Dror Ortho-Design, Inc. 10-K

Item 9A. Controls and Procedures. Disclosure Controls and Procedures Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in the Exchange Act) Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report, have concluded that, based on such evaluation, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Internal Control over Financial Reporting Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) under the Exchange Act. Internal control over financial reporting refers to the process designed by, or under the supervision of, our principal executive officer and principal financial officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and the disposition of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP and that receipts and expenditures are being made only in accordance with authorizations of our management and board of directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements. 55 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate. Management evaluated the effectiveness of our internal control over financial reporting based on the 2013 framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation management concluded that our internal control over financial reporting was not effective as of December 31, 2025. During the year ended December 31, 2025, management identified the following weaknesses, which were deemed to be material weaknesses in internal controls: 1. Due to the size of the Company and available resources, there are limited personnel to assist with the accounting and financial reporting function, which results in a lack of segregation of duties. 2. The Company does not have a Chief Financial Officer that can oversee day to day operations and the financial reporting function. This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which permits us to provide only management’s report in this Annual Report. Planned Remediation of Material Weaknesses The Company has begun remediation efforts and, until it has sufficient internal technical accounting resources, has engaged external consultants to support and assist with the evaluation of more complex applications of U.S. GAAP to aid in remediating the material weakness. The Company is also enhancing corporate oversight over process level controls and structures to ensure appropriate assignment of authority. These remediation efforts are ongoing and include, or are expected to include, the following: ● Actively recruiting and hiring a Chief Financial Officer with appropriate public company experience and expertise in U.S. GAAP and SEC reporting to oversee day to day operations and the financial reporting function, and increasing personnel resources and technical accounting expertise within the accounting function (and, until sufficient internal resources are in place, continuing to utilize external consultants to support complex GAAP matters). ● Engaging internal control consultants to perform a financial reporting risk assessment and to assist in identifying and designing the system of internal controls necessary to mitigate the risks identified. ● Preparing written documentation of internal control policies and procedures across key business processes. ● Strengthening corporate governance. While the Company aims to segregate duties as much as practicable, the current volume of transactions does not currently justify additional full time staff. As a result, the Company may not be able to fully remediate the material weakness until it has sufficient resources, at which time it expects to hire additional personnel. The Company will continue to monitor and assess the costs and benefits of additional staffing. Changes in Internal Controls over Financial Reporting There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter ended December 31, 2025 that have materially affected, or are reasonably likely to affect, our internal control over financial reporting. Item 9B. Other Information None. Item 9C Disclosure Regarding Foreign Jurisdictions That Prevent Inspections. Not applicable. 56 PART III Item 10. Directors, Executive Officers and Corporate Governance. Officers and Directors The following persons became our directors and executive officers on August 14, 2023 and hold the positions set forth opposite their respective names as of February 26, 2026: Name Age Position Eliyahu (Lee) Haddad 59 Chief Executive Officer and Director Moshe Shvets 62 Chief Technology Officer and Director Chaim Hurvitz 65 Director and Chairman of the Board Chaim Ravad 62 Director Yehuda Englander 45 Director Directors and Executive Officers Information concerning our directors and executive officers is set forth below. The biographical description of each director includes the specific experience, qualifications, attributes and skills that led the Board to conclude that such person should serve as a director. Eliyahu (Lee) Haddad Mr. Haddad has served as our Chief Executive Officer and director since December 2021. Mr. Haddad is a multi-disciplinary finance and technology expert, with extensive senior level operational experience in raising capital, growing complex business models, and guiding startups and later stage companies to successful exits. Prior to his employment at Dror, Mr. Haddad served as Chief Executive Officer of HFT Investments from 2007 through 2021. He also served as a Senior Adviser at Exceed Talent Capital between 2019 and 2023. Over the course of his 30-year career, Mr. Haddad has structured and managed a number of technology and media transactions valued at an aggregate of over $85 billion, including $250 million in transactions within the Israeli high-tech space in AI, medical technology, and cybersecurity. Mr. Haddad received a bachelor’s degree in economics and philosophy from Columbia University, where he was the recipient of the National Science Foundation Award in Theoretical Physics and started his career in the M&A subgroup of Morgan Stanley’s media and technology group for several years. We believe that Mr. Haddad’s extensive business experience qualifies him to serve as a member of our Board. Moshe Shvets Mr. Shvets has served as a director and as our Chief Technology Officer since July 20, 2020. Mr. Shvets has also served as a Senior Vice President since December 1, 2021. Mr. Shvets is a seasoned senior executive with 25 years of experience in building companies with over €250M yearly revenues that involve complex instrumentation & processes, regulation, software, and global infrastructure. Prior to joining Dror, Mr. Shvets founded and served as a director of BiSec Ltd. from 2015 to 2018. Mr. Shvets has also served as president of OAO Belzan from 2011 to 2013, and president of OAO DZV from 2011 to 2014. Before joining the management team, Mr. Shvets was one of the investors in our Company. Mr. Shvets received a bachelor’s degree from Saint Petersburg State University in Aerospace Instrumentation in 1999. We believe that Mr. Shvets’s extensive experience commercializing new technologies qualifies him to serve as a member of our Board. Chaim Hurvitz Mr. Hurvitz has served as a director and Chairman of our Board since January 17, 2012. Mr. Hurvitz has founded and has served as a chief executive office of C.H. Health, a healthcare focused venture capital firm since May 2011. His investments through CH Health have included several successful exits including the NASDAQ IPOs of Galmed Pharmaceuticals Ltd. (NASDAQ: GLMD) (“Galmed”) and UroGen Pharma Ltd. (NASDAQ: URGN) (“UroGen”). He was previously a member of Teva’s senior management, serving as the President of Teva International Group from 2002 through 2010, Vice-President of Israeli Pharmaceutical Sales from 1999 through 2002 and President and CEO of Teva Pharmaceuticals Europe from 1992 through 1999. Mr. Hurvitz presently serves the chairman of Univo Pharmaceuticals Ltd., the chairman of Shirat Hachaim Ltd., a director of Celexir, a director of Genoscience Pharma S.A.S., and has previously served as the chairman CTG Weld Limited, the chairman of PolyPid Ltd. (NASDAQ: PYPD), as the chairman of Galmed, as a director of UroGen, and as a director of Teva Pharmaceuticals Industries Ltd. (NYSE: TEVA). Mr. Hurvitz is also a member of management of the Manufacturers Association of Israel and Head of its Pharmaceutical branch. Mr. Hurvitz received a B.A. in political science and economics from Tel Aviv University in 1985. We believe that Mr. Hurvitz’s extensive management experience in the healthcare industry qualifies him to serve as a member of our Board. 57 Chaim Ravad Mr. Ravad has served as a director since February 2015. Mr. Ravad has experience in food catering and real estate industries. In his capacity as our director, Mr. Ravad has served as a major contributor to the development of Dror’s teeth straightening product from its early stages and until receipt of FDA and CE approval and has in the past successfully assisted in securing private investments in our Company. Mr. Ravad is a graduate of Hebron Yeshiva. Yehuda Englander Mr. Englander has served as a director since December 6, 2021. Mr. Englander is a co-founder of YYE ALEY SHLECHT ASSETS LTD. and YE RUT Finance Ltd. Prior to that, Mr. Englander led Yehuda Englander Finance Advisory Ltd. for four years. Mr. Englander received a B.A. in Accounting from Lev Academic Center at Jerusalem College of Technology. We believe that Mr. Englander’s extensive investment experience qualifies him to serve as a member of our Board. Involvement in Certain Legal Proceedings In 1992, simultaneously with the institution of administrative proceedings against Mr. Haddad, the Company’s Chief Executive Officer and Director, in connection with certain alleged violations of SEC rules, the Securities and Exchange Commission accepted Mr. Haddad’s settlement offer to be permanently barred from association with any broker, dealer, municipal securities dealer, investment advisor, or investment company. Mr. Haddad is not barred from being an officer or director of a public company. Additionally, none of the members of the Board or our executive officers has, in the last ten years, been involved in any legal proceeding of the type described under Item 103(c)(2) or Item 401(f) of Regulation S-K. Director Independence Our Common Stock is quoted on the OTC Pink Market operated by the OTC Markets Group Inc., which does not have director independence requirements. However, our Board has reviewed the independence of our directors based on the listing standards of the Nasdaq. Based on this review, the Board of Directors determined that Yehuda Englander, Chaim Hurvitz and Chaim Ravad are independent, as defined in Rule 5605(a)(2) of the Nasdaq rules. In making this determination, our Board considered the relationships that each of these non-employee directors has with us and all other facts and circumstances our Board deemed relevant in determining their independence. Family Relationships There are no family relationships among our directors or executive officers. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our directors and executive officers and each person who owns more than ten percent of a registered class of our equity securities (collectively, “Reporting Persons”) to file with the SEC initial reports of ownership and reports of changes in ownership of our Common Stock and our other equity securities. Reporting Persons are required by SEC regulation to furnish us with copies of all Section 16(a) forms that they file. Based solely on our review of the copies of the forms received by us during the fiscal year ended December 31, 2025 and written representations that no other reports were required, we believe that each person who, at any time during such fiscal year, was a director, officer or beneficial owner of more than ten percent of our common stock complied with all Section 16(a) filing requirements during such fiscal year. Committees of the Board of Directors Our Board of Directors has an audit committee (the “Audit Committee”), a nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”) and a compensation committee (the “Compensation Committee”), and we may have such other committees as the Board of Directors shall determine from time to time. Each of the standing committees of the Board of Directors has the composition and responsibilities described below. Audit Committee We have established an Audit Committee consisting of Yehuda Englander, Chaim Hurvitz and Chaim Ravad, each of whom is independent under SEC rules and the Nasdaq listing standards. Our Audit Committee consists solely of independent directors in accordance with the Nasdaq listing rules and Rule 10A-3 of the Exchange Act. SEC rules also require that a public company disclose whether its audit committee has an “audit committee financial expert” as a member. An “audit committee financial expert” is defined as a person who, based on his or her experience, possesses the attributes outlined in such rules. We have determined that Yehuda Englander, Chaim Hurvitz and Chaim Ravad each satisfy the definition of “audit committee financial expert.” Our Audit Committee oversees, reviews, acts on and reports on various auditing and accounting matters to our Board of Directors, including the selection of our independent accountants, the scope of our annual audits, fees to be paid to the independent accountants, the performance of our independent accountants and our accounting practices. In addition, the Audit Committee oversees our compliance programs relating to legal and regulatory requirements and is responsible for the review and approval of related party transactions. We adopted an audit committee charter defining the Audit Committee’s primary duties in a manner consistent with the rules of the SEC and applicable stock exchange or market standards. 58 Nominating and Corporate Governance Committee We have established a Nominating and Corporate Governance Committee consisting of Yehuda Englander and Chaim Hurvitz, each of whom is independent under the Nasdaq listing standards. As required by the Nasdaq listing standards, the Nominating and Corporate Governance Committee consists solely of independent directors. This committee identifies, evaluates and recommends qualified nominees to serve on our Board of Directors and develops and oversees our internal corporate governance processes. We adopted a nominating and corporate governance committee charter defining the Nominating and Corporate Governance Committee’s primary duties in a manner consistent with the rules of the SEC and the listing standards of the Nasdaq. Compensation Committee We have established a Compensation Committee consisting of Yehuda Englander and Chaim Hurvitz, each of whom is independent under the Nasdaq listing standards. This committee establishes incentives and other forms of compensation for officers and other employees and will administer our incentive compensation and benefit plans. We adopted a compensation committee charter defining the Compensation Committee’s primary duties in a manner consistent with the rules of the SEC and the listing standards of the Nasdaq. Code of Ethics Our Board of Directors adopted a code of business conduct and ethics applicable to our employees, directors and officers, in accordance with applicable United States federal securities laws and the corporate governance rules of Nasdaq. Any waiver of this code may be made only by our Board of Directors and will be promptly disclosed as required by applicable United States federal securities laws and the corporate governance rules of Nasdaq. Insider Trading Policy We have an insider trading policy that prohibits our directors, executive officers and all employees of the Company from the purchasing or selling our securities while being aware of material, non-public information about the Company as well as disclosing such information to others who may trade in securities of the Company. Our insider trading policy also prohibits our directors, executive officers, employees and their respective family members from engaging in hedging activities or other short-term or speculative transactions in the Company’s securities such as short sales, options trading, holding the Company’s securities in a margin account or pledging the Company’s securities as collateral for a loan, without the advance approval of our Chief Financial Officer. While the Company is not subject to the insider trading policy, the Company does not trade in its securities when it is in possession of material nonpublic information other than pursuant to previously adopted Rule 10b5-1 trading plans, if any. Director Nominations by Security Holders Our Second Amended and Restated Bylaws (the “Bylaws”) contain provisions that address the process by which a stockholder may nominate an individual to stand for election to our board of directors (the “Board”). To recommend a nominee for election to the Board, a stockholder must submit his or her recommendation to our Secretary at our corporate offices at Shatner Street 3, Jerusalem, Israel. Such nomination must satisfy the notice, information and consent requirements set forth in our Bylaws and must be received by us prior to the date set forth under “Submission of Future Stockholder Proposals” in our most recent proxy statement. A stockholder’s recommendation must be accompanied by the information with respect to stockholder nominees as specified in our Bylaws, including among other things, the name, age, address and occupation of the recommended person, the proposing stockholder’s name and address, the ownership interests of the proposing stockholder and any beneficial owner on whose behalf the nomination is being made (including the number of shares beneficially owned, any hedging, derivative, short or other economic interests and any rights to vote any shares) and any material monetary or other relationships between the recommended person and the proposing stockholder and/or the beneficial owners, if any, on whose behalf the nomination is being made. Item 11. Executive Compensation. The following table sets forth summary compensation information for the respective fiscal years. For the purpose of this prospectus, our “named executive officers” or “NEOs” are our principal executive officer (“PEO”), Mr. Haddad, and our sole non-PEO executive officer, Mr. Shvets. We provide a description of the employment arrangements with Mr. Haddad and Mr. Shvets, below under “Employment Agreements.” The following table includes all compensation earned by our named executive officers for the respective period, regardless of whether such amounts were actually paid during the period. This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. 59 Summary Compensation Table The following table sets forth information concerning the compensation of our named executive officers for the fiscal years indicated below. Name and principal position Year Salary ($) (1) Bonus ($) Stock awards ($) Option awards ($) (2) Nonequity incentive plan compensation ($) Nonqualified deferred compensation earnings ($) All other compensation ($) Total ($) Eliyahu (Lee) Haddad 2025 525,317 — — — — — — 525,317 (Chief Executive Officer and Director) 2024 447,832 — — — — — — 447,832 Moshe Shvets 2025 496,575 — — — — — — 496,575 (Chief Technology Officer) 2024 424,197 — — — — — — 424,197 (1) Compensation amounts received in non-U.S. currency have been converted into U.S. dollars using the average exchange rate for the applicable year. The average exchange rate for 2025 was 3.45 NIS per dollar and the average exchange rate for 2024 was 3.69 NIS per dollar. (2) In accordance with SEC rules, this column reflects the aggregate fair value of the option awards granted during the respective fiscal year computed as of their respective grant dates in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718 for share-based compensation transactions. The assumptions made in the valuation of the share-based payments are contained in Note 11 to our financial statements included in this prospectus. Narrative Disclosure Regarding Summary Compensation Table Our Board reviews compensation annually for all employees, including named executive officers. In making compensation determinations, the Board considers compensation for comparable positions in the market and with peer companies, the historical compensation levels of executives, individual performance as compared to the board’s expectations and objectives, the board’s desire to motivate employees to achieve short- and long-term results that are in the best interests of our stockholders and a long-term commitment to our Company. Annual Base Salaries Base salaries for the executive officers are initially established through arm’s-length negotiations at the time of the executive officer’s hiring, taking into account such executive officer’s qualifications, experience, the scope of his or her responsibilities and competitive market compensation paid by other companies for similar positions within the industry and geography. Base salaries are reviewed periodically, typically in connection with our annual performance review process, and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience. In making decisions regarding salary increases, we may also draw upon the experience of members of the Board with executives at other companies. Bonus Compensation During fiscal years 2025 and 2024, our named executive officers were not eligible to receive a discretionary annual bonus based on individual and company performance. Equity-Based Incentive Awards Our equity-based incentive awards are designed to align our interests and those of our stockholders with those of our employees and consultants, including our named executive officers. We have historically used stock options as incentives for long-term compensation to the named executive officers as the return on such awards is tied to an increase in our stock price. We may grant equity awards at such times as our Board determines appropriate in their discretion. Additional grants may occur periodically in order to incentivize executives with respect to achieving certain corporate goals or to reward them for exceptional performance. See “Outstanding Equity Awards at Fiscal Year-End” below for additional information regarding outstanding equity awards held by our named executive officers as of December 31, 2025. Employment Agreements Eliyahu (Lee) Haddad, Chief Executive Officer and Director On December 6, 2021, Private Dror entered into an employment agreement (the “Haddad Employment Agreement”) with Mr. Haddad to serve as Private Dror’s chief executive officer. Pursuant to this employment agreement, Mr. Haddad is entitled to a monthly salary (including all social benefit payments provided under Israeli law) of $22,256. Mr. Haddad is also entitled to an annual bonus based on achievement of objectives and the Board’s approval. In connection with his employment agreement, Mr. Haddad was granted options to purchase five percent (5%) of our fully diluted Ordinary Shares issued and issuable on the date of the employment agreement, which options shall vest in three tranches, on the first, second, and third anniversary of the date of the employment agreement. The options are subject to accelerated vesting upon the achievement by us of certain performance milestones. We cannot terminate Mr. Haddad’s employment not for “cause,” and in circumstances constituting “cause,” we may terminate the agreement effective immediately. Mr. Haddad can terminate the agreement for convenience upon 30 days written notice, and may terminate the agreement immediately for “good reason.” If Mr. Haddad’s employment is terminated without cause, or Mr. Haddad resigns for good reason, he is entitled to twelve month’s salary. 60 Following the closing of the Share Exchange, the Board appointed Mr. Haddad to the office of Chief Executive Officer on the terms of the Haddad Employment Agreement. On February 18, 2025, effective as of June 30, 2023 (the “Haddad First Amendment Effective Date”), we and Mr. Haddad entered into the First Amendment to the Haddad Employment Agreement (the “Haddad First Amendment”), pursuant to which we agreed, beginning on the Haddad First Amendment Effective Date, that Mr. Haddad’s salary shall be increased to a yearly net salary of $200,000. Additionally, pursuant to the terms of the Haddad First Amendment, Mr. Haddad shall receive a one-time payment upon achievement of the following milestones (subject to the determination of the Board that such milestones have been achieved) (i) $25,000 upon reaching a commercially available product and (ii) $50,000 upon the Company having reached and maintained a market capitalization of $100,000,000 for 30 trading days. Additionally, subject to the approval of the Board of Novint Technologies, Inc. (“Novint”) the adoption by Novint of an option plan, and the submission of such plan with the Israeli tax authorities, Mr. Haddad shall be issued with options to purchase shares of common stock of Novint as follows: (i) 50% of the outstanding share capital of Novint at a $100,000,000 valuation for 30 days, (ii) 50% of the outstanding share capital of Novint at a $200,000,000 valuation for 30 days, (iii) 50% of the outstanding share capital of Novint at a $350,000,000 valuation for 30 days, and (iv) 50% of the outstanding share capital of Novint at a $500,000,000 valuation for 30 days. On February 18, 2025, effective as of February 5, 2025, we and Mr. Haddad entered into the Second Amendment to the Haddad Employment Agreement (the “Haddad Second Amendment”), pursuant to which we agreed that Mr. Haddad’s pension and severance pay contributions on his behalf be made from a lower salary than Mr. Haddad’s monthly salary and that (i) from January 2023 through July 2023, the base salary for pension and severance contributions was NIS 38,000, (ii) from August 2023 through December 2023, the base salary for pension and severance contributions was NIS 29,675.08, and (iii) from January 2024 through December 2024, the base salary for pension and severance NIS 24,500. Moshe Shvets, Chief Technology Officer On January 26, 2022, Private Dror entered into an employment agreement (the “Shvets Employment Agreement”) with Mr. Shvets to serve as Private Dror’s Senior Vice President, effective as of December 1, 2021. Mr. Shvets was named Chief Technology Officer as of July 20, 2020. Pursuant to his employment agreement, Mr. Shvets is entitled to a monthly gross salary of NIS 32,000. Mr. Shvets is also entitled to certain social and fringe benefits as set forth in the employment agreement. In connection with his employment agreement, Mr. Shvets was granted options to purchase three percent (3%) of our fully diluted Ordinary Shares issued and issuable on the date of the employment agreement, which options shall vest in three tranches, on the first, second, and third anniversary of the date of the employment agreement. The options are subject to accelerated vesting upon the achievement by us of certain performance milestones. Mr. Shvets’ employment can be terminated by either party for convenience upon 30 days written notice. Following the closing of the Share Exchange, the Board appointed Mr. Shvets to the office of Chief Technology Officer on the terms of the Shvets Employment Agreement. On February 18, 2025, effective as of June 30, 2023 (the “Shvets First Amendment Effective Date”), we and Mr. Shvets entered into the First Amendment to the Shvets Employment Agreement (the “Shvets First Amendment”), pursuant to which we agreed, beginning on the Shvets First Amendment Effective Date, that Mr. Shvets’s salary shall be increased to a yearly net salary of $150,000. Additionally, pursuant to the terms of the Shvets First Amendment, Mr. Shvets shall receive a one-time payment upon achievement of the following milestones (subject to the determination of the Board that such milestones have been achieved) (i) $25,000 upon reaching a commercially available product and (ii) $50,000 upon the Company having reached and maintained a market capitalization of $100,000,000 for 30 trading days. 61 On February 18, 2025, effective as of February 5, 2025, we and Mr. Shvets entered into the Second Amendment to the Shvets Employment Agreement (the “Shvets Second Amendment”), pursuant to which we agreed that Mr. Shvets’s pension and severance pay contributions on his behalf be made from a lower salary than Mr. Shvets’s monthly salary and that (i) from January 2023 through July 2023, the base salary for pension and severance contributions was NIS 32,000, (ii) from August 2023 through December 2023, the base salary for pension and severance contributions was NIS 46,250, and (iii) from January 2024 through December 2024, the base salary for pension and severance NIS 24,500. Outstanding Equity Awards at Fiscal Year-End The following table presents information regarding outstanding equity awards held by our named executive officers as of December 31, 2025. Information in this table has been adjusted to give pro forma effect to the Share Exchange. Option awards Name Number of securities underlying unexercised options (#) exercisable Number of securities underlying unexercised options (#) unexercisable Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) Option exercise price ($) Option expiration date Eliyahu (Lee) Haddad (Chief Executive Officer and Director) 95,965,715 (1) - (1) — $ 0.0037 August 14, 2033 Moshe Shvets (Chief Technology Officer and Director) 57,578,694 (2) - (2) — $ 0.0037 August 14, 2033 (1) On December 6, 2021, Mr. Haddad was granted options to purchase up to 26,097 ordinary shares of Private Dror at an exercise price of $14.15 per ordinary share. In connection with the Share Exchange, these options were exchanged for options to purchase up to 95,965,715 shares of Common Stock at an exercise price of approximately $0.0038480 per share. These options vest in three tranches, on the first, second, and third anniversary of the employment start date. The options are subject to accelerated vesting upon the achievement by us of certain performance milestones. These options are fully vested as of December 31, 2024. (2) On December 1, 2021, Mr. Shvets was granted options to purchase up to 15,658 ordinary shares of Private Dror at an exercise price of $14.15 per ordinary share. In connection with the Share Exchange, these options were exchanged for options to purchase up to 57,578,694 shares of Common Stock at an exercise price of approximately $0.0038480 per share. These options vest in three tranches, on the first, second, and third anniversary of the employment start date. The options are subject to accelerated vesting upon the achievement by us of certain performance milestones. These options are fully vested as of December 31, 2024. Equity Incentive Plans 2021 Share Incentive Plan Prior to the Share Exchange, Private Dror adopted the Dror 2021 Share Incentive Plan (the “2021 Plan”), which provides for the granting of stock options, restricted stock, restricted stock units, and other stock-based awards to employees, directors, officers, consultants, and advisors of Private Dror or its affiliates. Under the 2021 Plan, 51,482 ordinary shares of Private Dror were initially reserved for issuance as awards, and stock options covering up to 44,365 ordinary shares of Private Dror (which were exchanged for stock options covering approximately 163,142,084 shares of Common Stock in connection with the Share Exchange) are outstanding as of the date hereof. No other type of equity award is currently outstanding under the 2021 Plan. As further described below, upon the closing of the Share Exchange, any stock options outstanding under the 2021 Plan were converted into stock options under the Dror Ortho-Design, Inc. 2023 Long-Term Incentive Plan (the “2023 Plan”). 62 2023 Long-Term Incentive Plan On August 14, 2023, our Board adopted the 2023 Plan. Under the 2023 Plan, we reserved 235,958,571 shares of our Common Stock for issuance as awards to our key employees, key contractors, and non-employee directors and those of our subsidiaries, of which 100% may be delivered pursuant to incentive stock options. The 2023 Plan currently consists of the primary plan document that governs all awards granted under the 2023 Plan for eligible U.S. employees, contractors, and non-employee directors who are subject to U.S. income taxation and a sub-plan annex designated for the purpose of grants of equity awards to eligible Israeli employees, officers, and contractors of the Company and its affiliates who are subject to Israeli income taxation. Upon the closing of the Share Exchange, we became the sponsor of the 2021 Plan, and all outstanding stock option awards previously granted under the 2021 Plan will be converted into awards under the 2023 Plan. Thus, all outstanding options to purchase ordinary shares of Dror (which are converted into options to purchase shares of Common Stock of the Company pursuant to the Share Exchange Agreement, as amended) were converted to options to purchase shares of Common Stock of the Company. The purpose of the 2023 Plan is to provide an incentive to attract and retain the services of key employees, key contractors, and non-employee directors of the Company and its subsidiaries and to provide such persons with a proprietary interest in the Company through the granting of awards. The 2023 Plan will be administered by our Board or a committee of the Board (the “Committee”) consisting of two or more members. At any time there is no Committee to administer the 2023 Plan, any reference to the Committee is a reference to the Board. The Committee will determine the persons to whom awards are to be made, determine the type, size and terms of awards, interpret the 2023 Plan, establish and revise rules and regulations relating to the 2023 Plan, and make any other determinations that it believes necessary for the administration of the 2023 Plan. The Committee may delegate certain duties to one or more officers of the Company as provided in the 2023 Plan. Unless terminated earlier by our Board, the 2023 Plan will expire on August 14, 2033. No awards may be made under the 2023 Plan after its expiration date, but awards made prior thereto may extend beyond that date. The 2023 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards which may be granted singly, in combination, or in tandem, and which may be paid in cash or shares of the Company’s Common Stock. Awards granted pursuant to the 2023 Plan will be evidenced by a written award agreement. The Committee will determine the terms of each award at the time of grant, including, without limitation, the number of shares subject to such award, the term of the award, the exercise price to be paid for the award (if applicable), the vesting and forfeiture conditions, the methods by or forms in which shares will be delivered to participants, the price to be paid for the award (if any), and any other terms and conditions applicable to such award. To date, no awards have been granted pursuant to the 2023 Plan, other than the awards that were previously granted pursuant to the 2021 Plan and will be converted into an award under the 2023 Plan, as described above. The Board may, at any time and from time to time, without the consent of the participants, alter, amend, revise, suspend or discontinue the 2023 Plan in whole or in part; provided, however, that (i) no amendment that requires shareholder approval in order for the 2023 Plan and any awards granted thereunder to continue to comply with Sections 421 and 422 of the Internal Revenue Code of 1986, as amended (the “Code”) (including any successors to such sections, or other applicable law) or any applicable requirements of any securities exchange or inter-dealer quotation system on which the Company’s Common Stock is listed or traded, shall be effective unless such amendment is approved by the requisite vote of the Company’s shareholders entitled to vote on the amendment; and (ii) unless required by law, no action by the Board regarding amendment or discontinuance of the 2023 Plan may adversely affect any rights of any participant or obligations of the Company to any participant with respect to any outstanding award under the 2023 Plan without the consent of the affected participant. 63 Commitments to Grant Stock Options In addition to the stock option awards to be granted in substitution of stock options currently outstanding under the 2021 Plan, we currently have a commitment to issue options to purchase up to 0.5% of the outstanding shares of Common Stock to Mr. Haddad, contingent on the Company achieving certain market capitalization targets. Director Compensation The following table presents the total compensation for each person who served as a non-employee member of our Board during the fiscal year ended December 31, 2025. Other than as set forth in the table and described more below, and as set forth in the Summary Compensation Table with respect to our employee directors, we did not pay any compensation to, reimburse any expense of, make any equity awards or non-equity awards to, or pay any other compensation to any of the other members of our Board in 2025. Name Fees earned or paid in cash ($) Stock awards ($) Option awards ($) (1) Non-equity incentive plan compensation ($) Nonqualified deferred compensation earnings ($) All other compensation ($) Total ($) Chaim Hurvitz — — — — — — — Chaim Ravad (2) — — — — — — — Yehuda Englander (2) 40,321 — — — — — 40,321 (1) In accordance with SEC rules, this column reflects the aggregate fair value of option awards granted during the fiscal year ended December 31, 2025, computed as of their respective grant dates in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718 for share-based compensation transactions. The assumptions made in the valuation of the share-based payments are contained in Note 2 to our financial statements included in this prospectus. (2) On June 1, 2022, Private Dror entered into a consulting agreement (the “Englander Consulting Agreement”) with Mr. Englander, pursuant to which, in consideration for certain financial and strategic consulting services, Mr. Englander receives a cash fee of NIS 3,500 + VAT each month and was also granted with options to purchase 2,610 Ordinary Shares of Private Dror, which options were exchanged for options to purchase 9,597,675 shares of Common Stock in connection with the Share Exchange and shall vest in three tranches on the first, second, and third anniversary of the date of the consulting agreement. The options are subject to accelerated vesting upon an exit event. Effective as of February 7, 2024, we entered into the First Amendment to the Englander Consulting Agreement with Mr. Englander, which provided that Mr. Englander’s monthly cash fee in respect of the services provided would be equal to $2,500 + VAT. The Company’s Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information We do not have any formal policy that requires the Company to grant, or avoid granting, equity-based compensation at certain times. We do not grant equity awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, and do not time the public release of such information based on award grant dates. The timing of any equity grants to executive officers or directors in connection with new hires, promotions, or other non-routine grants is tied to the event giving rise to the award (such as an executive officer’s commencement of employment or promotion effective date). During the year ended December 31, 2025, there were no equity grants made to our executive officers during any period beginning four business days before the filing of a periodic report or current report disclosing material non-public information and ending one business day after the filing or furnishing of such report with the SEC. 64 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The following table sets forth information regarding the beneficial ownership of Common Stock as of February 26, 2026: ● each person, or group of affiliated persons, known by us to beneficially own more than 5% of outstanding shares of any class of our voting securities; ● each of our directors; ● each of our named executive officers; and ● all directors and executive officers as a group. Unless otherwise indicated below, beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she, or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. The beneficial ownership percentages set forth in the following table are based on 956,997,116 shares of Common Stock and 5,847,937 shares of Preferred Stock, which are entitled to cast an aggregate of 1,583,936,559 votes, outstanding as of February 26, 2026. Name of Beneficial Owner (1) Number of Shares of Common Stock Beneficially Owned Percent of Class Number of Shares of Series A Convertible Preferred Stock Beneficially Owned Percent of Class 5% Stockholders AIGH Capital Management, LLC (2) 99,888,581 (3) 9.99 % 2,584,544 44.20 % Shirat Hachaim Ltd. 68,922,239 (4) 6.91 % 114,150.79 1.95 % Congregation Ahavas Tzdokah Vchesed Inc. 61,667,440 (5) 6.31 % - - Moshe Bodner 51,312,657 (6) 4.99 % 1,033,872.79 17.68 % Directors and Named Executive Officers Eliyahu (Lee) Haddad 105,056,623 (7) 9.74 % - - Moshe Shvets 105,378,694 (8) 10.19 % 213,620.94 3.65 % Chaim Hurvitz 68,922,239 (4) 6.91 % 114,150.79 1.95 % Chaim Ravad 48,802,164 (9) 4.99 % 1,672,945.54 28.61 % Yehuda Englander 6,398,386 (10) * - - All Directors and Executive Officers as a Group (5 persons) 334,558,106 30.25 % 200,071,727 34.21 % * Represents beneficial ownership of less than 1%. (2) Based on certain information made available to the Company and on the Schedule 13G/A filed jointly with the SEC on February 25, 2025, by Mr. Orin Hirschman and AIGH Capital Management, LLC (“AIGH CM”). AIGH CM, as an Advisor or Sub-Advisor of AIGH Investment Partners, L.P. (“AIGH LP”) and WVP Emerging Manager Onshore Fund, LLC - AIGH Series (“WVP-AIGH”), may be deemed to beneficially own the securities held by AIGH LP and WVP-AIGH. Mr. Hirschman, as Managing Member of AIGH CM and president of AIGH Investment Partners, L.L.C (“AIGH LLC”), may be deemed to beneficially own the securities held by AIGH CM and AIGH LLC. The principal business address of Mr. Hirschman and each such entity is 6006 Berkeley Avenue, Baltimore, MD 21209. (3) Represents (i) 77,000,000 shares of Common Stock held by AIGH LP, (ii) 113,000,000 shares of Common Stock issuable upon conversion of shares of Preferred Stock (subject to a 9.99% beneficial ownership limitation) held by AIGH LP, (iii) 190,000,000 shares of Common Stock issuable upon exercise of certain warrants (subject to a 9.99% beneficial ownership limitation) held by AIGH LP, (iv) 7,000,000 shares of Common Stock held by WVP-AIGH, (v) 40,000,000 shares of Common Stock issuable upon conversion of shares of Preferred Stock (subject to a 9.99% beneficial ownership limitation) held by WVP-AIGH, (vi) 47,000,000 shares of Common Stock issuable upon exercise of certain warrants (subject to a 9.99% beneficial ownership limitation) held by WVP-AIGH, (vii) 3,000,000 shares of Common Stock held by WVP-OES, (viii) 10,000,000 shares of Common Stock issuable upon conversion of shares of Preferred Stock (subject to a 9.99% beneficial ownership limitation) held by WVP-OES, (ix) 13,000,000 shares of Common Stock issuable upon exercise of certain warrants (subject to a 9.99% beneficial ownership limitation) held by WVP-OES, (x) 8,662,500 shares of Common Stock held by AIGH LLC, (xi) 95,454,385 shares of Common Stock issuable upon conversion of shares of Preferred Stock (subject to a 9.99% beneficial ownership limitation) held by AIGH LLC, and (xii) 45,454,545 shares of Common Stock issuable upon exercise of certain warrants (subject to a 9.99% beneficial ownership limitation) held by AIGH LLC. 65 (4) Represents (i) 47,800,000 shares of Common Stock, (ii) 21,122,239 shares of Common Stock issuable upon exercise of certain options held by Mr. Hurvitz that were exercisable as of February 26, 2026, or will be exercisable within 60 days thereafter, (iii) 42,417,309 shares of Common Stock issuable upon exercise of certain warrants held by Shirat Hachaim Ltd. (“Shirat Hachaim”) (subject to a 4.99% beneficial ownership limitation), and (iv) 11,415,079 shares of Common Stock issuable upon conversion of shares of Preferred Stock (subject to a 4.99% beneficial ownership limitation) held by Shirat Hachaim. Mr. Hurvitz is the sole owner of Shirat Hachaim and has sole voting and dispositive power over shares held by Shirat Hachaim. (5) Based on the Schedule 13G filed with the SEC on June 20, 2025, by Congregation Ahavas Tzdokah Vchesed Inc. Represents 61,667,440 shares of Common Stock. The principal business address of Congregation Ahavas Tzdokah Vchesed Inc. is 1347 42nd Street, Brooklyn, NY 11219. (6) Based on certain information available to the Company. Represents 103,387,279 shares of Common Stock issuable upon conversion of shares of Preferred Stock (subject to a 4.99% beneficial ownership limitation). (7) Represents (i) 4,545,454 shares of Common Stock, (ii) 95,965,715 shares of Common Stock issuable upon exercise of certain options held by Mr. Haddad that were exercisable as of February 26, 2026, or will be exercisable within 60 days thereafter, and (ii) 4,545,454 shares of Common Stock issuable upon exercise of certain warrants held by Mr. Haddad (subject to a 9.99% beneficial ownership limitation). (8) Represents (i) 47,800,000 shares of Common Stock, (ii) 57,578,694 shares of Common Stock issuable upon exercise of certain options held by Mr. Shvets that were exercisable as of February 26, 2026, or will be exercisable within 60 days thereafter, and (iii) 26,141,712 shares of Common Stock issuable upon exercise of certain warrants (subject to a 4.99% beneficial ownership limitation). (9) Represents (i) 47,800,000 shares of Common Stock, (ii) 228,251,826 shares of Common Stock issuable upon exercise of certain warrants (subject to a 4.99% beneficial ownership limitation), and (iii) 167,294,554 shares of Common Stock issuable upon conversion of shares of Preferred Stock (subject to a 4.99% beneficial ownership limitation). (10) Represents 6,398,386 shares of Common Stock issuable upon the exercise of options held by Mr. Englander that were exercisable as of February 26, 2026, or will be exercisable within 60 days thereafter. Securities Authorized for Issuance under Equity Compensation Plans The table below sets forth certain information as of December 31, 2025 regarding the shares of our Common Stock available for grant or granted under stock option plans and other compensation arrangements that (i) were adopted by our stockholders and (ii) were not adopted by our stockholder. Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants, and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in common) Equity Compensation plans approved by stockholders (1) 184,264,323 $ 0.0037 224,570,065 Equity Compensation plans not approved by stockholders — — — Total 184,264,323 $ 0.0037 224,570,065 (1) Represents shares approved for issuance under the 2021 Plan and the 2023 Plan. All information in this table has been adjusted to give effect to the Share Exchange. 66 Item 13. Certain Relationships and Related Transactions, and Director Independence. In addition to the compensation arrangements discussed under “Executive Compensation,” the following is a description of transactions since January 1, 2024 to which we have been a party, in which the amount involved exceeds or will exceed the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years, and in which any of our directors, executive officers or beneficial owners of more than 5% of our capital stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest. We also describe below certain other transactions with our directors, executive officers and stockholders. We believe that we have executed all of the transactions set forth below on terms no less favorable to us than we could have obtained from unaffiliated third parties. It is our intention to ensure that all future transactions between us and our officers, directors and principal stockholders and their affiliates are approved by our audit committee, once it has been formed and its members appointed, and a majority of the members of our Board, including a majority of the independent and disinterested members of our Board, and are on terms no less favorable to us than those that we could obtain from unaffiliated third parties. Indemnification Agreements and Directors’ and Officers’ Liability Insurance We have entered into separate indemnification agreements with our directors and executive officers, in addition to indemnification provided for in our Amended Charter and our Bylaws. Each indemnification agreement provides for indemnification and advancement by the Company of certain expenses and costs relating to claims, suits, or proceedings arising from service to the Company or, at its request, service to other entities to the fullest extent permitted by applicable law. We also maintain directors’ and officers’ liability insurance. Item 14. Principal Accountant Fees and Services. Accounting Fees Our independent registered public accounting firm is Barzily and Co., CPA’s (PCAOB Firm ID No.: 2015) (“Barzily”) located in Jerusalem, Israel. The following table presents fees for professional audit services rendered by Barzily for the audit of our annual financial statements for the years ended December 31, 2025 and 2024 and for the review of our quarterly financial statements for the years ended December 31, 2025 and 2024. For the year ended December 31, 2025 2024 Audit fees (1) $ 78,250 $ 66,394 Audit-related fees $ 0 $ 0 Tax-related fees (2) $ 1,500 $ 0 All other fees (3) $ 0 $ 0 Total fees $ 79,750 $ 66,394 (1) Audit fees for 2025 and 2024 primarily related to the audit of our annual consolidated financial statements for the 2025 and 2024 fiscal year, and the reviews of the financial statements included in our Quarterly Reports on Form 10-Q for the 2025 and 2024 fiscal year. (2) There were no tax-related fees billed in 2024. (3) There were no other fees billed in 2025 or 2024. Audit Committee Pre-Approval Policy and Procedures Our Board does not presently have a separately designated standing audit committee. As such, the percentage of services set forth above in the categories audit-related fees, tax-related fees, and all other fees that were approved by the Audit Committee pursuant to Rule 2-01(c)(7)(i)(C) (relating to the approval of a de minimis amount of non-audit services after the fact but before completion of the audit) was 0%. The functions of an audit committee are undertaken by our Board. 67 PART IV Item 15. Exhibit and Financial Statement Schedules. The following documents are filed as part of this report: (1) Financial Statements Page Audited Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID: 2015) F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations F-4 Consolidated Statements of Changes in Stockholders’ Equity (Deficiency) F-5 Consolidated Statements of Cash Flows F-6 Notes to the Consolidated Financial Statements F-7 (2) Financial Statement Schedules: None. (3) Exhibits: See “Index to Exhibits” for a description of our exhibits. Item 16. Form 10–K Summary. None. 68 Index to Exhibits Exhibit No. Description 2.1 Share Exchange Agreement, dated July 5, 2023, by and among Dror Ortho-Design, Inc., Dror Ortho-Design Ltd., and certain shareholders of Dror Ortho-Design Ltd. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 2.2 Amendment to the Share Exchange Agreement, dated August 14, 2023, by and among Dror Ortho-Design, Inc., Dror Ortho-Design Ltd., and certain shareholders of Dror Ortho-Design Ltd. (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 3.1 Amended and Restated Certificate of Incorporation of Dror Ortho-Design, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 3.2 Certificate of Designations of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 3.3 Certificate of Correction to the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock of Dror Ortho-Design, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the Commission on November 14, 2023) 3.4 Amended and Restated Certificate of Incorporation of Dror Ortho-Design, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 4, 2024) 3.5 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.5 to the Current Report on Form 8-K, filed with the Commission on March 1, 2007) 3.6 Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K/A, filed with the Commission on November 14, 2023) 4.1 Form of Class A Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 4.2 Form of Debenture, issued on June 5, 2025 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 5, 2025) 4.3 Form of Debenture, issued on June 16, 2025 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 18, 2025) 4.4 Form of Debenture, issued on July 17, 2025 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2025) 4.5 Form of Debenture (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 18, 2025) 4.6 Form of Debenture, issued on December 2, 2025 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 8, 2025) 4.7 Form of Debenture, issued on December 30, 2025 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2026) 4.8 Description of Securities (incorporated by reference to Exhibit 4.2 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2024) 4.9 Form of Warrant, issued on June 5, 2025 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 5, 2025) 4.10 Form of Warrant (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 18, 2025) 4.11 Form of Warrant (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2025) 4.12 Form of Warrant (incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 18, 2025) 4.13 Form of Warrant (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on December 8, 2025) 4.14 Form of Warrant (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2026) 10.1+ Employment Agreement, dated December 6, 2021, between Dror Ortho-Design Ltd. and Eliyahu (Lee) Haddad (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.2+ Employment Agreement, dated January 26, 2022, between Dror Ortho-Design Ltd. and Moshe Shvets (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.3+ Indemnification Agreement, dated December 6, 2021, between Dror Ortho-Design Ltd. and Eliyahu (Lee) Haddad (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.4+ Indemnification Agreement, dated December 6, 2021, between Dror Ortho-Design Ltd. and Moshe Shvets (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.5+ Indemnification Agreement, dated December 6, 2021, between Dror Ortho-Design Ltd. and Chaim Hurvitz (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.6+ Indemnification Agreement, dated December 6, 2021, between Dror Ortho-Design Ltd. and Chaim Ravad (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.7+ Indemnification Agreement, dated December 6, 2021, between Dror Ortho-Design Ltd. and Yehuda Englander (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 69 10.8+ Consulting Agreement, dated December 6, 2021, between Dror Ortho-Design Ltd. and Yaacov Bodner (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.9+ 2021 Share Incentive Plan (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.10+ 2023 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.11 Securities Purchase Agreement, dated August 14, 2023, between Dror Ortho-Design, Inc. and certain purchasers identified therein (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.12 Securities Purchase Agreement, dated June 5, 2025, by and among the Company and the investors signatory thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 5, 2025) 10.13 Securities Purchase Agreement, dated June 16, 2025, by and among the Company and the investors signatory thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on June 18, 2025) 10.14 Securities Purchase Agreement, dated July 17, 2025, by and among the Company and the investors signatory thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2025) 10.15 Securities Purchase Agreement, dated November 12, 2025, by and among the Company and the investors signatory thereto (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 18, 2025) 10.16 Securities Purchase Agreement, dated December 30, 2025, by and among the Company and the investors signatory thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2026) 10.17 Registration Rights Agreement, dated August 14, 2023, between Dror Ortho-Design, Inc. and certain purchasers identified therein (incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.18 Form of Lock-Up Agreement (incorporated by reference to Exhibit 10.13 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2023) 10.19+ Services Agreement, dated June 1, 2022, between Dror Ortho-Design Ltd. and Yehuda Englander (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on August 18, 2023) 10.20+ First Amendment to Services Agreement, dated February 7, 2023, between Dror Ortho-Design, Inc. and Yehuda Englander (incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2024) 10.21+ Services Agreement, dated February 7, 2023, between Dror Ortho-Design, Inc. and Chaim Ravad (incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2024) 10.22+ Amendment to Personal Employment, dated as of February 18, 2025, effective as of June 30, 2023, by and between Dror Ortho-Design Ltd. and Eliyahu Haddad (incorporated by reference to Exhibit 10.17 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2025) 10.23+ Amendment to Personal Employment, dated as of February 18, 2025, effective as of February 5, 2025, by and between Dror Ortho-Design Ltd. and Eliyahu Haddad (incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2025) 10.24+ Amendment to Personal Employment, dated as of February 18, 2025, effective as of June 30, 2023, by and between Dror Ortho-Design Ltd. and Moshe Shvets (incorporated by reference to Exhibit 10.19 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2025) 10.25+ Amendment to Personal Employment, dated as of February 18, 2025, effective as of February 5, 2025, by and between Dror Ortho-Design Ltd. and Moshe Shvets (incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2025) 21.1 List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 9, 2024) 31.1* Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1** Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2** Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101 INS* Inline XBRL Instance Document 101 SCH* Inline XBRL Taxonomy Extension Schema Document 101 CAL* Inline XBRL Taxonomy Calculation Linkbase Document 101 DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101 LAB* Inline XBRL Taxonomy Labels Linkbase Document 101 PRE* Inline XBRL Taxonomy Presentation Linkbase Document 104* Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. ** Furnished herewith. + Management contract or compensatory plan or arrangement. 70 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DROR-ORTHO DESIGN, INC. Date: February 27, 2026 By: /s/ Eliyahu (Lee) Haddad Name: Eliyahu (Lee) Haddad Title: Chief Executive Officer (Principal Executive Officer and Principal Financial and Accounting Officer) POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Eliyahu (Lee) Haddad as his true and lawful attorneys-in-fact and agents, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Eliyahu (Lee) Haddad Chief Executive Officer and Director (Principal Executive Officer and February 27, 2026 Eliyahu (Lee) Haddad Principal Financial and Accounting Officer) /s/ Chaim Hurvitz Director and Chairman of the Board February 27, 2026 Chaim Hurvitz /s/ Moshe Shvets Chief Technology Officer and Director February 27, 2026 Moshe Shvets /s/ Chaim Ravad Director February 27, 2026 Chaim Ravad /s/ Yehuda Englander Director February 27, 2026 Yehuda Englander 71 DROR ORTHO-DESIGN, INC. CONSOLIDATED FINANCIAL STATEMENTS Table of Contents Page Audited Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID: 2015 ) F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations F-4 Consolidated Statements of Changes in Stockholders’ Equity (Deficiency) F-5 Consolidated Statements of Cash Flows F-6 Notes to the Consolidated Financial Statements F-7 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Dror Ortho-Design Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Dror Ortho-Design Inc. (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders’ deficiency, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. . Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the board of directors and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. We have served as the Company’s auditor since 2023. /s/ Barzily and Co. Jerusalem, Israel February 27, 2026 F- 2 DROR ORTHO-DESIGN, INC. CONSOLIDATED BALANCE SHEETS (U.S. dollars) December 31, 2025 December 31, 2024 Assets Current Assets: Cash $ 228,540 $ 549,444 Receivables and prepaid expenses 10,234 89,139 Total Current Assets 238,774 638,583 Non-current Assets: Property and equipment at cost, net of accumulated depreciation 20,162 24,142 Total Assets 258,936 662,725 Liabilities And Stockholders’ DEFICIENCY Current Liabilities: Accounts payable $ 113,585 $ 215,359 Accrued expenses and other payables 292,548 171,379 Convertible promissory notes, net 1,308,229 - Derivative liability 722,192 - Registration Rights Agreement liability 520,000 520,000 Total Current Liabilities 2,956,554 906,738 Non-current Liabilities: Accrued severance 176,093 123,981 Total Liabilities 3,132,647 1,030,719 Commitments and Contingencies (Note 9) Stockholders’ Equity Preferred A Stock, $ 0.0001 par value, 12,500,000 shares authorized; 5,847,937 shares outstanding at December 31, 2025 and 2024 585 585 Common stock, $ 0.0001 par value; 3,254,475,740 shares authorized; 956,997,116 shares issued and outstanding at December 31, 2025 and 2024 95,699 95,699 Additional paid-in capital 19,081,548 19,042,378 Accumulated deficit ( 22,051,543 ) ( 19,506,656 ) Total Stockholders’ Deficiency ( 2,873,711 ) ( 367,994 ) Total Liabilities and Stockholders’ Deficiency $ 258,936 $ 662,725 The accompanying notes are an integral part of these consolidated financial statements F- 3 DROR ORTHO-DESIGN INC. CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. dollars) Year Ended December 31, 2025 December 31, 2024 Operating Expenses Research and development $ 815,902 $ 1,540,097 General and administrative expenses 1,367,916 1,437,832 Share-based compensation 39,170 2,246,033 Total Operating Expenses 2,222,988 5,223,962 Loss from operations ( 2,222,988 ) ( 5,223,962 ) Other expenses, net Financial expense, net ( 41,478 ) ( 31,989 ) Change in fair value of derivative 29,448 — Registration Rights Agreement expense — ( 520,000 ) Convertible promissory note discount amortization ( 309,869 ) — Total other expenses, net ( 321,899 ) ( 551,989 ) Loss before provision for income taxes ( 2,544,887 ) ( 5,775,951 ) Provision for income taxes — — Net loss $ ( 2,544,887 ) $ ( 5,775,951 ) Net loss per common share Basic and Diluted $ ( 0.00 ) $ ( 0.01 ) Weighted-average common shares outstanding Basic and Diluted 956,997,116 672,511,484 The accompanying notes are an integral part of these consolidated financial statements F- 4 DROR ORTHO-DESIGN INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY (U.S. dollars) Series A Preferred Stock Common Stock Treasury Stock Additional Paid-In Accumulated Total Stockholders’ Shares* Amount Shares* Amount Shares Amount Capital Deficit Deficiency Balance at January 1, 2024 10,463,363 $ 1,047 495,454,546 $ 49,545 — $ — $ 16,842,037 $ ( 13,730,705 ) $ 3,161,924 Stock-based compensation — — — — — — 2,246,033 — 2,246,033 Conversion of Series A Preferred Stock into Common Stock ( 4,615,426 ) ( 462 ) 461,542,570 46,154 — — ( 45,692 ) — — Net loss — — — — — — — ( 5,775,951 ) ( 5,775,951 ) Balance at December 31, 2024 5,847,937 $ 585 956,997,116 $ 95,699 — $ — $ 19,042,378 $ ( 19,506,656 ) $ ( 367,994 ) Balance at January 1, 2025 5,847,937 $ 585 956,997,116 $ 95,699 — $ — $ 19,042,378 $ ( 19,506,656 ) $ ( 367,994 ) Stock-based compensation — — — — — — 39,170 — 39,170 Net loss — — — — — — — ( 2,544,887 ) ( 2,544,887 ) Balance at December 31, 2025 5,847,937 $ 585 956,997,116 $ 95,699 — $ — $ 19,081,548 $ ( 22,051,543 ) $ ( 2,873,711 ) The accompanying notes are an integral part of these consolidated financial statements F- 5 DROR ORTHO-DESIGN INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars) For the Year Ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ ( 2,544,887 ) $ ( 5,775,951 ) Adjustments to reconcile net loss to net cash used in operating activities Stock-based compensation expense 39,170 2,246,033 Debt discount amortization 309,869 — Depreciation 4,946 4,035 Change in fair value of derivative ( 29,448 ) — Foreign exchange differences 38,695 26,703 Changes in operating assets and liabilities: Receivables and prepaid expenses 78,905 24,961 Accounts payable ( 128,576 ) 112,551 Accrued expenses and other payables 121,169 ( 18,892 ) Registration Rights Agreement liability — 520,000 Accrued severance 52,112 118,738 Net cash used in operating activities ( 2,058,045 ) ( 2,741,822 ) Cash flows from investing activities: Purchase of property and equipment ( 966 ) ( 25,849 ) Net cash provided by (used in) investing activities ( 966 ) ( 25,849 ) Cash flows from financing activities: Proceeds from convertible promissory notes, net 1,750,000 — Net cash provided by financing activities 1,750,000 — Effect of exchange rate changes on cash ( 11,893 ) ( 30,728 ) Net decrease in cash ( 320,904 ) ( 2,798,399 ) Cash, beginning of year 549,444 3,347,843 Cash, end of year $ 228,540 $ 549,444 Supplemental cash flow information: Cash paid for interest $ — $ — Cash paid for taxes $ — $ — The accompanying notes are an integral part of these consolidated financial statements F- 6 DROR ORTHO-DESIGN INC. NOTES TO FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION : Organization Dror Ortho-Design, Inc., a Delaware corporation (the “Company”) was incorporated as Novint Technologies, Inc. in the State of New Mexico in April 1999. On February 26, 2002, the Company changed its state of incorporation to Delaware by merging with Novint Technologies, Inc., a Delaware corporation. On August 14, 2023, following a share exchange agreement, the Company changed its name from “Novint Technologies, Inc.” to “Dror Ortho-Design, Inc.”. Following the Share Exchange (as defined below), the Company succeeded the business of Dror Ortho-Design, Ltd. (“Private Dror”) as its sole line of business. The Company is involved in the research and development of an orthodontic alignment platform and has not yet reached the sales stage for its product. The Company’s stock is quoted on the OTC Pink Market under the symbol “DROR.” Going Concern and Management’s Plans The financial statements are presented on a going concern basis. The Company has not yet generated any material revenues, has suffered recurring losses from operations with an accumulated deficit of $ 22,051,543 and negative working capital of $ 2,717,780 as of December 31, 2025, and is dependent upon external sources for financing its operations and repayment of its liabilities. This raises substantial doubt as to the Company’s ability to continue as a going concern. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. Further, the Company’s future operations are dependent on the success of the Company’s efforts to raise additional capital, its research and commercialization efforts, regulatory approvals, and ultimately the market acceptance of the Company’s products. There is no assurance that the Company will be successful in raising these funds. These financial statements do not include adjustments that may result from the outcome of these uncertainties. Subsequent to the balance sheet date, on February 26, 2026, the Company received $ 200,000 in the form of bridge notes from existing investors (See Note 15). The Company is exploring additional fundraising opportunities. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Presentation The accompanying financial statements for the years ended December 31, 2025 and 2024 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”). Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates or assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could vary from those estimates. Management utilizes various other estimates, including but not limited to Registration Rights Agreement liability, accrued royalties, accrued expenses, the fair value of derivative liabilities, expected maturity of convertible promissory notes, the valuation of stock-based compensation, the valuation allowance for deferred tax assets and other contingencies. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period that they are determined to be necessary. Functional Currency The Company accounts for foreign currency transactions pursuant to ASC 830, “Foreign Currency Matters”. The functional currency of the Company and its subsidiary is the United States Dollar (“US$”) as the U.S. dollar is the currency of the primary economic environment in which the Company operates. The accompanying financial statements have been expressed in US$. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations. The exchange rate of the US Dollar to the Israeli Shekel was 3.19 and 3.647 as of December 31, 2025 and 2024, respectively. F- 7 Cash The Company’s cash is held with financial institutions in the United States and Israel. Management believes that the financial institutions that hold the Company’s cash are financially sound and, accordingly, minimal credit risk exists with respect to these investments. Account balances held in the Unites States may, at times, exceed the Federal Deposit Insurance Corporation (FDIC) insurance limit. As of December 31, 2025 and 2024, the Company had $ 0 in excess of the FDIC insurance limit. As of December 31, 2025 and 2024, the Company had $ 80,331 and $ 544,175 , respectively, in Israeli financial institutions, which is uninsured. The Company has not experienced any losses in such accounts with these financial institutions. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight–line method on the various asset classes, which currently consists of office equipment over their estimated useful lives of seven years when placed in service. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Derivative Instruments Derivative financial instruments are recorded in the accompanying balance sheets at fair value in accordance with ASC 815. When the Company enters into a financial instrument such as a debt or equity agreement (the “host contract”), the Company assesses whether the economic characteristics of any embedded features are clearly and closely related to the primary economic characteristics of the remainder of the host contract. When it is determined that (i) an embedded feature possesses economic characteristics that are not clearly and closely related to the primary economic characteristics of the host contract, and (ii) a separate, stand-alone instrument with the same terms would meet the definition of a financial derivative instrument, then the embedded feature is bifurcated from the host contract and accounted for as a derivative instrument. The estimated fair value of the derivative feature is recorded in the accompanying balance sheets separately from the carrying value of the host contract. Subsequent changes in the estimated fair value of derivatives are recorded as a gain or loss in the Company’s statements of operations. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. Research and Development The Company expenses all research and development costs as they are incurred. Research and development includes expenditures in connection with in-house research and development as well as proprietary products and technology, and includes salaries and related costs, consulting fees, and professional services. F- 8 Share–based compensation The Company applies ASC 718-10, “Share- Based Payment,” which requires the measurement and recognition of compensation expenses for all share-based payment awards made to employees and directors including employee stock options under the Company’s stock plans and equity awards issued to non-employees based on estimated fair values. ASC 718-10 requires companies to estimate the fair value of equity-based option awards on the date of grant using an option-pricing model. The fair value of the award is recognized as an expense on a straight-line basis over the requisite service periods in the Company’s statement of operations. The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Since the Company does not have sufficient historical data regarding its volatility of its Common Stock, the expected volatility used is based on volatility of similar publicly listed companies in comparable industries. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards require the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. Income Taxes The Company accounts for income taxes using the asset-and-liability method in accordance with ASC Topic 740, “Income Taxes”. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on the deferred tax assets and liabilities of a change in tax rate is recognized in the period that includes the enactment date. A valuation allowance is recorded if it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized in future periods. The Company follows the guidance in ASC Topic 740-10 in assessing uncertain tax positions. The standard applies to all tax positions and clarifies the recognition of tax benefits in the financial statements by providing for a two-step approach of recognition and measurement. The first step involves assessing whether the tax position is more-likely-than-not to be sustained upon examination based upon its technical merits. The second step involves measurement of the amount to be recognized. Tax positions that meet the more-likely-than-not threshold are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate finalization with the taxing authority. The Company recognizes the impact of an uncertain income tax position in the financial statements if it believes that the position is more likely than not to be sustained by the relevant taxing authority. The Company will recognize interest and penalties related to tax positions in income tax expense. As of both December 31, 2025 and 2024, there were no unrecognized uncertain income tax positions. F- 9 Basic and Diluted Net Loss Per Common Share The Company computes net loss per share in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic loss per ordinary share is computed by dividing the loss for the period applicable to common shareholders, by the weighted average number of shares of Common Stock outstanding during the period. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of Common Stock equivalents such as stock options, warrants and convertible debt instruments. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As a result, the basic and diluted per share amounts for all periods presented are identical. For the years ended December 31, 2025 and 2024, the Company incurred net losses which cannot be diluted; therefore, basic and diluted loss per common share is the same. Each Series A Preferred Stock is convertible into 100 shares of Common Stock, and is included in the following table as if converted. As of December 31, 2025 and 2024, shares issuable which could potentially dilute future earnings were as follows: December 31, 2025 2024 Preferred Shares 584,793,654 584,793,654 Warrants 975,288,919 975,288,919 Stock Options 184,264,323 184,264,323 Shares excluded from the calculation of diluted loss per share 1,744,346,896 1,744,346,896 Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures” to require more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this guidance on its condensed consolidated financial statements and related disclosures. The adoption of this pronouncement is not expected to have a material impact on the Company’s condensed consolidated financial statements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures related to improvements to income tax disclosures. The amendments in this update require enhanced jurisdictional and other disaggregated disclosures for the effective tax rate reconciliation and income taxes paid. The amendments in this update are effective for fiscal years beginning after December 15, 2024. The adoption of this pronouncement did not have a material impact on the Company’s consolidated financial statements. F- 10 In October 2023, the FASB issued ASU 2023-06 “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative,” which incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification (“Codification”). The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification topics, allow investors to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The amendments in this ASU should be applied prospectively. The Company does not expect ASU 2023-06 will have a material impact to its consolidated financial statements or related disclosures. NOTE 3 – RECEIVABLES AND PREPAID EXPENSES: December 31, 2025 2024 VAT receivable $ 8,685 57,875 Prepaid expenses - 30,000 Other assets 1,549 1,264 $ 10,234 89,139 NOTE 4 – PROPERTY AND EQUIPMENT: December 31, 2025 2024 Equipment and furniture $ 36,382 35,416 Less accumulated depreciation ( 16,220 ) ( 11,274 ) Property and equipment, net $ 20,162 24,142 Depreciation expense was $ 4,946 and $ 4,035 for the years ended December 31, 2025 and 2024, respectively. NOTE 5 – ACCRUED EXPENSES AND OTHER PAYABLES: December 31, 2025 2024 Salary and related expenses $ 185,248 90,203 Accrued audit fees 60,250 56,250 Accrued legal fees 15,364 - Accrued consulting fees 26,091 24,076 Other expenses 5,595 850 $ 292,548 171,379 F- 11 NOTE 6 – REGISTRATIONS RIGHTS AGREEMENT LIABILITY: On August 14, 2023, the Company entered into a registration rights agreement with the certain investors (the “Private Placement Investors”) (together with all attachments and exhibits thereto, as each may be amended or modified from time to time, the “Registration Rights Agreement”), pursuant to which the Company agreed to register, among other registrable securities (as further described in the Registration Rights Agreement), on Form S-1 (or, if the Company is then eligible, on Form S-3) with the Securities and Exchange Commission (the “SEC”): (i) the Private Placement Shares, (ii) the shares of Common Stock underlying the shares of Series A Preferred Stock (the “Conversion Shares”), (iii) the shares of Common Stock underlying the Private Placement Warrants issued to the Private Placement Investors (the “Warrant Shares”), and (iv) the shares of the Company’s common stock underlying the securities issued to the investors who, on or about December 6, 2021, participated in the $ 3,000,000 private placement financing (the “December 2021 Shares” and, together with the Private Placement Shares, the Conversion Shares, the Warrant Shares, collectively, the “Registrable Securities”). Under the Registration Rights Agreement, among other things, if a registration statement registering the resale of the Registrable Securities is not filed by the 45th calendar date following the date of the Registration Rights Agreement and if such registration statement is not declared effective by the SEC by the 135th calendar day (or, in the event of a “full review” by the SEC, the 165th calendar day) following the date of the Registration Rights Agreement, then the Company was required to pay as partial liquidated damages in amount equal to the product of 1.0 % multiplied by the aggregate Subscription Amount (as defined in the Securities Purchase Agreement) paid by such investor pursuant to the Securities Purchase Agreement every calendar month (pro-rated for periods totaling less than a calendar month) until filed. Such liquidated damages would bear interest at the rate of 18 % per annum (or such lesser maximum amount that is permitted to be paid by applicable law), accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. Pursuant to Section 6(e) of the Registration Rights Agreement, the provisions of the Registration Rights Agreement may be amended by obtaining the written consent of the Company and the Private Placement Investors holding 50.1 % or more of the then-outstanding Registrable Securities (the “Required Holders”). On February 9, 2024, the Company filed a registration statement on Form S-1 registering for resale the Registrable Securities, which was declared effective by the SEC on June 14, 2024. On August 13, 2024, the Company and the Required Holders entered into an Amendment to the Registration Rights Agreement (“Registration Rights Agreement Amendment”), pursuant to which effective retroactively to September 28, 2023, (i) the date in which a registration statement registering the resale of the Registrable Securities (the “Registration Statement”) is required to be filed pursuant to the Registration Rights Agreement was amended to February 9, 2024, and (ii) the date in which the Registration Statement is required to be declared effective by the SEC pursuant to the Registration Rights Agreement was amended to June 14, 2024. In consideration for entering into the Registration Rights Agreement Amendment, the Company agreed to pay the Private Placement Investors the liquidated damages equal to the amount that would otherwise have accrued pursuant to the Registration Rights Agreement, without giving effect to the Registration Rights Agreement Amendment, which became due and payable upon signing the Registration Rights Agreement Amendment on August 13, 2024, and which did not become due or payable prior to such date. The Company recorded $ 520,000 as Registration Rights Agreement Liability in respect of the Registration Rights Agreement Amendment. This liability does not bear interest and a repayment date has not yet been determined. F- 12 NOTE 7 – ACCRUED SEVERANCE: Israeli law generally requires payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The Israel pension and severance pay liability to employees are covered mainly by regular deposits with recognized pension and severance pay funds under the employees’ names and through the purchase of insurance policies. The deposits include profits accumulated to the balance sheet date. The amounts funded as above are not reflected in the balance sheet since they are not under the control and management of the Company. Although certain employees have waived their rights to receive severance pay on a portion of their salaries, the Company has recorded a provision for the full amount that may have been required under Israeli labor law. December 31, 2025 2024 Severance liability $ 329,827 219,520 Funded portion ( 153,734 ) ( 95,539 ) Severance liability, net of funded portion $ 176,093 123,981 NOTE 8 – CONVERTIBLE PROMISSORY NOTES, NET During the year ended December 31, 2025, the Company entered into Securities Purchase Agreements (the “Purchase Agreements”) with certain existing investors. Pursuant to the Purchase Agreements, the Company agreed to sell to the purchasers in several private placements, Debentures (the “Debentures”) in aggregate principal amounts of $ 1,750,000 , initially for 60 day periods with varying maturity dates. The Debentures were extended when due, and the most recent extensions extended all the Debentures until March 31, 2026. The Debentures do not bear interest. The Debentures also set forth certain customary events of default after which the Debentures may be declared immediately due and payable, including certain types of bankruptcy or insolvency events of default. Subject to the satisfaction of certain conditions, including applicable prior notice to the holders of the Debentures, at any time prior to the maturity dates, the Company may elect to prepay all or a portion of the-then outstanding principal amount of the Debentures. Subsequent to the balance sheet date, on February 26, 2026, the Company received an additional $ 200,000 in the form of bridge notes due April 27, 2026 with the same terms as the Debentures (See Note 15). In the event that prior to the maturity dates the Company consummates a public offering of its securities (“Public Offering”), the then-outstanding principal amount of the Debentures automatically converts into shares of the Company’s Common Stock (the “Debenture Shares”) at a conversion price equal to the per share price of the shares of Common Stock offered in the Public Offering. The Debenture Shares, if any, are subject to the same terms and conditions as the shares of Common Stock issued in a Public Offering, including the issuance of any accompanying warrants to purchase shares of Common Stock issued and registration rights granted, if any, to investors in the Public Offering. In addition, pursuant to the Purchase Agreements the Company agreed to issue (A) subject to the consummation of a Public Offering, five-year warrants to purchase up to a number of shares of Common Stock (the “Purchase Warrants”), equal to: (i) in the event the Debentures are outstanding as of the date of the consummation of the Public Offering, 150 % of the Debenture Shares issued, if any; or (ii) in the event that the Debentures are not outstanding as of the Public Offering closing date, 100 % of the Debenture Shares that would have been issued, if any, as if such Debentures were outstanding as of the Public Offering closing date, and (B) subject to the completion of a Public Offering by the Company of warrants to purchase shares of Common Stock, additional warrants to purchase shares of Common Stock (the “Additional Warrants” and, collectively with the Purchase Warrants, the “Bridge Financing Warrants”) equal to: (i) in the event that the Debentures are outstanding as of the Public Offering closing date, 150 % of the number of shares of Common Stock underlying the warrants issued in the Public Offering that the purchaser would have been entitled to receive had the purchaser participated in the Public Offering in the amount equal to the purchaser’s subscription amount under the Purchase Agreements (the “Warrant Subscription Amount”); or (ii) in the event that the Debentures are not outstanding as of the Public Offering closing date, 100 % of the Warrant Subscription Amount. F- 13 The Company reviewed the terms of the Bridge Financing Warrants to be issued and determined that due to the variable number of instruments to be issued, they would constitute a derivative liability. At the initial date, the Company estimated the fair value of both sets of Bridge Financing Warrants and allocated the total gross proceeds received between them based on that relative fair value identified. The fair value of the embedded derivative financial instruments was bifurcated from the host instrument and remeasured on recurring basis at each reporting period under marked to market approach. The fair value of the derivative liabilities at inception amounted to $ 751,640 and were recorded as debt discounts to the Debentures which are amortized over the life of the loan using the effective interest method. Amortization of debt discount for the year ending December 31, 2025 amounted to $ 309,869 using effective interest rates of 74.15 %- 76.57 % for the estimated amortization period. The balance of the Debentures in the financial statements as of December 31, 2025 is $ 1,308,229 , which represents principal values of $ 1,750,000 , net of a debt discount of $ 441,771 . Derivative Liability The Company valued the derivative liability relating to the embedded conversion features using the Black Scholes Model using the following assumptions on the respective dates of the Debentures: June 5, 2025 June 16, 2025 July 17, 2025 September 15, 2025 November 11, 2025 December 2, 2025 December 30, 2025 December 31, 2025 Stock price $ 0.006 $ 0.0124 $ 0.019 $ 0.0215 $ 0.0079 $ 0.0160 0.0178 0.0100 Estimated exercise price 0.0057 0.0118 0.018 0.0204 0.0075 0.0152 0.0169 0.0095 Term (years) 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 Annual volatility 42.06 % 42.05 % 41.81 % 43.53 % 43.81 % 43.86 % 43.82 % 43.81 % Risk free rate 3.90 % 3.93 % 3.89 % 3.50 % 3.55 % 3.54 % 3.50 % 3.55 % Dividend yield 0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 % Estimated warrant amount* 75,000,000 24,193,548 15,789,474 27,906,977 37,974,684 18,750,000 21,067,416 262,500,000 Fair value of warrants at inception $ 128,417 $ 85,665 $ 85,213 $ 173,455 $ 85,160 $ 86,267 $ 107,463 $ 722,192 * Amount at December 31, 2025 represents the total estimated number of warrants. The Company has assumed that the debentures will be outstanding at the potential Public Offering. The Company discounted the Purchase Warrants value due to an estimated probability of 90 % of the occurrence of a Public Offering, as well as a dilution discount relating to the effect the exercise of the warrants would have on expected market value. The Additional Warrants were fully discounted resulting from the Company’s current estimation of a zero probability of an occurrence of Public Offering including warrants. The Company’s activity in its convertible promissory notes, net related derivative liability was as follows for the year ended December 31, 2025: Balance of derivative liability at January 1, 2025 $ - Grant of warrants 751,640 Change in fair value of warrant derivative liability ( 29,448 ) Balance of derivative liability at December 31, 2025 $ 722,192 F- 14 NOTE 9 – COMMITMENTS AND CONTINGENCIES: Israel Innovation Authority The Company partially financed their research and development expenditures under grant programs sponsored by the Israel Innovation Authority (“IIA”) (formerly the Office of Chief Scientist) for the support of research and development activities conducted in Israel. At the time the grants were received from the IIA, successful development of the related projects was not assured. In exchange for participation in the programs by the IIA, in accordance with the terms of the grant, the Company is required to pay 3 % of total sales of products developed within the framework of these programs. The royalties will be paid up to a maximum amount equaling 100 % of the grants provided by the IIA, linked to the dollar, bearing annual interest at a rate based on LIBOR. Beginning from January 1, 2024 the rate was adjusted to SOFR (Secured Over Financing Rate). The obligation to pay these royalties is contingent on actual sales of the products, and in the absence of such sales payment of royalties is not required. In some cases, the Government of Israel’s participation (through the IIA) is subject to export sales or other conditions. The maximum amount of royalties can increase in the event of production outside of Israel or the sale of any intellectual property developed under the grant to a non-Israeli entity. The current contingent royalty obligation as of December 31, 2025 and 2024 is approximately $ 1.23 and $ 1.18 million, respectively. Legal proceedings From time to time in the normal course of business, the Company may be subject to routine litigation incidental to its business. Although there can be no assurances as to the ultimate disposition of any such matters, it is the opinion of management, based upon the information available at this time, that there are no matters, individually or in the aggregate, that would have a material adverse effect on the results of operations and financial condition of the Company. War in Israel Starting October 7, 2023, Israel has been engaged in a complex multifront war in the Middle East. An agreement for a ceasefire in Gaza was reached in October 2025, conditioned on the parties meeting certain ongoing requirements. The Company’s research and development activities are located in Israel. Currently, such activities in Israel remain largely unaffected. During the years ended December 31, 2025 and 2024, the impact of the regional conflicts on the Company’s results of operations and financial condition was immaterial. Management will continue to monitor events in the region and their effect on the Company’s financial position and results of operations. NOTE 10 – STOCKHOLDERS’ DEFICIT: Common Stock On January 4, 2024, the Company filed its Amended and Restated Certificate of Incorporation, which provided for the number of authorized shares of the Company’s Common Stock, par value $ 0.0001 per share, to be increased from 500,000,000 to 3,254,475,740 . All issued shares of Common Stock are entitled to vote on a 1 share/1 vote basis . The Company had 956,997,116 shares of Common Stock issued and outstanding as of December 31, 2025 and 2024. Holders of our Common Stock have no preemptive, redemption, conversion or subscription rights. No sinking fund provisions are applicable to our Common Stock. Upon liquidation, dissolution or winding-up, holders of our Common Stock are entitled to share in all assets remaining after payment of all liabilities and the liquidation preferences of any of our outstanding shares of preferred stock. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of our Common Stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of our assets which are legally available. Such dividends, if any, are payable in cash, in property or in shares of capital stock. F- 15 Preferred Stock The Company is authorized to issue up to 12,500,000 shares of $ 0.0001 par value non-redeemable preferred stock. As of December 31, 2025 and 2024, 5,847,937 shares of Series A Preferred Stock were outstanding. The following is a summary of the principal terms of the Series A Preferred Stock as set forth in the Certificate of Designation. Conversion The Series A Preferred Stock has a Stated Value of $ 1.10 and is convertible into Common Stock at any time at a conversion price of $ 0.011 , or 100 shares of Common Stock for each share of Preferred A Stock, subject to adjustment for certain anti-dilution provisions set forth in the Series A Certificate of Designation. Upon conversion the shares of Series A Preferred Stock will resume the status of authorized but unissued shares of preferred stock of the Company. During the year ended December 31, 2024, holders of the Series A Preferred Stock converted 4,615,426 of Series A Preferred Stock into 461,542,570 shares of Common Stock. Dividends The holders of Series A Preferred Stock will be entitled to dividends, on an as-if converted basis, equal to and in the same form as dividends actually paid on shares of Common Stock, when and if actually paid. Voting Rights The shareholders of Series A Preferred Stock are entitled to vote with holders of the Company’s Common Stock, on all matters that such holders of Common Stock are entitled to vote upon, in the same manner and with the same effect as the holders of Common Stock, voting together with the holders of Common Stock as a single class. Each share of Preferred Stock shall entitle the shareholder to cast that number of votes per share of Preferred Stock equal to the number of shares of Common Stock into which such share of Preferred Stock is convertible (after giving effect to certain limitations on conversion, as applicable). As long as any shares of Series A Preferred Stock are outstanding, the Company may not, without the approval of a majority of the then outstanding shares of Series A Preferred Stock (a) alter or change the powers, preferences or rights given to the Series A Preferred Stock, (b) alter or amend our amended and restated certificate of incorporation, the Series A Certificate of Designation, or our amended and restated bylaws in such a manner so as to materially adversely affect any rights given to the Series A Preferred Stock, (c) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon a Liquidation (as defined below) senior to the Series A Preferred Stock, or (d) enter into any agreement to do any of the foregoing. Liquidation Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the then holders of the Series A Preferred Stock are entitled to receive out of the assets available for distribution to stockholders of the Company the same amount that a holder of Common Stock would receive if the Series A Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder) to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. Warrants On August 14, 2023, the Company issued warrants to purchase up to 946,652,602 shares of Common Stock, in addition to warrants to purchase up to 18,181,817 shares of Common Stock on September 13, 2023. The warrants expire five years from the initial exercise date and are exercisable at an exercise price of $ 0.033 per share. The initial exercise date was dependent on the authorization of additional shares of Common Stock which occurred on December 28, 2023. The warrants contain provisions that protect their holders against dilution by adjustment of the purchase price in certain events such as stock dividends, stock splits and other similar events. F- 16 On April 17, 2024, the Board of Directors approved the issuance of 10,454,500 warrants to purchase shares of Common Stock to Oriole Avenue Inc. (“Oriole”) (see Note 13) with the same terms as the warrants issued to the Private Dror Shareholders. The warrants were issued to an investor in respect of services to be performed pursuant to the Oriole Consulting Agreement concluding July 15, 2024. The fair value of the warrants on the date of issuance was $ 35,814 , which was recognized as general and administrative expense in the Statement of Operations. The aggregate fair value of $ 35,814 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 77.10 %, (iii) risk free rate of 4.62 % (iv) dividend rate of zero , (v) stock price of $ 0.01 , and (vi) exercise price of $ 0.033 . If at the time of the warrant’s exercise there is no effective registration statement registering, or no current prospectus available for, the resale of the shares of Common Stock underlying the warrant, then the holder will have the right to exercise warrant by means of a cashless exercise. In addition, if (i) the volume-weighted average price of the Company’s Common Stock for 20 consecutive trading days is at least 300 % of the exercise price of the warrants, (ii) the dollar trading volume of the Company’s Common Stock for each trading day within such 20 -day trading period equals or exceeds $ 500,000 , (iii) a registration statement providing for the resale of the Private Placement Shares is effective and such registration statement has been effective for six (6) months, (iv) the holder of the warrant is not in possession of any information provided by the Company that constitutes material nonpublic information and (v) the Company has not breached any of the terms of the investment documents (regardless of if such breach has been cured), then the warrants may be redeemed at a price of $ 0.001 per warrant up to one-half, in the aggregate, of the warrants upon not less than 20 days’ prior written notice of redemption to each holder, subject to certain customary restrictions. Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Warrants Shares Price Term Value Balance Outstanding, January 1, 2024 964,834,419 $ 0.03 5.00 $ - Granted 10,454,500 0.03 5.00 - Forfeited - - - - Exercised - - - - Balance Outstanding, December 31, 2024 975,288,919 $ 0.03 4.00 $ - Granted - Forfeited - - - - Exercised - - - - Balance Outstanding, December 31, 2025 975,288,919 $ 0.03 3.00 $ - Exercisable, December 31, 2025 975,288,919 $ 0.03 3.00 $ - The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing Common Stock price of $ 0.01 as of December 31, 2025, 2024 and 2023, which would have been received by the warrant holders had all warrant holders exercised their warrants as of that date. F- 17 Equity Incentive Plan In August 2023, the Company granted 163,142,084 employee stock options to two executives and a director. In December 2023, the Company authorized additional shares to cover the employee stock options and in 2024 prepared all the legal filings for the establishment of the 2023 Plan. On June 17, 2024, the Board of Directors approved the issuance of 21,122,239 fully-vested options to purchase shares of Common Stock to the chairman of the Board of Directors. The fair value of the options on the date of issuance was $ 170,920 , which was recognized as share-based compensation expense in the Statement of Operations. The aggregate fair value of $ 170,920 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 76.58 %, (iii) risk free rate of 4.30 % (iv) dividend rate of zero , (v) stock price of $ 0.01 , and (vi) exercise price of $ 0.0037 . The following table summarized the option activity for the years ended December 31, 2025 and 2024: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Shares Price Term (in years) Value Balance Outstanding, January 1, 2024 163,142,084 $ 0.004 9.62 $ 1,003,656 Granted 21,122,239 0.004 10.0 - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, December 31, 2024 184,264,323 $ 0.004 8.68 $ 350,102 Granted - Forfeited - - - - Exercised - - - - Expired - - - - Balance Outstanding, December 31, 2025 184,264,323 $ 0.004 7.68 $ 1,160,865 Exercisable, December 31, 2025 184,264,323 $ 0.004 7.68 $ 1,160,865 Share-based compensation expense for the years ended December 31, 2025 and 2024 amounted to $ 39,170 and $ 2,246,033 , respectively. Share-based compensation relating to general and administrative expenses amounted to $ 39,170 and $ 1,673,270 for the years ended December 31, 2025 and 2024, respectively. Share-based compensation relating to research and development expenses amounted to $ 0 and $ 572,763 for the years ended December 31, 2025 and 2024, respectively. The fair value of stock options that fully vested during the years ended December 31, 2025 and 2024 was $ 84,828 and $ 1,612,841 , respectively. The weighted average grant date fair value for options granted during the years ended December 31, 2024 was $ 0.01 , using the Black Scholes valuation method. As of December 31, 2025, there is no unrecognized compensation cost related to non-vested share-based compensation. The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $ 0.01 as of December 31, 2025, $ 0.0056 as of December 31, 2024 and $ 0.01 as of December 31, 2023, which would have been received by the option holders had all option holders exercised their options as of that date. F- 18 NOTE 12 – INCOME TAXES: The Company files corporate income tax returns in the United States (federal), in New York (state), and in Israel (foreign). The Company is subject to federal, state and local income tax examinations by tax authorities for the tax years 2022 through 2025. The Israeli subsidiary tax reports through 2018 are considered final assessments in accordance with the provisions of section 145 of the Income Tax Ordinance of the Israel Tax Authority. As of December 31, 2025, the Company had federal net operating loss carry forwards of $ 30.0 million. Federal net operating losses generated prior to January 1, 2018, amounting to $ 28.7 million, may be offset against future taxable income, subject to limitation under IRC Section 382, which begin to expire in 2026 if not utilized prior to that date, and fully expire during various years through 2037 for federal purposes. Net operating losses generated after January 1, 2018, amounting to $ 1.3 million, no longer have an expiration but are limited to 80 % of taxable income. Tax loss carryforwards in Israel amount to approximately USD $ 15.7 million, as of December 31, 2025, and do not expire. There are also Israeli capital loss carryforwards amounting to $ 0.3 million that can be offset only against capital gains but do not expire. The company does not incur a provision for income taxes because the Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets due to the uncertainty surrounding the realizability of the benefit, based on a more likely than not criteria and in consideration of available positive and negative evidence. The valuation allowance overall decreased by approximately $ 0.05 million and increased by approximately $ 1.4 million in the years ended 2025 and 2024, respectively, and was approximately $ 11.28 million and $ 11.3 million, respectively. The Company has fully reserved the deferred tax asset resulting from available net operating loss carryforwards. The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2025 and 2024 is as follows: Year Ended December 31, 2025 2024 % Amount % Amount U.S. Federal statutory tax rate 21.00 % $ ( 534,426 ) 21.00 % $ ( 1,212,950 ) Foreign tax effects Israel - foreign rate differential 2.02 % ( 51,486 ) 1.82 % ( 105,154 ) Effects of changes in tax laws or rates enacted in the current period Cumulative foreign exchange adjustment for electing to report Israel Net Operating Loss in USD 1.17 % ( 29,743 ) 0.00 % - Nontaxable or nondeductible items 0.24 % $ ( 6,182 ) 0.00 % 109 Other adjustments Expired Net Operating Loss - US - 27.60 % $ 702,500 - 0.06 % 3,651 Return to provision 2.42 % $ ( 61,615 ) 1.07 % ( 61,760 ) Other - 1.02 % $ 25,839 0.00 % - Increase (decrease) in valuation allowance 1.76 % ( 44,887 ) - 23.82 % 1,376,102 Income tax expense - - - - The increase in the Company’s net valuation allowance was mainly due to continued net operating losses from ongoing operations. F- 19 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities consist of the following: December 31, 2025 2024 Deferred tax assets: Net loss carryforwards $ 9,903,516 $ 9,877,997 Capital loss carryforwards 66,837 66,837 Foreign exchange adjustment on capital note ( 25,875 ) Stock-based compensation 1,052,937 1,034,960 Research and development 242,905 317,681 Accruals 42,445 30,177 Deferred asset before valuation allowance 11,282,765 11,327,652 Valuation allowance ( 11,282,765 ) ( 11,327,652 ) Net deferred tax asset $ - $ - In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability. The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of both December 31, 2025 and 2024 the Company had no unrecognized tax benefits. There were no changes in the Company’s unrecognized tax benefits during the years ended December 31, 2025 and 2024. The Company did not recognize any interest or penalties during the years ended December 31, 2025 and 2024 related to unrecognized tax benefits. During 2021, the Company submitted a request to the Israeli Income Tax Authority, for the approval of a plan for the issuance of employee stock options via a trustee as defined in section 102 of the Income Tax Ordinance. The Company chose a capital taxation route that would apply to the Company’s employees and undertook to deduct the full tax applicable to employees before shares are issued to an employee. NOTE 13 – RELATED PARTY TRANSACTIONS: Director Consulting Services On June 1, 2022, the Company entered into a consulting agreement (the “Englander Consulting Agreement”) with Yehuda Englander, a director of the Company, pursuant to which, in consideration for certain financial and strategic consulting services, Mr. Englander will receive a cash fee of NIS 3,500 each month and was also granted options to purchase 2,610 Ordinary Shares of Private Dror, which options were exchanged for options to purchase 9,597,675 shares of Common Stock in connection with the Share Exchange and which vest in three tranches on the first, second, and third anniversary of the date of the Englander Consulting Agreement (See note 10). The options are subject to accelerated vesting upon an exit event. On February 7, 2024, the Company amended the Englander Consulting Agreement, which provides that Mr. Englander’s monthly cash fee in respect of the services provided is equal to $ 2,500 and in addition to the monthly fee, Mr. Englander is entitled to expense reimbursement in an amount not to exceed $ 500 . Consulting services paid to the Mr. Englander recorded as general and administrative expenses for the years ended December 31, 2025 and 2024 was $ 40,321 and $ 31,153 , respectively. Accrued expense balances in respect of the Englander Consulting Agreement at December 31, 2025 and 2024 were $ 3,605 and $ 3,000 , respectively. On February 7, 2024, the Company entered into a consulting agreement (the “Ravad Consulting Agreement”) with Chaim Ravad, a director of the Company, pursuant to which, in consideration for certain services provided as a board member, Mr. Ravad will receive a cash fee of $ 5,000 each month. The Ravad Consulting Agreement was terminable by either party upon 30 days written notice to the other party and terminated automatically once Mr. Ravad received fees in the aggregate amount of $ 55,000 . Consulting services paid to Mr. Ravad recorded as general and administrative expenses was $ 0 and $ 55,000 for the years ended December 31, 2025 and 2024, respectively. Accrued expense balances in respect of the Ravad Consulting Agreement at December 31, 2025 and 2024 were $ 0 and $ 5,000 , respectively. F- 20 Shareholder Consulting Services On August 8, 2023, the Company entered into a consulting agreement (the “Oriole Consulting Agreement”) with Oriole Avenue Inc. (“Oriole”), an entity owned by Yaacov Bodner, a stockholder of the Company, pursuant to which, in consideration for certain shareholder, investors relations and general consultancy services, Oriole is entitled to receive cash payments equal in the aggregate to $ 145,000 , and warrants to purchase up to an aggregate of 10,454,500 shares of the Company’s Common Stock, with an exercise price of $ 0.033 per share and substantially the same terms as the Private Placement Warrants. The cash payment was paid in equal monthly installments of $ 14,500 , commencing on September 15, 2023, and expiring on July 15, 2024 . Although the agreement was signed and the services were provided, the Board of Directors did not approve of the warrant issuance until April 17, 2024, as required. The value of those warrants on April 17, 2024 amounted to $ 35,814 which was amortized over the remaining service period (See note 10). Consulting services paid to Oriole recorded as general and administrative expenses for the years ended December 31, 2025 and 2024 was $ 0 and $ 87,000 , respectively. NOTE 14 – SEGMENT REPORTING: ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. The Company has only one reportable segment, the Platform Segment, as all their research and development activities are related the development of the Company’s Platform. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. The Company adheres to the provisions of ASC 280, Segment Reporting, which establishes standards for the way public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in financial statements issued to shareholders. As the Company is currently involved in the development of one product, the Platform, the Company has determined that it operates in a single reportable segment. The Company’s Chief Operating Decision Maker (CODM), its Chief Executive Officer (CEO), reviews the consolidated results of operations when making decisions about allocating resources and assessing the performance of the Company as a whole and, hence, the Company has only one reportable segment. The Company’s assets are located in Israel. NOTE 15 – SUBSEQUENT EVENTS: On February 9, 2026, the Company was granted 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) for the Company’s ZSmile Platform. This follows the regulatory approval from the Israeli Ministry of Health’s AMAR Division, the authority responsible for the medical device regulation in Israel, which was received on December 14, 2025. On January 5, 2026 the Company entered into a service contract with the American Academy of Facial Esthetics LLC (“AAFE”) for the provision of marketing and promotional services. As payment for those services, the Company provided AAFE with $ 200,000 of Common Stock as a prepayment, amounting to 20,000,000 shares of Common Stock, in January 2026. On February 26, 2026, the Company entered into a securities purchase agreement (the “February 2026 Purchase Agreement”) with each of the purchasers signatory thereto (the “February 2026 Investors”), pursuant to which, the Company agreed to sell to the February 2026 Investors in a private placement, debentures in an aggregate principal amount of $ 200,000 due April 27, 2026 (the “February 2026 Debentures”). F- 21