A. History and Development of the Company Valens was incorporated on October 26, 2006, as a private limited liability company under the laws of the State of Israel. We are registered under the Companies Law as Valens Semiconductor Ltd., and our registration number with the Israeli Registrar of Companies is 51-388704-2. We are domiciled in Israel and our registered office is currently located at 8 Hanagar St. POB 7152, Hod Hasharon 4501309, Israel, also currently serving as our principal executive offices. Our telephone number is +972-(9)762-6900. Our capital expenditures amounted to $1.1 million, $1.9 million, and $1.2 million during the fiscal years ended December 31, 2025, 2024 and 2023, respectively, primarily consisting of expenditures related to Research & Development (“R&D”) equipment. For information on the Company’s current capital expenditures, see “Part I, Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources.” We are subject to certain of the informational filing requirements of the Exchange Act. Our SEC filings are available to you on the SEC’s website at http://www.sec.gov.com, which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC (including, in our case, our annual reports on Form 20-F, our reports of foreign private issuer on Form 6-K, any amendments to these reports, as well as certain other SEC filings). We also make available on our website, free of charge, all such SEC filings as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Our website address is https://www.valens.com/. The references to the SEC’s and our website are inactive textual references only, and information contained therein or connected thereto is not incorporated into this Annual Report. Since we are a “foreign private issuer,” we and our officers, directors and principal shareholders are exempt from certain rules and regulations under the Exchange Act. For more information, see “Part II, Item 10. Additional Information—H. Documents on Display.” B. Business Overview Our Mission Our mission is to be a leading global provider of high-performance connectivity solutions. We aim to transform digital connectivity across industries by providing reliable, resilient and optimized solutions for long distance connectivity over simple, low-cost wiring infrastructure, enabling cutting-edge innovation across verticals in automotive, audio-video and other adjacent markets. Our Company Valens is a high-performance connectivity company, providing chipsets that allow for the wired distribution of large amounts of data over long distances. Operating in a fabless model, Valens has two main business units. The first is the Cross-Industry Business Unit, which encompasses Professional Audio-Video (verticals include Video Conferencing, Education, Digital Signage, Entertainment), Industrial Vision (verticals include Machine Vision and Embedded Vision) and Medical. The second is the Automotive Business Unit (verticals include In-Cabin, ADAS, and Long Vehicles). In professional audio-video, Valens is the incumbent provider of chipsets that comply with the HDBaseT standard. Backed by the HDBaseT Alliance, which is co-managed by Valens, LG, Samsung and Sony Pictures, HDBaseT gained the Company a leadership position in the market. Valens has sold tens of millions of HDBaseT chipsets, with a customer base comprised of almost all of the world’s major consumer electronics companies. Valens is also exploring opportunities for leveraging its core technology in other adjacent markets. In the automotive industry, Valens is the leading provider of chipsets that comply with MIPI A-PHY, a connectivity standard that is an enabler for Advanced Driver-Assistance Systems (“ADAS”) and Automated Driving Systems (“ADS”). Valens is the first in the industry to offer A-PHY-compliant chipsets, and the first to achieve design wins with global OEMs. Valens’ first generation of automotive connectivity chipsets is the solution powering the Mercedes-Benz infotainment system, across all Mercedes-Benz passenger car models. Revenues from this engagement began in 2021. 33 Cross-Industry Business Professional Audio-Video Valens’ long-range wired connectivity technology has gained it a leadership position in the professional audio-video industry. The Company’s connectivity technology supports the digitization of wired connectivity and is used by key leading audio-video product manufacturers, including Crestron, EPSON, Extron, Harman, Legrand | AV, LG Electronics, Logitech, NEC, Panasonic, Samsung, Siemens, Sony, Sennheiser and many more. These companies have created thousands of electronic devices that embed Valens’ technology as part of their connectivity solution, in millions of products globally, across a variety of verticals such as videoconferencing, education, industrial, medical, digital signage, and more. The Company’s high performance connectivity technology enables the simultaneous delivery of ultra-high-definition digital video and audio, Ethernet, USB, control signals, and power, all through a single low cost, long-reach cable. The technology is a hardware-based solution, with no high-level software dependency, enabling true plug-and-play digital connectivity, converging these multiple interfaces over the simplest cabling infrastructure, ultimately providing in a lower total cost of ownership, a seamless user experience without compromising on quality. This includes connecting ultra-HD video sources and remote displays, such as high-resolution projectors and displays, audio-source and outputs and other USB peripherals, such as high-resolution cameras and recording devices. Professional Audio-Video is characterized by a diversified set of verticals, such as Video Conferencing, Education, Digital Signage, and Entertainment. The increasing need for remote collaboration and communication across these verticals creates constantly evolving business opportunities for Valens. Valens’ offerings are suitable for all types of meeting rooms, from large corporate boardrooms to huddle rooms, and small office/home office setups (known as SoHo), as well as classrooms with video collaboration systems, allowing for hybrid learning. Valens’ solutions can be deployed wherever long-distance high-definition connectivity solutions are required, for time sensitive applications that require zero latency (a few micro-seconds of latency are commonly perceived in the industry as “zero latency” and referred to herein as “zero latency”). Industrial Vision Industrial Vision represents another important market for the Company. Valens has been active in the Industrial market for over a decade, primarily offering extension solutions for Industrial PCs (IPCs), allowing their placement in remote environments, with Keyboard, Video, Mouse (KVM) capabilities and superior EMC performance. Valens chips can be found in the products of the largest IPC vendors, including B&R and Siemens. Recently, the Industrial Vision market has grown in importance with the rise of Machine and Embedded vision. The demand for increased factory automation has resulted in the integration of machine vision systems. Primarily based on fast-frame rate cameras, these systems ultimately are connected across a sprawling factory floor to an Industrial PC. One example of a machine vision industrial application that is clearly becoming dominant is Quality and Assurance, where connected cameras augment or replace the human eye to visually inspect and identify faulty products. Existing connectivity solutions on the market – GigE Vision, USB3 Vision, and CoaXPress – are insufficient in providing a reliable solution for this application. Valens’ automotive-grade solutions are relevant for this market, offering highly robust connectivity for machine vision. Concurrently, there has been a rise in demand for embedded vision solutions, which involve the deployment of multiple cameras providing data for interpretation by AI algorithms, for applications such as drones, AMR robots, humanoid robots, agricultural vehicles, and more. AI models rely on vast amounts of high-resolution image data, which must be transmitted reliably and efficiently. This can be achieved with Valens’ connectivity solutions (MIPI CSI-2), that can natively interface with AI processors, allowing for the streamlined deployment of automotive-grade connectivity for such applications. Valens chipsets offer important advantages in Industrial Vision. First, the chips support high resolution video, increasing the precision of automated vision solutions. Second, the chips are standardized, facilitating the implementation of smaller form factor camera modules. Due to size restrictions across relevant applications, the market has been trying to miniaturize the size of cameras in some of the machine vision applications, including robot arms. Valens’ standardized solutions allow for the removal from the camera module of the Image Signal Processor (ISP), a relatively large component. Third, Valens solutions demonstrate strong resilience for Electromagnetic Interferences (EMI) which is highly important for ensuring 24/7 operation in what can be noisy electromagnetic environments. 34 Valens’ products provide simple and affordable solutions for extending CSI-2 and USB, two interfaces that are widely used in the Industrial Vision market. For additional details see “Company Products.” As connectivity in the industrial environment is challenging, the demand for distribution of massive amounts of data, in a secure and efficient manner, over long distances, requires robust connectivity technology. Valens chipsets offer the high-performance connectivity required to support innovation in this industry. Medical Valens has long been active in the medical industry, and we continue to see growing interest in our data-extension capabilities. Our chipsets deliver a high-level of safety with zero latency, and high-bandwidth uncompressed video connectivity, which is required for medical imaging devices such as MRIs, CTs, X-Rays, and robotic surgery. Another need in the medical space is the extension of high-quality images from the cameras to the video processing units and visual displays, which require greater bandwidth. An example is high-quality medical procedure recording. Another example is robotics-assisted guided surgery, with training services before the procedure and recordings after, all done without breaking the sterile field as the processes can securely and accurately be done from a distance. Valens chips can be found in the products from market leaders, including Siemens, Drager, and Eizo. Within the medical industry, endoscopies are growing globally. These non-invasive medical procedures involve the insertion of a long, thin tube inside the body of the patient. The tube often contains electrosurgical instruments used to cut, coagulate, desiccate, or fulgurate tissues, as well as a camera to allow the medical professional to see and maneuver inside the body. This application requires high-bandwidth connectivity to support superior video, as well as strong immunity to Electromagnetic Interferences (EMI) for error-free links unaffected by the electrosurgical equipment. To this end, Valens has introduced to market a pioneering solution with a built-in electro-surgical noise canceller, able to handle the high-bandwidth error-free video, while also coexisting with LEDs and control signals over the same cable. The solution has proven product-market fit, as in 2025, Valens announced that three global OEMs will launch the first endoscopes based on Valens chipsets. Endoscopes are notoriously difficult to clean; over the years, many people have gotten sick, and some have died, due to improper cleaning of endoscopes. Disposable endoscopes will eliminate the risk of infection. Valens is well positioned to benefit from a transition to disposable endoscope architecture, which is ultimately expected to replace reusable devices. This transition will take time, as new devices are required to undergo regulatory approval processes. However, when the transition happens, Valens solutions are expected to be a perfect fit for this architecture due to the chips’ small form factor, low power consumption and a resilient, precise technology. Automotive In-Cabin Valens has taken its first steps in the automotive market through its engagement with Mercedes Benz, leveraging the core technology used in its audio-video chipsets, by providing data connectivity for in-vehicle infotainment and telematics systems. Valens powers Mercedes’ infotainment system, offering one of the highest-bandwidth infotainment connectivity solutions on the road today. The multi-gigabit connectivity solution is running over Unshielded Twisted Pair (UTP) wiring currently deployed in vehicles, supporting the aggregation of multiple interfaces for feature-rich infotainment and telematics systems. Revenues from this engagement began in 2021 and continued since. Today, the Company’s chips are deployed across a broad range of Mercedes passenger car models, including the S, C and E-class models, as well as the Electric Vehicle (EV) models. 35 ADAS Valens’ position as a company that sets industry standards was once again confirmed in 2020 when the MIPI Alliance selected Valens’ technology to form the baseline for its high-speed in-vehicle video connectivity standard (MIPI A-PHY). The MIPI Alliance is the standardization body that develops and drives connectivity specifications for interfaces widely used by carmakers around the world. Companies that participated in the development of the standard included Intel, MediaTek, ON Semiconductor, Qualcomm, Robert Bosch GmbH, ST Microelectronics, Synopsys, Toshiba and others. In 2021, the IEEE Standards Association also adopted A-PHY as an IEEE standard. In late 2021, Valens introduced the first chipsets in the industry to comply with the MIPI A-PHY standard, providing a reliable and resilient solution for high-speed in-vehicle connectivity. These second-generation automotive chips provide a connectivity solution for high resolution sensors to compute units. This use-case is necessary for ADAS and 360-degree perception sensors, as well as for applications such as autopilot, surround view, parking assist, and reverse assist. 2024 marked a milestone year in which three OEMs, which belong to a group of automotive brands, selected Valens’ MIPI A-PHY chipsets for their next-generation ADAS connectivity, with commercialization expected in 2027. In early 2026, Valens secured a 4th A-PHY design win with a premium carmaker serving the Chinese market, reinforcing the connectivity standard as a frontrunner for next-generation ADAS and autonomous systems. Valens continues to make progress with many other leading players across the automotive ecosystem, including, OEMs, Tier 1s, and System on Chip (SoC) vendors, cameras, radars, and lidars, in the evaluation of our A-PHY-based solutions and the pipeline of opportunities continued to expand. Although we are witnessing slower and longer decision making around new technology adoption, we believe that these evaluations will eventually mature to the selection of our A-PHY technology by OEMs, following the completion of their evaluations and decision-making processes. In 2025, we continued the collaboration with key industry players to expand the A-PHY based connectivity solutions ecosystem. To mention a few, Valens completed interoperability testing with seven A-PHY silicon vendors: Analogix, ESWIN Technology, Motorcomm, OmniVision Technologies, Silergy, SimChip (since purchased by Southchip), and Velink, as well as with Sony Semiconductor Solutions, who released to the market a first CMOS image sensor for automotive applications with built-in MIPI A-PHY interface. In addition, Valens was selected as the connectivity solution of choice for the EyeQ6H by Mobileye, an industry leader in ADAS and autonomous driving. In general, the market demand for MIPI A-PHY is driven, in part, by a transformation within the automotive industry towards software-defined, highly autonomous vehicles. To enable these evolutions, cars are anticipated to: ● be equipped with a growing number of sensors ● combine multiple sensor types – cameras, lidars and radars; and ● be supported by intelligently connected architectures, which will require increased link bandwidth to deliver aggregated sensor data, video and functionality required by safety applications, in real time. Valens’ solution is scalable, allowing it to bolster the evolution of car architecture and the growing need for in-vehicle high-bandwidth connectivity. Valens’ chipsets address the needs of the increasingly interconnected centralized vehicle computer systems, such as ADAS, ADS, infotainment, and telematics as well as applications such as auto-pilot, surround-view, parking assist, and reverse assist. Long Vehicles Valens offers chipsets family that deliver robust connectivity for long-reach automotive applications. In addition to solution provided to Stoneridge for tractor-trailer connectivity, in 2025 we added long-reach capabilities to our VA7000 family. The chipsets offer high-bandwidth, long distance connectivity while supplying power and controls over the cable. This solution further supports applications such as surround view and rear-view visibility in a market that suffers from a lack of reliable visibility solutions due to the complex technical challenge of long-distance connectivity in a rough EMC environment. Valens chipsets for long vehicles have been evaluated by Stoneridge, a leading designer and manufacturer of highly engineered electrical and electronic vehicle systems. This project continued in 2025 and included stringent on-road evaluations by fleets. Valens’ second-generation chipsets for long vehicles are also being evaluated by Tier-1 suppliers. 36 Our Technology Backed by more than 100 patents, Valens Semiconductor’s core technology is built on advanced digital signal processing (DSP) and robust error handling mechanisms, ensuring reliable high-speed connectivity in complex and demanding environments. These capabilities form the backbone of our solutions across industries, including professional audio-video, automotive, and industrial. Valens’ DSP-based architecture compensates for channel impairments, adapting dynamically to variations in the transmission environment, preserving signal fidelity over extended link distances and enabling robust operation even under challenging conditions. Unlike conventional approaches that rely heavily on shielding, Valens’ DSP technology continuously tracks and adjusts to real-time channel conditions. Error correction is seamlessly integrated into the physical layer, employing Dynamically Modulated Local Retransmission (“DMLR”) to address data corruption caused by EMI. This process operates within strict latency constraints, ensuring that retransmitted packets do not disrupt the flow of data. The robustness and efficiency of Valens’ core technology has led to its adoption as the foundation for two major industry standards: HDBaseT and MIPI A-PHY. Valens invented the HDBaseT connectivity technology and co-founded the HDBaseT Alliance, together with LG, Samsung, and Sony Pictures, as a standards association promoting HDBaseT technology. HDBaseT provides the most optimized solution for a myriad of verticals and applications, addressing the market connectivity needs for long distance transmission, convergence, low-cost and simplicity. HDBaseT is the global standard for the convergence and distribution of ultra-high-definition video & audio, Ethernet, control signals, USB and up to 100W of power over a single, low cost commonly used cable for up to 328 feet/100 meters. HDBaseT eliminates cable clutter without compromising performance or high quality. Furthermore, Valens asymmetric technology was selected as the baseline of the MIPI Alliance’s standard for high-speed video connectivity in cars. Our superior connectivity mechanisms ensure connectivity resilience with “on-line” error correction, adaptive equalization, and real-time noise cancelers. Valens’ highly efficient hardware-based solution is optimized for asymmetric links, with no software stack, leading to a simplified architecture, which in turn guarantees reduction in cost and wire harness complexity. The data transmission is done without any compression at Zero Latency, for very long distances while providing diagnostic capabilities on the link’s quality. These are all the foundations for enhanced ADAS applications and software defined vehicle architectures that require powerful sensor data aggregation and software/data separation. We believe the following attributes collectively differentiate our technology and create a higher barrier to entry: ● Validated as baseline for different connectivity standards. ● Multi-gigabit bandwidth of uncompressed content with zero latency and error-free links over long distances. ● Valens’ superior PHY with integrated DSP ensures safety and resilience in error correction, adaptive equalization, and real-time noise cancelers, as it is specifically designed to transmit high-performance video and data in challenging EMC environments. ● Robust and adaptive mechanisms that are able to deal with automotive-related challenges such as cable aging, temperature changes, and more, while guaranteeing safety even in the harsh automotive environment. ● Valens’ chipsets simplify connectivity between multiple applications deployed over the same link, including the unique capability and flexibility to support and extend a variety of protocols (such as USB and Ethernet) for both symmetric and asymmetric applications. By addressing the challenges of high-speed data transmission in complex environments, Valens delivers solutions that are reliable, scalable, and future-ready. 37 Our Strengths We believe that our competitive advantages are based on the following key strengths: ● An industry standard leader in two large and growing markets - Professional Audio-Video and Automotive. We set the standard for long-range connectivity and gained market share in the professional audio-video market with our HDBaseT technology and believe we are well positioned to repeat this success in the even larger automotive industry with our A-PHY compliant chipsets. ● Product-market fit in high growth-potential markets – Industrial Vision and Medical. Valens’ solutions are suitable for applications in markets that have high long-term growth potential, such as industrial and medical. ● Disruptive technological solutions. Our technological solutions are based on advanced, scalable, resilient to noise, secure DSP. This allows us to provide one of the safest, most resilient, high-speed and reliable in-vehicle connectivity solutions, all transmitted through standard, simple, low cost, low weight wires and connectors, enabling advanced electronic architecture in cars, such as software-defined vehicles, that require powerful sensor data aggregation and software/data separation. Our technology’s ability to provide a reliable connectivity solution even in the face of the increasing electromagnetic compatibility (EMC) challenge in the automotive environment is another competitive advantage of Valens. ● High quality products. We continuously strive to provide the highest quality products in all markets in which we operate. Since we started serving the automotive market, we adopted measures to meet the relevant automotive industry standards (such as AEC-Q100 Qualification), and our customers’ specific quality control requirements. We are also certified for ISO-26262 (Road Vehicle Functional Safety). These quality measures contributed to the improvement of our quality control over our entire product portfolio. In addition, we implement an Automotive Quality Excellence program, with an internal goal to constantly improve our product quality by actively acting to minimize the Defect Parts Per Million (“DPPM”). Being a fabless company, we are compliant with VDA6.3 and have successfully passed several automotive Tier 1 and OEM quality audits. As part of our subcontractor quality management, it is our requirement that all the subcontractors along our supply chain meet the applicable standards, and periodically, we perform audits based on these standards. ● Our ability to power cross-industry innovation by leveraging our technologies and products. We penetrated the automotive market with chipsets that were based on the technology originally used for the audio-video market. In parallel, we are seeing demand from our non-automotive customers for the advanced connectivity products that we designed for automotive applications, allowing us to expand in additional verticals. In re-utilizing our chipsets across industries, we manage to maintain relatively low R&D investment, accelerating the return on our development investment. ● Strong relationships with customers and partners. We currently supply components in mass volume to Mercedes-Benz, a leading Automotive OEM, which embeds our chipsets in multiple platforms through various Tier 1 suppliers such as Bosch, Continental, and Valeo, and we continue to work on strengthening these relationships with these industry leading customers and build on our reliable reputation to continue success and further grow our automotive business. In Professional Audio-Video, we maintain strong relationships with our long-term customers, among them are key leading audio-video product manufacturers, including Crestron, EPSON, Extron, Legrand | AV, LG Electronics, Logitech, Panasonic, Samsung, Sony and many more. ● Building a strong ecosystem momentum towards adoption by Automotive OEMs and Tier 1s. In 2025 the number of prospective automotive customers and partners evaluating our A-PHY compliant chipsets, continued to grow, including leading OEMs and Tier 1 suppliers, and significant progress was made in existing evaluation processes. For more information, see “Part I, Item 4. Information on the Company—B. Business Overview, Our Company, Automotive”. ● Leading market position in audio-video connectivity. We are the incumbent and vendor of choice for major players in the audio-video connectivity space. These companies drive the market trends, and we are there to support them in driving the change. We believe that our leading market position strengthens our ability to continue serving this core market and capitalize on growing demand for high-performance connectivity solutions, also in adjacent markets where needs are rising, such as industrial, education, medical and other verticals that will emerge in the future. The advantages of our technology make it an optimal connectivity solution to support the increasing need for Artificial Intelligence (AI) based applications in robust connectivity solutions that allow the distribution of ever-increasing data. 38 ● Established technological leadership, strong intellectual property, and system-level expertise with no software stack. We believe our technology leadership is based on our strong intellectual property portfolio. Our core competence is in our superior physical (PHY) layer that enables us to provide the most optimized connectivity solution for a wide variety of applications and speed, by utilizing advanced DSP with no software stack, which is a burden that commonly characterizes solutions competing with the connectivity solutions we offer. Additionally, we believe our integration capabilities coupled with our system-level knowledge, due to close customer collaboration, enable us to understand our customers’ specific system requirements and effectively adapt to meet their needs. ● Proven management team: We have a strong track record of execution and an experienced management team. Our executive management team’s experience in effectively guiding companies through various industry cycles and technology transitions provides us with reliable leadership, experienced in executing through change, and maintaining stability during market uncertainty. Our management successfully and responsibly navigated the Company through global challenges that affected the markets in which we operate in recent years and will continue to do so in the face of future challenges we may experience. Our Growth Opportunities/Strategies Valens is focused on organic growth across industries. Supplementing this, and leveraging the company’s strong balance sheet, Valens may seek opportunities for inorganic growth, by pursuing target companies that, together with Valens, will be characterized by synergistic value creation. Our first acquisition was in 2024 when Valens acquired Acroname, a pioneering company specializing in advanced automation and control technologies for the professional AV and industrial vision markets. We intend to grow our business through the following key areas: Cross Industry Business Professional Audio-Video: ● Video conferencing is evolving with the rise of hybrid work, and video quality and intelligent automation now define the conference experience. Meeting rooms designed for high equity between local and remote participants are driving this shift, requiring every endpoint, from displays to peripherals, to deliver high bandwidth and real-time responsiveness with zero latency. These modern meeting rooms are driving two key trends that Valens could capitalize on: the rise of uncompressed 4K video and the growing importance of next-generation USB. Valens has solutions that answer both these needs: the only solution for the long-range distribution of uncompressed video (HDMI 2.0), with zero latency, over category cable; and the first ASIC-based USB 3.2 high performance extension solution. Together, Valens is expected to capture a significant opportunity in the growing video conferencing market. Industrial Vision ● Automotive-grade connectivity is in high demand for the Industrial Vision market, both for Machine Vision (IPC connectivity for factory floor automation) and Embedded Vision (AI SoC connectivity for drones, AMR robots, humanoid robots, agricultural vehicles, etc.) Valens is the leading provider of chipsets that comply with the MIPI A-PHY automotive standard for high-speed sensor connectivity, which has been shown to offer significant advantages to the Industrial Vision markets. Medical ● We intend to pursue opportunities arising from the repurposing of the automotive-grade VA7000 chipset for endoscope applications. Endoscopies require high-resolution video, thin simple cabling and of course – strong performance that is resilient to the electrical surges created by cautery and other operations, all have requirements that can be fulfilled with our connectivity solutions. The transition to disposable tools, in an attempt to avoid complex and inefficient cleaning of endoscopes, increases the opportunities for Valens in this field. In 2025, Valens established a foothold in the industry, with three design wins with endoscope OEMs for designs based on our MIPI A-PHY compliant chipset – VA7000. Automotive ● ADAS: Valens is a key supplier of chipsets that comply with the MIPI A-PHY standard. Valens plans to continue to invest in causing the market to adopt A-PHY as the automotive connectivity solution of choice, to address the need in high performance connectivity solutions for rising data rates resulting from higher resolution ADAS systems. The adoption of Valens A-PHY-based automotive connectivity solution by three leading European OEMs in 2024, may serve as a catalyst for wider adoption of the technology by other manufacturers. 39 Company Products Our product portfolio includes over 20 products across a range of high-performance semiconductors and other components that are in turn integrated into a range of technological applications, including: Cross-Industry Automotive ● VS100™ family — Valens’ first chipsets, which revolutionized the audio-video market by enabling transmission of uncompressed ultra-high-definition video, audio, control, and power, with near-zero latency, over a single LAN cable, according to the HDBaseT Alliance’s Spec 1.0. ● VS2000™ family — Second generation of HDBaseT chipsets (Spec 2.0), supporting the transmission of ultra-HD video, audio, Ethernet, controls, USB 2.0, and power, over a LAN or fiber cable, with near-zero latency. It enables point-to-point, daisy-chaining, and multi-streaming. ● VS3000™ family — The first and only Application Specific Integrated Circuit (“ASIC”) in the industry that enables the long-distance transmission of uncompressed 4K@60Hz 4:4:4. It enables transmission of HDMI 2.0 (18Gbps) including HDCP, based on Spec 3.0 of HDBaseT technology, convergence of audio, video, 1Gbps Ethernet, USB 2.0, controls, and power, with Zero Latency, over a category cable (e.g., Cat 6A). ● VA6000™ family — (originally developed for automotive) small-form factor chipset; a cost-effective and flexible solution that enables the convergence of multiple interfaces, including audio (I2S, S/PDIF), Ethernet, USB 2.0, and controls with Zero Latency, over a single Unshielded Twisted Pair (“UTP”) cable. Its use in audio-video applications demonstrates our ability to leverage technologies and power cross-industry innovations. ● VA6000™ family — Valens’ first chipsets for Automotive. The highest bandwidth long-reach symmetric solution deployed in vehicles today, supporting the aggregation of multiple interfaces for feature-rich infotainment and telematics systems. The chipsets are designed to deliver resilient, multi-gig, long-distance connectivity over the simplest wiring and connector infrastructure. VA6003 is a derivative product of the VA6000, which brings significant power reduction, with a very efficient cost performance. It is designed to fit advanced infotainment use-cases and next generation of telematics units and smart antennas, requiring low power and resilient connectivity. ● VA7000™ family — (originally developed for automotive) Low-power, small-form factor chipset that supports camera serial interface (“CSI”) extension over low-cost cable infrastructure, making it ideal for extending multiple cameras in Industrial, Medical, and videoconferencing applications. Bandwidth and reach combinations surpass industry standards ● VA7000™ family — Valens’ asymmetric automotive chipsets, which supports connectivity of CSI-2-based cameras, radars, LiDARs, and other sensors, with link speeds of up to 8Gbps. Operates over standard, cost-effective, in-vehicle wires for up to 15 meters (50 feet), with 4 inline connectors. The VA7000 is the product on the market that complies with the MIPI A-PHY standard, and the first to support multi-gig connectivity over low-cost unshielded cables and connectors. ● Valens USB and Power Extender — a plug and play solution to extend USB and power over a single standard category cable, for distances of up to 328ft/100m. ● Valens VS6320 chipset — a high-performance and efficient long-distance single-chip extension solution solving the increasing demand for higher bandwidth for USB peripherals in videoconferencing, IT, industrial and medical applications, providing extension for high-performance USB3.2 Gen1 at up to 328ft/100m (Superspeed 5Gbps) and USB2 (480Mbps), as well as all types of USB transfer protocols (BULK, ISO, INT, Control) and dedicated control signals (UART, GPIO), all over simple category cables. 40 KEY PRODUCTS BY ACRONAME ● USBHub3c — USB Type-C Hub with Power Delivery Analyzer + Tester with 8 programmable ports | USB 10Gbps. ● USBHub3+ — Designed for demanding industrial environments, the USBHub3+ is a USB 5Gbps Hub with 8 programmable ports. ● USBHub2x4 — Hi-Speed USB compatible hub featuring 4 device downstream ports with standard USB Type-A connectors. ● USB-C Switch — USB-C-Switch is a programmable, bi-directional 4-channel USB type-C port selector. ● USBExt3c Extender Standard Kit — USB-C hub with integrated bidirectional USB and power extension and automatic host switching from either end of the extension, powered by the Valens VS6320. 41 COMPANY PRODUCT FAMILIES BY APPLICATION Market Segments Applications Product Series VS100 VS2000 VS3000 VS6320 VA6000 VA7000 Video Conferencing Offering a complete suite of multimedia distribution solutions, Valens is a market leader with chipsets that power innovation and meet the evolving needs of the hybrid video conferencing market. ■ ■ ■ UC&C Multi-camera Systems Projectors & Displays ✓ ✓ ✓ ✓ ✓ ✓ Education Classrooms are digitizing, with the proliferation of cameras, interactive whiteboards, and more. Valens has the versatile, plug-and-play media distribution solution to support hybrid classrooms. ■ ■ ■ Hybrid Classrooms Interactive Whiteboards Projectors ✓ ✓ ✓ ✓ ✓ ✓ Digital Signage Smart and simple digital signage architectures with uncompressed, zero-latency connectivity for longer link distances and reliable 24/7 operation. ■ ■ ■ Video Walls Outdoor Displays Interactive Kiosks ✓ ✓ ✓ ✓ Medical In an industry that cannot compromise on quality, Valens chipsets support the highest resolution video imaging with no latency, enabling robotic surgeries, disposal endoscopies, and digital operating rooms. ■ ■ ■ Medical Imaging Medical Cameras & Endoscopes Digital Operating Rooms ✓ ✓ ✓ ✓ ✓ ✓ Industrial Vision With a rich offering of high-performance connectivity solutions, Valens guarantees seamless factory automation for the industrial market. ■ ■ Machine Vision Embedded Vision ✓ ✓ ✓ ✓ ✓ Entertainment The highest performance connectivity solution for entertainment setups, from home theaters to super-size immersive video walls and projection mapping. ■ ■ ■ Museums & Exhibits Sports & Live Events Home Theatres ✓ ✓ ✓ ✓ ✓ ADAS & Autonomous As data rates rise with the proliferation of sensors and displays in vehicles, OEMs are facing technological barriers on their quest to reach higher levels of autonomy. Valens’ high-performance connectivity chipsets are the foundation upon which OEMs can level up. Valens chipsets support high bandwidth, zero latency and flawless performance, meeting the evolving requirements for enhanced ADAS and safety applications ■ ■ ■ Cameras Centralized Radar LiDAR ✓ In-Cabin Cars have become entertainment centers on wheels, leading to a need for a connectivity solution that can reliably handle the high bandwidth requirements of next-generation digital cockpits. Valens chipsets form the data foundation for an enhanced and seamless in-cabin experience. ■ ■ ■ Infotainment Driver monitoring (including surround view) E-mirrors ✓ ✓ Long Vehicles With industry leading resilience and link distance, Valens chipsets bring unprecedented visibility to truck drivers around the world. ■ ■ ■ Rear-view visibility Sensor aggregation Front/side cameras ✓ ✓ 42 We work in a fabless model, i.e., we outsource all our manufacturing operations, utilizing third-party foundry, assembly, and testing facilities. We primarily manufacture our products through contract manufacturers in Taiwan and Europe. As of today, all our silicon wafers, which are the basic element of any semiconductor product, are designed to be manufactured at TSMC, the largest foundry in the world. In 2025 the Company announced a partnership with Samsung Foundry to fabricate the future MIPI A-PHY chipsets of the Company using its advanced automotive process node. We use third party contract manufacturers for our assembly and test operations, including Advanced Semiconductor Engineering (‘ASE’), and UTAC. Lastly, all chips are tested in accordance with specially designed programs developed specifically for each product family. Along the product life cycle, we continuously invest in the improvement of testing to improve manufacturing yield and reduce production costs. We store our product inventory in certain locations, mainly in Asia and Europe, close to many of our customers’ manufacturing facilities. Sales, Marketing and Customer Support We sell our products worldwide through multiple sales channels, including through our direct sales force and through distributors and independent sales representatives, which resell our products to numerous end customers. Approximately 40% and 34% of our net sales in fiscal years 2025 and 2024 respectively were made to distributors. Our direct sales force and applications engineers provide our customers with specialized technical support. We believe that maintaining a close relationship with our customers and serving their specific technical needs improves their level of satisfaction and enables us to anticipate and influence their future product needs. We provide ongoing technical training for our distributor and sales representatives to keep them informed of our existing and new products. Our internal marketing organization is responsible for increasing our brand awareness and promoting our products to prospective customers and partners. This includes the creative management of our website, market research and analytics, and development of demand generation strategies and materials such as product announcements, brochures, training and videos, as well as securing thought leadership through published technical and trend articles and advertisements, and active engagement in key industry events. Customers Our installed customer base consists of major players in the audio-video space, automotive OEMs and Tier-1 suppliers. In the audio-video market, we serve the leading manufacturers of video distribution equipment, displays, projectors, cameras, video bars, industrial PCs, and healthcare equipment. We have a wide distribution of our revenues across over 200 customers (not including Acroname’s customers). In 2025 and 2024, our three largest customers, each year, collectively represented approximately 31% and 38% of our total revenue, respectively. In the automotive space, we typically promote our products to the OEMs who are in most cases the final decision makers on the technology that will be deployed in their cars, as well as to Tier 2 automotive suppliers, with actual sales made to Tier 1s. Our contracts are typically based on short-term purchase orders that comply with our products’ lead time. Competition The semiconductor industry is highly competitive and is characterized by constant and rapid technological change. Our competitors range from large, international companies offering a wide range of products to smaller companies specializing in narrow markets. The competitive landscape is changing as a result of a consolidation trends within many industries, as some of our competitors have merged with or been acquired by other competitors, while others have begun collaborating with each other. We expect competition in the markets in which we participate to continue to increase as existing competitors improve or expand their product offerings, as the switching costs between connectivity technologies in the automotive industry are not insignificant, and as new companies enter the market. Additionally, our ability to compete in the industries in which we operate depends on many factors, including our ability to collaborate with other industry players, identify emerging markets and technology trends in an accurate and timely manner, introduce new and innovative technologies and products, implement advanced manufacturing technologies at a sustainable pace, maintain the performance and quality of our products, and manufacture our products in a cost-effective manner. 43 Intellectual Property We consider the strength of our intellectual property portfolio to be among our most significant competitive advantages. The protection of our technology and intellectual property and proprietary rights is therefore an important aspect of our business. We rely on a combination of patent, trade secret, trademark and copyright laws, confidentiality and non-disclosure agreements, and technical measures to establish, maintain and protect our intellectual property rights and proprietary technologies and processes. As of February 1, 2026, we owned approximately 134 issued patents, and 6 pending patent applications in USA, China, Japan, South Korea and the European Patent Office (EPO). Our patents generally cover a wide variety of areas relevant to our products, specifically covering our innovation in the areas of convergence of multiple-data types/multi-stream over the same wires and robust operation under severe Electromagnetic Interference (“EMI”). Our proprietary, internally developed know-how is an important element of our intellectual property portfolio. The development of technological solutions requires sophisticated coordination among many specialized employees. We believe that duplication of this coordination by competitors or individuals seeking to copy our platform would be complex and lengthy. The risk of a competitor replicating the functionality of our platform is further mitigated by the fact that our service product offerings do not include exposure of source code, as our solution is based on hardware (integrated circuits) and software that is delivered as binary code. However, it is possible that competitors or unauthorized third parties may obtain, copy, use or disclose, illegally or otherwise, our proprietary technologies and processes, despite our efforts to protect such proprietary technologies and processes. We cannot guarantee that any of our pending patent applications will be granted, that our current or subsequently issued patents or trademarks will be effective to protect our intellectual property rights, that any of our pending patent applications will result in issued patents, that any of our intellectual property rights will provide us with any meaningful protection or commercial advantage, or that others will not infringe, misappropriate, or violate our intellectual property rights. In addition, while there is no active litigation involving any of our patents or other intellectual property rights, we may be required to enforce or defend our intellectual property rights against third parties in the future. For additional information on risks associated with our intellectual property, see sections titled “Risk Factors—Risks Related to Our Business and Industry—“We may not be able to adequately obtain, maintain, protect, defend or enforce our intellectual property rights, which could harm our competitive position,” “Risk Factors—Risks Related to Our Business and Industry—Our ability to compete successfully depends in part on our ability to commercialize our products without infringing, misappropriating or otherwise violating intellectual property rights of others,” “Risk Factors—Risks Related to Our Business and Industry—If we fail to comply with our obligations under license or technology agreements with third parties, or if we cannot license rights to use technologies on reasonable terms, we could be required to pay damages, lose license rights that are critical to our business or be unable to commercialize new products in the future,” and “Risk Factors—Risks Related to Being a Public Company—We may be named as a party to several legal proceedings in the future, including litigation related to our patents and other intellectual property, which could subject us to liability, require us to indemnify our customers, require us to obtain or renew licenses, require us to stop selling our products or force us to redesign our products.” Regulation Our operations are subject to various environmental, labor, health, safety, export control and other laws and regulations in Israel, the United States and other jurisdictions in which we operate. We are also required to obtain authorizations or licenses from governmental authorities for certain of our operations and have to protect our intellectual property worldwide. In the jurisdictions in which we operate, we need to comply with differing standards and varying practices of regulatory, tax, judicial and administrative bodies. Any failure on our part to comply with these laws and regulations may subject us to significant fines or other civil or criminal costs, obligations, sanctions or property damage or personal injury claims, or suspension of our facilities’ operating permits. Compliance with current or export control, future environmental and occupational health and safety laws and regulations could restrict our ability to expand our business or require us to modify processes or incur other substantial expenses which could harm our business. As part of our business development, we also collect some information about individuals, also referred to as personal information, from our customers and suppliers. Laws and regulations in Israel, the United States (both federal and state regulations), the EU General Data Protection Regulation, or the GDPR, and other jurisdictions around the world restrict how personal information is collected, stored, used, disclosed, and otherwise processed, as well as, among other things, set standards for its security, implement notice requirements regarding privacy practices, and provide individuals with certain rights regarding the use, disclosure and sale of their protected personal information. Although our current products serve for connectivity purposes and not for the collection, storage and processing of personal data and information, changes in regulation or changes in certain future use-cases for our products that will include requirements and liability for protection and information security could require us to modify our solutions and features, possibly in a material manner, which could potentially limit our ability to develop new products and features and subject us to increased compliance obligations and regulatory scrutiny. See “Risk Factors—Risks Related to Laws and Regulation.” 44 Human Capital Our success depends on our continued ability to attract, motivate and retain our workforce. As the source of our technological and product innovations, our engineering and technical personnel are a significant asset. Competition for these and other talented employees is significant in Israel where we are headquartered and operate. We measure our employees’ engagement by our voluntary attrition rate and employee feedback. As of December 31, 2025, we had 233 employees and contractors, primarily based in Israel, compared to 259 employees and contractors, as of December 31, 2024. Our research and development team is the largest department in the Company and draws from a broad spectrum of backgrounds and experiences, with strong engineering, analog mix signal, DSP, VLSI, and software capabilities. In January 2026, we announced a plan to improve operational efficiency, which includes a reduction in force across the Company’s departments by approximately 10%. Facilities Our principal executive office is located in Hod Hasharon, Israel. In addition to our Israeli headquarters, we have offices in the United States, Asia and Europe. We lease each of our offices. We believe that our current facilities are adequate to meet our immediate needs. Legal Proceedings From time to time, we may become a party to various litigation matters incidental to the conduct of our business. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, prospects, financial condition, liquidity, results of operation, cash flows or capital levels. C. Organizational Structure The Company has subsidiaries in the United States, China, Germany and Japan, which are listed below, as of December 31, 2025 (all subsidiaries are 100% owned, directly or indirectly, by Valens Semiconductor Ltd.) Name of Subsidiary Jurisdiction of Organization Valens Semiconductor Inc. U.S. (Delaware) Valens Merger Sub Inc. (“Merger Sub”) U.S. (Delaware) Valens Trading (Shanghai) Co. Ltd. China Valens Semiconductor GmbH Germany Valens Japan Ltd. Japan Acroname Inc. U.S. (Colorado) D. Property, Plants and Equipment Our corporate headquarter is in Hod Hasharon, Israel, where we occupy an office space totaling approximately 59,201 square feet (5,500 square meter), under a lease agreement that expires in February 2029. In addition, we have offices in: 1. Texas, USA, where we occupy an office space totaling approximately 1,760 square feet, under a lease agreement that expired in December 2024 and renewed for an additional term until December 2027. 2. Colorado, USA, where Acroname occupies an office space totaling approximately 4,750 square feet, under a lease agreement that expires in July 2029. 3. Tokyo, Japan, where we occupy an office space totaling approximately 280 square feet, under a lease agreement that expired in November 2025 and renewed for an additional term until November 2027. 4. Shenzhen, China, where we occupy an office space totaling approximately 2,010 square feet, under a lease agreement that expired in July 2024 and was renewed for an additional term until July 2026. 5. Shanghai, China, where we occupy an office space totaling approximately 1,080 square feet, under a lease agreement that expires in June 2027. Our offices outside of Israel support functions across sales and marketing, as well as services, research and development. E. Unresolved Staff Comments Not applicable. 45