{"url_path":"/sec/mtekw/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 KEY INFORMATION**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1872964/0001213900-26-057766-index.html","accession_number":"0001213900-26-057766","cik":"0001872964","ticker":"MTEK","issuer_name":"Maris Tech Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1872964/0001213900-26-057766-index.html","primary_entity_key":"0001872964","primary_entity_name":"Maris Tech Ltd."},"word_count":15277,"has_tables":true,"body_markdown":"** **\n\n**ITEM 3. KEY INFORMATION**\n\n** **\n\n**A. [Reserved]**\n\n \n\n**B. Capitalization and Indebtedness**\n\n \n\nNot applicable.\n\n** **\n\n**C. Reasons for the Offer and Use of Proceeds.**\n\n \n\nNot applicable.\n\n** **\n\n**D. Risk Factors.**\n\n \n\nOur business faces significant\nrisks. You should carefully consider the risks described below, together with all of the other information in this Annual Report. These\ndisclosures reflect our beliefs and opinions as to factors that could materially and adversely affect us and our securities in the future.\nReferences to past events are provided by way of example only and are not intended to be a complete listing or a representation as to\nwhether or not such factors have occurred in the past or their likelihood of occurring in the future. The risks described below are not\nthe only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may\nalso materially and adversely affect our business operations. If any of these risks actually occurs, our business and financial condition\ncould suffer and the price of our securities could decline. This Annual Report also contains forward-looking statements that involve risks\nand uncertainties. Our results could materially differ from those anticipated in these forward-looking statements, as a result of certain\nfactors including the risks described below and elsewhere in this report and our other Securities and Exchange Commission, or SEC, filings\n(see “Cautionary Note Regarding Forward-Looking Statements” above).\n\n** **\n\n**Summary Risk Factors **\n\n** **\n\n**Risks Related to Our Business, Industry,\nOperations and Financial Condition**\n\n \n\n \n●\nwe have been operating at a loss since our inception and may never be profitable;\n\n \n\n \n●\namounts included in backlog may not result in actual revenue and are an uncertain indicator of our future earnings;\n\n \n\n \n●\nWe may not be able to continue as a going concern, and our auditors or management may conclude that substantial doubt exists regarding our ability to continue as a going concern, which could adversely affect our business and the value of our securities.\n\n \n\n \n●  \nwe may not have sufficient manufacturing capabilities to satisfy any growing demand for our commissioned products. We may be unable to control the availability or cost of producing such products;  \n\n \n \n \n\n \n●\nour 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;\n\n \n\n1\n\n \n\n \n\n \n●\nwe operate in an evolving industry and, as a result, our past results may not be indicative of future operating performance;\n\n \n\n \n●\nour commercial success depends upon the degree of market acceptance by the professional, HLS, and defense markets as well as by other prospective markets and industries;\n\n \n\n \n●\nwe may not be able to introduce products acceptable to customers and we may not be able to improve the technology used in our current systems in response to changing technology and end-user needs;\n\n \n\n \n●\npotential growth of our business is based on international expansion, making us susceptible to risks associated with international sales and operations;\n\n \n\n \n●\nwe expect to face significant competition. If we cannot successfully compete with new or existing technologies or future developed products, our marketing and sales will suffer and we may never be profitable;\n\n \n\n \n●\nsignificant merchandise returns and recalls of our ready-made products could harm our business;\n\n \n\n \n●\nif we fail to offer high-quality customer support, our business and reputation may suffer;\n\n \n\n \n●\nour reliance on third-party suppliers for most of the component parts of our products could harm our ability to meet demand for our products in a timely and cost-effective manner;\n\n \n\n \n●\nif we are unable to establish significant sales, marketing and distribution capabilities or enter into successful relationships with business targets and third parties to perform these services, we may not be successful in commercializing our products and technology;\n\n \n\n \n●\nwe may require substantial additional funding to grow our business, which may not be available to us on acceptable terms, or at all;\n\n \n\n \n●\nwe may not accurately forecast revenues, profitability and appropriately plan our expenses;\n\n \n\n \n●\nwe rely on highly skilled personnel, and, if we are unable to attract, retain or motivate qualified personnel, we may not be able to operate our business effectively;\n\n \n\n \n●\nwe may have difficulty in entering into and maintaining strategic alliances with third parties;\n\n \n\n \n●\nwe may not be able to obtain patents or other intellectual property rights necessary to protect our proprietary technology and business;\n\n \n\n \n●\nwe may be unable to keep pace with changes in technology as our business and market strategy evolves;\n\n \n\n \n●\nsignificant disruptions of our information technology systems or breaches of our data security could adversely affect our business;\n\n \n\n \n●\nwe may be subject to general litigation, regulatory disputes and government inquiries;\n\n  \n\n \n●\nnew regulation as well as regulation in new target territories, including regulation relating to unmanned platforms, video and audio systems, may create obstacles to our sales and marketing efforts.\n\n** **\n\n2\n\n \n\n** **\n\n**Risks Related to Israeli Law and our Operations\nin Israel**\n\n \n\n \n●\nour principal executive offices, most of our research and development activities and other significant operations are located in Israel and, therefore, our results may be adversely affected by political, economic and military instability in Israel, including Israel’s ongoing multi-front conflicts with terrorist groups and regional actors such as Iran;\n\n \n\n \n●\nexchange rate fluctuations between foreign currencies and the U.S. Dollar may negatively affect our earnings;\n\n \n\n \n●\nwe may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business; and\n\n \n\n \n●\nwe received Israeli government grants for certain of our research and development activities, the terms of which may require us to pay royalties and to 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.\n\n** **\n\n**Risks Related to Our Status as a Public\nCompany and Ownership of our Ordinary Shares and Warrants**\n\n \n\n \n●    \nas of December 31, 2025, our principal shareholders, officers and directors beneficially owned an aggregate of approximately 30.76% of our outstanding Ordinary Shares. They will therefore be able to exert significant control over matters submitted to our shareholders for approval;  \n\n \n \n \n\n \n●\nour failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our Ordinary Shares and warrants to purchase Ordinary Shares issued as part of our initial public offering, or the Warrants\n\n \n\n \n●\nwe are an emerging growth company and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our securities less attractive to investors;\n\n \n\n \n●\nwe incur significant increased costs as a result of operating as a public company. Our management is required to devote substantial time to new compliance initiatives as well as compliance with ongoing U.S. requirements;\n\n \n\n \n●\nthe estimates of market opportunity, market size and forecasts of market growth included in our publicly-filed documents may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rate, if at all;\n\n \n\n \n●\nthe market price of our Ordinary Shares and Warrants may be highly volatile and such volatility could cause you to lose some or all of your investment and also subject us to litigation; and\n\n \n\n \n●\nownership in the Company may be diluted in the future.\n\n** **\n\n3\n\n \n\n** **\n\n**Risks Related to Our Business, Industry, Operations and Financial\nCondition **\n\n** **\n\n**Our business, operating results and growth\nrates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect\nto financial institutions and associated liquidity risk.**\n\n \n\nOur business depends on the\neconomic health of the global economy. If the conditions in the global economy remain uncertain or continue to be volatile, or if they\ndeteriorate, including as a result of armed conflicts in Israel and other parts of the Middle East, such as the Israel-Hamas, Israel-Hezbollah\nand Israel-Iran conflicts, terrorism or other geopolitical events, our business, operating results and financial condition may be materially\nadversely affected. Economic weakness, inflation and increases in interest rates, limited availability of credit, liquidity shortages\nand constrained capital spending have at times in the past resulted, and may in the future result, in challenging and delayed sales cycles,\nslower adoption of new technologies and increased price competition, and could negatively affect our ability to forecast future periods,\nwhich could result in an inability to satisfy demand for our products and a loss of market share.\n\n \n\nIn addition, increases in\ninflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business, and\nfailure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, geopolitical\ndevelopments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty\nabout the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure\nto adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.\n\n \n\nAny of the abovementioned\nfactors could affect our business, prospects, financial condition, and operating results. The extent and duration of the military action,\nsanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify\nthe impact of other risks described in this Annual Report.\n\n** **\n\n**We have been operating at a loss since our\ninception and may never be profitable.**\n\n \n\nWe have been operating at\na loss since our inception. In the fiscal years ended December 31, 2025, 2024, and 2023 we had a net loss of $5,409,322, $1,233,892 and\n$2,709,596, respectively.\n\n \n\nWe anticipate that our operating\nexpenses will continue to increase as we expand our operations and continue to invest in developing our product pipeline. These expenses\nmay exceed our budgeted amounts and our revenues may not increase sufficiently to turn an operating profit and become cash flow positive.\nIf any of the foregoing occur, we may continue to incur losses and remain unprofitable.\n\n** **\n\n**Amounts included in backlog may not result\nin actual revenue and are an uncertain indicator of our future earnings.**\n\n \n\nAs of January 1, 2026, our backlog was approximately 2.5 million. As\nof May 14, 2026, our backlog was approximately 3.1 million. We define backlog as the accumulation of all pending orders with a later fulfillment\ndate for which revenue has not been recognized and that we consider valid. Our backlog is comprised of executed purchase orders from new\ncustomers and existing customers with which we have had long-standing relationships and from governmental agencies. The disclosure of\nbacklog aids in the analysis of the demand for our products, as well as our ability to meet that demand. However, because revenue will\nnot be recognized until we have fulfilled our obligations to a customer, there may be a significant amount of time between executing a\ncontract with a customer and delivery of the product to the customer and revenue recognition. In addition, backlog is not necessarily\nindicative of the timing or amount of revenue that may be recognized in any future period, and we cannot assure that we will recognize\nrevenue with respect to each order included in backlog. Our customers may order products from multiple sources to ensure timely delivery\nand may cancel or defer orders without significant penalty. Our customers also may cancel orders when business is weaker, and inventories\nare excessive. If orders are cancelled or deferred, our backlog and anticipated revenue could be reduced, to the extent such orders are\nnot replaced. As a result, we cannot provide assurances as to the portion of backlog to be filled in a given year, and our backlog as\nof any particular date may not be representative of actual revenues for any subsequent period. In addition, certain purchase orders may\nnot ultimately be included in backlog if they do not meet our internal criteria for recognition as valid backlog.\n\n \n\n**We may not be able to continue as a going\nconcern, and our auditors or management may conclude that substantial doubt exists regarding our ability to continue as a going concern,\nwhich could adversely affect our business and the value of our securities.**\n\n \n\nWe have incurred significant net losses and negative cash flows from\noperations since our inception and had an accumulated deficit as of December 31, 2025. Our ability to continue as a going concern is dependent\non, among other things, our ability to generate sufficient revenue, achieve profitability, and obtain additional financing or funding\non acceptable terms, or at all. While management has implemented, and may continue to implement, plans to improve our liquidity, including\nincreasing available cash balances and generating cash flows from operations, there can be no assurance that these plans will be successful.\nIf we are unable to successfully execute these plans or secure additional capital when needed, we may be required to delay, reduce or\neliminate certain research and development programs, reduce operating expenses, or curtail our business operations. In addition, if our\nindependent registered public accounting firm or management determines that there is substantial doubt regarding our ability to continue\nas a going concern, such determination could negatively affect our ability to raise capital, investor confidence, and the market price\nof our securities.\n\n \n\n4\n\n \n\n** **\n\n**We may not have sufficient manufacturing\ncapabilities to satisfy any growing demand for our commissioned products. We may be unable to control the availability or cost of producing\nsuch products.**\n\n \n\nOur current manufacturing\ncapabilities may not reach the required production levels necessary in order to meet growing demands for any products we may commission\nor future products we may develop. There can be no assurance that our commissioned products can be manufactured at our desired commercial\nquantities, in compliance with our requirements and at an acceptable cost. Any such failure could delay or prevent us from shipping said\nproducts and marketing our technologies in accordance with our target growth strategies.\n\n** **\n\n**We operate in an evolving industry and,\nas a result, our past results may not be indicative of future operating performance.**\n\n \n\nWe operate in a rapidly evolving\nindustry that may not develop in a manner favorable to our business. Therefore, it may be difficult to assess our future performance.\nYou should consider our business and prospects in light of the risks and difficulties we may encounter.\n\n \n\nOur future success will depend\nin large part upon our ability to, *inter alia*:\n\n \n\n \n●\nmanage our inventory effectively;\n\n \n\n \n●\nsuccessfully develop, retain and expand our consumer product offering and geographic reach;\n\n \n\n \n●\ncompete effectively;\n\n \n\n \n●\nanticipate and respond to macroeconomic changes;\n\n \n\n \n●\neffectively manage our growth;\n\n \n\n \n●\nhire, integrate and retain talented people at all levels of our organization;\n\n \n\n \n●\navoid interruptions in our business from information technology downtime, cybersecurity breaches or labor stoppages;\n\n \n\n \n●\nmaintain the quality of our technology infrastructure; and\n\n \n\n \n●\ndevelop new features to enhance functionality.\n\n** **\n\n**Our commercial success depends upon the\ndegree of market acceptance by the professional, HLS and defense markets as well as by other prospective markets and industries.**\n\n \n\nWe provide intelligent video\ntransmission, including AI functionality, for professional, HLS and defense applications. Our current business model is that of a B2B\nin which we seek to identify target businesses interested in integrating our technology, or commissioning individual projects using our\ntechnology. Any product that we commission or that is brought to the market may or may not gain market acceptance by prospective customers.\nThe commercial success of our technologies, commissioned products and any future product that we may develop depends in part on the professional,\nHLS and defense community as well as other industries for various use cases, depending on the acceptance by such industries of our commissioned\nproducts as a useful and cost-effective solution compared to current technologies. Even though our B2B products are custom made, step\nby step with our customers in order to ensure compatibility and acceptance, if our technology or any future product that we may develop\ndoes not achieve an adequate level of acceptance, or does not garner significant commercial appeal, we may not generate significant revenue\nand may not become profitable. The degree of market acceptance will depend on a number of factors, including:\n\n \n\n \n●\nthe cost, size, weight, efficacy, performance, and convenience of our technology in relation to alternative products;\n\n \n \n \n\n \n●\nthe ability of third parties to enter into relationships with us without violating their existing agreements;\n\n \n\n5\n\n \n\n \n\n \n●\nthe effectiveness of our sales and marketing efforts;\n\n \n\n \n●\nthe strength of marketing and distribution support for competing technology and products; and\n\n \n\n \n●\npublicity concerning our technology or commissioned products or competing technology and products.\n\n \n\nOur efforts to penetrate industries\nand educate the marketplace on the benefits of our technology, and reasons to seek the commissioning of products based on our technology,\nmay require significant resources and may never be successful. Such efforts to educate the marketplace may require more resources than\nare required by conventional technologies.\n\n** **\n\n**We may not be able to introduce products\nacceptable to customers and we may not be able to improve the technology used in our current systems in response to changing technology\nand end-user needs.**\n\n \n\nThe markets in which we operate\nare subject to rapid and substantial innovation and technological change, mainly driven by technological advances and end-user requirements\nand preferences, as well as the emergence of new standards and practices. Even if we are able to complete the development of our products,\nour ability to compete in the unmanned platform markets will depend largely on our future success in enhancing our existing products and\ndeveloping new systems that will address the varied needs of prospective end-users, and respond to technological advances and industry\nstandards and practices on a cost-effective and timely basis to otherwise gain market acceptance.\n\n \n\nEven if we successfully introduce\nour existing products in development, it is likely that new systems and technologies that we develop will eventually supplant our existing\nsystems or that our competitors will create systems that will replace our systems. As a result, any of our products may be rendered obsolete\nor uneconomical by our or others’ technological advances.\n\n** **\n\n**Potential growth of our business is based\non international expansion, making us susceptible to risks associated with international sales and operations.**\n\n \n\nHaving consolidated our position\nin the local Israeli market, we have plans to expand internationally with broad range of the field-tested video and data analytics products.\nConducting international operations subjects us to certain risks which include localization of solutions and products and adapting them\nto local practices and regulatory requirements, exchange rate fluctuations and unexpected changes in tax, trade laws, tariffs, governmental\ncontrols and other trade restrictions. To the extent that we do not succeed in expanding our operations internationally and managing the\nassociated legal and operational risks, our results of operations may be adversely affected.\n\n** **\n\n**We expect to face significant competition.\nIf we cannot successfully compete with new or existing technologies or future developed products, our marketing and sales will suffer\nand we may never be profitable.**\n\n \n\nBased on product comparisons\nthat we have conducted, and in reviewing our products against the comparable products offered by our leading competitors, we believe that\nour products have significant advantages compared to our competitors, both in terms of miniaturization, latency and functionality, and\nin our products’ ability to provide our customers with a single solution that addresses all their needs in a single customizable,\nmodular product. Nonetheless, we are continuously competing against existing technologies in different industries and we cannot exclude\nthe possibility of new technologies or innovations created by our competitors in the future. Some of these competitors, either alone or\ntogether with their collaborative partners, operate larger research and development programs than we do, and may have substantially greater\nfinancial resources than we do, which may, in the long run hinder us from competing effectively against our competitors, which could reduce\nour market share and ability to develop or secure new customers and adversely impact our business, results of operations, financial condition\nand prospects.\n\n**  **\n\n**Significant merchandise returns and recalls\nof our ready-made products could harm our business.**\n\n \n\nDisruptions affecting the\nintroduction, release or performance of our ready-made products may damage customers’ businesses and could harm their and our reputation.\nWe may be subject to warranty and liability claims for damages related to defects in those products. In addition, if we do not meet industry\nor quality standards, if applicable, then the products may be subject to a recall, a material liability claim, or other occurrence that\nharms our reputation or decreases market acceptance of our products and could adversely impact our operating results.\n\n** **\n\n6\n\n \n\n** **\n\n**If we fail to offer high-quality customer\nsupport, our business and reputation may suffer.**\n\n \n\nHigh-quality customer support\nis important for the successful retention of existing customers. Providing this support requires that our support personnel have specific\nknowledge and expertise of our products and markets, making it more difficult for us to hire qualified personnel and to scale up our support\noperations. The importance of high-quality customer support will increase as we expand our business and pursue new customers. If we do\nnot provide effective and timely ongoing support, our ability to retain existing customers may suffer, and our reputation with existing\nor potential customers may be harmed, which would have a material adverse effect on our business, results of operations, financial condition\nand prospects.\n\n** **\n\n**Our reliance on third-party suppliers for\nmost of the component parts of our products could harm our ability to meet demand for our products in a timely and cost-effective manner.**\n\n \n\nThough we attempt to ensure\nthe availability of more than one supplier for each important component in any product that we commission, the number of suppliers engaged\nin the provision of the specified components suitable for our miniature intelligent video surveillance and communication technology products\nis limited, and therefore in some cases we engage with a single supplier, which may result in our dependency on such supplier. As such,\nwe may be subject to disruptions in our operations if our sole or limited supply contract manufacturers decrease or stop production of\ncomponents or do not produce components and products of sufficient quantity. Alternative sources for our component parts may not always\nbe available. Many of our component parts are manufactured overseas, so they have long lead times, and events such as local disruptions,\nnatural disasters or political conflict may cause unexpected interruptions to the supply of our products or components. As such, the loss\nof one or more of our specified suppliers, and our inability or delay in finding suitable replacement suppliers, could significantly affect\nour business, financial condition, results of operations and reputation.\n\n** **\n\n**If we are unable to establish significant\nsales, marketing and distribution capabilities or enter into successful relationships with business targets and third parties to perform\nthese services, we may not be successful in commercializing our products and technology.**\n\n \n\nGiven that we are currently\na B2B company, our business is reliant on our ability to successfully attract potential business targets. Furthermore, we have a limited\nsales and marketing infrastructure and have limited experience in the sale, marketing or distribution of our technologies beyond the B2B\nmodel. To achieve commercial success for our technologies or any future developed product, we will need to expand our current sales and\nmarketing infrastructure. There are risks involved with establishing and expanding our own sales, marketing and distribution capabilities.\nFor example, recruiting and training additional sales force could be expensive and time consuming and could delay any product launch.\nIn addition, our investment would be lost if we cannot retain or reposition our sales and marketing personnel.\n\n \n\nFactors that may inhibit our\nefforts to commercialize any future products on our own include:\n\n \n\n \n●\nour inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;\n\n \n\nthe inability of sales personnel to obtain access\nto potential customers;\n\n \n\n \n●\nthe lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage; and\n\n \n\n \n●\nunforeseen costs and expenses associated with creating an independent sales and marketing organization.\n\n \n\nIf we are unable\nto establish additional sales, marketing and distribution capabilities or enter into successful arrangements with third parties to perform\nthese services, our revenues and our profitability may be materially adversely affected.\n\n \n\nIn addition, we may not be\nsuccessful in entering into arrangements with third parties to sell, market and distribute our products inside or outside of Israel or\nmay be unable to do so on terms that are favorable to us. We likely will have little control over such third parties, and any of them\nmay fail to devote the necessary resources and attention to sell and market our products effectively. If we do not establish sales, marketing\nand distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing\nour technologies or any future products we may develop.\n\n** **\n\n7\n\n \n\n** **\n\n**Changes in our insurance coverage may adversely\naffect our business, financial condition and operational results.**\n\n \n\nWe maintain a public offering\nof securities insurance and appropriate policies of insurance consistent with those customarily carried by organizations in our industry\nsector. These increases in the cost of such insurance policies or the industry in which we operate could adversely affect our business,\nfinancial condition and operational results. Our insurance coverage may also be inadequate to cover losses it sustains. Uninsured loss\nor a loss in excess of our insured limits could adversely affect our business, financial condition and operational results.\n\n** **\n\n**We may require substantial additional funding\nto grow our business, which may not be available to us on acceptable terms, or at all.**\n\n \n\nAs of December 31, 2025 and\n2024, we had $2,593,094 and $2,335,232 in cash and cash equivalents and restricted deposits, respectively. While we expect that our existing\ncash and cash equivalents and our short-term bank deposit as of December 31, 2025, together with anticipated revenue from existing customers\npursuant to existing purchase orders, as well as projected revenue from new customers and new orders, will be sufficient to fund our current\noperations and satisfy our obligations for the next twelve months. We may require additional funding or may continue to use our existing\nline of credit to fund and grow our operations and to complete development of certain products and bring them to the market.\n\n \n\nThe existence of outstanding\nconvertible securities may also adversely affect our ability to raise additional capital on favorable terms, as potential investors may\nbe reluctant to invest while such securities remain outstanding.\n\n \n\nThere can be no assurance\nthat any financing will be available in amounts or on terms acceptable to us, if at all. In the event we require additional capital, the\ninability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to conduct business operations.\nIf we are unable to obtain additional financing, we will likely be required to curtail our development plans. In that event, shareholders\nwould likely experience a loss of most or all of their investment. Any additional funding that we do obtain may be dilutive to the interests\nof existing shareholders.\n\n** **\n\n**We may not accurately forecast revenues,\nprofitability and appropriately plan our expenses.**\n\n \n\nWe base our current and future\nexpense levels on our operating forecasts and estimates of future income and operating results. Income and operating results are difficult\nto forecast because they generally depend on the volume sales and timing, which are uncertain. Additionally, our business is affected\nby general economic and business conditions around the world. A softening in income, whether caused by changes in consumer preferences\nin the unmanned platform markets, or a weakening in global economies, may result in decreased net revenue levels, and we may be unable\nto adjust our expenses in a timely manner to compensate for any unexpected shortfall in income. This inability could cause our (loss)/income\nafter tax in a given quarter to be (higher)/lower than expected. We also make certain assumptions when forecasting the amount of expense,\nwe expect related to our share-based payments, which includes the expected volatility of our share price, and the expected life of share\noptions granted. These assumptions are partly based on historical results. If actual results differ from our estimates, our operating\nresults in a given period may be lower than expected.\n\n** **\n\n**We rely on highly skilled personnel, and,\nif we are unable to attract, retain or motivate qualified personnel, we may not be able to operate our business effectively.**\n\n \n\nOur success depends in large\npart on the continued employment of senior management and key personnel who can effectively operate our business, as well as our ability\nto attract and retain skilled employees. Competition for highly skilled management, technical, research and development and other employees\nis intense and we may not be able to attract or retain highly qualified personnel in the future. In making employment decisions, candidates\noften consider the value of the equity awards they would receive in connection with their employment. Our long-term incentive programs\nmay not be attractive enough or perform sufficiently to attract or retain qualified personnel.\n\n \n\nIf any of our\nemployees leave us, and we fail to effectively manage a transition to new personnel, or if we fail to attract and retain qualified and\nexperienced professionals on acceptable terms, our business, financial condition and results of operations could be adversely affected.\n\n \n\nOur success also depends on\nour having highly trained financial, technical, recruiting, sales and marketing personnel. We will need to continue to hire additional\npersonnel as our business grows. A shortage in the number of people with these skills or our failure to attract them to our company could\nimpede our ability to increase revenues from our existing technology and services or launch new product offerings and would have an adverse\neffect on our business and financial results.\n\n** **\n\n8\n\n \n\n \n\n**We may have difficulty in entering into\nand maintaining strategic alliances with third parties.**\n\n \n\nWe may enter into strategic\nalliances with third parties to gain access to new and innovative technologies and markets. These parties are often large, established\ncompanies. Negotiating and performing under these arrangements involves significant time and expense, particularly those with companies\nthat have significantly greater financial and other resources than we do. The anticipated benefits of these arrangements may never materialize,\nand performing under these arrangements may require significant resources which may affect our results of operations.\n\n** **\n\n**We may not be able to obtain patents or\nother intellectual property rights necessary to protect our proprietary technology and business.**\n\n \n\nThe value of our products\ndepends on our ability to protect our intellectual property, including trademarks, copyrights, patents and moral rights.\n\n \n\nWe currently have one approved\npatent and may seek to patent additional concepts, components, processes, designs and methods, and other inventions and technologies that\nwe consider to have commercial value or that will likely give us a technological advantage. Despite devoting resources to the research\nand development of proprietary technology, we may not be able to develop technology that is patentable or protectable.\n\n \n\nFurthermore, any patents issued\ncould be challenged, re-examined, held invalid or unenforceable or circumvented and may not provide sufficient protection or a competitive\nadvantage. In addition, despite efforts to protect and maintain patents, competitors and other third parties may be able to design around\ntheir patents or develop products similar to our work products that are not within the scope of their patents. Finally, patents provide\ncertain statutory protection only for a limited period of time that varies depending on the jurisdiction and type of patent.\n\n \n\nProsecution and protection\nof the rights sought in patent applications and patents can be costly and uncertain, often involve complex legal and factual issues and\nconsume significant time and resources. In addition, the breadth of claims allowed in patents, their enforceability and our ability to\nprotect and maintain them cannot be predicted with any certainty. The laws of certain countries may not protect intellectual property\nrights to the same extent as the laws of Israel. Even if patents are held to be valid and enforceable in a certain jurisdiction, any legal\nproceedings that we may initiate against third parties to enforce such patents will likely be expensive, take significant time and divert\nmanagement’s attention from other business matters. We cannot assure that any of our future pending patent applications provide\nany protectable, maintainable or enforceable rights or competitive advantages to us.\n\n  \n\nIn addition to patents, we\nwill rely on a combination of proprietary know how, copyrights, trademarks, trade secrets and other related laws and confidentiality procedures\nand contractual provisions to protect, maintain and enforce our proprietary technology and intellectual property rights in Israel and\nother countries. However, our ability to protect our brands by registering certain trademarks may be limited. In addition, while we will\ngenerally enter into confidentiality and nondisclosure agreements with our employees, consultants, contract manufacturers, distributors\nand resellers and with others to attempt to limit access to and distribution of our proprietary and confidential information, it is possible\nthat:\n\n \n\n \n●\nmisappropriation of our proprietary and confidential information, including technology, will nevertheless occur;\n\n \n\n \n●\nour confidentiality agreements will not be honored or may be rendered unenforceable;\n\n \n\n \n●\nthird parties will independently develop equivalent, superior or competitive technology or products;\n\n \n\n \n●\ndisputes will arise with our current or future strategic licensees, customers or others concerning the ownership, validity, enforceability, use, patentability or registrability of intellectual property; or\n\n \n\n \n●\nunauthorized disclosure of our know-how, trade secrets or other proprietary or confidential information will occur.\n\n \n\n9\n\n \n\n \n\nWe cannot assure that we will\nbe successful in protecting, maintaining or enforcing our intellectual property rights. If we are unsuccessful in protecting, maintaining\nor enforcing our intellectual property rights, then our business, operating results and financial condition could be materially adversely\naffected, which could:\n\n \n\n \n●\nadversely affect our reputation with customers;\n\n \n\n \n●\nbe time-consuming and expensive to evaluate and defend;\n\n \n\n \n●\ncause product shipment delays or stoppages;\n\n \n\n \n●\ndivert management’s attention and resources;\n\n \n\n \n●\nsubject us to significant liabilities and damages;\n\n \n\n \n●\nrequire us to enter into royalty or licensing agreements; or\n\n \n\n \n●\nrequire us to cease certain activities, including the sale of products.\n\n \n\nIf it is determined that we\nhave infringed, violated or are infringing or violating a patent or other intellectual property right of any other person or if we are\nfound liable in respect of any other related claim, then, in addition to being liable for potentially substantial damages, we may be prohibited\nfrom developing, using, distributing, selling or commercializing certain of our technologies unless we obtain a license from the holder\nof the patent or other intellectual property right. We cannot assure you that we will be able to obtain any such license on a timely basis\nor on commercially favorable terms, or that any such licenses will be available, or that workarounds will be feasible and cost-efficient.\nIf we do not obtain such a license or find a cost-efficient workaround, our business, operating results and financial condition could\nbe materially adversely affected and we could be required to cease related business operations in some markets and restructure our business\nto focus on our continuing operations in other markets.\n\n** **\n\n**We may be unable to keep pace with changes\nin technology as our business and market strategy evolves.**\n\n \n\nWe will need to respond to\ntechnological advances in a cost-effective and timely manner in order to remain competitive. The need to respond to technological changes\nmay require us to make substantial, unanticipated expenditures. There can be no assurance that we will be able to respond successfully\nto technological changes. If we will be unable to respond successfully to technological advance, we may lose our competitive advantage,\nwhich could adversely affect our business.\n\n** **\n\n**Significant disruptions of our information\ntechnology systems or breaches of our data security could adversely affect our business.**\n\n \n\nA significant invasion, interruption,\ndestruction or breakdown of our information technology systems and/or infrastructure by persons with authorized or unauthorized access\ncould negatively impact our business and operations. We could also experience business interruption, information theft and reputational\ndamage from cyber-attacks, which may compromise our systems and lead to data leakage either internally or at our third-party providers.\nOur systems may be the target of malware and other cyber-attacks. Although we have invested in measures to reduce these risks, we cannot\nassure you that these measures will be successful in preventing compromise or disruption of our information technology systems and data.\n\n** **\n\n10\n\n \n\n** **\n\n**We may be subject to general litigation,\nregulatory disputes and government inquiries.**\n\n \n\nAs a growing company with\nexpanding operations, we may in the future increasingly face the risk of claims, lawsuits, government investigations and other proceedings\ninvolving competition and antitrust, intellectual property, privacy, consumer protection, accessibility claims, securities, tax, labor\nand employment, commercial disputes, services and other matters. The number and significance of these disputes and inquiries have increased\nas the political and regulatory landscape changes, and as we have grown larger and expanded in scope and geographic reach, and our services\nhave increased in complexity.\n\n \n\nWe cannot predict the outcome\nof such disputes and inquiries with certainty. Regardless of the outcome, these can have an adverse impact on us because of legal costs,\ndiversion of management resources and other factors. Determining reserves for any litigation is a complex, fact-intensive process that\nis subject to judgment calls. It is possible that a resolution of one or more such proceedings could require us to make substantial payments\nto satisfy judgments, fines or penalties or to settle claims or proceedings, any of which could harm our business. These proceedings could\nalso result in reputational harm, criminal sanctions, consent decrees or orders preventing us from offering certain products or services\nor requiring a change in our business practices in costly ways or requiring development of non-infringing or otherwise altered products\nor technologies. Litigation and other claims and regulatory proceedings against us could result in unexpected expenses and liabilities,\nwhich could have a material adverse effect on our business, results of operations, financial condition and prospects.\n\n \n\n**We have previously identified\nmaterial weaknesses in our internal control over financial reporting, and if we fail to maintain effective internal control over financial\nreporting in the future, we may not be able to accurately report our financial results or prevent fraud.**\n\n** **\n\nEffective internal control\nover financial reporting is necessary for us to provide reliable financial reports and to prevent fraud. Although management concluded\nthat our internal control over financial reporting was effective as of December 31, 2025, maintaining an effective control environment\nrequires significant resources, continuous evaluation and ongoing improvements.\n\n \n\nAs of December 31, 2021, we\nidentified material weaknesses in our internal control over financial reporting related to (i) an insufficient number of financial reporting\npersonnel with an appropriate level of knowledge, experience and training in the application of U.S. GAAP and SEC rules and regulations\ncommensurate with our reporting requirements and (ii) inadequate segregation of duties consistent with control objectives. These material\nweaknesses continued through prior reporting periods. During the year ended December 31, 2025, we completed remediation measures, including\nthe hiring of additional qualified accounting personnel, enhancing segregation of duties, implementing formalized review controls and\naccounting policies, and strengthening user access controls. Based on management’s evaluation, these previously identified material\nweaknesses were remediated as of December 31, 2025.\n\n \n\nHowever, internal controls\nover financial reporting may become inadequate because of changes in conditions, personnel turnover, growth of our business, or deterioration\nin the degree of compliance with established policies or procedures. Any failure to maintain effective internal control over financial\nreporting could result in errors in our financial statements, failure to meet our reporting obligations, restatements of our financial\nstatements, loss of investor confidence, regulatory scrutiny, or a decline in the market price of our ordinary shares.\n\n \n\n**New regulation as well as regulations in\nnew target territories, including regulations relating to unmanned platforms, video and audio systems, may create obstacles to our sales\nand marketing efforts.**\n\n \n\nOther than the provisions\nof the Israeli Encouragement of Industrial Research, Development and Technological Innovation Law, 1984, as amended, and related regulations,\nor the Research Law, which may restrict our ability to move the production of products developed using grants received from the Israeli\nInnovation Authority, or the IIA (see “Risk Factors - Risks Related to Israeli Law and our Operations in Israel” for further\ninformation), We received Israeli government grants for certain of our research and development activities, the terms of which may require\nus to pay royalties and to satisfy specified conditions in order to manufacture products and transfer technologies outside of Israel.\nIf we fail to satisfy these conditions, we may be required to pay penalties and refund grants previously received. In events where our\nproducts have been required to comply with any foreign regulation, these issues have been under the jurisdiction and responsibility of\nour local distributors or customers. However, expansion of our operation into new territories, enhancing our sales and marketing in existing\nforeign territories, as well as new regulations that might be enacted in the future which may apply to our technologies or market segment,\nmay require us in the future to ensure that our products are in compliance with various regulatory constrains or technology standards\nimposed by local authorities. Such development may require us to make additional expenses in order to ensure compliance, as well as hinder\nor delay us from entering certain markets, thus adversely affecting our business, financial condition and operational results.\n\n \n\n11\n\n \n\n** **\n\n**Risks Related to Israeli Law and our Operations\nin Israel**\n\n** **\n\n**Our principal executive\noffices, most of our research and development activities and other significant operations are located in Israel and, therefore, our results\nmay be adversely affected by political, economic and military instability in Israel, including Israel’s ongoing multi-front conflicts\nwith terrorist groups and regional actors such as Iran.**\n\n \n\nWe are incorporated under\nIsraeli law and our executive offices, corporate headquarters and principal research and development facilities are located in Israel.\nIn addition, most of our officers and directors are residents of Israel. Accordingly, political, economic, military and security conditions\nin Israel and the surrounding region may directly affect our business. Any conflicts, political instability, terrorism, cyberattacks or\nother hostilities involving Israel, or the interruption or curtailment of trade between Israel and its present trading partners, could\nadversely affect our operations. Ongoing or renewed hostilities in the Middle East or other Israeli political or economic factors could\nharm our operations.\n\n \n\nIn October 2023, Hamas carried\nout attacks against Israel that resulted in a large-scale military conflict between Israel and Hamas in the Gaza Strip. Since that time,\nhostilities in the region have broadened and tensions across multiple fronts have increased, including periodic confrontations along Israel’s\nnorthern border with Hezbollah and continued activity by Iran-aligned groups in the region, such as the Houthi movement in Yemen. For\nexample, attacks on commercial vessels in the Red Sea have disrupted certain global shipping routes and could lead to delays or diversions\nin the transportation of goods.\n\n \n\nRegional tensions have also\ninvolved direct confrontation between Israel and Iran. In 2024, Iran launched direct attacks on Israel involving drones and missiles,\nand regional tensions increased as a result. In June 2025, Israel and Iran experienced a limited period of direct confrontation following\nIsraeli strikes on military and nuclear-related infrastructure in Iran. During this period, the United States also conducted air strikes\nagainst certain Iranian nuclear facilities, and Iran retaliated against U.S. interests in the region. The confrontation resulted in heightened\nsecurity conditions and temporary disruptions to transportation and commercial activity, including intermittent closures of Israeli and\nregional airspace.\n\n \n\nMore recently, in February 2026, hostilities between Israel and Iran\nescalated again. In late February 2026, Israel, together with the United States, conducted a coordinated military operation involving\nair and missile strikes against targets in Iran. These actions triggered a broad Iranian response and contributed to significant regional\ninstability. The situation remains highly fluid, and we are unable to predict when, or on what terms, this escalation will be resolved.\n\n \n\nFurther escalation, whether\ninvolving direct confrontation between Israel and Iran or through regional proxy groups, could result in additional mobilization of reserve\npersonnel, restrictions on movement or commerce, damage to infrastructure, supply chain interruptions, disruptions to global energy markets\nand heightened cybersecurity threats. Any of the foregoing could materially and adversely affect our operations, financial condition and\nresults of operations, particularly if disruptions are prolonged or recur.\n\n \n\nIn connection with the ongoing\nregional conflicts, Israeli military reservists have been called up to perform military service. One (1) of our employees have been called up\nas of May 14, 2026. Additional employees may also be called up for service and may be absent for extended periods of time. As a result,\nour operations could be disrupted by such absences, which in turn could materially and adversely affect our business, prospects, financial\ncondition and results of operations.\n\n \n\nIn addition, in the past the\nState of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State\nof Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial\ncondition or the expansion of our business. A campaign of boycotts, divestment and sanctions has also been undertaken against Israel,\nwhich could adversely impact our business.\n\n** **\n\n**Exchange rate fluctuations between foreign\ncurrencies and the U.S. Dollar may negatively affect our earnings.**\n\n \n\nOur reporting and functional\ncurrency is the U.S. dollar. Our revenues are currently primarily linked to U.S. dollars and we expect our future revenues to be denominated\nprimarily in U.S. dollars. However, certain amounts of our revenues and expenses are also in NIS and Euro. As a result, we are exposed\nto the currency fluctuation risks relating to the recording of our expenses in U.S. dollars. We may, in the future, decide to enter into\ncurrency hedging transactions. These measures, however, may not adequately protect us from material adverse effects.\n\n** **\n\n12\n\n \n\n** **\n\n**We may become subject to claims for remuneration\nor royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.**\n\n \n\nA significant portion of our\nintellectual property has been developed by our employees in the course of their employment for us. Under the Israeli Patent Law, 1967,\nor the Patent Law, inventions conceived by an employee in the course and as a result of or arising from his or her employment with a company\nare regarded as “service inventions,” which belong to the employer, absent a specific agreement between the employee and employer\ngiving the employee service invention rights. The Patent Law also provides that if there is no such agreement between an employer and\nan employee, the Israeli Compensation and Royalties Committee, or the Committee, a body constituted under the Patent Law, will determine\nwhether the employee is entitled to remuneration for his inventions. Recent case law clarifies that the right to receive consideration\nfor “service inventions” can be waived by the employee and that in certain circumstances, such waiver does not necessarily\nhave to be explicit. The Committee will examine, on a case-by-case basis, the general contractual framework between the parties, using\ninterpretation rules of the general Israeli contract laws. Further, the Committee has not yet determined one specific formula for calculating\nthis remuneration (but rather uses the criteria specified in the Patent Law). Although we have entered into assignment-of-invention agreements\nwith all our current and former employees pursuant to which such individuals assign to us all rights to any inventions created in the\nscope of their employment or engagement with us, we may still face claims demanding remuneration in consideration for assigned inventions.\nIf such claims are found to have merit despite our assignment of invention agreements, we could be required to pay additional remuneration\nor royalties to our current and/or former employees, or be forced to litigate such claims, which could negatively affect our business.\n\n** **\n\n**We received Israeli government grants for\ncertain of our research and development activities, the terms of which may require us to pay royalties and to satisfy specified conditions\nin order to manufacture products and transfer technologies outside of Israel. If we fail to satisfy these conditions, we may be required\nto pay penalties and refund grants previously received.**\n\n \n\nOur research and development\nefforts were financed in part through grants from the IIA.\n\n \n\nWith respect to the royalty-bearing\ngrants we are committed to pay royalties at a rate of 3% to 5% on sales proceeds from our products that were developed under IIA programs\nup to the total amount of grants received, linked to the U.S. dollar and bearing interest at the annual Secured Overnight Financing Rate,\nor SOFR, applicable to U.S. dollar deposits. With respect to IIA grants approved by the IIA prior to January 1, 2024, but which are outstanding\nthereafter, the annual interest rate shall be the higher of (i) the twelve months SOFR plus 1%, or (ii) a fixed annual interest rate of\n4%.\n\n \n\nAs of May 14, 2026, we paid approximately $7,301 in connection with\na single sale during 2012. Since 2013, we have not utilized the intellectual property that was developed using the governmental grant\nin any of our products. The total sum of royalties, including accumulated interest, we are required to repay the IIA, as of May 14, 2026,\nis approximately $660,000, net, after deducting the sums we paid as royalties to the IIA. \n\n \n\nRegardless of any royalty\npayment, we are further required to comply with the requirements of the Research Law with respect to those past grants. When a company\ndevelops know-how, technology or products using IIA grants, the terms of these grants and the Research Law restrict the transfer of such\nknow-how, and the transfer of manufacturing or manufacturing rights of such products, technologies or know-how outside of Israel, without\nthe prior approval of the IIA. We may not receive those approvals. Furthermore, the IIA may impose certain conditions on any arrangement\nunder which it permits us to transfer technology or development. This may restrict our ability to move the production of our products\noutside of Israel, or to sell intellectual property and other know-how.\n\n** **\n\n**It may be difficult to enforce a judgment\nof a U.S. court against us and our executive officers and directors and the Israeli experts named in this Annual Report in Israel or the\nUnited States, to assert U.S. securities laws claims in Israel or to serve process on our executive officers and directors and these experts.**\n\n \n\nWe were incorporated in Israel.\nSubstantially all of our executive officers and directors reside outside of the United States, and all of our assets and most of the assets\nof these persons are located outside of the United States. Therefore, a judgment obtained against us, or any of these persons, including\na judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and\nmay not be enforced by an Israeli court. It also may be difficult for you to effect service of process on these persons in the United\nStates or to assert U.S. securities law claims in original actions instituted in Israel. Additionally, it may be difficult for an investor,\nor any other person or entity, to initiate an action with respect to U.S. securities laws in Israel. Israeli courts may refuse to hear\na claim based on an alleged violation of U.S. securities laws reasoning that Israel is not the most appropriate forum in which to bring\nsuch a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable\nto the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proven as a fact by expert witnesses,\nwhich can be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding\ncase law in Israel that addresses the matters described above. As a result of the difficulty associated with enforcing a judgment against\nus in Israel, you may not be able to collect any damages awarded by either a U.S. or foreign court (see “Enforceability of Civil\nLiabilities” for additional information on your ability to enforce a civil claim against us and our executive officers or directors\nnamed in this Annual Report).\n\n** **\n\n13\n\n \n\n** **\n\n**Your rights and responsibilities as a shareholder\nwill be governed in key respects by Israeli laws, which differ in some material respects from the rights and responsibilities of shareholders\nof U.S. companies.**\n\n \n\nThe rights and responsibilities\nof the holders of our Ordinary Shares are governed by our amended and restated articles of association, or our Articles, and by Israeli\nlaw. These rights and responsibilities differ in some material respects from the rights and responsibilities of shareholders in U.S. companies.\nIn particular, a shareholder of an Israeli company has a duty to act in good faith and in a customary manner in exercising its rights\nand performing its obligations towards the company and other shareholders, and to refrain from abusing its power in such company, including,\namong other things, in voting at a general meeting of shareholders on matters such as amendments to a company’s articles of association,\nincreases in a company’s authorized share capital, mergers and acquisitions and related party transactions requiring shareholder\napproval, as well as a general duty to refrain from discriminating against other shareholders. In addition, a shareholder who is aware\nthat it possesses the power to determine the outcome of a vote at a meeting of the shareholders or to appoint or prevent the appointment\nof a director or executive officer in the company has a duty of fairness toward the company. There is limited case law available to assist\nus in understanding the nature of these duties or the implications of these provisions. These provisions may be interpreted to impose\nadditional obligations and liabilities on holders of our ordinary shares that are not typically imposed on shareholders of U.S. companies.\n\n \n\n**Risks Related to Our Status as a Public Company and Ownership of\nour Ordinary Shares and Warrants**\n\n** **\n\n**As of December 31, 2025, our principal shareholders,\nofficers and directors beneficially owned approximately 30.76% of our outstanding Ordinary Shares. They will therefore be able to exert\nsignificant control over matters submitted to our shareholders for approval.**\n\n \n\nAs of December 31, 2025, our principal shareholders,\nofficers and directors, in the aggregate, beneficially owned approximately 30.76% of our outstanding Ordinary Shares. This significant\nconcentration of share ownership may adversely affect the trading price for our Ordinary Shares because investors often perceive disadvantages\nin owning shares in companies with controlling shareholders. As a result, these shareholders, if they acted together, could significantly\ninfluence matters requiring approval by our shareholders, including the election of directors and the approval of mergers or other business\ncombination transactions. The interests of these shareholders may not always coincide with our interests or the interests of other shareholders.** **\n\n** **\n\n**We are an emerging growth company and any\ndecision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies\ncould make our securities less attractive to investors.**\n\n \n\nWe are an emerging growth\ncompany and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting\nrequirements applicable to other public companies but not to “emerging growth companies,” including:\n\n \n\n●not\nbeing required to have our independent registered public accounting firm audit our internal control over financial reporting under Section\n404 of the Sarbanes-Oxley Act;\n\n \n\n \n●\npermission to delay adopting new or revised accounting standards until such time as those standards apply to private companies;\n\n \n\n \n●\nreduced disclosure obligations regarding executive compensation in our periodic reports and annual report on Form 20-F; and\n\n \n\n \n●\nexemptions from the requirements of holding non-binding advisory votes on executive compensation and shareholder approval of any golden parachute payments not previously approved.\n\n \n\nWe may take advantage of\nsome or all of these and other exemptions until we are no longer an “emerging growth company”. We could be an emerging\ngrowth company up to the end of the fiscal year in which the fifth anniversary of the completion of our initial public offering,\nalthough we expect to not be an emerging growth company sooner. Our status as an emerging growth company will end as soon as any of\nthe following take place:\n\n \n\n \n●\nthe last day of the fiscal year in which we have more than $1.235 billion in annual revenue;\n\n \n\n \n●\nthe date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates;\n\n \n\n \n●\nwe have issued more than $1 billion in non-convertible debt in the past three years; or\n\n \n\n \n●\nthe last day of the fiscal year ending after the fifth anniversary after we become a public company.\n\n \n\n14\n\n \n\n \n\nWe cannot predict if investors\nwill find our securities less attractive if we choose to rely on any of the exemptions afforded emerging growth companies. If some investors\nfind our securities less attractive because we rely on any of these exemptions, there may be a less active trading market for our securities\nand the market price of our securities may be more volatile.\n\n \n\nIn addition, under the JOBS\nAct, “emerging growth companies” can delay adopting new or revised accounting standards until such time as those standards\napply to private companies. We have elected to avail ourselves of this exemption and, as a result, our financial statements may not be\ncomparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards\nthat are applicable to public companies. Section 107 of the JOBS Act provides that we can elect to opt out of the extended transition\nperiod at any time, which election is irrevocable.\n\n \n\nEven after we no longer qualify\nas an emerging growth company, we may qualify as a “smaller reporting company”, which would allow us to take advantage of\nmany of the same exemptions from disclosure requirements (excluding the exemption from compliance with the auditor attestation requirements\nof Section 404 of the Sarbanes-Oxley Act) and reduced disclosure obligations regarding executive compensation in our periodic reports\nand proxy statements. However, as a foreign private issuer we are not eligible to use the requirements for smaller reporting companies\nunless we use the forms and rules designated for domestic issuers and provide financial statements prepared in accordance with U.S. GAAP.\nWe cannot predict if investors will find our securities less attractive if we may rely on either of these exemptions. If some investors\nfind our securities less attractive as a result, there may be a less active trading market for our securities and our share price may\nbe more volatile.\n\n** **\n\n**Our failure to maintain compliance with\nNasdaq’s continued listing requirements could result in the delisting of our Ordinary Shares and Warrants.**\n\n \n\nOur Ordinary Shares and Warrants\nare currently listed on Nasdaq. In order to maintain this listing, we must satisfy minimum financial and other requirements. Nasdaq Listing\nRule 5550(a)(2) requires the minimum bid price of our Ordinary Shares on Nasdaq to remain above $1.00. If the bid price of our Ordinary\nShares closes below $1.00 per share for thirty consecutive trading days, we would be in violation of Nasdaq Listing Rule 5550(a)(2). In\naccordance with Nasdaq Listing Rule 5810(c)(3)(A), we would have 180 calendar days to regain compliance with the minimum bid price requirement.\n\n \n\nWe have previously received\nwritten notifications from the Listing Qualifications Department of Nasdaq that we were not in compliance with the minimum bid price requirement\nfor continued listing set forth in Nasdaq Listing Rule 5550(a)(2), or the minimum bid price. Although we have since regained compliance\nwith the minimum bid price requirement, and thus maintain our listing, there can be no assurance that we will\ncontinue to meet all applicable Nasdaq requirements in the future.\n\n \n\nIf our Ordinary Shares are\nremoved from listing with the Nasdaq, it may be subject to the so-called “penny stock” rules. The SEC has adopted regulations\nthat define a “penny stock” to be any equity security that has a market price per share of less than $5.00, subject to certain\nexceptions, such as any securities listed on a national securities exchange, which is the exception on which we currently rely. For any\ntransaction involving a “penny stock,” unless exempt, the rules impose additional sales practice requirements on broker-dealers,\nsubject to certain exceptions. If our Ordinary Shares were delisted and determined to be a “penny stock,” a broker-dealer\nmay find it more difficult to trade our Ordinary Shares and an investor may find it more difficult to acquire or dispose of our Ordinary\nShares on the secondary market.\n\n \n\nIf our Ordinary Shares are\ndelisted and there is no longer an active trading market for our shares, it may, among other things:\n\n \n\n \n●\ncause stockholders difficulty in selling our shares without depressing the market price for the shares or selling our shares at all;\n\n \n\n \n●\nsubstantially impair our ability to raise additional funds;\n\n \n\n15\n\n \n\n \n\n \n●\nresult in a loss of institutional investor interest and fewer financing opportunities for us; and/or\n\n \n\n \n●\nresult in costly litigation, significant liabilities and diversion of our management’s time and attention and could have a material adverse effect on our financial condition, business and results of operations.\n\n \n\nA delisting would also reduce\nthe value of our equity compensation plans, which could negatively impact our ability to retain employees.\n\n** **\n\n**We incur significant increased costs as\na result of operating as a public company. Our management is required to devote substantial time to new compliance initiatives as well\nas compliance with ongoing U.S. requirements. **\n\n \n\nAs a public company in the\nUnited States, we incur additional significant accounting, legal and other expenses that we did not incur before our initial public offering,\nor IPO. We also incur costs associated with corporate governance requirements of the SEC, and will incur costs in connection with the\nrequirements under Section 404 and other provisions of the Sarbanes-Oxley Act. These rules and regulations have increased our legal and\nfinancial compliance costs, introduce new costs such as investor relations, stock exchange listing fees and shareholder reporting, and\nto make some activities more time consuming and costly. The maintenance and testing of such processes and systems may require us to hire\noutside consultants and incur other significant costs. Any future changes in the laws and regulations affecting public companies in the\nUnited States, including Section 404 and other provisions of the Sarbanes-Oxley Act, and the rules and regulations adopted by the SEC,\nfor so long as they apply to us, will result in increased costs to us as we respond to such changes. These laws, rules and regulations\ncould make it more difficult or more costly for us to obtain certain types of insurance, including director and officer liability insurance,\nand we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.\nThe impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board\nof directors, our board committees, or as executive officers.  \n\n** **\n\n**The estimates of market opportunity, market\nsize and forecasts of market growth included in our publicly-filed documents may prove to be inaccurate, and even if the market in which\nwe compete achieves the forecasted growth, our business could fail to grow at similar rate, if at all.**\n\n \n\nMarket opportunity, size estimates\nand growth forecasts included in this Annual Report are subject to significant uncertainty and are based on assumptions and estimates\nthat may not prove to be accurate. Net revenue and operating results are difficult to forecast because they generally depend on the volume,\ntiming and type of orders we receive, all of which are uncertain. We base our expense levels and investment plans on our estimates of\ntotal net revenue and gross margins using human judgment combined with machine learning, natural language processing and data analytics.\nWe cannot be sure the same growth rates, trends and other key performance metrics are meaningful predictors of future growth. If our assumptions\nand calculations prove to be wrong, we may spend more than we anticipate acquiring and retaining customers or may generate less net revenue\nper active customer than anticipated, any of which could have a negative impact on our business and results of operations.\n\n \n\nIn addition, we are evaluating\nour total addressable market with respect to new product offerings and new markets. These estimates of total addressable market and growth\nforecasts are subject to significant uncertainty, are based on assumptions and estimates that may not prove to be accurate and are based\non data published by third parties that we have not independently verified. Even if the market in which we compete meets the size estimates\nand growth forecasted in this Annual Report, our business could fail to grow at similar rates, if at all.\n\n \n\nOur business is also affected\nby general economic and business conditions in international markets. A significant portion of our expenses is fixed, and as a result,\nwe may be unable to adjust our spending in a timely manner to compensate for any unexpected shortfall in net revenue. Any failure to accurately\npredict net revenue or gross margins could cause our operating results to be lower than expected, which could materially adversely affect\nour financial condition and share price.\n\n** **\n\n16\n\n \n\n** **\n\n**The market price of our Ordinary Shares\nand Warrants may be highly volatile and such volatility could cause you to lose some or all of your investment and also subject us to\nlitigation.**\n\n \n\nThe market price of our Ordinary\nShares and Warrants may fluctuate significantly in response to numerous factors, some of which are beyond our control, such as:\n\n \n\n \n●\nthe announcement of new products or product enhancements by us or our competitors;\n\n \n\n \n●\ndevelopments concerning intellectual property rights;\n\n \n\n \n●\nchanges in legal, regulatory, and enforcement frameworks impacting our technology or the application of our technology;\n\n \n\n \n●\nvariations in our and our competitors’ results of operations;\n\n \n\n \n●\nfluctuations in earnings estimates or recommendations by securities analysts, if our securities are covered by analysts;\n\n \n\n \n●\nthe results of product liability or intellectual property lawsuits;\n\n \n\n \n●\nfuture issuances of securities;\n\n \n \n \n\n \n●\nthe addition or departure of key personnel;\n\n \n\n \n●\nannouncements by us or our competitors of acquisitions, investments or strategic alliances;\n\n \n\n \n●\ngeneral market conditions and other factors, including factors unrelated to our operating performance;\n\n \n\n \n●\nother events or factors, including those resulting from war, incidents of terrorism or responses to these events; and\n\n \n\n \n●\ngeneral economic, political and market conditions in the United States or elsewhere.\n\n \n\nFurthermore, in recent years,\nthe stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of\nequity securities of many companies, and technology companies in particular. These fluctuations often have been unrelated or disproportionate\nto the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political\nand market conditions such as recessions, interest rate changes or international currency fluctuations, may negatively impact the market\nprice of our Ordinary Shares or Warrants.\n\n \n\nIn the past, companies that\nhave experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the\ntarget of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s\nattention from other business concerns, which could also harm our business.\n\n** **\n\n**Sales of a significant number of our Ordinary\nShares in the public markets or significant short sales of our Ordinary Shares, or the perception that such sales could occur, could depress\nthe market price of our Ordinary Shares and impair our ability to raise capital.**\n\n \n\nSubstantial sales of our Ordinary\nShares on Nasdaq, may cause the market price of our Ordinary Shares to decline. Sales by us or our security holders of substantial amounts\nof our Ordinary Shares, or the perception that these sales may occur in the future, could cause a reduction in the market price of our\nOrdinary Shares.\n\n \n\nSales of Ordinary Shares issued\nupon the conversion of our outstanding convertible promissory notes, or the anticipation of such sales, could further increase trading\nvolatility and place additional downward pressure on the market price of our Ordinary Shares.\n\n \n\n17\n\n \n\n \n\nThe issuance of any additional\nOrdinary Shares or any securities that are exercisable for or convertible into Ordinary Shares, may have an adverse effect on the market\nprice of our Ordinary Shares and will have a dilutive effect on our existing shareholders and holders of Ordinary Shares.\n\n \n\nIf there are significant short\nsales of our Ordinary Shares, the price decline that could result from this activity may cause the share price to decline more so, which,\nin turn, may cause long holders of the Ordinary Shares to sell their shares, thereby contributing to sales of Ordinary Shares in the market.\nSuch sales also may impair our ability to raise capital through the sale of additional equity securities in the future at a time and price\nthat our management deems acceptable, if at all.\n\n** **\n\n**Our Articles provide that, unless we consent\nto an alternative forum, the federal district courts of the United States shall be the exclusive forum for resolution of any complaint\nasserting a cause of action arising under the Securities Act, which could limit our shareholders’ ability to choose the judicial\nforum for disputes with us, our directors, shareholders, or other employees. In addition, the agreements governing the Warrants provide\nthat disputes shall be brought in the state and federal courts sitting in the City of New York, Borough of Manhattan, and that a claim\nunder the U.S. federal securities laws may be made in any federal district court.**\n\n \n\nSection 22 of the Securities\nAct of 1933, as amended, or the Securities Act, as modified by the JOBS Act, creates concurrent jurisdiction for U.S. federal and state\ncourts over all such Securities Act actions. Accordingly, both U.S. state and federal courts have jurisdiction to entertain such claims.\nTo prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts,\namong other considerations, our Articles provide that, unless we consent in writing to the selection of an alternative forum, the federal\ndistrict courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising\nunder the Securities Act. This exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the\nExchange Act, and our shareholders cannot and will not be deemed to have waived our compliance with the U.S. federal securities laws and\nthe rules and regulations thereunder as a result of our exclusive forum provision. Any person or entity purchasing or otherwise acquiring\nany interest in any of our securities shall be deemed to have notice of and consented to the foregoing provision of our Articles.\n\n \n\nSimilarly, the agreement governing\nthe Warrants provide that, and by owning Warrants investors agree that, all legal proceedings concerning the interpretations, enforcement\nand defense of the transactions contemplated by the Warrant (whether brought against a party hereto or their respective affiliates, directors,\nofficers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting\nin the City of New York, irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in the City of New York,\nBorough of Manhattan for the adjudication of any such dispute and irrevocably waive, and agree not to assert in any suit, action or proceeding,\nany claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or\nis an inconvenient venue for such proceeding. The warrant agent agreement has similar provisions with respect to the Company and the warrant\nagent. Each of the agreement governing the Warrants and the warrant agent agreement provide that the foregoing provisions do not limit\nor restrict the federal district court in which a party may bring a claim under the U.S. federal securities laws.\n\n \n\nHowever, the enforceability\nof similar forum provisions (including exclusive federal forum provisions for actions, suits, or proceedings asserting a cause of action\narising under the Securities Act) in other companies’ organizational documents and similar agreements has been challenged in legal\nproceedings, and there is uncertainty as to whether courts would enforce the exclusive forum provision in our Articles or the agreements\ngoverning the Warrants. If a court were to find the exclusive forum provision contained in our Articles or the agreements governing the\nWarrants to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other\njurisdictions, which could materially adversely affect our business, financial condition, and results of operations.\n\n \n\nAlthough we believe the exclusive\nforum provision benefits us by providing increased consistency in the application of U.S. federal securities laws, the Israeli Companies\nLaw 5759-1999, or together with applicable regulations promulgated thereunder the Companies Law, or New York law, as applicable, in the\ntypes of lawsuits to which they apply, such exclusive forum provision may limit a shareholder’s ability to bring a claim in the\njudicial forum of their choosing for disputes with us or any of our directors, shareholders, officers, or other employees, which may discourage\nlawsuits with respect to such claims against us and our current and former directors, shareholders, officers, or other employees.\n\n** **\n\n18\n\n \n\n** **\n\n**If securities or industry analysts either\ndo not publish research about us or publish inaccurate or unfavorable research about us, our business or our market, or if they change\ntheir recommendations regarding our Ordinary Shares or Warrants adversely, the trading price or trading volume of our Ordinary Shares\ncould decline.**\n\n \n\nThe trading market for our\nOrdinary Shares and Warrants will be influenced in part by the research and reports that securities or industry analysts may publish about\nus, our business, our market or our competitors. If one or more of the analysts initiate research with an unfavorable rating or downgrade\nour Ordinary Shares, provide a more favorable recommendation about our competitors or publish inaccurate or unfavorable research about\nour business, the market prices of our Ordinary Shares would likely decline. If any analyst who may cover us were to cease coverage of\nus or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the trading\nprice or trading volume of our Ordinary Shares to decline.\n\n** **\n\n**We do not intend to pay dividends for the\nforeseeable future.**\n\n \n\nWe currently intend to retain\nany future earnings to repay shareholder loans and finance the operation and expansion of our business, and we do not expect to declare\nor pay any dividends in the foreseeable future. Consequently, shareholders must rely on sales of their Ordinary Shares after price appreciation\nas the only way to realize any future gains on their investment.\n\n \n\nFurthermore, to the extent\nthat we pay any dividends in the future, the ability to offer fully franked dividends, *i.e.* dividends that come from already taxed\nearnings, is contingent on making taxable profits in excess of accumulated losses. Taxable profits may be volatile, making the payment\nof dividends unpredictable.\n\n \n\nThe value and availability\nof franking credits to a shareholder will differ depending on the shareholder’s particular tax circumstances. Shareholders should\nalso be aware that the ability to use franking credits, either as a tax offset or to claim a refund after the end of the income year,\nwill depend on the individual tax position of each shareholder.\n\n** **\n\n**Our investors’ ownership in the Company\nmay be diluted in the future.**\n\n \n\nIn the future, we may issue\nadditional authorized but previously unissued equity securities, resulting in the dilution of ownership interests of our present shareholders.\nFurthermore, we may issue equity awards to management, employees and other eligible persons in the future under our 2021 Share Option\nPlan, as amended, or the Option Plan. Additional Ordinary Shares issued by us in the future will dilute an investor’s investment\nin the Company. In addition, we may seek shareholder approval to increase the amount of the Company’s authorized shares, which would\ncreate the potential for further dilution of current investors.\n\n \n\nIn addition, our outstanding\nconvertible promissory notes provide for conversion at a price that is based on the market price of our Ordinary Shares at the time of\nconversion, subject to a floor price. As a result, the number of Ordinary Shares issuable upon conversion may be significantly greater\nthan anticipated, resulting in substantial dilution to existing shareholders.\n\n** **\n\n**The market prices of our Ordinary Shares\ncould be affected by our involvement in possible future litigation.**\n\n \n\nIn the ordinary course of\nbusiness, we may be involved in litigation disputes from time to time. Litigation disputes brought by third parties, including but not\nlimited to intellectual property, distribution partners, customers, suppliers, business partners and employees may adversely impact the\nfinancial performance and industry standing of the business, in the case where the impact of legal proceedings is greater than or outside\nthe scope of our insurance.\n\n** **\n\n**Possible force majeure events could impact\nour operations and the market price of our Ordinary Shares.**\n\n \n\nEvents may occur within or\noutside the United States and Israel that could impact on the American and/or Israeli economy, our operations and the market price of\nour Ordinary Shares. These events include acts of terrorism, an outbreak of international hostilities, fires, floods, earthquakes, labor\nstrikes, civil wars, natural disasters, outbreaks of disease or other natural or manmade events or occurrences that can have an adverse\neffect on the demand for our products and its ability to conduct business. While we seek to maintain insurance in accordance with industry\npractice to insure against the risks it considers appropriate after consideration of our needs and circumstances, no assurance can be\ngiven as to our ability to obtain such insurance coverage in the future at reasonable rates or that any coverage arranged will be adequate\nand available to cover any and all potential claims. The occurrence of an event that is not covered or fully covered by insurance could\nhave a material adverse effect on our business, financial condition and results of operations.\n\n** **\n\n19\n\n \n\n** **\n\n**As a “foreign private issuer”\nwe are permitted, and intend, to follow certain home country corporate governance practices instead of otherwise applicable SEC and Nasdaq\nrequirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.**\n\n \n\nOur status as a foreign private\nissuer also exempts us from compliance with certain SEC laws and regulations and certain regulations of Nasdaq, including the proxy rules,\nthe short-swing profits recapture rules, and certain governance requirements such as independent director oversight of the nomination\nof directors and executive compensation. In addition, we will not be required under the Exchange Act to file current reports and financial\nstatements with the SEC as frequently or as promptly as U.S. domestic companies whose securities are registered under the Exchange Act\nand we will generally be exempt from filing quarterly reports with the SEC. Also, although the Companies Law requires us to disclose the\nannual compensation of our five most highly compensated senior officers on an individual basis (rather than on an aggregate basis), this\ndisclosure will not be as extensive as that required of a U.S. domestic issuer. For example, the disclosure required under Israeli law\nwould be limited to compensation paid in the immediately preceding year without any requirement to disclose option exercises and vested\nstock options, pension benefits or potential payments upon termination or a change of control. Furthermore, as a foreign private issuer,\nwe are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act.\n\n \n\nThese exemptions and leniencies\nwill reduce the frequency and scope of information and protections to which you are entitled as an investor.\n\n \n\nThe determination of foreign\nprivate issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and,\naccordingly, the next determination will be made with respect to us on June 30, 2026. In the future, we would lose our foreign private\nissuer status if a majority of our shareholders, directors or management are U.S. citizens or residents and we fail to meet additional\nrequirements necessary to avoid loss of foreign private issuer status. The regulatory and compliance costs to us under U.S. securities\nlaws as a U.S. domestic registrant may be significantly higher.\n\n** **\n\n**We may become a “passive foreign investment\ncompany,” or PFIC, for U.S. federal income tax purposes in the current taxable year or may become one in any subsequent taxable\nyear. There generally would be negative tax consequences for U.S. taxpayers that are holders of the Ordinary Shares if we are or were\nto become a PFIC.**\n\n \n\nBased on the projected composition\nof our income and valuation of our assets, we do not expect to be a PFIC for 2025, and we do not expect to become a PFIC in the future,\nalthough there can be no assurance in this regard. The determination of whether we are a PFIC is made on an annual basis and will depend\non the composition of our income and assets from time to time. We will be treated as a PFIC for U.S. federal income tax purposes in any\ntaxable year in which either (1) at least 75% of our gross income is “passive income” or (2) on average at least 50% of our\nassets by value produce passive income or are held for the production of passive income. Passive income for this purpose generally includes,\namong other things, certain dividends, interest, royalties, rents and gains from commodities and securities transactions and from the\nsale or exchange of property that gives rise to passive income. Passive income also includes amounts derived by reason of the temporary\ninvestment of funds, including those raised in a public offering. In determining whether a non-U.S. corporation is a PFIC, a proportionate\nshare of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken\ninto account. The tests for determining PFIC status are applied annually, and it is difficult to make accurate projections of future income\nand assets which are relevant to this determination. In addition, our PFIC status may depend in part on the market value of the Ordinary\nShares. Accordingly, there can be no assurance that we currently are not or will not become a PFIC in the future. If we are a PFIC in\nany taxable year during which a U.S. taxpayer holds the Ordinary Shares, such U.S. taxpayer would be subject to certain adverse U.S. federal\nincome tax rules. In particular, if the U.S. taxpayer did not make an election to treat us as a “qualified electing fund”,\nor QEF, or make a “mark-to-market” election, then “excess distributions” to the U.S. taxpayer, and any gain realized\non the sale or other disposition of the Ordinary Shares by the U.S. taxpayer: (1) would be allocated ratably over the U.S. taxpayer’s\nholding period for the Ordinary Shares; (2) the amount allocated to the current taxable year and any period prior to the first day of\nthe first taxable year in which we were a PFIC would be taxed as ordinary income; and (3) the amount allocated to each of the other taxable\nyears would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest\ncharge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.\nIn addition, if the U.S. Internal Revenue Service, or the IRS, determines that we are a PFIC for a year with respect to which we have\ndetermined that we were not a PFIC, it may be too late for a U.S. taxpayer to make a timely QEF or mark-to-market election. U.S. taxpayers\nthat have held the Ordinary Shares during a period when we were a PFIC will be subject to the foregoing rules, even if we cease to be\na PFIC in subsequent years, subject to exceptions for U.S. taxpayer who made a timely QEF or mark-to-market election. A U.S. taxpayer\ncan make a QEF election by completing the relevant portions of and filing IRS Form 8621 in accordance with the instructions thereto. We\ndo not intend to notify U.S. taxpayers that hold the Ordinary Shares if we believe we will be treated as a PFIC for any taxable year in\norder to enable U.S. taxpayers to consider whether to make a QEF election. In addition, we do not intend to furnish such U.S. taxpayers\nannually with information needed in order to complete IRS Form 8621 and to make and maintain a valid QEF election for any year in which\nwe or any of our subsidiaries are a PFIC. U.S. taxpayers that hold the Ordinary Shares are strongly urged to consult their tax advisors\nabout the PFIC rules, including tax return filing requirements and the eligibility, manner, and consequences to them of making a QEF or\nmark-to-market election with respect to the Ordinary Shares in the event that we are a PFIC.\n\n** **\n\n20\n\n \n\n** **\n\n**We may be subject to securities litigation,\nwhich is expensive and could divert management attention.**\n\n \n\nIn the past, companies that\nhave experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the\ntarget of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s\nattention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant\nliabilities.\n\n \n\n**General Risk Factors**\n\n** **\n\n**If we are not able to attract and retain\nhighly skilled managerial, technical and marketing personnel, we may not be able to implement our business model successfully.**\n\n \n\nOur success depends in part\non our continued ability to attract, retain and motivate highly qualified management. We are highly dependent upon our senior management\nas well as other employees and consultants. Our management team must be able to act decisively to apply and adapt our business model in\nthe rapidly changing markets in which we will compete. In addition, we will rely upon technical employees or third-party contractors to\neffectively establish, manage and grow our business. Consequently, we believe that our future viability will depend largely on our ability\nto attract and retain highly skilled managerial, sales and technical personnel. In order to do so, we may need to pay higher compensation\nor fees to our employees or consultants than currently expected and such higher compensation payments may have a negative effect on our\noperating results. Competition for experienced, high-quality personnel in the digital video and data transfer technologies field is intense.\nWe may not be able to hire or retain the necessary personnel to implement our business strategy. Our failure to hire and retain quality\npersonnel on acceptable terms could impair our ability to develop new products and services and manage our business effectively.\n\n** **\n\n**If we engage in future acquisitions or strategic\npartnerships, this may increase our capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities,\nand subject us to other risks.**\n\n \n\nWe may evaluate various acquisition\nopportunities and strategic partnerships, including licensing or acquiring complementary products, intellectual property rights, technologies\nor businesses. Any potential acquisition or strategic partnership may entail numerous risks, including:\n\n \n\n \n●\nincreased operating expenses and cash requirements;\n\n \n\n \n●\nthe assumption of additional indebtedness or contingent liabilities;\n\n \n\n \n●\nthe issuance of our equity securities;\n\n \n\n \n●\nassimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;\n\n \n\n \n●\nthe diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition;\n\n \n\n \n●\nretention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships;\n\n \n\n \n●\nrisks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and\n\n \n\n \n●\nour inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.\n\n** **\n\n21\n\n \n\n** **\n\n**We are subject to certain U.S. and foreign\nanticorruption, anti-money laundering, export control, sanctions and other trade laws and regulations. We can face serious consequences\nfor violations.**\n\n \n\nAmong other matters, U.S. and foreign anticorruption,\nanti-money laundering, export control, sanctions and other trade laws and regulations, which are collectively referred to as Trade Laws,\nprohibit companies and their employees, agents, legal counsel, accountants, consultants, contractors and other partners from authorizing,\npromising, offering, providing, soliciting or receiving, directly or indirectly, corrupt or improper payments or anything else of value\nto or from recipients in the public or private sector. Violations of Trade Laws can result in substantial criminal fines and civil penalties,\nimprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm,\nand other consequences. We have direct or indirect interactions with officials and employees of government agencies or government-affiliated\nhospitals, universities and other organizations. We also expect our non-U.S. activities to increase over time. We can be held liable for\nthe corrupt or other illegal activities of our personnel, agents or partners, even if we do not explicitly authorize or have prior knowledge\nof such activities.** **\n\n** **\n\n**Our business and operations might be adversely\naffected by security breaches, including any cybersecurity incidents.**\n\n \n\nWe depend on the efficient\nand uninterrupted operation of our computer and communications systems, and those of our consultants, contractors and vendors, which we\nuse for, among other things, sensitive company data, including our intellectual property, financial data and other proprietary business\ninformation.\n\n \n\nWhile certain of our operations\nhave business continuity and disaster recovery plans and other security measures intended to prevent and minimize the impact of IT-related\ninterruptions, our IT infrastructure and the IT infrastructure of our consultants, contractors and vendors are vulnerable to damage from\ncyberattacks, computer viruses, unauthorized access, electrical failures and natural disasters or other catastrophic events. We could\nexperience failures in our information systems and computer servers, which could result in an interruption of our normal business operations\nand require substantial expenditure of financial and administrative resources to remedy. System failures, accidents or security breaches\ncan cause interruptions in our operations and can result in a material disruption of our targeted phage therapies, product candidates\nand other business operations. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data\nor applications, or inappropriate disclosure of confidential or proprietary information, we could incur regulatory investigations and\nredresses, penalties and liabilities and the development of our product candidates could be delayed or otherwise adversely affected.\n\n \n\nEven though we believe we\ncarry commercially reasonable business interruption and liability insurance, we might suffer losses as a result of business interruptions\nthat exceed the coverage available under our insurance policies or for which we do not have coverage. For example, we are not insured\nagainst terrorist attacks. Any natural disaster or catastrophic event could have a significant negative impact on our operations and financial\nresults. Moreover, any such event could delay the development of our product candidates. See Item 16K. “Cybersecurity”\nfor more information."}