The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023 and notes to those statements included elsewhere in this annual report. Some of the information contained in this discussion and analysis or set forth elsewhere in this annual report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Cautionary Note Concerning Forward-Looking Statements” and “Risk Factors” in Section D under Item 3 of this annual report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. We are driving a radar revolution, utilizing an outstanding, truly safe, commercially viable, 4D imaging radar solution. We are both chipset providers and solution providers for other markets, such as defense and homeland security, roboraxi, robotrucks, offhighway vehicles and a wide array of safety applications with next-generation sensing based on our proprietary chipset and perception algorithms. As a global leader in radar technology, we enable safe roads today while paving the way to full autonomy for passenger cars, autonomous trucks, delivery robots, robotaxis and commercial vehicles, and we empower a wide array of safety applications with advanced sensing and paradigm-changing perception. According to Yole Group, the automotive radar market is projected to reach approximately $13.5 billion by 20284. Our model to capture this opportunity is to work directly with top established Tier 1 automotive suppliers in order to power their next generation radars. Correspondingly, we have established relationships with Tier-1 suppliers who are building production radars based on our chipset. GlobalFoundries, our chip manufacturer responsible for chip production and supply chain management, has advised us that it will have the capacity necessary to meet our anticipated commitments for 2026 and 2027. 4 Yole Group, Driving Radar Resolution, September 2023. 58 We are expanding our focus beyond automotive OEMs into adjacent and what we believe are high-potential markets, including defense, robotaxi, robotruck, off-road ground vehicles, perimeter security, marine applications such as docking and safety alerts, traffic infrastructure, anti-drone systems, and other emerging sectors where high-resolution radar can provide meaningful value. At the same time, we are increasing our focus on the Chinese automotive market, where we haves already demonstrated traction and where we believe market timing is more immediate. These initiatives are expected to begin contributing to revenue in 2026, along with our ongoing long-term efforts to deepen engagement with Western automotive OEMs. We are aligning our roadmap and messaging around positioning HD imaging radar as the enabling sensor for safe Physical AI deployments reality: AI is only as capable as the sensing it receives, and sensor quality is the bottleneck for safe autonomy at scale. In parallel with our Tier 1 led production path, we are expanding direct engagement with OEM feature owners, perception teams, and driving stack providers to accelerate adoption of radar as an imaging-grade input for Physical AI. Key Factors Affecting our Operating Results We believe that our future performance and success depend to a substantial extent on the following factors, each of which is in turn subject to significant risks and challenges, including those discussed below and in the section of this annual report in Item 3 under “Risk Factors.” In our industry, staying ahead hinges on delivering cutting-edge technology at competitive prices. Success requires us to consistently offer the latest advancements, which is why we channel our research and development towards maintaining our technological edge. Our ability to thrive is closely tied to the worldwide demand for ADAS. Although we believe that widespread adoption of 4D imaging radar across applications for safety and autonomy is approaching and that we are well-positioned in both automotive and non-automotive markets to take advantage of this opportunity, mass production passenger vehicles OEMs are just beginning to develop level 3 and autonomous systems that will rely on incorporating imaging radar technology. We expect the rate of actual adoption and commercialization of radar-based solutions by automotive OEMs and their suppliers will impact our results of operations, including revenue and gross margins for the foreseeable future. Government regulations relating to ADAS and autonomous driving solutions are also key factors in the development of the market. We also intend to target markets beyond mass production passenger vehicles, including defense and homeland security application vehicle applications like traffic monitoring, robotized vehicles and transportation applications such as last-mile delivery robots, robot taxis and shuttles, heavy machinery, trucks, construction, busses and trains. Our solution has the potential to be a primary sensor candidate for many autonomous and semi-autonomous applications and next generation perception platforms. As a result, we believe that we could operate in some of those markets in parallel with the automotive market. As a Tier 2 supplier of advanced technology to Tier 1 automotive suppliers and OEMs, our results of operations will be impacted by the timing and the level of demand for our product from Tier 1 automotive suppliers and OEMs which base their radars on our chipset solution. We are competing for talent in a highly competitive environment, which results in higher compensation packages to employees. We cannot give assurance that we will be able to hire all required positions when they are required or to retain those that we hire. Our radar system is constantly evaluated in field trials by the top-15 global automakers by sales, reflecting the significant commercial interest in perception and imaging radars. We anticipate that these automakers will make their decisions with respect to their radar technology commencing in 2026 and 2027. We also have a preliminary order from Hirain, a leading Chinese ADAS Tier 1 supplier, for the first months of production, which when the order becomes a binding order will move us into the mass production phase. The order consists of 340,000 radar chipsets that will be supplied to Hirain’s customers throughout China. Because of the preliminary nature of the order, it is not included in our backlog. In order to achieve profitability, we need to generate orders and binding commitments from our current evaluation projects. Additional delays in the autonomy programs of the OEMs to which we provide our chipset, currently or in the future, could adversely affect our ability to meet our revenue targets and achieve profitability in the time frame we anticipate. 59 Since OEMs rely on Tier-1 automotive suppliers for components such as radar-based product, if a leading Tier1 supplier goes into production with an imaging radar that is based on our chips the chances of an OEM basing its radar on our technology is likely to increase. We believe that the fact that Tier-1 suppliers already have radar production lines that they need to upgrade for imaging radar, reduces dramatically the risk and the cost in taking our technology to the mainstream. As with other companies engaged in ADAS, our business is dependent upon regulations relating to autonomous driving solutions. Although we believe that our systems comply with applicable regulations, any new regulations may have the effect of preferring one technology over other technologies, Since the nature and scope of future regulations may be affected by conditions and events, we cannot predict the nature of any future regulations and their effect on our business. Market Trends and Uncertainties We estimate the total addressable market for Advanced Drive Assistance Systems, known as ADAS, and autonomous driving technology, will grow to approximately $65.1 billion or more in 20305 and we believe that this growth will result in a demand for our imaging radar chips. As automotive OEMs have shifted their focus from Level 4/5 autonomy to Level 2+, we believe we have the opportunity to generate significant business with our first-to-market 4D imaging radar. We believe that we can be the market leaders, with deeply integrated hardware and software products that currently meet the OEM specification requirements for safe Level 2+ to Level 5 autonomy, which constitutes a significant portion of the market. We believe that we have multiple levers for sustained growth and market opportunities beyond the automotive industry, focusing on attractive, high-growth, and profitable markets. Specifically, we are targeting passenger cars, robotaxi, robotrucks, off highway vehicles and defense and homeland security. Each of these represents a significant global opportunity, historically underserved or completely unaddressed by existing technologies. Our immediate market focus is on passenger and commercial vehicle safety on highways and ADAS applications. We see significant potential to improve standard ADAS and crash avoidance systems. The growing demand for ADAS is primarily driven by increasingly stringent safety regulations and consumer preferences in China, Europe, and North America. We believe that we are well-positioned to capitalize on this demand. However, while increasing automotive performance requirements may generate higher demand, our success depends on our ability to anticipate and adapt quickly to evolving regulatory standards and industry requirements. Ultimately, market acceptance of active safety technology is influenced by numerous factors. Adverse economic conditions may also result in a higher rate of losses on future accounts receivables due to credit defaults. As a result, a downturn in the worldwide economy could have a material adverse effect on our business, results of operations, and/or financial condition. War with Iran, Lebanon, Hamas, Terrorism and Related Conflicts On October 7, 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israel’s civilian population and industrial centers along Israel’s border with the Gaza Strip and in the Central District of Israel. Following the attack, Israel’s government declared war against Hamas and a military campaign against Hamas. In addition, Hezbollah has attacked military and civilian targets in northern Israel, to which Israel has responded. How long and how intense the current conflict in Gaza becomes is unknown at this time and any continued clash among Israel, Hamas or Hezbollah or other countries in the region including Syria and Iran, may escalate in the future into a greater regional conflict. Although there is a ceasefire with Hamas, we cannot predict when or whether the ceasefire will end. In June 2025, Israel and the United States bombed Iran’s nuclear facilities, following which Iran filed missiles and drones against Israel most of which were intercepted. On February 28, 2026, the United States and Israel launched military attacks against Iran, targeting primarily nuclear, military and leadership sites. These strikes are continuing as of the date of this report, and Iran is firing missiles and drones against Israel and against other Arab countries which Iran perceives as allied with the United States. In support of Iran, Hezbollah commenced strikes against Israel, and Israel responded with air attacks against Lebanon and has announced a ground attack on the southern portion of Lebanon which borders Israel. As a result of these hostilities, missiles and drones are fired at Israel, including Tel Aviv, on a daily basis, there is a call-up of Israel’s working population, including some of our employees, and the effect of any potential boycott both of Israeli products and business and of stocks in Israeli companies may affect our business. To date, our operations and financial results have not been affected in any material effect, and we are constantly considering and taking different measures to address these conflict risks. However, if a missile will strike in the area where our offices are located, our ability to conduct business will be impaired although we have a contingency plan in such event. 60 Potential Effects of Tariffs Threatened Tariffs and Export Restrictions The president of the United States has stressed the importance of tariffs. We cannot predict the extent of any tariffs or any counter-tariffs which may be adopted that may affect our business, our manufacturer, our Tier 1 suppliers and the automobile industry generally. To the extent that tariffs are threatened, even if not imposed, it may impact the automobile industry and may result in a delay in the development and introduction of cars with a higher level of autonomy. Any tariffs, which may result in counter-tariffs, could result in a significant increase in the cost of parts for automobiles with increasing costs of the automobiles subject to the tariffs as well as significant supply chain delays which would increase costs and time. In addition, the United States has imposed export restrictions on advanced chips, including artificial intelligence chips, which may affect both the ability of our supplier, GlobalFoundries, to obtain chips and the price of chips. Any factors which could result in higher prices for automobiles could result in a reduction in the production of automobiles and a delay in the introduction of new ADAS features which require our technology, all of which could have a material adverse impact on our business and prospects. Global Demand Our business is related to global automotive sales and automotive vehicle production by our Tier-1 customers and their OEM customers and engagements. Economic conditions in North America, Europe and Asia can have a significant impact on the production volume of new vehicles and the introduction of ADAS features, and, accordingly, on our revenue. OEM customers’ production can vary from period to period due to global demand, market conditions and competitive conditions. We expect to continue to seek to capitalize on our strong and collaborative relationships with Tier 1 suppliers and OEMs to expand our presence in key markets and capture the long-term growth opportunities within them. ADAS and Autonomous Driving Regulation Demand for our solutions is influenced by the impact of regulation and the ratings systems deployed by the various NCAPs, particularly the Euro NCAP ,the U.S. NCAP and the Chinese SAMR, administered by the National Highway Traffic Safety Administration. As these NCAPs demand more ADAS applications like automatic emergency braking, we believe that OEMs will increasingly include ADAS as a standard feature in their models to maintain or to achieve the highest safety ratings. In many countries, these safety assessments have created a “market for safety” as car manufacturers seek to demonstrate that their models satisfy the NCAPs’ highest ratings. We expect national NCAPs. led by the Euro NCAP, to continue to add specific ADAS applications to their evaluation items over the next several years. In recent years, as regulatory requirements and NCAP ratings have increased, OEMs have also begun to highlight their safety features as a competitive advantage. In China, the State Administration for Market Regulation (SAMR) (together with MIIT) has also been tightening oversight of intelligent connected vehicles, especially around product compliance, recalls, and over-the-air (OTA) software updates that may affect vehicle safety performance. Under a joint MIIT–SAMR notice dated February 25, 2025, manufacturers are expected to strengthen safety management of OTA upgrades, improve traceability and documentation, and ensure appropriate handling of potential safety defects through recall and related mechanisms—reflecting regulators’ focus on preventing unsafe deployment of driver-assistance and automated driving functions via software changes. As additional regulations are implemented around the world, we expect this to lead to increased global adoption of ADAS, and we believe that we are well positioned to benefit from these increasing safety regulations globally, particularly due to the verifiable nature of our current and future solutions. In February 2026, the Self Drive Act was introduced in the U.S. House of Representatives to establish a federal framework for the regulation of ADS. While the Self Drive Act seeks to provide regulatory certainty, it introduces new and rigorous requirements that could materially affect our business, financial condition, and results of operations. 61 Key provisions of with this proposed legislation and its anticipated implementation include: ● Mandatory “Safety Case” Requirements: The Self Drive Act requires manufacturers to develop a comprehensive “safety case”—a structured argument supported by evidence—demonstrating that an ADS-equipped vehicle does not pose an unreasonable risk to safety. As a provider of high-definition 4D imaging radar chipsets, which are critical components of these systems, we may be required to provide extensive data, testing results, and proprietary technical documentation to our OEM and Tier 1 customers to support their federal safety certifications. Any inability to provide sufficient evidence or any determination by the National Highway Traffic Safety Administration (“NHTSA”) that systems incorporating our technology do not meet these new standards could lead to a loss of customers or exclusion from the U.S. market. ● National Security and Supply Chain Restrictions: The legislation includes provisions focused on the security of connected vehicles and directs reviews of the supply chain for ADS software and hardware. Given that our principal research and development and manufacturing operations are located in Israel and our Tier 1 suppliers are located outside of the United States, any future federal rules that restrict the use of foreign-sourced technology in U.S. autonomous vehicles—or prioritize “Made in America” requirements—could put us at a competitive disadvantage compared to U.S.-based companies. ● New Federal Safety Standards and Timelines: The Self Drive Act mandates that NHTSA issue final rules prescribing new motor vehicle safety standards for ADS by September 2027. The uncertainty surrounding the “objective content requirements” of these future standards may cause our OEM customers to delay serial production or redesign their sensor suites, which could result in the deferral of revenue or increased expenses for us as we seek to align our chipset specifications with evolving federal mandates. ● Data Reporting and Liability: The Self Drive Act proposes a National Automated Vehicle Safety Data Repository, requiring the reporting of crash data involving ADS. If vehicles equipped with our radar chipsets are involved in accidents, the resulting public data could lead to increased litigation, reputational damage, or regulatory scrutiny, regardless of whether our technology was at fault. The Self Drive Act represents a significant shift from the current voluntary safety self-assessment framework to a more formal, mandatory federal oversight regime. If we or our customers fail to comply with the Self Drive Act ’s requirements once finalized, or if the costs of compliance exceed our expectations, our ability to compete in the U.S. automotive market would be significantly impaired. This bill has not been enacted into legislation and we cannot predict whether it will become law or, if it become law, what the terms of the law will be. Fully autonomous vehicles are still nascent, and regulation of autonomous driving is evolving around the world on both the local and national levels. We anticipate that regulatory bodies will demand that AV functionality undergo certain validation and audit requirements before autonomous driving is permitted. The potential impact of regulatory requirements and initiatives on the timing for widespread adoption of fully or even partially autonomous driving and on the cost of developing and introducing autonomous driving solutions is uncertain. Nevertheless, we see a clear trend of adopting partial autonomous driving features, operated in specific scenarios, under specific conditions, and at different levels of supervision. Radars based on our chipset can help develop such features and make them available on private vehicles at a high level of safety and affordability. We cannot provide any assurance regarding how any such regulations will impact us and the extent of such impact, particularly if autonomous driving is prohibited in certain areas. 5 https://www.marketsandmarkets.com/Market-Reports/driver-assistance-systems-market-1201.html 62 Reliance on Supplier Since we rely on GlobalFoundries for our manufacturing, to the extent that any of the factors described above affect GlobalFoundries, including its ability to obtain the semiconductors necessary for our product, our ability to deliver any products that are ordered from us will be impaired, which may impact our ability to obtain orders for our products. Public company expenses As a public company, we will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. Specifically, we expect our accounting, legal and personnel-related expenses to increase as we establish more comprehensive compliance and governance functions and hire additional personnel to support such functions, maintain and review internal controls over financial reporting in accordance with the Sarbanes-Oxley Act, and prepare and distribute periodic reports in accordance with SEC rules. Results of Operations Years Ended December 31, 2025, 2024 and 2023 Year Ended December 31, (dollars in thousands) 2025 2024 2023 Revenues $ 1,026 $ 768 $ 1,470 Cost of Revenues 1,828 1,553 1,508 Gross Loss (802 ) (785 ) (38 ) Operating Expenses: Research and Development 34,820 35,091 34,082 Sales and Marketing 5,039 5,430 5,194 General and Administrative 7,544 8,347 7,571 Total Operating Expenses 47,403 48,868 46,847 Operating Loss $ (48,205 ) $ (49,653 ) $ (46,885 ) Financial (Income), net (1,784 ) (336 ) (3,385 ) Net Loss $ (46,421 ) $ (49,317 ) $ (43,500 ) Basic loss per share attributable to ordinary shareholders $ (0.42 ) $ (0.61 ) $ (0.60 ) Weighted-average number of ordinary shares used in computing basic loss per share ordinary share 111,382,369 80,949,032 72,021,520 Diluted loss per share attributable to ordinary shareholders $ (0.42 ) $ (0.61 ) $ (0.61 ) Weighted-average number of ordinary shares used in computing diluted loss per ordinary share \ 111,382,369 80,949,032 72,053,372 Revenue The following table sets forth our revenue for the years ended December 31, 2025, 2024 and 2023 by geographic region (dollars in thousands): Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 Revenue % of Revenue Revenue % of Revenue Revenue % of Revenue Revenue by Geography: China $ 6 0.6 % $ 254 33.1 % $ 639 43.5 % Hong Kong 16 1.5 % - - % 266 18.1 % Sweden 747 72.8 % 224 29.2 % 247 16.8 % USA 204 19.9 % 220 28.6 % 148 10.1 % Germany - - 20 2.6 % 81 5.5 % Israel 53 5.2 % 50 6.5 % 50 3.4 % Other - - - - 39 2.6 % Total revenue $ 1,026 100 % $ 768 100 % 1,470 100 % The increase in revenue in 2025 compared to 2024 was primarily driven by sales of chipsets mainly to non-automotive applications. The reduction in revenue in 2024 compared to 2023 was driven by lower samples unit sold, as we progress toward production, and by the reduction in professional services sales. 63 Cost of Revenue Cost of revenue includes the manufacturing cost of radar sensors and chipsets, which primarily consists of components cost, assembly costs and personnel-related costs directly associated with our customer support personnel and an allocated portion of facility, IT costs and depreciation. Once we are operating on a production basis, we expect cost of revenue to increase as we increase our revenue, however, we expect the cost per unit to decrease over time as we shift from the manufacturing of prototype full radar system to production of chipsets sales in response to orders in commercial quantities. We expect that the fixed cost components (most notably labor cost) will also drive margin improvement upon revenue increase due to leveraging economy of scale notwithstanding increased labor costs. Cost of revenue for 2025 was approximately $1.8 million, resulting in a gross loss of approximately $0.8 million. Cost of revenue for 2024 was approximately $1.6 million, resulting in a gross loss of approximately $0.8 million. Cost of revenue for 2023 was approximately $1.5 million, resulting in a gross loss of approximately $0.04 million. Gross Margin Gross margin for 2025 was negative margin of 78.2% compared to a negative gross margin of 102.2% in 2024, and to 2.6% negative gross margin in 2023. The negative gross margin in 2025 primarily resulted from low revenue levels relative to fixed operating cost. The negative gross margin in 2024 primarily resulted from low level of revenue and the increase in our labor cost. The negative gross margin in 2023 primarily resulted from reduced revenue and fixed costs. Operating Expenses Research and Development Expenses Our research and development efforts are focused on enhancing and developing the 4D imaging radar chipset solution and the accompanying software. Research and development expenses include: ● Personnel-related expenses, including salaries, benefits, and share-based compensation expense for personnel in research and engineering functions; ● Expenses related to materials, software licenses, supplies and third-party services; ● Prototype expenses; ● Operation costs related to develop manufacturing processes; ● Allocated portion of facility and IT costs and depreciation; and ● Participation grants received from the Israel Innovation Authority (“IIA”) and the European Union “Ecsel” program (Electronic Components and Systems for European Leadership), which reduced our research and development expense in 2024, 2023 and 2022. Our principal operating expenses is research and development, which was approximately $34.8 million in 2025, $35.1 million in 2024 and $34.1 million in 2023. The decrease of $0.3 million in 2025 compared to 2024 was mainly due to a decrease in shared-based compensation expenses partially offset by an increase due to unfavorable foreign exchange impact, by increase in material cost and to a lesser extent by merit-based salary increases The increase of $1.0 million in 2024 compared to 2023 was mainly due to an increase in share-based compensation expenses and an increase in our work force and subcontractors costs, partially offset by the reduction in material costs expenses associated with our advancement toward production ramp up. Research and development expenses in 2026 will include mainly activities relating to product enhancement and new products as well as the development of the next generation radar system. 64 Sales and Marketing Expenses Marketing expenses include the cost of sales commissions, marketing programs, trade shows, consulting services, promotional materials, demonstration equipment and an allocated portion of facility, IT costs and depreciation. Labor cost related expenses consist of salaries and benefits. We expect that our sales and marketing expenses will increase in absolute dollars over time as we hire additional sales and marketing personnel to support our customers, Tier-1 supplier relationships, and OEM relationships, as we will also increase our marketing activities and penetration and grow our domestic and international footprint. Sales and marketing expenses were approximately $5 million in 2025 compared to $5.4 million in 2024 and $5.2 million in 2023. The decrease of $0.4 million in 2025 compared to 2024 was primarily driven by the decrease in shared-based compensation expenses partially offset by increases in labor cost and unfavorable foreign exchange impact. The increase of $0.2 million in 2024 compared to 2023 was primarily attributed to an increase in workforce and to an increase in share-based compensation expenses. General and Administrative Expenses General and administrative expenses consist of personnel-related expenses for corporate, executive, finance, and other administrative functions, expenses for outside professional services, including insurance, legal, audit, accounting services and other costs related to our status as a publicly traded company as well as expenses for facilities, depreciation, and travel. Personnel-related expenses consist of salaries, benefits, foreign exchange rate impact and employee share-based compensation. General and administrative expenses, which were approximately $7.5 million in 2025, $8.3 million in 2024 and approximately $7.6 million in 2023. The decrease of $0.8 million in 2025 compared to 2024 was mainly related to a decrease in shared-based compensation expenses partially offset by increases in labor cost and unfavorable foreign exchange impact. The increase of $0.7 million in 2024 compared to 2023 was related to the increase in share-based compensation, the provision of doubtful debt and to a lesser extent increase in labor, those were partially offset by savings in our directors and officers’ (D&O) insurance premium. Financial Expenses (income), Net To the extent that our financial expenses is based on a change in warrant liability and convertible bond, as our stock and bond prices increases the warrant liability increases with a result that we incur a financing charge as a result of an increased liability, and as our stock price decreases, we incur financing income which has a positive effect in the results of our operations as a result of a decreased liability. Our financial expenses also include exchange rates revaluations, interest income from bank deposits, bonds related expenses and bank fees. Financial income, net of $1.8 million in 2025, was primarily related to deposits interest and call options, the effects of changes in the warrant liability for warrants that are not treated as equity partially offset by Bond revaluation, the revaluation of the lease liability, and to a lesser extent foreign exchange rate revaluations and issuance costs. Financial income, net of $0.3 million in 2024, was primarily related to bank deposit interest, and to a lesser extent, warrants revaluation income partially offset by bond financing expenses and to a lesser extent unfavorable foreign exchange rate revaluations. Financial income, net of $3.4 million in 2023, was primarily related to deposit interest, favorable foreign exchange rate revaluations and to a lesser extent, warrants revaluation income. Liquidity and Capital Resources In June 2024, we issued convertible bonds in the principal amount of NIS 110 million (approximately $30 million (on TASE. The proceeds from the sale of the bonds, which were approximately NIS 112.4 million (approximately $30.5 million), were placed in escrow, to be released to us upon meeting certain conditions by March 31, 2025, or earlier upon conversion of the bonds, all as set forth in the deed of trust pursuant to which the bonds were issued. At December 31, 2024, all of the bonds were outstanding and all of the funds were held in the escrow account. During January 2025, bonds in the principal amount of NIS 78.5 million were converted into 8,233,177 ordinary shares, and we received NIS 78.5 million (approximately $22.4 million gross proceeds including interest from the escrow funds). The deed of trust pursuant to which the bonds were issued provides for the release of the funds from escrow (to the extent not released upon conversion of the bonds) if certain conditions are met by March 31, 2025. On March 20, 2025, following approval by the holders of a majority of the outstanding bonds, the date by which we must meet the conditions to the release of the funds from escrow was extended from March 31, 2025 to December 31, 2025. On December 31, 2024 and on the date of this annual report, these conditions had not been met. If we do not meet the release conditions by December 31, 2025, we will be required to effect an early redemption of the bonds, which will result in using the remaining funds in the escrow account to pay the bonds, and we will be required to pay the trustee such additional amounts as are required to pay the interest and any payment due as a result of the differential in the exchange rate. We will use our available funds to make any necessary payments to the trustee. 65 In November 2024, we sold, in an underwritten public offering, an aggregate of (i) 4,293,957 ordinary shares, (ii) Pre-Funded Warrants to purchase an aggregate of 3,956,043 ordinary shares (which were issued in lieu of ordinary shares), (iii) Tranche A Warrants to purchase up to an aggregate of 8,250,000 ordinary shares, and (iv) Tranche B Warrants to purchase an aggregate of 8,250,000 ordinary shares, although the holders of Tranche B Warrants may elect to receive Pre-Funded Warrants in lieu of an equal number of ordinary shares. Each ordinary share or Pre-Funded Warrant, as applicable, was sold together with one Tranche A Warrant to purchase one ordinary share and one Tranche B warrant to purchase one ordinary share. The net proceeds from the offering, after deducting underwriting discounts and other offering costs paid by us, was approximately $13.8 million. During January 2025, 118,134 Tranche A Warrants and 118,134 Tranche B Warrants were exercised into 236,268 ordinary shares in consideration for gross proceeds of $0.49 million. During January 2025, we raised gross proceeds of approximately $33.1 million in a public offering of sale of 10,332,031 ordinary shares at a price to the pubic of $3.20 per share. The aggregate net proceeds received by us from the offering were approximately $30.9 million net of underwriting discounts and other offering costs. The bonds, the Pre-Funded warrants, the Tranche A Warrants and the Tranche B Warrants are described in Item 12. The form of these securities is filed as an exhibit to this annual report, and the descriptions in this annual report are qualified in their entireties by the terms of the securities. Selected Balance Sheet Information (dollars in thousands). December 31. 2025 2024 Current assets $ 71,779 $ 57,631 Working capital 38,863 21,225 Accumulated deficit (299,378 ) (252,957 ) Shareholders’ equity 39,569 22,496 As of December 31, 2025, we had cash and cash equivalents totaling $4.3 million and short term bank deposits totaling $40.7 million. We use our funds primarily for our operating activities. Cash and cash equivalents are invested in accordance with our investment policy. Cash Flow Summary The following table summarizes our cash flows for the years ended December 31, 2025, 2024 and 2023 (in thousands): Years Ended December 31, 2025 2024 2023 Net cash used in operating activities $ (38,124 ) $ (32,502 ) $ (33,513 ) Net cash provided by (used in) investing activities (24,671 ) 3,987 (15,251 ) Net cash provided by financing activities 53,429 13,533 23,199 Net decrease in cash and cash equivalents and restricted cash (9,366 ) (15,240 ) (25,612 ) 66 Operating Activities During the year ended December 31, 2025, operating activities used approximately $38.1 million in cash. The primary factors affecting operating cash flows during 2025 were the net loss of approximately $46.4 million, reduced by non-cash charges of approximately $8.3 million consisting of $9.8 million of share-based compensation, depreciation of approximately $0.5 million, and finance income of approximately $5.3 million. Additionally, our working capital has increased by approximately $3.2 million. During the year ended December 31, 2024, operating activities used approximately $32.5 million in cash. The primary factors affecting operating cash flows during 2024 were the net loss of approximately $49.3 million, reduced by non-cash charges of approximately $16.5 million consisting of $15.7 million of share-based compensation, depreciation of approximately $0.6 million, revaluation of warrant liability and bond-related expenses of approximately $0.2 million, and finance income of approximately $0.3 million Additionally, our working capital has increased by approximately $0.3 million. During the year ended December 31, 2023, operating activities used approximately $33.5 million in cash. The primary factors affecting operating cash flows during this period were net loss of approximately $43.5 million, impacted by non-cash charges of approximately $13.4 million consisting of $13.6 million of share-based compensation and depreciation of approximately $0.6 million offset by warrants revaluation of approximately $0.8 million. Additionally, our working capital has decreased by approximately $3.4 million. Investing Activities During the year ended December 31, 2025, cash provided by investing activities was approximately $24.7 million, which was primarily from cash provided by short-term deposits consist of approximately $24.4 million and purchase from cash used to equipment and leasehold improvements of approximately $0.3. During the year ended December 31, 2024, cash provided by investing activities was approximately $4.0 million, which was primarily from cash provided by short-term deposits consist of approximately $4.6 million and purchase from cash used to equipment and leasehold improvements of approximately $0.6. During the year ended December 31, 2023, cash used in investing activities was approximately $15.3 million, which was primarily from cash used to short-term deposits consist of approximately $15.0 million and purchase from cash used to equipment and leasehold improvements of approximately $0.3. Financing Activities During the year ended December 31, 2025, cash provided by financing activities was approximately $53.4 million, consisting primarily of proceeds from issuance of ordinary shares of approximately $30.8 million, proceeds from conversion of convertible debentures of $21.7 million, exercise of options and warrants of approximately $0.9 million. During the year ended December 31, 2024, cash provided by financing activities was approximately $13.5 million, consisting primarily of proceeds from issuance of ordinary shares of approximately $13.8 million, exercise of options of approximately $0.2 million and payment of $0.5 million of issuance costs related to our convertible bonds. During the year ended December 31, 2023, cash provided by financing activities was approximately $23.2 million, consisting primarily of proceeds from issuance of ordinary shares of approximately $22.5 million and exercise of options of approximately $0.7 million. 67 Funding Requirements We expect our 2026 expenses to reduce compare to our 2025 level as we implemented cost-reduction measures, extending our financial runway and better aligning our workforce with strategic priorities. Our production build-up efforts have stabilized, and we have progressed toward the production phase, alongside our efforts to streamline our expenses and to emphasize resources to support our next step target to the production and commercialization stage. We continue to expand our research and development activities and expect to incur commercialization expenses related to product sales, marketing, manufacturing and distribution. Our costs and revenue can be impacted by the conditions described in the ‘Overview under Market Trends and Uncertainties as well as the factors described in Risk Factors, which would affect our requirement for additional funding. We also expect to continue to incur losses before we receive sufficient revenues to offset our expenses. We anticipate that we will shift toward profitable operations in the coming years. We anticipate the current cash balance together with our revenues will enable us to continue until we are cash flow positive from operations. Our losses will be driven by: ● Expanding production capabilities to bring our chipset to automotive grade production; ● expanding our design, development, installation and servicing capabilities; . ● delays by automobile manufacturers in making final decisions relating to the next generation of automobiles requiring ADAS features and the introduction of advanced driver assisted capabilities as well as autonomous vehicles (AV), as a result of broader economic shifts that we believe are leading to short-term delays in the automobile manufacturers roll-out of advanced driver assistance systems; ● significant investment in research and development; Introduction of the radar system to new markets and customers which require investments in sales, marketing, support, operations and development ● increase our sales and marketing activities and develop our distribution infrastructure; and ● increase our general and administrative expenses to support the growth and public company infrastructure. In addition, we may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in sufficient revenues, which would further increase our losses. During December 2025, we completed a private placement of $15.7 million, through a follow-on offering as an expansion of our existing outstanding Series A Convertible Bonds. This amount is held in escrow under the series A Convertible Bonds. During January 2026, we raised gross proceeds of $18.5 from an underwritten registered public offering, at a share price of $1.4. Although we believe that our balance sheet is strong, following the funds raised in January 2026 and during 2025, in the event that we need additional funding in anticipation of our proposed production ramp up in 2026, we will consider seeking to raise funds through the sale of equity securities or convertible debt. As of the date of this annual report, we have no plans for any such offering. See Item 11 with respect to Quantitative and Qualitative Disclosures about Market Risk. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with US GAAP. The preparation of these consolidated financial statements requires us to make estimates, assumptions and judgments that can significantly impact the amounts we report as assets, liabilities, revenue, costs and expenses and the related disclosures. We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. Our actual results could differ significantly from these estimates under different assumptions and conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance as these policies involve a greater degree of judgment and complexity. 68 Share-Based Compensation We recognize the cost of share-based awards granted to employees and directors based on the estimated grant-date fair value of the awards. We elected to recognize share-based compensation costs on a straight-line method for awards. Forfeitures are accounted for as they occur. The fair value of each option award is estimated on the grant date using the Black-Scholes option pricing model. The application of the Black-Scholes model utilizes significant assumptions, including volatility. Significant judgment is required in determining the expected volatility of our ordinary share. Due to the limited history of trading of our Ordinary Shares, we determined expected volatility based on a peer group of publicly traded companies. Increases (decreases) in the assumptions result in a directionally similar impact to the fair value of the option award. Warrant liabilities Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with changes in estimated fair value of ordinary share warrant liability in the consolidated statement of operations. In evaluating warrants liabilities, we, with the assistance of third-party valuations, utilize the Black-Scholes valuation model to estimate the fair value of these warrants at each reporting date. The application of the Black-Scholes model utilizes significant assumptions, including volatility. Significant judgment is required in determining the expected volatility of our ordinary share. Due to the limited history of trading of our Ordinary Shares, we determined expected volatility based on a peer group of publicly traded companies. Increases (decreases) in the assumptions result in a directionally similar impact to the fair value of the ordinary share warrant liability. Emerging Growth Company Status Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. We are an “emerging growth company” as defined in Section 2(a) of the Securities Act, and have elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. Following the consummation of the Business Combination, our Post-Combination Company will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of our ordinary shares that held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter, (ii) the last day of the fiscal year in which we achieve total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which we issue more than $1 billion in non-convertible debt in the prior three-year period or (iv) five fiscal years after we complete an initial public offering, which was in October 2021. We expect to continue to take advantage of the benefits of the extended transition period, although we may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used. We will cease to be an emerging growth company with the year beginning January 1, 2027. Recent Accounting Pronouncements See Note 2 of Notes to Consolidated Financial Statements for information related to recent accounting pronouncements. 69