A majority of our revenues and a portion of our expenses are transacted in U.S. dollars and our assets and liabilities together with our cash holdings are predominately denominated in U.S. dollars. However, the majority of our expenses are denominated in currencies other than the U.S. dollar, principally the NIS and the Euro. Increases in volatility of the exchange rates of currencies other than the U.S. dollar versus the U.S. dollar could have an adverse effect on the expenses and liabilities that we incur when remeasured into U.S. dollars. We review our monthly expected non-U.S. dollar denominated expenditures and look to hold equivalent non-U.S. dollar cash balances to mitigate currency fluctuations. However, our Euro cash balances increase significantly on a quarterly basis beyond our Euro liabilities, mainly from French research tax benefits applicable to the CIR, which is generally refunded every three years. Separately, our NIS liabilities are significantly higher than our NIS‑denominated assets, mainly because of operating lease obligations. This has resulted in a foreign exchange loss of $1.0 million and $1.2 million for the second quarter and first half of 2026, respectively, as compared to a foreign exchange gain of $0.6 million and $1.2 million for the comparable periods of 2025. 37 Table of Contents As a result of currency fluctuations and the remeasurement of non-U.S. dollar denominated expenditures to U.S. dollars for financial reporting purposes, we may experience fluctuations in our operating results on an annual and quarterly basis. To protect against the increase in value of forecasted foreign currency cash flow resulting from salaries paid in currencies other than the U.S. dollar during the year, we follow a foreign currency cash flow hedging program. We hedge portions of the anticipated payroll for our non-U.S. employees denominated in currencies other than the U.S. dollar for a period of one to twelve months with forward and option contracts. During the second quarter and first half of 2026, we recorded accumulated other comprehensive gain of less than $0.1 million and accumulated other comprehensive loss of less than $0.1 million, respectively, from our forward and option contracts, net of taxes, with respect to anticipated payroll expenses for our non-U.S. employees. During the second quarter and first half of 2025, we recorded accumulated other comprehensive gain of $1.2 million and $0.8 million, respectively, from our forward and option contracts, net of taxes, with respect to anticipated payroll expenses for our non-U.S. employees. As of June 30, 2026, the amount of other comprehensive gain from our forward and option contracts, net of taxes, was less than $0.1 million, which will be recorded in the consolidated statements of income (loss) during the following two months. We recognized a net gain of $0.7 million and $0.8 million for the second quarter and first half of 2026, respectively, and a net gain of $0.3 million and $0.4 million for the comparable periods of 2025, related to forward and options contracts. We note that hedging transactions may not successfully mitigate losses caused by currency fluctuations. We expect to continue to experience the effect of exchange rate and currency fluctuations on an annual and quarterly basis. A hypothetical 10% weakening of the U.S. dollar against the NIS and the Euro would have resulted in an increase to our salary and employee related expenses, which are a large portion of our operating costs, of approximately $1.6 million and $3.3 million for the second quarter and first half of 2026, respectively. A hypothetical 10% strengthening of the U.S. dollar against the NIS and the Euro would have resulted in a decrease to our salary and employee related expenses of approximately $1.3 million and $2.7 million for the second quarter and first half of 2026, respectively. The majority of our cash and cash equivalents are invested in high-grade certificates of deposits with major U.S., European and Israeli banks. Generally, cash and cash equivalents and bank deposits may be redeemed and therefore minimal credit risk exists with respect to them. Nonetheless, deposits with these banks exceed the Federal Deposit Insurance Corporation (FDIC) insurance limits or similar limits in foreign jurisdictions, to the extent such deposits are even insured in such foreign jurisdictions. While we monitor on a systematic basis the cash and cash equivalent balances in the operating accounts and adjust the balances as appropriate, these balances could be impacted if one or more of the financial institutions with which we deposit our funds fails or is subject to other adverse conditions in the financial or credit markets. To date, we have experienced no loss of principal or lack of access to our invested cash or cash equivalents; however, we can provide no assurance that access to our invested cash and cash equivalents will not be affected if the financial institutions that we hold our cash and cash equivalents fail. We hold an investment portfolio consisting principally of corporate bonds. We have the ability to hold such investments until recovery of temporary declines in market value or maturity. As of June 30, 2026, the unrealized losses associated with our investments were $0.9 million. As we tend to hold such bonds with unrealized losses to recovery, the allowance for credit losses was not material during the second quarter and first half of 2026. However, we can provide no assurance that we will recover present declines in the market value of our investments. Interest income and gains and losses from marketable securities, net, were $2.0 million and $4.1 million for the second quarter and first half of 2026, respectively, as compared to $1.5 million and $3.0 million for the comparable periods of 2025. The increase in interest income and gains and losses from marketable securities, net, during both the second quarter and first half of 2026 principally reflected higher combined bank deposits and marketable securities balances held (mainly resulting from the follow‑on offering completed in the fourth quarter of 2025), partially offset by lower yields. We are exposed primarily to fluctuations in the level of U.S. interest rates. To the extent that interest rates rise, fixed interest investments may be adversely impacted, whereas a decline in interest rates may decrease the anticipated interest income for variable rate investments. We typically do not attempt to reduce or eliminate our market exposures on our investment securities because the majority of our investments are short term. We currently do not have any derivative instruments but may put them in place in the future. Fluctuations in interest rates within our investment portfolio have not had, and we do not currently anticipate such fluctuations will have, a material effect on our financial position on an annual or quarterly basis.