Natural disasters, war, acts of terrorism and other events could adversely affect
Valtechs future revenues and operating income.
Natural disasters (including pandemics), war, terrorism, labor disruptions
and international conflicts, and actions taken by governmental entities or by Valtechs potential customers or suppliers in response to such events, could cause significant economic disruption and political and social instability in the areas
in which Valtech operates.
Valtech needs to attract and retain key employees to be competitive.
Valtechs ability to compete effectively depends upon its ability to attract and retain executives and other key employees, including
people in technical, marketing, sales and research positions. Competition for experienced employees, particularly for persons with specialized skills, can be intense. Valtechs ability to recruit such talent will depend on a number of factors,
including compensation and benefits, work location and work environment. If Valtech cannot effectively recruit and retain qualified executives and employees, its business could be adversely affected.
Valtech is incorporated under the laws of, and its principal offices are located in, the State of Israel and therefore its business
operations may be harmed by adverse political, economic and military conditions affecting Israel.
Valtech is incorporated under
the laws of, and its principal executive offices and research and development facilities are located in, the State of Israel. In addition, some of its subcontractors and suppliers are located in Israel. Accordingly, political, economic and military
conditions in Israel may directly affect its business.
In addition, a change in the security and political situation in Israel could have
a material adverse effect on Valtechs business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred between Israel and its Arab neighbors. In recent years, these have included hostilities between
Israel and Hezbollah in Lebanon, and Israel and Hamas in the Gaza Strip, both of which resulted in rockets being fired into Israel causing casualties and disruption of economic activities. In addition, Israel faces internal uprisings resulting in
organized and individual violent behavior and external threats. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could affect adversely Valtechs operations. Ongoing
and increased hostilities, the interruption or curtailment of trade between Israel and its trading partners or other Israeli political or economic factors could harm Valtechs operations and product development and cause its sales to decrease.
Civil unrest in various countries in the Middle East and North Africa are affecting the political stability of those countries. Such
instability may lead to deterioration in the political and trade relationships that exist between the State of Israel and these countries. Furthermore, several countries, principally in the Middle East, restrict doing business with Israel and
Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies whether as a result of hostilities in the region or otherwise. In addition, any hostilities involving Israel could have a
material adverse effect on Valtechs facilities. Similarly, Israeli corporations are limited in conducting business with entities from some countries in the region. These restrictive laws and policies may seriously limit Valtechs ability,
and that of the combined company, to sell its products in these countries.
Valtechs property insurance does not cover losses that
may occur as a result of an event associated with the security situation in the Middle East. However, the Israeli government is currently committed to covering the actual value of physical damages (but not business interruption costs) that are
caused by terrorist attacks or acts of war, Valtech cannot assure you that this government coverage will be maintained, or if maintained, will be sufficient to compensate Valtech fully for damages incurred. Any losses or damages incurred by Valtech
could have a material adverse effect on its business. Any armed conflicts or political instability in the region would likely negatively affect business conditions generally and could harm Valtechs results of operations.