UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-41375

Actelis Networks, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		52-2160309
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)
4039 Clipper Court Fremont, California		94538
710 Lakeway Drive, Suite 200 Sunnyvale, CA		94805
(Address of Principal Executive Offices)		(Zip Code)

(510) 545-1045

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.0001 per share		ASNS		The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐		Non-accelerated filer ☒		Smaller reporting company ☒
						Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant as of June 30, ~~2024~~2025, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately ~~11,077,194~~$5.7 million based on the closing sale price on that date of $26.3115. Shares of common stock held by each executive officer and director and by each other person who may be deemed to be an affiliate of the Registrant have been excluded from this computation. The determination of affiliate status for this purpose is not necessarily a conclusive determination for other purposes.

As of March 2115, ~~2025~~2026, there were 826,~~513~~725,~~181~~763 shares of the registrant’s common stock, par value $0.0001 per share, outstanding, including treasury shares.

ACTELIS NETWORKS, INC.

FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, ~~2024~~2025

TABLE OF CONTENTS

PART I
ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	2024
ITEM 1B.	UNRESOLVED STAFF COMMENTS	4551
ITEM 1C.	CYBERSECURITY	4651
ITEM 2.	PROPERTIES	4651
ITEM 3.	LEGAL PROCEEDINGS	4651
ITEM 4.	MINE SAFETY DISCLOSURES	4651
PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	4752
ITEM 6.	[RESERVED]	4752
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4853
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	5663
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F-1
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	5764
ITEM 9A.	CONTROLS AND PROCEDURES	5764
ITEM 9B.	OTHER INFORMATION	5764
ITEM 9C.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	5764
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	5865
ITEM 11.	EXECUTIVE COMPENSATION	6572
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	6875
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	7284
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	7485
PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	7586
ITEM 16.	FORM 10-K SUMMARY	7687
SIGNATURES		7788

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (the “Annual Report”) contains forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business.” These forward-looking statements involve a number of risks and uncertainties. We caution readers that any forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement. These statements are based on current expectations of future events. Such statements include, but are not limited to, statements about future financial and operating results, plans, objectives, expectations and intentions, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, cost savings, objectives of management, business strategies, financing, potential growth and market opportunities, products, and other statements that are not historical facts.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “anticipate” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” “possible” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Annual Report include, but are not limited to, statements about:

● our history of losses and need for additional capital to fund our operations and our ability to obtain additional capital on acceptable terms, or at all; ● our ability to protect our intellectual property and continue to innovate; ● our success in retaining or recruiting, or changes required in, our officers, key employees or directors; ● the potential insufficiency of our disclosure controls and procedures to detect errors or acts of fraud; ● the accuracy of our estimates regarding expenses, future revenues, and capital requirements; ● the success of competing products or technologies that are or may become available; ● our ability to grow the business due to the uncertainty resulting from any future pandemic; ● our ability to comply with complex and increasing regulations by governmental authorities; ● our ability to regain and maintain compliance with continued listing requirements of the Nasdaq Capital Market; ● our ability to continue as a going concern;

● ~~our~~statements ~~ability~~as to ~~protect~~the ~~our~~impact ~~intellectual~~of ~~property~~the political and ~~continue~~security situation in Israel and the Middle East on our business, including due to ~~innovate~~the number of armed conflicts between Israel and Hamas (an Islamist terror and political group in the Gaza Strip) and Hezbollah (an Islamist terror and political group in Lebanon) and Iran including its accomplices;

● our ~~success~~public insecurities’ ~~retaining~~potential orliquidity ~~recruiting,~~and ortrading; ~~changes~~and ~~required~~● ~~in,~~ our ~~officers,~~expectations ~~key~~regarding ~~employees~~the orperiod ~~directors;~~during which we qualify as an emerging growth company under the JOBS Act.

● the potential insufficiency of our disclosure controls and procedures to detect errors or acts of fraud;

● the accuracy of our estimates regarding expenses, future revenues, and capital requirements;

● the success of competing products or technologies that are or may become available;

● our ability to grow the business due to the uncertainty resulting from the COVID-19 pandemic or any future pandemic;

● our ability to comply with complex and increasing regulations by governmental authorities;

● our ability to regain and maintain compliance with continued listing requirements of the Nasdaq Capital Market; ● our ability to continue as a going concern;

● statements as to the impact of the political and security situation in Israel on our business, including due to the number of armed conflicts between Israel and Hamas (an Islamist militia and political group in the Gaza Strip) and Hezbollah (an Islamist militia and political group in Lebanon);

● our public securities’ potential liquidity and trading; and

● our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act.

Forward-looking statements are based on our management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions, and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Annual Report may turn out to be inaccurate. Important factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk Factors,” Use of Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and elsewhere in this Annual Report. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. You should read thoroughly this Annual Report and the documents that we refer to with the understanding that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements.

The forward-looking statements included in this Annual Report speak only as of the date of this Annual Report. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this Annual Report. See “Where You Can Find More Information.”

On ~~April~~ 19November 18, ~~2023~~2025, we effected a reverse stock split of our shares of common stock at the ratio of 1-for-10. Unless indicated otherwise by the context, all common stock, option, warrant and per share amounts as well as share prices appearing this Annual Report on Form 10-K have been adjusted to give retroactive effect to the stock split for all periods presented.

Item 1. Business

Company Overview

Actelis Networks, Inc. (“Actelis,” “we,” “~~the Company”~~us,” “~~Actelis”~~our,” “~~us”~~the Company,” “our company”) is a market leader in cyber-hardened, rapid-deployment networking solutions for wide-area ~~IoT~~ applications including federal and military, state and local government, ~~intelligent~~ intelligent traffic systems (“ITS”), ~~military,~~and additional IoT environments such as utility, and rail,. ~~telecom~~We ~~(notably~~also inprovide ~~multi~~Multi-~~dwelling~~Dwelling ~~units~~Units (“MDU”) both inside and ~~campus~~outside ~~applications~~of building solutions to modernize and protect infrastructure using existing infrastructure. ~~Additionally,~~ ~~through~~Through our “Cyber Aware Networking” initiative, we provide an AI-based cyber monitoring and protection software~~-based system~~ for all edge devices, enhancing ~~network~~ cyber security and resilience. Our unique portfolio of hybrid fiber, cyber hardened aggregation switches, high density Ethernet devices, advanced management software and ~~operational~~cyber-protection ~~continuity~~capabilities, unlocks the hidden value of essential networks, delivering safer connectivity for rapid, cost-effective deployment.

~~Our unique~~Critical ~~portfolio~~Trends ofAffecting ~~hybrid~~Communication ~~fiber, environmentally hardened aggregation switches, high density Ethernet devices, advanced management software~~Needs ~~and AI-based cyber-security offering, unlocks the hidden value of essential networks and the devices they connect, delivering a safe and cyber-aware connectivity for rapid, cost-effective deployment.~~Today

~~Our networking~~Three ~~solutions~~significant ~~use a combination of newly deployed fiber infrastructure and existing copper and coaxial lines which our patented~~global ~~technology~~shifts can upgrade to Fiber-grade to jointly create what we believe to be a highly cost-effective, secure and quick-to-deploy network. Our patent protected hybrid-fiber networking solutions deliver excellent communication over fiber to locations that may be easy to reach with new fiber. However, for locations that are ~~difficult,~~affecting ~~or too costly to reach with fiber, we can upgrade existing copper or coax lines to deliver cyber-hardened, high-speed connectivity without needing to replace~~ the ~~existing~~world ~~infrastructure with new fiber. We believe that such hybrid fiber networking solutions have distinct advantages in most real-life installations~~today, ~~while providing significant budget savings~~ and ~~accelerating~~particularly ~~deployment~~the ofneed ~~modern~~for ~~IoT~~vast ~~networks. Based on our experience, most IoT projects have challenging, hard to reach with fiber locations which may significantly increase such projects’ timeline~~ and ~~budgets.~~rapid Wemodernization ~~believe that our solutions can provide connectivity over either fiber, copper or coax with speeds~~ of ~~up to multi-Gigabit~~ communication, ~~while supporting Fiber-grade reliability~~ and ~~quality~~networking infrastructure.

~~A primary~~The ~~focus~~first ofmajor ~~ours~~shift is the toaccelerating ~~provide~~rise ~~our~~of ~~customers~~AI ~~with~~adoption, awhich ~~cyber~~demands ever-~~secure~~expanding ~~network~~computational ~~solution.~~resources Weto ~~currently~~sustain ~~offer~~its ~~Triple-Shield~~growth. ~~protection~~As ofthis trend continues, ~~data~~AI ~~delivered~~as ~~with~~an ~~coding~~automation capability is becoming increasingly fluid, ~~scrambling~~moving ~~and~~across ~~encryption~~the ofcloud, the data center, and the network ~~traffic~~edge where users and devices are directly served. WeThis ~~also~~redistribution ~~provide~~is ~~secure,~~driven ~~encrypted~~both ~~access~~by tothe ~~our~~intolerance ~~network~~for latency and by the resource constraints within ~~management~~centralized ~~software~~data centers. The network becomes the essential conduit enabling this movement, ~~and~~carrying ~~are~~the ~~working~~data and intelligence required to ~~further~~position ~~enhance~~AI ~~system-level~~workloads ~~and~~wherever ~~device-level~~they ~~software~~can ~~protection~~operate most effectively.

~~Our IoT~~The ~~cyber-security~~second ~~software~~shift ~~solution~~is ~~implements~~to AIdefense and toadvanced ~~monitor~~defense technologies, ~~identify~~shaped ~~vulnerabilities~~by current geopolitical tension and ~~threats~~realizations many countries, ~~offers~~including orthe ~~implements~~United ~~automatically~~States, AIare ~~generated~~making. ~~plans~~This ~~addressing~~defense ~~such~~which ~~exposures~~includes homeland security, cyber security and ~~constant~~operational ~~reporting~~continuity are requiring critical modernization of ~~all~~networking ~~such~~as ~~activities,~~well. ~~for~~For example, the ~~sake~~recent of2025 ~~documentation~~outages ~~and~~experienced ~~compliance. This~~in ~~solution~~Air ~~comes~~Traffic ~~with~~Control ~~the~~in ~~network~~New ~~itself,~~Jersey and ~~uses~~Pennsylvania ~~the~~drove ~~network~~an urgent ~~traffic~~approval toof ~~become~~over ~~cyber-aware~~$12 billion dollars of modernization budget for the ~~risks~~FAA ~~imminent~~(Federal toAviation ~~the~~Administration) ~~IoT~~networks. ~~devices~~Similarly, ~~that~~military environments are ~~connected~~modernizing rapidly to ~~that~~be ~~network~~ready for development.

~~When high~~The ~~speed~~third shift, ~~long~~albeit ~~reach~~not new, ~~reliable and secure connectivity~~ is ~~required,~~cyber ~~network~~security ~~operators usually resort to using wireline communication over physical communication lines such~~ as ~~fiber,~~a ~~coax~~pillar ~~and~~of ~~copper,~~operations ~~rather than wireless communication that is more limited~~ in ~~performance, reliability, reach and security~~general. ~~However,~~As ~~new~~the ~~fiber~~network ~~wireline~~may ~~infrastructure~~typically isbe ~~costly~~the toweakest ~~deploy~~link, ~~involves~~its ~~lengthy~~criticality ~~civil~~as ~~works~~a ~~to install, and, based on our internal calculations, often accounts for more than 50% of total cost of ownership (ToC) and time to deploy wide~~cyber-~~area~~safe ~~IoT~~medium ~~projects~~is obvious.

1These trends receive vast budgets, require very rapid progress and as such, the use of existing infrastructure. Actelis offers its solutions right in the center of such intersection, we explain hereafter how this is done.

~~Providing new~~Our ~~fiber~~networking ~~connectivity~~solutions touse ~~hard-to-reach~~a ~~locations~~combination isof ~~especially~~newly ~~costly~~deployed fiber infrastructure and ~~time-consuming,~~existing ~~often~~copper ~~requiring permits for boring, trenching,~~ and ~~right-of-way,~~coaxial ~~sometimes~~lines ~~done~~which ~~over~~our ~~many~~patented ~~miles.~~technology ~~Connecting~~can ~~such~~upgrade ~~hard-~~to Fiber-~~reach~~grade ~~locations~~to ~~may~~jointly ~~cause~~create ~~significant~~what ~~delays~~we believe ~~and~~to ~~budget~~be ~~overruns in~~a ~~IoT~~highly ~~projects.~~cost-effective, ~~Our~~secure, ~~solutions~~and ~~aim~~ quick-to-deploy ~~solve~~network. ~~these~~Our ~~challenges~~patent byprotected ~~instantly~~hybrid ~~enhancing~~fiber ~~performance~~networking ofsolutions ~~such~~deliver excellent ~~existing~~communication ~~copper~~over ~~and~~fiber ~~coax infrastructure~~ to ~~fiber-grade~~locations ~~performance,~~that ~~through~~may ~~the~~be ~~use~~easy ofto ~~advanced~~reach ~~signal~~with ~~processing~~new afiber. ~~unique~~However, ~~patented~~for ~~network~~locations ~~architecture,~~that ~~without~~are ~~the~~difficult, ~~need to~~or ~~run~~too ~~new~~costly ~~fiber~~ to ~~hard-to-~~reach ~~locations;~~with ~~thus~~fiber, ~~effectively~~we ~~accelerating~~can ~~deployment~~upgrade ofexisting ~~many~~copper ~~IoT~~lines ~~projects,~~to asdeliver ~~we estimate~~cyber-hardened, ~~sometimes~~high-speed ~~from many months~~connectivity without needing to ~~only days.~~replace ~~The~~the ~~result~~existing ~~for~~copper ~~the~~infrastructure ~~network~~with ~~owner~~new isfiber. aWe ~~hybrid~~believe ~~network~~ that ~~optimizes~~such ~~the~~hybrid ~~use~~fiber ofcopper ~~both~~networking ~~new~~solution ~~Fiber~~has ~~(where~~distinct ~~available)~~advantages asin ~~well~~most asreal-life ~~upgraded~~installations, ~~fiber-grade~~while ~~copper~~providing ~~and~~significant ~~coax~~budget ~~that~~savings isand ~~now~~accelerating ~~modernized,~~deployment ~~digitized~~of ~~and~~modern ~~cyber-hardened.~~IoT ~~This unique hybrid~~networks. ~~network~~Based ~~approach~~on isour ~~making~~experience, most IoT projects ~~often~~have ~~significantly more affordable~~challenging, ~~fast~~hard to ~~deploy~~reach ~~and~~with ~~predictable~~fiber tolocations ~~plan~~which ~~and~~may ~~budget.~~explode ~~The~~such ~~same~~projects’ istimeline ~~correct~~and inbudgets. ~~multi-dwelling~~We ~~unit~~believe ~~buildings~~that ~~where~~our ~~the~~solutions ~~wiring~~can ~~from~~provide ~~the~~connectivity ~~roof~~over ~~(in~~either ~~case~~fiber ~~of a wireless based connectivity)~~ or ~~from~~copper ~~the~~with ~~basement in~~speeds ~~case~~ of aup ~~wired connectivity~~ to ~~the building. In such cases we utilize existing in~~multi-~~building wiring~~Gigabit communication, ~~preventing~~while ~~the~~supporting ~~need for brand~~Fiber-~~new ones~~grade reliability and ~~enables multi-gigabit connectivity to each apartment or suite~~quality.

~~In addition,~~A ~~our~~primary ~~solutions~~focus ~~can~~of ~~also~~ours ~~provide power over existing copper and coax lines to remotely power up network elements and IoT components~~is ~~connected~~ to ~~them~~provide ~~(like~~our ~~cameras,~~customers ~~small~~with ~~cell~~a ~~and Wi~~cyber-Fisecure ~~base~~network ~~stations sensors etc~~solution.). ~~Connecting~~We ~~power~~currently ~~lines~~offer toTriple-Shield ~~millions~~protection of ~~IoT~~data ~~locations can~~delivered bewith ~~costly~~coding, scrambling and ~~very~~encryption ~~time~~of ~~consuming~~the asnetwork ~~well~~traffic. ~~(similar~~We toalso ~~data~~provide ~~connectivity~~secure, ~~for~~encrypted ~~the~~access ~~same~~to ~~reason-need~~our ~~for~~network ~~civil~~management ~~works).~~software, Byand ~~offering the~~are ~~ability~~working to ~~combine~~further ~~power~~enhance ~~delivery~~system-level ~~over the same existing copper~~ and ~~coax lines that we use for high~~device-~~speed~~level ~~data,~~software weprotection. ~~believe~~We ~~our solutions~~ are ~~solving~~also ~~yet~~working ~~another important challenge in connecting hard-~~to~~-reach~~ ~~locations.~~introduce Weadditional ~~believe that combining communication and power~~capabilities ~~over~~for ~~the~~network-wide ~~same~~cyber ~~existing~~protection ~~lines~~software isas ~~particularly~~an ~~important~~additional toSW ~~help connect many fifth generation, or 5G, small cells~~ and Wilicense-Fibased ~~base stations, as high cost of connectivity and power is often slowing their deployment~~services.

~~Since our~~When ~~inception~~high speed, ~~our~~long ~~business~~reach, reliable ~~was~~and ~~focused~~secure onconnectivity ~~serving~~is ~~telecommunication service providers~~required, ~~also~~network ~~known~~operators asusually ~~Telcos,~~resort to ~~provide~~using ~~connectivity for~~wireline ~~enterprises~~communication ~~and~~over ~~residential~~physical ~~customers.~~communication lines ~~Our~~such ~~products~~as ~~and~~fiber, ~~solutions~~coax, ~~have~~and ~~been~~copper, ~~deployed~~rather ~~with~~than ~~more~~wireless ~~than~~communication ~~100~~that ~~telecommunication~~is ~~service providers~~more ~~worldwide,~~limited in ~~enterprise~~performance, ~~residential~~reliability, reach and security. ~~mobile~~However, ~~base~~new ~~station~~fiber ~~connectivity~~wireline ~~applications.~~infrastructure Inis ~~recent years,~~costly asto wedeploy, ~~have~~involves ~~further developed~~lengthy ~~our~~civil ~~technology~~works ~~and~~to ~~introduced~~install, ~~additional products~~and, webased ~~turned~~on our ~~focus~~internal calculations, onoften ~~serving~~accounts ~~the~~for ~~wide-area~~more ~~IoT,~~than ~~federal~~50% ~~and~~of ~~DoD~~total ~~markets, as~~cost ~~well~~of asownership ~~multi-dwelling units (“MDUs”),~~ and ~~introduced,~~time into ~~2024,~~deploy ~~our cyber~~wide-~~aware~~area ~~networking solutions for~~ IoT ~~markets as well~~projects.

~~Our~~Providing new fiber connectivity ~~operations~~to ~~are~~hard-to-reach ~~focused~~locations onis ~~our~~especially ~~fast~~costly and time-~~growing~~consuming, ~~IoT~~often requiring permits for boring, ~~federal~~trenching, and ~~DoD markets~~right-of-way, ~~while~~sometimes done ~~maintaining~~over ~~our~~many ~~commitment~~miles. Connecting such hard-to-reach ~~our~~locations may cause significant delays and budget overruns in IoT projects. Our solutions aim to solve these challenges by instantly enhancing performance of such existing ~~Telco~~copper ~~customers~~and coax infrastructure to fiber-grade performance, through the use of advanced signal processing and ~~particularly~~unique, ~~MDUs.~~patented Innetwork ~~2024~~architecture, wewithout ~~introduced~~the need to run new ~~product~~fiber ~~offering~~to hard-to-reach locations; thus, ~~some~~effectively accelerating deployment of ~~which~~many ~~could~~IoT ~~serve~~projects, ~~both~~as we estimate, sometimes from many months to only days. The result for the network owner is a hybrid network that optimizes the use of both new Fiber (where available) as well as upgraded, fiber-grade copper and coax that is now modernized, digitized and cyber-hardened. This unique hybrid network approach is making IoT ~~markets~~projects often significantly more affordable, fast to deploy and ~~our~~predictable ~~Telco~~to ~~customers~~plan and budget.

In August 2024, we announced signing a strategic partnership with an advanced cybersecurity provider to develop and deliver a novel, AI-Powered SaaS offering, under Actelis’ ‘Cyber Aware Networking’ initiative. This software, designed as an intelligence layer integrated into Actelis’ networking devices, leverages the network’s power and proximity to IoT devices to monitor and protect physical assets such as cameras, sensors, and other devices at the edge, enabling corrective actions before issues propagate throughout the network.1

~~We derive~~In aaddition, ~~majority~~our ofsolutions can ~~our~~also ~~revenues~~provide ~~from~~power ~~our~~over existing copper and ~~new~~coax ~~IoT~~lines to remotely power up network elements and components connected to them (~~including~~like cameras, ~~federal~~small cell and ~~DoD~~Wi-Fi base stations sensors etc.). ~~customers~~Connecting power lines to millions of locations can be costly and very time consuming as well (similar to data connectivity, for the same reason — need for civil works). ~~For~~By offering the ~~years~~ ~~ended~~ability ~~December~~to combine ~~31,~~power ~~2024~~delivery over the same existing copper and ~~December 31,~~coax ~~2023~~lines that we use for high-speed data, we believe our ~~IoT~~solutions ~~customers~~are solving yet another important challenge in connecting hard-to-reach locations. We believe that combining communication and power over the ~~aggregate~~same ~~accounted~~existing lines ~~for~~is ~~approximately~~particularly ~~72%~~important to help connect many fifth generation, or 5G, small cells and ~~73%~~Wi-Fi base stations, as high cost of ~~our~~connectivity and ~~revenues,~~power ~~respectively~~is often slowing their deployment.

WeSince our inception, our ~~derive~~business awas ~~significant~~focused ~~portion~~on ofserving ~~our~~telecommunication ~~revenues~~service ~~from~~providers, aalso ~~limited~~known ~~number~~as ofTelcos, ~~our~~to provide connectivity for enterprises and residential customers. ~~For~~Our ~~the years~~products ~~ended~~and ~~December 31~~solutions have been deployed with hundreds of telecommunication service providers worldwide, ~~2024~~in enterprise, residential and ~~December 31,~~mobile ~~2023~~base station connectivity applications. In recent years, as we have further developed our ~~top~~technology and ~~ten~~introduced ~~customers~~additional inproducts, ~~the~~we ~~aggregate~~turned ~~accounted~~our ~~for~~focus ~~approximately~~on ~~74%~~serving the wide-area IoT, federal and ~~66%~~U.S. Department of War (“DoW”) markets, as well as multi-dwelling units, and introduced, in 2024, our ~~revenues~~cyber-aware networking solutions for IoT markets as well.

2In December 2024, we launched our MetaShield AI-Powered SaaS solution, under Actelis’ ‘Cyber Aware Networking’ initiative. This includes a software based platform designed as an intelligence layer integrated into Actelis’ networking devices, leverages the network’s power and proximity to IoT devices to monitor and protect physical assets such as cameras, sensors, and other devices at the edge, enabling corrective actions before issues propagate throughout the network.

We ~~have~~derive ~~incurred~~a ~~significant losses~~majority ~~and negative cash flows from operations and as~~ of ~~December 31, 2024, we had an accumulated deficit of $44.0 million. We have~~our ~~funded~~revenues from our ~~operations~~existing ~~to date through equity~~ and ~~debt~~new ~~financing~~IoT ~~and we had cash on hand~~ (including ~~short~~federal ~~term bank deposits~~ and ~~restricted cash equivalents~~DoW) ~~of $2~~customers.3 ~~million~~For ~~and~~the years ~~long-term~~ended ~~restricted~~December ~~cash~~31, ~~and~~2025 ~~cash equivalents~~ and ~~restricted bank deposits of $0.2 million as of~~ December 31, 2024., Weour ~~continue~~IoT tocustomers ~~invest~~ in ~~sales~~the ~~and~~aggregate ~~marketing~~accounted ~~resources~~for toapproximately ~~fuel~~73% and 72% of our ~~growth~~revenues, respectively.

~~Our technology~~We isderive ~~both~~a ~~powerful~~significant ~~and~~portion of ~~compact~~our ~~and~~revenues isfrom ~~built as~~ a ~~relatively~~limited ~~small~~number ~~set~~ of ~~feature-rich~~our ~~network elements, that serve as building block in many IoT verticals~~customers. ~~These~~For ~~elements~~the years ~~include~~ended ~~switches~~December 31, ~~typically~~2025 ~~enhanced~~and ~~with signal processing SW~~December 31, ~~concentrators~~2024, ~~reach extenders,~~our ~~data~~top ~~encryption~~ten ~~elements,~~customers ~~power~~in ~~sources~~the ~~and~~aggregate aaccounted ~~smart networking software that allows~~ for ~~remote~~approximately ~~management~~62% and ~~monitoring~~74% ~~down to the single element and line performance, configuration management making complex network topologies easy to deploy, analyze, debug and remote SW download to help with remote handling~~ of ~~large~~our ~~and small networks~~revenues.

~~Our~~We have incurred significant ~~cyber-security~~losses ~~solution~~and isnegative ~~SaaS-based.~~cash Asflows ~~such~~from operations and as of December 31, it2025, ~~provides~~we ~~continuous~~had ~~protection~~an ~~through~~accumulated ~~learning~~deficit of ~~the~~$52 ~~network~~million. We have funded our operations to date through equity and ~~devices~~debt itfinancing ~~protects,~~and we had cash on hand (including short term bank deposits and restricted cash equivalents) of $4.4 million and ~~constant~~long-term ~~alerting~~restricted cash and ~~review~~cash ~~against~~equivalents ~~external~~and ~~data~~restricted ~~bases~~bank deposits of ~~known~~$0.2 ~~threats~~million as of December 31, ~~creating~~2025. aWe ~~repeatable,~~continue ~~ever-improving~~to ~~protection~~invest ~~cycle~~in sales and marketing resources to fuel our growth.

~~Rapid~~Our technology is both powerful ~~Deployment~~and compact and ~~Lower~~is ~~Cost~~built as a relatively small set of ~~Critical~~feature-rich ~~Connectivity~~network elements, that serve as building block in the verticals we serve, namely Federal and Military, Intelligent Transportation, and MDUs. These elements include switches, typically enhanced with signal processing software, concentrators, reach extenders, data encryption elements, power sources and a smart networking software that allows for ~~IoT~~remote management and monitoring down to the single element and line performance, configuration management making complex network topologies easy to deploy, analyze, debug and remote software download to help with remote handling of large and small networks, on any wired infrastructure – be it Fiber, Copper or Coax. At the same time, we continue to serve our long-standing Telco customers in their hybrid communications needs. As cyber security standards tighten worldwide, in second half of 2025, we started offering customers on-going monitoring of vulnerabilities through our scanning and analysis tools for new developments in this industry, to keep and safeguard their networks when new threats become known or existing threats become relevant to their environment.

WeOur ~~aim~~cyber-security ~~to become the global~~offerings ~~leading~~include ~~provider~~various ofembedded cyber-~~secure~~hardening features, ~~cost-effective~~such ~~and~~as ~~quick-to-deploy~~encryption, ~~hybrid~~our ~~networking~~SaaS-based ~~for~~MetaShield ~~all~~platform, ~~wide-area~~as ~~IoT~~well ~~applications.~~as ~~Our~~vulnerability ~~products~~monitoring ~~work~~and ~~over~~analytics ~~all~~services, ~~types~~and ofembedded ~~wireline~~software ~~media~~improvements onoffered ~~the~~to ~~global~~existing ~~data~~customers ~~network,~~in ~~whether~~the ~~owned~~form orof ~~operated~~software byupgrades. ~~telecom~~As ~~service~~such, ~~providers~~we allow orcontinuous aprotection ~~private network~~through ~~operated~~learning byof ~~enterprises~~both orthe ~~government~~network ~~organizations~~elements as well as ~~MDU~~the ~~buildings.~~devices ~~Our~~connected ~~products~~to ~~are~~them, ~~structured~~delivering ~~as building blocks for~~constant ~~most~~alerting ~~IoT applications~~ and ~~are~~review ~~feature-rich.~~against ~~This~~external ~~allows~~data ~~for~~bases ~~one~~of ~~Actelis~~known ~~platform to often replace multiple other platforms available in the market~~threats, ~~allowing~~and ~~for~~offer ~~space-saving~~software ~~installation,~~upgrades ~~energy~~that ~~conservation~~overcome ~~(which~~newly weknown ~~believe~~or ~~results in a more environmentally sustainable~~identified ~~network~~vulnerabilities, ~~through~~creating ~~the~~a ~~avoidance of need to add new physical infrastructure)~~repeatable, ~~and making network planning easier for our customers. We aim at having our products installed and help accelerate deployment of wire~~ever-~~area~~improving ~~IoT~~protection ~~projects and applications everywhere~~cycle.

~~For example,~~Rapid inDeployment ~~one~~and ofLower ~~the~~Cost ~~projects where our solutions are deployed, we found that 70%~~ of ~~locations are easy-to-reach with new fiber optic~~Critical ~~installation.~~ Connectivity for such easy-to-reach locations may, as we believe, average $26,000 per mile for new fiber laid on poles, and can take between days to weeks to connect. However, the remaining 30% of locations were hard-to-reach with new fiber optics, and accordingly may require boring or trenching to reach IoT sensors or camera locations. Getting fiber to those 30% of hard-to-reach would require potentially connecting over obstacles, roads, long distances, and may also require obtaining the right of way and permits for extensive civil works. We believe this aspect of the deployment of new fiber optics may cost up to $400,000 per mile, which for this particular project would have impacted thousands of miles of roads, resulting in enormous cost, delay and interruption to traffic.

InWe aim to become the global ~~another~~leading ~~project,~~provider weof ~~have~~cyber-secure, ~~been~~cost-effective ~~selected~~and quick-to-deploy ~~provide~~hybrid networking for aall ~~major~~wide-area ~~city~~applications. ~~that~~Our ~~has~~products ~~fiber~~work over ~~installed~~all totypes ~~15%~~ of ~~its~~wireline ~~traffic~~media ~~junctions~~on the global data network, ~~however~~ ~~85%~~whether ofowned ~~its~~or ~~junctions~~operated ~~are~~by ~~connected~~telecom toservice ~~low~~providers ~~performance~~or ~~copper~~a ~~lines~~private ~~susceptible~~network operated ~~for~~by ~~bad~~enterprises ~~actors~~or togovernment ~~tamper~~organizations ~~with~~as well as MDU buildings. ~~Upgrading~~Our ~~the~~products ~~entire city’s~~are ~~infrastructure~~structured toas ~~Fiber~~building ~~would~~blocks ~~have~~especially for ~~involved~~Intelligent ~~major~~Transportation ~~civil~~Systems ~~works~~(ITS), ~~permit~~including ~~delays~~roads, rail and ~~traffic~~airport ~~interruptions~~applications ~~for months~~that ~~or years, with~~are afeature-rich. ~~cost~~This ~~that~~allows ~~would~~for ~~greatly~~one Actelis ~~exceed~~platform ~~city’s~~to ~~budget.~~often ~~Our~~replace ~~hybrid~~multiple ~~fiber~~other ~~network~~platforms ~~allowed~~available ~~for~~in the ~~city~~market, toallowing ~~use~~for ~~its~~space-saving ~~15%~~installation, ~~fiber~~energy ~~deployment,~~conservation ~~upgrade~~(which ~~instantly~~we ~~the~~believe ~~performance~~results ofin ~~its~~a ~~existing~~more ~~85%~~environmentally ~~copper~~sustainable ~~lines~~network, tothrough ~~fiber-grade~~the ~~and~~avoidance ~~join~~of ~~the~~need ~~two~~to ~~under~~add anew ~~comprehensive~~physical ~~management and~~infrastructure), ~~security~~and ~~software~~making ~~package~~network ~~from~~planning ~~Actelis~~easier tofor ~~create~~our ~~one~~customers. ~~seamless~~We ~~network,~~aim ~~while~~at ~~providing~~having ~~major~~our ~~savings~~products installed and help accelerate deployment of ~~both~~wire-area IoT ~~time~~projects and ~~money~~applications everywhere.

In another project, we provided our hybrid networking connectivity solution with remote powering over the data lines to 3G and 4G base stations. Looking forward, we believe that a dense grid of 5G small cells would be required to enable global 5G coverage, which, may accelerate IoT deployment in many smart city projects and other dense areas. We believe that connecting and powering these 5G small cells to the network cost effectively and rapidly, in both hard-to-reach and easy-to-reach locations is key to successful and timely deployment for such network.2

~~In 2022~~For example, wein ~~released~~one of the projects where our ~~first~~solutions ~~product~~are ~~family~~deployed, we found that 70% of ~~hardened~~locations are easy-to-reach with new fiber optic installation. Connectivity for such easy-to-reach locations may, ~~hybrid~~as we believe, ~~encrypted~~average $26,000 per mile for new fiber ~~product~~laid ~~family~~on poles, and can take between days to weeks to connect. However, the remaining 30% of locations were hard-to-reach with ~~10Gbps~~new ~~switching~~fiber ~~capacity~~optics, and accordingly may require boring or trenching to reach IoT sensors or camera locations. Getting fiber to those 30% of hard-to-reach would require potentially connecting over obstacles, roads, long distances, and may also require obtaining the right of way and permits for extensive civil works. We believe this aspect of the deployment of new fiber optics may cost up to $400,000 per mile, which for this particular project would have impacted thousands of miles of roads, resulting in enormous cost, delay and interruption to traffic.

3In another project, we have been selected to provide networking for a major city that has fiber installed to 15% of its traffic junctions, however 85% of its junctions are connected to low performance copper lines susceptible for bad actors to tamper with. Upgrading the entire city’s infrastructure to Fiber would have involved major civil works, permit delays and traffic interruptions for months or years, with a cost that would greatly exceed city’s budget. Our hybrid fiber network allowed for the city to use its 15% fiber deployment, upgrade instantly the performance of its existing 85% copper lines to fiber-grade and join the two under a comprehensive management and security software package from Actelis to create one seamless network, while providing major savings of both time and money.

In ~~2023~~ recent years, we ~~introduced~~have ~~the~~significantly advanced ~~next-generation~~our product ~~families~~offerings. ~~for~~In 2022, we launched our family of hardened, hybrid~~-fiber~~, ~~Gigabit~~encrypted ~~grade~~fiber ~~connectivity~~products ~~under~~with ~~the~~10Gbps ~~product~~switching ~~family~~capacity. Following ~~name~~that, ~~“Gigaline” or~~in ~~GL. Under~~2023 and 2024 we introduced and refined the next-generation “Gigaline” product families, ofproviding hybrid-fiber Gigabit-grade ~~networking~~connectivity ~~solutions~~across ~~for~~ fiber, copper, and coax environments, wewhich ~~solved~~addressed new challenges ~~faced~~ byfor ~~our~~ITS ~~IoT~~ and telecom customers and further enhanced our multi-gigabit products to support a broader range of use-cases. In 2025, we expanded our ~~offerings~~offering with the launch for large Coax environments, expanded our offering with fiber only solutions and introduced the MetaShield cyber-aware networking product family.

In 2024, we continued to refine and improve our multi-gigabit products, both hybrid-fiber and fiber-only, enabled their service to more types of use-cases, and launched the MetaShield cyber-aware networking product family.Cybersecurity

~~Cybersecurity~~Networking systems are vulnerable to cyber-attacks, as they often carry data related to critical processes and applications, such as provision of energy, water, gas and transportation services, to large populations. At the same time, they are often found in the wide range, meaning, in public locations, adding further risks of tampering and break-ins.

~~IoT networks~~In ~~are~~2024 ~~vulnerable~~we tosigned ~~cyber-attacks~~a asstrategic partnership ~~they~~with ~~often~~a ~~carry~~cyber-security ~~data~~development ~~related~~company, towhich ~~critical~~helped ~~processes~~us ~~and~~launch ~~applications,~~our ~~such~~new ascyber-aware ~~provision~~networking ~~of energy,~~solution ~~water,~~for ~~gas~~IoT ~~and~~networks. Later ~~transportation~~that ~~services~~year, towe ~~large~~launched ~~populations.~~our AtMetaShield ~~the~~SaaS ~~same~~product ~~time,~~as ~~they~~a ~~are~~cyber-security ~~often~~solution ~~found~~that incomes from the ~~wide~~network ~~range~~itself, ~~meaning, in~~and ~~public~~has ~~locations,~~since then ~~adding~~been ~~further~~introduced ~~risks~~to ofour ~~tampering~~existing and ~~break-ins~~new customers.

InOur products all include ~~August~~cyber ~~2024,~~safety features that we ~~signed~~are aconstantly ~~strategic~~developing. ~~partnership~~They ~~with~~currently include network traffic encryption and coding. We have developed and implemented a ~~cyber~~multi-~~security~~layered ~~development~~“Triple ~~company,~~Shield” ~~which~~technology ~~helped~~that usincludes ~~launch~~(i) information ~~our~~coding ~~new~~for ~~cyber-aware~~resilience and security ~~networking~~(for ~~solution~~copper wires); (ii) multi-line information scrambling for ~~IoT~~increased ~~networks.~~resilience Inand ~~December~~added ~~2024~~security (for copper wires); and (iii) an additional 256-bit hardware-based real-time encryption of data running over fiber, wecoax ~~launched~~or ~~our~~copper — creating ~~all~~end-~~new~~to-end protection ~~MetaShield~~for ~~SaaS~~the ~~product~~entire ashybrid anetwork. Our network management software is also cyber-~~security~~hardened ~~solution that~~and ~~comes~~helps ~~from~~protect the ~~network~~system. ~~itself,~~Our systems have been selected for deployment in sensitive applications with U.S. DoW and isother ~~currently~~governments ~~being~~and ~~introduced~~military toorganizations, ~~our~~airports, utility ~~existing~~companies, oil and ~~new~~gas ~~customers~~companies, smart cities, rail and traffic applications globally.

~~Our products~~In ~~all~~2024, ~~include cyber safety features that~~ we ~~are~~successfully completed ~~constantly~~the ~~developing.~~certification ~~They~~of ~~currently~~our ~~include~~product ~~network~~lines ~~traffic~~for ~~encryption~~Federal ~~and~~Intelligence ~~coding. We~~Protocol ~~have~~Standards ~~developed~~(FIPS) ~~and implemented a multi~~140-~~layered~~2 ~~“Triple~~and ~~Shield”~~were ~~technology~~approved ~~that~~by ~~includes~~the ~~(i) information coding for~~DoW’s ~~resilience~~Joint ~~and~~Interoperability ~~security~~Test ~~(for~~Command ~~copper wires);~~ (iiJITC) ~~multi-line~~ ~~information scrambling~~ for ~~increased~~interoperability ~~resilience~~ and ~~added~~cybersecurity, ~~security~~allowing ~~(for copper~~our ~~wires);~~products ~~and~~to ~~(iii) an~~be ~~additional~~included ~~256-bit~~in ~~hardware-based~~several ~~real-time encryption of data running over fiber, coax or copper — creating~~federal ~~end-to-end~~approved ~~protection~~product ~~for~~lists ~~the entire hybrid network~~(APL). ~~Our~~In ~~network~~February ~~management~~2026 ~~software~~we ishave ~~also~~deployed ~~cyber-hardened and helps protect~~ the ~~system. Our~~next ~~systems~~generation ~~have~~of ~~been~~FIPS ~~selected~~standard ~~for~~requirements ~~deployment~~ in ~~sensitive~~our ~~applications~~product ~~with U.S. DoD and other governments and military organizations,~~portfolio ~~airports, utility companies, oil and gas companies, smart cities, rail and traffic applications globally~~(140-3).

We successfully completed the certification of our product lines for Federal Intelligence Protocol Standards (FIPS) 140-2, and we are currently in the final stages of completing the next FIPS certification (140-3). In 2024, we were approved by the DoD’s Joint Interoperability Test Command (JITC) for interoperability and cybersecurity, allowing our products to be included in several federal approved product lists (APL).

~~Market~~In 2025, we enhanced our ~~Verticals~~service Wecapabilities ~~Address~~in monitoring and analysis of market and industry vulnerabilities, existing and new. This helps us offer such monitoring services to our customers to protect their installed base, while offering embedded and management software upgrades that are in-line with the threats that need mitigation. This further reflects the fact Cybersecurity is central to optimizing and modernizing networking solutions.

~~We execute~~Market ~~our~~Verticals ~~vision~~We ~~through a multi-channel, global approach that combines our expertise, with the expertise of our trusted business partners, system integrators, distributors, and consultants.~~Address

We ~~operate~~ aexecute ~~vertical-based~~our ~~marketing~~vision ~~plan where we dedicate efforts and resources to each vertical. The IoT verticals that we have focused~~through ona ~~include: intelligent transportation systems (ITS)~~multi-channel, ~~rail,~~global ~~federal~~approach ~~and~~that ~~military,~~combines ~~airports,~~our ~~energy and water~~expertise, ~~smart city, education campuses, industrial campuses, and MDU. The MDU vertical involves providing networking solutions for residential buildings~~ with ~~multiple units, such as apartment complexes and condominiums. Our products are utilized within networks deployed by cities such as~~ the ~~City~~expertise of ~~Los~~our ~~Angeles, the~~trusted ~~District~~business ~~of Columbia the City of Seattle~~partners, ~~the~~system ~~City of Munich~~integrators, ~~Germany, as well as notable entities such as Highways England, the~~ ~~Federal Aviation Administration~~distributors, ~~the U.S. military, including the Air Force, Navy~~ and ~~National Guard, as well as Stanford University~~consultants.

~~Our~~We operate a vertical-based ~~customers~~marketing ~~benefit~~plan ~~from~~where ~~rapidly~~we dedicate efforts and ~~cost-effectively~~resources ~~enabling~~to ~~their~~each ~~critical~~vertical. ~~IoT~~The ~~functions~~verticals ~~such~~we asfocus ~~traffic~~on ~~cameras~~include: Federal and ~~smart signaling~~military, intelligent ~~security~~transportation ~~cameras~~systems (ITS), smart ~~parking~~city, ~~meters~~rail, ~~and~~airports. ~~ticketing,~~We ~~rail~~also ~~signaling~~address utilities and ~~control,~~campuses. ~~electrical~~.. ~~substation~~In ~~management~~2024, ~~and~~we ~~protection,~~launched ~~military~~our MDU program ~~operations~~, ~~and~~which ~~many~~was ~~more.~~further ~~Recently,~~expanded ~~Actelis~~in ~~Networks~~2025 ~~has~~to ~~secured~~address ~~significant~~increasing ~~orders~~building ~~and~~sizes ~~launched~~as ~~groundbreaking~~well ~~solutions~~as ~~like~~arenas. ~~MetaShield,~~The MDU vertical requires networking solutions anfor ~~AI-based~~residential ~~cybersecurity~~buildings ~~solution~~with multiple units, ~~driving~~such ~~SaaS~~as ~~growth~~apartment complexes and ~~edge~~condominiums ~~infrastructure~~as ~~resilience.~~well Toas ~~date,~~hospitality weproperties ~~have~~such ~~been~~as hotels ~~most~~and ~~successful~~resorts, ~~in selling~~connecting each unit to ~~customers~~high-speed ininternet, using the ~~intelligent~~infrastructure ~~transportation systems~~present, ~~rail~~be it Coax, ~~federal~~fiber ~~and~~or ~~military~~copper, ~~airports,~~ and ~~MDU~~tailor it ~~markets,~~to ~~primarily~~the insize of the ~~US,~~ ~~Canada~~building, ~~Europe,~~from a dozen units to hundreds and ~~Japan~~thousands of them.

4Our solutions are utilized within networks deployed by cities such as the City of Los Angeles, the District of Columbia, Montgomery County, MD, the City of Seattle, the Cities of Munich, Frankfurt, Cologne and others in Germany, as well as notable entities such as Highways England, the Federal Aviation Administration, the Autostrada in Italy, the U.S. military, including the Air Force, Navy and National Guard, as well as Stanford University. In 2025, We received our first hotel implementation in the U.S., through a global strategic partnership with a hospitality guest experience platform provider.

~~Recent~~Our customers benefit from ~~Trends~~rapidly and cost-effectively enabling their critical functions such as traffic cameras and smart signaling, security cameras, smart parking meters and ticketing, rail signaling and control, electrical substation management and protection, military operations, and many more. Recently, Actelis Networks has secured significant orders and launched groundbreaking solutions like MetaShield, an AI-based cybersecurity solution, driving SaaS growth and edge infrastructure resilience. To date, we have been most successful in ~~our~~selling ~~Markets~~to customers in the intelligent transportation systems, rail, federal and military, airports, and MDU markets, primarily in the US, Canada, Europe, and Japan.

~~State of~~Recent ~~IoT~~Trends ~~Connectivity~~in ~~Market,~~our ~~including Federal and DoD~~ Markets

~~IoT infrastructure~~State ~~connectivity demand is growing rapidly. We believe there is an urgent need to connect tens~~ of ~~millions~~Connectivity of locations with a fast and secure connection. A huge challenge for IoT projects is that implementing connectivity between different IoT points in a network can consume the majority of a project’s cost and time to implementMarket, including ~~unpredictable~~Federal, Military and ~~unanticipated~~MDUs ~~challenges that arise in each individual project.~~

~~According~~Edge AI, also covered as edge computing, according to aGrandview ~~report~~research byis ~~Facts~~projected ~~and~~to ~~Factors~~grow ~~(January 2022)~~from ~~Global~~approximately ~~Internet~~$20 billion in 2024 to nearly $190 billion in 2033. According to US Congress’ budgeting program projections, US military base modernization budgets in 2025 were $37 billion as part of ~~Things~~a ~~(IoT)~~model projecting the Federal Defense program to grow to over $850 billing in 2029. With that, the already robust cyber-security market, according to Grandview research the global cyber-security market is ~~expected~~projected to grow from approximately $240 billion in 2024 to nearly $1500 billion in 2033.~~8 trillion~~ With these trends, infrastructure network connectivity demand is growing very rapidly. According to Markets and Markets, the Smart Transportation market is projected to grow to over $250 Billion by ~~2028~~2029, atlargely for intelligent transportation modernization. We believe there is an urgent need to connect tens of millions of locations with a ~~Compounded~~fast ~~Average~~and ~~Growth~~secure ~~Rate~~connection. ~~(CAGR)~~A huge challenge for ITS projects is that implementing connectivity between different points in a network can consume the majority of 24a project’s cost and time to implement, including unpredictable and unanticipated challenges that arise in each individual project.~~5%.~~

According to a report by Grand View Research (December 2022), the smart city market for connectivity infrastructure alone is expected to reach to $6,965.02 billion by 2030 at a CAGR of 25.8%. Accordingly, we believe that the number of IoT applications requiring our fast, smart, and secure connectivity is immense and provides us with a great market opportunity to grow our business. From smart transportation systems (smart cameras, smart lights and signals, Vehicle to Everything, or V2X communication) and smart security (cameras and radars), to smart parking, smart rail, power station monitoring, and industrial and warehouse automation, we believe that we are uniquely positioned to address all of these applications in a versatile and flexible manner.4

We believe that ~~there~~the isnumber of anIoT ~~unserved~~applications ~~segment~~requiring ~~that~~our fast, smart, and secure connectivity is ~~extremely~~immense ~~large~~and ~~within~~provides ~~that~~us with a great market ~~pertaining~~opportunity to ~~the~~grow our ~~challenges~~business. inFrom ~~protecting~~smart ~~the~~transportation ~~interface between~~systems ~~the~~(smart ~~physical~~cameras, ~~security~~smart lights and ~~the~~signals, ~~cybersecurity~~Vehicle ofto ~~campuses~~Everything, ~~enterprises,~~or ~~industrial~~V2X ~~IoT~~communication) and smart security (~~IIoT~~cameras and radars), ~~government~~to ~~facilities~~smart parking, ~~Smart~~smart ~~Cities~~rail, as well as airport and air traffic control infrastructure, also manifested by the $12.5 billion budget granted to the FAA in 2025, we believe that we are uniquely positioned to address all of these applications in a versatile and ~~utility~~flexible ~~plants~~manner.

In ~~addition,~~ ~~we are targeting~~ the ~~multi-dwelling, multi-tenant (~~MDU, ~~MTU)~~ market, which we believe ~~are~~is in dire need for multi-Gigabit connectivity, and ~~are~~is extremely limited in ~~their~~its ability to invest significant funds to enable such objective. According to ~~the~~US ~~National~~Census.gov, ~~Multi~~there ~~Family Council~~are ~~tabulations~~approximately of20 ~~2023~~million ~~American~~buildings ~~Community~~above ~~Survey~~5 ~~Market~~units ~~Data,~~built by the ~~U.S.~~year ~~service~~2000, ~~bureau~~most ~~(updated~~of which ~~October~~already ~~2024),~~wired ~~there~~by ~~are~~various ~~approximately 23~~infrastructures. ~~million~~The ~~apartment~~Broadband ~~units~~Equity inprogram ~~the~~or ~~U.S.~~BEAD ~~alone,~~has ~~the~~allotted ~~majority~~$28 ofbillion ~~which~~already ~~were~~to ~~built~~all ~~before~~50 ~~the~~states to ~~year~~modernize ~~2000,~~ and, ~~therefore~~provide high-speed reliable internet including underserved communities, doas ~~not~~part ~~have~~of ~~built-in fiber-to-~~the~~-apartment~~ ~~infrastructure~~Infrastructure Act.

~~5G base~~Recent stations and small cells need to be deployed in a dense grid of millions of locations and need to be connected to Gigabit speed communication and power. We are addressing these needs for the rapid connectivity and power, aiming at enabling faster and more cost-effective deployment of 5G in IoT.Developments

~~Recent Developments~~July 2025 Private Placement

On June 30, 2025, we entered ~~2024~~into ~~Warrant~~a ~~Inducement~~securities purchase agreement (the “July 2025 Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which we agreed to issue and sell to the Investors in a private placement (the “July 2025 Private Placement” or the “July 2025 Offering”) (a) 162,602 shares of Common Stock, (b) Series A-3 warrants (the “Series A-3 Warrants”) to purchase up to 162,602 shares of Common Stock, and (c) Series A-4 warrants (the “Series A-4 Warrants”, and, with the Series A-3 Warrants, the “July 2025 Common Warrants”) to purchase up to 325,204 shares of Common Stock, for a purchase price of $6.15 per share and related July 2025 Common Warrants, for a total aggregate gross proceeds of approximately $1 million. The July 2025 Private Placement closed on July 2, 2025.

OnThe Series A-3 Warrants have ~~June~~an 5,exercise ~~2024,~~price weof ~~entered~~$6.15 ~~into~~per anshare, ~~inducement~~are ~~agreement~~exercisable ~~with~~commencing aon ~~certain~~the ~~holder~~effective date of ~~certain~~shareholder ofapproval ~~our~~(the ~~existing~~“July ~~warrants~~2025 toShareholder Approval ~~purchase~~Date”) upof tothe ~~an aggregate~~issuance of ~~999,670~~the shares ofissuable ~~our~~upon ~~common~~exercise ~~stock~~of ~~originally~~the ~~issued~~Common onWarrants ~~May~~(“July 8,2025 ~~2023,~~Shareholder ~~with~~Approval”) and aexpire five ~~and~~years ~~one-half~~following ~~year~~the ~~term~~Shareholder Approval Date. On November 7, at2025, anthe ~~exercise~~July 2025 Shareholder Approval was obtained in ~~price~~a special meeting of ~~$2.75~~our ~~per~~shareholders, ~~share~~resulting (in the ~~“May~~July ~~2023~~2025 ~~Warrants”)~~Shareholder Approval Date being such date.

~~Pursuant to~~The ~~the~~Series ~~inducement~~A-4 ~~agreement, the holder agreed to exercise for cash its May 2023~~ Warrants ~~to purchase an aggregate of 999,670 shares~~have ~~of our common stock at~~ an exercise price of $26.7515 per share, inare ~~consideration~~exercisable ofcommencing ~~our~~on ~~agreement to issue new common stock purchase warrants (~~the ~~“June~~July ~~2024~~2025 ~~Warrants”),~~Shareholder asApproval ~~described~~Date ~~below,~~and toexpire ~~purchase~~eighteen ~~up to an aggregate of 1,999,340 shares of our common stock, at~~months anfollowing ~~exercise~~the ~~price~~July of2025 ~~$2.00~~Shareholder ~~per~~Approval ~~share~~Date.

~~H.C. Wainwright~~Under ~~& Co., LLC (~~the ~~“Placement~~terms ~~Agent”)~~of ~~acted as our exclusive placement agent in connection with~~ the ~~June 2024~~July ~~Warrant~~2025 ~~Inducement.~~Common InWarrants, ~~connection with~~ the ~~June~~warrant ~~2024~~holders ~~Warrant~~may ~~Inducement,~~not weexercise ~~issued to certain designees of~~ the ~~Placement Agent~~ warrants ~~(the~~ ~~“June 2024 Placement Agent Warrants”)~~ to ~~purchase~~the upextent tosuch ~~69,977~~exercise ~~shares~~would ofcause ~~common stock (representing 7.0% of~~ the ~~Existing Warrants~~warrant ~~being exercised)~~holder, ~~which~~together with ~~have~~its ~~the~~affiliates ~~same~~and ~~terms~~attribution ~~as the June 2024 Warrants~~parties, ~~except that the Placement Agent Warrants have an exercise price equal~~ to ~~$3.4375~~beneficially ~~per~~own ~~share~~a ~~(125%~~number of ~~the~~shares ~~exercise~~of ~~price~~common ofstock ~~the~~which ~~May~~would ~~2023~~exceed ~~Warrants)~~4.99% ~~The~~(or, ~~June~~at ~~2024 Warrants were immediately exercisable~~such ~~from~~Investor’s ~~the~~option ~~date~~upon of issuance, ~~until~~9.99%), ~~five and one-half year anniversary~~ of ~~such~~the ~~date~~Company’s ~~for~~then ~~999,670~~outstanding ofCommon ~~the~~Stock ~~June~~following ~~2024~~such ~~Warrants~~exercise, ~~and until twenty~~excluding ~~four~~for ~~months~~purposes ~~anniversary~~ of such ~~date~~determination ~~for~~shares ~~the remaining 999,670~~ of ~~the~~Common ~~June~~Stock ~~2024~~issuable ~~Warrants.~~upon ~~The~~exercise ~~Placement Agent Warrants are immediately exercisable from the date~~ of ~~issuance,~~such ~~until~~warrants ~~the~~which ~~five~~have ~~and~~not ~~one-half~~been ~~year anniversary of such date~~exercised.

5H.C. Wainwright & Co., LLC (“HCW”) acted as the placement agent for the issuance and sale of the Securities. The Company has agreed to pay an aggregate cash fee equal to 7.0% of the gross proceeds received by the Company from the July 2025 Offering and $35,000 for accountable expenses to the placement agent. The Company also agreed to issue to the placement agent, or its designees, Placement Agent Warrants to purchase up to 7.0% of the aggregate number of the shares of Common Stock sold to the Investors (or warrants to purchase up to 11,382 shares of Common Stock) at an exercise price per share of $7.688 which will be exercisable commencing on the Shareholder Approval Date and a have term of five years after the July 2025 Shareholder Approval Date (the “July 2025 Placement Agent Warrants,”).

The July 2025 Placement Agent ~~closing~~Warrants and the shares of Common Stock issuable upon exercise thereof, will be issued in reliance on the ~~June~~exemption ~~2024~~from ~~Warrant~~registration provided ~~Inducement~~by ~~occurred~~Section 4(a)(2) of the Securities Act as transactions not involving a public offering and in reliance on ~~June~~similar 6,exemptions under ~~2024~~applicable state laws.

~~July 2024 Warrant Inducement~~5

~~On June~~Nasdaq ~~30,~~Listing 2024, we entered into an inducement letter with a holder of our June 2024 Warrants, to purchase up to an aggregate of 999,670 shares of the June 2024 Warrants, originally issued on June 6, 2024, with a twenty-four month term, at an exercise price of $2.00 per share.Compliance

~~Pursuant~~On August 25, 2023, we received toa notification letter from the ~~inducement~~Listing ~~letter,~~Qualifications Staff (the ~~holder~~“Staff”) ~~agreed~~of toNasdaq ~~exercise~~indicating ~~for~~that ~~cash~~we ~~its~~are ~~warrants~~not toin ~~purchase~~compliance with anNasdaq ~~aggregate~~Listing ofRule ~~999,670~~5550(b)(1) ~~shares~~due ofto our ~~common stock~~failure atto anmaintain ~~exercise~~a ~~price~~minimum of $2~~.00 per share~~,500,000 in ~~consideration~~shareholders’ ofequity ~~our~~(the ~~agreement~~“Minimum Shareholders’ Equity Requirement”) or any alternatives to ~~issue~~such ~~new~~requirement. ~~common~~In ~~stock~~order ~~purchase~~to ~~warrants~~maintain (our listing on the ~~“July~~Nasdaq ~~2024~~Capital ~~Warrants”)~~Market, aswe ~~descried~~submitted ~~below,~~a toplan ~~purchase~~of upcompliance addressing how we intended to anregain ~~aggregate~~compliance. ofOn 1March 27,~~999~~ 2024,~~340~~ ~~shares~~we ofreceived ~~our~~a ~~common~~delist determination ~~stock~~letter (from Nasdaq advising us that the ~~“July~~Staff ~~2024~~had determined to delist our securities from Nasdaq due to non-compliance ~~Warrant~~with ~~Shares”)~~the Minimum Shareholders’ Equity Requirement, atunless anwe ~~exercise~~timely ~~price~~request ofa $1hearing before the Nasdaq Hearings Panel (the “Panel”).75 We ~~per~~timely ~~share~~requested a hearing before the Panel.

~~We engaged~~On ~~the~~August ~~Placement~~27, ~~Agent to act as our exclusive placement agent in connection with the July~~ 2024 ~~Warrant Inducement. In connection with the July 2024 Warrant Inducement~~, we ~~issued to certain designees of the Placement Agent warrants (the “July 2024 Placement~~received ~~Agent~~formal ~~Warrants”)~~written tonotice ~~purchase~~from upNasdaq toconfirming ~~69,977~~that ~~shares~~we ofhave ~~common~~evidenced ~~stock~~compliance ~~(representing~~with ~~7.0%~~all ofapplicable ~~the~~criteria ~~Existing~~for ~~Warrants~~continued ~~being~~listing ~~exercised),~~on Nasdaq ~~which~~as ~~have~~set ~~the~~forth ~~same~~in ~~terms~~Nasdaq asListing ~~the~~Rule ~~July 2024 Warrants~~5550, ~~except~~including ~~that~~ the ~~Placement~~Minimum ~~Agent~~Shareholders’ ~~Warrants~~Equity ~~have~~Requirement. anIn ~~exercise~~accordance ~~price~~with ~~equal~~Nasdaq ~~to $2.50 per~~Listing ~~share~~Rule 5815(~~125% of the exercise price of the June 2024 Warrants~~d)~~. The July 2024 Warrants were immediately exercisable from the date of issuance~~(4)(B), ~~until~~ ~~twenty~~we ~~four~~remained ~~months~~subject ~~anniversary~~to ofa ~~such~~panel ~~date.~~monitor ~~The~~for ~~July~~equity ~~2024~~compliance ~~Placement~~through ~~Agent~~August ~~Warrants are immediately exercisable from the date of issuance~~27, ~~until the five and one-half year anniversary of such date~~2025.

On May 12, 2025, Nasdaq notified us (the “Notification Letter”) that we were not in compliance with Nasdaq Listing Rule 5550(a)(2), which requires our Common Stock to maintain a minimum bid price of $1.00 per share (the “Bid Price Rule”). The Notification Letter had no immediate ~~closing~~effect on the listing or trading of our Common Stock on Nasdaq and, at this time, the ~~July~~Common ~~2024~~Stock ~~Warrant~~will ~~Inducement~~continue ~~occurred~~to trade on ~~July~~Nasdaq 2under the symbol “ASNS”. The Notification Letter provided that we have 180 calendar days, ~~2024~~or until November 10, 2025, to regain compliance with the Bid Price Rule.

~~September~~On August 19, 2025, we received ~~2024~~written ~~ATM~~notice ~~Agreement~~from Nasdaq stating that, due to the Company’s non-compliance with the Minimum Shareholders’ Equity Requirement as of June 30, 2025, and because, pursuant to Listing Rule 5815(d)(4)(B), the Company remained subject to a mandatory hearing panel monitor through August 27, 2025, the Company’s securities were subject to delisting from Nasdaq unless the Company timely requests a hearing before the Nasdaq Hearing Panel (the “Panel”). The Company had its hearing with the Panel on September 30, 2025.

~~In September~~At ~~2024, we entered into~~ the ~~ATM Agreement with H.C. Wainwright & Co.~~hearing, ~~LLC (~~the ~~“ATM Program”) pursuant to which~~Company wepresented ~~may~~its ~~offer~~plan ~~and sell, at our option, up~~ to ~~$3.4~~evidence ~~million~~compliance ofwith ~~our shares of common stock through an at-~~the~~-market~~ ~~equity~~Equity ~~program~~Rule ~~under which~~and ~~H.C.~~all ~~Wainwright~~other &applicable ~~Co.,~~criteria ~~LLC~~for ~~agreed~~continued tolisting ~~act~~on asThe ~~sales~~Nasdaq ~~agent. In March 2025, we increased the at-the-market equity~~Capital ~~program by an additional $1.3 million. As of the date of this report~~Market, ~~we have sold 2,472,850 of our shares of common stock for total gross proceeds of approximately $3.4 million under the ATM Program. As of the date of this filing~~ and sorequested ~~long~~to asremain ~~our~~listed ~~public float remains below $75.0 million, we are~~ subject to ~~limitations~~its ~~pursuant~~plan to ~~General~~regain ~~Instruction I~~compliance.~~B.6 of Form S-3, which limits the amount we can offer to up to one-third of our public float during any trailing 12-month period.~~

On October 28, 2025, we received a listing decision from Nasdaq notifying us that the Panel determined that the Company evidenced compliance with the Shareholders’ ~~Listing~~Equity ~~Compliance~~Requirement.

OnThe Panel also granted the ~~August~~Company’s ~~25,~~request ~~2023,~~for wecontinued ~~received~~listing aon ~~notification~~The ~~letter~~Nasdaq ~~from~~Capital ~~the~~Market, ~~Listing~~pursuant ~~Qualifications~~to ~~Staff~~an ~~(the~~exception ~~“Staff”)~~through ofDecember ~~the~~5, ~~Nasdaq~~2025, ~~Stock~~to regain ~~Market~~compliance ~~LLC~~with ~~(“Nasdaq”)~~the ~~indicating~~bid ~~that~~price werequirement ~~are~~set ~~not~~forth in ~~compliance with~~ Nasdaq Listing Rule 5550(ba)(1). ~~due~~In order to ~~our~~evidence ~~failure~~compliance ~~to maintain~~with athe ~~minimum~~bid ~~of $2~~price requirement,~~500,000~~ inthe ~~shareholders’~~Company ~~equity~~must ~~(the~~evidence ~~“Minimum~~a ~~Shareholders’~~closing ~~Equity~~bid ~~Requirement”)~~price ~~or any~~of ~~alternatives~~at toleast ~~such requirement~~$1.00 Inper ~~order~~share tofor ~~maintain~~a ~~our~~minimum ~~listing~~of ~~on the Nasdaq Capital Market~~10, webut ~~submitted~~generally anot ~~plan~~more ~~of compliance~~than ~~addressing~~20, ~~how~~consecutive webusiness ~~intended to regain compliance~~days. On ~~March~~November 277, ~~2024~~2025, we ~~received~~held a ~~delist~~special ~~determination~~meeting ~~letter~~of ~~from~~shareholders ~~Nasdaq~~where ~~advising us that the Staff had determined to delist~~ our ~~securities~~shareholders ~~from~~approved, ~~Nasdaq~~among ~~due to non-compliance with the Minimum Shareholders’ Equity~~other ~~Requirement~~things, ~~unless we timely request a hearing before~~ the ~~Nasdaq~~Reverse ~~Hearings~~Split. ~~Panel~~The ~~(the~~Reverse ~~“Panel”).~~Split Wewas ~~timely~~effected ~~requested~~on aNovember ~~hearing before~~18, ~~the Panel~~2025.

On ~~August~~ 27December 3, ~~2024~~2025, wethe Company received formal ~~written~~ notice from Nasdaq ~~confirming~~ that wethe ~~have~~Company ~~evidenced~~has regained compliance with ~~all~~the ~~applicable~~Bid ~~criteria for~~Price ~~continued listing on Nasdaq as set forth in Nasdaq Listing~~ Rule ~~5550,~~and ~~including~~evidenced ~~the~~compliance ~~Minimum~~with ~~Shareholders’ Equity Requirement.~~all Inother ~~accordance~~applicable ~~with~~criteria ~~Nasdaq Listing Rule 5815(d)(4)(B), we will remain subject to a panel monitor~~ for ~~equity~~continued ~~compliance~~listing ~~through~~on ~~August 27, 2025~~Nasdaq. AsAccordingly, of the ~~date~~previously ofdisclosed ~~this~~listing ~~filing,~~matter wehas ~~are~~been ~~in compliance with the Minimum Shareholders’ Equity Requirement~~closed.

6The Company will remain subject to a one-year “Panel Monitor”, as contemplated by Nasdaq Listing Rule 5815(d)(4)(A), through December 5, 2026. If during that period the Company fails to satisfy any of the criteria for continued listing on Nasdaq, the Staff may not grant the Company additional time to regain compliance. Rather, Nasdaq will issue a delist determination, which the Company may address by requesting a new hearing before the Nasdaq Hearings Panel.

In addition, on May 20, 2024, Nasdaq notified us that we were not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2), which requires our common stock to maintain a minimum bid price of $1.00 per share. On ~~June~~February 204, ~~2024~~2026, we received a ~~letter~~written ~~from~~notice Nasdaq indicating that, ~~for~~ the 10Staff ~~consecutive~~has ~~business~~determined ~~days from June 5, 2024~~ to ~~June~~delist ~~28, 2024,~~ the ~~closing bid price of the~~ Company’s ~~common~~ ~~stock~~securities ~~had~~from ~~been~~The ~~at $1.00 per share or greater. Accordingly, we have regained compliance with~~ Nasdaq ~~Listing~~Capital ~~Rule 5550(a)(2) and Nasdaq considers the prior bid price deficiency matter now closed~~Market.

~~Our Solutions~~6

~~We have~~As ~~invested~~disclosed ~~nearly~~in ~~$100 million over~~ the ~~years~~ ~~to develop our patented~~Notice, ~~multi-layered “Triple Shield” technology,~~ ~~which~~the ~~can~~Staff ~~serve~~determined ~~all connectivity markets. Our Triple Shield technology includes signal processing software~~ that ~~is implementing optimization of multi-line signal coordination,~~ the ~~elimination~~Company’s ofcommon ~~interference~~stock failed to ~~boost~~maintain ~~connectivity~~compliance ~~performance,~~with the ~~optimization~~Bid ofPrice ~~coding for resilience and security, multi-line data scrambling for low latency, increased resilience, and added security~~Rule. ~~Our~~While ~~solutions~~companies ~~also offer~~are ~~implementation~~typically ofafforded ~~256~~a 180-~~bit~~calendar-day ~~encryption~~compliance ofperiod ~~transmission~~to ~~for~~comply ~~data~~with ~~running~~the ~~over~~Bid ~~fiber~~Price orRule, ~~copper~~the ~~for~~Staff ~~network-wide~~concluded ~~protection~~that ofthe ~~data.~~Company ~~Our~~is ~~technology~~not iseligible ~~packaged~~for ~~into~~the acompliance ~~small~~period ~~set~~pursuant ofto ~~compact,~~Nasdaq ~~hardened,~~Listing ~~feature-rich~~Rule ~~network elements~~ 5810(~~such~~c)(3)(A)(iv) asdue ~~switches,~~to ~~concentrators and reach extenders) —~~ the ~~MetaLIGHT~~fact ~~product family —~~ that ~~are~~the ~~used~~Company aseffected ~~building~~a ~~blocks~~reverse stock ~~addressing~~split within the ~~needs~~prior ~~of most wide~~one-~~area~~year ~~IoT verticals and applications~~period, inspecifically a ~~space~~1-~~and energy~~for-~~saving~~10 ~~fashion.~~reverse ~~The~~stock ~~ability~~split toon ~~drive~~November ~~remote~~18, ~~powering~~2025, and ~~synchronization~~therefore ~~signals~~is tosubject ~~network ends over existing copper transmission lines provides additional significant cost-and-time benefits~~ to ~~network~~immediate ~~operators~~delisting.

InAs further disclosed in the ~~2023~~Notice, wethe ~~introduced~~Company had the ~~next-generation~~right ~~product~~to ~~families~~request ~~for~~a ~~hybrid-fiber-copper~~hearing ~~(or~~and that a hearing request would result in ~~short~~a ~~“hybrid-fiber”)~~stay ~~Gigabit~~of ~~grade~~any suspension or delisting ~~connectivity~~action ~~under~~pending the ~~product~~conclusion ~~family~~of ~~name~~the hearings process. Accordingly, ~~“Gigaline”~~on orFebruary ~~GL. Under~~11, 2026, the ~~Gigaline~~Company ~~families~~requested ofa ~~hybrid-fiber~~hearing ~~networking solutions~~before ~~for~~the ~~fiber~~Panel, which ~~copper~~served ~~and~~to ~~coax~~stay ~~environments,~~any wefurther ~~solved~~suspension ~~new~~or ~~challenges~~delisting ~~faced~~action bythrough ~~our~~the ~~IoT~~hearing ~~and~~or ~~telecom~~any ~~customers~~extension ~~and~~the ~~expanded~~Panel ~~our~~provides ~~offerings~~following the hearing.

~~One such~~At ~~product~~the ~~line~~hearing, the ~~GL800~~Company intends ~~aims~~to attake ~~extending~~all ~~multi-gigabit~~reasonable ~~fiber-grade~~measures ~~connectivity~~available and is going to ~~buildings,~~present ~~enterprises,~~a ~~IoT~~plan ~~installations,~~to ~~campuses~~regain compliance with the Bid Price Rule and remain listed on Nasdaq to the Panel. However, there can be no assurance that the Company will be able to regain compliance with the Bid ~~and~~Price ~~5G/4G~~Rule ~~base~~or ~~stations~~maintain compliance with all other Nasdaq continued listing requirements.

~~A second~~In ~~product~~connection ~~line,~~with the ~~GL900,~~Company’s entry ~~extends~~into ~~Gigabit~~the ~~connectivity~~Common ~~from~~Stock ~~fiber~~Purchase ~~installations~~Agreement ~~outside~~with ~~buildings~~White ~~(“homes~~Lion ~~passed”~~as ~~by fiber)~~described ~~into~~below, ~~individual~~if ~~offices~~the ~~and~~Company ~~apartments~~fails ~~within~~to ~~MDUs~~be ~~and~~listed ~~MTUs,~~on ~~without~~the Nasdaq Capital Market, the ~~need~~Commitment ~~for~~Fee ~~landlord~~Amount ~~investment~~(as indefined ~~re-wiring~~below) ~~buildings~~will ~~with fiber.~~increase ~~MDU/MTU~~subject ~~market~~to the terms of the Delisting Penalty Provision in the USCommon Stock ~~alone~~Purchase isAgreement. ~~estimated~~See by“Item ~~the~~1-Business-Recent ~~company~~Developments-Equity toLine ~~include~~of ~~more~~Credit ~~than~~Agreement” ~~18M~~for ~~buildings~~additional information.

~~A third~~September ~~product~~2025 ~~group,~~Warrant ~~GL5000 and GL6000, that was introduced in 2023 includes over 40 variants of hardened, 10Gbps fiber switches to expand our fiber offering into the IoT market.~~Inducement

~~Our~~On September 2, 2025, we entered ~~product~~into ~~offering~~an ~~includes~~inducement ~~our~~agreement ~~EMS~~(the ~~network~~“Inducement ~~management~~Letter”) ~~software,~~with ~~providing~~a ~~built-in~~certain ~~automation~~holder (the “Holder”) of certain of the Company’s existing warrants to ~~help~~purchase ~~configure,~~an ~~manage~~aggregate of 427,020 ~~monitor~~shares of the Company’s common stock, ~~safeguard~~consisting of (i) 127,119 ~~install~~warrants ~~and~~issued ~~maintain~~on ~~complex~~December 20, ~~hybrid~~2023 ~~networks~~with ofan ~~thousands~~expiration date of ~~elements~~June ~~remotely.~~20, ~~Our~~2029 ~~EMS~~at ~~management~~an ~~Software~~exercise ~~was~~price ~~enhanced~~of to$11.8 ~~support~~per share (ii) 99,967 warrants ~~these~~issued ~~new~~on ~~products~~June ~~and~~6, ~~strengthened~~2024 with ~~advanced~~an ~~security~~expiration ~~features~~date toof ~~support~~December ~~better~~6, ~~cyber~~2029 ~~production~~at ~~and~~an ~~meet~~exercise ~~DoD~~price ~~demands~~of $20.00 ~~Our~~per ~~products are~~share ~~also~~and ~~built~~(iii) ~~for~~199,934 ~~future~~warrants issued ~~integration~~on July 2, 2024 with ~~enhanced~~an ~~security~~expiration ~~services~~date weof ~~may~~July ~~introduce~~2, in2026 at an exercise price of $17.50 per share (the ~~future~~“Existing Warrants”).

~~A fourth~~Pursuant ~~product~~to ~~group,~~the ~~MetaShield~~Inducement Letter, ~~that~~the ~~was~~Holder ~~introduced~~agreed into ~~2024,~~exercise isfor acash ~~cyber-security,~~the ~~cyber-aware~~Existing ~~networking~~Warrants ~~solution,~~to purchase an ~~AI-powered~~aggregate of 427,020 ~~asset intelligence~~shares ~~and~~of ~~threat~~the ~~management~~Company’s common ~~that~~stock ~~comes~~at asa ~~part~~reduced ofexercise ~~our~~price ~~networking~~of ~~solutions~~$3.70 ~~Its~~per ~~objective~~share isin consideration of the Company’s agreement to ~~continuously~~issue ~~monitor~~new ~~IoT~~common ~~devices~~stock ~~for~~purchase ~~cyber-risks,~~warrants ~~network~~(the ~~behaviors~~“New Warrants”), ~~trends~~as ~~and~~descried ~~overall health~~below, to ~~detect~~purchase ~~cyber~~up ~~attacks~~to ~~and~~an ~~operational~~aggregate ~~anomalies~~of 640,530 toshares ~~document~~of ~~such~~the ~~performance~~Company’s ~~tracking~~common ~~and~~stock ~~provide~~(the ~~compliance~~“New ~~reports,~~Warrant ~~and~~Shares”) toat ~~automatically-correct~~an ~~the~~exercise ~~vulnerabilities,~~price ~~anomalies~~of ~~and~~$3.70 ~~attacks~~per ~~that~~share. itThe ~~identifies. It~~Company isreceived aaggregate ~~cloud-base~~gross ~~Software-as-a-service~~proceeds of ~~solution,~~approximately ~~that~~$1.6 ~~can~~million befrom athe ~~stand-alone~~exercise ~~solution~~of ~~that~~the ~~works~~Existing onWarrants ~~any~~by ~~network,~~the orHolder, ~~integrated~~before ~~with~~deducting financial advisory fees and other ~~our~~offering ~~networking~~expenses ~~solutions~~payable by the Company.

WeRodman & Renshaw LLC and ~~aim~~HCW acted as financial advisors to ~~continue~~the ~~developing~~Company ~~our~~in ~~technology~~connection with the transactions contemplated by the Inducement Letter. Pursuant to an ~~include~~engagement ~~more~~letter ~~system-wide~~with ~~security~~HCW, ~~and~~the ~~further~~Company ~~hybridity~~has ~~across~~agreed ~~all~~to ~~types~~pay ofthe ~~infrastructure~~financial advisors a cash fee equal to 7.0% of the aggregate gross proceeds Wereceived ~~will~~from ~~also~~the ~~seek~~Holder’s exercise of the Existing Warrants, as well as a management fee equal to ~~include~~1.0% ~~cutting~~of the gross proceeds from the exercise of the Existing Warrants and $25,000 paid for non-~~edge~~accountable ~~computing~~expenses. ~~capabilities~~The Company has also agreed to ~~serve~~issue ~~all~~to ~~connectivity~~the ~~needs~~financial advisors ~~for~~or ~~our~~their ~~IoT~~designees ~~customers~~warrants (the “Inducement Placement Agent Warrants”) to purchase up to 29,891 inshares anof ~~effective~~common ~~and~~stock ~~easily~~(representing ~~deployable~~7.0% ~~way~~of the Existing Warrants being exercised), ~~while~~which ~~maintaining~~will ~~our~~have ~~commitment~~the same terms as the New Warrants having a term of five years of Stockholder Approval (as defined below) except the Inducement Placement Agent Warrants will have an exercise price equal to ~~serve~~$4.625 ~~our~~per ~~existing~~share ~~Telco~~(125% ~~customers~~of the exercise price of the Existing Warrants).

The New Warrants have an exercise price equal to $3.70 per share. The New Warrants will be exercisable from the effective date (the “Warrant Stockholder Approval Date”) of shareholder approval (“Stockholder Approval”), until (i) the five-year anniversary of such date for 340,629 of the New Warrants and (ii) the twenty-four-month anniversary of such date for 299,901 of the New Warrants. The exercise price and number of New Warrant Shares issuable upon exercise of the New Warrants is subject to appropriate adjustment in the event of stock dividends, stock splits, subsequent rights offerings, pro rata distributions, reorganizations, or similar events affecting the Company’s common stock and the exercise price. On November 7, 2025, the Warrant Stockholder Approval was obtained in a special meeting of our shareholder, resulting in the Warrant Stockholder Approval Date being such date.

We believe that our strong reputation as a provider of high-quality solutions, and the trust we gain from being recognized as a solid solution provider by prominent customers (such as the U.S. DoD) help us execute our strategy.7

~~Products~~The closing of the transactions contemplated pursuant to the Inducement Letter occurred on September 3, 2025.

●Provided Gigaline 800/900/5000/6000 Series. Advanced, software managed, temperature and cyber-hardened, layer 2 and layer 3, hybrid-fiber-copper switching devices, at multi-gigabit speeds of up to 10Gbps. These devices deliver a much broader selection of solutions for large and small networks, at higher speeds, and better security, in support of hybrid-fiber networks that contain more fiber, and covering IoT, MDU and MTU markets. ● MetaLight ML500/600/700/Series. EADs (Ethernet Access Devices) are a series of products which are cost efficient, compact and hardened Ethernet switches for long-distance hybrid-fiber networks, located near the ~~IoT~~Inducement Letter ~~devices~~prohibited ~~connected to~~ the ~~network.~~Company ~~For~~from ~~example,~~entering ~~our~~into ~~EAD~~an isagreement ~~used~~ to ~~connect~~effect ~~street~~any ~~traffic~~issuance ~~lights~~by ~~and nearby controllers, cameras and IoT devices to~~ the ~~traffic~~Company ~~control~~involving center, where either fiber, copper or coax infrastructure cabling exists. This product family can be installed either indoors or outdoors, including under extreme weather conditions. ● MetaShield. is a ~~cyber-security,~~variable ~~cyber-aware~~rate ~~networking solution~~transaction, ~~an AI-powered, asset intelligence and threat management that comes as part of~~ the ~~network.~~Holder ~~Its~~agreed ~~objective is~~ to ~~continuously~~waive ~~monitor IoT devices for cyber-risks, network behaviors, trends and overall health, to detect cyber attacks and operational anomalies, to document~~ such ~~performance~~prohibition ~~tracking~~with ~~and~~respect ~~provide compliance reports, and~~ to ~~automatically-correct~~ the ~~vulnerabilities,~~transactions ~~anomalies~~contemplated ~~and~~by ~~attacks~~the ~~that~~ELOC itPurchase ~~identifies.~~Agreement ~~It is a cloud-base Software-~~as~~-a-service~~ ~~solution~~described below, ~~that~~and ~~can~~signed bean aamendment ~~stand-alone~~to ~~solution~~the ~~that~~Inducement ~~works~~Letter on ~~any~~October ~~network~~9, ~~or, integrated with our networking solutions~~2025. ●Pursuant ~~ML2300~~to ~~Aggregator~~such ~~Series. This product is designed for large~~amendment, ~~medium,~~the ~~and~~Company ~~small~~issued ~~aggregation/operating~~to ~~and~~the ~~control centers. Network aggregators can connect hundreds of locations or elements. For example~~Holder 10,000 ~~control~~warrants ~~centers of highways could use such aggregators~~ to ~~communicate~~purchase ~~with~~shares ~~hundreds~~ of ~~EADs~~common ~~installed~~stock inof ~~cabinets~~the ~~along~~Company ~~highways~~on insimilar ~~order~~terms toas ~~securely~~the ~~connect~~Series ~~IoT~~A-1 ~~devices (e~~Warrants.~~g. security cameras) to the highway network.~~

8Equity Line of Credit Agreement

	●	XR239 Series. This product is installed on long copper lines and can be remotely powered from the data lines themselves, while a special algorithm (Dynamic Spectral Software) is ensuring minimal interference with other signals running on adjacent conduits in the same cable. It features a repeater to extend connectivity range to long distances, in some cases up to 100Km. The repeater is installed outdoors and is resistant to cold, hot, rain, ice or snow. Our repeaters have been installed along rail systems in Alaska and Canada and have been safely performing for more than five years.
	●	Advanced MetaLIGHT/Gigaline EMS software. Our EMS (Element Management Systems) software enable remote management, monitoring, maintenance, and configuration of the installed equipment in the network. It is designed to monitor, control and configure our network elements in the field, locally or remotely, for networks of various scales up to thousands of elements. Our implementation during 2021 and 2022 for our end-user customer Highways England, as an example, is using such EMS systems to control thousands of EADs connecting IoT devices along thousands of highway miles. It includes detailed monitoring, logging and tracking of functions both locally and remotely, to allow for easy debugging and configuration of networks, security management, graphical display of network topologies, management of licenses, remote software download, and connectivity to other network and management systems. EMS may also manage other software keys and elements (for example, for encryption or other cyber-safety functions), for which customers may pay separately for the licenses.

On September 27, 2025, we entered into a common stock purchase agreement (the “Common Stock Purchase Agreement”), with an effective date of October 1, 2025, and a related registration rights agreement (the “White Lion RRA”) with White Lion Capital, LLC, a Nevada limited liability company (“White Lion”). Pursuant to the Common Stock Purchase Agreement, the Company has the right, but not the obligation to require White Lion to purchase, from time to time, up to $30,000,000 in aggregate gross purchase price (the “Commitment Amount”) of newly issued shares of the Company’s Common Stock, subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement.

WeThe Company is obligated under ~~also~~the ~~offer~~Common ~~support~~Stock Purchase Agreement and ~~maintenance~~the ~~services~~White ~~together~~Lion RRA to file a registration statement (the “Resale Registration Statement”) with the ~~sales~~SEC to register the Common Stock under the Securities Act of ~~our~~1933, ~~product.~~as ~~This~~amended ~~includes~~(the ~~consulting~~“Securities Act”), ~~telephone~~for ~~troubleshooting~~the resale ~~and~~by ~~remote~~White ~~support,~~Lion ~~training,~~of ~~product~~shares ~~repairs,~~of Common Stock that the Company may issue to White Lion under the Common Stock Purchase Agreement and ~~software~~to ~~updates~~register the Commitment Shares (as defined below) within five business days of the date of the Common Stock Purchase Agreement.

~~Product~~The maximum number of shares ~~Specifications~~issuable under the Common Stock Purchase Agreement is subject to the Exchange Cap.

~~Our~~The Company agreed to call ~~products~~a ~~use~~special ~~advanced~~meeting ~~signal~~of ~~processing~~its ~~implemented~~shareholders at(the “Special Meeting”) to obtain shareholder approval for the ~~system~~issuance ~~level~~of Common Stock under the Common Stock beyond the Exchange Cap (“Shareholder Approval”) within 120 days of October 1, ~~with~~2025. anIf ~~approach~~the ~~that~~Company failed ~~treats~~to ~~multiple~~call ~~copper~~the ~~lines~~Special Meeting within this timeframe, it shall pay liquidated damages to White Lion, as ~~one~~more ~~multi-line~~fully described in the ~~channel~~Common Stock Purchase Agreement. The Special Meeting was held on January 29, ~~which~~2026. weShareholder ~~believe~~Approval was not obtained due to ~~achieve~~a ~~the~~failure to ~~following~~reach ~~benefits:~~a quorum. Please see “January 2026 Special Meeting of Shareholders” below for more information.

●Because ~~Speeds~~Shareholder ~~ranging~~Approval was ~~from~~not ~~10MB~~obtained toat ~~10GBPS;~~the ~~distances~~Special upMeeting, the Company is obligated to ~~100Km~~call an additional Special Meeting every ninety (~~speeds~~90) days thereafter, for a ~~lower~~total ~~for~~period ~~longer~~of ~~distances)~~360 ~~infrastructure~~days, until Shareholder Approval is obtained. The follow-up meeting to obtain Shareholder Approval is scheduled to be held on April 13, 2026.

~~Supporting any~~As ~~hybrid~~consideration ~~combination~~for ofWhite ~~new~~Lion’s ~~Fiber~~irrevocable ~~infrastructure~~commitment ~~and~~to ~~existing~~purchase the ~~copper~~Company’s ~~and~~Common ~~coax~~Stock ~~infrastructure~~up to the Commitment Amount, ~~supporting~~the ~~data~~Company ~~security~~agreed anto ~~encryption~~issue shares of Common Stock to White Lion (the “Commitment ~~protocols~~Shares”) equal to $750,000 ~~certified~~(the ~~for~~“Commitment ~~FIPS~~Fee Amount”) divided by USthe ~~DoD~~lowest ~~labs;~~traded ~~supporting~~price ~~outdoor~~of ~~hardened~~the ~~environmental~~Company’s ~~requirements~~common stock ~~dense~~during ~~and~~the ~~compact~~30 tobusiness ~~save~~days ~~space and~~prior ~~allow~~to ~~for~~the ~~flexible~~issuance ~~location~~of ~~setting~~the Commitment Shares.

●If ~~Automatic~~at ~~calibration~~any ~~tools~~point during the term of the Common Stock Purchase Agreement the Company fails to be listed on the Nasdaq Capital Market, the Commitment Fee Amount will increase to $1,000,000 if remedied within six months or less, to $1,250,000 if remedied after six months but before twelve months, and $1,500,000 ~~automated~~if ~~management~~not SWremedied ~~enable~~within ~~hassle-free~~twelve ~~installation~~months ~~withing~~(the ~~hours~~“Delisting vsPenalty Provision”). ~~weeks~~The ~~over~~Delisting ~~existing~~Penalty ~~wiring~~Provision shall automatically be waived on the date that is six (6) months after the later of (A) the date on which Shareholder Approval is Obtained and (B) the date on which the Resale Registration Statement has been declared effective by the SEC.

● Improve communication reliability even if copper lines are of poor quality, so that network operators can, in most cases, guarantee their customers what we believe are Service Level Availabilities (SLAs) and uptime similar to that of fiber optic infrastructure regardless of the media used, and uptime that allows our customers to support mission-critical applications.8

InSubject to the satisfaction ~~addition~~of certain customary conditions including, without limitation, the effectiveness of a registration statement registering the shares issuable pursuant to ~~these~~the ~~main~~Common ~~benefits~~Stock Purchase Agreement, wethe ~~have~~Company’s ~~focused~~right ~~our~~to ~~efforts~~sell shares to White Lion will commence on October 1, 2025 and ~~implemented~~extend ~~technologies~~until inOctober ~~our~~1, ~~products~~2028, unless the Company has exercised its right in ~~order~~full to ~~achieve~~sell shares to White Lion under the ~~following:~~Common Stock Purchase Agreement prior to such date (the period beginning on the effective date and ending on the earlier of such dates, the “Commitment Period”). During such term, subject to the terms and conditions of the Common Stock Purchase Agreement, the Company shall notify (such notice, a “Purchase Notice”) White Lion when the Company exercises its right to sell shares (the effective date of such notice, a “Notice Date”). The Purchase Notice may be a Regular Purchase Notice or a Rapid Purchase Notice, each as described below.

●The ~~Transmission~~number inof shares sold pursuant to any such notice may not exceed 40% of the ~~copper~~Average ~~lines~~Daily toTrading ~~take~~Volume ~~into~~for ~~account~~the ~~signals~~common instock ~~neighboring~~traded ~~lines~~on toNasdaq ~~minimize~~immediately ~~crosstalk~~preceding receipt ~~interference~~of the applicable Purchase Notice, and can be ~~“Spectrally~~increased ~~Friendly”;~~at any time at the sole discretion of White Lion, up to 9.99% of the outstanding shares of the Company.

9Under a Regular Purchase Notice, the purchase price to be paid by White Lion for any such shares will equal 97.5% multiplied by the lower of the (i) lowest daily VWAP of the Common Stock during the Regular Purchase Valuation Period (as such term is defined in the Common Stock Purchase Agreement) or (ii) the closing price of the Common Stock one business day prior to the delivery of the Regular Purchase Notice.

●Under ~~Multi-line~~a ~~spatial~~Rapid ~~coding~~Purchase ~~scrambling~~Notice, the purchase price to be paid by White Lion for any such shares will equal (i) the lowest traded price of ~~data~~the inCommon aStock ~~way~~on ~~that~~the ~~enhances~~Rapid Purchase ~~connection~~Notice ~~immunity~~Date with respect to ~~interference,~~Rapid ~~and~~Purchase ~~makes~~Price ~~tapping~~Option ~~into~~1; or (ii) 99% multiplied by the ~~data~~lowest ~~very~~traded ~~difficult;~~price of the Common Stock two hours following written confirmation of the acceptance of the Rapid Purchase Notice by White Lion with respect to Rapid Purchase Price Option 2.

●The ~~Integration~~Company ofmay ~~remote~~terminate the ~~powering~~Common ~~and~~Stock ~~data~~Purchase Agreement at any time, which shall be effected by written notice being sent by the Company to White Lion. In addition, the Common Stock Purchase Agreement shall automatically terminate on the ~~same~~earlier ~~copper~~of ~~pairs;~~(i) the end of the Commitment Period or (ii) the date that, pursuant to or within the meaning of any bankruptcy law, the Company commences a voluntary case or any person commences a proceeding against the Company, a custodian is appointed for the Company or for all or substantially all of its property or the Company makes a general assignment for the benefit of its creditors. Certain provisions of the Common Stock Purchase Agreement survive termination, as described more fully in the text of the agreement.

●Concurrently ~~Minimizing~~with ~~transmission~~the ~~delay~~execution of the Common Stock Purchase Agreement, the Company entered into the White Lion RRA with White Lion in which the Company has agreed to register ~~support~~the ~~delay-sensitive~~shares ~~applications;~~of Common Stock purchased by White Lion under the Common Stock Purchase Agreement with the SEC for resale within 30 days of the execution date of the White Lion RRA. The White Lion RRA also contains usual and customary damages provisions for failure to have the registration statement declared effective by the SEC within the time periods specified therein.

●The ~~Ability~~Common toStock ~~safely~~Purchase Agreement and the White Lion RRA contain customary representations, warranties, conditions and ~~accurately~~indemnification ~~transmit~~obligations ~~clock~~of ~~signals~~the parties. The representations, warranties and covenants contained in such agreements were made only for ~~cellular~~purposes ~~base~~of ~~station~~such ~~synchronization~~agreements ~~(not~~and ~~available~~as ~~yet~~of specific dates, were solely for ~~5G)~~the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

~~Since our~~White ~~inception,~~Lion ~~our~~Private business was focused on serving telecommunication service providers (Telecom), also known as Telcos, for enterprises and residential customers. Our products and solutions have been deployed with more than 100 telecommunication service providers worldwide, in enterprise, residential and mobile base station connectivity applications. In recent years, as we have further developed our technology and rolled out additional products, we turned our focus on serving the IoT markets. Our operations are focused on our fast-growing IoT business while maintaining our commitment to our existing Telecom customers.Placement

~~Our~~Concurrently on September ~~Competitive~~27, ~~Advantage~~2025, the Company entered into a securities purchase agreement (the “PIPE Purchase Agreement”) with White Lion, pursuant to which the Company agreed to issue and sell to White Lion in a private placement (the “Offering”) (i) 87,177 shares (the “Shares”) of Common Stock, and (ii) pre-funded warrants to purchase up to 312,823 shares of Common Stock (the “White Lion Pre-Funded Warrants”) for a purchase price of $2.125 per share of Common Stock and $2.124 per White Lion Pre-Funded Warrant, for a total aggregate gross proceeds of approximately $850,000. The Offering closed on September 29, 2025.

We have invested heavily and over more than 10 years in the development of copper technologies and hybrid-fiber communication systems to create a solution that enables high-speed communication over real-life networks of mixed media, securely, reliably, and with Gigabit-grade resilience.9

~~Copper~~The Company had a right to ~~and~~redeem ~~coax~~48,826 ~~lines~~of ~~are~~the ~~readily~~shares ~~available~~of inCommon ~~billions~~Stock at a redemption price of ~~locations~~$0.001 ~~They~~per ~~are~~share. ~~often~~The ~~buried~~Company and White Lion have agreed that, in lieu ~~the~~of ~~ground~~such redemption, ~~running~~on inOctober 20, 2025, the ~~walls~~Company ofreduced ~~buildings or~~the ~~hanging~~number ~~from~~shares ~~telephone~~issuable ~~poles,~~pursuant inupon ~~bundles~~exercise of ~~tens~~the orWhite ~~hundreds~~Lion Pre-Funded ofWarrants ~~wires~~by 48,826 shares, to 263,997.

~~Copper~~The White Lion Pre-Funded ~~wires~~Warrants ~~were~~are ~~never~~immediately ~~designed~~exercisable ~~for~~at ~~long-reach,~~an ~~secure,~~exercise ~~high-speed~~price ~~communication~~of $0. ~~Attempts~~001 toper ~~deliver~~share ~~high-speed~~of ~~would~~Common ~~encounter~~Stock ~~many~~and ~~problems, including~~will ~~signal~~not ~~attenuation~~expire until exercised in full. However, ~~cross-talk~~the ~~interference~~Company ~~from~~may ~~other~~not ~~lines~~issue a number of shares of Common Stock pursuant to exercise of the White Lion Pre-Funded Warrants in an amount that will not exceed the ~~Bundle~~Exchange ~~and~~Cap ~~from~~when ~~any~~combined ~~external~~with ~~electrical~~the ~~sources~~number of Shares issued in the Offering, ~~variable~~before shareholder ~~quality~~approval ~~and~~for ~~signal~~further ~~interruptions,~~issuance ~~and~~beyond ~~variable~~the ~~latency.~~Exchange ~~Such~~Cap ~~wires~~is ~~are~~obtained. ~~also~~The ~~relatively~~Company ~~easy~~intends to ~~tap~~obtain ~~into~~such ~~physically,~~shareholder ~~and~~approval concurrently with the ~~information is~~Shareholder ~~also~~Approval ~~radiated~~required ~~outside~~for the issuance of ~~the~~shares ~~cable~~of ~~and~~Common ~~may~~Stock beunder ~~exposed~~the toCommon ~~security~~Stock ~~threats~~Purchase Agreement beyond the Exchange Cap.

~~In order~~The obligation to ~~correct~~file the Resale ~~issues~~Registration ~~with~~Statement ~~providing~~described ~~high~~above ~~speed~~also ~~communications~~covers ~~over~~the ~~copper~~registration ~~wiring,~~of wethe ~~developed~~shares ~~technologies~~of ~~utilizing~~Common aStock ~~multi-line approach, encoding, scrambling~~ and ~~processing~~shares underlying the ~~signals~~White Lion atPre-Funded ~~system~~Warrants ~~level~~issued ~~(rather~~pursuant ~~than~~to at the ~~single~~PIPE ~~lines~~Purchase ~~level),~~Agreement. ~~and~~The ~~finally~~Company ~~also~~filed ~~offering data~~the ~~encryption,~~Resale toRegistration ~~combat~~Statement ~~interference~~on October 7, ~~electromagnetic noise~~2025, and ~~issues~~such ~~with~~registration ~~copper~~statement ~~line~~became ~~quality~~effective ~~and~~on ~~data~~November ~~security~~28, 2025.

~~The next~~December ~~step~~2025 ~~was to integrate our existing technologies into hybrid-fiber building blocks, that provide seamless communication over mixed, real-life fiber-copper-coax networks, and many other advantages.~~Offering

~~We believe~~On ~~our~~December ~~products~~17, ~~offer~~2025, we offered and sold in a ~~unique~~public ~~solution~~offering on a best efforts basis (the ~~market~~“December in2025 ~~terms~~Offering”) (i) 4,352,500 shares of ~~value~~the Company’s Common Stock, by(ii) ~~providing~~1,897,500 pre-funded warrants to purchase up to 1,897,500 shares of Common Stock (the ~~following:~~“December 2025 Pre-Funded Warrants”), and (iii) 6,250,000 common warrants to purchase up to 6,250,000 shares of Common Stock, (the “December 2025 Common Warrants” and together with the Pre-Funded Warrants, the “December 2025 Warrants”), at a purchase price of $0.80 per share of Common Stock and accompanying December 2025 Common Warrant, and $0.7999 per December 2025 Pre-Funded Warrant and accompanying December 2025 Common Warrant. Aggregate gross proceeds from the December 2025 Offering (without taking into account any proceeds from any future exercises of December 2025 Warrants) were approximately $5 million. The Offering closed on December 19, 2025.

●The ~~High~~December ~~performance~~2025 ~~hybrid~~Pre-~~fiber~~Funded Warrants ~~communication~~are ~~system~~immediately exercisable at an exercise price of $0.0001 per share of Common Stock and will not expire until exercised in full.

●Each ~~Speeds~~December ~~from~~2025 ~~10Mbps~~Common Warrant tohas ~~10Gbps~~an exercise price of $0.80 per share, is exercisable immediately on upon issuance and will expire on the five-year anniversary of the date of issuance.

●A ~~Reach~~holder of upthe December 2025 Warrants will not have the right to ~~100Km~~exercise any portion of its December 2025 Warrants if the holder (~~speed~~together ~~declines~~with ~~over~~such ~~long~~holder’s affiliates, ~~distances~~and any persons acting as a group together with such holder or any of such holder’s affiliates or any other persons whose beneficial ownership of shares of Common Stock would be aggregated with the holder’s or any of the holder’s affiliates), would beneficially own shares of Common Stock in ~~copper~~excess of 4.99% (or, at the election of the holder, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise.

●Certain ~~Robust~~investors ~~connectivity~~in ~~allowing~~the ~~Gigabit-grade~~Offering entered ~~service~~into ~~SLAs~~a indefinitive ~~various~~securities ~~harsh~~purchase ~~environments~~agreement ~~over~~with ~~copper~~the Company (the “December 2025 Purchase Agreement”). The December 2025 Purchase Agreement contains representations, ~~coax~~warranties, indemnification and other provisions customary for transactions of this nature. Pursuant to the December 2025 Purchase Agreement, the Company agreed to abide by certain customary standstill restrictions for a period of thirty (30) days following the closing of the December 2025 Offering. In addition, subject to limited exceptions, the December 2025 Purchase Agreement provides that for a period of one year following the closing of the December 2025 Offering, the Company will not effect or ~~fiber~~enter into an agreement to effect a “variable rate transaction” as defined in the December 2025 Purchase Agreement.

~~Rapid installation in hours vs. weeks or months if new infrastructure is needed~~10

●HCW ~~Cyber~~acted as the sole placement agent (the “Placement Agent”), on a “best efforts” basis, in connection with the Offering. On March 3, 2025, the Company and the Placement Agent had entered into a letter agreement with the Company to serve as exclusive underwriter, agent or advisor in any offering of securities of the Company for a six-~~protection~~month term (the “Engagement Agreement”). The Engagement Agreement has been extended twice since its initial effectiveness and ran through March 12, 2026 . Under the Engagement Agreement, as extended, the Company agreed to pay the Placement Agent an aggregate cash fee equal to 7.0% of the gross proceeds received by the Company in the Offering, as well as a management fee equal to 1.0% of the gross proceeds raised in the Offering. The Company also agreed under the Engagement Agreement to reimburse the Placement Agent $25,000 for non-accountable expenses and up to $100,000 for fees and expenses of legal counsel and other out-of-pocket expenses of the Placement Agent in connection with the Offering. Pursuant to the Engagement Agreement, the Company will issue to the Placement Agent or its designees 437,500 warrants to purchase up to 437,500 shares of Common Stock, representing 7.0% of the sum of the Shares and Pre-Funded Warrants to be sold in the Offering (the “December 2025 Placement Agent Warrants”). The December 2025 Placement Agent Warrants have an exercise price of $1.00 per share of Common Stock (representing 125% of the public offering price per Share and accompanying Common Warrant), are exercisable for five years from the date of the commencement of sales in this offering, and otherwise reflect substantially the same terms as the December 2025 Common Warrants. The Engagement Agreement contains representations, warranties, indemnification and other provisions customary for transactions of this nature. The Company signed an ATM exclusive engagement with HCW on ~~several~~January ~~levels~~5, ~~including~~2026 that ~~Triple~~ending ~~Shield~~twenty-four ~~Protection:~~months following the first sale under the ATM.

●The ~~Multi-line~~net ~~data~~proceeds ~~scrambling~~to the Company from the December 2025 Offering are approximately $4.46 million after deducting placement agent fees and ~~coding~~estimated ~~(copper)~~offering expenses payable by the Company. The Company intends to use the proceeds from the Offering for general corporate purposes.

10January 2026 Special Meeting of Shareholders

●On ~~256-bit~~January ~~system~~29, 2026 we held a special meeting of shareholders where we reviewed the proposal to allow White Lion to purchase more than 19.99% of the company’s shares that were outstanding as of October 1, 2025 which was the ELOC’s effective start date. The meeting did not have a quorum, therefore according to the company’s by-~~wide~~laws ~~encryption~~and the definitive 14A the meeting was not adjourned, and the proposal was not approved. According to the ELOC Agreement the company will have to bring the same proposal for voting in a meeting of shareholders within 90 days. A special shareholder meeting was scheduled for April 13, 2026 bringing the proposal for voting.

●Issuer ~~System~~Purchases ~~level protection (encryption and other protections)~~ of ~~management software, operating system and traffic flow~~Equity Securities

~~Military — grade~~On November 17, 2022, the ~~DoD~~Board ~~certified~~authorized ~~FIPS~~a ~~cyber~~stock ~~protection~~repurchase program pursuant to which we may repurchase up to $1.0 million of outstanding shares of our common stock. The Board authorized us to purchase our common stock from time to time on a discretionary basis through open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b-18 of the Securities Exchange Act, as amended, and other applicable legal requirements. On March 18, 2026, the Board authorized an expansion of the repurchase program, such that the maximum aggregate purchase price under the program will now be $1.5 million. As of the date of this Annual Report, $50,000 worth of repurchases have been made.

●Repurchases ~~Dense,~~under ~~feature-full~~the ~~design~~share repurchase toprogram ~~replace~~will ~~multiple~~be ~~alternative~~made ~~elements~~at management’s discretion at prices management considers to be attractive and in the best interests of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and ~~allow~~our financial performance. The repurchase program may be suspended, terminated or modified at any time for ~~installation~~any ~~that~~reason, isincluding ~~compact~~market conditions, ~~lower~~the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and ~~power~~other ~~saving:~~factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate us to purchase any particular number of shares.

●Our ~~Advanced switching functions supporting complex network topologies~~Solutions

●We ~~Support~~have invested nearly $100 million over the years to develop our patented, multi-layered “Triple Shield” technology, which can serve all connectivity markets. Our Triple Shield technology includes signal processing software that is implementing optimization of multi-line signal coordination, the elimination of interference to boost connectivity performance, the optimization of coding for ~~both~~resilience ~~advanced~~and security, ~~digital~~multi-line data ~~IoT~~scrambling ~~devices~~for aslow ~~well~~latency, increased resilience, and added security. Our solutions also offer implementation of 256-bit encryption of transmission for data running over fiber or copper for network-wide protection of data. Our technology is packaged into a small set of compact, hardened, feature-rich network elements (such as ~~existing~~switches, ~~analog~~concentrators ~~devices~~and ~~with~~reach ~~serial~~extenders) ~~interfaces~~— the MetaLIGHT product family — that toare ~~save~~used as building blocks addressing the ~~need~~needs of most wide-area IoT verticals and applications, in a space-and energy-saving fashion. The ability to ~~replace~~drive ~~these~~remote ~~devices~~powering ~~while~~and ~~allowing~~synchronization ~~them~~signals to ~~join~~network ~~the~~ends ~~digital~~over existing copper transmission lines provides additional significant cost-and-time benefits to network operators.

●In ~~Power~~2023, ~~feeding~~we introduced the next-generation product families for ~~cameras~~hybrid-fiber-copper (or in short “hybrid-fiber”) Gigabit grade connectivity under the product family name, “Gigaline” or GL. Under the Gigaline families of hybrid-fiber networking solutions for fiber, copper and ~~other~~coax environments, we solved new challenges faced by our IoT ~~devices~~and ~~with~~telecom ~~the~~customers ~~data~~and ~~cable~~expanded our offerings.

●One ~~Ability~~such toproduct ~~install~~line, ~~our~~the GL800 ~~IoT~~aims ~~building~~at ~~blocks~~extending inmulti-gigabit ~~remote~~fiber-grade ~~locations~~connectivity ~~with~~to nobuildings, ~~power.~~enterprises, ~~Power~~IoT ~~can~~installations, becampuses, ~~provided~~and ~~from~~5G/4G ~~the communication line~~base stations.

●A ~~Ability~~second toproduct ~~provide~~line, ~~precise~~the GL900, ~~synchronization~~extends ~~over~~Gigabit connectivity from fiber installations outside buildings (“homes passed” by fiber) into individual offices and apartments within MDUs, without the ~~communication~~need ~~lines~~for landlord investment in re-wiring buildings with fiber. MDU market in the US alone is estimated by the company to ~~base~~include ~~stations~~more than 20 million buildings.

~~● Routing functions~~11

●A ~~Support~~third ~~for~~product ~~spectrally-friendly~~group, ~~reach~~GL5000 and ~~extenders~~GL6000, upthat towas ~~100Km~~introduced ~~with~~in ~~minimal~~2023 ~~impact~~includes onover ~~other~~40 ~~communication~~variants ~~lines~~of hardened, 10Gbps fiber switches to expand our fiber offering into the IoT market.

●Our ~~Automated~~product offering includes our EMS network management software, ~~tools~~providing ~~for~~built-in ~~installation~~automation ~~and~~to ~~management~~help ~~(including~~configure, ~~automated~~manage, ~~line~~monitor, ~~calibration~~safeguard, install and ~~configuration~~maintain complex, ~~recognition~~hybrid ~~during~~networks ~~installation~~of tothousands ~~avoid~~of ~~manual~~elements ~~work,~~remotely. ~~advanced~~Our EMS management ~~systems~~Software ~~that~~was ~~allow~~enhanced ~~remote~~to ~~troubleshooting~~support ofthese ~~any~~new ~~line~~products ~~connected~~and strengthened towith ~~the~~advanced ~~system~~security features to ~~save~~support onbetter ~~operation~~cyber production and ~~management~~meet ~~time)~~DoW demands. Our products are also built for future integration with enhanced security services we may introduce in the future.

WeA fourth product group, MetaShield, ~~believe~~that was introduced in 2024, is a cyber-security, cyber-aware networking solution, an AI-powered, asset intelligence and threat management that ~~the~~comes ~~combination~~as part of ~~these~~our ~~advantages~~networking ~~provides~~solutions. ~~our~~Its ~~customers~~objective ~~with~~is ato ~~highly~~continuously ~~cost~~monitor IoT devices for cyber-~~effective~~risks, ~~solution~~network behaviors, trends and overall health, to ~~quickly~~detect ~~obtain~~cyber ~~IoT~~attacks ~~connectivity~~and operational anomalies, to document such performance tracking and provide compliance ~~anywhere~~reports, inand ~~their~~to automatically-correct the vulnerabilities, anomalies and attacks that it identifies. It is a cloud-base Software-as-a-service solution, that can be a stand-alone solution that works on any network, or, integrated with our networking solutions.

~~We believe~~A ~~that~~fifth ~~our~~product ~~hybrid-fiber~~group ~~solutions~~is the ~~have~~Gigaline ~~a significant competitive advantage in several layers: (a) copper performance (speed~~9000, ~~reach,~~ ~~link~~addressing ~~stability~~large ~~and~~MDUs ~~data~~buildings ~~security); (b) seamless fiber-copper-coax integration~~ and ~~end-to-end~~hospitality ~~data~~properties ~~encryption;~~in ~~(c) overall system~~increments ~~cyber-hardened design; (d) versatile, compact and feature-dense products with a good fit to the vast majority~~ of ~~applications; (e) very~~hundreds ~~high product and transmission reliability; automatic configuration tools and advanced management~~ of ~~every~~units ~~element~~that incan ~~the field;~~scale and ~~(f) highly cost-effective when compared to alternatives. We believe that these advantages lead to very good value for~~provide ~~our~~Coax ~~customers~~based ~~for~~modernization ~~both rapid deployment~~ to ~~all~~Gigabit ~~locations,~~connectivity ~~regardless~~without ofthe ~~whether~~need ~~these locations are hard~~ to ~~reach.~~rewire Weand ~~also~~rather ~~believe~~use ~~that these~~existing ~~characteristics~~cable ~~provide~~TV ~~us with a competitive advantage against many, if not all, companies in our space, such as Cisco, Rad, Nokia, Siemens, Belden and others~~infrastructure.

We ~~have~~ ~~hundreds~~aim ofto ~~large,~~continue ~~medium and small network operators as end users of~~ developing our ~~products,~~technology ~~including~~to ~~municipalities,~~include ~~railway,~~more ~~airports, electricity,~~system-wide ~~water~~security ~~infrastructure~~and ~~companies~~further ashybridity ~~well~~across asall ~~other~~types ~~governmental~~of ~~agencies and military customers~~infrastructure. We ~~believe~~will ~~that~~also weseek ~~enjoy~~to ainclude ~~strong reputation for offering reliable, high~~cutting-~~performance~~edge ~~and~~computing ~~high-end~~capabilities ~~products.~~to Weserve ~~expect~~all ~~that~~connectivity ~~the~~needs ~~acceptance process~~ for our ~~new~~IoT ~~products for existing~~ customers ~~will become simpler due to customers positive accumulated experience working with us. We also have many non-exclusive third-party distributors~~, ~~resellers~~in ~~and~~an ~~system~~effective ~~integrators~~ and ~~partners~~easily ~~around~~deployable ~~the world~~way, ~~located in the U.S., Canada, Philippines, Germany,~~ ~~Italy,~~while ~~Spain,~~maintaining ~~Scandinavian~~our ~~countries,~~commitment ~~Greece, Netherlands, Japan and India. These non-exclusive third-party distributors are used~~ to ~~selling~~ ~~our~~serve ~~products, and we believe that they appreciate the reliability of~~ our ~~products~~existing ~~and~~Telco ~~the quality of service and support that we provide~~customers. ~~All of these advantages constitute an entry barrier, which we believe may make it more difficult for a competitor to reach a similar status.~~

11We believe that our strong reputation as a provider of high-quality solutions, and the trust we gain from being recognized as a solid solution provider by prominent customers (such as the U.S. DoW) help us execute our strategy.

We believe that over the past years, we have built a reputation for providing, according to our customers, reliable, high-quality communication solutions with better copper and hybrid fiber performance than other alternatives on the market. A competitor who wants to enter the market will have to compete with our reputation, which has been acquired over a long period by providing long-term quality service to hundreds of network operators and hundreds of thousands of end customers and IoT elements.Products

Our Sales and Marketing Strategy

	●	Gigaline 800/900/5000/6000/9000 Series. Advanced, software managed, temperature and cyber-hardened, layer 2 and layer 3, hybrid-fiber-copper-COAX switching devices, at multi-gigabit speeds of up to 10Gbps. These devices deliver a much broader selection of solutions for large and small networks, at higher speeds, and better security, in support of hybrid-fiber networks that contain more fiber, and covering ITS and MDU markets. In MDU, our Gigaline 900 and 9000 Series allow us to address from small, dozen unit to large, hundreds-to-thousands unit buildings.

	●	MetaLight ML500/600/700/Series. EADs (Ethernet Access Devices) are a series of products which are cost efficient, compact and hardened Ethernet switches for long-distance hybrid-fiber networks, located near the IoT devices connected to the network. For example, our EAD is used to connect street traffic lights and nearby controllers, cameras and IoT devices to the traffic control center, where either fiber, copper or coax infrastructure cabling exists. This product family can be installed either indoors or outdoors, including under extreme weather conditions.

We operate through two regions — Americas and International (consisting of EMEA, or Europe, Middle East and Africa, and APAC, or Asia Pacific) in a matrix with a vertical structure that is described below. Our sales and support teams are currently located in the United States, Mexico, Germany, Israel, and India. We also execute our sales and marketing plan through a multi-channel by vertical global approach that combines our expertise with the expertise of our trusted business partners. Our current business partners, as well as the partners we will seek in the future, are system integrators, distributors, contractors, resellers, and consultants. Our business partners are currently located in North America, Central America, Europe, India, Singapore, China, Australia, Vietnam and Japan. Once we identify a relevant business opportunity in a new territory, we seek to partner with local business partners or agents. We believe our strong brand name of high-quality communication solutions, as well as the credibility we gain with esteemed customers such as the U.S. DoD, enhances our ability to provide our products and services. For example, we achieved UL laboratories compliance with FIPS 140-2 cybersecurity standard required by the United States Department of Defense (the “DoD”) and the Joint Interoperability Test Command (JITC) labs approval of the Company’s products for cybersecurity and interoperability, putting the products in the DoD Approved Products List (APL).12

~~We operate~~● MetaShield. is a ~~vertical~~cyber-~~based~~security, ~~marketing~~cyber-aware ~~plan~~networking ~~where~~solution, wean ~~dedicate~~AI-powered, ~~tailored~~asset ~~solutions~~intelligence and ~~individual~~threat ~~resources~~management tothat ~~each~~comes ~~specific~~as ~~vertical~~part of the network. ~~Our verticals~~Its ~~include~~objective ~~Intelligent~~is ~~Traffic~~to ~~Systems~~continuously ~~(ITS)~~monitor IoT devices for cyber-risks, ~~rail~~network behaviors, ~~smart~~trends ~~city~~and overall health, ~~Telecom~~to detect cyber attacks and operational anomalies, ~~utilities~~to document such performance tracking and provide compliance reports, ~~federal~~and to automatically-correct the vulnerabilities, anomalies and ~~military~~attacks that it identifies. It is a cloud-base Software-as-a-service solution, that can be a stand-alone solution that works on any network, or, integrated with our networking solutions.

~~ITS~~● ML2300 Aggregator Series. This product is designed for large, medium, and small aggregation/operating and control centers. Network aggregators can connect hundreds of locations or elements. For example, control centers of highways could use such aggregators to communicate with hundreds of EADs installed in cabinets along highways in order to securely connect IoT devices (e.g. security cameras) to the highway network.

ITS include customers who manage road systems such as departments of traffic on either the municipality, county, state, or national level. The types of applications in this vertical that require communication include road cameras, lane management systems, and road signs.

	●	XR239 Series. This product is installed on long copper lines and can be remotely powered from the data lines themselves, while a special algorithm (Dynamic Spectral Software) is ensuring minimal interference with other signals running on adjacent conduits in the same cable. It features a repeater to extend connectivity range to long distances, in some cases up to 100Km. The repeater is installed outdoors and is resistant to cold, hot, rain, ice or snow. Our repeaters have been installed along rail systems in Alaska and Canada and have been safely performing for more than five years.

	●	Advanced MetaLIGHT/Gigaline EMS software. Our EMS (Element Management Systems) software enable remote management, monitoring, maintenance, and configuration of the installed equipment in the network. It is designed to monitor, control and configure our network elements in the field, locally or remotely, for networks of various scales up to thousands of elements. Our implementation during 2021 and 2022 for our end-user customer Highways England, as an example, is using such EMS systems to control thousands of EADs connecting IoT devices along thousands of highway miles. It includes detailed monitoring, logging and tracking of functions both locally and remotely, to allow for easy debugging and configuration of networks, security management, graphical display of network topologies, management of licenses, remote software download, and connectivity to other network and management systems. EMS may also manage other software keys and elements (for example, for encryption or other cyber-safety functions), for which customers may pay separately for the licenses.

~~Rail~~We also offer support and maintenance services together with the sales of our product. This includes consulting, telephone troubleshooting and remote support, training, product repairs, and software updates.

Rail systems include customers who own and operate traditional inter-city rail lines as well as light rails. Some applications requiring communication in this vertical are central train control systems, rail signals, safety cameras and alert sensors, and rail station communication. We currently have projects within this vertical in North America, Europe, and Asia Pacific.13

~~Federal and~~Product ~~Military~~Specifications

Our ~~current~~ ~~and~~products ~~future~~use ~~federal~~advanced signal ~~and~~processing ~~military~~implemented ~~federal~~at ~~aviation~~the ~~authorities,~~system ~~US military~~level, ~~Air~~with ~~Force~~an ~~and~~approach ~~Navy~~that ~~bases,~~treats ~~and~~multiple ~~other~~copper ~~government~~lines ~~and military~~as ~~facilities.~~one ~~For~~multi-line ~~example~~channel, ~~during 2022,~~ which we ~~were~~believe ~~selected by Norseman Defense Technologies as an authorized sales partner~~ to ~~provide our~~achieve ~~solutions to all branches of~~ the USfollowing Military and Government. The types of applications within this vertical that requiring communication include radars, perimeter security systems, energy systems, offices, laboratories and residences. We currently have projects within this vertical in North America, Europe and Asia Pacific.benefits:

~~Airports~~● Speeds ranging from 10Mbps to 10Gbps; distances up to 100Km (speeds a lower for longer distances) infrastructure

~~Airports include~~Supporting ~~customers~~any ~~who~~hybrid ~~are~~combination ~~either~~of anew ~~State~~Fiber orinfrastructure ~~Federal~~and ~~airport agency, or a service provider to the airport industry. The types of applications~~existing ~~within~~copper ~~this vertical requiring communication are airport security, baggage management,~~ and ~~airport~~coax ~~Wi-Fi. Since 2022~~infrastructure, wesupporting ~~are~~data ~~delivering to~~security ~~our~~an ~~airport~~encryption ~~integration customer~~protocols, ~~who~~certified isfor aFIPS ~~worldwide~~by ~~market-leader~~US inDoW ~~airport~~labs; ~~operation~~supporting ~~technology,~~outdoor hardened ~~with~~environmental ~~which~~requirements wedense ~~signed~~and ancompact ~~agreement~~ to ~~provide~~save ~~our~~space ~~solutions~~and toallow ~~hundreds~~for offlexible ~~airports~~location ~~in 39 countries~~setting.

~~Energy~~ ● Automatic calibration tools and ~~Water~~automated management software enable hassle-free installation withing hours vs. weeks over existing wiring. ● Improve communication reliability even if copper lines are of poor quality, so that network operators can, in most cases, guarantee their customers what we believe are Service Level Availabilities (SLAs) and uptime similar to that of fiber optic infrastructure regardless of the media used, and uptime that allows our customers to support mission-critical applications.

~~Energy and~~In ~~water~~addition ~~include~~to ~~customers~~these ~~such as electric utilities, oil companies and water utilities. The types of applications within this vertical~~main ~~that require communication are sub-station monitoring~~benefits, ~~oil~~we ~~and~~have ~~gas~~focused ~~pipeline~~our ~~and~~efforts ~~refineries, electric~~ and ~~water~~implemented ~~flow~~technologies ~~monitoring,~~in ~~and~~our ~~perimeter security.~~products ~~We have projects within this vertical~~ in ~~North~~order ~~America~~to ~~and~~achieve ~~Europe.~~the following:

12● Transmission in the copper lines to take into account signals in neighboring lines to minimize crosstalk interference and be “Spectrally Friendly”; ● Multi-line spatial coding scrambling of data in a way that enhances connection immunity to interference, and makes tapping into the data very difficult; ● Integration of remote powering and data on the same copper pairs; ● Minimizing transmission delay to support delay-sensitive applications; and ● Ability to safely, and accurately transmit clock signals for cellular base station synchronization (not available yet for 5G).

~~Smart~~Since our inception, our ~~City~~business has been focused on serving telecommunication service providers (Telecom), also known as Telcos, for enterprises and residential customers. Our products and solutions have been deployed with more than 100 telecommunication service providers worldwide, in enterprise, residential and mobile base station connectivity applications. In recent years, as we have further developed our technology and rolled out additional products, we turned our focus on serving the IoT markets. Our operations are focused on our fast-growing IoT business while maintaining our commitment to our existing Telecom customers.

~~We believe~~Our ~~the~~Competitive goal of nearly any city worldwide is to become smarter and better serve its residents and visitors. Smart city customers include such municipalities. The types of applications in this vertical requiring communication include security cameras, parking management, energy and water management, waste management, digital signs, and provision of Wi-Fi connectivity. We currently have projects in more than 100 cities, mostly in North America and Europe.Advantage

~~Telco~~We have invested heavily and over more than 10 years in the development of copper technologies and hybrid-fiber communication systems to create a solution that enables high-speed communication over real-life networks of mixed media, securely, reliably, and with Gigabit-grade resilience.

~~Telco customers~~Copper ~~include~~and ~~communication~~coax ~~service~~lines ~~providers~~are readily ofavailable ~~both~~in ~~wired~~billions ~~and~~of ~~wireless~~locations. ~~services~~They ~~(including~~are 4Goften ~~and~~buried ~~5G).~~in ~~The~~the ~~types~~ground, ofrunning ~~applications within~~in ~~this~~the ~~vertical~~walls ~~requiring~~of ~~communication~~buildings ~~include~~or ~~enterprise~~hanging ~~offices,~~from ~~branch offices~~telephone poles, ~~residential~~in ~~buildings,~~bundles ~~educational~~of ~~facilities and~~tens ~~back-haul~~or ~~for~~hundreds ~~mobile~~of ~~base stations~~wires.

~~Channel~~Copper wires were never designed for long-reach, secure, high-speed communication. Attempts to deliver high-speed would encounter many problems, including signal attenuation, cross-talk interference from other lines in the Bundle and ~~Territory~~from ~~coverage~~any external electrical sources, variable quality and signal interruptions, and variable latency. Such wires are also relatively easy to tap into physically, and the information is also radiated outside of the cable and may be exposed to security threats.

The majority of our business is conducted indirectly through various types of business partners, namely system integrators, distributors, contractors, resellers and consultants. Nevertheless, our team often accompanies a channel partner during the selling process to help secure a deal with an end-user. We seek to cover the geographic territories in which we sell, in combination with the target verticals described above. In this effort, we take advantage of existing strong relationships with business partners in the United States, Canada, Europe, Latin America, and Asia Pacific and also seek to recruit new business partners that can help us expand our coverage.14

In order to correct the issues ~~addition~~with providing high speed communications over copper wiring, we ~~maintain~~developed technologies utilizing a ~~website~~multi-line ~~(at~~approach, ~~www.actelis.com)~~encoding, ~~tailored~~scrambling and toprocessing the ~~IoT~~signals ~~strategy~~at ~~and~~system islevel ~~expanding~~(rather ~~our~~than ~~marketing~~at ~~initiatives~~the ~~(professional organizations~~single lines level), ~~shows~~and finally also offering data encryption, ~~online~~to ~~targeting~~combat interference, ~~online~~electromagnetic ~~campaigns~~noise, and ~~lead~~issues ~~generation)~~with tocopper ~~grow~~line ~~our~~quality ~~opportunity~~and ~~pipeline~~data security.

~~We operate~~The ~~through~~next ~~two~~step ~~main~~was ~~regional~~to ~~sales~~integrate our ~~teams — Americas~~existing ~~and~~technologies ~~International~~into ~~(consisting~~hybrid-fiber ofbuilding ~~EMEA (Europe~~blocks, ~~Middle East and Africa) and APAC (Asia Pacific)) in a vertical model similar to~~ that ~~which~~provide ~~was~~seamless ~~described~~communication inover ~~our marketing strategy above and generates its pipeline of leads and opportunities through a combination of channel presence~~mixed, onreal-~~line~~life ~~presence as well as direct touch. Our sales~~fiber-copper-coax ~~teams~~networks, ~~are very experienced in the target verticals~~ and ~~have~~many ~~significant~~other ~~competencies in the target networks of decision makers~~advantages. ~~We intend to invest in expanding this presence and strength.~~

~~Software~~We believe our products offer ~~and~~a ~~Services~~unique solution on the market in terms of value, by providing the following:

~~Our products~~● ~~consist~~High ofperformance ~~hardware and an embedded software that function together to deliver the product’s essential functionality. Our products are sold with a two~~hybrid-~~year~~fiber ~~warranty~~communication for repairs or replacements of the product in the event of damage or failure during the term of the support period, which is accounted for as a standard warranty. Services relating to repair or replacement of hardware beyond the standard warranty period are offered under renewable, fee-based contracts and include telephone support, remote diagnostics, and access to on-site technical support personnel.system:

~~We also~~● ~~offer~~Speeds ~~our~~from ~~customers~~10Mbps ~~our~~to ~~EMS~~10Gbps; ~~management~~● ~~software,~~Reach ~~either~~of asup ~~perpetual~~to or100Km ~~term-based.~~(speed ~~EMS~~declines isover ~~optional~~long ~~and~~distances isin ~~being~~copper); ~~sold~~● ~~separately from~~Robust ~~our~~connectivity ~~hardware~~allowing ~~products,~~Gigabit-grade ~~and~~service ~~has~~SLAs ~~been~~in ~~sold~~various ~~either~~harsh asenvironments aover ~~per-element license~~copper, coax or asfiber; aand ~~license~~● ~~for~~Rapid ainstallation ~~whole~~in ~~network~~hours vs. weeks or months if new infrastructure is needed.

~~Our customers~~● ~~may~~Cyber-protection ~~request~~on ~~added~~several ~~functions~~levels, ~~and~~including ~~features~~Triple ~~for~~Shield ~~their specific need which we can customize for an additional fee.~~Protection:

~~We also~~● ~~offer~~Multi-line ~~our~~data ~~customers~~scrambling ~~product~~and ~~support~~coding ~~services~~(copper); ~~which~~● ~~include~~256-bit ~~telephone~~system-wide ~~support,~~encryption; ~~remote diagnostics,~~ and ~~access~~● toSystem ~~on-site~~level ~~technical support~~protection ~~personnel.~~(encryption ~~Such~~and ~~support~~other ~~service~~protections) isof ~~sold as a standalone contract or in combination with EMS~~ management software ~~and is offered for a term~~, ~~usually~~operating ~~12 months~~system ~~with~~and atraffic ~~renewal option~~flow.

~~Additionally~~Military — grade, ~~our~~DoW ~~customers~~certified ~~can~~FIPS ~~purchase~~cyber ~~software support service which allow them to receive some additional features or free upgrades. Such support service is sold as a separate contract.~~protection

13● Dense, feature-full design to replace multiple alternative elements in the market, and allow for installation that is compact, lower cost and power saving:

~~We offer~~● ~~service~~Advanced ~~contracts~~switching atfunctions ~~different~~supporting ~~levels~~complex ~~(Silver,~~network ~~Gold,~~topologies; ~~Platinum)~~● Support for both advanced, ~~which~~digital ~~may~~IoT ~~include~~devices ~~different~~as ~~levels~~well ofas ~~support~~existing ~~(remotely~~analog ordevices inwith serial interfaces — to save the ~~field),~~ ~~hardware~~need ~~repairs,~~to ~~spare~~replace ~~parts,~~these ~~help~~devices ~~with~~while allowing them to join the digital network; ~~design,~~● ~~and~~Power ~~SW/HW~~feeding ~~upgrades.~~for ~~Such~~cameras ~~service~~and ~~contracts~~other ~~are~~IoT ~~sold~~devices ~~separately~~with ~~from~~ the ~~sale~~data ofcable; ~~hardware~~● ~~products~~Ability ~~and~~to ~~may~~install beour ~~sold~~IoT ~~combined~~building ~~with~~blocks ~~our~~in ~~EMS~~remote ~~software~~locations ~~licenses~~with no power. ItPower ~~usually~~can ~~covers~~be ~~periods~~provided ~~post~~from the ~~expiration of~~communication ~~our~~line; ~~warranty~~● ~~period~~Ability ~~and~~to ~~would~~provide beprecise ~~renewed~~synchronization onover anthe ~~annual~~communication ~~basis.~~lines ~~The~~to ~~cost~~base ofstations; ~~the~~● ~~service~~Routing isfunctions; ~~derived~~and ~~from~~● ~~the~~Support ~~size~~for ofspectrally-friendly ~~the~~reach ~~network,~~extenders ~~and the~~up ~~level~~to of100Km ~~support~~with ~~required~~minimal impact on other communication lines.

~~Competition~~● Automated software tools for installation and management (including automated line calibration and configuration recognition during installation to avoid manual work, advanced management systems that allow remote troubleshooting of any line connected to the system to save on operation and management time)

We compete in markets for networking and communications services and solutions for service providers, businesses, government agencies and other organizations worldwide. While our hybrid-fiber offerings are unique in our opinion, providing the highest value to network operators, our customer may still elect to implement their networks in other ways.15

~~As such~~We webelieve ~~compete~~that ~~with~~the ~~a number~~ combination of ~~companies~~these inadvantages ~~the~~provides ~~markets~~our wecustomers ~~serve.~~with ~~Our~~a ~~key~~highly ~~competitors~~cost-effective ~~include~~solution ~~Moxa~~to ~~Technologies,~~quickly ~~FlexDSL~~obtain ~~Telecommunications AG,~~IoT ~~EtherWAN~~connectivity ~~Systems,~~anywhere ~~Inc.~~in ~~and Belden Inc~~their network.

We believe ~~the~~that ~~following~~our hybrid-fiber solutions have a significant competitive ~~attributes~~advantage ~~are~~in ~~necessary~~several ~~for~~layers: ~~our~~(a) copper ~~solutions~~performance to(speed, ~~successfully~~reach, ~~compete~~link instability ~~IoT~~and data security); (b) seamless fiber-copper-coax integration and ~~Telecom~~end-to-end ~~networking~~data ~~markets~~encryption; (c) overall system cyber-hardened design; (d) versatile, compact and feature-dense products with a good fit to the vast majority of applications; (e) very high product and ~~likewise~~transmission wereliability; automatic configuration tools and advanced management of every element in the field; and (f) highly cost-effective when compared to alternatives. We believe that wethese advantages lead to very good value for our customers for both rapid deployment to all locations, regardless of whether these locations are ~~providing~~hard ~~leading~~to ~~products~~reach. inWe also believe that these characteristics provide us with a competitive advantage against many, if not all, ~~the~~companies ~~categories~~in ~~below:~~our space, such as Cisco, Rad, Nokia, Siemens, Belden and others.

●We ~~the~~have ~~performance~~hundreds of large, medium and ~~reliability~~small network operators as end users of our ~~solutions~~products, ~~over~~including ~~any~~municipalities, ~~wireline~~railway, (airports, electricity, water infrastructure companies as well as other governmental agencies and military customers. We believe that we enjoy a strong reputation for offering reliable, high-performance and high-end products. We expect that the acceptance process for our new products for existing customers will become simpler due to customers positive accumulated experience working with us. We also have many non-~~wireless)~~exclusive ~~medium;~~third-party distributors, resellers and system integrators and partners around the world, located in the U.S., Canada, Philippines, Germany, Italy, Spain, Scandinavian countries, Greece, Netherlands, Japan and India. These non-exclusive third-party distributors are used to selling our products, and we believe that they appreciate the reliability of our products and the quality of service and support that we provide. All of these advantages constitute an entry barrier, which we believe may make it more difficult for a competitor to reach a similar status.

~~Rapid~~We believe that over the ~~deployment/implementation~~past years, we have built a reputation for providing, according to our customers, reliable, high-quality communication solutions with better copper and hybrid fiber performance than other alternatives on the market. A competitor who wants to enter the market will have to compete with our reputation, which has been acquired over a long period by providing long-term quality service to hundreds of network operators and hundreds of thousands of end customers and IoT elements.

●Our ~~cost~~Sales ~~of deployment~~ and ~~return~~Marketing ~~on investment in terms of cost savings;~~Strategy

●We ~~sophistication~~operate through two regions — Americas and International (consisting of EMEA, ~~novel~~or Europe, Middle East and ~~innovative~~Africa, ~~intellectual~~and ~~property~~APAC, or Asia Pacific) in a matrix with a vertical structure that is described below. Our sales and ~~technology~~support teams are currently located in the United States, Mexico, Germany, Israel, and ~~functionality~~India. We also execute our sales and marketing plan through a multi-channel by vertical global approach that combines our expertise with the expertise of our trusted ~~offerings;~~business partners. Our current business partners, as well as the partners we will seek in the future, are system integrators, distributors, contractors, resellers, and consultants. Our business partners are currently located in North America, Central America, Europe, India, Singapore, China, Australia, Vietnam and Japan. Once we identify a relevant business opportunity in a new territory, we seek to partner with local business partners or agents. We believe our strong brand name of high-quality communication solutions, as well as the credibility we gain with esteemed customers such as the U.S. DoW, enhances our ability to provide our products and services. For example, we maintain UL laboratories compliance with FIPS 140-3 cybersecurity standard required by the DoW and the Joint Interoperability Test Command (JITC) labs approval of the Company’s products for cybersecurity and interoperability, putting the products in the DoW Approved Products List (APL).

●We ~~cross~~operate a vertical-~~platform~~based marketing ~~operability;~~plan where we dedicate tailored solutions and individual resources to each specific vertical. Our verticals include Intelligent Traffic Systems (ITS), rail, smart city, Telecom, utilities, federal and military.

~~● security;~~16

●Federal ~~ease of implementation~~ and ~~use of service;~~Military

●Our ~~management~~current ~~capabilities;~~and future federal and military federal aviation authorities, US military, Air Force and Navy bases, and other government and military facilities. The Federal and US Military environments operate millions of connection points that are excessively outdated. By addressing them with any infrastructure existing currently, we help them modernize quickly and achieve project completion fast. Since late 2025, we started focusing our sales efforts into the Programs of Record (PoRs) in the Department of War (DoW). These PoRs are running in the various branches of the DoW, and our efforts are aimed at becoming designed into several of them as the default technology for the relevant elements. In addition, we continue to answer to needs raised more tactically in specific locations and bases within the DoW. We believe that such dual approach is effective in order to further support our growth.

~~● high-quality customer support; and~~ITS

●ITS ~~price~~include customers who manage road systems such as departments of traffic on either the municipality, county, state, or national level. The types of applications in this vertical that require communication include road cameras, lane management systems, and road signs.

~~We believe~~Smart that we compare favorably on the basis of the factors listed above. However, many of our competitors have substantially greater financial, technical, and marketing resources; relationships with large vendor partners; larger global presence; larger customer bases; longer operating histories; greater brand recognition; and more established relationships in the industry than we do. Furthermore, new entrants not currently considered to be competitors may enter the market through acquisitions, partnerships, or strategic relationships. See “Item 1.A - Risk Factors — New competitors may enter the marketplace and begin to compete with the Company.”City

~~Manufacturing~~We believe the goal of nearly any city worldwide is to become smarter and better serve its residents and visitors. Smart city customers include such municipalities. The types of applications in this vertical requiring communication include security cameras, parking management, energy and water management, ~~Procurement~~waste management, digital signs, and ~~Logistics~~provision of Wi-Fi connectivity. We currently have projects in more than 100 cities, mostly in North America and Europe.

We take advantage of the combination of our inhouse skills and those of the third parties we partner with to execute our operational tasks which are planning and manufacturing finished goods inventory, planning and procuring raw materials and delivering products to our customers based on promised delivery schedules.Rail

14Rail systems include customers who own and operate traditional inter-city rail lines as well as light rails. Some applications requiring communication in this vertical are central train control systems, rail signals, safety cameras and alert sensors, and rail station communication. We currently have projects within this vertical in North America, Europe, and Asia Pacific.

Our raw material consists of electronic chipsets, FPGA components, modems, and other electronic and mechanical components. Most of those components are procured by our contract manufacturers and we assist them as needed in specific cases. For example, since the breakout of COVID-19, as the world is experiencing shortages of electronic components, we have assisted our manufacturers in acquiring components that are harder to find. We also secure components as have been designated to be the close to end of life by their manufacturers to ensure adequate quantities of future product shipments.Airports

~~Our~~Airports include customers ~~products~~who are ~~assembled~~either bya ~~various~~State ~~contract~~or ~~manufacturers~~Federal airport agency, ~~located~~or ina ~~Israel~~service ~~and~~provider into ~~Taiwan~~the ~~who~~airport ~~possess~~industry. ~~the~~The ~~expertise~~types of ~~assembly~~applications ~~and~~within ~~quality~~this ~~control~~vertical ~~required~~requiring ~~for~~communication ~~electronic~~are ~~manufacturing~~airport insecurity, abaggage ~~turn-key~~management, ~~fashion.~~and ~~Some~~airport ofWi-Fi. ~~our~~Since ~~products~~2022, we are ~~manufactured~~delivering to our ~~specifications under~~airport anintegration ~~OEM~~customer, ~~arrangement.~~who ~~The~~is ~~company~~a ~~uses~~worldwide ~~state~~market-~~of-the-art~~leader ~~logistics~~in ~~services~~airport ~~from~~operation ~~the~~technology, ~~best~~with ~~providers~~which ~~worldwide~~we ~~and~~signed ~~also~~an ~~has~~agreement ~~in-house~~to ~~expertise~~provide our insolutions ~~executing~~to ~~such~~hundreds ~~required~~of ~~processes~~airports in 39 countries.

~~We believe~~Energy ~~that we can add~~ and~~/or~~ replace our contract manufacturer if necessary. We have successfully transitioned from one contract manufacturer to another in the past, and we believe that a transition would be achievable, if necessary, in the future typically within three to six months.Water

~~Warranty~~Energy and water include customers such as electric utilities, oil companies and water utilities. The types of applications within this vertical that require communication are sub-station monitoring, oil and gas pipeline and refineries, electric and water flow monitoring, and perimeter security. We have projects within this vertical in North America and Europe.

~~Our products~~MDU ~~are~~and generally sold with a standard warranty of two years for product defects, as well as technical center support with properly trained personnel, during normal business hours, to address incidents raised customers. Within the warranty agreement, we offer to repair or replace defective products, or software bug fixes. Upon expiration of the warranty period, the customer has an option to purchase an extended warranty contract for an additional fee, typically for one or more periods of 12 months.Telco

~~Growth~~MDU include apartment buildings ~~Strategy~~and condominiums, as well as hospitality properties such as hotels and resorts. Existing MDUs (there are 20 million buildings of five units or more in the U.S., who are built before the year 2000), therefore, carrying aged infrastructure, particularly network cabling. We provide MDUs both inside and outside of building solutions to modernize and protect communication using existing infrastructure, reaching Gigabit speed and quality at a fraction of the cost and time.

~~Global Expansion and Recognition~~17

~~We intend~~In toaddition, ~~leverage~~we ~~(a)~~serve ~~the~~our legacy Telco customers, ~~partners,~~by ~~and~~supporting ~~representatives’~~communication ~~presence~~service inproviders ~~over~~of 30both ~~countries~~wired ~~including the Americas, Europe~~ and ~~Asia,~~wireless services (b)including ~~brand~~4G ~~recognition developed over more than 20 years,~~ and (c5G). ~~the~~The ~~fact that our products are differentiated, as we believe,~~types ~~offering~~of ~~unique~~applications ~~value~~within inthis ~~IoT~~vertical ~~verticals,~~requiring ~~particularly~~communication ininclude ~~Federal/Military,~~enterprise ~~Smart Cities~~offices, ~~Smart~~branch ~~Roads~~offices, ~~Utilities~~residential ~~and Rail~~buildings, ~~as well as for~~educational ~~Telecom~~facilities ~~carriers~~ and inback-haul ~~particular~~for ~~our~~mobile ~~differentiation~~base ~~in providing critical Gigabit and fiber grade solutions to Multi-Dwelling Units (“MDU”)~~stations. ~~Furthermore~~In 2025, we ~~believe~~launched ~~our~~MetaLight ~~unique~~650SV, ~~package~~helping ofveteran ~~cyber-hardened~~legacy ~~communications~~network ~~building~~T1 ~~blocks for IoT environments~~connections ~~coupled~~converge with ~~our~~existing ~~cyber~~fiber ~~management solution that comes with the network, will help us increase our presence and recognition as a stand-out solution~~networks.

~~In order~~Channel ~~to achieve the right level of global coverage, we continue to expand our network of partners~~ and ~~representatives,~~Territory as well as reputable advisors with unique expertise , and aim increasingly at partnering with larger numbers of companies with global presence. These can be system-integrators, value-added resellers, contractors, distributors, and consultants. For example, over the last year we expanded our network of partners in Italy, France, United States and more, including Federal/Military experts assisting us in growing this vertical.coverage

WeThe majority of our business ~~are~~is ~~investing~~conducted inindirectly ~~growing~~through ~~our~~various ~~sales~~types of business partners, ~~channel~~namely ~~management~~system ~~and~~integrators, ~~support~~distributors, ~~teams~~contractors, resellers and consultants. ~~dedicate~~Nevertheless, ~~resources~~our ~~which~~team ~~specialize~~often inaccompanies ~~specific~~a ~~verticals in~~channel ~~each~~partner ofduring the ~~theaters.~~selling ~~During~~process ~~2024,~~to wehelp ~~deployed~~secure ~~subject~~a ~~matter~~deal ~~consultants~~with ~~who~~an ~~are~~end-user. We ~~helping~~seek to cover the ~~Company~~geographic territories in ~~focusing~~which ~~its~~we ~~go-to-market strategy~~sell, in ~~product~~combination ~~marketing~~with the target verticals described above. In this effort, we astake ~~well~~advantage asof inexisting ~~marketing~~strong ~~campaigns~~relationships ~~such~~with asbusiness ~~outreach~~partners in the United States, ~~targeting~~Canada, ~~desired~~Europe, ~~audiences~~Latin America, and Asia ~~more~~Pacific and also seek to recruit new business partners that can help us expand our coverage.

15In addition, we maintain a website (at www.actelis.com) tailored to the IoT strategy and is expanding our marketing initiatives (professional organizations, shows, online targeting, online campaigns and lead generation) to grow our opportunity pipeline.

~~Expansion~~We operate through two main regional sales teams — Americas and International (consisting of ~~Multi~~EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific)) in a vertical model similar to that which was described in our marketing strategy above and generates its pipeline of leads and opportunities through a combination of channel presence, on-~~year~~line ~~deals~~presence as well as direct touch. Our sales teams are very experienced in the target verticals and have significant competencies in the target networks of decision makers. We intend to invest in expanding this presence and strength.

~~Over the~~Software ~~past years, we entered into several large multi-year contracts with ITS, military, airports,~~ and more that will generate more predictable sales for the next several years. For example, since the IPO, we announced several new deals we won or started to deliver, such as the worldwide airport technology provider, a provider of energy services to a major European city in a major European country, the city of San Jose, California and Northern Ireland railways. We intend to expand this strategy by investing in sales and marketing presence to extend the length these contracts and add many others.Services

~~Expansion~~Our products consist of hardware ~~into~~and ~~Cybersecurity~~an embedded software that function together to deliver the product’s essential functionality. Our products are sold with a two-year warranty for repairs or replacements of the product in the event of damage or failure during the term of the support period, ~~Recurring~~which ~~Revenue~~is accounted ~~Model~~for as a standard warranty. Services relating to repair or replacement of hardware beyond the standard warranty period are offered under renewable, fee-based contracts and include telephone support, remote diagnostics, and access to on-site technical support personnel.

~~Cybersecurity is~~We ~~essential~~also ~~for~~offer ~~IoT~~our ~~infrastructure.~~customers our ~~Such~~EMS ~~security must be addressed at the data traffic, switching, and network~~ management ~~level. Encryption is a fundamental building block to achieve the necessary protection~~software, ~~preferably~~either atas aperpetual ~~low~~or ~~networking layer~~term-based. ~~Our~~EMS ~~products~~is ~~are~~optional ~~already capable of delivering sensitive information for many critical IoT applications,~~ and weis ~~are~~being ~~investing~~sold ~~more~~separately infrom ~~making~~our ~~this~~hardware ~~a strong differentiator~~products, and tohas ~~have~~been ~~our~~sold ~~products~~either ~~recognized~~ as ~~the~~a ~~most cyber~~per-~~safe~~element ~~IoT~~license, ~~building~~or ~~blocks~~as ina ~~the~~license ~~growing~~for ~~secure~~a ~~IoT~~whole ~~communication market~~network.

~~Beyond that,~~Our wecustomers ~~are~~may ~~expanding our cyber-protection capabilities to provide protection not only of the data that is running in the system but~~request ~~also~~added tofunctions ~~help protect elements~~ and ~~devices~~features ~~connected~~for totheir ~~the~~specific ~~network,~~need ~~especially~~which inwe ~~the~~can ~~interface~~customize ~~between~~for ~~the~~an ~~physical~~additional ~~and cybersecurity systems~~fee. ~~We are referring to such objective as Cyber-Aware Networking.~~

~~Adding~~We also offer our customers ~~the~~product 5Gsupport ~~Connectivity~~services which include telephone support, remote diagnostics, and access to on-site technical support personnel. Such support service is sold as a standalone contract or in combination with EMS management software and is offered for ~~IoT~~a term, usually 12 months with a renewal option.

~~A dense~~Additionally, ~~grid~~our ofcustomers can 5Gpurchase ~~small~~software ~~cells~~support isservice ~~required in order to build a global 5G coverage,~~ which, asallow wethem ~~believe, may be key~~ to ~~IoT~~receive ~~deployment~~some ~~in many~~additional ~~smart~~features ~~cities~~or ~~and~~free ~~other dense areas~~upgrades. WeSuch ~~believe~~support ~~that~~service ~~connecting~~is ~~these 5G small cells to the network cost effectively and rapidly,~~sold ~~in both hard-to-reach and easy-to-reach locations,~~ as ~~well~~a asseparate ~~powering them cost-effectively is key to successful and timely deployment~~contract.

5GWe offer service contracts ~~networks~~at ~~deployment~~different islevels ~~slowed~~(Silver, ~~down~~Gold, asPlatinum), wewhich ~~believe,~~may byinclude different levels of support (remotely or in the ~~challenge~~field), tohardware ~~provide~~repairs, spare ~~connectivity~~parts, help with network design, and ~~power~~SW/HW toupgrades. ~~millions~~Such ofservice ~~base~~contracts ~~station~~are ~~locations~~sold separately from the sale of hardware products ~~that~~and ~~are~~may ~~required~~be ~~for~~sold combined with our EMS software licenses. It usually covers periods post the expiration of our warranty period and would be renewed on an ~~effective~~annual 5Gbasis. The cost of the service is derived from the size of the network, and the level of support required.

~~Adding Edge Computing Capabilities~~18

~~Once mass~~In ~~deployment~~December of2024, we launched our ~~IoT~~MetaShield ~~connectivity~~AI-Powered ~~building~~SaaS ~~blocks is achieved~~solution, weunder ~~are~~Actelis’ ~~planning~~‘Cyber toAware ~~leverage~~Networking’ ~~our~~initiative. ~~presence~~This inincludes ~~the~~a ~~field to offer our~~software ~~customers~~based ~~the~~platform ~~option~~designed toas ~~host~~an ~~and~~intelligence ~~integrate~~layer ~~various~~integrated ~~applications~~ into ~~our~~Actelis’ ~~building~~networking ~~blocks~~devices, ~~many~~leverages ofthe ~~which~~network’s ~~will be installed in critical~~power ~~information~~and ~~junctions~~proximity ~~for~~to IoT ~~networks.~~devices ~~Such~~to ~~applications~~monitor ~~may~~and ~~include~~protect ~~video~~physical ~~analysis,~~assets ~~data~~such ~~monitoring~~as ~~and extraction~~cameras, ~~firewalls and many others~~sensors, and ~~would~~other ~~enable~~devices ~~our~~at ~~customers,~~the ~~as we believe~~edge, ~~to develop recurring revenue models for them as well as for us. We are exploring~~enabling ~~and~~corrective ~~working~~actions onbefore ~~these~~issues ~~objectives,~~propagate ~~either~~throughout asthe ~~part of our own development, as well as in partnership with third-party technology partners~~network.

~~Some examples for such applications that we have been evaluating are:~~Competition

●We ~~Enhanced~~compete ~~cyber-protection~~in markets for networking ~~devices~~and communications services and ~~users;~~solutions for service providers, businesses, government agencies and other organizations worldwide. While our hybrid-fiber offerings are unique in our opinion, providing the highest value to network operators, our customer may still elect to implement their networks in other ways.

●As ~~Critical~~such ~~application~~we ~~processes~~compete ~~contributing~~with toa number ~~public~~of ~~safety~~companies in ~~roads~~the ~~and~~markets ~~smart~~we ~~cities~~serve. In ITS, ~~that~~our ~~include~~key ~~varying~~competitors ~~levels~~include ofMoxa ~~data~~Technologies, ~~and~~FlexDSL ~~therefore~~Telecommunications ~~require~~AG, ~~optimization~~EtherWAN Systems, ~~between~~Inc. ~~the~~and ~~local~~Belden ~~edge~~Inc. ~~and~~In the ~~cloud~~MDU markets, our competition includes companies such as ~~video~~InCoax, ~~analysis~~Positron and ~~object recognition~~ReadyLinks.

~~In December~~We ~~2024,~~believe wethe ~~launched~~following competitive ~~our~~attributes ~~all-new~~are ~~MetaShield~~necessary ~~SaaS~~for ~~product~~our assolutions ato ~~cyber-security~~successfully ~~solution~~compete ~~that~~in ~~comes~~IoT ~~from~~and ~~the~~Telecom ~~network~~networking ~~itself~~markets, and islikewise we ~~currently~~believe ~~being~~that ~~introduced~~we toare ~~our~~providing ~~existing~~leading ~~and~~products ~~new~~in ~~customers.~~all ~~We continue to work on~~ the ~~remaining~~categories ~~components mentioned above relative to edge computing.~~below:

16● the performance and reliability of our solutions over any wireline (non-wireless) medium;

~~United States’ Bipartisan~~Rapid ~~Infrastructure Law~~deployment/implementation

~~In November 2021,~~● ~~Former~~cost ~~President~~of ~~Biden~~deployment ~~signed~~and ~~the~~return ~~Bipartisan~~on ~~Infrastructure~~investment ~~Law~~in toterms ~~invest~~of ~~approximately~~cost ~~$1.2 trillion~~savings; to● ~~significantly upgrade the United States’ infrastructure. Specifically~~sophistication, ~~the~~novel ~~Bipartisan~~and ~~Infrastructure~~innovative ~~Law~~intellectual ~~mandates~~property ~~investing~~and ~~the~~technology, ~~following amounts:~~and ~~$110 billion~~functionality ~~to rebuild many~~ of ~~America’s~~our ~~roads and bridges~~offerings; ~~$39 billion~~● ~~in public transit; $66 billion in high~~cross-~~speed~~platform ~~rail~~operability; ~~$108 billion~~● ~~to upgrade the nation’s electricity grid~~security; ~~$55 billion~~● toease ~~expand~~of ~~access~~implementation toand ~~clean~~use ~~drinking water;~~of ~~$25 billion to modernize several US airports~~service; ~~$650 billion~~● inmanagement ~~previous authorized funding for roads including nearly $300 billion for the Highway Trust Fund~~capabilities; ~~and~~● ~~$65 billion to ensure that every American has access to~~ high-~~speed~~quality ~~internet~~customer ~~through deploying~~support; ~~broadband infrastructure. Part of the latter is the Broadband Equity Access~~ and ~~Deployment~~● ~~Program (the “BEAD”)~~price. The BEAD Program provides $42.45 billion to expand high-speed Internet access by funding planning, infrastructure deployment and adoption programs. All 50 states, the District of Columbia, and the five territories participating in the Broadband Equity, Access, and Deployment (BEAD) program have approved Internet for All plans. We believe that we have a significant positive contribution of value through our solutions to the BEAD projects, and we are pursuing funded programs where we look to offer our products.

ItWe believe that we compare ~~remains~~favorably ~~uncertain~~on ~~what~~the ~~actions~~basis of the factors listed above. However, ifmany ~~any~~of our competitors have substantially greater financial, technical, and marketing resources; relationships with large vendor partners; larger global presence; larger customer bases; longer operating histories; greater brand recognition; and more established relationships in the ~~Trump Administration~~ ~~may~~industry ~~take~~than we do. Furthermore, new entrants not currently considered to ~~repeal~~be orcompetitors ~~otherwise~~may ~~modify~~enter the ~~the~~market ~~Bipartisan Infrastructure~~through ~~Law~~acquisitions, partnerships, or ~~BEAD~~strategic relationships. See “Item 1.A - Risk Factors — New competitors may enter the marketplace and begin to compete with the Company.”

Recent increase and creation of new tariffs by the Trump Administration is not likely to affect the Company significantly, since the Company manufactures its products in Israel and Taiwan, and the procurement of raw material is done directly to these countries. Also, the United States has stable trade agreements with Israel, where our subsidiary manages our operations, and from which exports our products to the Unites States.19

~~We believe that this significant increase in infrastructure spending by the United States Government will likely result in investments in our communication infrastructure solutions~~Manufacturing, asProcurement ~~these~~and ~~spending initiatives are aimed at our targeted verticals.~~Logistics

~~Growth~~We take advantage of the ~~through~~combination ~~Mergers~~of our inhouse skills and ~~Acquisitions~~those of the third parties we partner with to execute our operational tasks which are planning and manufacturing finished goods inventory, planning and procuring raw materials and delivering products to our customers based on promised delivery schedules.

~~We continue~~Our toraw ~~evaluate~~material ~~potential~~consists of ~~growth~~electronic ~~through~~chipsets, ~~mergers~~FPGA components, modems, and ~~acquisitions~~other ~~opportunities~~electronic inand ~~situations~~mechanical ~~where~~components. weMost ~~believe~~of ~~that~~those acomponents ~~transaction~~are procured ~~will~~by ~~fill~~our ~~business~~contract ~~gaps~~manufacturers orand ~~add~~we ~~key~~assist ~~business~~them ~~operations~~as ~~without~~needed ~~requiring~~in usspecific tocases. ~~wait years~~For ~~for~~example, ~~marketing~~since ~~and~~the ~~sales~~breakout ~~cycles~~of toCOVID-19, ~~materialize.~~as the world ~~The~~is ~~resulting~~experiencing ~~combination~~shortages of ~~our~~electronic ~~existing~~components, ~~products~~we ~~and~~have ~~services,~~assisted ~~new~~our ~~key~~manufacturers ~~personnel,~~in ~~and~~acquiring ~~strategic~~components ~~partnerships~~that ~~through~~are ~~M&A~~harder ~~could~~to find. ~~provide~~We ~~new~~also ~~offerings~~secure components as have been designated to ~~our~~be ~~existing~~the ~~market~~close to end of life by their manufacturers to ensure adequate quantities of future product shipments.

~~For example,~~Our onproducts ~~May~~are ~~23,~~assembled by ~~2024,~~various wecontract ~~announced that we have entered into a binding term sheet (as amended~~manufacturers, ~~the~~located ~~“Term~~in ~~Sheet”)~~Israel ~~with Quality Industrial Corp, a Nevada corporation traded on the OTC under the symbol QIND (“Target”),~~ and ~~Ilustrato~~in ~~Pictures International~~Taiwan ~~Inc.,~~who apossess ~~Nevada corporation (“Seller”), providing for~~ the ~~potential~~expertise ~~acquisition~~ of ~~between~~assembly ~~61%~~and toquality ~~75%~~control ~~of the~~required ~~issued~~for ~~and~~electronic ~~outstanding~~manufacturing ~~shares~~in ofa ~~the~~turn-key ~~Target’s share capital~~fashion. ~~However,~~Some ~~following~~of our ~~due~~products ~~diligence~~are ~~process,~~manufactured weto ~~determined that the contemplated transaction is not in the best interest of~~ our ~~shareholders.~~specifications Asunder aan ~~result,~~OEM ~~on October 10, 2024, we invoked our right and~~arrangement. ~~provided~~The ~~the~~company ~~Target~~uses ~~with~~ state-of-the ~~requisite 30~~-~~day~~art ~~notice~~logistics ofservices ~~our~~from ~~intention~~the tobest ~~terminate~~providers ~~the~~worldwide ~~Term~~and ~~Sheet.~~also Ashas ofin-house ~~November~~expertise ~~11,~~in ~~2024,~~executing ~~the Term~~such ~~Sheet~~required ~~has been terminated~~processes.

~~If we~~We ~~target~~believe ~~businesses~~that inwe ~~the~~can ~~same~~add and/or ~~sector~~replace orour ~~location,~~contract wemanufacturer ~~hope~~if tonecessary. ~~combine~~We ~~resources~~have tosuccessfully ~~reduce~~transitioned ~~costs,~~from ~~eliminate~~one ~~duplicate~~contract ~~facilities~~manufacturer orto another in ~~departments~~the past, and ~~increase~~we ~~revenue.~~believe Wethat ~~still~~a ~~believe~~transition ~~this~~would ~~strategy~~be ~~will~~achievable, ~~provide~~if ~~for~~necessary, ~~accelerated~~in ~~growth~~the ~~and~~future ~~maximize~~typically ~~investor~~within ~~returns~~three to six months.

~~Environmental~~Warranty

We Our products are ~~not~~generally sold ~~aware~~with a standard warranty of ~~any~~two years ~~environmental~~for ~~laws~~product ~~that~~defects, ~~have~~as ~~been~~well ~~enacted~~as technical center support with properly trained personnel, during ~~nor~~normal ~~are~~business hours, to address incidents raised customers. Within the warranty agreement, we ~~aware~~offer ofto ~~any~~repair ~~such~~or ~~laws~~replace defective ~~being~~products, ~~contemplated~~or ~~for~~software bug fixes. Upon expiration of the ~~future~~warranty period, ~~that~~ ~~impact~~the ~~issues~~customer ~~specific~~has an option to ~~our~~purchase ~~business~~an extended warranty contract for an additional fee, typically for one or more periods of 12 months.

~~Human Capital~~Growth ~~Resources~~Strategy

~~As of~~Global ~~December 31,~~Expansion ~~2024, we had approximately 49 employees~~ and contractors, of which 38 were full-time employees, including 18 in sales and marketing, 22 in research development, engineering, and operations and 9 in general and administration. We have approximately 35 employees and contractors in Israel, 9 in the U.S., 3 in Europe and 2 in Asia. Our U.S.-based employees are employed through a Professional Employer Organization, providing employee benefits and services.Recognition

17We intend to leverage (a) the customers, partners, and representatives’ presence in over 30 countries including the Americas, Europe and Asia, (b) brand recognition developed over more than 20 years, and (c) the fact that our products are differentiated, as we believe, offering unique value in IoT verticals, particularly in Federal/Military, Smart Cities, Smart Roads, Utilities and Rail, as well as for Telecom carriers and in particular our differentiation in providing critical Gigabit and fiber grade solutions to Multi-Dwelling Units (“MDU”). Furthermore, we believe our unique package of cyber-hardened communications building blocks for IoT environments coupled with our cyber management solution that comes with the network, will help us increase our presence and recognition as a stand-out solution.

~~We believe~~In ~~our~~order ~~culture~~to ~~and~~achieve ~~principles~~the ~~enable~~right level usof toglobal ~~attract~~coverage, ~~retain,~~we ~~motivate~~continue ~~and~~to ~~develop~~expand our ~~workforce~~network of partners and representatives, as well as ~~drive~~reputable ~~employee~~advisors ~~engagement.~~with unique Weexpertise ~~believe~~, anand ~~engaged~~aim ~~workforce~~increasingly ~~leads~~at topartnering awith ~~more~~larger ~~innovative~~numbers ~~and~~of ~~productive~~companies ~~company~~with ~~that~~global ~~serves its customers better~~presence. ~~Our~~These ~~employees~~can ~~work~~be system-integrators, tovalue-added ~~ensure~~resellers, ~~that~~contractors, ~~our~~distributors, ~~products~~ and ~~services connect and protect our customers critical infrastructure~~consultants. AFor ~~testament~~example, toover ~~that is~~ the ~~long-term retention~~last ofyear ~~many~~we ofexpanded our ~~employees~~network ~~and~~of ~~their~~partners in ~~loyalty~~Italy, toFrance, ~~us.~~United WeStates ~~measure each one through a goal setting~~ and ~~measurement~~more, ~~system~~including toFederal/Military ~~maximize our~~experts ~~enterprise~~assisting ~~value~~us ~~and~~in ~~employee~~growing ~~career~~this ~~potential~~vertical.

We are investing in growing our sales, channel management and support teams, and ~~strive~~dedicate ~~for~~resources ~~ethnic~~which specialize in specific verticals in each of the theaters. During 2025, we upgraded our capabilities in Federal and ~~gender~~Military ~~diversity~~sales and marketing by hiring a Chief Revenue Officer, Americas and a Director of Federal sales, both veterans of those markets. Our new hires help us implement a new strategy through the US Department of War Programs of Record (PoR) to generate much more scalable growth in this vast market.

~~Legal Proceedings~~20

~~From time~~Expansion ~~to time, we may be involved in various claims and legal actions arising in the ordinary course~~ of ~~business.~~Multi-year To the knowledge of our management, there are no legal proceedings currently pending against us which we believe would have a material adverse effect on our business, financial position, results of operations and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.deals

~~Government~~Over the past years, ~~Regulation~~we entered into several large multi-year contracts with ITS, military, airports, and more that will generate more predictable sales for the next several years. For example, since the IPO, we announced several new deals we won or started to deliver, such as the worldwide airport technology provider, a provider of energy services to a major European city in a major European country, the city of San Jose, California and Northern Ireland railways. We intend to expand this strategy by investing in sales and marketing presence to extend the length these contracts and add many others.

~~Our products~~Expansion ~~are required to be certified for safety and local standards~~ in ~~each country that we sell in as needed. In the United States~~Cybersecurity, ~~Canada,~~ ~~Europe,~~Recurring ~~and Japan our products are UL certified (safety), EN (emissions Regulation), VCCI (Japanese emissions standard), CISPR~~Revenue ~~(European emission standard)~~Model, ~~ICES~~Cyber ~~(Canadian~~monitoring radio frequency emissions standards), ETSI (European electromagnetic compatibility standard), CFR (US Federal Broadcasting Regulation), as well as IEC (European Safety Standard). We have also received the JITC (Joint Interoperability Test Command) certification of meeting certain cybersecurity standards required by the DoD.services

~~We are~~Cybersecurity ~~subject~~is toessential for ~~numerous~~networking ~~federal,~~infrastructure. ~~state,~~Such ~~provincial,~~security ~~local,~~must ~~and~~be ~~foreign~~addressed ~~laws~~at ~~and regulations relating to~~ the ~~storage,~~data ~~handling~~traffic, ~~emission~~switching, and ~~discharge~~network ofmanagement ~~materials~~level. ~~into~~Encryption is ~~the~~a ~~environment,~~fundamental ~~including~~building ~~the~~block ~~Comprehensive~~to ~~Environmental~~achieve ~~Response, Compensation, and Liability Act;~~ the ~~Clean~~necessary ~~Water~~protection, ~~Act;~~preferably ~~the~~at ~~Clean~~a ~~Air~~low ~~Act;~~networking ~~the~~layer. ~~Emergency~~Our ~~Planning~~products ~~and~~are ~~Community~~already ~~Right-To-Know Act; the Resource Conservation and Recovery~~capable ~~Act;~~of ~~and~~delivering ~~similar~~sensitive ~~laws~~information infor ~~the~~many ~~other~~critical ~~countries~~applications, inand ~~which~~ we ~~operate.~~are ~~While~~investing wemore ~~believe~~in ~~that~~making ~~our~~this ~~existing~~a ~~environmental~~strong ~~control procedures~~differentiator, ~~are~~and ~~adequate,~~to wehave ~~will~~our ~~continue~~products torecognized ~~evaluate~~as ~~and~~the ~~update~~most ~~our~~cyber-safe ~~procedures~~IoT asbuilding ~~needed~~blocks toin ~~address~~the ~~new~~growing orsecure ~~changing~~IoT ~~aspects~~communication ~~of environmental matters~~market.

~~Intellectual~~To that end, we launched ~~Property~~MetaShield and we offer a SaaS, AI based cyber-security and operational continuity monitoring and mitigation software platform. Additionally, our customers are bound by elevated security standards requiring them to identify new vulnerabilities in the systems they operate, including our networking solutions that are installed in their environments. In 2025 we started to market vulnerability scanning, analytics and monitoring to the customers who require it and believe this initiative will expand further as more and more are required by their parent organizations or authorities to declare such compliance.

~~We rely on a combination of trade secrets, patent, trademark and copyright laws in the~~ United States,’ asBipartisan ~~well as intellectual property~~Infrastructure licenses and other contractual rights (including confidentiality procedures, contractual provisions, and non-disclosure and assignment-of-intellectual property agreements with our employees, independent contractors, consultants and companies with which we conduct business) to establish and protect our A.I. technology, intellectual property and proprietary rights, trade secrets, databases, and our brand.Law

18In November 2021, Former President Biden signed the Bipartisan Infrastructure Law to invest approximately $1.2 trillion to significantly upgrade the United States’ infrastructure. Specifically, the Bipartisan Infrastructure Law mandates investing the following amounts: $110 billion to rebuild many of America’s roads and bridges; $39 billion in public transit; $66 billion in high-speed rail; $108 billion to upgrade the nation’s electricity grid; $55 billion to expand access to clean drinking water; $25 billion to modernize several US airports; $650 billion in previous authorized funding for roads including nearly $300 billion for the Highway Trust Fund; and $65 billion to ensure that every American has access to high-speed internet through deploying broadband infrastructure. Part of the latter is the Broadband Equity Access and Deployment Program (the “BEAD”). The BEAD Program provides $42.45 billion to expand high-speed Internet access by funding planning, infrastructure deployment and adoption programs. All 50 states, the District of Columbia, and the five territories participating in the Broadband Equity, Access, and Deployment (BEAD) program have approved Internet for All plans and approximately $28 billion were ear-marked in total for all states. We believe that we have a significant positive contribution of value through our solutions to the BEAD projects, and we are pursuing funded programs where we look to offer our products.

~~We have~~It ~~registered~~remains ~~Actelis~~uncertain ~~Networks as a service trademark in the United States, and we are the registered holder of the domain name Actelis.com~~what ~~that includes “Actelis Networks~~actions, ~~Inc.”.~~if ~~We also have 16 registered patents in the United States; 3 registered patents in Europe~~any, ~~1 registered patent in Mexico, 1 registered patent in Indonesia, one pending application in~~ the Trump Administration ~~United~~may ~~States~~take and one pending application in Europe, all of which in the general area of high-speed carrier class Ethernet service and transport over bonded VDSL2, G.SHDSL as well as Fiber covering various aspects of our technology. While we continue to ~~consult~~repeal ~~with~~or ~~counsel~~otherwise onmodify the advisability to seek patent protection of some of our algorithms, we rely heavily on trade secrets to protect our intellectual property around our technology. While we continue to consult with counsel on the ~~advisability~~Bipartisan toInfrastructure ~~seek~~Law ~~patent~~or ~~protection of some of our algorithms, we rely heavily on trade secrets to protect our intellectual property around our technology~~BEAD.

~~Without accounting~~Recent ~~for~~increase ~~any~~and ~~potential~~creation of ~~patent~~new ~~term~~tariffs ~~adjustments~~by orthe ~~extensions~~Trump Administration oris ~~other~~not ~~forms~~likely ~~of exclusivity with respect~~ to ~~our~~affect ~~U.S.~~the ~~issued~~Company ~~patents~~significantly, ~~three~~ ~~patents~~since ~~expire~~the ~~between~~Company ~~2025~~manufactures ~~and~~its products ~~2026,~~in ~~five~~Israel ~~expire between 2027~~ and ~~2030~~Taiwan, and ~~8 expire between 2031 and 2038. Any patent issuing from~~ the ~~pending~~procurement ~~WIPO~~of ~~patent~~raw ~~application~~material ~~will~~is ~~begin~~done directly to ~~expire~~these ~~in 2041~~countries. ~~With respect to our European patents~~Also, 1the ~~European~~United ~~patent~~States ishas ~~expected~~stable totrade ~~expire~~agreements ~~between~~with ~~2024 and 2026~~Israel, ~~and~~where 2our ~~European~~subsidiary ~~patent~~manages ~~are~~our ~~expected~~operations, ~~to expire between 2027~~ and ~~2038.~~from ~~Our~~which ~~Mexican~~exports ~~patent is expected to expire in 2026 and~~ our ~~Indonesian~~products ~~patent is expected~~ to ~~expire~~the inUnites ~~2028~~States.

We ~~continue~~ tobelieve ~~maintain~~that ~~our~~this ~~intellectual~~significant increase ~~property and confidential business information~~ in ainfrastructure ~~number~~spending ofby ~~ways. For instance, we have a policy of requiring all employees and consultants to execute confidentiality agreements upon~~ the ~~commencement~~United States ofGovernment anwill ~~employment~~likely orresult ~~consulting relationship~~in ~~with~~investments ~~us. Our employee agreements also require relevant employees to assign to us all rights to any inventions made or conceived during their employment with us~~ in ~~accordance~~our ~~with~~communication ~~applicable law. In addition~~infrastructure solutions, weas ~~have~~these aspending ~~policy~~initiatives ofare ~~requiring~~aimed ~~individuals~~at ~~and entities with which we discuss potential business relationships to sign non-disclosure agreements. Lastly,~~ our ~~agreements~~targeted ~~with clients include confidentiality and non-disclosure provisions~~verticals.

~~Corporate Information~~21

~~We were~~Growth ~~incorporated~~through inMergers ~~Delaware in 1998. We completed our initial public offering on May 17, 2023~~ and our common stock is currently listed on the Nasdaq Global Select Market under the symbol “ASNS.” Our principal executive offices are located at 4039 Clipper Court, Fremont, CA 94538, and our telephone number is (510)-545-1040.Acquisitions

~~Available~~We continue to evaluate potential ~~Information~~growth through mergers and acquisitions opportunities in situations where we believe that a transaction will fill business gaps or add key business operations without requiring us to wait years for marketing and sales cycles to materialize. The resulting combination of our existing products and services, new key personnel, and strategic partnerships through M&A could provide new offerings to our existing market.

~~Our Annual~~If ~~Reports~~we ontarget ~~Form 10-K,~~businesses ~~Quarterly~~in the ~~Reports~~same onsector ~~Form 10-Q,~~or ~~Current Reports on Form 8-K~~location, ~~and~~we ~~amendments~~hope to ~~reports~~combine ~~filed pursuant~~resources to ~~Sections~~reduce ~~13(a) and 15(d) of the Securities Exchange Act of 1934~~costs, aseliminate ~~amended~~duplicate ~~(the~~facilities ~~“Exchange Act”), are filed with the U.S. Securities and Exchange Commission (the “SEC”). We are subject to the informational requirements of the Exchange Act and file~~ or ~~furnish~~departments ~~reports, proxy statements,~~ and ~~other information with the SEC. Such reports and other~~increase ~~information filed by us with the SEC are available free of charge on the SEC’s website at www~~revenue.~~sec.gov.~~ ~~or on our website at https://actelis.com/when such reports are available on the SEC’s website.~~ We ~~use~~still ~~our~~believe ~~website~~this asstrategy awill ~~means~~provide offor ~~disclosing material~~accelerated ~~non-public~~growth ~~information~~ and ~~for~~maximize ~~complying~~investor ~~with our disclosure obligations under Regulation FD~~returns. ~~The contents of the websites referred to above are not incorporated into this filing.~~

19Environmental

~~Item~~We are not aware of any environmental ~~1A.~~laws ~~Risk~~that ~~Factors~~have been enacted, nor are we aware of any such laws being contemplated for the future, that impact issues specific to our business.

~~Investing in~~Human ~~our~~Capital common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report, before deciding to invest in our common stock. The risks and uncertainties described below may not be the only ones we face. If any of the risks actually occur, our business, results of operations, financial condition and prospects could be harmed. In that event, the trading price of our common stock could decline, and you could lose part or all of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.Resources

~~Summary~~As of December 31, 2025, ~~Risk~~we ~~Factors~~had approximately 51 employees and contractors, of which 39 were full-time employees, including 13 in sales and marketing, 20 in research development, engineering, and operations and 6 in general and administration. We have approximately 34 employees and contractors in Israel, 15 in the U.S., ,1 in Europe and 1 in Asia. Our U.S.-based employees are employed through a Professional Employer Organization, providing employee benefits and services.

~~Our~~We believe our culture and ~~business~~principles isenable ~~subject~~us to ~~numerous~~attract, ~~risks~~retain, motivate and ~~uncertainties~~develop ~~that~~our ~~you~~workforce ~~should~~as ~~consider~~well ~~before~~as ~~investing~~drive inemployee ~~our company~~engagement. ~~You~~We ~~should~~believe ~~carefully~~an engaged ~~consider~~workforce ~~all~~leads ofto ~~the~~a ~~risks~~more ~~described~~innovative ~~more~~and ~~fully~~productive incompany ~~the~~that ~~section~~serves ~~titled~~its ~~“Risk~~customers ~~Factors”~~better. inOur ~~this~~employees ~~Annual~~work ~~Report~~to onensure ~~page~~that ~~23,~~our ~~before~~products ~~deciding~~and toservices ~~invest~~connect inand protect our ~~common~~customers ~~stock~~critical infrastructure. IfA ~~any~~testament ofto ~~these~~that ~~risks~~is ~~actually~~the ~~occurs,~~long-term ~~our~~retention ~~business,~~of ~~financial~~many ~~condition and results~~ of ~~operations~~our ~~would~~employees ~~likely~~and betheir ~~materially~~loyalty ~~adversely~~to ~~affected~~us. ~~These~~We ~~key~~measure ~~risks,~~each ~~include,~~one ~~but~~through ~~are~~a ~~not~~goal ~~limited~~setting and measurement system to, ~~the~~maximize ~~following:~~our enterprise value and employee career potential.

~~Risks~~We support and strive for ~~Related~~ethnic toand ~~Our~~gender ~~Business~~diversity.

●Legal We have a history of net losses, may incur substantial net losses in the future, and may not achieve or sustain profitability or growth in future periods. If we cannot achieve and sustain profitability, our business, financial condition, and operating results will be adversely affected.Proceedings

●From Wetime to time, we may be involved in various claims and legal actions arising in the ordinary course of business. To the knowledge of our management, there are no legal proceedings currently pending against us which we believe would have ~~negative~~a ~~cash~~material ~~flow~~adverse ~~from~~effect on our business, financial position, results of operations and, ~~given~~to the best of our ~~projected~~knowledge, ~~funding~~there ~~needs~~are no such legal proceedings contemplated or threatened. Regardless of outcome, ~~our~~litigation ~~ability~~can tohave ~~generate~~an ~~positive~~adverse ~~cash~~impact ~~flow~~on isus ~~uncertain~~because of defense and settlement costs, diversion of management resources and other factors.

● Our shares of common stock could be delisted from the Nasdaq Capital Market if we fail to regain compliance with the Nasdaq’s stockholders’ equity continued listing standards. Our ability to publicly or privately sell equity securities and the liquidity of our shares of common stock could be adversely affected if we are delisted from the Nasdaq Capital Market.22

●Government ~~Our financial condition raises substantial doubt as to our ability to continue as a going concern.~~Regulation

●Our ~~Unfavorable~~products ~~global~~are ~~economic~~required to orbe ~~political~~certified ~~conditions~~for ~~could~~safety ~~adversely~~and ~~affect~~local standards in each country that we sell in as needed. In the United States, Canada, Europe, and Japan our ~~business~~products are UL certified (safety), ~~financial~~EN ~~condition~~(emissions orRegulation), ~~results~~VCCI (Japanese emissions standard), CISPR (European emission standard), ICES (Canadian radio frequency emissions standards), ETSI (European electromagnetic compatibility standard), CFR (US Federal Broadcasting Regulation), as well as IEC (European Safety Standard). We have also received the JITC (Joint Interoperability Test Command) certification of ~~operations~~meeting certain cybersecurity standards required by the DoW.

●We ~~Prolonged~~are ~~inflation~~subject ~~rates~~to ~~could~~numerous federal, ~~negatively~~state, ~~impact~~provincial, ~~our~~local, ~~revenues~~and foreign laws and ~~profitability~~regulations ifrelating ~~increases~~to the storage, handling, emission, and discharge of materials into the environment, including the Comprehensive Environmental Response, Compensation, and Liability Act; the Clean Water Act; the Clean Air Act; the Emergency Planning and Community Right-To-Know Act; the Resource Conservation and Recovery Act; and similar laws in the ~~prices~~other countries ofin which we operate. While we believe that our ~~products~~existing orenvironmental acontrol ~~decrease~~procedures inare ~~customer~~adequate, ~~spending~~we ~~results~~will incontinue ~~lower~~to ~~sales~~evaluate and update our procedures as needed to address new or changing aspects of environmental matters.

●Intellectual We may need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our stockholders’ ownership interests.Property

●We ~~Our~~rely ~~indebtedness~~on ~~could~~a ~~adversely~~combination of ~~affect~~trade ~~our~~secrets, ~~ability~~patent, totrademark ~~raise~~and ~~additional~~copyright ~~capital~~laws toin ~~fund~~the ~~operations~~United States, ~~limit~~as ~~our~~well ~~ability~~as tointellectual ~~react~~property tolicenses ~~changes~~and inother contractual ~~the~~rights ~~economy~~(including orconfidentiality procedures, contractual provisions, and non-disclosure and assignment-of-intellectual property agreements with our ~~industry~~employees, independent contractors, consultants and ~~prevent~~companies uswith ~~from~~which ~~meeting~~we conduct business) to establish and protect our ~~financial~~A.I. ~~obligations~~technology, intellectual property and proprietary rights, trade secrets, databases, and our brand.

●We Tohave ~~support~~registered ~~our~~Actelis Networks ~~business~~as ~~growth,~~a service trademark in the ~~past~~United ~~years~~States, and we ~~increased~~are ~~our~~the ~~focus~~registered onholder ~~serving~~of ~~certain~~the ~~IoT~~domain ~~verticals~~name Actelis.com that includes “Actelis Networks, ~~while~~Inc.”. ~~continuing~~Out toof ~~serve~~29 ~~our~~patents ~~existing~~that ~~Telco~~we ~~customers~~were granted in the United States, 13 are registered and current while the remaining 16 expired. ~~This~~Out ~~change~~of 6 patents we were granted in ~~our~~Europe, ~~strategy~~3 ~~may~~are ~~make~~registered itand ~~more~~current ~~difficult~~while tothe ~~evaluate~~remaining ~~our~~3 ~~business~~expired, ~~growth~~1 registered patent in Indonesia, one pending application in Brazil, all of which in the general area of high-speed carrier class Ethernet service and ~~future~~transport over ~~prospects~~bonded VDSL2, G.SHDSL as well as Fiber G.fast and ~~may~~G.hn ~~increase~~protocols covering various aspects of our technology. While we continue to consult with counsel on the ~~risk~~advisability ~~that~~to seek patent protection of some of our algorithms, we ~~will~~rely ~~not~~heavily beon ~~successful~~trade insecrets to protect our ~~plans~~intellectual property around our technology. While we continue to consult with counsel on the advisability to seek patent protection of some of our algorithms, we rely heavily on trade secrets to protect our intellectual property around our technology.

●Without Weaccounting ~~may~~for ~~have~~any potential ~~ineffective~~patent ~~sales~~term adjustments or extensions or other forms of exclusivity with respect to our U.S. issued patents, three patents expire between 2025 and ~~marketing~~2026, ~~efforts~~five expire between 2027 and 2030, and 8 expire between 2031 and 2038. Any patent issuing from the pending WIPO patent application will begin to expire in 2041. With respect to our European patents, 1 European patent is expected to expire between 2024 and 2026, and 2 European patent are expected to expire between 2027 and 2038. Our Mexican patent is expected to expire in 2026 and our Indonesian patent is expected to expire in 2028.

20We continue to maintain our intellectual property and confidential business information in a number of ways. For instance, we have a policy of requiring all employees and consultants to execute confidentiality agreements upon the commencement of an employment or consulting relationship with us. Our employee agreements also require relevant employees to assign to us all rights to any inventions made or conceived during their employment with us in accordance with applicable law. In addition, we have a policy of requiring individuals and entities with which we discuss potential business relationships to sign non-disclosure agreements. Lastly, our agreements with clients include confidentiality and non-disclosure provisions.

●Corporate We outsource our product manufacturing and are dependent on our key manufacturers, and on our component and OEM suppliers. We are susceptible to problems, and have encountered problems in the past, in connection with procurement, decreasing quality, reliability, and protectability.Information

●We ~~Demand~~were ~~for~~incorporated in Delaware in 1998. We completed our ~~products~~initial public offering on May 17, 2022 and ~~solutions~~our ~~may~~common ~~not~~stock ~~grow~~is orcurrently ~~may~~listed ~~decline~~on the Nasdaq Capital Market under the symbol “ASNS.” Our principal executive offices are located at 710 Lakeway Drive, Suite 200, Sunnyvale, CA 94085, and our telephone number is (510)-545-1040.

~~● Our gross margins may not increase or may deteriorate.~~23

●Available ~~Changes in the price and availability of our raw materials and shipping could be detrimental to our profitability.~~Information

●Our ~~Expanding~~Annual ~~our~~Reports ~~operations~~on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and ~~marketing~~amendments ~~efforts~~to reports filed pursuant to ~~meet~~Sections ~~expected~~13(a) and 15(d) of ~~growth~~the ~~may~~Securities ~~impact~~Exchange Act of 1934, ~~profitability~~as ifamended ~~actual~~(the ~~growth~~“Exchange Act”), isare ~~less~~filed ~~than~~with ~~expected~~the U.S. Securities and Exchange Commission (the “SEC”). We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements, and other information with the SEC. Such reports and other information filed by us with the SEC are available free of charge on the SEC’s website at www.sec.gov. or on our website at https://actelis.com/when such reports are available on the SEC’s website. We use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. The contents of the websites referred to above are not incorporated into this filing.

●Item If1A. ~~our~~Risk internal Company cyber-security measures are breached or fail and unauthorized access is obtained to our IT environment, we may incur significant losses of data, which we may not be able to recover and may experience a delay in our ability to conduct our day-to-day business.Factors

●Investing Wein ~~provide~~our ~~cyber~~common ~~security~~stock ~~features~~involves asa ~~part~~high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report, before deciding to invest in our ~~products~~common ~~that~~stock. The risks and uncertainties described below may not ~~completely~~be ~~prevent~~the ~~information~~only ones ~~security~~we ~~breaches~~face. If any of the risks actually occur, our business, results of operations, financial condition and ~~our~~prospects ~~products~~could ~~are~~be ~~installed~~harmed. In inthat ~~live~~event, ~~customer~~the ~~environments~~trading price of our common stock could decline, and ~~may~~you becould ~~compromised~~lose bypart ~~cyber-attacks~~or all of your investment. Additional risks and ~~damage~~uncertainties ~~customer~~not ~~assets~~presently known to us or that we currently deem immaterial may also impair our business operations.

●Summary WeRisk ~~depend on key information systems and third-party service providers.~~Factors

●Our Webusiness ~~depend~~is onsubject ~~our~~to numerous ~~management~~risks ~~team~~ and ~~other~~uncertainties ~~key~~that ~~employees,~~you ~~and~~should ~~the~~consider ~~loss~~before investing in our company. You should carefully consider all of ~~one~~the orrisks described more offully ~~these~~in ~~employees~~the orsection antitled ~~inability~~“Risk Factors” in this Annual Report on page 24, before deciding to ~~attract~~invest ~~and~~in ~~retain~~our ~~highly~~common ~~skilled~~stock. ~~employees~~If ~~could~~any ~~adversely~~of ~~affect~~these risks actually occurs, our business, financial condition and results of operations would likely be materially adversely affected. These key risks, include, but are not limited to, the following:

●Risks WeRelated ~~may~~to ~~face~~Our ~~the effects of increased competition and rapid technological changes.~~Business

● ~~Our~~We ~~results~~have a history of net losses, may incur substantial net losses in the future, and may not achieve or sustain profitability or growth in future periods. If we cannot achieve and sustain profitability, our business, financial condition, and operating results will be adversely affected. ● We have negative cash flow from our operations ~~are~~and, ~~likely~~given our projected funding needs, our ability to ~~fluctuate~~generate positive cash flow is uncertain. ● Our shares of common stock could be delisted from ~~quarter~~the Nasdaq Capital Market if we fail to ~~quarter~~regain compliance with the Nasdaq’s stockholders’ equity continued listing standards. Our ability to publicly or privately sell equity securities and ~~year~~the liquidity of our shares of common stock could be adversely affected if we are delisted from the Nasdaq Capital Market. ● Our financial condition raises substantial doubt as to ~~year,~~our ~~which~~ability to continue as a going concern. ● Unfavorable global economic or political conditions could adversely affect ~~the~~our ~~trading~~business, ~~price~~financial condition or results of operations. ● Prolonged inflation rates could negatively impact our ~~common~~revenues ~~stock~~and profitability if increases in the prices of our products or a decrease in customer spending results in lower sales. ● We may need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our stockholders’ ownership interests.

● The loss of one or more of our significant customers, or any other reduction in the amount of revenue we derive from any such customer, would adversely affect our business, financial condition, results of operations and growth prospects.24

● Our indebtedness could adversely affect our ability to raise additional capital to fund operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our financial obligations. ● To support our business growth, in the past years we increased our focus on serving certain IoT verticals, while continuing to serve our existing Telco customers. This change in our strategy may make it more difficult to evaluate our business growth and future prospects, and may increase the risk that we will not be successful in our plans. ● We may be ineffective in our sales and marketing efforts. ● We outsource our product manufacturing and are dependent on our key manufacturers, and on our component and OEM suppliers. We are susceptible to problems, and have encountered problems in the past, in connection with procurement, decreasing quality, reliability, and protectability. ● Demand for our products and solutions may not grow or may decline. ● Our gross margins may not increase or may deteriorate. ● Changes in the price and availability of our raw materials and shipping could be detrimental to our profitability. ● Expanding our operations and marketing efforts to meet expected growth may impact profitability if actual growth is less than expected. ● If our internal Company cyber-security measures are breached or fail and unauthorized access is obtained to our IT environment, we may incur significant losses of data, which we may not be able to recover and may experience a delay in our ability to conduct our day-to-day business. ● We provide cyber security features as part of our products that may not completely prevent information security breaches, and our products are installed in live customer environments and may be compromised by cyber-attacks and damage customer assets. ● We depend on key information systems and third-party service providers. ● We depend on our management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could adversely affect our business. ● We may face the effects of increased competition and rapid technological changes. ● Our results of operations are likely to fluctuate from quarter to quarter and year to year, which could adversely affect the trading price of our common stock. ● The loss of one or more of our significant customers, or any other reduction in the amount of revenue we derive from any such customer, would adversely affect our business, financial condition, results of operations and growth prospects. ● Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk.

~~Risks Related to Protecting Our Technology and Intellectual Property~~25

●Risks ~~Claims~~Related ~~by others that we infringe their intellectual property could force us~~ to ~~incur~~Protecting ~~significant~~Our ~~costs~~Technology and orIntellectual ~~revise the way we conduct our business.~~Property

● Claims by others that we infringe their intellectual property could force us to incur significant costs or revise the way we conduct our business. ● Our patents and proprietary technology may be challenged or disputed. ● Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand. ● The lives of our patents may not be sufficient to effectively protect our products and business.

●Risks ~~Any~~Related ~~failure~~ to ~~protect~~Managing ~~our~~Our ~~intellectual~~Business Operations ~~property~~in ~~rights could impair our ability to protect our proprietary technology and our brand.~~Israel

● ~~The~~Geo-Political ~~lives~~conditions ofin the Middle East and in Israel, where our ~~patents~~research and development facilities are located, may ~~not~~harm our operations. ● Actelis Israel received Israeli government grants for certain of our research and development activities, the terms of which require us to pay royalties and satisfy specified conditions in order to manufacture products and transfer technologies outside of Israel. If we fail to satisfy these conditions, we may be ~~sufficient~~required to ~~effectively~~pay ~~protect~~penalties and refund grants previously received. ● We may be adversely affected by fluctuations in the currency exchange rate of the Israeli Shekel. ● Unanticipated changes in our ~~products~~effective tax rate and ~~business~~additional tax liabilities, including those resulting from our international operations or the implementation of new tax rules, could harm our future results.

Risks Related to ~~Managing~~our ~~Our~~Common ~~Business Operations in Israel~~Stock

● ~~Conditions~~The inrequirements ~~the~~of ~~Middle~~being ~~East~~a ~~and~~public incompany ~~Israel~~may strain our resources, ~~where~~divert management’s attention, and affect our ~~research~~ability to attract and ~~development~~retain ~~facilities~~executive ~~are~~management ~~located~~and qualified board members. ● If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, our shareholders could lose confidence in our financial and other public reporting, which would harm our ~~operations~~business and the trading price of our commons stock.

2126

●RISK Actelis Israel received Israeli government grants for certain of our research and development activities, the terms of which require us to pay royalties and satisfy specified conditions in order to manufacture products and transfer technologies outside of Israel. If we fail to satisfy these conditions, we may be required to pay penalties and refund grants previously received.FACTORS

●Investing Wein our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report, before deciding to invest in our common stock. The risks and uncertainties described below may not be ~~adversely~~the ~~affected~~only byones ~~fluctuations~~we inface. If any of the ~~currency~~risks ~~exchange~~actually ~~rate~~occur, our business, results of operations, financial condition and prospects could be harmed. In that event, the ~~Israeli~~trading ~~Shekel~~price of our common stock could decline, and you could lose part or all of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

●Risks ~~Unanticipated~~Related ~~changes~~to inOur ~~our effective tax rate and additional tax liabilities, including those resulting from our international operations or the implementation of new tax rules, could harm our future results.~~Business

~~Risks~~We have a history of net losses, may incur ~~Related~~substantial tonet losses in the future, and may not achieve or sustain profitability or growth in future periods. If we cannot achieve and sustain profitability, our ~~Common~~business, ~~Stock~~financial condition, and operating results will be adversely affected.

●We ~~The~~have ~~requirements~~incurred ofnet ~~being~~losses ain ~~public~~recent years, ~~company~~and we may ~~strain~~not ~~our~~achieve or ~~resources,~~maintain ~~divert~~profitability ~~management’s~~in ~~attention,~~the ~~and~~future. ~~affect~~We ~~our~~experienced ~~ability~~a tonet ~~attract~~loss of $8.3 million and ~~retain~~$4.4 ~~executive~~million ~~management~~in the years ended December 31, 2025 and ~~qualified~~2024, ~~board~~respectively. ~~members~~As a result, we had an accumulated deficit of $52 million as of December 31, 2025. We cannot predict when or whether we will reach or maintain profitability.

●We Ifmay also increase our operating expenses in the future as we ~~fail~~continue to ~~maintain~~invest anfor ~~effective~~our ~~system~~future ofgrowth, ~~internal~~including ~~control~~expanding ~~over~~our ~~financial~~research ~~reporting~~and development function to drive further development of our platform, weexpanding ~~may~~our ~~not~~sales beand ~~able~~marketing activities, developing the functionality to ~~accurately~~expand ~~report~~into adjacent markets, and reaching customers in new geographic locations, which will negatively affect our ~~financial~~operating results orif ~~prevent~~our ~~fraud~~total revenues do not increase. AsIn aaddition ~~result,~~to the anticipated costs to grow our ~~shareholders~~business, ~~could~~we ~~lose~~also ~~confidence~~expect into ~~our~~incur ~~financial~~significant additional legal, accounting, and other expenses as a newly public ~~reporting~~company. These efforts and additional expenses may be more costly than we expect, ~~which~~and we ~~would~~cannot ~~harm~~guarantee that we will be able to increase our ~~business~~revenues ~~and~~to ~~the~~offset ~~trading~~our ~~price~~operating ofexpenses. Any failure to increase our ~~commons~~revenues or ~~stock~~to manage our costs as we invest in our business would prevent us from achieving or maintaining profitability.

22There is no guaranty that we will be able to generate the revenue necessary to support our cost structure or obtain the level of financing necessary for our operations.

~~RISK~~We have incurred significant losses and negative cash flows from operations ~~FACTORS~~and incurred losses of $8.3 million and $4.4 million for the years ended December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and 2024, we had negative cash flows from operations of $7.7 million and $6.5 million, respectively. As of December 31, 2025, our accumulated deficit was $52 million. We have funded our operations to date through equity and debt financing and have cash on hand (including short term bank deposits and restricted cash equivalents) of $4.4 million and long-term restricted bank deposits of $30 thousand and long term deposit of $91 thousand as of December 31, 2025. We monitor our cash flow projections on a current basis and take active measures to obtain the funding it requires to continue our operations. However, these cash flow projections are subject to various uncertainties concerning their fulfilment such as the ability to increase revenues by attracting and expanding its customer base or reducing cost structure. If we will not succeed in generating sufficient cash flow or completing additional financing, then it will need to execute a cost reduction plan that has been prepared. Our transition to profitable operations is dependent on generating a level of revenue adequate to support our cost structure. We expect to fund operations using cash on hand, through operational cash flows and raising additional proceeds. There are no assurances, however, we will be able to generate the revenue necessary to support our cost structure or that we will be successful in obtaining the level of financing necessary for its operations.

~~Investing in~~Furthermore, ~~our~~we ~~common~~may ~~stock~~continue to ~~involves~~incur anegative ~~high~~cash ~~degree~~flow offrom ~~risk.~~operating ~~You~~and ~~should~~investing ~~carefully~~activities ~~consider~~for the ~~risks~~foreseeable ~~and~~future ~~uncertainties~~as ~~described~~we ~~below,~~expect ~~together with~~to ~~all~~incur ofresearch ~~the~~and ~~other~~development, sales ~~information~~and inmarketing, ~~this~~and ~~Annual~~general ~~Report,~~and ~~before~~administrative ~~deciding~~expenses toand ~~invest~~make capital expenditures in our ~~common~~efforts ~~stock.~~to ~~The~~increase ~~risks~~our ~~and~~sales. ~~uncertainties~~Our ~~described~~business ~~below~~also ~~may~~will ~~not~~at betimes ~~the~~require ~~only~~significant ~~ones~~amounts weof ~~face.~~working Ifcapital ~~any~~to support our growth of ~~the~~additional ~~risks~~platforms. ~~actually~~An ~~occur,~~inability ~~our~~to ~~business,~~generate positive ~~results~~cash offlow ~~operations,~~from ~~financial~~operating ~~condition and~~activities ~~prospects~~for ~~could~~the benear ~~harmed.~~term Inmay ~~that~~adversely ~~event,~~affect ~~the~~our ~~trading~~ability ~~price~~to ofraise ~~our~~needed ~~common~~capital ~~stock~~for ~~could~~our ~~decline~~business on reasonable terms, ~~and~~or ~~you~~at ~~could~~all, ~~lose~~diminish ~~part~~supplier or ~~all~~customer ~~of your~~willingness ~~investment.~~to ~~Additional~~enter ~~risks~~into transactions with us, and ~~uncertainties~~have ~~not~~other ~~presently~~adverse ~~known~~effects that tomay usdecrease orour long-term viability. There can be no assurance that we ~~currently~~will ~~deem~~achieve ~~immaterial~~positive ~~may~~cash ~~also~~flow ~~impair~~in ~~our business~~the ~~operations~~near future or at all.

~~Risks~~Our financial condition raises substantial ~~Related~~doubt as to ~~Our~~our ~~Business~~ability to continue as a going concern

We Our consolidated financial statements have been prepared assuming that we will continue to operate as a ~~history~~going ofconcern. ~~net~~These ~~losses~~events and conditions, ~~may~~along ~~incur~~with ~~substantial~~other ~~net~~matters, ~~losses~~indicate inthat ~~the~~a ~~future,~~material ~~and~~uncertainty exists that may ~~not~~cast ~~achieve~~significant doubt on our ability to continue as a going concern. This going concern determination could materially limit our ability to raise additional funds through the issuance of equity or ~~sustain~~debt ~~profitability~~securities or ~~growth~~otherwise. Further financial statements includes an explanatory paragraph with respect to our ability to continue as a going concern. There can be no assurance that we will succeed in ~~future~~generating ~~periods~~sufficient revenues from our product sales to continue our operations as a going concern. If funds are not available to us, we ~~cannot~~may ~~achieve~~be ~~and~~required ~~sustain~~to ~~profitability~~delay, ~~our~~reduce ~~business,~~the ~~financial~~scope ~~condition~~of, ~~and~~or ~~operating~~eliminate ~~results~~research ~~will~~or bedevelopment ~~adversely~~plans for, or commercialization efforts with ~~affected~~respect to our products. This raises substantial doubts about our ability to continue as a going concern.

We have incurred net losses in recent years, and we may not achieve or maintain profitability in the future. We experienced a net loss of $4.4 million and $6.3 million in the years ended December 31, 2024 and 2023, respectively. As a result, we had an accumulated deficit of $44 million as of December 31, 2024. We cannot predict when or whether we will reach or maintain profitability.27

~~We may~~Our ~~also~~shares ~~increase~~of ~~our~~common ~~operating~~stock ~~expenses~~could inbe ~~the future as we continue to invest for our future growth, including expanding our research~~delisted ~~and~~from ~~development function to drive further development of our platform, expanding our sales and marketing activities, developing~~ the ~~functionality to~~Nasdaq ~~expand~~Capital ~~into~~Market ~~adjacent markets, and reaching customers in new geographic locations, which will negatively affect our operating results~~ if ~~our total revenues do not increase. In addition to the anticipated costs to grow our business,~~ we ~~also~~fail ~~expect~~ to ~~incur~~regain ~~significant additional~~compliance ~~legal,~~with ~~accounting,~~the ~~and~~Nasdaq’s ~~other~~stockholders’ ~~expenses~~equity ascontinued alisting ~~newly public company~~standards. Our ~~These~~ability ~~efforts~~to ~~and~~publicly ~~additional~~or ~~expenses~~privately ~~may~~sell beequity ~~more~~securities ~~costly than we expect,~~ and wethe ~~cannot~~liquidity ~~guarantee~~of ~~that we will be able to increase~~ our ~~revenues~~shares toof ~~offset~~common ~~our~~stock ~~operating~~could ~~expenses.~~be ~~Any~~adversely ~~failure to~~affected ~~increase~~if ~~our revenues or to manage our costs as~~ we ~~invest~~are indelisted ~~our business would prevent us~~ from ~~achieving~~the orNasdaq ~~maintaining~~Capital ~~profitability~~Market.

~~There~~On August 25, 2023, we received isa nonotification ~~guaranty~~letter from the Listing Qualifications Staff (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that we ~~will~~are benot ~~able~~in compliance with Nasdaq Listing Rule 5550(b)(1) due to ~~generate~~our failure to comply with the ~~revenue~~Minimum ~~necessary~~Shareholders’ Equity Requirement or any alternatives to ~~support~~such ~~our~~requirement. ~~cost~~In ~~structure~~order orto ~~obtain~~maintain our listing on the ~~level~~Nasdaq Capital Market, we submitted a plan of ~~financing~~compliance addressing how we intended to regain compliance. On March 27, 2024, we received a delist determination letter from ~~necessary~~Nasdaq ~~for~~advising us that the Staff had determined to delist our ~~operations~~securities from Nasdaq due to non-compliance with the Minimum Shareholders’ Equity Requirement, unless we timely request a hearing before the Nasdaq Hearings Panel (the “Panel”). We timely requested a hearing before the Panel.

WeOn ~~have~~August ~~incurred significant losses and negative cash flows from operations and incurred losses of $ 4.4 million and $6.3 million for the years ended December 31~~27, ~~2024~~ ~~and 2023, respectively. During the years ended December 31,~~ 2024 ~~and 2023~~, we ~~had~~received formal ~~negative~~written ~~cash~~notice ~~flows~~ from ~~operations~~Nasdaq ~~of $6.5~~confirming ~~million~~that ~~and~~we ~~$6.6 million, respectively. As of December 31, 2024, our accumulated deficit was $ 44 million. We~~ have ~~funded~~evidenced ~~our~~compliance ~~operations to~~with ~~date~~all ~~through~~applicable ~~equity~~criteria ~~and~~for ~~debt~~continued ~~financing~~listing ~~and have cash~~ on ~~hand (including short term bank deposits and restricted cash equivalents) of~~Nasdaq ~~$2.3 million and long-term restricted cash and cash equivalents and restricted bank deposits of $0.2 million~~ as ofset ~~December 31,~~forth ~~2024. We~~in ~~monitor~~Nasdaq ~~our~~Listing ~~cash~~Rule ~~flow projections on a current basis and take active measures to obtain the funding it requires to continue our operations. However~~5550, ~~these~~including ~~cash flow projections are subject to various uncertainties concerning their fulfilment such as~~ the ~~ability~~Minimum toShareholders’ ~~increase revenues~~Equity ~~by attracting and expanding its customer base or reducing cost structure~~Requirement. IfIn weaccordance ~~will~~with ~~not~~Nasdaq ~~succeed in generating sufficient cash~~Listing ~~flow~~Rule ~~or completing additional financing~~5815(d)(4)(B), ~~then~~we itremained ~~will~~subject ~~need~~ to ~~execute~~ a ~~cost~~panel ~~reduction~~monitor ~~plan~~for ~~that~~equity ~~has~~compliance ~~been prepared. Our transition to profitable operations is dependent on generating a level of revenue adequate to support our cost structure. We expect to fund operations using cash on hand,~~ through ~~operational~~August ~~cash flows and raising additional proceeds. There are no assurances~~27, ~~however, we will be able to generate the revenue necessary to support our cost structure or that we will be successful in obtaining the level of financing necessary for its operations~~2025.

~~Furthermore, we~~On ~~may~~May ~~continue~~12, to2025, ~~incur~~Nasdaq ~~negative~~notified us ~~cash flow from operating and investing activities for~~ (the ~~foreseeable~~“Notification ~~future~~Letter”) asthat we ~~expect~~were tonot ~~incur research~~in ~~and~~compliance ~~development,~~with ~~sales~~Nasdaq ~~and~~Listing ~~marketing~~Rule 5550(a)(2), ~~and~~which ~~general~~requires ~~and administrative expenses and make capital expenditures in~~ our ~~efforts~~Common Stock to ~~increase~~ ~~our~~maintain ~~sales.~~a ~~Our~~minimum ~~business~~bid ~~also~~price ~~will at times require significant amounts~~ of ~~working~~$1.00 ~~capital~~per toshare ~~support~~(the ~~our~~“Bid ~~growth~~Price ~~of additional platforms~~Rule”). AnThe ~~inability~~Notification toLetter ~~generate~~had ~~positive~~no ~~cash~~immediate effect ~~flow~~on ~~from operating activities for~~ the ~~near~~listing ~~term~~or ~~may~~trading ~~adversely~~of ~~affect~~ our ~~ability~~Common ~~to raise~~Stock ~~needed capital for our business~~ on ~~reasonable~~Nasdaq ~~terms~~and, or at ~~all~~this time, ~~diminish~~the ~~supplier~~Common orStock ~~customer~~will ~~willingness~~continue to ~~enter~~trade ~~into~~on ~~transactions~~Nasdaq under ~~with~~the ~~us,~~symbol ~~and~~“ASNS”. ~~have~~The ~~other~~Notification ~~adverse~~Letter ~~effects~~provided that ~~may~~we ~~decrease~~have ~~our~~180 ~~long-term~~calendar ~~viability.~~days, ~~There~~or ~~can~~until beNovember no10, ~~assurance~~2025, ~~that~~to ~~we will achieve positive~~regain ~~cash~~compliance ~~flow~~with in the ~~near~~Bid ~~future~~Price ~~or at all~~Rule.

23On August 19, 2025, we received written notice from Nasdaq stating that, due to the Company’s non-compliance with the Minimum Shareholders’ Equity Requirement as of June 30, 2025, and because, pursuant to Listing Rule 5815(d)(4)(B), the Company remained subject to a mandatory hearing panel monitor through August 27, 2025, the Company’s securities were subject to delisting from Nasdaq unless the Company timely requests a hearing before the Panel. The Company has its hearing with the Panel on September 30, 2025.

~~Our~~At the hearing, the Company ~~financial~~presented ~~condition~~its ~~raises~~plan ~~substantial~~to ~~doubt~~evidence ascompliance with the Equity Rule and all other applicable criteria for continued listing on The Nasdaq Capital Market, and requested to ~~our~~remain ~~ability~~listed subject to ~~continue~~its asplan ato ~~going~~regain ~~concern~~compliance.

~~Our consolidated~~On ~~financial~~October ~~statements have been prepared assuming that we will continue to operate as a going concern. These events and conditions~~28, ~~along~~ ~~with other matters~~2025, ~~indicate~~we ~~that a material uncertainty exists that may cast significant doubt on our ability to continue as a~~received going concern. This going concern determination could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise. Further financial statements may include an explanatory paragraph with respect to our ability to continue as a ~~going~~listing ~~concern.~~decision ~~There can be no assurance that we will succeed in generating sufficient revenues~~ from ~~our~~Nasdaq ~~product~~notifying ~~sales to continue our operations as a going concern. If funds are not available to~~ us, wethat ~~may~~the bePanel ~~required~~determined tothat ~~delay, reduce~~ the ~~scope~~Company ~~of,~~evidenced ~~or eliminate~~compliance ~~research or development plans for, or commercialization efforts~~ with ~~respect~~the ~~to our products. This may raise substantial doubts~~Shareholders’ ~~about~~Equity ~~our ability to continue as a going concern~~Requirement.

~~Our shares~~The ofPanel ~~common~~also ~~stock~~granted ~~could~~the Company’s berequest ~~delisted~~for ~~from~~continued ~~the~~listing on The Nasdaq Capital Market, ifpursuant weto ~~fail~~an exception through December 5, 2025, to regain compliance with the ~~Nasdaq’s~~bid ~~stockholders’ equity~~price ~~continued~~requirement ~~listing~~set ~~standards~~forth in Nasdaq Listing Rule 5550(a)(1). ~~Our~~In ~~ability~~order to ~~publicly~~evidence orcompliance ~~privately~~with ~~sell~~the ~~equity~~bid ~~securities~~price requirement, ~~and~~ the ~~liquidity~~Company must evidence a closing bid price of ~~our~~at ~~shares~~least $1.00 per share for a minimum of ~~common~~10, but generally not more than ~~stock~~20, ~~could~~consecutive bebusiness ~~adversely~~days. ~~affected~~On ifNovember 7, 2025, we ~~are~~held ~~delisted~~a ~~from~~special meeting of shareholders where our shareholders approved, among other things, the ~~Nasdaq~~Reverse ~~Capital~~Split. ~~Market~~The Reverse Split was effected on November 18, 2025.

On ~~August~~ ~~25,~~December ~~2023~~3, we received a notification letter from the Listing Qualifications Staff (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that we are not in compliance with Nasdaq Listing Rule 5550(b)(1) due to our failure to maintain a minimum of $22025,~~500,000~~ ~~in shareholders’ equity (~~the ~~“Minimum Shareholders’ Equity Requirement”) or~~Company any alternatives to such requirement. In order to maintain our listing on the Nasdaq Capital Market, we submitted a plan of compliance addressing how we intended to regain compliance. On March 27, 2024, we received aformal ~~delist~~notice ~~determination letter~~ from Nasdaq ~~advising us~~ that the ~~Staff~~Company ~~had~~has ~~determined~~regained ~~to delist our securities from Nasdaq due to non-~~compliance with the ~~Minimum~~Bid ~~Shareholders’~~Price ~~Equity Requirement,~~Rule ~~unless~~and we timely request a hearing before the Nasdaq Hearings Panel (the “Panel”). We timely requested a hearing before the Panel. On August 27, 2024, we received formal written notice from Nasdaq confirming that we have evidenced compliance with all other applicable criteria for continued listing on Nasdaq. ~~as set forth in Nasdaq Listing Rule 5550~~Accordingly, ~~including~~ the ~~Minimum~~previously ~~Shareholders’ Equity~~disclosed ~~Requirement.~~listing Inmatter ~~accordance~~has ~~with~~been ~~Nasdaq Listing Rule 5815(d)(4)(B), we will remain subject to a panel monitor for equity compliance through August 27, 2025~~closed.

AsThe Company will remain subject ofto a one-year “Panel Monitor”, as contemplated by Nasdaq Listing Rule 5815(d)(4)(A), through December 5, 2026. If during that period the ~~date~~Company fails to satisfy any of ~~this~~the ~~filing~~criteria for continued listing on Nasdaq, wethe ~~believe~~Staff ~~that~~may wenot ~~are~~grant inthe Company additional time to regain compliance. ~~with~~Rather, Nasdaq will issue a delist determination, which the ~~Minimum~~Company ~~Shareholders’~~may ~~Equity~~address ~~Requirement~~by requesting a new hearing before the Nasdaq Hearings Panel.

In addition, on May 20, 2024, Nasdaq notified us that we were not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2), which requires our common stock to maintain a minimum bid price of $1.00 per share. On June 20, 2024, we received a letter from Nasdaq that, for the 10 consecutive business days from June 5, 2024 to June 28, 2024, the closing bid price of the Company’s common stock had been at $1.00 per share or greater. Accordingly, we have regained compliance with Nasdaq Listing Rule 5550(a)(2) and Nasdaq considers the prior bid price deficiency matter now closed.

~~We have~~On inFebruary ~~the past~~4, ~~and may in the future~~2026, ~~be unable to comply with certain of the listing standards that~~ we ~~are required to meet to maintain~~received ~~the~~a ~~listing~~written ofnotice ~~our ordinary shares on~~ Nasdaq. Ifindicating wethat ~~fail to satisfy~~ the ~~continued~~Staff ~~listing~~has ~~requirements~~determined ~~of Nasdaq, such as minimum stockholders’ equity requirements or minimum bid price requirements, Nasdaq may take steps~~ to delist ~~our shares of common stock. Such a delisting would have a negative effect on~~ the price of our shares of common stock, impair the ability to sell or purchase our shares of common stock when persons wish to do so, and any delisting materially adversely affect our ability to raise capital or pursue strategic restructuring, refinancing or other transactions on acceptable terms, or at all. Delisting from Nasdaq could also have other negative results, including the potential loss of institutional investor interest and fewer business development opportunities, as well as a limited amount of news and analyst coverage of us. Delisting could also result in a determination that our shares of common stock are a “penny stock,” which would require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary market for our shares of common stock. In the event of a delisting, we would attempt to take actions to restore our compliance with NasdaqCompany’s listing requirements, but we can provide no assurance that any such action taken by us would allow our shares of common stock to become listed again, stabilize the market price or improve the liquidity of our securities~~, prevent~~ ~~our shares of common stock~~ from ~~dropping~~The ~~below the~~ Nasdaq ~~minimum~~Capital ~~bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements~~Market.

24As disclosed in the Notice, the Staff determined that the Company’s common stock failed to maintain compliance with the Bid Price Rule. While companies are typically afforded a 180-calendar-day compliance period to comply with the Bid Price Rule, the Staff concluded that the Company is not eligible for the compliance period pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iv) due to the fact that the Company effected a reverse stock split within the prior one-year period, specifically a 1-for-10 reverse stock split on November 18, 2025, and therefore is subject to immediate delisting.

~~Unfavorable~~As further disclosed in the Notice, the Company had the right to request ~~global~~a ~~economic~~hearing and that a hearing request would result in a stay of any suspension or ~~political~~delisting ~~conditions~~action ~~could~~pending ~~adversely~~the ~~affect~~conclusion ~~our~~of ~~business~~the hearings process. Accordingly, ~~financial~~on ~~condition~~February 11, 2026, the Company requested a hearing before the Panel, which served to stay any further suspension or ~~results~~delisting ofaction ~~operations~~through the hearing or any extension the Panel provides following the hearing.

~~Our business~~At ~~is susceptible to general conditions in~~ the ~~global economy and in the global financial markets. A global financial crisis or a global or regional political disruption has caused~~hearing, ~~and could in~~ the ~~future cause, extreme volatility in the capital and credit markets.~~Company Aintends ~~severe~~to ortake ~~prolonged~~all ~~economic~~reasonable ~~downturn,~~measures ~~including~~available ~~a recession, the currently prolonged inflationary economic environment, continued rising interest rates, debt~~ and is ~~equity~~going ~~market~~to ~~fluctuations,~~present diminished liquidity and credit availability, increased unemployment rates, decreased investor and consumer confidence, supply chain challenges, natural catastrophes, the effects of climate change, regional and global conflicts and terrorist attacks or political disruption or turmoil could result in a ~~variety~~plan ~~of risks~~ to ~~our~~regain ~~business,~~compliance ~~including weakened~~with ~~demand~~the ~~for~~Bid ~~our~~Price ~~product~~Rule ~~candidates or any future product candidates, if approved,~~ and ~~our ability to raise additional capital~~ ~~when~~remain ~~needed~~listed on ~~acceptable~~Nasdaq ~~terms,~~to ifthe ~~at all~~Panel. AHowever, ~~weak~~there orcan ~~declining~~be ~~economy~~no orassurance ~~political~~that ~~disruption~~the ~~could~~Company ~~also~~will ~~strain~~be ~~our~~able ~~manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers~~ to ~~delay~~regain ~~making~~compliance ~~payments~~with ~~for our potential products. Any of~~ the ~~foregoing could materially and adversely affect our business, financial condition, results of operations and prospects, and we cannot~~Bid ~~anticipate~~Price ~~all~~Rule ~~of the ways in which the political~~ or ~~economic~~maintain ~~climate~~compliance ~~and~~with ~~financial~~all ~~market~~other ~~conditions~~Nasdaq ~~could~~continued ~~adversely~~listing ~~impact our business~~requirements.

~~Prolonged~~In connection with the Company’s ~~inflation~~entry ~~rates~~into ~~could~~the ~~negatively~~Common ~~impact~~Stock ~~our~~Purchase ~~revenues~~Agreement ~~and~~with ~~profitability~~White ifLion ~~increases~~as indescribed below, if the ~~prices~~Company offails ~~our~~to ~~products~~be orlisted aon ~~decrease~~the inNasdaq ~~customer~~Capital ~~spending~~Market, ~~results~~the Commitment Fee Amount (as defined below) will increase subject to the terms of the Delisting Penalty Provision in ~~lower~~the ~~sales~~Common Stock ~~which~~Purchase ~~would~~Agreement. ~~adversely~~See ~~affect~~“Item ~~our~~1-Business-Recent ~~business,~~Developments-Equity ~~results~~Line of ~~operations~~Credit ~~and~~Agreement” ~~financial~~for ~~condition~~additional information.

~~Inflation rates,~~On ~~particularly~~January in26, ~~the United States~~2026, ~~have~~Nasdaq filed ~~increased~~a inrule ~~2022~~proposal ~~through~~with ~~2024~~the atSEC ~~levels~~that ~~not~~would ~~seen~~permit ~~in years~~the inimmediate ~~many countries~~suspension ~~where our customers reside. Continued~~ and ~~increased~~delisting ~~inflation~~of ~~may~~a ~~result~~company inlisted ~~decreased~~on ~~demand~~the ~~for~~Nasdaq ~~our products and~~Capital ~~services,~~Market ~~increased~~if ~~operating~~its ~~costs~~market ~~(including~~value ~~our~~of ~~labor~~listed ~~costs),~~securities ~~reduced~~remains ~~liquidity,~~below ~~and~~$5 ~~limitations~~million onfor ~~our~~30 ~~ability~~consecutive tobusiness ~~access credit or otherwise raise debt and equity capital~~days. InAs ~~addition,~~of the ~~United States~~date ~~Federal~~of ~~Reserve~~this ~~has raised~~Annual Report, ~~and~~our ~~may~~market ~~again~~value ~~raise, interest~~of ~~rates~~listed insecurities ~~response~~is tobelow ~~concerns~~$5 ~~about~~million ~~inflation.~~and ~~Increases in interest rates, especially~~ if ~~coupled~~this ~~with~~rule ~~reduced~~were ~~government spending~~to ~~and~~go ~~volatility~~into ~~in financial markets, may have the~~ effect ~~of further increasing economic uncertainty~~ and ~~heightening these risks. In an inflationary environment,~~ we ~~may~~are be unable to ~~raise the sales prices of our products at or above the rate at which our costs~~ increase~~, which could have a material and adverse effect on~~ our ~~business,~~market ~~results~~value of ~~operations~~listed ~~and~~securities ~~financial~~above ~~condition. Accordingly,~~$5 ~~the U.S. dollar has strengthened against foreign currencies as a result of the United States Federal Reserve’s actions to lower inflation~~million, ~~which~~we iswould ~~affecting~~become ~~our~~subject ~~business partners, where they sell local currency~~ to ~~the~~immediate ~~end-user of~~suspension ~~our products~~ and ~~services~~delisting.

We have in the past, and may in ~~need~~the future, be unable to ~~raise~~comply ~~additional~~with ~~capital~~certain of the listing standards that we are required to meet to maintain the listing of our ~~business~~shares of common stock on Nasdaq. If we fail to satisfy the continued listing requirements inof Nasdaq, such as minimum stockholders’ equity requirements or minimum bid price requirements, Nasdaq may take steps to delist our shares of common stock. Such a delisting would have a negative effect on the ~~future~~price of our shares of common stock, impair the ability to sell or purchase our shares of common stock when persons wish to do so, and ~~such~~any delisting materially adversely affect our ability to raise capital ~~raising~~or ~~may~~pursue bestrategic ~~costly~~restructuring, refinancing or ~~difficult~~other transactions on acceptable terms, or at all. Delisting from Nasdaq could also have other negative results, including the potential toloss ~~obtain~~of institutional investor interest and fewer business development opportunities, as well as a limited amount of news and analyst coverage of us. Delisting could ~~dilute~~also result in a determination that our ~~stockholders~~shares of common stock are a “penny stock,” which would require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary market for our shares of common stock. In the event of a delisting, we would attempt to take actions to restore our compliance with Nasdaq’s ~~ownership~~listing ~~interests~~requirements, but we can provide no assurance that any such action taken by us would allow our shares of common stock to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our shares of common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements.

In order for us to pursue our business objectives, we may need to raise additional capital, which additional capital may not be available on reasonable terms or at all. Any additional capital raised through the sale of equity or equity-backed securities may dilute our shareholders’ ownership percentages and could also result in a decrease in the market value of our equity securities. The terms of any securities issued by us in future capital transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect on the holders of any of our securities then outstanding. In addition, we may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition.29

25Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations.

Our business is susceptible ~~indebtedness~~to general conditions in the global economy and in the global financial markets. A global financial crisis or a global or regional political disruption has caused, and could ~~adversely~~in ~~affect~~the future cause, extreme volatility in the capital and credit markets. A severe or prolonged economic downturn, including a recession, the currently prolonged inflationary economic environment, continued rising interest rates, debt and equity market fluctuations, diminished liquidity and credit availability, increased unemployment rates, decreased investor and consumer confidence, supply chain challenges, natural catastrophes, the effects of climate change, regional and global conflicts and terrorist attacks or political disruption or turmoil could result in a variety of risks to our business, including weakened demand for our product candidates or any future product candidates, if approved, and our ability to raise additional capital towhen ~~fund~~needed ~~operations~~on acceptable terms, if ~~limit~~at all. A weak or declining economy or political disruption could also strain our ~~ability~~manufacturers toor ~~react~~suppliers, possibly resulting in supply disruption, or cause our customers to ~~changes~~delay making payments for our potential products. Any of the foregoing could materially and adversely affect our business, financial condition, results of operations and prospects, and we cannot anticipate all of the ways in which the ~~economy~~political or ~~our~~economic ~~industry~~climate and ~~prevent~~financial usmarket ~~from~~conditions ~~meeting~~could ~~our~~adversely ~~financial~~impact ~~obligations~~our business.

~~On December~~Prolonged 2,inflation ~~2020,~~rates wecould ~~entered~~negatively impact ~~into~~our arevenues ~~loan~~and ~~agreement~~profitability ~~with~~if ~~Migdalor,~~increases orin the ~~Migdalor~~prices ~~Loan, for a loan~~ of upour toproducts ~~approximately~~or ~~$6.0~~a ~~million. As~~decrease ofin ~~the~~customer ~~date~~spending ofresults ~~this~~in ~~report,~~lower wesales which ~~have~~would ~~fully~~adversely ~~repaid~~affect ~~the~~our ~~loan principal~~business, ~~and~~results ~~have~~of anoperations ~~interest~~and ~~outstanding~~financial ~~balance of $111,000~~condition.

InInflation rates, particularly ~~February~~in ~~2024~~the United States, wehave ~~entered~~increased ~~into~~in a2022 ~~new~~through ~~credit~~2025 ~~line~~at ~~facility~~levels ~~from~~not anseen ~~Israeli~~in years ~~bank~~in ofmany upcountries towhere $1our customers reside.5 ~~million~~Continued and increased inflation may result in decreased demand for our products and services, increased operating costs (~~the~~including our ~~“Credit~~labor ~~Line”~~costs), reduced liquidity, and limitations on our ability to access credit or otherwise raise debt and equity capital. ~~The~~ ~~Credit~~In ~~Line~~addition, the isUnited States ~~secured~~Federal byReserve ~~customer~~has ~~invoices~~raised, and ~~will~~may ~~incur~~again raise, interest atrates ain ~~Federal~~response ~~SOFR~~to ~~rate~~concerns ~~plus~~about 5inflation.5% Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks. ~~The~~In ~~Credit~~an ~~Line~~inflationary ~~has~~environment, ~~been~~we ~~extended~~may be unable to raise the sales ~~under~~prices ~~February~~of 1our products at or above the rate at which our costs increase, ~~2026~~which could have a material and adverse effect on our business, results of operations and financial condition. ~~The~~Accordingly, ~~current~~the ~~balance~~U.S. dollar ~~outstanding~~has strengthened against foreign currencies as a result of the United States Federal Reserve’s actions to lower inflation, which is ~~approximately~~affecting ~~$574~~our business partners,~~000~~ where they sell local currency to the end-user of our products and services.

We may need to raise additional ~~debt in the future in order~~ capital to ~~extend~~meet ~~the~~our ~~financing~~business werequirements ~~need~~ in ~~ways~~the ~~that~~future, ~~are~~and ~~less~~such orcapital ~~non-dilutive vs. equity fund~~ raising. ~~Such debt funding~~ may ~~increase~~be ~~the~~costly ~~burden~~or ondifficult ~~our cash flow, make us subject~~ to ~~interest~~obtain ~~accruing~~and ~~overtime~~could ~~which~~dilute ~~will~~our ~~affect~~stockholders’ ~~our~~ownership ~~profitability as well as our ability to fund our operations~~interests.

~~To support~~In order for us to pursue our business ~~growth~~objectives, inwe ~~the~~may ~~past years~~need weto ~~increased~~raise ~~our~~additional ~~focus~~capital, onwhich ~~serving~~additional ~~certain~~capital ~~IoT~~may ~~verticals,~~not ~~while~~be ~~continuing~~available toon ~~serve~~reasonable terms or at all. Any additional capital raised through the sale of equity or equity-backed securities may dilute our ~~existing~~shareholders’ ~~Telco~~ownership percentages ~~customers.~~and ~~This~~could ~~change~~also result in a decrease in the market value of our ~~strategy~~equity ~~may~~securities. ~~make~~The itterms of any securities issued by us in future capital transactions may be more ~~difficult~~favorable to ~~evaluate~~new ~~our~~investors, ~~business~~and ~~growth~~may include preferences, superior voting rights and ~~future~~the ~~prospects,~~issuance ~~and~~of warrants or other derivative securities, which may ~~increase~~have a further dilutive effect on the ~~risk~~holders ~~that~~of any of our securities then outstanding. In addition, we ~~will~~may ~~not~~incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We may also be ~~successful~~required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our ~~plans~~financial condition.

~~Since our inception, our business was focused on serving Telcos for enterprises and residential customers.~~ Our ~~products~~indebtedness ~~and~~could ~~solutions~~adversely ~~have~~affect been deployed with more than 100 telecommunication service providers worldwide, in enterprise, residential and mobile base station connectivity applications. In recent years, as we have further developed our ~~technology~~ability ~~and~~to ~~rolled~~raise ~~out~~ additional ~~products,~~capital weto ~~turned~~fund ~~our focus on serving the IoT markets. Our~~ operations ~~are focused on our fast-growing IoT business~~, ~~while~~limit ~~maintaining~~ our ~~commitment~~ability to ~~our~~react ~~existing Telco customers. A portion of our revenue continues~~ to bechanges ~~derived~~in ~~from our existing Telco customers. For~~ the ~~years~~ ~~ended~~economy ~~December 31, 2024~~or ~~and December 31, 2023,~~ our ~~Telco~~industry ~~customers~~and inprevent us ~~the aggregate increased by 1%~~ from ~~approximately~~meeting ~~27% of~~ our ~~revenues~~financial ~~in the year ended December 31, 2023, to 28% in the year ended December 31, 2024~~obligations.

~~Our change~~In inFebruary ~~strategy~~2024, ~~and~~we ~~our~~entered ~~efforts~~into a new credit line facility from an Israeli bank of up to ~~serve~~$1.5 million (the ~~IoT~~“Credit ~~verticals~~Line”). ~~that~~The weCredit ~~have~~Line ~~focused~~is onsecured ~~may~~by ~~prove~~customer ~~more~~invoices ~~expensive~~and ~~than~~will weincur ~~currently~~interest at ~~anticipate~~a Federal SOFR rate plus 5.5%. The Credit Line has been extended until February 1, or ~~may~~2026. ~~require~~The ~~longer~~current ~~development~~balance ~~and~~outstanding ~~deployment~~is ~~times~~approximately $36,000. ~~and~~As weof ~~may~~the ~~not~~date ~~succeed~~hereof, inthe ~~fully~~Company ~~penetrating~~has ~~such~~not ~~IoT~~further ~~verticals~~extended the credit facility; however, orit atmay ~~all~~do so in the future.

We may raise additional debt in the future in order to extend the financing we need in ways that are less or non-dilutive vs. equity fund raising. Such debt funding may ~~have~~increase ~~ineffective~~the ~~sales~~burden ~~and~~on ~~marketing~~our ~~efforts~~cash flow, make us subject to interest accruing overtime which will affect our profitability as well as our ability to fund our operations.

Our sales and marketing efforts to drive growth may be ineffective as we try to win new deals either directly with end-user customers, or indirectly through business partners, distributors, system integrators or value-add resellers. These ineffective efforts may cause us to miss our planned growth and harm our financial results.30

~~We outsource~~To support our ~~product~~business ~~manufacturing~~growth, ~~and~~in ~~are~~the ~~dependent~~past years we onincreased our ~~key~~focus ~~manufacturers~~on serving certain IoT verticals, ~~and~~while oncontinuing ~~our~~to ~~component~~serve ~~and~~our ~~OEM~~existing ~~suppliers~~Telco customers. WeThis ~~are~~change ~~susceptible~~in our strategy may make it more difficult to ~~problems,~~evaluate our business growth and ~~have~~future ~~encountered~~prospects, ~~problems~~and inmay increase the ~~past,~~risk inthat ~~connection~~we ~~with~~will ~~procurement,~~not ~~decreasing~~be ~~quality,~~successful in ~~reliability,~~our ~~and protectability~~plans.

~~Our~~Since our inception, our ~~devices~~business ~~are~~was ~~assembled~~focused byon ~~using~~serving ~~fully~~Telcos ~~manufactured~~for ~~parts,~~enterprises ~~the~~and ~~manufacturing~~residential ofcustomers. ~~which~~Our ~~has~~products and solutions have been ~~fully~~deployed ~~outsourced~~with more than 100 telecommunication service providers worldwide, in enterprise, residential and mobile base station connectivity applications. In recent years, as we have nofurther ~~direct control~~developed ~~over~~our technology and rolled out additional products, we turned our focus on serving the IoT ~~manufacturing~~markets. ~~processes~~Our operations are focused on our fast-growing IoT business, while maintaining our commitment to our existing Telco customers. A portion of our ~~products~~revenue continues to be derived from our existing Telco customers. WeFor ~~outsource~~the years ~~procurement~~ended December 31, 2025 and December 31, ~~manufacturing~~2024, ~~activities~~our toTelco ~~certain~~customers ~~key~~in ~~manufacturers~~the aggregate decreased by 1% from approximately 28% of our revenues in the year ended ~~and~~December ~~certain~~31, ~~component~~2024, ~~and~~to ~~OEM~~27% ~~suppliers~~in the year ended December 31, 2025.

~~We also~~Our ~~purchase~~change ~~unique~~in ~~components~~strategy and our ~~products~~efforts ~~from~~to ~~suppliers~~serve ~~who~~the ~~are~~IoT ~~exclusively~~verticals ~~able~~that towe ~~fulfill~~have ~~such~~focused ~~supply.~~on We may ~~lose~~prove ~~some~~more orexpensive ~~all of~~than ~~these~~we ~~relationships,~~currently ~~or have a material weakness in negotiating favorable terms~~anticipate, or ~~such unique components have or~~ may berequire ~~declared~~longer ~~end-of-life~~development ~~which~~and ~~may~~deployment ~~require product design changes. Such circumstances have hurt our profitability in the past~~times, and we may ~~hurt~~not ~~our~~succeed ~~profitability~~ in ~~the~~fully ~~future,~~penetrating ~~and~~such ~~negatively~~IoT ~~affect~~verticals, ~~our~~or ~~ability~~at ~~to deliver our product on time to customers~~all.

~~Our lack~~We ~~of control in our manufacturing process due to the fact that we outsource our product manufacturing~~ may ~~increase~~have ~~quality~~ineffective orsales ~~reliability risks~~ and ~~could limit our ability to quickly increase or decrease production rates. If necessary, switching production to other or additional~~marketing ~~subcontractors will entail a material cost and a temporary decrease in our productivity~~efforts. Our manufacturing process has been disrupted in the past, and may be disrupted in the future, by various factors, including but not limited to shipping delays, bottlenecks resulting from raw materials specific shortages, quality problems or a decrease in quality, manpower shortages by the manufacturers or political unease that would trigger the closure of a facility or financial insolvency.

26Our sales and marketing efforts to drive growth may be ineffective as we try to win new deals either directly with end-user customers, or indirectly through business partners, distributors, system integrators or value-add resellers. These ineffective efforts may cause us to miss our planned growth and harm our financial results.

~~Furthermore, a~~We ~~supplier~~outsource ~~may~~our ~~discontinue~~product ~~production~~manufacturing ~~of a particular part for any number of reasons, which may require us to purchase a large inventory~~and ofare ~~such~~dependent ~~discontinued~~on ~~parts in order to ensure that a continuous supply of such parts remains available to~~ our ~~customers.~~key ~~Such “end-of-life” parts purchases could result in significant expenditures by us in a particular period~~manufacturers, and ~~ultimately any unused parts may result in a significant inventory write-off, either of which could have an adverse impact~~ on our ~~financial~~component ~~condition~~ and ~~results~~OEM ofsuppliers. ~~operations for~~We ~~the~~are ~~applicable~~susceptible ~~periods.~~to ~~Additionally~~problems, inand ~~case~~have ~~any~~encountered ~~part embedded~~ problems in ~~our~~the ~~products is no longer available~~past, ~~we may be required to redesign such product~~ in ~~order~~connection towith ~~enable~~procurement, ~~usage~~decreasing ofquality, ~~alternative parts~~reliability, ~~or be forced to announce end-of-life of such product. Refer to “Management’s Discussion~~ and ~~Analysis of Financial Condition and Results of Operations,” for additional information on supply constraints related to the COVID-19 pandemic~~protectability.

~~Demand~~Our devices are assembled ~~for~~by using fully manufactured parts, the manufacturing of which has been fully outsourced, and we have no direct control over the manufacturing processes of our products. We outsource procurement and ~~solutions~~manufacturing ~~may~~activities ~~not~~to ~~grow~~certain orkey ~~may~~manufacturers ~~decline~~and certain component and OEM suppliers.

We also purchase unique components ~~may~~and ~~experience~~products afrom ~~reduction~~suppliers inwho ~~customer~~are ~~demand~~exclusively asable ato ~~result~~fulfill ofsuch ~~either~~supply. ofWe ~~competition~~may ~~from~~lose ~~other~~some ~~companies~~or all of these relationships, ~~technological~~or ~~changes~~have ~~required~~a bymaterial ~~our~~weakness ~~target~~in ~~markets~~negotiating favorable terms, or ~~disruptions~~such unique components have or may be declared end-of-life ~~existing~~which ~~and~~may ~~new~~require ~~customer~~product design ~~relationships~~changes. Such ~~demand~~circumstances ~~reduction~~have ~~will~~hurt ~~prevent~~our usprofitability ~~from~~in ~~realizing~~the past, and may hurt our profitability in the future, and negatively affect our ~~planned~~ability ~~growth~~to deliver our product on time to customers.

Our lack of control in our ~~gross~~manufacturing ~~margins~~process due to the fact that we outsource our product manufacturing may ~~not~~increase quality or reliability risks and could limit our ability to quickly increase or decrease production rates. If necessary, switching production to other or additional subcontractors will entail a material cost and a temporary decrease in our productivity. Our manufacturing process has been disrupted in the past, and may ~~deteriorate~~be disrupted in the future, by various factors, including but not limited to shipping delays, bottlenecks resulting from raw materials specific shortages, quality problems or a decrease in quality, manpower shortages by the manufacturers or political unease that would trigger the closure of a facility or financial insolvency.

~~If our~~Furthermore, ~~gross~~a ~~margins~~supplier domay discontinue ~~not~~production ~~increase~~of asa ~~planned~~particular orpart ~~deteriorate,~~for itany ~~will~~number beof ~~harder~~reasons, ~~for~~which may require us to ~~achieve~~purchase ~~profitability,~~a ~~which~~large ~~could~~inventory ~~substantially impact~~of ~~our~~such ~~business~~discontinued parts ~~and~~in ~~ability~~order to ~~carry~~ensure onthat ~~operations~~a ifcontinuous ~~other~~supply ~~financing~~of ~~sources~~such ~~are~~parts ~~not~~remains ~~secured~~available onto ~~satisfactory~~our ~~terms~~customers. ~~Our~~Such ~~gross~~“end-of-life” ~~margins~~parts ~~may~~purchases ~~deteriorate~~could asresult in significant expenditures by us in a particular period, and ultimately any unused parts may result ofin a significant inventory write-off, either ~~reductions~~of which could have an adverse impact on our financial condition and results of ~~customers~~operations ~~price~~for ~~points~~the applicable periods. Additionally, ~~increases~~in case any part embedded in our products is no longer available, we may be required to redesign such product ~~component~~in order ~~and~~to ~~manufacturing~~enable ~~costs~~usage of alternative parts, or ~~unfavorable~~ ~~changes~~be inforced ~~the~~to ~~mix~~announce ~~between~~end-of-life ~~more~~of such product. Refer to “Management’s Discussion and ~~less~~Analysis ~~profitable~~of ~~customers~~Financial Condition and~~/or~~ ~~products~~Results of Operations,” for additional information on supply constraints related to the COVID-19 pandemic.

~~Changes in the price and availability of our raw materials and shipping could be detrimental to our profitability.~~31

~~Chipsets, electronic~~Demand ~~and~~for ~~mechanical components are significant components of~~ our products. ~~Over the past few years, the prices~~ and ~~availability~~solutions may ofnot ~~electronic~~grow ~~and~~or ~~mechanical components have been fluctuating and~~ may ~~continue to evolve unpredictably in the future~~decline.

~~Furthermore, our~~We ~~products~~may ~~are~~experience ~~assembled~~a ~~with various contract manufacturers located~~ reduction in ~~Israel~~customer ~~and~~demand inas ~~Taiwan.~~a Weresult ~~have experienced instances~~ of ~~limited supply~~either of ~~certain~~competition ~~raw~~from ~~materials~~other ~~and shipping delays~~companies, ~~which~~technological ~~resulted~~changes inrequired ~~extended~~by ~~lead~~our ~~times~~target markets, ~~increased~~or disruptions ~~shipping~~of ~~costs~~existing and ~~higher-than-usual backlogs.~~new ~~Economic~~customer ~~and~~relationships. ~~political~~Such ~~circumstances~~demand ~~may~~reduction ~~negatively~~will ~~affect~~prevent ~~the~~us ~~price~~from ~~and~~realizing ~~availability~~our ofplanned ~~raw materials, shipping and availability of assembly capacity of contract manufacturers~~growth.

~~We may~~Our ~~have~~gross ~~previously~~margins ~~agreed to set prices with our customers and any changes in supply costs~~ may ~~decrease~~not ~~our margin and directly affect profitability. If prices~~ increase, ~~supply interruptions, shipping delays,~~ or ~~shortages of materials continue to occur, it could have~~may ~~a negative effect on revenues and earnings~~deteriorate.

~~Expanding~~ If our ~~operations~~gross ~~and~~margins ~~marketing~~do ~~efforts~~not increase as planned or deteriorate, it will be harder for us to ~~meet~~achieve ~~expected~~profitability, ~~growth~~which ~~may~~could substantially impact ~~profitability~~our business and ability to carry on operations if ~~actual~~other ~~growth~~financing issources are not secured on satisfactory terms. Our gross margins may deteriorate as a result of either reductions of customers price points, increases in product component and manufacturing costs, or unfavorable changes in the mix between more and less ~~than~~profitable ~~expected~~customers and/or products.

~~To meet~~Changes ~~expected~~in ~~growth,~~the weprice ~~plan to expand operations, including additional hiring, advertising,~~ and ~~promotion.~~availability ~~If actual growth is less~~of ~~than expected, it would negatively impact~~ our ~~ability~~raw tomaterials ~~become~~and ~~profitable,~~shipping ~~which~~could ~~would require we raise additional capital if required, which may not~~ be ~~available~~detrimental onto ~~favorable terms, or at all, which would impact~~ our ~~ability to carry on operations~~profitability.

27Chipsets, electronic and mechanical components are significant components of our products. Over the past few years, the prices and availability of electronic and mechanical components have been fluctuating and may continue to evolve unpredictably in the future.

If Furthermore, our ~~internal~~products are ~~company~~assembled ~~cyber-security~~with ~~measures~~various ~~are~~contract ~~breached~~manufacturers orlocated ~~fail~~in Israel and ~~unauthorized~~in ~~access~~Taiwan. isWe ~~obtained~~have toexperienced ~~our~~instances ITof ~~environment,~~limited wesupply ~~may incur~~of ~~significant~~certain ~~losses~~raw ofmaterials ~~data~~and shipping delays, which weresulted ~~may~~in ~~not~~extended belead ~~able~~times, toincreased ~~recover~~shipping costs and higher-than-usual backlogs. Economic and political circumstances may ~~experience~~negatively aaffect ~~delay~~the inprice ~~our~~and ~~ability~~availability toof ~~conduct~~raw ~~our day-to-day~~materials, shipping and availability of assembly ~~business~~capacity of contract manufacturers.

~~As cybersecurity~~We ~~attacks~~may ~~continue~~have previously agreed to ~~evolve~~set ~~and~~prices ~~increase,~~with our ~~cyber-security~~customers ~~measures~~ and ~~our~~any ITchanges ~~environment~~in ~~could~~supply becosts ~~penetrated~~may ordecrease ~~compromised by~~our ~~internal~~margin and ~~external~~directly ~~parties’~~affect ~~intent~~profitability. onIf ~~extracting confidential information~~prices increase, ~~disrupting~~supply ~~business processes~~interruptions, ~~corrupting~~shipping ~~information~~delays, or ~~looking to force the Company to pay a ransom. These risks could arise from external parties~~ or ~~from~~shortages ~~acts or omissions~~ of ~~internal or~~materials ~~service~~continue ~~provider~~to ~~personnel.~~occur, ~~Such~~it ~~unauthorized access~~ could ~~disrupt~~have ~~our~~a ~~business~~negative ~~and~~effect ~~could~~on ~~result in the loss of assets, litigation,~~revenues ~~remediation costs, damage to our reputation~~ and ~~failure to retain or attract customers following such an event, which could adversely affect our business~~earnings.

~~Cyber attackers~~Expanding ~~update~~our ~~their~~operations ~~methods frequently. Sometimes cyberattacks are unrecognizable at the time of their occurrence~~ and ~~even~~marketing ~~long after.~~efforts In addition, cyber incidents can occur as a result of non-technological failures, like human error or malicious acts. In some cases, information security incidents at our customers or suppliers can also lead to ~~information~~meet ~~security~~expected ~~incidents~~growth inmay ~~our~~impact ~~information~~profitability ~~systems. For~~if ~~these~~actual ~~reasons,~~growth weis ~~cannot~~less ~~guarantee~~than ~~that the safeguards taken by us and the safeguards we will take in the future will completely prevent information security incidents or damages that may result from them as detailed above~~expected.

WeTo meet expected growth, ~~provide~~we ~~cyber~~plan ~~security~~to ~~features~~expand asoperations, ~~part~~including ofadditional ~~our~~hiring, ~~products~~advertising, ~~that~~and ~~may~~promotion. ~~not~~If ~~completely~~actual ~~prevent~~growth ~~information~~is ~~security~~less ~~breaches~~than expected, ~~and~~it would negatively impact our ~~products are~~ability ~~installed~~to inbecome ~~live~~profitable, ~~customer~~which ~~environments~~would ~~and~~require we raise additional capital if required, which may not be ~~compromised~~available on byfavorable ~~cyber-attacks~~terms, ~~and~~or ~~damage~~at ~~customer~~all, ~~assets~~which would impact our ability to carry on operations.

~~Our products~~If ~~include~~our internal company cyber-security ~~features~~measures are ~~such~~breached asor ~~data-traffic~~fail ~~encryption~~and ~~that~~unauthorized ~~are~~access ~~engineered~~is obtained to ~~protect~~ our ~~customers’~~IT ~~data and~~ environment., ~~Cyber-attacks~~we ~~become~~may ~~more~~incur ~~sophisticated~~significant ~~and~~losses ~~evolve~~of ~~quickly~~data, ~~and~~which ~~these~~we ~~features~~ may ~~fail to protect our customers as intended~~ ~~and~~not ~~fail~~be atable ~~preventing information security breaches. We plan~~ to ~~offer~~recover ~~new cyber security products~~ and ~~features~~may ~~which~~experience wea ~~will~~delay ~~either develop internally, obtain from partnerships with third-parties, or through acquisitions~~ in ~~the~~our ~~future.~~ability ~~These~~to ~~planned~~conduct ~~new cyber~~our day-~~security products and features may fail~~ to-day ~~protect our customers as intended and not prevent information security breaches~~business.

~~Our~~As cybersecurity attacks ~~products~~continue ~~are~~to ~~installed~~evolve inand ~~live~~increase, ~~customer~~our ~~network~~cyber-security ~~environments,~~measures and ~~may~~our IT environment could be ~~subject~~penetrated toor ~~cyber-attacks~~compromised ~~seeking~~by ~~access~~internal toand external ~~our~~parties’ ~~customers~~intent ~~networks~~on extracting confidential information, disrupting business processes, corrupting information, or looking ~~through~~to ~~our~~force ~~products~~the Company to pay a ransom. ~~Those~~These ~~cyber-attack~~risks ~~attempts~~could ~~may~~arise ~~take~~from ~~advantage~~external ofparties ~~vulnerabilities~~or from acts or omissions of internal or service provider personnel. Such unauthorized access could disrupt our ~~products~~business ~~within~~and could result in the ~~networks~~loss of assets, ~~vulnerabilities~~litigation, remediation costs, ~~that~~damage ~~may~~to beour ~~known~~reputation orand ~~unknown~~failure to usretain or attract customers following such an event, which could adversely affect our business.

~~Our~~Cyber attackers update their ~~products~~methods ~~and~~frequently. ~~services~~Sometimes ~~include~~cyberattacks ~~information~~are ~~systems~~unrecognizable ~~and~~at ~~digital~~the ~~data~~time of ~~various~~their ~~types,~~occurrence ~~including~~and ~~data~~even ~~kept~~long byafter. ~~our~~In ~~employees~~addition, ~~suppliers,~~cyber ~~and~~incidents ~~customers~~can ~~(and~~occur ~~their~~as ~~own~~a ~~customers).~~result Inof ~~recent years~~non-technological ~~there~~failures, ~~has~~like ~~been~~human anerror ~~increase~~or inmalicious ~~the~~acts. ~~frequency~~In ~~and~~some ~~severity~~cases, ofinformation ~~cyber incidents~~security ~~(including~~incidents ~~cybercrime).~~at ~~This~~our ~~trend~~customers isor ~~expected~~suppliers tocan ~~continue~~also inlead ~~the~~to ~~future~~information ~~and~~security ~~even~~incidents ~~worsen,~~in ~~despite~~our ~~all~~information ~~the~~systems. ~~defense~~For ~~mechanisms~~these ~~employed~~reasons, ~~against~~we ~~it.~~cannot ~~Cyber~~guarantee ~~events~~that ~~can~~the ~~lead~~safeguards totaken ~~unauthorized~~by ~~access,~~us ~~unauthorized~~and ~~disclosure,~~the ~~misuse,~~safeguards ~~disruption,~~we ~~deletion,~~will ortake ~~modification~~in of the ~~Company~~ ~~and~~future ~~its~~will ~~customer~~completely ~~assets,~~prevent ~~data,~~information security ~~and~~incidents ~~processing,~~or asdamages ~~well~~that asmay ~~disrupting day-to-day~~result ~~operations,~~from ~~computing services, and significantly slowing~~ them ~~down~~as ~~and~~detailed ~~even disabling information systems~~above.

In the event of damage caused by such cyber-attacks, we may suffer negative consequences, such as disruption of the Company’s and/or our customers’ activities, disruption of or disabling information systems, theft of our and/or our customers’ data, or damage to its reputation thus affecting clients’ trust in the Company, and potentially exposing it to lawsuits. In such cases, our business results may be severely harmed.32

We provide cyber security features as part ~~depend~~of onour ~~key~~products that may not completely prevent information ~~systems~~security breaches, and ~~third~~our products are installed in live customer environments and may be compromised by cyber-~~party~~attacks ~~service~~and ~~providers~~damage customer assets.

~~We depend~~Our onproducts ~~key~~include ~~information~~cyber-security features ~~systems~~such toas ~~transact~~data-traffic ~~our~~encryption ~~business~~that ~~accurately and efficiently. These systems and services~~ are ~~vulnerable~~engineered to ~~interruptions or~~protect ~~other~~our ~~failures~~customers’ ~~resulting~~data ~~from,~~and ~~among~~environment. ~~other things, natural disasters, terrorist~~ Cyber-attacks, ~~software,~~become more ~~equipment~~sophisticated orand ~~digital~~evolve ~~failures~~quickly, ~~processing~~ ~~errors,~~and ~~computer~~these ~~viruses,~~features ~~other~~may ~~security~~fail ~~issues~~to orprotect ~~supplier~~our ~~defaults.~~customers ~~Security,~~as ~~backup,~~intended and ~~disaster~~fail ~~recovery~~at ~~measures~~preventing ~~may~~information ~~not~~security bebreaches. ~~adequate~~We orplan ~~implemented properly~~ to ~~avoid~~offer ~~such~~new ~~disruptions~~cyber orsecurity ~~failures.~~products ~~Any~~and ~~disruption~~features orwhich ~~failure~~we ofwill ~~these~~either ~~systems~~develop ~~or services could cause substantial errors~~internally, ~~processing~~obtain ~~inefficiencies,~~from ~~security~~partnerships with ~~breaches~~third-parties, ~~inability~~or tothrough ~~use~~acquisitions in the ~~systems~~future. orThese ~~process~~planned ~~transactions,~~new ~~loss of~~cyber-security ~~customers~~products orand ~~other~~features ~~business~~may ~~disruptions,~~fail ~~all~~to ofprotect our ~~which~~customers ~~could~~as ~~negatively~~intended ~~affect~~and ~~our~~not ~~business~~prevent ~~and~~information ~~financial~~security ~~performance~~breaches.

28Our products are installed in live customer network environments, and may be subject to cyber-attacks seeking access to our customers networks through our products. Those cyber-attack attempts may take advantage of vulnerabilities of our products within the networks, vulnerabilities that may be known or unknown to us.

~~We depend~~Our onproducts ~~our~~and ~~management~~services include ~~team~~information systems and ~~other~~digital ~~key~~data of various types, including data kept by our employees, suppliers, and customers (and their own customers). In recent years there has been an increase in the ~~loss~~frequency and severity of ~~one~~cyber incidents (including cybercrime). This trend is expected to continue in the future and even worsen, despite all the defense mechanisms employed against it. Cyber events can lead to unauthorized access, unauthorized disclosure, misuse, disruption, deletion, or ~~more~~modification of ~~these~~the ~~employees~~Company orand anits ~~inability~~customer assets, data, and processing, as well as disrupting day-to-day ~~attract~~operations, computing services, and ~~retain~~ ~~highly~~significantly ~~skilled~~slowing ~~employees~~them ~~could~~down and ~~adversely~~even ~~affect~~disabling ~~our~~information ~~business~~systems.

~~Our future~~In ~~success~~the ~~depends,~~event inof ~~part,~~damage oncaused by ~~our~~such ~~ability~~cyber-attacks, towe ~~continue~~may tosuffer ~~attract~~negative ~~and~~consequences, ~~retain~~such ~~highly~~as ~~skilled~~disruption ~~personnel. The loss~~ of the ~~services of~~Company’s ~~any~~and/or of our ~~key~~customers’ ~~personnel~~activities, disruption ~~the~~of ~~inability to attract~~ or ~~retain~~disabling ~~qualified~~information ~~personnel~~systems, ortheft ~~delays~~of inour ~~hiring~~and/or ~~required~~our ~~personnel~~customers’ data, ~~particularly in~~or ~~engineering~~damage ~~and~~to ~~sales,~~its ~~may~~reputation ~~seriously~~thus ~~and~~affecting clients’ ~~adversely~~trust ~~affect~~in ~~our~~the ~~business~~Company, ~~financial~~and ~~condition~~potentially ~~and~~exposing ~~results~~it ofto ~~operations~~lawsuits. ~~Although~~In ~~we have~~such ~~entered~~cases, ~~into employment or consulting agreements with~~ our ~~personnel,~~business ~~their~~results ~~employment~~may isbe ~~generally~~severely ~~for no specific duration~~harmed.

~~Our future~~We ~~performance~~depend ~~also depends~~ on ~~the~~key ~~continued~~information ~~services~~systems and ~~continuing contributions of our senior management team, which includes~~ ~~Tuvia~~third-party ~~Barlev,~~service ~~our Chief Executive Officer, to execute on our business plan and to identify and pursue new opportunities and product innovations~~providers. The loss of services of our senior management team, particularly our Chief Executive Officer, could significantly delay or prevent the achievement of our development and strategic objectives, which could adversely affect our business, financial condition and results of operations.

We depend on key information systems to transact our business accurately and efficiently. These systems and services are vulnerable to interruptions or other failures resulting from, among other things, natural disasters, terrorist attacks, software, equipment or digital failures, processing errors, computer viruses, other security issues or supplier defaults. Security, backup, and disaster recovery measures may ~~face~~not be adequate or implemented properly to avoid such disruptions or failures. Any disruption or failure of these systems or services could cause substantial errors, processing inefficiencies, security breaches, inability to use the ~~effects~~systems or process transactions, loss of ~~increased~~customers ~~competition~~or ~~and~~other business ~~rapid~~disruptions, ~~technological~~all ~~changes~~of which could negatively affect our business and financial performance.

~~The industry~~We independ ~~which~~on weour ~~are~~management ~~engaged~~team ~~is subject to rapid~~ and ~~significant technological change. There can be no assurance that our systems~~other ~~can~~key ~~be upgraded to meet future innovations which will be required to meet our customer’s requirements~~employees, orand ~~that~~the ~~new~~loss ~~technologies will~~of beone ~~adopted successfully by us,~~ or ~~existing~~more ~~technologies~~of ~~will~~these ~~not~~employees ~~be improved, which would render the offerings obsolete~~ or ~~non-competitive. Companies~~an weinability ~~compete~~to ~~with~~attract ~~enjoy~~and ~~significant~~retain ~~competitive~~highly ~~advantages,~~skilled ~~including~~employees ~~greater~~could ~~name recognition; greater financial, technical,~~adversely ~~and~~affect ~~service~~our ~~resources; established networks; additional product offerings; and greater resources for product development and sales and marketing~~business.

~~There can~~Our befuture nosuccess ~~assurance~~depends, in ~~that other established networking technology companies~~part, ~~any~~on ofour ~~which~~ability ~~would~~to ~~likely~~continue ~~have~~to ~~greater~~attract ~~resources~~and ~~than~~retain ~~us, will~~highly ~~not~~skilled ~~enter the market~~personnel. InThe ~~addition,~~loss ~~new~~of ~~competitors may enter~~ the ~~marketplace~~services ~~and/or~~of ~~begin~~any ~~offering~~of ~~networking~~our ~~technology~~key ~~products~~personnel, ~~and~~the ~~solutions~~inability ~~and in channels similar~~ to attract or ~~competing~~retain ~~with~~qualified ~~ours.~~personnel, ~~Such~~or ~~competition~~delays ~~may~~in ~~reduce~~hiring ~~demand~~required ~~for~~personnel, ~~our~~particularly ~~products~~in engineering and ~~impact the growth~~sales, ~~prospects~~may seriously and ~~ability~~adversely toaffect ~~achieve~~our ~~profitability~~business, ~~which~~financial ~~may~~condition ~~require~~and usresults toof ~~raise~~operations. ~~new~~Although ~~capital,~~we ~~which~~have ~~may~~entered ~~not~~into ~~be available on favorable terms,~~employment or atconsulting ~~all,~~agreements ~~and~~with ~~that~~our ~~would~~personnel, ~~impair~~their ~~our~~employment ~~ability~~is togenerally ~~carry~~for onno ~~operations~~specific duration.

WeOur future performance also ~~cannot~~depends ~~assure~~on ~~you~~the ~~that~~continued weservices ~~will~~and becontinuing ~~able~~contributions of our senior management team, which includes Tuvia Barlev, our Chief Executive Officer, to ~~compete~~execute ~~successfully~~on ~~against~~our ~~any~~business ofplan ~~these~~and ~~competitors~~to identify and pursue new opportunities and product innovations. ~~Our~~The ~~failure~~loss toof ~~compete~~services ~~successfully~~of ~~with~~our senior management team, particularly our ~~competitors~~Chief Executive Officer, could ~~harm~~significantly delay or prevent the achievement of our development and strategic objectives, which could adversely affect our business, financial condition and results of operations.

~~We are dependent on skilled human capital.~~33

~~Our ability~~We tomay ~~innovate~~face ~~and execute its business plans is dependent on~~ the ~~ability~~effects ~~to hire, replace, and train skilled personnel. The employment market suffers from shortages~~ of ~~candidates,~~increased competition and ~~such~~rapid ~~shortages~~technological ~~may continue in future years, causing delays and preventing us from executing our plans~~changes.

~~Our results~~The ofindustry ~~operations~~in which we are ~~likely~~engaged is subject to ~~fluctuate~~rapid ~~from~~and ~~quarter~~significant technological change. There can be no assurance that our systems can be upgraded to ~~quarter~~meet future ~~and~~innovations ~~year~~which will be required to ~~year~~meet our customer’s requirements, ~~which~~or ~~could~~that ~~adversely~~new ~~affect~~technologies will be adopted successfully by us, or existing technologies will not be improved, which would render the ~~trading~~offerings ~~price~~obsolete or non-competitive. Companies we compete ofwith ~~our~~enjoy ~~common~~significant ~~stock~~competitive advantages, including greater name recognition; greater financial, technical, and service resources; established networks; additional product offerings; and greater resources for product development and sales and marketing.

~~Our results~~There ofcan ~~operations,~~be ~~including~~no ~~our~~assurance that ~~revenue,~~other ~~cost~~established ofnetworking ~~revenue~~technology companies, ~~gross~~any ~~margin,~~of ~~operating~~which ~~expenses,~~would ~~cash~~likely ~~flow,~~have ~~and~~greater ~~deferred~~resources ~~revenue~~than us, ~~have fluctuated~~will ~~from~~not ~~quarter~~enter tothe ~~quarter~~market. In ~~and~~addition, ~~year~~new tocompetitors ~~year~~may inenter the ~~past~~marketplace and/or ~~may~~begin ~~continue~~offering tonetworking ~~vary~~technology ~~significantly~~products inand ~~the~~solutions ~~future~~and soin ~~that~~channels similar ~~period-~~to~~-period comparisons~~ ofor ~~our~~competing ~~results~~with ofours. ~~operations~~Such competition may ~~not~~reduce bedemand ~~meaningful.~~for ~~Accordingly,~~ our ~~financial~~products ~~results~~and inimpact ~~any~~the ~~one~~growth ~~quarter~~prospects ~~should~~and ~~not~~ability ~~be relied~~to ~~upon~~achieve asprofitability, ~~indicative~~which ~~of future performance. Our quarterly financial results~~ may ~~fluctuate~~require asus ato ~~result~~raise ofnew ~~a variety of factors~~capital, ~~many of~~ which ~~are~~may ~~outside~~not ofbe ~~our~~available ~~control,~~on ~~may~~favorable beterms, ~~difficult~~or toat ~~predict~~all, and ~~may~~that ~~not fully reflect the underlying performance of our business.~~would ~~Factors~~impair ~~that may cause fluctuations in~~ our ~~quarterly~~ability ~~financial~~to ~~results~~carry ~~include:~~on operations.

●We ~~our~~cannot ~~ability~~assure you that we will be able to ~~attract~~compete ~~new~~successfully ~~customers~~against ~~and~~any ~~increase~~of ~~revenue~~these ~~from~~competitors. Our failure to compete successfully with our ~~existing~~competitors ~~customers;~~could harm our business.

●We ~~the~~are ~~loss~~dependent ofon ~~existing~~skilled ~~customers;~~human capital.

●Our ~~customer~~ability ~~satisfaction~~to ~~with~~innovate ~~our~~and execute ~~products~~its business plans is dependent on the ability to hire, ~~solutions~~replace, ~~platform~~and ~~capabilities~~train skilled personnel. The employment market suffers from shortages of candidates, and ~~customer~~such ~~support;~~shortages may continue in future years, causing delays and preventing us from executing our plans.

●Our ~~mergers~~results of operations are likely to fluctuate from quarter to quarter and ~~acquisitions~~year orto ~~other~~year, ~~factors~~which ~~resulting~~could inadversely affect the ~~consolidation~~trading price of our ~~customer~~common ~~base;~~stock.

29Our results of operations, including our revenue, cost of revenue, gross margin, operating expenses, cash flow, and deferred revenue, have fluctuated from quarter to quarter and year to year in the past and may continue to vary significantly in the future so that period-to-period comparisons of our results of operations may not be meaningful. Accordingly, our financial results in any one quarter should not be relied upon as indicative of future performance. Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, may be difficult to predict, and may not fully reflect the underlying performance of our business. Factors that may cause fluctuations in our quarterly financial results include:

● our ability to attract new customers and increase revenue from our existing customers; ● the loss of existing customers; ● customer satisfaction with our products, solutions, platform capabilities and customer support; ● mergers and acquisitions or other factors resulting in the consolidation of our customer base; ● mix of our revenue; ● our ability to gain new partners and retain existing partners; ● fluctuations in share-based compensation expense; ● decisions by potential customers to purchase competing offerings or develop in-house technologies and solutions as alternatives to our offerings; ● changes in the spending patterns of our customers;

~~● our ability to gain new partners and retain existing partners;~~34

● ~~fluctuations~~the amount and timing of operating expenses related to the maintenance and expansion of our business and operations, including investments in ~~share~~research and development, sales and marketing, and general and administrative resources; ● network outages; ● developments or disputes concerning our intellectual property or proprietary rights, our products and services, or third-~~based~~party ~~compensation~~intellectual ~~expense~~property or proprietary rights; ● negative publicity about our company, our offerings or our partners, including as a result of actual or perceived breaches of, or failures relating to, privacy, data protection or data security; ● the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; ● general economic, industry, and market conditions; ● the impact of pandemics, such as the COVID-19 pandemic, or any other, epidemic, outbreak of infectious disease or other global health crises on our business, the businesses of our customers and partners and general economic conditions; ● the impact of political uncertainty or unrest; ● changes in our pricing policies or those of our competitors; ● fluctuations in the growth rate of the markets that our offerings address; ● seasonality in the underlying businesses of our customers, including budgeting cycles, purchasing practices and usage patterns; ● the business strengths or weakness of our customers; ● our ability to collect timely on invoices or receivables; ● the cost and potential outcomes of future litigation or other disputes; ● future accounting pronouncements or changes in our accounting policies; ● our overall effective tax rate, including impacts caused by any reorganization in our corporate tax structure and any new legislation or regulatory developments; ● our ability to successfully expand our business in the United States and internationally; ● fluctuations in foreign currency exchange rates; and ● the timing and success of new products and solutions introduced by us or our competitors, or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or partners.

~~● decisions by potential customers to purchase competing offerings or develop in-house technologies and solutions as alternatives to our offerings;~~35

●The ~~changes~~impact inof one or more of the ~~spending~~foregoing ~~patterns~~or other factors may cause our results of operations to vary significantly. Such fluctuations make forecasting more difficult and could cause us to fail to meet the expectations of investors and securities analysts, which could cause the trading price of our ~~customers;~~common stock to fall substantially, resulting in the loss of all or part of your investment, and subject us to costly lawsuits, including securities class action suits.

●The ~~the~~loss ~~amount~~of ~~and~~one ~~timing~~or more of ~~operating~~our ~~expenses~~significant customers, ~~related~~or toany ~~the~~other ~~maintenance~~reduction ~~and~~in ~~expansion~~the amount of ~~our~~revenue ~~business~~we ~~and~~derive ~~operations,~~from ~~including~~any ~~investments~~such incustomer, ~~research~~would ~~and~~adversely ~~development,~~affect ~~sales~~our ~~and~~business, ~~marketing~~financial condition, ~~and~~results ~~general~~of operations and ~~administrative~~growth ~~resources;~~prospects.

●Our ~~network~~future ~~outages;~~success is dependent on our ability to establish and maintain successful relationships with a diverse set of customers.

●We ~~developments~~currently orderive ~~disputes~~a ~~concerning~~significant portion of our ~~intellectual~~revenue ~~property~~from ora ~~proprietary~~limited ~~rights,~~number of our ~~products~~customers. For the years ended December 31, 2025 and ~~services~~December 31, or2024, our ~~third-party~~top ~~intellectual~~ten ~~property~~customers orin ~~proprietary~~the ~~rights;~~aggregate accounted for approximately 62% and 74% of our revenues.

●We ~~negative~~expect ~~publicity~~to ~~about~~continue to derive a significant portion of our ~~company~~revenue from a limited number of customers in the future and, in some cases, the portion of our ~~offerings~~revenue attributable to individual customers may increase. The loss of one or more significant customers or a reduction in the amount of revenue we derive from any such customer could significantly and adversely affect our ~~partners~~business, ~~including~~financial ascondition aand ~~result~~results of ~~actual~~operations. Customers may choose not to renew their contracts or ~~perceived~~may ~~breaches~~otherwise reduce the breadth of, orthe ~~failures~~offerings ~~relating~~which they purchase for any number of reasons. We are also subject to, ~~privacy,~~the ~~data~~risk ~~protection~~that any such customer will experience financial difficulties that prevent them from making payments to us on a timely basis or ~~data~~at ~~security;~~all.

●Our ~~the~~business, ~~timing~~operating ofresults ~~expenses~~and ~~related~~growth rates tomay ~~the~~be ~~development~~adversely affected by current or ~~acquisition~~future ofunfavorable ~~technologies~~economic orand ~~businesses~~market conditions and ~~potential~~adverse ~~future~~developments ~~charges~~with ~~for~~respect to ~~impairment~~financial ofinstitutions ~~goodwill~~and ~~from~~associated ~~acquired~~liquidity ~~companies;~~risk.

●Our ~~general~~business depends on the economic health of the global economies. If the conditions in the global economies remain uncertain or continue to be volatile, ~~industry~~or if they deteriorate, including as a result of the impact of military conflict, such as the security situation in the Middle East, Russia and Ukraine, terrorism or other geopolitical events, our business, operating results and financial condition may be materially adversely affected. Economic weakness, inflation and increases in interest rates, limited availability of credit, liquidity shortages and constrained capital spending have at times in the past resulted, and may in the future result, in challenging and delayed sales cycles, slower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods, which could result in an inability to satisfy demand for our products and a loss of market ~~conditions;~~share.

●Our operations would be particularly vulnerable to potential interruptions in the ~~impact~~supply of ~~pandemics~~certain critical materials and metals, such as neon gas and palladium, which are used in semiconductor manufacturing. Any interruption to semiconductor chip supply could significantly impact our ability to receive the components ~~COVID~~and timely roll-19out ~~pandemic,~~of orour operations. Furthermore, any ~~other~~potential increase in geopolitical tensions in Asia, ~~epidemic~~particularly in the Taiwan Strait, ~~outbreak~~could ofalso ~~infectious~~significantly ~~disease~~disrupt orexisting ~~other~~semiconductor ~~global~~chip ~~health~~manufacturing ~~crises~~and onincrease ~~our~~the ~~business,~~prospect of an interruption to the ~~businesses~~semiconductor chip supply across the world. A significant portion of ~~our~~the ~~customers~~world’s ~~and~~semiconductor ~~partners~~manufacturing is in Taiwan, and ~~general~~similar ~~economic~~geopolitical ~~conditions;~~tensions there could create further supply chain disruptions, which could result in further delays for our products’ components.

●The world’s largest semiconductor chip manufacturer is located in Taiwan and a large part of equipment and materials, is manufactured in, and imported from, Taiwan. A setback to the ~~impact~~current state of ~~political~~relative ~~uncertainty~~peace orand ~~unrest;~~stability in the region could compromise existing semiconductor chip production and have downstream implications for our company. We are continuing to monitor the situation in Ukraine, the Middle East and globally, and assessing its potential impact on our business.

~~● changes in our pricing policies or those of our competitors;~~36

●In ~~fluctuations~~addition, increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, geopolitical developments and global supply chain disruptions, have caused, and may in the ~~growth~~future ~~rate~~cause, ofglobal economic uncertainty and uncertainty about the ~~markets~~interest ~~that~~rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequately respond to these risks could have a material adverse impact on our ~~offerings~~financial ~~address;~~condition, results of operations or cash flows.

●There ~~seasonality~~can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the ~~underlying~~current ~~businesses~~equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to alter our operating plans. In addition, there is a risk that one or more of our ~~customers~~service providers, ~~including~~financial institutions, ~~budgeting~~manufacturers, ~~cycles~~suppliers and other partners may be adversely affected by the foregoing risks, ~~purchasing~~which ~~practices~~could directly affect our ability to attain our operating goals on schedule and ~~usage~~on ~~patterns;~~budget.

●The effects of health pandemics, such as the ~~business~~global ~~strengths~~COVID-19 orpandemic ~~weakness~~could ofhave an adverse impact on our ~~customers;~~business, financial condition and results of operations.

●In ~~our~~December 2019, ~~ability~~a novel tocoronavirus ~~collect~~disease, ~~timely~~or COVID-19, was first reported and on ~~invoices~~March 11, or2020, ~~receivables;~~the World Health Organization characterized COVID-19 as a pandemic. The widespread health crisis is adversely affecting the broader economies, financial markets and overall demand environment for many of our products.

●Our operations and the ~~cost~~operations of our suppliers, channel partners and ~~potential~~customers ~~outcomes~~were disrupted to varying degrees by a range of ~~future~~external ~~litigation~~factors related to the COVID-19 pandemic, some of which are not within our control. Many governments imposed, and may yet impose, a wide range of restrictions on the physical movement of people in order to limit the spread of COVID-19. The COVID-19 pandemic has had, and likely will continue to have, an impact on the attendance and productivity of our employees, and those of our channel partners or ~~other~~customers, ~~disputes;~~resulting in negative impacts to our results of operations and overall financial performance. We suffered delays in realization of certain new orders from our customers, delay in testing of some of our new technologies in customer premises and difficulty conducting business development activities in an effective way (face-to-face). Additionally, COVID-19 has resulted in delays in non-residential construction, non-crisis-related IT purchases and project completion schedules in general, all of which can negatively impact our results in both current and future periods.

●The ~~future~~duration ~~accounting~~and ~~pronouncements~~extent of any future epidemic or ~~changes~~pandemic insuch as the COVID 19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of the virus, the extent and effectiveness of containment actions, the effects of measures enacted by policy makers and central banks around the globe, and the impact of these and other factors on our ~~accounting~~employees, ~~policies;~~customers, channel partners and suppliers. If we are not able to respond to and manage the impact of such events effectively, our business will be affected.

●Our ~~our~~performance ~~overall~~is ~~effective~~affected ~~tax rate, including impacts caused~~ by ~~any~~general ~~reorganization~~economic and inpolitical ~~our~~conditions ~~corporate tax structure~~ and ~~any~~taxation ~~new legislation or regulatory developments;~~policies.

●The success of our ~~ability~~activities may tobe ~~successfully~~affected ~~expand~~by ~~our~~general ~~business~~economic and market conditions, like interest rates, currency exchange rate fluctuations, availability of credit, inflation rates, economic uncertainty, changes in ~~the~~laws, ~~United~~and United States and ~~internationally;~~international political circumstances. Unexpected volatility or illiquidity could impair profitability or result in losses.

●We ~~fluctuations~~may inbe ~~foreign~~adversely ~~currency~~affected ~~exchange~~by ~~rates;~~the political and economic situation in the U.S., Europe and a number of countries in Asia.

30The U.S. communications market is directly affected by economic developments in the U.S. economy. The European and Asian communications market is similarly reliant on political and economic stability in those regions. Changing trends in these markets may lead to a decrease in investments and a delay in projects, which could harm our business. To reduce our sensitivity to market changes, we operate in a large number of different vertical markets and territories.

● the timing and success of new products and solutions introduced by us or our competitors, or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or partners.37

~~The impact~~Our ofbusiness ~~one or more of the foregoing or other factors may cause our results of operations to vary significantly. Such fluctuations make forecasting more difficult and~~ could ~~cause~~be usadversely ~~to fail to meet the expectations of investors and securities analysts, which could~~impacted ~~cause~~by ~~the~~changes ~~trading price of our common stock to fall substantially, resulting~~ in ~~the loss of all or part of your investment~~laws, regulations and ~~subject us~~tariffs related to ~~costly~~government ~~lawsuits, including securities class action suits~~contracts.

~~The~~Federal or state government ~~loss~~bodies ofor ~~one~~agencies have in the past adopted, and may in the future adopt, laws or ~~more~~regulations affecting the use of ~~our~~the ~~significant~~Internet ~~customers~~as a commercial medium. Legislators, regulators, or ~~any~~government ~~other~~bodies ~~reduction~~or agencies may also make legal or regulatory changes or interpret or apply existing laws or regulations that relate to government contracts. Changes in ~~the~~these ~~amount~~laws, ofregulations ~~revenue~~or weinterpretations ~~derive~~could ~~from~~require ~~any~~us ~~such~~to ~~customer~~modify our platform in order to comply with these changes, ~~would~~to incur substantial additional costs or divert resources that could otherwise be ~~adversely~~deployed ~~affect~~to grow our business, ~~financial~~or ~~condition,~~expose ~~results~~us ofto ~~operations~~unanticipated ~~and~~civil ~~growth~~or ~~prospects~~criminal liability, among other things.

~~Our future~~We ~~success~~are issubject ~~dependent~~to onlaws ~~our~~and ~~ability~~regulations worldwide, changes to ~~establish~~which could increase our costs and ~~maintain~~individually ~~successful~~or ~~relationships~~in ~~with~~the aaggregate ~~diverse~~adversely ~~set~~affect ofour ~~customers~~business.

We ~~currently~~ ~~derive~~are asubject ~~significant~~to ~~portion~~laws ofand regulations affecting our ~~revenue~~domestic ~~from~~and ainternational ~~limited~~operations in a number of ~~our customers~~areas. ~~For~~These ~~the~~U.S. ~~years~~and ~~ended~~foreign ~~December 31, 2024~~laws and ~~December 31,~~regulations affect ~~2023~~our activities including, ~~our~~but ~~top~~not ~~ten~~limited ~~customers~~to, in ~~the~~areas ~~aggregate~~of ~~accounted~~labor, ~~for~~health ~~approximately~~and ~~74%~~safety, tax, import and ~~66%~~export ofrequirements, ~~our~~foreign exchange ~~revenues~~controls and cash repatriation restrictions, data privacy requirements, anti-competition, and environmental.

~~We expect~~Compliance towith ~~continue~~these tolaws, regulations ~~derive~~and asimilar ~~significant~~requirements ~~portion~~may ofbe ~~our~~onerous ~~revenue~~and ~~from~~expensive, aand ~~limited~~they ~~number~~may ofbe ~~customers~~inconsistent infrom ~~the~~jurisdiction ~~future~~to ~~and~~jurisdiction, ~~in some cases,~~further increasing the ~~portion~~cost of ~~our~~compliance ~~revenue~~and ~~attributable~~doing tobusiness. ~~individual~~Any ~~customers~~such ~~may~~costs, ~~increase.~~which ~~The~~may ~~loss~~rise ofin ~~one~~the orfuture ~~more~~as ~~significant~~a ~~customers~~result orof achanges ~~reduction~~ in ~~the~~these ~~amount~~laws and ofregulations ~~revenue~~or wein ~~derive~~their ~~from~~interpretation, ~~any~~could ~~such~~individually ~~customer~~or ~~could~~in ~~significantly~~the ~~and~~aggregate ~~adversely~~make ~~affect~~ our ~~business,~~products ~~financial condition~~ and ~~results~~services ofless ~~operations.~~attractive ~~Customers~~to ~~may~~our customers, ~~choose~~delay ~~not~~the tointroduction ~~renew~~of ~~their~~new ~~contracts~~products orin ~~may~~one ~~otherwise~~or ~~reduce~~more ~~the~~regions, ~~breadth~~or ofcause ~~the~~us ~~offerings~~to ~~which they~~change ~~purchase~~or ~~for~~limit ~~any~~our ~~number~~business ~~of reasons~~practices. We ~~are~~have implemented ~~also~~policies ~~subject~~and procedures designed to ~~the~~ensure ~~risk~~compliance ~~that~~with ~~any~~applicable ~~such~~laws ~~customer~~and ~~will~~regulations, ~~experience~~but ~~financial~~there ~~difficulties~~can be no assurance that ~~prevent~~our ~~them~~employees, ~~from~~contractors, ~~making~~or ~~payments~~agents towill usnot onviolate asuch ~~timely~~laws ~~basis~~and regulations or atour ~~all~~policies and procedures.

~~Our business,~~Scrutiny ~~operating~~of ~~results~~sustainability and ~~growth~~environmental, social, ~~rates may be adversely affected by current or future unfavorable economic~~ and ~~market~~governance ~~conditions and~~(“ESG”) ~~adverse~~initiatives ~~developments~~could ~~with~~increase ~~respect~~our tocosts ~~financial~~or ~~institutions~~otherwise ~~and~~adversely ~~associated~~impact ~~liquidity~~our ~~risk~~business.

~~Our business~~Public ~~depends~~companies onhave ~~the~~recently faced ~~economic~~scrutiny ~~health~~related ofto ~~the~~ESG ~~global~~practices ~~economies.~~and Ifdisclosures ~~the~~from ~~conditions~~certain ininvestors, ~~the~~capital ~~global~~providers, ~~economies~~shareholder ~~remain~~advocacy ~~uncertain~~groups, ~~or continue~~other tomarket beparticipants ~~volatile,~~and orother ifstakeholder ~~they~~groups. ~~deteriorate,~~Such ~~including~~scrutiny asmay a result ofin ~~the~~increased ~~impact of military conflict~~costs, ~~such~~enhanced ascompliance ~~the~~or ~~security~~disclosure ~~situation~~obligations, or inother ~~the Middle~~adverse ~~East,~~impacts ~~Russia~~on ~~and~~our ~~Ukraine~~business, ~~terrorism~~financial condition or ~~other~~results ~~geopolitical~~of ~~events,~~operations. If our ~~business,~~ESG ~~operating~~practices ~~results~~ and ~~financial~~reporting ~~condition~~do ~~may~~not meet beinvestor ~~materially~~or ~~adversely~~other ~~affected.~~stakeholder ~~Economic weakness~~expectations, ~~inflation~~we ~~and~~may ~~increases~~be insubject ~~interest~~to ~~rates,~~investor ~~limited~~or ~~availability~~regulator ofengagement ~~credit,~~regarding ~~liquidity~~such matters. Our failure ~~shortages~~to ~~and~~comply ~~constrained~~with ~~capital~~any ~~spending~~applicable ~~have~~ESG atrules ~~times~~or inregulations ~~the~~could ~~past~~lead ~~resulted,~~to penalties and ~~may~~adversely inimpact ~~the~~our ~~future result~~reputation, inaccess ~~challenging~~to capital and ~~delayed sales~~employee ~~cycles,~~retention. ~~slower~~Such ~~adoption~~ESG ofmatters ~~new~~may ~~technologies~~also ~~and~~impact ~~increased~~our ~~price~~third-party ~~competition,~~contract manufacturers and ~~could~~other ~~negatively~~third ~~affect~~parties ~~our~~on ~~ability~~which towe ~~forecast future periods~~rely, which ~~could~~may ~~result~~augment inor ancause ~~inability~~additional toimpacts ~~satisfy~~on ~~demand for~~ our ~~products~~business, ~~and~~financial acondition, ~~loss~~or results of ~~market share~~operations.

~~Our operations~~Risks ~~would~~Related ~~be particularly vulnerable~~ to ~~potential~~Protecting ~~interruptions~~Our ~~in the supply of certain critical materials and metals, such as~~Technology ~~neon gas~~ and ~~palladium,~~Intellectual which are used in semiconductor manufacturing. Any interruption to semiconductor chip supply could significantly impact our ability to receive the components and timely roll-out of our operations. Furthermore, any potential increase in geopolitical tensions in Asia, particularly in the Taiwan Strait, could also significantly disrupt existing semiconductor chip manufacturing and increase the prospect of an interruption to the semiconductor chip supply across the world. A significant portion of the world’s semiconductor manufacturing is in Taiwan, and similar geopolitical tensions there could create further supply chain disruptions, which could result in further delays for our products’ components.Property

~~The world’s~~Claims ~~largest~~by ~~semiconductor~~others ~~chip~~that ~~manufacturer~~we isinfringe ~~located in Taiwan and a large part of equipment and materials, is manufactured~~their ~~in,~~intellectual ~~and~~property ~~imported~~could ~~from,~~force ~~Taiwan.~~us ~~A setback~~ to ~~the~~incur ~~current~~significant ~~state~~costs ofor ~~relative~~revise ~~peace and stability in~~ the ~~region~~way ~~could~~we ~~compromise~~conduct ~~existing semiconductor chip production and have downstream implications for~~ our ~~company. We are continuing to monitor the situation in Ukraine, the Middle East and globally, and assessing its potential impact on our~~ business.

31Our competitors protect their proprietary rights by means of patents, trade secrets, copyrights, trademarks and other intellectual property. We have not conducted an independent review of patents and other intellectual property issued to third parties, who may have patents or patent applications relating to our proprietary technology. We may receive letters from third parties alleging, or inquiring about, possible infringement, misappropriation, or violation of their intellectual property rights. Any party asserting that we infringe, misappropriate, or violate proprietary rights may force us to defend ourselves, and potentially our customers, against the alleged claim. These claims and any resulting lawsuit, if successful, could subject us to significant liability for damages or interruption or cessation of our operations. Any such claims or lawsuit could:

~~In addition,~~● ~~increases~~be intime-consuming ~~inflation raise our costs for commodities, labor, materials~~ and ~~services~~expensive ~~and other costs required~~ to ~~grow and operate our business~~defend, ~~and~~whether ~~failure~~meritorious toor ~~secure~~not; ~~these~~● onrequire ~~reasonable~~us ~~terms~~to ~~may~~stop ~~adversely~~providing ~~impact~~products ~~our~~or ~~financial~~services ~~condition.~~that ~~Additionally,~~use ~~increases in inflation, geopolitical developments and global supply chain disruptions, have caused, and may in~~ the ~~future~~technology ~~cause,~~that ~~global~~infringes ~~economic uncertainty and uncertainty about~~ the ~~interest~~other ~~rate~~party’s ~~environment,~~intellectual which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.property;

There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to alter our operating plans. In addition, there is a risk that one or more of our service providers, financial institutions, manufacturers, suppliers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and on budget.38

~~The effects~~● divert the attention of ~~health~~our ~~pandemics,~~technical ~~such~~and asmanagerial ~~the~~resources; ~~global~~● ~~COVID-19~~require ~~pandemic~~us ~~could~~to ~~have~~enter aninto ~~adverse~~royalty ~~impact~~or licensing agreements with third-parties, which may not be available on terms that we deem acceptable; ● prevent us from operating all or a portion of our business or force us to redesign our products, ~~financial~~services ~~condition~~or technology, which could be difficult and ~~results~~ expensive and may make the performance or value of ~~operations~~our product or service offerings less attractive; ● subject us to significant liability for damages or result in significant settlement payments; or ● require us to indemnify our customers.

~~In December 2019~~Furthermore, aduring ~~novel~~the ~~coronavirus~~course of ~~disease~~litigation, confidential information may be disclosed in the form of documents or ~~COVID-19~~testimony in connection with discovery requests, depositions ~~was~~or ~~first~~trial ~~reported~~testimony. Disclosure of our confidential information and onour ~~March 11,~~involvement ~~2020,~~in ~~the~~intellectual ~~World~~property ~~Health~~litigation ~~Organization~~could ~~characterized~~materially ~~COVID-19~~adversely asaffect aour ~~pandemic~~business. ~~The~~Some ~~widespread~~of ~~health~~our ~~crisis~~competitors ismay ~~adversely~~be ~~affecting~~able to sustain the ~~broader~~costs ~~economies~~of intellectual property litigation more effectively than we can because they have substantially greater resources. In addition, ~~financial~~any ~~markets~~litigation ~~and~~could significantly harm our ~~overall~~relationships ~~demand~~with ~~environment~~current ~~for~~and ~~many~~prospective customers. Any of the foregoing could disrupt our ~~products~~business and have a material adverse effect on our business, operating results and financial condition.

Our ~~operations~~ ~~and~~patents ~~the operations of our suppliers, channel partners~~ and ~~customers~~proprietary ~~were~~technology ~~disrupted to varying degrees by a range of external factors related to the COVID-19 pandemic, some of which are not within our control. Many governments imposed, and~~ may ~~yet impose, a wide~~ ~~range~~be ofchallenged restrictions on the physical movement of people in order to limit the spread of COVID-19. The COVID-19 pandemic has had, and likely will continue to have, an impact on the attendance and productivity of our employees, and those of our channel partners or ~~customers, resulting in negative impacts to our results of operations and overall financial performance~~disputed. We suffered delays in realization of certain new orders from our customers, delay in testing of some of our new technologies in customer premises and difficulty conducting business development activities in an effective way (face-to-face). Additionally, COVID-19 has resulted in delays in non-residential construction, non-crisis-related IT purchases and project completion schedules in general, all of which can negatively impact our results in both current and future periods.

~~The duration~~We hold certain patent and trade ~~extent~~secret rights relating to various aspects of ~~any~~our ~~future~~technologies, ~~epidemic~~which orare ~~pandemic~~of ~~such~~material asimportance to the ~~COVID~~Company 19and ~~pandemic~~its ~~depends~~future onprospects. Any ~~future~~patents ~~developments~~we ~~that~~have ~~cannot~~obtained or do obtain may be ~~accurately predicted~~challenged atby ~~this~~re-examination ~~time,~~or ~~such~~otherwise asinvalidated or eventually found unenforceable. Both the ~~severity~~patent application process and ~~transmission~~the ~~rate~~process of ~~the~~managing ~~virus,~~patent ~~the~~disputes ~~extent~~can be time consuming and ~~effectiveness~~expensive. ofCompetitors ~~containment~~may ~~actions,~~attempt ~~the~~to ~~effects~~challenge or invalidate our patents or may be able to design alternative techniques or devices that avoid infringement of ~~measures~~our ~~enacted~~patents or bydevelop ~~policy~~products ~~makers~~with ~~and~~functionalities ~~central~~that ~~banks~~are ~~around~~comparable ~~the~~to ~~globe,~~ours. ~~and~~In the ~~impact~~event ofa ~~these~~competitor ~~and~~infringes upon our patent or other ~~factors~~intellectual property onrights, litigation to enforce our ~~employees~~ intellectual property rights or to defend our patents against challenge, ~~customers~~even if successful, could ~~channel~~be ~~partners~~expensive and ~~suppliers.~~time Ifconsuming weand ~~are~~could ~~not~~require ~~able~~significant totime ~~respond~~and toattention ~~and~~from ~~manage~~our ~~the~~management. ~~impact~~We ofdo ~~such~~not ~~events~~have ~~effectively,~~sufficient resources to enforce our ~~business~~intellectual ~~will~~property berights ~~affected~~or to defend our patents against challenges from others.

~~Our~~Any failure to protect our intellectual ~~performance~~property isrights ~~affected~~could byimpair ~~general~~our ~~economic~~ability ~~and~~to ~~political~~protect ~~conditions~~our proprietary technology and ~~taxation~~our ~~policies~~brand.

~~The~~ Our success ofand ability to compete depend largely upon our ~~activities~~intellectual ~~may~~property. beTo ~~affected~~date, bywe have 16 registered patents in the United States; 3 registered patents in Europe, 1 registered patent in Mexico, 1 registered patent in Indonesia, one pending application in the United States and one pending application in Europe, all of which in the general ~~economic~~area of high-speed carrier class Ethernet service and ~~market~~transport ~~conditions~~over bonded VDSL2, G.SHDSL ~~like~~as ~~interest~~well ~~rates~~as Fiber covering various aspects of our technology. We take reasonable steps to protect our intellectual property, ~~currency~~especially when ~~exchange~~working ~~rate~~with ~~fluctuations~~third parties. However, the steps we take to protect our intellectual property rights may be inadequate. For example, ~~availability~~other ofparties, ~~credit~~including our competitors, ~~inflation~~may ~~rates~~independently develop similar technology, ~~economic~~duplicate ~~uncertainty~~our services, ~~changes~~or design around our intellectual property and, in ~~laws~~such cases, ~~and~~we ~~United States~~may ~~and~~not ~~international~~be ~~political~~able ~~circumstances~~to assert our intellectual property rights against such parties. Further, our contractual ~~Unexpected~~arrangements ~~volatility~~may ornot ~~illiquidity~~effectively ~~could~~prevent ~~impair~~disclosure ~~profitability~~of our confidential information or ~~result~~provide an adequate remedy in ~~losses~~the event of unauthorized disclosure of our confidential information, and we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights.

3239

We make business decisions about when to seek patent protection for a particular technology and when to rely upon trade secret protection, and the approach we select may ultimately prove to be ~~adversely~~inadequate. ~~affected~~Even byin cases where we seek patent protection, there is no assurance that the ~~political~~resulting patents will effectively protect every significant feature of our technology or provide us with any competitive advantages. Moreover, we cannot guarantee that any of our pending patent application will issue or be approved. The United States Patent and ~~economic~~Trademark ~~situation~~Office and various foreign governmental patent agencies also require compliance with a number of procedurals, documentary, fee payment, and other similar provisions during the patent application process and after a patent has issued. There are situations in which noncompliance can result in abandonment or lapse of the Upatent, or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.S If this occurs, our competitors might be able to enter the market, which would have a material adverse effect on our business. Effective trademark, ~~Europe~~copyright, patent, and atrade ~~number~~secret ofprotection may not be available in every country in which we conduct business. Further, intellectual property law, including statutory and case law, in the United States and other countries, is constantly developing, and any changes in ~~Asia~~the law could make it harder for us to enforce our rights.

~~The~~In order to protect our intellectual Uproperty rights, we may be required to spend significant resources to monitor and protect these rights.~~S. communications~~ ~~market~~Litigation isbrought ~~directly~~to ~~affected~~protect and byenforce ~~economic~~our ~~developments~~intellectual property rights could be costly, time-consuming, and distracting to management and could result in the Uimpairment or loss of portions of our intellectual property.S Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights. ~~economy.~~ ~~The~~An ~~European~~adverse determination of any litigation proceedings could put our intellectual property at risk of being invalidated or interpreted narrowly and ~~Asian~~could ~~communications~~put our ~~market~~related pending patent applications at risk of not issuing. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation particularly in the US, there is ~~similarly~~a ~~reliant~~risk onthat ~~political~~some ~~and~~of ~~economic~~our ~~stability~~confidential or sensitive information could be compromised by disclosure in ~~those~~the ~~regions~~event of litigation. ~~Changing~~In ~~trends~~addition, induring the course of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these ~~markets~~results to ~~may~~be ~~lead~~negative, it could have a substantial adverse effect on the price of our common stock. Negative publicity related to a ~~decrease~~decision inby ~~investments~~us ~~and~~to initiate such enforcement actions against a ~~delay~~client inor ~~projects~~former client, ~~which~~regardless ~~could~~of its accuracy, may adversely impact our other client relationships or prospective client relationships, harm our brand and business., Toand ~~reduce~~could cause the market price of our ~~sensitivity~~common stock to ~~market~~decline. ~~changes~~Our failure to secure, weprotect, ~~operate~~and inenforce aour ~~large number~~intellectual ofproperty ~~different~~rights ~~vertical~~could ~~markets~~adversely affect our brand and ~~territories~~our business.

~~Our business~~The ~~could~~lives beof ~~adversely~~our ~~impacted~~patents bymay ~~changes~~not inbe ~~laws,~~sufficient to ~~regulations~~effectively ~~and~~protect ~~tariffs~~our ~~related~~products toand ~~government contracts~~business.

~~Federal or~~Patents ~~state~~have ~~government~~a ~~bodies~~limited orlifespan. ~~agencies~~In ~~have~~the inUnited ~~the~~States, ~~past~~if ~~adopted~~all maintenance fees are paid timely, ~~and~~the natural expiration of a patent is generally 20 years after its first effective nonprovisional filing date. Although various extensions may inbe available, the ~~future~~life ~~adopt~~of a patent, ~~laws~~and orthe ~~regulations~~protection ~~affecting~~it affords, is limited. Given the ~~use~~amount of time required for the ~~Internet~~development, astesting aand ~~commercial~~regulatory ~~medium.~~review ~~Legislators,~~of ~~regulators~~new product candidates, orpatents ~~government~~protecting ~~bodies~~such candidates might expire before or shortly ~~agencies~~after ~~may~~such ~~also~~product ~~make~~candidates ~~legal~~are orcommercialized. ~~regulatory~~Even ~~changes~~if patents covering our product candidates are obtained, once the patent orlife ~~interpret~~has orexpired ~~apply~~for ~~existing~~a ~~laws~~product, orwe ~~regulations~~may ~~that~~be ~~relate~~open to ~~government~~competition ~~contracts.~~from ~~Changes~~biosimilar inor ~~these~~generic ~~laws~~medications. As a result, ~~regulations~~our orpatent ~~interpretations~~portfolio ~~could~~may ~~require~~not provide us with sufficient rights to ~~modify~~exclude ~~our~~others ~~platform~~from incommercializing ~~order~~product candidates similar or identical to ~~comply~~ours. ~~with~~Our patents ~~these~~issued ~~changes~~as of March 20, 2025 will expire on dates ranging up to ~~incur~~October ~~substantial~~31, ~~additional~~2038, ~~costs~~subject orto ~~divert~~any ~~resources that~~patent ~~could~~extensions ~~otherwise~~that may be available ~~deployed~~for tosuch ~~grow~~patents. ~~our~~More ~~business~~specifically, orthe ~~expose~~following uspatents towill ~~unanticipated~~expire ~~civil~~over orthe ~~criminal~~next ~~liability~~three years:, ~~among~~US7606315, ~~other~~US7613235, ~~things~~EP1943827, EP3459181, GB2556826, MX279453, US7587042, IDP0030744.

WeIn addition, although upon ~~are~~issuance ~~subject~~in the United States a patent’s life can be increased based on certain delays caused by the USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution. A patent term extension based on regulatory delay may be available in the United States. However, only a single patent can be extended for each marketing approval, and any patent can be extended only once, for a single product. Moreover, the scope of protection during the period of the patent term extension does not extend to the full scope of the claim, but instead only to the scope of the product as approved. Laws governing analogous patent term extensions in foreign jurisdictions vary widely, as do laws ~~and~~governing ~~regulations~~the ~~worldwide~~ability to obtain multiple patents from a single patent family. Additionally, ~~changes~~we may not receive an extension if we fail to exercise due diligence during the testing phase or regulatory review process, apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which ~~could~~we ~~increase~~will have the right to exclusively market our ~~costs~~product will be shortened and ~~individually~~our orcompetitors may obtain approval of competing products following our patent expiration and may take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to launch their product earlier than might otherwise be the ~~aggregate~~case, ~~adversely~~and our revenue ~~affect~~could be reduced, possibly materially. If we do not have sufficient patent life to protect our products, our business and results of operations will be adversely affected.

We are subject to laws and regulations affecting our domestic and international operations in a number of areas. These U.S. and foreign laws and regulations affect our activities including, but not limited to, in areas of labor, health and safety, tax, import and export requirements, foreign exchange controls and cash repatriation restrictions, data privacy requirements, anti-competition, and environmental.40

~~Compliance with~~We ~~these laws, regulations and similar requirements~~ may benot ~~onerous and expensive, and they may~~ be ~~inconsistent~~able ~~from jurisdiction~~ to ~~jurisdiction,~~ ~~further~~adequately ~~increasing the cost of compliance and doing business. Any such costs, which may rise in the future as a result~~defend ofagainst ~~changes~~piracy ~~in these laws and regulations or in their interpretation, could individually or in the aggregate make our products and services less attractive to our customers, delay the introduction~~ of ~~new~~intellectual ~~products~~property in ~~one~~foreign ~~or more regions, or cause us to change or limit our business practices~~jurisdictions. We have implemented policies and procedures designed to ensure compliance with applicable laws and regulations, but there can be no assurance that our employees, contractors, or agents will not violate such laws and regulations or our policies and procedures.

~~Scrutiny~~Considerable research is being performed in countries outside of ~~sustainability~~the United States, and ~~environmental,~~a ~~social~~number of potential competitors are located in these countries. The laws protecting intellectual property in some of those countries may not provide adequate protection to prevent our competitors from misappropriating our intellectual property. Several of these potential competitors may be further along in the process of product development and also operate large, company-funded research and ~~governance~~development ~~(“ESG”)~~programs. ~~initiatives~~As ~~could~~a ~~increase~~result, our ~~costs~~competitors may develop more competitive or affordable ~~otherwise~~products, ~~adversely~~or achieve earlier patent protection or product commercialization than we are able to achieve. Competitive products ~~impact~~may ~~our~~render ~~business~~any products that we develop obsolete.

~~Public companies~~Risks ~~have~~Related ~~recently faced scrutiny related~~ to ~~ESG~~Managing ~~practices~~Our ~~and~~Business ~~disclosures from certain investors, capital providers, shareholder~~Operations ~~advocacy groups, other market participants and other stakeholder groups. Such scrutiny may result~~ in increased costs, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial condition or results of operations. If our ESG practices and reporting do not meet investor or other stakeholder expectations, we may be subject to investor or regulator engagement regarding such matters. Our failure to comply with any applicable ESG rules or regulations could lead to penalties and adversely impact our reputation, access to capital and employee retention. Such ESG matters may also impact our third-party contract manufacturers and other third parties on which we rely, which may augment or cause additional impacts on our business, financial condition, or results of operations.Israel

33Geo-Political conditions in the Middle East and in Israel, where our research and development facilities are located, may harm our operations.

~~Risks~~Our office where we conduct ~~Related~~our toresearch ~~Protecting~~and ~~Our~~development, ~~Technology~~operations, sales outside the Americas, and ~~Intellectual~~administration ~~Property~~activities, is located in Israel. Many of our employees are residents of Israel. Most of our officers and directors are residents of Israel. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries, and between Israel and the Hamas (an Islamist terror and political group in the Gaza Strip), Hezbollah (an Islamist terror and political group in Lebanon), and Iran, including its accomplices.

~~Claims~~In October 2023, Hamas terrorists byinfiltrated ~~others~~Israel’s ~~that~~southern weborder ~~infringe~~from ~~their~~the ~~intellectual~~Gaza ~~property~~Strip ~~could~~and ~~force~~conducted usa series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to ~~incur~~their ~~significant~~continued ~~costs~~rocket orand ~~revise~~terror attacks. On January 19, 2025, a temporary ceasefire went into effect. On March 18, 2025 the ceasefire ended ~~way~~with wethe ~~conduct~~resumption ~~our~~of ~~business~~the war between Israel and Hamas.

~~Our~~In addition, since the commencement ~~competitors~~of ~~protect~~these ~~their~~events, ~~proprietary~~there ~~rights~~have bybeen ~~means~~continued ofhostilities ~~patents,~~along ~~trade~~Israel’s ~~secrets,~~northern ~~copyrights,~~border ~~trademarks~~with Lebanon (with the Hezbollah terror organization) and on other ~~intellectual~~fronts ~~property.~~from various extremist groups in region, such as the Houthis in Yemen and various rebel militia groups in Syria and WeIraq. ~~have~~In ~~not~~October ~~conducted~~2024, anIsrael ~~independent~~began ~~review~~limited ofground ~~patents~~operations against Hezbollah in Lebanon, and ~~other~~in ~~intellectual~~November ~~property~~2024, ~~issued~~a toceasefire ~~third~~was ~~parties~~brokered between Israel and Hezbollah. In addition, ~~who~~Iran ~~may~~recently ~~have~~launched ~~patents~~direct attacks on Israel involving hundreds of drones and missiles and orhas ~~patent~~threatened ~~applications~~to ~~relating~~continue to ~~our~~attack ~~proprietary~~Israel ~~technology~~and is widely believed to be developing nuclear weapons. WeIran ~~may~~is ~~receive~~also ~~letters~~believed ~~from~~to ~~third~~have ~~parties~~a ~~alleging,~~strong influence oramong ~~inquiring~~extremist ~~about~~groups in the region, ~~possible~~ ~~infringement~~such as Hamas in Gaza, ~~misappropriation~~Hezbollah in Lebanon, orthe ~~violation~~Houthi ofmovement ~~their~~in ~~intellectual~~Yemen ~~property~~and ~~rights~~various rebel militia groups in Syria and Iraq. ~~Any~~These ~~party~~situations ~~asserting~~may ~~that~~potentially weescalate ~~infringe,~~in ~~misappropriate, or~~the ~~violate~~future ~~proprietary~~to ~~rights~~more violent events which may ~~force~~affect Israel and us. toAdditionally, ~~defend~~Yemeni ~~ourselves~~rebel group, ~~and~~the ~~potentially~~Houthis, ~~our~~launched ~~customers,~~series ~~against~~of attacks on global shipping routes in the ~~alleged~~Red ~~claim~~Sea, causing disruptions of supply chain. ~~These~~Such ~~claims and~~clashes ~~any~~may ~~resulting~~escalate ~~lawsuit,~~in ifthe ~~successful~~future into a greater regional conflict. In March 2026, ~~could~~hostilities ~~subject~~resumed along usIsrael’s tonorthern ~~significant~~border ~~liability~~with ~~for~~Lebanon, ~~damages~~when orHezbollah ~~interruption~~resumed orits ~~cessation~~attacks as part of ~~our~~a ~~operations~~broader regional escalation. In response, ~~Any~~Israel ~~such~~resumed ~~claims~~military oroperations ~~lawsuit~~against ~~could:~~Hezbollah in southern Lebanon.

●On beFebruary ~~time-consuming~~28, 2026, the United States and ~~expensive~~Israel tolaunched ~~defend~~coordinated military strikes against Iran, ~~whether~~including ~~meritorious~~attacks on strategic military infrastructure and leadership targets, with the stated aim of degrading Iran’s capacity to conduct or ~~not;~~support hostile operations against them. In response, Iran has fired missiles and drones toward population centers and military installations in Israel, Europe and neighboring countries in the Gulf region, and also launched counter-strikes against U.S. forces and allied bases throughout the Gulf region

~~● require us to stop providing products or services that use the technology that infringes the other party’s intellectual property;~~41

●As ~~divert~~of the ~~attention~~date of this annual report, we have not been impacted by any absences of personnel at our ~~technical~~service providers or counterparties located in Israel. Military service call ups that result in absences of personnel from us for an extended period of time may materially and ~~managerial~~adversely ~~resources;~~affect our business, prospects, financial condition and results of operations. As of the date of this annual report, we currently have 39 full-time employees, with 33 employees located in Israel and 6 employees located outside of Israel.

●Since ~~require~~the uswar broke out on October 7, 2023, our operations have not been adversely affected by this situation, and we have not experienced any material disruptions to ~~enter~~our ~~into~~operations. ~~royalty~~We orhave ~~licensing~~the ~~agreements~~ability, ~~with~~if ~~third-parties~~necessary, ~~which~~to ~~may~~shift our manufacturing from Israel to other countries where we have business partners, and we have not behad ~~available~~customers in Israel in the last year. However, the intensity and duration of Israel’s current war is difficult to predict at this stage, as are such war’s economic implications on ~~terms~~the ~~that~~Company’s webusiness ~~deem~~and ~~acceptable;~~operations and on Israel’s economy in general. If the ceasefires declared collapse or a new war commences or hostilities expand to other fronts, our operations may be adversely affected.

●Our ~~prevent~~commercial usinsurance ~~from~~does not ~~operating~~cover ~~all~~losses orthat may occur as a ~~portion~~result of ~~our~~events ~~business~~associated orwith ~~force~~the ussecurity tosituation ~~redesign~~in ~~our~~the ~~products,~~Middle ~~services~~East. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or ~~technology~~acts of war, ~~which~~we ~~could~~cannot beassure you ~~difficult~~that ~~and~~this ~~expensive~~government ~~and~~coverage ~~may~~will ~~make~~be ~~the~~maintained. ~~performance~~Any losses or ~~value~~damages ofincurred by us could have a material adverse effect on our business. ~~product~~Any armed conflicts or ~~service~~political ~~offerings~~instability ~~less~~in ~~attractive;~~the region would likely negatively affect business conditions and could harm our results of operations. To-date, we have received Israeli government war related support funding of approximately $100,000.

●The ~~subject~~continued uspolitical toinstability and ~~significant~~hostilities ~~liability~~between ~~for~~Israel ~~damages~~and its neighbors and any future armed conflict, terrorist activity or ~~result~~political instability in ~~significant~~the ~~settlement~~region could ~~payments;~~adversely affect our operations in Israel and adversely affect the market price of our shares of common stock. In addition, several organizations and countries may restrict doing business with Israel and Israeli companies have been and are today subjected to economic boycotts. The interruption or curtailment of trade between Israel and its present trading partners could adversely affect our business, financial condition and results of operations.

●Finally, ~~require~~political usconditions within Israel may affect our operations. Israel has held five general elections between 2019 and 2022, and prior to ~~indemnify~~October 2023, the Israeli government pursued extensive changes to Israel’s judicial system, which sparked extensive political debate and unrest. Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our ~~customers~~business, financial condition, results of operations and growth prospects.

~~Furthermore, during~~Actelis ~~the~~Israel ~~course~~received ofIsraeli ~~litigation,~~government grants ~~confidential~~for ~~information~~certain ~~may be disclosed in the form~~ of ~~documents~~our orresearch ~~testimony~~and indevelopment ~~connection with discovery requests~~activities, ~~depositions~~the orterms ~~trial~~of ~~testimony.~~which ~~Disclosure~~require ofus ~~our~~to ~~confidential~~pay ~~information~~royalties and ~~our~~satisfy ~~involvement~~specified conditions in ~~intellectual~~order ~~property~~to ~~litigation could~~manufacture ~~materially~~products ~~adversely~~and ~~affect~~transfer ~~our~~technologies ~~business.~~outside ~~Some~~ of ~~our~~Israel. ~~competitors~~If ~~may~~we befail ~~able~~ to ~~sustain~~satisfy ~~the~~these ~~costs~~conditions, ~~of intellectual property litigation more effectively than~~ we ~~can~~may ~~because~~be ~~they have substantially greater resources. In addition, any litigation could significantly harm~~required ~~our~~to ~~relationships~~pay ~~with~~penalties ~~current~~ and ~~prospective~~refund ~~customers.~~grants ~~Any~~previously ~~of the foregoing could disrupt our business and have a material adverse effect on our business, operating results and financial condition~~received.

Our ~~patents~~ wholly owned subsidiary, Actelis Israel, which manages our research and ~~proprietary~~development ~~technology~~efforts, ~~may~~has bebeen ~~challenged~~financed in part through royalty-bearing grants in an aggregate amount of approximately $14 million (plus accrued interest), received from the Israeli Innovation Authority (formerly known as the Office of the Chief Scientist of the Israeli Ministry of Economy), or ~~disputed~~the IIA, as of December 31, 2025. We are committed to pay royalties at a rate of 3% on revenues up to the total amount of grants received, linked to the U.S. dollar and bearing interest at an annual rate of LIBOR applicable to U.S. dollar deposits.

We hold certain patent and trade secret rights relating to various aspects of our technologies, which are of material importance to the Company and its future prospects. Any patents we have obtained or do obtain may be challenged by re-examination or otherwise invalidated or eventually found unenforceable. Both the patent application process and the process of managing patent disputes can be time consuming and expensive. Competitors may attempt to challenge or invalidate our patents or may be able to design alternative techniques or devices that avoid infringement of our patents or develop products with functionalities that are comparable to ours. In the event a competitor infringes upon our patent or other intellectual property rights, litigation to enforce our intellectual property rights or to defend our patents against challenge, even if successful, could be expensive and time consuming and could require significant time and attention from our management. We may not have sufficient resources to enforce our intellectual property rights or to defend our patents against challenges from others.42

~~Any~~We are further required to ~~failure~~comply with the requirements of the Israeli Encouragement of Industrial Research, Development and Technological Innovation Law, 5744-1984 (formerly known as the Law for Encouragement of Research and Development in the Industry, 1984), as amended, and related regulations, or the Research Law, with respect to ~~protect~~those ~~our~~past ~~intellectual~~grants. ~~property~~When a grantee 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 ~~could~~of ~~impair~~such ~~our~~products, ~~ability~~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 ~~protect~~third ~~our~~parties ~~proprietary~~inside or outside of Israel of Actelis Israel’s know how or for the transfer outside of Israel of manufacturing or manufacturing rights related to those aspects of such technologies. We may not receive those approvals. Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer technology ~~and~~or ~~our~~development ~~brand~~outside of Israel.

~~Our success~~The ~~and~~transfer ~~ability~~or tolicense ~~compete~~of IIA-supported ~~depend~~technology ~~largely~~or ~~upon~~know-how ~~our~~outside ~~intellectual~~of ~~property.~~Israel Toand ~~date,~~the wetransfer ~~have~~of 16manufacturing ~~registered~~of ~~patents~~IIA-supported inproducts, ~~the~~technology ~~United~~or ~~States;~~know-how 3outside ~~registered~~of ~~patents~~Israel inmay ~~Europe,~~involve 1the ~~registered~~payment ~~patent~~of insignificant ~~Mexico~~amounts, 1depending ~~registered~~upon ~~patent~~the invalue ~~Indonesia,~~of ~~one~~the ~~pending~~transferred ~~application~~or inlicensed ~~the~~technology ~~United~~or ~~States~~know-how, ~~and~~our ~~one~~research ~~pending~~and ~~application~~development ~~in Europe~~expenses, ~~all~~the amount of ~~which~~IIA insupport, the ~~general~~time ~~area~~ of ~~high-speed~~completion ~~carrier~~of ~~class~~the ~~Ethernet~~IIA-supported ~~service~~research project and ~~transport over~~other ~~bonded VDSL2, G~~factors.~~SHDSL~~ asThese ~~well~~restrictions asand ~~Fiber~~requirements ~~covering~~for ~~various~~payment ~~aspects~~may ofimpair our ~~technology.~~ability Weto ~~take~~sell, ~~reasonable~~license ~~steps~~or tootherwise ~~protect~~transfer our ~~intellectual~~technology ~~property,~~assets ~~especially~~outside ~~when~~of ~~working~~Israel ~~with~~or ~~third parties. However, the steps we take~~ to ~~protect~~outsource ~~our~~or ~~intellectual~~transfer ~~property~~development ~~rights~~or ~~may~~manufacturing beactivities ~~inadequate. For~~with ~~example,~~respect ~~other~~to ~~parties,~~any ~~including~~product ~~our competitors, may independently develop similar technology, duplicate our services,~~ or ~~design~~technology ~~around~~outside ~~our~~of ~~intellectual~~Israel. ~~property and~~Furthermore, inthe ~~such~~consideration ~~cases,~~available ~~we may not be able~~ to ~~assert~~ our ~~intellectual~~shareholders ~~property~~in ~~rights~~a ~~against~~transaction ~~such~~involving ~~parties. Further,~~the ~~our~~transfer ~~contractual~~outside ~~arrangements~~of ~~may not effectively prevent disclosure~~ Israel of ~~our~~technology ~~confidential information~~ or ~~provide~~know-how andeveloped ~~adequate~~with ~~remedy in~~IIA ~~the~~funding ~~event~~(such ofas ~~unauthorized~~a ~~disclosure~~merger ofor ~~our~~similar ~~confidential~~transaction) ~~information, and we~~ may be ~~unable~~reduced toby ~~detect~~any ~~the~~amounts ~~unauthorized~~that ~~use~~we ~~of, or take~~are ~~appropriate~~required ~~steps~~ to ~~enforce,~~pay ~~our~~to ~~intellectual~~the ~~property rights~~IIA.

34There are costs and difficulties inherent in managing cross-border business operations.

~~We make~~Managing ~~business decisions about when to seek patent protection for~~ a ~~particular~~business, ~~technology and when to rely upon trade secret protection~~operations, ~~and~~personnel ~~the~~or ~~approach~~assets ~~we select may ultimately prove to be inadequate. Even~~ in ~~cases~~another ~~where~~country ~~we seek patent protection, there~~ is nochallenging ~~assurance that~~and ~~the resulting patents will effectively protect every significant feature of our technology or provide us with any competitive advantages~~costly. ~~Moreover,~~ weAny ~~cannot~~management ~~guarantee~~ that ~~any~~we ofmay ~~our~~have ~~pending~~(whether ~~patent~~based ~~application~~abroad ~~will issue~~ or bein ~~approved.~~the ~~The~~ United States ~~Patent and~~) ~~Trademark~~may ~~Office~~be ~~and~~inexperienced ~~various~~in ~~foreign~~cross-border ~~governmental~~business ~~patent~~practices ~~agencies~~and ~~also~~unaware ~~require compliance with a number~~ of ~~procedurals,~~significant ~~documentary, fee~~differences ~~payment, and other similar provisions during the patent application process and after a patent has issued. There are situations~~ in ~~which~~ ~~noncompliance~~accounting ~~can result in abandonment or lapse of the patent~~rules, orlegal ~~patent application~~regimes, ~~resulting in partial or complete loss of~~and ~~patent~~labor ~~rights in the relevant jurisdiction~~practices. IfEven ~~this~~with ~~occurs,~~a ~~our~~seasoned ~~competitors~~and ~~might~~experienced bemanagement ~~able~~team, ~~to enter~~ the ~~market,~~costs ~~which~~and ~~would~~difficulties ~~have~~inherent ain ~~material adverse~~managing ~~effect~~cross-border ~~on our~~ business~~. Effective trademark~~ operations, ~~copyright~~personnel, ~~patent,~~ and ~~trade~~assets ~~secret~~can ~~protection~~be ~~may~~significant ~~not~~(and bemuch ~~available~~higher inthan ~~every country~~ in ~~which~~a wepurely ~~conduct~~domestic business.) ~~Further, intellectual property law, including statutory~~ and ~~case~~may ~~law,~~negatively inimpact ~~the United States and other~~our ~~countries,~~financial ~~is constantly developing,~~ and ~~any~~operational ~~changes in the law could make it harder for us to enforce our rights~~performance.

~~In order~~Employment ~~to protect our intellectual property rights, we may be required to spend significant resources to monitor~~ and ~~protect~~other ~~these~~material ~~rights.~~contracts ~~Litigation~~we ~~brought~~have towith ~~protect and enforce~~ our ~~intellectual~~Israeli ~~property~~employees ~~rights~~are ~~could~~governed beby ~~costly,~~Israeli ~~time-consuming, and distracting to management and could result in the impairment or loss of portions of our intellectual property~~laws. ~~Furthermore,~~Our ~~our~~inability ~~efforts~~ to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights. An adverse determination of any litigation proceedings could put our intellectual property at risk of being invalidated or ~~interpreted~~obtain narrowly and could put our related pending patent applications at risk of not issuing. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation particularly in the US, there is a ~~risk~~remedy ~~that~~under some of our confidential or sensitive information could be compromised by disclosure in the event of litigation. In addition, during the course of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these ~~results~~agreements ~~to be negative, it~~ could ~~have a substantial adverse effect on the price of~~ ~~our common stock. Negative publicity related to a decision by us to initiate such enforcement actions against a client or former client, regardless of its accuracy, may~~ adversely ~~impact~~affect our ~~other client relationships or prospective client relationships, harm our brand and~~ business, and ~~could~~financial ~~cause the market price of our common stock to decline~~condition. ~~Our failure to secure, protect, and enforce our intellectual property rights could adversely affect our brand and our business.~~

~~The~~All employees were asked ~~lives~~to sign employment agreements that contain confidentiality, non-compete and assignment of intellectual property provisions. The employment agreements with our ~~patents~~employees in Israel are governed by Israeli laws. The system of laws and the enforcement of existing laws and contracts in Israel may not be ~~sufficient~~as certain in implementation and interpretation as in the United States, leading to ~~effectively~~a ~~protect~~higher than usual degree of uncertainty as to the outcome of any litigation. Our inability to enforce or obtain a remedy under any of these or future agreements could adversely affect our ~~products~~business and ~~business~~financial condition. Delay with respect to the enforcement of particular rules and regulations, including those relating to intellectual property, customs, tax, and labor, could also cause serious disruption to operations abroad and negatively impact our results.

~~Patents have~~Israeli acourts ~~limited~~have ~~lifespan.~~required employers Inseeking ~~the~~to ~~United~~enforce ~~States,~~non-compete ifundertakings ~~all~~of ~~maintenance~~a ~~fees~~former ~~are~~employee ~~paid~~to ~~timely,~~demonstrate that the ~~natural~~competitive ~~expiration~~activities of athe ~~patent is generally~~former 20employee ~~years~~will ~~after~~harm ~~its~~one ~~first~~of ~~effective~~a ~~nonprovisional~~limited ~~filing~~number ~~date.~~of ~~Although~~material ~~various~~interests ~~extensions may be available, the life~~ of ~~a patent, and~~ the ~~protection~~employer itwhich ~~affords,~~have isbeen ~~limited.~~recognized ~~Given~~by the ~~amount~~courts, ofsuch ~~time~~as ~~required for~~ the secrecy ~~development, testing and regulatory review~~ of ~~new~~a ~~product candidates,~~company’s ~~patents~~confidential ~~protecting~~commercial ~~such~~information ~~candidates might expire before~~ or ~~shortly~~the ~~after~~protection ~~such~~of ~~product~~its ~~candidates~~intellectual ~~are commercialized~~property. ~~Even if~~If ~~patents~~we ~~covering~~cannot ~~our~~demonstrate that ~~product~~such ~~candidates~~interests ~~are~~will ~~obtained,~~be ~~once the patent life has expired for a product~~harmed, we may be ~~open~~unable to ~~competition from~~prevent ~~biosimilar or generic medications. As a result,~~ our ~~patent~~competitors ~~portfolio~~from ~~may~~benefiting ~~not provide us with sufficient rights to exclude others~~ from ~~commercializing~~the ~~product~~expertise ~~candidates similar or identical to ours. Our patents issued as~~ of ~~March~~our ~~20,~~former ~~2025 will expire on dates ranging~~employees ~~from~~or ~~September~~consultants ~~25,~~and ~~2025~~our toability ~~October 31, 2038, subject~~ to ~~any~~remain ~~patent~~competitive ~~extensions that~~ may be ~~available for such patents~~diminished. ~~More specifically, the following patents will expire over the next three years:, US7606315, US7613235, EP1943827, EP3459181, GB2556826, MX279453, US7587042, IDP0030744.~~

35In addition, Chapter 8 of the Israeli Patents Law, 5727-1967, or the Patents Law, deals with inventions made in the course of an employee’s service and during his or her term of employment, whether or not the invention is patentable, or service inventions. Section 134 of the Patents Law sets forth that if there is no agreement which explicitly determines whether the employee is entitled to compensation for the service inventions and the extent and terms of such compensation, such determination will be made by the Compensation and Rewards Committee, a statutory committee of the Israeli Patents Office. As a result, it is unclear if, and to what extent, our research and development employees may be able to claim compensation with respect to our future revenues. Such claims, if successfully asserted, could adversely affect our results of operations and profitability.

In addition, although upon issuance in the United States a patent’s life can be increased based on certain delays caused by the USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution. A patent term extension based on regulatory delay may be available in the United States. However, only a single patent can be extended for each marketing approval, and any patent can be extended only once, for a single product. Moreover, the scope of protection during the period of the patent term extension does not extend to the full scope of the claim, but instead only to the scope of the product as approved. Laws governing analogous patent term extensions in foreign jurisdictions vary widely, as do laws governing the ability to obtain multiple patents from a single patent family. Additionally, we may not receive an extension if we fail to exercise due diligence during the testing phase or regulatory review process, apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product will be shortened and our competitors may obtain approval of competing products following our patent expiration and may take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to launch their product earlier than might otherwise be the case, and our revenue could be reduced, possibly materially. If we do not have sufficient patent life to protect our products, our business and results of operations will be adversely affected.43

We may ~~not~~ be ~~able~~adversely toaffected ~~adequately~~by ~~defend~~fluctuations in ~~against~~the ~~piracy~~currency ofexchange ~~intellectual~~rate ~~property~~of inthe ~~foreign~~Israeli ~~jurisdictions~~Shekel.

~~Considerable research~~A issignificant ~~being~~amount ~~performed in countries outside~~ of ~~the~~our ~~United States,~~expenses ~~and~~are apresented ~~number~~in ofIsraeli ~~potential~~Shekels, both ~~competitors~~expenses ~~are~~from ~~located~~employees inand ~~these countries~~suppliers. ~~The~~Our ~~laws~~customers ~~protecting~~buy ~~intellectual~~our ~~property~~products priced in ~~some~~US ofdollars ~~those~~or ~~countries~~Euros. ~~may~~The ~~not~~strengthening ~~provide~~of ~~adequate~~the ~~protection~~shekel against tothe ~~prevent~~dollar ~~our~~and ~~competitors from~~the ~~misappropriating~~euro ~~our~~could ~~intellectual~~erode ~~property~~our profitability. ~~Several~~For ofexample, ~~these~~the ~~potential~~dollar ~~competitors~~depreciated ~~may~~against bethe ~~further~~NIS ~~along~~during in2025 ~~the~~by ~~process of product~~approximately ~~development~~12.5%. ~~and~~We ~~also~~cannot ~~operate~~predict ~~large,~~any ~~company-funded~~future ~~research~~trends ~~and~~in ~~development~~the ~~programs.~~rate Asof ainflation ~~result,~~in ~~our~~Israel ~~competitors~~or ~~may~~the ~~develop~~rate ~~more~~of ~~competitive or~~devaluation ~~affordable~~(if ~~products,~~any) orof ~~achieve~~the ~~earlier~~NIS ~~patent~~against ~~protection~~the dollar. orIf ~~product~~the ~~commercialization~~dollar ~~than~~cost weof ~~are~~our ~~able~~operations toin ~~achieve.~~Israel ~~Competitive~~increases, ~~products may~~our ~~render~~dollar-measured ~~any~~results ~~products~~of ~~that~~operations wewill ~~develop~~be ~~obsolete~~adversely affected.

~~Risks~~Unanticipated changes in our effective tax ~~Related~~rate toand ~~Managing~~additional ~~Our~~tax ~~Business~~liabilities, ~~Operations~~including inthose ~~Israel~~resulting from our international operations or the implementation of new tax rules, could harm our future results.

~~Conditions~~We are subject to income taxes in the ~~Middle~~United States ~~East~~and Israel. Our domestic and international tax liabilities are subject to the allocation of expenses in differing ~~Israel,~~jurisdictions ~~where~~and complex transfer pricing regulations administered by taxing authorities in various jurisdictions. Tax rates in the jurisdictions in which we operate may change as a result of factors outside of our ~~research~~control or relevant taxing authorities may disagree with our determinations as to the income and ~~development~~expenses ~~facilities~~attributable ~~are~~to ~~located~~specific jurisdictions. In addition, changes in tax and trade laws, treaties or regulations, or their interpretation or enforcement, have become more unpredictable and may ~~harm~~become more stringent, which could materially adversely affect our ~~operations~~tax position.

~~Our~~Forecasting our estimated ~~office~~annual ~~where~~effective wetax ~~conduct~~rate ~~our~~is ~~research~~complex and ~~development,~~subject ~~operations~~to uncertainty, ~~sales~~and ~~outside~~there ~~the~~may ~~Americas,~~be ~~and~~material ~~administration~~differences ~~activities,~~between isour ~~located in~~forecasted ~~Israel.~~and ~~Many~~actual effective oftax ~~our~~rate. ~~employees~~Our ~~are~~effective ~~residents~~tax ofrate ~~Israel.~~could ~~Most~~be ofadversely ~~our~~affected ~~officers~~by ~~and~~changes ~~directors~~in ~~are~~the ~~residents~~mix of ~~Israel.~~earnings ~~Since~~and ~~the~~losses ~~establishment~~in countries with ofdiffering ~~the~~statutory ~~State~~tax ofrates, ~~Israel~~certain innon-deductible ~~1948~~expenses, athe ~~number~~valuation of ~~armed~~deferred ~~conflicts~~tax ~~have~~assets ~~taken~~and ~~place~~liabilities, ~~between~~adjustments ~~Israel~~to ~~and~~income taxes ~~its~~upon ~~neighboring~~finalization ~~countries~~of tax returns, ~~and~~changes ~~between Israel~~in ~~and~~available ~~the~~tax ~~Hamas~~attributes, ~~(an~~decision ~~Islamist~~to ~~militia~~repatriate ~~and~~non-U.S. earnings ~~political~~for ~~group~~which inwe have ~~the~~not ~~Gaza~~previously ~~Strip)~~provided for U.S. taxes, and ~~Hezbollah~~changes ~~(an~~in ~~Islamist~~federal, ~~militia~~state, ~~and~~or ~~political~~international ~~group in~~tax ~~Lebanon)~~laws and accounting principles.

~~In October 2023~~Finally, ~~Hamas~~we ~~terrorists~~may ~~infiltrated~~be ~~Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian~~subject ~~and~~to ~~military~~income ~~targets.~~tax ~~Hamas~~audits ~~also~~throughout ~~launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with~~ the ~~Gaza Strip and in other areas within the State of Israel~~world. ~~These~~An ~~attacks~~adverse ~~resulted~~resolution ~~in extensive deaths, injuries and kidnapping~~ of ~~civilians~~one ~~and~~or ~~soldiers.~~more ~~Following~~uncertain ~~the~~tax ~~attack,~~positions ~~Israel’s~~in ~~security~~any ~~cabinet~~period ~~declared~~could ~~war~~have ~~against Hamas and~~ a ~~military campaign against~~material ~~these~~impact ~~terrorist~~on ~~organizations~~our ~~commenced~~results inof ~~parallel~~operations toor ~~their~~financial ~~continued~~condition ~~rocket~~for ~~and~~that ~~terror attacks~~period. ~~On January 19, 2025, a temporary ceasefire went into effect, the result of which is uncertain.~~

~~In addition,~~Risks ~~since~~Related the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and on other fronts from various extremist groups in region, such as the Houthis in Yemen and various rebel militia groups in Syria and Iraq. In October 2024, Israel began limited ground operations against Hezbollah in Lebanon, and in November 2024, a ceasefire was brokered between Israel and Hezbollah. In addition, Iran recently launched direct attacks on Israel involving hundreds of drones and missiles and has threatened to ~~continue~~our toCommon attack Israel and is widely believed to be developing nuclear weapons. Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthi movement in Yemen and various rebel militia groups in Syria and Iraq. These situations may potentially escalate in the future to more violent events which may affect Israel and us. Additionally, Yemeni rebel group, the Houthis, launched series of attacks on global shipping routes in the Red Sea, causing disruptions of supply chain. Such clashes may escalate in the future into a greater regional conflict.Stock

~~In connection~~The ~~with~~requirements ~~the Israeli security cabinet’s declaration~~ of ~~war~~being ~~against~~a ~~Hamas~~public ~~and~~company may ~~possible~~strain ~~hostilities~~our ~~with~~resources, ~~other~~divert ~~organizations~~management’s attention, ~~several~~ ~~hundred~~and ~~thousand~~affect ~~Israeli~~our ~~military~~ability ~~reservists~~to ~~were~~attract ~~drafted~~and toretain ~~perform~~executive ~~immediate~~management ~~military~~and ~~service~~qualified board members.

36As a public company, we are subject to the reporting requirements of the Exchange Act, the listing standards of Nasdaq and other applicable securities rules and regulations. The requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources. For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention may be diverted from other business concerns, which could harm our business, results of operations, and financial condition.

~~As of~~We ~~the~~also ~~date~~expect ofthat ~~this~~being a ~~Annual~~public ~~Report,~~company weand ~~have~~these ~~not~~new ~~been~~rules and ~~impacted~~regulations bywill ~~any~~make ~~absences~~it ofmore ~~personnel~~expensive atfor ~~our~~us ~~service~~to ~~providers~~obtain ordirector ~~counterparties located~~and inofficer ~~Israel.~~liability insurance, ~~Military~~and ~~service~~we ~~call~~may ~~ups~~be ~~that~~required ~~result~~to inaccept ~~absences~~reduced ofcoverage ~~personnel~~or ~~from~~incur ussubstantially ~~for~~higher ancosts ~~extended~~to ~~period~~obtain ofcoverage. ~~time~~These ~~may~~factors ~~materially~~could ~~and~~also ~~adversely~~make ~~affect~~it ~~our~~more ~~business,~~difficult ~~prospects,~~for ~~financial~~us ~~condition~~to attract and ~~results~~retain ofqualified ~~operations.~~members As of ~~the~~our ~~date~~board of ~~this Annual Report~~directors, ~~we currently~~particularly ~~have~~to 38serve ~~full-time~~on ~~employees,~~our ~~with~~audit committee 33and ~~employees~~compensation ~~located~~committee, ~~in Israel~~ and 5qualified ~~employee~~executive ~~located outside of Israel~~officers.

~~Since the~~As ~~war~~a ~~broke~~result ~~out~~of ondisclosure of ~~October~~information 7,in ~~2023,~~filings ~~our~~required ~~operations~~of ~~have~~a ~~not~~public ~~been~~company, ~~adversely~~our ~~affected~~business byand ~~this~~financial ~~situation,~~condition ~~and~~is wemore ~~have~~visible, ~~not~~which ~~experienced any~~may ~~material~~result ~~disruptions~~in toan ~~our~~increased risk ~~operations.~~of Wethreatened ~~have~~or ~~the~~actual ~~ability~~litigation, ifincluding ~~necessary,~~by tocompetitors ~~shift~~and ~~our~~other ~~manufacturing~~third ~~from~~parties. ~~Israel~~If tosuch ~~other~~claims ~~countries where~~are wesuccessful, ~~have~~our business ~~partners,~~ and weresults ~~have~~of ~~not~~operations ~~had~~could ~~customers~~be ~~in Israel in the last year. However~~harmed, ~~the intensity~~ and ~~duration~~even ofif ~~Israel’s current~~the ~~war~~claims isdo ~~difficult~~not toresult ~~predict~~in atlitigation ~~this~~or ~~stage, as~~ are ~~such~~resolved ~~war’s~~in ~~economic~~our ~~implications~~favor, onthese claims, and the ~~Company’s~~time ~~business~~ and ~~operations~~ ~~and~~resources onnecessary ~~Israel’s~~to ~~economy~~resolve inthem, ~~general.~~could Ifdivert the ~~ceasefires~~resources ~~declared~~of ~~collapse~~our ormanagement aand ~~new~~harm ~~war~~our ~~commences~~business, orresults ~~hostilities~~of ~~expand~~operations, toand ~~other~~financial ~~fronts, our operations may be adversely affected~~condition.

Our commercial insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations. To-date, we have received Israeli government war related support funding of approximately $100,000.44

~~Finally, political~~The ~~conditions~~individuals ~~within~~who ~~Israel~~now ~~may affect~~ constitute our ~~operations.~~senior ~~Israel~~management ~~has~~team ~~held~~have ~~five~~limited ~~general~~experience ~~elections~~managing ~~between~~a ~~2019~~publicly-traded ~~and~~company ~~2022,~~ and ~~prior to~~limited ~~October~~experience ~~2023,~~complying with the ~~Israeli~~increasingly complex ~~government~~laws ~~pursued~~pertaining ~~extensive changes~~ to ~~Israel’s~~public ~~judicial system, which sparked extensive political debate and unrest~~companies. ~~Actual~~Our orsenior ~~perceived~~management ~~political~~team ~~instability~~may innot ~~Israel~~successfully or ~~any~~efficiently ~~negative~~manage ~~changes~~our intransition ~~the~~to ~~political environment, may individually~~a orpublic incompany ~~the~~that ~~aggregate~~is ~~adversely~~subject ~~affect~~to ~~the~~significant ~~Israeli~~regulatory ~~economy~~oversight and, inreporting ~~turn, our business, financial condition, results of operations and growth prospects~~obligations.

~~Actelis Israel~~We ~~received~~are ~~Israeli~~an ~~government~~“emerging ~~grants~~growth ~~for~~company,” and ~~certain of~~ our ~~research~~compliance ~~and~~with ~~development activities,~~ the ~~terms~~reduced ofreporting ~~which require us to pay royalties~~ and ~~satisfy~~disclosure ~~specified~~requirements ~~conditions~~applicable ~~in order~~ to ~~manufacture~~“emerging ~~products~~growth ~~and~~companies” ~~transfer~~may ~~technologies outside of Israel. If we fail to~~make ~~satisfy~~our ~~these~~common ~~conditions,~~stock weless ~~may~~attractive ~~be required~~ to ~~pay penalties and refund grants previously received~~investors.

~~Our wholly~~We ~~owned~~are ~~subsidiary~~an “emerging growth company,” ~~Actelis~~as ~~Israel~~defined in the JOBS Act, ~~which~~and ~~manages~~we ~~our~~have ~~research~~elected to take advantage of certain exemptions and ~~development~~relief ~~efforts,~~from ~~has~~various reporting ~~been~~requirements ~~financed~~that inare ~~part~~applicable ~~through~~to ~~royalty-bearing~~other public companies that are not “emerging growth companies.” These provisions ~~grants~~include, inbut anare ~~aggregate~~not ~~amount~~limited ofto: ~~approximately~~requiring ~~$14~~only two ~~million~~years ~~(plus~~of ~~accrued~~audited ~~interest),~~financial ~~received~~statements ~~from~~and ~~the~~only ~~Israeli~~two years ~~Innovation~~of ~~Authority~~related selected ~~(formerly~~financial ~~known~~data asand ~~the~~management’s ~~Office~~discussion and analysis of ~~the~~financial ~~Chief~~condition ~~Scientist~~and results of ~~the~~operations ~~Israeli~~disclosures; ~~Ministry~~being ofexempt from ~~Economy),~~compliance orwith the ~~IIA,~~auditor asattestation requirements of ~~December~~Section ~~31,~~404(b) of ~~2024.~~the WeSarbanes-Oxley Act; being exempt from any ~~are~~rules ~~committed~~that tocould ~~pay~~be ~~royalties~~adopted atby athe ~~rate~~Public ofCompany 3%Accounting onOversight ~~revenues~~Board uprequiring mandatory audit firm rotations or a supplement to the ~~total~~auditor’s ~~amount~~report ofon ~~grants~~financial ~~received,~~statements; ~~linked~~being subject to ~~the~~reduced ~~U.S. dollar~~disclosure obligations regarding executive compensation ~~and~~in ~~bearing~~our ~~interest~~periodic atreports anand ~~annual~~proxy ~~rate~~statements; ofand ~~LIBOR~~not ~~applicable~~being required to ~~U.S. dollar~~hold ~~deposits~~nonbinding advisory votes on executive compensation or on any golden parachute payments not previously approved.

~~We are~~In ~~further required to comply with the requirements of the Israeli Encouragement of Industrial Research~~addition, ~~Development~~while ~~and~~we ~~Technological~~are ~~Innovation~~an ~~Law, 5744-1984~~“emerging ~~(formerly~~growth ~~known as the Law for Encouragement of Research and Development in the Industry~~company,” ~~1984),~~we aswill ~~amended, and~~not ~~related~~be ~~regulations,~~required orto ~~the~~comply ~~Research Law,~~ with ~~respect~~any tonew ~~those~~financial ~~past~~accounting ~~grants.~~standard ~~When~~until ~~a grantee 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~~standard ~~transfer~~is ofgenerally ~~manufacturing~~applicable orto ~~manufacturing~~private ~~rights~~companies. ofAs ~~such~~a ~~products~~result, ~~technologies~~our orfinancial ~~know-how~~statements ~~outside~~may ofnot ~~Israel, without the prior approval of the IIA. Therefore, the discretionary approval of an IIA committee would~~ be ~~required~~comparable ~~for~~to ~~any~~companies ~~transfer~~that orare ~~license~~not ~~to third parties~~“emerging ~~inside~~growth orcompanies” ~~outside of Israel of Actelis Israel’s know how~~ or ~~for~~elect ~~the~~not ~~transfer outside of Israel of manufacturing or manufacturing rights related~~ to ~~those~~avail ~~aspects~~themselves of ~~such~~this ~~technologies~~provision. ~~We may not receive those approvals. Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer technology or development outside of Israel.~~

37We may remain an “emerging growth company” until as late as December 31, 2027, the fiscal year-end following the fifth anniversary of the completion of our IPO, though we may cease to be an “emerging growth company” earlier under certain circumstances, including if (1) we have more than $1.07 billion in annual net revenues in any fiscal year, (2) we become a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates as of the end of the second quarter of that fiscal year or (3) we issue more than $1.0 billion of non-convertible debt over a three-year period.

The ~~transfer~~ orexact ~~license~~implications of the ~~IIA-supported~~JOBS ~~technology~~Act orare ~~know-how~~still ~~outside~~subject ofto ~~Israel~~interpretations and ~~the~~guidance ~~transfer~~by ~~of manufacturing of IIA-supported products, technology or know-how outside of Israel may involve~~ the ~~payment~~SEC ofand ~~significant~~other ~~amounts~~regulatory agencies, ~~depending~~and ~~upon~~we ~~the~~cannot ~~value~~assure ofyou ~~the transferred~~that orwe ~~licensed~~will ~~technology~~be orable ~~know-how,~~to ~~our~~take ~~research~~advantage ~~and~~of ~~development~~all ~~expenses, the amount~~ of ~~IIA support,~~ the ~~time~~benefits of ~~completion of~~ the ~~IIA-supported research~~JOBS ~~project and other factors~~Act. ~~These~~In ~~restrictions~~addition, ~~and~~investors ~~requirements for payment~~ may ~~impair~~find our ~~ability~~common tostock ~~sell,~~less ~~license or otherwise~~attractive ~~transfer our technology assets outside of Israel or~~ to ~~outsource~~the orextent ~~transfer~~we ~~development~~rely oron ~~manufacturing~~the ~~activities~~exemptions ~~with~~and ~~respect~~relief ~~to any~~granted ~~product~~by orthe ~~technology~~JOBS ~~outside of Israel~~Act. ~~Furthermore,~~If ~~the~~some ~~consideration~~investors ~~available~~find to our ~~shareholders~~common instock aless ~~transaction~~attractive ~~involving~~as ~~the~~a ~~transfer~~result, ~~outside~~there ofmay ~~Israel~~be ofa ~~technology~~less oractive ~~know-how~~trading ~~developed~~market ~~with~~for ~~IIA~~our ~~funding~~common ~~(such~~stock asand aour ~~merger~~stock orprice ~~similar transaction)~~ may ~~be reduced~~decline byor ~~any~~become ~~amounts~~more ~~that we are required to pay to the IIA~~volatile.

~~There~~If we fail to maintain an effective system ~~are~~of ~~costs~~internal ~~and~~control ~~difficulties~~over ~~inherent~~financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, our shareholders could lose confidence in ~~managing~~our ~~cross-border~~financial and other public reporting, which would harm our business ~~operations~~and the trading price of our common stock.

~~Managing~~ As a ~~business,~~public ~~operations~~company, ~~personnel~~we orare subject ~~assets~~to insignificant ~~another~~requirements ~~country~~for isenhanced ~~challenging~~financial reporting and ~~costly~~internal controls. ~~Any~~The ~~management~~process ~~that~~of wedesigning ~~may~~and ~~have~~implementing effective ~~(whether~~internal ~~based abroad~~controls oris ina ~~the~~continuous ~~United States)~~effort ~~may~~that berequires ~~inexperienced~~us to anticipate and react to changes in ~~cross-border~~our business ~~practices~~and the economic and ~~unaware~~regulatory ofenvironments and to expend significant ~~differences~~resources into maintain a system of internal controls that is adequate to satisfy ~~accounting~~our ~~rules~~reporting obligations as a public company. In addition, ~~legal~~we ~~regimes~~are required, ~~and~~pursuant ~~labor~~to ~~practices.~~Section 404, ~~Even~~to ~~with~~furnish a ~~seasoned~~report ~~and~~by ~~experienced~~ management on, ~~team~~among other things, the ~~costs~~effectiveness ~~and~~of ~~difficulties inherent~~our internal control over financial reporting in ~~managing~~the ~~cross-border~~second ~~business~~annual ~~operations,~~report ~~personnel,~~following ~~and~~the ~~assets~~completion of ~~can~~our beIPO. This ~~significant~~assessment ~~(and~~will ~~much~~need ~~higher~~to ~~than~~include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. A material weakness is a ~~purely~~deficiency ~~domestic business)~~or ~~and~~combination ~~may~~of ~~negatively~~deficiencies ~~impact~~in ~~our~~internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual and ~~operational~~interim ~~performance~~financial statements will not be detected or prevented on a timely basis.

Employment and other material contracts we have with our Israeli employees are governed by Israeli laws. Our inability to enforce or obtain a remedy under these agreements could adversely affect our business and financial condition.45

~~All employees~~The ~~were~~rules ~~asked~~governing tothe standards ~~sign employment agreements~~ that ~~contain~~must ~~confidentiality,~~be ~~non-compete~~met ~~and~~for ~~assignment~~our ofmanagement ~~intellectual~~to ~~property provisions.~~assess ~~The~~our ~~employment~~internal ~~agreements~~control ~~with~~over ~~our~~financial ~~employees~~reporting ~~in Israel~~ are ~~governed~~complex byand ~~Israeli~~require ~~laws.~~significant documentation, ~~The~~testing, ~~system of laws~~ and ~~the~~possible ~~enforcement of~~remediation. ~~existing~~Testing ~~laws~~ and ~~contracts~~maintaining ininternal ~~Israel~~controls may ~~not~~divert beour asmanagement’s ~~certain~~attention from inother ~~implementation~~matters ~~and~~that ~~interpretation~~are asimportant ~~in the United States, leading~~ to aour ~~higher~~business. ~~than~~Once ~~usual~~we ~~degree~~are ofno ~~uncertainty~~longer asan to“emerging ~~the~~growth ~~outcome~~company,” ~~of any litigation. Our inability to enforce~~ or ~~obtain~~ a ~~remedy under any~~“smaller ofreporting ~~these~~company”, orour ~~future~~auditors ~~agreements~~will ~~could~~be ~~adversely~~required ~~affect~~to ~~our~~issue ~~business~~an ~~and~~attestation ~~financial~~report ~~condition.~~on ~~Delay with respect to~~ the ~~enforcement~~effectiveness of ~~particular rules~~our ~~and~~internal ~~regulations, including those relating to intellectual property, customs, tax, and labor, could also cause serious disruption~~controls toon ~~operations~~an ~~abroad~~annual ~~and negatively impact our results~~basis.

~~Israeli~~Although as of December ~~courts~~31, ~~have~~2025, ~~required~~the ~~employers~~company ~~seeking~~reported tothat ~~enforce~~it ~~non-compete~~has ~~undertakings~~effective ofinternal acontrols ~~former~~over ~~employee~~financial toreporting, ~~demonstrate~~there ~~that~~can ~~the~~be ~~competitive~~no ~~activities~~assurance that we will ofnot ~~the~~suffer ~~former~~from ~~employee~~material ~~will~~weaknesses ~~harm~~or ~~one~~significant ofdeficiencies ain ~~limited~~the ~~number~~future. ofIf ~~material~~we ~~interests~~fail ofto ~~the~~maintain ~~employer~~effective ~~which~~internal ~~have~~controls ~~been~~over financial ~~recognized~~reporting byin the ~~courts~~future, such asfailure ~~the~~could ~~secrecy~~result ofin a ~~company’s~~material ~~confidential~~misstatement ~~commercial~~of ~~information~~our annual or ~~the~~quarterly ~~protection~~financial ofstatements that ~~its~~would ~~intellectual~~not ~~property.~~be Ifprevented weor ~~cannot demonstrate~~detected ~~that~~on ~~such~~a ~~interests~~timely ~~will~~basis beand ~~harmed,~~which wecould ~~may~~cause beinvestors ~~unable~~and other users to ~~prevent~~lose confidence in our ~~competitors~~financial statements, ~~from~~limit ~~benefiting~~our ~~from~~ability to raise capital and have a negative effect on the ~~expertise~~trading price of our ordinary shares. Additionally, ~~former~~failure ~~employees~~to remediate the material weakness or ~~consultants~~otherwise maintain effective internal controls over financial reporting may also negatively impact our operating results and financial condition, impair our ability to ~~remain~~timely ~~competitive~~file ~~may~~our beperiodic ~~diminished~~and other reports with the SEC, subject us to additional litigation and regulatory actions and cause us to incur substantial additional costs in future periods relating to the implementation of remedial measures.

In ~~addition,~~ ~~Chapter 8 of~~ the ~~Israeli Patents Law~~future, ~~5727-1967,~~ orit ~~the~~is ~~Patents~~possible that ~~Law,~~additional ~~deals~~material ~~with~~weaknesses ~~inventions~~or ~~made~~significant indeficiencies ~~the~~may ~~course~~be ~~of an~~identified ~~employee’s~~that ~~service~~we ~~and~~may ~~during~~be ~~his~~unable orto ~~her~~remedy ~~term~~before ~~of employment, whether or not~~ the ~~invention~~requisite deadline isfor ~~patentable,~~these ~~or service inventions~~reports. ~~Section 134~~ ofOur ~~the~~ability ~~Patents~~to ~~Law~~comply ~~sets~~with ~~forth~~the ~~that~~annual ifinternal ~~there~~control isreporting norequirements ~~agreement~~will ~~which~~depend ~~explicitly~~on ~~determines whether~~ the ~~employee is entitled~~effectiveness toof ~~compensation~~our ~~for~~financial ~~the~~reporting ~~service inventions~~ and ~~the~~data ~~extent~~systems and ~~terms~~controls ofacross ~~such~~our ~~compensation,~~company. ~~such~~Any ~~determination~~weaknesses ~~will~~or bedeficiencies ~~made~~or byany ~~the~~failure ~~Compensation~~to implement ~~and~~new ~~Rewards~~or ~~Committee~~improved controls, aor ~~statutory~~difficulties ~~committee~~encountered ofin the ~~Israeli~~implementation ~~Patents~~or ~~Office.~~operation Asof athese ~~result~~controls, itcould isharm ~~unclear~~our ~~if,~~operating results and tocause ~~what~~us ~~extent,~~to ~~our~~fail ~~research and~~to ~~development~~meet ~~employees~~our ~~may~~financial bereporting ~~able~~obligations, toor ~~claim~~result ~~compensation~~in ~~with~~material ~~respect~~misstatements toin our ~~future~~consolidated ~~revenues.~~financial ~~Such claims~~statements, ~~if successfully asserted,~~ which could adversely affect our ~~results~~business ofand ~~operations~~reduce ~~and~~our ~~profitability~~stock price.

WeIf we are unable to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404, our independent registered public accounting firm may benot ~~adversely~~issue ~~affected~~an byunqualified ~~fluctuations~~opinion. If we are unable to conclude that we have effective internal control over financial reporting, investors could lose confidence in our reported financial information, which could have a material adverse effect on the ~~currency~~trading ~~exchange~~price ~~rate~~of our common stock. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of ~~the~~public ~~Israeli~~companies, ~~Shekel~~could also restrict our future access to the capital markets.

~~We compute~~If awe ~~significant~~fail ~~number~~to maintain an effective system of ~~expenses~~internal incontrol ~~Israeli~~over ~~Shekels~~financial reporting, ~~both~~we ~~expenses~~may ~~from~~not ~~employees~~be ~~and~~able ~~suppliers.~~to ~~Our~~accurately ~~customers~~report ~~buy~~ our ~~products~~financial results or prevent fraud. As a result, ~~priced~~stockholders incould USlose ~~dollars~~confidence orin ~~Euros.~~our ~~The~~financial ~~strengthening~~and ofother ~~the~~public ~~shekel~~reporting, ~~against~~which ~~the~~would ~~dollar~~harm our business and the ~~euro~~trading ~~could~~price ~~erode~~ of our ~~profitability~~common stock.

38Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

Unanticipated changes in our effective tax rate and additional tax liabilities, including those resulting from our international operations or the implementation of new tax rules, could harm our future results.46

We are ~~subject~~required to ~~income~~disclose changes ~~taxes~~made in ~~the~~our ~~United States~~internal controls and ~~Israel.~~procedures ~~Our~~on ~~domestic~~a ~~and~~quarterly ~~international~~basis ~~tax~~and ~~liabilities~~our ~~are~~management ~~subject~~is required to assess the ~~allocation~~ effectiveness of these ~~expenses~~controls inannually. In ~~differing~~addition, ~~jurisdictions~~our ~~and~~independent ~~complex~~registered ~~transfer~~public ~~pricing~~accounting ~~regulations~~firm ~~administered~~will bybe ~~taxing~~required ~~authorities~~to inattest ~~various~~to ~~jurisdictions.~~the effectiveness ~~Tax~~of ~~rates~~our ininternal ~~the~~controls ~~jurisdictions~~over infinancial ~~which~~reporting wepursuant ~~operate~~to ~~may~~Section 404, ~~change~~however asthey awill ~~result~~not ofbe ~~factors~~required ~~outside~~to ofdo ~~our~~so ~~control~~for orso ~~relevant~~long as ~~taxing~~we ~~authorities may~~are ~~disagree~~an ~~with~~emerging ~~our~~growth ~~determinations~~company. asWe tocould ~~the~~be ~~income~~an ~~and~~emerging ~~expenses~~growth ~~attributable~~company for up to ~~specific~~five years ~~jurisdictions~~(i.e., Inuntil ~~addition~~December 31, 2027). ~~changes~~An inindependent ~~tax and~~assessment ~~trade~~of ~~laws,~~the ~~treaties~~effectiveness orof ~~regulations,~~our orinternal ~~their~~controls ~~interpretation~~over orfinancial ~~enforcement,~~reporting ~~have~~could ~~become~~detect ~~more~~problems ~~unpredictable~~that ~~and~~our management’s ~~may~~assessment ~~become~~might ~~more~~not. ~~stringent, which~~Undetected material weaknesses in our internal controls over financial reporting could ~~materially~~lead ~~adversely~~to restatements ~~affect~~of our ~~tax~~financial ~~position~~statements and require us to incur the expense of remediation.

~~Forecasting our~~Our ~~estimated~~disclosure ~~annual~~controls ~~effective tax rate is complex~~ and ~~subject~~procedures ~~to uncertainty, and there~~ may ~~be material differences between our forecasted~~ and actual effective tax rate. Our effective tax rate could be adversely affected by changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses, the valuation of deferred tax assets and liabilities, adjustments to income taxes upon finalization of tax returns, changes in available tax attributes, decision to repatriate non-U.S. earnings for which we have not ~~previously~~prevent ~~provided~~or ~~for~~detect ~~U.S. taxes,~~all ~~and~~errors ~~changes in federal, state,~~ or ~~international~~acts ~~tax~~of ~~laws and accounting principles~~fraud.

~~Finally,~~We are subject to certain wereporting ~~may~~requirements of the Exchange Act. Our disclosure controls and procedures are designed to reasonably assure that information required to be ~~subject~~disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to ~~income~~management, recorded, ~~tax~~processed, ~~audits~~summarized ~~throughout~~and reported within the ~~world~~time periods specified in the rules and forms of the SEC. We Anbelieve ~~adverse~~that any ~~resolution~~disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of ~~one~~the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more ~~uncertain~~people ~~tax~~or ~~positions~~by inan ~~any~~unauthorized ~~period~~override of the controls. ~~could~~Accordingly, ~~have~~because aof ~~material~~the ~~impact~~inherent onlimitations in our ~~results~~control ofsystem, ~~operations~~misstatements or ~~financial~~insufficient ~~condition~~disclosures ~~for~~due ~~that~~to ~~period~~error or fraud may occur and not be detected.

~~Risks Related~~An toactive ~~our~~trading ~~Common~~market ~~Stock~~may not develop for our securities.

~~The~~Our common stock is listed ~~requirements~~on the Nasdaq Capital Market. However, we cannot predict the extent to which investor interest in our Company will lead to the development of ~~being~~an active trading market in our common stock or how liquid that market might become. If such a ~~public~~market ~~company~~does ~~may~~not ~~strain~~develop ~~our~~or ~~resources~~is not sustained, it ~~divert~~may ~~management’s~~be ~~attention,~~difficult ~~and~~for ~~affect~~you ~~our~~to ~~ability~~sell your shares of common stock at the time you wish to ~~attract and~~sell ~~retain~~them, ~~executive~~at ~~management~~a ~~and~~price ~~qualified~~that ~~board~~is ~~members~~attractive to you, or at all.

~~As a public company, we are subject to the reporting requirements of the Exchange Act, the listing standards of Nasdaq and other applicable securities rules and regulations.~~ The ~~requirements~~trading ofmarket ~~these~~for ~~rules and regulations will continue to increase~~ our ~~legal,~~common ~~accounting,~~stock ~~and~~in ~~financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources. For example,~~ the ~~Exchange Act~~future ~~requires,~~could ~~among~~be ~~other~~subject ~~things, that we file annual, quarterly, and current reports with respect~~ to ~~our~~wide ~~business~~fluctuations ~~and results of operations. As a result of the complexity involved~~ in ~~complying with~~response ~~the rules and regulations applicable~~ to ~~public~~several ~~companies~~factors, ~~our management’s attention may be diverted from other business concerns~~including, ~~which~~but ~~could~~not ~~harm~~limited ~~our business, results of operations, and financial condition.~~to:

~~We also~~● ~~expect~~actual ~~that~~or ~~being~~anticipated avariations ~~public~~in ~~company~~our ~~and~~results ~~these~~of ~~new~~operations; ~~rules and~~● ~~regulations~~our ~~will~~ability ~~make~~or itinability ~~more expensive for us~~ to ~~obtain~~generate ~~director and~~revenues ~~officer liability insurance, and we may be required to accept reduced coverage~~ or ~~incur~~profit; ~~substantially~~● ~~higher~~the ~~costs~~number ~~to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members~~ of ~~our~~shares ~~board~~in ~~of directors, particularly to serve on~~ our ~~audit~~public ~~committee~~float; and ~~compensation~~● ~~committee,~~increased ~~and qualified executive officers~~competition.

~~As a~~Furthermore, ~~result~~our ofstock ~~disclosure~~price may ofbe ~~information~~impacted inby ~~filings~~factors ~~required~~that ofare aunrelated ~~public~~or ~~company,~~disproportionate to our ~~business~~operating ~~and~~performance. ~~financial~~These ~~condition~~market ~~is more visible~~fluctuations, ~~which~~ ~~may~~as ~~result~~well inas general aneconomic, ~~increased~~political, ~~risk~~and ofmarket ~~threatened~~conditions, orsuch ~~actual~~as ~~litigation~~recessions, ~~including~~interest byrates ~~competitors~~or ~~and~~international ~~other~~currency ~~third~~fluctuations ~~parties.~~may ~~If such claims~~adversely ~~are~~affect ~~successful,~~the ~~our~~market ~~business~~price ~~and results~~ of ~~operations~~our ~~could~~common bestock. ~~harmed~~Additionally, ~~and~~moving ~~even~~forward ifwe ~~the~~anticipate ~~claims~~having doa ~~not~~limited ~~result~~number inof ~~litigation~~shares ~~or are resolved~~ in our ~~favor~~public float, ~~these claims,~~ and ~~the~~as ~~time~~a ~~and~~result, ~~resources~~there ~~necessary~~could tobe ~~resolve~~extreme ~~them,~~fluctuations ~~could~~in ~~divert~~ the ~~resources~~price of our ~~management~~common ~~and harm our business, results of operations, and financial condition~~stock.

The individuals who now constitute our senior management team have limited experience managing a publicly-traded company and limited experience complying with the increasingly complex laws pertaining to public companies. Our senior management team may not successfully or efficiently manage our transition to a public company that is subject to significant regulatory oversight and reporting obligations.47

39Our issuance of additional capital stock in connection with financings, acquisitions, investments, our 2015 Equity Incentive Plan, or otherwise will dilute all other stockholders.

WeIn the future, we may need ~~are~~to anraise ~~“emerging~~additional ~~growth~~capital ~~company,”~~through equity and debt financings in order to fund our ~~compliance~~operations. ~~with~~If we raise capital through equity financings in the ~~reduced~~future, ~~reporting~~that ~~and~~will ~~disclosure~~result ~~requirements~~in ~~applicable~~dilution to all other stockholders. We also expect to grant equity awards to employees, directors, ~~“emerging~~and ~~growth~~consultants ~~companies”~~under our 2015 Equity Incentive Plan. As part of our business strategy, we may acquire or make ~~our~~investments ~~common~~in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock ~~less~~may ~~attractive~~cause stockholders to ~~investors~~experience significant dilution of their ownership interests and the per-share value of our common stock to decline.

We ~~are~~ ando “emerging growth company,” as defined in the JOBS Act, and we have elected to take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not ~~“emerging~~intend ~~growth companies.” These provisions include, but are not limited~~ to: ~~requiring~~pay ~~only~~dividends ~~two years~~on ~~of audited financial statements and only two years~~our ofcommon ~~related~~stock ~~selected financial data~~ and, ~~management’s~~consequently, ~~discussion and analysis of financial condition and results of operations disclosures; being exempt from compliance with~~ the ~~auditor~~ability ~~attestation requirements~~ of ~~Section 404(b) of~~common ~~the~~stockholders ~~Sarbanes-Oxley~~to ~~Act;~~achieve ~~being exempt from any rules that could be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotations or~~ a ~~supplement to~~return ~~the auditor’s report~~ on ~~financial~~investment ~~statements;~~will ~~being~~depend ~~subject~~on toappreciation, ~~reduced~~if ~~disclosure obligations regarding executive compensation~~any, in ~~our~~the ~~periodic~~price ~~reports~~of ~~and~~our ~~proxy~~common ~~statements; and not being required to hold nonbinding advisory votes on executive compensation or on any golden parachute payments not previously approved~~stock.

~~In addition,~~You ~~while~~should wenot ~~are~~rely on an investment ~~“emerging~~in ~~growth~~our ~~company,”~~common westock ~~will~~to ~~not~~provide bedividend ~~required~~income. We do not plan to ~~comply~~declare ~~with~~or pay any ~~new~~dividends ~~financial~~on ~~accounting~~our capital stock in the ~~standard~~foreseeable ~~until~~future. ~~such~~Instead, ~~standard~~we isintend ~~generally~~to ~~applicable~~retain any earnings to ~~private~~finance ~~companies~~the operation and expansion of our business. AsAny acredit ~~result~~agreements, which ~~our~~we ~~financial~~may ~~statements~~enter into with institutional lenders, may ~~not~~restrict our ability to pay dividends. Whether we pay cash dividends in the future will be ~~comparable~~at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital torequirements ~~companies~~and any other factors that ~~are~~the ~~not~~board ~~“emerging~~of ~~growth~~directors ~~companies”~~decides oris ~~elect~~relevant. ~~not~~Therefore, toany ~~avail~~return ~~themselves~~on your investment in our capital stock must come from increases in the fair market value and trading price of ~~this~~the ~~provision~~capital stock.

~~We may~~Future ~~remain~~sales anof ~~“emerging~~our ~~growth~~common ~~company” until as late as December 31~~stock, ~~2027,~~or the ~~fiscal year-end following the fifth~~ ~~anniversary~~perception ofthat ~~the~~future ~~completion~~sales ofmay ~~our IPO~~occur, ~~though we~~ may ~~cease~~cause to be an “emerging growth company” earlier under certain circumstances, including if (1) we have more than $1.07 billion in annual net revenues in any fiscal year, (2) we become a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates as of the ~~end~~market ofprice ~~the second quarter~~ of ~~that~~our ~~fiscal~~common ~~year~~stock orto ~~(3) we~~decline, ~~issue~~even ~~more~~if ~~than~~our ~~$1.0 billion~~business ofis ~~non-convertible~~doing ~~debt over a three-year period~~well.

~~The exact~~Sales ~~implications~~ of ~~the~~substantial ~~JOBS~~amounts of ~~Act~~our ~~are~~common ~~still~~stock ~~subject~~in ~~to interpretations and guidance by~~ the ~~SEC~~public ~~and other regulatory agencies~~market, ~~and~~or ~~we cannot~~the ~~assure~~perception ~~you~~ that wethese ~~will~~sales bemay ~~able~~occur, tocould ~~take~~materially ~~advantage~~and ofadversely ~~all~~affect of the ~~benefits~~ price of ~~the JOBS Act. In addition, investors may find~~ our common stock ~~less attractive to the extent we rely on the exemptions~~ and ~~relief~~could ~~granted~~impair ~~by the JOBS Act. If some investors find~~ our ~~common stock~~ability ~~less~~to ~~attractive~~raise ascapital athrough ~~result,~~the ~~there~~sale ~~may~~of beadditional aequity ~~less active trading market for our common stock and our stock price may decline or become more volatile~~securities.

IfOur amended and restated wecertificate ~~fail~~of incorporation, or the Charter, authorizes us to ~~maintain~~issue anup ~~effective~~to ~~system~~42,803,774 shares consisting of ~~internal~~30,000,000 ~~control~~shares ~~over~~of ~~financial~~common stock ~~reporting~~with a par value of $0.0001 per share, we2,803,774 ~~may~~shares ~~not~~of benon-voting ~~able~~common tostock ~~accurately~~with ~~report~~a ~~our~~par ~~financial~~value of $0.0001 per share and 10,000,000 ~~results~~shares orof ~~prevent~~preferred ~~fraud.~~stock Aswith a ~~result,~~par ~~our~~value ~~shareholders~~of ~~could~~$0.0001 ~~lose~~per ~~confidence~~share. inAs ~~our~~of ~~financial~~December ~~and~~31, ~~other~~2025, ~~public~~we ~~reporting~~had 8,058,392 ~~which~~outstanding ~~would harm~~shares ~~our~~of ~~business~~common stock and ~~the~~no ~~trading~~outstanding ~~price~~shares of ~~our~~preferred ~~common~~ stock.

~~As a~~In ~~public company~~addition, weas ~~are~~of ~~subject~~such todate, approximately ~~significant~~3,853 ~~requirements~~shares ~~for~~of ~~enhanced~~common ~~financial~~stock ~~reporting~~were ~~and~~issuable ~~internal~~upon ~~controls.~~the ~~The~~exercise ~~process~~ of ~~designing and~~outstanding ~~implementing~~stock ~~effective~~options ~~internal controls is a continuous effort that requires us to anticipate~~ and ~~react~~173,473 toshares ~~changes~~vesting ~~in our business and the economic and regulatory environments and to expend significant resources to maintain a system~~ of ~~internal controls that is adequate~~ torestricted ~~satisfy~~stock ~~our reporting obligations as a public company~~units. ~~In addition~~Moreover, weas ~~are~~of ~~required,~~that ~~pursuant to Section 404~~date, toapproximately ~~furnish a report by management on~~6,750 ~~among~~shares ~~other things, the effectiveness~~ of our ~~internal~~common ~~control~~stock ~~over~~are ~~financial~~available ~~reporting~~for infuture ~~the~~grants ~~second annual report~~under ~~following the completion of~~ our ~~IPO. This~~stock ~~assessment~~incentive ~~will~~plan ~~need~~and tofor ~~include~~future ~~disclosure~~purchase ofunder ~~any material weaknesses identified by~~ our ~~management~~ inemployee ~~our~~stock ~~internal~~purchase ~~control over financial reporting~~plan. AIn ~~material~~addition, ~~weakness~~as ~~is a deficiency or combination~~ of ~~deficiencies~~such ~~in internal control over financial reporting~~date, ~~such~~none ~~that~~shares ~~there is a reasonable possibility that a material misstatement~~ of ~~a company’s annual~~ ~~and~~common ~~interim~~stock ~~financial~~are ~~statements~~issuable ~~will~~pursuant ~~not~~to beour ~~detected~~ATM orProgram ~~prevented~~with ~~on a timely basis~~HCW.

~~The rules~~Sales ~~governing~~of ~~the~~a ~~standards~~substantial ~~that~~number of ~~must~~shares beof ~~met for~~ our ~~management~~common tostock ~~assess~~in ~~our~~the ~~internal~~public ~~control over financial reporting are complex and require significant documentation~~market, ~~testing,~~or ~~and~~the ~~possible~~perception ~~remediation.~~that ~~Testing~~such ~~and~~sales ~~maintaining internal controls~~ may ~~divert our management’s attention from other matters that are important to our business. Once we are no longer an “emerging growth company~~occur,” orcould ~~a “smaller~~depress ~~reporting company”, our auditors will be required to issue an attestation report on~~ the ~~effectiveness~~market price of our ~~internal~~ ~~controls~~common ~~on an annual basis~~stock.

In the course of preparing the financial statements that are included in this Annual Report, management has determined that a material weakness exists within the internal control over financial reporting. The ~~material~~market ~~weakness~~price ~~identified relates to lack~~ of aour ~~sufficient~~common ~~number~~stock may ofbe ~~finance~~volatile ~~personnel~~and tomay ~~allow~~decline ~~for~~regardless ~~adequate segregation~~ of ~~duties. We concluded that the material weakness in~~ our ~~internal~~operating ~~control over financial reporting occurs because as a newly public company~~performance, ~~we do not have the necessary business processes, systems, personnel,~~ and ~~related~~ ~~internal~~you ~~controls~~may ~~necessary~~lose toall ~~satisfy~~or ~~the~~part ~~accounting and financial reporting requirements~~ of ayour ~~public company~~investments.

40The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

~~We may~~● ~~not~~overall beperformance ~~able~~of ~~to fully remediate~~ the ~~identified~~equity ~~material~~markets ~~weakness~~and/or ~~until~~publicly ~~the~~listed ~~steps~~technology ~~described~~companies; ~~above~~● ~~have~~actual ~~been~~or ~~completed~~anticipated ~~and~~fluctuations in our ~~internal controls~~net ~~have~~revenues ~~been~~or other operating ~~effectively~~metrics; ~~for~~● achanges ~~sufficient~~in ~~period~~the offinancial ~~time.~~projections we provide to the public or our failure to meet these projections;

~~As previously~~● ~~disclosed, during~~ the ~~years~~exercise ~~ended~~of ~~December~~currently ~~31,~~outstanding ~~2022~~warrants ~~and~~in ~~December~~large 31numbers, ~~2023,~~which wemay ~~identified~~cause adownward ~~material~~pressure ~~weakness~~on ~~in the design and operation of~~ our ~~internal~~stock ~~control over financial reporting in connection with the preparation of our financial statements.~~price;

~~Although as~~● failure of ~~December~~securities ~~31,~~analysts ~~2024,~~to ~~the~~initiate ~~material weaknesses in our internal control over financial reporting had been remediated, there can be no assurance that we will not suffer from other material weaknesses~~ or ~~significant deficiencies in the future. If we fail to~~ maintain ~~effective internal~~coverage ~~controls~~of ~~over financial reporting in the future~~us, ~~such~~changes ~~failure could result~~ in ~~a material misstatement of our annual or quarterly~~ financial ~~statements~~estimates ~~that~~by ~~would~~any ~~not~~securities beanalysts ~~prevented~~who orfollow ~~detected on a timely basis and which could cause investors and other users to lose confidence in~~ our ~~financial statements~~company, ~~limit~~or our ~~ability to raise capital and have a negative effect on the trading price of our ordinary shares. Additionally,~~ failure to ~~remediate~~meet the ~~material~~estimates ~~weakness~~ or otherwise maintain effective internal controls over financial reporting may also negatively impact our operating results and financial condition, impair our ability to timely file our periodic and other reports with the ~~SEC,~~expectations ~~subject us to additional litigation and regulatory actions and cause us to incur substantial additional costs in future periods relating to the implementation~~ of ~~remedial measures.~~investors;

In the future, it is possible that additional material weaknesses or significant deficiencies may be identified that we may be unable to remedy before the requisite deadline for these reports. Our ability to comply with the annual internal control reporting requirements will depend on the effectiveness of our financial reporting and data systems and controls across our company. Any weaknesses or deficiencies or any failure to implement new or improved controls, or difficulties encountered in the implementation or operation of these controls, could harm our operating results and cause us to fail to meet our financial reporting obligations, or result in material misstatements in our consolidated financial statements, which could adversely affect our business and reduce our stock price.48

~~If we~~● ~~are~~the ~~unable~~economy toas ~~conclude~~a onwhole anand ~~ongoing~~market ~~basis~~conditions ~~that~~in weour ~~have~~industry; ~~effective~~● ~~internal~~political ~~control~~and ~~over~~economic ~~financial~~stability ~~reporting~~ in ~~accordance~~Israel; ~~with~~● ~~Section 404, our~~exchange ~~independent~~rate ~~registered~~fluctuations ~~public~~between ~~accounting~~U.S. ~~firm~~dollars ~~may~~and ~~not~~Israeli ~~issue~~New anShekel; ~~unqualified~~● ~~opinion.~~rumors Ifand wemarket ~~are~~speculation ~~unable~~involving tous ~~conclude~~or ~~that~~other wecompanies ~~have~~in ~~effective internal~~our ~~control~~industry; ~~over~~● ~~financial~~announcements ~~reporting,~~by ~~investors~~us ~~could~~or ~~lose~~our ~~confidence~~competitors inof ~~our~~significant ~~reported~~innovations, ~~financial~~acquisitions, ~~information~~strategic partnerships, ~~which~~joint ~~could~~ventures, ~~have~~or ~~a material~~capital ~~adverse~~commitments; ~~effect~~● onnew ~~the~~laws ~~trading~~or ~~price~~regulations or new interpretations of ~~our~~existing ~~common~~laws ~~stock.~~or ~~Failure~~regulations applicable to ~~remedy~~our ~~any~~business; ~~material~~● ~~weakness~~lawsuits inthreatened ~~our~~or ~~internal~~filed ~~control~~against ~~over financial~~us; ~~reporting,~~● recruitment or todeparture ~~implement~~of orkey ~~maintain~~personnel; ● other ~~effective~~events ~~control~~or ~~systems~~factors, ~~required~~including ofthose ~~public~~resulting ~~companies~~from war, ~~could~~incidents ~~also~~of ~~restrict~~terrorism, ~~our future~~or ~~access~~responses to these events; and ● the ~~capital~~expiration ~~markets~~of contractual lock-up or market standoff agreements.

IfIn addition, extreme price weand ~~fail~~volume tofluctuations ~~maintain~~in anthe ~~effective~~stock ~~system~~markets ofhave ~~internal~~affected ~~control~~and ~~over~~continue ~~financial~~to ~~reporting,~~affect wemany ~~may~~technology ~~not~~companies’ bestock ~~able~~prices. toOften, their ~~accurately~~stock ~~report~~prices ~~our~~have ~~financial results~~fluctuated in ways unrelated or ~~prevent~~disproportionate ~~fraud~~to the companies’ operating performance. AsIn athe ~~result~~past, ~~stockholders~~securities action ~~could~~litigation ~~lose~~has ~~confidence~~often been brought against a Company following a decline in ~~our~~the ~~financial~~market ~~and~~price ~~other~~of ~~public~~its ~~reporting,~~securities. ~~which~~This ~~would~~risk ~~harm~~is especially ~~our~~relevant ~~business~~for ~~and~~us ~~the~~because ~~trading~~technology companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of ~~our~~management’s ~~common~~attention ~~stock~~and resources, which could harm our business.

~~Effective internal~~A ~~controls~~possible ~~over~~“short ~~financial~~squeeze” ~~reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure~~due ~~controls and procedures, are designed~~ to ~~prevent~~a ~~fraud.~~sudden ~~Any~~increase ~~failure to implement required new or improved controls, or difficulties encountered~~ in ~~their~~demand ~~implementation~~of ~~could cause us to fail to meet~~ our ~~reporting~~common ~~obligations.~~stock In addition, any testing by us conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that ~~are~~largely ~~deemed~~exceeds tosupply ~~be material weaknesses or that~~ may ~~require~~lead ~~prospective or retroactive changes~~ to ~~our~~price ~~financial~~volatility ~~statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence~~ in our ~~reported~~common ~~financial information, which could have a negative effect on the trading price of our~~ stock.

~~We will~~Investors bemay ~~required~~purchase our common stock to ~~disclose~~hedge ~~changes~~existing ~~made~~exposure in our ~~internal~~common ~~controls~~stock ~~and~~or ~~procedures~~to speculate on athe ~~quarterly~~price ~~basis~~of ~~and~~ our ~~management~~common ~~will~~stock. beSpeculation ~~required~~on the price toof ~~assess~~our ~~the~~common ~~effectiveness~~stock ofmay ~~these~~involve ~~controls~~long ~~annually,~~and ~~beginning~~short ~~with~~exposures. ~~our~~To ~~second~~the ~~annual~~extent ~~report~~aggregate onshort ~~Form 10-K. In~~exposure ~~addition, our~~exceeds ~~independent~~the ~~registered~~number ~~public~~of ~~accounting~~shares ~~firm~~of ~~will~~our becommon stock ~~required~~available tofor ~~attest~~purchase toin the ~~effectiveness~~open ofmarket, ~~our~~investors ~~internal~~with ~~controls~~short ~~over~~exposure ~~financial reporting~~may ~~pursuant~~have to ~~Section 404,~~pay ~~however~~a ~~they~~premium ~~will~~to ~~not~~repurchase beour ~~required~~common stock for delivery to dolenders soof ~~for~~our socommon ~~long~~stock. asThose werepurchases ~~are~~may anin ~~emerging~~turn, ~~growth~~dramatically ~~company. We~~increase ~~could~~the beprice anof ~~emerging~~our ~~growth~~common ~~company~~stock ~~for~~until investors upwith short exposure are able to ~~five years~~purchase ~~(i.e.,~~additional ~~until~~common ~~December 31,~~stock ~~2027)~~to cover their short position. AnThis ~~independent~~is ~~assessment~~often ofreferred ~~the~~to as ~~effectiveness~~a of“short ~~our~~squeeze.” ~~internal~~A ~~controls~~short ~~over~~squeeze ~~financial~~could ~~reporting~~lead ~~could~~to ~~detect~~volatile ~~problems~~price ~~that~~movements in our ~~management’s~~common ~~assessment~~stock ~~might~~that are not. directly correlated ~~Undetected~~to ~~material~~the ~~weaknesses~~performance inor ~~our~~prospects ~~internal~~of ~~controls~~our ~~over~~common ~~financial~~stock ~~reporting~~and ~~could~~once ~~lead~~investors topurchase ~~restatements~~the shares of ~~our~~common ~~financial~~stock ~~statements and~~necessary ~~require~~to uscover totheir ~~incur~~short position the ~~expense~~price of ~~remediation~~our common stock may decline.

41If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our stock price and trading volume could decline.

~~Our~~The trading market for our ~~disclosure~~common ~~controls~~stock will depend, in part, on the research and ~~procedures~~reports ~~may~~that securities or industry analysts publish about us or our business. Securities and industry analysts do not ~~prevent~~currently, and may never, publish research on our company. If no securities or ~~detect~~industry ~~all~~analysts commence ~~errors~~coverage of our company, the trading price for our common stock would likely be negatively impacted. In the event securities or ~~acts~~industry analysts initiate coverage, if one or more of ~~fraud~~the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. In addition, if our operating results fail to meet the forecast of analysts, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our stock price and trading volume to decline.

We are subject to certain reporting requirements of the Exchange Act. Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.49

AnProvisions in our charter documents and ~~active~~under ~~trading~~Delaware ~~market~~law ~~may~~could ~~not~~make ~~develop~~an ~~for~~acquisition of our ~~securities~~company more difficult, limit attempts by our stockholders to replace or remove our current board of directors and limit the market price of our common stock.

~~Our common~~Provisions ~~stock is listed on the Nasdaq Capital Market. However, we cannot predict the extent to which investor interest~~ in our ~~Company~~amended ~~will~~and ~~lead~~restated tocertificate ~~the development~~ of anincorporation, ~~active trading market in our common stock~~ or ~~how~~the ~~liquid~~Charter, ~~that~~and ~~market~~bylaws, ~~might become. If such a market does not develop~~ or isthe ~~not sustained~~Bylaws, it may behave ~~difficult~~the ~~for~~effect ~~you~~of todelaying ~~sell~~or ~~your~~preventing ~~shares~~a change of ~~common~~control ~~stock~~or atchanges ~~the~~in ~~time~~our ~~you~~management. ~~wish~~Our toCharter ~~sell~~and ~~them~~Bylaws, at ainclude ~~price~~provisions that ~~is attractive to you, or at all.~~:

~~The trading~~● ~~market~~permit ~~for~~the ~~our~~board ~~common~~of ~~stock~~directors into establish the ~~future~~number ~~could~~of directors and fill any vacancies and newly-created directorships; ● classify our board of directors is classified into three classes of directors with staggered three-year terms and stockholders will only be ~~subject~~able to ~~wide~~remove ~~fluctuations~~directors infrom ~~response~~office tofor ~~several~~cause; ~~factors~~and ● provide that the board of directors is expressly authorized to make, ~~including~~alter, ~~but not~~or ~~limited~~repeal ~~to:~~our Bylaws.

●Moreover, ~~actual~~Section 203 of the Delaware General Corporation Law, or ~~anticipated~~the ~~variations~~DGCL, may discourage, delay, or prevent a change in control of our ~~results~~company. Section 203 imposes certain restrictions on mergers, business combinations, and other transactions between us and holders of ~~operations;~~15% or more of our common stock.

●Our Charter provides that derivative actions brought on our ~~ability~~behalf, actions against our directors, officers, employees or ~~inability~~agent for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and the stockholders shall be deemed to ~~generate~~have ~~revenues~~consented to this choice of forum provision, which may have the effect of discouraging lawsuits against our directors, officers, other employees or ~~profit;~~agents.

●Our Charter provides that, unless we consent in writing to the ~~number~~selection of ~~shares~~an inalternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (a) any derivative action or proceeding brought on our ~~public~~behalf, ~~float;~~(b) any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any current or former director, officer, stockholder, employee or agent of the Company to the Company or the Company’s stockholders, (c) any action asserting a claim against us or any current or former director, officer, stockholder, employee or agent of the Corporation arising pursuant to any provision of the DGCL, or our Company’s Certificate of Incorporation or Bylaws, (d) any action to interpret, apply, enforce or determine the validity of the Company’s Certificate of Incorporation or Bylaws, (e) any action asserting a claim governed by the internal affairs doctrine or (f) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the General Corporation Law. The federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint, claim or proceeding asserting a cause of action arising under the Exchange Act or the Securities Act. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

●Stockholders ~~increased~~cannot ~~competition~~waive compliance with the federal securities laws and the rules and regulations thereunder. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provision in our Charter.

~~Furthermore,~~The choice-of-forum provision ~~our~~may ~~stock~~limit ~~price~~a ~~may~~stockholder’s beability ~~impacted~~to bybring ~~factors~~a claim in a judicial forum that ~~are~~it ~~unrelated~~finds favorable for disputes with the Company or its ~~disproportionate~~directors, officers or other employees, and may result in increased costs to ~~our~~a ~~operating~~stockholder ~~performance~~who has to bring a claim in a forum that is not convenient to the stockholder, which may discourage such lawsuits. ~~These~~Although ~~market~~under ~~fluctuations~~Section 115 of the DGCL, exclusive forum asprovisions ~~well~~may asbe ~~general~~included ~~economic~~in a company’s certificate of incorporation, ~~political~~the enforceability of similar forum provisions in other companies’ certificates or incorporation or bylaws has been challenged in legal proceedings, and ~~market~~it ~~conditions,~~is ~~such~~possible asthat ~~recessions,~~a ~~interest~~court ~~rates~~could find these types of provisions to be inapplicable or ~~international~~unenforceable. ~~currency~~If ~~fluctuations may~~a ~~adversely~~court ~~affect~~were to find the ~~market~~exclusive ~~price~~forum provision of our ~~common~~Charter inapplicable ~~stock.~~or ~~Additionally,~~unenforceable ~~moving~~with ~~forward~~respect weto ~~anticipate~~one ~~having~~or amore ~~limited~~of ~~number~~the specified types of ~~shares~~actions or proceedings, we may incur additional costs inassociated ~~our~~with ~~public~~resolving ~~float~~such matters in other jurisdictions, which could materially and asadversely aaffect ~~result~~our business, ~~there~~financial ~~could~~condition and beresults ~~extreme~~of ~~fluctuations~~operations and result in a diversion of the ~~price~~time and resources of our ~~common~~management ~~stock~~and board of directors.

~~Our issuance of additional capital stock in connection with financings, acquisitions, investments, our 2015 Equity Incentive Plan, or otherwise will dilute all other stockholders.~~50

~~In the~~ITEM ~~future, we may need to raise additional capital through equity and debt financings in order to fund our operations~~1B. IfUNRESOLVED weSTAFF ~~raise capital through equity financings in the future, that will result in dilution to all other stockholders~~COMMENTS. We also expect to grant equity awards to employees, directors, and consultants under our 2015 Equity Incentive Plan. As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per-share value of our common stock to decline.

42None.

~~We do~~ITEM ~~not~~1C. intend to pay dividends on our common stock and, consequently, the ability of common stockholders to achieve a return on investment will depend on appreciation, if any, in the price of our common stockCYBERSECURITY.

~~You should~~Risk ~~not~~management rely on an investment in our common stock to provide dividend income. We do not plan to declare or pay any dividends on our capital stock in the foreseeable future. Instead, we intend to retain any earnings to finance the operation and expansion of our business. Any credit agreements, which we may enter into with institutional lenders, may restrict our ability to pay dividends. Whether we pay cash dividends in the future will be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements and any other factors that the board of directors decides is relevant. Therefore, any return on your investment in our capital stock must come from increases in the fair market value and trading price of the capital stock.strategy

~~Future sales~~We ofhave ~~our~~developed ~~common~~and ~~stock,~~maintain a orcybersecurity ~~the~~risk ~~perception~~management program that ~~future~~focuses ~~sales~~primarily ~~may~~on ~~occur~~securing and safeguarding computer systems, ~~may~~networks, ~~cause~~cloud ~~the~~services, business ~~market~~applications, ~~price~~and ofdata and that is integrated in our ~~common~~overall ~~stock~~risk management strategy and framework. We have implemented protocols to ~~decline~~protect against cyber threats and ensure the containment and security of sensitive business data, including ongoing security reviews ~~even~~of ifcritical systems, continuous monitoring of event data, and employee training programs, which processes are aligned with our overall business isand ~~doing~~operational goals and strategies. Our risk assessment occurs on an ongoing basis and covers identification of risks that could act against the company’s objectives as well as specific risks related to a compromise to the security of data.

~~Sales of~~We ~~substantial~~engage ~~amounts~~a ofthird-party ~~our~~to provide ~~common~~operational ~~stock~~support infor ~~the~~cybersecurity ~~public~~risks. ~~market,~~This orforms ~~the~~a ~~perception~~critical ~~that~~part ~~these~~of ~~sales~~our ~~may~~risk ~~occur~~management strategy, ~~could~~facilitating ~~materially~~effective management and ~~adversely affect~~mitigation ~~the price~~ of ~~our~~risks, ~~common stock~~ and ~~could~~ensuring ~~impair~~adherence ~~our ability~~ to ~~raise~~applicable ~~capital~~regulatory ~~through~~and ~~the~~industry ~~sale of additional equity securities~~standards.

~~Our~~Overall, we believe that ~~amended~~we ~~and~~have ~~restated~~established ~~certificate~~a ofrobust ~~incorporation,~~framework orfor ~~the~~confidentiality, ~~Charter~~integrity, ~~authorizes~~and usavailability toof ~~issue~~information, upadhering to 42relevant security standards,~~803~~ practices,~~774~~ ~~shares~~and ~~consisting~~compliance ~~of 30~~requirements. In addition,~~000,000~~ ~~shares~~we ofmaintain ~~common~~insurance ~~stock~~to help protect against risks associated with acybersecurity threats. ~~par~~As ~~value~~of the date of ~~US$0.0001~~this ~~per~~report, ~~share~~we do not believe that any risks from cybersecurity threats have materially affected, 2or are reasonably likely to materially affect,~~803~~ us,~~774~~ ~~shares~~including our business strategy, results of ~~non-voting~~operations, ~~common~~or ~~stock~~financial ~~with~~condition. aHowever, ~~par~~despite our ~~value~~efforts, ofwe ~~US$0.0001~~cannot ~~per~~eliminate ~~share~~all ~~and~~risks 10from cybersecurity threats,~~000,000~~ ~~shares~~or ofprovide ~~preferred~~assurances ~~stock~~that ~~with~~we ahave ~~par~~not ~~value~~experienced ofan ~~US$0~~undetected cybersecurity incident.~~0001~~ ~~per~~For ~~share~~more information about these risks, please see “Item 1.A – Risk Factors – Risks Related to Our Business AsOperations of– ~~December~~If ~~31,~~our ~~2024~~internal company cyber-security measures are breached or fail and unauthorized access is obtained to our IT environment, we ~~have~~may ~~8,513,181~~incur ~~outstanding~~significant ~~shares~~losses of ~~common~~data, ~~stock~~which we may not be able to recover and nomay ~~outstanding~~experience ~~shares~~a ofdelay ~~preferred~~in our ability to ~~stock.~~conduct our day-to-day business” in this Annual Report.

In addition, as of such date, approximately 98,932 shares of common stock are issuable upon the exercise of outstanding stock options and the vesting of restricted stock units. Moreover, as of that date, approximately 99,298 shares of our common stock are available for future grants under our stock incentive plan and for future purchase under our employee stock purchase plan. In addition, as of such date, up to $1.3 million of shares of common stock are issuable pursuant to our ATM Program with HCW.Governance

~~Sales~~Our board of directors provides oversight of aour ~~substantial~~cybersecurity ~~number~~program ofand ~~shares~~helps ofguide our ~~common~~strategy ~~stock~~for managing cybersecurity risks in the ~~public~~context ~~market~~of our overall risk management system. Our cybersecurity program is managed by our Deputy Chief Executive Officer and Chief Financial Officer and our external IT team, orwho ~~the~~are ~~perception~~responsible ~~that~~for ~~such~~leading ~~sales~~enterprise-wide ~~may~~cybersecurity ~~occur~~execution, ~~could~~protocols, ~~depress~~framework, standards and processes. Our Deputy ~~the~~Chief ~~market~~Executive ~~price~~Officer and Chief Financial Officer has extensive operational responsibility for IT, of more than seven years, and he manages our ~~common~~external ~~stock.~~IT team,

The Deputy Chief Executive ~~market~~Officer ~~price~~and ofChief ~~our~~Financial ~~common~~Officer ~~stock~~reports ~~may~~to beour ~~volatile~~board ~~and~~of ~~may~~directors, ~~decline~~as ~~regardless~~well ofas our ~~operating~~Chief ~~performance,~~Executive Officer and ~~you~~other ~~may~~members ~~lose~~of ~~all or part~~senior ofmanagement ~~your~~as ~~investments~~appropriate.

~~The market~~ITEM ~~price~~2. ~~of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:~~PROPERTIES.

●We ~~overall~~had ~~performance~~leased a facility in Fremont, California, which consisted of approximately 3,000 square feet of office, lab and warehouse space through October 2025. We vacated the ~~equity~~Fremont ~~markets~~facility on November 6, 2025 and moved our business location to a Regus/orHQ.com ~~publicly~~hosted facility ~~listed~~in ~~technology~~Sunnyvale, ~~companies;~~and established a service agreement with a Loveland, CO based company to host our inventory, testing lab and provide services as needed for customer success. Our occupation of the Sunnyvale facility runs on a monthly basis, with an initial one-year commitment which runs through October 2026. Our inventory hosting services in Loveland will run on a continuous basis until terminated.

●The ~~actual~~lease orin ~~anticipated~~Petach ~~fluctuations~~Tikva, Israel terminated December 31, 2025 and we signed a new amendment with the same landlord in the same building for a different suite and warehouse approximately 50% smaller for through December 2027. This downsizing effort was done in an effort to refit our ~~net~~lease ~~revenues~~to orconform ~~other~~to ~~operating~~our ~~metrics;~~current needs and for cost savings purposes.

●We ~~changes~~believe inour ~~the~~facilities are ~~financial~~sufficient ~~projections~~to wemeet ~~provide~~our tocurrent ~~the~~needs ~~public~~and orthat ~~our~~suitable ~~failure~~space towill ~~meet~~be ~~these~~available ~~projections;~~as and when needed. We do not own any real property.

●ITEM ~~failure~~3. ofLEGAL securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet the estimates or the expectations of investors;PROCEEDINGS.

●We ~~the~~are ~~economy~~not ascurrently a ~~whole~~party to ~~and~~any ~~market~~material ~~conditions~~legal ~~in our industry;~~proceedings.

●ITEM ~~political~~4. ~~and~~MINE ~~economic~~SAFETY ~~stability in Israel;~~DISCLOSURES.

●Not ~~exchange rate fluctuations between U~~applicable.~~S. dollars and Israeli New Shekel;~~

~~● rumors and market speculation involving us or other companies in our industry;~~51

●PART ~~announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;~~II

43Market Information

●Our ~~lawsuits~~common ~~threatened~~stock or

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