 8.4 million, compared to a loss of 6.7 million, compared to a loss of 23.9 million, compared to 5.1 million to 8.9 million in 2024, an increase of 4.6 million in 2023[297]. - Cash and cash equivalents as of December 31, 2024, were approximately 9.9 million in long-term debt investments[294]. Revenue Segments - The web data collection segment revenues increased by 21.3 million to 4.3 million, or 83%, from 0.9 million, due to the cessation of advertising services and scaling down of operations[276]. - Approximately 41% of data collection revenue in 2024 derived from 42 customers purchasing services between 1,000,000[260]. Operating Expenses - Total operating expenses decreased from 17.2 million in 2024, primarily due to the absence of goodwill impairment[273]. - Total cost of revenues for 2024 was 7.7 million in 2023, primarily due to a 4.5 million in 2024, a 26% increase from 7.0 million in 2024 from 5.7 million in 2024, primarily due to higher payroll and share-based compensation[287]. Shareholder Information - As of March 10, 2025, the company had approximately 69.3 million Ordinary Shares issued and outstanding, with an additional 10.3 million Ordinary Shares issuable upon exercise of outstanding warrants and employee options, which may dilute current shareholders' holdings[134]. - The company does not anticipate paying any cash dividends in the foreseeable future, and has never declared or paid cash dividends[137]. - Holders of ADSs may not receive the same distributions or dividends as those made to holders of Ordinary Shares, and may not receive any value for them if it is illegal or impractical to make them available[135]. - The issuance of additional Ordinary Shares due to outstanding warrants and options may depress the company's share price and create a "market overhang" effect[134]. Compliance and Regulatory Risks - The company is subject to U.S. and Israeli export control laws, which could limit its ability to compete in international markets if compliance issues arise[96]. - The company may be classified as a "passive foreign investment company" (PFIC) for U.S. federal income tax purposes, which could have negative tax consequences for U.S. taxpayers holding its ADSs or Ordinary Shares[142]. - The company regained compliance with Nasdaq's minimum bid requirement after changing the ratio of its ADSs to Ordinary Shares, following a failure to comply in 2022[133]. - Delisting from Nasdaq could adversely affect the company's business and the trading of its Ordinary Shares, potentially leading to trading in less efficient over-the-counter markets[133]. Intellectual Property Risks - The company’s reverse access technology is patent protected in several jurisdictions, including the U.S., Europe, Israel, China, and Hong Kong[105]. - The company may face challenges in obtaining and maintaining effective patent rights, which could impair its competitive position[108]. - The company relies on trade secret protection and confidentiality agreements to safeguard proprietary information, but these measures may not be fully effective[110]. - The company may face challenges in commercializing products due to potential infringement of third-party intellectual property rights, which could lead to costly litigation or licensing requirements[112]. - The company’s ability to develop and commercialize products may be blocked if third-party patents cover aspects of its formulations or processes[117]. Market and Economic Conditions - The company may experience challenges in meeting ESG expectations, which could impact its reputation and stakeholder relations[169]. - The company’s ability to generate future global revenues may be adversely affected by weakened economic conditions[167]. - The ongoing political unrest in Israel may deter foreign investment and lead to increased currency fluctuations and interest rates[160]. - The Israeli government downgraded its credit rating from A1 to A2 in October 2023, with a further downgrade to Baa1 and a negative outlook expected by September 2024[159]. - Geopolitical events, such as the conflict between Russia and Ukraine, may adversely affect the company's international business and economic conditions[97]. Risks Related to Operations - The company is exposed to foreign currency risk, with the NIS depreciating by 0.6% against the U.S. dollar in 2024, impacting net income due to higher expenses incurred in NIS[94]. - The company faces risks associated with global operations, including longer collection periods and higher costs of doing business internationally[165]. - The company is exposed to potential cybersecurity threats due to its association with Israeli operations[159]. - Insurance policies do not cover losses from war and terrorism, and government coverage may not be sufficient to cover potential damages[158]. - Political and military instability in Israel may adversely affect the company's operations and financial condition[150]. - The company has not been materially adversely affected by the ongoing war since October 7, 2023, but the future impact remains uncertain[157].
Alarum Technologies .(ALAR) - 2024 Q4 - Annual Report