As filed with the Securities and Exchange Commission on June 8, 2026.

Registration No. 333-      ​

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM F-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Silentium Ltd.
(Exact name of registrant as specified in its charter)

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date hereof.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company   ☒

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 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

†

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.

​

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

2,150,000 Ordinary Shares

Silentium Ltd.

This is a firm commitment initial public offering of ordinary shares, no par value per share, of Silentium Ltd. No public market currently exists for our ordinary shares. We anticipate that the initial public offering price will be between $6.00 and $8.00 per share.

We have applied to list our ordinary shares on the NYSE American stock exchange under the symbol “SIAI.”

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and are subject to reduced public company reporting requirements.

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 15 of this prospectus.

Neither the Securities and Exchange Commission, or the SEC, nor any state or other foreign securities commission has approved nor disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

​

1)

The underwriting discount does not include a non-accountable expense allowance equal to 1.0% of the initial public offering price payable to the underwriters. We refer you to “Underwriting” section beginning on page 134 for additional information regarding underwriters’ compensation.

​

We have granted a 45-day option to the representative of the underwriters to purchase up to 322,500 additional ordinary shares solely to cover over-allotments, if any.

The underwriters expect to deliver the ordinary shares on or about       , 2026.

ThinkEquity

The date of this prospectus is       , 2026.

 

TABLE OF CONTENTS

 

 

i

 

ABOUT THIS PROSPECTUS

Neither we nor the underwriters have authorized anyone to provide you with information that is different from that contained in this prospectus, any amendment or supplement to this prospectus, or in any free writing prospectus we may authorize to be delivered or made available to you. Neither we nor the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell ordinary shares and seeking offers to purchase ordinary shares only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date on the front of this prospectus, regardless of the time of delivery of this prospectus or any sale of ordinary shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.

Through and including      2026 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Neither we nor any of the underwriters have taken any action to permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

The terms “shekel,” “Israeli shekel” and “NIS” refer to New Israeli Shekels, the lawful currency of the State of Israel, and the terms “dollar,” “U.S. dollar” or “$” refer to United States dollars, the lawful currency of the United States of America. All references to “shares” in this prospectus refer to ordinary shares of Silentium Ltd., of no par value per share.

On May 28, 2026, we effected a reverse share split of our ordinary shares at the ratio of 2,060-for-1, or the Reverse Split. Unless the context expressly dictates otherwise, all references in this prospectus to our share capital, including the number of ordinary shares outstanding and per-share data for periods prior to the effective date of the Reverse Split have been retroactively adjusted to give effect to the Reverse Split.

TRADEMARKS

“SILENTIUM”, “QUIET BUBBLE”, “PERSONAL SOUND BUBBLE” and “ACUSTIFUSION” are trademarks of ours that we use in this prospectus. This prospectus also includes trademarks, trade names and service marks that are the property of other organizations. Solely for convenience, our trademarks and trade names referred to in this prospectus appear without the ® or ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor to our trademark and trade names.

MARKET, INDUSTRY AND OTHER DATA

This prospectus includes statistical, market and industry data and forecasts which we obtained from publicly available information and independent industry publications and reports that we believe to be reliable sources. These publicly available industry publications and reports generally state that they obtain their information from sources that they believe to be reliable, but they do not guarantee the accuracy or completeness of the information. Although we are responsible for all of the disclosures contained in this prospectus, including such statistical, market and industry data, we have not independently verified any of the data from third-party sources, nor have we ascertained the underlying economic assumptions relied upon therein.

In addition, while we believe the market opportunity information included in this prospectus is generally reliable and is based on reasonable assumptions, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Special Note Regarding Forward-Looking Statements.”

 

ii​

1

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2

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3

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4

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5

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6

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7

​

8

9

10

​	Ordinary Shares offered by us	​	​	2,150,000 Ordinary Shares	​
​	Ordinary Shares to be issued and outstanding after this offering	​	​	5,503,228 Ordinary Shares, or 5,825,728 Ordinary Shares if the representative of the underwriters (the “Representative”) exercises in full its over-allotment option to purchase additional Ordinary Shares.	​
​	Over-allotment option	​	​	We have granted the Representative an option for a period of up to 45 days to purchase, at the public offering price, up to 322,500 additional Ordinary Shares, less underwriting discounts, to cover over-allotments, if any.	​
​	Use of proceeds	​	​	We expect to receive approximately $12.5 million in net proceeds from the sale of Ordinary Shares offered by us in this offering (approximately $14.7 million if the Representative exercises its over-allotment option in full), based upon an assumed public offering price of $7.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the underwriting discount and estimated offering expenses payable by us. We intend to use the net proceeds from this offering (i) to acquire new OEM customers; (ii) for R&D; (iii) to expand our business with existing OEM customers; (iv) to strengthen our relationships with Tier-1 and semiconductor partners; (v) to expand into adjacent markets; and (vi) for working capital and general corporate purposes. The amounts and schedule of our actual expenditures will depend on multiple factors. As a result, our management will have broad discretion in the application of the net proceeds of this offering. See “Use of Proceeds” for more information about the intended use of proceeds from this offering.	​
​	Risk factors	​	​	Investing in our securities involves a high degree of risk. You should read the “Risk Factors” section starting on page 15 of this prospectus for a discussion of factors to consider carefully before deciding to invest in the Ordinary Shares.	​
​	symbol:	​	​	We have applied to list the Ordinary Shares on the NYSE American under the symbol “SIAI”.	​

​

11

12

(in thousands of USD, except share and per share data)

​

​

Year Ended December 31,

​

​

2025

​

​

2024

​

Statements of Operations Data:

​

​

​

​

​

​

​

​

​

Revenues

​

​

​

$

3,949

​

​

​

​

​

3,911

​

​

Cost of revenues

​

​

​

​

1,248

​

​

​

​

​

995

​

​

Research and development expenses, net

​

​

​

​

3,914

​

​

​

​

​

3,826

​

​

Selling and marketing expenses

​

​

​

​

1,087

​

​

​

​

​

1,458

​

​

General and administrative expenses

​

​

​

​

2,047

​

​

​

​

​

1,968

​

​

Operating loss

​

​

​

​

(4,347)

​

​

​

​

​

(4,336)

​

​

Finance income (expenses), net

​

​

​

​

(211)

​

​

​

​

​

623

​

​

Net loss before taxes

​

​

​

​

(4,558)

​

​

​

​

​

(3,713)

​

​

Tax

​

​

​

​

158

​

​

​

​

​

124

​

​

Net loss for the year

​

​

​

​

(4,716)

​

​

​

​

​

(3,837)

​

​

Basic and diluted loss per share

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average number of shares outstanding used in computing basic and diluted loss per share

​

​

​

​

​

​

​

​

​

​

​

​

​

Earnings (Loss) per share (Basic)(1)

​

​

​

$

(10.67)

​

​

​

​

​

0.08

​

​

Loss per share (Diluted)

​

​

​

$

(10.67)

​

​

​

​

​

(0.09)

​

​

Weighted average ordinary shares (Basic)

​

​

​

​

443,372

​

​

​

​

​

51,774,703

​

​

Weighted average ordinary shares (Diluted)

​

​

​

​

443,372

​

​

​

​

​

52,165,443

​

​

​

13

(in thousands of USD)

​

​

As of December 31, 2025

​

​

Actual

​

​

Pro Forma(1)

​

​

Pro Forma As Adjusted(2)

​

​

​

​

(Unaudited)

​

Cash and cash equivalents

​

​

​

$

831

​

​

​

​

​

2,463

​

​

​

​

​

14,929

​

​

Total assets

​

​

​

$

3,705

​

​

​

​

​

5,337

​

​

​

​

​

17,803

​

​

Total liabilities

​

​

​

$

7,062

​

​

​

​

​

5,738

​

​

​

​

​

5,153

​

​

Temporary equity

​

​

​

$

7,536

​

​

​

​

​

0

​

​

​

​

​

0

​

​

Total shareholders’ equity (deficit)

​

​

​

$

(10,893)

​

​

​

​

​

(401)

​

​

​

​

​

12,650

​

​

14

 

RISK FACTORS

Investing in our Ordinary Shares involves a high degree of risk. You should carefully consider the risks and uncertainties described below, in addition to the other information set forth in this prospectus, including the consolidated financial statements and the related notes included elsewhere in this prospectus, before purchasing our Ordinary Shares. If any of the following risks actually occurs, our business, financial condition, cash flows and results of operations could be negatively impacted. In that case, the trading price of our Ordinary Shares would likely decline and you might lose all or part of your investment.

Risks Related to Our Financial Condition and Capital Requirements

We are a development-stage company and have a limited operating history on which to assess the prospects for our business, have incurred significant losses since the date of our inception, and anticipate that we will continue to incur significant losses until we are able to successfully commercialize our products.

We have incurred net losses since our inception in 1997, including net losses of $4,716,000 for the year ended December 31, 2025, and $3,837,000 for the fiscal year ended December 31, 2024. As of December 31, 2025, we had accumulated losses of $77,558,000.

We have devoted substantially all of our financial resources to develop our products and have financed our operations primarily through the issuance of equity securities. We expect to continue to incur significant losses until we are able to successfully commercialize our products. The amount of our future net losses will depend, in part, on completing the development of our products, the rate of our future expenditures and our ability to obtain funding through the issuance of our securities, strategic collaborations or grants. We anticipate that our expenses will increase substantially if and as we:

➢

continue the development of our products;

​

➢

establish a sales, marketing, distribution and technical support infrastructure to commercialize our products;

​

➢

seek to identify, assess, acquire, license, and/or develop other products and subsequent generations of our current products;

​

➢

seek to maintain, protect, and expand our intellectual property portfolio;

​

➢

seek to attract and retain skilled personnel; and

​

➢

create additional infrastructure to support our operations as a public company and our product development and planned future commercialization efforts.

​

We expect that we will need to raise substantial additional capital before we can expect to become profitable from sales of our products. This additional capital may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations.

We expect that we will require substantial additional capital to commercialize our products. In addition, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. Our future capital requirements will depend on many factors, including but not limited to:

➢

the scope, rate of progress, results and cost of product development, and other related activities;

​

➢

the cost of establishing commercial supplies of our products;

​

➢

the cost and timing of establishing sales, marketing, and distribution capabilities; and

​

➢

the terms and timing of any collaborative and other arrangements that we may establish.

​

Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our products. In addition, we cannot guarantee that

 

15​

RISK FACTORS

future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our shareholders and the issuance of additional securities by us, whether equity or debt, or the possibility of such issuance, may cause the market price of our Ordinary Shares to decline. The incurrence of indebtedness could result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable, and we may be required to relinquish rights to some of our technologies or products or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of our products or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

Our financial statements contain an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all.

Our audited financial statements for the year ended December 31, 2025 contain an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. We have incurred losses in each year since our inception, including net losses of $4,716,000 and $3,837,000 for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we have accumulated losses of $77,558,000. These events and conditions, along with other matters, indicate that a material uncertainty exists that may cast significant doubt on our ability to continue as a going concern. The financial statement for the year ended December 31, 2025 does not include any adjustments that might result from the outcome of this uncertainty. This going concern opinion could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise. Future financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through debt or equity financing. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or commercialization efforts with respect to our products. This may raise substantial doubts about our ability to continue as a going concern.

We have identified material weaknesses in our internal controls over financial reporting, and if we fail to remediate these weaknesses or maintain effective internal controls, our business and results of operations could be adversely affected.

We have identified material weaknesses in our internal controls related to lack of sufficient accounting resources with relevant technical accounting skills to address issues related to the financial statement close process, and because of the size of the Company and its staff complement, we were not able to sufficiently design internal controls to provide the appropriate level of oversight regarding the financial recordkeeping and review of the Company’s financial reporting over financial reporting. Specifically, we did not maintain effective information technology general controls for certain IT systems that support our financial reporting processes, and we did not design and implement effective controls to address segregation of duties conflicts.

These material weaknesses could result in a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements would not be prevented or detected on a timely basis. As a result, our ability to produce accurate and timely financial statements or comply with applicable laws and regulations could be impaired.

We are in the process of designing and implementing remediation measures to address these material weaknesses, including enhancing our IT general controls, improving segregation of duties through additional

 

16

RISK FACTORS

personnel and system-based controls, and strengthening our financial reporting processes. However, we cannot assure you that these remediation efforts will be successful or that we will be able to remediate these material weaknesses on a timely basis. If we fail to remediate these material weaknesses or otherwise maintain an effective system of internal control over financial reporting, investors could lose confidence in our financial reporting, and the trading price of our securities could be adversely affected.

Risks Related to Our Business and Industry

We expect to incur substantial research and development costs and devote significant resources to identifying and commercializing new products and services, which could significantly reduce our profitability and may never generate revenue.

Our future growth depends on penetrating new markets, adapting existing products to new applications and introducing new products and services that achieve market acceptance. We plan to incur substantial research and development costs as part of our efforts to design, develop and commercialize new products and services and enhance our existing products. We believe that there are significant opportunities in a number of business areas. Because we account for research and development costs as operating expenses, these expenditures will adversely affect our earnings in the future. Further, our research and development programs may not produce successful results, and its new products and services may not achieve market acceptance, create any additional revenue or become profitable, which could materially harm our business, prospects, financial results and liquidity.

The Company will be affected by operational risks and may not be adequately insured for certain risks.

The Company will be affected by a number of operational risks and the Company may not be adequately insured for certain risks, including: catastrophic accidents; fires; blockades or other acts of social activism; changes in the regulatory environment; impact of non-compliance with laws and regulations; natural phenomena, such as inclement weather conditions, floods, earthquakes and ground movements. There is no assurance that the foregoing risks and hazards will not result in damage to, or destruction of, the Company’s technologies, personal injury or death, environmental damage, adverse impacts on the Company’s operation, costs, monetary losses, potential legal liability and adverse governmental action, any of which could have an adverse impact on the Company’s future cash flows, earnings and financial condition. Also, the Company may be subject to or affected by liability or sustain loss for certain risks and hazards against which the Company cannot insure or which the Company may elect not to insure because of the cost. This lack of insurance coverage could have an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition.

We operate in evolving markets, which makes it difficult to evaluate our business and future prospects.

Our products are sold in rapidly evolving markets. The commercial real-time, closed-loop control subset of Active Acoustics, or Active Acoustic Management or AAM, solutions market is in the early stages of customer adoption. Accordingly, our business and future prospects may be difficult to evaluate. We cannot accurately predict the extent to which demand for our products and services will increase, if at all. The challenges, risks and uncertainties frequently encountered by companies in rapidly evolving markets could impact our ability to do the following:

➢

generate sufficient revenue to reach and maintain profitability;

​

➢

acquire and maintain market share;

​

➢

manage growth in operations;

​

➢

develop and renew contracts;

​

➢

attract and retain additional engineers and other highly-qualified personnel;

​

➢

successfully develop and commercially market new products;

​

➢

adapt to new or changing policies and spending priorities of governments and government agencies; and

​

 

17​

RISK FACTORS

➢

access additional capital when required and on reasonable terms.

​

If we fail to successfully address these and other challenges, risks and uncertainties, its business, results of operations and financial condition would be materially harmed.

We operate in a competitive market.

We face competition and new competitors will continue to emerge throughout the world. Competition in our markets may increase, and competing products offered by other suppliers may reduce our ability to win or retain vehicle programs, which could cause our revenue to fall below expectations. It is expected that competition in these markets will intensify.

If competitors develop and market more successful products or services, offer competitive products or services at lower price points, or we do not produce consistently high-quality and well-received products and services, revenues, our margins and profitability will be materially affected.

Our ability to compete effectively will depend on, among other things, our pricing and performance of our software products and related integration support, quality of customer service, development of new and enhanced products and integration tooling in response to customer demands and changing technology, reach and quality of sales and distribution channels and capital resources. Competition could lead to a reduction in the rate at which we win new vehicle programs or expand within existing platforms, a decrease in our market share and a decline in our revenue.

The markets in which we compete are characterized by rapid technological change, which requires us to develop new software-based products, solutions and product enhancements, and could render our existing products obsolete.

Continuing technological changes in the market for our products could make our products less competitive or obsolete, either generally or for particular applications. Our future success will depend upon our ability to develop and introduce a variety of new capabilities and enhancements to our existing software platforms, such as Quiet Bubble® (QB™) for broadband Active Acoustics management and Personal Sound Bubble® (PSB™) for individualized acoustic zones, service offerings, as well as introduce a variety of new product offerings, to address the changing needs of the markets in which we offers products. Delays in introducing new products and enhancements, the failure to choose correctly among technical alternatives or the failure to offer innovative products or enhancements at competitive prices may cause existing and potential customers to purchase the products of our competitors. While our current products are software solutions integrated into OEM platforms, any expansion into hardware or complete systems could expose us to additional operational and regulatory risks.

If we are unable to devote adequate resources to develop new products or cannot otherwise successfully develop new products or enhancements that meet customer requirements on a timely basis, our products could lose market share, our revenue could decline, and we could experience operating losses.

Under applicable employment laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our current and former employees.

We generally enter into non-competition agreements with our employees. These agreements prohibit our employees from competing directly with us or working for our competitors or clients for a limited period after they cease working for us. We may be unable to enforce these agreements and it may be difficult for us to restrict our competitors from benefiting from the expertise that our current and former employees or consultants developed while working for us. For example, Israeli courts have required employers seeking to enforce non-compete undertakings of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests of the employer that have been recognized by the courts, such as the secrecy of a company’s confidential commercial information or the protection of its intellectual property. If we cannot demonstrate that such interests will be harmed, we may

 

18

RISK FACTORS

be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be diminished.

Changes in public policy or regulatory interpretations applicable to our Active Acoustic Management solutions in the United States could limit adoption and constrain our ability to expand sales.

Our Active Acoustic Management, or AAM, solutions are not subject to specific federal regulatory approvals in the United States. AAM refers to technologies that electronically control and optimize sound environments by reducing unwanted noise (such as through spatial active noise cancellation), creating personalized sound zones, and enhancing acoustic characteristics of spaces. These solutions combine real-time sound analysis, digital signal processing, and existing audio system components as part of our current integration model to deliver improved acoustic comfort and tailored sound experiences. While these technologies are conceptually related to a specific technique used within Active Acoustics to reduce targeted noise components (ANC), they go beyond noise suppression to include sound zoning and acoustic enhancement.

However, their use in commercial and industrial environments must comply with general noise-related regulations, including the Noise Control Act of 1972, Occupational Safety and Health Administration (OSHA) workplace noise exposure standards, and applicable state and local noise ordinances. These regulations primarily govern permissible noise levels and worker safety rather than the technology itself. While we believe our solutions support compliance with these requirements, any changes in public policy, new regulations, or interpretations that restrict the use of Active Acoustic Management systems — such as concerns about masking alarms or emergency signals — could limit our ability to expand sales to certain markets.

We are subject to governmental regulation and other legal obligations in jurisdictions outside of the United States, and our actual or perceived failure to comply with such obligations could adversely affect our business and operating results.

The regulatory framework for AAM-based technology worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Our products are subject to a variety of laws and regulations and may be subject to other or additional laws and regulations in the future. The use of our products is also subject to certain authorization, certification and compliance requirements that vary depending on the jurisdiction in which our products are used. See “Business — Government Regulation” for additional information.

Compliance with any new obligations imposed by government bodies and agencies depends in part on how particular regulators interpret and apply them. If we fail to comply with these obligations or if regulators assert that we have failed to comply with these obligations, we may be subject to certain fines, sanctions, or other penalties, as well as litigation. Further, it could hinder the Company’s ability to retain existing customers and attract new customers, particularly if our products were perceived to be less compliant than our competitors’ products, which would have a material adverse impact on the Company’s prospects.

Any inability to adequately address safety and privacy concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations or other legal obligations could result in additional cost and liability to us, damage our reputation, inhibit sales, and adversely affect our business and operating results.

Failure to make competitive technological advances will put us at a disadvantage and may lead to negative operational and financial outcome.

We are focused on the development and application of AAM technologies. Technology markets, by their very nature, are continually evolving. Particularly, the market of AAM technologies may become increasingly competitive. To succeed, we will need to research and develop enhancements to our existing software products, as well as new software products that are suitable for existing applications of AAM technology and new applications that might not yet exist.

 

19​

RISK FACTORS

There is no guarantee that our research and development activities will meet the changing needs of our customers and markets. At the same time, products and technologies developed by others may render our products and technology obsolete or non-competitive, which could materially adversely affect our business, operating results and financial prospects.

If we fail to offer high-quality products or customer service, our business and reputation could suffer.

We believe global branding is critical for the long-term success of our business. We will continue to differentiate ourselves from our competitors through our commitment to a high-quality products and customer experience. Accordingly, high-quality products and customer service are important for the growth of our business and any failure to maintain such standards, or a related market perception, could affect our ability to sell products and services to existing and prospective customers.

Negative commentary or complaints may have a damaging impact on our ability to achieve our business objectives. Further, as our business model is based on royalty-based revenue from Auto OEM production programs (including programs sourced through Tier-1 suppliers and semiconductor partners), poor customer experiences may result in loss of customers, adverse publicity, litigation, regulatory enquiries and reduction of use of our products.

Our commercial opportunity could be reduced if our competitors develop and commercialize products or services that offer better performance or are more cost-effective to use than our products or services.

The markets in which we operate are particularly competitive due to the lucrative nature of the contracts available within the automotive active acoustics and NVH solutions market. Our performance could be adversely affected if existing or new competitors increase their market share through technology development, marketing and increased product or technology offerings or through price reduction for alternatives.

We may be subject to the risks associated with future acquisitions.

As part of our overall business strategy, we may pursue select strategic acquisitions that would provide additional product or service offerings, additional industry expertise, and a stronger industry presence in both existing and new jurisdictions. Any such future acquisitions, if completed, may expose us to additional potential risks, including risks associated with: (a) the integration of new operations, services and personnel; (b) unforeseen or hidden liabilities; (c) the diversion of resources from our existing business and technology; (d) potential inability to generate sufficient revenue to offset new costs; (e) the expenses of acquisitions; or (f) the potential loss of or harm to relationships with both employees and existing users resulting from its integration of new businesses.

If we are unable to retain management and key employees our future success could be impaired.

Our future success depends substantially on the continued services of our executive officers and key employees. If one or more of our executive officers or key employees were unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all. In addition, if any of our executive officers or key employees joins a competitor or forms a competing company, we may lose experience, know-how, as well as business partners. These executive officers and key employees could develop AAM technologies that could compete with and take customers and market share away from us.

We may not be able to successfully manage our planned growth and expansion.

We expect to continue to make investments in our products in development. We expect that our annual operating expenses will continue to increase as we invest in business development, marketing, research and development, manufacturing and production infrastructure, and develop customer service and support resources for future customers. Failure to expand operational and financial systems timely or efficiently may result in operating inefficiencies, which could increase costs and expenses to a greater extent than we anticipate and may also prevent us from successfully executing our business plan. We may not be able to offset the costs of operation expansion by leveraging the economies of scale from our growth in negotiations

 

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with our suppliers and contract manufacturers. Additionally, if we increase our operating expenses in anticipation of the growth of our business and this growth falls short of our expectations, our financial results will be negatively impacted.

If our business grows, we will have to manage additional product design projects, materials procurement processes, and sales efforts and marketing for an increasing number of products, as well as expand the number and scope of our relationships with suppliers, distributors and end customers. If we fail to manage these additional responsibilities and relationships successfully, we may incur significant costs, which may negatively impact our operating results. Additionally, in our efforts to be first to market with new products with innovative functionality and features, we may devote significant research and development resources to products and product features for which a market does not develop quickly, or at all. If we are not able to predict market trends accurately, we may not benefit from such research and development activities and our results of operations may suffer.

As our future development and commercialization plans and strategies develop, we expect to need additional managerial, operational, sales, marketing, financial and legal personnel. Our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. In particular, a period of significant growth in the number of personnel could place a strain upon our management systems and resources. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, failure to deliver and timely deliver our products to customers, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional new products.

Our future success will depend in part on the ability of our officers and other key employees to implement and improve financial and management controls, reporting systems and procedures on a timely basis and to expand, train, motivate and manage our workforce. Our current and planned personnel, systems, procedures and controls may be inadequate to support our future operations. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenue could be reduced, and we may not be able to implement our business strategy.

We face uncertainty and adverse changes in the economy.

Uncertainty and adverse changes in the economy could negatively impact our business. Future economic distress may result in a decrease in demand for our products, which could have a material adverse impact on our operating results and financial condition. Uncertainty and adverse changes in the economy could also increase costs associated with developing and publishing products, increase the cost and decrease the availability of sources of financing, and increase our exposure to material losses from bad debts, any of which could have a material adverse impact on our financial condition and operating results.

Our operating results and financial condition have fluctuated in the past and may fluctuate in the future.

Even if we are successful in marketing our products to the market, our operating results and financial condition may fluctuate from quarter to quarter and year to year and are likely to continue to vary due to several factors, many of which will not be within our control. If our operating results do not meet the guidance that we provide to the marketplace or the expectations of securities analysts or investors, the market price of our Ordinary Shares will likely decline. Fluctuations in our operating results and financial condition may be due to several factors, including those listed below and those identified throughout this “Risk Factors” section:

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the degree of market acceptance of our products and services;

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the mix of products and services that we sell during any period;

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changes in the amount that we spend to develop, acquire or license new products, technologies or businesses;

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changes in the amounts that we spend to promote our products and services;

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changes in the cost of satisfying our warranty obligations and servicing our products;

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delays between our expenditures to develop and market new or enhanced systems and consumables and the generation of sales from those products;

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development of new competitive products and services by others;

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difficulty in predicting sales patterns and reorder rates that may result from a multi-tier distribution strategy associated with new product categories;

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litigation or threats of litigation, including intellectual property claims by third parties;

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changes in accounting rules and tax laws;

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changes in regulations and standards;

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the geographic distribution of our sales;

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our responses to price competition;

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general economic and industry conditions that affect end-user demand and end-user levels of product design and manufacturing;

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changes in interest rates that affect returns on our cash balances and short-term investments;

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changes in dollar-shekel exchange rates that affect the value of our net assets, future revenues and expenditures from and/or relating to our activities carried out in those currencies; and

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the level of research and development activities by our company.

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Due to all of the foregoing factors, and the other risks discussed herein, you should not rely on quarter-to-quarter comparisons of our operating results as an indicator of our future performance.

If critical components such as semiconductors or audio chips required for OEM integration or raw materials used to manufacture our products become scarce or unavailable, then we may incur delays in manufacturing and delivery of our products, which could damage our business.

We do not manufacture hardware; however, development and validation of our software solutions depend on access to hardware platforms. We must procure, and in some cases design and manufacture, hardware development platforms to test and optimize our software for integration into OEM systems as part of our current integration model. Our reliance on these platforms involves risks and uncertainties, including potential supply shortages, price increases, and delays in obtaining components such as semiconductors, audio processors, and related electronics. If we are unable to secure or develop the necessary hardware platforms on a timely basis and at acceptable cost, our ability to complete development, validate performance, and deliver software solutions to customers could be adversely affected.

Additionally, shortages in electronic components required for OEM integration, such as chips or audio modules, could impact our customers’ ability to implement our technology, which may delay commercialization and harm our business, results of operations and financial condition.

Our solutions are licensed to semiconductor companies and Tier-1 audio suppliers and integrated into Auto OEM platforms; integration requires system-level tuning and validation, which involves risk of defects or performance issues.

Integration requires system-level tuning and validation to help ensure software stability and correct interaction with OEM components. If our software or integrated systems incorporating our software contain defects, errors, or performance issues-whether upon initial deployment, during updates, or after release — Auto OEMs or Tier-1 partners may suspend integration, require remediation, or terminate agreements. Such events could lead to delays, increased development and warranty costs, and damage to our reputation and customer relationships.

 

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Although we do not manufacture hardware for commercial sale, our technology operates on third-party hardware platforms, and we occasionally provide prototypes or demonstrators. If any of these prototypes, or any integrated vehicle system or component that includes our software, is alleged to be defective or unsafe, we could face contractual, product-liability, or indemnity claims from Auto OEMs or Tier-1 partners and may be subject to regulatory scrutiny. Any decision to conduct a service campaign or product recall would be made by the Auto OEM and could, in certain cases, implicate software supplied by us as part of an integrated system. Current or future automotive safety, cybersecurity, or software-integrity regulations may also subject integrated vehicle systems incorporating our software to increased scrutiny, mandatory corrective actions, or regulatory investigations.

Our business may be adversely affected by changes in automotive safety regulations or concerns that drive further regulation of the automobile safety market.

Government vehicle safety regulations are an important factor for our business. Historically, these regulations have imposed ever-more stringent safety regulations for vehicles. These safety regulations often require, or customers demand, that vehicles have more safety features and more advanced safety products.

While we believe increasing automotive safety standards will present a market opportunity for our technology, government safety regulations are subject to change based on a number of factors that are not within our control, including new scientific or technological data, adverse publicity regarding industry recalls and safety risks, accidents involving our technology, domestic and foreign political developments or considerations, and litigation relating to our technology and our competitors’ technology. Changes in government regulations, as well as changes or evolution in court doctrines in interpreting those regulations, especially in the automotive industry, could adversely affect our business. If government priorities shift and we are unable to adapt to changing regulations or to court interpretations of those regulations, our business may be materially and adversely affected.

Federal and local regulators impose more stringent compliance and reporting requirements in response to product recalls and safety issues in the automotive industry. As the vehicles that embed our technology go into production, we may become subject to stringent requirements, including a duty to report, subject to strict timing requirements, safety defects with our products. Such rules and regulations may impose potentially significant civil penalties for violations including the failure to comply with such reporting actions. If we cannot rapidly address any safety concerns or defects with our products, our business, results of operations and financial condition may be adversely affected.

For example, the U.S. Department of Transportation has issued regulations that require manufacturers of certain autonomous vehicles to provide documentation covering specific topics to regulators, such as how automated systems detect objects on the road, how information is displayed to drivers, what cybersecurity measures are in place and the methods used to test the design and validation of autonomous driving systems. As cars that carry our sensors go into production, the obligations of complying with safety regulations could increase and it could require increased resources and adversely affect our business.

If we fail to scale our business operations or otherwise manage our future growth effectively as we attempt to grow our company, we may not be able to produce, market, service and sell our products successfully.

We intend to expand our operations significantly, which will require hiring, retaining and training new personnel, controlling expenses, expanding existing production facilities and establishing new facilities, and implementing administrative infrastructure, systems, and processes. Our future operating results depend to a large extent on our ability to manage this expansion and growth successfully. Failure to expand operational and financial systems in a timely or efficient manner may result in operating inefficiencies, which could increase costs and expenses to a greater extent than we anticipate and may also prevent us from successfully executing our business plan. We may not be able to offset the costs of operation expansion by leveraging the economies of scale from our growth in negotiations with our suppliers and contract manufacturers. Additionally, if we increase our operating expenses in anticipation of the growth of our business and this growth falls short of our expectations, our financial results will be materially adversely impacted.

 

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If our business grows, we will have to manage additional product design projects, materials procurement processes, and sales and marketing efforts for an increasing number of products, as well as expand the number and scope of our relationships with suppliers, distributors and end customers. If we fail to manage these additional responsibilities and relationships successfully, we may incur significant costs, which may materially adversely impact our operating results. Additionally, in our efforts to be first to market with new products with innovative functionality and features, we may devote research and development resources to products and product features for which a market does not develop quickly, or at all. If we are not able to predict market trends accurately, we may not benefit from such research and development activities, and our results of operations may suffer.

As our future development and commercialization plans and strategies develop, we expect to need additional managerial, operational, sales, marketing, financial and legal personnel. Our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to manage these growth activities. In particular, a period of significant growth in the number of personnel could place a strain upon our management systems and resources. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, failure to deliver or timely deliver our products to customers, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional new products.

Our future will depend in part on the ability of our officers and other key employees to implement and improve financial and management controls, reporting systems and procedures on a timely basis and to expand, train, motivate and manage our workforce. Our current and planned personnel, systems, procedures and controls may be inadequate to support our future operations. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenue could be reduced, and we may not be able to implement our business strategy.

Furthermore, we have no experience to date in high-volume manufacturing of our products and we cannot assure that we will be able to develop efficient, automated, low-cost manufacturing capabilities and processes, and reliable sources of component supply, that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully market our services and products as our operations expand. Any failure to effectively manage our growth could materially and adversely affect our business, prospects, financial condition, results of operations, and cash flows.

If we expand our business to include the manufacture and sale of complete products that incorporate hardware, we would be exposed to additional risks that could adversely affect our business, financial condition and results of operations.

We currently focus on developing software solutions that are integrated into OEM platforms, and we do not manufacture or sell complete products that include hardware components. If, in the future, we elect to design, manufacture and sell complete products, we would be required to assume risks that we do not currently face. These risks include, among others, challenges associated with hardware design and sourcing, manufacturing and quality control, supply chain management, product certification and compliance with applicable safety and regulatory requirements, and the potential for product defects, failures or recalls. In addition, manufacturing and selling complete products could increase our operating costs, require significant capital investment, and expose us to product liability, warranty and indemnification claims. Any failure to manage these risks successfully could harm our reputation, result in delays or increased costs, and have a material adverse effect on our business, financial condition and results of operations.

Our insurance policies are expensive and protect us only from some business risks, which leaves us exposed to significant uninsured liabilities.

We do not carry insurance for all categories of risk that our business may encounter. Although we have general and product liability insurance that we believe is appropriate, this insurance is subject to deductibles and coverage limitations. Our current product liability insurance may not continue to be available to us on

 

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acceptable terms, if at all, and, if available, coverage may not be adequate to protect us against any future product liability claims. If we are unable to obtain insurance at an acceptable cost or on acceptable terms or otherwise protect against potential product liability claims, we could be exposed to significant liabilities. A product liability claim, recall or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could negatively affect our business, financial condition and results of operations.

Additionally, the substantial increase in the cost of directors’ and officers’ liability insurance may cause us to opt for reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors, on our board committees or as executive officers. We do not know if we will be able to maintain existing insurance with adequate levels of coverage. Any significant uninsured liability may require us to pay substantial amounts, which would negatively affect our business, financial condition and results of operations.

The Company’s products may be subject to recall or return.

Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, safety concerns, packaging issues and inadequate or inaccurate labeling disclosure. If any of the Company’s equipment were to be recalled due to an alleged product defect, safety concern or for any other reason, the Company could be required to incur unexpected expenses of the recall and any legal proceedings that might arise in connection with the recall. The Company may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin or at all. In addition, a product recall may require significant management time and attention. Additionally, product recalls may lead to increased scrutiny of the Company’s operations by regulatory agencies, requiring further management time and attention and potential legal fees, costs and other expenses.

Our ability to commercialize new products depends on successful development.

We are investing in new products and software solutions, including AI-enabled acoustic control features and our Personal Sound Bubble (PSB™) platform, as well as other technologies that we may develop in the future. The successful commercialization of these offerings depends on the completion of development, customer validation, and market adoption, each of which is uncertain and may not occur on anticipated timelines or at all. If we are unable to successfully develop, validate, and bring these products and technologies to market, we could lose potential business opportunities, incur additional development costs, and experience a material adverse effect on our business, financial condition, and results of operations.

If we release defective products or services, our operating results could suffer.

Products and services designed and released by us involve extremely complex software programs and physical products, which are difficult to develop and distribute. While we have quality controls in place to detect and prevent defects in its products and services before they are released, these quality controls are subject to human error, overriding, and reasonable resource constraints. Therefore, these quality controls and preventative measures may not be effective in detecting and preventing defects in our products and services before they have been released into the marketplace. In such an event, we could be required, or decide voluntarily, to suspend the availability of the product or services, which could significantly harm its business and operating results.

Our products and services are complex and could have unknown defects or errors, which may give rise to legal claims against us, diminish our brand or divert our resources from other purposes.

Our products rely on complex adaptive audio and acoustic signal-processing software that leverages sophisticated algorithmic and model-based approaches, delivered primarily as (i) PC-based tuning and measurement tools with graphical interfaces for OEM engineers, and (ii) embedded software running on demand-side platforms, or DSPs, or similar components, including non-visual software interfaces (APIs/​SDKs) for system integration. From time to time, we use hardware solely for demonstrations or proofs-of-concept. We do not currently commercialize standalone hardware modules or consumer-facing products,

 

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RISK FACTORS

although we may do so in the future, including development kits for engineers and, potentially, products with end-user interfaces to accomplish their missions. Despite testing, the Company’s products have contained defects and errors and may in the future contain defects, errors or performance problems when first introduced, when new versions or enhancements are released or even after these products have been used by our customers for a period of time. These problems could result in expensive and time-consuming design modifications or warranty charges, delays in the introduction of new products or enhancements, significant increases in our service and maintenance costs, exposure to liability for damages, damaged customer relationships and harm to the Company’s reputation, any of which could materially harm the Company’s results of operations and ability to achieve market acceptance. In addition, increased development and warranty costs could be substantial and could significantly reduce our operating margins.

As a manufacturer of AAM products, and with auditory wearable sector companies under increased scrutiny, claims could be brought against us if use or misuse of one of our AAM products causes, or merely appears to have caused, personal injury or death. In addition, defects in our products may lead to other potential life, health and property risks, the results of which could significantly damage our reputation and support for its AAM products in general. The existence of any defects, errors or failures in our products or the misuse of our products could also lead to product liability claims or lawsuits against us. Any claims against us, regardless of their merit, could severely harm our financial condition and strain its management and other resources. We anticipate these risks will grow as use of our AAMs in automotive and industrial sectors increases.

Although we maintain insurance policies, we cannot provide any assurance that this insurance will be adequate to protect us from all material judgments and expenses related to potential future claims or that these levels of insurance will be available in the future at economical prices or at all. In particular, we are unable to predict if we will be able to obtain or maintain product liability insurance for any products that may be approved for marketing. A successful product liability claim could result in substantial cost to the Company. Even if we are fully insured as it relates to a particular claim, the claim could nevertheless diminish our brand and divert management’s attention and resources, which could have a negative impact on our business, financial condition and results of operations.

Shortfalls in available external research and development funding could adversely affect the Company.

We depend on our research and development activities to develop the core technologies used in our AAM products and for the development of our future products. A portion of our research and development activities can depend on funding by commercial companies and the Israeli government. Israeli government and commercial spending levels can be impacted by a number of variables, including general economic conditions, specific companies’ financial performance and competition for Israeli government funding. Any reductions in available research and development funding could harm our business, financial condition and operating results.

Negative consumer perception regarding our products could have a material adverse effect on the demand for our products and on our business, results of operations, financial condition and cash flows.

We believe the AAM industry is highly dependent upon consumer perception regarding the safety, efficacy and quality of the products used. Consumer perception of these products can be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention and other publicity regarding the use of AAM solutions. There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other publicity will be favorable to the AAM market. Future research reports, findings, regulatory proceedings, litigation, media attention or other publicity that are perceived as less favorable than, or that question, earlier research reports, findings or publicity could have a material adverse effect on the demand for our products and our business, results of operations, financial condition and cash flows. The dependence upon consumer perceptions means that adverse scientific research reports, findings, regulatory proceedings, litigation, media attention or other publicity, whether or not accurate or with merit, could have a material adverse effect on the Company, the demand for our products, and our business, results of operations, financial condition and cash flows. Further, adverse publicity

 

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reports or other media attention regarding the safety, the efficacy, and quality of AAM-based surveys in general, or our products specifically, could have a material adverse effect.

If we fail to successfully promote our product brand, this could have a material adverse effect on our business, prospects, financial condition and results of operations.

We believe that brand recognition is an important factor to its success. If we fail to promote our brands successfully, or if the expenses of doing so are disproportionate to any increased net sales it achieves, it would have a material adverse effect on our business, prospects, financial condition and results of operations. This will depend largely on our ability to maintain trust, be a technology leader, and continue to provide high-quality and secure technologies, products and services. Any negative publicity about us or our industry, the quality and reliability of our technologies, products and services, our risk management processes, changes to our technologies, products and services, our ability to effectively manage and resolve customer complaints, our privacy and security practices, litigation, regulatory activity, and the experience of sellers and buyers with our products or services, could adversely affect our reputation and the confidence in and use of our technologies, products and services. Harm to our brand can arise from many sources, including failure by us or our partners to satisfy expectations of service and quality; inadequate protection of sensitive information; compliance failures and claims; litigation and other claims; employee misconduct; and misconduct by our partners, service providers, or other counterparties. If we do not successfully maintain a strong and trusted brand, our business could be materially and adversely affected.

We may be subject to electronic communication security risks.

A significant potential vulnerability of electronic communications is the security of transmission of confidential information over public networks. Anyone who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in its operations. We may be required to expend capital and other resources to protect against such security breaches or to alleviate problems caused by such breaches.

Our business could be adversely affected if our consumer protection and data privacy practices are not perceived as adequate or there are breaches of our security measures or unintended disclosures of our consumer data.

The rate of privacy law-making is accelerating globally and interpretation and application of consumer protection and data privacy laws in Israel, the United States and elsewhere are often uncertain, contradictory and in flux. As business practices are being challenged by regulators, private litigants and consumer protection agencies around the world, it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data and/or consumer protection practices. This could result in increased litigation, government or court-imposed fines, judgments or orders requiring that we change its practices, which could have an adverse effect on our business and reputation. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.

Significant disruptions of our information technology systems or breaches of our data security could adversely affect our business.

A significant invasion, interruption, destruction or breakdown of our information technology systems and/or infrastructure by persons with authorized or unauthorized access could negatively impact our business and operations. We could also experience business interruption, information theft and/or reputational damage from cyber-attacks, which may compromise our systems and lead to data leakage either internally or at our third-party providers. Our systems are expected to be the target of malware and other cyber-attacks. Although we have invested in measures to reduce these risks, we cannot assure you that these measures will be successful in preventing compromise and/or disruption of our information technology systems and related data.

 

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We rely on OEMs, Integrators and Service Providers, which may expose us to confidentiality and operational risks.

We rely on a limited number of OEM customers, integration partners (which are Tier 1 suppliers, system integrators and semiconductor/DSP partners that integrate our algorithms into their hardware or software platforms), service providers, and development vendors to support the design, testing, and deployment of our technology within their systems and platforms. As part of these collaborations, we may need to enable such partners to interface with certain elements of our technology or tools in a controlled manner. We do not grant these partners any ownership rights in our technology, nor do we transfer proprietary core know-how or any rights that would be inconsistent with applicable intellectual property laws or governmental restrictions, including those applicable to know-how developed with support from the Israel Innovation Authority.

Although our business model includes software licensing tied to OEM programs and platforms, we do not maintain a broad third-party licensing ecosystem, and we do not generate revenue from general-purpose or standalone software royalties. Aside from one immaterial legacy software agreement, we have no material licensing arrangements outside our OEM-specific commercial programs.

Any failure by our partners or vendors to maintain appropriate confidentiality, security, or operational standards could expose us to risks, including unauthorized use, operational disruption, or competitive harm. As we expand our offerings to include SDKs and development kits, the number of third parties interacting with certain interfaces or tools may increase, potentially heightening these risks. Additionally, if any partner or vendor experiences financial or operational difficulties or fails to deliver adequate services, we may face delays, disruptions, or increased costs in identifying and transitioning to alternative providers.

Our planned international operations will expose us to additional market and operational risks, and failure to manage these risks may adversely affect our business and operating results.

We expect to derive a substantial percentage of our sales from international markets. Accordingly, we will face significant operational risks from doing business internationally, including:

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fluctuations in foreign currency exchange rates;

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potentially longer sales and payment cycles;

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potentially greater difficulties in collecting accounts receivable;

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potentially adverse tax consequences;

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reduced protection of intellectual property rights in certain countries, particularly in Asia and South America;

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difficulties in staffing and managing foreign operations;

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laws and business practices favoring local competition;

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costs and difficulties of customizing products for foreign countries;

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compliance with a wide variety of complex foreign laws, treaties and regulations;

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an outbreak of a contagious disease, such as coronavirus, which may cause us, third party vendors and manufacturers and/or customers to temporarily suspend our or their respective operations in the affected city or country;

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tariffs, trade barriers and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets; and

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being subject to the laws, regulations and the court systems of many jurisdictions.

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Further, international trade conflicts could have negative consequences on the demand for our products and services outside Israel. Other risks of doing business internationally include political and economic instability in the countries of our customers and suppliers, changes in diplomatic and trade relationships

 

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RISK FACTORS

and increasing instances of terrorism worldwide. Some of these risks may be affected by Israel’s overall political or military situation. See “Risks Related to Our Incorporation, Location and Operations in Israel” for further information.

Our failure to manage the market and operational risks associated with its international operations effectively could limit the future growth of our business and adversely affect our operating results.

Risks Related to Our Intellectual Property

We have been subject to opposition proceedings regarding our QUIET BUBBLE® trademark in the European Union, and any further challenges to our intellectual property rights, including appeals, could be expensive, time-consuming, and could divert management’s attention.

We used our QUIET BUBBLE® trademark in connection with its unique active acoustic control system and method since 2011, and have registered the QUIET BUBBLE® trademark in numerous jurisdictions, including the European Union (EU) via an International Registration (Madrid Protocol) in 2022. In 2023, we were notified by the European Intellectual Property Office (EUIPO) that Technofirst of Parc d’Activités de Napollon, 48 avenue des Templiers, F-13676 AUBAGNE Cedex, France, or Technofirst, had filed an opposition against our EU registration. After an extended cooling-off period during which the parties discussed potential resolutions without reaching agreement, we requested that Technofirst provide proof of use of its alleged prior rights. On October 27, 2025, the EUIPO issued a decision dismissing the opposition in its entirety due to Technofirst’s failure to provide the required proof of use. The decision provided a two-month appeal period, ending on December 27, 2025, during which Technofirst could have appealed. However, no appeal was filed by the deadline, and the opposition was therefore dismissed, and protection has been granted to the International Registration as a Trademark Registration in the EU.

Although the opposition has been dismissed in our favor, we cannot assure that further challenges to our trademark rights will not arise in the future. Any continued opposition, appeal, or other challenge to our intellectual property rights could result in substantial costs, diversion of management attention and resources, and uncertainty regarding our ability to protect and enforce our brand. If we are unsuccessful in defending our trademark rights, we could be required to cease use of our trademarks in the EU or other jurisdictions, which could adversely affect our business, results of operations, and financial condition.

If we are unable to obtain and maintain effective intellectual property rights for our products, including for our software platforms, algorithms, and integration technologies, we may not be able to compete effectively in our markets and If we fail to secure or enforce these rights, competitors could replicate our solutions, reducing our market share and revenue.

If we are unable to obtain and maintain effective intellectual property rights for our products, we may not be able to compete effectively in our markets. We rely on patents, trade secret protection, and confidentiality agreements to protect the intellectual property related to our technologies and products. Our success depends on our ability to obtain and maintain patent and other intellectual property protection in the United States and other countries for our proprietary technology and products. We seek to protect our position by filing patent applications in multiple jurisdictions for technologies and products that are important to our business. Patent prosecution is expensive and time-consuming, and we may not be able to file and prosecute all necessary applications in all jurisdictions at a reasonable cost or in a timely manner. We may also fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.

Our patent portfolio currently consists of an aggregate of 73 patents and patent applications, as described in “Business — Intellectual Property.” We cannot offer any assurances about which, if any, patent applications will issue, the breadth of any such patent or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties. Any successful opposition to these patents or any other patents owned by or licensed to us after patent issuance could deprive us of rights necessary for the successful commercialization of any new products that we may develop.

 

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Further, there is no assurance that all potentially relevant prior art relating to our patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue, and even if such patents cover our products, third parties may challenge their validity, enforceability, or scope, which may result in such patents being narrowed, found unenforceable or invalidated. Furthermore, even if they are unchallenged, our patent applications and any future patents may not adequately protect our intellectual property, provide exclusivity for our new products, or prevent others from designing around our claims. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.

If we cannot obtain and maintain effective patent rights for our products, we may not be able to compete effectively, and our business and results of operations would be harmed.

Intellectual property rights of third parties could adversely affect our ability to commercialize our technology , and we might be required to litigate or obtain licenses from third parties. Such litigation or licenses could be costly or not available on commercially reasonable terms.

It is inherently difficult to conclusively assess our freedom to operate without infringing on third party rights. Our competitive position may be adversely affected if existing patents or patents resulting from patent applications issued to third parties or other third-party intellectual property rights are held to cover our products software platforms, or integration technologies , or our manufacturing or uses relevant to our development plans. In such cases, we may not be in a position to develop or commercialize our technology our software platforms, integration technologies or new products unless we successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned or enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms. There may also be pending patent applications that if they result in issued patents, could be alleged to be infringed by our software platforms, integration technologies, or new products . If such an infringement claim should be brought and be successful, we may be required to pay substantial damages, be forced to abandon our new products or seek a license from any patent holders. No assurances can be given that a license will be available on commercially reasonable terms, if at all.

It is also possible that we have failed to identify relevant third-party patents or applications. For example, U.S. patent applications filed before November 29, 2000 and certain U.S. patent applications filed after that date that will not be filed outside the United States remain confidential until patents issue. Patent applications in the United States and in most of the other countries are published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent applications covering our new products or platform technology could have been filed by others without our knowledge. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our platform technologies, our new products or the use of our new products. Third party intellectual property right holders may also actively bring infringement claims against us. We cannot guarantee that we will be able to successfully settle or otherwise resolve such infringement claims. If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or continue costly, unpredictable and time-consuming litigation and may be prevented from or experience substantial delays in pursuing the development of and/or marketing our new products. If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing our technology, our software platforms, integration technologies, or products that are held to be infringing. We might, if possible, also be forced to redesign our software platforms, integration technologies, or products so that we no longer infringe the third party’s intellectual property rights. Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.

Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents.

Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of any patents that may issue from our patent applications or narrow the

 

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scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. We therefore cannot be certain that we were the first to file the invention claimed in our owned and licensed patent or pending applications, or that we or our licensor were the first to file for patent protection of such inventions. Assuming all other requirements for patentability are met, in the United States prior to March 15, 2013, the first to make the claimed invention without undue delay in filing is entitled to the patent, while outside the United States, the first to file a patent application is entitled to the patent. Since March 15, 2013, the United States has moved to a first to file system. Changes to the way patent applications will be prosecuted could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents, all of which could have a material adverse effect on our business and financial condition.

We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming, unpredictable and unsuccessful.

Competitors may infringe our intellectual property. If we were to initiate legal proceedings against a third party to enforce a patent covering one of our new products, the defendant could counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the United States Patent and Trademark Office, or USPTO, or made a misleading statement, during prosecution. The validity of U.S. patents may also be challenged in post-grant proceedings before the USPTO. The outcome following legal assertions of invalidity and unenforceability is unpredictable.

Derivation proceedings initiated by third parties or brought by us may be necessary to determine the priority of inventions and/or their scope with respect to our patent or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring our new products to market.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our Ordinary Shares.

We may be subject to claims challenging the inventorship of our intellectual property.

We may be subject to claims that former employees, collaborators or other third parties have an interest in, or right to compensation, with respect to our current patent and patent applications, future patents or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our products. Litigation may be necessary to defend against these and other claims challenging inventorship or claiming the right to compensation. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

 

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We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting, and defending patents on products, as well as monitoring their infringement in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States.

A substantial part of the commercial success of the Company will depend on its ability to maintain, establish and protect its intellectual property assets, maintain trade secret protection, register copyrights and trademarks, and operate without infringing the proprietary rights of third parties. Our patent portfolio currently consists of an aggregate of 73 patents and patent applications, as described in “Business —  Intellectual Property.” We cannot assure investors that any of our currently pending or future patent applications will result in issued patents and we cannot predict how long it will take for such patent applications to issue as patents. There is a further risk that the claims of each patent application, as filed, may change in scope during examination by the patent offices. Further, if and where a patent is granted, there can be no guarantee that such patent will be valid or enforceable or that the patent will be granted in other jurisdictions.

Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products. Future patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, which could make it difficult for us to stop the marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our future patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to monitor and enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.

A significant portion of our intellectual property has been developed by our employees in the course of their employment for us. Under the Israeli Patent Law, 5727-1967, or the Patent Law, inventions conceived by an employee during the scope of his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent an agreement between the employee and employer providing otherwise. The Patents Law also provides that if there is no agreement between an employer and an employee determining whether the employee is entitled to receive consideration for service inventions and on what terms, this will be determined by the Israeli Compensation and Royalties Committee, or the Committee, a body constituted under the Patents Law. Case law clarifies that the right to receive consideration for “service inventions” can be waived by the employee and that in certain circumstances, such waiver does not necessarily have to be explicit. The Committee will examine, on a case-by-case basis, the general contractual framework between the parties, using interpretation rules of the general Israeli contract laws. Further, the Committee has not yet determined one specific formula for calculating this remuneration, but rather uses the criteria specified in the Patents Law. Although we generally enter into agreements with our employees pursuant to which such individuals assign to us all rights to any inventions created during and as a result of their employment with us, we may face claims demanding remuneration in consideration for assigned

 

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inventions. As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current and/or former employees, or be forced to litigate such monetary claims (which will not affect our proprietary rights), which could negatively affect our business.

Our patents and trade secrets may not prevent competitors from designing around our technology or developing alternatives.

We rely on a combination of patents, trade secrets, and other intellectual property protections to safeguard our proprietary technology, including our algorithmic and model-based approaches for audio and acoustic signal processing. However, these protections may be limited in scope, subject to challenge, or otherwise insufficient to prevent third parties from independently developing similar or competitive technologies, designing around our patents, or using technologies that compete with ours. In addition, intellectual property rights are subject to expiration, and enforcement can be costly, time-consuming, and uncertain, particularly in jurisdictions with weaker IP protection. As we re-expand our offerings to include SDKs and development tools for integration, we may need to share proprietary technology with partners, which could increase the risk of misappropriation. Any failure to protect our intellectual property could result in increased competition, loss of market share, or reduced revenue, which could have a material adverse effect on our business and financial condition.

Risks Related to the Offering and the Ownership of Our Ordinary Shares

If you purchase securities in this offering, you will incur immediate and substantial dilution.

The assumed public offering price of the Ordinary Shares being offered hereby is substantially higher than the net tangible book value per share of our outstanding Ordinary Shares. Therefore, if you purchase securities in this offering, you will pay a price per Ordinary Share that substantially exceeds our net tangible book value per Ordinary Share after this offering. To the extent outstanding options or warrants are exercised, you will incur further dilution. Based on the assumed initial offering price of $7.00 per Ordinary Share, you will experience immediate dilution of $4.70 per Ordinary Share, representing the difference between our pro forma net tangible book value per Ordinary Share after giving effect to this offering and the offering price. In addition, purchasers of our Ordinary Shares in this offering will have contributed approximately 16.3% of the aggregate price paid by all purchasers of our Ordinary Shares but will own only approximately 39.1% of our Ordinary Shares outstanding after this offering. See “Dilution” for further information.

Participation in this offering by certain of our existing shareholders, including entities affiliated with certain of our directors and beneficial owners of greater than 5% of our share capital, could reduce the public float for our shares.

Certain of our existing shareholders, including entities affiliated with certain of our directors and beneficial owners of greater than 5% of our share capital, have indicated an interest in purchasing up to an aggregate of $       million of Ordinary Shares in this offering at the initial public offering price per Ordinary Share. However, because indications of interest are not binding agreements or commitments to purchase, the underwriter may determine to sell more, less or no Ordinary Shares in this offering to any of these shareholders, or any of these shareholders may determine to purchase more, less or no Ordinary Shares in this offering. The underwriter will receive the same underwriting discount on any Ordinary Shares purchased by these shareholders as they will on any other shares sold to the public in this offering.

Our directors, officers and holders of 10% or more of our outstanding Ordinary Shares beneficially own approximately 27.9% of our outstanding Ordinary Shares. They will therefore be able to exert significant control over matters submitted to our shareholders for approval.

As of the date of this prospectus, our directors, officers and holders of 10% or more of our outstanding Ordinary Shares beneficially own approximately 27.9% of our Ordinary Shares. Upon completion of this offering, our directors, officers and holders of 10% or more of our outstanding Ordinary Shares will, in the aggregate, beneficially own approximately 17.3% of our outstanding Ordinary Shares. This significant concentration of share ownership may adversely affect the trading price for our Ordinary Shares because

 

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investors often perceive disadvantages in owning shares in companies with controlling shareholders. As a result, these shareholders, if they acted together, could significantly influence or even unilaterally approve matters requiring approval by our shareholders, including the election of directors (other than external directors, if any) and the approval of mergers or other business combination transactions. The interests of these shareholders may not always coincide with our interests or the interests of other shareholders.

We have never paid and we currently do not intend to pay dividends.

We have never declared or paid any cash dividends on our Ordinary Shares. We currently intend to retain any future earnings to finance operations and to expand our business and, therefore, do not expect to pay any cash dividends in the foreseeable future. As a result, capital appreciation, if any, of our Ordinary Shares will be investors’ sole source of gain for the foreseeable future. In addition, Israeli law may limit our declaration or payment of dividends and may subject our dividends to Israeli withholding taxes.

Management will have broad discretion as to the use of the net proceeds from this offering.

Our management will have broad discretion in the allocation of the net proceeds and could use them for purposes other than those contemplated at the time of this offering. Our shareholders may not agree with the manner in which our management chooses to allocate and spend the net proceeds.

The JOBS Act allows us to postpone the date by which we must comply with some of the laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC, which could undermine investor confidence in our company and adversely affect the market price of our Ordinary Shares.

For so long as we remain an “emerging growth company” as defined in the JOBS Act, we intend to take advantage of certain exemptions from various requirements that are applicable to public companies that are not “emerging growth companies” including:

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the provisions of the Sarbanes-Oxley Act requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting;

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Section 107 of the JOBS Act, which provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. This means that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to delay such adoption of new or revised accounting standards. As a result of this adoption, our financial statements may not be comparable to companies that comply with the public company effective date; and

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any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.

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We intend to take advantage of these exemptions until we are no longer an “emerging growth company.” We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of our first sale of equity securities pursuant to an effective registration statement under the Securities Act, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Ordinary Shares that is held by non-affiliates exceeds $700 million as of the prior December 31, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

We cannot predict if investors will find our Ordinary Shares less attractive because we may rely on these exemptions. If some investors find our Ordinary Shares less attractive as a result, there may be a less active trading market for our Ordinary Shares, and our market prices may be more volatile and may decline.

 

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As a “foreign private issuer” we are permitted to and follow certain home country corporate governance practices instead of otherwise applicable SEC and the NYSE American requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.

Our status as a foreign private issuer also exempts us from compliance with certain SEC laws and regulations and certain regulations of the NYSE American, including the proxy rules, the short-swing profits recapture rules, and certain governance requirements such as independent director oversight of the nomination of directors and executive compensation. In addition, we are not required, under the Exchange Act, to file current reports and financial statements with the SEC as frequently or as promptly as U.S. domestic companies whose securities are registered under the Exchange Act, and we are generally exempt from filing quarterly reports with the SEC. Also, although regulations promulgated under the Companies Law require us to disclose the annual compensation of our five most highly compensated senior officers on an individual basis, this disclosure is not as extensive as that required of a U.S. domestic issuer. For example, the disclosure required under Israeli law would be limited to compensation paid in the immediately preceding year without any requirement to disclose option exercises and vested stock options, future pension benefits or potential payments upon termination or a change of control. Furthermore, as a foreign private issuer, we are also not subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. Section 8103 of the National Defense Authorization Act for Fiscal Year 2026, named the “Holding Foreign Insiders Accountable Act”, which was signed into law on December 18, 2025, requires directors and officers of foreign private issuers to make insider reports under Section 16(a) of the Exchange Act, effective March 18, 2026. Our principal shareholders will remain exempt from the reporting under Section 16(a) of the Exchange Act and our directors, officers and principal shareholders continue to remain exempt from the short-swing profit recovery provisions contained in Section 16(b) of the Exchange Act.

These exemptions and leniencies will reduce the frequency and scope of information and protections to which you are entitled as an investor.

The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on June 30, 2026. In the future, we would lose our foreign private issuer status if a majority of our shareholders, directors or management are U.S. citizens or residents and we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic registrant may be significantly higher.

We may be a “passive foreign investment company” for U.S. federal income tax purposes in the current taxable year or may become one in any subsequent taxable year. There generally would be negative tax consequences for U.S. taxpayers that are holders of our Equity Securities if we are or were to become a “passive foreign investment company”.

Based on the projected composition of our income and valuation of our assets, we do not expect to be a “passive foreign investment company”, or a PFIC, for 2026 and we do not expect to become a PFIC in the future, although there can be no assurance in this regard. The determination of whether we are a PFIC is made on an annual basis and will depend on the composition of our income and assets from time to time. We will be treated as a PFIC for U.S. federal income tax purposes in any taxable year in which either (1) at least 75% of our gross income is “passive income” or (2) on quarterly average at least 50% of our assets by value produce passive income or are held for the production of passive income. Passive income for this purpose generally includes, among other things, certain dividends, interest, royalties, rents and gains from commodities and securities transactions and from the sale or exchange of property that gives rise to passive income. Passive income also includes amounts derived by reason of the temporary investment of funds, including those raised in a public offering. In determining whether a non-U.S. corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account. The tests for determining PFIC status are applied annually and it is difficult to make accurate projections of future income and assets which are relevant to this determination. In addition, our PFIC status may depend in part on the market value of our Equity Securities. Accordingly, there can be no assurance that we currently are not or will not become a PFIC in the future. If we are a PFIC in any taxable year during which a U.S. taxpayer holds our Equity Securities, such

 

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U.S. taxpayer would be subject to certain adverse U.S. federal income tax rules. In particular, if the U.S. taxpayer did not make an election to treat us as a “qualified electing fund,” or QEF, or make a “mark-to-market” election, then “excess distributions” to the U.S. taxpayer, and any gain realized on the sale or other disposition of our Equity Securities by the U.S. taxpayer: (1) would be allocated ratably over the U.S. taxpayer’s holding period for our Equity Securities; (2) the amount allocated to the current taxable year and any period prior to the first day of the first taxable year in which we were a PFIC would be taxed as ordinary income; and (3) the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. In addition, if the U.S. Internal Revenue Service, or the IRS, determines that we are a PFIC for a year with respect to which we have determined that we were not a PFIC, it may be too late for a U.S. taxpayer to make a timely QEF or mark-to-market election. U.S. taxpayers that have held our Equity Securities during a period when we were a PFIC will be subject to the foregoing rules, even if we cease to be a PFIC in subsequent years, subject to exceptions for U.S. taxpayer who made a timely QEF or mark-to-market election. A U.S. taxpayer can make a QEF election by completing the relevant portions of and filing IRS Form 8621 in accordance with the instructions thereto. We do not intend to notify U.S. taxpayers that hold our Equity Securities if we believe we will be treated as a PFIC for any taxable year in order to enable U.S. taxpayers to consider whether to make a QEF election. In addition, we do not intend to furnish such U.S. taxpayers annually with information needed in order to complete IRS Form 8621 and to make and maintain a valid QEF election for any year in which we or any of our subsidiaries are a PFIC. U.S. taxpayers that hold our Equity Securities are strongly urged to consult their tax advisors about the PFIC rules, including tax return filing requirements and the eligibility, manner, and consequences to them of making a QEF or mark-to-market election with respect to our Equity Securities in the event that we are a PFIC. See “Taxation — Certain Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Companies” for additional information.

We may be subject to securities litigation, which is expensive and could divert management attention.

In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could seriously hurt our business. Any adverse determination in litigation could also subject us to significant liabilities.

Certain recent initial public offerings of companies with public floats comparable to our anticipated public float have experienced extreme volatility that was seemingly unrelated to the underlying performance of such companies. We may experience similar volatility, which may make it difficult for prospective investors to assess the value of our Ordinary Shares.

Our Ordinary Shares may be subject to extreme volatility that is seemingly unrelated to the underlying performance of our business. Recently, companies with comparable anticipated public floats and initial public offering sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price volatility was seemingly unrelated to the respective company’s underlying performance. Although the specific cause of such volatility is unclear, our anticipated public float may amplify the impact of the actions taken by a few shareholders on the price of our Ordinary Shares, which may cause our share price to deviate, potentially significantly, from a price that better reflects the underlying performance of our business. Should our Ordinary Shares experience run-ups and declines that are seemingly unrelated to our actual or expected operating performance and financial condition or prospects, prospective investors may have difficulty assessing the rapidly changing value of our Ordinary Shares. In addition, investors of our Ordinary Shares may experience losses, which may be material, if the price of our Ordinary Shares declines after this offering or if such investors purchase Ordinary Shares prior to any price decline.

 

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Risks Related to Our Incorporation, Location and Operations in Israel and Operations in Hong Kong and China

We are exposed to fluctuations in currency exchange rates.

A major portion of our business is conducted, and a material portion of our operating expenses is incurred, outside the United States, mainly in New Israeli Shekels (NIS) and Chinese Renminbi (RMB). Therefore, we are exposed to currency exchange fluctuations in other currencies, particularly in NIS and the risks related thereto. Our primary expenses paid in NIS are employee salaries, fees for consultants and subcontractors and lease payments on our Israeli facilities. As a result, we are affected by foreign currency exchange fluctuations through both translation risk and transaction risk. Thus, we are exposed to the risks that: (a) the NIS may appreciate relative to the dollar; (b) the NIS devalue relative to the dollar; (c) the inflation rate in Israel may exceed the rate of devaluation of the NIS; or (d) the timing of such devaluation may lag behind inflation in Israel. In any such event, the dollar cost of our operations in Israel would increase and our dollar-denominated results of operations would be adversely affected. Our operations also could be adversely affected if we are unable to effectively hedge against currency fluctuations in the future.

Provisions of Israeli law and our amended and restated articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of, our company, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders.

Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, and requires special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to such types of transactions. For example, a merger may not be consummated unless at least 50 days have passed from the date on which a merger proposal is filed by each merging company with the Israel Registrar of Companies and at least 30 days have passed from the date on which the shareholders of both merging companies have approved the merger. In addition, the merger must be approved by a majority of the votes of shareholders present and voting at the relevant shareholders’ meeting. Moreover, a tender offer for all of a company’s issued and outstanding shares can only be completed if the acquirer receives positive responses from the holders of at least 95% of the company’s issued share capital. Completion of the tender offer also requires approval of a majority of the offerees that do not have a personal interest in the tender offer, unless, following consummation of the tender offer, the acquirer would hold at least 98% of the company’s outstanding shares. Furthermore, the shareholders, including those who accepted the tender offer, may, at any time within six months following the completion of the tender offer, claim that the consideration for the acquisition of the shares does not reflect their fair market value and petition an Israeli court to alter the consideration accordingly, unless the acquirer stipulated in its tender offer that a shareholder accepting the offer may not seek such appraisal rights and the acquirer or the company published all required information with respect to the tender offer prior to the tender offer’s response date.

In addition, our Articles of Association provide that our directors (other than external directors, if applicable) are elected on a staggered basis, such that a potential acquirer cannot readily replace our entire board of directors at a single annual general shareholder meeting. This could prevent a potential acquirer from receiving board approval for an acquisition proposal that our board of directors opposes.

Israeli tax considerations also may make potential transactions unappealing to us or to our shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax. See “Taxation — Israeli Tax Considerations and Government Programs” for additional information.

It may be difficult to enforce a judgment of a United States court against us and our officers and directors in Israel or the United States or to serve process on our officers and directors.

We were incorporated in Israel. All of our executive officers and directors reside outside of the United States, and all of our assets and most of the assets of these persons are located outside of the United States. Therefore, a judgment obtained against us, or any of these persons, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and

 

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may not necessarily be enforced by an Israeli court. It also may be difficult to affect service of process on these persons in the United States or to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a United States or foreign court.

Our amended and restated articles of association to be effective upon the closing of this offering will provide that, unless we consent to an alternate forum, the federal district courts of the United States shall be the exclusive forum of resolution of any claims arising under the Securities Act.

Our amended and restated articles of association to be effective upon the closing of this offering will provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any claims arising under the Securities Act, or Federal Forum Provision. We believe this exclusive forum provision benefits us by providing increased consistency in the application of U.S. federal securities laws in the types of lawsuits to which they apply. While the Federal Forum Provision does not restrict the ability of our shareholders to bring claims under the Securities Act, nor does it affect the remedies available thereunder if such claims are successful, we recognize that it may limit shareholders’ ability to bring a claim in the judicial forum that they find favorable and may increase certain litigation costs which may discourage the filing of claims under the Securities Act against us and our current and former directors, officers or other employees. Our shareholders will not be deemed to have waived our compliance with the U.S. federal securities laws and the rules and regulations thereunder as a result of our exclusive forum provision. Further, the enforceability of similar forum provisions (including exclusive federal forum provisions for actions, suits, or proceedings asserting a cause of action arising under the Securities Act) in other companies’ organizational documents and similar agreements has been challenged in legal proceedings, and there is uncertainty as to whether courts would enforce the exclusive forum provision in our amended and restated articles of association. In the event a court finds the exclusive forum provision contained in our amended and restated articles of association to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our results of operations. The Federal Forum will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.

Our amended and restated articles of association to be effective upon the closing of this offering will provide that unless we consent otherwise, the competent courts of Tel Aviv, Israel shall be the sole and exclusive forum for substantially all disputes between us and our shareholders under the Companies Law and the Israeli Securities Law, which could limit our shareholders’ ability to bring claims and proceedings against, as well as obtain a favorable judicial forum for disputes with, us and our directors, officers and other employees.

Our amended and restated articles of association to be effective upon the closing of this offering will provide that, unless we consent in writing to the selection of an alternative forum, the competent courts of Tel Aviv, Israel shall be the exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our shareholders or (iii) any action asserting a claim arising pursuant to any provision of the Companies Law or the Israeli Securities Law. This exclusive forum provision is intended to apply to claims arising under Israeli law and would not apply to claims brought pursuant to the Securities Act or the Exchange Act or any other claim for which U.S. federal courts would have exclusive jurisdiction. Such exclusive forum provision in our amended and restated articles of association to be effective upon the closing of this offering will not relieve us of our duties to comply with U.S. federal securities laws and the rules and regulations thereunder, and shareholders will not be deemed to have waived our compliance with these laws, rules and regulations. This exclusive forum provision may limit a shareholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees, which could limit our shareholders’ ability to bring claims and proceedings against, as well as obtain a favorable judicial forum for disputes with, us and our directors, officers and other employees.

 

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Our headquarters, research and development and other significant operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability in Israel including the recent war with Hamas in Gaza and with Hezbollah in Lebanon.

Our executive offices and research and development facilities are located in Israel. In addition, most of our key employees and officers are residents of Israel. Accordingly, political, geopolitical, economic and military conditions in Israel may directly affect our business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring Arab countries, Hamas (an Islamist terrorist militia and political group that controls the Gaza strip), Hezbollah (an Islamist terrorist militia and political group based in Lebanon) and other terrorist organizations active in the region. These conflicts have involved missile strikes, hostile infiltrations and terrorism against civilian targets in various parts of Israel, which have negatively affected business conditions in Israel. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could negatively affect business conditions in Israel in general and our business in particular, and adversely affect our product development, operations and results of operations. Ongoing and revived hostilities or other Israeli political or economic factors, such as, an interruption of operations at the Tel Aviv airport or the nautical routes, could prevent or delay shipments of our components or products.

In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. In October 2025, a ceasefire was brokered between Israel and Hamas. However, we cannot predict if and to what extent this ceasefire will remain in effect or upheld.

Since the commencement of these events, there have been continued hostilities along Israel’s northern border with the Hezbollah terror organization, with Iran, the Houthis in Yemen and on other fronts with various extremist groups in the region, such as various rebel militia groups in Syria and Iraq. In October 2024, Israel began limited ground operations against Hezbollah in Lebanon, and in November 2024, a ceasefire was brokered between Israel and Hezbollah, but in March 2026, hostilities resumed along Israel’s northern border with Lebanon, when Hezbollah resumed its attacks as part of a broader regional escalation. In response, Israel resumed military operations against Hezbollah in Lebanon. In April 2026, a temporary ceasefire was brokered between Israel and Hezbollah, however, we cannot predict if and to what extent this ceasefire will remain in effect or upheld. It is possible that hostilities with Iran, Hezbollah, the Houthis and terrorist groups in Syria will escalate, and that other terrorist organizations, including Palestinian military organizations in the West Bank, will join the hostilities. In addition, in June 2025, in light of continued nuclear threats and intelligence assessments indicating imminent attacks, Israel launched a preemptive strike directly targeting military and nuclear infrastructure inside Iran, aimed at disrupting Iran’s capacity to coordinate or launch further hostilities against Israel, as well as to degrade its nuclear program. In response, Iran launched multiple waves of drones and ballistic missiles at Israeli cities. While a ceasefire was reached in June 2025 following 12 days of hostilities, on February 28, 2026, the United States and Israel launched coordinated military strikes against Iran, including attacks on strategic military infrastructure and leadership targets, with the stated aim of degrading Iran’s capacity to conduct or support hostile operations against them. In response, Iran has fired missiles and drones toward population centers and military installations in Israel, Europe and neighboring countries in the Gulf region, and also launched counter-strikes against U.S. forces and allied bases throughout the Gulf region. A two-week ceasefire was brokered in April 2026 to allow the parties to negotiate, which was later extended, but its durability and the prospects for a successful agreement remain uncertain. A broader regional conflict involving additional state and non-state actors remains a significant risk. Additionally, following the fall of the Assad regime in Syria, Israel has conducted limited military operations targeting the Syrian army, Iranian military assets and infrastructure linked to Hezbollah and other Iran-supported groups.

These situations may potentially escalate in the future to more violent events which may affect Israel and us. Any hostilities, armed conflicts, terrorist activities involving Israel or the interruption or curtailment of

 

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trade between Israel and its trading partners, or any political instability in the region could adversely affect business conditions and our results of operations and could make it more difficult for us to raise capital and could adversely affect the market price of our Ordinary Shares. An escalation of tensions or violence might result in a significant downturn in the economic or financial condition of Israel, which could have a material adverse effect on our operations in Israel and our business. Parties with whom we do business have sometimes declined to travel to Israel during periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary in order to meet our business partners face to face. In addition, the political and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.

Since the war broke out on October 7, 2023, our operations have not been adversely affected by this situation, and we have not experienced disruptions to our business operations. As such, our product and business development activities remain on track. While the intensity and duration of the security situation in Israel have been difficult to predict, as were the economic implications on our business and operations and on Israel’s economy in general, the ceasefire marks a potential shift towards stability in the region. If sustained, this could reduce the risk of disruptions to our business and the Israeli economy in general. However, if the war is renewed or expands to other fronts, such as Lebanon, Syria and the West Bank, our operations may be harmed.

Several countries, principally in the Middle East, still restrict doing business with Israel and Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies if hostilities in Israel or political instability in the region continues or increases. Similarly, Israeli companies are limited in conducting business with entities from several countries.

Our commercial insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East. Although the Israeli government has in the past covered certain damages that were caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for damages incurred. Any losses or damages incurred by us could have a material adverse effect on our business.

Finally, political conditions within Israel may affect our operations. Israel held numerous general elections between 2019 and 2022, and prior to October 2023, the Israeli government pursued extensive changes to Israel’s judicial system, which sparked extensive political debate and unrest. Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of operations and growth prospects.

Political relations could limit our ability to sell or buy internationally.

We could be adversely affected by the interruption or reduction of trade between Israel and its trading partners. Several countries, companies and organizations still restrict business with the State of Israel and with Israeli companies and continue to participate in a boycott of Israeli companies. Foreign government defense export policies towards Israel could also make it more difficult for us to obtain the export authorizations necessary for our activities. See “Risks Related to Our Business and Industry” for further information. These restrictive laws and policies may have an adverse impact on our operating results, financial conditions or the expansion of our business. Similarly, Israeli corporations are limited in conducting business with entities from several countries.

Your rights and responsibilities as a shareholder will be governed by Israeli law, which differs in some material respects from the rights and responsibilities of shareholders of U.S. companies.

The rights and responsibilities of the holders of our Ordinary Shares are governed by our articles and by Israeli law. These rights and responsibilities differ in some material respects from the rights and responsibilities of shareholders in typical U.S. corporations. In particular, a shareholder of an Israeli company has certain duties to act in good faith and fairness in exercising its rights and performing its obligations toward the

 

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company and other shareholders and to refrain from abusing its power in the company, including, among other things, in voting at the general meeting of shareholders on certain matters, such as an amendment to the company’s articles of association, an increase of the company’s authorized share capital, a merger of the company, and approval of related party transactions that require shareholder approval. In addition, a shareholder who is aware that it possesses the power to determine the outcome of a shareholder vote or to appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness toward the company with regard to such vote or appointment. There is limited case law available to assist us in understanding the nature of this duty or the implications of these provisions. These provisions may be interpreted to impose additional obligations on holders of our Ordinary Shares that are not typically imposed on shareholders of U.S. corporations.

Certain of our research and development activities and programs were supported by Israeli Governmental grants. The terms of such grants require us to pay royalties for the sale of the applicable products. We may be required to pay penalties in addition to repayment of the grants to satisfy specified conditions in order to manufacture products and transfer technologies outside of Israel.

Our research and development efforts were financed, in part, through royalty-bearing and non-royalty-bearing grants from the Israel Innovation Authority, or the IIA. As of December 31, 2025, we received IIA royalty-bearing grants totaling approximately $3.4 million, of which approximately $608,330 has been repaid. We may in the future apply to receive additional grants from the IIA. However, we cannot predict whether we will be entitled to any future grants, or the amounts of any such grants.

We are committed to pay royalties to the IIA at a rate of approximately 18% on sales proceeds from our products (and related know-how and services) that were developed, in whole or in part, using the IIA royalty-bearing grants we received under IIA programs, up to the total amount of royalty-bearing grants received, linked to the U.S. dollar and bearing annual interest at rates prescribed by the IIA’s rules and guidelines.

In general, the Innovation Law requires, among other things, that the products developed as part of the programs under which the grants were given be manufactured in Israel and restricts the ability to transfer know-how funded by the IIA outside of Israel. A transfer for the purpose of the Innovation Law is generally interpreted very broadly and includes, among other things, any sale of the IIA-funded know-how, any license to develop the IIA-funded know-how or the products resulting from such IIA-funded know-how or any other transaction, which, in essence, constitutes a transfer of IIA-funded know-how. The transfer of IIA-funded know-how outside of Israel requires prior approval and may be subject to payment of a redemption fee to the IIA, calculated in accordance with a formula provided under the Innovation Law (which is subject to a cap of six times the total amount of the IIA grants received, plus interest). These restrictions may impair our ability to sell, license or otherwise transfer IIA-funded know-how outside of Israel.

In general, manufacturing products developed with IIA-funded know-how outside of Israel also requires prior approval from the IIA. Even if we do receive approval to manufacture products developed with IIA-funded know-how outside of Israel, such transfer of manufacturing capacity outside of Israel may be subject to an increase in the amount of royalties payable, inter alia, depending on the manufacturing volume that is performed outside of Israel, and such transfer will be subject to an increase in the rate of royalties. This restriction may impair our ability to outsource manufacturing or engage in our own manufacturing operations for those products or technologies.

The restrictions under the Innovation Law (including with respect to the restriction of the transfer of IIA-funded know-how and manufacturing outside of Israel) continue to apply even after payment of the full amount of royalties payable in respect of grants. However, upon payment of the redemption fee on a transfer of IIA-funded know-how outside Israel, the obligations towards the IIA (including the obligation to pay royalties) and restrictions under the Innovation Law cease to apply.

We cannot be certain that any approval of the IIA will be obtained on terms that are acceptable to us, or at all. We may not receive the required approvals should we wish to transfer IIA-funded know-how and/or manufacture products developed with IIA-funded know-how outside of Israel in the future. Furthermore,

 

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in the event that we undertake a transaction involving the transfer to a non-Israeli entity of IIA-funded know-how pursuant to a merger or similar transaction, or in the event we undertake a transaction involving the licensing of IIA Funded Know-How for R&D purposes to a non-Israeli entity, the consideration available to our shareholders may be reduced by the amounts we are required to pay to the IIA. Any approval, if given, will generally be subject to additional financial obligations. Failure to comply with certain requirements under the IIA’s rules and guidelines and the Innovation Law may subject us to financial sanctions, to mandatory repayment of grants received by us (together with interest and penalties), as well as may expose us to criminal proceedings.

Subject to prior approval of the IIA, we may transfer the IIA-funded know-how to another Israeli company. If the IIA-funded know-how is transferred to another Israeli entity, the transfer would still require IIA approval but will not be subject to the payment of the redemption fee (however, there may be an obligation to pay royalties to the IIA from the income of such sale transaction as part of the royalty payment obligation, other than in specific circumstances that will be examined by the IIA, mainly when the transfer is between related entities). In such case, the acquiring company would have to assume all of the applicable restrictions and obligations towards the IIA (including the restrictions on the transfer of know-how and manufacturing outside of Israel) as a condition to the IIA’s approval.

The Israeli government grants that we have received for research and development expenditures require us to meet several conditions and may restrict our ability to manufacture some of our product candidates and transfer relevant know-how outside of Israel and require us to satisfy specified conditions.

We have received royalty-bearing grants and non-royalty bearing grants from the government of Israel through the National Authority for Technological Innovation, or the Israel Innovation Authority, also known as the IIA (formerly known as the Office of the Chief Scientist of the Ministry of Economy and Industry, or the OCS), for the financing of a portion of our research and development expenditures in Israel. The total gross amount of grants actually received by us from the IIA as of December 31, 2025 totaled approximately $3.4 million. We are required to pay the IIA royalties from the revenues generated from the sale of products (and related services) developed (in all or in part), directly or indirectly, using the IIA grants we received as part of a research and development program funded by the IIA, or the Approved Program, (at rates which are determined under the IIA rules), up to the aggregate amount of the total royalty bearing grants received by the IIA, plus annual interest for a File (as defined under the IIA’s rules). As we received grants from the IIA, we are subject to certain restrictions under the Encouragement of Research, Development and Technological Innovation in the Industry Law 5744-1984, or the Innovation Law, the regulations promulgated thereunder and the IIA’s rules and guidelines. These restrictions may impair our ability to perform or outsource manufacturing of IIA funded products outside of Israel, granting licenses for R&D purposes or otherwise transfer outside of Israel the know-how resulting, directly or indirectly, in whole or in part, in accordance with or as a result of, research and development activities made according to an Approved Program, as well as any rights associated with such know-how (including later developments, which derive from, are based on, or constitute improvements or modifications of such know-how), or the IIA Funded Know-How.

The restrictions under the IIA’s rules and guidelines continue to apply even after payment to the IIA of the full amount of royalties payable pursuant to the grants. In addition, the IIA may from time to time audit sales of products which it claims incorporate IIA Funded Know-How and this may lead to additional royalties being payable on additional product candidates, and may subject such products to the restrictions and obligations specified hereunder.

The IIA restrictions may impair our ability to perform or outsource manufacturing rights of IIA funded products outside of Israel or otherwise transfer or license for R&D purpose our IIA Funded Know-How in and outside of Israel without the approval of the IIA, and we cannot be certain that any approval of the IIA will be obtained on terms that are acceptable to us, or at all.

Our operations may be disrupted as a result of the obligation of management or key personnel to perform military service.

As of the date hereof, we currently have 36 full-time employees, including six members of senior management, most of whom are located in Israel. Certain of our employees and consultants in Israel, including members

 

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of our senior management, may be obligated to perform military reserve duty generally until they reach the age of 40 (or older, for officers or others who hold certain positions in the Israeli armed forces reserves) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. In connection with the Israeli security cabinet’s declaration of war against Hamas and possible hostilities with other organizations, the Israeli military called up several hundred thousand of its reserves for active service. It is possible that there will be similar large-scale military reserve duty call-ups in the future. Our operations could be disrupted by the absence of a significant number of our officers, directors, employees and consultants. Military service call ups that result in absences of personnel from us for an extended period of time may materially and adversely affect our business, prospects, financial condition and results of operations.

Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect our future business and profitability.

We are an Israeli company and thus subject to Israeli corporate income tax as well as other local taxes applicable to our operations. New local laws and policy relating to taxes, whether in Israel or in any of the jurisdictions in which we operate, may have an adverse effect on our future business and profitability. Further, existing applicable tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us or our subsidiaries.

We principally conduct our business operations through Silentium Ltd. in Israel; however due to the long arm provisions under the current PRC laws and regulations, the Chinese government may exercise significant oversight and discretion over our subsidiaries in Hong Kong and mainland China and may intervene in or influence our subsidiaries’ operations at any time, which could result in a material change in the operations of our Hong Kong and PRC subsidiaries. Changes in the policies, regulations and rules, and in the enforcement of laws by the Chinese government may also be quick with little or no advance notice.

Although we have two Asia-based wholly owned subsidiaries, Silentium (Asia) Limited (which is a holding company in Hong Kong that does not have significant business operations) and Silentium Acoustic Technology (Shanghai) Co., Ltd. (which is a subsidiary of Silentium (Asia) Limited and which functions as our customer service center in China, supporting customer engagement, technical services, sales activities, and integration-related activities for local customers), we are an Israeli company. Because we now maintain operations in Hong Kong and the PRC, due to long arm provisions under the current PRC laws and regulations, there remains regulatory uncertainty with respect to the application, implementation and interpretation of laws in China that could affect our operations. The PRC government may choose to exercise significant oversight and discretion, and the policies, regulations and rules and the enforcement of laws of the Chinese government to which we are subject may change rapidly and with little advance notice to us or our shareholders. As a result, the application, interpretation and enforcement of new and existing laws and regulations of the PRC are often uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or authorities and may be inconsistent with our current policies and practices. Compliance with new laws, regulations and other government directives of the PRC may also be costly and such compliance or any associated inquiries or investigations or any other government actions may:

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delay or impede our operations;

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result in negative publicity or increase our operating costs; and/or

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require significant management time and attention.

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Any legal or regulatory changes that restrict or otherwise unfavorably impact our subsidiaries’ ability to conduct their businesses could reduce revenues, increase costs, require them to obtain more licenses, permits, approvals or certificates or subject them to additional liabilities. To the extent that any new or more stringent measures are implemented, our business, financial condition and results of operations could be adversely affected, and the value of our Ordinary Shares could decrease.

 

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It could be difficult to enforce our contractual, intellectual property and other property rights in the PRC.

The enforcement of contractual, intellectual property and other property rights in the PRC may be difficult and expensive, and it may be difficult and expensive to effect service of process in the PRC. We cannot predict future developments in the PRC legal system relating to the interpretation or upholding of contractual, intellectual property or other property rights or the effect of such developments on our business. The uncertainty of laws and legal procedures in China, including effecting proper service of process, could negatively affect our ability to enforce our contracts with our customers in China and properly operate our PRC subsidiary.

PRC laws and regulations governing businesses in the PRC apply directly to our PRC operations and may also be applicable to our Hong Kong subsidiary. These laws are sometimes vague and uncertain and, as a result, the legal and operational risks of operating in China apply directly to our PRC subsidiary and also apply to our Hong Kong subsidiary.

We are subject to a variety of laws and regulations of the PRC, such as PRC laws regarding privacy, data security, cybersecurity and data protection, which apply directly to Silentium Acoustic Technology (Shanghai) Co., Ltd., a subsidiary of Silentium (Asia) Limited, which functions as our customer service center in China. Furthermore, due to the relationship between mainland China and Hong Kong, these laws may also be applicable to our Hong Kong subsidiary, Silentium (Asia) Limited. These laws and regulations are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly with respect to foreign laws. In particular, there are numerous laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure and protection of personal information and other user data. Such laws and regulations often vary in scope, may be subject to differing interpretations and may be inconsistent among different jurisdictions.

The national laws adopted by the PRC are generally not applicable to Hong Kong according to the Basic Law of the Hong Kong Special Administrative Region (the “Basic Law”), which came into effect on July 1, 1997. The Basic Law is the constitutional document of Hong Kong, as it sets out the PRC's basic policies regarding Hong Kong. The principle of “one country, two systems,” which is a prominent feature of the Basic Law, dictates that Hong Kong will retain its unique common law and capitalist system for 50 years after the handover in 1997. Under the principle of “one country, two systems,” Hong Kong’s legal system, which is different from that of the PRC, is based on the common law supplemented by statutes.

According to Article 18 of the Basic Law, national laws adopted by the PRC shall not be applied in Hong Kong, except for those listed in Annex III to the Basic Law, such as the laws in relation to the national flag, national anthem and diplomatic privileges and immunities. Further, there is no legislation stating that the laws in Hong Kong should be commensurate with those in the PRC. Despite the foregoing, the legal and operational risks of operating in China also apply to businesses operating in Hong Kong.

There remains uncertainty as to how the various PRC laws will be interpreted or implemented and whether the PRC regulatory agencies may adopt new laws, regulations, rules or detailed implementation and interpretation related to various laws, and as to the applicability of PRC laws to our business operations in Hong Kong. If any such new laws, regulations, rules or implementation and interpretation come into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. However, there can be no assurance that any new PRC laws, regulations, rules, implementation or interpretation will not have an adverse effect on our PRC or Hong Kong subsidiaries.

We could be affected by legal and political considerations involving Hong Kong.

As Hong Kong is a special administrative region of the People’s Republic of China, the PRC may, by its political, legal and economic policies, exert influence on foreign companies doing business in Hong Kong. The PRC economy features a high degree of governmental involvement. In recent years, the PRC government has implemented various measures to guide the allocation of resources and thereby narrow the gaps between economic development in different regions in the country. We cannot offer any assurance that the PRC government will not, in the near future, adopt policies that will adversely affect political, legal and

 

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economic conditions in Hong Kong, presenting us with the same operational risks as those faced in the PRC, and which in turn may materially affect our business. Moreover, because we have a wholly owned subsidiary, Silentium (Asia) Limited, based in Hong Kong, which does not have significant business operations but holds our Chinese operational subsidiary, Silentium Acoustic Technology (Shanghai) Co., Ltd., our business operations and financial condition could be affected by political and legal developments in Hong Kong. Any adverse economic, social and/or political conditions, material social unrest, strikes, riots, civil disturbances or disobedience, as well as significant natural disasters, may adversely affect our business operations. For example, the Hong Kong protests that lasted from 2019 to 2020 were triggered by the introduction of the Fugitive Offenders amendment bill by the Hong Kong government. Despite not being enacted, similar incidents may cause large-scale protests or riots that could materially and adversely affect various sectors of the Hong Kong economy. Our business operations are susceptible to the effects of similar protests as well as any other incidents or factors that affect the stability of social, economic and political conditions in Hong Kong. We cannot guarantee that similar protests or social unrest will not occur in the future or that there will be no other events that could disrupt the legal, economic, political and social conditions in Hong Kong. If such events persist for a prolonged period of time, our overall business, financial condition and results of operations may be adversely affected.

Future inflation in China may increase our operating costs in China.

In recent years, the Chinese economy has experienced periods of rapid expansion and highly fluctuating rates of inflation. During the past ten years, the rate of inflation in China has been as high as 5.9% and as low as -0.8%. These factors have led to the adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation. High inflation may in the future cause the Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China. This could the operations of our subsidiary in China.

Moreover, the significant economic growth in China has resulted in a general increase in labor costs and a shortage of low-cost labor. Inflation may cause production and local operational costs to continue to increase. If we are unable to pass on the increase in operational costs to our customers, we may suffer a decrease in profitability and a loss of customers, and our results of operations could be materially and adversely affected.

General Risk Factors

Raising additional capital would cause dilution to our existing shareholders and may affect the rights of existing shareholders.

We may seek additional capital through a combination of private and public equity offerings, debt financings and collaborations and strategic arrangements. To the extent that we raise additional capital through the issuance of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a holder of our Ordinary Shares.

Sales of a substantial number of our Ordinary Shares in the public market by our existing shareholders could cause our share price to fall.

Sales of a substantial number of our Ordinary Shares in the public market, or the perception that these sales might occur, could depress the market price of our Ordinary Shares and could impair our ability to raise capital through the sale of additional equity securities. Furthermore, while our directors, officers and shareholders will be subject to lock-up agreements with the underwriter of this offering that restrict their ability to transfer our Ordinary Shares, such lock-up will expire six months from the date of this prospectus. We are unable to predict the effect that sales may have on the prevailing market price of our Ordinary Shares. See “Shares Eligible for Future Sale” for further information.

 

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If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they adversely change their recommendations or publish negative reports regarding our business or our shares, our share price and trading volume could decline.

The trading market for our Ordinary Shares will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. We do not have any control over these analysts and we cannot provide any assurance that analysts will cover us or provide favorable coverage. If any of the analysts who may cover us adversely change their recommendation regarding our shares, or provide more favorable relative recommendations about our competitors, our share price would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline.

We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company whose Ordinary Shares will be listed in the United States, we will incur significant legal, accounting and other expenses that we did not incur as a private company. We will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, the other rules and regulations of the SEC and the rules and regulations of the NYSE American stock exchange, or the NYSE American, and provisions of the Companies Law that apply to public companies such as us. The expenses that will be required in order to adequately prepare for being a public company will be material, and compliance with the various reporting and other requirements applicable to public companies will require considerable time and attention of management. For example, the Sarbanes-Oxley Act and the rules of the SEC and national securities exchanges have imposed various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. These rules and regulations will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits on coverage or incur substantial costs to maintain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified personnel to serve on our board of directors, our board committees, or as executive officers.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, beginning as early as our annual report on Form 20-F for the fiscal year ended December 31, 2026. In addition, we will be required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting beginning with our annual report on Form 20-F following the date on which we are no longer an emerging growth company. Our compliance with Section 404 of the Sarbanes-Oxley Act will require that we incur substantial accounting expense and expend significant management efforts. We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. If we are not able to comply with the requirements of Section 404 in a timely manner, the market price of our shares could decline and we could be subject to sanctions or investigations by the NYSE American, the SEC or other regulatory authorities, which would require additional financial and management resources.

Our ability to successfully implement our business plan and comply with Section 404 requires us to be able to prepare timely and accurate financial statements. We expect that we will need to continue to improve existing, and implement new operational and financial systems, procedures and controls to manage our business effectively. Any delay in the implementation of, or disruption in the transition to, new or enhanced systems, procedures or controls, may cause our operations to suffer and we may be unable to conclude that our internal control over financial reporting is effective and to obtain an unqualified report on internal

 

46

RISK FACTORS

controls from our auditors as required under Section 404 of the Sarbanes-Oxley Act. This, in turn, could have an adverse impact on trading prices for our Ordinary Shares and could adversely affect our ability to access the capital markets.

We have no operating experience as a publicly traded company in the United States.

We have no operating experience as a publicly traded company in the United States. Although the individuals who now constitute our management team have experience managing a publicly-traded company, there is no assurance that the past experience of our management team will be sufficient to operate our company as a publicly traded company in the United States, including timely compliance with the disclosure requirements of the SEC. Following the completion of this offering, we will be required to develop and implement internal control systems and procedures in order to satisfy the periodic and current reporting requirements under applicable SEC regulations and comply with the NYSE American listing standards. These requirements will place significant strain on our management team, infrastructure and other resources. In addition, our management team may not be able to successfully or efficiently manage our company as a U.S. public reporting company that is subject to significant regulatory oversight and reporting obligations.

 

47​

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could, “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would,” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

➢

our plans and ability to obtain or protect intellectual property rights, including extensions of patent terms where available and our ability to avoid infringing the intellectual property rights of others;

​

➢

the need to hire additional personnel and our ability to attract and retain such personnel;

​

➢

the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements;

​

➢

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

​

➢

our ability to generate revenue and profit margin under our anticipated contracts which is subject to certain risks;

​

➢

our dependence on third parties;

​

➢

our financial performance and our ability to repay our loans and debts;

​

➢

our ability to generate revenue and profit margin under our anticipated contracts;

​

➢

our ability to successfully develop, validate, and commercialize new products and technologies;

​

➢

our expectations regarding having our Ordinary Shares listed on the NYSE American;

​

➢

our anticipated use of the net proceeds from this offering;

​

➢

our ability to negotiate favorable terms in any collaboration, licensing or other arrangements into which we may enter and perform our obligations under such collaborations;

​

➢

our expected ability to operate effectively as a publicly traded company in the United States;

​

➢

our expectations regarding the commercialization and expansion of recent technology launches, strategic engagements, and mass production awards in automotive and public transportation sectors;

​

➢

our intentions to capitalize on geographic market trends, regulatory drivers, and consumer expectations to drive demand for advanced NVH solutions and acoustic management technologies;

​

➢

our outlook for expanding our competitive advantage by delivering production-ready, scalable, and deeply integrated acoustic solutions that support long-term deployment across vehicle generations and platforms;

​

➢

our plans to pursue new commercial agreements and licensing arrangements with Auto OEMs, Tier-1 suppliers, and semiconductor partners, supporting predictable, multi-year revenue streams;

​

➢

our intentions to manage manufacturing requirements through outsourcing to qualified partners while maintaining core software and system design in-house;

​

➢

our expectations for disciplined headcount growth, aligned with customer adoption, expansion of production programs, and long-term strategic objectives;

​

➢

our expectations regarding the commercialization timeline and market adoption of new technologies, including advanced acoustic solutions for electric and hybrid vehicles and broader mobility applications;

​

 

48

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

➢

our commitment to ongoing innovation and enhancement of our Active Acoustic Management platform, including development and rollout of new features such as Road Noise Cancellation, Intelligent RNC, Engine Noise Cancellation, Wind Noise Cancellation, HVAC Noise Cancellation, Internal Car Communication, and Spatial Voice Management;

​

➢

our intentions to expand our market presence through engagement with Auto OEMs, Tier-1 suppliers, semiconductor partners, and entry into adjacent transportation markets;

​

➢

our expectations for continued deployment and adoption of our software-based Active Acoustics solutions across new vehicle models, OEMs, and transportation segments; and

​

➢

statements as to the impact of the political and security situation in Israel on our business.

​

Forward-looking statements are based on our management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions, and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this prospectus may turn out to be inaccurate. Important factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk Factors” and elsewhere in this prospectus. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements.

The forward-looking statements included in this prospectus speak only as of the date of this prospectus. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this prospectus. See “Where You Can Find More Information.”

 

49​

 

USE OF PROCEEDS

We estimate that the net proceeds from the sale of Ordinary Shares in this offering will be approximately $12.5 million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, based on an assumed initial public offering price of $7.00 per ordinary share, which is the midpoint of the price range set forth on the cover page of this prospectus. If the underwriters exercise their option to purchase up to an additional 322,500 Ordinary Shares in full, we estimate that the net proceeds to us from this offering will be approximately $14.7 million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Each $1.00 increase (decrease) in the assumed initial public offering price of $7.00 per ordinary share would increase (decrease) the net proceeds to us from this offering, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, by $1,978 thousand, assuming that the number of Ordinary Shares offered by us, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of Ordinary Shares we are offering. An increase (decrease) of 100,000 in the number of Ordinary Shares we are offering would increase (decrease) the net proceeds to us from this offering, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, by $644 thousand, assuming the assumed initial public offering price stays the same.

We currently expect to use the net proceeds from this offering for the following purposes:

➢

approximately $2.8 million to acquire new OEM customers;

​

➢

approximately $2.1 million for R&D;

​

➢

approximately $1.9 million to expand our business with existing OEM customers;

​

➢

approximately $1.5 million to strengthen our relationships with Tier-1 and semiconductor partners;

​

➢

approximately $1.0 million to expand into adjacent markets; and

​

➢

the remainder for working capital and general corporate purposes.

​

Although we currently anticipate that we will use the net proceeds from this offering as described above, there may be circumstances where a reallocation of funds is necessary. Due to the uncertainties inherent in the product development and commercialization process, it is difficult to estimate with certainty the exact amounts of the net proceeds from this offering that may be used for any of the above purposes on a stand-alone basis. Amounts and timing of our actual expenditures will depend upon a number of factors, including our sales, marketing and commercialization efforts, regulatory approval and demand for our product candidates, operating costs and other factors described under “Risk Factors” in this prospectus. Accordingly, our management will have flexibility in applying the net proceeds from this offering. An investor will not have the opportunity to evaluate the economic, financial or other information on which we base our decisions on how to use the proceeds.

Based on our current plans, we believe that our existing cash, cash equivalents and short-term deposits, together with the net proceeds of this offering, will be sufficient to enable us to fund our operating expenses and capital expenditure requirements for at least the next 24 months. We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect.

 

50

 

DIVIDEND POLICY

We have never declared or paid any cash dividends to our shareholders of our Ordinary Shares, and we do not anticipate or intend to pay cash dividends in the foreseeable future. Payment of cash dividends, if any, in the future will be at the discretion of our board of directors in compliance with applicable legal requirements and will depend on a number of factors, including future earnings, our financial condition, operating results, contractual restrictions, capital requirements, business prospects, our strategic goals and plans to expand our business, applicable law and other factors that our board of directors may deem relevant.

The Israeli Companies Law imposes further restrictions on our ability to declare and pay dividends. See “Description of Share Capital — Dividend and Liquidation Rights” for additional information.

Payment of dividends may be subject to Israeli withholding taxes. See “Taxation — Israeli Tax Considerations and Government Programs” for additional information.

 

51​

 

CAPITALIZATION

The following table sets forth our cash and cash equivalents and our capitalization as of December 31, 2025:

➢

on an actual basis;

​

➢

on a pro forma basis to give effect to the following events as if each event had occurred on or before December 31, 2025: (i) the conversion of 973,554 preferred shares (including 19,034 preferred shares issued upon the automatic conversion of warrants) into 973,554 Ordinary Shares; and (ii) the issuance of 1,972,153 Ordinary Shares upon the conversion of the SAFEs in the aggregate amount of $2,991,200 (including approximately $1,666,800 in committed capital from SAFEs executed between January and May 2026, of which $34,700 remains unfunded as of June 8, 2026), which will automatically convert upon the consummation of this offering, based on an assumed initial public offering price of $7.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus; and

​

➢

on a pro forma as adjusted basis to give effect to the additional issuance of 2,150,000 Ordinary Shares in this offering, at an assumed public offering price of $7.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses, as if the sale of the securities had occurred on December 31, 2025.

​

The pro forma as adjusted information set forth in the table below is illustrative only and will be adjusted based on the actual public offering price and other terms of this offering determined at pricing.

You should read this table in conjunction with the sections titled “Summary Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes included elsewhere in this prospectus.

​

1)

Each $1.00 increase or decrease in the assumed initial public offering price of $7.00 per ordinary share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, respectively, the amount of cash, cash equivalents and short-term deposits, total shareholders’

​

 

52

CAPITALIZATION

(deficiency) equity and total capitalization by $1,978 thousand, assuming the number of Ordinary Shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of Ordinary Shares we are offering. An increase or decrease of 100,000 in the number of Ordinary Shares we are offering would increase or decrease, respectively, each of the amount of cash, cash equivalents and short-term deposits, total shareholders’ (deficiency) equity and total capitalization by $644 thousand, assuming the assumed initial public offering price per ordinary share, as set forth on the cover page of this prospectus, remains the same. The pro forma as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing.

The number of the Ordinary Shares to be issued and outstanding immediately after this offering as shown above assumes that all of the Ordinary Shares offered hereby are sold, is based on 407,521 Ordinary Shares issued and outstanding as of December 31, 2025, and includes an aggregate of 2,945,706 Ordinary Shares issuable upon the conversion of all of our outstanding preferred shares and all SAFEs immediately prior to the closing of this offering. This number excludes:

➢

200,305 Ordinary Shares issuable upon the exercise of warrants outstanding as of such date, at a weighted average exercise price of $16.85;

​

➢

373,757 Ordinary Shares issuable upon the exercise of options held by directors, employees and consultants under our 2013 Israeli Share Option Plan, or the 2013 Plan, outstanding as of such date, at a weighted average exercise price of $9.30, of which 135,354 were vested as of such date; and

​

➢

726,243 Ordinary Shares reserved for future issuance under our 2013 Plan.

​

Unless otherwise indicated, all information in this prospectus assumes or gives effect to:

➢

no exercise by the representative of the underwriters of the over-allotment option;

​

➢

no exercise by the representative of the underwriters of the warrants;

​

➢

no exercise of outstanding warrants;

​

➢

the conversion of all of our outstanding preferred shares (including 19,034 preferred shares issued upon the automatic conversion of warrants) into an aggregate of 973,554 Ordinary Shares immediately prior to the closing of this offering;

​

➢

1,972,153 Ordinary Shares issuable upon the conversion of the SAFEs in the aggregate amount of $2,991,200 (of which $34,700 remains unfunded as of June 8, 2026), which will occur upon the completion of this offering; and

​

➢

the 2,060-for-1 Reverse Split which we completed in May 2026, and the customary adjustments to our outstanding options and warrants.

​

 

53​

 

DILUTION

If you invest in our Ordinary Shares in this offering, your interest will be immediately diluted to the extent of the difference between the initial public offering price per ordinary share in this offering and the pro forma as adjusted net tangible deficit per ordinary share after this offering. Dilution results from the fact that the initial public offering price per ordinary share is substantially in excess of the net tangible deficit per ordinary share. As of December 31, 2025, we had a historical net tangible deficit of $(3,357,000), or $(8.24) per ordinary share. Our net tangible deficit per share represents total tangible assets less total liabilities, divided by the number of Ordinary Shares outstanding on December 31, 2025.

Our pro forma net tangible deficit as of December 31, 2025, was $(401,000), or $(0.12) per Ordinary Share. Pro forma net tangible deficit per share represents total tangible assets less total liabilities, divided by the number of Ordinary Shares outstanding as of December 31, 2025, after giving effect to the following events as if each event had occurred on or before December 31, 2025: (i) the conversion of 973,554 preferred shares (including 19,034 warrants that were automatically converted into such preferred shares) into 973,554 Ordinary Shares; and (ii) the issuance of 1,972,153 Ordinary Shares upon the conversion of the SAFEs in the aggregate amount of $2,991,200 (including approximately $1,666,800 in committed capital from SAFEs executed between January and May 2026, of which $34,700 remains unfunded as of June 8, 2026), which will automatically convert upon the consummation of this offering, based on an assumed initial public offering price of $7.00 per Ordinary Share, which is the midpoint of the price range set forth on the cover page of this prospectus.

After giving effect to the sale of Ordinary Shares in this offering at an assumed initial public offering price of $7.00 per ordinary share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses, and after taking into account the automatic conversion of all outstanding preferred shares into Ordinary Shares, our as adjusted net tangible book value at December 31, 2025 would have been $2.30 per share. This represents an immediate increase in as adjusted net tangible book value of $2.37 per share to existing shareholders and immediate dilution of $4.70 per ordinary share to new investors. The following table illustrates this dilution per ordinary share:

The as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing. A $1.00 increase (decrease) in the assumed initial public offering price of $7.00 per ordinary share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our as adjusted net tangible book value as of December 31, 2025 after this offering by approximately $0.36 per ordinary share, and would increase (decrease) dilution to investors in this offering by $0.64 per ordinary share, assuming that the number of Ordinary Shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of Ordinary Shares we are offering. An increase (decrease) of 100,000 in the number of Ordinary Shares we are offering would increase (decrease) our as adjusted net tangible book value as of December 31, 2025 after this offering by approximately $0.07 per ordinary share, and would decrease (increase) dilution to investors in this offering by approximately $0.07 per ordinary share, assuming the assumed initial public offering price per ordinary share remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.​

 

54

DILUTION

If the underwriters exercise in full their option to purchase additional Ordinary Shares, the as adjusted net tangible book value will increase to $2.53 per ordinary share, representing an immediate increase in as adjusted net tangible book value to existing shareholders of $2.68 per ordinary share and an immediate dilution of $4.47 per ordinary share to new investors participating in this offering.

The following table shows, as of December 31, 2025, on an as adjusted basis, the number of Ordinary Shares purchased from us, the total consideration paid to us and the average price paid per share by existing shareholders and by new investors purchasing Ordinary Shares in this offering at an assumed initial public offering price of $7.00 per ordinary share, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us:

A $1.00 increase (decrease) in the assumed initial public offering price of $7.00 per Ordinary Share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) the total consideration paid by investors participating in this offering, total consideration paid by all shareholders and the average price per share paid by all shareholders by approximately $1,978 thousand, $1,978 thousand and $2.66, respectively, assuming that the number of Ordinary Shares offered by us, as set forth on the cover page of this prospectus, remains the same and before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, 100,000 share increase (decrease) in the number of Ordinary Shares offered by us, as set forth on the cover of this prospectus, would increase (decrease) the total consideration paid by investors participating in this offering, total consideration paid by all shareholders and the average price per share paid by all shareholders by approximately $644 thousand, $644 thousand and $2.40, respectively, assuming the assumed initial public offering price of $7.00 per Ordinary Share (the midpoint of the price range set forth on the cover page of this prospectus) remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The number of the Ordinary Shares to be issued and outstanding immediately after this offering as shown above assumes that all of the Ordinary Shares offered hereby are sold, is based on 407,521 Ordinary Shares issued and outstanding as of December 31, 2025, and includes an aggregate of 2,945,706 Ordinary Shares issuable upon the conversion of all of our outstanding preferred shares and all SAFEs immediately prior to the closing of this offering. This number excludes:

➢

200,305 Ordinary Shares issuable upon the exercise of warrants outstanding as of such date, at a weighted average exercise price of $16.85;

​

➢

373,757 Ordinary Shares issuable upon the exercise of options held by directors, employees and consultants under our 2013 Israeli Share Option Plan, or the 2013 Plan, outstanding as of such date, at a weighted average exercise price of $9.30, of which 135,354 were vested as of such date; and

​

➢

726,243 Ordinary Shares reserved for future issuance under our 2013 Plan.

​

To the extent that outstanding options are exercised, new options or warrants are issued or we issue additional ordinary shares in the future, there will be further dilution to new investors. We may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our equity holders.

 

55​

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our audited consolidated financial statements including the related notes thereto, beginning on page F-1 of this prospectus. In addition to historical information, this discussion contains forward-looking statements that involve risks and uncertainties. You should read the sections of this prospectus titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” for a discussion of the factors that could cause our actual results to differ materially from our expectations.

Overview

Silentium Ltd. develops software-based Active Acoustics solutions designed to manage in-cabin sound in vehicles. The Company’s technology reduces unwanted noise, enhances desired audio cues, and enables personalized, configurable acoustic experiences, thereby supporting improved comfort, safety, and perceived quality in modern vehicles.

Silentium’s solutions are primarily deployed in the automotive market and are designed to integrate with vehicle computing, control, and audio systems. Rather than relying on heavy mechanical insulation or dedicated hardware modules, the Company’s software leverages existing microphones, speakers, processors, and electronic control units (ECUs) to monitor, estimate, and dynamically shape acoustic fields inside the vehicle cabin. This software-centric approach aligns with the automotive industry’s transition toward software-defined vehicle architectures, in which functionality is increasingly implemented and updated through software rather than fixed hardware components.

The Company works directly with Auto OEMs, Tier-1 suppliers, and semiconductor and digital signal processing partners to support adoption across vehicle platforms and production programs. Silentium’s technology is typically embedded at the vehicle platform level and remains integrated throughout the production lifecycle of the model, which generally ranges from four to seven years. As of May 31, 2026, Silentium’s technology was deployed in approximately 1.8 million vehicles across 24 vehicle models and five Auto OEMs (see “Business — Our Key Performance Indicators”). As additional vehicles enter production, the number of vehicles incorporating our software increases, generating royalties over the production life of each vehicle program and enhancing revenue visibility.

Revenues are derived from non-recurring engineering (NRE) fees generated during the software development and integration phases of specific vehicle programs, followed by per-vehicle royalties that become payable upon the commencement of serial production. Our royalty revenue depends on the Auto OEM’s production volumes over the multi-year lifespan of the vehicle program. The Company also integrates its algorithms into existing infotainment and audio system architectures through Tier-1 suppliers and semiconductor manufacturers, which can facilitate deployment across additional vehicle platforms.

Silentium operates globally, with its headquarters and principal research and development activities based in Israel and additional engineering, technical support, and business development presence in North America, Europe, and Asia. This enables close collaboration with Auto OEMs and Tier-1 suppliers across major automotive production hubs and supports ongoing program execution, calibration, and validation activities. While automotive remains the Company’s core focus, its Active Acoustic Management (AAM) technology may also be applicable to other transportation and mobility use cases, including rail, commercial vehicles, and heavy machinery, where noise reduction, communication clarity, and acoustic zoning are relevant.

For more information regarding our business and operations, see the section entitled “Business” below.

Basis of Presentation

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. We currently conduct our business through one operating segment.

 

56

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Components of Operating Results

Sales

We generate revenue primarily through software licensing agreements tied to OEM programs and platforms, complemented by integration and calibration services.

Cost of Sales

Our cost of sales includes the following:

➢

employee-related expenses, such as salaries and share-based compensation;

​

➢

expenses relating to outsourced and contracted services, such as consulting; and

​

➢

office space rental costs.

​

General and administrative expenses

Our general and administrative expenses consist primarily of personnel costs, including salaries and share-based compensation related to directors and employees, facility costs, patent application and maintenance expenses, and external professional service costs, including legal, accounting, audit, finance, business development, investor relations and human resource services, and other consulting fees.

We anticipate that our general and administrative expenses will increase in the future as we increase our administrative headcount and infrastructure to support our continued research and development programs and the potential commercialization of our products. We also anticipate that we will incur increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with the SEC requirements, director and officer insurance premiums, director compensation, and other costs associated with being a public company.

Research and development expenses

Our research and development expenses include the following:

➢

employee-related expenses, such as salaries and share-based compensation;

​

➢

expenses relating to outsourced and contracted services, such as consulting and advisory services;

​

➢

supply and development costs; and

​

➢

costs associated with regulatory compliance.

​

We recognize research and development expenses as we incur them.

Research and development activities are a primary focus. Development timelines, the probability of success and development costs can differ materially from expectations. In addition, we cannot forecast whether and when collaboration arrangements will be entered into, if at all, and to what degree such arrangements would affect our development plans and capital requirements. We expect our research and development expenses to increase over the next several years as our development program progresses. We would also expect to incur increased research and development expenses if we were to identify and develop additional technologies.

Results of Operations

Our results of operations have varied in the past and can be expected to vary in the future due to numerous factors. We believe that period-to-period comparisons of our operating results are not necessarily meaningful and should not be relied upon as indications of future performance.

 

57​

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Below is a summary of our results of operations for the periods indicated:

Revenue information by country:

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Revenues

Sales increased by approximately $38,000, or 1.0%, to $3,949,000 for the year ended December 31, 2025, compared to $3,911,000 for the year ended December 31, 2024. The increase resulted mainly from growth in revenues recognized from software licenses.

For the years ended December 31, 2025 and 2024, we derived approximately 30% and 28% of our revenue, respectively, from four Auto OEM customers. We had four and five OEM and Auto OEM customers for the years ended December 31, 2025 and 2024, respectively. We had five and four Tier 1 and Tier 2 integration partners for the years ended December 31, 2025 and 2024, respectively. During the same periods, we derived approximately 70% and 72% of our revenue, respectively, from our Tier 1 and Tier 2 integration partners. Our top three customers accounted for approximately 88% and 86% of our revenue for the years ended December 31, 2025 and 2024, respectively. No other individual customer accounted for more than 10% of our total revenue. We do not derive revenue from service providers or development vendors.

 

58

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cost of sales

Cost of sales increased by approximately $253,000, or 25.4%, to $1,248,000 for the year ended December 31, 2025, compared to $995,000 for the year ended December 31, 2024. The increase resulted mainly from a one-time compensatory salary related charge in 2025.

Research and development expenses

Research and development expenses increased by approximately $88,000, or 2.3%, to $3,914,000 for the year ended December 31, 2025, compared to $3,826,000 for the year ended December 31, 2024. The increase resulted mainly from a decline in government grants that support R&D activities in 2025.

Sales and marketing expenses

Sales and marketing expenses decreased by approximately $371,000, or 25.4%, to $1,087,000 for the year ended December 31, 2025, compared to $1,458,000 for the year ended December 31, 2024. The decrease resulted mainly from a reduction in compensation paid to sales and marketing employees and contractors in 2025.

General and administrative expenses

General and administrative expenses increased by approximately $79,000, or 4.0%, to $2,047,000 for the year ended December 31, 2025, compared to approximately $1,968,000 for the year ended December 31, 2024. The increase resulted mainly from additional audit fees incurred for a PCAOB audit in 2025.

Financial income (expenses), net

Financial expenses increased by approximately $834,000, or 133.9%, to $211,000 for the year ended December 31, 2025, compared to financial income of $623,000 for the year ended December 31, 2024. In the year ended December 31, 2024, we recognized financial income of $623,000 primarily as a result of the reevaluation of the outstanding SAFE agreements from 2023 and 2024, which were converted pursuant to the Series C Preferred Share Purchase and Recapitalization Agreement in September 2024.

Net loss for the year

Net loss for the year increased by approximately $879,000, or 22.9%, to $4,716,000 for the year ended December 31, 2025, compared to $3,837,000 for the year ended December 31, 2024. The increase resulted mainly from increases in cost of sales, research and development, general administrative, and financial expenses, offset by an increase in revenues and a decrease in selling and marketing expenses.

Critical Accounting Policies and Estimates

We describe our significant accounting policies and estimates in Note 2 to our annual financial statements contained elsewhere in this prospectus. We believe that these accounting policies and estimates are critical in order to fully understand and evaluate our financial condition and results of operations.

We prepare our financial statements in accordance with U.S. GAAP.

In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of our accounting policies and the reported amounts recognized in the financial statements. On a periodic basis, we evaluate our estimates, including those related to share-based compensation and derivatives. We base our estimates on historical experience, authoritative pronouncements and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Other than as described above, for the periods included in the financial statements, we do not believe there are critical accounting estimates that are subject to uncertainty or that have significantly changed during the relevant periods.

Recently-Issued Accounting Pronouncements

Certain recently-issued accounting pronouncements are discussed in Note 2, Significant Accounting Policies, to the financial statements included in elsewhere in this registration statement, regarding the impact of the U.S. GAAP standards as issued by the FASB that we will adopt in future periods in our financial statements.

Liquidity and Capital Resources

Overview

Since our inception, we have incurred losses and negative cash flows from our operations. For the year ended December 31, 2025, we incurred a net loss of $4,716,000 while net cash of $4,206,000 was used in our operating activities. For the year ended December 31, 2024, we incurred a net loss of $3,837,000 while net cash of $4,476,000 was used in our operating activities. As of December 31, 2025 and December 31, 2024, we had working capital of $(3,153,000) and $1,567,000, respectively, and an accumulated deficit of approximately $77,558,000 and $72,842,000, respectively. As of December 31, 2025, our cash and cash equivalents totaled approximately $831,000. We believe that after the completion of this offering our cash and cash equivalents will enable us to fund our operations for at least the next 24 months.

Through December 31, 2025, we have financed our operations primarily through private placements, Simple Agreements for Future Equity, or SAFEs, and government grants for research and development projects received from the IIA for aggregate proceeds of approximately $75,000,000.

As a result, these factors along with other factors are indicators that material uncertainties exist that raise significant doubt about our ability to continue as a going concern and, therefore, our ability to realize assets and discharge liabilities in the normal course of business.

The table below shows a summary of our cash flows for the periods indicated:

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Net cash provided by (used in) operating activities

Net cash used in operating activities decreased by approximately $270,000, or 6.0%, to approximately $4,206,000 for the year ended December 31, 2025, compared to approximately $4,476,000 for the year ended December 31, 2024. The decrease resulted mainly from an increase in trade receivables, partially offset by a decrease in other accounts receivables and an increase in trade payables and other accounts payables.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net cash used in investing activities

Net cash used in investing activities increased by $180,000, or 119.2%, to approximately $331,000 for the year ended December 31, 2025, compared to $151,000 for the year ended December 31, 2024. The increase resulted mainly from a lower restricted deposit to secure an additional bank loan in 2025.

Net cash used in financing activities

Net cash provided by financing activities decreased by $2,546,000, or 51.5%, to approximately $2,395,000 for the year ended December 31, 2025, compared to $4,941,000 for the year ended December 31, 2024. The decrease resulted mainly from lower investments in our Preferred C shares in 2025 compared to 2024.

We have incurred losses and cash flow deficits from operations since our inception, resulting in accumulated losses at December 31, 2025 of approximately $77,558,000. We anticipate that we will continue to incur net losses for the foreseeable future. To meet future capital needs, we would need to raise additional capital through equity or debt financing or other strategic transactions. However, any such financing may not be on favorable terms or even available to us. Our failure to obtain sufficient funds on commercially acceptable terms when needed would have a material adverse effect on our business, results of operations and financial condition. Our forecast for the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and the actual amount of our expenses could vary materially and adversely as a result of a number of factors. We have based our estimates on assumptions that may prove to be wrong, and our expenses could prove to be significantly higher than we currently anticipate.

Our future capital requirements will depend on many factors, including, but not limited to:

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the progress and costs of our research and development activities;

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the costs of development and expansion of our operational infrastructure;

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our ability, or that of our collaborators, to achieve development milestones and other events or developments under potential future licensing agreements;

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the amount of revenues and contributions we receive under future licensing, collaboration, development and commercialization arrangements with respect to our technologies;

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the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;

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the costs of contracting with third parties to provide sales and marketing capabilities for us or establishing such capabilities ourselves, once our technologies are developed and ready for commercialization;

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the costs of acquiring or undertaking development and commercialization efforts for any future products or technology;

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the magnitude of our general and administrative expenses; and

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any additional costs that we may incur under future in- and out-licensing arrangements relating to our technologies and futures products.

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Until we can generate significant recurring revenues, we expect to satisfy our future cash needs through capital raising and/or developing applications of one or more of our product candidates. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available on favorable terms, or at all, we may be required to delay, reduce the scope of or eliminate research or development efforts or plans for commercialization with respect to our technologies and make necessary change to our operations to reduce the level of our expenditures in line with available resources.

We are a development-stage technology company and it is not possible for us to predict with any degree of accuracy the outcome of our research and development efforts. As such, it is not possible for us to predict with

 

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any degree of accuracy any significant trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net loss, liquidity or capital resources, or that would cause financial information to not necessarily be indicative of future operating results or financial condition. However, to the extent possible, certain trends, uncertainties, demands, commitments and events are described herein.

Indebtedness

Bank Mizrahi Loans

In October 2022, we entered into a loan agreement, or the 2022 Loan Agreement, with Bank Mizrahi Tefahot Ltd., or the Bank, for a long-term loan, or the 2022 Loan, of up to $4,000,000 to be repaid in 30 monthly payments beginning six months after the initial drawdown, which bears interest at a rate of 7.5% plus Term SOFR per annum. In October 2022, we drew down the first installment of $2,000,000, followed by a second drawdown of $1,000,000 in February 2023. In 2024 and 2025 the Bank agreed to defer principal repayments on the outstanding balance of the 2022 Loan.

As part of the terms of the 2022 Loan Agreement, we extended the term of the Bank’s previously outstanding warrant (the “Mizrahi Warrant”), which was granted to the Bank in connection with a loan agreement in 2020 and entitles the Bank to purchase 2,185 Ordinary Shares at an exercise price of $183 per share. Alternatively, the Bank is entitled to require a cash payment equal to $300,000, or the Alternative Payment, upon the consummation of this offering.

In addition to the extension of the Mizrahi Warrant, we issued a new warrant to the Bank, or the New Warrant, which entitles the Bank to invest $300,000 in consideration for 44,810 Preferred C Shares at an exercise price of $6.7 per share in addition to 200% warrant coverage exercisable at an exercise price of $6.7 per share, or alternatively to participate as an investor in the September 2025 SAFE, with an investment of $300,000, in lieu of exercising such New Warrant. Alternatively, the Bank is entitled to require a cash payment equal to $375,000, or the Cash Payment, upon the consummation of this offering.

In April 2026, the Bank agreed to defer its decision regarding the exercise of the warrants until at least six months after the completion of this offering, provided that such closing shall occur before July 20, 2026.

In December 2024, we entered into an additional loan agreement with the Bank, or the December 2024 Loan, for a long-term loan in the aggregate principal amount of $1,000,000 which is to be repaid in 24 equal monthly installments beginning twelve months after the date of each advance and bears interest at an annual rate of 7.5% plus Term SOFR. In November 2025, we entered into an additional loan with the Bank, or the November 2025 Loan, for a short-term loan in the aggregate principal amount of $400,000 which is to be repaid in one installment in November 2026 and bears an interest at an annual rate of 7.5% plus Term SOFR. The December 2024 Loan and the November 2025 Loan provide for a bonus payment of $300,000 which is payable to the Bank upon the consummation of this offering.

Our outstanding loans from the Bank totaled $2.4 million as of June 8, 2026. The maturity dates of these loans range from July 2026 to June 2028.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to a variety of financial risks, which result from our financing, operating and investing activities. The objective of financial risk management is to contain, where appropriate, exposures in these financial risks to limit any negative impact on our financial performance and position. Our main financial instruments are our cash and other receivables, trade and other payables. The main purpose of these financial instruments is to raise finance for our operations. We actively measure, monitor and manage our financial risk exposures by various functions pursuant to the segregation of duties and principals. The risks arising from our financial instruments are mainly credit risk and currency risk. The risk management policies employed by us to manage these risks are discussed below.

 

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Credit risk

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the balance sheet date. We closely monitor the activities of our counterparties and control the access to our intellectual property which enables it to ensure the prompt collection. Our main financial assets are cash as well as trade receivables and other receivables and represent our maximum exposure to credit risk in connection with our financial assets. Wherever possible and commercially practical, we hold cash with major financial institutions in Israel, and from time to time we may hold cash balances with financial institutions in other jurisdictions, including United States and China, primarily to support local operations. Such balances may be subject to regulatory, currency conversion, or repatriation restrictions.

Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not our functional currency. We are exposed to foreign exchange risk arising from currency exposure primarily with respect to the NIS, as the majority of our expenses are denominated in NIS, as well as to the U.S. dollar (USD) and other currencies in which we conduct operations. As most of our revenues are USD and RMB derived, the USD is our primary functional currency. Our policy is not to enter into any currency hedging transactions.

Liquidity risks

Liquidity risk is the risk that arises when the maturity of assets and the maturity of liabilities do not match. An unmatched position potentially enhances profitability, but it can also increase the risk of loss. We have procedures to minimize such loss by maintaining sufficient cash and other highly liquid current assets and by having available an adequate amount of committed credit facilities. As of December 31, 2025, we had accumulated losses of $77,558,000.

Inflation risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations in the reporting period. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through hedging transactions. Our inability or failure to do so could harm our business, financial condition and results of operations.

Off-Balance Sheet Arrangements

We do not believe that off-balance sheet arrangements and commitments are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Emerging Growth Company Status

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

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a requirement to present only two years of audited financial statements in addition to any required interim financial statements and correspondingly reduced Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure;

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to the extent that we no longer qualify as a foreign private issuer, (i) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (ii) exemptions from the requirement to hold a non-binding advisory vote on executive compensation, including golden parachute compensation;

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; and

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an exemption from compliance with the requirement that the Public Company Accounting Oversight Board has adopted regarding a supplement to the auditor’s report providing additional information about the audit and the financial statements.

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We may take advantage of these exemptions for up to five years or until such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company upon the earliest to occur of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; (iii) the date on which we are deemed to be a large accelerated filer under the rules of the SEC; or (iv) the last day of the fiscal year following the fifth anniversary of this offering. We may choose to take advantage of some but not all of these exemptions. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This means that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

 

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Company Overview

Silentium Ltd. develops software-based Active Acoustics solutions designed to manage in-cabin sound in vehicles. The Company’s technology reduces unwanted noise, enhances desired audio cues, and enables personalized, configurable acoustic experiences, thereby supporting improved comfort, safety, and perceived quality in modern vehicles.

Silentium’s solutions are primarily deployed in the automotive market and are designed to integrate with vehicle computing, control, and audio systems. Rather than relying on heavy mechanical insulation or dedicated hardware modules, the Company’s software leverages existing microphones, speakers, processors, and electronic control units (ECUs) to monitor, estimate, and dynamically shape acoustic fields inside the vehicle cabin. This software-centric approach aligns with the automotive industry’s transition toward software-defined vehicle architectures, in which functionality is increasingly implemented and updated through software rather than fixed hardware components.

The Company works directly with Auto OEMs, Tier-1 suppliers, and semiconductor and digital signal processing partners to support adoption across vehicle platforms and production programs. Silentium’s technology is typically embedded at the vehicle platform level and remains integrated throughout the production lifecycle of the model, which generally ranges from four to seven years.

Silentium is a development-stage company. To date, the Company’s commercialized products consist exclusively of road noise and engine noise cancellation solutions. As of May 31, 2026, Silentium’s technology was deployed in approximately 1.8 million vehicles across 24 vehicle models and five Auto OEMs (see “Business — Our Key Performance Indicators”). As additional vehicles enter production, the number of vehicles incorporating our software increases, generating royalties over the production life of each vehicle program and enhancing revenue visibility.

Revenues are derived from non-recurring engineering (NRE) fees generated during the software development and integration phases of specific vehicle programs, followed by per-vehicle royalties that become payable upon the commencement of serial production. Our royalty revenue depends on the Auto OEM’s production volumes over the multi-year lifespan of the vehicle program. The Company also integrates its algorithms into existing infotainment and audio system architectures through Tier-1 suppliers and semiconductor manufacturers, which can facilitate deployment across additional vehicle platforms.

Silentium operates globally, with its headquarters and principal research and development activities based in Israel and additional engineering, technical support, and business development presence in North America, Europe, and Asia. This enables close collaboration with Auto OEMs and Tier-1 suppliers across major automotive production hubs and supports ongoing program execution, calibration, and validation activities. While automotive remains the Company’s core focus, its Active Acoustic Management (AAM) technology may also be applicable to other transportation and mobility use cases, including rail, commercial vehicles, and heavy machinery, where noise reduction, communication clarity, and acoustic zoning are relevant.

Market Size, Opportunity & Drivers

As the automotive and broader transportation industries evolve, Auto OEMs are required to manage noise and vibration across increasingly complex vehicle architectures and operating conditions. Rising consumer expectations for cabin comfort, the growing adoption of software-defined vehicle architectures, and increasing system integration across vehicle platforms are reshaping vehicle acoustics and increasing the importance of more flexible and scalable NVH solutions. In addition, the continued adoption of electrified powertrains has introduced new acoustic and vibration characteristics that further increase NVH management requirements, particularly as traditional sources of masking noise such as internal combustion engines (ICE) are reduced or eliminated.

 

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Silentium’s Active Acoustics technology addresses NVH-related in-cabin sound challenges through a software-based approach, aligning with industry trends toward advanced, real-time acoustic solutions.

Total Addressable Market

According to NVH Market Forecasts, the global NVH market is projected to grow from approximately $13.9 billion in 2024 to approximately $21.2 billion by 2032, representing a compound annual growth rate of approximately 5.4%. Automotive applications within the broader NVH market represent over 40% of the market, and remain the largest end market for NVH solutions due to regulatory requirements, growing technical and architectural complexity of modern vehicle platforms, and increasing emphasis on cabin comfort and perceived quality according to NVH Market Forecasts.

Market Drivers

We believe that the following market drivers are increasing demand for advanced acoustic solutions addressing regulatory compliance, platform complexity, and cabin comfort requirements across modern vehicle architectures, aligning with our technology and service offering:

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Improvements in Auto OEM Cabin Acoustics

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Consumer Expectations and Brand Differentiation

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Pressure on Auto OEMs to reduce cost, complexity, and vehicle weight

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Stringent Noise and Vibration Regulatory Standards

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Late-Stage NVH Resolution Constraints

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Geographic Trends

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Broader Transportation Applications

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Increasing adoption of electric and hybrid vehicle platforms

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New Regulatory Requirements

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Improvements in Auto OEM Cabin Acoustics

Auto OEMs constitute the largest and most significant purchasers of NVH solutions.2 Cabin acoustics are increasingly recognized as a core element of vehicle quality and brand identity, particularly as powertrain performance becomes commoditized. NVH solutions are evolving from hardware-intensive, passive systems toward software-driven approaches that can be integrated into the vehicle’s core computing architecture. The industry’s transition toward software-defined vehicle architectures aligns with Silentium’s Active Acoustics approach, which integrates into OEM core computing platforms and replaces hardware-intensive NVH solutions with scalable software.

Consumer Expectations and Brand Differentiation

Consumer expectations for cabin acoustics have risen substantially. Features historically associated with premium vehicles — such as quiet cabins, clear voice interaction, and immersive audio — are increasingly expected across a broader range of vehicle segments. As a result, cabin acoustics have become an important driver of customer satisfaction and a meaningful factor in how Auto OEMs position their brands around perceived quality, comfort, and refinement. In response, Auto OEMs are increasingly moving away from isolated, hardware-centric NVH solutions toward holistic, system-level acoustic management approaches that enable consistent cabin sound quality and brand tuning across vehicle platforms.

2

Global Noise, Vibration And Harshness Market Size by Industry (Automotive, Aerospace and Defense), By Application (Interior Noise, Exterior Noise), By Solution Type (Software Solutions, Hardware Solutions) By Geographic Scope And Forecast, Verified Market Research

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Holistic acoustic management refers to managing the entire in-cabin sound environment at the system-level rather than mitigating individual noise sources with discrete hardware components. Silentium enables this approach through software-based Active Acoustics that integrates with the vehicle’s core audio and computing systems to dynamically monitor and control cabin sound in real time, supporting consistent acoustic performance and brand-specific tuning across vehicle platforms.

Pressure on Auto OEMs to reduce cost, complexity, and vehicle weight

Traditional NVH solutions have historically relied on mechanical components and passive materials, including mufflers, intake resonators, and sound dampeners, which add cost, weight, and system complexity. Software-based and adaptive NVH approaches enable Auto OEMs to address acoustic requirements with reduced reliance on hardware, supporting lower vehicle mass, simplified system architectures, and greater flexibility across platforms. These considerations are increasingly important as current and future vehicle designs place greater emphasis on cost efficiency, modularity, and software-defined functionality.

Regulatory Standards

Regulatory authorities worldwide are imposing increasingly stringent noise and vibration regulations, recognizing noise pollution as a material environmental, health, and safety concern. These standards compel Auto OEMs to meet defined limits on both interior and exterior vehicle acoustics across the vehicle lifecycle, from initial design through validation and production. Compliance has shifted NVH from a secondary consideration to a core engineering requirement, driving the adoption of advanced NVH solutions. As regulatory thresholds tighten, particularly in urban environments and with the transition to electric vehicles, effective NVH performance has become increasingly critical for regulatory compliance, market access, and risk mitigation.

Late-Stage NVH Resolution Constraints

Increasing vehicle complexity and regulatory validation requirements heighten the cost and risk of resolving NVH issues late in the development cycle, driving demand for solutions that mitigate acoustic issues without requiring physical redesign.

 

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Geographic Trends

According to third-party industry research, including reports published by Verified Market Research, the Asia-Pacific region accounts for a significant — often the largest — share of global NVH solutions and testing markets and is experiencing faster growth, driven by high levels of automotive production and increasing vehicle electrification. North America and Europe represent substantial NVH markets, characterized by established Auto OEM and supplier ecosystems and ongoing demand for advanced cabin comfort and acoustic performance.

Broader Transportation Applications

Beyond passenger vehicles, active acoustic and NVH solutions are increasingly applied in other transportation segments where noise control has direct safety and performance implications. In commercial vehicles and buses, improved cabin acoustics can reduce driver fatigue and support clearer in-cabin communication. Similar requirements exist in aerospace, rail, and heavy machinery applications, where managing noise and vibration contributes to operator alertness, safety, regulatory compliance, and overall operational efficiency.

Increased Adoption of Electric Vehicles (EV)

Electric vehicle adoption is accelerating globally. According to the International Energy Agency’s Global EV Outlook 2024, EVs represented more than one-fifth of global new car sales in 2023 and, under current stated government policies, are projected to account for approximately 40% of global new car sales by 2030, with higher penetration under more ambitious policy scenarios3. Electric vehicles lack an internal combustion engine and its sounds that tended to mask other unwanted noises such as road/tire, wind and heating, ventilation and air conditioning (HVAC) blower noises but also, provided the vehicle with an acoustic brand signature (tuned intake, exhaust sounds) especially for sports cars. Therefore, Auto OEMs now look at advanced acoustic management such as ANC and active sound design to improve cabin acoustic environment and at the same time, provide the in-cabin powertrain sounds and exterior acoustic signatures that reflect the vehicle’s nature and brand attributes.

Our Solution

Active Acoustic Management (AAM) represents the Company’s software-defined approach to controlling, shaping, and personalizing the in-cabin sound environment. Silentium’s AAM is built around two flagship pillars Quiet Bubble (QB) and Personal Sound Bubble (PSB), which together deliver broadband active acoustic management and individualized acoustic zone management within the vehicle cabin. Broadband active acoustic management refers to the real-time control of a wide range of noise frequencies across the entire cabin environment, while individualized acoustic zones enable targeted sound control for specific occupants or seating positions. AAM is part of our broader Active Acoustics framework, which also includes non-AAM capabilities such as sound field enhancement and tooling. The conceptual AAM pillars (QB and PSB) are implemented through the AAM software platform are described below.

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Quiet Bubble (QB):   Provides broadband ANC through real-time control of a wide range of noise frequencies across the entire cabin environment, supporting a quieter and more comfortable in-cabin experience.

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Personal Sound Bubble (PSB):   Enables individualized acoustic zones, allowing targeted sound control for specific occupants or seating positions, including private and customized listening experiences.

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Together, these pillars address critical NVH challenges, including road, wind, and powertrain noise; cabin sound variability across driving conditions; and interference between alerts, voice, and infotainment audio. By replacing traditional passive NVH hardware solutions with adaptive software integrated into the vehicle’s audio and computing systems, Silentium enables Auto OEMs to reduce cost, weight, and system complexity while improving in-cabin comfort, clarity, and overall user experience.

3

https://www.iea.org/reports/global-ev-outlook-2024

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Technology

As vehicle architectures evolve, acoustic control is increasingly being addressed through software-based systems rather than fixed mechanical solutions. Auto OEMs are transitioning toward software-defined vehicle (SDV) architectures that rely on centralized computing and software-based control to manage an expanding range of vehicle functions.

Within these environments, acoustic management must operate in real time, integrate with vehicle control and audio systems, and support validation and updates over the vehicle lifecycle. Silentium’s solutions are designed to operate within such SDV architectures, supporting acoustic functionality as part of broader vehicle platform development rather than as a standalone subsystem.

Silentium’s ANC technology excels at reducing low-frequency road noise, one of the most common (especially in EVs) and difficult noise sources to address due to its high energy and tendency to transmit through vehicle structures, by using predictive signal processing to generate real-time “anti-noise,” a sound signal emitted in opposite phase to the unwanted noise. By integrating sensing, processing, and sound output into a single low-latency system, the solution enables effective cancellation of low-frequency noise, reducing reliance on heavy passive damping materials.

Within this software-defined architecture, Silentium’s AAM platform offer a modular set of active acoustic capabilities that address distinct in-cabin noise sources and sound-use cases. These capabilities are delivered as software features that can be deployed individually or in combination, depending on vehicle architecture, program requirements, and development stage.

Our current and planned active acoustic features portfolio includes:

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Road Noise Cancellation (RNC):   Real-time suppression of road-induced noise across varying road surfaces and driving conditions. RNC has been commercially deployed and continues to be implemented in additional production vehicle programs.

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iRNC (Intelligent Road Noise Cancellation):   An advanced evolution of RNC that incorporates enhanced sensing and adaptive algorithms. iRNC is in the final stage of commercialization and requires the completion of final validation prior to commercial launch. We currently expect iRNC to

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be ready for commercial launch within three to six months, with an estimated remaining cost to achieve commercialization of approximately $0.4 million.

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Engine Noise Cancellation (EOC):   Active attenuation of engine and powertrain-related noise signatures. EOC has been commercially deployed and continues to be implemented in additional production vehicle programs.

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Wind Noise Cancellation (WNC):   Software-based mitigation of wind noise, particularly at higher speeds. This capability is currently in an late-stage development phase. Additional algorithmic refinement, cost optimization, and compatibility assessments across diverse vehicle cabins are required prior to commercial launch. We currently expect WNC to be ready for commercial launch within 18 to 30 months following the launch of iRNC, with an estimated remaining cost to achieve commercialization of approximately $0.8 million

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HVAC Noise Cancellation (HNC):   Reduction of noise generated by heating, ventilation, and air-conditioning systems during cabin operation. This capability is currently in an early-stage development phase, and will require further product refinement and cost optimization prior to commercial launch. Because the development of HNC leverages advancements made in our WNC technology, we currently expect HNC to be ready for commercial launch within six months following the launch of WNC, with an estimated remaining cost to achieve commercialization of approximately $0.4 million.

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Internal Car Communication (ICC):   Enhancement of speech intelligibility between occupants without increasing overall cabin volume by leveraging ANC components. This capability is included in the product roadmap. ICC is in the development stage, and will require algorithmic advancement, signal-processing refinement, and feasibility validation prior to commercial launch. We currently expect ICC to be ready for commercial launch within 12 to 18 months, with an estimated remaining cost to achieve commercialization of approximately $0.5 million.

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Active Acoustic Management (AAM)

During the vehicle design phase, Auto OEMs invest significant efforts to reduce noise, vibration, and harshness, typically using mechanical and passive acoustic materials, such as vibration isolators, dampers, bushings, engine and chassis mounts, acoustic panels, barriers, and sound-absorbing or sound-insulating materials. Today, Active Acoustics as software is increasingly important from the initial design phase, especially as the severity of some NVH issues, such as road and tire noise, aerodynamic wind noise, and structural vibrations that affect all vehicle platforms, and high-frequency motor, inverter, and gear whine in electric and hybrid vehicles previously masked by internal combustion engines, are often only detected close to the planned production date. NVH mitigation by software is a practical solution to resolve these issues without delaying production, avoiding enormous financial and reputational consequences.

The AAM architecture integrates directly into the vehicle’s existing control and audio computing systems, including customer electronic control units (ECUs) and audio processors, and supports standard Auto OEM development workflows, first validating performance in software simulations (model-in-the-loop) and then on real vehicle hardware before production (hardware-in-the-loop). Over-the-air (OTA) software updates allow parameters and features to be managed and updated throughout the vehicle lifecycle without physical intervention.

Silentium’s software design tools extend beyond algorithm development to support end-of-line testing and verification, which refers to acoustic validation performed at the final stage of vehicle production to confirm performance consistency before vehicles leave the manufacturing line. This process supports quality assurance and reduces post-deployment variability. These tools are designed to integrate with existing Auto OEM computer-aided design (CAD) environments and simulation workflows, so that OEMs can, where they choose, incorporate acoustic validation from early design stages through final production validation as part of their standard engineering processes.

The AAM software platform described below implements the QB and PSB pillars introduced earlier and provides the runtime, integration, and validation environment for all AAM functions.

 

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Platform Architecture and Core Capabilities

Our AAM platform combines real-time sensing, signal estimation, and adaptive control to mitigate unwanted noise by generating counteracting acoustic signals, while also enabling personalized acoustic zones, defined as targeted sound control for specific occupants or seating positions within the cabin. The platform is built on a set of core acoustic software foundations, meaning the underlying signal-processing and sound-field control capabilities that operate at the level of the physical sound field. These foundations enable control of sound in three-dimensional cabin space (X−Y−Z), across the frequency spectrum, and over time. Core capabilities include spatial source fission, spatial noise canceling, spatial sound field control, and spatial echo canceling, all supported by continuous virtual sensing of the acoustic environment. Together, these capabilities form the signal-processing and modeling basis for precise, real-time manipulation of sound within complex and dynamic vehicle cabins.

On top of these foundations sits a modular family of Active Acoustic edge software products, each delivering a distinct, acoustic function, with offerings ranging from production-ready and proven solutions to future-ready capabilities still under development.

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Quiet Bubble (QB) suite:   Delivers broadband ANC by controlling a wide range of noise frequencies in real time, creating a quieter and more comfortable cabin. The QB suite is a mature, production-proven ANC software framework that serves as the foundation for multiple noise control features across our product portfolio. Continuous enhancement of the QB suite requires ongoing framework optimization, automation improvements, and adaptation to support the simultaneous operation of multiple ANC-based capabilities. We currently expect to complete these enhancements within 18 months, with an estimated cost of approximately $0.7 million.

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Personal Sound Bubble (PSB) suite:   Enables individualized acoustic zones, providing targeted sound control for specific occupants or seating positions, including private listening experiences. The PSB suite is in the development stage, and will require system level engineering, integration with infotainment and audio architectures, and validation to reach market ready maturity prior to commercial launch. Current development activities include multi zone audio control refinement, voice processing feature tuning, perceptual sound design modeling, and integration with vehicle loudspeaker, amplifier, and microphone configurations. We currently expect the PSB suite to be ready for commercial launch within 24 to 36 months, with an estimated remaining cost to achieve commercialization of approximately $1.2 million.

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AcS (Acoustics Sound Design) suite:   Supports controlled sound creation and shaping for alerts, feedback, and brand-defined acoustic signatures. The AcS suite is in an early development stage, and will require system level engineering, integration with infotainment and audio architectures, and validation to reach market ready maturity prior to commercial launch. We currently expect the AcS suite to be ready for commercial launch in 24 to 36 months, with an estimated remaining cost to achieve commercialization of approximately $1.0 million.

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Spatial-VM (Spatial Voice Management) suite:   An A.I. research and development initiative focused on spatially aware voice capture, enhancement, and separation to support in-cabin communication and voice-interaction use cases. The Spatial-VM suite is at early research stage, and will require several stages of research and pre-production development, including dataset expansion, neural network model development, model based optimization of acoustic control performance, computational efficiency improvements suitable for embedded automotive hardware, and system level integration with our existing platform architecture before commercial launch. Based on our current progress and typical OEM product planning cycles, we do not expect AI-driven acoustic control capabilities, including the Spatial-VM suite, to reach commercial readiness for at least 36 to 60 months. Furthermore, any commercial deployment will depend on adoption within future OEM vehicle programs. Given this early stage of development and our dependence on OEM program timing and integration requirements, we are unable to reasonably estimate the commercialization costs for the Spatial-VM suite at this time.

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The cost estimates presented above reflect only the incremental investments required to advance our internal product roadmap, and they do not include cost associated with the broader engineering activities that

 

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comprise our regular R&D operations, such as product implementation, integration, validation, and commercialization work performed for customer projects.

Consequently, the continued development, validation, and commercialization of our planned software packages, including PSB, AcS, Spatial-VM, and other AAM-related capabilities, will require financial resources beyond those currently available to us. While we anticipate that the net proceeds from this offering, combined with future revenues, will be used to support our development activities, completing these multi-year development programs may require raising additional capital. If we are unable to obtain such financing when needed and on acceptable terms, we may be forced to delay, scale back, or alter our growth plans.

The edge software products are unified through a common Active Acoustics Framework and API, where the framework provides the shared software logic and rules for how acoustic functions work together, and the API provides standardized interfaces for integration, configuration, and scaling within a software-defined vehicle architecture. Silentium’s proprietary AcustiFusion intelligent AAM tuning platform provides practical tools to design, tune, and optimize acoustic performance across vehicle programs, reducing development time and ensuring consistent results from prototype through series production.

At the system-level, this architecture forms a scalable Active Acoustics Management platform that transforms sound into a controllable software layer. By leveraging existing in-vehicle audio hardware — microphones, processors, and speakers — the platform replaces heavy, static mechanical solutions with lightweight, adaptive, and updatable software. The result is a future-ready acoustic architecture that supports evolving vehicle platforms, new use cases, and long-term software-driven acoustic functionality across the vehicle lifecycle.

Go-To-Market Strategy

Our go-to-market strategy is centered on early and deep engagement with Auto OEMs, primarily through non-exclusive collaboration with Tier 1 audio suppliers, infotainment, and system integrators, which serve as our principal channel for identifying and accessing new Auto OEM programs at an early stage, which define system requirements and control vehicle platform specifications. Initial engagement is typically initiated through these Tier 1 partners during pre-development or platform definition phases and typically begins with paid services, funded by either the Auto OEM or the relevant Tier 1 supplier, including demonstrations, evaluations, tuning, and proof-of-concept (PoC) activities, or Engagement Services, allowing us to influence technical specifications and performance criteria before formal procurement processes begin.

These Engagement Services are typically performed prior to RFQ issuance or platform freeze and represent a discrete, non-recurring revenue stream. Following technical validation and sourcing decisions, production deployment and lifecycle responsibilities are allocated in line with program-specific Auto OEM sourcing decisions and procurement structures, with system integration and manufacturing performed by the Auto OEM or a Tier-1 supplier, as applicable, and Silentium is providing the software delivery, updates, and ongoing technical support.

OEM Engagement serves as the primary demand-generation channel. Even where OEMs do not ultimately procure software directly, early technical validation positions the Company’s solutions as reference implementations within OEM specifications and requests for quotation (RFQs).

Sales Channels

Our commercial organization is structured around dedicated account managers and business development personnel assigned to specific Auto OEMs, Tier 1 suppliers, and semiconductor partners. Account managers lead technical engagement, commercial structuring, and long-term relationship development within each assigned account, supporting continuity across evaluation, RFQ, and production phases. In select regions, including Japan, we complement our direct teams with established automotive trading partners who facilitate customer access, program coordination, and local commercial practices under a commission-based model. This structure enables consistent engagement with customers across vehicle program lifecycles while aligning our sales motion with regional procurement norms.

 

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We operate a multi-channel sales model, tailored to Auto OEM procurement preferences and regional market practices. The Company typically engages Auto OEMs first, as Tier-1 suppliers are generally more responsive to the Company’s solutions once Auto OEMs recognize the value proposition and incorporate those solutions into their platform requirements and sourcing directives, which are then communicated to their Tier-1 suppliers, and channel mix varies by geography and OEM procurement culture.

Commercial engagement follows Auto OEM sourcing decisions at the program level, ensuring a single commercial path per program and minimizing channel conflict.

Direct OEM Sales

In cases where Auto OEMs elect to license software directly, the Company enters into licensing agreements with the OEM and provides ongoing support and updates. This model is increasingly relevant as Auto OEMs assume greater responsibility for the development, integration, validation, and lifecycle management of in-vehicle software within software-defined vehicle architectures.

Indirect Sales via Tier-1 Suppliers

For Auto OEMs that procure complete systems exclusively through Tier-1 suppliers, Silentium would be directed to such Tier-1 audio, infotainment, or system integrators. OEM-driven RFQs issued to Tier-1 suppliers often specify performance requirements shaped during earlier and, where those requirements align with the Company’s capabilities as demonstrated through prior evaluations, proof-of-concept (PoC) activities, or technical assessments, Tier-1 suppliers may license our technology to comply with Auto OEM specifications.

Tier-1 suppliers are incentivized to license the Company’s software as it enables compliance with OEM specifications, reduces integration risk, and supports competitiveness in system-level sourcing processes.

Licensing via Semiconductor and DSP Suppliers

The Company licenses its software to automotive semiconductor and DSP suppliers, which embed the technology into reference designs and platforms sold to Tier-1 suppliers and OEMs. This channel extends market reach and accelerates adoption across multiple vehicle programs and geographies.

Semiconductor partners benefit from increased platform differentiation and higher adoption of their silicon solutions, while the Company benefits from scaled distribution without assuming system integration or manufacturing responsibilities.

Ecosystem-Driven Market Expansion

In addition to direct engagement with Auto OEMs and Tier-1 suppliers, the Company works with a focused set of complementary partners, including sensor providers, audio hardware suppliers, and system integrators, to accelerate integration of its technology into production vehicle platforms. These partnerships are structured around technical interoperability and joint technical testing and system-level verification, enabling faster system-level demonstrations, reducing integration risk for Tier-1 suppliers, and supporting scalable deployment across multiple vehicle programs.

Growth Strategy

Our growth strategy focuses on four clear areas:

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Expansion within existing customers by addressing additional noise sources and adding new software features and products over the vehicle lifecycle. We currently expect to use approximately 15% of the net proceeds from this offering to expand our business with existing OEM customers over the two to three years following this offering. See “Use of Proceeds.”

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New OEM and Tier-1 customer acquisition, through both direct and indirect channels. We currently expect to use approximately 22% of the net proceeds from this offering to acquire new OEM customers over the three to four years following this offering. See “Use of Proceeds.”

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Ecosystem partnerships that accelerate system integration and reduce execution risk for Tier-1 suppliers, supporting scalable deployment across multiple vehicle programs. We currently expect to use approximately 12% of the net proceeds from this offering to strengthen our relationships with Tier-1 and semiconductor partners over the two to three years following this offering. See “Use of Proceeds.”

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Continuing investment in algorithm development, early-stage, exploratory research relating to AI-driven acoustic control, and integration tooling that reduces engineering effort and supports predictable validation outcomes. We currently expect to use approximately 17% of the net proceeds from this offering for R&D over the two to four years following this offering. See “Use of Proceeds.”

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Adjacent transportation markets, including buses, rail, heavy vehicles, and other non-passenger automotive platforms, leveraging the same core technology and sales model. We currently expect to use approximately 8% of the net proceeds from this offering to expand into adjacent markets over the two to four years following this offering. See “Use of Proceeds.”

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Sales Process

The Company’s engagements with Auto OEM customers generally follow a staged commercialization process aligned with industry procurement and vehicle development cycles. For new customers, engagements typically begin with a demonstration, paid proof-of-concept (PoC), technical workshops, or tuning and calibration services (Engagement Services), followed by a bid or RFQ process. Programs that are awarded as mass production programs proceed through a production program phase and ultimately reach start of production, or SOP. Following SOP, the vehicle enters mass production, and the Company’s technology is deployed over the production life of the applicable vehicle model which typically spans seven years. Although our agreements do not include exclusivity provisions, Auto OEMs generally select a single supplier for active acoustic software per vehicle model due to program-level validation requirements, system integration complexity, calibration consistency, and the high cost of re-validating multiple suppliers within the same production program. As a result, once the Company’s solution is selected and validated for a given vehicle model, it is generally the sole deployed solution for that model for its whole production lifecycle including subsequent model updates, even though no contractual exclusivity is granted. For existing OEM customers, subsequent programs generally progress through these stages more efficiently, reflecting established commercial and technical relationships. Lifecycle and expansion considerations include:

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Early-stage engagements primarily generate non-recurring engineering revenue from engagement services and, in some cases, during the production program phase.

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Following SOP, the Company typically generates royalty-based revenue over the production life of the vehicle model.

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Follow-on programs with existing Auto OEM customers typically involve shorter sales cycles, a higher likelihood of award, and often expand through adoption across additional vehicle models, platforms, or subsequent model generations within the same OEM.

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This structure provides predictable, multi-year revenue streams and high retention, making our model inherently sticky.

 

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Business Model

The Company generates revenue primarily through a royalty-based licensing model, under which Auto OEMs pay a per-vehicle royalty for each vehicle produced with Silentium’s software embedded. Royalties are typically payable based on vehicle production volumes and are tied to specific vehicle platforms or programs. The license granted to the OEM is non-exclusive, limited in scope, and does not transfer ownership of the software.

In addition to royalties, the Company generates non-recurring engineering and service revenue related to software integration, calibration, and validation during vehicle development. These services are typically performed during pre-production phases and are intended to support adoption and successful deployment of the Company’s software; they are not usage-based and do not represent the primary revenue driver.

Once integrated into a vehicle platform, Silentium’s software typically remains in production for the life of that platform (approximately 5 – 6 years), with royalty revenue scaling based on vehicle production volumes over the program lifecycle. This reflects the broader transition toward vehicle architectures in which core functions are implemented and updated through software integrated into centralized computing systems rather than fixed hardware components.

Silentium also works with Tier-1 suppliers and semiconductor partners to support integration into OEM platforms and facilitate adoption across vehicle portfolios, while maintaining a consistent royalty-based economic model aligned with OEM production volumes.

High-level contract characteristics with Auto OEMs

The following description summarizes the contractual structure and key terms that govern the Company’s commercial arrangements with Auto OEMs and Tier-1 suppliers, rather than the economic impact of those arrangements.

Silentium’s commercial arrangements with Auto OEMs are typically structured under two primary contract types and are generally consistent across customer programs. These arrangements generally include (i) engineering service agreements for non-recurring services, such as software porting, tuning, validation,

 

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and integration, and (ii) model-specific software licensing agreements that permit the Auto OEM or its Tier-1 supplier to embed Silentium’s proprietary acoustic software in defined vehicle platforms.

Engineering service agreements are generally entered into in connection with Auto OEM development or pre-production programs and typically define a scoped work plan with milestone-based deliverables, defined project durations, customer acceptance criteria for each phase, and fixed, non-recurring fees. Such agreements are typically governed by a project-specific statement of work, or SOW, that defines the applicable engineering tasks, development steps, and acceptance criteria. Deliverables are structured as a series of milestones, which may vary in number depending on the complexity of the applicable proof-of-concept or start-of-production program. Customer acceptance is generally required at each milestone prior to progression to subsequent phases, and work packages are typically independent, allowing either party to discontinue further work following completion of an accepted milestone pursuant to termination-for-convenience provisions. These agreements are project-based in nature and are intended to support Auto OEM evaluation, integration, and validation activities. All intellectual property rights in the Company’s proprietary software, algorithms, and underlying technology remain with Silentium, and the Auto OEM does not receive rights beyond use of the delivered software built for evaluation or integration purposes.

Software licensing agreements are typically non-exclusive, model-specific, and non-transferable, with rights limited to embedding the licensed software in specified vehicle models or associated Tier-1 hardware platforms used by Auto OEMs. Each licensing arrangement is generally limited to a single vehicle model or version, with a separate license exhibit for each model specifying applicable fees, term, and permitted Tier-1 hardware platforms. Licenses are non-sublicensable, except to approved Tier-1 suppliers solely for purposes of embedding or installing the licensed software in authorized hardware. License fees are generally structured on a per-unit, usage-based pricing model, with royalties payable based on the Auto OEM’s or Tier-1 supplier’s reported vehicle installations or semiconductor shipments incorporating the licensed software.

Agreements generally do not include exclusivity provisions, minimum volume commitments, or long-term purchase obligations; however, Auto OEMs generally select a single acoustic software supplier for each vehicle model due to program-level integration complexity, calibration requirements, and the cost of validating multiple suppliers within the same platform. Accordingly, there are no guaranteed minimum royalty payments, and revenue derived from licensing arrangements is depends on the sole deployed solution for that and on actual Auto OEM production levels. Renewal and termination provisions typically permit either party to terminate the agreement upon advance written notice, subject to customary conditions, while preserving the Auto OEM’s or Tier-1 supplier’s rights to continue using the licensed software in vehicles already in production. As a result, the commercial value of licensing arrangements is primarily dependent on the Auto OEM’s actual production volumes and reported usage over the lifecycle of the applicable vehicle model.

Taken together, the Company’s contractual framework with Auto OEMs and Tier-1 suppliers combines non-recurring engineering service fees with ongoing, unit-based software license royalties, aligned with the development cycle and production lifecycle of individual vehicle programs.

Contract Types

Engineering Service Agreements (including NRE, POC, and SOP-related projects):   Project-based, milestone-driven agreements covering software porting, tuning, validation, and system integration activities for Auto OEM programs, typically governed by SOWs with defined tasks, acceptance criteria, and fixed fees, and structured to allow termination following completion of accepted milestones.

Model-Specific Software Licensing Agreements:   Agreements granting limited rights to embed Silentium’s proprietary software in defined vehicle models or Tier-1 hardware platforms used by Auto OEMs, typically on a non-exclusive, per-unit royalty basis, with separate license exhibits per vehicle model and no minimum volume commitments.

The Company has entered into various service and licensing agreements with its top three customers for 2025 and 2024. Under these agreements, specific licenses granted typically have terms ranging from five to

 

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up to 10 years, subject to mutual agreement for extension. The agreements are subject to termination provisions that generally require prior notice ranging from three to six months.

Installed Base and Revenue Visibility

Our installed base is expanding rapidly, enhancing forward revenue visibility. The table below shows our historical growth in the Auto OEM relationships and number of vehicles on the road. For more information, please see “— Our Key Performance Indicators” below.

Our Key Performance Indicators

Our management uses certain key performance indicators, or KPIs to make decisions, establish our business plans and forecasts, identify trends affecting our business, and evaluate our overall performance, which KPI are typically used by our competitors in the same industry, but are not recognized under accounting principles generally accepted in the United States. Management believes future trends in such KPIs will reflect our Company’s ongoing transition from a development-stage company to a scaled, production-driven software platform within the automotive sector. We define our key performance indicators as follows:

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Vehicles on the Road:   “Vehicles on the road” is defined as the cumulative number of manufactured vehicles incorporating our software that are in use. Management typically estimates “vehicles on the road” using historical production data, adjusted for reporting timing variances and management’s assumptions regarding production ramp-up. Management believes this metric evaluates the cumulative scale of our software installation in vehicles and assesses the breadth and durability of our OEM program deployments. As of May 31, 2026, we had approximately

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1.8 million vehicles on the road, compared to approximately 1.6 million and 1.1 million vehicles on the road as of December 31, 2025 and December 31, 2024, respectively. Based on current production programs, awarded OEM platforms and internal forecasts, management expects the number of vehicles on the road to increase significantly from 2025 to 2029. Management anticipates this projected growth will be driven primarily by the expansion of existing production programs, the commencement of serial production for newly awarded platforms, and anticipated increases in underlying OEM production volumes.

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Automotive Production Programs in Production:   “Automotive production programs in production” represents the number of distinct OEM vehicle programs for which our software has entered serial production and remains active as of the end of the applicable period. A single program encompasses one or more vehicle models or trim levels and may cover multiple vehicle platforms. Management utilizes this metric to assess the diversity and durability of our OEM relationships and the progression of awarded programs into revenue-generating production phases, and believes an increase in this metric generally reflects the successful commercialization of previously awarded programs and the broader deployment of our technology across additional OEM platforms. As of December 31, 2025, we had seven active OEM production programs in serial production, compared to six active OEM production programs as of December 31, 2024.

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Automotive Production Volumes:   “Automotive production volumes” represents the total number of vehicles produced during the applicable period that incorporate our software. Management utilizes this metric to evaluate production activity within active OEM programs and to access the scale and ramp-up dynamics of those programs. For the year ended December 31, 2025, automotive production volumes were approximately 600 thousand vehicles, compared to approximately 500 thousand vehicles for the year ended December 31, 2024. Automative production volumes may fluctuate from period to period due to variations in OEM production schedules, platform ramp-ups, regulatory adoption timing, and broader automotive industry conditions. Over the long term, management anticipates that automative production volumes will increase as additional awarded programs commence serial production and existing programs progress into higher-volume phases.

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AUTO OEM Customers:   “Auto OEM customers” represents the number of automotive original equipment manufacturers for which we have active automative production programs or awarded programs progressing toward serial production. As of December 31, 2025, we had five Auto OEM customers with active production programs, compared to five OEM customers as of December 31, 2024. Management utilizes this metric to assess market penetration, evaluate the expansion of our Auto OEM relationships, and monitor our ability to mitigate customer concentration risk. Management believes that securing new Auto OEM customers, expanding relationships with existing auto OEM customers, and successfully converting awarded programs into serial production are key drivers of our long-term installed base growth.

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Our KPIs estimates are based solely on our internal records and other information available to us as of the date of this prospectus. Our actual results and final KPIs may differ materially from these preliminary figures. These KPIs estimates are not a substitute for our full financial statements prepared in accordance with GAAP, nor are they necessarily indicative of future performance. You should not place undue reliance on this information. Please read our KPI information in conjunction with the “Special Note Regarding Forward-Looking Statements”. “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the financial statements and related notes included elsewhere in this prospectus.

Competition

The Company competes in a market that includes both large, established automotive audio suppliers and a range of smaller, specialized technology providers. Large incumbents such as branded audio and Tier-1 system suppliers offer noise reduction and sound enhancement capabilities as part of broader infotainment, audio, or comfort systems, often relying on hardware-centric architectures or adaptations of consumer audio technologies for automotive use.

 

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In parallel, the market includes numerous smaller vendors offering point solutions that address specific acoustic use cases. While these solutions may perform well in narrowly defined applications, they are typically limited in scope, lack deep integration with vehicle-level software architectures, or are not designed to scale across multiple vehicle platforms and production programs.

Silentium differentiates itself by delivering a software-native, automotive-grade acoustic platform that combines full ANC, personal sound zones, and adaptive acoustic control, and is designed to integrate directly with Auto OEM and Tier-1 development environments. This system-level approach, together with proven deployment in production vehicle programs, positions the Company differently from both traditional hardware-focused suppliers and point-solution software providers, supporting broader adoption, higher switching costs, and long-term scalability within software-defined vehicle architectures.

Competitive Advantage

Silentium’s competitive position is based on a combination of demonstrated acoustic performance and deep integration within Auto OEM vehicle development and production environments. The Company’s solutions delivers precise, real-time acoustic control that meets stringent automotive performance requirements and have supported adoption by Tier-1 suppliers and Auto OEMs in production vehicle programs. Beyond performance, Silentium’s solutions are designed to operate as part of in-vehicle software architectures, integrating with infotainment systems, digital signal processors, and centralized computing platforms used by Auto OEMs and Tier-1 suppliers. This level of integration creates switching costs and supports long-term deployment across vehicle programs.

The Company’s software-based approach enables scalability across multiple dimensions. Once deployed within a vehicle platform, Silentium’s solutions can be extended across additional vehicle models and production volumes with limited incremental development effort. Multiple acoustic functions can be enabled through software configuration, allowing expansion within existing customer relationships without requiring new hardware integration or changes to vehicle architecture.

In addition, Silentium’s solutions are designed for high-volume automotive production, supporting standard validation workflows, end-of-line testing, and over-the-air updates throughout the vehicle lifecycle. These capabilities enable the Company to scale revenue through broader platform adoption and functional expansion, supporting continued growth beyond initial program launches and across successive vehicle generations.

Research & Development

The Company’s research and development, or R&D, organization is focused on advancing its ANC and broader Active Acoustic Management technologies to support current OEM production programs, while aligning its acoustic software platform with evolving vehicle electrical and software architectures, including software-centric and centralized computing environments.

R&D activities are directed toward maintaining and expanding the Company’s core algorithmic capabilities, supporting customer programs through series production, and extending the scalability and applicability of its solutions across a broader range of vehicle platforms.

R&D efforts include ongoing algorithm development, feature enhancement, and the porting of the Company’s ANC, Road Noise Control RNC, and EOC technologies across leading automotive DSP and system-on-chip platforms. These activities support both production and pre-start-of-production, or pre-SOP, programs with automotive OEMs and Tier-1 suppliers, as well as collaborations with semiconductor partners to ensure compatibility with current and next-generation chipsets.

A key area of development is the redesign of the Company’s system architecture to improve scalability and cost efficiency, particularly for mid-range and cost-sensitive vehicle segments. These efforts include optimization of computational requirements, modularization of software components, and the development

 

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of automation tools and cloud-enabled remote tuning capabilities intended to reduce engineering effort, shorten integration cycles, and accelerate customer delivery timelines.

The Company’s R&D organization also supports commercial and customer engagement activities through the development of demonstration platforms and evaluation systems used by OEMs and Tier-1 suppliers. These activities include proof-of-concept demonstrations, validation programs, and the development of next-generation demo vehicles and test environments. In parallel, the Company is expanding its toolset for remote diagnostics, calibration, and system updates, supporting distributed customer programs and post-deployment optimization.

In addition to its core ANC and RNC offerings, the Company continues to expand its technology toward a more comprehensive Active Acoustic Management stack. Current and planned development initiatives include next-generation QB technologies, PSB capabilities, and related features such as Active Sound Design (ASD), Acoustic Vehicle Alerting Systems (AVAS), and Spatial Voice Management (Spatial-VM™).

Certain R&D initiatives have been delayed, scaled back, or deprioritized as a result of resource constraints following a reduction in R&D staffing in 2025. The Company continues to prioritize R&D activities based on customer program requirements, anticipated commercialization timelines, and alignment with long-term platform strategy.

Manufacturing

The Company does not operate in-house manufacturing facilities. Hardware required for internal development, testing, and validation is outsourced to third-party suppliers.

If hardware is required for certain applications or adjacent markets, manufacturing would be outsourced to qualified third-party original design manufacturers (ODMs), external partners that build hardware to the Company’s specifications. In such cases, the Company would define the system architecture and technical requirements and manage the manufacturing process, while production is performed by the ODM.

The Company does not currently engage qualified ODMs or third parties for the development or manufacture of its core products or proprietary software. Core system design, software and algorithm development, system integration, and productization are performed in-house. From time to time, the Company may utilize third parties for non-core, ancillary services, such as prototype fabrication, bench or build support, laboratory testing, or logistics related to evaluation kits or demonstration units. These services do not involve access to or development of the Company’s proprietary algorithms and do not include the outsourced manufacture of finished products for sale.

The Company’s solutions are deployed on third-party semiconductor platforms supplied by chip vendors, which results in certain platform dependencies, including development toolchains, firmware environments, and hardware reference architectures. These dependencies do not constitute outsourcing of the Company’s core development activities or manufacturing processes.

Facilities/Properties

In support of its global workforce and customer-facing activities, the Company maintains a number of operational and technical facilities that provide infrastructure for employee collaboration, development, and customer program execution. The Company’s principal headquarters and primary laboratory facilities are located in Israel and serve as the central hub for research and development, product engineering, system calibration and validation, and corporate functions. These facilities support the majority of the Company’s technical personnel and core development activities.

In addition, the Company maintains foreign offices and operational sites to support regional employees, application engineering, and commercial activities. In China, the Company operates offices in Suzhou, Shanghai, and Shenzhen, supporting customer projects, engineering collaboration, and on-site system integration with local OEMs and Tier-1 suppliers. In Japan, the Company utilizes a fully serviced shared

 

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office in Nagoya, primarily supporting customer support and application engineering activities. In Germany, the Company maintains demo-car and working-space infrastructure, including garage facilities, to support vehicle-based testing, demonstrations, and customer validation, with certain operational support provided through a local partner. The Company also maintains home-office based employee and representative presence in the United States, the United Kingdom, and Korea to support local customer engagement, partner coordination, and business development. This geographic structure enables employees to operate in close proximity to customers while maintaining centralized technical leadership and operational oversight in Israel.

Recent Developments

We are accelerating our growth trajectory with strategic engagements and technology launches that position us at the forefront of automotive acoustics. The developments listed below are grouped by the phases of the Company’s sales process outlined above.

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Demo / Paid Proof of Concept

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POC Program in Rail Sector:   We are entering the public transport market with a first-of-its-kind ANC application for a leading global train and tram manufacturer, scheduled to start in the first quarter of 2026.

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Bid / Request for Quote

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Major RFQs with Global Automotive Leaders:   We are actively participating in large-scale RFQs for integration of our iRNC solutions into next-generation vehicle platforms, with decisions expected in the first half of 2026.

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Truck Auto OEM Engagement:   We are engaged in an RFQ for a combined software and hardware ANC solution for Truck driver cabins.

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Sensor and ECU Tier-1 Leader:   We are engaged in providing our RNC/EOC SW solutions in dedicated ECU to provide ANC functionalities and be supplied by a leading Sensor Tier-1 to a European Auto OEM for first mass production starting by the end of 2026.

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Mass Production Awards

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Tier-1 Licensing Agreement:   Currently under negotiation with a major global Tier-1 supplier for technology licensing, which is expected to be executed in the second quarter of 2026.

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Advanced Licensing with major Auto OEM:   We are in negotiations to license our iRNC technology to a performance-focused major automaker, with program kickoff anticipated in the second quarter of 2026.

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Mass Production

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Production Program for Premium BEV SUV:   Our Road Noise Cancellation (RNC) technology will be deployed in a flagship electric SUV from a global Auto OEM leader.

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Employees

As of the date of this prospectus, the Company employs approximately 36 employees. The workforce comprises a multidisciplinary team with expertise in acoustics, signal processing, software engineering, automotive systems, and customer integration, supporting the Company’s technology development and commercialization activities.

The majority of employees are engaged in project management and research and development functions, representing approximately 66% of total headcount. These roles include acoustics and algorithm development, embedded and application software, systems engineering, validation, product management and testing. Commercial activities are supported by a focused sales and business development organization, representing approximately 17% of headcount, supplemented by application and field engineering resources that

 

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support OEM and Tier-1 customer programs. Corporate, finance, operations, and administrative functions account for the remaining 17% of employees.

The sales organization consists of business development and account management personnel assigned to specific OEMs, Tier-1 suppliers, and semiconductor partners. Each account manager is responsible for technical engagement, commercial structuring, and long-term relationship development within their assigned accounts. In select regions, including Japan, the Company operates through local trading partners compensated on a commission basis.

The Company’s employees are primarily located in Israel, which serves as the principal center for research and development and corporate functions. Additional personnel are located in Europe, the United States, and Asia, primarily supporting sales, business development, customer programs, and regional partner engagement. This geographic footprint enables close proximity to global automotive OEMs, Tier-1 suppliers, and semiconductor partners, while maintaining a centralized and cost-efficient technology organization.

The Company expects future headcount growth to be driven primarily by increased customer adoption and expansion of production programs. Planned recruitment is expected to be concentrated principally in research and development and application engineering functions, with a continued focus on Israel as the core innovation hub. Selective additions in Europe, the United States, and Asia may be made to support regional customer programs, partnerships, and commercial expansion. The Company intends to manage headcount growth in a disciplined manner, aligned with revenue growth, operational efficiency, and long-term strategic objectives.

Organizational Chart

Intellectual Property

We seek patent protection and other effective intellectual property rights for our products and technologies in the United States and internationally. Our policy is to pursue, maintain and defend intellectual property rights developed internally and to protect the technology, inventions and improvements that are commercially important to the development of our business.

Our intellectual property portfolio is organized into four thematic pillars:

1.

Adaptive Control and stability — broadband and tonal cancellation, multichannel coordination, and dynamic acoustic profiles.

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2.

Acoustic estimation and modeling — hybrid physical — statistical models, source localization, and sensor fusion.

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3.

Zoning and spatial sound shaping — creation and maintenance of personal acoustic zones, leakage mitigation, and zone separation under motion.

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4.

Integration, tooling and validation — efficient calibration, model-in-the-loop and hardware-in-the-loop validation, and deployment on target compute platforms.

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As of the date of this prospectus, our patent portfolio consists of an aggregate of 73 patents and patent applications (the count includes individual national validations of European patents), as detailed in the following table: All of the patents and patent applications in our portfolio are utility patents covering systems, methods, and apparatuses relating to active acoustics, noise control, and sound-field management. One item in the portfolio is a Chinese utility model, which is similarly classified as a form of utility protection under Chinese laws.