| ACQUISITION OF REVOLTZ |
NOTE 3 – ACQUISITION OF REVOLTZ | | a. | On April 24, 2021, CR Ltd. invested $250 representing 19.99% of the share capital of Revoltz Ltd. (“Revoltz”), an Israeli private company focusing on research, development and production of micro-mobility vehicles for the urban environment for the business and the private markets. | | | b. | On July 28, 2022, CR Ltd. entered into a convertible loan agreement with Revoltz pursuant to which CR Ltd. was required to loan an amount of $60 (the “Loan Principal Amount”) in Revoltz. In addition, CR Ltd. will provide an additional loan to Revoltz in an amount of up to $340 (the “Additional Amount” and, together with the Loan Principal Amount, the “Total Loan Amount”). The Total Loan Amount will carry interest at the minimum rate prescribed by Israeli law. | The Total Loan Amount will be converted into shares of Revoltz upon the occurrence of any of the following events (each, a “Trigger Event”): | | i) | The consummation of funding by Revoltz of an aggregate amount of $1,000 at a pre-money Revoltz valuation of at least $7,000 (in the form of Simple Agreement for Future Equity, equity or otherwise); or | | | ii) | Revoltz has generated an aggregate of $1,000 or more in revenue. | In the event that a Trigger Event will not occur on or prior to the 24-month anniversary of the date on which the Loan Principal Amount is actually extended to Revoltz, the loan will be due and repayable by Revoltz to the Company. | | c. | On June 24, 2025, the Company entered into the Revoltz Exchange Agreement with Revoltz and the Exchanging Shareholders. According to the Revoltz Exchange Agreement, the Company issued an aggregate of 12.3% of its issued and outstanding capital stock on a pro rata and post-closing basis, equal to 1,385,002 shares of the Company’s common stock, to the Exchanging Shareholders, and the Exchanging Shareholders transferred to the Company 37,476 ordinary shares of Revoltz, which represents 32.74% of the outstanding share capital of Revoltz on a fully diluted and post-closing basis. The transactions contemplated by the Revoltz Exchange Agreement closed on June 26, 2025 (“the Closing”). | Concurrently with the Closing, Revoltz signed agreements with certain of its debt holders. Under the terms of such agreements, Revoltz issued 7,000 Revoltz ordinary shares in replacement of debt in a total amount of $462 (including the $65 loan balance mentioned in Note 3.b above). Upon the issuance of such Revoltz ordinary shares, CR Ltd.’s equity investment in Revoltz decreased from 18.6% to 18.33% of the outstanding share capital of Revoltz. After the Closing, the Company, together with CR Ltd., holds 51.07% of the outstanding share capital of Revoltz. The acquisition was accounted for as a business combination under ASC Topic 805, Business Combinations (“ASC 805”) that was achieved in stages. As a result of the change of control, the Company was required to remeasure CR Ltd.’s pre-existing equity investment in Revoltz at fair value prior to consolidation. CR Ltd. estimated the fair value of its 18.6% pre-existing investment in Revoltz to be approximately $1,321. The remeasurement resulted in the recognition of a pre-tax gain of $1,287, which is presented within other income on the Consolidated Statements of Comprehensive Loss. | | d. | As part of the Revoltz Exchange Agreement, the Company and Revoltz signed a monthly funding letter (the “Funding Letter”) that became effective upon the Closing of the transactions contemplated by the Revoltz Exchange Agreement. According to the Funding Letter, the Company agreed to provide Revoltz monthly funding in the amount up to $25 per month until the earlier of: (i) a period of 24 months, and (ii) termination of the appointment of Revoltz’s CEO. | | | e. | The table below summarizes the fair value of the consideration transferred to acquire Revoltz: | | Fair value of previously held equity method investment | | $ | 1,321 | | | Issuance of shares | | | 2,325 | | | Loan converted into shares | | | 65 | | | Non-controlling interests | | | 3,474 | | | Total purchase consideration | | $ | 7,185 | | The total consideration was allocated to the fair value of the net assets acquired, including identifiable intangible assets as of the Acquisition Date, with the excess purchase price recorded as goodwill. The goodwill that arose from the acquisition consists of synergies expected from the activities of the Company and Revoltz. Management’s estimate of the fair values of the acquired intangible assets as of the acquisition date is based on established and accepted valuation techniques performed with the assistance of third-party valuation specialists. The Company finalized the purchase price allocation for the acquisition of Revoltz during the second quarter of 2026. The measurement period under ASC 805 has concluded and no material measurement period adjustments were identified or recorded. | Total purchase consideration | | $ | 7,185 | | | | | | | | | Net assets acquired | | | | | | Tangible assets | | | | | | Cash | | $ | (2 | ) | | Other assets | | | (77 | ) | | | | | | | | Liabilities and other | | | 271 | | | Net book value of tangible assets | | | 192 | | | Intangible assets | | | | | | Technology | | | 7,279 | | | Deferred tax | | | (1,674 | ) | | Total intangible assets | | | 5,605 | | | Goodwill | | | 1,772 | | | Total net assets acquired | | $ | 7,185 | |
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