The Israeli company Jeen.ai is merging with Micronet Ltd. and will enter trading on the Tel Aviv Stock Exchange with a raising of 26 million NIS. The company Jeen.ai, which operates in the developing field of creative artificial intelligence (GenAI), has in the last two years developed a secure platform for the rapid assimilation of GenAI applications in large organizations, which allows its customers to adapt and implement GenAI-based solutions that support business needs, such as corporate chat, transcription and analysis of conversations, AI assistants based on organizational information, AI bots, AI-based automations such as credit approvals and control of the supply chain for customers and rapid implementation in AZURE clouds AWS, GCP or local NVIDIA servers
Jeen.ai began its journey as a spin-off of the GenAI activity at One Technologies, which owns 25% of it, and set out on its own in July 2024, in a move designed to deepen its activity in the global market and open up possibilities for capital market recruitment.
Since it began its operations, Jeen.ai has shown an impressive growth in the number of its customers and it predicts that this trend will continue to grow, the company already provides its product and services to dozens of large companies including Isracard, Delek, Reichman University, Amdocs, Fadagis, Cellcom and more.
Micronet signed an agreement in principle for the purchase of the entire issued and paid-up capital of Jeen.ai (fully diluted) in exchange, the shareholders of Jeen.ai will be allocated ordinary shares of the company that will constitute approximately 52% of the issued and paid-up share capital of the company
The Micronet company engaged in the development, production, marketing and sale of computer systems for collecting and transmitting data in the core areas of the mobile computing solutions market for managing vehicle fleets and the MRM (mobile resource management) market.
Micronet Ltd. entered into a non-binding principle agreement with Jeen.ai Technologies Bina Ltd. for the purchase of the entire issued and paid-up capital of Jeen.ai. After the transaction is completed, Micronet will hold all of Jeen.ai's securities, in exchange for allocating shares in the company to Jeen.ai's shareholders.
The CEO of Jeen.ai is the entrepreneur Oded Tahori, who founded the company Sense.bi which was purchased in 2018 by the One Technologies group for NIS 26 million, where he served until recently as the director of innovation and the ONE BI division. The company has a strong team of experienced founders consisting of The exporters of One Technologies and the founders of the international robotics company temi who bring with them over a decade of proven experience in the development of software products, data, BI, AI as well as deep connections and the ability to rapidly establish an international distribution network and direct access to leading enterprise companies in the world.
Through the unique platform it developed and its team of experts, Jeen.ai allows its customers to adapt and implement GenAI-based solutions that will support their business needs, such as: corporate chat, conversation transcription and analysis, a digital AI assistant based on corporate information, an AI bot for customers, and other services that combine innovation with an interface Friendly and fast implementation. Jeen.ai's system makes it possible to improve efficiency, increase productivity and extract deep insights from the data, and it can be implemented in cloud environments or in a secure local environment on NVIDIA servers.
In exchange for the transfer of the entire issued capital of Jeen.ai to the company, the shareholders of Jeen.ai will be allocated ordinary shares of the company, which will immediately after their allocation constitute approximately 52% of the issued and paid-up share capital of the company (fully diluted), after the completion of the additional fundraising and without taking In the contingent future allocations account.
The essential terms of the agreement of principles:
Consideration for Jeen.ai's issued equity: Micronet will grant Jeen.ai shareholders its common stock. These shares will constitute approximately 52% of Micronet's share capital after their allocation (in full dilution) and after the completion of additional fundraising, without taking into account future allocations.
The additional fundraising: As part of the transaction, Micronet will raise an additional amount of at least 7.4 million NIS and no more than 11 million NIS from various investors. The Micronet share price will be no less than NIS 2.35 per share. The fundraising will be carried out at the same time as the deal is completed, and the deal will not be considered complete if the fundraising is not completed. The shareholders of Jeen.ai will participate in at least 10% of the additional fundraising. It should be noted that c Yen is the one responsible for bringing the investors for the additional fundraising.
Future allocations: The offerors will be entitled to future conditional allocations without additional consideration, subject to meeting the following goals:
A. First additional allocation: If during 24 months from the completion date the average closing price of the company's stock on the stock exchange will be at least 3.6 NIS per share and the daily trading turnover will not be less than 50 thousand NIS for 45 consecutive days, an additional ordinary share will be allocated, so that the bidders will hold -60% of the company's share capital.
on. Second additional allocation: if during 36 months from the date of completion the average closing price of the company's stock will be at least 4.3 NIS and the daily trading turnover will not be less than 50 thousand NIS for 60 consecutive days, an additional share will be allocated, so that the bidders will hold 70% from the company's share capital.
third. Third additional allocation: If during 24 months from the date of completion the average closing price of the company's stock will be at least 4 NIS and the daily trading turnover will not be less than 50 thousand NIS for 60 consecutive days, and certain financial conditions that the company will meet, additional shares will be allocated, So that the bidders will own 75% of the company's share capital.
The offerors stated that they checked the conditions in the stock exchange's regulations and confirmed that the company's shares will meet the conditions required for their registration on the stock exchange's main list.
As part of the terms of the transaction, moving to the date of completion, "Pareto Mergers and Acquisitions Ltd" will be allocated shares amounting to 4% of the company's issued capital from the portion of those offered, and will be entitled to 2% of the additional fundraising amount.
In addition, at the time of completion of the transaction, all the existing directors will end their terms, except for the external directors and two additional directors who will be retained by Micronet, and four new directors will be appointed.
Another condition for completing the deal is that at the time in question, the company's net cash balance will be at least 15 million NIS. -14 million NIS, the deal will be cancelled. The parties will sign a detailed agreement within 45 days from the date of signing the agreement of principles, which will include additional terms and obligations.
Downside Protection mechanism for not meeting targets
The parties reached agreements regarding the failure to meet the targets in 2025. The agreement signed between the companies includes a budget for 2025 with conditions for approving exceptional expenses and protecting the company's equity. The agreement also refers to the self-purchase proposal mechanism in cases of low revenues and the mechanism for allocating shares to the bidders according to the revenues and the amount of the additional fundraising that will be carried out.
If Jeen.ai's revenues in 2025 will be less than NIS 13 million, a general meeting will be convened, the agenda of which will be to carry out a self-purchase offer for the company's shares, amounting to 73% of the public's shares, at a price of NIS 1.62 per share, and the bidders and the consultant have committed not to comply with it .
The agreement of principles includes additional conditional conditions that will include completion of due diligence, receiving a valuation for Jeen.ai in an amount not less than NIS 35 million, and receiving the stock exchange's approval for listing the offered shares for trading.
The Gen AI market is expected to continue growing at an impressive pace in the coming years. According to analyst forecasts, the average annual growth rate (CAGR) of the market is expected to be around 35%-40% during the next five years. In the enterprise sector, the impact is expected to be even greater, with a forecast for an average annual growth rate of about 45%. Forecasts indicate that spending on Gen AI solutions among large companies and enterprises could reach hundreds of billions of dollars by 2030, as demand grows for solutions that bring intelligent automation, data-based decision making, and improved customer experience.
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