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Item 1A. Risk Factors

2026-04-16 compared with 2025-08-04 · 398 added, 339 removed, 901 unchanged (45% of the section changed)

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Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refers to the Company and its subsidiaries.

Summary of Risk Factors

The following list provides a summary of our risk factors, which are further discussed below:

Risks Related to ConnectM’s Common Stock

● The market price of ConnectM’s Common Stock is likely to be highly volatile, and you may lose some or all of your investment.

● Volatility in ConnectM’s share price could subject ConnectM to securities class action litigation.

● Sales of a substantial number of the shares of ConnectM’s Common Stock in the public market could cause the price of the shares of ConnectM’s Common Stock to fall.

● Because ConnectM does not anticipate paying any cash dividends in the foreseeable future, capital appreciation, if any, would be your sole source of gain.

● Future sales of shares of ConnectM’s Common Stock may depress its stock price.

● Provisions in our Charter and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.

● Our Charter provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders and that the federal district courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees or the underwriters or any offering giving rise to such claim.

● ConnectM is an emerging growth company and smaller reporting company, and ConnectM cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make its shares less attractive to investors.

● Risks Related to ConnectM’s Business

Business and Operational Risks

● Due to ConnectM operating as a going concern, there is a possibility that ConnectM may never be profitable and you may lose all or part of your investment.

During the twelve months ended December 31, 2025 and 2024, ConnectM incurred net losses of approximately $16,000,000 and $23,000,000, respectively.

Continued operations are dependent on ConnectM’s ability to complete equity or debt financings or generate profitable operations.

Such financings may not be available or may not be available on reasonable terms.

● Our growth strategy depends on the widespread adoption Modern Energy Economy (MEE) Systems, MEE Technology, and MEE Services.

● If we cannot compete successfully against other home electrification and energy companies, we may not be successful in developing our operations and our business may suffer.

● With respect to providing electricity on a price-competitive basis, solar systems face competition from traditional regulated electric utilities, from less-regulated third party energy service providers and from new renewable energy companies.

● Due to the limited number of suppliers in our industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, quality issue, price change, or other limitations in our ability to obtain components or technologies we use could result in adverse effects.

● Damage to our brand and reputation or failure to expand our brand would harm our business and results of operations.

● Developments in alternative technologies may materially adversely affect demand for our offerings.

● Obtaining a sales contract with a potential customer does not guarantee that the potential customer will not decide to cancel or that we will not need to cancel due to a failed inspection, which could cause us to generate no revenue despite incurring costs and adversely affect our results of operations.

● Our inability to properly utilize our workforce could have a negative impact on our profitability.

● Expanding operations internationally will subject us to a variety of risks and uncertainties that could adversely affect our business and operating results.

● We may not be able to effectively manage our growth.

● We are a decentralized company and place significant decision-making powers with our subsidiaries’ management, which presents certain risks.

● We may not realize the anticipated benefits of past or future investments, strategic transactions, or acquisitions, and integration of these acquisitions may disrupt our business and management.

● If we are unsuccessful in developing and maintaining our proprietary technology, including our Connected Operations applications, our ability to attract and retain OEMs could be impaired, our competitive position could be harmed and our revenue could be reduced.

● Our business is concentrated in certain markets, putting us at risk of region-specific disruptions.

● Changes to the applicable laws and regulations governing direct-to-home sales and marketing may limit our ability to effectively compete.

● Our growth depends in part on the success of our relationships with third parties.

● ConnectM operates in the early-stage market of MEE adoption, has a history of losses and expects to incur significant ongoing expenses

● Failure to hire and retain a sufficient number of employees and service providers in key functions would constrain our growth and our ability to timely complete customers’ projects and successfully manage customer accounts.

● Failure by our vendors or our component suppliers to use ethical business practices and comply with applicable laws and regulations may adversely affect our business.

● If we are unable to retain and recruit qualified technicians and advisors, or if our board of directors, key executives, key employees or consultants discontinue their employment or consulting relationship with us, it may delay our development efforts or otherwise harm our business.

● ConnectM’s management has limited experience in operating a public company.

● The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members and officers.

● We may be materially adversely affected by negative publicity.

● Our business, financial condition, results of operations and prospects can be materially adversely affected by weather conditions, including, but not limited to, the impact of severe weather.

● Our results of operations may fluctuate from quarter to quarter, which could make our future performance difficult to predict and could cause our results of operations for a particular period to fall below expectations, resulting in a decline in the price of our Common Stock.

● Adverse economic conditions may have negative consequences on our business, results of operations and financial condition.

● ConnectM is highly reliant on its networked and cloud-based business model and information technology systems and data, and those of its service providers which may be subject to cyber-attacks, service disruptions or other security incidents, which could result in data breaches, loss or interruption of services, intellectual property theft, claims, litigation, regulatory investigations, significant liability, reputational damage and other adverse consequences.

● Our ability to obtain insurance and the terms of any available insurance coverage could be materially adversely affected by international, national, state or local events or company-specific events, as well as the financial condition of insurers.

● Our insurance policies against many potential liabilities require high deductibles, and our risk management policies and procedures may leave us exposed to unidentified or unanticipated risks.

Additionally, difficulties in the insurance markets may adversely affect our ability to obtain necessary insurance.

● Increases and uncertainty in our health insurance costs could adversely impact our results of operations and cash flows.

● Failure to remain in compliance with covenants under our credit and loan agreements, service our indebtedness, or fund our other liquidity needs could adversely impact our business.

● If we fail to develop and maintain an effective system of internal control over financial reporting and other business practices, and of board-level oversight, we may not be able to report our financial results accurately or prevent and detect fraud and other improprieties.

Consequently, investors could lose confidence in our financial reporting, and this may decrease the trading price of our stock.

● Our historical financial results may not be indicative of what our actual financial position or results of operations would have been if we had always been a public company.

● Our reported financial results may be affected, and comparability of our financial results with other companies in our industry may be impacted, by changes in the accounting principles generally accepted in the U.S.

● The Company has material weaknesses in its internal control over financial reporting.

If ConnectM is unable to remediate these material weaknesses, or if ConnectM identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal controls, ConnectM may not be able to accurately or timely report its financial condition or results of operations, which may adversely affect its business and the market price of ConnectM’s Common Stock.

Risks Related to Data Privacy

● Any security breach or unauthorized access or disclosure or theft of data, including personal information we gather, store and use, or other hacking and phishing attacks on our systems, could harm our reputation, subject us to claims or litigation, financial harm and have an adverse impact on our business.

● Our business is subject to complex and evolving laws and regulations regarding privacy and data protection.

Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, increased cost of operations or otherwise harm our business.

Risks Related to Electrification and Decarbonization Business

● ConnectM’s future growth and success are highly dependent on the continued acceleration of electrification across homes, commercial buildings, and transportation fleets.

This includes the adoption of electric-heating technologies such as heat pumps, the integration of distributed energy resources like solar and storage systems, and the transition from internal-combustion vehicles to EVs for both passenger and fleet applications.

● The electrification market is characterized by rapid technological changes often due to technical improvements, regulatory requirements and customer requirements, which requires ConnectM to continue to develop new products and product innovations.

Any delays in such development could adversely affect market adoption of its products and ConnectM’s financial results.

● Certain statements ConnectM makes about estimates of market opportunity and forecasts of market growth may prove to be inaccurate.

● The MEE industry is an emerging market which is constantly evolving and may not develop at the size or the rate we expect.

● We have historically benefited from declining costs in the solar industry, and our business and financial results may be harmed not only as a result of any increases in costs associated with our electrification service offerings but also any failure of these costs to continue to decline as we currently expect.

If we do not reduce our cost structure in the future, our ability to continue to be profitable may be impaired.

● We face competition from traditional energy companies as well as solar and other renewable energy companies.

● A material reduction in the retail price of traditional utility-generated electricity or electricity from other sources could harm our business, financial condition, results of operations and prospects.

● The production and installation of electrification and decarbonization systems depends heavily on suitable meteorological and environmental conditions.

If meteorological or environmental conditions are unexpectedly unfavorable, the electricity production and overall savings from our MEE services may be below consumer expectations, and our ability to timely deploy new MEE Systems may be adversely impacted.

● Climate change may have long-term impacts on our business, our industry, and the global economy.

● Changes in U.S.

energy policy, including the enactment of the “Big Beautiful Bill,” could materially and adversely affect our business, financial condition, and results of operations.

Risks related to ConnectM’s Technology, Intellectual Property and Infrastructure

● ConnectM expects to incur research and development costs and devote significant resources to developing new products, which could significantly reduce its profitability and may never result in revenue to ConnectM.

● ConnectM may need to defend against intellectual property infringement or misappropriation claims, which may be time-consuming and expensive.

● ConnectM’s business may be adversely affected if it is unable to protect its technology and intellectual property from unauthorized use by third parties.

● ConnectM’s technology could have undetected defects, errors or bugs in hardware or software which could reduce market adoption, damage its reputation with current or prospective customers, and/or expose it to product liability and other claims that could materially and adversely affect its business.

● Some of ConnectM’s products contain open-source software, which may pose particular risks to its proprietary software, products and services in a manner that could harm its business.

● Interruptions, delays in service or inability to increase capacity, including internationally, at third-party data center facilities could impair the use or functionality of ConnectM’s subscription services, harm its business and subject it to liability.

Risks Related to Customers

● ConnectM may be unable to leverage customer data in all geographic locations, and this limitation may impact research and development operations.

● ConnectM’s ability to maintain customer satisfaction depends in part on the quality of ConnectM’s customer support.

Failure to maintain high-quality customer support could adversely affect ConnectM’s reputation, business, results of operation, and financial condition.

● ConnectM’s business will depend on customers renewing their services subscriptions.

If customers do not continue to use its subscription offerings or if they fail to add more MEE Services, its business and operating results will be adversely affected.

● Changes in subscriptions or pricing models may not be reflected in near-term operating results.

Risks Related to Finance, Tax and Accounting

● Changes to applicable U.S.

tax laws and regulations or exposure to additional income tax liabilities could affect ConnectM’s business and future profitability.

● As a result of ConnectM’s plans to expand operations, including in international jurisdictions such as India, ConnectM’s tax rate may fluctuate, its tax obligations may become more complex and subject to greater scrutiny by U.S.

and foreign taxing authorities, and changes in tax laws or interpretations could adversely affect ConnectM’s after-tax profitability and financial results.

● The ability of ConnectM to utilize net operating loss and tax credit carryforwards is conditioned upon ConnectM attaining profitability and generating taxable income.

ConnectM has incurred significant net losses since inception and it is anticipated that ConnectM will continue to incur significant losses.

Additionally, ConnectM’s ability to utilize net operating loss and tax credit carryforwards to offset future taxable income may be limited.

● ConnectM’s reported financial results may be negatively impacted by changes in GAAP.

● Our business currently depends on government incentives and policies supporting clean energy adoption, and any reduction, delay, or repeal of such programs could adversely affect our results of operations.

● We may be required to record an impairment expense on our goodwill or intangible assets.

● ConnectM incurs increased general and administrative expenses as a public company, including higher costs related to accounting, audit, legal and consulting services, which could adversely affect its results of operations

Risks Related to Legal Matters, Regulations, and Policy

● Privacy concerns and laws, or other domestic or foreign regulations, may adversely affect ConnectM’s business.

● Failure to comply with anticorruption and anti-money laundering laws and similar laws associated with activities outside of the United States, could subject ConnectM to penalties and other adverse consequences.

● Failure to comply with laws relating to employment could subject ConnectM to penalties and other adverse consequences.

● Existing and future environmental health and safety laws and regulations could result in increased compliance costs or additional operating costs or construction costs and restrictions.

Failure to comply with such laws and regulations may result in substantial fines or other limitations that may adversely impact ConnectM’s financial results or results of operations.

● Actual and potential claims, lawsuits and proceedings could ultimately reduce our profitability and liquidity and weaken our financial condition.

● Misconduct by our employees, subcontractors or partners or our overall failure to comply with laws or regulations could harm our reputation, damage our relationships with customers, reduce our revenue and profits, and subject us to criminal and civil enforcement actions.

● We have subsidiary operations in three states and are exposed to multiple state and local regulations, as well as federal laws and requirements applicable to government contractors.

Changes in law, regulations or requirements, or a material failure of any of our subsidiaries or us to comply with any of them, could increase our costs and have other negative impacts on our business.

● Past and future environmental, safety and health regulations could impose significant additional costs on us that could reduce our profits.

● Unsatisfactory safety performance may subject us to penalties, affect customer relationships, result in higher operating costs, negatively impact employee morale and result in higher employee turnover.

● Changes in United States trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.

● Tax matters, including changes in corporate tax laws and disagreements with taxing authorities, could impact our results of operations and financial condition.

● Some of our customers may choose to size their systems to take advantage of net metering offered in their states, and changes to those policies may significantly reduce demand for our solar service offerings.

● Electric utility statutes and regulations and changes to such statutes or regulations may present technical, regulatory and economic barriers to the purchase and use of our solar service offerings that may significantly reduce demand for such offerings.

● We are not currently regulated as a utility under applicable laws, but we may be subject to regulation as a utility in the future or become subject to new federal and state regulations for any additional MEE offerings we may introduce in the future.

● Interconnection limits or circuit-level caps imposed by regulators may significantly reduce MEE customers’ ability to sell electricity from our solar service offerings in certain markets or slow interconnections, harming our growth rate and customer satisfaction scores.

Risks Relating to Projections

● We may not successfully implement our business model.

● ConnectM’s projections are subject to significant risks, assumptions, estimates and uncertainties, including assumptions regarding future legislation and changes in regulations, both inside and outside of the U.S.

As a result, ConnectM’s projected revenues, market share, expenses and profitability may differ materially from our expectations.

Risks Related to Ownership of our Common Stock

● Our ability to be successful will be dependent upon the efforts of certain key personnel.

The loss of key personnel could negatively impact the operations and profitability of our business and its financial condition could suffer as a result.

● There is no guarantee that an active and liquid public market for shares of our Common Stock will develop.

● Risks Related to Having Become a Public Company

● Volatility in and disruption to the global economic environment, including the impact of an economic recession, trade protectionism and tariffs, and changes in the regulatory and business environments in which we operate may have a material adverse effect on our business, results of operations and financial condition.

● We are subject to cybersecurity risks to operational systems, security systems, or infrastructure owned by us or third-party vendors or suppliers.

● We operate in an intensely competitive business environment.

We may not be as successful as our competitors incorporating artificial intelligence (“AI”) into our business or adapting to a rapidly changing marketplace.

Risks Related to Our Securities

We need to raise additional capital to support our operations.

We have incurred substantial losses since our inception.

Net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital.

We expect to continue to incur significant losses for the foreseeable future.

The report of our independent registered public accounting firm on our financial statements for the years ended December 31, 2024 and 2023 contains explanatory language that substantial doubt exists about our ability to continue as a going concern.

We may find it difficult to raise money on terms favorable to us or at all.

The failure to obtain sufficient capital to support our operations would have a material adverse effect on our business, financial condition and results of operations.

If sufficient financing is not received in a timely manner, we would then need to pursue a plan to license or sell assets, seek to be acquired by another entity, cease operations and/or seek bankruptcy protection.

● If you purchase our securities you may experience future dilution as a result of future equity offerings or other equity issuances.

In order to raise additional capital, we will need to offer and issue additional shares of our common stock or other securities convertible into or exchangeable for our common stock in the future.

We cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing other securities in the future could have rights superior to existing stockholders.

The price per share at which we sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price per share at which you purchase our securities.

In addition, we have a significant number of Warrants outstanding.

Further, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

● The market price of our Common Stock and the trading volume of our Common Stock has been and may continue to be, highly volatile, and such volatility could cause the market price of our Common Stock to decrease.

During the past year, the market price of our common stock fluctuated from a low of $0.67 per share to a high of $12.47 per share, and our stock price continues to fluctuate.

The market price and trading volume of our common stock may continue to fluctuate significantly in response to numerous factors, some of which are beyond our control, such as:

● our ability to grow our revenue and customer base;

● the trading volume of our common stock;

● developments concerning regulatory oversight and approvals;

● variations in our and our competitors’ results of operations;

● changes in earnings estimates or recommendations by securities analysts, if our common stock is covered by analysts;

● successes or challenges in our collaborative arrangements or alternative funding sources;

● adverse effects on our business condition and results of operations from general economic and market conditions and overall fluctuations in the United States and international markets, including deteriorating market conditions due to investor concerns regarding inflation and Russia’s war on Ukraine;

● future issuances of common stock or other securities;

● the addition or departure of key personnel;

● announcements by us or our competitors of acquisitions, investments or strategic alliances;

● general market conditions and other factors, including factors unrelated to our operating performance.

Further, the stock market in general has recently experienced extreme price and volume fluctuations.

Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock and the loss of some or all of your investment.

● We have never paid dividends on our capital stock, and we do not anticipate paying dividends in the foreseeable future.

We have never paid dividends on any of our capital stock and currently intend to retain any future earnings to fund the growth of our business.

We may also enter into credit agreements or other borrowing arrangements in the future that will restrict our ability to declare or pay cash dividends on our common stock.

● A significant portion of our Common Stock is restricted from immediate resale, but may be sold into the market in the future pursuant to registration rights granted to the holders thereof.

The exercise of such rights could cause the market price of our Common Stock to drop significantly, even if our business is doing well.

The market price of shares of our Common Stock could decline as a result of substantial sales of common stock, particularly by our significant stockholders, a large number of shares of common stock becoming available for sale or the perception in the market that holders of a large number of shares intend to sell their shares.

In connection with the Business Combination MCAC and certain stockholders of ConnectM entered into a registration rights agreement (the “ Business Combination Registration Rights Agreement ”) with ConnectM.

An aggregate of 5,340,000 shares of Common Stock will be entitled to registration pursuant to the Business Combination Registration Rights Agreement, which consist of 2,300,000 Founder Shares and 3,040,000 Placement Warrant Shares issuable upon exercise of the Placement Warrants.

At any time and from time to time after the Closing, either (i) the Demanding ConnectM Holder or (ii) the Demanding Sponsor Holders may make a written demand for registration under the Securities Act of all or part of their Registrable Securities.

The Demanding Sponsor Holders and the Demanding ConnectM Holder may each demand not more than four (4) Underwritten Shelf Takedowns in any twelve (12) month period.

If at any time following the Closing, ConnectM proposes to file a registration statement under the Securities Act,

the holders of the Registrable Securities shall be offered an opportunity to register the sale of such number of Registrable Securities as such holders may request in writing.

The demand registration rights and “piggy-back” registration rights under the Business Combination Registration Rights Agreement are subject to certain requirements and customary conditions.

As such, sales of a substantial number of shares of our Common Stock in the public market could occur at any time.

These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Common Stock.

● We may issue additional shares of our Common Stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of your shares.

We may issue additional shares of our Common Stock or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions and issuances under our Incentive Plan, without stockholder approval, in a number of circumstances.

Our issuance of additional shares of Common Stock or other equity securities of equal or senior rank could have the following effects:

● your proportionate ownership interest in ConnectM will decrease;

● the relative voting strength of each previously outstanding share of common stock may be diminished;

● the market price of our shares of our stock may decline.

Because our common stock is quoted on the OTC, your ability to sell your shares in the secondary trading market may be limited.

As a result of the transfer of our common stock from Nasdaq to the OTC, we anticipate that our stockholders may face negative consequences related to our securities, including but not limited to:

● limited availability of market quotations for our securities.

● a determination that our common stock is a “penny stock” which will require brokers trading in our securities to adhere to more stringent rules.

● reduced level of trading activity in the secondary trading market for shares of our common stock.

● a limited amount of analyst coverage;

● decreased ability to issue additional securities or obtain additional financing in the future.

Because our common stock is quoted on the OTC, your ability to sell your shares in the secondary trading market may be limited.

The OTC is the only trading market for our common stock.

We cannot assure our stockholders that our common stock will continue to trade on this market, whether broker-dealers will continue to provide public quotes of our common stock on this market, whether the trading volume of our common stock will be sufficient to provide for respective efficient trading markets or whether quotes for our common stock will continue on this market in the future, which could result in significantly lower trading volumes and reduced liquidity for investors seeking to buy or sell our common stock.

As a result, prices for shares of our common stock may be lower than might otherwise prevail if our common stock was listed on a national securities exchange.

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.

The price of our securities may fluctuate significantly due to general market and economic conditions.

An active trading market for our securities may not be sustained.

In addition, the price of our securities can vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports.

There can be no assurance that the Public Warrants will be in the money during their exercise period, and they may expire worthless.

The exercise price for our Public Warrants is $11.50 per share.

There can be no assurance that the Public Warrants will be in the money prior to their expiration and, as such, the warrants may expire worthless.

The terms of Public Warrants may be amended in a manner that may be adverse to the holders.

The warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us, provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of a majority of the then-outstanding Public Warrants to make any change that adversely affects the interests of the registered holders.

Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least a majority of the then-outstanding Public Warrants approve of such amendment.

Our ability to amend the terms of the Public Warrants with the consent of a majority of the then-outstanding Public Warrants is unlimited.

Examples of such amendments could be amendments to, among other things, increase the exercise price of the Public Warrants, shorten the exercise period or decrease the number of shares of Common Stock purchasable upon exercise of a Public Warrant.

We may redeem unexpired warrants, in accordance with their terms, prior to their exercise at a time that is disadvantageous to holders of warrants.

We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Warrant, provided that the last sale price of our Common Stock equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any twenty (20) trading days within a thirty (30) trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met.

We will not redeem the warrants unless an effective registration statement under the Securities Act covering the Common Stock issuable upon exercise of the warrants is effective and a current prospectus relating to such Common Stock is available throughout the thirty (30) day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act.

If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.

Redemption of the outstanding warrants could force holders thereof to (i) exercise warrants and pay the exercise price therefor at a time when it may be disadvantageous for such holder to do so, (ii) sell warrants at the then-current market price when such holder might otherwise wish to hold warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of such warrants.

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

The trading market for our Common Stock is influenced by the research and reports that industry or securities analysts may publish about us, our business and operations, our market, and our competitors.

Securities and industry analysts do not currently, and may never, publish research on us.

If no securities or industry analysts commence coverage of us, our stock price and trading volume would likely be negatively impacted.

If any of the analysts who may cover us change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Common Stock would likely decline.

If any analyst who may cover us were to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

Risks Related to the Forward Purchase Agreement

If the trading price of the Common Stock decreases, the amount of cash ConnectM receives through the Forward Purchase Agreement mechanisms will decrease.

From time to time, Meteora may sell the Recycled Shares and ConnectM will recoup the proceeds at 95% of the Reset Price (as defined therein) less the Prepayment Shortfall.

While ConnectM may receive cash proceeds out of the escrow account from sales of Recycled Shares by Meteora, Meteora may not have any incentive to sell such Recycled Shares unless the trading price of the Common Stock is above the Reset Price.

There is no guarantee that the trading price of the Common Stock will equal or exceed the Reset Price at any given time.

In such a case, Meteora may not sell the Recycled Shares, in which case ConnectM may not receive cash settlement proceeds from the Forward Purchase Agreement and Meteora may retain ownership of all of the Recycled Shares it purchased pursuant to the Forward Purchase Agreement.

If Meteora decides to sell the Recycled Shares into the market, it may cause the trading price of our Common Stock to decline significantly.

ConnectM will have cash payment obligations that could, as a result, significantly reduce ConnectM’s cash reserves.

Pursuant to the Forward Purchase Agreement, at the Maturity Date, ConnectM is required to purchase from Meteora all of the unsold Recycled Shares for consideration equal to the Maturity Consideration, payable in cash or stock at ConnectM’s option.

If ConnectM elected to pay the Maturity Consideration in cash, the amount of cash on hand to fund operations would be reduced accordingly, which could adversely affect ConnectM’s ability to make necessary investments, and, therefore, could adversely affect its results of operations.

Other events may result in Meteora having no payment obligations to ConnectM at settlement under the Forward Purchase Agreement.

In addition to the risk of a substantial decline in the market price of the shares of Common Stock, the occurrence of certain events will accelerate the maturity date and may result in Meteora having no payment obligation to ConnectM at settlement.

Such events include (a) if the VWAP Price, for any 20 trading days during a 30 consecutive trading day-period beginning 30 days following the closing of the Merger, is below $5.00 per share, (b) if ConnectM’s shares of Class A Common Stock cease to be listed on a national securities exchange or upon the filing of a Form 25, or (c) if the Registration Statement is not declared effective by the Commission within the time periods set forth in the Forward Purchase Agreement, or if the Registration Statement after it is declared effective ceases to be continuously effective as required by the Forward Purchase Agreement, which will result in the unregistered shares being excluded from the calculation of the amounts due at settlement.

ConnectM may be required to make a future cash payment or issue additional shares of Common Stock to Meteora pursuant to the Forward Purchase Agreement at the Maturity Date, which would reduce the amount of cash available to ConnectM to fund its operations or dilute the percentage ownership held by the existing stockholders.

Pursuant to the Forward Purchase Agreement, at the Maturity Date, ConnectM is required to purchase from Meteora all of the unsold Recycled Shares for the Maturity Consideration equal to an amount, in cash or shares of Common Stock at the sole discretion of ConnectM, equal to (a) in the case of cash, the product of the unsold Recycled Shares and $2.00, or $2.50, solely in the event of a Registration Failure (as defined in the Forward Purchase Agreement), and (b) in the case of shares of Class A Common Stock, such number of shares (the “ Maturity Shares ”) with a value equal to the product of the unsold Recycled Shares and $2.00, or $2.50, solely in the event of a Registration Failure, divided by the VWAP Price of the Common Stock for the 30 trading days ending on the Maturity Date, subject to the payment of Penalty Shares if such shares are not freely tradable.

Depending on the amount of the Maturity Consideration and the trading price of the Common Stock, the issuance of these shares in payment of such consideration could result in substantial dilution and decreases to ConnectM’s stock price.

If ConnectM elected to pay the Maturity Consideration in cash, the amount of cash on hand to fund operations would be reduced accordingly, which could adversely affect our ability to make necessary investments, and, therefore, could affect our results of operations.

Risks Related to the Reverse Stock Split

● The Reverse Stock Split may decrease the liquidity of the shares of our Common Stock.

● Following the Reverse Stock Split, the resulting market price of our Common Stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors.

Consequently, the trading liquidity of our Common Stock may not improve.

Risks Related to ConnectM’s Common Stock

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The market price of our Common Stock is likely to be highly volatile and may be subject to wide fluctuations in response to a variety of factors, including the following:

● the impact of COVID-19 pandemic on ConnectM’s business;

● the inability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, ConnectM’s ability to grow and manage growth profitably, and retain its key employees;

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These fluctuations have often been unrelated or disproportionate to the operating performance of those companies.

Broad market and industry factors, as well as general economic, political,

regulatory and market conditions, may negatively affect the market price of ConnectM’s common stock, regardless of ConnectM’s actual operating performance.

Broad market and industry factors, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of ConnectM’s Common Stock, regardless of ConnectM’s actual operating performance.

Volatility in ConnectM’s share price could subject ConnectM to securities class action litigation.

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Sales of a substantial number of the shares of ConnectM’s Common Stock in the public market could cause the price of the shares of ConnectM’s Common Stock to fall.

Sales of a substantial number of shares of ConnectM’s common stock in the public market or the perception that these sales might occur could depress the market price of ConnectM’s common stock and could impair our ability to raise capital through the sale of additional equity securities.

We are unable to predict the effect that sales may have on the prevailing market price of ConnectM’s common stock.

In addition, the sale of substantial amounts of ConnectM’s common stock or the perception such sales may occur, could adversely impact its price.

The selling stockholders will determine the timing, pricing and rate at which they sell such shares into the public market.

Certain selling stockholders will have an incentive to sell because they will still realize a profit from such sales because they purchased shares and/or warrants at prices below the price per share paid by public investors in the IPO and/or below the recent trading prices of the shares of Common Stock.

Sales by such investors may prevent the trading price of the shares of ConnectM’s common stock from exceeding the price per share in the IPO of MCAC and may cause the trading prices of our securities to experience a further decline.

Sales of a substantial number of shares of our Common Stock, or the perception that such sales may occur, could depress the market price of our Common Stock and impair our ability to raise capital.

We have a significant number of shares issued and outstanding, as well as additional shares issuable upon the exercise, conversion or settlement of warrants, options, convertible notes and other equity-linked securities.

The issuance or potential issuance of these securities, including at prices below the current market price, could result in substantial dilution and place downward pressure on our stock price.

In addition, holders of our securities may sell shares into the public market at their discretion, including shares acquired at prices below the current market price, which could increase volatility and further depress the trading price of our Common Stock.

Because ConnectM does not anticipate paying any cash dividends in the foreseeable future, capital appreciation, if any, would be your sole source of gain.

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Future sales of shares of ConnectM’s Common Stock may depress its stock price.

Pursuant to the Registration Rights Agreement and the Amended Bylaws, after the consummation of the Business Combination and subject to certain exceptions, the Sponsor, those receiving shares of ConnectM’s common stock pursuant to the Merger Agreement, directors, officers and employees of the Company receiving shares of ConnectM’s common stock upon the settlement or exercise of warrants, stock options or other equity awards, and warrantholders of the Company receiving shares of ConnectM’s common stock upon the settlement or exercise of such warrants (other than holders of warrants that are currently listed) will be contractually restricted from selling or transferring any of their shares of common stock.

Such restrictions begin at Closing and end on the date that is the earlier of (1) 180 days after Closing and (2)(x) the date on which the closing price of ConnectM’s common stock equals or exceeds $16.50 per share for any 20 trading days within any 30-day period commencing at least 150 days after the Closing, or (y) a Change of Control (as defined in the Lock-Up Agreement).

Immediately following the Closing, 8,155,880 shares of ConnectM common stock, representing approximately 38.4% of the outstanding shares of ConnectM common stock, were freely tradable.

However, following the expiration of the applicable lock-up period, such equityholders will not be restricted from selling shares of ConnectM’s common stock held by them, other than by applicable securities laws.

Further, there is a likelihood that ConnectM will need to continue to raise capital through one or more equity financings in order to continue growing its business.

There is a likelihood that ConnectM will need to continue to raise capital through one or more equity financings in order to continue growing its business.

As such, sales of a substantial number of shares of ConnectM’s Common Stock in the public market could occur at any time.

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The Charter and Amended Bylaws contain provisions that could significantly reduce the value of our shares to a potential acquiror or delay or prevent changes in control or changes in our management without the consent of our board of directors.

The provisions in our charter documents will include the following:

The provisions in our charter documents include the following:

● a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors;

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● advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.

We will also be subject to the anti-takeover provisions contained in Section 203 of the DGCL.

We are also subject to the anti-takeover provisions contained in Section 203 of the General Corporation Law of the State of Delaware (the “ DGCL ”).

Under Section 203, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approved the transaction.

Our Charter provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders and that the federal district courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees or the underwriters or any offering giving rise to such claim.

The Charter provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws, or any action

asserting a claim against us that is governed by the internal affairs doctrine.

Furthermore, the Charter also provides that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, including all causes of action asserted against any defendant named in such complaint.

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For as long as ConnectM continues to be an emerging growth company, it may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including exemption from compliance with the auditor attestation requirements under Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

ConnectM will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of the IPO (December 31, 2026), (b) in which ConnectM has total annual gross revenue of at least $1.235 billion or (c) in which ConnectM is deemed to be a large accelerated filer, which means the market value of shares of ConnectM’s common stock that are held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which ConnectM has issued more than $1.0 billion in non-convertible debt during the prior three-year period.

ConnectM will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of the IPO of Monterey Capital Acquisition Corporation, the special purpose acquisition company with which we merged;

(December 31, 2027), (b) in which ConnectM has total annual gross revenue of at least $1.235 billion or (c) in which ConnectM is deemed to be a large accelerated filer, which means the market value of shares of ConnectM’s Common Stock that are held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter, and (2) the date on which ConnectM has issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies.

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Business and Operational Risks

Due to ConnectM operating as a going concern, and there is a possibility that ConnectM may never be profitable and you may lose all or part of your investment.

During the twelve months ended December 31, 2024 and 2023, ConnectM incurred net losses of approximately $23 million and $9 million, respectively.

We need to raise additional capital to support our operations.

We believe our cash and cash equivalents on hand and cash we expect to obtain from this offering, together with cash we expect to generate from future operations, will be sufficient to meet our working capital and capital expenditure requirements in the near future.

However, in the future we may still require additional capital to respond to customer demands, technological advancements, competitive dynamics or technologies, business opportunities, challenges, acquisitions or unforeseen circumstances and we may determine to engage in equity or debt financings or enter into credit facilities for other reasons.

We may not be able to timely secure additional debt or equity financing on favorable terms, or at all.

If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could experience significant dilution and any new securities we issue could have rights, preferences, and privileges superior to those of holders of our Common Stock.

If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.

Due to ConnectM operating as a going concern, there is a possibility that ConnectM may never be profitable and you may lose all or part of your investment.

During the twelve months ended December 31, 2025 and 2024, ConnectM incurred net losses of $16,058,000 and $22,508,000, respectively.

Continued operations are dependent on ConnectM’s ability to complete equity or debt financings or generate profitable operations.

Such financings may not be available or may not be available on reasonable terms.

During the twelve months ended December 31, 2024 and 2023, ConnectM has incurred net losses of approximately $22.5 million and $9.2 million, respectively.

As of December 31, 2024, ConnectM had an accumulated deficit of $45.4 million.

During the twelve months ended December 31, 2025 and 2024, ConnectM has incurred net losses of approximately $16,058,000 and $22,508,000, respectively.

As of December 31, 2025 and 2024, ConnectM had an accumulated deficit of approximately $61,671,000 and $45,426,000.

ConnectM expects to incur additional losses and higher operating expenses for the foreseeable future.

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Traditional utilities generally have substantially greater financial, technical, operational and other resources than we do.

As a result, these competitors may be able to devote more resources to the research,

development, promotion, and sale of their products or respond more quickly to evolving industry standards and changes in market conditions than we can.

As a result, these competitors may be able to devote more resources to the research, development, promotion, and sale of their products or respond more quickly to evolving industry standards and changes in market conditions than we can.

Traditional utilities could also offer other value-added products or services that could help them to compete with us even if the cost of electricity they offer is higher than that of ours.

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Even if industry-wide shortages do not occur, suppliers may decide to allocate key components with high demand or insufficient production capacity to more profitable customers, customers with long-term supply agreements or customers other than us and our supply of such components may be reduced as a result.

The supply of components from various locales is also uncertain due to COVID-19 that has resulted in travel restrictions and shutdowns of businesses in various regions.

Typically, we purchase the components for our MEE systems on an as-needed basis and do not operate under long-term supply agreements.

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Our backlog is subject to unexpected adjustments and cancellations, which means that amounts included in our backlog may not result in actual revenue or translate into profits.

Any supply shortages, delays, quality issues, price changes or other limitations in our

ability to obtain components or technologies we use could limit our growth, cause cancellations or adversely affect our profitability, and result in loss of market share and damage to our brand.

Any supply shortages, delays, quality issues, price changes or other limitations in our ability to obtain components or technologies we use could limit our growth, cause cancellations or adversely affect our profitability, and result in loss of market share and damage to our brand.

Damage to our brand and reputation or failure to expand our brand would harm our business and results of operations.

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We intend to increase our spending to finance the expansion of our operations, expand our installation, engineering, administrative, sales and marketing staffs, increase spending on our brand awareness and other sales and marketing initiatives, make significant investments to drive future growth in our business and implement internal systems and infrastructure to support our growth.

We do not know whether our revenue will grow rapidly enough

to absorb these costs and our limited operating history makes it difficult to assess the extent of these expenses or their impact on our results of operations.

We do not know whether our revenue will grow rapidly enough to absorb these costs and our limited operating history makes it difficult to assess the extent of these expenses or their impact on our results of operations.

Our ability to sustain profitability depends on a number of factors, including but not limited to:

● mitigating the impact of the COVID-19 pandemic on our business;

● growing our customer base;

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The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members and officers.

We will be subject to the reporting requirements of the Exchange Act, and other applicable securities rules and regulations.

We are subject to the reporting requirements of the Exchange Act, and other applicable securities rules and regulations.

Compliance with these rules and regulations has increased our legal and financial compliance costs, made some activities more difficult, time-consuming or costly and increased demand on our systems and resources.

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Furthermore, our physical plants could be placed at greater risk of damage should continued changes in the global climate produce additional unusual variations in temperature and weather patterns, resulting in more intense, frequent and extreme weather events, and abnormal levels of precipitation.

A disruption or failure of electric generation, or storage systems in the event of a hurricane, tornado or other severe weather event, or otherwise, could prevent us from operating our business in the normal course and could result in any of the adverse consequences described above.

A disruption or failure of electric generation, or

storage systems in the event of a hurricane, tornado or other severe weather event, or otherwise, could prevent us from operating our business in the normal course and could result in any of the adverse consequences described above.

Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

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● actual or anticipated changes in our growth rate;

● general economic, industry and market conditions, including as a result of the COVID-19 pandemic and/or future pandemics;

● general economic, industry and market conditions;

● changes to our cancellation rate.

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If that occurs, the market price of our Common Stock could decline and stockholders could lose part or all of their investment.

Our results of operations have been and may continue to be adversely impacted by the COVID-19 pandemic, and the duration and extent to which it will impact our results of operations remains uncertain.

A significant outbreak of epidemic, pandemic, or contagious diseases in the human population, such as the current COVID-19 pandemic, could result in a widespread health crisis that could adversely affect the broader economies, financial and capital markets, commodity and energy prices, and overall demand environment for our products.

A global health crisis could affect, and has affected, our workforce, customers and vendors, as well as economies and financial markets globally, potentially leading to an economic downturn, which could decrease spending, adversely affecting the demand for our products.

In response to the COVID-19 pandemic, federal, state, local, and foreign governments put in place, and in the future may again put in place, travel restrictions, quarantines, “stay at home” orders and guidelines, and similar government orders and restrictions, in an attempt to control the spread of the disease.

Such restrictions or orders resulted in, and in the future may result in, business closures, work stoppages, slowdowns and delays, among other effects that negatively impacted, and in the future may negatively impact, our operations, as well as the operations of our customers and business partners.

Such results have had and will continue to have a material adverse effect on our business, operations, financial condition, results of operations, and cash flows.

Although we have continued to operate consistent with federal guidelines and state and local orders, the extent to which the COVID-19 pandemic impacts our business, operations, financial results and financial condition will depend on numerous evolving factors which are uncertain and cannot be predicted, including:

● the duration and scope of the pandemic and associated disruptions;

● a general slowdown in our industry;

● governmental, business and individuals’ actions taken in response to the pandemic;

● the effect on our customers and our customers’ demand for our products and installations;

● the effect on our suppliers and disruptions to the global supply chain;

● our ability to sell and provide our products and provide installations, including disruptions as a result of travel restrictions and people working from home;

● the ability of our customers to pay for our products;

● delays in our projects due to closures of jobsites or cancellation of jobs;

● any closures of our and our suppliers’ and customers’ facilities.

These effects of the COVID-19 pandemic and related economic repercussions have materially affected how we and our customers, vendors, subcontractors, developers, and general contractors are operating our businesses, and the duration and extent to which this will negatively impact our future results of operations and overall financial performance remains uncertain.

ConnectM faces risks related to health pandemics, including the aftereffects of the COVID-19 pandemic or potential future pandemics, which could have a material and adverse effect on our business, operations, financial condition, results of operations, and cash flows.

In addition, while we believe we have taken appropriate steps to maintain a safe workplace to protect our employees from contracting and spreading the coronavirus, including following the guidance set out from both the Occupational Safety and Health Administration and Centers for Disease Control and Prevention, we may not be able to completely prevent the spread of the virus among our employees.

We may face litigation or other proceedings making claims related to unsafe working conditions, inadequate protection of our employees or other claims.

Any of these claims, even if without merit, could result in costly litigation or divert management’s attention and resources.

Furthermore, we may face a sustained disruption to our operations due to one or more of the factors described above.

Although the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic instability that has occurred or may occur in the future.

Any of these events could amplify the other risks and uncertainties described in this Report and could materially adversely affect our business, operations, financial condition, results of operations, cash flows or the market price of our common stock.

Adverse economic conditions may have negative consequences on our business, results of operations and financial condition.

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This could result in increased costs to ConnectM and result in significant legal and financial exposure and/or reputational harm.

In addition, ConnectM and certain of its subsidiaries may collect, process or store sensitive consumer financial information, including payment card data, in connection with its operations.

The handling of such information subjects ConnectM to additional legal, regulatory and industry requirements, including the Payment Card Industry Data Security Standard (“PCI DSS”) and applicable data protection and privacy laws.

Any failure to comply with these requirements, or any actual or perceived compromise of payment card or other financial information, could result in fines, penalties, increased transaction fees, loss of payment processing privileges, contractual liability, regulatory investigations and reputational harm.

Furthermore, the collection and storage of payment information may increase ConnectM’s exposure to cyber-attacks and fraud, and any such incident could result in significant financial losses, remediation costs and litigation.

Because ConnectM also relies on third-party service providers, it cannot guarantee that its service providers’ and component suppliers’ systems have not been breached or that they do not contain exploitable defects, bugs, or vulnerabilities that could result in a security incident, or other disruption to, ConnectM’s or ConnectM’s service providers’ or component suppliers’ systems.

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Further, the implementation, maintenance, segregation and improvement of these systems require significant management time, support and cost, and there are inherent risks associated with developing, improving and expanding ConnectM’s core systems as well as implementing new systems and updating current systems, including disruptions to the related areas of business operation.

These risks may affect ConnectM’s ability to manage its data and inventory, procure parts or supplies or manufacture, sell, deliver and service products, adequately protect its intellectual property or achieve and maintain compliance with, or realize available benefits under, tax laws and other applicable regulations.

These risks may affect ConnectM’s ability to manage its data and inventory,

procure parts or supplies or manufacture, sell, deliver and service products, adequately protect its intellectual property or achieve and maintain compliance with, or realize available benefits under, tax laws and other applicable regulations.

If ConnectM does not successfully implement, maintain or expand its information technology systems as planned, its operations may be disrupted, its ability to accurately and/or timely report its financial results could be impaired and deficiencies may arise in its internal control over financial reporting, which may impact its ability to certify its financial results (see also “ Risks Related to Finance, Tax and Accounting - ConnectM has identified material weaknesses in its internal control over financial reporting.

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If we were unable to obtain necessary levels of insurance, it is likely we would be unable to compete for or work on most projects.

Increases and uncertainty in our health insurance costs could adversely impact our results of operations and cash flows.

The costs of employee health insurance have been increasing in recent years due to rising health care costs, legislative changes, and general economic conditions.

Additionally, we may incur additional costs as a result of the Patient Protection and Affordable Care Act (the “ Affordable Care Act ”) that was signed into law in March 2010.

Future legislation could also have an impact on our business.

The status of the Affordable Care Act, any amendment, repeal or replacement thereof, is currently uncertain.

For example, in December 2019, the United States Court of Appeals for the Fifth Circuit struck down a central provision of the Affordable Care Act, ruling that the requirement that people have health insurance was unconstitutional, sending the case back to a federal district judge in Texas to determine which of the law’s many parts could survive without the mandate.

On March 2, 2020, the United States Supreme Court granted certiorari to review this case, and on June 17, 2021, the U.S.

Supreme Court dismissed a challenge on procedural grounds that argued Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.

The Affordable Care Act will remain in effect in its current form;

however, we continue to evaluate the effect that the Affordable Care Act has on our business.

Failure to remain in compliance with covenants under our credit and loan agreements, service our indebtedness, or fund our other liquidity needs could adversely impact our business.

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and/or (4) foreclosure on any collateral securing the obligations under the agreements.

If we are unable to service our debt obligations or fund our other liquidity needs, we could be forced to curtail our

operations, reorganize our capital structure (including through bankruptcy proceedings) or liquidate some or all of our assets in a manner that could cause holders of our securities to experience a partial or total loss of their investment in us.

If we are unable to service our debt obligations or fund our other liquidity needs, we could be forced to curtail our operations, reorganize our capital structure (including through bankruptcy proceedings) or liquidate some or all of our assets in a manner that could cause holders of our securities to experience a partial or total loss of their investment in us.

If we fail to develop and maintain an effective system of internal control over financial reporting and other business practices, and of board-level oversight, we may not be able to report our financial results accurately or prevent and detect fraud and other improprieties.

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A change in these principles or interpretations could have a significant effect on our reported financial results and on the financial results of other companies in our industry and may even affect the reporting of transactions completed before the announcement or effectiveness of a change.

For example, in June 2016 the FASB issued Accounting Standards Update No.

2016-13, Measurement of Credit Losses on Financial Instruments (“ASU No.

2016-13”), which replaces the current incurred loss impairment methodology with a current expected credit losses model.

Other companies in our industry may be affected differently by the adoption of ASU No.

2016-13 or other new accounting standards, including timing of the adoption of new accounting standards, adversely affecting the comparability of financial statements.

In February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842), which primarily changes the lessee’s accounting for operating leases by requiring recognition of lease right-of-use assets and lease liabilities.

This standard is effective for annual reporting periods beginning after December 15, 2021.

ConnectM adopted this standard, effective January 1, 2022, under the alternative transition method as permissible under ASU 2018-11 and will apply this standard to all leases.

As a result, comparative financial information of ConnectM has not been restated and continues to be reported under the accounting standards in effect for those periods.

The Company has adopted all recently effective accounting standards, including ASU No.

2016-13, Financial Instruments — Credit Losses (ASC 326), and ASU No.

2016-02, Leases (ASC 842).

Future accounting standard updates issued by the FASB may require changes to our recognition, measurement, or disclosure practices and could affect comparability of our financial statements with those of other companies in our industry that may adopt such standards at different times or apply them differently.

The Company has material weaknesses in its internal control over financial reporting.

In preparation of its consolidated financial statements to meet the requirements applicable to its current status as a publicly traded company, ConnectM and its independent registered public accounting firm identified material weaknesses in its internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The first material weakness identified related to a deficiency in ConnectM’s controls over complex accounting topics centered around the appropriate treatment of specific incremental costs that were directly attributable to the transaction with MCAC and the forward purchase agreement.

Specifically, ConnectM’s accounting and internal control infrastructure did not allow for adequate review processes over this complex accounting topic due to lack of sufficient resources.

Due to this material weakness, material errors were identified and corrected in ConnectM’s audited financial statements for the year ended December 31, 2024.

The second material weakness identified related to a deficiency in ConnectM’s controls over revenue recognition centered around the appropriate timing of the recognition of its solar system services for which ConnectM recognized revenue when it had not fully satisfied its performance obligation.

Specifically, ConnectM’s accounting and internal control infrastructure did not allow for the proper assessment of the timing of revenue recognition for its solar system services due to lack of sufficient resources.

Due to this material weakness, material errors were identified and corrected in ConnectM’s audited financial statements for the year ended December 31, 2024.

There are other material weaknesses identified relating to complex accounting relating to debt and derivatives, contingent consideration, deferred offering costs, management not identifying impaired intangible assets, and to the Company not being able to timely issue their financial statements.

These material weaknesses are due to inadequate staffing at the Company.

An additional material weakness was identified due to the failure to get proper approval from the Board for related party transactions.

ConnectM has implemented measures designed to improve internal controls over financial reporting to remediate the control deficiencies outlined above that led to the material weaknesses, including strengthening reviews by its finance team and expanding its accounting and finance team to add additional qualified accounting and finance resources, which may include expanding the use of third party consultants that possess the required expertise to assist management with its review.

ConnectM cannot assure you that the measures it has taken to date, and actions it may take in the future, will be sufficient to remediate the control deficiencies that led to the material weaknesses in its internal controls over financial reporting or that they will prevent or avoid potential future material weaknesses.

In addition, neither its management nor an independent registered public accounting firm has performed an evaluation of its internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act because no such evaluation has been required.

If ConnectM is unable to successfully remediate its existing or any future material weaknesses in its internal control over financial reporting, identifies any additional material weaknesses in the future or otherwise fails to maintain an effective system of internal controls, the accuracy and timing of ConnectM financial reporting may be adversely affected, ConnectM may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in the consolidated company’s financial reporting, and the market price of ConnectM’s common stock may decline as a result.

In connection with the preparation and audit of our consolidated financial statements, management and our independent registered public accounting firm identified material weaknesses in our internal control over financial reporting.

A material weakness is a deficiency, or combination of deficiencies, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

The material weaknesses relate primarily to (i) insufficient technical accounting expertise and controls over complex accounting matters, including revenue recognition and accounting for debt, derivatives and other complex transactions, (ii) ineffective controls over the financial statement close and review process, including the identification of errors and the timely preparation of financial statements, and (iii) deficiencies in governance and approval controls, including with respect to related party transactions.

These material weaknesses were driven in part by limited accounting personnel and insufficient U.S.

GAAP expertise.

We have implemented, and continue to implement, remediation measures designed to address these control deficiencies, including enhancing our review procedures, strengthening our finance and accounting organization, and engaging third-party specialists to assist with complex accounting matters.

However, remediation of material weaknesses can be time-consuming and costly, and we cannot assure you that these efforts will be successful or that additional material weaknesses will not be identified in the future.

If we are unable to remediate our existing material weaknesses, or if additional material weaknesses are identified, we may be unable to maintain effective internal control over financial reporting, which could result in material misstatements in our financial statements, delays in our financial reporting, or our failure to meet our reporting obligations.

Any such outcome could adversely affect investor confidence in our financial reporting and the market price of our Common Stock.

Risks Related to Data Privacy

Any security breach or unauthorized access or disclosure or theft of data, including personal information we gather, store and use, or other hacking and phishing attacks on our systems, could harm our reputation, subject us to claims or litigation, financial harm and have an adverse impact on our business.

We receive, store and use personal information of customers, including names, addresses, e-mail addresses, credit information and other housing and energy use information, as well as the personal information of our employees.

We receive, store and use personal information of customers, including names, addresses, e-mail addresses, credit card information and other housing and energy use information, as well as the personal information of our employees.

Unauthorized disclosure of such personal information, whether through breach of our systems by an unauthorized party, employee theft or misuse, or otherwise, could harm our business.

In addition, computer malware, viruses, social engineering (predominantly spear phishing attacks), and general hacking have become more prevalent, have occurred on our systems in the past, and could occur on our systems in the future.

Inadvertent disclosure of such personal information, or if a third party were to gain unauthorized access to the personal information in

our possession, has resulted in, and could result in future claims or litigation arising from damages suffered by such individuals.

Inadvertent disclosure of such personal information, or if a third party were to gain unauthorized access to the personal information in our possession, has resulted in, and could result in future claims or litigation arising from damages suffered by such individuals.

In addition, we could incur significant costs in complying with the multitude of federal, state and local laws regarding the unauthorized disclosure of personal information.

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Risks Related to Electrification and Decarbonization Business

ConnectM’s future growth and success is highly correlated with and thus dependent upon the continuing rapid electrification of homes and adoption of EVs and electrification for passenger and fleet applications.

ConnectM’s future growth is highly dependent upon the increased electrification of home heating using heat pumps and the adoption of EVs by businesses and consumers.

federal government, and some state and local governments provide incentives to homeowners in the form of rebates, tax credits and other financial incentives, such as payments for regulatory credits to replace fossil fuels for home heating and also for cooking applications, The High Efficiency Electric Home Rebate Act (HEEHRA) is the official name of the Inflation Reduction Act’s (IRA) heat pump incentive program.

Although demand for heat pumps has grown in recent years, there is no guarantee of continuing future demand.

If the market for heat pumps develops more slowly than expected, or if demand for heat pumps decreases, ConnectM’s business, prospects, financial condition and operating results would be harmed.

The market for heat pumps could be affected by numerous factors, such as:

● perceptions about heat pump quality, safety, performance and cost;

● volatility in the cost of heating oil and natural gas, including as a result of trade restrictions;

● concerns regarding the reliability and stability of the electrical grid;

● availability of maintenance and repair services for heat pumps;

● consumers’ perception about the convenience and cost of using heat pumps;

● government regulations and economic incentives, including adverse changes in, or expiration of, favorable tax incentives related to heat pumps or decarbonization generally;

● relaxation of government mandates regarding the sale of heat pumps;

● concerns about the future viability of heat pump manufacturers.

One of the many things the Inflation Reduction Act of August 2022 accomplishes is the expansion of the Federal Tax Credit for Solar Photovoltaics, also known as the Investment Tax Credit (ITC).

This credit can be claimed on federal income taxes for a percentage of the cost of a solar photovoltaic (PV) system.

The ITC increased in amount and its timeline has been extended.

Those who install a PV system between 2022 and 2032 will receive a 30% tax credit, which will decrease to 26% for systems installed in 2033 and to 22% for systems installed in 2034.

Homeowners who installed a system in 2022 have an increased tax credit from 22% to 30% if the tax credit has not been already claimed.

The solar plus storage equipment expenses included in the ITC have expanded.

Now, energy storage devices that have a capacity rating of 3 kilowatt hours or greater are included and includes stand-alone storage.

The ITC will cut the cost of installing rooftop solar for a home by 30%, or more than $7,500 for an average system.

By helping Americans get solar on their roofs, these tax credits will help millions more families unlock an additional average savings of $9,000 on their electricity bills over the life of the system.

The market for solar solutions could be affected by numerous factors, such as:

● perceptions about solar solutions quality, safety, performance and cost;

● concerns regarding the reliability and stability of the electrical grid;

● availability of maintenance and repair services for solar solutions;

● consumers’ perception about the convenience and cost of using solar solutions;

● government regulations and economic incentives, including adverse changes in, or expiration of, favorable tax incentives related to solar;

● relaxation of government mandates regarding the sale of solar solutions;

and concerns about the future viability of solar solutions manufacturers.

Electrification rebates provide point-of-sale consumer discounts to enable low- and moderate-income households across the U.S.

to electrify their homes.

Notably, households will experience HEEHRA’s point-of-sale rebates as immediate, off-the-top discounts when making qualifying electrification purchases.

The electrification rebates cover the following home energy assessment and weatherization projects:

insulation, air sealing, and ventilation.

For low-income households (under 80 percent of consumers’ area median income), the electrification rebates cover 100 percent of weatherization costs up to $1,600.

For moderate-income households (between 80 percent and 150 percent of consumers’ area median income), the electrification rebates cover 50 percent of weatherization costs up to $1,600.

The rebates may be implemented differently in each state, so there are no guarantees regarding final amounts, eligibility, or timeline.

Without additional appropriations from Congress, the rebate programs will end once the initial IRA funding is exhausted.

Total electrification rebates across all qualified electrification projects are capped at $14,000.

Electric and gas utilities provide no cost home energy assessment services to residential homeowners.

The market for home energy assessment and weatherization solutions could be affected by numerous factors, such as:

● perceptions about home energy assessment and weatherization solutions quality, safety, performance and cost;

● volatility in the cost of heating oil and natural gas, including as a result of trade restrictions;

● concerns regarding the reliability and stability of the electrical grid;

● availability of maintenance and repair services for home energy assessment and weatherization solutions;

● consumers’ perception about the convenience and cost of using home energy assessment and weatherization solutions;

● government regulations and economic incentives, including adverse changes in, or expiration of, favorable tax incentives related to weatherization and decarbonization generally;

● relaxation of government mandates regarding the sale of home energy assessment and weatherization solutions;

● concerns about the future viability of home energy assessment and weatherization solutions manufacturers.

The market for EVs is still rapidly evolving, characterized by rapidly changing technologies, competitive pricing and competitive factors, evolving government regulation and industry standards and changing consumer demands and behaviors, changing levels of concern related to environmental issues and governmental initiatives related to energy independence, climate change and the environment generally.

Although demand for EVs has grown in recent years, there is no guarantee of continuing future demand.

If the market for EVs develops more slowly than expected, or if demand for EVs decreases, ConnectM’s business, prospects, financial condition and operating results would be harmed.

The market for EVs could be affected by numerous factors, such as:

● perceptions about EV features, quality, safety, performance and cost;

● perceptions about the limited range over which EVs may be driven on a single battery charge;

● competition, including from other types of alternative fuel vehicles, plug-in hybrid electric vehicles and high fuel-economy internal combustion engine vehicles;

● volatility in the cost of oil and gasoline, including as a result of trade restrictions;

● concerns regarding the reliability and stability of the electrical grid;

● the change in an EV battery’s ability to hold a charge over time;

● the availability and reliability of a national electric vehicle charging network or infrastructure;

● availability of maintenance and repair services for EVs;

● consumers’ perception about the convenience and cost of charging EVs;

● increases in fuel efficiency of non-electric vehicles;

● government regulations and economic incentives, including adverse changes in, or expiration of,

● favorable tax incentives related to EVs, EV electrification or decarbonization generally;

● relaxation of government mandates or quotas regarding the sale of EVs;

● concerns about the future viability of EV manufacturers.

In addition, sales of vehicles in the automotive industry can be cyclical, which may affect growth in acceptance of EVs.

It is uncertain how macroeconomic factors will impact demand for EVs, particularly since EVs can be more expensive than traditional gasoline-powered vehicles, when the automotive industry globally has been experiencing a recent decline in sales.

Furthermore, because fleet operators often make large purchases of EVs, this cyclicality and volatility in the automotive industry may be more pronounced with commercial purchasers, and any significant decline in demand from these customers could reduce demand for ConnectM’s products and services in particular.

Demand for EVs may also be affected by factors directly impacting automobile prices or the cost of purchasing and operating automobiles, such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and governmental regulations, including tariffs, import regulation and other taxes.

Further, the automotive industry in general and EV manufacturing have experienced recent substantial supply chain interruptions due to COVID-19 and a worldwide semiconductor shortage adversely impacting the automotive industry in 2020 and 2021, resulting in reduced EV production schedules and sales.

Volatility in demand or delays in EV production due to global supply chain constraints may lead to lower vehicle unit sales, which may result in reduced demand for EV charging solutions and therefore adversely affect ConnectM’s business, financial condition and operating results.

ConnectM’s future growth and success are highly dependent on the continued acceleration of electrification across homes, commercial buildings, and transportation fleets.

Federal, state, and local governments in the United States currently provide a range of incentives—such as rebates, tax credits, and other financial benefits—to encourage the replacement of fossil-fuel systems in residential and transportation sectors.

These programs include the High-Efficiency Electric Home Rebate Act (“HEEHRA”) and the Home Owner Managing Energy Savings (“HOMES”) Rebate Program, both authorized under the Inflation Reduction Act (“IRA”), as well as the Investment Tax Credit (“ITC”) and the Clean Vehicle Credit under Internal Revenue Code §30D.

However , these programs depend on future appropriations, administrative implementation, and ongoing political and fiscal support, and there is no assurance that they will continue at current levels or on expected timelines.

If market adoption of electrification technologies—such as heat pumps, solar systems, battery storage, or EVs—develops more slowly than anticipated, or if demand declines due to changes in incentives, regulation, or consumer preferences, ConnectM’s business, growth prospects, financial condition, and operating results could be materially and adversely affected.

The markets for electrification technologies may be influenced by a range of factors, including:

● perceptions about the quality, safety, performance, or cost of heat pumps, solar systems, battery storage, and EVs;

● volatility in the prices of heating oil, natural gas, or gasoline, including as a result of global trade restrictions;

● concerns about the reliability, capacity, and resilience of the electrical grid;

● availability of skilled labor, maintenance, and repair services for electrification equipment;

● consumer perceptions regarding convenience, payback periods, and affordability;

● changes in government policies, regulations, or tax incentives, including the reduction, delay, or expiration of favorable programs such as the IRA, ITC, or EV credits;

● relaxation of government mandates or building-code requirements related to electrification;

● uncertainty regarding the timing, structure, and funding availability of federal or state rebate programs administered by state energy offices;

● concerns about the future viability of manufacturers of heat pumps, solar panels, batteries, and EV components.

Because many of ConnectM’s customers rely on incentive programs or government-backed financing mechanisms to make electrification projects economically viable, any funding delays, reductions, or changes in eligibility criteria could decrease demand for ConnectM’s products and services.

In addition, the EV market is highly dynamic and subject to technological disruption, supply-chain constraints, and cyclical demand fluctuations.

Global shortages of semiconductors or critical minerals could reduce vehicle production and delay EV deployments, which may, in turn, reduce demand for ConnectM’s connected-fleet and electrification solutions.

The electrification market is characterized by rapid technological changes often due to technical improvements, regulatory requirements and customer requirements, which requires ConnectM to continue to develop new products and product innovations.

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Continuing technological changes in battery and other electrification technologies could adversely affect adoption of current electrification technology and/or ConnectM’s products.

ConnectM’s future success will depend upon its ability to develop and

introduce a variety of new capabilities and innovations to its existing product offerings, as well as introduce a variety of new product offerings, to address the changing needs of the electrification market.

ConnectM’s future success will depend upon its ability to develop and introduce a variety of new capabilities and innovations to its existing product offerings, as well as introduce a variety of new product offerings, to address the changing needs of the electrification market.

As new products are introduced, gross margins tend to decline in the near term and improve as the product becomes more mature with a more efficient manufacturing process.

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Market opportunity estimates and growth forecasts, whether obtained from third-party sources or developed internally, are subject to significant uncertainty and are based on assumptions and estimates that may prove to be inaccurate.

This is especially so at the present time due to the uncertainties associated with the ongoing COVID-19 pandemic, worldwide supply chain disruptions, macroeconomic effects of inflation and market and geopolitical volatility.

This is especially so at the present time due to the uncertainties associated with the ongoing macroeconomic effects of inflation and market and geopolitical volatility.

The estimates and forecasts relating to the size and expected growth of the target MEE market, market demand and adoption, capacity to address this demand and pricing may also prove to be inaccurate.

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Declining costs related to raw materials, manufacturing and the sale and installation of our solar service offerings have been a key driver in the pricing of our solar service offerings and, more broadly, customer adoption of solar energy.

While historically the prices of solar panels and raw materials have declined, the cost of solar panels and raw materials have increased and may increase in the future, and such products’ availability could decrease, due to a variety of factors, including restrictions stemming from the COVID-19 pandemic, supply chain disruptions, tariffs and trade barriers, export regulations, regulatory or contractual limitations, industry market requirements, and changes in technology and industry standards.

While historically the prices of solar panels and raw materials have declined, the cost of solar panels and raw materials have increased and may increase in the future, and such products’ availability could decrease, due to a variety of factors, including restrictions stemming from supply chain disruptions, tariffs and trade barriers, export regulations, regulatory or contractual limitations, industry market requirements, and changes in technology and industry standards.

We cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the United States and other countries, what products may be subject to such actions, or what actions may be taken by the other countries in retaliation.

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Furthermore, components of our MEE Systems, such as panels and inverters, could be damaged by severe weather or natural catastrophes, such as hailstorms, tornadoes, fires, or earthquakes.

Sustained unfavorable weather or environmental

conditions also could unexpectedly delay the installation of our MEE Systems, leading to increased expenses and decreased revenue in the relevant periods.

Sustained unfavorable weather or environmental conditions also could unexpectedly delay the installation of our MEE Systems, leading to increased expenses and decreased revenue in the relevant periods.

Extreme weather conditions, as well as the natural catastrophes that could result from such conditions, can severely impact our operations by delaying the installation of our MEE Systems, lowering sales, and causing a decrease in the savings from our MEE Systems due to smoke or haze.

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We seek to mitigate these climate-related risks not only through our core business model and sustainability initiatives, but also by working with organizations who are also focused on mitigating their own climate-related risks.

Changes in U.S.

energy policy, including the enactment of the “Big Beautiful Bill,” could materially and adversely affect our business, financial condition, and results of operations.

Our business strategy currently depends in part on the continued growth of distributed energy resources, including solar, battery storage, and other clean-energy technologies.

Federal and state tax credits, rebates, and similar incentives have historically played a significant role in driving adoption of these technologies.

The “Big Beautiful Bill,” now enacted into law, phases out or significantly reduces certain incentives for distributed solar and wind energy projects, while expanding or preserving incentives for other technologies such as utility-scale battery storage, geothermal, hydropower, and nuclear energy.

If the law’s provisions are fully implemented as enacted, demand for distributed solar and related solutions could decline, project financing costs could increase, and revenue growth in impacted product categories could suffer.

The shift in incentive structure may also alter the competitive landscape among energy technologies — accelerating growth in certain segments while constraining others.

The uncertainty associated with this transition may lead developers, financiers, and customers to delay projects or defer purchasing decisions.

Because our business model depends on the ability of our Owned Service Network and various software to cross-sell solar, storage, and other distributed-energy solutions, the reduction or elimination of incentives for distributed solar and wind could negatively impact customer adoption and project economics.

While the law’s preserved or expanded incentives for storage or other technologies may create new opportunities, there is no assurance that we will be able to capture these benefits at a scale sufficient to offset any decline in our core product categories.

Accordingly, changes in U.S.

energy policy, including the implementation of the “Big Beautiful Bill” in its current form, could materially and adversely affect our business, financial condition, and results of operations.

ConnectM’s operations in India, including through its subsidiaries such as ConnectM India and Cambridge Energy Resources, subject the Company to additional business, regulatory and operational risks that could adversely affect its results of operations.

ConnectM conducts a portion of its operations in India, including EV fleet management, energy solutions and commercial and industrial solar deployments.

Operating in India exposes ConnectM to a variety of risks that differ from those in the United States, including evolving regulatory frameworks, complex permitting and approval processes, and potential changes in government policies related to energy, electrification and foreign investment.

The Indian regulatory environment may be subject to significant uncertainty, including changes in tax laws, import duties, local content requirements, and incentives for renewable energy and EV adoption.

In addition, enforcement of laws and regulations may be inconsistent, and ConnectM may face delays in obtaining or maintaining necessary licenses, approvals or certifications required to operate its business.

ConnectM’s operations in India may also be affected by currency exchange rate fluctuations, restrictions on the repatriation of capital, inflation, and broader macroeconomic conditions.

Furthermore, the Company may be exposed to risks related to local labor markets, supply chain constraints, infrastructure limitations and reliance on local partners, contractors and vendors.

In addition, geopolitical developments, trade restrictions or changes in international relations could adversely impact ConnectM’s ability to operate in India or expand its business in the region.

Any of these factors could result in increased costs, project delays, reduced demand for ConnectM’s services or other adverse impacts on its business, financial condition and results of operations.

Risks related to ConnectM’s Technology, Intellectual Property and Infrastructure

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Interruptions, delays in service or inability to increase capacity, including internationally, at third-party data center facilities could impair the use or functionality of ConnectM’s subscription services, harm its business and subject it to liability.

ConnectM currently serves customers from third-party data center facilities operated by Amazon Web Services (“ AWS ”) located in the United States.

ConnectM currently serves customers from third-party data center facilities operated by Amazon Web Services (“ AWS ”) and Google Cloud Services, primarily located in the United States.

Any outage or failure of such data centers could negatively affect ConnectM’s product connectivity and performance.

Furthermore, ConnectM depends on connectivity from its edge to its data centers through cellular service providers, such as AT&T.

Any incident affecting a data center facility’s or a cellular service provider’s infrastructure or operations, whether

caused by fire, flood, severe storm, earthquake, or other natural disasters, power loss, telecommunications failures, breach of security protocols, computer viruses and disabling devices, failure of access control mechanisms, war, criminal act, military actions, terrorist attacks and other similar events could negatively affect the use, functionality or availability of ConnectM’s services.

Any incident affecting a data center facility’s or a cellular service provider’s infrastructure or operations, whether caused by fire, flood, severe storm, earthquake, or other natural disasters, power loss, telecommunications failures, breach of security protocols, computer viruses and disabling devices, failure of access control mechanisms, war, criminal act, military actions, terrorist attacks and other similar events could negatively affect the use, functionality or availability of ConnectM’s services.

Any damage to, or failure of, ConnectM’s systems, or those of its third-party providers, could interrupt or hinder the use or functionality of its services.

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There can be no assurance that ConnectM will be able to hire sufficient support personnel as and when needed.

To the extent that ConnectM is unsuccessful in hiring, training, and retaining adequate support personnel, its ability to provide high-quality and timely support to its customers will be negatively impacted and its customers’ satisfaction with its Cloud Services and MEE Systems could be adversely affected.

To the extent that ConnectM is unsuccessful in hiring, training, and retaining adequate support personnel, its ability to provide high-quality

and timely support to its customers will be negatively impacted and its customers’ satisfaction with its Cloud Services and MEE Systems could be adversely affected.

Any failure to maintain high-quality customer support, or a market perception that ConnectM does not maintain high-quality customer support, could adversely affect ConnectM’s reputation, business, results of operations, and financial condition, particularly with respect to its fleet customers.

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Changes to applicable U.S.

tax laws and regulations or exposure to additional income tax liabilities could affect ConnectM’s business and future profitability.

and foreign tax laws and regulations or exposure to additional income tax liabilities could affect ConnectM’s business and future profitability.

ConnectM is a U.S.

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tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to ConnectM.

In addition, ConnectM has operations in India and other international jurisdictions, including through its subsidiaries, which subjects the Company to foreign tax regimes that are complex and evolving.

These jurisdictions may impose taxes on income, withholding taxes, indirect taxes (such as goods and services tax), transfer pricing requirements and other compliance obligations.

Changes in Indian tax laws, regulations or administrative practices, or adverse interpretations thereof, could result in increased tax liabilities, penalties or disputes with taxing authorities.

Furthermore, cross-border transactions between ConnectM’s U.S.

and foreign subsidiaries may be subject to scrutiny under transfer pricing rules, and any adjustments could increase the Company’s effective tax rate and adversely affect its financial condition and results of operations.

For example, on December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“ Tax Act ”), was signed into law making significant changes to the Code, and certain provisions of the Tax Act may adversely affect ConnectM.

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The Tax Act could be subject to potential amendments and technical corrections and is subject to interpretations and implementing regulations by the U.S.

Treasury and Internal Revenue Service (“ IRS ”), any of which could mitigate or increase certain adverse effects of the legislation.

Treasury and Internal Revenue Service (“IRS”), any of which could mitigate or increase certain

adverse effects of the legislation.

In addition, the Tax Act may impact taxation in other jurisdictions, including with respect to state income taxes as state legislatures respond to the Tax Act.

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ConnectM’s after-tax profitability and financial results may also be adversely impacted by changes in the relevant tax laws and tax rates, treaties, regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive effect.

For example, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting recently entered into force among the jurisdictions that have ratified it, although the United States has not

yet entered into this convention.

These recent changes could negatively impact ConnectM’s taxation, especially as ConnectM expands its relationships and operations internationally.

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Additionally, ConnectM’s ability to utilize net operating loss and tax credit carryforwards to offset future taxable income may be limited.

ConnectM had approximately $35 million of U.S.

federal net operating loss carryforwards available to reduce future taxable income as of December 31, 2024.

Federal net operating losses occurring after December 31, 2017, of approximately $31 million may be carried forward indefinitely.

Federal net operating loss carryforwards begin to expire in 2026.

ConnectM has accumulated significant U.S.

federal net operating loss carryforwards available to reduce future taxable income.

A substantial portion of these net operating losses, arising after December 31, 2017, may be carried forward indefinitely, while the remaining carryforwards are subject to expiration beginning in 2026.

In addition, net operating loss carryforwards and certain tax credits may be subject to significant limitations under Section 382 and Section 383 of the Code, respectively, and similar provisions of state law.

Under those sections of the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change attributes, such as research tax credits, to offset its post-change income or tax may be limited.

In general, an “ownership change” will occur if there is a cumulative change in ownership by “5% stockholders” that exceeds 50 percentage points over a rolling three-year period.

In general, an “ownership

change” will occur if there is a cumulative change in ownership by “5% stockholders” that exceeds 50 percentage points over a rolling three-year period.

Future changes in ConnectM’s stock ownership, which are outside of ConnectM’s control, may trigger ownership changes.

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A change in these principles or interpretations could have a significant effect on reported financial results, and may even affect the reporting of transactions completed before the announcement or effectiveness of a change.

Our business currently depends on the availability of utility rebates, tax credits and other benefits, tax exemptions and exclusions, and other financial incentives.

We may be adversely affected by changes in U.S.

tax laws, and the expiration, elimination or reduction of these benefits could adversely impact our business.

Our business depends on government policies that promote and support solar energy and enhance the economic viability of owning solar energy systems.

federal, state and local governmental bodies provide incentives to owners, distributors, installers and manufacturers of solar energy systems to promote solar energy.

The Inflation Reduction Act (IRA) directs nearly $400 billion in federal funding to clean energy, with the goal of substantially lowering the U.S.’ carbon emissions by the end of this decade.

The funds will be delivered through a mix of tax incentives, grants, and loan guarantees.

Clean electricity and transmission command the biggest slice, followed by clean transportation, including EV incentives.

Approximately $43 billion in IRA tax credits as consumer incentives, aim to lower emissions by making EVs, energy-efficient appliances, rooftop solar panels, geothermal heating, and home batteries more affordable.

Starting in 2023, qualifying EVs will be eligible for a tax credit of up to $7,500 and $4,000 for new and used vehicles, respectively.

The IRA extended the energy-efficient home improvement credit through 2032.

There is also a tax credit for nonbusiness (residential) energy property expenditures which increases the rate of the credit to 30% and allows an annual $1,200 limitation of the credit amount in lieu of a lifetime limitation.

The act also allows an annual $2,000 credit for geothermal heat pumps and biomass stoves and increases the credit for windows and doors.

These policies are effective through 2032 and provide strong tail winds for decarbonization and electrification of residential homes in the U.S.

Our business currently depends on government incentives and policies supporting clean energy adoption, and any reduction, delay, or repeal of such programs could adversely affect our results of operations.

Our business model depends, in part, on the continued availability of federal, state, and local incentives that promote the adoption of clean energy technologies, including rebates, tax credits, grants, and favorable regulatory frameworks.

These programs reduce the cost of solar, HVAC electrification, and energy efficiency solutions for customers and enhance the economic attractiveness of our products and services.

While the Inflation Reduction Act of 2022 (“IRA”) extended and expanded many clean energy incentives through 2032—providing production and investment tax credits, residential energy efficiency incentives, and electric vehicle credits—future changes in U.S.

federal or state tax laws, budget priorities, or administrative policies could materially impact the timing, scope, or availability of these benefits.

The continued political debate around fiscal spending, as well as potential amendments or rollbacks of portions of the IRA or related state programs, create uncertainty.

Any expiration, reduction, or adverse modification of these incentives could increase the cost of our offerings to customers, reduce demand for our solutions, and adversely affect our revenue growth and profitability.

We may be required to record an impairment expense on our goodwill or intangible assets.

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Factors that can lead to impairment of goodwill and intangible assets include significant adverse changes in the business climate and actual or projected operating results, declines in the financial condition of our business and sustained decrease in our stock price.

During the year ended December 31, 2024, the Company recognized goodwill impairment of $1,568,309 and an impairment of our intangible assets of $835,319.

Furthermore, during the year ended December 31, 2023, the Company recognized goodwill impairment of $157,103 and an impairment of our intangible assets of $24,750.

Risks Related to Legal Matters, Regulations, and Policy

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In addition, some companies, particularly larger enterprises, often will not contract with vendors that do not meet these rigorous standards.

Accordingly, the failure, or perceived inability, to comply with these laws, regulations, standards and other obligations may limit the use and adoption of ConnectM’s solutions, reduce overall demand, lead to regulatory investigations, litigation and significant fines, penalties or liabilities for actual or alleged noncompliance, or slow the pace at which it closes sales transactions, any of which could harm its business.

Accordingly, the failure, or perceived inability, to comply with these laws, regulations, standards and other obligations may limit the use and

adoption of ConnectM’s solutions, reduce overall demand, lead to regulatory investigations, litigation and significant fines, penalties or liabilities for actual or alleged noncompliance, or slow the pace at which it closes sales transactions, any of which could harm its business.

Moreover, if ConnectM or any of its employees or contractors fail or are believed to fail to adhere to appropriate practices regarding customers’ data, it may damage its reputation and brand.

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Misconduct, fraud, non-compliance with applicable laws and regulations, or other improper activities by one or more of our employees, directors, executive officers, subcontractors or partners could have a significant negative impact on our business and reputation.

Examples of such misconduct include employee or subcontractor theft, personal misconduct and failure to comply with safety standards, including regulatory, company or site-specific COVID-19 safety protocols, laws and regulations, customer requirements, environmental laws and any other applicable laws or regulations.

Examples of such misconduct include employee or subcontractor theft, personal misconduct and failure to comply with safety standards, including regulatory, company or site-specific safety protocols, laws and regulations, customer requirements, environmental laws and any other applicable laws or regulations.

While we take precautions to prevent and detect these activities, such precautions may not be effective and are subject to inherent limitations, including human error and fraud.

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Our projects are conducted at a variety of sites including construction sites and industrial facilities.

Each location is subject to numerous safety risks, including electrocutions, fires, explosions, mechanical failures, weather-related incidents, transportation accidents, damage to equipment and, with respect to indoor sites, an increased risk of COVID-19 outbreaks.

Each location is subject to numerous safety risks, including electrocutions, fires, explosions, mechanical failures, weather-related incidents, transportation accidents and damage to equipment..

These hazards can cause personal injury and loss of life, severe damage to or destruction of property and equipment and other consequential damages and could lead to suspension of operations, large damage claims and, in extreme cases, criminal liability.

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We conduct business across the United States and file income taxes in various tax jurisdictions.

Our effective tax rates could be affected by many factors, some of which are outside of our control, including changes in tax laws and regulations in the various tax

jurisdictions in which we file income taxes.

Our effective tax rates could be affected by many factors, some of which are outside of our control, including changes in tax laws and regulations in the various tax jurisdictions in which we file income taxes.

For instance, the Tax Cuts and Jobs Act was enacted into law in December 2017.

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As a result, we are not subject to the various regulatory requirements applicable to U.S.

However, any federal, state, local or other applicable regulations could place

significant restrictions on our ability to operate our business and execute our business plan by prohibiting or otherwise restricting our sale of electricity.

However, any federal, state, local or other applicable regulations could place significant restrictions on our ability to operate our business and execute our business plan by prohibiting or otherwise restricting our sale of electricity.

These regulatory requirements could include restricting our sale of electricity, as well as regulating the price of our electrification and decarbonization solution offerings.

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This inability could cause our operating results in a given period to be higher or lower than budgeted.

Concentration of ownership among existing executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions.

As of the date of this report, our directors, executive officers and their affiliates as a group will beneficially own approximately 24.5% of the outstanding common stock (without giving effect to exercise of the warrants).

As a result, these stockholders are able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, any amendment of the certificate of incorporation and approval of significant corporate transactions.

This control could have the effect of delaying or preventing a change of control or changes in management and will make the approval of certain transactions difficult or impossible without the support of these stockholders.

Risks Related to Ownership of our Common Stock.

ConnectM’s financial forecasts may not prove accurate.

In connection with the Business Combination, certain forecasted financial information for ConnectM was provided to the Board, which was internally prepared and provided by ConnectM, and adjusted by ConnectM and MCAC management and their representatives to take into consideration the consummation of the transactions contemplated by the Merger Agreement, as well as certain adjustments that were appropriate in their judgment and experience.

The forecasts were based on numerous variables and assumptions known to ConnectM and MCAC at the time of preparation.

Such variables and assumptions are inherently uncertain and many are beyond the control of ConnectM or MCAC.

Important factors that may affect actual results and cause the forecasts to not be achieved include, but are not limited to, risks and uncertainties relating to the businesses of ConnectM (including its ability to achieve strategic goals, objectives and targets over applicable periods), industry performance, the competitive environment, changes in technology and general business and economic conditions.

Various assumptions underlying the forecasts may prove to not have been, or may no longer be, accurate.

The forecasts may not be realized, and actual results may be significantly higher or lower than projected in the forecasts.

The forecasts also reflect assumptions as to certain business strategies or plans that are subject to change.

As a result, the inclusion of such forecasts in this report should not be relied on as “guidance” or otherwise predictive of actual future events, and actual results may differ materially from the forecasts.

Our ability to be successful will be dependent upon the efforts of certain key personnel.

The loss of key personnel could negatively impact the operations and profitability of our post-combination business and its financial condition could suffer as a result.

The loss of key personnel could negatively impact the operations and profitability of our business and its financial condition could suffer as a result.

Our ability to be successful is dependent upon the efforts of our key personnel.

Although some key personnel may remain with the post- combination business in senior management or advisory positions following the business combination, it is possible that we will lose some key personnel, the loss of which could negatively impact the operations and profitability of our post-combination business.

ConnectM’s success depends to a significant degree upon the continued contributions of senior management, certain of whom would be difficult to replace.

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A number of those requirements require it to carry out activities ConnectM has not done previously and additional expenses associated with SEC reporting requirements will continue to be incurred.

Furthermore, if any issues in complying with those requirements are identified, ConnectM may be subject to additional costs and expenses to come into compliance (see also “ Financial, Tax and

Accounting-Related Risks - Risks Related to Finance, Tax and Accounting - ConnectM has identified material weaknesses in its internal control over financial reporting.

Furthermore, if any issues in complying with those requirements are identified, ConnectM may be subject to additional costs and expenses to come into compliance (see also “ Financial, Tax and Accounting-Related Risks - Risks Related to Finance, Tax and Accounting - ConnectM has identified material weaknesses in its internal control over financial reporting.

If ConnectM identifies a material weakness in the future or otherwise fails to maintain an effective internal control over financial reporting, this may result in material misstatements of ConnectM’s consolidated financial statements or cause ConnectM to fail to meet its periodic reporting obligations ,” for more detail).

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Furthermore, our suppliers may not be successful in generating sufficient sales or securing alternate financing arrangements, and therefore may no longer be able to supply goods and services to us.

In that event, we would need to find alternate sources for these goods and services, and there is no assurance we would be able to find such alternate sources on favorable terms, if at all.

In that event, we would need to find alternate sources for these goods and services, and there is no assurance we would

be able to find such alternate sources on favorable terms, if at all.

Any such disruption in our supply chain could adversely affect our ability to manufacture and deliver our products on a timely basis, and thereby affect our results of operations.

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A significant cyber incident could impact our production capability, harm our reputation and business relationships, impact our competitive position (including compromising our intellectual property assets), and subject us to regulatory actions or litigation and fines and/or penalties, including pursuant to evolving global privacy and security regulations and laws, as well as significant investigative, restoration or remediation costs and/or increased compliance costs.

Any of the foregoing could materially affect our

business, results of operations and financial condition.

Any of the foregoing could materially affect our business, results of operations and financial condition.

There is no guarantee that our measures to prevent, detect and mitigate these threats, including employee and key third-party partner education, monitoring of networks and systems, and maintenance of backup and protective systems, will be successful in preventing or mitigating a cyber-incident.

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AI-related changes to the products and services on offer may affect our customers’ expectations, requirements, or tastes in ways we cannot adequately anticipate or adapt to, causing our business to lose sales, market share, or the ability to operate profitably and sustainably.

Risks Related to Our Securities

If you purchase our securities you may experience future dilution as a result of future equity offerings or other equity issuances.

In order to raise additional capital, we will need to offer and issue additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock in the future.

The price per share at which we sell additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock in future transactions may be higher or lower than the price per share at which you purchase our securities.

In addition, we have a significant number of Warrants outstanding.

Further, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

The market price of our Common Stock and the trading volume of our Common Stock has been and may continue to be, highly volatile, and such volatility could cause the market price of our Common Stock to decrease.

Our Common Stock is currently quoted on the OTCQX Best Market under the symbol “CNTM,” where trading volumes can be limited and price movements can be more pronounced than on national exchanges.

Over the past twelve months, the market price of our Common Stock has experienced significant fluctuations, and there can be no assurance that such volatility will decrease in the future.

The market price and trading volume of our Common Stock may continue to fluctuate significantly in response to numerous factors, some of which are beyond our control, including:

● our ability to grow our revenue and customer base and achieve sustainable profitability;

● the limited trading volume and liquidity of our Common Stock on the OTC market;

● developments concerning regulatory oversight, reporting compliance, or listing status;

● variations in our results of operations or those of our competitors;

● changes in earnings estimates or recommendations by securities analysts (if our Common Stock becomes covered by analysts);

● successes or challenges in completing or integrating acquisitions and strategic partnerships;

● adverse effects on our business from macroeconomic conditions, including rising interest rates, credit tightening, or reduced investor risk appetite;

● future issuances or conversions of Common Stock or other equity-linked securities;

● the addition or departure of key personnel;

● announcements by us or our competitors of acquisitions, financings, or strategic alliances;

● general market conditions and other factors, including those unrelated to our operating performance.

Further, the OTC market and broader equity markets have, from time to time, experienced extreme price and volume fluctuations that have affected the market prices of securities of many companies, often unrelated to the operating performance of those companies.

Such market fluctuations could result in extreme volatility in the price of our Common Stock and could cause investors to lose part or all of their investment.

We have never paid dividends on our capital stock, and we do not anticipate paying dividends in the foreseeable future.

We have never paid dividends on any of our capital stock and currently intend to retain any future earnings to fund the growth of our business.

We may also enter into credit agreements or other borrowing arrangements in the future that will restrict our ability to declare or pay cash dividends on our Common Stock.

A significant portion of our Common Stock is restricted from immediate resale, but may be sold into the market in the future pursuant to registration rights granted to the holders thereof.

The exercise of such rights could cause the market price of our Common Stock to drop significantly, even if our business is doing well.

The market price of shares of our Common Stock could decline as a result of substantial sales of Common Stock, particularly by our significant stockholders, a large number of shares of Common Stock becoming available for sale, or the perception in the market that holders of a large number of shares intend to sell their shares.

In connection with the Business Combination, MCAC and certain stockholders of ConnectM entered into a registration rights agreement (the “ Business Combination Registration Rights Agreement ”) with ConnectM.

An aggregate of 5,340,000 shares of Common Stock are entitled to registration pursuant to the Business Combination Registration Rights Agreement, which consist of 2,300,000 shares of Common Stock initially purchased by MCAC’s sponsor in a private placement prior to the IPO and 3,040,000 shares of Common Stock issuable upon exercise of certain warrants.

Holders of such shares may make a written demand for registration under the Securities Act of all or part of their shares If at any time, ConnectM proposes to file a registration statement under the Securities Act, these holders shall be offered an opportunity to register the sale of such number of shares as such holders may request in writing.

The demand registration rights and “piggy-back” registration rights under the Business Combination Registration Rights Agreement are subject to certain requirements and customary conditions.

As such, sales of a substantial number of shares of our Common Stock in the public market could occur at any time.

These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Common Stock.

We may issue additional shares of our Common Stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of your shares.

Our issuance of additional shares of Common Stock or other equity securities of equal or senior rank could have the following effects:

● your proportionate ownership interest in ConnectM will decrease;

● he relative voting strength of each previously outstanding share of Common Stock may be diminished;

● the market price of our shares of our stock may decline.

Because our Common Stock is quoted on the OTC, your ability to sell your shares in the secondary trading market may be limited.

As a result of the transfer of our Common Stock from Nasdaq to the OTC, we anticipate that our stockholders may face negative consequences related to our securities, including but not limited to:

● limited availability of market quotations for our securities.

● a determination that our Common Stock is a “penny stock” which will require brokers trading in our securities to adhere to more stringent rules.

● reduced level of trading activity in the secondary trading market for shares of our Common Stock.

● a limited amount of analyst coverage;

● decreased ability to issue additional securities or obtain additional financing in the future.

Because our Common Stock is quoted on the OTC, your ability to sell your shares in the secondary trading market may be limited.

The OTC is the only trading market for our Common Stock.

We cannot assure our stockholders that our Common Stock will continue to trade on this market, whether broker-dealers will continue to provide public quotes of our Common Stock on this market, whether the trading volume of our Common Stock will be sufficient to provide for respective efficient trading markets or whether quotes for our Common Stock will continue on this market in the future, which could result in significantly lower trading volumes and reduced liquidity for investors seeking to buy or sell our Common Stock.

As a result, prices for shares of our Common Stock may be lower than might otherwise prevail if our Common Stock was listed on a national securities exchange.

The price of our securities may fluctuate significantly due to general market and economic conditions.

An active trading market for our securities may not be sustained.

In addition, the price of our securities can vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports.

There can be no assurance that the Public Warrants will be in the money during their exercise period, and they may expire worthless.

A total of 9,200,000 public warrants (the “Public Warrants”) were issued in the IPO, with each whole warrant entitling the holder to purchase one share of Common Stock at a price of $11.50 per share.

Each warrant became exercisable 30 days after the Closing and will expire five years after the Closing, or earlier upon redemption or liquidation.

There can be no assurance that the Public Warrants will be in the money prior to their expiration and, as such, the warrants may expire worthless.

The terms of Public Warrants may be amended in a manner that may be adverse to the holders.

Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least a majority of the then-outstanding Public Warrants approve of such amendment.

Our ability to amend the terms of the Public Warrants with the consent of a majority of the then-outstanding Public Warrants is unlimited.

We may redeem unexpired warrants, in accordance with their terms, prior to their exercise at a time that is disadvantageous to holders of warrants.

Securities and industry analysts do not currently, and

may never, publish research on us.

If no securities or industry analysts commence coverage of us, our stock price and trading volume would likely be negatively impacted.

Risks Related to the Reverse Stock Split

The Reverse Stock Split may decrease the liquidity of the shares of our Common Stock.

At a special meeting of stockholders held on January 15, 2026, the stockholders approved a reverse stock split of the Company’s Common Stock at a ratio between 1-for-5 and 1-for-50, with the final ratio to be determined by the Company’s Board of Directors.

On March 26, 2026, the Board of Directors approved a 1-for-32 reverse stock split and authorized the Company to effect the reverse stock split at 4:01 p.m.

(Eastern Time) on April 17, 2026, with trading on a split-adjusted basis expected to commence on April 20, 2026, subject to regulatory approval and completion of applicable procedures.

The reverse stock split will result in one share of Common Stock being issued for each 32 shares outstanding, with fractional shares rounded up to the nearest whole share.

The Company has filed, or is in the process of filing, the necessary documentation with applicable regulatory authorities, including FINRA, and is coordinating with its transfer agent and other parties to effect the reverse stock split.

Once the Reverse Split is effected, the liquidity of the shares of our Common Stock may be affected adversely by the Reverse Stock Split given the reduced number of shares that are outstanding as a result of the Reverse Stock Split, especially if the market price of our Common Stock does not increase proportionally as a result of the Reverse Stock Split.

In addition, the Reverse Stock Split may have increased the number of stockholders who own odd lots (less than 100 shares) of our Common Stock and such stockholders may experience an increase in the cost of selling their shares of Common Stock and greater difficulty effecting such sales.

Following the Reverse Stock Split, the resulting market price of our Common Stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors.

Consequently, the trading liquidity of our Common Stock may not improve.

Although we believe that a higher market price of our Common Stock may help generate greater or broader investor interest, there can be no assurance that the Reverse Stock Split will result in a share price that will attract new investors, including institutional investors.

In addition, there can be no assurance that the market price of our Common Stock will satisfy the investing requirements of those investors.

As a result, the trading liquidity of our Common Stock may not necessarily improve.

Unresolved Sta ﬀ Comments.

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Risk Management and Strategy

The Company relies heavily on its information systems, and the availability and integrity of these systems is essential to conducting its business and operations.

As a developer of modern energy economy technology systems and services, the Company faces various security threats, including cybersecurity threats, to gain unauthorized access to its sensitive information or to render its information or systems unusable, and threats to the security of its facilities and infrastructure or third-party facilities and infrastructure, such as gathering and processing and other facilities, and pipelines.

This risk may be heightened as a result of an increased remote working environment, similar to the one created by the COVID-19 outbreak in 2020.

The potential for such security threats subjects its operations to increased risks that could have a material adverse effect on its business, financial condition, results of operations and cash flows.

As the Company implements various procedures and controls to monitor and mitigate such security threats and to increase security for its information, systems, facilities and infrastructure it may result in increased costs.

Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring.

If any of these security breaches were to occur, they could lead to losses of, or damage to, sensitive information or facilities, infrastructure and systems essential to its business and operations, as well as data corruption, communication interruptions or other disruptions to its operations, which, in turn, could have a material adverse effect on its business, financial position, results of operations and cash flows.

As a smaller reporting company in the earlier stages of its cybersecurity maturity, the Company is actively developing and implementing a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of its Confidential Information and Critical Systems.

The Company’s cybersecurity risk management program is being integrated into the overall enterprise risk management program and includes a cybersecurity incident response plan.

The Company’s cybersecurity risk management program includes, or is in the process of establishing, the following elements:

● Risk assessments designed to help identify material cybersecurity risks to the Company’s Confidential Information, Critical Systems, and the broader enterprise IT environment.

● A security team principally responsible for managing:

● The Company’s cybersecurity risk assessment processes;

● Security controls over Confidential Information and Critical Systems;

● The Company’s response to cybersecurity incidents.

● Cybersecurity awareness training for employees and senior management, including spear-phishing resistance training.

● A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents, including the process for informing senior management and the Board of Directors.

● A vendor management policy for third-party service providers, suppliers, and vendors that access, process, or store the Company’s Confidential Information or Critical Systems.

● The engagement of external cybersecurity experts, where appropriate, to advise on best practices, conduct vulnerability assessments, and assist with aspects of security controls.

The Company’s approach to cybersecurity is continuing to mature, and the Company is in the process of evaluating its cybersecurity needs and developing measures to enhance its cybersecurity posture.

This includes conducting vulnerability assessments, developing incident response procedures, and considering engagement of external cybersecurity consultants for additional assessments and advisory services.

The Company’s goal is to establish a cybersecurity framework that is commensurate with its size, complexity, and the nature of its operations, thereby reducing its exposure to cybersecurity risks.

As of the date of this Annual Report on Form 10-K, the Company has not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Company, including its operations, business strategy, results of operations, or financial condition.

However, the Company recognizes that the absence of a fully formalized cybersecurity framework may leave it vulnerable to cyberattacks, data breaches, and other cybersecurity incidents.

Such events could potentially lead to unauthorized access to, or disclosure of, sensitive information, disrupt business operations, result in regulatory fines or litigation costs, and negatively impact the Company’s reputation among customers and partners.

The Company faces risks from cybersecurity threats that, if realized, could have a material adverse effect on the Company, including an adverse effect on its business, financial condition, and results of operations.

Despite the Company’s efforts to improve its cybersecurity measures, there can be no assurance that its initiatives will fully mitigate the risks posed by cyber threats.

The landscape of cybersecurity risks is constantly evolving, and the Company will continue to assess and update its cybersecurity measures in response to emerging threats.

For further discussion of cybersecurity risk factors, see Item 1A.

Risk Factors.

The Board of Directors of ConnectM Technology Solutions, Inc.

considers cybersecurity risk as part of its overall risk oversight function.

The Board has delegated oversight of cybersecurity and other information technology risks to the Audit Committee.

The Audit Committee oversees the establishment and effectiveness of the Company’s cybersecurity risk management program and related internal controls.

The Audit Committee is informed of material risks, when applicable, from cybersecurity threats by the Company’s management.

Updates on cybersecurity matters, including material risks and threats, are provided to the Audit Committee on a periodic basis, and the Audit Committee in turn reports to the full Board of Directors regarding its activities, including those related to cybersecurity, at regular board meetings.

In addition, the Board of Directors will oversee any cybersecurity risk management framework and, through the Audit Committee, will review and approve cybersecurity policies, strategies, and risk management practices as they are developed and implemented.

The Company’s executive management team, along with any managed information technology service providers, is responsible for assessing and managing risks from cybersecurity threats to the Company, including risks to its Confidential Information and Critical Systems.

Management has primary responsibility for the Company’s overall cybersecurity risk management program.

Under the oversight of the Audit Committee, the Company’s Chief Executive Officer is primarily responsible for the assessment and management of material cybersecurity risks and for establishing and maintaining adequate and effective internal controls covering cybersecurity matters.

The Chief Executive Officer has been designated as the lead in implementing the Company’s cybersecurity incident response plan.

● Management meets with the Company’s information technology service providers periodically to discuss current cybersecurity issues, which may include efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, including:

● Threat intelligence and other information obtained from governmental, public, or private sources, and from external service providers engaged by the Company;

● Alerts and reports produced by security tools deployed in the Company’s information technology environment, including spear-phishing reports;

● Briefings from internal security personnel and external cybersecurity consultants.

The Audit Committee, with the assistance of the Chief Executive Officer, is responsible for overseeing the establishment and effectiveness of controls and other procedures, including controls and procedures related to the public disclosure of material cybersecurity matters.

The Company’s cybersecurity incident response plan governs its assessment and response upon the occurrence of a material cybersecurity incident, including the process for informing senior management and the Board of Directors .

As of the date of this report, other than the foregoing, the Company is not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition, and that are required to be reported herein.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors