{"url_path":"/sec/hubc/10-k/2026/item-5","section_key":"item-5","section_title":"Item 5 Operating","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-07-17","source_url":"https://www.sec.gov/Archives/edgar/data/1905660/0001213900-26-079236-index.html","accession_number":"0001213900-26-079236","cik":"0001905660","ticker":"HUBC","issuer_name":"Hub Cyber Security Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1905660/0001213900-26-079236-index.html","primary_entity_key":"0001905660","primary_entity_name":"Hub Cyber Security Ltd."},"word_count":21492,"has_tables":true,"body_markdown":"** **\n\n**Item 5. Operating\nand Financial Review and Prospects**\n\n** **\n\n**A.\nOperating Results**\n\n* *\n\n*You should read the following\ndiscussion together with the consolidated financial statements and related notes included elsewhere in this Annual Report. The statements\nin this discussion regarding industry outlook, our expectations regarding our future performance, planned investments in our expansion\ninto additional geographies, research and development, sales and marketing and general and administrative functions as well as other non-historical\nstatements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties,\nincluding, but not limited to, the risks and uncertainties described in Item 3.D entitled “Risk Factors” and “Cautionary\nStatement Regarding Forward-Looking Statements” included elsewhere in this Annual Report. Our actual results may differ materially\nfrom those contained in or implied by any forward-looking statements.*\n\n* *\n\n*Certain information called\nfor by this Item 5, including a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023 has been reported\npreviously in our Annual Report on Form 20-F for the fiscal year ended December 31, 2024, filed with the SEC on May 1, 2025 under the\nsection entitled “Item 5—Operating and Financial Review and Prospects,” and is incorporated herein by reference.*\n\n* *\n\n**Overview**\n\n \n\nIn 2025, HUB focused on two\nsymbiotic lines of business: (1) the Products and Technology division – secured data fabric and confidential computing; and (2)\nthe Professional Services division – cyber security and other technology services.\n\n \n\n**Products and Technology Division**\n\n \n\n \n●\nHUB’s Products and Technology division focuses on research and development of HUB’s products and solutions.\n\n \n\n \n●\nHUB’s product solutions were marketed and licensed directly to banks, financial services, government agencies, defense organizations, research institutions and large enterprises.\n\n \n\n \n●\nWe recorded a significant impairment of this division as of December 31, 2025, for the secured data fabric business, which ceased operations in June 2026.\n\n \n\n**Professional Services Division**\n\n** **\n\nThe Professional Services\ndivision is comprised of services performed by Comsec, QPoint and certain ALD activities.\n\n \n\n \n●\nALD provides quality control in complex engineering projects and ensuring smooth and reliable execution in mission critical processes.\n\n \n\n \n●\nComsec provides cyber risk assessment, risk mitigation and cyber incident response services to customers worldwide. Comsec customers are large enterprises, militaries and government agencies, and Comsec has deep and long-term connections with the IT procurement departments in those organizations and is recognized by them as an approved provider.\n\n \n\n \n●\nQPoint provides a variety of tech solutions and services, including software development and testing, cybersecurity, information systems, consulting, and training. Its team of over 145 engineers provides advanced technological expertise, offering readily available and professional solutions to leading Israeli companies and organizations.\n\n \n\n73\n\n \n\n**Management, Sales, and Distribution**\n\n \n\n \n●\nHUB’s Management, Sales, and Distribution team oversees marketing, sales, and related commercial activities to advance and support the distribution of HUB’s product solutions and services.\n\n \n\n \n●\nThey oversee strategic planning, resource allocation, and operational execution to align our goals with market demands and ensure sustainable growth.\n\n \n\n \n●\nThis team drives revenue by identifying customer needs, closing deals, and ensuring effective delivery and support of software products through various channels.\n\n** **\n\n**Our Operations**\n\n \n\nIn 2025, we operated in several\ncountries and provided innovative cybersecurity computing appliances, secured data fabric services as well as cybersecurity and reliability,\navailability, maintainability and safety (RAMS) professional services. Our zero trust confidential computing product received positive\ninitial market feedback, with detailed discussions held with interested parties in Israel, EMEA, APAC and the United States, including\nwell established companies in the telecommunications, insurance, banking and technology sectors.\n\n \n\nSince 2021, HUB has completed\nfour acquisitions of cybersecurity consulting services and distribution companies – ALD, Comsec, QPoint and BST. This provided HUB\nwith an established and trusted customer base, including governmental agencies and enterprises that were expected to be prime targets\nfor its data fabric and confidential computing solutions.\n\n \n\nWe have not been successful\nin achieving the strategic plans we had for the secured data fabric business due to financial, development and other challenges, and as\na result, as of December 31, 2025, we recorded a full impairment on the technology asset acquired in the BST acquisition. During June\n2026 we ceased BST’s operations, terminated BST’s main commercial contract and terminated the employees of this business.\n\n \n\nOn June 26, 2026, we entered\ninto securities purchase agreements (each, a “Purchase Agreement” and, collectively, the “Purchase Agreements”)\nwith certain holders (each, a “Seller” and, collectively, the “Sellers”) of senior subordinated convertible notes\n(the “Evofem Notes”) of Evofem Biosciences, Inc., a Delaware corporation (“Evofem”), and of certain purchase rights\nto acquire securities of Evofem (the “Purchase Rights”). Pursuant to the Purchase Agreements, the Company agreed to purchase\nfrom the Sellers all of their respective Evofem Notes and Purchase Rights, free and clear of liens, in exchange solely for the issuance\nof equity securities of the Company as described below. For more information, see “*Item 4.A – Information on the Company\n– History and Development of the Company – Recent Developments*.”\n\n \n\nEvofem is a commercial-stage\nbiopharmaceutical company with two innovative women’s health products: (i) PHEXX®, a non-hormonal prescription contraceptive\nvaginal gel and (ii) SOLOSEC®, a single-dose oral antimicrobial agent for the treatment of two common sexual health infections\n– bacterial vaginosis (BV) and trichomoniasis.\n\n \n\nIn July 2026, we entered\ninto a promissory note with Evofem pursuant to which we provided a loan to Evofem in the principal amount of $706,304, bearing interest\nof 12% per annum, compounded monthly. The loan matures 11 months from the effective date, unless accelerated due to an event of default.\nThe loan included an administration fee equal to 2% of the total loan amount, due on the effective date and a weekly monitoring fee of\n$2,000, accruing from the effective date and payable on the maturity date. Evofem is entitled to use the proceeds of the loan exclusively\nfor making payments to its suppliers for the manufacture, production, and distribution of its products, PHEXX and SOLOSEC.\n\n \n\nThe Evofem transaction is\nthe latest milestone in a comprehensive restructuring that the Company has implemented, during which the Board and management team have\ntaken steps to improve liquidity, simplify the Company’s organizational structure, cut operating costs and strengthen corporate\ngovernance.\n\n \n\nAs part of this plan, the\nCompany has substantially reduced operating expenses, eliminating many external consultants and contractors and reducing headcount solely\nat the HUB level by approximately 50%. During May and June 2026, we executed a targeted workforce reduction of approximately 10% of all\nour employees or full-time employee equivalents in order to improve our operational efficiency. Most of the reduction was related to the\ncessation of activities in the BST business.\n\n \n\nThe Company has also engaged\nDeloitte to support its restructuring efforts, operational improvements and financial planning as it works to strengthen its balance sheet.\nAdditionally, the Board continues to explore various strategic alternatives intended to maximize value for shareholders and position HUB\nfor future growth. The Company believes the Evofem transaction reflects a first step in a disciplined approach to pursuing strategic opportunities\nwhile preserving liquidity.\n\n \n\n74\n\n \n\n**Basis of presentation**\n\n \n\nThe Company’s financial\nstatements are prepared in accordance with International Financial Reporting Standards, or IFRS as issued by the International Accounting\nStandards Board (“IASB”).\n\n** **\n\n**Our Segments**\n\n \n\nWe organize our business\ninto two reporting segments:\n\n \n\n(i) Product and Technology\nSegment – we develop and market integrated cybersecurity hardware/software solutions that allow organizations to protect their RAM\nor confidential computing data to create a reliable work environment. We offer data and cybersecurity and system security and reliability\nsolutions and related services such as consulting, planning, training, integrating and ongoing servicing of cybersecurity, risk management,\nsystem quality, reliability and security projects and fully managed corporate cybersecurity services. We recently expanded our data security\nservices into Trust Rails, the framework that allows institutions to enforce control, auditability and compliance across interactions\nbetween systems.\n\n \n\n(ii) Professional Services\nSegment – we offer data and cybersecurity and system security and reliability solutions and related services such as consulting,\nplanning, training, integrating and ongoing servicing of cybersecurity, risk management, system quality, reliability and security projects\nand fully managed corporate cybersecurity services.\n\n \n\nThese segments share unified\nproduct development, operations, and administrative resources. The chief operating decision maker (the “CODM”), which is our\nchairperson of the board, acting as principal executive, evaluates segment operating performance and makes resource allocation decisions\nbased on revenue, cost of revenue and operating profit (loss) from reportable segments.\n\n** **\n\n**Key Factors Affecting Our Results of Operations**\n\n** **\n\n**Retention and Expansion of Customer Base**\n\n \n\nHUB’s results of operations\nare driven by its ability to retain customers, increase revenue generated from existing customers and expand its customer base. The retention\nof customers is a measure of the long-term value of customer agreements and HUB’s ability to establish and maintain deep, long-term\nrelationships with customers. A number of factors drive HUB’s ability to attract and retain customers, particularly large enterprise\ncustomers (which HUB defines as customers that represent 10% or more of total revenue), including customers’ satisfaction with HUB’s\nsolutions provided by its technical staff, services and pricing, customers’ technology budgets, and the effectiveness of HUB’s\nefforts to help its customers realize the benefits of its solutions.\n\n \n\nFor the year ended December\n31, 2025, HUB’s annual revenue increased by 7% from $29.6 million for the year ended December 31, 2024 to $31.7 million for the\nyear ended December 31, 2025.\n\n \n\nHUB achieved a gross retention\nrate of 90% and 87% as of December 31, 2024 and 2025, respectively, for customers who generated over $27.7 million revenues over the trailing\n12 months.\n\n \n\n75\n\n \n\n**Impact of Acquisitions**\n\n \n\nHUB has historically grown\nthrough selected acquisitions and, in addition to efforts to grow its confidential computing business organically, it acquired parallel\ntechnology like BST’s secured data fabric. HUB’s results of operations have been, and are expected to continue to be, affected\nby such acquisitions. We are currently conducting an evaluation process of potential strategic opportunities, with the goal of enhancing\nvalue for our shareholders.\n\n \n\nOn February 28, 2021, HUB\nTLV and ALD entered into a merger agreement, pursuant to which HUB TLV became a wholly owned subsidiary of HUB and the shareholders of\nHUB TLV owned 51% of HUB’s issued and outstanding share capital. The transaction was completed on June 21, 2021. According to IAS36,\nwe perform an impairment test each to ensure that the net book value of the assets are recoverable. If enterprise value is lower compared\nto the carrying amount of the business unit, then an impairment entry must be recorded. We have used third party evaluation services to\nperform impairment tests since December 31, 2023, where the profit and loss approach was selected, based on five parameters: depreciation\nand amortization, capital expenditures, investment in working capital, weighted average cost of capital and sensitivity analysis. The\noutcome of this analysis has been reflected in our financial statements. Since ALD will not generate cash flow as expected, it has a negative\naffect on the cash flow of the Company and its subsidiaries. To mitigate and address this risk, the Company focuses on two main areas:\n(1) seeking new business opportunities in the overall services arena and (2) exploring and evaluating additional capital investments that\nwill result in positive cash flow impact.\n\n \n\nOn September 27, 2021, HUB\nentered into an agreement for the purchase of the entire issued and outstanding share capital of Comsec Ltd. (“Comsec”). Comsec\nprovides cybersecurity consulting, design, testing and control services and sells data security and cybersecurity software and hardware\nsolutions. The purchase price of this acquisition was NIS 70 million and the transaction was completed on November 17, 2021. Since December\n31, 2023, Comsec’s distribution activity has been classified as a “discontinued operation” under IFRS 5, “*Non-current\nAssets Held for Sale and Discontinued Operations*.” As a result, the performance presentation for this activity is separate from\nthe ongoing business, which does not have a direct impact on the operating results and cash flow. \n\n \n\nIn May 2022, HUB entered\ninto an asset purchase agreement with Legacy Technologies GmbH (“Legacy”), a European cyber firm with an extensive EMEA distribution\nnetwork of cyber solutions for major government and enterprise data centers. The acquired assets were mainly comprised of customer relationships\nof Legacy. The transaction was completed on July 5, 2022. In fiscal year 2022, HUB recorded an impairment loss of $8,738 thousand for\nthe assets acquired from Legacy, due to the fact that revenue was not recognized or that HUB had not acquired new customers from Legacy’s\nassets. As a result, HUB concluded that such assets were no longer viable and would not generate economic benefits in future.\n\n \n\nOn April 3, 2024, HUB acquired\nthe shares of QPoint that it did not yet own at that time, constituting 53.5% of QPoint’s outstanding shares for NIS 25,000,000\nin cash. This acquisition was strategically aligned with the Company’s mission to establish a leading global secure data fabric\necosystem. QPoint has a diverse customer base of over 100 clients, including renowned brands, such as Rafael Advanced Defense Systems,\nthe Israel Airport Authority and the Ministry of Defense of Israel.\n\n \n\nIn November 2023, HUB began\nto collaborate with BST with the goal of becoming a significant player in the secured data fabric industry, and on January 27, 2025, HUB\nconsummated a merger agreement with BST resulting in BST and its subsidiaries becoming subsidiaries of HUB. As a result of the acquisition,\nHUB issued to BST equity holders 197 ordinary shares and pre-funded warrants to purchase 44 ordinary shares of HUB. The exercise of the\npre-funded warrants is limited to the extent that, upon exercise, the holder and its affiliates would hold more than 4.99% of HUB’s\noutstanding ordinary shares. The ordinary shares issued in the transaction are also subject to transfer restrictions. HUB accounted for\nthe transaction as an asset acquisition rather than a business combination. The acquired asset was initially recognized at a cost of $43\nmillion. Following an impairment assessment performed in accordance with IAS 36 Impairment of Assets, the asset was fully amortized as\nof December 31, 2025. We have not been successful in achieving the strategic plans we had for the secured data fabric business due to\nfinancial, development and other challenges. During June 2026 we ceased BST’s operations, terminated BST’s main commercial\ncontract and terminated the employees of this business.\n\n \n\n**Innovation**\n\n \n\nHUB may continue to invest\nin research and development to maintain solution differentiation and grow the community of large enterprise customers. In the short-term,\nHUB may make continual investments in upgrading technology to continue providing customers a reliable and effective solution.\n\n \n\nFor the year ended December\n31, 2025, HUB’s research and development expenses as a percentage of revenue were approximately 8.7%.\n\n \n\n76\n\n \n\n**Investment in Growth**\n\n \n\nAlthough HUB currently has\nlimited cash resources, it may make significant investments in the future in order to execute potential new strategic opportunities, with\nthe goal of enhancing value for its shareholders, thereby prioritizing long-term growth over short-term profitability. \n\n \n\nAs a result, sales and marketing\nexpenses may increase on an absolute basis in future periods, which would be expected to contribute to long-term growth, but may negatively\nimpact short-term profitability, as they drive an increase in operating expenses in advance of revenues attributable to such investments,\nas well as a decrease in free cash flow.\n\n \n\nFor the year ended December\n31, 2025, sales and marketing expenses as a percentage of revenue were approximately 32%.\n\n \n\n**Components of our Results of Operations**\n\n** **\n\n**Revenue**\n\n \n\nRevenue is primarily generated\nfrom rendering professional services, including consulting, planning, training, integrating and servicing our cybersecurity, risk management,\nsystem quality, reliability and security projects. Revenue is recognized in the period in which the services are provided.\n\n \n\n**Cost of Revenue**\n\n \n\nCost of revenue primarily\nconsists of salaries and related expenses associated with teams integral in providing HUB’s service, subcontractors and consultant\nexpenses, share-based compensation, as well as depreciation and material costs and amortization of intangible assets.\n\n \n\n**Research and Development Expenses, net**\n\n \n\nResearch and development\nexpenses include costs incurred in developing, maintaining, and enhancing our products and technology. Additional expenses include costs\nrelated to development, consulting, including share-based compensation, travel and other related costs. HUB believes that continuing to\ninvest in research and development efforts is essential to maintaining its competitive position. HUB expects research and development\nexpenses, net from government grants, to increase in the future as it continues to broaden its product portfolio.\n\n** **\n\n**Sales and Marketing Expenses**\n\n \n\nSales and marketing expenses\nconsist primarily of salaries and other related costs including share-based compensation, sales and sales support functions, as well as\nadvertising and promotional personnel. Sales and marketing expenses also include depreciation and amortization and impairment of intangible\nassets.\n\n \n\n**General and Administrative Expenses**\n\n \n\nGeneral and administrative\nexpenses include costs incurred to support and operate our business. These costs primarily include personnel-related salary costs including\nshare-based compensation, professional services related to finance, legal, IT consulting and outsourcing, as well as impaired costs associated\nwith intangible assets (including the full amortization of BST).\n\n \n\nAdditionally, we expect to\ncontinue to incur significant expenses associated with being a public company, including costs of additional personnel, accounting, audit,\nlegal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements,\ndirector and officer insurance costs, and investor and public relations costs.\n\n \n\n**Finance Income and Finance Expenses**\n\n \n\nFinance income and finance\nexpenses primarily consist of revaluation of financial instruments which are measured on fair market value as well as income and expenses\nassociated with fluctuations in foreign exchange rates, interest payable or received and bank fees.\n\n \n\n77\n\n \n\n**Taxes on Income**\n\n  \n\nTaxes on income consist primarily\nof income taxes related to the jurisdictions in which HUB conducts business. HUB’s effective tax rate is affected by non-deductible\nexpenses, utilization of tax losses from prior years for which deferred taxes were not recognized, effect on deferred taxes at a rate\ndifferent from the primary tax rate and differences in previous tax assessments.\n\n \n\n**Results of Operations** \n\n \n\nThe following table sets\nforth HUB’s operating results for the years ended December 31, 2025 and 2024. We have derived this data from our consolidated financial\nstatements included elsewhere in this Annual Report. This information should be read in conjunction with our consolidated financial statements\nand related notes included elsewhere in this Annual Report. The results of historical periods are not necessarily indicative of the results\nof operations for any future period.\n\n \n\n  \nYear ended\nDecember 31,  \n   \n% \n\n  \n2025  \n2024  \nChange  \nChange \n\n  \n(In $ thousands)  \n(In $ thousands)  \n(In $ thousands)  \n  \n\nRevenue \n 31,662  \n 29,562  \n 2,100  \n 7.1%\n\nCost of Revenue \n 26,372  \n 24,515  \n 1,857  \n 7.6%\n\nGross Profit \n 5,290  \n 5,047  \n 243  \n 4.8%\n\nResearch and development expenses, net \n 2,745  \n 2,002  \n 743  \n 37.1%\n\nSales and marketing expenses \n 10,200  \n 4,182* \n 6,018  \n 143.9%\n\nGeneral and administrative expenses \n 66,724  \n 24,905* \n 41,819  \n 167.9%\n\nOther expenses, net \n (4,094) \n 181  \n (4,275) \n (2,362)%\n\nOperating loss \n (70,285) \n (26,223) \n (44,062) \n 168%\n\nFinancial income \n (2,227) \n (2,220) \n (7) \n 0.2%\n\nFinancial expenses \n 49,248  \n 12,586  \n 36,662  \n 291.3%\n\nLoss before taxes on income \n (117,306) \n (36,589) \n (80,717) \n 220.6%\n\nTaxes on income \n 743  \n 557  \n 186  \n 33.4%\n\nNet loss from continuing operation \n (118,049) \n (37,146) \n (80,903) \n 217.8%\n\nNet income (loss) from discontinued operation \n (1,741) \n (1,885) \n (144) \n 7.6%\n\nTotal net loss \n (119,790) \n (39,031) \n (80,759) \n 206.9%\n\n \n\n*\nExpenses related to the Company’s public listing and capital raising activities in 2024 were reclassified from sales and marketing expenses to general and administrative expenses.\n\n** **\n\n78\n\n** **\n\n**Comparison of the Years Ended December 31,\n2025 and 2024**\n\n** **\n\n*Revenue*\n\n \n\nRevenue was $31,662,000 and\n$29,562,000 for the years ended December 31, 2025 and 2024, respectively, an increase of $2,100,000 or 7.1%, for the year ended December\n31, 2025, compared to 2024.\n\n \n\nThe increase in revenues\nwas mainly due to the professional services division, as the Company entered into new contracts with customers from the governmental sector.\n\n \n\nThe table below sets forth\na breakdown of HUB’s revenue by customer location for the years ended December 31, 2025 and 2024.\n\n \n\n  \nYear ended\nDecember 31,  \n   \n**Change** \n\n  \n2025  \n2024  \nChange  \n% \n\n  \n(In $ thousands)  \n(In $ thousands)  \n   \n  \n\nIsrael \n 28,141  \n 27,808  \n 333  \n 1.2%\n\nAmerica \n 234  \n 699  \n (465) \n (66.5)%\n\nEurope \n 2,855  \n 1,055  \n 1,800  \n 170.6%\n\nAsia Pacific \n 432  \n -  \n 432  \n 100%\n\nTotal \n$31,662  \n$29,562  \n 2,100  \n 7.1%\n\n \n\n*Cost of Revenue*\n\n \n\nCost of revenue was $26,372,000\nand $24,515,000 for the years ended December 31, 2025 and 2024, respectively, an increase of $1,857,000 or 7.6% for the year ended December\n31, 2025, compared to 2024.\n\n \n\nThe increase was mainly\ndue to an increase in headcount which resulted in an increase in payroll and payroll related expenses.\n\n \n\n*Gross Profit*\n\n* *\n\nGross profit was $5,290,000\nand $5,047,000 for the years ended December 31, 2025 and 2024, respectively, an increase of $243,000 or 4.8%, for the year ended December\n31, 2025, compared to 2024. The increase was mainly due to entry into new contracts signed during 2024 with higher profitability that\ncontinued and expanded into 2025.* *\n\n \n\n*Research and Development Expenses, net*\n\n \n\nResearch and development\nexpenses, mainly attributed to the Product and Technology Segment, were $2,745,000 and $2,002,000 for the years ended December 31, 2025\nand 2024, respectively, an increase of $743,000 or 37.1% for the year ended December 31, 2025, compared to 2024. The increase was mainly\ndue to higher consulting fees in the amount of $228,000, share based compensation expenses of $174,000, and additional headcount resulting\nin an increase of $136,000, partially offset by a decrease of $86,000 from settlements with former employes reached during 2025.\n\n \n\n*Sales and Marketing Expenses*\n\n \n\nSales and marketing expenses\nwere $10,200,000 and $4,182,000,000 for the years ended December 31, 2025 and 2024, respectively, an increase of $6,018,000 or 143.9%\nfor the year ended December 31, 2025, compared to 2024. The increase was mainly due to impairment of an intangible asset related to a\ncustomer relationship of $3.1 million and an additional increase in consulting activities resulting in an increase of $3 million. Expenses\nrelated to the Company’s public listing and capital raising activities in 2024 were reclassified from sales and marketing expenses\nto general and administrative expenses.\n\n \n\n*General and Administrative Expenses*\n\n \n\nGeneral and administrative\nexpenses were $66,724,000 and $24,905,000 for the years ended December 31, 2025 and 2024, respectively, an increase of $41,819,000 or\n167.9% for the year ended December 31, 2025, compared to 2024. The increase was mainly attributable to an increase resulting from a $43,554,000\nimpairment loss and an $11,000,000 class action settlement expense, partially offset by approximately $9,800,000 related to the settlement\narrangement with Oppenheimer & Co., a decrease of approximately $3,761,000 in consulting expenses in connection with the settlement\narrangement with A-Labs and a decrease in the Company’s public listing and capital raising activities resulting in a decrease of\n$1,000,000. Expenses related to the Company’s public listing and capital raising activities in 2024 were reclassified from sales\nand marketing expenses to general and administrative expenses.\n\n \n\n79\n\n \n\n*Other Expenses, net*\n\n \n\nOther expenses, net were\nan income of $4,094,000 and expenses of $181,000 for the years ended December 31, 2025, and 2024, respectively, an increase of $4,275,000,\nor 2,362% for the year ended December 31, 2025, compared to 2024. The increase was mainly due to the divestment of BlackSwan “held\nfor sale” entities during the second half of 2025.* *\n\n \n\n*Financial Income and Finance Expenses*\n\n \n\nFinancial expenses were $49,248,000 and $12,586,000 for the years ended\nDecember 31, 2025, and 2024, respectively, and financial income was $2,227,000 and $2,220,000 for the years ended December 31, 2025, and\n2024, respectively, resulting in a net increase of $36,655,000 of finance expenses for the year ended December 31, 2025, compared to 2024.\nThe increase is primarily attributed to convertible components measurement, warrants measurement and interest expenses recorded in 2025\ncompared to 2024.\n\n* *\n\n*Taxes on Income*\n\n \n\nTaxes on income were $743,000\nand $557,000 for the years ended December 31, 2025, and 2024, respectively. This increase in tax expense was primarily derived from receipt\nof a final tax assessment related to prior years in the professional services segment.\n\n \n\n**Key Performance Indicators and Non-IFRS Financial\nMetrics**\n\n \n\nHUB monitors the key business\nmetrics set forth below to help it evaluate its business and growth trends, establish budgets, measure the effectiveness of its sales\nand marketing efforts, and assess operational efficiencies. The calculation of the key metrics discussed below may differ from other similarly\ntitled metrics used by other companies, securities analysts or investors.\n\n \n\n**Key Performance Indicators**\n\n \n\nThe following table summarizes\nthe key performance indicators that HUB uses to evaluate its business for the periods presented.\n\n  \n\n  \nYear ended\nDecember 31  \n   \n% \n\n  \n2025  \n2024  \nChange  \nChange \n\n  \n(in $ thousands)  \n   \n  \n\nRevenue \n   \n   \n   \n  \n\nProduct and Technology Segment (1) \n 1,439  \n 1,039  \n 400  \n 38%\n\nProfessional Services Segment (2) \n 30,223  \n 28,523  \n 1,700  \n 6%\n\nTotal \n$31,662  \n$29,562  \n 2,100  \n 7%\n\n \n\n(1)\nThe Product and Technology Segment develops and markets integrated cybersecurity hardware/software solutions that allow organizations to protect their RAM or confidential computing data to create a reliable work environment and also from customer identity products derived from BlackSwan’s technology.\n\n \n\n(2)\nThe Professional Services Segment offers data and cybersecurity and system security and reliability solutions and related services such as consulting, planning, training, integrating and ongoing servicing of cybersecurity, risk management, system quality, reliability and security projects and full managed corporate cybersecurity services.\n\n \n\n  \nYear ended\nDecember 31  \n   \n% \n\n  \n2025  \n2024  \nChange  \nChange \n\n  \n(in $ thousands)  \n   \n  \n\nSegment results (operating loss) \n    \n    \n    \n   \n\nProduct and Technology Segment \n (11,660) \n (9,137) \n (2,523) \n 28%\n\nProfessional Services Segment \n (58,625) \n (17,086) \n (41,539) \n 243%\n\nTotal \n$(70,285) \n$(26,223) \n (44,062) \n 168%\n\n \n\n80\n\n \n\n**Non-IFRS Financial Metrics**\n\n \n\nIn addition to HUB’s\nresults determined in accordance with IFRS, HUB’s management believes that the following non-IFRS financial measures are useful\nin evaluating HUB’s operating performance.\n\n \n\n*Adjusted EBITDA*\n\n \n\nHUB defines Adjusted EBITDA\nas net loss as adjusted for income taxes, finance income, finance expenses, depreciation and amortization, impairments, share-based compensation\nexpense and other one-time costs. Adjusted EBITDA is included in this Annual Report because it is a key metric used by management and\nHUB’s board of directors to assess its financial performance. Adjusted EBITDA is frequently used by analysts, investors and other\ninterested parties to evaluate companies in HUB’s industry. Management believes that Adjusted EBITDA is an appropriate measure of\noperating performance because it eliminates the impact of expenses that do not relate directly to the performance of the underlying business.\n\n \n\nAdjusted EBITDA is not an\nIFRS measure of HUB’s financial performance or liquidity and should not be considered as alternatives to net income or loss as a\nmeasure of financial performance, as alternatives to cash flows from operations as a measure of liquidity, or as alternatives to any other\nperformance measure derived in accordance with IFRS. Adjusted EBITDA should not be construed as an inference that HUB’s future results\nwill be unaffected by unusual or other items. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s\ndiscretionary use, as it does not reflect HUB’s tax payments and certain other cash costs that may recur in the future, including,\namong other things, cash requirements for costs to replace assets being depreciated and amortized.\n\n \n\nManagement compensates for\nthese limitations by relying on HUB’s IFRS results in addition to using Adjusted EBITDA as a supplemental measure. HUB’s measure\nof Adjusted EBITDA is not necessarily comparable to similarly titled captions of other companies due to different methods of calculation.\n\n \n\n  \nYear ended\nDecember 31,  \n   \n% \n\n  \n2025  \n2024  \nChange  \nChange \n\n  \n(In $ thousands)  \n   \n  \n\nNet loss from continuing operation \n$(118,049) \n$(37,146) \n (80,903) \n 218%\n\nAdjusted EBITDA \n$(21,220) \n$(18,912) \n (2,308) \n   10.9%\n\n \n\nAdjusted EBITDA decreased\nin the year ended December 31, 2025, primarily due to significant growth in operational costs across all of our business (see analysis\nbelow).\n\n \n\n  \nYear ended\nDecember 31,  \n   \n% \n\n  \n2025  \n2024  \nChange  \nChange \n\n  \n(In $ thousands)  \n   \n  \n\nNet loss \n$(118,049) \n$(37,146) \n (80,903) \n 218%\n\nFinancial income(1) \n (2,227) \n (2,220) \n (7) \n 0.3%\n\nFinancial expenses(1) \n 49,248  \n 12,586  \n 36,662  \n 291%\n\nTaxes on income \n 743  \n 557  \n 186  \n 33%\n\nDepreciation and amortization(2)  \n 1,896  \n 2,379  \n (483) \n (20)%\n\nShare-based compensation expense(3)  \n 3,189  \n 2,070  \n 1,119  \n 54%\n\nOne time cost(4) \n (2,704) \n 2,209  \n (4,913) \n (222)%\n\nImpairment of goodwill and intangibles(5) \n 46,684  \n 653  \n 46,031  \n 7,049%\n\nAdjusted EBITDA \n$(21,220) \n$(18,912) \n$(2,308) \n  10.9%\n\n \n\n1.\nRepresents mainly financial expenses, net, which were recorded in connection with convertible loans and warrants issued during 2024 and 2025.\n\n \n\n2.\nRepresents the amortization of the intangible assets as well as recurring depreciation of company’s fixed assets.\n\n \n\n3.\nRepresents non-cash share-based compensation expenses.\n\n \n\n4.\n\nThe increase in one-time costs was primarily driven\nby an $11 million provision recorded in connection with the U.S. class action settlement, partially offset by a reversal of the Oppenheimer\nprovision in the amount of $9.8 million and a gain from loss of control in subsidiaries in the amount of $4.6 million.\n\n \n\n5.\nRepresents impairment of other intangibles, primarily for the BST technology\nasset.\n\n \n\n81\n\n \n\n**B. Liquidity and Capital Resources**\n\n \n\n*Going Concern*\n\n \n\nSince inception, HUB has\nincurred losses and generated negative cash flows from operations and has funded its operations, research and development, capital expenditure\nand working capital requirements through revenue received from customers, bank loans and other debt facilities and government grants,\nas well as equity contributions from shareholders.\n\n \n\nAs of December 31, 2025,\nHUB’s cash and cash equivalents were approximately $1,763,000. The Company intends to finance operating costs over the next twelve\nmonths through a combination of future issuances of equity and/or debt securities, reducing operating expenses and divesting assets.\n\n \n\nOur future capital requirements\nwill depend on many factors, including, but not limited to, our growth, market acceptance of our offerings, the timing and extent of spending\nto support our efforts to develop our platform, and the expansion of sales and marketing activities. We will need to seek additional equity\nor debt financing from outside sources, and we may not be able to raise it on terms acceptable to us or at all. If we issue additional\nequity securities to raise additional funds, further dilution to existing shareholders may occur. However, we cannot predict with certainty\nthe outcome of our actions to generate liquidity, including the availability of additional financing. If we are unable to raise additional\ncapital when desired, our business, financial condition, and results of operations could be adversely affected.\n\n \n\nAs a result of liquidity and cash flow concerns that have arisen resulting\nfrom our business operations, we face significant uncertainty regarding the adequacy of our liquidity and capital resources and our ability\nto repay our obligations as they become due. We generate negative cash flow, require constant and immediate cash injections to continue\nto operate, and are failing to meet obligations as they become due, including financial debt, suppliers’ debts and other ordinary\ncourse operational costs. In addition, and as a result of our ongoing operating losses, we had outstanding liabilities that could not\nbe met by our revenues, including defaults under certain loans, payments due to our debt holders, vendors and service providers and government\nduties, which resulted in a seizure being placed on certain of our bank accounts. During certain\nperiods in 2024 and 2025, we were unable to make required deposits in employee pension and severance funds, which were later paid and\nsettled and payments due for certain periods in 2025 and 2026 were paid in June 2026. Furthermore, we have been unable to fully\npay required withholding taxes on employee compensation payments and government fees. Certain\nof our subsidiaries also did not make timely tax filings with the ITA for several years. Our independent registered public accounting\nfirm has included in its report an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern.\n\n \n\nThe significant uncertainty\nregarding our liquidity and capital resources and our ability to repay our obligations as they become due, provides substantial doubt\nabout our ability to continue as a going concern for the next twelve months from the date of issuance of this Annual Report. The Company’s\nmanagement is closely monitoring the situation and has been attempting to alleviate the liquidity and capital resources concerns through\nworkforce reductions, interim financing facilities and other capital raising efforts.\n\n \n\nFollowing the filing of this\nAnnual Report, we expect to be able to obtain additional sources of debt and equity financing, together with additional revenues from\nnew business opportunities and have engaged with potential investors with regards to such financing alternatives. However, such opportunities\nremain uncertain and are predicated upon events and circumstances which are outside our control. The inability to borrow or raise sufficient\nfunds on commercially reasonable terms, would have serious consequences to our business, financial condition, results of operations and\ngrowth prospects.\n\n \n\nOur\nability to continue as a going concern is contingent upon, among other factors, the sale of ordinary shares to obtain additional funding\nto support our operations and/or obtaining alternate financing. Management currently believes that it will be necessary for us to secure\nadditional funds to continue our existing business operations and to fund our obligations. We have raised and will continue to seek to\nraise additional funds during 2026 through a variety of equity and/or debt financing arrangements; however, there can be no assurance\nthat we will be able to obtain funds on commercially acceptable terms, if at all. If we cannot generate sufficient revenues, reduce cost\nand/or secure additional financing on acceptable terms, we may be required to, among other things, alter our business strategy, significantly\ncurtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms.\n\n \n\nWe\nexpect to use any such proceeds for general corporate and working capital purposes, which would increase our liquidity, but our ability\nto fund our operations is not dependent upon receipt of cash proceeds from the exercise of the warrants. We believe the likelihood that\nwarrant holders will exercise their warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the market\nprice of our ordinary shares. If the market price for our ordinary shares is less than the respective prices of the warrants, we believe\nwarrant holders will be unlikely to exercise their warrants.\n\n  \n\nSee “—Financings”\nbelow for more details on our recent efforts to fund operating activities.\n\n** **\n\nThe Company believes that\nits available cash will not be sufficient to meet its current obligations for a period of at least twelve months from the date of the\nfiling of this Annual Report. Accordingly, the Company has concluded there is substantial doubt about its ability to continue as a going\nconcern.\n\n \n\n82\n\n** **\n\n**Material Cash Requirements**\n\n \n\nThe table below summarizes\ncertain material cash requirements as of the year ended December 31, 2025 that will affect HUB’s future liquidity. HUB plans to\nutilize its liquidity and cash flows from business operations, including investments, to fund its material cash requirements.\n\n \n\n  \n2025  \n2026  \n2027  \n2028  \n2029  \nThereafter  \nTotal \n\n  \nTotal (in thousands) \n\nLoans from bank \n 5,607  \n -  \n -  \n -  \n -  \n -  \n 5,607 \n\nLoans from others \n 8,376  \n -  \n -  \n -  \n -  \n    \n 8,376 \n\nLease liabilities \n 1,155  \n 569  \n 139  \n -  \n -  \n -  \n 1,863 \n\nLiabilities for government grants \n 288  \n 43  \n 39  \n 36  \n 32  \n 119  \n 557 \n\nTotal \n$15,426  \n$612  \n$178  \n$36  \n$32  \n$119  \n$16,403 \n\n** **\n\n**Cash Flows Summary**\n\n** **\n\nThe following table shows\na summary of HUB’s cash flows for the years ended December 31, 2025 and 2024.\n\n \n\n  \nYear ended\nDecember 31,  \n   \n% \n\n  \n2025  \n2024  \nChange  \nChange \n\n  \n(In thousands)  \n   \n  \n\nNet cash provided by / (used in): \n   \n   \n   \n  \n\nNet cash used in operating activities \n$(31,398) \n$(17,110) \n (14,288) \n 84%\n\nNet cash provided by / (used in) investing activities \n (133) \n (452) \n 319  \n (71)%\n\nNet cash provided by financing activities \n 25,343  \n 17,176  \n 8,167  \n 47.55%\n\nExchange rate differences on cash and cash equivalents \n 4,866  \n (51) \n 4,917  \n (9,641)%\n\nNet (decrease) in cash and cash equivalents \n$(1,322) \n$(437) \n$(885) \n 203%\n\n \n\n*Cash Flows Used in Operating Activities*\n\n \n\nNet cash used in operating activities was $31,398,000 for the year\nended December 31, 2025, reflecting a net loss of $119,790,000 and non-cash adjustments of $95,076,000, which primarily consists of intangible\nassets and goodwill impairment in an aggregate amount of $44,741,000, finance expenses related to convertible loans and warrants in an\naggregate amount of $31,079,000, issuance of shares in an aggregate amount of $6,408,000, share-based compensation expenses in an aggregate\namount of $2,693,000 and depreciation and amortization in an aggregate amount of $1,896,000. In addition, decreases in asset and liability\nitems in 2025 were $5,377,000, which was primarily affected by an increase other accounts payable in the amount of $4,034,000.\n\n \n\nNet\ncash used in operating activities was $17,110,000 for the year ended December 31, 2024, reflecting a net loss of $39,031,000 and non-cash\nadjustments of $16,615,000 which primarily consists of finance expenses related to convertible loans and warrants in an aggregate amount\nof $7,227,000, issuance of shares in an aggregate amount of $2,420,000, share-based compensation expenses in an aggregate amount of $2,070,000,\nintangible assets and goodwill impairment in an aggregate amount of $653,000 and depreciation and amortization in an aggregate amount\nof $2,379,000. In addition, changes in asset and liability items in 2024 were $8,810,000, which was primarily affected by an increase\nin other accounts payable in the amount of $7,776,000.\n\n \n\n83\n\n \n\n*Cash Flows Used in Investing Activities*\n\n \n\nNet\ncash used in investing activities was $133,000 for the year ended December 31, 2025, compared to $452,000 for the year ended December\n31, 2024, resulting in a decrease of $319,000. The decrease was primarily due to withdrawal (investment) from a restricted bank deposit\nin the amount of $157,000.\n\n \n\n*Cash Flows Provided by Financing Activities*\n\n \n\nCash\nflows provided by financing activities primarily relate to proceeds from issuances of shares, short-term credit from banks and government\ngrants, which have been used to fund working capital and for general corporate purposes.\n\n \n\nNet\ncash provided by financing activities was $25,343,000 for the year ended December 31, 2025, compared to $17,176,000 for the year ended\nDecember 31, 2024, an increase of $8,167,000. The increase was primarily due to an increase in receipt of short-term loans in an amount\nof $6,342,000.  \n\n \n\n**Loans**\n\n** **\n\n*HUB PrivCap Funding Loan and Settlement*\n\n \n\nOn February 21, 2025, HUB entered into a loan agreement (the “PrivCap\nLoan”) with PrivCap Funding, LLC. The PrivCap Loan provided for a $175,000 principal amount with a total repayment obligation of\n$235,000 (including interest and fees) due by March 1, 2025. The loan proceeds were used to engage Sideways Frequency LLC for marketing\nservices. The PrivCap Loan provided that if full repayment was not received by March 17, 2025, HUB would transfer 31 unrestricted ordinary\nshares at $7,500 per share to PrivCap Funding on March 18, 2025, with a $2,000 per day penalty for any delay in share transfer.\n\n \n\nIn connection with the PrivCap Loan, HUB modified existing warrants\npreviously issued to Daniel Cohen under Securities Purchase Agreements dated December 20, 2023 and January 9, 2024. Effective February\n15, 2025, the aggregate exercise price under these warrants was increased to $1,200,000, with an exercise price of $7,500 per share. Additionally,\nHUB issued 13 new warrants to Jamie Goldstein under the same terms, exercisable at $7,500 per share.\n\n \n\nOn August 6, 2025, HUB entered into a settlement agreement with PrivCap\nFunding and Daniel Cohen (collectively, “PrivCap”) to resolve all obligations under the PrivCap Loan through an equity settlement.\nUnder the settlement agreement, HUB agreed to transfer 6 unrestricted ordinary shares to PrivCap by August 22, 2025, provided the stock\nprice is at least $41,250 per share on the transfer date. If the share price falls below $41,250 per share, HUB must transfer additional\nshares to ensure the total value equals no less than $275,000. The settlement agreement includes a penalty of 1 additional share per day\nfor any delay beyond the August 22, 2025 deadline. Upon completion of the share transfer, all parties release claims related to the original\nloan agreement. On August 21, 2025, Hub issued 7 ordinary shares to PrivCap pursuant to the aforementioned settlement agreement.\n\n** **\n\n*HUB Agile Capital Loan*\n\n \n\nOn April 29, 2025, HUB entered\ninto a Business Loan and Security Agreement (the “Agile Loan”) with Agile Capital Funding, LLC (as Collateral Agent), Agile\nLending, LLC (as Lead Lender), and other lenders. The Agile Loan provided for a $2,000,000 term loan, including a $200,000 administrative\nagent fee, resulting in net proceeds of $1,800,000 to HUB. The total repayment amount, including interest and fees, is $2,980,000. The\nloan matures 30 weeks from the effective date with weekly repayment scheduled throughout the term which has not yet been fully satisfied.\nInterest accrues from the effective date until paid in full, with a default rate of 5% above the applicable rate upon an event of default.\nHUB agreed to secure the Agile Loan by a continuing security interest in substantially all of HUB’s property, rights, and assets,\nincluding accounts, equipment, inventory, intellectual property, and shares in HUB Cyber Security, Inc. and BlackSwan Technologies, Inc.\n\n \n\nThe Agile Loan contains various\ncustomary covenants and includes negative covenants that restrict HUB from disposing of business or property, changing key management\n(Noah Hershcoviz and Lior Davidsohn). Events of default include payment defaults, covenant breaches, material adverse changes, insolvency,\nand judgments exceeding $50,000.\n\n \n\nAs of the date of this Annual\nReport, the Agile Loan was fully repaid under the August 2025 Notes. See “Financings – August 2025 Financing” below.\n\n** **\n\n84\n\n** **\n\n*HUB Mizrahi Loans*\n\n \n\nIn December 2024, Comsec\nLtd. and Bank Mizrahi entered into a debt settlement agreement concerning the restructuring of the overall outstanding debt of Comsec\nDistribution Ltd. Pursuant to the settlement agreement, the parties agreed that the outstanding debt amount of NIS 23 million will be\nrepaid over 24 months with quarterly installments, commencing on June 30, 2025. Interest will accrue at a rate of Prime (Bank of Israel\nintrabank plus 1.5%) plus 3.25%. In addition, Bank Mizrahi agreed to waive any claims or objections regarding the debts, interest rates,\nor associated banking charges. Bank Mizrahi reserves the right to demand immediate repayment if the debtors breach the settlement agreement\nor if significant events occur that cast doubt on the debtors’ ability to meet obligations.\n\n \n\nThe debt settlement agreement\nwith Bank Mizrahi replaced the following loans, which were outstanding prior to the settlement date:\n\n \n\n1.Loan date July 6, 2020: Originally NIS 5,000 thousand ($1,452 thousand), bearing interest of Prime + 1.5%.\n\n \n\n2.Loan dated September 1, 2021: Originally NIS 980 thousand ($309 thousand), bearing interest of Prime +\n1.5%.\n\n \n\n3.Loan dated September 1, 2021: Originally NIS 6,000 thousand ($1,934 thousand), bearing interest of Prime\n+ 1.95%.\n\n \n\n4.On-call Loans: Aggregate principal amount of NIS 34,106 thousand, bearing interest of 8.1%.\n\n** **\n\nAs of December 31, 2025,\nthe remaining principal amount is NIS 14,598 thousand ($4,576 thousand).\n\n** **\n\n*QPoint Loans*\n\n \n\nOn-call loans received by\nQPoint, in an aggregate principal amount of NIS 3,400 thousand ($1,066 thousand). The loan bears interest of Prime + 1.1%. As of December\n31, 2025, the remaining principal amount is $1,066 thousand. \n\n \n\n*Aginix Loans*\n\n** **\n\nOn July 19, 2024, Aginix\nEngineering and Project Management Ltd. (“Aginix”), a wholly-owned subsidiary of QPoint, received a loan from Bank Hapoalim,\nwith an original principal amount of NIS 1,200 thousand ($334 thousand), which was repayable in 12 installments beginning in August 2024.\nThe loan bears interest of 7%. As of December 31, 2025, the loan was fully repaid.\n\n \n\nOn December 31, 2024, Aginix\nreceived a loan from Bank Hapoalim, with an original principal amount of NIS 500 thousand ($137 thousand), which was repayable in 12 installments\nbeginning in January 2025. The loan bears interest of 6.5%. As of December 31, 2025, the loan was fully repaid.\n\n \n\nDuring 2025, Aginix received\nseveral loans aggregating to approximately NIS 2,800 thousand ($878 thousand), bearing an annual interest rate of approximately 7%. The\nloans are repayable through monthly installments of principal and interest. As of December 31, 2025, the outstanding balance of these\nloans amounted to approximately NIS 1,525 thousand ($478 thousand).\n\n* *\n\n*BlackSwan Loans*\n\n* *\n\nFollowing the merger with\nBlackSwan on January 27, 2025, BlackSwan had two outstanding loans.\n\n \n\nOn August 9, 2022, BlackSwan\nreceived a loan from Yossi Lahav Consultants, with an original principal amount of $1,500 thousand. The loan bears accrued fixed interest\nof $750 thousand. BlackSwan did not meet the repayment terms of this loan. On June 4, 2024, Yossi Lahav Consultants filed a claim against\nBlackSwan and others for failure to meet the repayment terms and for related damages. For further details, see Note 22 to our audited\nconsolidated financial statements for the year ended December 31, 2025 included in this Annual Report.\n\n \n\nOn September 8, 2022, BlackSwan\nreceived a loan from A-Labs Consultants with an original principal amount of $200 thousand. The loan bears, bearing accrued interest of\napproximately 2.42%. As of the date of this Annual Report, this loan has not yet been repaid.\n\n \n\n85\n\n \n\n**Financings**\n\n** **\n\n*August 2025 Financing*\n\n* *\n\nOn August 27, 2025, we entered\ninto a securities purchase agreement (the “August 2025 SPA”) providing for the issuance of subordinated convertible notes\n(the “August 2025 Notes”) to certain accredited investors, including Keystone, in the aggregate original principal amount\nof up to $20,000,000 to be issued in multiple closings. Closings under the August 2025 SPA can be held over a period of one year at the\nelection of Keystone.\n\n \n\nThe notes issued in June\n2025 (see “*—June 2025 SPA*”) resulted in aggregate cash proceeds of $3,625,000 and in the exchange of notes issued\nby us in March and April 2025 in the aggregate principal amount of $2,187,500.\n\n \n\nAt the initial closing of\nthe August 2025 SPA, we issued August 2025 Notes in the aggregate original principal amount of $7,850,000 for an aggregate purchase price\nof $7,000,000 in cash and in the exchange of the notes that we issued previously to investors in June 2025. In addition, the Company issued\nwarrants to purchase 90 ordinary shares.\n\n \n\nIn the first additional closing\nunder the August 2025 SPA, held on September 4, 2025, the Company issued and sold Amended Notes in the aggregate principal amount of $2,968,750\nand warrants to purchase an aggregate of 34 ordinary shares, in consideration for cash payments in the aggregate amount of $2,375,000,\nunder the same terms as the initial closing.\n\n \n\nThe August 2025 Notes mature\non August 27, 2027 and bear interest at 4% per annum, payable quarterly in ordinary shares under certain equity conditions (including\nthe effectiveness of a resale registration statement) or, at the Company’s option, in cash. Late payments accrue interest at an\nadditional premium of 8% per year. No scheduled amortization payments are required.\n\n \n\nThe August 2025 Notes are\nsubordinated to existing senior indebtedness not to exceed $25 million in aggregate. They contain various restrictive covenants, including\nlimitations on dividends, incurrence of indebtedness, certain subsequent equity placements, asset sales and certain variable rate transactions.\n\n \n\nThe August 2025 Notes are\nconvertible into ordinary shares at the option of the holders at an initial conversion price of $43,200 per share, subject to anti-dilution\nadjustments for certain dilutive issuances. Holders may elect an alternate conversion price at the lower of the fixed conversion price\nor 95% of lowest VWAP during the five days up to and including the date of conversion, subject to a $15,000 floor price. If such conversion\nprice is lower than the floor price, the Company would be required to pay the balance in cash.\n\n \n\nThe August 2025 Notes contain\nseveral mandatory and optional redemption provisions. Holders also have optional redemption rights in respect of financings pursuant to\nequity lines of credit and at-the-market offerings, allowing them to require redemption of up to their pro-rata portion of 30% of net\nproceeds from eligible transactions at a 110% of the redemption amount. Holders also have the right to exchange their August 2025 Notes\nfor the securities issued in a subsequent placement, at a 10% discount. The Company has the right to redeem all a portion of the August\n2025 Notes, from time to time, at 120% of the conversion amount.\n\n \n\nOn October 15, 2025, the\nCompany and certain accredited investors, including Keystone, entered into Amendment No. 1 to the August 2025 SPA increasing the aggregate\nprincipal amount of notes issuable thereunder to $35,000,000, adding additional investors and amending the form of note as described below\n(the “Amended Note”).\n\n \n\nIn the second additional\nclosing under the August 2025 SPA, held on October 16, 2025, the Company issued and sold Amended Notes in the aggregate principal amount\nof $20,525,625 and warrants to purchase an aggregate of 237 ordinary shares, in consideration for (i) cash payments in the aggregate amount\nof $7,250,000 with the principal amount of $10,019,374, (ii) the partial exchange of August 2025 Notes in the aggregate principal amount\nof $9,568,751 (at a 10% discount) and (iii) the exchange of $750,000 owed under the Company’s Business Loan and Security Agreement\n(the “Agile Loan”) with Agile Capital Funding, LLC (as Collateral Agent) and Agile Lending, LLC (as Lead Lender), dated April\n29, 2025, with a new principal amount of $937,500.\n\n \n\nOn December 31, 2025, the\nCompany held an additional closing under the August 2025 SPA in the aggregate principal amount of $1,250 thousand, for an aggregate purchase\nprice of $1,000 thousand and warrants to purchase an aggregate of 14 ordinary shares. On December 31, 2025, the Company and certain accredited\ninvestors, including Keystone, entered into Amendment No. 2 to the August 2025 SPA, increasing the aggregate principal amount of notes\nissuable thereunder to $47,250,000.\n\n \n\nAs of December 31, 2025, a total amount of $11,625 thousand was received\nin cash and $1,500 thousand were converted into 100 ordinary shares.\n\n86\n\n \n\nThe Amended Notes have a\nterm of two years from the date of issuance thereof. They do not bear interest, except during the pendency of an event of default, in\nwhich case the rate will be 9% per year. Late payments accrue interest at an additional premium of 8% per year. Commencing approximately\n30 days after the effectiveness of the Company’s Form F-1 for an equity line of credit, the Company will be required to repay a\npro rata portion of the principal and interest accrued thereon on the first trading day of each calendar month, in cash or shares (subject\nto equity conditions) at its election.\n\n \n\nThe Amended Notes are subordinated\nto existing senior indebtedness not to exceed $25 million in aggregate. They contain various restrictive covenants, including limitations\non dividends, incurrence of indebtedness, certain subsequent equity placements, asset sales and certain variable rate transactions.\n\n \n\nThe Amended Notes are convertible\ninto ordinary shares at the option of the holders at an initial conversion price of $43,200 per share, subject to anti-dilution adjustments\nfor certain dilutive issuances. Holders may elect an alternate conversion price at the lower of the fixed conversion price or 90% of lowest\nVWAP during the 20 days up to and including the date of conversion, subject to a $15,000 floor price (or 20% of the Nasdaq minimum price\nif there’s an event of default). If such conversion price is lower than the floor price, the Company would be required to pay the balance\nin cash.\n\n \n\nThe Amended Notes contain\nseveral mandatory and optional redemption provisions. Holders also have optional redemption rights in respect of financings pursuant to\nequity lines of credit and at-the-market offerings, allowing them to require redemption of up to their pro-rata portion of 30% of net\nproceeds from eligible transactions at a 110% of the redemption amount. Holders also have the right to exchange their Amended Notes for\nthe securities issued in a subsequent placement, at a 10% discount. The Company has the right to redeem all a portion of the Amended Notes,\nfrom time to time, at 120% of the conversion amount.\n\n \n\nIn change of control transactions (with control defined based on a 50%\nthreshold), holders may require redemption at 115% of the conversion amount. Holders also have participation rights in future financings,\nwith the right to purchase their pro-rata portion of 30% of any subsequent placement exceeding $5,000,000 in the aggregate.\n\n \n\nUpon events of default (including\nregistration statement failures, trading suspensions, conversion failures, or material breaches), holders may require redemption at 120%\nof the conversion amount. Upon any bankruptcy event of default, the Company must immediately pay all outstanding amounts multiplied by\na 120% redemption premium without requiring notice or demand from holders.\n\n \n\nThe August 2025 Warrants\nhave an initial exercise price of $54,000 per share, subject to decrease on days 30, 60 and 90 following the issuance date to 20% below\nthe prevailing market price at that time and to anti-dilution adjustments for certain dilutive issuances. The August 2025 Warrants have\na term of three years. Cashless exercise is permitted after six months if a resale registration statement is not effective. In connection\nwith a “fundamental transaction,” the holder has the right to exchange its warrant for a similar warrant in the successor\nentity or cash pursuant to a Black-Scholes formula. Upon an event of default, the holder has the right to redeem its warrant for cash\nbased on a Black-Scholes formula.\n\n \n\nThe August 2025 Notes, the\nAmended Notes and the August 2025 Warrants are subject to a beneficial ownership limitation of 4.99% (subject to increase to 9.99% with\n61-day notice and shareholder approval) to prevent any holder from exceeding this threshold. We are required to reserve 200% of the shares\nissuable upon conversion of all August 2025 Notes, Amended Notes and August 2025 Warrants at the applicable conversion price or exercise\nprice.\n\n \n\nConcurrently with the entry\ninto the August 2025 SPA, we entered into a registration rights agreement, whereby we undertook to file with the SEC a Form F-1 registration\nstatement within 45 days from the initial closing in order to register for resale the shares issuable upon the conversion and/or exercise\nof the August 2025 Notes and August 2025 Warrants and the Placement Agent Warrant (as defined below) and to use our reasonable best efforts\nto cause the registration statement to be effective within 90 days from the initial closing (or 120 days in the event of a full SEC review).\nThe same rights apply with respect to the shares issuable upon conversion of the Amended Notes. The registration rights agreement provides\nfor liquidated damages for certain defaults equal to 1% of the original principal amount of the August 2025 Notes for each 30-day period\nuntil the default is cured, up to an aggregate of 10% thereof. The registration rights agreement contains other customary terms and conditions,\nincluding indemnification obligations.\n\n \n\nRodman & Renshaw LLC\nacted as sole placement agent for the offering. The fees of the placement agent consisted of a total of $300,000 in cash and the issuance\nof a warrant to purchase an aggregate of 1 ordinary share on the same terms and conditions as the warrants issued to investors in the\noffering, except for the potential adjustment of the exercise price on days 30, 60 and 90.\n\n* *\n\n*June 2025 SPA*\n\n \n\nOn June 30, 2025, we entered\ninto a securities purchase agreement (the “June 2025 SPA”) providing for the issuance of subordinated convertible notes (the\n“June 2025 Notes”) to certain accredited investors, including Keystone, in the aggregate original principal amount of $6,719\nthousand. At the closing, we received an aggregate purchase price of $3,625 thousand in cash and the exchange of the notes that we issued\npreviously to investors in March and April 2025 in the aggregate principal amount of $2,187 thousand. The June 2025 Notes issued in consideration\nfor cash were issued with a 20% original issue discount, and the June 2025 Notes issued in consideration for our outstanding notes were\nissued on a dollar-for-dollar basis. Out of the June 2025 Notes $6,000 thousand were subsequently exchanged for new notes issued under\nthe August 2025 SPA. As of December 31, 2025, a total amount of $3,625 thousand was received in cash.\n\n* *\n\n87\n\n* *\n\n*March 2025 Notes*\n\n* *\n\nOn March 27, 2025, the Company\ncompleted the issuance of a series of notes (the “March 2025 Notes”) to certain investors, including Keystone Capital Partners,\nLLC as the lead investor (“Keystone” and collectively with the other investors, the “March 2025 Note Investors”),\nin an aggregate principal amount of $1,625,000 and original issue discount of $325,000, for an aggregate purchase price of $1,300,000.\nThe March 2025 Notes originally matured on December 11, 2025, did not bear interest, and included a prepayment option at a premium of\n125%. In addition, the Company was required to use the cash proceeds deriving from a financing in which it receives proceeds of at least\n$10 million to repay the March 2025 Notes.\n\n \n\nThe March 2025 Note Investors\nhad the right to convert the principal amount into ordinary shares of the Company upon the occurrence of a subsequent equity financing\npursuant to which the Company receives at least $5 million, subject to certain conditions.\n\n \n\nThe conversion of the March\n2025 Notes was limited to the extent that, upon their conversion, a March 2025 Note Investor and its affiliates would in aggregate beneficially\nown more than 4.99% of the Company’s outstanding share capital at any time. The March 2025 Notes were exchanged with the June 2025\nSPA, which thereafter was replaced with the August 2025 Financing described herein.\n\n* *\n\n*ELOC Transaction*\n\n* *\n\nConcurrently with the investment\nby the March 2025 Note Investors described above, the Company entered into an Ordinary Shares Purchase Agreement (the “ELOC Purchase\nAgreement”) with Keystone, pursuant to which the Company has the right to sell to Keystone up to an aggregate of $50 million\nof newly issued ordinary shares (the “ELOC Shares”).\n\n  \n\nAs consideration for Keystone’s\ncommitment to purchase ELOC Shares upon the terms of and subject to satisfaction of the conditions set forth in the ELOC Purchase Agreement,\nthe Company agreed to issue to Keystone a note in a principal amount of $1,000,000 and an additional commitment note on May 28, 2025,\nin the principal amount of $1,500,000, each of which does not bear interest and has a maturity date of December 11, 2025 and November\n28, 2026, respectively (the “Commitment Note”). The Commitment Note is due by way of conversion into the Company’s shares\nbased on the closing share price of the Company’s shares on the date immediately prior to the maturity date, provided that in each\ncase the applicable conversion price shall not be lower than twenty percent (20%) of the closing sale price of the Company’s shares\non the issuance date of the Commitment Note. The Commitment Note can be converted prior to the maturity date by either the Company or\nKeystone at any time following the earlier of (i) the date on which the shares issuable upon conversion are registered under a registration\nstatement filed with the SEC or (ii) September 11, 2025. In the event of a conversion prior to the maturity date, the number of Company\nshares to be issued upon the conversion of the Commitment Note will be based on the closing share price on the day prior to the issuance\nof the conversion notice provided that the closing sale price on the day prior to the issuance of the conversion notice is not lower than\n10% as compared to the closing sale price on the date immediately prior thereto. The conversion of the Commitment Note will be limited\nto the extent that, upon its conversion, Keystone and its affiliates would in aggregate beneficially own more than 4.99% of the Company’s\noutstanding share capital at any time.\n\n \n\nIn addition, in connection\nwith the ELOC Purchase Agreement, the Company and Keystone entered into a Registration Rights Agreement pursuant to which the Company\nundertook to register with the SEC the shares issuable upon conversion of the Commitment Note and the ELOC Shares that the Company has\nthe right to sell to Keystone.\n\n \n\nThe Company does not have\na right to commence any sales of ELOC Shares to Keystone under the ELOC Purchase Agreement before a registration statement of such shares\nis declared effective by the SEC and the final form of prospectus is filed with the SEC (the “Commencement Date”). Following\nsuch date, the Company will control the timing and amount of any sales of ELOC Shares to Keystone. Actual sales of shares of ELOC Shares\nto Keystone under the ELOC Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including,\namong others, market conditions, the trading price of the ELOC Shares and determinations by the Company as to the appropriate sources\nof funding for the Company and its operations. The Company is obligated to use 33% proceeds from the sale of ELOC Shares to repay the\nprincipal amount under the March 2025 Notes.\n\n  \n\nAs of December 31, 2025,\nan amount of $1,600,000 was converted into 107 shares.\n\n \n\nUnder the ELOC Purchase Agreement,\non any business day on which the closing sale price of the Company’s shares is equal to or greater than $0.05 (the “Fixed\nPurchase Date”), the Company may direct Keystone to purchase shares (a “Fixed Purchase”) at a purchase price equal\nto 95% of the lesser of (i) the daily volume-weighted average price (the “VWAP”) of the Company’s shares for the five\n(5) trading days immediately preceding the applicable fixed purchase date and (ii) the lowest sale price on the applicable Fixed Purchase\nDate, provided, that Keystone’s committed obligation under any single Fixed Purchase shall not exceed $50,000.\n\n \n\nIn addition to Fixed Purchases,\non any business day on which the Company has directed Keystone to purchase the maximum allowable Fixed Purchase amount, the Company may\nalso direct Keystone to purchase additional shares on the trading day immediately following the purchase date for such Fixed Purchase\n(the “VWAP Purchase Date” and such purchase, a “VWAP Purchase”) at a purchase price equal to 90% of the lesser\nof (i) the closing sale price of the Company’s shares on the applicable VWAP Purchase Date and (ii) the VWAP during the period on\nthe applicable VWAP Purchase Date beginning at the opening of trading and ending on the earlier of (1) close of trading, (2) the time\nat which the trading volume of the Company’s shares on Nasdaq has reached the number of shares to be sold in the VWAP Purchase divided\nby 30%, and (3) the time at which the sale price of the Company’s shares on Nasdaq is 75% of the closing sale price on the date\non which the Company directs Keystone to make a VWAP Purchase (such period, the “VWAP Purchase Period”), provided, that Keystone’s\ncommitted obligation under any single VWAP Purchase shall not exceed the lesser of (a) 300% of the number of shares sold in the corresponding\nFixed Purchase and (b) 30% of the trading volume of the VWAP Purchase Period.\n\n \n\n88\n\n \n\nIn addition, on a VWAP Purchase\nDate, the Company may also direct Keystone to purchase on such day, an additional number of shares (an “Additional VWAP Purchase”)\nat a purchase price equal to 90% of the lesser of (i) the VWAP beginning at the completion of any prior VWAP Purchases and the last Additional\nVWAP Purchase, as applicable, and ending on the earlier of (1) close of trading, (2) the time at which the trading volume of the Company’s\nshares on Nasdaq has reached the number of shares to be sold in the Additional VWAP Purchase divided by 30%, and (3) the time at which\nthe sale price of the Company’s shares on Nasdaq is 75% of the closing sale price on the date on which the Company directs Keystone\nto make an Additional VWAP Purchase (such period, the “Additional VWAP Purchase Period”), and (ii) the lowest sale price on\nsuch day, provided, that Keystone’s committed obligation under any single Additional VWAP Purchase shall not exceed the lesser of\n(a) 300% of the number of shares sold in the Fixed Purchase that corresponded to the VWAP Purchase corresponding to the Additional VWAP\nPurchase and (b) 30% of the trading volume of the Additional VWAP Purchase Period.\n\n \n\nKeystone’s aggregate\ncommitted obligation under a VWAP Purchase and all Additional VWAP Purchases for a particular VWAP Purchase Date shall not exceed $1,000,000\nin the aggregate.\n\n \n\nThe ELOC Purchase Agreement\nprovides that the Company may not issue or sell any shares under the ELOC Purchase Agreement if the issuance or sale of such shares would\nresult in Keystone and its affiliates beneficially owning more than 4.99% of the Company’s outstanding share capital at any time.\n\n* *\n\n*Julestar Financing Transaction*\n\n* *\n\nIn February 2025, the Company\nentered into a Loan Agreement with Julestar LLC, a New York limited liability company (“Julestar”), pursuant to which\nJulestar loaned us $2,650,000 in consideration for a promissory note in the principal amount of $3,117,647 (the “Julestar Note”).\nThe principal amount, and interest thereon, was required to be repaid in 40 weekly installments over the 10-month term of the loan. The\nJulestar Note accrued interest at a rate of 10% per annum. To secure the repayment of the Julestar Note, the Company undertook to grant\na subordinated pledge over the shares of certain of its subsidiaries, subject to the consent of a senior lender within 60 days, however\nthis consent was not obtained.\n\n \n\nThe Loan Agreement included\nthe issuance of five-year warrants to purchase 35 ordinary shares (the “Julestar Warrants”), subject to downward adjustment\nin the number of underlying shares in the event of early repayment of the Julestar Note in full or upward adjustment in the event the\nJulestar Note is not repaid in full within 90 days of the issuance date. The exercise price of the Julestar Warrants is $75,000 per share,\nsubject to adjustment in certain circumstances, including dilutive issuances. The Julestar Warrants are subject to a limitation that prohibits\nownership of more than 4.99% of Company’s outstanding share capital at any time.\n\n \n\nThe Company undertook to\nregister the shares issuable upon the exercise of the Julestar Warrants with the Securities and Exchange Commission on a Form F-1 or Form\nF-3.\n\n \n\nSince the Company did not\nrepay the loan within 90 days, as of May 5, 2025, the Company amended the warrants to increase the number of shares issuable thereunder\nby an additional 113 shares at an exercise price of $75,000 per share, subject to adjustment in certain circumstances, including dilutive\nissuances. The Company repaid $1,300 thousand owing under the Julestar Note in 2025.\n\n \n\nAs a result of the issuance\nof the Julestar Warrants, the exercise price of the warrant to purchase 35 ordinary shares issued in an earlier financing transaction\non December 30, 2024 automatically decreased from $127,500 to $75,000 per share.\n\n \n\nIn June 2026, the Company\nrepaid $1.35 million to Julestar.\n\n* *\n\n*J.J. Astor Financing*\n\n* *\n\nIn December 2024, the Company\nentered into a Loan Agreement with J.J. Astor & Co. (“Astor”) pursuant to which Astor agreed to loan us $2,200,000 in\nconsideration for a promissory note in the principal amount of $2,750,000 (the “December 2024 Convertible Note”). After fees\nand expenses, the net proceeds of the loan were $2,087,000. The December 2024 Convertible Note is payable in 40 weekly installments of\n$68,750 each in cash or registered ordinary shares, at our election. The December 2024 Convertible Note will not accrue interest (unless\nthere is an event of default).\n\n \n\nThe Company is entitled to\nprepay the December 2024 Convertible Note at any time, with declining discounts for prepayment within 30, 60 or 90 days. Upon an event\nof default, the outstanding principal amount will increase to 110% of the outstanding principal amount, plus interest thereon at the rate\nof 16% per annum. The December 2024 Convertible Note will be convertible by Astor following an event of default.\n\n \n\n89\n\n \n\nThe conversion price of the\nDecember 2024 Convertible Note is 80% of the average of the four lowest VWAP prices for the 20 trading days prior to conversion but not\nlower than the 20% of the average of the four lowest VWAP prices for the 20 trading days prior to the closing date. To the extent that\nthe conversion price is lower than such minimum price, the Company will be required to pay a make-whole payment.\n\n \n\nOne-half of the net proceeds\nof the amount the Company raises in any subsequent equity financing of less than $5 million will be required to be used to prepay the\nDecember 2024 Convertible Note, and all of larger equity financings will be required to be used to prepay the December 2024 Convertible\nNote.\n\n \n\nThe Company agreed to issue\nto Astor a five-year warrant to purchase 8 ordinary shares at an exercise price of $127,500 per share (the “December 2024 Warrant”),\nsubject to adjustment in certain circumstances, including dilutive issuances. The Company undertook to register the shares issuable upon\nconversion of the December 2024 Convertible Note and upon exercise of December 2024 Warrant on our registration statement on Form F-1.\nIf there is no such registration statement in effect, the holder of the December 2024 Warrant will be entitled to exercise on a cashless\nbasis. On January 13, 2025, Astor assigned the December 2024 Warrant to Wolverine Flagship Fund Trading Limited, which now holds the rights\nunder the December 2024 Warrant. The December 2024 Convertible Note and December 2024 Warrant are subject to a limitation that prohibits\nownership of more than 4.99% our outstanding share capital at any time.\n\n \n\nEach of the Company’s\nsubsidiaries agreed to guarantee the December 2024 Convertible Note and the Company and each of its subsidiaries agreed to grant a subordinated\npledge over its assets to secure the December 2024 Convertible Note, each to become effective following an event of default and receipt\nof consent from our senior lenders. Failure to obtain such consents will be deemed an event of default under the December 2024 Convertible\nNote.\n\n \n\nOn May 28, 2025, we amended\nthe Loan Agreement with Astor to add an additional loan in the amount of $1,560,000, which was evidenced by a $1,853,750 convertible promissory\nnote payable in 40 weekly installments of $46,343 each (the “May 2025 Convertible Note”). After fees and expenses, the net\nproceeds of this loan were approximately $1,477,600. We agreed that Astor would hold back $926,875 from the proceeds to ensure the payment\nof weekly installments. The May 2025 Convertible Note matures on March 30, 2026 and has terms substantially similar to the December 2024\nConvertible Note. We also issued to Astor a warrant to purchase 42 ordinary shares at $37,500 per share on terms substantially similar\nto the December 2024 Warrant. On July 16, 2025, Astor assigned the warrant to Wolverine Flagship Fund Trading Limited, which now holds\nthe rights thereunder.\n\n \n\nIn connection with the issuance\nof the May 2025 Convertible Note, Astor agreed to waive the default under the December 2024 Convertible Note caused by our failure to\npay some of the weekly installments. As a result of the default, the principal amount under the December 2024 Convertible Note was increased\nby 10%, the interest rate during the period in which the default was continuing was increased to 16% per year, compounded monthly, and\nthe December 2024 Convertible Note became convertible at the option of the holder thereof.\n\n \n\nAs of the date of this Annual\nReport, the Company has paid an aggregated amount of $840,000 and Astor has converted the principal amount of $2,165,497 of the December\n2024 Convertible Note into our ordinary shares, pursuant to which conversions we have issued 98 ordinary shares.\n\n \n\n*Claymore Capital Financings*\n\n \n\nIn August 2024, we entered\ninto Securities Purchase Agreements with multiple private investors to raise gross proceeds of approximately $3.3 million in exchange\nfor the issuance of convertible notes (the “August 2024 Notes”) with an aggregate principal amount of approximately $4.0 million\nand warrants to acquire an aggregate of approximately 313 ordinary shares of the Company. The August 2024 Notes are unsecured, have a\nterm of two years and do not accrue interest. They are convertible into ordinary shares of the Company at any time at the option of the\nholder of each note at a price equal to the lower of $105,000 or the price per share of which the Company sells shares to a third party,\nbut in no event less than $75,000. The August 2024 Warrants are exercisable for a period of three years at an exercise price of $150,000\nper share. Claymore Capital PTY Ltd. (“Claymore”) served as the placement agent for this transaction and received a fee of\napproximately $233,000 in cash and a warrant to purchase approximately 7 ordinary shares of the Company on terms substantially similar\nto the terms of the August 2024 Warrants. The Company entered into a consulting agreement with the placement agent for an initial period\nof three months, during which the placement agent was paid a fee of $15,000 per month.\n\n \n\nIn August 2024, Claymore\nagreed to extend a loan to the Company in the amount of $500,000 with interest at the rate of 10% of the principal amount until it was\nsubsequently repaid in August 2024. In November 2024, Claymore agreed to extend a loan of an additional $200,000 with interest at the\ncumulative rate of 20% of the principal amount until it was subsequently repaid in December 2024. In November 2024, Claymore agreed to\nextend a loan of an additional $500,000 at the cumulative rate of 45% of the principal amount until it was subsequently repaid in February\n2025.\n\n \n\nIn November and December\n2024, Claymore and investors introduced by Claymore made follow-on investments on the terms of the August 2024 financing in the aggregate\namount of $1,150,000 in exchange for convertible notes with an aggregate principal amount of $1,391,500 and warrants to purchase an aggregate\nof 10 ordinary shares. The convertible notes are unsecured, have a term of two years and do not accrue interest. They are convertible\ninto ordinary shares of the Company at any time at the option of the holder of each note at a price of $150,000. The warrants to purchase\nan aggregate of 10 ordinary shares are exercisable for a period of three years at an exercise price of $107,145 per share. Claymore’s\nplacement fees for the foregoing follow-on investments amounted to $77,000 in cash, 7 ordinary shares and a warrant to purchase 2 ordinary\nshares on the same terms of the investors’ warrants. The Company extended the consulting agreement with the placement agent for\na period of 12 months, during which the placement agent will be paid a fee of $15,000 per month.\n\n \n\n90\n\n \n\nIn December 2024, Claymore\nand investors introduced by Claymore loaned us an aggregate of $1,262,500 in exchange for notes with an aggregate principal amount of\n$1,402,778 and warrants to purchase an aggregate of 8 ordinary shares. The notes are unsecured, and do not accrue interest. However, in\nthe event that the note has not been repaid by the maturity date, interest will accrue at a rate of 5% per month. The notes are repayable\nat the earlier of (i) the six-month anniversary of the issuance of the note or (ii) five business days following the closing of a financing\nof at least $10,000,000 or the sale of our QPoint subsidiary. If the notes are not repaid by the maturity date, they will be convertible\nat a conversion price of $75,000. The notes provide that if the notes are not repaid by March 31, 2025, the holders thereof will be entitled\nto receive collateral to secure the notes. The warrants to purchase an aggregate of 8 ordinary shares are exercisable for a period of\nthree years at an exercise price of $75,000 per share. Claymore’s placement fees for the foregoing loan amounted to $77,875 in cash,\nand a warrant to purchase 8 ordinary shares on the same terms of the investors’ warrants.\n\n \n\nIn January and February 2025,\nClaymore and investors introduced by Claymore made follow-on investments on the terms of the August 2024 financing in the aggregate amount\nof $1,467,000 in exchange for convertible notes with an aggregate principal amount of $1,775,070 and warrants to purchase an aggregate\nof 13 ordinary shares.\n\n \n\nThe convertible notes\nare unsecured, have a term of two years and do not accrue interest. They are convertible into ordinary shares of the Company at any\ntime at the option of the holder of each note at a price of $75,000. The warrants to purchase an aggregate of 13 ordinary shares are\nexercisable for a period of three years at an exercise price of $107,145 per share. Claymore’s placement fees for the\nforegoing follow-on investments amounted to $102,690 in cash, 9 ordinary shares and a warrant to purchase 3 ordinary shares on the\nsame terms of the investors’ warrants.\n\n \n\nIn February 2025, Claymore\nagreed to extend a loan to the Company in the amount of $255,000 with interest at the rate of 19% of the principal amount and a maturity\ndate of April 18, 2025. Claymore received pre-funded warrants to purchase 1 ordinary share as fees for the foregoing loan. Claymore agreed\nto extend the repayment of the loan until May 18, 2025, in exchange for an additional pre-funded warrant to purchase 1 ordinary share.\n\n \n\nIn March 2025, Claymore investors\nagreed to extend a loan to the Company with a principal amount of $200,000 and a face value of $300,000 until it was subsequently repaid\nin March 2025. Claymore received pre-funded warrant to purchase 1 ordinary share as fees for the foregoing loan.\n\n \n\nIn April 2025, Claymore made\nfollow-on investments on the terms of the August 2024 financing in the aggregate amount of $928,000 in exchange for convertible notes\nwith an aggregate principal amount of $1,122,880 and warrants to purchase an aggregate of 8 ordinary shares. The convertible notes are\nunsecured, have a term of two years and do not accrue interest. They are convertible into ordinary shares of the Company at any time at\nthe option of the holder of each note at a price of $105,000, subject to adjustment in certain circumstances, including dilutive issuances,\nbut no lower than $75,000. The warrants to purchase an aggregate of 8 ordinary shares are exercisable for a period of three years at an\nexercise price of $150,000 per share. In the event that the conversion price of the note is reduced, the exercise price of the warrant\nwill be reduced proportionately. Claymore’s placement fees for the foregoing follow-on investments amounted to $64,960 in cash,\npre-funded warrant to purchase 22 ordinary shares and a warrant to purchase 6 ordinary shares on the same terms of the investors’\nwarrants. The Company extended the consulting agreement with the placement agent for an additional period of 12 months, until October\n31, 2026, during which the placement agent will be paid a fee of $20,000 per month.\n\n \n\nIn June 2025, we issued to\nClaymore a convertible note with a principal amount of $2,760,000 and a pre-funded warrant to purchase an aggregate of 20 ordinary shares\nin consideration for investments in multiple installments in the aggregate amount of $2,400,000. The convertible note is unsecured, has\na term of five years, does not accrue interest and is not prepayable without consent of the holder. It is convertible into ordinary shares\nof the Company at any time at the option of the holder at a price of $45,000, subject to adjustment in certain circumstances, including\ndilutive issuances. In case of a default, the holder of the note will be entitled to receive collateral in the amount of the outstanding\nprincipal amount.\n\n \n\nIn July 2025, we issued a\nconvertible note to an investor introduced by Claymore, with a principal amount of $1,150,000 in consideration for an investment of $1,000,000,\non terms substantially similar to the note issued to Claymore in June 2025 described above. Claymore received pre-funded warrants to purchase\n13 ordinary shares as fees for the foregoing loan.\n\n \n\nIn August 2025, we issued\nto Claymore a convertible note with a principal amount of $575,000 and a pre-funded warrant to purchase an aggregate of 6 ordinary shares\nin consideration of an agreement to invest an aggregate amount of $500,000. The convertible note is unsecured, has a term of five years,\ndoes not accrue interest and is not prepayable without consent of the holder. It is convertible into ordinary shares of the Company at\nany time at the option of the holder at a price of $45,000, subject to adjustment in certain circumstances, including dilutive issuances.\nIn case of a default, the holder of the note will be entitled to receive collateral in the amount of the outstanding principal amount.\n\n \n\n91\n\n \n\nThe conversion of the notes\nand warrants issued in the foregoing financings are limited to the extent that, upon conversion or exercise, the holder and its affiliates\nwould in the aggregate beneficially own more than 4.99% of the Company’s outstanding ordinary shares. The Company has undertaken\nto register the resale of the ordinary shares underlying such notes and warrants on a registration statement with the SEC.\n\n \n\nAs of the date of this Annual\nReport, Claymore and several investors introduced by Claymore, converted an aggregate principal amount of $10.8 million of the notes issued\nto them into our ordinary shares, pursuant to which conversions we have issued 280 ordinary shares.\n\n \n\nAdditionally, in July 2025\nand August 2025, we entered into subscription agreements with an investor, Oozi Cats, whose investment was arranged by Claymore, for the\npurchase of an aggregate of 32 ordinary shares at $45,000 per share, for total proceeds of $1.5 million. Specifically, 16 shares were\npurchased in July 2025 for $750,000 and 16 shares were purchased in August 2025 for $750,000. Mr. Cats is subject to a 5% beneficial ownership\nlimitation. Concurrently with these investments, we issued pre-funded warrants to Claymore to purchase an aggregate of 37 ordinary shares\n(18 ordinary shares in July 2025 and 18 ordinary shares in August 2025). Both pre-funded warrant series expire five years from their respective\nissuance dates (or upon an exit transaction if earlier) and are subject to a 4.99% beneficial ownership limitation.\n\n \n\nAs of December 31, 2025,\nthe accredited investor introduced by Claymore converted the principal amount of $500 thousand of the notes issued to him into ordinary\nshares, pursuant to which conversions the Company issued 33 ordinary shares. In addition, Claymore has exercised its prefunded warrants\ninto 13 ordinary shares.\n\n \n\nIn August 2025, the Company\nissued Claymore a convertible note with a principal amount of $575 thousand and a prefunded warrant to purchase 6 ordinary shares in consideration\nfor $500 thousand. The convertible note is unsecured, has a term of five years, does not accrue interest and is not prepayable without\nconsent of the holder. It is convertible into ordinary shares of the Company at any time at the option of the holder at a price of $45,000\nper share, subject to adjustment in certain circumstances, including dilutive issuances. In case of a default, the holder of the note\nwill be entitled to receive collateral in aggregated amount equal to the outstanding principal amount.\n\n \n\nAs of December 31, 2025,\nClaymore exercised prefunded warrants into 6 ordinary shares.\n\n \n\nIn November 2025, the Company\nissued to Claymore 100 prefunded warrants in exchange for the cancellation of prior agreements with the Company regarding marketing services\nand a price adjustment to the convertible note issued to Claymore.\n\n \n\nIn November 2025, the Company\nentered into an amendment of a March 2025 loan with Claymore Capital and two investors who were introduced by Claymore, with respect to\nthe March 2025 loan provided by the two investors. Pursuant to the amendment, the $140,000 loan was repaid through the issuance of 9 ordinary\nshares to the lenders.\n\n* *\n\n*Settlement-Related Convertible Notes*\n\n \n\nIn February 2025, in connection\nwith the settlement agreements that the Company entered into with each of Oppenheimer and Dominion, as described below under “—Settlements\nwith Oppenheimer and Dominion,” Claymore agreed to make, on the Company’s behalf, all of the cash payments that the Company\nwas required to make to Oppenheimer and Dominion under the respective settlement agreements. Under the Oppenheimer settlement agreement,\nthe Company was required to pay Oppenheimer an aggregate of $3.0 million in scheduled installments through December 2025, and under the\nDominion settlement agreement, the Company was required to pay Dominion an aggregate of $4.5 million in scheduled installments through\nDecember 2025.\n\n \n\nIn consideration for Claymore’s\nagreement to make the foregoing payments on the Company’s behalf, the Company issued to Claymore convertible notes in the aggregate\nprincipal amount of $13.5 million, comprised of (i) a convertible note in the principal amount of $6 million in connection with the Oppenheimer\nsettlement (the “Oppenheimer Settlement Note”) and (ii) a convertible note in the principal amount of $7.5 million in connection\nwith the Dominion settlement (the “Dominion Settlement Note” and, together with the Oppenheimer Settlement Note, the “Settlement\nNotes”). The Settlement Notes do not bear interest and were each repayable by way of mandatory conversion into the Company’s\nordinary shares on the fifth anniversary of the respective issuance date, subject to earlier conversion at Claymore’s option.\n\n \n\nIn June 2025, Claymore exercised its right to convert each of the Settlement\nNotes in full prior to maturity. Upon conversion, the Company issued to Claymore an aggregate of 14 ordinary shares, comprised of 6 ordinary\nshares issued upon conversion of the Oppenheimer Settlement Note and 8 ordinary shares issued upon conversion of the Dominion Settlement\nNote, in each case at the contractual conversion price applicable to the respective Settlement Note. As of the date of this annual report,\nClaymore has made, on the Company’s behalf, all of the cash payments that the Company was required to make to Oppenheimer and Dominion\nunder the respective settlement agreements, and the Company has no remaining payment obligations to Oppenheimer or Dominion under the\nrespective settlement agreements.\n\n \n\n92\n\n \n\n*July 2025 Warrants*\n\n \n\nIn July 2025, we agreed to\nre-issue warrants to purchase an aggregate of 166 ordinary shares to investors who participated in our financing in April 2022 of ordinary\nshares and warrants. In light of subsequent market price changes and the Company’s multiple reverse share splits between February\n2023 and March 2025, the warrants were re-issued in July 2025 with adjusted pricing and quantity terms to compensate investors for all\ncumulative effects. As of August 31, 2025, such warrants to purchase an aggregate of 154 ordinary shares have been issued. The warrants\nare exercisable for cash at a price of $120,000 per share and expire on January 14, 2027. Most of the warrants are subject to early expiration\nif they are not exercised within 14 days after the market price of the ordinary shares equals or exceeds $120,000 per share for ten trading\ndays in a period of 20 consecutive trading days.\n\n \n\n*March-November 2024 Financing and Restructure*\n\n \n\nIn March-November 2024, we\nsold to an accredited investor (the “March-November 2024 Investor”), in a series of unregistered private transactions, notes\n(the “March-November 2024 Notes”) with an aggregate principal amount of $11,000,000, and warrants (the “March-November\n2024 Warrants”) pursuant to a Securities Purchase Agreement entered into with the March-November 2024 Investor (the “March-November\n2024 Purchase Agreement”). Our acquisition of QPoint’s shares that were not held by us to complete ownership of 100% of QPoint\nshares was partially funded by proceeds we received pursuant to the March-November 2024 Purchase Agreement.\n\n \n\nThe loan amount under the\nMarch-November 2024 Notes was repayable by the Company on (a) November 29, 2024 with respect to $1,000,000 of the principal amount and\n(b) with respect to the remaining $10,000,000, the earlier of (i) August 10, 2024 with respect to $4,000,000 of the principal amount and\nSeptember 24, 2024 with respect to $6,000,000 of the principal amount, or (ii) five (5) business days following the closing of a financing\nin the Company of at least $25,000,000. The principal amount under the March-November 2024 Notes carries a variable interest rate based\non the date of repayment as follows: (a) with respect to $8,000,000 of the principal amount, (i) for the principal amount repaid on or\nprior to May 12, 2024, 7%, (ii) for the principal amount repaid following May 12, 2024 and on or prior to June 12, 2024, a rate between\n7% and 8.5% of such principal amount computed by adding to 7% the result obtained by multiplying 1.5 by the quotient of the number of\ndays elapsed in such period until (and including) the repayment date divided by the number of days in such period, and (iii) for the principal\namount repaid following June 12, 2024, 8.5% of such principal amount plus 15% per annum, on the basis of the actual number of days elapsed\ncommencing from the date following June 12, 2024 and ending on the repayment date; (b) with respect to $2,000,000 of the principal amount,\n(i) for the principal amount repaid on or prior to September 24, 2024, 10%, and (ii) for the principal amount repaid following September\n24, 2024, 10% of such principal amount plus 15% per annum, on the basis of the actual number of days elapsed commencing from the date\nfollowing September 24, 2024 and ending on the repayment date; and (c) with respect to $2,000,000 of the principal amount, (i) for the\nprincipal amount repaid on or prior to November 29, 2024, 8.5% of such principal amount, and (ii) for the principal amount repaid following\nNovember 29, 2024, 8.5% of such principal amount plus 15% per annum, on the basis of the actual number of days elapsed commencing from\nthe date following November 29, 2024 and ending on the repayment date.\n\n \n\nIf the March-November 2024\nNotes are not repaid prior to the applicable maturity date, the March- November 2024 Investor may convert the applicable portion of the\noutstanding loan amount into the Company’s ordinary shares at a rate equal to the arithmetic average of the closing price of the\nordinary shares in the five (5) trading days prior to the date of conversion, provided that such conversion rate shall not be lower than\n$75,000. The loan amount is secured by a pledge on the shares of the QPoint group. Additionally, for so long as the loan amount under\nthe March- November 2024 Notes is outstanding, the Company has undertaken to cause the QPoint group to adopt a dividend policy and designate\ndividend proceeds for the repayment of the loan amount.\n\n \n\nThe March-November 2024 Warrants issued under the March-November 2024\nPurchase Agreement were exercisable as follows: (i) March-November 2024 Warrants exercisable into 29 ordinary shares were exercisable\nat an exercise price equal to $105,000 per share until March 12, 2027, (ii) March-November 2024 Warrants exercisable into 7 ordinary shares\nwere exercisable at an exercise price equal to $75,000 per share until April 3, 2027, (iii) March-November 2024 Warrants exercisable into\n13 ordinary shares were exercisable at an exercise price equal to $105,000 per share until June 26, 2027, (iv) March-November 2024 Warrants\nexercisable into 1 ordinary shares were exercisable at an exercise price equal to $75,000 per share until June 26, 2027, and (v) March-November\n2024 Warrants exercisable into 10 ordinary shares were exercisable at an exercise price equal to $82,500 per share until June 26, 2027.\n\n \n\n93\n\n \n\nThe conversion of the March-November\n2024 Notes and the exercise of the March-November 2024 Warrants will be limited to the extent that, upon the conversion or exercise, the\nMarch-November 2024 Investor and its affiliates would in aggregate beneficially own more than 4.99% of the ordinary shares.\n\n \n\nOn February 17, 2025, HUB\nand the March-November 2024 Investor agreed to amend the terms of the March-November 2024 Notes and the March-November 2024 Warrants.\nPursuant to the amended terms, the maturity date of each of the March-November 2024 Notes, having an aggregate principal amount of $11\nmillion (plus accrued interest), was extended to August 16, 2025. Additionally, per the amendment terms, in the event the notes are not\npaid or converted in full by April 1, 2025, from and after April 1, 2025, the current interest rate of the notes will increase from 15%\nper annum to 20% per annum. \n\n \n\nPursuant to the amendment,\nthe exercise price of each of the March-November 2024 Warrants was changed to a unified exercise price of NIS 266,550 (being the NIS equivalent\nof $75,000 per share based on the last published exchange rate published by the Bank of Israel on the date of the amendment) and the term\nof the March-November 2024 Warrants was extended to a unified end date of February 17, 2030. The Company also issued to the March-November\n2024 Investor an additional warrant exercisable into 13 ordinary shares at an exercise price\nof $75,000 per share and a pre-funded warrant exercisable into 66 ordinary shares, in each case until February 17, 2030, and\nin each, the exercise of the new warrants will\nbe limited to the extent that, upon the exercise of the new warrants, the March-November 2024 Investor would\nnot beneficially own more than 4.99% of our outstanding ordinary shares.\n\n \n\nAdditionally, pursuant to\nthe amended terms, the March-November 2024 Investor agreed to sell all or a signification portion of the notes to a third party who will\nconvert the notes and attempt to sell the resulting conversion shares. The March-November 2024 Investor agreed by no later than April\n2, 2025, to inform the Company in writing of the amount of proceeds the March-November 2024 Investor irrevocably received from the sale\nof such conversion shares by the third party, in which case the Company shall be deemed to have repaid the principal and accrued interest\nunder the converted notes in the amount equal to the sale proceeds. In the event that the sale proceeds are lower than the aggregate principal\nand accrued interest under the converted notes thereon, the Company agreed to issue to the March-November 2024 Investor a convertible\nnote in the principal amount equal to such shortfall amount (and if the sale proceeds (and any repayments from the Company) are less than\n$6.5 million, also the interest that would have accrued on the converted notes in accordance with their terms had they not been converted).\nThe new note would have an interest rate of 20% per annum, commencing retroactively from the date of conversion of the converted notes,\nand a maturity date of August 16, 2025, and otherwise the same terms and conditions as the converted notes. In the event that, at April\n2, 2025, the March-November 2024 Investor holds unsold conversion shares, then warrants held by the March-November 2024 Investor will\nbe exercised for an equivalent number of ordinary shares pursuant to the terms thereof and such conversion shares will be deemed to be\nissued pursuant to such exercise in lieu of the issuance of new ordinary shares.\n\n \n\nOn\nAugust 16, 2025, the Company entered into a Fifth Amendment to the Securities Purchase Agreement with the March-November 2024 Investor\nthat: (i) extended the maturity date of all convertible notes of the Company in the aggregate principal amount of $11,000,000 for an additional\nsix months from August 16, 2025 to February 16, 2026; (ii) implemented compound interest, whereby interest now accrues on previously accrued\ninterest commencing from the amendment date; and (iii) facilitated the introduction of Seven Knots, LLC, which has undertaken to purchase\nthe convertible notes from the March-November 2024 Investor, pursuant to a separate note purchase and assignment agreement dated August\n20, 2025. The amendment maintains all other existing terms and conditions of the notes, including the Company’s obligation to repay\nthe principal amount plus all accrued interest.\n\n \n\nOn\nAugust 20, 2025, the March-November 2024 Investor entered into a Note Purchase and Assignment Agreement with Seven Knots, LLC for the\nsale of all outstanding convertible notes for a purchase price of $14,054,165, representing the principal amount plus accrued interest\nthrough August 31, 2025, with adjustments for additional interest thereafter. Seven Knots is required to purchase at least $6,000,000\nof the notes within 60 days and the remaining balance within 90 days from the agreement date. If Seven Knots fails to meet these payment\nmilestones, the Fifth Amendment automatically terminates. On August 18, 2025, prior to the purchase agreement, the March-November 2024\nInvestor converted $1,500,000 of the June 26, 2024 note at a conversion price of $45,000 per share, resulting in the issuance of 33 ordinary\nshares directly to Seven Knots, LLC. This conversion amount counts toward the initial $6,000,000 purchase requirement. Once Seven Knots\ncompletes the full purchase, the Company’s repayment obligations to the March-November 2024 Investor will be considered fully satisfied;\nhowever, these milestones were not met in full and therefore the Fifth Amendment automatically terminated, putting us in breach of the\nMarch-November 2024 Notes.\n\n \n\nTo\ncompensate Seven Knots for its undertakings to Mr. Gottdiener in the note purchase and assignment agreement, we issued to the purchaser\na convertible note in the principal amount of $1,500,000. The note bears no interest and matures on August 20, 2026 by way of conversion\ninto ordinary shares. The note is also convertible, in whole or in part, at the option of the holder at any time. The conversion price\nis the lower of (i) $45,000 and (ii) 95% of the lowest VWAP of the Ordinary Shares during the five consecutive trading day period ending\nand including the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice, subject to the\nNasdaq floor price. The holder is also entitled to redeem all or portion of the note in cash from the holder’s pro rata portion\nof 33% of the proceeds received by the Company pursuant to an equity line of credit or at-the-market offering, at a price of 110% of the\namount being redeemed. The holder is subject to a beneficial ownership limitation of 4.99%.\n\n \n\n94\n\n \n\nOn\nSeptember 17, 2025, the Company entered into a Master Exchange Agreement (the “Exchange Agreement”) with the Exchange Accredited\nInvestor, which undertook in August 2025 to purchase the convertible notes issued to the March-November 2024 Investor. On the same date,\nthe Exchange Accredited Investor entered into a Note Purchase Agreement with AGP to purchase AGP’s note having a principal amount\n(plus accrued interest) of $2,248 thousand for a purchase price of $750 thousand. Pursuant to the Exchange Agreement, the Exchange Accredited\nInvestor has the right to exchange all or a portion of its notes for new notes, which have substantially the same terms and conditions\nas the Amended Notes. After giving effect to applicable original issue discount, under the terms of the Exchange Agreement, up to $16,420\nthousand aggregate principal amount of outstanding notes are exchangeable for up to $19,840 thousand aggregate principal amount of new\nnotes under the Exchange Agreement. Astor has an option to purchase from the Exchange Accredited Investor, up to one-half of the new notes\nissued pursuant to the Exchange Agreement and Keystone has an option to purchase from the Exchange Accredited Investor, up to 25% of the\nnew notes issued pursuant to the Exchange Agreement.\n\n \n\nThe\nnote bears no interest and matures on the second anniversary from the issuance of each note. The note is also convertible, in whole or\nin part, at the option of the holder at any time. The conversion price of (i) $43,200or (ii) 90% (or 80% in case of default) of the lowest\nVWAP of the Ordinary Shares during the twenty consecutive trading day period ending and including the trading day immediately preceding\nthe delivery or deemed delivery of the applicable conversion notice, subject to the Nasdaq floor price. The holder is subject to a beneficial\nownership limitation of 4.99%.\n\n \n\nAs\nof December 31, 2025, notes in the aggregate principal amount of $9,004 thousand have been exchanged under the Exchange Agreement for\nAmended Notes in the aggregate principal amount of $11,063 thousand.\n\n \n\nAs\nof December 31, 2025, a total amount of $6,662,682 was converted into 361 ordinary shares.\n\n \n\nOn\nJune 4, 2026, the Company and the March-November 2024 Investor entered into a Sixth Amendment to the Securities Purchase Agreement. Pursuant\nto this amendment, the Company issued a Secured Convertible Note (the “June 2026 Note”) in the original principal amount of\n$5,556,000 in exchange for a cash investment in the same amount. This investment followed sales of notes in multiple installments\nfrom the March-November 2024 Investor to Seven Knots, LLC pursuant to their Note Purchase and Assignment Agreement, dated August 20, 2025.\nSuch agreement was amended on June 3, 2026 to accommodate additional note purchases from time to time up to an aggregate principal amount\nof $8,000,000. The June 2026 Note bears interest at 20% per annum, computed on a 360-day basis and including interest on interest.\nThe Note is secured *pari passu* by the same Charged Assets that secure existing outstanding notes under the Securities\nPurchase Agreement. The outstanding principal and accrued interest are due and payable on the earlier of (i) June 11, 2026, or (ii) five\nbusiness days following the closing of a sale by the Company of QPoint Technologies Ltd. Commencing June 11, 2026, the holder is entitled\nto demand repayment of all or a portion of the June 2026 Note upon two business days’ notice. The holder may convert any portion\nof the outstanding loan amount into Ordinary Shares at a price equal to the arithmetic average of the Closing Sale Prices of the Ordinary\nShares for the five Trading Days prior to the conversion date, subject to a floor price of $0.71 per share. Conversion is subject to a\nbeneficial ownership limitation of 4.99%. From June 3, 2026 to June 30, 2026, the Company raised aggregate proceeds of $4,706,304 in private\nplacements from accredited investors in exchange for convertible notes in the aggregate principal amount of $5,882,880, representing a\n20% original issue discount. The convertible notes were issued under the Exchange Agreement and have a maturity date of two years from\ntheir respective dates of issuance.\n\n \n\n*2023-2024 Investment by Accredited Investors*\n\n \n\nBetween November 2023 and\nJanuary 2024, the Company entered into Securities Purchase Agreements (the “First 2023-2024 Accredited Investor SPAs”) providing\nfor the sale by the Company to certain accredited investors (the “First 2023-2024 Accredited Investors”), in unregistered\nprivate transactions, of convertible notes with an aggregate principal amount of $3,100,000 (the “First 2023-2024 Accredited Investor\nNotes”), and warrants exercisable into one ordinary share for each ordinary share issuable to the Investors upon the conversion\nof the principal amount of the First 2023-2024 Accredited Investor Notes, assuming conversion on the respective issuance dates of the\nNotes (the “First 2023-2024 Accredited Investor Warrants”).\n\n \n\nThe aggregate principal amount\nof the First 2023-2024 Accredited Investor Notes was convertible into our ordinary shares at a rate of the lower of (i) $$375,000 and\n(ii) the product of 75% multiplied by the arithmetic average of the volume-weighted average price of the ordinary shares in the five (5)\ntrading days prior to the date of conversion, provided that such conversion rate would not be lower than $225,000. The First 2023-2024\nAccredited Investor Notes did not bear interest and were repayable on the three-month anniversary of their issuance, subject to earlier\nconversion by the First 2023-2024 Accredited Investors. The First 2023-2024 Accredited Investors had the right to convert the First 2023-2024\nAccredited Investor Notes, in whole or in part, at any time following their issuance.\n\n \n\nThe First 2023-2024 Accredited\nInvestor Notes were subsequently fully converted by the First 2023-2024 Accredited Investors.\n\n \n\nIn February 2025, the Company\nand the First 2023-2024 Accredited Investors agreed to amend the terms of the First 2023-2024 Accredited Investor SPAs and the First 2023-2024\nAccredited Investor Warrants. Pursuant to the amended terms, the exercise price of each of the First 2023-2024 Accredited Investor Warrants\nwas changed to a unified exercise price of $150,000 per share and the Company issued to the First 2023-2024 Accredited Investors additional\nwarrants exercisable into 11 ordinary shares at an exercise price of $150,000 per\nshare and 9 ordinary shares.\n\n \n\n95\n\n \n\n*Second 2023-2024 Accredited Investor Financing\nTransaction*\n\n \n\nIn March 2024, the Company\nentered into Securities Purchase Agreements (the “Second 2023-2024 Accredited Investor SPAs”) providing for the sale by the\nCompany to certain accredited investors (the “Second 2023-2024 Accredited Investors” and together with the First 2023-2024\nAccredited Investors, the “2023-2024 Accredited Investors”), in unregistered private transactions, of convertible notes with\nan aggregate principal amount of $550,000 (the “Second 2023-2024 Accredited Investor Notes”), and warrants exercisable into\n1 ordinary share for each ordinary share issuable to the Investors upon the conversion of the principal amount of the Second 2023-2024\nAccredited Investor Notes, assuming conversion on the respective issuance dates of the Notes (the “Second 2023-2024 Accredited Investor\nWarrants”).\n\n \n\nThe aggregate principal amount\nof the Second 2023-2024 Accredited Investor Notes is convertible into our ordinary shares at a rate equal to the arithmetic average of\nthe volume-weighted average price of the ordinary shares in the five (5) trading days prior to the date of conversion, provided that such\nconversion rate would not be lower than $225,000. The Second 2023-2024 Accredited Investor Notes do not bear interest and are repayable\non March 14, 2027, subject to earlier conversion by the Second 2023-2024 Accredited Investors. The Second 2023-2024 Accredited Investors\nhave the right to convert the Second 2023-2024 Accredited Investor Notes, in whole or in part, at any time following their issuance.\n\n \n\nPursuant to the First 2023-2024\nAccredited Investor SPAs, we issued First 2023-2024 Accredited Investor Warrants which are exercisable into 1 ordinary share. The First\n2023-2024 Accredited Investor Warrants are exercisable until January 1, 2027 for an exercise price equal to the closing price of the ordinary\nshares as of the respective issuance dates of the First 2023-2024 Accredited Investor Warrants and have a weighted average exercise price\nof $3,495,000. Pursuant to the Second 2023-2024 Accredited Investor SPAs, we issued Second 2023-2024 Accredited Investor Warrants which\nwere exercisable into 1 ordinary share. The Second 2023-2024 Accredited Investor Warrants were exercisable until September 14, 2025 for\nan exercise price of $225,000. The exercise of the 2023-2024 Accredited Investor Warrants will be limited to the extent that, upon their\nexercise, a 2023-2024 Accredited Investor and its affiliates would in the aggregate beneficially own more than 4.99% of our ordinary shares.\n\n \n\nIn February 2025, HUB and\nthe First 2023-2024 Accredited Investors agreed to amend the terms of the First 2023-2024 Accredited Investor SPAs and the First 2023-2024\nAccredited Investor Warrants. Pursuant to the amended terms, the exercise price of each of the First 2023-2024 Accredited Investor Warrants\nwas changed to a unified exercise price of $150,000 per share and the Company also issued an additional warrant exercisable into 11 ordinary\nshares at an exercise price of $150,000 per share. In addition, the Company issued\n9 ordinary shares to the First 2023-2024 Accredited Investors.\n\n \n\nIn addition, in February\n2025, HUB and the Second 2023-2024 Accredited Investors agreed to amend the terms of the Second 2023-2024 Accredited Investor SPAs, the\nSecond 2023-2024 Accredited Investor Notes and the Second 2023-2024 Accredited Investor Warrants. Pursuant to the amended terms, the exercise\nprice of each of the First 2023-2024 Accredited Investor Warrants was changed to a unified exercise price of $172,500 per share, and the\nCompany issued to the Second 2023-2024 Accredited Investors additional warrants exercisable into 11 ordinary shares at\nan exercise price of $150,000 per share, and the conversion price of each of the Second 2023-2024 Accredited Investor Notes\nwas changed to a unified conversion price of $171,300 per share.\n\n \n\nThe Second 2023-2024 Accredited\nInvestors were subsequently fully converted by the Second 2023-2024 Accredited Investors.\n\n* *\n\n*Shayna Loans*\n\n* *\n\nOn each of February 23, 2023,\nJune 11, 2023 and July 7, 2023, we entered into Convertible Loan Agreements (together the “Shayna Loan Agreements”) with Shayna\nLP, a Cayman Islands company (“Shayna”), in the amounts of NIS 10 million (approximately $2.8 million), NIS 5 million (approximately\n$1.4 million) and NIS 1.85 million (approximately $500,000) respectively (each a “Shayna Loan” and, together, the “Shayna\nLoans”). The Shayna Loans were subsequently amended in 2024 pursuant to a series of agreements with Shayna and Akina Holding Limited\n(“Akina”), which assigned most of Shayna’s rights to Akina and established new conversion and warrant terms. All original\ninterest, conversion, and warrant provisions under the Shayna Loan Agreements were superseded by the 2024 amendments.\n\n \n\n96\n\n \n\nThe Shayna Loans were amended\nin March–May 2024 through a series of agreements with Shayna and Akina. On March 31, 2024, the Company entered into the first amendment\nwith Shayna and Akina, pursuant to which Shayna and Akina are entitled to convert the Shayna Loans into a total of 34 ordinary shares,\nbased on an agreed USD/NIS exchange rate of NIS 3.65 and a conversion price of $135,000.00 per share. Under this amendment, Akina will\nreceive 25 ordinary shares, while Shayna will receive 8 ordinary shares. Additionally, warrants have been issued for the purchase of the\nsame number of ordinary shares at an exercise price of $135,000 per share, with Akina entitled to 25 ordinary shares and Shayna entitled\nto 8 ordinary shares. Furthermore, a customary clause limits the beneficial ownership of both Shayna and Akina to 4.99% of the Company’s\noutstanding ordinary shares.\n\n \n\nOn April 18, 2024, the Company\nentered into the second amendment with Shayna and Akina, pursuant to which if Akina defaults on its payment installments to Shayna, Shayna\nwill have the right to assume all of Akina’s conversion rights under the Shayna Loan Agreements.\n\n \n\nOn May 9, 2024, the Company\nentered into the third amendment with Shayna and Akina, pursuant to which a cash payment of $1,150,800 for Shayna’s consulting services\nunder the Convertible Loan Agreements was converted into 8 ordinary shares of the Company, calculated at a price of $135,000 per share.\nAdditionally, Shayna was issued a warrant to purchase 8 ordinary shares of the Company at an exercise price of $120,000 per share, with\nan exercise period of six months.\n\n \n\nDuring 2024, Akina converted\nthe loan under the Convertible Loan Agreements into our ordinary shares, pursuant to which conversions we have issued 35 ordinary shares\nand exercised the warrant and purchased 29 ordinary shares of the Company at an exercise price of $135,000. In addition, Shayna exercised\nthe warrant and purchased 8 ordinary shares of the Company at an exercise price of $120,000.\n\n \n\n*Lind Financing*\n\n* *\n\nOn May 4, 2023, we entered into a Securities Purchase Agreement (the\n“Lind SPA”) with Lind Global Asset Management VI LLC, an investment fund managed by The Lind Partners, a New York based institutional\nfund manager (together, “Lind”). Pursuant to the Lind SPA, the Company agreed to issue to Lind up to two secured convertible\npromissory notes in three tranches (the “Lind Notes” and each a “Lind Note”) for gross proceeds of up to $16,000,000\nand warrants (the “Lind Warrants” and each a “Lind Warrant”) to purchase the Company’s ordinary shares.\nThe Lind SPA and Lind Note were subsequently amended in August and November 2023.\n\n \n\n97\n\n \n\nAs of the date of this Annual Report, Lind has converted the principal\namount of the Lind Note into our ordinary shares and exercised most of the Lind Warrants. Only a small number of Lind Warrants remain\noutstanding.\n\n* *\n\n*Convertible Notes*\n\n \n\nUpon the closing of the Business\nCombination agreement the Company entered into two convertible notes agreements (collectively, the “Convertible Notes Agreements”)\nwith Alliance Global Partners (“AGP”), the representative of the underwriters in RNER’s IPO and a stockholder of RNER,\nand another vendor involved in the Business Combination (the “Vendor”). Pursuant to the Convertible Notes Agreements, AGP\npurchased convertible notes of and from the Company in an aggregate principal amount of $5,219,319 and the Vendor purchased convertible\nnotes of and from the Company in an aggregate principal amount of $349,319 (each, a “Convertible Note”). Each Convertible\nNotes will bear interest at a rate of 6% per annum, has a maturity date of March 1, 2024 and will be convertible for Company Ordinary\nShares at AGP’s or the Vendor’s option, as applicable, at any time prior to the respective Convertible Notes being paid in\nfull. The proceeds from the Convertible Notes Agreements were used to pay expenses in connection with the closing of the Business Combination\nagreement. The loan from AGP was neither paid nor converted. \n\n \n\nAGP alleged that the Company\nwas in default under the Convertible Notes Agreements, having failed to make the required payments thereunder, and the parties are in\na commercial dispute. The Company has entered into a settlement with AGP with respect to the convertible note of the Company issued to\nAGP on February 28, 2023 (the “Original Note”). The Original Note has a principal amount of approximately $5.2 million\nand provides for interest at the rate of 6% per year and default interest at the rate of 18% per year. The Original Note provided for\namortization payments commencing on June 1, 2023, with final maturity on March 1, 2024. The obligations under the Original Note\nare recorded in the Company’s balance sheet as of June 30, 2024 at approximately $5.7 million.\n\n \n\nOn November 22, 2024, the\nCompany and AGP entered into an amended and restated note dated (the “Amended Note”), which contemplates the AGP will convert\n$250,000 of the principal amount in each of seven 30-day periods, up to an aggregate amount of $1.8 million (but the first conversion\ncan be in the amount of $320,000 and final conversion $230,000). Upon each conversion, one-seventh of the excess debt above $1.8 million\nwill be cancelled. Upon conversion of the full $1.8 million, the Amended Note will be extinguished. If an aggregate amount of $1.8 million\nis not converted by May 30, 2025, the terms of the Original Note will again apply, unless otherwise agreed by the parties. The Amended\nNote contains a conversion price equal to 93% of the prevailing market price, subject to a $60,000 floor. The floor price may be adjusted\ndownward after three months if the market price falls below the floor price and does not subsequently increase above the floor price.\n\n \n\nDuring the year ended December\n31, 2024, AGP converted an aggregate amount of $1,070,000, which was allocated to two parts: until November 2024, an aggregate amount\nof $500,000 which was converted into 4 ordinary shares, while the remaining amount of $570,000, which was subject to the November 2024\nAmended Note, converted into 8 ordinary shares. During January and February 2025, AGP converted an aggregated amount of $500,000 into\n6 ordinary share.\n\n \n\nOn September 17, 2025, an\naccredited investor entered into a Note Purchase Agreement with AGP to purchase AGP’s note having a principal amount (plus accrued\ninterest) of $2,248,000 for a purchase price of $750 thousand.\n\n \n\n*BST Loan*\n\n** **\n\nWe entered into a Loan and\nSecurity Agreement with BlackSwan Technologies, Inc., a Delaware corporation (“BST”), with an effective date of December 4,\n2023 (the “BST Loan Agreement”). Under the BST Loan Agreement, we may make, at our sole discretion, cash advances to BST,\nfrom time to time, until June 30, 2024, in an aggregate principal amount of up to $6,000,000.\n\n \n\nThe principal amounts we\nlend to BST under the BST Loan Agreement accrue interest at a fixed rate per annum equal to 15% and are repayable on January 1, 2025,\nprovided that BST has the right to prepay any outstanding loan amounts upon at least two days prior notice. Upon the occurrence of certain\ncustomary events of default, any outstanding loan amounts are immediately repayable and overdue obligation will carry interest at a fixed\nrate per annum equal to 18%.\n\n \n\nAs a continuing security\nfor the full and punctual payment and performance when due (whether at stated maturity, acceleration or otherwise) of BST’s obligations\nunder the BST Loan Agreement, each of BST and its subsidiary, BlackSwan Technologies GmbH, a German company (“BST Germany”),\ngranted us a first ranking fixed charge and pledge in all of the rights and interests of BST, BST Germany and their subsidiaries (i) under\nany agreements entered into by any of them following the effective date of the BST Loan Agreement and any rights to receive proceeds thereunder\nand (ii) in any Intellectual Property.\n\n \n\nWe have provided BST an aggregate amount of $2,732 thousand under the\nBST Loan Agreement. Following the merger between us and BST on January 27, 2025, the balance was classified as an inter-company receivable\nand is no longer included as a credit facility. \n\n \n\n98\n\n \n\n*A-Labs Loan*\n\n \n\nOn January 16, 2023, we entered\ninto a loan agreement with A-Labs Finance and Advisory Ltd. (“A-Labs”), pursuant to which A-Labs agreed to issue us a $1,000,000\nprincipal amount note for gross proceeds of $900,000 (the “A-Labs Loan”). The principal amount A-Labs Loan is due to be repaid\nin one repayment on January 16, 2026 (the Maturity Date”) (36 months from the execution of the A-Labs Loan). The A-Labs Loan bears\ninterest at 12% per annum and interest became payable quarterly commencing on April 1, 2023 until the Maturity Date. Overdue payments\nwill accrue interest in arrears at the rate of 18% per annum from the relevant payment date until such payment is made. In addition, we\npaid A-Labs the sum of $4.2 million between July 2021 and March 2023 as consulting fees under a financial advisory services agreement\nentered into July 2021 (the “A-Labs Agreement”) and we issued to A-Labs warrants to purchase 27 of our ordinary shares. Additionally,\nin March 2023, a total of $2.2 million that was owed to A-Labs pursuant to the A-Labs Agreement was converted into our ordinary shares\nat a conversion price of $1,500,000 per ordinary share. This conversion of amounts we owed to A-Labs under the A-Labs Agreement, was effected\nto partially satisfy the commitment that A-Labs made to us to purchase $20 million of our ordinary shares in the private placement in\nconnection with the closing of our business combination with Mount Rainier Acquisition Corp., a Delaware special purpose acquisition company,\nin 2023 (the “PIPE Financing”). In December 2022, we amended the A-Labs Agreement to provide that for each financing\ntransaction closed, in addition to paying a commission to A-Labs in cash, we would be required to issue warrants to purchase ordinary\nshares in an amount equal to the cash consideration that would otherwise be payable under the financial advisory services agreement divided\nby 4.81, which warrants shall be exercisable for 4 years and at an exercise price of NIS 72,150(regardless of the price per share paid\nby investors in the relevant financing transaction). Additionally, we committed to provide compensation under the A-Labs Agreement for\nall investors with whom we would enter into a financing transaction prior to our shares being listed for trading on the Nasdaq regardless\nof whether such investors were introduced to the Company by A-Labs. In each of September 2022 and January 2023, we paid to A-Labs an additional\ncommission of $50,000 in exchange for extra services provided by A-Labs over the course of certain fund raising efforts and loan issuances.\nAdditionally, as part of the Shayna Loans, we paid to A-Labs commissions totaling $140,000 for services provided as part of the fund raising\nefforts. The term of the A-Labs Agreement was for 12 months following the execution in July 2021, provided that the A-Labs Agreement will\nautomatically renew for additional 12 month terms unless either party provides written notice to the other party of its intention not\nto renew at least 30 days prior to the end of such initial 12 month term or any renewed terms. Additionally, the A-Labs Agreement may\nbe terminated by either party upon a minimum of 30 days prior written notice. In August 2023, we received from A-Labs a waiver of the\nretainer fees for the services. Nevertheless, as of the date of this Annual Report, there remain unpaid fees of $3,298,000 under the A-Labs\nAgreement.\n\n \n\nOn November 6, 2025, we entered\ninto a settlement agreement with each of A-Labs, MOFO Holdings LLC and Viserion Ltd. (the “PIPE Investors”), which had entered\ninto subscription agreements with us to invest an aggregate of $50 million in the PIPE Financing. After all the other closing conditions\nfor the business combination were met, we decided to proceed with the closing despite not having received the funds payable under the\nSubscription Agreements from the PIPE Investors. The signing of the settlement agreements followed a mediation process, which was approved\nby our Audit Committee and Board of Directors, and by our shareholders on December 16, 2025. According to the settlement agreement, taking\ninto account the parties’ respective claims and the various agreements between them, no funds or other form of consideration shall\nbe paid or transferred from the PIPE Investors to us, and we shall not pay any funds or any other form of consideration to any of the\nPIPE Investors, all in exchange for full and absolute waivers by the parties toward each other (including shareholders, officers, directors\nparent and subsidiaries thereof, and anyone acting on behalf of any of them).\n\n \n\nAdditionally, according to\nthe settlement, we will repay to A-Labs the amount outstanding in connection with a secured loan extended by A-Labs to us on January 17,\n2023 in the amount of $900,000, which with original issuance discount and accrued interest amounts to $1,800,000. The repayment will be\nin the form of our ordinary shares based on the lowest closing price of the ordinary shares on Nasdaq during the five trading days preceding\nthe date of the shareholders’ approval, which was on December 16, 2025. The shares will be subject to the following lock-up periods:\n40% of the shares will be restricted for a period of 40 days, 30% will be restricted for a period of 70 days, 25% will be restricted for\na period of 100 days and 5% will be restricted for a period of 130 days. The 5% tranche will be subject to a one-time upward or downward\nadjustment to the extent that the sum of (i) the proceeds from the sale of shares by A-Labs and (ii) the current market value of the shares\nheld by A-Labs are less than or greater than $1,800,000, respectively. A-Labs must make reasonable commercial efforts to maximize the\nconsideration it receives for the sale of shares. The sale of shares by A-Labs on Nasdaq on any trading day may not exceed 5% of the current\nday’s trading volume of the ordinary shares thereon.\n\n \n\nIn April 2026, we received\na letter addressed to our directors from counsel to A-Labs, demanding that we pay the $1,800,000 plus interest. In May 2026, the Company’s\ncounsel responded by rejecting all allegations raised by A-Labs in their letter.\n\n \n\nIn addition, on April 16,\n2026, an application was filed against the Company to hold it liable for a judgment awarded against A-Labs in favor of Teshua Ltd., based\non the alleged amount of $1,800,000. The Company explained that it was unable to realize the shares due to an attachment imposed on A-Labs\nand/or its representatives, and that, in any event, at present the matter does not concern the amount alleged by A-Labs, but rather shares\nwhose value is substantially lower. A hearing on this matter is scheduled for July 21, 2026.\n\n \n\nSeparately, on February 27,\n2026, DC Rainier SPV LLC, the former sponsor of Mount Rainier Acquisition Corp., filed a complaint against the Company and A-Labs in the\nSupreme Court of the State of New York alleging, among other things, that the Company and A-Labs misrepresented the existence of approximately\n$50 million of PIPE financing commitments in connection with the Mount Rainier business combination, and on April 28, 2026, the plaintiff\nfiled a motion for entry of a default judgment against the Company seeking not less than $5,080,027, plus interest, fees and costs. For\nmore information, see Note 28(7) to our audited consolidated financial statements for the year ended December 31, 2025 included in this\nAnnual Report.\n\n** **\n\n99\n\n** **\n\n*Settlements with Oppenheimer and Dominion*\n\n \n\nIn\nFebruary 2025, we reached a settlement agreement with Oppenheimer & Co., Inc. (“Oppenheimer”) for $3 million, with $1.1\nmillion being paid on the effective date and the remaining balance payable in ten monthly payments of $200,000 from March to December\n2025 (with the first payment being $100,000). As part of the settlement arrangement, Claymore Capital Pty Ltd. (“Claymore”)\nagreed to make on the Company’s behalf, all the payments that the Company is required to make under the settlement agreement with\nOppenheimer. In consideration, the Company issued Claymore a convertible note in the principal amount of $6 million. The note was convertible\nat the option of the holder at a discount of 25% to the prevailing market price, but not higher than $225,000 or lower than the Nasdaq\nfloor price. The note did not bear interest and matured on February 18, 2030, at which time we were entitled to convert the note into\nordinary shares. As of June 2025, Claymore converted the note in full into 122 ordinary shares, at a conversion price of $45,000 per share\nand made all required payments to Oppenheimer. See “—Settlement-Related Convertible Notes” above.\n\n \n\nIn\nFebruary 2025, we also reached a settlement agreement with Dominion Capital LLC and its affiliates (together, “Dominion”)\nfor $4.5 million, with $400,000 being payable by February 21, 2025, $200,000 payable by March 3, 2025 and the remaining balance payable\nin ten monthly payments of $390,000 from March to December 2025. As a result, the Israeli insolvency proceedings that were initiated by\nDominion in 2023 were dismissed on March 7, 2025.As part of the settlement arrangement, Claymore agreed to make on the Company’s\nbehalf all the payments that the Company is required to make under the settlement agreement with Dominion. In consideration, the Company\nissued Claymore a convertible note in the principal amount of $7.5 million. The note was convertible at the option of the holder at a\ndiscount of 25% to the prevailing market price, but not higher than $225,000 or lower than the Nasdaq floor price. The note did not bear\ninterest and matured on February 20, 2030, at which time we were entitled to convert the note into ordinary shares. As of June 2025, Claymore\nconverted the note in full into 166 ordinary shares, at a conversion price of $45,000 per share and made all required payments to Dominion.\nSee “—Settlement-Related Convertible Notes” above.\n\n \n\n*Debt Arrangement with Comsec Creditors*\n\n \n\nOn March 24, 2024, we entered\ninto a debt settlement agreement with certain creditors of Comsec. Comsec’s total liabilities amount to approximately NIS 52.0 million\n(approximately $16.3 million) divided between different groups of creditors with different priorities, which is covered by a guarantee\nby us of up to NIS 36.3 million (approximately $11.4 million).  \n\n \n\nAs of December 31, 2025,\nComsec’s total liabilities amount to $265 thousand. The amount paid under the debt settlement agreement to unsecured creditors amounted\nto $135 thousand. As of the date of this Annual Report, the Company is in material breach of the debt settlement agreement.  \n\n \n\n**Foreign Currency Exchange Rate Risk**\n\n \n\nThough HUB operates internationally,\nits operations are primarily located in Israel and the majority of its expenses are denominated in New Israeli Shekels, or NIS. HUB is\nsubject to fluctuations in foreign currency rates in connection with these arrangements.\n\n \n\n**Interest Rate Risk**\n\n \n\nInterest rate risk is the\nrisk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.\n\n \n\nHUB’s exposure to the\nrisk of changes in market interest rates relates primarily to HUB’s long-term liabilities with floating interest. This risk is of\nprimary focus to HUB given its current dependency on debt financing and the ability to obtain future debt financing. HUB manages its interest\nrate risk by seeking to have a balanced portfolio of fixed and variable rate loans.\n\n \n\n100\n\n \n\n**JOBS Act**\n\n \n\nWe qualify as an “emerging\ngrowth company,” as defined in Section 2(a)(19) of the Securities Act of 1933, as amended, or the Securities Act, as modified by\nthe Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as we continue to be an emerging growth company,\nwe are permitted to and intend to take advantage of specified reduced reporting and other regulatory requirements that are generally unavailable\nto other public companies, including: (i) presentation of only two years of audited financial statements and only two years of related\nOperating and Financial Review and Prospects disclosure; (ii) an exemption from the auditor attestation requirements regarding our internal\ncontrol over financial reporting required by Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);\n(iii) an exemption from the requirement that our auditor’s report include disclosure regarding “critical audit matters”;\nand (iv) an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board (the “PCAOB”),\nrequiring mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit\nand the financial statements. We may take advantage of these provisions until the last day of the fiscal year during which we mark the\nfifth anniversary of February 28, 2023, the date of the first sale of our ordinary shares pursuant to an effective registration statement\nunder the Securities Act. However, if certain events occur prior to the end of such five-year period, including if (i) we become a “large\naccelerated filer” under the Exchange Act, (ii) our annual gross revenues exceed $1.235 billion, or (iii) we issue more than $1.0\nbillion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year\nperiod. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided\nin Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We have elected to take advantage\nof such extended transition period, which means that when an accounting standard is issued or revised and it has different application\ndates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies\nadopt the new or revised standard. This election is irrevocable. As a result, our financial statements may not be comparable to those\nof companies that comply with public company effective dates.\n\n \n\n**C. Research and Development, Patents and\nLicenses, Etc. **\n\n \n\nFor a discussion of our research\nand development policies, see Item 4B. “Business Overview” and Item 3D. “Key Information —Risk Factors —Risks\nRelated to Our Incorporation and Operations in Israel.”\n\n \n\nFor a description of our\nintellectual property, please see Item 4B. “—Intellectual Property.”\n\n \n\n**D. Trend Information **\n\n \n\nOther than as described in"}