NASDAQ: ROC

ROC uses the term “Vision AI” as a
branch of artificial intelligence focused on transforming unstructured visual data into structured, explainable insight. Vision AI is
not generative or conversational. It is operational AI, built for accuracy, speed, and auditability. Whether it is deployed in a military
checkpoint, a digital evidence lab, or a financial onboarding workflow, Vision AI enables real-time decisions with transparency and accountability.
ROC’s product portfolio includes the following:

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ROC SDK: All ROC Products are built on the foundation of the ROC’s Software Development Kit (ROC SDK). ROC SDK offers ROC’s ever-growing library of AI / ML developed Vision AI algorithms, including biometrics (Face, Fingerprint, & Iris) and object detection models (Automated License-Plate Recognition (ALPR), Pedestrian, Vehicles, Optical Character Recognition (OCR), Weapon, and more). ROC SDK is widely used within Public Security, National Security, and Fintech use-cases. A complete list of computer vision modalities includes: Face Recognition, Fingerprint Recognition, Iris Recognition, Latent Fingerprint Recognition, Age Estimation, Face Analytics, Deepfake and Liveness Detection, Weapon Detection, Tattoo Matching, Object Detection, License Plate Recognition and Vehicle Recognition.

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ROC ABIS: ROC ABIS, ROC’s newest go-to-market product, is an enterprise-grade biometric identity system. Law enforcement can accelerate investigations with real-time matching of faces, latent prints, and ten-prints in seconds. Modern, streamlined workflows empower examiners to tackle complex forensic challenges and ensure rapid case resolution.

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ROC Watch: ROC Watch is a real-time or post-event video analytics platform that delivers multimodal video analytics, visitor management, and threat detection in a single pane of glass. ROC Watch is utilized within Federal agencies such as DOD, Police Departments, Airports, Schools, and Commercial Safety & Security.

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ROC Enroll: ROC Enroll is a remote Identity Verification solution that enforces high-quality and compliant selfie facial capture, spoof-prevention (Liveness), face to ID matching, and can support an identity document verification plugin (provided by third-party providers). It can also be utilized as an extension of ROC Watch for access management or gallery enrollment. ROC Enroll is widely used by MTN (telecom) in South Africa for SIM card registration.

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ROC’s algorithmic efficiency has long been
a strategic advantage. Our AI models typically require only a fraction of the compute power that legacy platforms demand, allowing us
to deploy faster, operate leaner, and scale without excess infrastructure. For example, an analysis published on February 20, 2024 of
the National Institute of Standards and Technology (NIST) Evaluation of Latent Fingerprint Technologies (ELFT) showed that the ROC’s
latent fingerprint algorithm was capable of searching a database more than 500 times faster than every other vendor who was benchmarked.
Additionally, an analysis on March 8, 2023 of the NIST Face Recognition Vendor Test (FRVT) showed that the ROC face recognition algorithm
ranked 61st out of 338 algorithms in hardware efficiency, while none of our key competitors ranked within the top 150 most efficient algorithms.
Further, an analysis performed on February 15, 2023 of the NIST Proprietary Fingerprint Template (PFT) benchmarked that the ROC fingerprint
algorithms had template comparison speeds that were the fastest of any vendor, and as much as 1000x faster than certain key competitors.

This advantage has enabled us to simplify system
architecture while supporting extremely large deployments through our horizontally and vertically scalable enterprise search infrastructure.
ROC is routinely measured by NIST as having the most accurate and computationally efficient facial and fingerprint recognition algorithms
in the world — a rare combination that enables both unmatched performance and flexible deployment. We support secure, air-gapped
installations as well as cloud-native delivery, and are actively attaining Criminal Justice Information Services (“CJIS”)
and related compliance standards to support our growing federal and state customer base. Our engineering team includes experts who have
built mission-critical systems for the Federal Bureau of Investigation (the “FBI”) and other agencies, ensuring our platforms
are secure, interoperable, and optimized for rapid integration through exposed Application Programming Interfaces (“APIs”)
and robust reference applications.

ROC’s mission and leadership emerged from
the U.S. national security community. Prior to creating ROC, our founders, Brendan Klare and Joshua Klontz, worked within the facial recognition
research group at Noblis, Inc., which is a science and technology services provider to leading U.S. national security agencies. Our founders’
work included supporting a major case study for the FBI, regarding the deployment of facial recognition technology during the course of
the 2013 Boston Marathon Bombing investigation. Our CEO, B. Scott Swann, served an 18-year career with the FBI, where he fulfilled multiple
executive roles, advancing technology to include Special Assistant in the FBI Director’s Office for the Science and Technology Executive
Assistant Director; Executive Officer in the Office of the Director of National Intelligence; and Unit Chief at the FBI’s Criminal
Justice Information Services Division. Mr. Swann led the FBI’s major case study on the Boston Marathon Bombing, through which he
first met and worked with Mr. Klare and Mr. Klontz. Mr. Swann worked closely with the FBI’s CJIS division, the FBI’s central
repository and search database for fingerprints and other biometric evidence.

Our growth now includes global financial companies,
state and local public safety organizations, and large retail enterprises. We are rapidly expanding in access control, identity verification,
and physical security applications — particularly in high-assurance and infrastructure-critical sectors. Our commercial business
is scaling through an already mature channel network, and we are seeing increasing demand from global integrators who want to deliver
ROC’s technology under their own brands. Our international pipeline is significant, with especially strong momentum in the Middle
East and APAC regions, where governments are investing in next-generation identity and surveillance systems. These global opportunities
are already driving business today and represent a substantial long-term growth vector.

On November 19, 2019, ROC published the Code of Ethics that addressed
the use of our face recognition technology. To our knowledge, ROC was the first biometric vendor to adopt such code of ethics addressing
the use of face recognition technology. Subsequently, ROC has incorporated the Code of Ethics into our software licensing agreements to
provide a contractual means for limiting access to our technology if a licensee violates the Code of Ethics. From the beginning, we believed
that transparency, accountability, and technical rigor must go hand in hand. We build with fairness and explainability in mind and design
for environments where decisions must be auditable and justifiable. That said, the broader landscape is also shifting. Adoption of face
recognition and Vision AI tools is accelerating across law enforcement, defense, and critical infrastructure. Agencies that once hesitated
are now embracing these capabilities — supported by clearer governance, better training, and stronger results. This growing acceptance
comes at an ideal time for ROC. We are entering the public markets as demand is breaking open, not just for AI, but for trusted, operationally
proven AI.

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ROC has been deliberately built from the ground
up. Every employee has been carefully selected not just for skill but for alignment with our mission. Our team combines rising stars in
artificial intelligence and Vision AI with senior engineers and practitioners who have delivered large-scale systems for the U.S. government
and enterprise. We believe in talent density, small teams, and high-trust environments. Every contributor matters, and every contributor
has a stake in ROC’s equity. This model has not only helped us outperform technically — it has helped us retain culture, focus,
and resilience while competing against far larger and better-funded companies.

Corporate History

In 2015, ROC’s three co-founders filed the
initial Articles of Incorporation as a Subchapter S Corporation with the State of Virginia as Rank One Computing Corporation. In 2018,
ROC filed a Statement of Conversion with updated Articles of Incorporation with the State of Colorado and issued 10,000 shares of common
stock. In 2021, ROC hired B. Scott Swann as ROC’s CEO. In 2022, ROC filed an Amended and Restated Articles of Incorporation with
the State of Colorado to effect a 10 for 1 forward stock split and increase the authorized number of shares of common stock to 200,000.
In 2024, ROC revoked its Subchapter S election. In 2025, ROC formed a wholly owned single member limited liability company, ROC Federal
LLC, in the State of West Virginia. In 2026, ROC filed a Second Amended and Restated Articles of Incorporation with the State of Colorado
to, among others, effect a 167 for 1 forward stock split, increase the authorized number of shares of common stock to 100,000,000 shares
of common stock, and authorize 1,000,000 shares of preferred stock.

Vision, Industry, and Market Opportunity

ROC’s Vision

ROC operates at the intersection of several large
and fast-growing technology markets – computer vision (Vision AI), biometrics, video analytics, and digital evidence management.
These segments each experienced robust growth from 2023 through 2025, driven by advances in artificial intelligence (AI), increasing security
and efficiency demands, and expanding government and commercial use cases. Below we present an analysis of each market, including U.S.
and global market size estimates, growth projections, key demand drivers, emerging use cases, and relevant regulatory or technology trends.
Our discussion also highlights how ROC’s strategic strengths – alignment with national security needs, efficiency in edge
computing, and a multimodal AI platform – position us to capitalize on these industry dynamics.

ROC calculates our total addressable market (TAM)
on a global basis, rather than limiting it to specific geographies, because its products and services address a fundamental and universal
need that isn’t geographically constrained. Our digital business model allows for seamless expansion into new regions with minimal
capital expenditure, making the entire global market addressable over time. This approach is consistent with industry practice for technology
companies with scalable offerings but does present some uncertainties with respect to localized market opportunities. Based on market
research provided by leading market researchers, including Fortune Business Insights, Straits Research, Grand View Horizon, and the Edge
AI and Vision Alliance, the total addressable market in 2025 for ROC products and services, collectively, was approximately $106 billion,
globally:

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Vision AI: $23.7 billion

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Biometrics: $60.3 billion

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Video Analytics: $12.3 billion

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Digital Evidence: $9.4 billion

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Vision AI Market

The global Vision AI market is expanding rapidly
as AI-powered image and video understanding becomes mainstream across industries. In 2024, the global Vision AI market was estimated at
approximately $15.8 billion. Longer-term projections show continued high growth: for example, one study projected the global market to
grow from about $23.7 billion in 2025 to $108.9 billion by 2033, a Compound Annual Growth Rate (“CAGR”) of roughly 24.1%.
Despite variations in forecasts, there is a broad consensus that Vision AI is a high-growth segment, with double-digit annual expansion
expected through the decade.

The U.S. Vision AI market represents a significant
portion of this opportunity. North America holds the largest regional share of the Vision AI market, with the United States alone accounting
for an estimated 30.6% of global revenue in 2024. U.S. market size is substantial and growing and is driven by strong investment in AI
across government and commercial sectors. Notably, North America has recently overtaken Asia-Pacific as the dominant force in the Vision
AI market, reflecting increased adoption in the U.S. across applications from defense to retail.

Despite the United States leading the world in
AI adoption and infrastructure, some of its biometric screening systems used by government agencies still rely heavily on foreign Vision
AI algorithms. A French biometrics company provides fingerprint and facial recognition technology for the FBI’s NGI program, the
DOD ABIS, Department of State consular systems, NCTC watchlisting, and many state and local systems. A Japanese biometrics company delivers
facial biometric software for DHS entry and exit programs and CBP passenger matching, while another French biometrics company supports
additional DHS identity operations. Chinese biometrics companies have significant market presence in Southeast Asia and Africa, often
providing technology at extremely low cost or even free in exchange for influence and control over national security systems. Russian
companies provide high accuracy facial recognition tools that are deployed globally.

Key growth drivers in Vision AI include:

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Automation and Industry 4.0: Manufacturers and enterprises are investing in vision-based automation (for quality inspection, robotics, etc.), spurred by the need for efficiency and the maturation of deep learning. Government programs promoting automation in industries are further boosting adoption of machine vision systems.

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Cross-sector AI Integration: Vision AI is being deployed in an expanding range of sectors – from healthcare (medical imaging diagnostics) to automotive (autonomous driving and advanced driver assistance), retail (inventory management and shopper analytics), and security (surveillance and threat detection). This broad applicability drives robust demand globally.

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Advances in AI Technology: Ongoing improvements in algorithms (e.g., convolutional neural networks, deep learning) and the availability of large training datasets have significantly improved accuracy, enabling new use cases and better performance in challenging conditions. These technical advances continually expand what Vision AI systems can reliably do, encouraging further investments.

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National Security and Defense Needs: Defense, intelligence, and law enforcement agencies are major adopters of Vision AI for applications such as aerial reconnaissance, autonomous drones, and video surveillance analytics. Government demand for domestically developed, secure Vision AI solutions is rising in light of national security concerns and restrictions on foreign-made AI technology. Public-sector use (alongside smart city initiatives and border security programs) contributes substantially to U.S. market growth, aligning with ROC’s focus on U.S. national security customers.

Emerging use cases are driving incremental growth.
For example, in smart cities, Vision AI systems monitor traffic, detect accidents, and enhance public safety. In retail, Vision AI is
used for frictionless checkout and shelf stock analysis. Facial recognition and object detection in live video streams are now deployed
for access control and threat monitoring in airports, schools, and businesses. Such applications illustrate the proliferation of Vision
AI into everyday infrastructure. Notably, the object detection sub-segment is expected to be one of the fastest-growing in coming years,
as organizations seek real-time situational awareness from video data.

Technology and regulatory trends are shaping the
Vision AI landscape. One significant trend is the shift toward edge computing – moving vision AI processing from cloud data centers
to local devices and cameras for lower latency and improved privacy. Modern deployments often demand runtime efficiency on edge hardware
(such as surveillance cameras, drones, or mobile devices) rather than reliance on constant cloud connectivity. This plays to ROC’s
strength in efficiency at the edge, as our algorithms are optimized for high performance on-device. Indeed, the edge-enabled portion of
the video analytics market is projected to grow at approximately 34% annually, far outpacing overall market growth, as organizations embrace
on-premise and on-device AI to reduce bandwidth costs and address data sovereignty concerns. Another trend is convergence of multimodal
AI – combining Vision AI with other sensor inputs (such as audio or biometrics) to enrich analysis. Our multimodal platform approach
aligns with this, allowing clients to integrate face recognition, object tracking, and other modalities in one solution.

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Regulatory factors are also coming into focus.
There is increasing scrutiny on the use of AI and surveillance. For example, the European Union(“EU”)’s proposed AI
Act and various state-level laws in the U.S. aim to ensure transparency and accountability in AI systems, especially those used for facial
recognition or security monitoring. Privacy regulations (like the GDPR and U.S. state privacy acts) impose requirements on handling image
data, requiring vendors to build compliance (data anonymization, consent management, etc.) into their vision solutions. While such regulations
could moderate certain uses (e.g., restricting facial recognition in public spaces), they are also expected to favor vendors with trustworthy
practices and high accuracy. ROC’s focus on accuracy and its U.S.-made, trusted technology is a strategic asset as customers navigate
these regulatory expectations. Overall, the Vision AI market’s growth trajectory remains strong, underpinned by technological advancement
and expanding use cases, and our edge-efficient, security-aligned platform is well positioned to benefit from these trends.

Biometrics Market

The global biometrics market – which includes
facial recognition, fingerprint, iris, voice recognition and other identity technologies – is experiencing robust expansion, underpinned
by rising security demands and widespread adoption in both government and consumer applications. In 2024, the global biometrics market
reached an estimated $50.08 billion in revenue and is predicted to increase from $60.32 billion in 2025 to approximately $307.24 billion
by 2034, expanding at a CAGR of 19.89% from 2025 to 2034. This sustained growth outlook reflects how integral biometrics have become in
modern security, fintech, and identity systems worldwide.

The U.S. biometrics market is one of the leading
national markets, fueled by strong government and commercial uptake of biometric technologies. In 2023, the U.S. biometric technology
market generated approximately $7.6 billion in revenue, accounting for about 18% of the global market. U.S. biometrics spending is forecast
to accelerate with roughly 18% CAGR through 2030, reaching an estimated $24+ billion by 2030. This suggests the U.S. market could approach
an approximately $10 billion annual run-rate by the mid-2020s, given current growth rates. North America as a whole is currently the largest
regional market for biometrics, ahead of Asia-Pacific. Key U.S. growth drivers include federal and local government programs (e.g., enhanced
border control systems, FBI Next Generation Identification upgrades), financial services deploying biometrics for fraud prevention, and
the private sector’s embrace of biometric access control and authentication. ROC’s national security alignment is pertinent
here – U.S. government and defense agencies are major buyers of biometric solutions for homeland security and military applications,
and there is increasing preference for American-made, reliable technology in these sensitive deployments.

Key demand drivers in biometrics include:

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Security and Fraud Prevention Needs: Heightened security concerns globally – from identity theft and cybercrime to terrorism – are driving organizations to adopt biometrics as a more secure alternative to passwords, PINs, or ID cards. Governments have initiated programs for e-passports, national ID systems, and border security that rely on fingerprint and facial recognition at scale. Financial institutions and enterprises are similarly integrating biometric authentication (fingerprint, face or voice ID) to secure banking apps, payment systems, and physical access, responding to rising cyber threats and fraud attempts. This fundamental need for robust identity verification underpins steady demand growth.

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Government Programs and Regulation: Many governments are actively investing in biometric deployments for public safety and administrative efficiency. Examples include nationwide digital ID initiatives (such as India’s Aadhaar program or biometric voter registration in various countries), as well as mandates for stronger identity checks in immigration and air travel. In the U.S., government initiatives and funding (e.g., through the U.S. Department of Homeland Security or Department of Defense) have expanded the use of biometrics in law enforcement and military contexts. These public-sector programs not only contribute directly to market growth but also build public acceptance of biometrics.

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Consumer Electronics Integration: The incorporation of biometric sensors in consumer devices has exploded – nearly all modern smartphones now include fingerprint scanners or facial recognition for user authentication. This trend normalized biometrics for millions of consumers and has significantly enlarged the market. The low cost of these sensors and the convenience of biometric unlocking have driven adoption in phones, laptops, smart home devices, and even vehicles. As a result, biometric technology in consumer electronics has become a major segment, contributing to market scale and habituating users to biometric security in other domains (banking apps, building entry, etc.).

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Multimodal Biometrics for Accuracy: Organizations are increasingly deploying multimodal biometric systems– using a combination of biometric modalities (e.g., face + fingerprint, or voice + iris) – to achieve higher accuracy and reliability. Combining modalities can compensate for limitations of any single method (for instance, if a face image is of poor quality, a fingerprint can verify identity, and vice versa). This approach is especially favored in high-security environments. According to industry research, adoption of multimodal biometric solutions is on the rise, increasing from 16% of organizations in 2023 to 22% in 2024. The growing interest in multimodal systems plays to ROC’s strength in multimodal platform delivery, as our software natively supports face, fingerprint, and iris recognition in one unified solution.

With these drivers in place, emerging use cases
for biometrics are expanding beyond traditional security. In financial services, biometrics are used for seamless customer onboarding
(eKYC) and transaction authentication (e.g., facial recognition for mobile payments). In healthcare, hospitals use biometrics to verify
patient identity and secure access to health records. Workplaces are replacing badge swipes with facial or iris scans for attendance and
secure entry. Even the travel industry is rolling out biometric boarding gates and luggage drop-offs to improve passenger flow. Each new
application domain introduces biometrics to a wider user base, reinforcing the overall market growth.

Several market dynamics and trends are notable
in biometrics. One is the emphasis on privacy and data protection. As biometric data (like fingerprints or face templates) becomes widespread,
regulators are enacting laws to protect it. For example, the Illinois Biometric Information Privacy Act (the “BIPA”) in the
U.S. imposes strict requirements on private companies collecting biometrics, and Europe’s GDPR treats biometrics as sensitive data.
These regulations are prompting the industry to adopt privacy-by-design practices – e.g., on-device processing (so raw biometrics
are not sent to the cloud), data encryption, and user consent frameworks. ROC’s efficient edge algorithms are able to address these
concerns by enabling biometric matching to occur locally on devices or secure servers, minimizing data exposure. Likewise, accuracy and
bias mitigation have become crucial: there is growing regulatory and public scrutiny to ensure facial recognition algorithms are unbiased
and accurate across demographics. ROC’s top-tier accuracy (as evidenced by NIST evaluations) and demographic benchmarking (as evidenced
by NIST evaluations) position us well as clients demand high-performing solutions.

Another trend is Biometrics-as-a-Service (BaaS)
and cloud platforms for biometrics. Enterprises that do not want on-premise infrastructure are turning to cloud-based biometric APIs for
functions like identity verification. This is expanding the market to new users (e.g., online retailers adding fingerprint login via a
service). ROC’s flexible deployment models – on-premise for sensitive government clients or cloud/containerized for commercial
clients – align with this shift. Finally, the convergence of biometrics with broader digital identity ecosystems is accelerating.
Biometrics are increasingly used alongside digital wallets and identity documents for a holistic ID solution (for instance, using face
recognition to unlock a mobile driver’s license app). This convergence is creating opportunities for platforms that can handle multimodal
inputs and integrate with various identity data sources. Overall, the biometrics market’s strong growth is underpinned by its central
role in security and convenience, and ROC’s strengths in multimodal, high-accuracy and edge-capable biometrics align tightly with
where the industry is headed.

Video Analytics Market

The video analytics market – comprising
AI-driven analysis of video feeds for security, surveillance, and business intelligence – is experiencing rapid growth as organizations
increasingly seek to extract actionable insights from the vast amounts of video data being collected. Globally, the video analytics market
was valued at around $10.25 billion in 2024. This market is on a steep upward trajectory: it is projected to reach approximately $48.94
billion by 2032 according to various forecasts. For example, Fortune Business Insights estimates the global market will grow at a 21.8%
CAGR from 2025 to 2032, reaching $48.9 billion by 2032. An even longer-range analysis by Precedence Research projects the market to expand
at roughly 22.6% CAGR through 2034, ultimately hitting $94.5 billion by 2034. In summary, industry analysts expect roughly a 20–23%
annual growth rate in the video analytics sector over the next several years, making it one of the fastest-growing areas of the AI market.

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Within this, the U.S. video analytics market is
particularly significant and is growing briskly. North America led the world with about 40% of the global video analytics market share
in 2024. The United States, as the largest contributor in North America, had an estimated market size of $3.45 billion in 2024. U.S. video
analytics revenue is forecast to grow at approximately 22–23% CAGR going forward, in line with global trends, reaching around $7–8+
billion by 2027 and approximately $27 billion by 2034. This high growth is fueled by the widespread deployment of AI analytics in security
systems across U.S. cities, airports, retail stores, and federal projects. In fact, the United States currently utilizes video analytics
more than any other country, thanks to strong enterprise investment and public sector spending on smart surveillance. Major U.S.-based
technology players and defense integrators in this space (e.g., Cisco, IBM, Motorola Solutions/Avigilon) further catalyze domestic adoption
through innovation and large project rollouts. ROC’s close alignment with the U.S. government and law enforcement needs –
a segment that heavily uses video analytics for threat detection and situational awareness – gives us strategic advantage in this
growing home market.

Key demand drivers in video analytics include:

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Security and Public Safety Requirements: Security is the original and still primary driver for video analytics adoption. Government agencies, law enforcement, and private enterprises are increasingly relying on AI to monitor surveillance cameras in real time for threats – such as detecting intruders, unattended packages, or anomalous behaviors automatically. The government sector holds a major share of the video analytics market, as public safety initiatives (smart city surveillance, border security cameras, etc.) invest heavily in AI-driven video monitoring. Likewise, critical infrastructure (airports, transit systems, utilities) and commercial buildings are deploying video analytics for intrusion detection and incident response. This pervasive need for enhanced security and rapid incident detection is a fundamental growth engine for the industry.

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Proliferation of Video Data and Cameras: The sheer number of video cameras in use (from Closed Circuit Television (“CCTV”) networks to body-worn cameras and mobile devices) has exploded, creating massive volumes of video data that far exceed humans’ capacity to monitor in real time. Estimates suggest tens of millions of surveillance cameras are active globally, generating an ever-growing stream of footage. Organizations are turning to AI analytics to filter and interpret video data at scale, whether it’s for identifying traffic congestion on city streets or analyzing shopper movements in a store. The need to derive value from this data deluge – turning raw video into actionable alerts or business intelligence – is a core market driver. In the U.S., for example, it’s noted that 80% of all criminal cases involve video evidence in some form, underscoring the demand for tools to efficiently analyze video.

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Advancements in AI Accuracy: Recent advances in Vision AI algorithms (e.g., deep learning-based object recognition) have greatly improved the accuracy and reliability of video analytics, making them more viable to deploy. Modern systems can track individuals across multiple cameras, recognize faces or license plates with high accuracy, and even detect behaviors (fights, falls, etc.) that previously would have been too complex to automate. These improvements reduce false alarms and build end-user trust in automated analytics, encouraging wider adoption in security operations centers and beyond. Key companies in the field continuously refine algorithms for scenarios like low-light or crowded environments, expanding the range of deployable use cases.

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Operational Insights and ROI: Beyond security, many organizations are adopting video analytics for the operational and business insights they provide. For instance, retailers use video analytics to measure foot traffic patterns, dwell times, and product engagement in stores to optimize layouts and marketing. Transportation authorities apply analytics for traffic flow management and incident detection on roads. Healthcare facilities use them to monitor patient falls or identify when sanitation is needed in a room. These use cases deliver tangible ROI by improving efficiency, safety, or customer experience. The rising demand for such real-time insights – e.g., using cameras not just as passive recorders but active sensors for data – is broadening the market. One key trend is the growth of behavioral analytics that go beyond simple motion detection to interpret complex behaviors (for example, identifying if someone is loitering versus simply passing by). This new frontier of value extraction from video is convincing more enterprises to invest in AI analytics.

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In terms of emerging trends and use cases, an
important development is the integration of video analytics with cloud and edge computing architectures. Many organizations are shifting
from purely on-premise video management to hybrid models where some analytics run on camera devices or edge gateways (for immediate response),
while heavier processing or aggregated trend analysis runs in cloud platforms. This allows scalability and flexibility – routine
tasks can be handled at the edge, reducing bandwidth usage, while cloud systems can apply deeper analytics or archival searches. ROC’s
strength in delivering efficient analytics on the edge (e.g., on cameras or mobile devices) aligns with this trend; our solutions can
run AI on low-power devices, enabling real-time alerts even when connectivity is limited. Industry forecasts specifically highlight edge-enabled
video analytics as a high-growth subsegment (projected to reach approximately $75 billion by 2030 from just $5 billion in 2021), reflecting
how vital edge computing is becoming in this market.

Another trend is consolidation and platformization.
Initially, the video analytics space saw many niche vendors offering point solutions (license plate recognition, people counting, etc.),
but we are now seeing consolidation into more comprehensive platforms. Customers (especially large city or enterprise deployments) prefer
integrated suites that can handle multiple analytics functions and camera types under one umbrella. This favors companies like ROC that
offer a broad multimodal analytics platform – for example, our software can perform facial recognition, object detection, and forensic
video search in one system, whereas a piecemeal approach would require several separate tools. The trend toward unified video analytics
and evidence platforms (often tying into video management systems, VMS, used by security teams) plays to our advantage as a one-stop provider.

Regulatory and societal factors also affect the
video analytics domain. Public privacy concerns are leading to calls for transparency in how video AI is used. Cities deploying facial
recognition in cameras, for instance, have encountered pushback leading to moratoriums in some jurisdictions. We anticipate regulations
may require measures like bias testing of algorithms, audit logs for how AI alerts are generated, and perhaps restrictions on certain
uses (e.g., real-time face ID in public without warrants). At the same time, regulatory mandates can drive adoption: a growing number
of local laws require retention and review of surveillance footage (for accountability), which in practice necessitates intelligent video
management. For example, several U.S. states now mandate police body-worn cameras and proper handling of the footage, greatly expanding
the volume of video that departments must review and store – a challenge that practically demands advanced video analytics and evidence
management tools. ROC’s audit capabilities and high-accuracy algorithms to minimize misidentifications and our strong public safety
domain knowledge position us to navigate these regulatory trends. In summary, the video analytics market is expected to continue its strong
growth, driven by security imperatives and expanding analytic applications, and ROC’s efficient, comprehensive edge analytics platform
is aligned with the key technological and market shifts in this sector.

Digital Evidence Management Market

The digital evidence management market involves
software and cloud solutions used by law enforcement, legal agencies, and enterprises to store, manage, analyze, and secure digital evidence.
This includes handling data such as surveillance videos, body-camera footage, audio recordings, photos, and electronic documents in a
manner that preserves integrity for investigations and court proceedings. With the surge of digital data in policing and compliance, this
market has grown into a substantial segment on its own. In 2023, the global digital evidence management (“DEM”) market was
valued at around $7.5–7.7 billion. Forecasts predict the global DEM market to climb to approximately $13–15 billion by 2028–2029,
and around $19 billion by the early 2030s, equating to a solid double-digit CAGR in the 10–12% range over the next decade. For example,
The Business Research Company projects the market to grow at 11.9% CAGR through 2029, reaching $14.8 billion in 2029, while other analysts
looking out to 2032–2033 see growth continuing at similar rates to over $19 billion. This indicates a steady and resilient expansion,
as managing digital evidence has become mission-critical for modern policing and regulatory compliance.

The U.S. market for digital evidence management
is a major component of the global total, given the large number of law enforcement agencies and the early adoption of body cameras and
digital forensic tools in the United States. North America is currently the largest regional market for digital evidence management solutions.
This leadership is due in part to U.S. public safety agencies investing heavily in body-worn cameras, dashcams, and cloud-based evidence
systems in recent years. While exact U.S.-only market size figures for 2023–2025 are less reported, North America’s dominance
suggests the U.S. accounts for a significant share (likely on the order of one-third to half of global demand). For context, industry
reports note that the global body-worn camera and DEM market reached about $1.85 billion in 2023, much of which is U.S.-driven. Eight
U.S. states now have laws mandating police use of body cameras, which directly expands the need for digital evidence storage and analysis.
Moreover, leading vendors in this space are U.S.-based (for example, Axon (formerly Taser International) provides the dominant cloud evidence
platform for police, and companies like Motorola Solutions and Safe Fleet are key providers), underscoring U.S. market strength. We expect
the U.S. will remain a growth engine for DEM, as more agencies phase out old manual evidence processes in favor of modern digital management
systems. ROC’s national security alignment and relationships in U.S. law enforcement technology position us well in this regard
– our solutions can complement and integrate with digital evidence platforms, adding AI-driven analysis (e.g., face recognition
in forensic video) to the evidence management workflow.

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Demand drivers in digital evidence management
are primarily rooted in the increasing volume and importance of digital evidence in both criminal justice and corporate settings:

●
Proliferation of Digital Media in Policing: Police and investigative agencies are collecting far more digital evidence than ever before – including high-definition video from body-worn cameras, CCTV footage from crime scenes, audio recordings of interviews, smartphone data extractions, and digital photos. This surge is straining traditional methods of managing evidence (like manual cataloguing or local DVDs). There is a critical need for scalable systems to ingest, catalog, securely store, and easily retrieve this data. For instance, each police officer with a body camera can generate several gigabytes of video per shift, and investigations often involve pulling footage from numerous cameras. Digital evidence management solutions meet this need by providing centralized, searchable repositories and ensuring chain-of-custody tracking for each file. The push for transparency and accountability in law enforcement (e.g., documenting encounters via video) further accelerates this trend, as evidenced by the widespread adoption of body cams across departments.

●
Cybercrime and Digital Investigations: Beyond physical-world video, cybercrime investigations produce large quantities of digital evidence – such as logs, emails, and seized device data – that must be managed and analyzed. The rise in cyber fraud and incidents (for example, financial cybercrime losses in the U.S. hit $8.8 billion in 2022, up over 30% from the prior year) is driving demand for systems to handle digital forensic evidence. Law enforcement agencies and even private enterprises need platforms to organize evidence from computer forensics (hard drives, cloud accounts) in a way that maintains evidentiary integrity for court. This convergence of cyber/digital forensics with traditional evidence management is expanding the market’s scope.

●
Regulatory Compliance and Legal Requirements: Stricter regulations and standards regarding evidence handling are compelling agencies to upgrade their capabilities. Courts and prosecutors now expect video and digital evidence to be readily accessible and properly authenticated. In many jurisdictions, there are mandates on how long certain recordings (e.g., police footage) must be retained and how they should be redacted for privacy when released. Failing to manage digital evidence properly can result in legal challenges or lost cases. Therefore, agencies invest in DEM solutions to ensure compliance with evidence laws and data retention policies, and to produce audit trails that demonstrate evidence has not been tampered with. Similarly, in corporate settings (like financial institutions or companies subject to e-discovery), compliance requirements drive adoption of secure digital evidence archiving.

●
Efficiency and Interagency Collaboration: Modern DEM systems greatly improve efficiency by allowing quick search and sharing of evidence among authorized parties. This is a driver as agencies grapple with labor-intensive manual evidence review. For example, instead of an officer spending hours reviewing footage for an incident, video analytics (a feature of some DEM systems) can automatically flag relevant segments. Additionally, large investigations often involve multiple agencies – a digital evidence platform enables seamless (and logged) sharing of files between police, prosecutors, and defense attorneys in a secure manner. The push for interagency data sharing in the justice system (for instance, cloud-based evidence portals accessible by both police and prosecutors) is encouraging agencies to adopt standardized digital evidence solutions. This demand for efficiency and collaboration is increasing, especially as high-profile cases often require sifting through terabytes of video or data.

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Given these drivers, emerging use cases and trends
in the DEM market include the integration of advanced analytics and cloud technologies. There is a trend toward embedding AI analytics
within evidence management platforms – for example, using face recognition or object detection to automatically index video evidence
so investigators can quickly search for a suspect across hours of footage. ROC’s technology contributes here: our algorithms can
process video evidence within these systems to identify persons of interest or to redact faces for privacy when releasing footage, adding
significant value to the raw storage function of DEM. Another trend is the migration to cloud-based evidence management. Traditionally,
evidence was stored on DVDs or on-premises servers, but now many agencies are moving to CJIS-compliant cloud solutions (such as Axon Evidence.com
or similar) that offer scalability and remote access. Cloud deployments allow evidence to be accessible “anytime, anywhere”
with proper credentials, which proved especially useful during the pandemic and continues to be attractive for distributed law enforcement
operations. This has been a major driver for market growth as well, since cloud-based models often operate on subscription, making it
easier for smaller agencies to come on board without large upfront IT investments. However, this shift also raises the importance of data
security – DEM vendors emphasize encryption and compliance to ensure evidence is secure in the cloud. We anticipate continued growth
in cloud and hybrid evidence management models, and ROC’s software is designed to integrate with both on-premise and cloud workflows,
aligning with this trend.

On the regulatory side, as mentioned, mandates
like body-worn camera requirements in various states directly boost this market. There is also likely to be increasing standardization
and certification around digital evidence handling (for example, standards for hashing evidence files to verify integrity, or accreditation
of cloud evidence systems for law enforcement use). These create a need for vendors to meet high reliability and security benchmarks.
ROC’s focus on national security and law enforcement means we are attuned to these requirements – for instance, our software
can operate within air-gapped secure networks and produce logs that support evidentiary standards, which is attractive to government clients
facing stringent regulations.

Finally, a noteworthy trend is the convergence
of digital evidence management with biometrics and video analytics – essentially building end-to-end solutions from evidence capture
to analysis. Agencies increasingly seek a unified platform where, for example, a piece of video evidence can be instantly analyzed for
faces or objects and then tagged for easy retrieval in an investigation. ROC’s multimodal analytics abilities position us well in
this converging landscape. We can augment digital evidence systems with face recognition (one of our core offerings) to automatically
identify individuals across an archive of video evidence, or with AI object search to find vehicles, etc., thereby significantly enhancing
the utility of stored evidence. We view this convergence as a key opportunity: the industry is moving toward comprehensive digital policing
platforms that incorporate collection, management, and analytic exploitation of evidence. Our edge-efficient algorithms and multimodal
approach can plug into these systems, fulfilling agencies’ desire for one integrated solution that covers everything from capturing
evidence to drawing investigative insights from it.

In summary, across all four segments – Vision
AI, biometrics, video analytics, and digital evidence management – the market dynamics from 2023 through 2025 are characterized
by strong growth and evolving needs that align closely with ROC’s strengths. Global and U.S. market sizes in each area are expanding
at double-digit CAGRs, fueled by technological advancements and urgent demand for AI-driven security and automation solutions. Key drivers
(security requirements, data proliferation, automation, and efficiency imperatives) and emerging uses (from smart cities to forensic analytics)
are creating a fertile environment for growth. We expect regulatory developments to continue shaping these markets, with increasing emphasis
on trusted and high-performance solutions – precisely the space where ROC focuses. With our American-made, security-centric approach,
edge computing efficiency, and multimodal AI platform, we believe we are uniquely positioned to capitalize on these trends. We can serve
the growing call for AI at the edge in vision applications, deliver the multi-biometric capabilities that customers increasingly require,
and integrate into the digital evidence ecosystems that law enforcement and others are building. This alignment with market direction
provides a strong foundation for our growth, giving investors insight into the considerable market opportunity we are targeting and our
strategic fit within it.

Sources: Global and U.S. market size estimates
and CAGRs are drawn from industry research and forecasts. Key trends and drivers are supported by recent analyses highlighting technology
adoption and sector demand factors. These data points underscore the robust growth and dynamic environment in which ROC operates, as detailed
in the above industry analysis.

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Our Competitive Strengths

Our greatest strength is the caliber of our team
- executive leadership (with decades of experience in computer vision and machine learning algorithms, software engineering, and national
security), our career professionals (Ph.D.’s in Computer Science and software engineers with multi-decade careers in systems deployment
and government research), and our junior team members (elite talent with demonstrated capacity to become future organizational leaders).
Our team is built on connections that have spanned long before ROC was ever founded. There is trust and deep connection across our team,
which has resulted in the long-term 90% retention of our key talent. Our team further offers us an extreme edge in the recruitment of
additional talent as ROC grows.

The byproduct of the caliber of our team is a
compounding set of additional competitive strengths that grow each year through the strategic knowledge of customer requirements in national
security and public safety sectors possessed by our Chief Executive Officer (“CEO”) and others key leaders. In turn, these
requirements and roadmaps fuel our product features which are executed by the research and engineering teams (led by our cofounders and
other key leaders). Together, we have been able to build products from the ground up that are designed for mission impact and deliver
products that work in the environments where it matters most. Our ability to consistently outperform incumbent vendors, integrate across
use cases, and remain cost-efficient gives us a unique position as both a category leader and category disruptor. Across sectors and continents,
we are earning trust not just for our performance, but for the way we operate — with precision, accountability, and integrity.

More specifically, there are five key competitive
strengths of our business.

First, our products are differentiated through
architectural and algorithmic efficiency that directly translates into operational and economic advantages. ROC’s AI models consistently
rank among the most accurate and efficient in global government benchmarks, enabling our solutions to perform under constraints where
others cannot. Our software can run on smaller, lower-power devices — including mobile systems and edge appliances — without
sacrificing performance. That means ROC can deliver identity and visual intelligence at the point of capture, in the field, without relying
on constant cloud access or expensive infrastructure. This capability is critical to our customers in defense, public safety, and frontline
commercial operations, where connectivity is limited and real-time decision-making is essential. It also translates into lower infrastructure
costs, making our solutions attractive not just for their speed and accuracy, but for their long-term affordability and efficiency.

Second, we are not simply a software vendor —
we are a platform company. Our system is built from the ground up to unify what has long been fragmented use cases in identity systems
and analytics. In the past, for example, governments and enterprises needed one or more vendors for multi-biometrics algorithms (face,
finger, iris), another vendor for computer vision algorithms such as license plate recognition or threat detection (e.g., weapons detection).
Further, the application systems to deploy these core algorithms are often fragmented across different vendor. ROC consolidates all of
these capabilities into a single growing platform that enables wide ranging use-cases from real-time video analytics, national and enterprise
scale identification systems, mobile identity verification, and analysis of forensic evidence. Further, our software is designed to easily
integrate and operate alongside legacy technologies and systems. Altogether, this means fewer contracts, fewer integration headaches,
and a dramatically improved user experience for mission operators. Our modular platform can be deployed on the cloud, on-premises, or
on the tactical edge, and integrates easily with existing systems. For many customers, this is the first time they can manage identity,
video, and investigative intelligence from a single pane of glass. Most importantly, this architecture is built to scale. ROC powers large-scale
enterprise deployments across private and public cloud environments with significantly less infrastructure overhead than our competitors.
Whether supporting a single agency or an entire nation, our platform offers the flexibility, performance, and efficiency to meet the mission
at any scale.

Third, we are proudly and entirely U.S.-built.
While we license our technology globally, our primary customer markets are in the U.S., and these markets have long been dominated by
foreign providers and black-box AI models. ROC offers an alternative that is transparent, accountable, and aligned with U.S. national
security priorities. Our software is developed and maintained in the United States, with no offshore dependencies. We have earned the
trust of customers who operate in the most sensitive environments in the world, including, but not limited to, major components of the
U.S. Department of Defense. These institutions do not just buy software; they invest in partners who can meet the highest bars for explainability,
privacy, and lawful deployment. We do not take that responsibility lightly. To our knowledge, ROC was the first facial recognition company
in the United States to publish a code of ethics addressing the use of face recognition technology. We believe transparency builds trust,
and trust builds markets.

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Fourth, we are designed to be affordable —
not by compromising on performance, but by eliminating unnecessary bloat. ROC has never taken venture capital or debt financing. Unlike
many competitors weighed down by too much reliance on investor capital, inflated overhead, or long repayment schedules, our organic growth
has allowed us to stay lean, generally profitable, and focused on delivering maximum value to our customers. The efficiency required to
operate our business in a cashflow positive manner for the last decade means we know we can generally build our software at less cost
and higher effectiveness than our competitors. And this allows us to deliver enterprise-grade systems at a fraction of the cost of legacy
vendors. Combined with our algorithmic efficiency, which minimizes compute requirements and infrastructure overhead, ROC delivers one
of the lowest total costs of ownership in the market. That matters not only to resource-constrained government agencies and mid-sized
enterprises, but also to global partners building large-scale identity and evidence ecosystems. We give our customers more performance,
more transparency, and more control — for less.

Finally, we believe that competitive strength
starts with people. ROC was built by engineers and practitioners who have spent their careers designing and delivering mission-critical
systems. Many of our team members come from the FBI, the military, and top AI research labs. Nearly half of our Company consists of software
engineers, with more than 20% holding advanced degrees in artificial intelligence related specialties like machine learning. That technical
density enables us to move fast, build securely, and outperform on the hardest problems. Our leadership team combines startup grit with
government credibility, and our culture emphasizes shared mission, long-term thinking, and operational discipline. We have remained profitable
without raising outside capital and have maintained extremely low turnover, even while scaling. This is not accidental — it’s
a reflection of the purpose and pride that defines our work. Our customers feel that difference in every interaction.

Taken together, these strengths — technical,
architectural, operational, and cultural — give us a unique and defensible position in the rapidly expanding market for identity
and visual intelligence. We are not chasing hype cycles. We are building the infrastructure of trust in the AI era.

Our Challenges

As ROC scales from an organically grown, component-led
company into a platform leader in operational AI, we face a series of strategic, operational, and financial challenges that must be addressed
with discipline and foresight. While we are confident in the strength of our technology, culture, and customer relationships, we also
recognize that our next phase of growth brings new complexities that demand focus and agility.

1. Navigating Rapid Growth While Preserving Culture
and Performance

ROC has grown significantly in recent years, and
we expect this acceleration to continue. Our transition from a lean, component-driven company to a full-stack platform provider —
with global customers and increasingly large contracts — is putting pressure on our internal systems, processes, and team dynamics.
As we scale our product offerings and customer base, we must continue to invest in infrastructure, hire talent at a high bar, and maintain
the cultural DNA that has powered our success to date. Failure to do so could lead to operational inefficiencies, talent dilution, or
delays in execution.

Managing this growth requires thoughtful organizational
design. We must preserve the responsiveness and technical rigor that define ROC, even as we adopt more formal structures around delivery,
compliance, and quality assurance. We believe we can scale without becoming bureaucratic, but this will require continual calibration
of our processes and priorities.

2. Scaling Revenue Across Government and Commercial
Sectors

To date, much of ROC’s revenue has been
earned through a high volume of smaller contracts — pilot programs, phased deployments, or integrations scoped to single use cases
or agencies. While this approach has built strong technical credibility and fostered deep customer relationships across multiple government
segments, it has also led to lumpy, non-recurring revenue streams that limit predictability and scale.

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We believe the next stage of ROC’s growth
will be driven by larger, multi-year government contracts. These engagements will provide stronger revenue foundations, longer contract
terms, and higher dollar values per customer. However, a key challenge remains: securing our first wave of anchor reference accounts for
full-scale national systems. While we are deeply embedded with many government customers today, these engagements have yet to convert
into the flagship, multi-year programs that will define our revenue trajectory. Winning that first set of major, referenceable deployments
— particularly in civil ID, public safety, and defense intelligence — is a strategic imperative.

We do not believe this opportunity lies solely
in the commercial sector. We anticipate that our federal sector — particularly at the intersection of national security, digital
evidence, and identity infrastructure — will unlock larger and more sustained revenue opportunities than any we have seen before.
In anticipation of this growth, in 2025, we launched ROC Federal LLC, a wholly owned subsidiary designed to manage sensitive U.S. government
programs with enhanced focus and operational discipline. ROC Federal allows us to better isolate classified or sensitive workstreams,
maintain rigorous security controls, and operate with the dedicated compliance posture expected by U.S. federal customers. This structure
positions us to pursue larger federal contracts with greater agility, scalability, and assurance.

At the same time, our commercial sector brings
a different set of challenges. As we transition from selling high-performance biometric components to offering complete platforms —
for access control, identity verification, and digital case management — we must compete against both incumbent vendors and internal
development teams within large enterprises. Commercial customers often evaluate pricing, integration ease, and support differently than
public sector clients. Many of our commercial wins to date have come through channels and integrators, which we will continue to support.
But to scale recurring revenue, we must evolve our go-to-market model, emphasize product-led growth strategies, and invest in post-sales
success and renewal. The shift from component licensing to full solution sales — and from upfront fees to SaaS and managed services
— is an organizational and operational transformation that will take time to fully realize.

3. Winning in a Fragmented and Competitive Market

We operate across several highly competitive technology
segments, including biometrics, computer vision, and digital evidence management. Many of our competitors are significantly larger, have
deeper entrenchment in government contracts, and/or have operated for years with limited competition due to inertia in procurement processes.
While these incumbents have long dominated identity infrastructure and surveillance markets, they are increasingly vulnerable, and ROC
is well positioned to challenge them.

In many ways, the legacy players have made our
opportunity easier. Several have significantly reduced investment in research and innovation. Their product portfolios are aging, and
many rely on monolithic architectures that are expensive to scale and difficult to integrate. Customer satisfaction across these legacy
platforms is declining — with persistent complaints around licensing complexity, slow delivery timelines, poor support, and outdated
UI/UX design. We are regularly approached by former customers of these providers looking for faster, more transparent, and mission-aligned
alternatives.

Yet even in this environment, displacing an incumbent
remains difficult. Government agencies and large enterprises often favor the status quo, especially when switching platforms requires
retraining, re-certification, or data migration. In the public sector in particular, change requires leadership — and in many cases,
courage. Despite clear performance and cost advantages, ROC still encounters instances where agencies bypass competitive bidding in favor
of sole-source justifications to foreign providers. These decisions often reflect outdated assumptions or perceived risk mitigation, but
they have real consequences: reinforcing dependency on foreign black-box systems and denying emerging U.S. platforms the opportunity to
compete on merit.

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We do not accept this dynamic as inevitable. ROC
is committed to working constructively with government buyers and procurement officers to advocate for open competition, transparency,
and accountability. We are not asking for special treatment — only for a fair chance to compete. And in the current political environment,
where there is growing bipartisan support for domestic technology alternatives and supply chain sovereignty, we believe this message is
resonating.

Winning in this market will require more than
technical superiority. It will require strategic persistence, policy engagement, and active partnership with customers willing to lead
transformation. We are ready for that challenge — and increasingly, so are our customers.

4. Balancing Focus Across Government, Commercial,
and International Markets

Unlike many peers who serve only one sector, ROC
is positioned to lead in public sector, commercial, and international markets simultaneously. This is a strength but also a challenge.
Each vertical has unique customer expectations, procurement models, pricing sensitivities, and compliance requirements.

Nowhere is this challenge more evident than in
our international expansion strategy. Historically, ROC’s global footprint has been anchored by high-performance component sales
— primarily SDKs and algorithms integrated by international partners. These wins have built brand recognition across multiple continents,
but they did not demand the same level of delivery complexity or support infrastructure required by full-system deployments.

Today, we are seeing robust global demand not
only for our multimodal biometric capabilities, but also for ROC’s video analytics platform, particularly in use cases involving
border surveillance, forensic triage, and real-time threat detection. Across regions including Southeast Asia, the Middle East, Africa,
Canada, and Mexico, governments and integrators are seeking full-stack identity and video solutions that combine ROC’s core engines
with complete user-facing systems and infrastructure integration. These markets represent a highly qualified near-term pipeline, but they
also require a step-change in how we deliver, support, and maintain our offerings across borders.

Delivering turnkey solutions — including
hardware-integrated appliances, cloud or air-gapped deployment, on-site installation, and multiyear support — will require scaling
international teams, building regional partnerships, and evolving our internal structures for global compliance and operations. This is
a meaningful expansion of our current model. Corporate entity creation, export controls, data sovereignty, channel coordination, and multi-lingual
support each add complexity. Moreover, while many of these international opportunities are with allied governments and trusted integrators,
geopolitical considerations and regional stability risks must be carefully managed.

If we are to become the global alternative to
legacy biometric and surveillance incumbents, we must invest heavily in our international operating model. That includes building delivery
infrastructure abroad while preserving our commitment to accuracy, transparency, and ethical deployment at a global scale.

5. Adapting to Public Market Scrutiny and Infrastructure
Demands

As a newly-public company, we must adapt to a
new level of transparency and operational discipline. This includes building and maintaining Sarbanes–Oxley Act of 2002–compliant
internal controls, maturing our financial systems, and expanding our compliance functions. Our leadership team will need to allocate time
and resources to these areas, while continuing to drive growth and innovation.

The demands of public company governance, investor
relations, and quarterly reporting represent a meaningful shift in how ROC operates. Our ability to meet these expectations, without compromising
on speed or customer intimacy, is essential to our long-term success.

6. Navigating Ethical Expectations and AI Risk
Perception

We operate in one of the most scrutinized sectors
of artificial intelligence. The use of facial recognition, video analytics, and other identity technologies — including automated
license plate recognition (“ALPR”) — carries real societal impact and is subject to evolving legal, ethical, and political
scrutiny. These technologies, when improperly deployed, raise complex questions about civil liberties, surveillance, and bias. While our
products are designed for responsible use, the public discourse surrounding them is often shaped by misinformation, lack of context, or
high-profile misuse by others.

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We have taken early leadership in articulating
clear boundaries and safeguards around how our technologies should be deployed. ROC was an early advocate of the ethical development and
use of AI for facial recognition and published the Code of Ethics in November 2019. We continue to build systems that prioritize transparency,
explainability, and privacy-by-design principles. But expectations are growing — not just from our customers, but from the public
and regulators worldwide.

Laws such as the BIPA in Illinois and the GDPR
in the European Union impose stringent requirements on the collection, storage, and use of biometric and personally identifiable information.
These laws, along with emerging frameworks in Canada, the U.K., and California (under the CPRA), are shaping how ROC must operate across
jurisdictions. While our systems are engineered to comply with these frameworks — including audit logging, access controls, and
data minimization features — compliance is not static. As regulation continues to evolve, we must stay ahead of shifting legal interpretations
and invest proactively in adaptable architecture and documentation.

In addition, ALPR — one of our fast-growing
computer vision capabilities — presents its own set of public acceptance challenges. In some jurisdictions, plate recognition has
faced backlash over perceptions of overreach, profiling, or lack of oversight. While ROC’s ALPR technology is built with safeguards
and settings parameters, its inclusion in broader surveillance systems may raise questions for civil liberties groups or the press. It
is our responsibility to ensure that these technologies are used for legitimate, narrowly defined public safety purposes, and that our
customers understand how to deploy them responsibly.

Ultimately, we must continue to lead not just
technically, but morally — ensuring that our technology is used responsibly and that we are prepared to respond to any reputational
or regulatory challenges. This includes investing in transparency, auditability, and partnerships with stakeholders who shape policy and
public trust. The companies that thrive in this space will be those that treat ethical leadership as a competitive advantage. We intend
to be one of them.

Competition

We operate in intensely
competitive markets that span biometric identity, computer vision, digital evidence, public safety, defense, and identity verification.
These sectors are occupied by multinational incumbents, highly capitalized startups, and integrated platform providers with decades-long
relationships in both public and commercial sectors, including IDEMIA, NEC, Tech 5, and Paravision. Many benefit from scale and name recognition,
but also carry the weight of legacy systems, foreign-sourced AI components, and architectures that no longer meet the evolving standards
of performance, security, and transparency.

Ironically, in many cases,
these industry giants have made our job easier. Their retreat from sustained research investment, shrinking support teams, and reduced
delivery performance have left a noticeable void. Customers often describe stagnant roadmaps, weak responsiveness, or hidden model behaviors
that erode trust. As these shortcomings have become more visible, the opportunity for ROC to emerge as a reliable, modern, and mission-aligned
alternative has accelerated.

In biometric identity,
where precision and speed matter most, ROC delivers top-tier algorithmic performance validated through independent testing—all while
maintaining low computational overhead. Our solutions are built to run on edge devices, integrate flexibly with existing infrastructure,
and adapt quickly to changing operational conditions. In the realm of video analytics and digital evidence, we deliver unified capabilities—real-time
facial recognition, object and license plate detection, threat alerting, and post-event forensic search—in a single, streamlined
software stack. These tools are optimized for the frontline user, not just for performance benchmarks.

Public safety deployments
are a clear example of where ROC’s simplicity, accuracy, and cost-efficiency have outperformed slower, more complex alternatives.
While others require proprietary hardware or siloed platforms to enable their solutions, ROC deploys on existing networks and infrastructure,
reducing total cost of ownership and accelerating time to value. We offer edge deployment and local data governance to meet the privacy
needs of communities and institutions alike.

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In the federal space,
we do not view the large systems integrators as competitors, but as vital partners. Most federal programs award implementation and delivery
to major integrators who then rely on best-in-class technologies to fulfill mission objectives. ROC is often selected in this capacity—trusted
to deliver U.S.-made, testable, and secure AI capabilities that support national security, intelligence, and defense missions. Our alignment
with federal objectives and our proven record of operating in classified environments continue to strengthen our position across the government
ecosystem.

In the commercial sector,
we are seeing growing demand for ROC’s biometric and AI solutions in industries such as financial services, healthcare, logistics,
retail, and telecommunications. As identity verification becomes central to digital onboarding, fraud prevention, and customer trust,
organizations are moving away from black-box third-party platforms toward solutions that offer transparency, modularity, and compliance.
Early commercial providers in this space are now facing mounting pressure from customers who expect significantly lower transaction costs—something
these bloated providers struggle to deliver due to complex architectures and deep reliance on third-party components. Many of their systems
are cobbled together from multiple vendors, making cost reduction and performance optimization difficult.

By contrast, ROC owns and controls nearly the
entire AI stack that powers its biometric and computer vision solutions, with the sole exception of document verification. As discussed
above, certain customers who utilize ROC Enroll may choose to offer Identity Document Verification. ROC allows for these COTS products
to be integrated into the workflow by third-party providers. Today, ROC purchases and resells these licenses through a single vendor but
could support other vendors if required. Our ability to deliver high-accuracy biometrics, privacy-conscious deployments, and flexible
integration options makes us a preferred partner for enterprises seeking performance without compromise. Our modular architecture allows
commercial clients to adopt ROC components within their existing platforms, helping them meet regulatory, operational, and user experience
goals.

Rather than compete on
size or brand, we lead with performance, adaptability, and values. We win by solving hard problems with speed, accuracy, and trust. As
public scrutiny of AI intensifies and national security concerns escalate, the importance of sovereign, American-made technology has never
been more urgent. The United States has, for too long, relied on foreign-built systems for core elements of its identity and biometric
infrastructure—leaving critical vulnerabilities in place across both commercial and government applications.

ROC is directly addressing
this gap. We develop our AI, algorithms, and biometric systems entirely within the United States, with no dependency on foreign components
or opaque model development. This not only enhances trust and transparency but ensures that our customers—whether commercial enterprises
or federal agencies—are investing in resilient, future-proof infrastructure that aligns with national interests.

We believe our momentum,
mission clarity, and sovereign foundation position us not just as a credible alternative—but as the next-generation leader at the
intersection of AI, identity, and public safety.

Intellectual Property

ROC’s primary business activity is creating
high value, highly differentiable intellectual property in the form of computer vision and machine learning models, software libraries,
applications, and systems, as well as trade secret methodologies for developing and deploying these models and various forms of software.
Our secondary activities are marketing, licensing, and deploying this intellectual property.

As of December 31, 2025, our registered intellectual
property portfolio consisted of nonprovisional (utility) U.S. patents US 10,839,251 B2 and US 11,354,422 B2 and US trademarks in “ROC”,
“RANK ONE”, “ROC ENROLL”, “ROC EXPLORE”, “ROC EXAMINE”, “ROC WATCH”, the “caret
design to the left of the stylized word “ROC” and the “caret design” alone, which we use in our branding.

Intellectual property laws, procedures and restrictions
provide only limited protection, and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed,
misappropriated or otherwise violated (see Part I. Item 1. “Business - Legal Proceedings”). Furthermore, the laws of certain
countries do not protect intellectual property and proprietary rights to the same extent as the laws of the United States, and we therefore
may be unable to protect our proprietary technology in certain jurisdictions.

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Despite our efforts to protect our proprietary
rights, unauthorized parties may attempt to copy or obtain and use our technology to develop products and services with the same functionality
as our products. Policing unauthorized use of our technology is difficult. Our competitors could also independently develop technologies
like ours, and our intellectual property rights may not be broad enough for us to prevent competitors from selling products and services
incorporating those technologies. For more information regarding the risks relating to intellectual property, see Part I.