OTC: ASNS

The second shift is to defense
and advanced defense technologies, shaped by current geopolitical tension and realizations many countries, including the United States,
are making. This defense which includes homeland security, cyber security and operational continuity are requiring critical modernization
of networking as well. For example, the recent 2025 outages experienced in Air Traffic Control in New Jersey and Pennsylvania drove an
urgent approval of over $12 billion dollars of modernization budget for the FAA (Federal Aviation Administration) networks. Similarly,
military environments are modernizing rapidly to be ready for development.

The third shift, albeit not
new, is cyber security as a pillar of operations in general. As the network may typically be the weakest link, its criticality as a cyber-safe
medium is obvious.

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

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

A primary focus of ours is
to provide our customers with a cyber-secure network solution. We currently offer Triple-Shield protection of data delivered with coding,
scrambling and encryption of the network traffic. We also provide secure, encrypted access to our network management software, and are
working to further enhance system-level and device-level software protection. We are also working to introduce additional capabilities
for network-wide cyber protection software as an additional SW and license-based services.

When high speed, long reach,
reliable and secure connectivity is required, network operators usually resort to using wireline communication over physical communication
lines such as fiber, coax, and copper, rather than wireless communication that is more limited in performance, reliability, reach and
security. However, new fiber wireline infrastructure is costly to deploy, involves lengthy civil works to install, and, based on our internal
calculations, often accounts for more than 50% of total cost of ownership and time to deploy wide-area IoT projects.

Providing new fiber connectivity
to hard-to-reach locations is especially costly and time-consuming, often requiring permits for boring, trenching, and right-of-way, sometimes
done over many miles. Connecting such hard-to-reach locations may cause significant delays and budget overruns in IoT projects. Our solutions
aim to solve these challenges by instantly enhancing performance of such existing copper and coax infrastructure to fiber-grade performance,
through the use of advanced signal processing and unique, patented network architecture, without the need to run new fiber to hard-to-reach
locations; thus, effectively accelerating deployment of many IoT projects, as we estimate, sometimes from many months to only days. The
result for the network owner is a hybrid network that optimizes the use of both new Fiber (where available) as well as upgraded, fiber-grade
copper and coax that is now modernized, digitized and cyber-hardened. This unique hybrid network approach is making IoT projects often
significantly more affordable, fast to deploy and predictable to plan and budget.

1

In addition, our solutions
can also provide power over existing copper and coax lines to remotely power up network elements and components connected to them (like
cameras, small cell and Wi-Fi base stations sensors etc.). Connecting power lines to millions of locations can be costly and very time
consuming as well (similar to data connectivity, for the same reason — need for civil works). By offering the ability to combine
power delivery over the same existing copper and coax lines that we use for high-speed data, we believe our solutions are solving yet
another important challenge in connecting hard-to-reach locations. We believe that combining communication and power over the same existing
lines is particularly important to help connect many fifth generation, or 5G, small cells and Wi-Fi base stations, as high cost of connectivity
and power is often slowing their deployment.

Since our inception, our
business was focused on serving telecommunication service providers, also known as Telcos, to provide connectivity for enterprises and
residential customers. Our products and solutions have been deployed with hundreds of telecommunication service providers worldwide, in
enterprise, residential and mobile base station connectivity applications. In recent years, as we have further developed our technology
and introduced additional products, we turned our focus on serving the wide-area IoT, federal and U.S. Department of War (“DoW”)
markets, as well as multi-dwelling units, and introduced, in 2024, our cyber-aware networking solutions for IoT markets as well.

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

We derive a majority of our
revenues from our existing and new IoT (including federal and DoW) customers. For the years ended December 31, 2025 and December 31,
2024, our IoT customers in the aggregate accounted for approximately 73% and 72% of our revenues, respectively.

We derive a significant portion
of our revenues from a limited number of our customers. For the years ended December 31, 2025 and December 31, 2024, our
top ten customers in the aggregate accounted for approximately 62% and 74% of our revenues.

We have incurred significant
losses and negative cash flows from operations and as of December 31, 2025, we had an accumulated deficit of $52 million. We have
funded our operations to date through equity and debt financing and we had cash on hand (including short term bank deposits and restricted
cash equivalents) of $4.4 million and long-term restricted cash and cash equivalents and restricted bank deposits of $0.2 million as of
December 31, 2025. We continue to invest in sales and marketing resources to fuel our growth.

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

Our cyber-security offerings
include various embedded cyber-hardening features, such as encryption, our SaaS-based MetaShield platform, as well as vulnerability monitoring
and analytics services, and embedded software improvements offered to existing customers in the form of software upgrades. As such, we
allow continuous protection through learning of both the network elements as well as the devices connected to them, delivering constant
alerting and review against external data bases of known threats, and offer software upgrades that overcome newly known or identified
vulnerabilities, creating a repeatable, ever-improving protection cycle.

Rapid Deployment and Lower Cost of Critical
Connectivity

We aim to become the global
leading provider of cyber-secure, cost-effective and quick-to-deploy hybrid networking for all wide-area applications. Our products work
over all types of wireline media on the global data network, whether owned or operated by telecom service providers or a private network
operated by enterprises or government organizations as well as MDU buildings. Our products are structured as building blocks especially
for Intelligent Transportation Systems (ITS), including roads, rail and airport applications that are feature-rich. This allows for one
Actelis platform to often replace multiple other platforms available in the market, allowing for space-saving installation, energy conservation
(which we believe results in a more environmentally sustainable network, through the avoidance of need to add new physical infrastructure),
and making network planning easier for our customers. We aim at having our products installed and help accelerate deployment of wire-area
IoT projects and applications everywhere.

2

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

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

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

Cybersecurity

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

In 2024 we signed a strategic
partnership with a cyber-security development company, which helped us launch our new cyber-aware networking solution for IoT networks.
Later that year, we launched our MetaShield SaaS product as a cyber-security solution that comes from the network itself, and has since
then been introduced to our existing and new customers.

Our products all include
cyber safety features that we are constantly developing. They currently include network traffic encryption and coding. We have developed
and implemented a multi-layered “Triple Shield” technology that includes (i) information coding for resilience and security
(for copper wires); (ii) multi-line information scrambling for increased resilience and added security (for copper wires); and (iii) an
additional 256-bit hardware-based real-time encryption of data running over fiber, coax or copper — creating end-to-end
protection for the entire hybrid network. Our network management software is also cyber-hardened and helps protect the system. Our systems
have been selected for deployment in sensitive applications with U.S. DoW and other governments and military organizations, airports,
utility companies, oil and gas companies, smart cities, rail and traffic applications globally.

In 2024, we successfully
completed the certification of our product lines for Federal Intelligence Protocol Standards (FIPS) 140-2 and were approved by the DoW’s
Joint Interoperability Test Command (JITC) for interoperability and cybersecurity, allowing our products to be included in several federal
approved product lists (APL). In February 2026 we have deployed the next generation of FIPS standard requirements in our product portfolio
(140-3).

3

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

Market Verticals We Address

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

We operate a vertical-based
marketing plan where we dedicate efforts and resources to each vertical. The verticals we focus on include: Federal and military, intelligent
transportation systems (ITS), smart city, rail, airports. We also address utilities and campuses. .. In 2024, we launched our MDU program
, which was further expanded in 2025 to address increasing building sizes as well as arenas. The MDU vertical requires networking solutions
for residential buildings with multiple units, such as apartment complexes and condominiums as well as hospitality properties such as
hotels and resorts, connecting each unit to high-speed internet, using the infrastructure present, be it Coax, fiber or copper, and tailor
it to the size of the building, from a dozen units to hundreds and thousands of them.

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

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

Recent Trends in our Markets

State of Connectivity Market, including Federal,
Military and MDUs

Edge AI, also covered as
edge computing, according to Grandview research is projected to grow from approximately $20 billion in 2024 to nearly $190 billion in
2033. According to US Congress’ budgeting program projections, US military base modernization budgets in 2025 were $37 billion as
part of a model projecting the Federal Defense program to grow to over $850 billing in 2029. With that, the already robust cyber-security
market, according to Grandview research the global cyber-security market is projected to grow from approximately $240 billion in 2024
to nearly $500 billion in 2033. With these trends, infrastructure network connectivity demand is growing very rapidly. According to Markets
and Markets, the Smart Transportation market is projected to grow to over $250 Billion by 2029, largely for intelligent transportation
modernization. We believe there is an urgent need to connect tens of millions of locations with a fast and secure connection. A huge challenge
for ITS projects is that implementing connectivity between different points in a network can consume the majority of a project’s
cost and time to implement, including unpredictable and unanticipated challenges that arise in each individual project.

4

We believe that the number
of IoT applications requiring our fast, smart, and secure connectivity is immense and provides us with a great market opportunity to grow
our business. From smart transportation systems (smart cameras, smart lights and signals, Vehicle to Everything, or V2X communication)
and smart security (cameras and radars), to smart parking, smart rail, as well as airport and air traffic control infrastructure, also
manifested by the $12.5 billion budget granted to the FAA in 2025, we believe that we are uniquely positioned to address all of these
applications in a versatile and flexible manner.

In the MDU market, which
we believe is in dire need for multi-Gigabit connectivity, and is extremely limited in its ability to invest significant funds to enable
such objective. According to US Census.gov, there are approximately 20 million buildings above 5 units built by the year 2000, most of
which already wired by various infrastructures. The Broadband Equity program or BEAD has allotted $28 billion already to all 50 states
to modernize and provide high-speed reliable internet including underserved communities, as part of the Infrastructure Act.

Recent Developments

July 2025 Private Placement

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

The Series A-3 Warrants have
an exercise price of $6.15 per share, are exercisable commencing on the effective date of shareholder approval (the “July 2025 Shareholder
Approval Date”) of the issuance of the shares issuable upon exercise of the Common Warrants (“July 2025 Shareholder Approval”)
and expire five years following the Shareholder Approval Date. On November 7, 2025, the July 2025 Shareholder Approval was obtained in
a special meeting of our shareholders, resulting in the July 2025 Shareholder Approval Date being such date.

The Series A-4 Warrants have
an exercise price of $6.15 per share, are exercisable commencing on the July 2025 Shareholder Approval Date and expire eighteen months
following the July 2025 Shareholder Approval Date.

Under the terms of the July
2025 Common Warrants, the warrant holders may not exercise the warrants to the extent such exercise would cause the warrant holder, together
with its affiliates and attribution parties, to beneficially own a number of shares of common stock which would exceed 4.99% (or, at such
Investor’s option upon issuance, 9.99%), of the Company’s then outstanding Common Stock following such exercise, excluding
for purposes of such determination shares of Common Stock issuable upon exercise of such warrants which have not been exercised.

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

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

5

Nasdaq Listing Compliance

On August 25, 2023, we received
a notification letter from the Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that we are not in compliance
with Nasdaq Listing Rule 5550(b)(1) due to our failure to maintain a minimum of $2,500,000 in shareholders’ equity (the “Minimum
Shareholders’ Equity Requirement”) or any alternatives to such requirement. In order to maintain our listing on the Nasdaq
Capital Market, we submitted a plan of compliance addressing how we intended to regain compliance. On March 27, 2024, we received a delist
determination letter from Nasdaq advising us that the Staff had determined to delist our securities from Nasdaq due to non-compliance
with the Minimum Shareholders’ Equity Requirement, unless we timely request a hearing before the Nasdaq Hearings Panel (the “Panel”).
We timely requested a hearing before the Panel.

On August 27, 2024, we received
formal written notice from Nasdaq confirming that we have evidenced compliance with all applicable criteria for continued listing on Nasdaq
as set forth in Nasdaq Listing Rule 5550, including the Minimum Shareholders’ Equity Requirement. In accordance with Nasdaq Listing
Rule 5815(d)(4)(B), we remained subject to a panel monitor for equity compliance through August 27, 2025.

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

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

At the hearing, the Company
presented its plan to evidence compliance with the Equity Rule and all other applicable criteria for continued listing on The Nasdaq Capital
Market, and requested to remain listed subject to its plan to regain compliance.

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

The Panel also granted the
Company’s request for continued listing on The Nasdaq Capital Market, pursuant to an exception through December 5, 2025, to regain
compliance with the bid price requirement set forth in Nasdaq Listing Rule 5550(a)(1). In order to evidence compliance with the bid price
requirement, the Company must evidence a closing bid price of at least $1.00 per share for a minimum of 10, but generally not more than
20, consecutive business days. On November 7, 2025, we held a special meeting of shareholders where our shareholders approved, among other
things, the Reverse Split. The Reverse Split was effected on November 18, 2025.

On December 3, 2025, the Company
received formal notice from Nasdaq that the Company has regained compliance with the Bid Price Rule and evidenced compliance with all
other applicable criteria for continued listing on Nasdaq. Accordingly, the previously disclosed listing matter has been closed.

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

On February 4, 2026, we received
a written notice Nasdaq indicating that the Staff has determined to delist the Company’s securities from The Nasdaq Capital Market.

6

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

As further disclosed in the
Notice, the Company had the right to request a hearing and that a hearing request would result in a stay of any suspension or delisting
action pending the conclusion of the hearings process. Accordingly, on February 11, 2026, the Company requested a hearing before the Panel,
which served to stay any further suspension or delisting action through the hearing or any extension the Panel provides following the
hearing.

At the hearing, the Company
intends to take all reasonable measures available and is going to present a plan to regain compliance with the Bid Price Rule and
remain listed on Nasdaq to the Panel. However, there can be no assurance that the Company will be able to regain compliance with the Bid
Price Rule or maintain compliance with all other Nasdaq continued listing requirements.

In connection with the Company’s
entry into the Common Stock Purchase Agreement with White Lion as described below, if the Company fails to be listed on the Nasdaq Capital
Market, the Commitment Fee Amount (as defined below) will increase subject to the terms of the Delisting Penalty Provision in the Common
Stock Purchase Agreement. See “Item 1-Business-Recent Developments-Equity Line of Credit Agreement” for additional information.

September 2025 Warrant Inducement

On September 2, 2025, we entered
into an inducement agreement (the “Inducement Letter”) with a certain holder (the “Holder”) of certain of the
Company’s existing warrants to purchase an aggregate of 427,020 shares of the Company’s common stock, consisting of (i) 127,119
warrants issued on December 20, 2023 with an expiration date of June 20, 2029 at an exercise price of $11.8 per share (ii) 99,967 warrants
issued on June 6, 2024 with an expiration date of December 6, 2029 at an exercise price of $20.00 per share and (iii) 199,934 warrants
issued on July 2, 2024 with an expiration date of July 2, 2026 at an exercise price of $17.50 per share (the “Existing Warrants”).

Pursuant to the Inducement
Letter, the Holder agreed to exercise for cash the Existing Warrants to purchase an aggregate of 427,020 shares of the Company’s
common stock at a reduced exercise price of $3.70 per share in consideration of the Company’s agreement to issue new common stock
purchase warrants (the “New Warrants”), as descried below, to purchase up to an aggregate of 640,530 shares of the Company’s
common stock (the “New Warrant Shares”) at an exercise price of $3.70 per share. The Company received aggregate gross proceeds
of approximately $1.6 million from the exercise of the Existing Warrants by the Holder, before deducting financial advisory fees and other
offering expenses payable by the Company.

Rodman & Renshaw LLC and
HCW acted as financial advisors to the Company in connection with the transactions contemplated by the Inducement Letter. Pursuant to
an engagement letter with HCW, the Company has agreed to pay the financial advisors a cash fee equal to 7.0% of the aggregate gross proceeds
received from the Holder’s exercise of the Existing Warrants, as well as a management fee equal to 1.0% of the gross proceeds from
the exercise of the Existing Warrants and $25,000 paid for non-accountable expenses. The Company has also agreed to issue to the financial
advisors or their designees warrants (the “Inducement Placement Agent Warrants”) to purchase up to 29,891 shares of common
stock (representing 7.0% of the Existing Warrants being exercised), which will have the same terms as the New Warrants having a term of
five years of Stockholder Approval (as defined below) except the Inducement Placement Agent Warrants will have an exercise price equal
to $4.625 per share (125% of the exercise price of the Existing Warrants).

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

7

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

Provided that the Inducement
Letter prohibited the Company from entering into an agreement to effect any issuance by the Company involving a variable rate transaction,
the Holder agreed to waive such prohibition with respect to the transactions contemplated by the ELOC Purchase Agreement as described
below, and signed an amendment to the Inducement Letter on October 9, 2025. Pursuant to such amendment, the Company issued to the Holder
10,000 warrants to purchase shares of common stock of the Company on similar terms as the Series A-1 Warrants.

Equity Line of Credit Agreement

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

The Company is obligated under
the Common Stock Purchase Agreement and the White Lion RRA to file a registration statement (the “Resale Registration Statement”)
with the SEC to register the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), for the resale
by White Lion of shares of Common Stock that the Company may issue to White Lion under the Common Stock Purchase Agreement and to register
the Commitment Shares (as defined below) within five business days of the date of the Common Stock Purchase Agreement.

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

The Company agreed to call
a special meeting of its shareholders (the “Special Meeting”) to obtain shareholder approval for the issuance of Common Stock
under the Common Stock beyond the Exchange Cap (“Shareholder Approval”) within 120 days of October 1, 2025. If the Company
failed to call the Special Meeting within this timeframe, it shall pay liquidated damages to White Lion, as more fully described in the
Common Stock Purchase Agreement. The Special Meeting was held on January 29, 2026. Shareholder Approval was not obtained due to a failure
to reach a quorum. Please see “January 2026 Special Meeting of Shareholders” below for more information.

Because Shareholder Approval
was not obtained at the Special Meeting, the Company is obligated to call an additional Special Meeting every ninety (90) days thereafter,
for a total period of 360 days, until Shareholder Approval is obtained. The follow-up meeting to obtain Shareholder Approval is scheduled
to be held on April 13, 2026.

As consideration for White Lion’s irrevocable commitment to purchase
the Company’s Common Stock up to the Commitment Amount, the Company agreed to issue shares of Common Stock to White Lion (the “Commitment
Shares”) equal to $750,000 (the “Commitment Fee Amount”) divided by the lowest traded price of the Company’s common
stock during the 30 business days prior to the issuance of the Commitment Shares.

If at any point during the
term of the Common Stock Purchase Agreement the Company fails to be listed on the Nasdaq Capital Market, the Commitment Fee Amount will
increase to $1,000,000 if remedied within six months or less, to $1,250,000 if remedied after six months but before twelve months, and
$1,500,000 if not remedied within twelve months (the “Delisting Penalty Provision”). The Delisting Penalty Provision shall
automatically be waived on the date that is six (6) months after the later of (A) the date on which Shareholder Approval is Obtained and
(B) the date on which the Resale Registration Statement has been declared effective by the SEC.

8

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

The number of shares sold
pursuant to any such notice may not exceed 40% of the Average Daily Trading Volume for the common stock traded on Nasdaq immediately preceding
receipt of the applicable Purchase Notice, and can be increased at any time at the sole discretion of White Lion, up to 9.99% of the outstanding
shares of the Company.

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

Under a Rapid Purchase Notice,
the purchase price to be paid by White Lion for any such shares will equal (i) the lowest traded price of the Common Stock on the Rapid
Purchase Notice Date with respect to Rapid Purchase Price Option 1; or (ii) 99% multiplied by the lowest traded price of the Common Stock
two hours following written confirmation of the acceptance of the Rapid Purchase Notice by White Lion with respect to Rapid Purchase Price
Option 2.

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

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

The Common Stock Purchase
Agreement and the White Lion RRA contain customary representations, warranties, conditions and indemnification obligations of the parties.
The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific
dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting
parties.

White Lion Private Placement

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

9

The Company had a right to
redeem 48,826 of the shares of Common Stock at a redemption price of $0.001 per share. The Company and White Lion have agreed that, in
lieu of such redemption, on October 20, 2025, the Company reduced the number shares issuable pursuant upon exercise of the White Lion
Pre-Funded Warrants by 48,826 shares, to 263,997.

The White Lion Pre-Funded
Warrants are immediately exercisable at an exercise price of $0. 001 per share of Common Stock and will not expire until exercised in
full. However, the Company may not issue a number of shares of Common Stock pursuant to exercise of the White Lion Pre-Funded Warrants
in an amount that will not exceed the Exchange Cap when combined with the number of Shares issued in the Offering, before shareholder
approval for further issuance beyond the Exchange Cap is obtained. The Company intends to obtain such shareholder approval concurrently
with the Shareholder Approval required for the issuance of shares of Common Stock under the Common Stock Purchase Agreement beyond the
Exchange Cap.

The obligation to file the
Resale Registration Statement described above also covers the registration of the shares of Common Stock and shares underlying the White
Lion Pre-Funded Warrants issued pursuant to the PIPE Purchase Agreement. The Company filed the Resale Registration Statement on October
7, 2025, and such registration statement became effective on November 28, 2025.

December 2025 Offering

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

The December 2025 Pre-Funded
Warrants are immediately exercisable at an exercise price of $0.0001 per share of Common Stock and will not expire until exercised in
full.

Each December 2025 Common
Warrant has an exercise price of $0.80 per share, is exercisable immediately on upon issuance and will expire on the five-year anniversary
of the date of issuance.

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

Certain investors in the Offering
entered into a definitive securities purchase agreement with the Company (the “December 2025 Purchase Agreement”). The December
2025 Purchase Agreement contains representations, warranties, indemnification and other provisions customary for transactions of this
nature. Pursuant to the December 2025 Purchase Agreement, the Company agreed to abide by certain customary standstill restrictions for
a period of thirty (30) days following the closing of the December 2025 Offering. In addition, subject to limited exceptions, the December
2025 Purchase Agreement provides that for a period of one year following the closing of the December 2025 Offering, the Company will not
effect or enter into an agreement to effect a “variable rate transaction” as defined in the December 2025 Purchase Agreement.

10

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

The net proceeds to the Company
from the December 2025 Offering are approximately $4.46 million after deducting placement agent fees and estimated offering expenses payable
by the Company. The Company intends to use the proceeds from the Offering for general corporate purposes.

January 2026 Special Meeting
of Shareholders

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

Issuer Purchases of Equity
Securities

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

Repurchases under the share
repurchase program will be made at management’s discretion at prices management considers to be attractive and in the best interests
of both the Company and its stockholders, subject to the availability of stock, general market conditions, the trading price of the stock,
alternative uses for capital, and our financial performance. The repurchase program may be suspended, terminated or modified at any time
for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities,
liquidity, and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase
program does not obligate us to purchase any particular number of shares.

Our Solutions

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

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

One such product line, the
GL800 aims at extending multi-gigabit fiber-grade connectivity to buildings, enterprises, IoT installations, campuses, and 5G/4G base
stations.

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

11

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

Our product offering includes
our EMS network management software, providing built-in automation to help configure, manage, monitor, safeguard, install and maintain
complex, hybrid networks of thousands of elements remotely. Our EMS management Software was enhanced to support these new products and
strengthened with advanced security features to support better cyber production and meet DoW demands. Our products are also built for
future integration with enhanced security services we may introduce in the future.

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

A fifth product group is
the Gigaline 9000, addressing large MDUs buildings and hospitality properties in increments of hundreds of units that can scale and provide
Coax based modernization to Gigabit connectivity without the need to rewire and rather use existing cable TV infrastructure.

We aim to continue developing
our technology to include more system-wide security and further hybridity across all types of infrastructure. We will also seek to include
cutting-edge computing capabilities to serve all connectivity needs for our IoT customers, in an effective and easily deployable way,
while maintaining our commitment to serve our existing Telco customers.

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

Products

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

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

12

●
MetaShield. is a cyber-security, cyber-aware networking solution, an AI-powered, asset intelligence and threat management that
comes as part of the network. Its objective is to continuously monitor IoT devices for cyber-risks, network behaviors, trends and overall
health, to detect cyber attacks and operational anomalies, to document such performance tracking and provide compliance reports, and
to automatically-correct the vulnerabilities, anomalies and attacks that it identifies. It is a cloud-base Software-as-a-service solution,
that can be a stand-alone solution that works on any network, or, integrated with our networking solutions.

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

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

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

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

13

Product Specifications

Our products use advanced
signal processing implemented at the system level, with an approach that treats multiple copper lines as one multi-line channel, which
we believe to achieve the following benefits:

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

Supporting any hybrid combination of new Fiber infrastructure and existing
copper and coax infrastructure, supporting data security an encryption protocols, certified for FIPS by US DoW labs; supporting outdoor
hardened environmental requirements dense and compact to save space and allow for flexible location setting.

●
Automatic calibration tools and automated management software enable
hassle-free installation withing hours vs. weeks over existing wiring.

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

In addition to these main
benefits, we have focused our efforts and implemented technologies in our products in order to achieve the following:

●
Transmission in the copper lines to take into account signals in neighboring lines to minimize crosstalk interference and be “Spectrally Friendly”;

●
Multi-line spatial coding scrambling of data in a way that enhances connection immunity to interference, and makes tapping into the data very difficult;

●
Integration of remote powering and data on the same copper pairs;

●
Minimizing transmission delay to support delay-sensitive applications; and

●
Ability to safely, and accurately transmit clock signals for cellular base station synchronization (not available yet for 5G).

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

Our Competitive Advantage

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

Copper and coax lines are
readily available in billions of locations. They are often buried in the ground, running in the walls of buildings or hanging from telephone
poles, in bundles of tens or hundreds of wires.

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

14

In order to correct the issues
with providing high speed communications over copper wiring, we developed technologies utilizing a multi-line approach, encoding, scrambling
and processing the signals at system level (rather than at the single lines level), and finally also offering data encryption, to combat
interference, electromagnetic noise, and issues with copper line quality and data security.

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

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

●

High performance hybrid-fiber communication system:

●
Speeds from 10Mbps to 10Gbps;

●
Reach of up to 100Km (speed declines over long distances in copper);

●
Robust connectivity allowing Gigabit-grade service SLAs in various
harsh environments over copper, coax or fiber; and

●

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

●
Cyber-protection on several
levels, including Triple Shield Protection:

●
Multi-line data scrambling and coding (copper);

●
256-bit system-wide encryption; and

●
System level protection (encryption and other protections) of management software, operating system and traffic flow.

Military — grade,
DoW certified FIPS cyber protection

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

●
Advanced switching functions supporting complex network topologies;

●
Support for both advanced, digital IoT devices as well as existing analog devices with serial interfaces — to save the need to replace these devices while allowing them to join the digital network;

●
Power feeding for cameras and other IoT devices with the data cable;

●
Ability to install our IoT building blocks in remote locations with no power. Power can be provided from the communication line;

●
Ability to provide precise synchronization over the communication lines to base stations;

●
Routing functions; and

●
Support for spectrally-friendly reach extenders up to 100Km with minimal impact on other communication lines.

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

15

We believe that the combination
of these advantages provides our customers with a highly cost-effective solution to quickly obtain IoT connectivity anywhere in their
network.

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

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

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

Our Sales and Marketing Strategy

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

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

16

Federal and Military

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

ITS

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

Smart City

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

Rail

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

Airports

Airports include customers
who are either a State or Federal airport agency, or a service provider to the airport industry. The types of applications within this
vertical requiring communication are airport security, baggage management, and airport Wi-Fi. Since 2022, we are delivering to our airport
integration customer, who is a worldwide market-leader in airport operation technology, with which we signed an agreement to provide our
solutions to hundreds of airports in 39 countries.

Energy and Water

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

MDU and Telco

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

17

In addition, we serve our
legacy Telco customers, by supporting communication service providers of both wired and wireless services (including 4G and 5G). The types
of applications within this vertical requiring communication include enterprise offices, branch offices, residential buildings, educational
facilities and back-haul for mobile base stations. In 2025, we launched MetaLight 650SV, helping veteran legacy network T1 connections
converge with existing fiber networks.

Channel and Territory coverage

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

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

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

Software and Services

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

We also offer our customers
our EMS management software, either as perpetual or term-based. EMS is optional and is being sold separately from our hardware products,
and has been sold either as a per-element license, or as a license for a whole network.

Our customers may request
added functions and features for their specific need which we can customize for an additional fee.

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

Additionally, our customers
can purchase software support service which allow them to receive some additional features or free upgrades. Such support service is sold
as a separate contract.

We offer service contracts
at different levels (Silver, Gold, Platinum), which may include different levels of support (remotely or in the field), hardware repairs,
spare parts, help with network design, and SW/HW upgrades. Such service contracts are sold separately from the sale of hardware products
and may be sold combined with our EMS software licenses. It usually covers periods post the expiration of our warranty period and would
be renewed on an annual basis. The cost of the service is derived from the size of the network, and the level of support required.

18

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

Competition

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

As such we compete with a
number of companies in the markets we serve. In ITS, our key competitors include Moxa Technologies, FlexDSL Telecommunications AG, EtherWAN
Systems, Inc. and Belden Inc. In the MDU markets, our competition includes companies such as InCoax, Positron and ReadyLinks.

We believe the following
competitive attributes are necessary for our solutions to successfully compete in IoT and Telecom networking markets, and likewise we
believe that we are providing leading products in all the categories below:

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

Rapid deployment/implementation

●
cost of deployment and
return on investment in terms of cost savings;

●
sophistication, novel and
innovative intellectual property and technology, and functionality of our offerings;

●
cross-platform operability;

●
security;

●
ease of implementation
and use of service;

●
management capabilities;

●
high-quality customer support;
and

●
price.

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

19

Manufacturing, Procurement and Logistics

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

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

Our products are assembled
by various contract manufacturers, located in Israel and in Taiwan who possess the expertise of assembly and quality control required
for electronic manufacturing in a turn-key fashion. Some of our products are manufactured to our specifications under an OEM arrangement.
The company uses state-of-the-art logistics services from the best providers worldwide and also has in-house expertise in executing such
required processes.

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

Warranty

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

Growth Strategy

Global Expansion and Recognition

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

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

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

20

Expansion of Multi-year deals

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

Expansion in Cybersecurity, Recurring Revenue
Model, Cyber monitoring services

Cybersecurity is essential
for networking infrastructure. Such security must be addressed at the data traffic, switching, and network management level. Encryption
is a fundamental building block to achieve the necessary protection, preferably at a low networking layer. Our products are already capable
of delivering sensitive information for many critical applications, and we are investing more in making this a strong differentiator,
and to have our products recognized as the most cyber-safe IoT building blocks in the growing secure IoT communication market.

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

United States’ Bipartisan Infrastructure
Law

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

It remains uncertain what
actions, if any, the Trump Administration may take to repeal or otherwise modify the the Bipartisan Infrastructure Law or BEAD.

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

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

21

Growth through Mergers and Acquisitions

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

If we target businesses in
the same sector or location, we hope to combine resources to reduce costs, eliminate duplicate facilities or departments and increase
revenue. We still believe this strategy will provide for accelerated growth and maximize investor returns.

Environmental

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

Human Capital Resources

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

We believe our culture and
principles enable us to attract, retain, motivate and develop our workforce as well as drive employee engagement. We believe an engaged
workforce leads to a more innovative and productive company that serves its customers better. Our employees work to ensure that our products
and services connect and protect our customers critical infrastructure. A testament to that is the long-term retention of many of our
employees and their loyalty to us. We measure each one through a goal setting and measurement system to maximize our enterprise value
and employee career potential.

We support and strive for
ethnic and gender diversity.

Legal Proceedings

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

22

Government Regulation

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

We are subject to numerous
federal, state, provincial, local, and foreign laws and regulations relating to the storage, handling, emission, and discharge of materials
into the environment, including the Comprehensive Environmental Response, Compensation, and Liability Act; the Clean Water Act; the Clean
Air Act; the Emergency Planning and Community Right-To-Know Act; the Resource Conservation and Recovery Act; and similar laws in the other
countries in which we operate. While we believe that our existing environmental control procedures are adequate, we will continue to evaluate
and update our procedures as needed to address new or changing aspects of environmental matters.

Intellectual Property

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

We have registered Actelis
Networks as a service trademark in the United States, and we are the registered holder of the domain name Actelis.com that includes “Actelis
Networks, Inc.”. Out of 29 patents that we were granted in the United States, 13 are registered and current while the remaining
16 expired. Out of 6 patents we were granted in Europe, 3 are registered and current while the remaining 3 expired, 1 registered patent
in Indonesia, one pending application in Brazil, all of which in the general area of high-speed carrier class Ethernet service and transport
over bonded VDSL2, G.SHDSL as well as Fiber G.fast and G.hn protocols covering various aspects of our technology. While we continue to
consult with counsel on the advisability to seek patent protection of some of our algorithms, we rely heavily on trade secrets to protect
our intellectual property around our technology. While we continue to consult with counsel on the advisability to seek patent protection
of some of our algorithms, we rely heavily on trade secrets to protect our intellectual property around our technology.

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

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

Corporate Information

We were incorporated in Delaware
in 1998. We completed our initial public offering on May 17, 2022 and our common stock is currently listed on the Nasdaq Capital
Market under the symbol “ASNS.” Our principal executive offices are located at 710 Lakeway Drive, Suite 200, Sunnyvale, CA
94085, and our telephone number is (510)-545-1040.

23

Available Information

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