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Welcome to the Mobilicom Limited First Half 2026 Financial and Operating Results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I would now like to turn the conference over to Liad Gelfer, Director of Finance.

Good afternoon, everyone. My name is Liad Gelfer, Mobilicom, Director of Finance. Welcome to Mobilicom First Half 2026 Financial and Operating Results conference call. Joining me today is Oren Elkayam, Mobilicom's Founder and Chief Executive Officer. Earlier today, Mobilicom issued a press release announcing its financial results and business highlights for the six months ended June 30, 2026. A copy is available on the investor relations section of the company's website. Before we begin, please note that today's call includes forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially as described in our SEC filings, including our most recent Form 20-F. This statement speaks only as of today, and we undertake no obligation to update them. We will also refer to non-IFRS measures reconciled to IFRS in today's press release.

Today's agenda includes summary of the first half and a brief introduction to Mobilicom, financial highlights and our equity and cash position, first half achievements and design wins, progress against the 2026 outlook, our U.S. defense market position, CEO closing statement, and we will close with Q&A session. This webinar is being recorded and will be available for replay in irmobilicom.com. With that, I would like to turn the call over to Oren Elkayam, Founder and Chief Executive Officer. Oren, please go ahead.

Thank you very much, Liad, and good afternoon, everyone. It was a good quarter with continuous execution of our vision. We can share that we had about $1.2 million in revenue for the second quarter. I would like to emphasize that 100% of our revenue this period were from off-the-shelf product sales to customers, all from enterprise, defense, mainly customers, and majority of that came from the U.S. market. We maintain a very high growth margin with our hardware solution in addition to the software licensing. We maintain strong financial cash position with nearly $16 million cash in hand, which is adjusted numbers. We launched two products in the period, the SkyHopper Multiband and the Scarper Tactical, and won two new design wins based on those products.

One of which is with the Israeli tier 1 player in this market for a new short to mid-range loitering munition platform, which we anticipate that will have large volumes in the future. Ongoing monthly delivery cadence continue with our U.S. tier 1 customer for the U.S. Department of War program of records, and we also have seen the regulation by FCC and others. We received FCC Trusted Drone exemption status for all of our products, cyber, software, and the hardware solution. I think that based on those achievements, I want to thank our leaders and employees worldwide for the execution behind these results and a special thanks to Yossi Segal, our co-founder, for his continuous innovation and technology leadership. For those joining for us for the first time, the next two slides will give you some short overview of who is Mobilicom and company overview at a glance.

In high-level terms, Mobilicom offers the essential IP-based high-value cybersecurity software and hardware solution or subsystem, you can call it, for drones, robotics, and autonomous systems and manufacturers. Those are proprietary solutions that are powering, connecting, securing, safeguarding the autonomous systems. Mobilicom is not doing the drone. Mobilicom is doing the guts, the important IP-based subsystem to drones, robotics, and autonomous systems. We can say that investment in Mobilicom and Mobilicom itself is in the convergence of three major trends that we see in the market today. One is drone, second is cybersecurity, and third is robotics autonomy, which position the company extremely well for the growth that is expected from those markets. In this slide, you can see Mobilicom has two essential two segments. One is hardened hardware. Hardened is, in this case, meaning secured, more challenging to hack. And then a cybersecurity and software business.

Mobilicom hardware solution were certified as U.S.-approved products by the Department of War and the U.S. agencies. We have the Blue UAS Select, as you can see on the logo below. We have the Trusted Cyber Certification. We obtained the NDAA validation following testing, not with self-declaration, which is much more progress. We achieved the equipment frequency allocation for the Department of War under the DD 1494 and the newly released FCC Trusted Drone, a new regulation that was initiated this year to build and promise a U.S. ecosystem for the future. Our business model is very vivid. We get first foot in the door with secured hardware, which yielding 50%-60% growth margin, which is very fit for hardware. And then we cross-sell the cyber or software solution, which can get to up to 90% growth margin and has minimal competition today.

Since we are already a hardware supplier to drones and autonomous platform, the platform maker can incorporate cybersecurity or software from Mobilicom without undergoing any new procurement cycle. Mobilicom in the cybersecurity for small size autonomous system is a leader in this market and well-positioned to the success that is built on the fact that new standards are required and the change is coming in the coming quarters. The first half of this year shows that the model is working in both directions, and the clearest example is the AI-enabled autonomous weapon system design win that we had recently, where we sold both hardware and software and were selected together from day one. I will come back to it at a later stage. I will now hand it over to Liad for the first half financial highlights.

Thank you, Oren. The detailed figures are on the slides and in today's release. Rather than just read them, let me give you the four things they tell us. First, the shape of the half. The majority of our revenues landed in the second quarter. That is what the program moving to a monthly delivery looks like. During the quarter, we entered the monthly delivery cadence under the program of record, and we expect the cadence to continue through to the second half. Second, backlog. It is lower than the end of the first quarter, precisely because it shipped under monthly delivery cadence. Backlog behave as throughput rather than a stock of waiting orders. Orders received since the first half year end are already building it for the second half fulfillment. Third, margin. Held with this band our hardware model is built on.

Even as production volume stepped up, we are scaling without giving away the value of the IT. Fourth, the cost side. Our EBITDA loss works out to roughly half a million USD a month, in line with our adjusted cash burn. The model difference between the two is the working capital we deliberately built for second half deliveries. Both measures tell the same story, a controlled target investment in production readiness ahead of tier 1 volume. The IFRS net loss is a much larger figure, but the substantial majority of it is non-cash, share-based compensation, currency movement, and the warrant valuation. The full reconciliation was in today's release. Let's move to the equity and strong cash position slide. On the equity side, the capital structure on this slide is deliberately simple, and everything is visible.

One class of ordinary shares, a non-warrant position, and no leverage of any kind, no debt, no facilities, no ATM program. Two points worth taking away. The cash that came in during the half arrived from holders exercising instruments they already held, not from any new issuance. The warrants still outstanding represent additional potential capital of $12.6 million already built into the structure, sitting on the top of the cash we hold today, totaling $28.5 million. Put together, the balance sheet give us a multi-year runway and the freedom to execute the second half from strength. Back to you, Oren.

Thank you, Liad. I think that we can see here the focus on six achievements that we are presenting. I will not review them one by one, but I would like to give you my thoughts on where we should focus with those slides and achievements. One is we expanded onto new platform through two different routes. The larger munition win came through the tier 1 relationship we already hold, a new platform category for us, with the potential to scale alongside when the program advanced to mass production, which shows capability to have a strong relationship with a customer, especially tier 1, and then the success of first platform is yielding the expansion to a second platform, in this case, longer range, different mission. Mobilicom is working across the board with multi-platforms at the same tier 1 manufacturer, and that's important execution for us.

On the same point of expanding to new platforms, we have the AI-enabled autonomous system win place for our products. Two software, which is the ICE, electronic warfare resistance solution, and the OS3 cybersecurity for autonomy, and two hardware, the Scarper data link, and the 10-inch Mobile Ground Control Station, all together to one onto a single new program spanning drone and ground robotics with the first order already delivered. That is a clear proof that we sell an integrated stack rather than components. An integrated stack means substantially more Mobilicom content, more value on every platform, and retention rate of the customer is the highest you can achieve. That is part of our unique position in the market, which is unmatched by any other player. Second point I would like to emphasize is the speed.

We have seen the release of SkyHopper Multiband and the Scarper Tactical hardware products as part of the Scarper family, and we have done that in Q1. In this quarter, we showed that those design wins were converted to designs and initial orders in the same half of the year. Fastest conversion we achieved so far. That shows that we can create a new innovation to maintain the gap or to progress with the market, and be converted to design wins and delivery for first implementation within customers. Third point that is worth emphasizing is the U.S. engine kept compounding. Monthly delivery cadence under the U.S. Marine Corps program, through our partner advancing also on the Army LASSO validation phase, and our trusted drone position secured with onshore plan execution. All of those are strengthening our U.S. position for the future.

Add the initial order across the Asia-Pacific and UAE and India, and the picture is consistent. More platform, more content per platform, and faster conversion from products and innovation to design wins, to initial production and delivery to scalability and production that we have with Tier 1. This slide is a brief reminder on the outlook framework we presented at the beginning of this year. The two next slides will show where we stand right now. In this slide, we are just reviewing again what was promised, and here is how we executed on this promise and how we progress in the second quarter and the first half of 2026. On the hardware Tier 1 platform pipelines, those are platforms of Tier 1 manufacturers with hardware solution offerings.

Design wins already above the top of the range, including new launcher munition platform wins for our SkyHopper Multiband and Scarper Tactical that we explained earlier. We can see that initial production current player continue to generate follow-on orders. In the ramp-up phase, we see one against a goal of two, that one has entered a monthly delivery cadence, which is important for a company like Mobilicom. In total, we have nine Tier 1 customers platforms. Again, a goal which was eight to 10, and we are entering the second half of the year, and we are already meeting the target. On the cybersecurity and software side, on the right side, we can see that the engagement continues across the NVIDIA and Qualcomm ecosystem, progressing against the four to six OEM partner goal.

The AI-enabled autonomous weapon system win belongs here too because a software-led selection with OS3 operating security safety and cyber compliance, which are autonomy cybersecurity solution. The ICE software were chosen with our hardware from day one. We have seen wins, delivery, and soon deployment to these customers as well. On our goals and on operational and finance, we have mentioned multiple targets for the year. Of course, the first half, roughly 3,000 units were in motion at different stages. The first 1,000 were already produced in the first quarter and ongoing deliveries that started back then and continue now. Production of another 1,000 commenced in the second quarter, and the long lead items procurement for additional 1,000 accelerated in response to the world's supply chain constraints.

Those long lead items stock will help us and will be used to support our first U.S. production run in 2026. We maintain a backlog unit capacity that will expedite delivery on customer demand that we anticipate that will ramp up from quarter to quarter. On the U.S. manufacturing footprint, significant progress was made this quarter. We have mapped multiple manufacturers across the United States. We shorted this to five contenders against benefit, tax, and location criteria. We conducted on-site inspections and capacity and capabilities review with those players. We narrowed down the field to two last candidates, and right now we are in the final stages of entering as we promised The Pentagon, which is closely monitoring our progress in this field. On the program of record, we moved to an ongoing monthly delivery cadence, driving the first half revenue ramp up that you see for Q2.

I think that in this slide, which we presented at the beginning of the year, we presented this position in details on our first quarter call, but I will keep it brief and updated as following. For our OEM customers, we are embedded across U.S. branches, and we hold five U.S. endorsement and validation shown on the slide, which without those products cannot be participating in U.S. Federal, Department of Foreign, other programs. Two updates are worth highlighting since the last call. First, our aggressive U.S. production build-out progress support both our growth plans and keeping the SEC onshore plan effective and on track.

Second, we were selected to showcase our secure autonomy solution at the very, I think that one of the biggest Department of War and federal drills in the United States, the Northern Strike 2026, which is a premier Department of War exercise, putting our technology directly in front of military end users and decision makers, which build a brand and later on will build new programs and operations with those end customers. Before we take questions, I would like to summarize the presentation with key reasons why Mobilicom is compelling opportunity today. The short list of the key items are we have an ongoing monthly delivery cadence to our U.S. One customers and Department of War, and that is seen in the Q2 delivery and revenue. The designing engine running ahead of plan.

We are in the gold for the full-year target, which were executed in the middle of the year with nine tier 1 customer platforms on the book. The integrated stacks position is proven. We have seen software and hardware selected together, been giving us bigger position in the design, larger dollars for every platform in percentage and value, and rising content on every platform of Mobilicom, which also leads to retention rates, which is very high with these partners. The regulatory moat, trusted drone status maintained through an execution of onshoring plan with the U.S. manufacturing partner selection at the final stage of progress, which is important per the insights we are getting from The Pentagon that is reviewing and working with us on that. New products monetization immediately. We launched new products. We won two design wins with initial orders to support the integration, and we delivered.

That shows capability to convert faster and move along phases faster. We have a fortress balance sheet, debt-free, multi-year runway, warrant exercise, adding additional cash in hand to support our future growth. I think that the market is moving toward us. The new cybersecurity mandates that were released in the recent months are converging on exactly what we build, and that is important for our future. I would like, again, to close my closing statement with thanks to our team worldwide, Yossi, my co-founder partner, and our technology, business, and operational teams in U.S., Israel, and Australia. I think that, Liad, this is the time to get back to you for the Q&A session.

Thank you, Oren. We will now move to the question and answer session. Operator, we appreciate your help here.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing any keys. One moment please while we poll for questions. Our first question is from Mike McCormack with Water Tower Research. Please go ahead.

Hey, guys. Thanks. First quarter revenue reflected your customer moving into program of record ramp up. How did that convert in the second quarter?

Thanks for the question, Mike. Actually, it converted exactly the model they choose. Second quarter revenue was approximately $1.2 million because deliveries under the U.S. program of record moved onto a monthly cadence. That also explained the backlog movement. Orders shift rather than just set. What the second quarter tells us is not a number to extrapolate. It is what we entered, is that we actually entered a monthly delivery cadence, and this is what we expect the cadence to continue. That's the short answer to that.

Okay. If I can follow up, you have runway, no debt, and you terminated the ATM. Under what circumstances would you raise capital?

We don't need to raise capital to execute the plan we have described today. We hold a multi-runway at the current burn. We carry no debt of any kind, and the warrants still outstanding represent roughly $20.6 million of additional potential funding on top of the cash that we already hold. The bar for new capital is actually opportunity, not a necessity. Something that, materiality, accelerate the plan, M&A, and so on. Absent that, our focus is converting the balance sheet we have into production, deliveries, and of course, the cash, eventually to positive cash flow. I hope that answered your question.

Excellent. Thank you. Yes, it did. Thank you.

You are welcome.

Our next question is from Barry Sine with Litchfield Hills Research. Please go ahead.

Hey, good afternoon, Oren and Liad. Congratulations. Really very good momentum from 2Q versus 1Q. A couple of questions, if you do not mind. First of all, I want to talk about the design wins. You had a great slide where you talked about what you did last year, your goals for this year, and what you have now. What is the timeline typically when you get a design win in order to get to initial low rate production and then to volume revenue, which it sounds like you are at on one program of record already?

Yeah, I think I will take that. Thank you, Barry, for the question. I think that we manage that in a three-step or three-stage pipeline, and it is exactly how we did the slide that we are showing in our presentation showed earlier how it is built. The first integration and qualification stage is following the design win that we are winning. We actively supporting the original equipment manufacturers, the OEMs, during their platform integration, validation, and qualification. Historically, this initial OEM platform designs require lengthy timelines because it was the first time that they build first systems to the market. Today, the development cycles are significantly faster, typically span over several months, especially for those experienced OEMs with the existing platforms already in the market.

The actual timeline remains dependent on the customer program schedule, of course, but it is much faster than what we have seen in the past. The second phase is initial production orders from qualification. Initial production orders typically begin at a low rate. These early units enable the OEM or the manufacturer of the autonomous platform to successfully deploy the platform, promote the programs, and secure broader sales to the end customers, which are usually governments around the world, typically spanning few quarters. The timeline here is multiple quarters to deploy and progress into larger orders. Then volume scaling, which is the third phase. Production volume scales according to the customer program milestones rather than our own activity because usually, we are ready faster and earlier than our partners, the large conglomerated OEMs, which is standard for embedded defense system platforms.

We can see that the five new wins from this half are new fuel entering on top of the funnel that we have built earlier, which some of them are, as you mentioned, already in volume scalability and ongoing monthly delivery, and some of them are already in initial production run rate.

Okay, that is helpful. As you are selected by a drone manufacturer, I wonder if you can talk about the factors that go into that. Is it price? Is it technology? Their cybersecurity testing? Who are you competing with? What does the competitive environment look like? How do you stack up price-wise, technology-wise, et cetera?

I think that I can summarize it with multiple key decision-making items that we hear again and again from those OEMs and manufacturers of autonomous platforms. First is the ability to deliver the performance they need in contested environments, which is the most important capability. They want to be able to achieve range, resilience, electronic warfare resistance, and so forth. That is crucial for their success of the mission that their platform is designed for. The second criteria that we see is compliance. Especially in the U.S. we see that National Defense Authorization Act, Blue UAS, and now the new FCC Trusted Drones status. Manufacturer that is choosing us inherits a qualified company with solution and approved supply chain rather than building one by himself, and that reduce the risk on their end and reduce the headache from their side.

The third criteria that we see is price and supply capacity that can support mass market and customer program scalability for the next phases of market program ramp-up. Price and supply capacity are becoming importantly because as you scale in volume, they expect low prices to maintain that, which you can achieve by producing higher quantity, obviously. They would like to see your U.S. approved supply chain capacity to maintain what the U.S. government would like to achieve. By the way, we also see the same decision-making of local supply chain or supply capacity capability in other places. We see that in Israel. We see that in the European market. We've seen it, for example, in Canadian market that anticipates and requests that future program will be with local capacity to volume production as well. The fourth thing, which is we see recently, is the integrated stack.

Very few suppliers can put the security, secure data link, and electronic warfare resistance into the platform together with cybersecurity on the table as one offering. In embedded drone cybersecurity, where we are positioned as leaders, we are facing very limited direct competition to date. To summarize that, we see mainly key four items, which is performance in real combat environments, compliance with regulations that are needed, for example, by the U.S. government, a price and supply capacity to be able to scale later based on the new regulations, and integrated stack that can accelerate some of the customers and OEMs. Here it's important that we share, we believe that as the platform development cycles accelerate, and we will see that any new platforms will be initiated every 12 to maybe 24 months between generations.

Which means that it's driven by frequent modifications and program-specific adjustment, and platform manufacturers will drive immense value from working with a one-stop-shop partner. This consolidated strategy ensure a defense advantage in time to market, in operational performance, and obviously price, which is also expected. Here, I think that this is one of the two critical differentiation factors from Mobilicom. The first one is the cybersecurity across the board, and second is building the position of one-stop shop with hardware, software, and cyber capabilities that can come as single stack that can span generation and platform faster and be the ideal partner for the largest OEM. Those are the critical aspects that we see when evaluated by different customers.

Okay. That is great. My last question. You have talked about the two programs of record, OPF-L for the Marine Corps and the LASSO program, where you have one of your customers moving through for qualification. The other program that I want to ask about is Drone Dominance, and I think that came out last year. It was the first phase. They are moving into the next phases, and there are new requirements, some of which look like they may really require some of your products. How are you positioned for the new requirements as that program, Drone Dominance, evolves with your product line? Thank you.

Great questions. Yes, the Drone Dominance Program, in short, DDP, is a Department of War program which is using alternative, let us say, procurement processes. Their goal is mainly to learn from the things that were done in Ukraine and how they build an extensive industry over a short time period and scale to millions of units in production on a yearly basis. They would like to use that program to build a U.S. ecosystem for the smallest, highest volume of drones, but yet the lower value of drones, which are called FPV, first-person view class of drones. Those are very small, cheaper drones, which are below the Group 1, Group 2 platforms we are serving today. The DDP phase I was, as you mentioned, started earlier this year, and it was purely price-driven and validation of simple missions with minimal requirements.

Just let us understand who is the ecosystem participants and can help America scale on that, and that was the initial phase. Currently, not where RIP plays. It was not relevant for Mobilicom because of what they required. There was no pure play for Mobilicom over there. What matters is what happens next. The second phase II of the DDP, Drone Dominance Program, which is the selection is underway now, shifted the requirements from simple analog data link to secured, encrypted digital communication, which is exactly where the Scarper family of solutions sits today, and signals that the mass production will also require compliance to some cybersecurity.

On that, can you meet the price or requirements? Obviously, phase I with low price drone, you have very sophisticated cybersecurity capabilities. Can you meet the military's expectations in terms of pricing for phase II on drone dominance, do you believe?

Once going into the future. Every step of the program evaluation, secure digital data links, certified vendors, American manufacturing, cybersecurity, all of them move towards our existing position. For the FPV market segment, which is, yes, showing incredible numbers of volume under this program that intend to build this ecosystem in America, but very competitive, low value drone, which is very small one. For this FPV market segment, it provides optionality that we can choose to pursue if we want to, especially as they are moving more and more to Mobilicom capabilities as mandate for the future. We are very closely monitoring this emerging U.S. market trends and the DoD, Department of War resolutions, while carefully identifying our unique selling point for this market as it is very competitive area, demanding lower prices, but offering large opportunities and quantities.

That's, yes, creating a big buzz around the market, but it's also important that you can generate from that a sustainable company with growth margin revenue and scalability and not entering into fundamentally losing money over the ambitious plan. We are glad with the new resolution that came and brought the requirements towards Mobilicom's offering in different elements. We believe that phase III and phase IV in 2027 will be much more appealing to what we have to offer, and we are yet to decide if we are going to take and choose these lower-end, high volume, low-cost platforms and target that with partners. But there are activities that we are doing under that market segment to fortify our unique selling point for that.

Okay. Thank you very much.

Do we have more time for additional questions, maybe?

We have reached the end of the question and answer session. I would like to turn the floor back over to Liad Gelfer for closing comments.

Do you have any final questions, maybe?

Thank you. I think we can have the last one, another one that we just received. Sorry for raising it after we closed, but we close it after that, of course. Technically. Okay. So the question we just received, the final question right now. So with the FCC Trusted status and the tier 1 wins in hand, what are you most focused on over the coming quarters? Oren.

There are multiple things that keep us busy on the coming quarters. I think the first one is assisting and advancing our current recent designing with large OEM manufacturers who are often being very busy and have limited resources by guiding them through integration and validation process towards initial production and identifying first deployment customers that they can achieve because that will progress us as their partner to larger programs in the next phases faster than later. I think the second thing that keep us busy is delivering the second half by maintaining the monthly cadence and encouraging new orders from the existing OEMs that are in this production.

Third is finalizing the U.S. manufacturing agreement and building this U.S. production capacity, which is significant position as indicated by The Pentagon, and to meet first the requirements in salad, but be part of the very small number of ecosystem players that can meet the entire requirements of the DoD and the federal market in the United States, which we aim to accomplish and deliver first production run in 2026. Fourth, deepening our software layer. The OS3 cybersecurity for autonomy and the secured autonomy framework is the new cybersecurity requirements move into programs because that is where the higher margin recurring parts of licensing model of our solutions live, and that's unique position that we have versus others, and we are leading this market position.

I will say that those are the key four items, and all of it is funded from our current balance sheets we have, with the same disciplined bend rate that we are continuing to enforce over the last year. That's our focus for the coming quarters.

Thank you, Oren. I believe that concludes today's call. A replay will be available on ir.mobilicom.com. For any follow-up questions, please contact Chris Donovan, our Head of Investor Relations at [email protected]. Thank you for joining us and thank you for your continued interest in Mobilicom. Have a great day.

Thank you, Chris, good afternoon, everybody, I would like to thank you for joining us on this call. For those of joining us for the first time, the next few slides will enable me to introduce and provide a concise overview of Mobilicom. If you would like a longer version, they are available on our investor website, obviously. We will present briefly who we are, what we do, and how the company has strategically evolved to address a rapidly growing market in the cybersecurity opportunities around autonomous platform and unmanned systems. Let me introduce Mobilicom at a glance. Mobilicom offer essential IP-based high-value cybersecurity software and hardware solutions. Those are subsystems within the drones robotics, bought and used by drones robotics manufacturers to build their platforms. Those proprietary solution are the one that power, connect, secure, and safeguard drones robotics.

We can say that those are the heart and soul of the drones and robots. Mobilicom is actually at the convergence of three major trends. One is the drones, second is cybersecurity, and third is robotics autonomy, which position the company extremely well in the current evolution that we see in the defense, as well as in the commercial market. If you would like to describe a little bit more about Mobilicom's offering and our visionary approach, we can see that Mobilicom has two core divisions. One is hardware solution. Those are hardened, resilient communication and data link system designed to operate in contested environment. The second is cybersecurity and software solutions. Those focus on electronic warfare resistance, cybersecurity protection for the drone platforms and robotics.

We can also see that Mobilicom hardware, which is hardened hardware, holds significant key U.S. defense and regulatory validation, including the Blue sUAS Framework. We have the Trusted Cyber Certification, the NDAA validation, the DD Form 1494 equipment frequency allocation approval. During this quarter, Mobilicom was also included in the FCC new Trusted Drone list. Collectively, all of those certifications and approvals strengthened Mobilicom position with the U.S. Department of Defense market for drones and autonomous systems, and being part of the supply chain, for America, and may help streamline the qualification and procurement process for OEMs and defense programs seeking trusted, compliant drone technology for American solutions. Our business model is very clear for those two, let's say, departments or offering.

On the hardware, we established the customer relationship through the hardware solution that you see on the left side, the families of the data link, the mesh networking, the ground control stations, which enable them the basic operational capabilities of drones robotics. Those are generating about 50%-60% gross margin for our business, which is very steep and high, and it's based on the IP and knowledge and knowhow that we have embedded inside those products. We have the expansion into higher value cybersecurity and software solution that can generate higher gross margin, which is close to 90% with limited direct competition as we see today. That gives Mobilicom evolution into a very lucrative licensing per unit business model.

Since we already a hardware supplier for the drone manufacturers and the platforms, we can incorporate the cybersecurity and software solutions more efficiently without restarting a lengthy process with the platform and qualification or procurement with the same vendors we supplied them the hardware, which makes our cross-sell opportunity easier and market expansion faster in getting into scalability in our business. I would like to, with this slide, remind everybody what we previously discussed on our 2025 annual earning update, what we expect in 2026 going to be a year of growth for the U.S. drone ecosystem. We believe we are extremely well-positioned as one of the supply chain leaders for components for small-sized drones and larger ammunition providers. In this slide is our forward-looking framework for 2026. The following slide will show how we progressed on the plan that we set for this year.

Let me walk through the progress we have made against the 2026 outlook in Q1. On the hardware side, which is describing the Tier 1 customer pipeline. This is in addition to second and 3-Tier customers. We advise that on design win and R&D stages, our 2026 goal was three to four Tier 1 partners at this stage. As for now, we have met the goal for the year with the four players, including the two leading U.S.Tier 1 ISR drone platform for a cybersecurity SkyHopper and ICE electronic warfare software in the period, which we announced recently. In the initial production, the goal for the year was to be in three to four Tier 1 players and customers in this phase. As for now, we have three, all originating from the 2025 continuing with us.

These continue to generate initial follow-on orders still within the low rate initial production scale to support ongoing commercialization activity demos, and initial deployment with both existing and prospective customers. On the ramp-up stage, which is the goal was two for the year. We are with one currently. Our existing ramp-up customer is accelerating into mass production under the OPF-L program of record, deploying for the U.S. Department of Defense. The total Tier 1 customer we have right now, eight so far, against the goal of eight to 10, with the year still in front of us. We believe that we will continue to grow on that. On the software and cybersecurity side, the AI autonomy and OEM ecosystem, the 2026 goal is for four to six OEM partners across NVIDIA and Qualcomm, plus two AI autonomy software partners. The status is ongoing progress.

We are continuing our engagement with the NVIDIA ecosystem and the partners that we have there for the hardware and the software that we published in 2025. We are constantly working with Qualcomm and Qualcomm-based solution on the AI edge platforms and working with multiple engagements to fulfill the goal for the year. Let's discuss some of the operational progress and financial progress. On the operational side, production capacity, the status is ongoing progress as we planned. Our strategic long lead time inventory is building up continuously, and component pre-buying has been expanded above the initial plan, as we see stronger than expected demand signals from our Tier 1 customers. The U.S. manufacturing, our status is ongoing progress as contract manufacturers are in selection process in United States with an on-site visit and final terms underway.

I will come back to this in more details later in the call in dedicated slide. From the program of record expansion, the status is confirmed as this is the headline of the quarter. We received a $2.2 million purchase order in Q1 under the initial OPF-L plan, OPF-L program of record. There is an additional, which is part of the ramp-up that we are experiencing. Separately, our Tier 1 customer in the U.S. has progressed under the additional program of record, which is the U.S. Army LASSO program, which we'll cover both in the next slides. I would like to dedicate this slide on an update on the meaningful progress that was done and ongoing progressing with the programs of record. Let's spend a moment on the program of record picture, because this is where the fundamental story of our U.S. defense business sits.

First, during Q1, our Tier 1 customer has progressed under the U.S. Army LASSO program, which is Low Altitude Stalking and Strike Ordnance. This is a program of record of the Army. The progress was this is an initial deployment phase to equip infantry brigade combat teams with man-portable precision strike capability. What does it mean for Mobilicom? Our cybersecurity, data link, and electronic warfare software solutions are embedded with each this customer platform. The LASSO progress, therefore, broadens the U.S. Defense footprint of platforms in which Mobilicom technology is embedded and could be deployed in masses, and adds a new U.S. service branch, the U.S. Army, to customer base previously anchored by the Marine Corps. While we are thrilled by this inclusion, however, LASSO is currently in initial deployment phase, and we have no Mobilicom orders associated with this program to date.

We anticipate that that will change, but this is part of the progress that we see over those program. What the LASSO of progress does tell us and the investors is that something powerful and structural, the program of record winners tend to win additional programs of record. That is what we said in the past and that we are witnessing that is happening today. That is the compounding dynamic of U.S. defense procurement and is now visibly playing out for the platform for which we are embedded in. Now onto the fundamental program, the U.S. Marine Corps OPF-L. Already, we have close to thousands of systems already fielded in the recent years for testing evaluations and use. The production for mass deployment start has commenced in January, and the production is ramping up.

All of Mobilicom recent U.S. Tier 1 orders are related to this program, including the $2.2 million additional order we received in Q1. This program has a continued multi-year delivery cadence ahead of it. Usually, programs of record are at least for five years. Most are extended for 10 years, there is additional procurement for spare parts, maintenance, training, and so on. You understand the volume and the value of such program for a company like Mobilicom. I would like to take a step back from the individual programs in these slides and provide you with the full picture of our position in the U.S. defense drones ecosystem, which that's essential if you compare Mobilicom to competition, newcomers, and other players in this market. Currently, we have five very important regulatory or compliance certification, starting with the Blue sUAS Framework select.

Select means that they selected us and did the entire process by the Defense Innovation Unit for the Department of Defense. The NDAA certification, which was validated by DoD testers and evaluators. It's not self-declaration. It was a thorough process for software and hardware. We have the trusted cyber testing that we have done under the standardization. The DD Form 1494, excuse me for the numerical description, this is electromagnetic registration within the Department of Defense map, which is essential if you would like to catalog and include system for mass deployment within the U.S. forces. The new FCC Trusted Drone designation, which defines Mobilicom as a critical provider for the U.S. drones, that's really important. I would like to say that products not on this list cannot participate in future U.S. federal program. That's why it's a structural moat.

Obviously, the programs of record deployment and the success today with those programs shows how our position regulatory-wise and being embedded across the Department of Defense certification and regulation is translated into business, and we intend to continue with that and expand that. The operational channels footprint with the U.S. Our U.S. production capacity is being extended. The dual U.S.-Israel operation supporting us in our development, combat-proven evaluation, and then bringing solution to market. Established U.S. Department of Defense DLA partnership and sales channels are critical factor visited us on the different recent shows, seen us with those partners, which are critical partners getting into the U.S. procurement for the Department of Defense, which together give us flexibility to deliver into both allied government and commercial drones market later on.

Let's take a moment to discuss the recent announcement from, I think, a week ago, from one of the shows where we announced the two new design wins, with Tier 1 platform makers. This slide discussed one of the most important commercial developments since the annual call that we had, well, held a few months ago. We announced new design wins with two leading U.S. Tier 1 defense drone manufacturer platforms for ISR, which means intelligence, surveillance, and reconnaissance drone platforms. The first design win is with a well-known American drone manufacturer for a Group 1, which is handheld size ISR intelligence surveillance drone platform, supporting military application that already own and have deployment with United States, and scaling dramatically.

Mobilicom SkyHopper data link and the iService security software suite are being integrated to extend operational range, improve resiliency in contested environment, and provide advanced electronic warfare resistance and secure communication capabilities beyond the platform current configuration. Integration activity has been progressing over the past several months, and we currently anticipate to complete the integration process during the next quarter that will allow the customer to progress and catalog and use our solution and start selling them to, obviously, Department of War and other customers worldwide. The second Tier 1 design win, it's a major U.S. defense and commercial aerospace conglomerate. This is for a Group 2, slightly bigger, backpack-sized ISR drone, intelligence surveillance and drone platform designed for long-range mission, longer payload capacity. Mobilicom developed a tailored SkyHopper configuration specifically for this platform with the customer, including customized interfaces, mission-specific integration requirements, and so forth.

The combined SkyHopper and the ICE electronic warfare resistance solution is expected to enhance operational range, strength, resilience, and electronic warfare resistance capability and support more advanced operational scenarios for the customer's platform beyond what they have today. The integration and testing activity for the second design win are progressing very well. We anticipate to complete the validation process over the coming months or two, enabling the customer to begin offering the enhanced platform to the end users. Importantly, those two design wins represent two more seats at the U.S. Tier 1 table for Mobilicom, with both OEMs selecting Mobilicom's cyber secure SkyHopper data link and ICE electronic warfare software protection solutions. This reinforced the exact trajectory we said we were on, expanding presence across the trusted U.S. defense drone platform as ISR and autonomous or loitering munition solution and increasing military-grade cybersecurity communication.

I think it's, again, a good opportunity to discuss the cybersecurity regulatory momentum and what it means for Mobilicom. On the cybersecurity side, we are seeing an urgent need to meet cybersecurity regulations. I would like to mention that Mobilicom's strategy was not developed in response to current market trends. Mobilicom began investing in drones and autonomous system cybersecurity years ago based on the belief that cybersecurity would eventually become a core requirement for scalable autonomous operation. The challenge was developing cybersecurity solutions specifically designed for small-sized drones or robotics platform, where the size, the power consumption, the memory, the computing resources are highly constrained. Mobilicom developed a lightweight, embedded cybersecurity solution optimized for this tactical edge environment, while also working alongside with U.S. defense standardization initiatives. Today, we are seeing the market evolve in the direction we anticipated.

The U.S. Defense cybersecurity frameworks that were published, including the CMMC standard, the Cyber Survivability Endorsement Standard, the CSRMC initiative, the new one that was released in November last year, and the broader agenda by the Department of Defense called the Zero Trust Strategy, are increasing cybersecurity requirements across the drone and autonomous platform programs. The industry is moving beyond the basic one-time static cyber test that they had in the past towards an active, always-on online cybersecurity protection embedded directly on the autonomy AI edge computing of those platforms. This aligns closely with Mobilicom OS3 cybersecurity software and the Secured Autonomy Framework Mobilicom released, which were specifically designed for this new generation of requirements.

As cybersecurity is becoming increasingly integrated into program of record and future large-scale drone deployments, we believe Mobilicom is well-positioned as an early provider of purposely built cybersecurity solution for autonomous systems and specifically for small-sized loitering drones and autonomous system. Over time, this also creates a highly attractive recurring software licensing per unit opportunity for Mobilicom tied to deployed drone and robotics platforms. Now I would like to hand the call to Liad to walk through the Q1 2026 financial highlights, as well as our equity and cash position.

Thank you, Oren. Three months ended March 31st, 2026. The single number that frames the quarter is the $2.4 million in revenue visibility. Revenue visibility is what we covers recognized revenues plus confirmed backlog at quarter end. It was up 50% year-over-year. That is the metric that best captures what actually happened in Q1. Let me unpack the numbers behind it. Revenue. We reported Q1 revenue of $548,000 against the $844,000 in Q1 2025. This difference is entirely driven by delivery timing rather than just market demand. Specifically, certain Q1 shipments were deferred into later quarters, okay, due to temporary procurement schedules as the customer transitioned to scale program of record production. The underlying demand remains intact. The revenue has simply shifted out in time.

Order backlog was $1.8 million at March 31st, against $737,000 at the same point a year ago, up approximately 151% above the same point last year. Backlog more than doubled while reported revenue temporarily dipped. Post-quarter momentum since March 31st, the order book has continued to grow with additional orders from our U.S. Tier One customer under the OPF program, plus follow-on orders from other global customers, all of them to be delivered within 2026. As Oren just covered, two additional U.S. Tier One design wins. Cash position, $70.7 million as of March 31st. As we mentioned previously, zero debt, zero credit facility, zero convertible, clean balance sheet. During the quarter, we also terminated our at-the-market facility, a deliberate decision made from a position of strength because we did not need it. That decision reflects the discipline we want to demonstrate to investors.

We will only raise capital when it creates more value than it dilutes. Operating cash burn, approximately $528,000 per month in Q1. The increase is funding operation readiness and growth initiatives. The investment is targeted in three areas, each tied directly to revenue we expect to recognize within the next 12-18 months. First one is solution integration work for the new U.S. Tier 1 manufacturers we are designing into, like these two new design wins we published recently. Second one, proactive long-lead item inventory buildup for production scale deliveries, including for those under the OPF program of record and other orders to come. The third and the last one, our U.S. manufacturing strategy and UST expansion. $17.7 million in cash, combined with disciplined execution, provides runway toward positive cash flow as the order momentum continue to build through 2026. About our equity and cash position.

These slides consolidate our equity structure and cash position as of March 31st, 2026. Capital structure, ordinary shares outstanding were 12.6 million as of March 31st, 2026. Warrants outstanding are 2.6 million. The majority is struck at $5, which representing another additional 12.9 million of additional capital if exercised. Fully diluted share was 15.2 million, excluding employee ESOP and RSU grants, and 17.8 million, including all dilutive components. One thing to say compared to 2025, while the total fully diluted share did not change, we did see exercise of warrants in about 1.2 million, meaning it continue with this opportunity for additional future warrants exercise as the share will continue to increase. Balance sheet and cash management metrics, this has been covered and discussed in the previous slide. I will not return on that. Now back to Oren.

Thank you, Liad. This slide has six tiles of a snapshot and recap of execution across customers, technology, and partnership in Q1, most of which we have already covered, but I would like to briefly touch on two additional points. The international expansion. During the quarter, we announced design win with an Asia Pacific customer, a UAE-based defense manufacturer with initial orders, and an Israeli customer for India deployment with an initial order as well. The hardware first foot in the door playbook replicating across the regions, we see those expansion important for future growth of the company beyond United States, which is our focus today. We also launched two new products during the quarter. We continue with innovation, with maintaining the gap and answering the needs of the customers we are serving in America, in Europe.

The first, SkyHopper Tactical, which is a wearable software-defined communication solution purposely built in response to direct operational requirements from defense customers and designed for dismounted team operation in contested environment. That was a requirement that came from the early deployment into programs of record with the Department of Defense. Per those requirements that came in the second half of 2025, a new product was initiated, development was done, and product was released in a very short time, and it will arrive to the hands of the soldier that will use that very soon. The SkyHopper multiband, our next generation communication platform featuring software-defined band selection solution, which is twice the widest available solution in the market until that product was released.

We are doubling the capacity of the frequencies and operational scenario from any other solution for this market. That's unique, especially giving that software, that electromagnetic jamming interception and operation is the biggest issues today that we see in Ukraine, the Middle East, and American operation abroad. Therefore, expanding or doubling on that give better opportunity and performance to carry on the mission in any operational scenario. I would like to summarize our presentation to date. We believe that Mobilicom is entering an important transition period as Tier 1 defense programs advance from development to validation into broader production and deployment phases. Our investment thesis is centered on three core drivers. First, demand is building faster than current delivery timing. Backlog increased approximately 150% year-over-year.

Revenues visibility increased 50%. Mobilicom secure additional few millions of dollars order for program of record for deployment in United States as a follow-on to a $1.5 million order in late 2025. Second, we believe Mobilicom strategic moat continues to widen through expanding programs of record exposure with the FCC trusted drone designation, the growing Tier 1 customer relationship, and increasing cybersecurity requirements tied to the initiatives across autonomous defense systems. Third, the company is investing from the position of financial strength, ending the quarter with almost $18 million cash in hand, zero debt, no ATM facility, while continuing to invest in inventory to supply customer demand and being production readiness, including U.S. manufacturing footprint and cybersecurity solutions that support future production scalability opportunities, and higher margin recurring software revenue.

I think that this is the time to thank the leaders and employees around the world of Mobilicom for the tremendous effort this quarter. The execution, the dedication behind those results are all thanks to them. I also want to extend a specific thank to our co-founder, Yossi Segal, probably the smartest person I know. His continued innovation technology leadership, which remains central to Mobilicom differentiation for the long-term vision. Thanks to our entire team, we believe that Mobilicom is positioned at the right place and the right time, with rapidly evolving defense and autonomous system market, with significant opportunity ahead to scale and grow production programs ramp up, Tier 1 opportunity expansion, and demand for trusted cybersecure drone and autonomous solutions acceleration. On behalf of the entire Mobilicom team, thank you for the continued support. Chris, I think that this is the time to move to the Q&A.

Thank you. We'll now move to a question and answer session. Reminder for our analysts that are asking live questions, if you joined via the Zoom platform, please use the raise your hand function on the menu bar, and we'll unmute your line, and you can confirm with the pop-up on your screen. With that, I will open the line to Barry Sine with Litchfield Hills Research. Thank you.

Hey, good afternoon. Thank you for taking the call. Couple questions, if you don't mind. First of all, congratulations. Two major Tier 1 design wins, so we're off to the races there. I also really appreciated the update you gave us from last quarter's expected goals, and it looks like we're really meeting those goals. That's a great update, so thank you for that. Question is, on the new U.S. Tier 1 ISR design wins, could you just walk us through, typically, what is the path from a design win to the different milestones, and when might investors expect to see significant revenue coming from those new design wins?

Thank you, Barry. I would like to say typically what we usually have and specifically for those specific programs. For typical Mobilicom cycle with customers, and it's mainly dependent on the customers. Mobilicom is very fast and agile. Typically, 6-12 months for integration certification, and then we move to initial production orders, and then to ramp up. For the two new design wins, customer evaluation and integration through 2026 is already in very progress stage. Therefore, we expect that they will translate from completion of all the validation testing and catalog into their sales catalog solutions within the third quarter, which allow them initial orders in late 2026, and material contribution of those platforms move to scale production in 2027 onward. Short answer, initial revenue in 2026 and meaningful revenue in 2027.

Presumably because these are programs of record or are large Tier 1s, not just in 2027, but continuing on beyond that.

Yes. Both of those platforms are of very large known companies, significant Tier 1 players that already have substantial business, both in U.S. with the Department of Defense, but also with allied countries. They don't have to look for the business. The business exists. The fact that they are a partner with Mobilicom, integrating Mobilicom to close the gap on needs that they have that couldn't be met and answered with the current solution, speaks volume about our opportunity and how fast they can scale that from validation and testing, which is completed right now, into business creation, which is the next phase.

My next question. You announced during the quarter, and you referenced this in the call, about your most recent regulatory win, which is all of your products are in the FCC Trusted Drone Program, and that is on top of multiple other compliance certifications. Can you walk us through what does that mean when you're going to a customer and competing for a design win? How does that impact customers' decisions not just for U.S. tier ones, but for other customers and internationally? Presumably, if you're meeting the standards in the U.S., that should benefit you globally.

Yes, definitely. First, it was important that you mentioned, but I would like to note it again, that our full suite is covered. The SkyHopper data link, the MCU Mesh Networking, the Mobile Ground Control Stations, the OS3 cybersecurity for autonomous platform, the ICE electronic warfare software, all of them were defined in the papers and the publication made by the Department of Defense and the FCC public to the world under Mobilicom as trusted and critical components for America for drones robotics. That was amazing that they decided to include all of our offering. Second, federal customers and their OEMs can use our components without any restriction or risk for government exclusion, which means it signals to the market that Mobilicom is a critical technology provider for trusted drone. Yet another validation for Mobilicom position by the government, which is the regulator.

I would like to emphasize, it's creating a U.S. small ecosystem of vendors that meet the different criteria who will enjoy the market scalability. You cannot buy something which is not within the ecosystem that was approved, certified and regulated, which is, in a sense, a walled garden opportunity for the players that are in this list, and it's a very short list. In addition to that, I think that the CSRMC and the CMMC standards and the Zero Trust Strategy on cybersecurity are becoming gating criteria for mass production. Competitors facing delays before they can ship to scale, and we do not. We can anticipate that if customers would like to scale their production and they have to meet the cybersecurity criteria, they will not be allowed to do so without meeting those things, and therefore, we are the solution for the scalability going forward.

With your question to the regulatory procurement decisions, we witnessed that bids and programs recently initiated required that the winners will meet such regulation before they receive mass procurement orders. One example that I can use is from the Drone Dominance Initiative or program, which is very famous recently, where several of the 11 winners named several months ago didn't receive eventually the commercial order, and they didn't because they didn't meet those criteria. That was a very powerful sign that it's great that you have technology and you pass the first holders of first phase, second phase.

Before you are getting any commercial large quantity orders, most of the list of the 11 didn't receive that because they didn't meet those NDA requirements by validation and testing, not by declaration, the cybersecurity requirements, and other procurement registration that Mobilicom has, which then advise you the importance of what we have achieved for getting to the scalability with different programs in the United States going forward.

One more question, if you don't mind, please. You've talked about two key programs of record. The first one, and I think that's tied to some of the large orders you've announced recently, is the U.S. Marine Corps OPF-L program. The new one is the U.S. Army LASSO program. The U.S. Army is about two and a half times bigger than the Marine Corps, I'm assuming that this is a much larger potential opportunity with this new program of record than even the one that you already have won with OPF-L. Can you talk about that?

Any program of record is substantial for Mobilicom, given the fact that it's not a regular order, it's a long-term, multi-year commitment of the government to buy, preserve their capability, maintain, replace, and so forth. Any program of record is a huge one. You've mentioned the fact that our partner progressed on the LASSO program, which is not yet in the commercial stage, but it's getting there, and there is few players over there. The fact that our partner, the Tier 1 American platform maker that use our solutions or multiple of our products, progress to the next phase is very important. Once they win that can open a huge scalability opportunity, which is multiple times bigger than the OPF-L that we have today. That's obvious.

The U.S. Army is much, much bigger than the Marine Corps, that could accelerate significantly our adoption, obviously. What we said in the past is once you win the first one, your chances of winning the following ones are much bigger. The fact that they move to the next phase actually prove what we said. I would like to remind that these specific partners is not engaging on one program of record like the OPF-L. They are targeting eight, four in the U.S., and four international. You can imagine their importance for Mobilicom if they will scale to two, three, four of the eight. That's obviously a strategic partner that we are proving our commitment to joint work and acceleration with him as we speak.

Okay. Thank you for taking my questions, Oren.

Thank you Barry.

Now we're going to take a question from Blair Carey, i3 Capital.

Hey, Oren and Liad. How are you guys?

Thank you, Blair. Thank you for joining us.

Thanks for the update. I just have a couple of quick questions here, more relating to not necessarily U.S. operations. We've seen a dramatic depreciation or appreciation of the new Israeli shekel versus the U.S. dollar over the last even six months. I would say it's really accelerated over the last Q1 of this year. What is sort of the expense mix, and how are you guys thinking about hedging against your U.S. revenues and your Israel expenses?

It's a tough question, but important question to be asked, and so I would like to address it. First, I would like to say that the fact that we have R&D and operation team and insight in Israel is very important given the fact that Israel is in the forefront of drones, robotics, autonomy, and cybersecurity. Everybody clearly see the biggest cyber or drones companies coming from Israel. Being with foot on the ground, with sites over there, with R&D center over there, with talent over there, is extremely important for Mobilicom, in addition to the fact that the combat-proven experience that we gain from our products being deployed over there, and the technology that we understand and develop in cooperation with the government over there is essential and priceless for Mobilicom going forward, introducing that innovation into America and elsewhere. That's important to understand.

Second, the recent year FX changes, it's been, I think, in the last 12 months, was significant, yes. It affects our new Israeli shekel, which is mainly labor cost for the team in Israel. Yet the production that we are doing in Israel is done under US dollars, which means that it's not suffering or affected by the changes in the FX currency between the US dollars and new Israeli shekels. Third point, I think, is that the ongoing team growth in United States, the operation in United States, alongside with the planned U.S. production capacity this year, will decrease the effect of FX going forward while contributing to our business opportunity growth in United States. In the short term, we also implement different defensive methodology, FX currency, and that's another angle that we took on that.

Okay. Thanks very much for that, Oren. That helps me understand. As I understand it right now, the current contract manufacturing is done both in Israel and the Philippines. Is that correct?

Currently, the production is done in Philippines and Israel, where everything is done under the US dollars.

Yep.

The new production capacity is built in United States based on the Pentagon requirement and request.

Yep.

We increase our footprint in America and made it 100% American product, which we are proud of, and aligning ourselves with the Department of Defense requirements.

Yep.

Would like to win on the back of that additional business, obviously.

Yeah, I understand. Okay. Basically, over the course of this year, as the production capacity expands in the U.S., we should expect less impact as a result of foreign exchange on the cost structures, was what I'm hearing.

Yes, definitely. The fact that we increasing our team over here, and operation over here, and production over here will balance the effects of the FX and give us a more balanced strategy for Mobilicom being international company with different sites. Yes.

Thank you very much. Can you give me an idea about what's going on with the sales cycle and compare between what you've experienced in the U.S. versus the rest of the world, but in particular APAC, and in the NATO region countries?

What we've seen in the U.S. is affecting obviously Europe and Israel and other sites which are worldwide, which are leaders in the drone evolution. Most of them are targeting also the Department of Defense market. We've seen that the fact that there is tremendous budgets being allocated by the U.S. need to close the gap on the production scalability that was done by our adversaries like Russia and elsewhere, Iran. Budgets and programs are being allocated and progress rapidly. Therefore, we see momentum build in the market, and therefore we see more of players building their capacity and needs and adjusting their solution to mass market and adjusting their solution to meet with the challenges that we see in the battlefield where we have experience. That accelerate the market momentum.

Obviously, there is one end of the equation that fuel the entire anticipation of ramp up. Once they are deployed, the beauty behind those programs is that they will continue for long term. It's not one procurement process that I have to chase the other one. It's procurement processes that have multi-year, usually 5-10 years of constant deployment and delivery. I would like to also mention that Mobilicom specifically, our biggest success so far is in the loitering munition space, which is one-way ticket kamikaze drones. Once you use them, even for training, you have to buy another one.

Yeah

The recurring revenue on the hardware, let alone on the software. We have few things that are working well for us, although the recent wins were in a new field, in intelligence and surveillance field. Our previous wins in integrations and design wins by multiple Tier 1 players are in the loitering. We are now expanding into ISR drones and other elements. It is exciting time because the cycles in the U.S., it really depends on the companies. Some of the large companies we work with obviously are moving slower than Mobilicom. We are agile, very fast-moving company. Usually, we are ahead of the curve. We are before their needs, and we are waiting for them, which is obviously what you have to do when you are working with giants.

Once the giants are getting to mass market deployment, it's a great machine to ride to success, and this is what Mobilicom is doing.

Just to follow along with that, how does that relate, that cycle that you've described there today in the U.S. relate to your efforts in Europe and in the APAC region? Are you winning deals faster? Are your partners winning deals faster because there's already a quasi-certification from the Department of Defense? Or do you have to go through the same sort of procurement journey?

I would like to use real data from real meetings from the last few weeks, okay? Let's not extrapolate. Let's give you some information and truth.

Yeah.

In the last few weeks, Mobilicom was super busy across the globe. We've been in multiple conferences, exhibitions where we sponsored the event, had booths, lots of meetings with government procurement officers, program officers, as well as OEMs and manufacturers, which are eventually our target customers. We've done it in Europe, in multiple location in U.S. In those location, obviously we met with a lot of American companies, which some of them are partners right now or in partnership and progress, but a lot of other European or Israeli companies.

The fact that we met with Mobilicom and they want to replace their existing solution and add Mobilicom to their offering is to mainly Reduce the risk that once they will win something in America, they will have to replace their elements inside to something that America can trust, which is Mobilicom, one of few players over there. It's opened the door for us for additional business with Israeli as well as European companies that now would like and open the gate for Mobilicom for partnership and integration on the back of our success in America. Because if they want to win the American or NATO market, they have to use solutions that were certified and approved in America. Therefore, it accelerate or increase the opportunity for Mobilicom with companies outside of America. This is what I see.

I can name you, it's not one or two or three customers. Discussion were made and progress was made with multiple of those across the globe that we met in the recent weeks, in the recent two, three weeks.

I understand. Okay. Thank you. That's somewhat helpful. Just quickly, your OEMs, is it still mostly airborne drones that is of interest, or are they seeing more interest in land and sea drones as well?

One of the big Tier 1s that we are having from the A Tier 1s that we mentioned and discussed in Asia Pacific, a huge conglomerate, is all about ground robotics.

Okay, this is ground robotics. We've done some implementation with other Tier 1 in Israel, which is maritime.

Yeah

Deployed to India. I mean, actively deployed in India. We've seen and already implemented in other applications, which are either maritime or ground robotics from different kinds. Majority of loitering munition or small-sized drones, Group 1, Group 2, which are scalability-wise and volume-wise are the biggest and the lion's share of the market.

Okay. Thank you, Oren.

If you're chasing the dollar, dollars are big.

I get it. Thank you.

All right. Thank you, Oren, and thank you for those questions. With the interest of time, we're going to cut the presentation here. We saw some other questions come in via Q&A. We'll make sure to respond to you separately. That's going to conclude our session. On behalf of Oren, Liad, and the entire team, I want to thank you for joining us today and your continued interest in Mobilicom. A replay for this webinar, along with this presentation and related materials, will be available shortly on the IR site at ir.mobilicom.com. Along with the SEC filings, including our Form 20-F can be found at sec.gov. For any follow-up questions, feel free to reach out to me directly, Chris Donovan at [email protected]. Thank you very much for your time, and enjoy the rest of your day.

Welcome everyone to Mobilicom 2025 annual financial report webinar with investors. Joining us are Liad Gelfer, Head of Finance, and Oren Elkayam, CEO and Founder. This webinar covers Mobilicom 2025 financial reports with investors. Please note that today's presentations contain forward-looking statements subject to material risks. I'm advising everyone to refer to our Form 20-F for a full description. The agenda will include summary of 2025 annual financial and operational key highlights, 2026 financial outlook, and lastly, Q&A session with investors and analysts. This webinar is being recorded and will be later available on the company's investor website. I will now pass the call to our CEO, Oren Elkayam. Oren, the presentation is yours.

Thank you, Liad. I would like to start with a very brief introduction of Mobilicom for those of you that are not familiar with the company, and we'll continue with my belief on 2025 as we see it. Mobilicom offer an essential IP-based, high-value cybersecurity software, hardware, and cybersecurity solution. Those are subsystems sold to drones or robotics manufacturers. Those proprietary solution are the ones that power, connect, secure, and safeguard drones robotics. Mobilicom is actually in the convergence of three major trends: drones, the cybersecurity, and robotics autonomy, which positions the company extremely well going forward. Mobilicom has essentially two divisions: a hardened hardware solution. Hardened in this case means secured, more challenging to hack. Then cybersecurity software business, as you can see on this slide.

Mobilicom hardware solution were certified in 2025 as U.S.-approved products with the Blue UAS Select, the Trusted Cyber, the NDAA validation, and the DD Form 1494 electronic equipment allocation. The business model is very viable. We get foot in the door with secured hardware, which yield 50%-60% in margin, and then cross-sell the cybersecurity and software solution with up to 90% margin at minimal competition. Since we are already a hardware supplier to many of those drones platform providers, we can incorporate cybersecurity and software without undergoing a new procurement cycle. Mobilicom is a leader in this area and is well-positioned to success. I would like to start by give you my insight on 2025. 2025 marked a turning point for our business, securing Mobilicom position in the U.S. defense market.

We achieved critical milestones with the certifications of Mobilicom products for the Department of Defense, with the Blue UAS Select program, with the Trusted Cyber verification, with the NDAA validation and the equipment frequency allocation. Over 70% of our revenue and growth came from the U.S. market. It was the year where we reinforced our position as leader in cybersecurity offering and our standing with the following. We have released the Secured Autonomy Framework, which is an innovative approach to the market. We formed strategic partnership, completed integration and launched joint product with two NVIDIA AI autonomy computer providers. We established strategic partnership and introduced joint offering with an AI autonomy provider, software providers. Our solution are first to comply with the newly issued, Department of Defense cyber regulation, the CSRMC.

We are proud to be key contributor to our top-tier U.S. drone provider, supplying essential hardware and software solution for their loitering kamikaze drone. Over nearly four years of joint journey, at the start of 2025, we processed orders worth hundreds of thousands of dollars every few months. We finished the year with ultimately reaching a purchase order of $1.5 million for a quarter. That shows the significant growth and that our anticipation for next year. We are thrilled that this partner, the top-tier customer, has recently secured the Department of Defense program of record, a dedicated budget of approximately $250 million in deliveries planned over the next five years, and with option to extend that further. We have experienced massive increase in our balance sheet in 2025, driven by additional funding from warrant exercise and fundraising activity.

We finished the year with over $19 million cash in hand, reducing our monthly burn rate to the lowest in our history. This is a solid financial position that will allow us to grow in the coming years, which 2026 and 2027, which are pivotal years for our growth. We expanded our leadership and team by hiring new members, resulting in larger and stronger U.S. team as well as EMEA, Europe, Middle East, Africa team. This growth allow us to broaden our outreach across U.S., EMEA, and Asia-Pacific, leading to new customer acquisitions. I think that this is the time to thank our leaders and employees worldwide for their efforts and dedication that have resulted in an impressive achievement so far. I would like to express a special thanks to Yossi Segal, our co-founder, for his continuous innovation and leadership in technology.

Thanks to all of them, we are in the right place at the right time. We are still in an early stage of our scalability and growth, given our current position. I would like to hand off the call to Liad, our Head of Finance, to review our financial result first, and then I will continue briefing you on our activities in 2025 and the forward-looking expectation for 2026. Liad, please continue.

Thank you, Oren. We closed the year with $90 million in cash, up by 120% from previous year at $8.7 million. Out of that, $20.6 million raised via warrant exercise and equity, as Oren mentioned earlier. We have zero debt, zero credit lines, zero convertible, very strong flexibility. Revenue closed at $3.4 million, a 7% year-over-year growth. Out of that, over 70% from the U.S., mainly in defense sector. Q4 closed at $226,000. It's the second quarter of over $900,000 revenue. The H2 acceleration is the forward signal for our company. Gross margin at 53% only on hardware. It's IP-based technology margin consistent with our prior periods, and with operations set for scale production delivery in the future.

Monthly burn was $159,000, down 41% year-over-year. As Oren mentioned, lowest in the company history enabled the company several years of runway on existing cash. On a GAAP basis, the $23.7 million net loss includes $30.7 million of non-cash warrant fair value, which is IFRS requirement, and $5.9 million non-cash share-based compensation. Neither is cash out of the door. Non-IFRS EBITDA was $4 million, which is really close to the $3.2 million of last year. Full reconciliation you can see in our 20-F. The burn rate was decreasing over the years from $350,000 up to $159,000 in 2025. It's a 52% reduction while growing revenues. This is operating model maturity, not a cost cutting.

Our model, which reflects unique ROIC, return on invested capital, hardware is an asset-light contract manufacturing at high margins. Software licensing has near zero marginal cost per customer. We're talking about our operating leverage as we scale. We have a straightforward route to becoming cash flow positive, which we'll discuss over the next slide. About the balance sheet strength. The table shows cash up at 121%, more than double from last year. Again, zero debt. Equity is up by 190% to $8.8 million. It's reflecting a strong capital stewardship. On the $9.1 non-current financial liability, as mentioned earlier, this is an IFRS mark-to-market accounting for our warrants, not debt, no cash repayment, and warrants. When warrants are exercised, it automatically convert to equity.

Exactly what happened with the 12.6 of the exercise in 2025. As of December 31, 2025, we had 12.2 million shares outstanding. On a fully diluted, excluding ESOP and RSU, it was 50 million. Including all grants, we're talking about 17.8 million. This excludes warrants at about $5 per strike. If exercised, it's additional $40.1 million additional capital. The key metrics here that $75 million market cap on outstanding and $108 million on fully diluted. We believe what makes Mobilicom a hidden gem is that it's relatively low EV for revenue factor at around 90.6x multiplier at the end of the year, which decreased to 17x multiplier under the current market cap.

In comparison, our drone sector peers listed on NASDAQ have multiples of 40 and even higher. The $42 cash as a percent of the fully diluted market cap can bring us a really substantial cash cushion for the future. I will now hand off the call back to Oren to review our 2025 operational highlights. Oren, it's yours.

Thank you, Liad. Obviously, we had quite a lot of achievements in 2025, but I would like to focus on the key achievements and main ones that will help us grow significantly in 2026 and 2027. Let's go through a few of them. I think that the most important milestones that we have achieved in the end of 2025 and beginning of 2026 is the fact that a U.S. tier one partner, Mobilicom partner, won a program of record, which is a formally funded multiyear acquisition program. This is the gold standard of defense procurement. Our tier one customer won nearly $250 million POR, program of record, with our SkyHopper PRO data link and ICE electronic warfare resistance software as essential embedded components inside. Production has commenced. Deployment has commenced.

Purchase orders started as the customer ramp up to full production scale. Mobilicom expects continuous orders over the next five years. POR winners are usually historically wins additional programs of record by other Corps in the DoW as well as allied nations. This is a compounding multiyear revenue driver for Mobilicom. Mobilicom, in fact, expects the program of record budget to increase more significantly than it was set four years ago, before the surge in demand for loitering munition kamikaze drones caused by the recent conflict in Ukraine and the Middle East. I will give you one example. The fiscal year 2026 budget request by the Marines shows a massive increase in autonomy investment of over $5 billion, suggesting a high demand for capabilities like those offered in this program of record.

I think that one of the biggest milestones achieved after years and years of joint work is this program of record that will pivot Mobilicom success going forward and will be the base of additional wins by this partner and other partners that are using Mobilicom solution. A second important milestone this year was the U.S. regulatory compliance. This builds on the Blue UAS Framework certification from February 2025, where the SkyHopper family of products models were DoD Department of Defense approved, and the NDAA hardware and software compliance, where the Trusted Cyber certification was achieved, and the DD Form 1494 electromagnetic allocation map was accomplished. Mobilicom arguably has a comprehensive U.S. regulatory certification stack in the drone communication and cybersecurity space. What this means for competitors is products not on this list cannot participate in U.S. federal programs.

That is a structural competitive moat. There is essentially a very little competition space right now in United States. In the data link and communication segment, there are only five data link SOF providers in this space. In the market that is going to grow rapidly, some will say to tenfold very fast. Therefore, there is expected that every one of those players will win and grow significantly. That showcase our unique position with this regulatory in a market that is experiencing very high growth. In EMEA and Asia Pacific, we experience expansion and wins. Mobilicom invest in business expansion and landed new design wins with customers across Europe, Asia Pacific. For example, we have new customers in Europe, in Germany. We have an India ISR platform. We have Middle East UAE partners and customers.

We have Asia Pacific growth with a tier one player in the robotics as a robotic provider. Significant expansion is occurring in other markets as well. Our OS3 and Secured Autonomy was a very big breakthrough this year. We reinforced our position as leader in cybersecurity offering for small-sized drones and robotics with the release of the Secured Autonomy framework, which is a leading market position for us and for the market security. We formed a strategic partnership and completed integration and launched first product with two NVIDIA AI autonomy computer providers, Aitech and ARK. We established strategic partnership and joint offering with the leading AI autonomy provider, Palladyne AI.

Our solution comply to the new, newly released cybersecurity regulatory that was recently released by the Department of Defense, which is going to be a pivotal compelling event for the industry requiring all platforms, and definitely autonomous platform, to have active cybersecurity like Mobilicom's OS3 solution, which is currently the sole solution in the marketplace. Together, this partnership create a hardware to software flywheel. Embedded hardware drives deployment, while the software generates recurring high margin revenue, and certification protect the moat. I would like to expand further about the OS3, and the American Department of Defense CSRMC standardization. In November 2025, the U.S. Department of Defense issued cybersecurity risk management construct, the CSRMC. This mandate a shift from static to continuous active real time cybersecurity defense across all autonomous systems, by September 2027 as estimated.

In the defense market, September 2027 is tomorrow, which means that g-companies will have to decide, by the time that they will realize what they have to accomplish and deploy between buy versus make, buy most probably will be the choice solution of choice. Our OS3 platform was designed for exactly this. It was not built in response to the regulation. It was built ahead of it. We believe we are one of the first commercially available solution fully addressing CSRMC requirements. Combined with the recent FCC Trusted Drones, our OS3 position reinforce why we describe Mobilicom as the emerging standard for autonomy system cybersecurity. Every defense drone manufacturer that must comply with the CSRMC should evaluate our solution, and we are already in the room. Another important milestone was the transitioning to ordinary shares. We accomplished ADS to ordinary share conversion in December 2027.

Another promise we made for the market and executed on time, trading as Mobilicom since December 8. This removes fees and friction. It opens index eligibility. It simplifies U.S. market access. A structural upgrade to our capital market profile. Given our achievement, as well as our position to capture market share in this rapidly growing market, we are still in the early stage of our scalability and growth. We would like now to present the outlook for 2026. Obviously, given the fact that we are early in a market growth, we are unable to provide guidance for 2026 in numbers, but we can say a lot on what our expectation on the business delivery that will lead to revenue growth significantly in 2026 and 2027.

We can see from the outlook of our hardware business that we are embedded across multiple players in tier one, tier two, and tier three platform makers around the globe. We would like to focus on tier one because we believe that the tier one customer pipeline is the one that will determine the success, because those are the big players are going to win the big programs and budgets. We finished the year of 2025 with six total tier one customers, two of them in design win and R&D stage, four of them in initial production. We anticipate to have between 8-10 tier one players across the globe, where three to four will be in R&D stage, three to four are in initial production, and two will be in the ramp-up production mass production scale.

In fact, those of you that follow what is happening with Mobilicom, with the recent growth in the Q4 of 2025, the order that we received ahead of time, the program of record that was achieved, the first of the two ramp-up was already happening. Delivery, production, and scalability is already happening, and the ramp-up of the first one is already delivered, so we are on time. In addition to that, few additional players are under integration. Significant players from U.S. platform makers are in integration with Mobilicom. We are expanding the tier one customer pipeline in the U.S. and in the world, as we promised. On the cybersecurity and software pipeline, we had in 2025 two NVIDIA partner-based for our solution.

We estimated that we can accomplish four NVIDIA and Qualcomm being a significant player on the smallest drones that we are seeing right now scaling dramatically. Therefore, we will have those four to six partners, Qualcomm- and NVIDIA-based, as well as additional AI autonomy software partners. That will position Mobilicom very strongly in the software and cybersecurity business for the drones or robotics market, and will specifically position Mobilicom as the center with the Secured Autonomy concept and partnership to provide a complete offering for the autonomy of drones or robotics, which is the future of every deployment going forward. With regard to cash flow positive, which is our aim, we have indicated in the past that an annual rate of $12 million in revenue is the line where we can get to cash flow positive.

Which means that the quarterly run rate of about $3 million will bring us to cash flow positive run rate. We anticipate again that we can reach this point in three to four quarters as the customers and programs of the governments are scaling. As they do deploy and as the programs are ramping up forward as we see happening right now, and customers are ramping up in their production, Mobilicom delivering to those customers the hardware and software will reach that point. Again, after you saw our cash position, we have more than enough funding in place to reach the cash flow positive targets that we have. Another important guidance that we would like to describe is our production and delivery capacity.

We believe and discuss in the next slide the strategic inventory and ready to deliver at scale position that we would like to accomplish, and the U.S. manufacturing strategy. Both of them will bring us to the capability to expand our capacity of production. In the hardware annual production capacity, we want to exceed 3,000 units. On the software annual delivery capacity, obviously it's unlimited, being software solution. Those are the capacity that we want to achieve. I would like to specifically describe two important activities and milestones for 2026. In the supply chain context, I would like to share with you that AI electronics demand has surged. Global defense race is underway. The tariff situation with the U.S. tariffs on China drone components is significant.

China export controls are hardened and creating a big issue for the industry, and there is 16-24 weeks component lead times right now in the market. We see competitors without forward inventory are facing production delays. We are entering a perfect storm situation, when all of those elements on the left side are creating a very big industry-wide challenge, and that's for us a big opportunity. Our response is proactive pre-buying the long-lead time items components. We would like to have MCU and RF models ahead of everybody else. We would like to have NDAA compliant parts now, and we would like to utilize our significant cash position and financial strength to our success going forward. The results when POR, program of record, orders accelerate as we expect, we fulfill immediately.

When new PORs are entering, we will fulfill immediately. When competitor shortage creates gaps, we stepped in. Pre-buying at today prices protect our gross margin from further tariff escalation. Cash-constrained competitors cannot replicate this strategy. Therefore, our balance sheet is not a safety net, it's our weapon right now, and that's why the growing financial balance sheet, and which was improved quarter by quarter last year, is going to be utilized to build the stage for the great success going forward. Let's discuss the U.S. manufacturing. Obviously, some of you follow the American Security Drone Act, the ASDA, in force since December 2025. Ban federal funds for foreign adversary drone components. You cannot buy and use any foreign components or drones based on this act. The executive order, fourteen three oh seven, direct agencies to prioritize U.S. manufactured drone.

We are establishing U.S.-based assembly and integration to comply. As was announced just few days ago, the Department of Defense has already designated us as trusted drone provider, one of only four global players that receive it in weeks after the legislation have passed. That designation explicitly supports our path to U.S. production. We aim to be manufacturing domestically by the end of 2026. The five-step plan that we have established is establish U.S. assembly, leverage our program of record momentum to justify the investment, which is not high, by the way. We will create a regulatory moat versus non-compliant competitors. We will scale towards the government plan to reach 1 million drone a year vision, and we'll unlock the full federal addressable market for Mobilicom, not just our current customer base, beyond that.

We believe that with the right U.S. production, scalability, in addition to the production scalability that we have around the globe, will enable us to win bigger business and continue the momentum that was created, and that also reinforce the position that we gained with the Department of Defense and the FCC, that established Mobilicom as critical, strong component provider, and put that in the government books as can be seen days ago. That, I think, reinforce our position. I would like to provide some comments summarizing the presentation to date, before questions. There are eight good reasons why Mobilicom is a compelling opportunity today. First, the FCC Trusted Drones set Mobilicom as one of the few first players, and the only company with multiple products exempt. The DoD, Department of Defense, validation of our technology is a critical milestone for the investor community.

The program of record that our partner won of starting from $250 million with five years funded program of record, that is our system-embedded inside and production is running, is a great pivotal stage for Mobilicom that we'll build upon. The certification of Blue UAS Select and others with the full compliance stack as U.S. solution for our SkyHopper hardware solution are DoD-certified, and are important because the competitors' number is low, and with those that are not in the game and not in the list will not be able to win the growth of the American market as Mobilicom is going to enjoy. The secured autonomy and OS3 industry first to comply to the recent Department of Defense standardization and regulation is critical, together with NVIDIA and Qualcomm compute that we have.

Our strong balance sheet with $19 million in cash, zero debt, and several years of runway is important factor. The capital efficiency, under $160,000 per month, and three consecutive years of reduction give us a clear path to cash flow positive target. The U.S. production by the end of this year expand our production capacity, and the regulatory moat versus competitors is important position. We are expanding our tier one drone platform partners and increasing our cybersecurity and autonomy position with NVIDIA and Qualcomm AI partners. All of those show that Mobilicom in 2025 build a foundation. 2026 is where it compounds. 2027 will grow even higher and better. We have a very exciting years ahead of us.

Thank you, Oren.

With that.

We'll now move to the investor analyst Q&A session. Our next questions are coming from Barry Sine, sorry, with Litchfield Hills Research. Barry, your line is live.

Hey, good afternoon, gentlemen. Can you hear me okay?

Yes, we do. Thank you.

Okay, a couple of questions if you don't mind. First, I wanted to talk about just getting an update, make sure we're all on the same page in terms of current ownership and dilution. It looks like from the 20-F, and by the way, Liad, thank you very much for getting that out so timely so we have it for this call. Looks like insider ownership is about 7.6% currently, you know, following the tax transactions that management did last year. Is that about right?

I would like to correct you. The insiders' ownership is much higher than that. First, I would like to mention that the sales to cover transaction conducted in 2025 were mandatory tax withholding sales related to the RSU vesting, not discretionary insider sales. We didn't have any discretionary insider sales in 2025. The sales to cover executed under the 10b5-1 broker plan was completed. The insiders, including board members and key executive, currently hold about 15% on a fully diluted basis, so much higher than you mentioned.

Okay, I'm glad I asked. In terms of scalability and your capital requirements, in the presentation you gave a lot of numbers, $19 million in cash. There's still additional warrants that if those are exercised, that'll bring your cash up to about $33 million. No debt, you'll seem to be in pretty good shape. Your CapEx is minimal, and I'm assuming when you talk about U.S. manufacturing, you're gonna do that through a contract manufacturer. You're not gonna break ground and build your own factory. It's. I think, Oren, you said during the script that you do have more than enough funding. If you kinda bring us up to date, because there are other companies in this space where we're seeing a lot of capital raises, and as you know, those come with dilution.

I think it's an important question, thank you for that, because I think that this is where we shine. This is our uniqueness and I believe the difference between Mobilicom and everything else that you see on the market right now in the drone-related business. Our business model intentionally maintains a very low capital requirement. For our hardware production, we use contract manufacturing. We do not own facilities and factories, for the software delivery has near zero marginal cost. Our assets base is IP, know-how, certification, the customer relationship, not the production equipment. If we have to scale 2x or even 10x in production increase, does not require potentially a proportional capital investment. It requires supply chain pre-position, which with our $19 million cash in hand, and much less than that we can accommodate, in coordination with contract manufacturers that we can use.

We are taking producers around the world, we give them the drawings and know-how of Mobilicom that they can build a solution for us. They build the hardware, and then we burn inside the IP and software that makes this hardware the valuable product that we have. We control the IP, we control the know-how, and we can scale fast with no significant capital investment, and that's the beauty around Mobilicom business model. We do not anticipate needing equity raises to reach cash flow positive. The $19.1 million cash position with the existing very low burn rate provides sufficient runway to fund operation and strategic inventory throughout the programs of record ramp up and additional programs of record that we anticipate. The U.S. manufacturing specifically, we are establishing assembly operation, not building new factories.

The capital requirement is manageable and is already built into our operational plan. For your question, we do not anticipate any fundraising. We don't need that in order to build the capacity even to go 2 times or 10 times on our capacity of production.

Okay, that's very helpful. My next question. You touched on this in your prepared remarks. I wanted to ask about the Federal Communications Commission's announcement, where you're included in the first batch in their trusted program. Congratulations on that. If you could kind of translate that for investors, what does that mean in terms of your ability as you go out, you talk to prospective customers or even your existing customer base? What does that mean? You know, maybe we can discuss what that means in terms of the impact on the bottom line on the EBITDA generation for 2026.

I think that before I'm answering the question, we have to emphasize the fact that the government of the United States and this administration issue a new legislation under the FCC related to drones and drone components being produced or delivered from outside of the United States. Within weeks, one of the first companies to get a waiver for that and be acknowledged as a critical drone solution provider with multiple solution inside is Mobilicom. That says volumes about our position, because the fact that the Pentagon and others are calling us and working with us on understanding our needs and capacity and scalability and production and so on give you some insight on Mobilicom's position within the U.S. drone marketplace. With regard to your question, the FCC Trusted Drone designation is more than just compliance milestone.

It certified that our entire product range, including the SkyHopper PRO data link, the mesh networking, the ground control station, and our newly cybersecurity and software solution like the OS3 and the ICE electronic, electromagnetic resistance solution, possess no national security risk and is considered as a critical component for the U.S. Department of Defense. We are one of the four companies worldwide that receive it within weeks. We are the only one with multiple products included. This designation remove the procurement barriers for U.S. federal buyers. It strengths our position with the Blue UAS market. It support our U.S. manufacturing plan. For the near terms, we believe it will accelerate existing customer procurement decision and facilitate new discussion with drone manufacturers that provide that previously was hesitant to do business due to regulatory concern.

In the long term, it will enhance Mobilicom standing with the Department of Defense and increase awareness and perception of Mobilicom among global drone and robotics manufacturer worldwide. I think that has immense important milestone for Mobilicom success going forward.

If I can sneak in one more. I wanted to ask about the impact of the current situation with Iran. Obviously, the United States and Israel are engaged in combat operations there, and I know that you have to be very sensitive in terms of you generally don't disclose customers or operations. Let me ask this question more hypothetically. Hypothetically, if I was the prime minister of a small Middle Eastern country, you know, in combat operations, you know, with a larger country that was some distance away, how might I utilize Mobilicom's products or, you know, drones that incorporated Mobilicom components into those drones?

Barry, I appreciate your sensitive question. I would like to say the following. We have contractor confidential obligation with all our defense customers and definitely with the government we are dealing with. This is, you know, standard practice in this industry. We do not comment on specific operational deployments or theaters where the weapons are being carried or used. What I can say that our systems are in production with tier one U.S. providers and Israeli tier one drone and loitering kamikaze drone manufacturers, whose platform are sold to the U.S. Department of Defense, to the Israeli Ministry of Defense, to European allies and nations. Those platforms are being actively deployed right now as we speak to the soldiers. No more demos and testing. Those are real deployments to soldiers in those nations, as we speak.

The recent program of record that was won by our top-tier U.S. partner is also heavily deployed with the U.S. Marines, which if you follow the news, are usually the first to reach U.S. war conflict area zones around the world. I don't want to say more than that, but I think that I gave enough clues here. The FCC, by the way, Trusted Drones designation, specifically citing our role in U.S. defense and national security program. It also reflect the operational relevance of our technology to the defense community. Going backward to that and the fact that we are defined as critical software, cyber and hardware provider to U.S. that receive this waiver immediately within weeks speaks volumes about that.

We believe that the geopolitical urgency in the structural tailwinds of our business is in the tailwinds of our business. We believe that conflicts globally are demonstrating that drones without robust communication, without electronic warfare resistance, without cybersecurity that Mobilicom has, are rapidly neutralized. Therefore, that reality is driving the CSRMC mandate and the U.S. ASDA legislation and accelerating the procurement timeline for our customers and for Mobilicom products. Did I answer that for satisfaction?

No, that's a great answer. I understand the sensitivity, but you gave a lot of information, you know, working around that sensitivity. Thank you very much, and those are my questions. Thank you.

Thank you, Barry.

Thank you, Barry, for the questions. We have received few more questions from investors. The first one is, can you provide an update on new customer wins over the past quarter, particularly within U.S. and NATO aligned defense programs, and how these may translate into recurring revenue? Oren.

In the past six months, we had a few design wins across the globe. We have design wins with a European German partner. We had a UAE, which is important ally to United States, design win and purchase orders. We had design wins and purchase orders for an Indian ISR, intelligence surveillance reconnaissance platform. We had an Asian tier one robotics partner that have consecutive orders. These wins follow a consistent pattern. There is an initial design win, then there is initial orders, and there is follow-on production orders that lead to platform expansion. This is the pattern that we see. Recurring revenue dynamics. Once embedded in production drone platform, our system generate reorders at each production run of those customers.

One example is our Israeli tier one or the U.S. tier one that has placed multiple consecutive production orders over the last two years for the loitering munition, and adds new platforms. They not only produce more from quarter to quarter and place that into the hands of soldiers in different allied nation in United States, and because of the nature of their loitering munition, they also scale and add new platform to Mobilicom. We've seen that happens with Mobilicom. The same is happening with our Asian tier one, for example, robotics partner, is on their second order right now, which is twice the size of the previous order. This is not one-time project revenue.

This is the beginning of platform embedded recurring demand. We see sequence that is repeated by the Israeli tier ones, the American top-tier player, the Asian top-tier players. We anticipate that will continue with the same partners, for other partners that we have, which will eventually scale Mobilicom revenue, scale our business and scale our market share across the software, the cyber and hardware business.

Thank you. Another question received was, following your participation in the recent program of record through the major U.S. defense contractors, what visibility do you have into additional program wins or expansions, and how should investors think about scaling revenues from these opportunities?

I would like to say the following. Our top tier U.S. customer, which won the program of record for the DoW just recently, is aiming for multiple additional programs of record with the Department of Defense and few additionals with allied nations. As we mentioned, we believe that, as we mentioned and we can see in typical history, program of record winners typically secure more program of record from other corps of America and from allied nations. This creates a compounding multi-year revenue growth opportunity for Mobilicom. We estimate some of those win could materialize in the coming year and two. We anticipate those additional wins in the coming future. In addition, we have discussed in the past our Israeli-based tier one customers that are addressing the U.S.

Programs of record as well that could be materialized in the coming year as well. We have not one, but several tier ones that are progressing on several programs of record around the globe. Furthermore, I can say that based on our achievements in 2025, and the win of program of record and the scalability, other significant drone players in the United States are right now under integration with Mobilicom. Those company platforms are already in production, and they already have delivery programs to the U.S. Department of Defense and their allied nations. Winning them and entering as a solution in their platform will open immediate delivery to other programs as well. For revenue scaling, a program of record creates a 5-year funded production program and then that can be extended.

If a second program of record or similar scale will be awarded, the combined revenue runway would materially change our cash flow positive timeline. We do not guide on specific POR probability, but we believe that our certified product portfolio, the field proven track record, the regulatory compliance position put us as a credible choice for additional programs to be won by our partners, and that will leverage and will promote Mobilicom significantly. We have one, we anticipate more, and any one more will just scale significantly Mobilicom progress and revenue generation and cash flow positive obviously, and profitable company. Then the software per unit licensing model will kick in that will even accelerate more the Mobilicom growth.

Thank you, Oren. Last question. As the business scales, how do you expect the mix between hardware and software revenue to evolve? What implication does that have for the gross margins and long-term pure operating leverage?

I would like to start by saying that what we've seen in history in other revolutions similar to the drones or robotics revolution or autonomy revolution we've seen here, that the business always started with hardware, but the long-term winners and the profitable companies came from the operating system software cyber side of business. Given that, we said that the hardware, which is lucrative, solution based on IP that Mobilicom own, giving us a very lucrative, a significant gross margin to start with, which is the foot in the door, and then we are scaling and cross-selling the software and cyber security solution. Today, revenue is mainly hardware driven, with software embedded as part of our end-to-end solutions. The gross margins of the hardware is 50%-60%, reflecting a genuine IP value of our system.

As software partnerships commercialize, like the ICE Suite, the OS3 licensing, the Secured Autonomy Framework, the partnership with Palladyne AI bundle solution, all of those are per unit licensing. The software revenue layer growth will is 80%-90% gross margin. The trajectory is that as those tier one customer move from design wins to ramp-up phase, hardware volume increase, simultaneously the software and cybersecurity licensing per unit add their margin recurring software revenue, which then the mix over time, we expect the software to represent an increased percentage of our total revenue, improving the blended gross margin and operating leverage. I would like to say that a 50%-60% hardware margin, which is very steep and high by the way, is only the floor, but not the ceiling to where we can get.

If you add to that the ROIC, the return on investment capital, that's the magic of Mobilicom in comparison to all the other peers, because then we have a lucrative business that needs very little capital investment to scale 10 times, but we have the benefits of the high gross margin and the software and cyber gross margin that bring most of our revenue and gross margin to the bottom line, and that's the magic of Mobilicom.

Thank you, Oren. In the interest of time, we have no time for other questions. We will be glad if you could send us by email to the [email protected] contact, and we'll do our best, you know, to answer every question that you didn't succeed to do today. We want to thank everyone for joining Mobilicom 2025 annual earnings call, and remind everyone that this webinar will be recorded and will be presented in our IR website under News and Media section. Thank you very much to everyone, and goodbye.