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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

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For the fiscal year ended December 31, 2025

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For the transition period from _____________________ to _____________________.

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Commission file number: 001-41709

SEALSQ Corp

(Exact name of Registrant as specified in its charter)

SEALSQ Corp

(Translation of Registrant’s name into English)

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British Virgin Islands

(Jurisdiction of incorporation or organization)

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Avenue Louis-Casaï 58

CH-1216 Cointrin, Switzerland

(Address of principal executive offices)

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John O’Hara

Chief Financial Officer

SEALSQ Corp

Craigmuir Chambers, Road Town

Tortola, British Virgin Islands 1110

Tel: 011-41-22-594-3000

Fax: 011-41-22-594-3001

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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Securities registered or to be registered pursuant to Section 12(b) of the Act.

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Securities registered or to be registered pursuant to Section 12(g) of the Act: None

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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 191,525,129 Ordinary Shares and 1,499,800 Class F Shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or (15)(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act ☒

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

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If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

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INTRODUCTION AND USE OF CERTAIN TERMS

SEALSQ was formed in 2022 as a holding company to incorporate, acquire, hold, and dispose of interests in national and international entities, in particular entities active in the area of secure semiconductor technology and related areas. Its Ordinary Shares, as defined below, have been listed on the Nasdaq Stock Market LLC under the symbol “LAES” since May 24, 2023.

SEALSQ has prepared this annual report using a number of conventions, which you should consider when reading the information contained herein. In this annual report, unless otherwise indicated, references to “SEALSQ,” the “SEALSQ Group,” the “Group” the “Company,” “we,” “our,” “us” or similar terms refer to the registrant, SEALSQ Corp, and its subsidiaries, except where the context otherwise requires.

Unless otherwise indicated, all information contained in this report regarding “WISeKey” has been provided by WISeKey to SEALSQ for purposes of inclusion in this report. Any reference to “WISeKey” is to WISeKey International Holding AG and its subsidiaries, except where the context otherwise requires.

References to:

“$”, “US$”, “USD” and “U.S. dollars” are to the lawful currency of the United States of America

“Articles” are to SEALSQ’s Amended and Restated Memorandum and Articles of Association as in effect as of the date of this report

“BVI” are to the British Virgin Islands

“BVI Act” are to the BVI Business Companies Act (Revised Edition 2020)

“BVI Insolvency Act” are to the BVI Insolvency Act, 2003, as amended

“Code” are to U.S. Internal Revenue Code of 1986, as amended

“ETP” or “ETPs” are to exchange-traded products

“IRS” are to the U.S. Internal Revenue Service

“GAAP” are to generally accepted accounting principles in the United States

“JOBS Act” are to the U.S. Jumpstart Our Business Startups Act of 2012

“Nasdaq” are to the Nasdaq Stock Market

“Nasdaq Rules” are to the Nasdaq Stock Market Rules LLC

“PFIC” are to a passive foreign investment company as defined under the Code

“Quantix Edge Security” are to Quantix Edge Security, S.L., a Spanish joint venture between the Spanish Government, WISeKey, SEALSQ, OdinS, and TProtege. The joint venture operates a semiconductor personalization center focused on post-quantum chip design using RISC-V architecture while meeting Common Criteria and NIST standards.

“Sarbanes-Oxley Act” are to the U.S. Sarbanes-Oxley Act of 2002

“SEC” or “Commission” are to the U.S. Securities and Exchange Commission

“SPAC” are to a special purpose acquisition company

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“Securities Act” is to the U.S. Securities Act of 1933, as amended

“Securities Exchange Act” and “Exchange Act” are to the U.S. Securities Exchange Act of 1934, as amended

“Spin-Off Distribution” is to the May 23, 2023 transaction whereby WISeKey distributed 20% of SEALSQ’s outstanding Ordinary Shares to holders of WISeKey Class B Shares, including to holders of ADSs representing WISeKey Class B Shares, and to holders of WISeKey Class A Shares, as a distribution by way of a dividend in kind to such holders who held Class B Shares and Class A Shares as of the May 19, 2023 record date, and holders of ADSs as of the May 22, 2023 record date, for the Spin-Off Distribution

“WISeSat” are to WISeSat.Space Corp, a subsidiary of WISeKey, a company that provides a next-generation satellite platform designed to deliver secure, cost-effective, and globally accessible IoT connectivity

The following industry-specific acronyms and terms are used throughout the report and have the meanings as set out below:

“ANSSI” is the Agence Nationale de la Sécurité des Systèmes d’Information, the French National Cybersecurity Agency

“AI” means Artificial Intelligence

“ASIC” means Application-Specific Integrated Circuit

“AWS” means Amazon Web Services

“Common Criteria EAL” refers to the Common Criteria Evaluation Assurance Level attributed to an IT product or system on a grade of 1 to 7 with 7 being the highest

“CA” means Certificate Authority

“Chiplet” means a small, modular integrated circuit die that performs a specific function (e.g., CPU core, memory controller, I/O, AI accelerator) and is designed to be combined with other chiplets — using advanced packaging and high-bandwidth interconnects — to create a larger, more complex system. This approach offers better yields, cost efficiency, scalability, and flexibility compared to traditional monolithic SoCs

“CSNA 2.0” means “Commercial National Security Algorithm Suite 2.0”. The updated suite of quantum-resistant cryptographic algorithms approved by the NSA for use in National Security Systems, as published in the NSA Cybersecurity Advisory (CSA) dated September 2022, which are analyzed as being secure against both classical and quantum computers

“Cyber Trust Mark” means the U.S. cybersecurity labeling program for consumer IoT devices

“ECC” means Elliptic Curve Cryptography, a key-based technique for encrypting data

“Fabless Semiconductor Company” means a company that designs and sells semiconductors while outsourcing manufacturing to specialized foundries, which reduces capital costs, increases flexibility, speeds up product cycles, and allows more resources for design and R&D. Companies like Nvidia, AMD, and Qualcomm are typical examples of fabless semiconductor companies

“FIDO” means Fast Identity Online

“FIPS140-2” refers to the Federal Information Processing Standard Publication 140-2 and is a US government computer security standard which is graded in levels from 1 to 4

“FIPS 140-3” refers to the Federal Information Processing Standard Publication 140-3, the current U.S. government computer security standard for cryptographic modules

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“HNDL” means Harvest Now, Decrypt Later, which is a cybersecurity threat in which adversaries collecting encrypted data today with the intention of storing it indefinitely and decrypting it in the future once sufficiently powerful quantum computers become available to break current cryptographic algorithms

“IC” is an Integrated Circuit

“IC’Alps” means IC’Alps SASU, a France-based semiconductor design company

“IoT” is the Internet of Things

“HSM” means Hardware Security Module

“IPv6” is version six of the Internet Protocol

“ISO27001” refers to the international standard for information security management systems

“Matter” or “MATTER” means the smart home connectivity standard developed by the Connectivity Standards Alliance

“NCCOE” is the U.S. National Cybersecurity Center of Excellence

“NIST” refers to the U.S. National Institute of Standards & Technology

“OEM” is an Original Equipment Manufacturer

“OSAT” means Outsourced Semiconductor Assembly and Testing

“PKI” is Public Key Infrastructure

“PQC” is Post-Quantum Cryptography

“QS7001” means the SEALSQ Quantum Shield QS7001™ next-generation secure semiconductor that embeds NIST-standardized post-quantum cryptography algorithms ML-KEM (Kyber) and ML-DSA (Dilithium) directly in hardware

“QUASAR” means QUAntum resistant Secure ARchitecture

“Qubit” means the basic unit of quantum information, analogous to a classical binary digit (bit), that leverages the quantum mechanical principles of superposition and entanglement to exist in a combination of the “0” and “1” states simultaneously, rather than in only one of such states at any given time

“QSOC” means Quantum Spatial Orbital Cloud, SEALSQ’s satellite-based secure communications initiative

“RSA” means Rivest-Shamir-Aelman, a public-key encryption algorithm

“SoC” means System-on-Chip, which are integrated circuits, where multiple system components (e.g., CPU, memory controllers, I/O, and peripherals) are integrated onto a single monolithic silicon die for compact, power-efficient applications like mobile devices, IoT, and embedded systems

“TPM” means Trust Platform Module

“USP” refers to Utility Service Providers

“ZTP” means Zero Touch Provisioning

“WebTrust” refers to the seal of assurance program for certification authorities developed by AICPA/CPA Canada

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SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This annual report contains forward-looking statements. These forward-looking statements include information about possible or assumed future results of SEALSQ’s operations or its performance. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “estimates,” “projects,” “forecasts” and variations of such words and similar expressions, as they relate to SEALSQ, WISeKey, its management or third parties, are intended to identify the forward-looking statements. Forward-looking statements include statements regarding SEALSQ’s business strategy, financial performance, results of operations, market data, events or developments that SEALSQ expects or anticipates will occur in the future, as well as any other statements which are not historical facts. Although SEALSQ believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond SEALSQ’s control. Actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements appear in a number of places in this annual report and include, but are not limited to, statements contained in the sections entitled Item 3. Key Information, Item 4. Information on the Company and Item 5. Operating and Financial Review and Prospects.

These forward-looking statements include, but are not limited to, statements relating to:

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The preceding list is not intended to be an exhaustive list of all of SEALSQ’s forward-looking statements. The forward-looking statements are based on its beliefs, assumptions and expectations of future performance, taking into account the information currently available to SEALSQ and are only predictions based upon SEALSQ’s current expectations and projections about future events. There are important factors that could cause its actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Those factors include, in addition to those set forth in Item 3.D. Risk Factors and those included elsewhere in this report, among others, the following:

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Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results.

Except as required by law, SEALSQ undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing factors that could cause its actual results to differ materially from those contemplated in any forward-looking statement included in this annual report should not be interpreted as exhaustive. You should read this annual report, and each of the documents filed as exhibits to the annual report, completely, with this cautionary note in mind, and with the understanding that its actual future results may be materially different from expected.

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Item 1.Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2.Offer Statistics and Expected Timetable

Not applicable.

Item 3.Key Information

A.RESERVED

B.Capitalization and Indebtedness

Not applicable.

C.Reasons for the Offer and Use of Proceeds

Not applicable.

D.Risk Factors

These disclosures reflect SEALSQ’s beliefs and opinions as to factors that could materially and adversely affect SEALSQ and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.

Summary of Risk Factors

Investing in SEALSQ’s Ordinary Shares may expose you to a number of risks, including risks relating to its business and industry, financial risks, legal risks, and risks relating to its Ordinary Shares. The following summarizes part, but not all, of these risks. Please carefully consider all of the information discussed in Item 3. Key Information—D. Risk Factors and elsewhere in this annual report which contains a more thorough description of risks relating to investing in SEALSQ.

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Risks Related to SEALSQ’s Business and Industry

The semiconductor industry is highly cyclical.

Historically, the relationship between supply and demand in the semiconductor industry has caused a high degree of cyclicality in the semiconductor market. Semiconductor supply is partly driven by manufacturing capacity, which in the past has demonstrated alternating periods of substantial capacity additions and periods in which no or limited capacity was added. As a general matter, semiconductor companies are more likely to add capacity in periods when current or expected future demand is strong and margins are, or are expected to be, high. Investments in new capacity can result in overcapacity, which can lead to a reduction in prices and margins. In response, companies typically limit further capacity additions, eventually causing the market to be relatively undersupplied. In addition, demand for semiconductors varies, which can exacerbate the effect of supply fluctuations. As a result of this cyclicality, the semiconductor industry has, in the past, experienced significant downturns, such as in 1997/1998, 2001/2002, in 2008/2009, in early 2020 and in 2022/2023, often in connection with, or in anticipation of, maturing life cycles of semiconductor companies’ products and declines in general economic conditions. These downturns have been characterized by diminishing demand for end-user products, high inventory levels, under-utilization of manufacturing capacity and accelerated erosion of average selling prices. The foregoing risks have historically had, and may continue to have, a material adverse effect on its business, financial condition and results of operations.

Significantly increased volatility and instability, and unfavorable economic conditions may adversely affect SEALSQ’s semiconductor business.

Forecasting demand trends is challenging for SEALSQ, its semiconductor customers and its suppliers. SEALSQ may be unable to accurately predict the extent or duration of market cycles or their effect on its financial condition or result of operations, and can give no assurance as to the timing, extent or duration of the current or future semiconductor business cycles generally, or specific to the markets in which SEALSQ participates. In the event of a future decline in global economic conditions, SEALSQ’s business, financial condition and results of operations could be materially adversely affected, and the resulting economic decline might disproportionately affect the markets in which SEALSQ participates, further exacerbating a decline in its results of operations. The COVID-19 global pandemic, for example, created a period of significant instability in the global economy, including among SEALSQ’s semiconductor clients and suppliers. The restrictions imposed upon people and businesses around the world served, in the short run, to reduce demand for SEALSQ’s semiconductor products as many companies reduced or paused their operations. While this has since served to benefit SEALSQ through the increased demand for IT network infrastructure among other examples, this may not always be the situation.

The semiconductor industry is highly competitive. If SEALSQ fails to introduce new technologies and products in a timely manner, this could adversely affect its business.

The semiconductor industry is highly competitive and is characterized by constant and rapid technological change, short product lifecycles, significant price erosion, and evolving standards. Accordingly, the success of SEALSQ’s business depends heavily on its ability to develop new technologies and products that are ultimately successful in the market. The costs related to the research and development required to develop new technologies and products are significant, and any reduction in its research and development budget could harm its competitiveness. Meeting evolving industry requirements and introducing new products to the market in a timely manner, and at prices that are acceptable to SEALSQ’s customers, are significant factors in determining SEALSQ’s competitiveness and success. Commitments to develop new products must be made well in advance of any resulting sales, and technologies and standards may change during development, potentially rendering products outdated or noncompetitive before their introduction. If SEALSQ is unable to successfully develop new products, its revenue may decline substantially. Moreover, some of SEALSQ’s competitors are well-established, larger entities than SEALSQ and have greater resources than it does. If these competitors increase the resources they devote to developing and marketing their products, SEALSQ may not be able to compete effectively. Any consolidation among SEALSQ’s competitors could enhance their product offerings and financial resources, further strengthening their competitive position. In addition, some competitors operate in narrow business areas relative to SEALSQ, allowing them to concentrate their research and development efforts directly on products and services for those areas, which may give them a competitive advantage. As a result of these competitive pressures, SEALSQ may face declining sales volumes or lower prevailing prices for its products, and SEALSQ may not be able to reduce its total costs in line with this declining revenue. If any of these risks materialize, they could have a material adverse effect on SEALSQ’s business, financial condition and results of operations.

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If SEALSQ fails to develop new products in response to, or in anticipation of, rapid technological changes in the industry or the industries SEALSQ serves, its business may be materially and adversely affected.

The market for SEALSQ’s products is characterized by rapidly evolving security threats, technological advancements, and shifting end-user requirements. For example, rapid improvements are occurring in post-quantum cryptography, hardware Root of Trust, secure enclaves, trusted execution environments, supply chain security, AI-driven security analytics, and zero-trust architectures. Furthermore, while the pace of improvements in semiconductor transistor density has slowed, driving up costs and complexity, the demand for more secure, tamper-resistant hardware is accelerating, especially in sectors such as defense, automotive, critical infrastructure, and secure communications.

The increasing sophistication of cybersecurity adversaries, including state-sponsored actors, combined with the growing regulatory focus on hardware security, adds complexity and cost to the design, verification, and manufacturing of SEALSQ’s existing and developmental products. As a result of these rapidly changing technological and threat landscapes — along with unforeseen security vulnerabilities — the future market for these products is difficult to predict.

These risks are further exacerbated by the fact that many of SEALSQ’s secure semiconductor platforms leverage common architectural frameworks across multiple end markets. In some cases, secure processing architectures, cryptographic hardware and secure IP blocks are reused across product generations and applications. Therefore, if a fundamental architectural vulnerability was discovered, or if SEALSQ’s architectures were rendered uncompetitive, obsolete, or unmarketable due to evolving security standards or new attack vectors, multiple products and customer segments could be impacted. This could force SEALSQ to expend significant resources and incur substantial costs to redesign products, develop new architectures or remediate deployed devices in the field.

SEALSQ’s business, reputation, and relationships with government agencies, OEMs and technology partners could be adversely affected if SEALSQ is unable to deliver technological improvements, address newly discovered vulnerabilities or adapt its products to evolving security requirements and technological shifts on a timely basis. Whether SEALSQ will be able to compete effectively in the future will depend substantially on its ability to anticipate emerging threats, advance its products to meet evolving regulatory, market and end-user security requirements, and respond to changes in global hardware, software and security architecture standards in a cost-effective and timely manner.

There is also additional risk that public opinion, regulatory scrutiny or customer sentiment around hardware security, particularly in areas such as AI, government surveillance and data privacy, may diverge from SEALSQ’s expectations. For example, failure to achieve market acceptance for secure semiconductors designed to enhance AI model integrity, protect sensitive data or mitigate supply chain risks could materially and adversely impact its business and operating results.

The demand for SEALSQ’s semiconductor products depends to a significant degree on the demand for its customers’ end products.

The vast majority of SEALSQ’s Semiconductors segment revenue is derived from sales to manufacturers in the IT infrastructure (Network Servers, Switch, Home boxes, PC Keyboards, etc.), utilities distribution, edge infrastructure (Smart Meters), and Access Control modules. Demand in these markets fluctuates significantly, driven by consumer spending, consumer preferences, the development of new technologies and prevailing economic conditions. In addition, the specific products in which SEALSQ’s semiconductors are incorporated may not be successful or may experience price erosion or other competitive factors that affect the price manufacturers are willing to pay SEALSQ. Such customers have in the past, and may in the future, vary order levels significantly from period to period, request postponements to scheduled delivery dates, modify their orders or reduce lead times. This is particularly common during periods of low demand. This can make managing SEALSQ’s semiconductor business difficult, as it limits the predictability of future revenue. It can also affect the accuracy of its financial forecasts. Furthermore, developing industry trends, including customers’ use of outsourcing and new and revised supply chain models, may affect SEALSQ’s revenue, costs and working capital requirements.

If semiconductor customers do not purchase products made specifically for them, SEALSQ may not be able to resell such products to other customers or may not be able to require the customers who have ordered these products to pay a cancellation fee. The foregoing risks could have a material adverse effect on SEALSQ’s business, financial condition and results of operations.

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The semiconductor industry is characterized by continued price erosion, especially after a product has been on the market.

One of the results of the rapid innovation in the semiconductor industry is that pricing pressure, especially on products containing older technology, can be intense. Product life cycles are relatively short and, as a result, products tend to be replaced by more technologically advanced substitutes on a regular basis.

In turn, demand for older technology falls, causing the price at which such products can be sold to drop, in some cases precipitously. In order to continue profitably supplying these products, SEALSQ must reduce its production costs in line with the lower revenue it can expect to generate per unit. Usually, this must be accomplished through improvements in process technology and production efficiencies. If SEALSQ cannot advance its process technologies or improve its production efficiencies to a degree sufficient to maintain required margins, it will no longer be able to make a profit from the sale of these products. Moreover, SEALSQ may not be able to cease production of such products, either due to contractual obligations or for customer relationship reasons, and as a result may be required to bear a loss on such products. SEALSQ cannot guarantee that competition in its core product markets will not lead to price erosion, lower revenue or lower margins in the future. Should reductions in manufacturing costs fail to keep pace with reductions in market prices for the products it sells, this could have a material adverse effect on SEALSQ’s business, financial condition and results of operations.

Delays in development, launch and/or rollout of SEALSQ’s next-generation post-quantum cryptography products and services could have a material adverse effect on its business, results of operations and financial condition.

SEALSQ completed the commercial release of its post-quantum cryptography products in Q4 2025, with the first revenues expected to be generated in the second half of 2026. While SEALSQ expects to recognize revenue in 2026 relating to the implementation of new technologies into its planned Open Semiconductor and Test centers including the provision of professional services, projections expect returns from the full-scale commercial deployment of the post-quantum-resistant chips starting in the second half of 2026. However, if SEALSQ experiences delays in the production of these products, or if there are issues with the integration of the new chip into potential client solutions, it could have a material adverse effect on its business, results of operations and financial condition. Delays could result from either the “qualification” process, the “certification” process or both. While SEALSQ has expanded its revenue streams from Matter certification adoption and implementing new Cyber Trust Mark standards, its ability to generate and grow its revenues in the future will largely be dependent on the ability to develop its next-generation post-quantum cryptography products and services.

SEALSQ’s quantum-resistant chip is a newly developed product, and its qualification process is still ongoing. Additionally, the sales process includes a period of ensuring the product is compatible with potential client products. During these processes, unforeseen issues may arise that require debugging and potentially a remask. Such adjustments could result in a delay of six to nine months in the chip’s market availability, impacting the ability to meet customer demand and production timelines.

In addition, the quantum-resistant chip is currently undergoing certification for FIPS 140-3 Level 3, Hardware (HW) Common Criteria certification, and Combination (HW+SW) Common Criteria certification. If the certification labs identify a critical flaw that prevents compliance with required security standards, SEALSQ may need to partially redesign the affected components. This could significantly delay product availability for customers that require these certifications for deployment. Additionally, there is a risk of delays in the final certification process. Once the certification labs complete their testing and release the test report, there may be further delays in obtaining the FIPS certificate from NIST (the U.S. standards authority). Any such delays could postpone customer acceptance, impact sales cycles, and shift the anticipated production ramp-up schedule. Furthermore, after SEALSQ’s quantum-resistant chip is released, a hardware or software vulnerability could be discovered that could render the chip uncompetitive, obsolete or unmarketable if the vulnerability is not fixed. This could force SEALSQ to expend significant resources to remediate such vulnerability.

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Failure of SEALSQ’s quantum-resistant semiconductor products to perform as intended, achieve required certifications, interoperate at scale, or gain timely market acceptance—and/or slower-than-expected development of quantum computing threats—could materially reduce demand for its products, delay or prevent revenue generation, increase costs, expose SEALSQ to warranty and indemnity claims, and adversely affect the results of operations.

SEALSQ is investing significant resources to design, manufacture, and commercialize quantum-resistant secure elements and related modules, including new products implementing post-quantum cryptographic algorithms. These products embody complex hardware, firmware, and cryptographic implementations that must meet stringent performance, reliability, security, and certification requirements across diverse use cases and environments. If SEALSQ’s chips, reference designs, or associated software do not perform as intended, exhibit defects, vulnerabilities, or reliability issues, fail to meet customer specifications or certification standards (such as FIPS or Common Criteria), or cannot be integrated or provisioned at customer scale, customers may delay, reduce, or cancel orders, require re-designs, or select alternative solutions. SEALSQ could incur substantial costs to remediate issues, including product rework, field returns, replacements, patches, or recalls, as well as increased warranty, support, and indemnity obligations. Any publicized defect or vulnerability—particularly one that implicates cryptographic correctness, side-channel resistance, secure boot/attestation, or supply-chain integrity—could damage SEALSQ’s brand and impair its ability to obtain new customers.

Market demand for quantum-resistant semiconductors is influenced by the pace and nature of quantum computing development, regulatory guidance, standardization timelines, and customer migration priorities. If practical cryptographically relevant quantum computers emerge later than industry forecasts, or if customers conclude that existing classical algorithms remain adequate for longer than anticipated, procurement cycles for post-quantum hardware may be deferred, scaled back, or reallocated to software-based mitigations. Conversely, if quantum threats emerge faster or differently than expected, the current implementations might not align with prevailing standards, certification baselines, or customer requirements, requiring unplanned re-engineering. Either scenario could materially reduce or delay demand relative to expectations. Furthermore, if new or revised standards, profiles, or certification protection profiles diverge from the algorithms, parameter sets, or implementation approaches SEALSQ has adopted, it may need to modify products, incur additional engineering and certification expense, or support multiple variants, which could compress margins and delay commercialization.

If demand falls short of SEALSQ’s projections, or if customers do not transition from pilots to volume production on anticipated schedules, its inventories could become excess or obsolete, SEALSQ could experience lower factory utilization and unfavorable variances, and it may be required to record inventory write-downs. Lower-than-expected demand or product performance issues could also trigger impairment indicators for capitalized development, acquired intangibles, or goodwill, and reduce operating cash flows. Because SEALSQ’s pipeline and forecasts include opportunities with governmental, defense, and critical-infrastructure customers, changes in budget cycles, procurement rules, national-sovereignty requirements, export controls, or qualification milestones could magnify the volatility of orders and timing of revenue recognition.

SEALSQ’s success depends on its ability to keep pace with technical advances in cryptography and semiconductor design.

SEALSQ needs to keep up with changing technologies to provide effective identification and authentication solutions. In addition, SEALSQ needs to continue its growth trend to broaden and strengthen the portfolio of its products to stay ahead of the technology changes and risks in order to be successful.

SEALSQ needs to anticipate, and quickly react to, rapid changes occurring in security technologies and to the development of new and improved semiconductors and software that result from these changes. If SEALSQ are unable to respond quickly and cost-effectively to changing hardware and software technologies and evolving industry standards, the existing offering could become non-competitive and it may lose market share. SEALSQ’s success will depend, in part, on its ability to effectively use leading technologies critical to the business, enhance its existing solutions, find appropriate technology partners, and continue to develop new solutions and technology that address the increasingly sophisticated and varied needs of its current and prospective clients and their customers, and its ability to influence and respond to technological advances, emerging industry and regulatory standards and practices and competitive service offerings. SEALSQ’s ability to remain technologically competitive may require substantial expenditures and lead-time, and the integration of newly acquired technologies will also take time. If SEALSQ is unable to adapt and integrate in a timely manner to changing market conditions or customer requirements, its business, financial condition and results of operations could be seriously harmed.

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The use of cryptography is subject to a variety of laws around the world. Unfavorable developments in legislation and regulation may adversely affect SEALSQ’s business, operating results, and financial condition.

The use of cryptography is subject to a variety of laws around the world. Government regulation of the internet is evolving and any changes in government regulations relating to the internet or other areas of SEALSQ’s business or other unfavorable developments may adversely affect its business, operating results, and financial condition.

For example, the U.S. agency NIST has recently selected the post-quantum cryptographic algorithms for all governmental use of cryptography. While SEALSQ has aligned product development with NIST’s PQC process, its ability to fully comply with evolving standards and successfully integrate these algorithms across the product portfolio is critical to maintaining its eligibility for government contracts and leadership in the post-quantum security market. Failure to timely implement NIST-selected algorithms or adapt to additional regional cryptographic requirements could limit market access, increase compliance and development costs, or fragment SEALSQ’s product offerings across different jurisdictions, which could materially and adversely affect its business, operating results, and financial condition.

SEALSQ’s services and products depend on the continued integrity of public key cryptography technology and algorithms that may be compromised or proven obsolete over time.

SEALSQ’s services and products rely heavily on cryptography. Advances in attacks on cryptographic algorithms and technology may weaken their effectiveness, and significant new technology requirements may be imposed by root distribution programs that requires SEALSQ to make significant modifications to its systems or to reissue digital certificates to some or all customers, which could damage SEALSQ’s reputation or otherwise harm its business.

Quantum computing may threaten the resilience of current cryptography against attacks during the current lifespan of hardware. This is certainly the case for SEALSQ’s secure modules embedded in larger systems and/or deployed on remote locations, such as for smart meter and satellite deployments.

SEALSQ cannot guarantee that its services and products will still offer sufficient protection against attacks carried out with quantum computers.

SEALSQ’s semiconductors and software services are highly technical and may contain undetected software bugs or vulnerabilities, which could manifest in ways that could seriously harm its reputation and business.

SEALSQ’s semiconductors and software services are highly technical and complex and may contain undetected software bugs, hardware errors, and other vulnerabilities. There is a risk that defects or errors could arise, particularly when new versions or enhancements are released. SEALSQ cannot assure you that its software or other components will not experience errors or performance problems in the future. These bugs and errors can manifest in any number of ways in these products, including through diminished performance, security vulnerabilities, malfunctions, or even permanently disabled products.

Some errors in SEALSQ’s products may be discovered only after a product has been used by customers and may in some cases be detected only under certain circumstances or after extended use. Any errors, bugs, or other vulnerabilities discovered in the code or back-end after delivery could damage SEALSQ’s reputation, drive away customers, and allow third parties to manipulate or exploit vulnerabilities.

SEALSQ also face claims for product liability, tort, or breach of warranty. Defending a lawsuit, regardless of its merit, is costly and may divert management’s attention and seriously harm its reputation and its business. In addition, if its liability insurance coverage proves inadequate or future coverage is unavailable on acceptable terms or at all, SEALSQ’s business could be seriously harmed.

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Services offered by SEALSQ’s PKI business rely on the continued integrity of public key cryptography technology and algorithms that may be compromised or proven obsolete over time.

Services and products are relying heavily on cryptography, in particular, services offered by SEALSQ’s PKI business are based on public key cryptography technology. With public key cryptography technology, a user possesses a public key and a private key, both of which are required to perform encryption and decryption operations. The security afforded by this technology depends on the integrity of a user’s private key and ensuring that it is not lost, stolen or otherwise compromised. Advances in attacks on cryptographic algorithms and technology may weaken their effectiveness, and significant new technology requirements may be imposed by root distribution programs that require SEALSQ to make significant modifications to its systems or to reissue digital certificates to some or all of its customers, which could damage the reputation or otherwise harm the business. Severe attacks on public key cryptography could render PKI services in general obsolete or unmarketable.

Quantum computing may threaten the resilience of current cryptography against attacks during the current lifespan of hardware. This is certainly the case for SEALSQ’s secure modules embedded in larger systems and/or deployed on remote locations, such as for smart meter and satellite deployments.

Although SEALSQ is committed to adapt the PKI platforms to the evolving technologies and industry regulations, it cannot guarantee that its current services and products will still offer sufficient long-term protection against future attacks executed with quantum computers.

Cybersecurity incidents, including data security breaches or computer viruses, could harm its business by disrupting SEALSQ’s delivery of services, damaging its reputation or exposing it to liability.

SEALSQ operates sensitive PKI platforms, retain certain confidential customer information in its secure data centers and registration systems, and its digital certificates and electronic signatures may be used by customers in mission critical applications. It is critical to SEALSQ’s business strategy that its facilities and infrastructure remain secure and are perceived by the marketplace to be secure.

SEALSQ receives, process, store and transmit, often electronically, the data of its customers and others, much of which is confidential. Unauthorized access to SEALSQ’s computer systems or stored data could result in theft, including cyber-theft, or improper disclosure of confidential information, and the deletion or modification of records could cause interruptions in its operations. These cybersecurity risks increase when SEALSQ transmits information from one location to another, including over the Internet or other electronic networks. Despite the security measures it has implemented, SEALSQ’s facilities, systems and procedures, and those of its third-party service providers, may be vulnerable to security breaches, acts of vandalism, software viruses, misplaced or lost data, programming or human errors or other similar events which may disrupt SEALSQ’s delivery of services or expose the confidential information of its customers and others. Any security breach involving the misappropriation, loss or other unauthorized disclosure or use of confidential information of SEALSQ’s customers or others, whether by SEALSQ or a third party, could subject it to civil and criminal penalties, have a negative impact on its reputation, or expose it to liability to its customers, third parties or government authorities. SEALSQ is not aware of such breaches or any other material cybersecurity risks in its supply chain to date. Any of these developments could have a material adverse effect on SEALSQ’s business, results of operations and financial condition.

To mitigate these risks, SEALSQ complies with one of the highest security standards in its industry: WebTrust, ISO27001 and the “Common Criteria” standard. Compliance with these standards require SEALSQ to implement, monitor and audit on a yearly basis all the processes where we, or SEALSQ’s third-party suppliers, manipulate sensitive data. This includes supply chain processes and partners which, like the SEALSQ Group, are audited every year by security experts certified by governmental authorities. In addition, one of its customers, Cisco, also conducts an independent and extensive audit to control SEALSQ’s processes and propose improvements.

SEALSQ’s security processes are piloted by a Global Security Director, under the supervision of a Security Board, which includes the top management of SEALSQ. Once a year, the Global Security Director reassesses SEALSQ’s cybersecurity risks and proposes to the Security Board a plan of action and budget for the year to come.

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The Executive Board Members of SEALSQ hold a weekly meeting with the General Manager to discuss all matters including operational matters and risk management, as well as holding regular, wider meetings with the senior management of SEALSQ. During these meetings, the risks faced by the business and any new matters arising or potential threats identified are discussed. The SEALSQ management team also provide updates on their ongoing projects designed to manage these risks, as well as presenting the results of any audits that are being carried out. The full board of directors are also kept appraised on the results of all audits carried out during the year and are required to decide on strategic decisions such as whether to attain accreditations for the business. The board of directors and Audit Committee are responsible also for overseeing the annual audit of SEALSQ which, while primarily focused on the financials of SEALSQ, does also cover certain risks associated with the business.

If its security systems are breached, SEALSQ may face civil liability, and public perception of its security measures could be diminished, either of which would negatively affect SEALSQ’s ability to attract and retain customers.

Techniques used to gain unauthorized access to data and software are constantly evolving, and SEALSQ may be unable to anticipate or prevent unauthorized access to cryptographic data. SEALSQ’s software services, which are supported by its own systems and those of third parties that it works with, are vulnerable to software bugs, computer viruses, internet worms, break-ins, phishing attacks, attempts to overload servers with denial-of-service, or other attacks and similar disruptions from unauthorized use of SEALSQ’s and third-party computer systems, any of which could lead to system interruptions, delays, or shutdowns, causing loss of critical data or the unauthorized access to personal data.

Computer malware, viruses, computer hacking, and phishing attacks have become more prevalent in SEALSQ’s industry. SEALSQ and its systems have been subject to such attacks in the past, albeit they have always been unsuccessful, and further such attempts to compromise its systems’ security may occur in the future. Because of its brand of trust and security, SEALSQ believes that it is a particularly attractive target for such attacks. Though it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, any failure to maintain performance, reliability, security, and availability of its products and technical infrastructure to the satisfaction of SEALSQ’s customers may harm its reputation and ability to retain existing customers and attract new customers. Although SEALSQ has developed systems and processes that are designed to protect its data and user data, to prevent data loss, to disable undesirable accounts and activities on its platform, and to prevent or detect security breaches, it cannot assure you that such measures will provide absolute security, and SEALSQ may incur significant costs in protecting against or remediating cyber-attacks.

Additionally, if an actual or perceived breach of security occurs to its systems or a third party’s platform, SEALSQ may face regulatory or civil liability and public perception of its security measures could be diminished, either of which would negatively affect its ability to attract and retain customers, which in turn would harm its efforts to attract and retain business partners. SEALSQ also would be required to expend significant resources to mitigate the breach of security and to address matters related to any such breach. SEALSQ also may be required to notify regulators about any actual or perceived personal data breach (including the EU Lead Data Protection Authority) as well as the individuals who are affected by the incident within strict time periods.

Any failure, or perceived failure, by SEALSQ to maintain the security of data relating to its customers, to comply with its posted privacy policy, laws and regulations, rules of self-regulatory organizations, industry standards, and contractual provisions to which SEALSQ may be bound, could result in the loss of confidence, or result in actions against SEALSQ by governmental entities or others, all of which could result in litigation and financial losses, and could potentially cause it to lose customers, advertisers, and revenues. In Europe, the European Data Protection Authority could impose fines and penalties of up to 4% of annual global turnover or €20 million, whichever is higher, for a personal data breach.

Failure at tape-out or failure to achieve the expected final test yields for SEALSQ’s ICs could negatively impact its results of operations.

The tape-out process is a critical milestone in SEALSQ’s IoT business. A tape-out means all the stages in the design and verification process of SEALSQ’s ICs have been completed, and the chip design is sent for manufacturing. The tape-out process requires considerable investment in time and resources and close cooperation with the wafer foundry, and repeated failures can significantly increase costs, lengthen product development period, and delay product launch. If the tape-out or testing of a new chip design fails, either as a result of design flaws by SEALSQ’s research and development team or problems with production or the testing process by the wafer foundry, SEALSQ may incur considerable costs and expenses to fix or restart the design process. Such obstacles may decrease its profitability or delay the launch of new products.

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Once tape-out is achieved, the IC design is sent for manufacturing, and the final test yield is a measurement of the production success rate. The final test yield is a function of both product design, which is developed by SEALSQ, and process technology, which typically belongs to a third-party foundry. Low final test yields can result from a product design deficiency or a process technology failure or a combination of both. As such, SEALSQ may not be able to identify problems causing low final test yields until its product designs go to the manufacturing stage, which may substantially increase its per unit costs and delay the launch of new products.

SEALSQ’s IC products mainly depend on supplies from third-party foundries, and any failure to obtain sufficient foundry capacity from such foundries would significantly delay the shipment of its products.

SEALSQ’s IoT activity is a fabless IC design business and, as such, it does not own any IC fabrication facilities. SEALSQ currently works with two leading foundries as its main IC fabrication partners and places purchase orders according to its business needs. It is important for SEALSQ to have a reliable relationship with third-party foundries as well as other future foundry service providers to ensure adequate product supply to respond to customer demand.

SEALSQ cannot guarantee that its foundry service providers will be able to meet its manufacturing requirements. The ability of its foundry service providers to provide SEALSQ with foundry services is limited by available capacity. If any of its foundry service providers fails to succeed in their capacity promise, it will not be able to deliver to SEALSQ ICs as per the purchase orders that SEALSQ has placed to them, which will significantly affect its shipment of its products and solutions. This could in turn result in lost sales and have a material adverse effect on its relationships with its customers and on its business and financial condition. In addition, SEALSQ does not have a guaranteed level of production capacity from its foundry service providers. SEALSQ does not have long-term contracts with them, and it sources its supplies on a purchase order basis. As a result, SEALSQ depends on its foundry service providers to allocate to it a portion of their manufacturing capacity sufficient to meet its needs, produce products of acceptable quality and at acceptable final test yields and deliver those products to SEALSQ on a timely basis and at acceptable prices. If any of SEALSQ’s foundry service providers raises its prices or is unable to meet its required capacity for any reason, such as shortages or delays in the shipment of semiconductor equipment or raw materials required to manufacture ICs, or if its business relationships with any of its foundry service providers deteriorate, SEALSQ may not be able to obtain the required capacity and would have to seek alternative foundries, which may not be available on commercially reasonable terms, or at all. Moreover, it is possible that other customers of any of its foundry service providers that are larger and/or better financed than SEALSQ, or that have long-term contracts with them, may receive preferential treatment in terms of capacity allocation or pricing. In addition, if SEALSQ does not accurately forecast its capacity needs, any of its foundry service providers may not have available capacity to meet its immediate needs or it may be required to pay higher costs to fulfil those needs, either of which could materially and adversely affect its business, results of operations or financial condition.

Other risks associated with SEALSQ’s dependence on third-party foundries include limited control over delivery schedules and quality assurance, lack of capacity in periods of excess demand, unauthorized use of its intellectual property and limited ability to manage inventory and parts. In particular, although SEALSQ has entered into confidentiality agreements with its third-party foundries for the protection of its intellectual property, they may not protect SEALSQ’s intellectual property with the same degree of care as SEALSQ uses to protect its intellectual property. If SEALSQ fails to properly manage any of these risks, its business and results of operations may be materially and adversely affected.

Moreover, if any of its foundry service providers suffers any damage to its facilities, suspends manufacturing operations, loses benefits under material agreements, experiences power outages or computer virus attacks, lacks sufficient capacity to manufacture its products, encounters financial difficulties, is unable to secure necessary raw materials from its suppliers or suffers any other disruption or reduction in efficiency, SEALSQ may encounter supply delays or disruptions.

SEALSQ relies on a limited number of third parties for IC packaging and testing services.

In relation to SEALSQ’s semiconductor business, fabrication of ICs requires specialized services to process the silicon wafers into ICs by packaging them and to test their proper functioning. SEALSQ primarily collaborates with an Outsource Semiconductors Assembly and Testing (OSAT) provider for such services, which may expose it to a number of risks, including difficulties in finding alternate suppliers, capacity shortages or delays, lack of control or oversight in timing, quality or costs, and misuse of SEALSQ’s intellectual property. If any such problems arise with its packaging and testing partners, SEALSQ may experience delays in its production and delivery timeline, inadequate quality control of products or excessive costs and expenses. As a result, SEALSQ’s financial condition, results of operations, reputation and business may be adversely affected.

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SEALSQ’s supply chain depends on third-party suppliers. Failure of one of its suppliers to handle increased demand could impact the ability to take advantage of upside business opportunities.

SEALSQ outsources several critical functions in its supply chain to third-party suppliers, such as the manufacture of its semiconductors. They all have a number of risks that are present in their businesses that could limit their ability to meet increased demands if SEALSQ see increased orders from its customers. If its suppliers cannot satisfy demand, SEALSQ may not be able to meet its customer demands. Also, if suppliers add higher costs to cover their increased volume, SEALSQ may see drops in its gross profit margins. Many of these costs are not fixed, even though there may be contracts in place, and may be increased at the discretion of the third-party vendor.

The following issues related to SEALSQ’s third-party suppliers could have an adverse effect on its ability to meet customer demand and negatively impact revenues, business operations, profitability and cash flows:

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In particular, SEALSQ’s agreement with one of its third-party suppliers, Presto Engineering Inc. (“Presto”), defines, among other things, the following contractual obligations:

Presto’s failure to meet these obligations could have an adverse effect on SEALSQ’s ability to meet customer demand and negatively impact revenues, business operations, profitability and cash flows.

Although common in its industry, SEALSQ does not have agreements with any other major third-party suppliers. Rather, the SEALSQ provides such suppliers with purchase orders on a quarterly basis, which triggers the launch of manufacturing of the Company’s products. SEALSQ has weekly discussions and provides the suppliers with 12-month rolling forecasts to allow them to anticipate equipment allocations and raw material supplies. However, since SEALSQ does not have written agreements with these suppliers, it is subject to the risk that any of these suppliers could terminate their relationship with SEALSQ, leaving it without critical products, software or other services needed to operate its business.

SEALSQ is dependent on the timely supply of equipment and materials from various sub-contractors and if any one of these suppliers fails to meet, or delays, their committed delivery schedules due to supply chain disruptions or other reasons, SEALSQ can suffer with lower or lost revenues.

SEALSQ uses various suppliers for silicon manufacturing and testing its parts. Any one of these suppliers could not meet their commitments for on-time delivery of its products. The market supply of such products has seen and continues to see difficulties in meeting demand and these kinds of supply disruptions can happen due to global shortages of silicon wafers or chemicals used in the processing of the silicon packaging, or shortages in the labor force due to unrest or sicknesses. During the latter half of 2021 and 2022, SEALSQ had to manage its delivery schedule carefully as a result of the global shortage of semiconductors material. During this period, SEALSQ was receiving greater volumes of orders than it was capable of delivering due to such shortages, so it had to program the orders based upon the allocations of materials and production capacity available to SEALSQ. While SEALSQ was able to grow its revenue during this time though careful negotiation with its suppliers, SEALSQ believes that revenues would have been higher had there not been such supply disruption. Further, its business and operating conditions can be at risk if it cannot deliver on product demand as committed in its customer contracts. The global shortage was alleviated in 2023 meaning that the same constraints were no longer applicable during that year and currently, SEALSQ does not have issues around supply allocations. However, supply disruptions may happen in the future and may negatively affect its business, financial condition and results of operations.

SEALSQ’s ability to forecast its future results of operations and plan for and model future growth is limited and subject to a number of uncertainties due to recent changes in SEALSQ’s context as well as in its own sales organization and go-to-market strategies.

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SEALSQ faces intense competition from companies that are larger and better known than it is, and it may lack sufficient financial or other resources to maintain or improve its competitive position.

The digital security market space in which SEALSQ operates faces intense competition, constant innovation and evolving security threats. There are several global security companies with strong presence in this market, including VeriSign, Inc., DigiCert Inc., Entrust Datacard, Let’s Encrypt, Symantec Corporation, FireEye, Inc., Red Hat Software, VASCO Data Security International, Inc., Zix Corp, NXP Semiconductors, Infineon Technologies, STMicroelectronics and Samsung Electronics. As SEALSQ integrates and moves into the knowledge automation space there are also related data lake and automation companies with strong foundations including Palantir and Snowflake.

Some of SEALSQ’s competitors are large companies that have the technical and financial resources and broad customer bases needed to bring competitive solutions to the market and already have existing relationships as a trusted vendor for other products. Such companies may use these advantages to offer products and services that are perceived to be as effective as SEALSQ’s at a lower price or for free as part of a larger product package or solely in consideration for maintenance and services fees. They may also develop different products to compete with SEALSQ’s current security solutions and respond more quickly and effectively than it does to new or changing opportunities, technologies, standards or client requirements. Additionally, it may compete with smaller regional vendors that offer products with a more limited range of capabilities that purport to perform functions similar to its security solutions. Such companies may enjoy stronger sales and service capabilities in their particular regions.

SEALSQ’s competitors may have competitive advantages, such as:

SEALSQ’s current and potential competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their resources. Current or potential competitors may be acquired by third parties with access to greater available resources. As a result of such acquisitions, SEALSQ’s current or potential competitors may be able to adapt more quickly to new technologies and customer needs, devote greater resources to the promotion or sale of their products and services, initiate or withstand substantial price competition, take advantage of other opportunities more readily or develop and expand their product and service offerings more quickly than SEALSQ does. Larger competitors with more diverse product offerings may reduce the price of products that compete with SEALSQ’s in order to promote the sale of other products or may bundle them with other products, which would lead to increased pricing pressure on its products and could cause the average sales prices for its products to decline.

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If SEALSQ does not successfully anticipate market needs and enhance existing products or develop new products that meet those needs on a timely basis, it may not be able to compete effectively and its ability to generate revenues will suffer.

Many of its customers operate in markets characterized by rapidly changing technologies and business plans, which require them to adapt to increasingly complex digital security infrastructures to protect internal and external corporate communications. As customers’ technologies and business plans grow more complex, SEALSQ expects them to face new and increasingly sophisticated threats of security breaches or counterfeiting. SEALSQ faces significant challenges in:

As a result, SEALSQ must continually modify and improve its products in response to changes in SEALSQ’s customers’ technology infrastructures.

SEALSQ may not be able to successfully anticipate or adapt to changing technology or customer requirements on a timely basis or at all. If it fails to keep up with technological changes or to convince its customers and potential customers of the value of its security and automation solutions even in light of new technologies and integration, SEALSQ’s business, results of operations and financial condition could be materially and adversely affected.

SEALSQ cannot guarantee that it will be able to anticipate future market needs and opportunities or be able to develop product enhancements or new products to meet such needs or opportunities in a timely manner, if at all. Even if it is able to anticipate, develop and commercially introduce enhancements and new products, there can be no assurance that enhancements or new products will achieve widespread market acceptance.

SEALSQ’s product enhancements or new products could fail to attain sufficient market acceptance for many reasons, including:

If SEALSQ fails to anticipate market requirements or fails to develop and introduce product enhancements or new products to meet those needs in a timely manner, that could cause it to lose existing customers and prevent it from gaining new customers, which would significantly harm its business, financial condition and results of operations.

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Any decline in demand for SEALSQ’s products from its clients could have a material adverse effect on the business, results of operations and financial condition.

SEALSQ’s business is at risk of its clients delaying or withdrawing purchase orders for items where SEALSQ already committed to the production or deployment of these pieces. In these situations, and when sufficient notice is given, it is usually able to adjust SEALSQ’s production schedules such that the production or deployment schedules can be transferred to alternative clients thereby limiting SEALSQ’s exposure. However, there can be a short-term impact upon the levels of stock that SEALSQ holds at any given point in time. Because its products have a lengthy development cycle, often in the range of 18 to 24 months from design-win or project award to delivering the first batch of finished goods or services, there is a limited risk that SEALSQ finds itself holding material amounts of stocks of finished goods that will not be eventually delivered to its clients. The greatest risk is that a client might reduce their production allocations with SEALSQ and, in this instance, it would be required to adapt its purchase requirements accordingly. Most of its raw materials (in particular, SEALSQ’s wafers) can be redirected to alternative products and so the risk is more concentrated to finished goods and committed engineering or deployment capacity. In the event that a client was to significantly reduce demand with a limited lead-time and not place new orders for that product at a later stage, this could lead to some finished goods becoming obsolete. The main risk arising from a decline in demand for SEALSQ’s products from one of its larger clients is that SEALSQ would need to find new sources of revenue to replace such client.

SEALSQ’s reputation and business could be harmed based on real or perceived shortcomings, defects or vulnerabilities in its security solutions or the failure of its security solutions to meet customers’ expectations.

Organizations are facing increasingly sophisticated digital security threats and threats of counterfeiting. If SEALSQ fails to identify and respond to new and increasingly complex methods of counterfeiting products or hacking personal and corporate digital accounts, its business and reputation will suffer. In particular, SEALSQ may suffer significant adverse publicity and reputational harm if any of its products fail to perform as advertised. An actual or perceived breach of SEALSQ’s customers’ sensitive business data, regardless of whether the breach is attributable to the failure of its products, could adversely affect the market’s perception of the efficacy of SEALSQ’s security solutions and current or potential customers may look to SEALSQ’s competitors for alternatives to its security solutions. Similarly, an actual or perceived failure of SEALSQ’s products to prevent counterfeit products from being detected, regardless of whether such failure is attributable to its products, could adversely affect the market’s perception of the efficacy of its authentication solutions and could encourage current or potential customers to look to SEALSQ’s competitors for an alternative to its products. The failure of its products may also subject SEALSQ to product liability lawsuits and financial losses stemming from the indemnification of its partners and other third parties, as well as the expenditure of significant financial resources to analyze, correct or eliminate any vulnerability. It could also cause SEALSQ to suffer reputational harm, lose existing customers or deter them from purchasing additional products and services and prevent new customers from purchasing its security solutions.

Sometimes it will be necessary to make a product or product line obsolete and there may be negative impacts to sales or disruption to the customer base during the ramp down of that product.

All products have a natural lifecycle that includes the inevitable end-of-life (“EOL”) process. During the ramping down of a product, or product family, there are many ways that SEALSQ’s business operations can be challenged. Last time buys are a typical way for customers to deal with the EOL of a product that is still critical to one of their end products. These kinds of orders show an increase in short term sales but result in the abrupt drop off of revenue from that customer, for that product, after the last time buy is delivered. Discontinuing a product also comes with the risk that SEALSQ may lose that customer for good if SEALSQ does not have a replacement for the product or if they decide to look at alternative suppliers because of the change in supply.

SEALSQ’s research and development efforts may not produce successful products or enhancements to its security solutions that result in significant revenue or other benefits in the near future, if at all.

Investing in research and development personnel, developing new products and enhancing existing products is expensive and time-consuming, and there is no assurance that such activities will result in significant new marketable products or enhancements to SEALSQ’s products, design improvements, cost savings, revenues or other expected benefits. If SEALSQ spends significant time and effort on research and development and is unable to generate an adequate return on its investment, its business and results of operations may be adversely affected. SEALSQ’s research and development roadmap anticipates a continued increase in 2026 in its expenditure, in particular focused on its post-quantum cryptography.

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Failure to protect SEALSQ’s intellectual property could substantially harm its business, operating results, and financial condition.

The success of SEALSQ’s business depends on its ability to protect and enforce its patents, trade secrets, trademarks, copyrights, and all of other intellectual property rights, including the silicon intellectual property rights of SEALSQ’s semiconductors.

SEALSQ’s attempt to protect its intellectual property under patent, trade secret, trademark, and copyright law through a combination of employee, third-party assignment and nondisclosure agreements, other contractual restrictions, technological measures, and other methods. These afford only limited protection and SEALSQ is still early in the process of securing its intellectual property rights. Despite SEALSQ’s efforts to protect its intellectual property rights and trade secrets, unauthorized parties may attempt to copy aspects of its technology, or obtain and use trade secrets and other confidential information. Moreover, policing SEALSQ’s intellectual property rights is difficult and time consuming. SEALSQ cannot assure you that it would have adequate resources to protect and police its intellectual property rights, and it cannot assure you that the steps it takes to do so will always be effective.

SEALSQ has filed, and may in the future file, patent applications on certain of its innovations. It is possible, however, that these innovations may not be patentable. In addition, given the cost, effort, risks, and downside of obtaining patent protection, including the requirement to ultimately disclose the invention to the public, SEALSQ may choose not to seek patent protection for some innovations. Furthermore, SEALSQ’s patent applications may not result in granted patents, the scope of the protection gained may be insufficient or an issued patent may be deemed invalid or unenforceable. SEALSQ also cannot guarantee that any of its present or future patents or other intellectual property rights will not lapse or be invalidated, circumvented, challenged, or abandoned. Neither can SEALSQ guarantee that its intellectual property rights will provide competitive advantages. SEALSQ’s ability to assert its intellectual property rights against potential competitors or to settle current or future disputes could be limited by its relationships with third parties, and any of its pending or future patent applications may not have the scope of coverage originally sought. SEALSQ cannot guarantee that its intellectual property rights will be enforced in jurisdictions where competition may be intense or where legal protection may be weak. SEALSQ could lose both the ability to assert its intellectual property rights against, or to license technology to, others and the ability to collect royalties or other payments.

Litigation or proceedings before governmental authorities and administrative bodies may be necessary in the future to enforce SEALSQ’s intellectual property rights, to protect its patent rights, trademarks, trade secrets, and domain names and to determine the validity and scope of the proprietary rights of others. SEALSQ’s efforts to enforce or protect its proprietary rights may be ineffective and could result in substantial costs and diversion of resources and management time, each of which could substantially harm its operating results. Additionally, changes in law may be implemented, or changes in interpretation of such laws may occur, that may affect its ability to protect and enforce SEALSQ’s patents and other intellectual property.

SEALSQ’s growth prospects and revenue will be adversely affected if its efforts to attract prospective customers and to retain existing customers are not successful.

SEALSQ’s ability to grow its business and generate revenue depends on retaining and expanding its total customer base and increasing services revenue by effectively monetizing added value. SEALSQ must convince prospective customers of the benefits of its solutions and its existing customers of the continuing value of those solutions. SEALSQ’s ability to attract new customers, retain existing customers, and reach out to new markets depends in large part on its ability to continue to offer leading technologies and products, superior security and trust, and integration capabilities. For instance, in SEALSQ’s Semiconductors segment, some of its semiconductor competitors, including Infineon, Microchip, NXP and STMicroelectronics, have developed, and are continuing to develop, secure elements, which puts SEALSQ at a significant competitive disadvantage.

SEALSQ derives a significant amount of its revenue each year from a limited number of significant customers.

SEALSQ derives a significant amount of its revenue each year from a small number of customers. In the year ended December 31, 2025, the SEALSQ Group’s ten largest customers accounted for 63% of its revenue. SEALSQ’s business and results of operations are largely dependent upon the success of its significant customers. The loss of any large customer, a decline in the volume of sales to these customers or the deterioration of their financial condition could adversely affect SEALSQ’s business, results of operations and financial conditions.

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One of SEALSQ’s largest customers is CISCO Systems International (“Cisco”). SEALSQ operates under the terms of a Master Purchase Agreement, dated August 14, 2014. This agreement defines, among other things:

Additionally, SEALSQ has agreed to provide necessary support to Cisco, its EMS Providers, and any designated third parties for remediation efforts, including but not limited to customer notifications, replacement scheduling, and corrective measures such as product removal, return, reinstallation, and repair.

SEALSQ depends on its customers’ ability to sell their products, which may pose challenges for the Company’s ability to forecast demand or optimize inventory and sales.

Large orders may depend on the ability of SEALSQ’s customers to be awarded significant regional or national contracts. The design of many industrial devices involves the risk that such devices may not see the demand expected in the relevant market, or that high-volume contracts may be awarded to competing suppliers. SEALSQ’s customers may be bidding against multiple suppliers to win government contracts, and if they lose, SEALSQ may not realize the results originally expected during forecasting of opportunity size and profitability. As such, the volume predictions used in pricing negotiations and forecasts may not always be achievable by SEALSQ’s customers and may adversely affect SEALSQ’s operating results.

Changes in regulations or citizen concerns regarding privacy and protection of citizen data, or any failure or appearance of failure to comply with such laws, could diminish the value of its services and cause SEALSQ to lose customers and revenue.

The regulatory framework for privacy issues worldwide is currently in flux and is likely to remain so for the foreseeable future. Practices regarding the collection, use, storage, transmission, and security of personal information by companies operating over the internet have recently come under increased public scrutiny.

The U.S. government, including the Federal Trade Commission and the Department of Commerce, may continue to review the need for greater regulation over the collection of information concerning consumer behavior on the internet, including regulation aimed at restricting certain targeted advertising practices.

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Additionally, the EU may continue to review the need for greater regulation or reform to its existing data protection legal framework, which may result in a greater compliance burden for companies with users in Europe. Various government and consumer agencies also have called for new regulation and changes in industry practices. SEALSQ’s business, including its ability to operate and expand internationally, could be adversely affected if legislation or regulations are adopted, interpreted, or implemented in a manner that is inconsistent with SEALSQ’s current business practices and that require changes to these practices, the design of its website, services, features, or its privacy policy. In particular, the success of its business has been, and SEALSQ expects will continue to be, driven by its ability to responsibly use the personal data that its customers share with SEALSQ.

Accordingly, SEALSQ’s business could be harmed by any significant change to applicable laws, regulations, or industry practices regarding the use of its customers’ personal data, for example regarding the manner in which disclosures are made and how the express or implied consent of customers for the use of personal data is obtained. Such changes may require SEALSQ to modify its services and features, possibly in a material manner, and may limit its ability to develop new services and features that make use of the data that its customers voluntarily share with SEALSQ. In addition, some of its developers or other partners, such as those that help SEALSQ measure the effectiveness of advertisements, may receive or store information provided by it or by its customers through mobile or web applications integrated with its services. SEALSQ provides limited information to such third parties based on the scope of services provided to it. However, if these third parties or developers fail to adopt or adhere to adequate data security practices, or in the event of a breach of their networks, SEALSQ’s data or its customers’ data may be improperly accessed, used, or disclosed.

Interruptions, delays or discontinuations in service arising from SEALSQ’s own systems or from third parties could impair the delivery of its services and harm its business.

SEALSQ relies on systems housed in its own facilities and upon third parties, including bandwidth providers and third-party “cloud” data storage services, to enable its customers to receive its content in a dependable, timely, and efficient manner. SEALSQ has experienced and may in the future experience periodic service interruptions and delays involving its own systems and those of third parties that SEALSQ works with. Both SEALSQ’s own facilities and those of third parties are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures, and similar events. They also are subject to break-ins, sabotage, intentional acts of vandalism, the failure of physical, administrative, technical, and cybersecurity measures, terrorist acts, natural disasters, human error, the financial insolvency of third parties that it works with, and other unanticipated problems or events. The occurrence of any of these events could result in interruptions in SEALSQ’s services and to unauthorized access to, or alteration of, the content and data contained on its systems and that these third parties store and deliver on its behalf.

Any disruption in the services provided by these third parties could materially adversely impact SEALSQ’s business reputation, customer relations, and operating results. Upon expiration or termination of any of its agreements with third parties, SEALSQ may not be able to replace the services provided to SEALSQ in a timely manner or on terms and conditions, including service levels and cost, that are favorable to it, and a transition from one third party to another could subject SEALSQ to operational delays and inefficiencies until the transition is complete.

SEALSQ’s business model consists in promoting trust and security, and it depends on trust in its brand. Negative media coverage could adversely affect its brand and any failure to maintain, protect, and enhance SEALSQ’s brand would hurt its ability to retain or expand its customer base.

Maintaining, protecting, and enhancing SEALSQ’s brand is critical to expanding its customer base, and will depend largely on its ability to continue to develop and provide top-level security. If SEALSQ does not successfully maintain its brand, its business could be harmed.

SEALSQ’s brand may be impaired by a number of other factors, including a failure to protect the cryptographic keys, data and software of end customers, any failure to keep pace with technological advances on its platform or with its services, a failure to protect its intellectual property rights, or any alleged violations of law, regulations, or public policy. Further, if SEALSQ’s partners fail to maintain high standards in the supply chain, or if SEALSQ partners with supply chain partners that its customers reject, the strength of its brand could be adversely affected.

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SEALSQ has not historically been required to spend considerable resources to establish and maintain its brand. However, if it is unable to maintain the growth rate in its customer base, it may be required to expend greater resources on advertising, marketing, and other brand-building efforts to preserve and enhance brand awareness, which would adversely affect operating results and may not be effective.

If management is unable to provide reports as to the effectiveness of SEALSQ’s internal control over financial reporting, investors could lose confidence in the reliability of its financial statements, which could result in a decrease in the value of its shares.

Under Section 404 of Sarbanes-Oxley, SEALSQ is required to include in each of its annual reports on Form 20-F, a report containing its management’s assessment of the effectiveness of its internal control over financial reporting. If, in such annual reports on Form 20-F, management cannot provide a report as to the effectiveness of its internal control over financial reporting as required by Section 404, investors could lose confidence in the reliability of SEALSQ’s financial statements, which could result in a decrease in the value of its shares and SEALSQ could be subject to sanctions or investigations by the Nasdaq Stock Market, SEC or other regulatory authorities.

SEALSQ’s CEO and CFO manage multiple, publicly traded companies and the requirements of managing multiple public companies may strain their resources.

SEALSQ’s CEO and CFO currently hold the same management positions at WISeKey and, for its CEO, at WISeSat; WISeKey is a publicly traded company, and WISeSat will become a publicly traded company if the proposed business combination with Columbus Acquisition Corp., a publicly traded special purpose acquisition company (“SPAC”), relating to the proposed public listing of WISeSat is completed. WISeKey is, and WISeSat would as a publicly traded company be, required to comply with various regulatory and reporting requirements, including those required by the SEC. Complying with these reporting and other regulatory requirements may divert their attention from other business concerns of SEALSQ, which could have a material adverse effect on its business, financial condition and results of operations.

Obligations associated with being a public company require significant resources and management attention.

SEALSQ is subject to the reporting requirements of the Securities Exchange Act, and the other rules and regulations of the SEC, including the Sarbanes-Oxley Act. Section 404 of Sarbanes-Oxley requires that SEALSQ evaluates and determines the effectiveness of its internal control over financial reporting.

SEALSQ works with its legal, accounting and financial advisors to identify any areas in which changes should be made to its financial and management control systems to manage its growth and its obligations as a public company. SEALSQ evaluates areas such as corporate governance, corporate control, internal audit, disclosure controls and procedures and financial reporting and accounting systems. SEALSQ will make changes in any of these and other areas, including its internal control over financial reporting, which it believes are necessary. However, these and other measures SEALSQ may take may not be sufficient to allow SEALSQ to satisfy its obligations as a public company on a timely and reliable basis. In addition, compliance with reporting and other requirements applicable to public companies do create additional costs for it and require the time and attention of management. SEALSQ’s limited management resources may exacerbate the difficulties in complying with these reporting and other requirements while focusing on executing business strategy. SEALSQ may not be able to predict or estimate the amount of the additional costs it may incur, the timing of such costs or the degree of impact that its management’s attention to these matters will have on its business.

SEALSQ depends on highly skilled key personnel to operate its business, and if it is unable to attract, retain, and motivate qualified personnel, its ability to develop and successfully grow its business could be harmed.

SEALSQ believes that its future success is highly dependent on the talents and contributions of senior management, including Carlos Moreira, founder and Chief Executive Officer of SEALSQ, members of its executive team, and other key employees, such as key engineering, finance, research and development, marketing, and sales personnel. SEALSQ’s future success depends on its continuing ability to attract, develop, motivate, and retain highly qualified and skilled employees and senior management. All of SEALSQ’s employees, including senior management, are free to terminate their employment relationship with SEALSQ at any time, and their knowledge of its business and industry may be difficult to replace.

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Furthermore, SEALSQ’s performance depends on favorable labor relations with its employees and compliance with labor laws in the countries where SEALSQ has employees and plans to hire new employees. Any deterioration of current relations or increase in labor costs due to its compliance with labor laws could adversely affect its business.

Qualified individuals are in high demand, particularly in the digital industry, and SEALSQ may incur significant costs to attract them. If SEALSQ is unable to attract and retain its senior management and key employees, it may not be able to achieve its strategic objectives, and its business could be harmed. In addition, SEALSQ believes that senior management has developed highly successful and effective working relationships. SEALSQ cannot ensure that it will be able to retain the services of any members of its senior management or other key employees. If one or more of these individuals leave, it may not be able to fully integrate new senior management or replicate the current dynamic, and working relationships that have developed among its senior management and other key personnel, and its operations could suffer.

SEALSQ is currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine, the Israel-Hamas war, and the hostilities among Iran, the United States, and Israel. SEALSQ’s business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy and capital markets resulting from their conflict, or any other geopolitical tensions.

U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine.

In February 2022, a full-scale military invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. SEALSQ is continuing to monitor the situation in Ukraine and globally and assessing its potential impact on its business. Additionally, Russia’s prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have led to sanctions and other penalties being levied by the United States, the European Union and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, payment system, expansive ban on imports and exports of products to and from Russia and ban on exportation of U.S. denominated bank notes to Russia or persons located there. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.

Additionally, on October 7, 2023, Hamas, a U.S. designated terrorist organization, launched a series of coordinated attacks from the Gaza Strip onto Israel. On October 8, 2023, Israel formally declared war on Hamas, and the armed conflict is ongoing as of the date of this filing.

On February 28, 2026, the U.S. and Israel launched coordinated strikes against Iran. In response, Iran conducted retaliation attacks that expanded the conflict beyond just Iran and Israel and has threatened some commercial routes, especially traffic through the Strait of Hormuz, raising concerns about broader regional instability in the Middle East. These tensions include military posturing, proxy conflicts, and the potential for direct confrontation, which could lead to disruptions in global energy markets, supply chains, and international trade. Any escalation of hostilities could have far-reaching implications for global economic stability and capital markets.

Although SEALSQ’s operations have not experienced material and adverse impact on supply chain, cybersecurity or other aspects of its business from the ongoing conflict between Russia and Ukraine, from the war between Israel and Hamas, or from tensions between Iran, the United States, and Israel, nor from any associated event such as the Red Sea shipping crisis, there is no assurance that such conflicts and events would not develop or escalate in a way that could materially and adversely affect SEALSQ’s business, financial condition, and results of operations in the future.

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SEALSQ’s business could suffer as a result of tariffs and trade sanctions or similar actions.

The imposition by the U.S. government of trade measures, including tariffs, sanctions or other restrictions on goods exported from, or imported into, the United States, or countermeasures imposed in response to such U.S. government trade measures, could adversely affect global economic conditions, SEALSQ’s operations or its ability to sell its products globally, which could adversely affect its operating results and financial condition. The U.S. tariff environment remains highly volatile and uncertain. On January 14, 2026, following the completion of a Section 232 national security investigation, the U.S. President signed a proclamation imposing a 25% ad valorem tariff on certain advanced computing semiconductors and their derivative products, effective January 15, 2026, with certain exemptions. On February 20, 2026, the U.S. Supreme Court held that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs, striking down the sweeping tariffs previously imposed under IEEPA on imports from China, Canada, Mexico, and most other trading partners. In response, President Trump immediately imposed replacement tariffs under Section 122 of the Trade Act of 1974, initially at a rate of 10% and subsequently increased to 15%, on a global basis effective February 24, 2026. While a significant portion of SEALSQ’s current supply chain does not directly import products to the U.S. because SEALSQ supplies to contract manufacturers located outside the U.S. However, the tariffs on imports of semiconductor chips, or products containing semiconductor chips could impact the contract manufacturers and the entire semiconductor supply chain when finished goods are delivered to end-customers into the U.S.. End customers may seek to restructure their supply chains to areas or countries unaffected by tariffs, or may demand that the semiconductor supply chain absorb the added costs, which would reduce SEALSQ’s revenue and gross profit. The ongoing legal uncertainty surrounding U.S. presidential tariff authority and potential Congressional action to extend or codify tariffs, create significant unpredictability for SEALSQ’s business planning and operations. Escalations in trade measures may directly impair SEALSQ’s business by increasing trade-related costs or disrupting established supply chains and may indirectly impair its business by causing a negative effect on global economic conditions and financial markets. In addition, de-escalation of trade measures, or selected exemptions from trade measures, may not result in an immediate increase in SEALSQ’s business activity. The ultimate impact of the evolving trade measures is uncertain and may be affected by various factors, including the outcome of pending and future legal challenges to tariff authority, whether and when broader tariffs are implemented, Congressional action on tariff extensions, and any retaliatory countermeasures imposed by other countries.

Additional changes or threatened changes in U.S. trade measures have affected and may continue to affect trade involving many countries, including Mexico, Canada, Taiwan, the People’s Republic of China, the United Kingdom, South Korea, Japan, and the member countries of the European Union. The U.S. Supreme Court’s ruling that IEEPA does not authorize tariffs has created substantial uncertainty regarding existing trade agreements negotiated under the prior tariff regime. On January 15, 2026, the United States and Taiwan signed a trade agreement that provides preferential tariff treatment for Taiwanese semiconductor companies investing in U.S. manufacturing capacity, which may affect competitive dynamics in the semiconductor industry. Any trade measure against Taiwan, which is a major hub for global semiconductor manufacturing, may specifically target imports of semiconductor products, which, if imposed, could seriously and negatively affect SEALSQ’s business and the U.S. economy overall. Countries that do not reach satisfactory agreements may face the imposition of broader tariffs on semiconductors and derivative products. The materials subject to these trade measures may impact the cost or availability of raw materials used by SEALSQ’s suppliers or in its customers’ products. SEALSQ cannot predict the evolving trade policies, but the imposition of trade measures by the U.S. on a broader range of imports, or further retaliatory trade measures taken in response to additional U.S. trade measures, could increase costs in its supply chain or reduce demand for SEALSQ’s customers’ products, either of which could adversely affect its results of operations. Any increase in trade-related costs associated with such measures may impair the profitability of international production, may strain SEALSQ’s suppliers’ ability to reliably provide inputs necessary to produce these items, and may otherwise affect its partners’ abilities to provide its products at previously contracted prices. SEALSQ’s business and financial results could be negatively affected as a result.

SEALSQ face many risks associated with its international expansion, including geopolitical tensions, trade barriers, payment delays and currency failures.

SEALSQ is continuing to expand its operations into additional international markets. The expansion into international markets may cause difficulties because of distance, as well as language and cultural differences. Other risks related to international operations include fluctuations in currency exchange rates, difficulties arising from staffing and managing foreign operations, legal and regulatory requirements of different countries, and overlapping or differing tax laws. Management cannot assure that it will be able to market and operate its services successfully in foreign markets, select appropriate markets to enter, open new offices efficiently or manage new offices profitably.

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Offering SEALSQ’s services in a new geographical area also poses geopolitical risks. For example, export and import of cryptographic technologies is subject to sanctions, and national import and export restrictions. Changes in these restrictions due to geopolitical tensions may significantly harm its business.

As a result of these obstacles, SEALSQ may find it impossible or prohibitively expensive to enter additional markets, or its entry into foreign markets could be delayed, which could hinder its ability to grow its business.

Business practices in the global markets that SEALSQ serves may differ and may require SEALSQ to include non-standard terms in customer contracts, such as extended payment or warranty terms. To the extent that it enters into customer contracts that include non-standard terms related to payment, warranties or performance obligations, its results of operations may be adversely impacted.

Additionally, SEALSQ’s global sales and operations are subject to a number of risks, including the following:

These factors could harm SEALSQ’s ability to generate future global revenues and, consequently, materially impact its business, results of operations and financial condition.

SEALSQ’s use of artificial intelligence may adversely affect its business operations, products, or financial results, and expose it to evolving legal, regulatory, technological, and operational risks.

SEALSQ utilizes artificial intelligence (“AI”) technologies in several aspects of its business, including the development and enhancement of its software services, and the protection of its products against advanced cyberattacks. AI is also a core component of SEALSQ’s strategic initiatives, including the development of AI identity frameworks and the integration of AI capabilities into its existing software platforms and services, post-quantum secure semiconductors and RISC-V-based platforms.

While AI offers potential benefits in product innovation, design efficiency, and security enhancement, its use of AI exposes SEALSQ to a wide range of risks, many of which are difficult to predict given the rapid pace of AI technological advancements and the limited historical experience with AI deployments in semiconductor design and security-critical applications. There can be no assurance that SEALSQ’s AI-enabled products and services will achieve the desired performance improvements, security benefits, or cost efficiencies. In some cases, AI implementation may introduce new design flaws, security vulnerabilities, or operational inefficiencies that could adversely affect product functionality, customer trust, or market acceptance.

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Utilizing AI may expose SEALSQ to additional intellectual property, cybersecurity, operational, and technological risks, as the technologies underlying AI and its use are subject to a variety of laws, including intellectual property, privacy, and consumer protection. SEALSQ is also subject to increasing legal, regulatory, and ethical scrutiny regarding its use of AI. In particular, the SEC and other global regulatory bodies are actively reviewing corporate disclosures and governance practices related to AI usage. New or expanded laws, regulations, and industry standards governing AI transparency, accountability, explainability, ethical use, bias prevention, privacy, or security could impose additional compliance obligations on SEALSQ. Such obligations could require SEALSQ to modify, restrict, or discontinue certain AI-enabled functionalities, leading to increased development costs, reduced product performance, or delays in product releases.

Furthermore, shifting public perception and heightened regulatory focus on the ethical implications of AI, particularly in relation to AI-assisted cybersecurity, government surveillance, and supply chain security, could negatively affect demand for SEALSQ’s products, limit the markets in which SEALSQ can operate, or expose it to reputational harm.

The technologies underlying AI are inherently complex, rapidly evolving, and subject to a high degree of uncertainty. As a result, SEALSQ cannot predict all of the legal, regulatory, operational, technological, or ethical risks associated with the use of AI in its products and operations. If SEALSQ is unable to effectively manage AI-related risks, its business, reputation, financial condition, and results of operations could be materially and adversely affected.

SEALSQ’s strategic initiatives relating to embedded security and post-quantum cryptography as foundational pillars of “Physical AI” may not achieve market acceptance or technological viability and are subject to significant risks and uncertainties.

Physical AI refers to artificial intelligence systems that interact with and operate in the physical world, such as robotics, autonomous vehicles, and AI-enabled connected devices. SEALSQ technology is particularly relevant to secure Physical AI, and is targeting this market as potential of growth. Accordingly, SEALSQ has started discussion with robotics providers and technology providers who are already present on this market, in order to use them as channels. The successful execution of this strategy depends on SEALSQ’s ability to develop and commercialize secure semiconductors, RISC-V-based platforms, and post-quantum cryptographic solutions capable of being deployed at scale in connected and AI-enabled devices. These technologies are complex and may require significant additional development, validation, and certification, particularly as post-quantum standards continue to evolve and implementation in constrained hardware environments may create performance, integration, or cost challenges. SEALSQ’s execution also depends on third-party foundries, supply chain partners, and broader ecosystem adoption, which are outside its control. If SEALSQ is unable to deliver commercially viable products on expected timelines, or if market adoption develops more slowly than anticipated, its business, reputation, and results of operations could be materially and adversely affected.

Integration of IC’Alps into SEALSQ’s business may be unsuccessful or may not generate the anticipated synergies, operational efficiencies, or financial benefits, which could materially and adversely affect SEALSQ’s business, results of operations, and cash flows.

Successfully integrating IC’Alps requires the consolidation of engineering teams and leadership, alignment of product roadmaps, harmonization of processes and internal controls, integration of IT systems, migration to SEALSQ’s quality, security, and certification frameworks, and coordination of sales, pricing, and contract terms. If SEALSQ is unable to integrate these functions effectively, on schedule, and within budget, it may fail to realize expected cost savings, revenue synergies, design-win acceleration, or margin improvements, and SEALSQ’s operating expenses could increase without a corresponding growth in revenue.

Realizing anticipated commercial benefits depends on SEALSQ’s ability to cross-sell and co-develop offerings that combine IC’Alps’s ASIC services with its security IP, secure elements, and trust services. Customers may not adopt combined solutions at the pace or volumes SEALSQ expects, may require additional custom features, or may prefer incumbent providers. Differences in business models and revenue recognition, heightened execution risks, project scope changes, cost overruns, yield shortfalls, schedule slippage, or acceptance delays could reduce or defer revenue, compress margins, and increase working capital needs. In addition, any failure to meet performance, confidentiality, IP ownership, or delivery commitments under IC’Alps contracts could expose SEALSQ to liquidated damages, penalties, or indemnity claims and damage its reputation.

Integration also introduces operational, legal, and compliance risks, including with respect to cybersecurity and data protection, export controls and technology transfer, contractual assignment and change-of-control consents, maintenance of effective disclosure controls and procedures, and internal control over financial reporting across a larger and more complex organization.

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If SEALSQ is unable to successfully integrate IC’Alps and achieve the expected benefits in the time frames anticipated, or at all, its revenue, margins, and cash flows could be significantly below SEALSQ’s expectations, and its competitive position could be harmed.

SEALSQ’s QSOC initiative depends exclusively on WISeSat for orbital capacity and related operational services, and any failure to finalize acceptable arrangements with WISeSat or obtain the contemplated capacity and services could materially delay or impair SEALSQ’s ability to develop, test, validate, and commercialize QSOC.

SEALSQ’s Quantum Spatial Orbital Cloud, or QSOC, initiative currently depends exclusively on WISeSat as the provider of the orbital capacity and related operational services contemplated by the parties. If SEALSQ is unable to finalize the contemplated arrangements with WISeSat on acceptable terms, if WISeSat is unable or unwilling to provide the contemplated capacity and services, if the service specifications are not agreed, or if the arrangement does not evolve into a commercially viable service offering within the expected timeframe, SEALSQ’s ability to develop, test, validate and commercialize QSOC may be materially delayed or impaired.

Assertions by third parties of infringement or other violations by SEALSQ of their intellectual property rights could harm its business, operating results, and financial condition.

Third parties may assert that SEALSQ has infringed, misappropriated, or otherwise violated their copyrights, patents, and other intellectual property rights, and, as it faces increasing competition, the possibility of intellectual property rights claims against SEALSQ grows.

SEALSQ’s ability to provide its services is dependent upon its ability to license intellectual property rights, including to semiconductor designs. Various laws and regulations govern the copyright and other intellectual property rights associated with semiconductor design and cryptographic algorithms. Existing laws and regulations are evolving and subject to different interpretations, and various legislative or regulatory bodies may expand current or enact new laws or regulations. Although SEALSQ expends significant resources to seek to comply with the statutory, regulatory, and judicial frameworks by, for example, entering into license agreements, it cannot assure you that it is not infringing or violating any third-party intellectual property rights, or that SEALSQ will not do so in the future.

Moreover, for its semiconductor solutions, SEALSQ relies on multiple hardware designers, and firmware and software programmers to design its proprietary technologies. Although it make every effort to prevent the incorporation of licenses that would require SEALSQ to disclose code and/or innovations in its products, SEALSQ does not exercise complete control over the development efforts of its developers, and it cannot be certain that its developers have not used designs or software that is subject to such licenses or that they will not do so in the future. In the event that portions of its proprietary technology are determined to be subject to licenses that require SEALSQ to publicly release the affected portions of its semiconductor design and source code, re-engineer a portion of its technologies, or otherwise be limited in the licensing of its technologies, SEALSQ may be forced to do so, each of which could materially harm its business, operating results, and financial condition.

SEALSQ is dependent upon its parent company and other members of the WISeKey Group for the provision of certain services.

SEALSQ is currently dependent upon its parent company and other members of the WISeKey Group for the provision of certain services, including certain financial, legal and Information Technology support. SEALSQ has entered into certain service agreements with its parent company under the terms of which certain members of staff and associated resources of WISeKey will be required to carry out certain tasks and duties on behalf of SEALSQ. Under the terms of the service agreements, WISeKey agrees to provide these services to SEALSQ on a cost-plus basis and WISeKey will regularly invoice SEALSQ for the associated costs of providing these services. However, if WISeKey were to no longer carry out these roles then SEALSQ would be required to appoint the appropriate C-suite staff and build out its own support functions which may lead to additional costs and a loss of expertise in the short-term.

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Financial Risks

SEALSQ has a history of losses and may not achieve profitability in the future.

SEALSQ has invested substantial amounts of financial resources so far on its acquisitions, brand technology and market position. As at December 31, 2025, SEALSQ had, on a consolidated level, an accumulated cumulative deficit of USD 76,107,000.00, compared to USD 41,913,000.00 as at December 31, 2024. In the past, SEALSQ made significant investments in its operations which have not resulted in corresponding revenue growth and, as a result, increased its losses. SEALSQ expects to make significant future investments to support the further development and expansion of its business and these investments may not result in increased revenue or growth on a timely basis or at all.

SEALSQ may also incur significant losses in the future for a number of reasons, including slowing demand for its products and services, increasing competition, weakness in the software and security industries generally, as well as other risks described herein, and SEALSQ may encounter unforeseen expenses, difficulties, complications and delays, and other unknown factors. If SEALSQ incurs losses in the future, it may not be able to reduce costs effectively because many of SEALSQ’s costs are fixed. In addition, to the extent that SEALSQ reduces variable costs to respond to losses, this may affect its ability to attract customers and grow its revenues. Accordingly, SEALSQ may not be able to achieve or maintain profitability and SEALSQ may continue to incur significant losses in the future.

SEALSQ’s operating results can vary significantly due to the impairment of goodwill and other tangible and intangible assets due to changes in the business environment.

SEALSQ’s operating results can also vary significantly due to impairments of intangible assets, including goodwill, and other fixed assets. As at December 31, 2025, the value of SEALSQ’s goodwill as recorded on its balance sheet was USD 5,656,000.00 and the value of acquired technologies and other intangible assets was USD 20,953,000.00, net of impairment and amortization. Because the market for SEALSQ’s products is characterized by rapidly changing technologies, its future cash flows may not support the value of goodwill and other intangibles recorded in its consolidated financial statements. According to U.S. GAAP, SEALSQ is required to annually test its recorded goodwill and indefinite-lived intangible assets, if any, and to assess the carrying values of other intangible assets when impairment indicators exist. As a result of such tests, SEALSQ could be required to book impairment charges in its statement of operations if the carrying value is greater than the fair value. The amount of any potential impairment is not predictable.

Factors that could trigger an impairment of such assets include, but are not limited to, the following:

Any potential future impairment, if required, could have a material adverse effect on SEALSQ’s business, financial condition and results of operations.

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SEALSQ is exposed to risks associated with acquisitions and investments.

SEALSQ may in the future make acquisitions of, or investments in, existing companies or existing or new businesses. Acquisitions and investments involve numerous risks that vary depending on their scale and nature, including, but not limited to:

In addition, if SEALSQ is unsuccessful at integrating such acquisitions or the technologies associated with such acquisitions, its revenues and results of operations could be adversely affected. Any integration process may require significant time and resources, and SEALSQ may not be able to manage the process successfully. SEALSQ may not successfully evaluate or utilize the acquired technology or personnel, or accurately forecast the financial impact of an acquisition transaction, including accounting charges. SEALSQ may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could adversely affect its financial condition. The sale of equity or incurrence of debt to finance any such acquisitions could result in dilution to its shareholders. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede SEALSQ’s ability to manage its operations.

SEALSQ may need additional capital in the future and it may not be available on terms favorable for it or at all.

Although SEALSQ has raised significant capital during 2024, 2025 and 2026 to date, SEALSQ may require additional capital in the future to do, among other things, the following:

SEALSQ’s ability to obtain external financing in the future is subject to a variety of uncertainties, including: (i) SEALSQ’s financial condition, results of operations and cash flows, and (ii) general market conditions for financing activities.

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The terms of available financing may also restrict SEALSQ’s financial and operating flexibility. If adequate funds are not available on acceptable terms, SEALSQ may be forced to reduce its operations or delay, limit or abandon expansion opportunities. Moreover, even if SEALSQ is able to continue its operations, the failure to obtain additional financing could have a material adverse effect on its business, financial condition and results of operations.

SEALSQ is a holding company with no direct cash generating operations and which relies on its subsidiaries to provide it with funds necessary to pay dividends to shareholders.

SEALSQ is a holding company with no significant assets other than the equity interests in its subsidiaries. SEALSQ’s subsidiaries own substantially all the rights to its revenue streams. SEALSQ has no legal obligation to, and may not, declare dividends or other distributions on its shares. SEALSQ’s ability to pay dividends to its shareholders depends on its ability to satisfy a solvency test under the BVI Act and its Articles, which will depend on the performance of its subsidiaries and their ability to distribute funds to SEALSQ. Under the BVI Act, a company satisfies the solvency test if the value of the company’s assets exceeds its liabilities and the company is able to pay its debts as they fall due (the “BVI Solvency Test”).

The ability of a subsidiary to make distributions to SEALSQ could be affected by a claim or other action by a third party, including a creditor, or by laws which regulate the payment of dividends by companies. In addition, the subsidiaries’ ability to distribute funds to SEALSQ depends on, among other things, the availability of sufficient legally distributable profit of such subsidiaries. SEALSQ cannot offer any assurance that legally distributable profit or reserves from capital contributions will be available in any given financial year.

Even if the BVI Solvency Test can be met, SEALSQ may not be able to pay a dividend or a distribution for a variety of reasons. Payment of future dividends and other distributions will depend on SEALSQ’s liquidity and cash flow generation, financial condition and other factors, including regulatory and liquidity requirements, as well as tax and other legal considerations.

Legal Risks

Claims, litigation, government investigations, and other proceedings may adversely affect SEALSQ’s business and results of operations

SEALSQ faces a variety of potential claims, lawsuits, investigations, and other legal proceedings across different areas, such as intellectual property, taxes, labor, privacy, data security, consumer protection, commercial disputes, and more, involving both its own operations and those of third parties. These proceedings can negatively impact SEALSQ due to legal expenses, disruption of operations, diversion of management attention, adverse publicity, and other factors. The outcomes of these matters are uncertain and come with significant risks. Assessing potential losses and establishing legal reserves involves judgment and may not fully capture all uncertainties and unpredictable outcomes. Until these matters are resolved, SEALSQ may face losses beyond what is currently recorded, which could be significant. Changes or inaccuracies in its estimates and assumptions could materially affect its business or financial results.

Employment laws in some of the countries in which SEALSQ operates are relatively stringent.

As of December 31, 2025, SEALSQ had employees located in the United States, in France and other countries and regions. In some of the countries in which it operates, employment laws may grant significant job protection to employees, including rights on termination of employment and setting maximum number of hours and days per week that a particular employee is permitted to work. In addition, in certain countries in which it operates, SEALSQ is or may be required to consult and seek the advice of employee representatives and/or unions. These laws, coupled with the requirement to consult with any relevant employee representatives and unions, could impact its ability to react to market changes and the needs of SEALSQ’s business.

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SEALSQ may incur fines or penalties, damage to its reputation or other adverse consequences if its employees, agents or business partners violate, or are alleged to have violated, anti-bribery, competition or other laws.

SEALSQ’s internal controls may not always protect SEALSQ from reckless or criminal acts committed by its employees, agents or business partners that would violate BVI, U.S. or other laws, including anti-bribery, competition, trade sanctions and regulations and other related laws. Any such improper actions could subject SEALSQ to administrative, civil or criminal investigations in the competent jurisdictions, could lead to substantial civil or criminal monetary and non-monetary penalties against SEALSQ or its subsidiaries, and could damage its reputation. Even the allegation or appearance of SEALSQ’s employees, agents or business partners acting improperly or illegally could damage SEALSQ’s reputation and result in significant expenditures in investigating and responding to such actions.

SEALSQ could be subject to litigation that, if not resolved in its favor and not sufficiently insured against, could have a material adverse effect on the SEALSQ Group

As SEALSQ continues to expand products, partnerships, sales and distribution, the risk of being involved in legal proceedings will invariably increase. Legal proceedings, especially when involving intellectual property rights and product liability, may have material adverse effects on SEALSQ’s financial condition, results of operations and cash flows.

Risks related to the proposed redomiciliation of SEALSQ’s controlling shareholder

SEALSQ’s controlling shareholder, WISeKey, has announced its intention to change its place of incorporation from Switzerland to the British Virgin Islands through a proposed cross-border merger. Although SEALSQ Corp is not a party to the proposed redomiciliation and does not expect to change its own place of incorporation or listing as a result of the transaction, the redomiciliation of its controlling shareholder could have adverse legal, regulatory and governance consequences for SEALSQ.

The proposed redomiciliation is subject to shareholder approval, regulatory approvals and other customary conditions, and there can be no assurance that it will be completed on the anticipated timeline or at all. Any delays, challenges or failure to complete the redomiciliation could result in legal disputes, regulatory scrutiny or adverse market perception affecting WISeKey, which could in turn negatively impact SEALSQ due to its status as a controlled subsidiary.

If completed, the redomiciliation would result in WISeKey being governed by the laws of the British Virgin Islands rather than Swiss law. Differences between Swiss law and British Virgin Islands law relating to corporate governance, shareholder rights, disclosure obligations and fiduciary duties could give rise to uncertainty, disputes or claims involving WISeKey, including claims brought by shareholders or regulators. Any such disputes, investigations or proceedings involving WISeKey could result in reputational harm, management distraction or legal costs for SEALSQ, or could adversely affect its relationship with its controlling shareholder, its access to capital markets or investor confidence in SEALSQ.

In addition, changes in WISeKey’s jurisdiction of incorporation or regulatory profile could affect contractual arrangements, regulatory filings, tax positions or compliance obligations applicable to SEALSQ as part of the WISeKey group, and could result in additional legal or compliance costs or the need to modify existing governance, disclosure or reporting practices.

Risks Related to Taxation

If a United States person is treated as owning at least 10% of SEALSQ’s shares, including constructively through the ownership of convertible securities, or if SEALSQ or one of SEALSQ’s non-U.S. subsidiaries is or becomes a controlled foreign corporation (“CFC”), there could be materially adverse U.S. federal income tax consequences to a United States person treated as owning at least 10% of SEALSQ’s shares, including constructively through the ownership of convertible securities.

If a U.S. investor owns or is treated as owning (indirectly or constructively, including constructively through the ownership of convertible securities) at least 10% of the total value or voting power of SEALSQ’s shares, such investor generally will be treated as a “United States shareholder” with respect to each “controlled foreign corporation,” or CFC, in SEALSQ’s group, if any. A non-U.S. corporation generally will be a CFC if United States shareholders own, directly, indirectly or constructively, more than 50% of the total value or total combined voting power of such corporation.

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A United States shareholder of a CFC is generally required to report annually and include in its U.S. federal taxable income its pro rata share of “subpart F income,” “net controlled foreign corporation tested income” (known as “global intangible low-taxed income” before changes to the Code introduced in 2025) and investments in U.S. property by the controlled foreign corporation, regardless of whether it makes any distribution of that income. Failure to comply with these reporting obligations may subject a United States shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such shareholder’s U.S. federal income tax return for the year for which reporting was due from starting. Any such U.S. holder who is an individual generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a U.S. corporation.

SEALSQ cannot provide any assurance that SEALSQ will assist investors in determining whether SEALSQ or any of SEALSQ’s non-U.S. subsidiaries is treated as a CFC or whether any investor is treated as a United States shareholder with respect to any such CFC or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. U.S. holders should consult their tax advisers regarding the potential application of these rules to their investment in SEALSQ’s shares.

There is substantial uncertainty regarding SEALSQ’s status as a passive foreign investment company, or PFIC, for its 2025 taxable year and there is a significant risk that SEALSQ could be a PFIC in 2026 and possibly future taxable years.

Under the Code, generally a non-U.S. corporation is a passive foreign investment company (“PFIC”) for any taxable year in which, after the application of certain look-through rules with respect to subsidiaries, either (i) 75% or more of its gross income consists of passive income or (ii) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income. Cash and cash-equivalents generally are passive assets for these purposes, and digital assets are likely to be passive assets for these purposes as well. Goodwill and other unbooked intangible assets (the value of which may be determined by reference to the excess of the sum of a corporation’s market capitalization and liabilities over the value of its book assets) are active to the extent attributable to activities that produce or are intended to produce active income.

There is substantial uncertainty regarding SEALSQ’s PFIC status for 2025. SEALSQ held, and continues to hold, a substantial amount of passive assets, including cash. Therefore, SEALSQ’s PFIC status for 2025, and likely for the current and future taxable years, depends on the value of its goodwill and other intangible assets. SEALSQ has not obtained, and does not intend to obtain, valuations of SEALSQ’s goodwill and other intangible assets. However, the average value of SEALSQ’s assets (including goodwill and other intangible assets) for 2025 is determined, in large part, by reference to the market value of SEALSQ’s Ordinary Shares, which has fluctuated substantially over time. Moreover, the determination of whether SEALSQ is a PFIC for any taxable year requires the application of principles and methodologies that in some circumstances are unclear. In particular, PFIC’s status for 2025 is uncertain because, among other things, the law applicable to determining whether SEALSQ’s goodwill is categorized as an asset that produces active or passive income is subject to varying interpretations.

There is also a significant risk that SEALSQ could be a PFIC in 2026 and possibly future taxable years. Whether SEALSQ is a PFIC for the current or any future year is a fact-intensive determination that can only be determined after the close of the taxable year and will depend on the composition of its income and assets and the value of its assets from time to time during the year. SEALSQ currently holds a significant amount of cash and other liquid assets, and so the composition of SEALSQ’s income and assets will be affected by how, and how quickly, SEALSQ uses its liquid assets. If SEALSQ deploys significant amounts of cash and investments for active purposes, SEALSQ may be less likely to be classified as a PFIC for the current or future taxable years. SEALSQ’s PFIC status for any taxable year may also be largely driven by the market value of SEALSQ’s Ordinary Shares, which could continue to be volatile. Accordingly, there is a significant risk that SEALSQ could be a PFIC for 2026 and possibly for future taxable years.

If SEALSQ is a PFIC for any taxable year during which a U.S. investor holds SEALSQ Ordinary Shares, certain adverse U.S. federal income tax consequences could apply to such U.S. Holder. See the discussion in the Item 10.E. Taxation section of this annual report titled “Material Tax Considerations — U.S. Federal Income Tax Considerations.” U.S. Holders are urged to consult with their own tax advisors regarding the possible application of the PFIC rules.

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The Company could be required to comply with economic substance requirements in the British Virgin Islands.

British Virgin Islands legislation requires certain entities registered in the British Virgin Islands engaged in “relevant activities” to maintain a substantial economic presence in the British Virgin Islands and to satisfy economic substance requirements. The list of “relevant activities” includes carrying on as a business any one or more of: banking, insurance, fund management, financing and leasing, headquarters, shipping, distribution and service center, intellectual property and pure equity holding entities.

Entities which are tax resident outside of the British Virgin Islands (as SEALSQ is), provided they are not tax resident in a country included in Annex I to the European Union list of non-cooperative jurisdictions for tax purposes (which SEALSQ is not), are not required to have economic substance in the British Virgin Islands, regardless of the activity they are conducting.

If SEALSQ’s tax status changes and it is conducting any “relevant activities” or if the scope of the relevant statute is changed by subsequent legislation, it may be required to increase its substance in the British Virgin Islands, which could result in additional costs that could adversely affect its financial condition or results of operations. If SEALSQ was required to satisfy economic substance requirements in the British Virgin Islands, but failed to do so, it could face spontaneous disclosure to competent authorities in the EU of the information filed by the entity with the BVI International Tax Authority and the BVI Financial Investigation Agency in connection with the economic substance requirements and SEALSQ’s beneficial and legal ownership and may also face financial penalties, restriction or regulation of SEALSQ’s business activities and/or may be struck off or liquidated as a registered entity in the British Virgin Islands.

The French tax authorities may determine that SEALSQ is not a Swiss tax resident.

SEALSQ believes that it is and will remain a Swiss resident company for tax purposes and that SEALSQ will benefit from the France-Switzerland double tax treaty when dividend and interest payments are made by SEALSQ France to SEALSQ Corp. Additionally, any payments of dividends and interest to SEALSQ would be made into a bank account that is located in Switzerland and would not be subsequently rewired to a bank account located in the BVI (or any other blacklisted jurisdiction).

The status of SEALSQ’s tax residence may be subject to challenge by the French tax authorities and the onus would be upon SEALSQ to demonstrate that (i) SEALSQ has sufficient substance in Switzerland, including having its place of effective management in Switzerland along with sufficient substance, in particular employees and offices, (ii) SEALSQ is not controlled, directly or indirectly, by a non-French or non-Swiss tax resident, and (iii) SEALSQ is the beneficial owner of the dividends and interest paid by SEALSQ France SAS.

It is important to note that pursuant to a French government Decree (arrêté) dated February 16, 2024, the British Virgin Islands is no longer on the list of “non-cooperative States and territories”. As a result, even if SEALSQ Corp was deemed a tax resident of the British Virgin Islands, the potential adverse French tax consequences that existed prior to that date on dividend and interest payments made by SEALSQ France to SEALSQ Corp have ceased to exist.

A change in tax laws, treaties or regulations, or their interpretation, of any country in which SEALSQ operates, could result in a higher tax rate on its earnings, which could result in a significant negative impact on its earnings and cash flows from operations.

SEALSQ operates in various jurisdictions. Consequently, it is subject to changes in applicable tax laws, treaties or regulations in the jurisdictions in which it operates, which could include laws or policies directed toward companies organized in jurisdictions with low tax rates. A material change in the tax laws or policies, or their interpretation, of any country in which it has significant operations, or in which SEALSQ is incorporated or resident, could result in a higher effective tax rate on its worldwide earnings and such change could be significant to its financial results.

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Risk Related to SEALSQ’s Corporate Structure

As a “foreign private issuer” (within the meaning of the U.S. Securities Act) SEALSQ is entitled to claim exemptions from certain Nasdaq corporate governance standards, and, if it elected to rely on these exemptions, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

As a foreign private issuer, SEALSQ is permitted to, and it does, rely on exemptions from certain Nasdaq corporate governance standards applicable to domestic U.S. issuers. This may afford less protection to holders of its Ordinary Shares.

SEALSQ is exempted from certain corporate governance requirements of Nasdaq by virtue of being a foreign private issuer. SEALSQ is required to provide a brief description of the significant differences between its corporate governance practices and the Nasdaq corporate governance practices required to be followed by domestic U.S. companies listed on Nasdaq. The standards applicable to SEALSQ are considerably different from the standards applied to domestic U.S. issuers. For instance, SEALSQ is not required to:

SEALSQ has relied on and intends to continue to rely on some of these exemptions. As a result, you may not be provided with the benefits of certain corporate governance requirements of Nasdaq.

As a “foreign private issuer” and, as a result, SEALSQ is subject to reduced requirements with respect to the reporting of financial statements and other material events to SEALSQ’s shareholders and the SEC.

As a foreign private issuer, SEALSQ is exempt from, among other things, the rules prescribing the furnishing and content of proxy statements under the Exchange Act. In addition, its executive officers and directors and principal shareholders are exempt from the short-swing profit and recovery provisions contained in Section 16 of the Exchange Act, and its principal shareholders are also exempt from the reporting requirements contained in Section 16 of the Exchange Act. SEALSQ is also not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as domestic U.S. companies with securities registered under the Exchange Act. As a result, SEALSQ’s shareholders may be afforded less protection than they would under the Exchange Act rules applicable to domestic U.S. companies.

SEALSQ may lose its foreign private issuer status, which would then require SEALSQ to comply with the Exchange Act’s domestic reporting regime and cause it to incur significant legal, accounting and other expenses.

As a foreign private issuer, SEALSQ is not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. In order to maintain SEALSQ’s current status as a foreign private issuer, either (a) a majority of its Ordinary Shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of its executive officers or directors may not be United States citizens or residents, (ii) more than 50 percent of its assets cannot be located in the United States and (iii) its business must be administered principally outside the United States. These criteria are tested annually. If SEALSQ lost this status, it would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. SEALSQ may also be required to make changes in its corporate governance practices in accordance with various SEC and stock exchange rules. The regulatory and compliance costs to SEALSQ under U.S. securities laws if it is required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the cost SEALSQ would incur as a foreign private issuer. As a result, SEALSQ expects that a loss of foreign private issuer status would increase its legal and financial compliance costs and would make some activities highly time-consuming and costly. SEALSQ also expects that if it were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for SEALSQ to obtain director and officer liability insurance, and SEALSQ may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for SEALSQ to attract and retain qualified members of its board of directors.

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SEALSQ is a “controlled company” as defined under the Nasdaq corporate governance rules. As a result, it qualifies for, and intends to rely on, exemptions from certain corporate governance requirements that would otherwise provide protection to shareholders of other companies.

SEALSQ is a “controlled company” as defined under the Nasdaq corporate governance rules because WISeKey owns more than 50% of its total voting power. For so long as it remains a controlled company, SEALSQ may rely on certain exemptions from the corporate governance rules, including the rule that its board of directors be comprised of a majority of independent directors. As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements. Even if SEALSQ ceases to be a controlled company, it may still rely on exemptions available to foreign private issuers, including being able to adopt home country practices in relation to corporate governance matters.

SEALSQ will likely not pay dividends in the foreseeable future.

The dividend policy is subject to the discretion of SEALSQ’s board of directors and will depend on, among other things, its earnings, financial condition, capital requirements and other factors. There is no assurance that its board of directors will declare dividends even if SEALSQ is profitable. Under BVI law, SEALSQ may only pay dividends if it satisfies the BVI Solvency Test, being that SEALSQ’s assets must exceed its liabilities and it must be able to pay its debts as they fall due.

As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.

SEALSQ’s corporate affairs are governed by its Articles, the BVI Act and the common law of the British Virgin Islands. The rights of shareholders to take legal action against its directors, actions by minority shareholders and the fiduciary responsibilities of its directors under British Virgin Islands law are governed by the BVI Act and the common law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the British Virgin Islands as well as from the common law of England and the wider Commonwealth, which has persuasive, but not binding, authority on a court in the British Virgin Islands. Decisions of the Judicial Committee of the Privy Council are binding on courts in the British Virgin Islands. The rights of SEALSQ’s shareholders and the fiduciary responsibilities of its directors under British Virgin Islands law are largely codified in the BVI Act, but are potentially not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law. As a result of all of the above, holders of SEALSQ’s shares may have more difficulty in protecting their interests through actions against its management, directors or major shareholders than they would as shareholders of a U.S. company.

British Virgin Islands companies may not be able to initiate shareholder derivative actions in the United States, thereby depriving shareholders of the ability to protect their interests.

Shareholders of British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States as issues of standing and demand are generally determined by the law of the place of incorporation. Shareholders of a British Virgin Islands company could, however, bring a derivative action in the British Virgin Islands courts, and there is a clear statutory right to commence such derivative claims under Section 184C of the BVI Act, but only with the leave of the court. Leave will typically be granted only where the court is satisfied, among other things, that the applicant is acting in good faith and that it is in the interests of the company that the claim be brought. The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are also unlikely to recognize or enforce against SEALSQ judgments of courts in the United States based on certain liability provisions of U.S. securities laws, and to impose liabilities against SEALSQ, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature. There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands will generally recognize and enforce the non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. This means that even if shareholders were to sue SEALSQ successfully, they may not be able to recover anything to make up for the losses suffered.

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The laws of the British Virgin Islands may provide less protection for minority shareholders than those under U.S. law, so minority shareholders may have less recourse than they would under U.S. law if the shareholders are dissatisfied with the conduct of SEALSQ’s affairs.

Under the laws of the British Virgin Islands, the rights of minority shareholders are protected by provisions of the BVI Act dealing with shareholder remedies and other remedies available under common law (in tort or contractual remedies). The principal protection under statutory law is that shareholders may bring an action to enforce the constitutional documents of the SEALSQ (i.e., its Articles) as shareholders are entitled to have the affairs of SEALSQ conducted in accordance with the BVI Act and the memorandum and articles of association of SEALSQ. A shareholder may also bring an action under statute if they feel that the affairs of the company have been or will be carried out in a manner that is unfairly prejudicial, discriminating, or oppressive to them. The BVI Act also provides for certain other protections for minority shareholders, including in respect of investigation of the company and inspection of SEALSQ books and records. There are also common law rights for the protection of shareholders that may be invoked, largely dependent on English common law, since the common law of the British Virgin Islands for business companies is limited.

The Company is not subject to the supervision of the BVI Financial Services Commission, and so the shareholders are not protected by any regulatory inspections by the BVI Financial Services Commission in the BVI.

SEALSQ is not an entity subject to any regulatory supervision in the BVI by the BVI Financial Services Commission. As a result, SEALSQ’s shareholders are not protected by any regulatory supervision or inspections by any regulatory agency in the BVI, and SEALSQ is not required to observe any restrictions in respect of conduct save as disclosed in this report, its Articles, or the BVI Act.

It may be difficult to enforce service of process and judgments against SEALSQ and its officers and directors.

SEALSQ is incorporated under the laws of the British Virgin Islands and its principal executive offices are located outside the United States. Most of SEALSQ’s directors and officers and those of its subsidiaries are residents of countries other than the United States. Substantially all of its subsidiaries’ assets and a substantial portion of the assets of its directors and officers are located outside the United States. As a result, it may be difficult or impossible for United States investors to effect service of process within the United States upon SEALSQ, its directors or officers, its subsidiaries or to realize against SEALSQ or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

BVI Regulatory Environment

SEALSQ is currently a non-operating business and as such it does not have any industry-specific regulators or regulations that it needs to comply with in the BVI. As a BVI business company limited by shares, SEALSQ is regulated by the laws of the British Virgin Islands, and principally by the corporate law of the BVI which is contained in the BVI Act. The BVI does not distinguish between public and private companies. SEALSQ is also governed by the BVI Insolvency Act (Revised Edition 2020) and the laws and regulations of the BVI which pertain to economic substance and beneficial ownership, as well as common law.

Risks Relating to SEALSQ’s Ordinary Shares

SEALSQ’s Ordinary Shares were not publicly traded before the completion of the Spin-Off Distribution on May 23, 2023. While an active trading market currently exists, such a market may not be maintained and therefore it may not provide you with adequate liquidity for SEALSQ’s Ordinary Shares.

Before the Spin-Off Distribution, which was completed on May 23, 2023, there was no public market for SEALSQ’s Ordinary Shares. As of December 31, 2025, WISeKey and its affiliates, including Mr. Carlos Moreira, held 3.75% of the Ordinary Shares and WISeKey held 99.99% of the Class F Shares, which together mean they held approximately 51.86% of the voting rights of SEALSQ, and this concentration of ownership could make it less likely that an active and liquid trading market for its Ordinary Shares be maintained on Nasdaq.

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Although SEALSQ’s Ordinary Shares are listed on the Nasdaq Global Select Market the market for its Ordinary Shares has demonstrated varying levels of trading activity. The current level of trading may not be sustained in the future. The lack of an active market for SEALSQ’s Ordinary Shares may impair investors’ ability to sell their Ordinary Shares at the time they wish to sell them or at a price that they consider reasonable, may reduce the fair market value of their Ordinary Shares and may impair SEALSQ’s ability to raise capital to continue to fund operations by selling Ordinary Shares and may impair its ability to acquire additional assets by using its Ordinary Shares as consideration.

SEALSQ may experience extreme share price volatility unrelated to its actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of its Ordinary Shares.

The U.S. stock market has witnessed instances of extreme stock price run-ups followed by rapid price declines, particularly among newly public companies. In many instances, such volatility has appeared disconnected from the issuers’ operational performance and financial condition. While market fluctuations are an inherent risk for publicly traded companies, such volatility could distort the market perception of SEALSQ’s share price and financial performance, potentially affecting the liquidity of its Ordinary Shares.

Further, if the trading volumes of SEALSQ’s Ordinary Shares are low, shareholders may face difficulties in liquidating their investments or may be forced to sell at unfavorable prices. As a result, investors may experience losses on their investment in its Ordinary Shares, and its ability to access capital markets could be adversely affected.

If securities or industry analysts do not publish research or reports about SEALSQ’s business, or publish negative reports about its business, its share price and trading volume could decline.

As a company that became publicly traded on May 23, 2023, there is currently limited analyst coverage of the SEALSQ Group. The trading market for SEALSQ’s Ordinary Shares will depend, in part, upon the research and reports that securities or industry analysts publish about SEALSQ or its business. SEALSQ does not have any control over analysts as to whether they will cover it, and if they do, whether such coverage will continue. If additional analysts do not commence coverage of SEALSQ, or if one or more of these analysts cease coverage of the SEALSQ Group or fail to regularly publish reports on it, it could lose visibility in the financial markets, which could cause its share price or trading volume to decline. In addition, if one or more of the analysts who cover SEALSQ downgrades its shares or change their opinion of its shares, the share price may likely decline.

The exercise of SEALSQ’s outstanding warrants may result in significant dilution to existing shareholders and could cause its stock price to decline.

As of March 27, 2026, SEALSQ has outstanding warrants to purchase an aggregate of 153,410,592 Ordinary Shares. If some or all of these warrants are exercised, it will be required to issue additional Ordinary Shares, which would increase the number of shares outstanding, dilute the ownership interests of existing shareholders, and could adversely affect the per-share amounts of SEALSQ’s net income (loss), book value, and other financial measures. The extent of dilution experienced by existing shareholders will depend on the number of warrants exercised, the exercise prices relative to the market price of SEALSQ’s Ordinary Shares at the time of exercise, and the terms of the warrants, including any provisions that adjust the exercise price or the number of shares issuable upon certain events.

The mere existence of the warrants may create an overhang and encourage short selling, placing downward pressure on SEALSQ’s stock price; exercises followed by sales would increase the public float and could further depress the price. If the market price of SEALSQ’s Ordinary Shares is below a warrant’s exercise price, the warrants may remain unexercised, depriving SEALSQ of proceeds while the overhang persists. In addition, any anti-dilution or reset adjustments could increase the number of shares issuable or lower the exercise price, which would exacerbate dilution and pressure its stock price. SEALSQ’s stock price may also fluctuate based on anticipated or actual issuances upon exercise of outstanding warrants.

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You may experience future dilution as a result of future equity offerings and other issuances of SEALSQ’s Ordinary Shares or other securities.

To raise additional capital, including to support SEALSQ’s growth plans, or in connection with equity awards, strategic transactions or otherwise, SEALSQ may in the future offer additional Ordinary Shares, or other securities convertible into or exchangeable for its Ordinary Shares, including convertible debt. SEALSQ expects that a component of its potential future financing requirements will be raised through equity offerings. SEALSQ cannot predict the size of future issuances or sales of SEALSQ’s Ordinary Shares or other securities, including those made in connection with future acquisitions or capital raising activities, or the effect, if any, that such issuances or sales may have on the market price of its Ordinary Shares. The issuance and sale of substantial amounts of Ordinary Shares or other equity-linked securities, or announcement that such issuance and sales may occur, may have the effect of diluting the value of the Ordinary Shares held by SEALSQ’s investors and could adversely affect the market price of its Ordinary Shares. In addition, SEALSQ cannot assure you that it will be able to make future sales of its Ordinary Shares or other securities at a price per share that is equal to or greater than the price per share paid by investors, and investors purchasing shares or other securities in the future could have rights that are superior to existing shareholders. The issuance of additional Ordinary Shares or other securities could adversely impact the trading price of SEALSQ’s Ordinary Shares.

The market price of SEALSQ’s Ordinary Shares may be subject to significant fluctuations.

The market price of its Ordinary Shares has been, and is likely to continue to be, volatile. The variance in SEALSQ’s stock price makes it difficult to forecast the stock price at which an investor may be able to buy or sell Ordinary Shares. Among the factors that could affect its share price are:

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If SEALSQ’s Ordinary Shares do not meet the Nasdaq Global Select Market’s minimum share price requirement, and if SEALSQ cannot cure such deficiency within the prescribed timeframe, its Ordinary Shares could be delisted.

Under the rules of the Nasdaq Global Select Market, listed companies are required to maintain a share price of at least $1.00 per share (the “Minimum Bid Price Requirement”). If the share price declines below $1.00 for a period of 30 consecutive business days, then the listed company has a cure period of at least 180 days to regain compliance with the Minimum Bid Price Requirement. If the price of SEALSQ’s Ordinary Shares closes below $1.00 for 30 consecutive days, and if SEALSQ cannot cure that deficiency within the 180-day timeframe, then its Ordinary Shares could be delisted. Additionally, in January 2025, the SEC approved Nasdaq’s proposal to modify its listing standards governing minimum bid price compliance periods and delisting processes, such that, among other matters, if a company fails to maintain the Minimum Bid Price Requirement, and had previously executed a reverse stock split within the prior year, it would immediately receive a notification letter from the Nasdaq Listing Qualifications Department commencing delisting proceedings, with no compliance period.

In the event of a delisting from the Nasdaq Global Select Market, SEALSQ’s Ordinary Shares would likely be traded in the over-the- counter inter-dealer quotation system, more commonly known as the OTC. OTC transactions involve risks in addition to those associated with transactions in securities traded on the securities exchanges, such as the Nasdaq Global Select Market, or other exchange-listed stocks. Many OTC stocks trade less frequently and in smaller volumes than exchange-listed stocks. Accordingly, SEALSQ’s Ordinary Shares would be less liquid than it would be otherwise. Also, the prices of OTC stocks are often more volatile than exchange-listed stocks. Additionally, many institutional investors are prohibited from investing in OTC stocks, and it might be more challenging to raise capital when needed.

If the market price of SEALSQ’s Ordinary Shares is below $5.00 per share, under stock exchange rules, SEALSQ’s shareholders will not be able to use such Ordinary Shares as collateral for borrowing in margin accounts. This inability to continue to use SEALSQ’s Ordinary Shares as collateral may lead to sales of such shares creating downward pressure and increased volatility in the market price of its Ordinary Shares.

Provisions in SEALSQ’s Articles are intended to discourage certain types of transactions that may involve an actual or threatened hostile acquisition of control over SEALSQ, which will likely depress the trading price of its Ordinary Shares.

SEALSQ’s Articles contain provisions that may make the acquisition of control over SEALSQ more difficult, including the following:

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These provisions, alone or together, could discourage, delay or prevent a transaction involving a change of control of the SEALSQ Group. These provisions could also limit the opportunity for its shareholders to receive a premium for their Ordinary Shares and could also affect the price that some investors are willing to pay for its Ordinary Shares.

SEALSQ is an “emerging growth company” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make its Ordinary Shares less attractive to investors.

SEALSQ is an “emerging growth company”, as defined in the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. SEALSQ cannot predict if investors will find its Ordinary Shares less attractive because it may rely on these exemptions. If some investors find its Ordinary Shares less attractive as a result, there may be a less active trading market for its Ordinary Shares and the share price may be more volatile.

In addition, under the JOBS Act, SEALSQ’s independent registered public accounting firm will not be required to attest to the effectiveness of its internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 for so long as SEALSQ is an emerging growth company.

For as long as SEALSQ takes advantage of the reduced reporting obligations, the information that it provides its shareholders may be different from information provided by other public companies.

Techniques employed by short sellers may drive down the market price of the Ordinary Shares.

Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale.

As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its prospects to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.

Public companies that have substantially all of their operations in China have been the subject of short selling. Much of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.

It is not clear what effect such negative publicity could have on SEALSQ. If SEALSQ were to become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, it could have to expend significant resources to investigate such allegations and/or defend itself.

While SEALSQ would strongly defend against any such short seller attacks, it may be constrained in the manner in which it can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such a situation could be costly, time-consuming, and could distract SEALSQ’s management from growing its business. Even if such allegations are ultimately proven to be groundless, allegations against SEALSQ could severely impact its business, and any investment in Ordinary shares could be greatly reduced or even rendered worthless.

SEALSQ could be subject to securities class action litigation.

In the past, securities class action litigation has often been brought against public companies following declines in the market prices of their securities. If SEALSQ faces such litigation, it could result in substantial costs and a diversion of management’s attention and its resources, which could harm its business.

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Risks Relating to the Dual Class Structure of SEALSQ’s Shares

The dual class structure of SEALSQ’s shares has the effect of concentrating voting power with certain shareholders, in particular WISeKey, which will effectively eliminate your ability to influence the outcome of important transactions, including a change of control.

SEALSQ’s Ordinary Shares have one (1) vote per share as against each other Ordinary Share but, as a class, the Ordinary Shares are fixed at 50.01% of SEALSQ’s voting power. SEALSQ’s Class F Shares have a variable number of votes that ensure that WISeKey and other Class F Shareholders are fixed at 49.99% of SEALSQ’s voting power, and WISeKey may, and as of December 31, 2025 does, have voting power that, in the aggregate, exceeds 49.99% of SEALSQ’s voting power, regardless of the actual proportion of the shares of SEALSQ held by it. This voting feature is not common among other corporations and may have an adverse effect on SEALSQ’s shareholders other than WISeKey. SEALSQ is reserving up to 5% of its Class F Shares for issuance pursuant to an F Share Option Plan for certain directors and senior management of SEALSQ, its subsidiaries and its parent. As a result, WISeKey’s initial ownership percentage of Class F Shares is subject to the grant and exercise of SEALSQ Class F Share Options from time to time. SEALSQ’s Articles provide that, in the event of a change of control (being the acquisition by any person or entity, alone or jointly, of more than 50% of the voting rights of any Class F Shareholder which is a corporate entity), as determined by SEALSQ’s board of directors, the Class F Shares owned by such Class F Shareholder will be subject to a mandatory and automatic redemption by SEALSQ in exchange for the issuance of new Ordinary Shares at a ratio of five (5) Ordinary Shares for each one (1) Class F Share redeemed. A change in the control of WISeKey would trigger this provision as it is a corporate entity holding Class F Shares. See Item 10.B. Memorandum and Articles of Association for a further discussion of the terms of the Articles. Accordingly, WISeKey will effectively control all matters submitted to the shareholders for the foreseeable future, including the election of directors, amendments of SEALSQ’s organizational documents, compensation matters, and any merger, consolidation, sale of all or substantially all of SEALSQ’s assets, or other major corporate transaction requiring shareholder approval.

WISeKey and the other Class F Shareholders may have interests that differ from yours and may vote in a way with which you disagree with and which may be adverse to your interests. This concentrated control is likely to have the effect of limiting the likelihood of an unsolicited merger proposal, unsolicited tender offer, or proxy contest for the removal of directors. As a result, SEALSQ’s governance structure and its Articles may have the effect of depriving its shareholders of an opportunity to sell their shares at a premium over prevailing market prices and make it more difficult to replace its directors and management.

SEALSQ’s governance structure and its Articles may negatively affect the decision by certain institutional investors to purchase or hold its Ordinary Shares.

The holding of multi-class or low-voting shares, such as SEALSQ’s Ordinary Shares, may not be permitted by the investment policies of certain institutional investors or may be less attractive to the portfolio managers of certain institutional investors. In addition, the FTSE Russell requires that at least 5% of a company’s total voting rights be held by unrestricted public shareholders for inclusion in the Russell U.S. equity indexes. By contrast, in April 2023, the S&P Dow Jones Indices revised its methodology to permit companies with multiple share-class structures to be considered for inclusion in the S&P Composite 1500 and its component indices; inclusion is still subject to all other eligibility criteria and index-committee discretion. If SEALSQ’s capital structure does not satisfy the requirements of the indexes or does not meet other eligibility criteria, its Ordinary Shares would be ineligible for inclusion in those indexes, and mutual funds, exchange traded funds and other investment vehicles that seek to passively track those indices would not invest in SEALSQ’s Ordinary Shares, which could negatively affect the trading price and volume of its Ordinary Shares.

The Class F Shareholders’ Agreement also has the effect of concentrating voting power with WISeKey and the other Class F Shareholders, which will effectively eliminate your ability to influence the outcome of important transactions, including a change of control.

SEALSQ’s Articles provide that all Class F Shareholders must enter into the Class F Shareholders’ Agreement. The Class F Shareholders’ Agreement provides that all of the Class F Shares will be voted as one and in accordance with the majority (by the number of shares held) view of the holders of the Class F Shares. Accordingly, together with SEALSQ’s dual class structure, such Class F Shareholders will effectively control all matters submitted to the shareholders for the foreseeable future, including the election of directors, amendments of SEALSQ’s organizational documents, and any merger, consolidation, sale of all or substantially all of its assets, or other major corporate transaction requiring shareholder approval.

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WISeKey and other Class F Shareholders could have, and WISeKey currently does have, voting power that exceeds 49.99% of the voting power of SEALSQ’s outstanding capital stock.

SEALSQ’s Articles will not prevent WISeKey or other Class F shareholders from having more than 49.99% of the voting power of its outstanding shares in aggregate. As of December 31, 2025, WISeKey holds 3.13% of SEALSQ’s Ordinary Shares, and combined with its holding of Class F Shares, 51.55% of the voting power of SEALSQ’s outstanding shares in aggregate. In the future, other Class F Shareholders could have voting power that exceeds 49.99% of the voting power of SEALSQ’s outstanding shares in aggregate, including substantially in excess, as a result of their ownership of its Ordinary Shares.

As a result of issuances of SEALSQ’s Ordinary Shares or the disposal of Ordinary Shares by WISeKey and other Class F Shareholders, WISeKey and other Class F Shareholders could have, and WISeKey currently does have, voting power that is substantially greater than, and outsized in comparison to, their economic interests and the percentage of SEALSQ’s Ordinary Shares that they hold.

In certain circumstances, SEALSQ’s Class F Shareholders could have voting power that is substantially greater than, and outsized in comparison to, their economic interests and the percentage of its Ordinary Shares that they hold. This separation between voting power and economic interests could cause conflicts of interest between WISeKey, SEALSQ’s Class F Shareholders and its other shareholders, which may result in WISeKey and SEALSQ’s other Class F Shareholders undertaking, or causing SEALSQ to undertake, actions that would be desirable for WISeKey and SEALSQ’s other Class F Shareholders but would not be desirable for SEALSQ’s other shareholders.

As of December 31, 2025, WISeKey holds 3.13% of SEALSQ’s Ordinary Shares, and combined with its holding of Class F Shares, 51.55% of the voting power of SEALSQ’s outstanding shares in aggregate. In the event that WISeKey and SEALSQ’s other Class F Shareholders have less than 49.99% of the voting power of SEALSQ’s shares prior to giving effect to the voting power of the Class F Shares, which is currently the case, the issuance of additional Ordinary Shares by SEALSQ in the future to shareholders other than Class F Shareholders will dilute the economic interests of WISeKey and SEALSQ’s other Class F Shareholders in SEALSQ but will not result in further dilution of the 49.99% voting power of WISeKey as a holder of Class F Shares and of SEALSQ’s other Class F Shareholders.

Future issuances of SEALSQ’s Ordinary Shares will dilute the voting power of its holders of Ordinary Shares but may not result in further dilution of the voting power of Class F Shareholders.

Future issuances of SEALSQ’s Ordinary Shares will dilute both the voting power and economic interests of holders of its Ordinary Shares and future issuances to shareholders other than Class F Shareholders will dilute only the economic interests of SEALSQ’s Class F Shareholders but not the 49.99% voting power of the Class F Shareholders. Because the Class F Shares have variable voting rights, in the event that SEALSQ’s Class F Shareholders have less than 49.999999% of the voting power of its shares prior to giving effect to the voting power of the Class F Shares, future issuances of Ordinary Shares to shareholders other than Class F Shareholders will not result in dilution of the 49.99% voting power of SEALSQ’s Class F Shareholders, but rather, will correspondingly increase the voting power of the Class F Shares.

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Risks Related to SEALSQ’s Investment Policy and Investment Portfolio

The value of SEALSQ’s investment portfolio may decline.

The Company’s Investment Policy permits the Company to invest from time to time in securities and certain cryptocurrencies as approved by the Board (collectively referred to herein as the “Approved Cryptocurrencies”), including Bitcoin, Ethereum, HBAR (which are digital assets based on an open source cryptographic protocol existing on the Hedera Network), and WECAN tokens (which are Ethereum-based native utility token compliant with the ERC-20 standard tokens issued by WeCan Group SA, (a Swiss blockchain and data compliance company in which SEALSQ has a 31.9% equity stake as of December 31, 2025)), and SEALSQ will be exposed to market volatility in connection with these investments. SEALSQ’s financial position and financial performance could be adversely affected by worsening market conditions or poor performance of such investments. Bitcoin, for example, is a highly volatile asset and has experienced significant price fluctuations over time. SEALSQ’s cryptocurrency strategy has not been tested and may prove unsuccessful. SEALSQ may also invest from time to time in nonmarketable securities and may need to hold such instruments for a long period of time and may not be able to realize a return of its cash investment should there be a need to liquidate to obtain cash at any given time. SEALSQ may also invest from time to time in securities that are interest-bearing securities and if there are changes in interest rates, those changes would affect the interest income SEALSQ earns on these investments and, therefore, impact its cash flows and results of operations, as well as the value of such assets as reflected on the balance sheet.

SEALSQ’s investment portfolio may be concentrated in just a few holdings, which may result in a single holding significantly impacting the value of its investment portfolio.

The SEALSQ Group’s investment portfolio is overseen in accordance with the guidelines approved by the Investment Committee pursuant to the Investment Policy. SEALSQ’s investment portfolio may be concentrated in just a few holdings. Accordingly, a significant decline in the market value of one or more of such holdings may not be offset by hypothetically better performance of the other holdings, if any. This concentration of risk may result in a more pronounced effect on net income and stockholders’ equity and may result in greater volatility in the fair market value of SEALSQ’s investment portfolio from one period to another.

The trading prices of many digital assets, including the Approved Cryptocurrencies, have experienced extreme volatility in recent periods and may continue to do so. Extreme volatility in the future, including declines in the trading prices of any of the Approved Cryptocurrencies, is likely to influence SEALSQ’s financial results and the market price of its ordinary shares.

Digital assets are highly volatile assets, and to the extent SEALSQ holds material positions in the Approved Cryptocurrencies or other digital assets, fluctuations in the price of any of the Approved Cryptocurrencies or other digital assets are likely to influence its financial results and, as a result, the market price of its ordinary shares. To the extent SEALSQ holds material positions in the Approved Cryptocurrencies or other digital assets, its financial results and the market price of its Ordinary Shares would be adversely affected, and its business and financial condition would be negatively impacted, if the price of any of the Approved Cryptocurrencies or other digital assets decreased substantially (as it has in the past, such as during 2022), including as a result of:

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The Approved Cryptocurrencies and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty.

The Approved Cryptocurrencies and other digital assets are relatively novel and are subject to significant uncertainty, which could adversely impact their price. The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects and evolving, and it is possible that regulators in the United States or other countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of any of the Approved Cryptocurrencies.

The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of any of the Approved Cryptocurrencies and other digital assets or the ability of individuals or institutions to own or transfer any of the Approved Cryptocurrencies and other digital assets. Regulatory authorities have been evolving in their approach to digital assets. It is not possible to predict whether, or when, any of these developments will lead to Congress granting additional authorities to the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. It is also not possible to predict the nature of any such additional authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function or the willingness of financial and other institutions to continue to provide services to the digital assets industry, nor how any new regulations or changes to existing regulations might impact the value of digital assets generally, and the Approved Cryptocurrencies specifically. The consequences of increased regulation of digital assets and digital asset activities could adversely affect the market price of any of the Approved Cryptocurrencies and, in turn, adversely affect the market price of SEALSQ’s Ordinary Shares.

Moreover, the risks of engaging in a digital asset treasury strategy are relatively novel and have created, and could continue to create, complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

The growth of the digital assets industry in general, and the use and acceptance of the Approved Cryptocurrencies in particular, may also impact the price of any of the Approved Cryptocurrencies or other digital assets and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of the Approved Cryptocurrencies may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to the Approved Cryptocurrencies, institutional demand for the Approved Cryptocurrencies as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for the Approved Cryptocurrencies as a means of payment, and the availability and popularity of alternatives to the Approved Cryptocurrencies. Even if growth in the adoption of the Approved Cryptocurrencies occurs in the near or medium-term, there is no assurance that usage of the Approved Cryptocurrencies will continue to grow over the long-term.

Because the Approved Cryptocurrencies have no physical existence beyond the record of transactions on their respective blockchains and networks, a variety of technical factors related to the Approved Cryptocurrencies blockchains and networks could also impact the price of the Approved Cryptocurrencies. For example, malicious attacks by miners, inadequate mining fees to incentivize validating of Bitcoin transactions, hard “forks” of the Bitcoin blockchain into multiple blockchains, and advances in digital computing, algebraic geometry, and quantum computing could undercut the integrity of the Bitcoin blockchain or other digital asset blockchains and networks and negatively affect the price of Bitcoin or other digital assets. The liquidity of Bitcoin or other digital assets may also be reduced and damage to the public perception of Bitcoin or other digital assets may occur, if financial institutions were to deny or limit banking services to businesses that hold Bitcoin, provide Bitcoin or other digital asset-related services or accept Bitcoin or other digital assets as payment, which could also decrease the price of Bitcoin or other digital assets. Similarly, the open-source nature of the Bitcoin blockchain or other digital asset blockchains means the contributors and developers of the Bitcoin blockchain or other digital assets are generally not directly compensated for their contributions in maintaining and developing the blockchain, and any failure to properly monitor and upgrade such blockchains could adversely affect such blockchains and negatively affect the price of Bitcoin or other digital assets.

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The launch of central bank digital currencies (“CBDCs”) may change consumer preferences and the perceived value or prospects of digital assets.

The introduction of a government-issued digital currency could eliminate or reduce the need or demand for private-sector issued crypto currencies, or significantly limit their utility. National governments around the world could introduce CBDCs, which could in turn limit the size of the market opportunity for cryptocurrencies, and change consumer preferences and the perceived value or prospects of digital assets.

HBAR is the native token of the Hedera public network, which differs materially from conventional blockchains. Investing in or holding HBAR could expose SEALSQ to risks specific to Hedera’s technology, governance, and token economics.

The Hedera network is governed and controlled by the Hedera Governing Council, which is comprised of a limited number of multinational corporations and academic institutions, and it retains the authority to direct protocol upgrades, determine validator participation, and influence network policy. Therefore, control is concentrated in a small group and decisions adverse to HBAR holders could be made without broad community consent. Hedera’s hashgraph consensus algorithm remains relatively new and previously undiscovered weaknesses may emerge as usage grows. Certain features of HBAR, such as token freezing, KYC/AML compliance flags, and issuer-controlled minting and burning, could expose network participants and developers to heightened scrutiny under evolving securities, commodities, and payments regulations across multiple jurisdictions.

The WECAN tokens are novel, highly speculative digital assets that entail risks beyond those inherent in Ethereum-based ERC-20 tokens

WECAN tokens rely on a proprietary and semi-permissioned infrastructure, which may concentrate operational control and create a single point of systemic failure. Given that the WECAN tokens are used in digital identity, such as KYC/AML verification, and data auditability functions, there is a risk of heightened exposure to regulatory and compliance oversight across multiple jurisdictions. Since the WECAN tokens have low trading volumes and a high token supply, there is a greater risk of price manipulation, impaired secondary market exit, and dilution upon the release of vested or reserved token allocations. Further, the success of the WECAN token, in part, is dependent on enterprise adoption and strategic partnerships and if those do not materialize, the WECAN token may lose value or cease to exist. The WECAN token is built on the ERC-20 standard, and it is, therefore, exposed to technical vulnerabilities in the ERC-20 standard and in any bridging mechanisms used to link Ethereum and the WECAN infrastructure.

Changes in the governance of a digital asset network or protocol may not receive sufficient support from users and validators, which may negatively affect that digital asset network’s or protocol’s ability to grow and respond to challenges.

The governance of some digital asset networks and protocols, such as the Bitcoin and Ethereum Networks, is generally by voluntary consensus and open competition. For such networks and protocols, there may be a lack of consensus or clarity on that network’s or protocol’s governance, which may stymie such network’s or protocol’s utility, adaptability and ability to grow and face challenges. The foregoing notwithstanding, the underlying software for some digital networks and protocols is informally or formally managed or developed by a group of core developers that propose amendments to the relevant network’s or protocol’s source code. Core developers’ roles may evolve over time, generally based on self-determined participation.

If a significant majority of users and validators were to adopt amendments to the networks for the Approved Cryptocurrencies based on the proposals of such core developers, the networks for the Approved Cryptocurrencies would be subject to new source code that may adversely affect the value of the Approved Cryptocurrencies.

As a result of the foregoing, it may be difficult to find solutions or marshal sufficient effort to overcome any future problems, especially long-term problems, on digital asset networks.

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If SEALSQ or its third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to its Approved Cryptocurrencies, or if its private keys are lost or destroyed, or other similar circumstances or events occur, SEALSQ may lose some or all of its Approved Cryptocurrencies and its financial condition and results of operations could be materially adversely affected.

Security breaches and cyberattacks are of particular concern with respect to SEALSQ’s holdings and potential holdings of the Approved Cryptocurrencies or other digital assets. The Approved Cryptocurrencies and other blockchain-based cryptocurrencies and the entities that provide services to participants in the digital asset ecosystems have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. For example, in October 2021 it was reported that hackers exploited a flaw in the account recovery process and stole from the accounts of at least 6,000 customers of the Coinbase exchange, although the flaw was subsequently fixed and Coinbase reimbursed affected customers. Similarly, in November 2022, hackers exploited weaknesses in the security architecture of the FTX Trading digital asset exchange and reportedly stole over $400 million in digital assets from customers. A successful security breach or cyberattack could result in:

Further, any actual or perceived data security breach or cybersecurity attack directed at other companies with digital assets or companies that operate digital asset networks, regardless of whether SEALSQ is directly impacted, could lead to a general loss of confidence in the broader blockchain ecosystem or in the use of the blockchain ecosystems to conduct financial transactions, which could negatively impact SEALSQ.

Attacks upon systems across a variety of industries, including industries related to Bitcoin and/or Ethereum, are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against a target. These attacks may occur on SEALSQ’s systems or those of its third-party service providers or partners. SEALSQ may experience breaches of its security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. In particular, SEALSQ expects that unauthorized parties will attempt, to gain access to its systems and facilities, as well as those of its partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. In addition, certain types of attacks could harm SEALSQ even if its systems are left undisturbed. For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched against a target and SEALSQ may not be able to implement adequate preventative measures. Further, there has been an increase in such activities due to the increase in work-from-home arrangements. The risk of cyberattacks could also be increased by cyberwarfare in connection with the ongoing or future military and/or geopolitical conflicts, including potential proliferation of malware into systems unrelated to such conflicts. Any future breach of its operations or those of others in the digital asset industry, including third-party services on which SEALSQ relies, could materially and adversely affect its financial condition and results of operations.

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SEALSQ faces risks relating to the custody of any Approved Cryptocurrency it may hold, including the loss or destruction of private keys required to access such digital assets and cyberattacks or other data loss relating to its digital assets.

SEALSQ intends to hold its Approved Cryptocurrencies with regulated custodians that have duties to safeguard its private keys. SEALSQ’s holdings of any of its Approved Cryptocurrencies may be concentrated with a single custodian from time to time. In light of the significant amount of Approved Cryptocurrencies SEALSQ may hold, it would seek to engage additional custodians to achieve a greater degree of diversification in the custody of its Approved Cryptocurrencies it may hold as the extent of potential risk of loss is dependent, in part, on the degree of diversification. If there is a decrease in the availability of digital asset custodians that SEALSQ believes can safely custody any of the Approved Cryptocurrencies it may hold, for example, due to regulatory developments or enforcement actions that cause custodians to discontinue or limit their services in the United States or consolidation in the custody industry, SEALSQ may need to take other measures to custody any of the Approved Cryptocurrencies it may hold, and its ability to seek a greater degree of diversification in the use of custodial services would be materially adversely affected.

Any insurance that SEALSQ obtains that would covers losses of its holdings of digital assets may only cover a small fraction of the value of the entirety of its digital asset holdings, and there can be no guarantee that such insurance will be maintained as part of the custodial services SEALSQ may have or that such coverage will cover losses with respect to its digital assets. Moreover, the use of custodians may expose SEALSQ to the risk that the digital assets that custodians may hold on its behalf could be subject to insolvency proceedings and it could be treated as a general unsecured creditor of the custodian, inhibiting its ability to exercise ownership rights with respect to such digital assets. Any loss associated with such insolvency proceedings is unlikely to be covered by any insurance coverage SEALSQ may maintain related to its digital assets.

The Approved Cryptocurrencies are controllable only by the possessor of both the unique public key and private key(s) relating to the local or online digital wallet in which such digital assets are held. While the blockchain ledger for the Approved Cryptocurrencies requires a public key relating to a digital wallet to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the Approved Cryptocurrencies held in such wallet. To the extent the private key(s) for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private key(s) is accessible, neither SEALSQ nor its custodians will be able to access the Approved Cryptocurrencies held in the related digital wallet. Furthermore, SEALSQ cannot provide assurance that its digital wallets, nor the digital wallets of its custodians held on its behalf, will not be compromised as a result of a cyberattack. The Bitcoin and blockchain ledger, as well as other digital assets and Decentralized Ledger technologies, have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities.

SEALSQ’s digital asset treasury strategy exposes SEALSQ to risk of non-performance by counterparties

Its digital asset treasury strategy exposes SEALSQ to the risk of non-performance by counterparties, whether contractual or otherwise. Risk of non-performance includes inability or refusal of a counterparty to perform because of a deterioration in the counterparty’s financial condition and liquidity or for any other reason. For example, SEALSQ’s execution partners, custodians, or other counterparties might fail to perform in accordance with the terms of its agreements with them, which could result in a loss of the digital assets, a loss of the opportunity to generate funds, or other losses.

One of the counterparty risks with respect to digital assets is custodian default in the performance of obligations under the various custody arrangements SEALSQ may enter into. A series of recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry, the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets industry, SEC enforcement actions against other providers, and placement into receivership or civil fraud lawsuit against digital asset industry participants have highlighted the perceived and actual counterparty risk applicable to digital asset ownership and trading. Legal precedent created in these bankruptcy and other proceedings may increase the risk of future rulings adverse to its interests in the event one or more of its custodians becomes a debtor in a bankruptcy case or is the subject of other liquidation, insolvency or similar proceedings.

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While custodians are subject to regulatory regimes intended to protect customers in the event of a custodial bankruptcy, receivership or similar insolvency proceeding, no assurance can be provided that any custodially-held digital assets will not become part of the custodian’s insolvency estate if one or more of the custodians enters bankruptcy, receivership or similar insolvency proceedings. Additionally, if SEALSQ pursues any strategies to create income streams or otherwise generate funds using its digital assets, it would become subject to additional counterparty risks. Although no such strategies are contemplated at this time, SEALSQ will need to carefully evaluate market conditions, including price volatility as well as service provider terms and market reputations and performance, among others, prior to implementing any such strategy, all of which could affect its ability to successfully implement and execute on any such future strategy. These risks, along with any significant non-performance by counterparties, including in particular the custodians with which SEALSQ may custody substantially all of its digital assets, could have a material adverse effect on its business, prospects, financial condition, and operating results.

The availability of spot Bitcoin Exchange Traded Products and Ethereum Exchange Traded Products (ETPs) may adversely affect the market price of SEALSQ’s Ordinary Shares.

Although Bitcoin, Ethereum and other digital assets have experienced a surge of investor attention since Bitcoin was invented in 2008, until recently investors in the United States had limited means to gain direct exposure to Bitcoin and Ethereum through traditional investment channels, and instead generally were only able to hold Bitcoin and Ethereum through “hosted” wallets provided by digital asset service providers or through “unhosted” wallets that expose the investor to risks associated with loss or hacking of their private keys. Given the relative novelty of digital assets, general lack of familiarity with the processes needed to hold Bitcoin or Ethereum directly, as well as the potential reluctance of financial planners and advisers to recommend direct Bitcoin or Ethereum holdings to their retail customers because of the manner in which such holdings are custodied, some investors have sought exposure to Bitcoin and Ethereum through investment vehicles that hold Bitcoin and Ethereum, respectively, and issue shares representing fractional undivided interests in their underlying Bitcoin or Ethereum holdings. These vehicles, which were previously offered only to “accredited investors” on a private placement basis, have in the past traded at substantial premiums or discounts to net asset value, or NAV, possibly due to the relative scarcity of traditional investment vehicles providing investment exposure to Bitcoin or Ethereum, or due to the inability to convert such instruments to digital asset holdings, or withdraw digital assets from such facilities.

In 2024, the SEC approved the listing and trading of spot Bitcoin ETPs and spot Ethereum ETPs, the shares of which can be sold in public offerings and are traded on U.S. national securities exchanges. To the extent investors view SEALSQ’s Ordinary Shares as providing exposure to Bitcoin or Ethereum, it is possible that the value of its Ordinary Shares may have included (or may in the future include) a premium over the value of Bitcoin or Ethereum SEALSQ was expected to hold (or that it may in the future hold) due to the prior scarcity of traditional investment vehicles providing investment exposure to Bitcoin or Ethereum or may be subject to declined due to investors now having a greater range of options to gain exposure to Bitcoin and Ethereum and investors choosing to gain such exposure through ETPs rather than SEALSQ’s ordinary shares.

Although SEALSQ is an operating company with a post-quantum technology hardware and software solutions business, and it believes it offers a different value proposition than a passive Bitcoin or Ethereum investment vehicle such as a spot Bitcoin ETP or spot Ethereum ETP, investors may nevertheless view SEALSQ’s Ordinary Shares as an alternative to an investment in an ETP, and choose to purchase shares of a spot Bitcoin ETP or spot Ethereum ETP instead of its Ordinary Shares. They may do so for a variety of reasons, including if they believe that ETPs offer a “pure play” exposure to Bitcoin or Ethereum that is generally not subject to federal income tax at the entity level as SEALSQ is, or the other risk factors applicable to an operating business, such as SEALSQ’s. Additionally, unlike spot Bitcoin ETPs or spot Ethereum ETPs, SEALSQ (i) does not seek for its shares to track the value of the underlying Bitcoin or Ethereum SEALSQ holds before payment of expenses and liabilities, (ii) do not benefit from various exemptions and relief under the Securities Exchange Act of 1934, as amended, including Regulation M, and other securities laws, which enable spot Bitcoin ETPs and spot Ethereum ETPs to continuously align the value of their shares to the price of the underlying Bitcoin or Ethereum they hold through share creation and redemption, (iii) are a British Virgin Islands corporation rather than a statutory trust, and do not operate pursuant to a trust agreement that would require SEALSQ to pursue one or more stated investment objectives, and (iv) are not required to provide daily transparency as to SEALSQ’s Bitcoin and Ethereum holdings or its daily NAV. Furthermore, recommendations by broker-dealers to buy, hold, or sell complex products and non-traditional ETPs, or an investment strategy involving such products, may be subject to additional or heightened scrutiny that would not be applicable to broker-dealers making recommendations with respect to its ordinary shares.

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As a result of the foregoing factors, availability of spot Bitcoin ETPs and spot Ethereum ETPs on U.S. national securities exchanges could have a material adverse effect on the market price of SEALSQ’s ordinary shares

SEALSQ’s digital asset treasury strategy subjects it to enhanced regulatory oversight.

As noted above, several spot Bitcoin ETPs and spot Ethereum ETPs have received approval from the SEC to list their shares on a U.S. national securities exchange with continuous share creation and redemption at NAV. Even though SEALSQ is not, and does not function in the manner of, a spot Bitcoin ETP or a spot Ethereum ETP, it is possible that it nevertheless could face regulatory scrutiny from the SEC or other federal or state agencies due to SEALSQ’s holdings of digital assets. For example, if SEALSQ holds a substantial portion of its assets in the form of digital assets, or if it earns a substantial portion of its income from digital assets, regulators could take the position that SEALSQ is a commodity pool operator or otherwise subject to regulations (including registration requirements) under the Commodity Exchange Act of 1936 (as amended, the “CEA”) and/or, to the extent such digital assets are treated as securities, that SEALSQ is an investment company subject to regulations (including registration requirements) under the Investment Company Act of 1940 (as amended, the “ICA”). SEALSQ currently does not believe that its planned digital asset treasury strategy will require registration under the CEA or the ICA, but if regulators believe otherwise, it could be subject to enforcement action, or it may be required to discontinue such strategy or incur substantial costs to register and comply with regulations under the CEA and/or the ICA.

As discussed in more detail below, the SEC and U.S. Commodity Futures Trading Commission (the “CFTC”) recently issued the Joint Interpretation (as defined below), which provides some comfort that certain of the digital assets held and planned to be held by SEALSQ are not, in and of themselves, securities for purposes of the federal securities laws. However, as further discussed below, certain digital assets SEALSQ holds or plans to hold, such as WECAN tokens, are not specifically mentioned in the Joint Interpretation, and there is uncertainty as to whether such unmentioned digital assets may be treated as securities under the federal securities laws. Even for digital assets that the Joint Interpretation specifically mentions as not being securities in and of themselves, it is possible that certain transactions in such digital assets may nonetheless be considered investment contracts, and thus securities for purposes of the federal securities laws.

In addition, there has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist activities, or circumvent sanctions regimes, including those sanctions imposed in response to the ongoing conflict between Russia and Ukraine. While SEALSQ has implemented and maintains policies and procedures reasonably designed to promote compliance with applicable anti-money laundering and sanctions laws and regulations and plans take care to only acquire its digital assets through entities subject to anti-money laundering regulation and related compliance rules in the United States, if SEALSQ is found to have purchased any of its Approved Cryptocurrencies from bad actors that have used digital assets to launder money or persons subject to sanctions, it may be subject to regulatory proceedings and any further transactions or dealings in digital assets by SEALSQ may be restricted or prohibited.

Additional laws, guidance and policies may be issued by domestic and foreign regulators following the filing for Chapter 11 bankruptcy protection by FTX Trading, one of the world’s largest cryptocurrency exchanges, in November 2022. U.S. and foreign regulators have also increased, and are highly likely to continue to increase, enforcement activity, and are likely to adopt new regulatory requirements in response to FTX Trading’s collapse. Increased enforcement activity and changes in the regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government or any new legislation affecting digital assets, as well as enforcement actions involving or impacting SEALSQ’s trading venues, counterparties and custodians, may impose significant costs or significantly limit its ability to hold and transact in digital assets.

In addition, private actors that are wary of digital assets or the regulatory concerns associated with digital assets may in the future take further actions that may have an adverse effect on SEALSQ’s business or the market price of its ordinary shares.

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Due to the currently unregulated nature and lack of transparency surrounding the operations of many digital asset trading venues, digital asset trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in digital asset trading venues and adversely affect the value of SEALSQ’s digital assets.

Digital asset trading venues are relatively new and, in many cases, unregulated. Even if regulated, such venues may not be complying with such regulations. Furthermore, there are many crypto assets trading venues that do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in digital asset trading venues, including prominent exchanges that handle a significant volume of Bitcoin, Ethereum or other digital asset trading and/or are subject to regulatory oversight, in the event one or more Bitcoin, Ethereum or other digital asset trading venues cease or pause for a prolonged period the trading of Bitcoin, Ethereum or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

In 2019 there were reports claiming that 80-95% of Bitcoin trading volume on trading venues was false or non-economic in nature, with specific focus on currently unregulated exchanges located outside of the United States. Any actual or perceived false trading in the digital asset markets, and any other fraudulent or manipulative acts and practices, could adversely affect the value of SEALSQ’s Approved Cryptocurrencies. Negative perception, a lack of stability in the broader digital asset markets and the closure, temporary shutdown or operational disruption of digital asset trading venues, lending institutions, institutional investors, institutional miners, custodians, or other major participants in the digital asset ecosystem, due to fraud, business failure, cybersecurity events, government-mandated regulation, bankruptcy, or for any other reason, may result in a decline in confidence in any of the Approved Cryptocurrencies and the broader digital asset ecosystem and greater volatility in the price of the Approved Cryptocurrencies. For example, in 2022, each of Celsius Network, Voyager Digital, Three Arrows Capital, FTX Trading, and BlockFi filed for bankruptcy, following which the market prices of Bitcoin and other digital assets significantly declined. As the price of SEALSQ’s ordinary shares could be affected by the value of any digital assets SEALSQ may hold, the failure of a major participant in the digital asset ecosystem could have a material adverse effect on the market price of its Ordinary Shares.

SEALSQ’s failure to deal appropriately with conflicts of interest could adversely affect its businesses.

Some of SEALSQ’s executive officers, members of its Investment Committee and members of the Board of Directors engage in personal investment activities. These personal investments, done in their individual capacities or through affiliated investment vehicles, may give rise to potential conflicts or perceived conflicts between the personal financial interests of the executive officers, members of its Investment Committee or members of the Board of Directors and the interests of SEALSQ, any of its subsidiaries or any stockholder other than such executive officers, members of its Investment Committee or members of the Board of Directors.

SEALSQ’s historical financial statements does not reflect the potential variability in earnings that it may experience in the future relating to holdings of digital assets.

SEALSQ’s historical financial statements does not fully reflect the potential variability in earnings that it may experience in the future from acquiring, holding or selling significant amounts of digital assets.

The price of Bitcoin and other digital assets has historically been subject to dramatic price fluctuations and is highly volatile.

SEALSQ expects to determine the fair value of its Approved Cryptocurrencies based on quoted (unadjusted) prices on the applicable exchange (if available), and following adoption of ASU 2023-08, will be required to measure its holdings of the Approved Cryptocurrencies at fair value in SEALSQ’s statement of financial position, and to recognize gains and losses from changes in the fair value of its Approved Cryptocurrencies in net income each reporting period, which may create significant volatility in SEALSQ’s reported earnings and decrease the carrying value of its digital assets, which in turn could have a material adverse effect on the market price of its Ordinary Shares. Conversely, any sale of SEALSQ’s Approved Cryptocurrencies at prices above its carrying value for such assets creates a gain for financial reporting purposes even if SEALSQ would otherwise incur an economic or tax loss with respect to such transaction, which also may result in significant volatility in its reported earnings.

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Due in particular to the volatility in the price of Bitcoin, Ethereum and HBAR, SEALSQ expects SEALSQ’s adoption of ASU 2023-08 may increase the volatility of its financial results and it could significantly affect the carrying value of SEALSQ’s Bitcoin and Ethereum on its balance sheet. Due to the investment in WeCan Group SA, the developer of the WeCan token, SEALSQ’s investment in the WeCan token will be valued at cost and reviewed periodically for indicators of impairment. Gains in the value of the WECAN token will only be recognized upon sale of the token.

Due to anticipated future purchases, SEALSQ expects that the proportion of its total assets represented by its holdings of the Approved Cryptocurrencies will increase in the future. As a result, and in particular with respect to the periods with respect to which ASU 2023-08 will apply, and for all future periods, volatility in its earnings may be significantly more than what SEALSQ experienced in prior periods.

The emergence or growth of new digital assets, including those with significant private or public sector backing, could have a negative impact on the price of the Approved Cryptocurrencies and adversely affect SEALSQ’s business

There are numerous alternative digital assets and many entities, including consortiums and financial institutions, that are researching and investing resources into private or permissioned blockchain platforms or digital assets. If such new digital assets are perceived as superior to those SEALSQ may hold, those new digital assets could gain market share relative to those it may hold and the value of digital assets it may hold could decline or otherwise be lower than it otherwise would have been.

Additionally, central banks in some countries have started to introduce digital forms of legal tender. For example, China’s Central Bank Digital Currency (“CBDC”) project was made available to consumers in January 2022, and governments including the United States, the United Kingdom, the European Union, and Israel have been discussing the potential creation of new CBDCs. Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could also compete with, or replace, Bitcoin, Ethereum and other digital assets SEALSQ may hold as a medium of exchange or store of value. As a result, the emergence or growth of these or other digital assets could cause the market price of the Approved Cryptocurrencies it may hold to decrease, which could have a material adverse effect on SEALSQ’s business, prospects, financial condition, and operating results.

SEALSQ’s holdings of digital assets will be less liquid than its existing cash and cash equivalents and may not be able to serve as a source of liquidity for it to the same extent as cash and cash equivalents.

Historically, the digital asset markets have been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent to entirely electronic, virtual form and decentralized networks. During times of market instability, SEALSQ may not be able to sell its digital assets at favorable prices or at all. For example, a number of Bitcoin trading venues temporarily halted deposits and withdrawals in 2022. As a result, SEALSQ’s holdings of digital assets may not be able to serve as a source of liquidity for SEALSQ to the same extent as cash and cash equivalents. Further, the Approved Cryptocurrencies SEALSQ intends to hold with its custodians and transact with its trade execution partners do not (and may not in the future) enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, SEALSQ may be unable to enter into term loans or other capital raising transactions collateralized by its unencumbered digital assets, or otherwise generate funds using digital asset holdings, including in particular during times of market instability or when the price of its digital assets has declined significantly. If SEALSQ is unable to sell its digital assets, enter into additional capital raising transactions using its digital assets as collateral, or otherwise generate funds using its digital asset holdings, or if SEALSQ is forced to sell its digital assets at a significant loss, in order to meet its working capital requirements, its business and financial condition could be negatively impacted.

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SEALSQ is not registered as an investment company under the Investment Company Act of 1940 (as amended, the “ICA”) or as a Commodity Pool Operator, Commodity Trading Advisor or otherwise under the Commodity Exchange Act of 1936 (as amended, the “CEA”) and shareholders do not have the protections associated with ownership of shares in a registered investment company under the ICA nor the protections afforded by the CEA.

The ICA is designed to protect investors by preventing insiders from managing investment companies to their benefit and to the detriment of public investors, such as the issuance of securities having inequitable or discriminatory provisions; the management of investment companies by irresponsible persons; the use of unsound or misleading methods of computing earnings and asset values; changes in the character of investment companies without the consent of investors; and investment companies engaging in excessive leveraging. To accomplish these ends, the ICA requires the safekeeping and proper valuation of fund assets, restricts greatly transactions with affiliates, limits leveraging, and imposes governance requirements as a check on fund management.

The SEALSQ Group is not registered as an investment company under the ICA, and believes that it is not required to register as such under the ICA. Consequently, its shareholders do not have the regulatory protections provided to investors in investment companies.

SEALSQ will not hold or trade in commodity futures contracts regulated by the CEA, as administered by the CFTC, and believes that it is not a commodity pool for purposes of the CEA, and is not subject to regulation by the CFTC as a commodity pool operator or a commodity trading advisor. Consequently, SEALSQ’s shareholders will not have the regulatory protections provided to investors in CEA-regulated instruments or commodity pools.

Regulatory change reclassifying Bitcoin, Ethereum or other digital assets as a security could lead to SEALSQ’s classification as an “investment company” under the Investment Company Act of 1940, as amended, or the 1940 Act, and could adversely affect the market price of Bitcoin, Ethereum or its other digital asset holdings and the market price of its ordinary shares.

Under Sections 3(a)(1)(A) and (C) of the ICA, a company generally will be deemed to be an “investment company” for purposes of the ICA if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. SEALSQ does not believe that it is an “investment company,” as such term is defined in the ICA, and is not registered as an “investment company” under the ICA as of the date hereof.

A determination that the digital assets SEALSQ holds are securities could lead to its classification as an “investment company” under the ICA, if the portion of its assets consisting of digital assets treated as securities, together with other securities SEALSQ holds, exceeds the applicable thresholds in the ICA, which would subject it to significant additional regulatory controls that could have a material adverse effect on its business and operations and may also require SEALSQ to change the manner in which it conducts its business.

On March 17, 2026, the SEC and CFTC issued a joint interpretation (Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets, Release Nos. 33-11412, 34-105020) regarding the application of federal securities laws to certain types of digital assets and transactions, or the Joint Interpretation. According to the Joint Interpretation, based on the SEC’s understanding of their characteristics, terms, and functions as of the date of the Joint Interpretation, Bitcoin (BTC), Ether (ETH), Hedera (HBAR) and certain other digital assets would not, in and of themselves, be considered securities for purposes of the federal securities laws. However, the Joint Interpretation does not mention certain digital assets SEALSQ holds or plans to hold, such as WECAN tokens, and thus, there is uncertainty as to whether such unmentioned digital assets may be treated as securities under the federal securities laws. While the Joint Interpretation provides comfort that Bitcoin, Ether, Hedera and certain other digital assets SEALSQ holds or plans to hold are not securities in and of themselves, certain transactions in such digital assets may nonetheless be considered investment contracts, and thus securities for purposes of the federal securities laws. The Joint Interpretation provides further comfort that specific transactions in non-securities digital assets, such as certain staking and mining services, would not be considered investment contracts. However, the Joint Interpretation does not discuss all digital asset-related activities and transactions that SEALSQ may undertake, and it is possible that certain of those activities or transactions could be determined to involve an investment contract, and thus, the holding, offer or sale of a security by SEALSQ for purposes of federal securities laws.

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SEALSQ monitors its assets and income for compliance under the ICA and seeks to conduct its business activities in a manner such that it does not fall within its definitions of “investment company” or that SEALSQ qualifies under one of the exemptions or exclusions provided by the ICA and corresponding SEC regulations. If any of its digital assets are determined to constitute a security for purposes of the federal securities laws, SEALSQ would take steps to reduce the percentage of such digital assets that constitute investment securities under the ICA. These steps may include, among others, selling SEALSQ’s digital assets that SEALSQ might otherwise hold for the long term and deploying its cash in non-investment assets, and it may be forced to sell its digital assets at unattractive prices. SEALSQ may also seek to acquire additional non-investment assets to maintain compliance with the ICA, and it may need to incur debt, issue additional equity or enter into other financing arrangements that are not otherwise attractive to SEALSQ’s business. Any of these actions could have a material adverse effect on SEALSQ’s results of operations and financial condition. Moreover, SEALSQ can make no assurance that it would successfully be able to take the necessary steps to avoid being deemed to be an investment company. If it were unsuccessful, then SEALSQ would have to register as an investment company, and the additional regulatory restrictions imposed by ICA could adversely affect the market price of its digital assets and in turn adversely affect the market price of SEALSQ’s ordinary shares.

SEALSQ’s custodially-held digital assets may become part of the custodian’s insolvency estate if one or more of its custodians enters bankruptcy, receivership or similar insolvency proceedings.

If digital assets SEALSQ may hold with custodians are considered to be the property of its custodians’ estates in the event that any such custodians were to enter bankruptcy, receivership or similar insolvency proceedings, SEALSQ could be treated as a general unsecured creditor of such custodians, inhibiting its ability to exercise ownership rights with respect to such digital assets and this may ultimately result in the loss of the value related to some or all of such digital assets. A series of high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry, including the filings for bankruptcy protection by Three Arrows Capital, Celsius Network, Voyager Digital, FTX Trading and Genesis Global Capital, the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets industry, including Signature Bank and Silvergate Bank, SEC enforcement actions against Coinbase, Inc. and Binance Holdings Ltd., the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by Nevada’s Department of Business and Industry, and the filing and subsequent settlement of a civil fraud lawsuit by the New York Attorney General against Genesis Global Capital, its parent company Digital Currency Group, Inc., and former partner Gemini Trust Company, have highlighted the counterparty risks applicable to owning and transacting in digital assets. Additional bankruptcies, closures, liquidations, regulatory enforcement actions or other events involving participants in the digital assets industry in the future may further negatively impact the adoption rate, price, and use of digital assets, limit the availability to SEALSQ of financing collateralized by digital assets, or create or expose additional counterparty risks. Any loss associated with such insolvency proceedings is unlikely to be covered by any insurance coverage SEALSQ may maintain related to digital asset holdings it may have. Even if SEALSQ is able to prevent any digital assets it may hold from being considered the property of a custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that it would still be delayed or may otherwise experience difficulty in accessing any digital assets it may hold with the affected custodian during the pendency of the insolvency proceedings. Any such outcome could have a material adverse effect on its financial condition and the market price of its Ordinary Shares.

A temporary or permanent blockchain “fork” to its digital assets could adversely affect SEALSQ’s business.

Blockchain protocols, including Bitcoin, Ethereum and the Hedera network, are open source. Any user can propose modifications to the protocol software. If a substantial majority of participants—such as miners in proof-of-work systems or validators in proof-of-stake systems—agree to adopt a proposed change, the modification may be implemented, allowing the protocol to evolve without disrupting network functionality. However, if less than a substantial majority of users and miners consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “fork”, i.e., “split” of the impacted blockchain protocol network and respective blockchain, with one prong running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two parallel versions of the Bitcoin or other blockchain protocol network, as applicable, running simultaneously, but with each split network’s digital asset lacking interchangeability. A “hard fork” – where there is disagreement among the users about the rules of the network – can have a significant negative impact on value of the digital asset.

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The Bitcoin network has been subject to “forks” that resulted in the creation of new networks, including Bitcoin cash ABC, Bitcoin cash SV, Bitcoin diamond, Bitcoin gold and others. Some of these forks have caused fragmentation among platforms as to the correct naming convention for forked crypto assets. Due to the lack of a central registry or rulemaking body, no single entity has the ability to dictate the nomenclature of forked digital assets, causing disagreements and a lack of uniformity among platforms on the nomenclature of forked digital assets, and which results in further confusion to customers as to the nature of assets they hold on platforms, and which can negatively impact the value of the digital assets. In addition, several of these forks were contentious and as a result, participants in certain communities may harbor ill will towards other communities. As a result, certain community members may take actions that adversely impact the use, adoption, and price of Bitcoin, or any of their forked alternatives.

Furthermore, when the Ethereum and Ethereum Classic networks split in July 2016, replay attacks, in which transactions from one network were rebroadcast on the other network to achieve “double-spending,” plagued platforms that traded Ethereum through at least October 2016, resulting in significant losses to some crypto asset platforms. Similar replay attacks occurred in connection with the Bitcoin cash and Bitcoin cash SV network split in November 2018. Another possible result of a hard fork is an inherent decrease in the level of security due to the splitting of some mining power across networks, making it easier for a malicious actor to exceed 50% of the mining power of that network, thereby making digital assets that rely on proof-of-work more susceptible to attack, as has occurred with Ethereum Classic.

SEALSQ intends to recognize forked and airdropped assets consistent with its custodians’ practices and policies. SEALSQ may not immediately or ever have the ability to withdraw a forked or airdropped Bitcoin, Ethereum or other digital assets that is received or created with respect to Bitcoin, Ethereum and/or other digital assets that it holds with SEALSQ’s custodians. Future forks may occur at any time. A fork can lead to a disruption of networks and SEALSQ’s information technology systems, cybersecurity attacks, replay attacks, or security weaknesses, any of which can further lead to temporary or even permanent loss of assets.

The due diligence procedures conducted by SEALSQ and its liquidity provider to mitigate transaction risk may fail to prevent transactions with a sanctioned entity.

SEALSQ plans to execute trades through liquidity providers, and will rely on these third parties to implement controls and procedures to mitigate the risk of transacting with sanctioned entities. While SEALSQ expects such third-party service providers to conduct their business in compliance with applicable laws and regulations and in accordance with its contractual arrangements, there is no guarantee that they will do so. Accordingly, SEALSQ may be exposed to risk that its due diligence procedures may fail. If SEALSQ is found to have transacted in digital assets with bad actors that have used digital assets to launder money or with persons subject to sanctions, it may be subject to regulatory proceedings, or digital asset may be subject to freezing or forfeiture and any further transactions or dealings in digital assets by SEALSQ may be restricted or prohibited.

Item 4.Information on the Company

A.History and Development of SEALSQ

SEALSQ Corp (formally known as “SEAL (BVI) Corp.”) was incorporated as a BVI business company under the BVI Act, in the British Virgin Islands on April 1, 2022 with company number: 2095496. The Company’s registered office is located at Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. The registered agent of the Company is Harneys Corporate Services Limited of Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, VG 1110, British Virgin Islands. SEALSQ’s principal executive offices and effective place of management are located at Avenue Louis-Casaï 58, 1216 Cointrin, Switzerland. SEALSQ’s telephone number from the United States is 011 41 22 594 3000. SEALSQ’s website can be accessed at www.SEALSQ.com. The information on or linked to on SEALSQ’s website is not a part of this report.

SEALSQ Corp is the holding company of the SEALSQ Group. The SEALSQ Group consists of SEALSQ Corp, SEALSQ Corp’s branch, registered in Meyrin, Switzerland, SEALSQ France SAS, SEALSQ USA Ltd, SEALSQ Japan KK, SEALSQ France, Taiwan Branch and IC’Alps SASU. SEALSQ’s business purpose is to incorporate, acquire, hold, and dispose of interests in national and international entities, in particular entities active in the area of security technology of IoT devices, branded appliances and precious objects, and other such related areas.

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SEALSQ is a subsidiary of WISeKey International Holding Ltd, a Swiss stock corporation (Aktiengesellschaft) of unlimited duration under the laws of Switzerland and registered in the Commercial Register of the Canton of Zug, Switzerland, on December 2, 2015 under the register number CHE-143.782.707. SEALSQ was incorporated by WISeKey to serve as the holding company of 2 subsidiaries and 1 branch (which formerly represented WISeKey’s global semiconductor business). Pursuant to an internal restructuring of WISeKey on January 1, 2023, WISeKey transferred the ownership of SEALSQ France SAS (formerly known as “WISeKey Semiconductors SAS”), a French semiconductor manufacturer and distributor, WISeKey IoT Japan KK, a Japan-based sales subsidiary of SEALSQ France SAS, and SEALSQ France, Taiwan Branch, a Taiwan-based sales and support branch of SEALSQ France SAS, to SEALSQ in a share exchange.

SEALSQ France SAS was incorporated in France on September 30, 2010, and was acquired by WISeKey International Holding AG on September 21, 2016 for a total consideration of $11.0 million. On March 15, 2020, SEALSQ France SAS purchased the entire share capital of WISeCoin R&D Lab France SAS, a French company engaged in research and development in the connected device and IoT security domain, from WISeCoin AG, a fellow undertaking of WISeKey, for a notional consideration of EUR 1. On January 1, 2021, the entire assets and liabilities of WISeCoin R&D Lab France SAS were merged into SEALSQ France SAS and WISeCoin R&D Lab France SAS was dissolved with immediate effect. SEALSQ France SAS purchased the entire share capital of WISeKey IoT Japan KK on April 15, 2019 from WISeKey SA, a fellow subsidiary undertaking of WISeKey International Holding AG for a nominal consideration of JPY 1. SEALSQ France SAS completed the transfer of SEALSQ France, Taiwan Branch, on March 4, 2019 from WISeKey International Holding AG for no consideration.

On January 1, 2023, WISeKey contributed these subsidiaries to SEALSQ, and on May 23, 2023, as the then-sole shareholder of SEALSQ, distributed 20% of SEALSQ’s outstanding Ordinary Shares to holders of WISeKey Class B Shares (“Class B Shares”), including to holders of WISeKey American Depositary Shares (“ADSs”) representing Class B Shares, and to holders of WISeKey Class A Shares (“Class A Shares”), as a distribution by way of a dividend in kind to such holders who held such ADSs as of the May 22, 2023 record date and such Class B shares and Class A shares as of the May 19, 2023 record date (the “Spin-Off Distribution”). As of December 31, 2023, WISeKey held 100% ownership of SEALSQ Class F Shares with a par value of $0.05 per share (“Class F Shares” and the holders thereof “Class F Shareholders”) and 38.85% of SEALSQ Ordinary Shares.

On May 24, 2023, SEALSQ listed its Ordinary Shares on the Nasdaq Global Market under the ticker symbol “LAES”. On October 4, 2023, SEALSQ transferred the listing of its Ordinary Shares from the Nasdaq Global Market to the Nasdaq Capital Market.

On August 4, 2025, SEALSQ Corp received final approval from the French Ministry of the Economy, Finance and Industrial and Digital Sovereignty under applicable foreign investment regulations and completed the acquisition of 100% of the share capital and voting rights of IC’Alps SASU (“IC’Alps”), a France-based semiconductor design company. Following completion of the acquisition, IC’Alps became a wholly owned subsidiary of SEALSQ Corp.

On October 27, 2025, SEALSQ Corp transferred the listing of its ordinary shares from the Nasdaq Capital Market to the Nasdaq Global Select Market.

As of December 31, 2025, WISeKey held 99.99% ownership of the SEALSQ Class F Shares and 3.13% of SEALSQ Ordinary Shares.

The SEC maintains an internet site at http://www.sec.gov that contains reports, information statements, and other information regarding issuers that file electronically with the SEC.

B.Business Overview

Overview

SEALSQ was established to combine decades of expertise in cryptographic security and trusted digital infrastructure. Headquartered in Switzerland, SEALSQ operates across Europe, the United States and the APAC region. SEALSQ’s solutions provide the foundation of digital trust for businesses and governments worldwide.

SEALSQ generates revenues from the design and sale of semiconductor secure chips and from Digital Certificates, Software as a Service, Software licenses and Post-Contract Customer Support for cybersecurity applications.

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SEALSQ’s comprehensive portfolio, which includes secure microcontrollers, PKI services, compliance with IoT standards like Matter, GSMA eUICC root certificates, tailored ASICs, and post-quantum cryptography capabilities, uniquely positions SEALSQ to address evolving market needs. SEALSQ has a comprehensive range of secure elements, smart card products, and open ARM platforms offering advanced standards of security, including quantum-proof cryptography.

Its principal activities include design, development, and marketing of semiconductor systems, with manufacturing outsourced to third-party foundries. Its main categories of products sold and/or services performed for each of the last three financial years are: