Company: ALAR
Filing Date: 2025-03-20
Form Type: 20-F
Source: 0001213900-25-025287
Chunk: 124

Company: Alarum Technologies Ltd.
Filing Date: 2025-03-20
Form: 20-F
Item: Item 10
Chunk 124
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 INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND SALE
OF ORDINARY SHARES AND AMERICAN DEPOSITARY SHARES, INCLUDING THE EFFECTS OF APPLICABLE STATE, LOCAL, FOREIGN OR OTHER TAX LAWS AND POSSIBLE
CHANGES IN THE TAX LAWS.

Passive Foreign
Investment Company Consequences

In general, a corporation
organized outside the United States will be treated as PFIC for any taxable year in which either (1) at least 75% of its gross income
is “passive income”, the PFIC income test, or (2) on average at least 50% of its assets, determined on a quarterly basis,
are assets that produce passive income or are held for the production of passive income, the PFIC asset test. Passive income for this
purpose generally includes, among other things, dividends, interest, royalties, rents, and gains from the sale or exchange of property
that gives rise to passive income. Assets that produce or are held for the production of passive income generally include cash, even if
held as working capital or raised in a public offering, marketable securities, and other assets that may produce passive income. Generally,
in determining whether a non-U. S. corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it
owns, directly or indirectly, at least a 25% interest (by value) is taken into account.

Our status as a PFIC will
depend on the nature and composition of our income and the nature, composition and value of our assets (which, generally may be determined
based on the fair market value of each asset, with the value of goodwill and going concern value being determined in large part by reference
to the market value of our Ordinary Shares, which may be volatile). Based upon the estimated value of our assets, including any goodwill,
and the nature and estimated composition of our income and assets, we do not expect to be classified as a PFIC for the taxable year ended
December 31, 2024 and in future taxable years, although there can be no assurance in this regard. In particular, so long as we do not
generate revenue from operations for any taxable year and do not receive any research and development grants, or even if we receive a
research and development grant, if such grant does not constitute gross income for U. S. federal income tax purposes, we likely will be
classified as a PFIC for such taxable year. Even