Company: NCEL
Filing Date: 2025-05-16
Form Type: 20-F
Source: 0001213900-25-044868
Chunk: 143

Company: NewcelX Ltd.
Filing Date: 2025-05-16
Form: 20-F
Item: Item 3
Chunk 143
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eration. While it has previously been held that an employee may waive his or her rights to remuneration in writing, orally or by
conduct, litigation is pending in the Israeli labor court is questioning whether such waiver under an employment agreement is enforceable.
Although the combined company’s Israeli employees have agreed that the combined company exclusively own any rights related to their
inventions, the combined company may face claims demanding remuneration in consideration for employees’ service inventions. As a
result, the combined company could be required to pay additional remuneration or royalties to its current and/or former employees, or
be forced to litigate such claims, which could negatively affect the combined company’s business.

The combined company received Israeli government
grants for certain of its research and development activities, the terms of which may require it to pay royalties and to satisfy specified
conditions in order to manufacture products and transfer technologies outside of Israel. If the combined company fails to satisfy these
conditions, it may be required to pay penalties and refund grants previously received.

The combined company’s
research and development efforts have been financed in part through royalty-bearing grants that it received from the Israel Innovation
Authority, or the IIA. The combined company is further required to comply with the requirements of the Israeli Encouragement of Industrial
Research, Development and Technological Innovation Law, 5744-1984, as amended, and related regulations, or the Research Law, with
respect to those past grants. When a company develops know-how, technology or products using IIA grants, the terms of these grants and
the Research Law restrict the transfer or license of such know-how, and the transfer of manufacturing or manufacturing rights of such
products, technologies or know-how outside of Israel, without the prior approval of the IIA. Therefore, the discretionary approval
of an IIA committee would be required for any transfer or license to third parties inside or outside of Israel of know how or for the
transfer outside of Israel of manufacturing or manufacturing rights related to those aspects of such technologies. The combined company
may not receive those approvals. Furthermore, the IIA may impose certain conditions on any arrangement under which it permits the combined
company to transfer technology or development.

The transfer or license
of IIA-supported technology or know-how outside of Israel and the transfer of manufacturing of IIA-supported products, technology or
know-how outside of Israel may involve the payment of significant amounts, depending upon the value of the transferred or licensed
technology or know-how, the combined company