A. History and Development of the Company Our Organization Our corporate name is Arbe Robotics Ltd. We are an Israeli corporation founded on November 4, 2015. The mailing address for our principal executive office is 107 HaHashmonaim St. Tel Aviv-Yafo, Israel. Our telephone number is +972-73-7969804, ext. 200. As an Israeli corporation, we are organized pursuant to and subject to the provisions of the Israeli Companies Law, 5759-1999, as amended and the regulations promulgated thereunder (collectively the “Israeli Companies Law”). We have two wholly-owned subsidiaries, one in the United States -- Arbe Robotics US Inc., a Delaware corporation, and one, Shanghai Arbe Technologies Co., Ltd., organized under the laws of the People’s Republic of China. Our Status as a Foreign Private Issuer under the Exchange Act We are a “foreign private issuer” under SEC rules. Consequently, for so long as we continue to meet such qualification, we will be subject to the reporting requirements under the Exchange Act applicable to foreign private issuers. We are required to file our annual report for each year with the SEC by April 30 of the following year. In addition, we will furnish reports on Form 6-K to the SEC regarding certain information that is distributed or required to be distributed by us to our shareholders. A foreign private issuer is defined as “any foreign issuer other than a foreign government except an issuer meeting the following conditions as of the last business day of its most recently completed second fiscal quarter: “(i) More than 50 percent of the outstanding voting securities of such issuer are directly or indirectly owned of record by residents of the United States; and “(ii) Any of the following: “(A) The majority of the executive officers or directors are United States citizens or residents; “(B) More than 50 percent of the assets of the issuer are located in the United States; or “(C) The business of the issuer is administered principally in the United States.” Based on our foreign private issuer status, under existing rules and regulations, we are not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as a U.S. company whose securities are registered under the Exchange Act. We are also not be required to comply with Regulation FD, which addresses certain restrictions on the selective disclosure of material information. Commencing March 18, 2026, our directors and executive officers, but not 10% shareholders, are required to file ownership reports pursuant to Section 16(a) of the Exchange Act, but our directors, executive officers and 10% shareholders are not subject to “short-swing” profit recovery provisions of Section 16(b) of the Exchange Act. Despite our exemption due to our foreign private issuer status, we nevertheless currently expect to issue interim quarterly financial information publicly and to furnish it to the SEC on Form 6-K. The SEC has issued a concept release relating to potential changes in the definition of foreign private issuer which could make it more difficult for a foreign company to be able to meet the definition of foreign private issuer. Depending on the nature of any change which the SEC adopts in the definition, we may cease to meet the definition of foreign private issuer, which could both increase our costs and make it more difficult for us to raise capital. Further, if we are no longer a foreign private issuer, we will not be able to take advantage of the home company exemption from certain Nasdaq corporate governance regulations and our directors, executive officers and 10% shareholders will be subject to the short-swing profit recovery provisions of Section 16(b) of the Exchange Act. See Item 16G for information as the Nasdaq rules for which we use the home country exception to the Nasdaq rules. 40 Our Status as an Emerging Growth Company We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we will be eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in their periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As long as we remain an emerging growth company we will be exempt from the auditor attestation requirement. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used. We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of our initial public offering, (b) in which our total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter; and (ii) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References to “emerging growth company” in this proxy statement/annual report have the meaning associated with that term in the JOBS Act. Under this definition of emerging growth company, we will cease to be an emerging growth company commencing with the year beginning January 1, 2027. Functional and Reporting Currency A substantial portion of our activity, including transactions with customers, as well as equity transactions and cash investments, are incurred in U.S. dollars. Our management believes that the U.S. dollar is the currency of the primary economic environment in which we operate. Thus, our functional and reporting currency is the U.S. dollar. Where to get Additional Information The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. We are subject to the information requirements of the Exchange Act and will file annual and other reports, including this annual report, and other information with the SEC. You can read our SEC filings, over the Internet at the SEC’s website at www.sec.gov. These documents, and other information concerning us, is also available on our website at https://arberobotics.com/. Information contained on, or that can be accessed through, our website or any other website is expressly not incorporated by reference into and is not a part of this annual report. B. Business Overview We are a provider of imaging radar solutions, and we are leading a radar revolution, bringing uncompromised imaging capabilities to various markets. In the private automotive market we are enabling safe driver-assist systems today while paving the way for fully autonomous driving in the future. We are a Tier 2 supplier, empowering Tier-1 companies, which are companies that supply parts or systems directly to OEMs (car manufacturers), autonomous ground vehicles, commercial and industrial vehicles. 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. While up to now, the role of automotive radars in the traditional perception paradigm was limited to “legacy ADAS features,” such as adaptive cruise control (ACC) and automatic emergency braking (AEB), the introduction of our imaging radar with its a high channel count delivers an order of magnitude better resolution than existing radar solutions which, we believe, profoundly changes this paradigm, making the radar a key player in the overall driving solution including hands-free and eyes-off features. We believe that our imaging radar is essential for Level 2+ and higher levels of autonomy. 41 We provide long-range high resolution in 4D - the distance, the angular measurement of objects, both horizontally and vertically, and their relative speed. This is designed to enable the system that uses our imaging radars to determine the exact location and shape of objects. For example, it could determine whether a stationary object in front of a vehicle is a manhole cover you can drive over or a guardrail you need to avoid. Our 4D imaging radar is the world’s first radar to separate, track and identify objects in any weather or lighting condition using a 2K virtual channel array. Radar resolution without false alarm (“grating lobes”) is determined by the number of channels, much like camera resolution is defined by pixels. Traditional automotive radars offered in the range of 16 virtual channels, and advanced radars in production reach approximately 200 channels. We have made a groundbreaking leap, delivering a 2,304-channel array, which we believe is ten more channels than leading alternatives, thereby-providing unparalleled resolution and performance, with ultra-high resolution in both azimuth and elevation, delivering an image that we believe is 100 times more detailed than any commercial radar presently on the market. We achieve this capability with our proprietary RF chipset and a groundbreaking radar processor chip, the first dedicated processor designed specifically for the performance and power saving requirements of the automotive industry. Through our state-of-the-art analysis of the vehicle’s surroundings, we believe that our cutting-edge radar chipset incorporates the first radar technology detailed enough to enhance the perception algorithms, elevating L2+ and higher applications from nice-to-have comfort solutions to must-have safety features. The data captured by our perception radar, based on our chipset technology, has the fidelity, richness and resolution to support artificial intelligence algorithms that identify, classify and track objects to create a full free space map ahead of the vehicle based on radar data only, as well as an analysis of the evolving hazards sensed by the radars. These advantages are also relevant to other markets like off highway vehicles that can navigate based on radar in harsh environments, perimeter security applications and many other applications. Our Radar Systems We are developing advanced radar solutions, which are mainly intended to be used in Advanced Driver Assistance Systems (“ADAS”) and autonomous vehicles’ (“AV”) sensor suites as well as a wide array of safety applications with advanced sensing and paradigm changing perception. One target market for our chipsets is automotive module manufacturers called Tier 1 automotive suppliers, the target market for radars systems developed by the Tier 1 supplier based on our chipset are car makers - automotive manufacturers (OEMs) worldwide, although we are also marketing to the manufacturers. Additionally, alongside these potential customers, there is a large target markets for defense and homeland security application, 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 chipset solution includes three types of chips: transmitter (Tx), receiver (Rx) and processor, which together are referred to as our “radar chipset” or the “chipset.” We believe our radar chipset solution is a first of its kind, capable of high-resolution sensing “in four dimensions” generating tens of thousands of detections per frame with a point cloud density that we believe is unparalleled by any other radar solution on the market. The chipset distinguishes itself through its improved ability to support multi-channel processing - up to 2,304 virtual channels, through a combination of up to two transmitters (24 channels each) and up to four receivers (12 channels each). By comparison, other current-generation radar systems presently utilize 12 virtual channels, while the newest, best in class systems available in the market by our competitors are utilizing 256 virtual channels at best, although other companies are working on the development of improvements in their products and might have systems with higher capacity under development. Our solution addresses the core issues that have caused the recent autonomous vehicle and autopilot accidents such as detection of stationary objects, identifying vulnerable road users, operation at poor lighting conditions and eliminating false alarms at low latency with no range, Doppler, and angular ambiguities. Unlike the vast majority of the radars on the market, our radar technology is designed to address all driving scenarios and use cases, which we believe makes it a mandatory technology for any vehicles program targeting supervised autonomous driving features (L2+) and up to unsupervised autonomous driving (L3 and L4). However, while our system can identify the object, the vehicle’s computer systems determine how the vehicle will respond to this information provided by our system. 42 In the private automobile market, we operate as a Tier-2 semiconductor company, developing advanced radar technology and solutions – multi-channel Radio Frequency Integrated Circuit (RF IC) for transmission and reception and a dedicated radar processing IC that includes specialized Radar Processing Unit (‘RPU’) and additional general-purpose processing/control cores. We do not have our own chipset manufacturing facilities. We rely on GlobalFoundries for manufacturing and testing our chipset. For the automotive markets, our advanced technology allows our radar chipset solution to sense the environment, at long ranges and with a wide field of view, at a rate of up to 30 frames per second, allowing it to generate a reliable ultra-high-definition image, under all weather and lighting conditions, with great precision, while minimizing the likelihood of false alarms. Information about the environment is ‘sensed’ by the Tx and Rx elements of the chipset, at the 77 – 81 GHz RF band. The data is then processed at the Radar Processor, by an advanced proprietary algorithms into a 4D image — range, radial (on line-of-sight) velocity, azimuth and elevation — at ultra-high resolution with high fidelity and low latency, which is an input to the perception algorithm, sensor fusion and to the decision and control systems, to allow functionality such as emergency braking in any conditions, to enable safe adaptive cruise control, lane-change assist, and up to advanced automated and autonomous driving features, scaling up with the industry’s evolution toward hands-free, eyes-off and full autonomous driving. We designed the Phoenix perception radar system: The Phoenix perception radar, with its 2K ultra-high resolution, enables what we believe is an unmatched level of safety, and enriches perception algorithms for advanced capabilities including free space mapping, object tracking, and simultaneous localization and mapping (SLAM) at a cost that we believe is comparable in cost, size, power and heat with currently available radars that provide fewer than 200 channels. No matter the speed, elevation, range, or surrounding weather and lighting conditions, Phoenix differentiates true threats from false alarms to provide a safe road ahead for drivers, pedestrians and other vulnerable road users. We believe it is the industry’s first perception radar. As of the date of this annual report, we are working with Tier-1s which are currently developing radar products based on our chipset. Radars that are based on our chipset were submitted by the Tier 1s pursuant to multiple RFIs/RFQs and advanced solution evaluations that are currently active with OEMs, robotaxis, delivery robots, and autonomous trucks projects We have been selected for eight “imaging radar - based perception” projects, two of which are with the top five global OEMs which are progressing towards a selection in 2026 and 2027. These selection dates reflect a delay from the earlier target of 2024. Our solution was also selected to provide perception radars for autonomous trucks (“robotrucks”) and automated guided vehicles, known as AGVs, across ports in Chine. Our solution is constantly evaluated in field trials, including day and night performance, in variable weather and lighting conditions. The trials, thus far, have revealed what we believe is superior and promising performance: Our radar chipset solution senses its environment according to its spec, with the highest native resolution available in the market, while maintaining low false alarm rate in each frame and therefore enables an accurate and separate identification of all objects in the environment at their actual position, and it distinguishes between vehicles, vulnerable road users (pedestrians, animals, cyclists, motorcyclists) and objects and obstacles along the way. Based on the sensing of the environment created by the chipset at any given moment, the radar system can alert the vehicle central computer unit, allowing the driver assistance system to take control of the car, and activate safety applications such as emergency braking and lane control assist, or to activate autonomous control functions to avoid the danger. Our radar chipset solution is designed to integrate into the radar systems of next-generation systems as well as in ADAS in autonomous vehicles of all levels of autonomous driving, thanks in part to its ability to accurately create and image at an increased range of detection (of 300 meters) in a wide field of view, while optimizing costs and power-consumption, without its functionality being impaired by interference from other radar systems in the environment. The system maintains efficacy under conditions of low signal-to-noise ratio (“SNR”) and in multi-object scenarios (conditions under which alternative technologies struggle to provide effective solutions) - both in respect of false positives (error category I) and false negatives (error category II). 43 We believe that our chipset solves some of the challenges faced by current-generation radar systems, by providing a system that enables: ● Increased resolution and improved capability to differentiate between adjacent objects; ● Enhanced detection of stationary objects; ● Generation of a high-resolution radar image of all the objects in the scene; ● Compliance with the current European NCAP, the US NHTSA, and the Chinese SAMR standards for installation in Level 2 and higher autonomous vehicles; ● Reduction of false alarms; ● Ability to process the huge volumes of data generated when imaging the environment in four dimensions, at high update rate in real-time; ● Reducing mutual interference between radars that operate in the environment simultaneously; ● Reduced energy consumption; and ● Maintain competitive retail radar costs. We believe our technology is the first to create a high-fidelity, high-resolution radar image, that facilitates tracking, and SLAM and real-time decision-making. Our radar chipset heralds a breakthrough in radar technology that will enable Tier 1 manufacturers and OEMs to replace the current radars with an advanced solution that meets the current safety requirements of Euro-NCAP, the Chinese SAMR and NHTSA for autonomous vehicles at all levels of autonomous driving. Although our radar systems can identify images, each auto maker has its own computer system that instructs the vehicle how to respond to the images identified by our radar. If the computer system does not address the response to the image generated, the automobile may not operate as planned. The following chart shows the number of radar sensors, cameras and LiDAR units in vehicles with different levels of autonomy. As the level of autonomy increases, the number of radar sensors and cameras increases. LiDAR units are not expected to be included in any vehicle with an autonomy level less than 3. The number of radar sensors is a function of the autonomy level of the vehicle. 44 Recognizing the different levels of innovation and autonomy and the need to standardize the approaches across the spectrum of possibilities for the sake of safety, the Society of Automotive Engineers (SAE) has developed and defined six levels of automation for autonomous vehicles: Level 0 through Level 5. These levels have been adopted by the U.S. Department of Transportation. These levels are: Level 0 — No Automation: A vehicle that is fully controlled by a driver. Level 1 — Driver Assistance: A vehicle controlled by the driver, featuring minimal autonomous control components, designed to assist the driver. For example: a button that when pressed, keeps the vehicle at a constant speed, parking assistance or staying inside a lane. Level 2 — Partial Automation: A vehicle that includes integrated automation systems, where the driver is still required to control and monitor the environment at all times. For example: A system capable of detecting lanes and driving independently (cruise control) but alerts the driver to emergencies (driver involvement is required to operate the steering wheel and brakes). The industry refers to a level that was not originally recognized by the SAE, Level 2+, which adds surround perception and AI to improve the safety and convenience of human-driven vehicles. While the driver is still responsible for the car, the platform can perform automated maneuvers for a more seamless driving experience — such as making highway entrances and exits, lane changes and merges. Level 3 — Conditional Automation: Requires the presence of a driver behind the wheel, but the driver is not required to monitor the environment. The driver must be prepared to seize control of the vehicle at any given time upon receipt of an alert. For example: The driver can press the control button and be relieved of the need to monitor the route (and can attend to other matters during this time), but the driver’s presence and alertness are still essential. At this level, the vehicle can be used as an autonomous vehicle only when road and weather conditions allow it. Level 4 — High Automation: The vehicle is capable of performing all driving functions under certain conditions. The driver has the option of taking control of the vehicle. Level 5 — Full Automation: The vehicle is capable of performing all driving functions under all conditions. Pictured below is our Production Intent System (“B Sample” in automotive terminology), and below the picture is an infographic of the specifications. 45 We believe that the dimensions of radar systems based on our radar chipset, and the projected affordable price point are expected to facilitate its integration into mass production. We estimate that we will be able to offer our radar chipset solution in commercial quantities in 2026; however, such schedule is based on our completing the chipset development and making our product suitable as a commercial product and obtaining orders for commercial quantities of our chipset, which will be affected by the timing of manufacturers introducing vehicles with the ADAS features that require our technology. We can give no assurance that we will be able to sell the radar chipset solution in commercial quantities or that our manufacturer will have the facilities available to manufacture the chipsets in such quantities. Automotive Market Outlook The automotive industry is increasingly harnessing sophisticated technologies in its aim to develop and enhance safety and introduce autonomous driving vehicles. Today, the leading technologies are based primarily on cameras, high resolution radar sensors, and in some cases Lidar sensors, combined with data processing based on complex algorithms. The various technologies differ from each other in their features and performance in different conditions and scenarios. Significant investment and rapid growth in this industry are being driven by the need to increase road safety. Given the stakes involved in commercializing autonomous driving features, the technologies and products needed for truly safe driver assist solutions require long development and validation cycles and must ensure safety prior to commercial deployment. In the last decade, the world’s leading car manufacturers have begun to incorporate advanced automation systems in vehicles, aiming to assist the driver and even control certain driving functions. The vision for the future is that within several years, the technology will transition from enabling autonomous vehicle capabilities to the production of driverless vehicles, including development of unmanned shuttle services (robotaxis) that would complement traditional public transport services. The vision of a fully autonomous vehicle (driverless) is seen as a potential solution for reducing the number of traffic accidents (due to the elimination of the “human element” from the equation), and as an incentive to create innovative autonomous vehicle-sharing services that will lead to the public foregoing the purchase of private vehicles, to reduce the problem of traffic congestion, and to potentially significantly reduce fuel consumption and air pollution. However, as automobiles become more autonomous, government regulatory authorities may increase regulations to address concerns about driverless vehicles, particularly on city streets. Another significant area of development is the increasing integration of advanced sensor systems and artificial intelligence (AI) technologies. Market projections by Global Market Insights1 indicate substantial growth in automotive AI software, reaching an estimated $200 billion by 2032, with particular emphasis on enhanced safety features and autonomous capabilities. The convergence of high-resolution radar systems with AI-driven decision-making algorithms is anticipated to be a critical factor in achieving regulatory safety standards for autonomous vehicles. 1 https://www.gminsights.com/industry-analysis/artificial-intelligence-ai-in-automotive-market 46 According to a forecast by Goldman Sachs Research, growth is expected in sales volumes of Level 2 and Level 2+ automated vehicles, reaching approximately 30% of new car sales by 2027. Sales of Level 3 and Level 4 vehicles are also expected to grow, reaching approximately 10% and 2.5% of new car sales, respectively, by 2030. These levels of automation offer increasing degrees of driver assistance, with Level 3 allowing drivers to take their eyes off the road and hands off the wheel in select situations. By 2040, AV adoption is expected to be highest in China (~90% of sales), followed by Europe (~80%), and then the US (~65%). * Source: Goldman Sachs Research, 2024. Advanced Driver Assistance Systems (ADAS) include advanced automation functions (based on camera and radar) designed to reduce the risk of traffic accidents, alert the driver to obstacles on the road, and even take control of the vehicle under certain conditions. The ADAS category includes the following systems, among others: (a) Distance maintenance system - designed to warn of a collision with a vehicle ahead or behind, by alerting the driver of imminent danger and flagging the need to take preventive action. This type of system may be an effective tool to compensate for the driver’s lack of concentration or distraction while driving. (b) Lane departure control system — designed to alert the driver when veering off a lane without signaling. (c) Autonomous braking system — designed to operate the brake system autonomously, or increase their power when identifying risk of harm to road users (pedestrians, cyclists, vehicles, etc.). In recent years, automakers have been installing ADAS such as those mentioned above as standard features in many vehicle models, and these systems have also been installed electively by vehicle owners. Alongside development and production of current-generation ADAS, there has been accelerated development of advanced technology for next-generation systems, designed to support autonomous driving, in preparation for manufacture of Level 2+ and higher autonomy. The currently deployed radar technology holds a central position in the ADAS category. This type of technology is installed in adaptive cruise control (ACC) systems, blind spot detection (BSD) systems, forward collision warning (FCW) systems, and intelligent park assist systems, among others. In many cases, automakers choose to integrate ADAS based on several technologies simultaneously (radar and cameras). We believe that it is likely that as the technology advances, this trend of sensor fusion, or integrating multiple technologies into vehicles and collectively taking inputs from each, will increase and further strengthen detection certainty for L2+ and beyond. In fact, Transparency Market Research indicates that the sensor fusion market is expected to expand from $3.9M in 2023 to $4B by 2034, advancing at a CAGR of 23.7%, and advanced radar detailed enough to support sensor fusion will likely continue to play a core role. 47 According to MarketsandMarkets,2 the automotive radar market is expected to experience significant growth, from $6.6B today to $33B by 2030, registering a CAGR of 31.1% IDTechEx Research3 suggests that this growth will be driven by both increasing adoption of side radars for features like blind spot detection in Level 1 and 2 vehicles, as well as the growing demand for more sophisticated radar systems in Level 2+, 3, and 4 autonomous vehicles. Growth in radar systems for higher levels of automation is also anticipated, as these systems require more advanced sensing capabilities. However, these developments are dependent upon the timing of the automobile manufacturers decision to introduce vehicles with ADAS features. Market outlook: Physical AI and the role of radar sensing Public market research indicates that “Physical AI” and closely related “Embodied AI” categories are entering a high-growth phase starting in 2026, driven by the shift from AI that analyzes information to AI that perceives and acts in the real world. Acumen Research and Consulting estimates the Physical AI market at ~$5.0B in 2025, growing at a 32.8% CAGR (2026 to 2035) to ~$82.8B by 2035 (report updated February 19, 2026). In a similar framing, SNS Insider projects Physical AI at ~$5.23B (2025E), reaching ~$49.73B by 2033 at a 32.53% CAGR (2026 to 2033) (report dated December 2025). MarketsandMarkets uses the term Embodied AI and forecasts growth from $4.44B (2025) to $23.06B (2030) at a 39.0% CAGR (2025 to 2030) (published June 2025). Taken together, these independent forecasts support a consistent outlook: Physical or Embodied AI is scaling quickly as industries industrialize perception, simulation, and real-time edge autonomy. Radar sensors are a direct beneficiary of this trend because Physical AI performance is constrained by sensing fidelity, uptime and safety validation. As autonomy moves toward Level 2+ and beyond, radar’s robustness across darkness and adverse weather, combined with richer spatial and motion signals, makes it a critical input for sensor fusion and safety cases. This is reflected in automotive radar market forecasts. MarketsandMarkets estimates the automotive radar market growing from $6.6B (2024) to $33.6B (2030), a 31.1% CAGR (news release dated July 11, 2024). The convergence of fast-growing Physical AI workloads and fast-growing radar adoption supports a clear implication for autonomy stacks: higher-fidelity, imaging-grade radar data can reduce ambiguity for AI perception, improve object separation and tracking in clutter, and support safer deployment trajectories as regulatory scrutiny increases as well as operating in conditions that other sensors are underperforming. Market outlook for Embodied AI and automotive radar, with yearly values interpolated using the CAGRs published by MarketsandMarkets (Automotive Radar: July 11, 2024; Embodied AI: June 2025). Sources: ● Acumen Research and Consulting, “Physical AI Market Size, Share, Industry Report 2026–2035”, last updated Feb 19, 2026. (acumenresearchandconsulting.com) ● SNS Insider, “Physical AI Market … Global Forecast 2026–2033”, dated Dec 2025. (SNS Insider) ● MarketsandMarkets, “Embodied AI Market … Global Forecast to 2030”, published Jun 2025. (MarketsandMarkets) ● MarketsandMarkets (via PRNewswire), “Automotive Radar Market worth $33.6B by 2030”, dated Jul 11, 2024. (PR Newswire) 48 Growth Strategies Our growth strategies include the following: ● Extending engagements with OEMs and driving stack providers: While we keep focus on the well-established production path with our Tier 1 customers, we are extending our focus to better fit the age-of-autonomy: Working directly with OEM’s feature owners, perception teams and driving stack providers (like NVIDIA and others) to enhance the mutual understanding for the need for an imaging radar and how it is to be used for advanced ADAS and higher level of autonomy. We plan to extend the work through collaborative field tests, radar datasets, radar and waveform design, perception and fusion early integrations with perception radars, feature benchmarking and development of innovative algorithms that maximizes the benefits of such a radar to these partners, providing them with what we believe is an invaluable competitive edge. ● Expanding go-to-market flexibility with system-level offerings for select verticals and direct customers: In parallel with our chipset-first strategy, we are exploring opportunities to provide complete radar systems, hardware, software, and perception-ready outputs, for customers and verticals that want to work directly with Arbe and move faster than traditional automotive supply paths. This approach enables shorter integration timelines and broadens product applications beyond mass-produced passenger cars into adjacent markets such as autonomous ground vehicles and robots, agricultural tools, industrial automation and factories, intelligent traffic systems, rail junction safety, heavy transportation and machinery, defense, and homeland security. ● We see the Chinese automotive market evolving quickly, with OEMs accelerating investment in autonomous driving and next-generation sensing technologies. Momentum in China, including with a new win we recently announced, reinforces our view that this market represents an important shorter-term revenue opportunity for Arbe, that serve as meaningful growth engines for us. ● We are expanding our focus beyond automotive OEMs into adjacent and 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. ● Positioning HD imaging radar as the enabling sensor for safe Physical AI deployments: As Physical AI rolls out gradually from controlled environments (factories, logistics) toward less controlled ones (public roads and open environments), safety validation, regulation, and real-world uptime become the gating factors. We are aligning Arbe’s roadmap and messaging around this reality: AI is only as capable as the sensing it receives, and sensor quality is the bottleneck for safe autonomy at scale. We are emphasizing “design for uptime” and affordability as core requirements for deployment, while highlighting radar’s inherent robustness in harsh conditions (darkness, glare, rain, fog, dust) where other sensors degrade. 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. We plan to extend this work through collaborative field testing, creation and sharing of radar datasets, radar and waveform optimization, early perception and fusion integrations, feature benchmarking, and joint development of algorithms that fully leverage HD radar’s dense spatial-and-velocity data—providing partners with a differentiated perception layer versus lower-channel radars and enabling faster validation toward higher levels of autonomy. ● Capitalize on regulatory changes. We believe that our existing infrastructure positions us well to capitalize on regulatory changes pertaining to required installation of active traffic accident prevention systems in general, and radar systems in particular, which is expected to increase the demand for the technology and products that we are developing. 2 https://www.electronicproducts.com/automotive-radar-and-lidar-sensors-one-masterpiece-and-another-in-the-making/# 3 https://www.electricvehiclesresearch.com/articles/32433/three-key-takeaways-from-idtechexs-new-automotive-radar-market-report3 49 Sales and Marketing In light of the ability of technological systems to reduce the risk of traffic accidents, authorities, organizations and governments around the world have established regulations that require the installation of ADAS in certain vehicles and operation of autonomous driving features. For instance, in 2024 the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) has officially established a Federal Motor Vehicle Safety Standard mandating the inclusion of automatic emergency braking (AEB), encompassing pedestrian AEB, as a default feature in all passenger cars and light trucks by September 2029. This safety measure is poised to notably reduce rear-end collisions and incidents involving pedestrians. AEB systems utilize sensors to identify proximity to potential collisions with vehicles or pedestrians ahead and autonomously engage the brakes in the absence of driver intervention. Pedestrian AEB technology will be functional both during daylight and in low-light conditions, thereby significantly curbing injuries, property damage, and the associated expenses resulting from such accidents. The European New Car Assessment Program, otherwise referred to as NCAP, rates vehicles by safety features. The rating system has been successful at influencing consumers to make vehicle purchases based on how high the NCAP rating is, making safety a priority for consumers. The mission of NCAP is “Vision Zero” to eventually have zero accidents or fatalities on the road, with this vision, automotive technology companies and automakers are looking for technologies that will enable them to develop more safety features that can predict and prevent car accidents before they happen. Vision Zero will require that all vehicles shift from passively protecting individuals to actively protecting them - both in the vehicle as well as outside the car. 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. In the United States, 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. 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. We do now know whether the Self Drive Act will become law in its present form. Our private automotive go to market strategy is primarily targeted at Tier 1 suppliers, with the aim of fostering cooperation with the Tier 1 suppliers to integrate our radar chipsets into the radar systems that Tier 1 manufacturers will sell to OEMs. Our sales and marketing team continues to focus on expanding its relationships with OEMs and radar focused Tier-1 suppliers and seeks to leverage its existing relationships to expand its market to other industries. In this market, we are considered a Tier-2 automotive supplier because we sell our product to Tier-1 companies that then integrate our product into the overall system supplied to the OEMs. Our business model of being a Tier-2 supplier that subcontracts its manufacturing, together with its market leadership, results in an advantageous cost structure that requires minimal sales and marketing expenses with respect to OEMs. We are taking marketing steps intended to position us as a leading company in research and development of chip technology for next-generation imaging radar systems in autonomous vehicles. We are increasing our focus on verticals beyond private automotive as we see meaningful demand for high-resolution radar in mission-critical use cases where perception must remain reliable in harsh, complex conditions. In 2025, this momentum was reflected in non-automotive deployments and evaluations, including Sensrad’s delivery of its first radar series powered by Arbe’s chipset for a defense-sector autonomous off-road vehicle application and for smart infrastructure projects, alongside continued expansion into additional non-automotive applications such as marine collision-prevention systems. Looking forward, we are also evaluating additional go-to-market and commercialization models to accelerate adoption in these verticals. In addition to our primary approach of enabling more radar suppliers, we are pursuing new relationships and may, in certain non-automotive markets, support more direct sales or more integrated solution deliveries to end customers where appropriate. This includes expanding engagement in defense and homeland security, including collaboration where our chipset is integrated into leading homeland security suppliers’ systems to deliver joint, system-level solutions for defense forces, law enforcement, perimeter security, and related applications. 50 The marketing strategies employed include participation in industry conferences, public relations publications, developing written, and video based content, leveraging social media and proactive inquiries to potential customers. We leverage a variety of channels to reach prospects which include organic and paid social media activity, joint events, webinars and media and analyst relations. Our radar solution is part of the NVIDIA automotive ecosystem, where it is being combined with NVIDIA accelerated computing to enable advanced AI-based perception for next-generation vehicles. As highlighted in recent announcements, our automotive-grade, ultra-high-resolution radar is designed for integration with NVIDIA DRIVE AGX platforms, supporting capabilities such as free-space mapping, richer perception stacks, and hands-free and eyes-off driving. Because NVIDIA DRIVE serves a broad range of transportation developers, including automakers, truck makers, Tier 1s, robotaxi operators and autonomous vehicle startups, we believe that this collaboration strengthens our visibility and positioning across key mobility markets. Material Agreements We are party to certain agreements that we believe are important to our business. Some of these agreements are memoranda of understanding, with a definitive agreement to be negotiated in the future. We can give no assurance that these memoranda of understanding will develop into agreement or will generate significant, if any, revenue for us. Further, our ability to generate revenue from any of these agreements is dependent upon our ability to develop and deliver products that meet the customer’s requirement, as to which no assurance can be given. Strategic Relationships Our business strategy was based primarily on cooperation with Tier 1 automotive manufacturers to integrate our radar chipset into the radar systems manufactured by the Tier 1 manufacturers, which will ultimately be sold by the Tier 1 manufacturers to the OEMs. To implement this strategy, we are also working with the OEMs to create an interest in our products. We are extending our offering for market beyond the private automotive such as radars for defense, perimeter security and adjacent markets like L4 robotaxies, robotrucks, offroad vehicles and others. Magna On November 5, 2025, Magna Electronics, LLC and Arbe signed a Supply Agreement that will regulate the production phase when Magna will have a contract with OEM for imaging radar. Hirain Hirain and Arbe signed a number of agreements regulating the development manufacturing of radar product(s) based on Arbe’s chipset. During the fourth quarter of 2022, Hirain issued a preliminary order for 340,000 radar chipsets in order to secure capacity for its anticipated production ramp-up. Hirain has issued a binding purchase order for thousands of chipsets to be shipped in 2026 to support the initial ramp to production. In the private automotive space, more than six large automotive OEM in Europe, the US and Japan are planning or are currently in evaluation of solutions which use our chipset as part of their radar solutions during 2026. Chips for non-retail automotive radar systems Arbe is collaborating closely with Sensrad which is a spin-off venture from Qamcom Group’s radar division to offer a unique imaging radar sensor based on our radar chipset. Sensrad announced several customer wins in the off-road vehicle applications, traffic infrastructure as well as other fields. We believe there are significant opportunities for growth in the non-automotive market, and we are supporting Sensrad in delivering radar solutions and driving innovation in such key markets. Also, Arbe is looking on a case by case basis to expand the market reach through complimenting direct offering. 51 Manufacturing On June 27, 2022, we entered into a manufacturing agreement with GlobalFoundries for the manufacture of our semiconductor products, as well as other services, including pre-production, quality assurance, assembly, testing and supply-chain management. The initial term of the agreement is five years. The agreement includes customary terms for semiconductor manufacturing agreements, such as product recalls, warranty and business continuity. We depend on GlobalFoundries to manufacture our semiconductor products. This agreement helps us secure the production of our semiconductor products and GlobalFoundries is committed to supply our binding forecasts. We leverage GlobalFoundries’ capabilities as a silicon manufacturer and for chipset supply chain management in turn-key work model to better secure production capacity to meet our customers’ fulfillment and quality and reliability automotive requirements. GlobalFoundries is also executing the AEC-Q100 qualification process of our chipsets which is scheduled to be completed in 2026. Research and Development We were founded as a research and development company, developing microchips for miniature radar systems for companies operating drone fleets, with the aim of providing a technological solution that would enable the drone to detect at high speeds and improved resolution various obstacles, using little electrical power. Once drone fleet industry did not develop, we decided to change the focus of our strategy and research and development to the field of chips for radar systems for automotive industry. Our research and development activities are conducted in Israel. We have received Israel Innovation Authority (“IIA”) grant approval for certain approved programs. We received grants from IIA and the European Community that, as of March 1, 2025, amount to approximately $4.4 million, based on the exchange rate when the grants were received. We are obligated to pay royalties to the IIA, amounting to 4% of the sales of the products and other related revenues generated from such projects. The maximum aggregate royalties paid generally cannot exceed 100% of the grants received, plus annual interest generally equal to 12-months SOFR applicable to dollar deposits, as published on the first business day of each calendar year. The obligation to pay these royalties is contingent on sales of the products. Our principal operating expenses are research and development expenses, which were approximately $34.8 million, $35.1 million and $34.1million for the years ended December 31, 2025, 2024 and 2023, respectively. Our research and development efforts are focused on enhancing and developing the 4D imaging radar chipset solution and the accompanying software. The increase in research and development expenses reflects the ramp up in our operations, including hiring and starting work toward our full production plan. Intellectual Property Our intellectual property is a crucial part of our business. Our IP rights are protected by a combination of patents, trade secret protection, confidentiality agreements, and other contractual agreements with employees and third parties. We have applied for patent protection in several jurisdictions including Israel, United States, Europe, Japan and China and have been granted patents in all of the above countries. Unpatented trade secrets are also an important aspect of our business. We filed patent applications for 18 unique patent families covering a wide range of fields related to our products features and aspects including radar signal processing, radar Tx/Rx integrated circuit design, radar coexistence and mutual interface mitigation techniques, package design, antenna design, post-processing methods and algorithms, and system design. We filed these applications, including utility and provisional applications, in jurisdictions that we believe are the main markets and development centers around the world, principally the United States, the European Union, Japan and China. Twenty-seven patents, covering fifteen different inventions, have been granted in the United States, Europe, Israel, Japan, and China, with patents generally having a term of 20 years from their filing date. Among the patents granted are patents covering methods for mitigation of mutual interference between automotive radars including frequency hopping multiband chirp techniques, nonlinear frequency hopping fractional bandwidth multiband chirp techniques, methods for multi-stage radar signal processing, radar system self-test techniques, a radome for automotive radar patch antennas, RFIC packaging techniques including low loss transmission lines, a radar-based system for real-time simultaneous localization and mapping, known as SLAM, a MIMO radar array antenna, and a method for separating targets and clutter from noise. 52 Competition The market for competitive automotive radar sensing solutions that enable autonomous driving is an emerging market with many potential applications in the development stage. As a result, we face competition from a range of companies (from large corporations to start-ups) seeking to have their products incorporated into these developing applications and it may take a period of time for its primary competitors to emerge. The private automotive market is formed of Tier 1 manufacturers which manufacture radar systems, as well as companies that develop and manufacture software and hardware such as chips and sensors for the radar systems, which are called Tier 2 suppliers. We are a Tier 2 supplier, which has its products manufactured by a third-party manufacturer. As a Tier 2 supplier, we supply imaging radar chipset to Tier 1 manufacturers who are building imaging radar systems and to OEMs. The structure of the L4 robotaxi and robotrucks market is less stringent and tier-2 are acting also as direct suppliers. We believe that the following strengths differentiate us and will enable us to successfully compete and maintain our leadership position in our target markets. ● Technology. We believe that our 4D imaging radar technology brings the fundamental leap required to achieve true radar imaging capabilities to the level that it can be used as a primary sensor for perception in tandem with cameras and optionally LiDAR. Our technology addresses the key challenges in the automotive radar domain while maintaining competitive size, power and cost for the Level 3 and Level 4 mass market, for high-density, high-resolution RF front-end, through cutting-edge algorithms to effectively utilize the radar and the powerful radar processing unit required to run the radar. We believe our technology will bring safety and autonomy to the mass market in all drivable weather conditions and all lighting conditions with redundancy at an attractive cost. ● Cost and Energy Efficient High-Performance Radar Solutions. Tier-1 manufacturers and automakers are extremely sensitive to the cost of any component in the vehicle, and especially to relatively highly priced individual components such as radar sensors. They demand competitive prices and put significant weight on this parameter when deciding on vendors. We expect that our products will be competitively priced as a result of mass production. We believe that our products will be competitively prices will offer better performance. ● Global Coverage and Large Ecosystem. Our products are marketed worldwide and amenable to global implementation. ● Significant Interest from leading companies in the industry. Our progress has garnered the interest of major companies in the industry. ● Automotive grade development and production. Vehicle components are required to have a high functional safety grade. Achieving compliance with functional safety standards is a time-consuming and labor-intensive process that requires significant cooperation with automotive grade industry participants, such as Tier-1 suppliers and automobile manufacturers. Since 2018, we have worked closely with leading Tier-1 suppliers to develop a radar solution that meets these rigorous requirements. This process has included continuous and extensive product-safety auditing. As a result of our close work with these Tier 1 automotive suppliers, we have developed rigorous safety and quality expertise. We believe that this experience provides us with a competitive advantage in marketing against companies that have not worked with Tier 1 automotive suppliers in the development of their products. ● Relationships with multiple Tier-1 suppliers enable market penetration. OEMs design their future models and vehicles several years in advance and often then freeze the design in order to produce and deliver the vehicles on time. Therefore, designs for mass-production of reliable Level 3 to Level 4 consumer car programs where imaging and perception radars are required, is expected in 2028-2030 are being decided in 2026-2027. Radar solutions that will be candidates for inclusion in these programs must go through the process of automotive-grade manufacturing and audit by the OEMs and Tier-1 suppliers. We believe that our experience working with Tier 1 automotive suppliers and OEMs places us in a better position to market to the next generation of autonomous vehicles. Our chipset has the highest channel count in the industry, which provides the highest resolutions, true 4-dimensional view of the vehicle’s environment, including separation in high resolution in elevation with low false alarm rate, an industry first. In addition, our dedicated radar processor chip, which was designed specifically for the automotive industry sets it apart from competition, providing not only fast time to market, but more importantly the ability to reduce power consumption, and overall solution cost. 53 The following chart compares the performance of radar chipset, to our chipset: Texas Instruments and NXP offer a radar transceiver of 4Rx * 4Tx, and recently started sampling 8Rx * 8Tx chips capable of scaling up to 24Rx * 24Tx. NXP also offers dedicated radar processing chip capable of processing up to 4 trancievers. Mobileye After previously announcing the development of a 2,304 virtual channels radar (48x48 Rx*Tx), Mobileye has announced that it updated its channel count to 1,536 virtual channels (32x48), which we believe gives up some image quality resolution in order to decrease the throughput and required processing power. We believe that on the one hand Mobileye’s decision to develop a 4D imaging radar is significant to the automotive market in acknowledging Mobileye’s view of the imaging radar’s key role in the overall perception solution, while on the other hand we believe that our excess channel count indicates that our solution can achieve a higher angular native resolution with lower inherent false alarms and an efficient handling of high throughput and processing. To the best of our knowledge, Mobileye’s production may be lagging ours by around two years. We also believe that Mobileye plans to play some of the roles of the Tier 1 automotive supplier, and compete with our customers, who are leading automotive radar Tier 1s, with years of experience in this space. We believe, based on the specification Mobileye published, that our current chipset has significant cost and power consumption advantages over the Mobileye solution while the performance of the two solution are on par with a 30% channel count advantage to our solution. We believe that using our radar chipset solution would better meet the needs of the developing autonomous vehicle market who are very cost and power sensitive Forvia (Hella) Forvia developed a 24x24 radar based on NXP chipset. This radar totaling 576 channels which are 25% of the channels supported by the Arbe platform causing it to have high ambiguity due to grating lobes and/or doppler. As far as we know this platform uses the very new 8TX * 8RX chips from NXP which just recently sampled and a new processor. Those chips are relatively new and NXP discussed start of production only in 2028. While these NXP based 24x24 solutions are equivalent from price perspective to the previous 12x16 solution such as the Conti ARS-54x these solution lack the massive channel count to provide a full, reach and reduced false alarm. Overall, we believe the Arbe solution is equivalent from price and power, but provides significantly higher number of channels resulting in better performance. There are also competitors that are more centered around China like Huawei and Caltera. Current ADAS Radars Traditional commercial radar systems have 5-degree (or worse) native resolution. Due to their low azimuth resolution and sometimes lack of elevation resolution, traditional radars, that were originally designed for controlling emergency braking and adaptive cruise control, are limited to detecting moving vehicles and discarding all detections of the stationary environment and cannot address free space mapping that requires high elevation resolution. Traditional radars have a high level of false alarms that trigger reports of phantom objects and false positives and may lead to accidents. We have revolutionized radar by addressing these core issues that have caused recent driverless vehicle and autopilot accidents by detecting stationary objects, identifying vulnerable road users, and eliminating false alarms without radar ambiguities allowing radar-based free space mapping. Ambarella for short range radar During 2021, Ambarella acquired Oculii, which was established in 2013, and offers a software solution which is implemented on top of traditional 4Rx * 3Tx radar chips, with the aim to improve the elevation and azimuth resolution and to expand the field of view. This approach will also lead to a denser point cloud, which in turn would allow more advanced signal processing. However, we believe that this software solution is not applicable to autonomy level beyond level 2. 54 Continental ARS 540 The Continental system is based on four Texas Instrument 3Rx * 4Tx chips, cascaded to achieve a 16*12 array, as well as the Xilinx FPGA (field-programmable gate array) board, and not a radar processor on a chip like our solution. FPGA is not designed for large scale automotive solutions, and therefore has many drawbacks - it is expensive, the continental system costs in the range of $200 in high volumes, it requires high power consumption, has heat dissipation issues, and supports fewer frames per second and very low number of detections per frame. The platform may have ambiguity issues increasing the false alarm rate as well as filtering out real detection. Continental is expected to launch the next generation based on a processor that will replace the FPGA. Environmental, Social and Governance (ESG) As an auto-tech company, we have developed what we believe is a revolutionary radar that will enable truly safe driver-assist systems that can save lives on the road. Our mission is to strengthen and enhance the safety of vehicle users and others in the industry who can apply the technology to their service. Our Environmental, Social and Governance (ESG) practices are guided by our social mission of saving lives and securing people’s safety on the road. Notably, the social element in ESG is reflected in the essence of our product as we created a system that assists with the prevention of injuries and fatalities while driving. As part of our community involvement, we encourage our employees to participate in in volunteering initiatives in the local community. As part of our spirit, we strengthen diversity and equality through equal pay and affirmative action towards recruiting and advancing qualified women. We conduct our business activities based on a firm commitment to ethical values and corporate governance best practices. Our policy is to follow leading ESG principles in relation to our supply chain, including, evaluating, and engaging responsible suppliers. Our suppliers must operate in compliance with all applicable national and international laws and regulations, as well as implementing the principles of the Responsible Business Alliance (RBA) Code of Conduct. Our product manufacturer is GlobalFoundries, a company that we believe values, supports and leads best ESG practices. Notably, in October 2024, ISS recognized GlobalFoundries with a ‘Prime’ rating for its corporate ESG performance. We believe in the importance of promoting and adopting practices that support ESG implementation within our activities. During 2025, we identified some ESG topics relevant across all company activities. We will continue to advance our commitment to ESG practices across our operations, as well as monitor the development of regulatory requirements. Regulations The automotive industry is subject to high standards of safety and quality. The integration of Advanced Driver Assistance Systems may stem from binding regulatory directives or from initiative on the part of the car manufacturers themselves (driven, inter alia, by the wish to obtain a higher safety rating or to accommodate demand from vehicle consumers). Our products will need to meet quality and safety control standards, regional and international ISO standards and dedicated standards pertaining to ADAS. Autonomous vehicles are subject to emerging regulatory frameworks at the federal and state levels that are in a rapid state of change. In general, at both the federal and state level, the U.S. has provided a positive and relatively permissive legal environment to allow the safe testing and development of autonomous functionality. We do not anticipate any near-term federal standards that would impede the foreseeable deployments of our radar technology. Some states, however, particularly California and New York, still enforce certain operational or registration requirements for certain autonomous functions. For example, California has been regulating autonomous vehicles in some fashion since 2012 through various restrictions and appears poised to continue to do so. In December 2022, California introduced legislation that prohibits full self-driving marketing claims. On the other hand, while California state lawmakers considered a bill that would have prohibited autonomous trucks and self-driving vehicles weighing more than 10,001 without human drivers behind the wheel. It was ultimately vetoed by the Governor. It is possible that restrictions at the state level in the U.S. will further ease or be removed as the data and experience supporting the safety of autonomous functionality continues to grow, but we cannot predict when or whether that might happen or will be superseded by federal laws and regulations. However, we believe such hurdles will be removed as state regulators gain better experience with the technology. U.S. federal regulations, however, remain largely permissive of deployments of higher levels of safe and responsible autonomous functionality, although the proposed Safe Drive Act, which is discussed below, may impose federal requirements. 55 In 2015, NHTSA announced a plan to update the criteria for 5-star safety ratings, to encourage automakers to use technology to prevent traffic accidents. In 2016, NHTSA added automated braking systems to the list of technologies required to achieve a 5-star safety ratings. The technologies currently recommended by NHTSA include: forward collision warning, lane departure warning, rear view video system, and automatic emergency breaking. In 2023, NHTSA promulgated the “Occupant Protection for Vehicles with Automated Driving Systems” final rule to update several FMVSS to account for vehicles that are equipped with ADAS and do not have traditional manual controls associated with human drivers. NHTSA also proposed rules to update FMVSS for crash avoidance, safety messaging and passenger-less vehicles and jointly proposed a rule with the Federal Motor Carrier Safety Administration regarding AEB test devices for heavy vehicles. In 2024 NHTSA officially established a Federal Motor Vehicle Safety Standard mandating the inclusion of AEB, encompassing pedestrian AEB, as a default feature in all passenger cars and light trucks by September 2029. 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 automated driving systems (“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. Key provisions of this legislation 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. However, we cannot determine whether the Self Drive Act will become law in the form presented or at all. 56 Foreign markets such as China and the EU also continue to develop their respective standards to define deployment requirements for higher levels of autonomy. In China, for example, the government has undertaken numerous efforts to promote autonomous vehicle development, including its February 2020 release of the Strategies for Innovation and Development of Autonomous Vehicles by China’s National Development and Reform Commission and ten other agencies. This initiative sets forth an ambitious plan to create a systematic framework for technical innovation, industrial ecology, infrastructure, regulations and standards, product regulation and network security in the autonomous vehicles market by 2025, and from 2035 to 2050, to fully establish an ecosystem for autonomous vehicles. Much of the emerging regulatory and legislative activity around autonomous vehicles in the EU has been focused on data privacy and security, given the volume and types of data collected, stored and transmitted by autonomous vehicles. A key part of Europe’s emerging autonomous vehicles strategy is the creation of a common European mobility data space, to be further developed in the EU’s “Smart and Sustainable Transport Strategy.” Given the intense work in these areas, we expect a workable path forward in the near-term in these markets. The automotive industry in Japan puts all automotive and telecommunications technologies through a rigorous certification process prior to commercial evaluation in the region. In February 2022, we obtained the Japanese Telecommunication and Radio certification for radar samples based on our mass production RF chipset. Like all companies operating in similar industries, we are subject to environmental regulation, including water use; air emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation and disposal of hazardous materials; and the remediation of environmental contamination. Compliance with these rules may include the need to obtain permits and licenses and to allow inspections of our facilities and products. Overall, the autonomous vehicles regulatory landscape is still evolving rapidly. We may become subject to additional regulatory schemes and requirements as the development of federal, state and foreign legal frameworks around autonomous vehicles continues to develop and change. In recent years, governments, authorities and organizations around the world have sought to tackle the problem of traffic accidents, through, among other methods, regulation and legislation that encourage, and even require, installation of ADAS in vehicles. Such trends are gaining momentum and are being promoted by the NHTSA and Euro-NCAP, among others, who institute standards for safety ratings for new vehicles, and provide the highest rating (5 stars) where advanced technology for the prevention of traffic accidents is installed. A similar trend applies to the Chinese car safety assessment program CNCAP which incorporates “Active Safety” criteria into its 5-star rating. In Israel, for instance, in 2015, the government approved the Ministry of Transport’s plan to provide a financial incentive for private vehicle owners to install lifesaving safety systems, and to establish that buses and trucks would be required to install a system for identifying pedestrians as a condition for renewing the vehicle’s license. It should be noted that in addition to the regulatory trends, awareness among automakers and vehicle owners of the importance and benefits of installing ADAS (even in the absence of binding regulation) has increased, and it is likely that in the future, the vast majority of new vehicles will be equipped with such systems. This trend is expected to accelerate due to various factors, including improvements that have enabled price reduction. Regulation or standardization may stipulate that automakers or vehicle-owners install ADAS in general, and radar systems in particular, which could facilitate our penetration into potential target markets. Similarly, internal regulation adopted by OEMs voluntarily, or regulation by insurance companies requiring ADAS as a prerequisite for an insurance policy may also benefit our operations and business outcomes. As an Israeli company, we are subject to laws and regulations applicable to all companies, including export controls, privacy, cybersecurity, anti-corruption, labor relations and workplace laws and regulations. Legal Proceedings We are not currently a party to any legal proceedings. 57 C. Organizational Structure We have two wholly-owned subsidiaries, one in the United States -- Arbe Robotics US Inc., a Delaware corporation, and one, Shanghai Arbe Technologies Co., Ltd., organized under the laws of the People’s Republic of China. D. Property, plants and equipment. We do not have any material tangible fixed assets. We do not own any real estate. We rent offices from third parties, extending over an area of approximately 2,109 square meters located in 105 and 107 HaHashmonaim Street in Tel Aviv. We pay monthly rent of approximately $48,500. The offices serve both for our R&D activities and our corporate headquarters, in addition to a workshop we rent for the use of our test vehicle experiments and storage.