A. OPERATING RESULTS The information contained in this section should be read in conjunction with our financial statements for the year ended December 31, 2025, and related notes and the information contained elsewhere in this annual report. Our financial statements have been prepared in accordance with U.S. GAAP. This discussion contains forward-looking statements that are subject to known and unknown risks and uncertainties. As a result of many factors, such as those set forth under “ITEM 3.D. Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” our actual results may differ materially from those anticipated in these forward-looking statements. Outlook We sell our services and products directly and through our subsidiaries and distributors to several countries mainly Israel and Brazil. In 2025, we experienced increased revenue and growth in most of the markets in which we provide our telematics services. These markets in which we operate, are generally characterized by high vehicle theft rates, and therefore insurance companies and car manufactures are seeking solutions to reduce their losses resulting from car theft and at the same time increasing their sales by adding additional value to the customer. Therefore, we believe the markets in which we operate, especially in Israel and will continue to provide growth and demand for our telematics products and services. Geographical breakdown Telematics services’ subscriber base The following table sets forth the geographic breakdown of subscribers to our telematics services as of the dates indicated: (1) December 31, 2025 2024 2023 Israel 1,039,000 930,000 814,000 Brazil 814,000 725,000 672,000 Others 777,000 754,000 766,000 Total(1) 2,630,000 2,409,000 2,252,000 (1) All numbers provided are rounded, and therefore totals may be slightly different than the results obtained by adding the numbers provided Revenues The following table sets forth the geographic breakdown of our revenues for each of our business segments for the relevant periods indicated. (1) (1) We attribute revenues to countries based on the location of the customer. Year ended December 31, 2025 2024 2023 Telematics services Telematics products Telematics services Telematics products Telematics services Telematics products Israel 134.0 62.6 114.1 61.1 104.4 49.9 Brazil 80.5 1.7 81.8 1.6 83.8 2.0 Others 50.1 30.1 46.6 31.1 46.4 33.5 Total 264.6 94.4 242.5 93.8 234.6 85.4 Telematics services segment We generate revenues from rendering our SVR, fleet management connected car, UBI and other value-added services. A majority of our revenues represent subscription fees paid to us by our customers. We recognize revenues from subscription fees on a monthly basis. Most of our customers are free to terminate their subscription at any time. In the absence of such termination, the subscription term continues automatically. We also generate subscription fees from our fleet management services. Assuming no additional growth in our subscriber base and based on our historical average churn rates of 3% per month in this segment, we can anticipate that at least 90% of our subscription fees generated in a prior quarter will recur in the following quarter. 22 Telematics products segment We generate revenues from sale of our telematics products to customers in Israel, Brazil, and other regions which we operate. We currently sell or lease our telematics end-units in each of the above regions. Growth in our subscriber base is the principal driver for the sale of our telematics products. We recognize revenues from sales of our telematics products upon transfer of control to the customer (usually upon delivery). Cost of revenues Telematics services segment The cost of revenues in our telematics services segment consists primarily of staffing, maintenance and operation of our control centers and base stations, costs associated with our staff and costs incurred for private enforcement, licenses, permits and royalties, as well as communication costs and costs due to depreciation of leased products and installation fees. Cost of revenues for sales of our fleet management services also includes payments to a third party who markets our services. Telematics products segment The cost of revenues in our telematics products segment consists primarily of the cost of unit of our manufacturers and costs associated with installation fees. Operating expenses Research and development Our research and development expenses consist primarily of salaries, costs of materials and other overhead expenses, primarily in connection with the design and development of our telematics products and software solutions. We expense some of our research and development costs as incurred. Subject to certain criteria we capitalize software development costs. For further information see Note 1S to our consolidated financial statements. Selling and marketing Our selling and marketing expenses consist primarily of advertising, salaries, commissions and other employee expenses related to our selling and marketing team and promotional and public relations expenses. General and administrative Our general and administrative expenses consist primarily of salaries, bonuses, accounting and other general corporate expenses. Operating Income Telematics services segment Operating income in our telematics services segment is primarily affected by increases in our subscriber base and our ability to increase the resulting revenues without a commensurate increase in our corresponding costs. Telematics products segment Operating income in our telematics products segment is primarily affected by our ability to increase sales of our telematics products. Financing expenses (income), net Financing income (expenses), net include, inter alia ,short-term and long-term interest expenses, financial commissions, income (expenses) in respect of changes in obligation to purchase non-controlling interests ,and gains (losses) from currency fluctuations from the translation of monetary balance sheet items denominated in currencies other than the functional currency of each entity in the group, gains (losses) in respect of marketable securities and other investments, and expenses related to tax positions. Taxes on income Income earned from our services and product sales is subject to tax in the country in which we provide our services or from which we sell our products. 23 Critical Accounting Policies and Estimates Our consolidated financial statements are prepared as accordance with U.S. General Accepted Principles ("GAAP") Certain of our accounting policies require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates on a periodic basis. We base our estimates on historical experience, industry trends, authoritative pronouncements and various other assumptions that we believe to be reasonable under the circumstances. Such assumptions and estimates are subject to an inherent degree of uncertainty. On a regular basis we review the accounting policies assumptions and estimates to verify that our financial statements are in accordance with GAAP and presented fairly. The following are our most critical accounting policies and the significant judgments and estimates affecting the application of those policies in our consolidated financial statements. For further information see Note 1 to our consolidated financial statements included elsewhere in this report. Revenue recognition We and our subsidiaries generate revenue from subscriber fees for the provision of services and sales of systems and products, mainly in respect of fleet management services, stolen vehicle recovery services and other value-added services. To a lesser extent, revenues are also derived from technical support services. We and our subsidiaries sell the systems primarily through their direct sales force and indirectly through resellers. We apply ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). In accordance with ASC 606, we determine revenue recognition through the following five steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, we satisfy a performance obligation. A contract with a customer exists when certain criteria are met. For each type of contract, at inception, we assess the goods or service promised in a contract with a customer and identifies the performance obligations. With respect to contracts that are determined to have multiple performance obligations, such as contracts that combine product with services (mostly SVR services) and/or rights to use assets, we allocate the contract’s transaction price to each performance obligation using it’s the best estimate of the relative standalone selling price of each distinct good or service in the contract. However, when applicable (see below), we estimate the selling prices of certain services using the residual approach. Revenues are recognized when, or as, control of services or products is transferred to the customers at a point in time or over time, as applicable to each performance obligation. Revenues are recorded in the amount of consideration to which we expect to be entitled in exchange for performance obligations upon transfer of control to the customer, excluding amounts collected on behalf of other third parties and sales taxes. Our credit terms to customers are, on average, between thirty and ninety days. We do not adjust the amount of consideration for the effects of a significant financing component since we expect, at most contracts' inception, that the period between the time of transfer of the promised goods or services to the customer and the time the customer pays for these goods or services to be generally one year or less, based on the practical expedient. In accordance with ASC 606, the Company’s revenues are recognized depending on the various products and services as follows: 1. Revenues from sales of Automatic Vehicle Location ("AVL") products are recognized when the control of the product passed to the customer, usually upon delivery. 2. Revenues from provision of SVR services are recognized over time, as the customers simultaneously receive and consume the benefits provided by the Company performance as the Company performs. 24 3. For arrangements that involve the delivery or performance of multiple products (mostly AVL products), services (such as SVR services) and/or rights to use assets, the Company analyzes whether the goods or services that were promised to the customer are distinct (i.e., if both are met: 1. The customer can benefit from the good or service, either on its own or together with other resources that are readily available; and, 2. The Company’s promise to transfer the good or service is separately identifiable from other promises in the contract). If we determine that the product or service is 'distinct' we apply the policy described in 1 or 2 above, as applicable. We have some arrangements that are determined to have multiple performance obligations that are distinct. For such arrangements, we allocate the contract’s transaction price to each performance obligation using the relative standalone selling price of each distinct good or service in the contract. However, in limited circumstances, we estimate the selling prices of the SVR services (which are sold together with AVL products) using the residual approach. Under the residual approach, the standalone selling price of the SVR services was estimated by reference to the total transaction price less the sum of the observable standalone selling prices of all other goods or services promised in the contract. We use this approach since we sold the same type of service in these jurisdictions to different customers (at or near the same time) for a broad range of amounts (thus, the stand-alone selling price was highly variable). 4. Revenues from SVR services subscription fees and from installation services (related to AVL products that remain as the Company's property), sold to customers within a single arrangement were accounted for revenue recognition purposes, on a combined basis as a single performance obligation, since the installation services element was determined not to be ‘distinct’. Therefore, the entire contract fee was recognized over time, on a straight-line basis over the subscription period. 5. With regards to amounts earned by certain Brazilian subsidiary for arranging a bundle transaction of SVR services subscription together with insurance services to be supplied by a third party insurance company, these revenues are recognized ratably on a straight-line basis over the subscription period , since the amount allocated to us (for the SVR services subscription, and for arranging the transaction), is contingent upon the delivery of the SVR services. As the insurance company is acting as a principal with respect to the insurance component, we recognize only the net amounts as revenues, after deduction of amounts related to the insurance component. 6. Deferred revenues include unearned amounts received from customers (mostly for future subscription services and extended warranty) but not yet recognized as revenues. Such deferred revenues are recognized as described in paragraph 2 above or paragraph "extended warranty" below, as applicable. For the years ended December 31, 2025 and 2024 the Company recognized revenue of approximately US$ 22.8 million and US$ 27.1 million, respectively, that was included in the deferred revenue balance at the beginning of each reporting period. As of December 31, 2025, the aggregate amount of the amounts allocated to remaining unsatisfied performance obligations (deferred revenue) that the Company expects to recognize as revenue in future periods is $42.1 million of which, $27.2 million (64.6%) is expected to be recognized over the next 12 months (and presented as short-term balance), and the remainder amount of $14.9 million (35.4%) is expected to be recognized through 2027. Extended warranty - In the majority of countries, in which we operate, the statutory warranty period is one year, and the extended warranty covers periods beyond year one. Revenues from extended warranty include warranty services which were sold separately for a monthly fee, or warranty services that were determined to represent a separate performance obligation and were sold together with an AVL unit. Such revenues are recognized over the duration of the warranty periods. 25 Contingencies We and our subsidiaries are involved in certain legal proceedings that arise from time to time in the ordinary course of our business and in connection with certain agreements with third parties. Except for income tax contingencies, we record accruals for contingencies to the extent that the management concludes that the occurrence is probable and that the related liabilities are estimable. Legal expenses associated with contingencies are expensed as incurred. Goodwill and intangible assets Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in business combinations accounted for in accordance with the "purchase method" and is allocated to reporting units at acquisition. Goodwill is not amortized but rather tested for impairment at least annually and whenever events or changes in circumstances indicates that amount of goodwill may not be recoverable in accordance with the provisions of ASC Topic 350, "Intangibles - Goodwill and Other". The annual goodwill assessment is performed as of December 31, each year. As required by ASC Topic 350, the Company chooses either to perform a qualitative assessment whether the quantitative goodwill impairment test is necessary or proceeds directly to the quantitative goodwill impairment test. Such determination is made for each reporting unit on a stand-alone basis. The qualitative assessment includes various factors such as macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, earnings multiples, gross margin and cash flows from operating activities and other relevant factors. When the Company chooses to perform a qualitative assessment and determines that it is more likely than not (more than 50 percent likelihood) that the fair value of the reporting unit is less than its carrying value, then the Company proceeds to the quantitative goodwill impairment test. If the Company determines otherwise, no further evaluation is necessary. When the Company decides or is required to perform the quantitative goodwill impairment test, the Company compares the fair value of the reporting unit to its carrying value and an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, if any. Management determines the fair value of its reporting units using the income approach. Within the income approach, the method that is generally used to measure the fair value of a reporting unit is the discounted cash flow method. Management starts with a forecast of the expected net cash flows associated with the reporting unit, which includes the application of a terminal growth rate, and applies a discount rate to arrive at a net present value amount. Cash flow projections are based on management’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. In the performance of the quantitative analysis the Company applies assumptions that market participants would consider in determining the fair value of each reporting unit. As of December 31, 2025, 2024 and 2023, the Company had four reporting units which include goodwill. Telematics services: Under the telematics services segment there are two reporting units with goodwill. For one of which with an allocated amount of approximately US$ 1.9 million of goodwill, the Company performed a qualitative assessment as of December 31, 2025 and 2024, and concluded that the qualitative assessment did not result in a more likely than not indication of impairment, and therefore no further impairment testing was required, with respect to such unit. For the second reporting unit (resulted from RT acquisition) with an allocated amount of approximately US$ 32.3 million of goodwill (as of December 31, 2025), the Company performed the annual impairment test, as of December 31, 2025 using a quantitative assessment and reached to a conclusion that no impairment should be recorded at that point. The impairment test was performed using the income approach. The measurement of fair value of reporting units as part of goodwill impairment analysis is classified within Level 3 within the fair value hierarchy. 26 Telematics products: Under the telematics products segment there are two reporting units with goodwill, for one of which with an allocated amount of approximately US$ 2.2 million of goodwill, the Company performed a qualitative assessment as of December 31, 2025 and 2024, and concluded that the qualitative assessment did not result in a more likely than not indication of impairment, and therefore no further impairment testing was required, with respect to such unit. For the second reporting unit (resulted from RT acquisition) with an allocated amount of approximately US$ 3.5 million of goodwill (as of December 31, 2025), the Company performed the annual impairment test, as of December 31, 2025, using a quantitative assessment and reached to a conclusion that no impairment should be recorded at that point. The impairment test was performed using the income approach. The measurement of fair value of reporting units as part of goodwill impairment analysis is classified within Level 3 within the fair value hierarchy. Results of Operations The following table sets forth for the periods indicated selected items from our consolidated statements of income as a percentage of our total revenues. Year ended December 31, Consolidated statements of operations data: 2025 2024 2023 Revenues Telematics services 73.7 72.1 73.3 Telematics product 26.3 27.9 26.7 Total Revenues 100 100 100 Cost of revenues Telematics services 30.2 29.8 30.8 Telematics products 20.1 22.4 21.3 Total cost of revenues 50.3 52.2 52.1 Gross profit 49.7 47.8 47.9 Operating Expenses Research and development expenses 5.8 5.4 5.3 Selling and marketing Expenses 5.1 4.5 4.3 General and administrative expenses, net 17.3 16.7 17.7 Other income, net - - -- Total operating expenses 28.2 26.6 27.3 Operating Income 21.5 21.2 20.6 Other income, net (0.1 ) - - Financing income (expenses), net (0.5 ) - (0.5 ) Income before income tax 20.9 21.2 20.1 Income tax (4.2 ) (4.3 ) (4.2 ) Share in losses of affiliated companies, net - (0.1 ) (0.2 ) Net income for the year 16.7 16.8 15.7 Less: net income attributable to non-controlling interests (0.6 ) (0.8 ) (0.7 ) Net income attributable to company stockholders 16.1 16.0 15.0 27 Analysis of our Operation Results for the Year ended December 31, 2025 as compared to the Year ended December 31, 2024 Revenues Total revenues increased from $336.3 million in 2024 to $359.0 million in 2025 or 7%. This increase consisted of an increase of $22.1 million from subscription fees from our telematics services and an increase of $0.7 million from sales of our telematics products. Telematics services segment Revenues in our telematics services segment increased by $22.1 million from $242.5 million in 2024 to $ 264.6 million in 2025. The increase was mainly due to an increase in our average annual number of subscribers from 2,330,000 in 2024 to 2,520,000 in 2025. Telematics products segment Revenues in our telematics products segment increased from $93.8 million in 2024, to $94.5 million in 2025 or 1%. This increase of $0.7 million was primarily due to an increase in the quantity of units' sales. Cost of revenues Total cost of revenues increased from $175.6 million in 2024, to $180.4 million in 2025 or 3%. This increase consisted of an increase of $8.3 million in the telematics services segment and a decrease of $3.4 million in the telematics product segment. As a percentage of total revenues, cost of revenue decreased from 52.2 % in 2024 to 50.3% in 2025. Telematics services segment Cost of revenues for our telematics services segment increased from $100.2 million in 2024, to $108.4 million in 2025 or 8%. This increase was primarily due to an increase in salary expenses of approximately $8.1 million. As a percentage of total revenues for this segment, cost of revenues decreased from 41.3% in 2024 to 41.0 % in 2025. Telematics products segment Cost of revenues for our telematics products segment decreased from $75.4 million in 2024, to $72.0 million in 2025 or 4.6%. This decrease was mainly due to the change in the mixture of products sales. As a percentage of total revenues for this segment, cost of revenues decreased from 80.5% in 2024, to 76.2% in 2025. Operating expenses Research and development. Our research and development expenses increased from $18.1 million in 2024 to $20.8 million in 2025. As a percentage of total revenues, research and development expenses increased from 5.4 % in 2024 to 5.8% in 2025. Selling and marketing Our selling and marketing expenses increased from $15.3 million in 2024 to $18.4 million in 2025. As a percentage of total revenues, selling and marketing expenses increased from 4.5% in 2024 to 5.1% in 2025. General and administrative General and administrative expenses increased from $56.2 million in 2024, to $62.5 million in 2025. The increase was mainly due to an increase in salary expenses of approximately $5.0 million and an increase in professional expenses in amount of $0.9 million. As a percentage of total revenues, general and administrative expenses increased from 16.7% in 2024 to 17.4% in 2025. Operating income Total operating income increased from $71.2 million in 2024, to $77.0 million in 2025 or 8.2%. This increase of approximately $5.8 million reflects an increase of $3.3 million in the operating income in the telematics service segment and a decrease of $2.5 million in the operating income in the telematics products segment. 28 Telematics services segment Operating income in our telematics services segment increased from $69.2 million in 2024 to $72.5 million in 2024, or 4.8%. This increase was mainly attributed to the increase of our average base of subscribers from 2,330,000 subscribers in 2024 to 2,520,000 subscribers in 2025. As a percentage of income in our telematics services segment revenues, operating income in our telematics services segment decreased from 28.5% in 2024 to 27.4% in 2025. Telematics products segment Operating income in our telematics products segment increased from $2.0 million in 2024 to $4.5 million in 2025. This increase in was mainly attributed to the increase in other product costs and sales mixture. As a percentage of income in our telematics products segment revenues, operating income in our telematics products segment increased from 2.1 % in 2024 to 4.8% in 2025. Financing income (expenses), net Financing expenses net, was $1.9 million in 2025 compared with $0.1 million income in 2024. The decrease in the financing income was mainly due to an increase in losses in respect of exchange rate effect in an amount of $3.7 million and on the other hand, an increase of income in respect of deposit in an amount of $1.1 million Income Tax Income Tax expenses increased from $14.6 million in 2024, to $14.9 million in 2025 or 2.2 %. As a percentage of income before tax, income tax expenses decreased from 20.5% in 2024 to 19.9% in 2025 mainly due to the countries profit mixture. Analysis of our Operation Results for the Year ended December 31, 2024 as compared to the Year ended December 31, 2023 Revenues Total revenues increased from $320.0 million in 2023 to $336.3 million in 2024 or 5.1%. This increase consisted of an increase of $8.0 million from subscription fees from our telematics services and an increase of $8.3 million from sales of our telematics products. Telematics services segment Revenues in our telematics services segment increased by $8.0 million from $ 234.5 million in 2023 to $242.5 million in 2024, or 3.4%. The increase was mainly due to an increase in our average annual number of subscribers from 2,186,000 in 2023 to 2,330,000 in 2024. Telematics products segment Revenues in our telematics products segment increased from $85.4 million in 2023, to $93.8 million in 2024 or 9.7%. This increase of $8.3 million was primarily due to an increase in the quantity of units' sales. Cost of revenues Total cost of revenues increased from $166.8 million in 2023, to $175.6 million in 2024 or 5.3%. This increase consisted of an increase of $ 1.5 million in the telematics services segment and an increase of $7.3 million in the telematics product segment. As a percentage of total revenues, cost of revenues increased slightly from 52.1% in 2023 to 52.2% in 2024. Telematics services segment Cost of revenues for our telematics services segment increased from $98.7 million in 2023, to $100.2 million in 2023 or 1.5%. This increase was primarily due to an increase in salary expenses of approximately $2.0 million, a decrease in depreciation and amortization expenses of approximately $1.5 million and an increase in installation and communication costs expenses of approximately $0.5 million. As a percentage of total revenues for this segment, cost of revenues decreased from 42.1% in 2023 to 41.3% in 2024. 29 Telematics products segment Cost of revenues for our telematics products segment increased from $68.1 million in 2023, to $75.4 million in 2024 or 10.8%. This increase was mainly due to the increase in our products’ sales and the change in the mixture of products sales. As a percentage of total revenues for this segment, cost of revenues increased from 79.7% in 2023, to 80.5% in 2024. Operating expenses Research and development. Our research and development expenses increased from $17.0 million in 2023 to $18.1 million in 2024. As a percentage of total revenues, research and development expenses increased from 5.3% in 2023 to 5.4% in 2024. Selling and marketing Our selling and marketing expenses increased from $13.6 million in 2023 to $15.3 million in 2024. As a percentage of total revenues, selling and marketing expenses increased from 4.3% in 2023 to 4.5% in 2024. General and administrative General and administrative expenses decreased from $56.6 million in 2023, to $56.2 million in 2024 or 1%. The decrease was mainly due to a decrease in salary expenses of approximately $0.6 million As a percentage of total revenues, general and administrative expenses decreased from 17.7% in 2023 to 16.7 % in 2024. Operating income Total operating income increased from $ 66.0 million in 2023, to $71.2 million in 2024 or 7.9%. This increase of approximately $ 5.2 million reflects an increase of $4.1 million in the operating income in the telematics service segment and an increase of $1.1 million in the operating loss in the telematics products segment. Telematics services segment Operating income in our telematics services segment increased from $65.1 million in 2023 to $69.2 million in 2024, or 6.3%. This increase was mainly attributed to the increase of our average base of subscribers from 2,160,000 subscribers in 2023 to 2,330,000 subscribers in 2024. As a percentage of income in our telematics services segment revenues, operating income in our telematics services segment increased from 27.7% in 2024 to 28.5% in 2024. Telematics products segment Operating income in our telematics products segment increased from $0.9 million in 2023 to $2.0 million in 2024. This increase in operating income was mainly attributed to the increase in product sold and sales mixture. As a percentage of income in our telematics products segment revenues, operating income in our telematics products segment increased from 1.1% in 2023 to 2.1% in 2024. Financing income (expenses), net Financing income, net, was $0.1 million in 2024 compared with an expenses of $1.6 million in 2023. The decrease in the financing expenses was mainly due to a decrease in exchange rate differences in an amount of $1.7 million. Income Tax Income Tax expenses increased from $13.4 million in 2023, to $14.6 million in 2024 or 9.2%. As a percentage of income before tax, income tax expenses slightly decreased from 20.7% in 2023 to 20.5% in 2024 mainly due to the countries profit mixture. 30 Impact of Currency Fluctuations on Results of Operations, Liabilities and Assets Although we report our consolidated financial statements in dollars, in 2023, 2024 and 2025, a portion of our revenues and direct expenses was derived in other currencies. For fiscal years, 2023 ,2024 and 2025 we derived approximately 25.3%, 23.1% and 22.4% of our revenues in dollars and other currencies, 48.2%, 52.1% and 54.6% in NIS 26.5%, 24.8% and 22.9% in Brazilian Reals. In fiscal years, 2023, 2024 and 2025, 27.0%, 25.1% and 23.5% of our expenses were incurred in dollars and other currencies, 51.2%, 55% and 56.5% in NIS and 21.8%, 19.9% and 20.0% in Brazilian Reals. Exchange differences upon conversion from our functional currency to dollars (presentation currency) are accumulated as a separate component of accumulated other comprehensive income under stockholders’ equity. In the year 2025, accumulated other comprehensive income increased by $ 18.3 million. In the year 2024, accumulated other comprehensive income decreased by $12.4 million. In the year 2023, accumulated other comprehensive income increased by $0.8 million. The fluctuation of the other currencies in which we incur our expenses or generate revenues against the dollar has had the effect of increasing or decreasing (as applicable) reported revenues, cost of revenues and operating expenses in such foreign currencies when converted into dollars from period to period. The following table illustrates the effect of the changes in exchange rates on our revenues, gross profit and operating income for the periods indicated (each for December 31): Year ended December 31, 2023 2024 2025 Actual At 2022 exchange rates (1) Actual At 2023 exchange rates (1) Actual At 2024 exchange rates Revenues 319,978 329,420 336,257 344,146 359,023 350,084 Gross profit 153,161 158,291 160,620 163,895 178,577 173,866 Operating income 65,955 67,422 71,169 73,518 77,028 75,567 Based on average exchange rates during the period. Those columns are Non-GAAP information. Our policy remains to reduce exposure to exchange rate fluctuations by entering into foreign currency forward transactions that mainly qualify as hedging transactions under ASC Topic 815, “Derivatives and Hedging”, the results of which are reflected in our income statements as revenues or cost of revenues. The result of these transactions, which are affected by fluctuations in exchange rates, could cause our revenues, cost of revenues, gross profit and operating income to fluctuate. B. LIQUIDITY AND CAPITAL RESOURCES We fund our operations primarily from cash and cash equivalents generated from operations. As of December 31, 2023, 2024 and 2025 we had $53.4 million, $ 77.4 million and $107.6million in cash and marketable securities and $86.1 million, $106.8 million and $133.5 million in working capital, respectively. We hold most of our cash and cash equivalents in US dollars or the local currency of their location. As of December 31, 2025 we had no a short term loans. As of December 31, 2024 we had a short term loans at the amount of $ 0.1 million. As of December 31, 2023 we had a long term loan at the amount of $0.2 million and a short term loans at the amount of $0.4 million. As of December 31, 2023, 2024 and 2025, we also had $2.1 million, $1.1million and $4.1 million, respectively, available to us under existing lines of credit. As of December 31, 2023 we utilized $0.6 million of our credit line As of December 31,2024 we utilized $ 0.1 million of our credit line. As of December 31, 2025 we did not utilize any of our credit line. We believe that our cash flow from operations, availability under our lines of credit and cash and marketable securities will be adequate to fund our capital expenditures, contractual commitments and other demands and commitments for the foreseeable future as well as for the long-term. We believe that cash flow generated from operations and cash available to us from our credit facilities will be sufficient to cover future expansion of our various businesses into new geographical markets or new products, as currently contemplated and as we describe herein. However, if existing cash and cash generated from operations are insufficient to satisfy our liquidity requirements, we may seek financing elsewhere by selling additional equity or debt securities or by obtaining additional credit facilities. 31 As of December 31, 2023 , 2024 and 2025 we had long-term liabilities of $ 24.6 million, $27.6 million and $35.1 million, respectively, for employee rights upon retirement for certain of our employees that become payable upon their retirement. Our Israeli employees are entitled to one month’s salary, equal to the applicable monthly salary at the time of such employee’s retirement, for each year of employment, or a portion thereof, upon retirement. This liability is partially funded by deposit balances maintained for these employee benefits in the amount of $18.5 million, $21.8 million and $28.5 million, as of December 31, 2023, 2024 and 2025, respectively. The deposited funds include profits accumulated up to the balance sheet date and may be withdrawn upon the fulfilment of the obligation pursuant to Israeli severance pay laws or labor agreements. In Ecuador, there are two unique Laws which are relevant to our activities: 1. Remittance tax (Impuesto a la Salida de Divisas) - Remittance tax of 5% is imposed on the transfer of money abroad in cash or through pay checks, transfers, or courier of any nature carried out with or without the mediation of the Ecuadorian financial system, including transfer from foreign bank accounts. Dividends are exempt from this tax, under certain considerations. 2. Labor profit sharing - Although it is not considered a tax, companies are obligated to pay 15% of their pre-tax earnings to their employees. This payment is considered a deductible expense for CIT computation purposes. In Mexico, All Mexican employers, whether individuals or entities, are required to calculate and pay mandatory profit- sharing payments to employees within 60 days following the filing of their annual Mexican tax return. The obligation for employers to make such payments is based on the legal provisions in Section IX of Article 123 of the Political Constitution of the United Mexican States, which establishes that employees shall have the right to participate in their employer’s profits in the amount of 10% of such employer’s taxable income. As such, the following types of employees have the right to receive profit sharing payments: (a) permanent employees hired to carry out normal, long-term work for an employer, without regard to the number of days worked during the January 1 through December 31, 2019 fiscal year; (b) eventual permanent employees who have worked for an employer fewer than 60 days, whether continuously or sporadically, during the fiscal year referred to above; (c) former employees who have the right to claim profit sharing payments, when such rights have not lapsed. Dividends In February 2024 the board of directors approved the increase of quarterly dividend to $8 million. This latter amount of quarterly dividends was declared on February 29, May 28 and November 21, 2024. In February 2025 the board of directors approved the increase of quarterly dividend to $10 million commencing from payment declared on April 3, 2025. On March 5, 2026, the Board of Directors approved a one-time dividend distribution of $30 Million dollars. As part of implementation of our Board of Directors decision of $25 million share repurchase program, Share repurchases were funded by our wholly owned subsidiary with available cash. Repurchases of the Company’s ordinary shares were based on Rule 10b-18 terms. During the years 2019 and 2021 we purchased 227,828 and 228,725 of our shares for approximately $6 million each year. During the year 2021, we also directly purchased additional 50,995 shares for approximately $1.3 million not through publicly announced plans. During 2022 we purchased additional 357,362 shares for approximately $5 million. During 2023 we purchased additional 282,644 shares for approximately $ 6.6 million. During year 2025 we purchased our shares as detailed in item 16E. As of the date of this report, the updated quantity of treasury shares are 3,666,789 (including the aforementioned 655,909 shares which are entitled to dividend distributed). The following table sets forth the components of our historical cash flows for the periods indicated: Year ended December 31, 2025 2024 2023 Net cash provided by operating activities 88,578 74,267 77,218 Net cash used in investing activities (24,180 ) (15,940 ) (17,229 ) Net cash used in financing activities (42,707 ) (31,769 ) (32,934 ) Effect of exchange rate changes on cash and cash equivalents 8,503 (2,635 ) (1,471 ) Net increase/decrease in cash and cash equivalents 30,194 23,923 25,584 32 Years ended December 31 ,2025, December 31, 2024 and December 31, 2023 Net cash provided by operating activities. Our operating activities provided cash of $77.2 million in 2023, $74.3 million in 2024 and $88.6 million in 2025. Cash from operating activities in 2025 increased in an amount of approximately $14.3 million, this increase was mainly due to the decrease in other current assets and decrease in inventory. Net cash used in investing activities. Net cash used in investing activities in 2025 in an amount of approximately $24.2 million, included capital expenditure in the amount of $21.8 million. Net cash used in investing activities in 2024 in an amount of approximately $15.0 million, included capital expenditure in the amount of $13.6 million Net cash used in investing activities in 2023 in an amount of approximately $17.2 million, included capital expenditure in the amount of $14.2 million. Net cash used in financing activities. Net cash used in financing activities in 2025 in an amount of approximately $42.7 million consisted primarily of cash dividend payment in an amount of approximately $39.5 million and acquisition of company shares in an amount of $3.1 million. Net cash used in financing activities in 2024 in an amount of approximately $31.8 million consisted primarily of a repayment of short and long term credit from financial institution in an amount of $ 0.4 million and cash dividend payment in an amount of approximately $31.3 million. Net cash used in financing activities in 2023 in an amount of approximately $32.9 million consisted primarily of a repayment of short and long term credit from financial institution in an amount of $11.4 million, cash dividend payment in an amount of approximately $14.9 million and acquisition of company shares in an amount of approximately $6.6 million. C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES Most of our research and development activities take place in Israel, Mexico, Colombia and Ecuador. Our Research and Design department is constantly working on upgrading the service infrastructure and improving our fleet management applications, including by introducing new services and uses of the system, while utilizing both internal development staff and outsourcing such activities to third parties, as well as developing new service platforms for cellular/GPS based devices. Expenditures for research and development activities undertaken by us were approximately $20.8 million in 2025, $18.1 million in 2024 and $17.0 million in 2023. D. TREND INFORMATION The COVID-19 pandemic had no impact on our business during year 2025. Nevertheless, in case this pandemic or similar in effect will erupt this may have an adverse effect on our business. Please see Item 4.A. – History and Development of the Company and Item 4.B. – Business Overview above for trend information. E. CRITICAL ACCOUNTING ESTIMATES Elaborated discussion on critical accounting policies and estimates please see above pages 23-25. 33 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. DIRECTORS AND SENIOR MANAGEMENT The following table sets forth information regarding our executive officers, key employees and directors as of the date of this annual report: Name Age Position Izzy Sheratzky 79 President and director Yehuda Kahane 81 Director Ze’ev Koren 81 Chairman of the Board of Directors and an independent director Efraim Sheratzky 73 Director Eyal Sheratzky 57 Co-Chief Executive Officer and Director Nir Sheratzky 54 Co-Chief Executive Officer and Director Gil Sheratzky 48 CEO of our Subsidiary, International Activity and Business Development Officer and a Director Yoav Kahane (1)(2) 52 Director and an independent Director Yigal Shani 81 Director Israel Baron (1)(2)(3) + 72 External Director Riki Segev (1)(2) 57 External Director Tal Sheratzky- Jaffa 48 Director and an independent director Ami Saranga 62 Deputy Chief Executive Officer Israel operation Eli Kamer 59 Executive Vice President, Finance; Chief Financial Officer Guy Aharonov 60 Co-General Counsel Udi Mizrahi 54 Deputy Chief Executive Officer International Operation and VP of Finance Matan Omer 36 Co-General Counsel & Data Privacy Officer Notes: (1) Member of audit committee (2) Member of compensation committee (3) External director elected in accordance with the Israeli Companies Law + Chairperson of all committees 34 Izzy Sheratzky is a co-founder of our company and its President. He has previously served as the Chairman of our Board of Directors, which in our company constitutes both an officer and director positions, ever since our company was acquired from Tadiran in 1995. Until 2003, Mr. Sheratzky also served as our Chief Executive Officer. Mr. Sheratzky also serves as the Chairman of the Board of Directors of Moked (1973) Investigations Company Ltd., Moked Services, Information and Investments Ltd., and Moked Ituran. He also serves as a director in Tikal Document Collection Ltd. Mr. Sheratzky is the father of Eyal, Nir and Gil Sheratzky, Brother of Efraim Sheratzky and uncle of Tal Sheratzky-Jaffa. Yehuda Kahane is a co-founder of our company and has served on our board since 1995. Professor Kahane is an entrepreneur in both the academic and business arenas. He is a Fellow of the World Academy of Art and Science. He received the 2011 highest international award for his lasting contribution to the theory, practice and education in insurance and risk management, as well as a lifetime achievements award by the Israeli Insurance industry. He is a co-founder and chairperson of the YK Center for Preparing for the New Economy. Kahane is a Professor (Emeritus) from the Collar Business, Tel Aviv University where he headed the Institute for Business and the Environment. He taught at many business schools around the world, including the Wharton School, the University of Texas (Austin), the University of Toronto and the University of Florida, and has founded and served as the first Dean of the Israeli Academic School of Insurance. Professor Kahane chairs and is a major owner of Capital Point Ltd., and is active in the formation, seed investment and management of start-up companies and technological incubators, unrelated to our company. He chairs the association for the visually impaired people in Herzliya and Sharon district, and a board member of the Center for Blind People in Israel (The Umbrella organization). He is an honorary member of the Israel-Brazil Chamber of Commerce. Professor Kahane holds a BA degree in Economics and Statistics, an MA degree in Business Administration and a PhD in Finance from the Hebrew University of Jerusalem and is a Fellow of the Israeli Association of Actuaries. He specializes in insurance, risk management, environmental issues and technological forecasting. He is the father of Yoav Kahane. Zeev Koren has served as a director of our company since 2006 and since 2011 serves as the Chairman of the Board of Directors of the Company. In 1988 Brigadier Gen. (Res) Koren retired from the Israel Defence Forces after a career of 25 years, where in his final position he served as the head of human resources planning for the general staff division. Since then he has served in a senior capacity in companies in the fields of international forwarding and medical services. During the past ten years he has also served as the general manager of a Provident Management Company. He holds a B.A. in Political Science and Criminology from Bar Ilan University. Efraim Sheratzky was appointed to the board on February 9, 2015, to replace Mr. Amos Kurz, as a Class A Director. Efraim Sheratzky studied insurance in the Israeli Insurance College. Efraim Sheratzky owns together with Yigal Shani, Tzivtit Insurance Agency (1998) Ltd. Efraim Sheratzky served as our director from 1999 and until 2005. Efraim Sheratzky is the brother of Izzy Sheratzky and the uncle of Eyal, Nir and Gil Sheratzky and father of Ms. Tal Sheratzky-Jaffa. Mr. Efraim Sheratzky was elected, on December 16, 2025, in annual general shareholders meeting, to serve as a director in Class A for additional period until third succeeding Annual General meeting, thereafter. Eyal Sheratzky has served as a director of our company since its acquisition from Tadiran in 1995 and currently serves as a Co-Chief Executive Officer since 2003. Prior to 2003, he served as Vice President of Business Development during the years 1999 through 2002. Mr. Sheratzky also serves as a director of Moked Ituran and certain of our other subsidiaries, including Ituran Network. From 1994 to 1999, he served as the Chief Executive Officer of Moked Services, Information and Investments and as legal advisor to several of our affiliated companies. Mr. Sheratzky holds LLB and LLM degrees from Tel Aviv University School of Law and an Executive MBA degree from the Kellogg School of Management at Northwestern University, USA. Mr. Sheratzky is the son of Izzy Sheratzky and the brother of Nir and Gil Sheratzky and nephew of Effraim Sheratzky. Mr. Eyal Sheratzky was elected, on December 16, 2025, in annual general shareholders meeting, to serve as a director in Class A for additional period until third succeeding Annual General meeting, thereafter. Nir Sheratzky has served as a director of our company since its acquisition from Tadiran in 1995 and currently serves as a Co-Chief Executive Officer since 2003. Prior to 2003, Mr. Sheratzky served as an Executive Officer in our company from 1995 to 2003. Mr. Sheratzky is also a director in Moked Ituran. He holds BA and MA degrees in Economics from Tel Aviv University. Nir is the son of Izzy Sheratzky and the brother of Eyal and Gil Sheratzky and nephew of Effraim Sheratzky. Gil Sheratzky serves as a director of our company and since 2013 as our International Activity and Business Development Officer. Mr. Sheratzky has been serving since January 23, 2007 as the Chief Executive Officer of our subsidiary, E-Com Global Electronic Commerce Ltd. From 2003 and until 2013 Mr. Sheratzky served as our marketing communication officer. During the years 2000 - 2001 Gil worked in our control center, and during the years 2001 - 2002 he worked in an advertising agency. Mr. Sheratzky holds a BA in Business Administration from the Herzliya Interdisciplinary Center, and an MBA degree from the Booth School of Business at Chicago University, USA. Gil serves also as director in Bringg and chairman of Mapa GIS (a subsidiary of Ituran). Gil Sheratzky is the son of Izzy Sheratzky and the brother of Eyal Sheratzky and Nir Sheratzky and nephew of Effraim Sheratzky 35 Yoav Kahane (Director and an Independent Director, and also a member of audit committee and a member of compensation committee) has served as director of our company since 1998. Mr. Kahane is serving as the Chief Executive Officer of Vizo Specs Ltd,a startup company he co-founded that develop a non-invasive technology for immediate enhancement of attention and the treatment of ADHD. During 2020 he served as CBO of PrintCB, developer and manufacturer of advanced copper materials for car electrification. a. During 2006-2014, Mr. Kahane has worked for Enzymotec in various managerial positions including Director of Business Development, VP Sales & Marketing, Infant Nutrition Business Unit Manager, Chief Executive Officer and Chairman of Advanced Lipids AB, a joint venture of AAK AB and Enzymotec, specializing in nutritional ingredients to the infant nutrition industry. During the years 2004-2005, Mr. Kahane served as Vice President of Sales and Marketing in Elbit Vision Systems Ltd. During the years 2001 and 2002, he served as Manager of Business Development in Denver Holdings and Investments Ltd. In 2000, Mr. Kahane established Ituran Florida Corp. and served as its Chief Executive Officer until 2001. Mr. Kahane holds a BA degree in Life Sciences from Tel-Aviv University, a BA degree in Insurance and an MBA degree from the University of Haifa. Yoav Kahane is the son of Professor Yehuda Kahane. Mr. Kahane. Mr. Kahane was elected, on December 16, 2025, in annual general shareholders meeting, to serve as an Independent Director in Class A for additional period until third succeeding Annual General meeting, thereafter. Yigal Shani has served as a director of our company since its acquisition from Tadiran in 1995. Mr. Shani is an insurance agent and a partner in the insurance agency Tzivtit Insurance Agency (1998) Ltd. together with Efraim Sheratzky, which provides insurance services to our company. Mr. Shani has resigned on March 13, 2014 in order to allow compliance with the provisions of the Israeli Companies Law, which require that the board of directors to include at least one female and was reappointed on February 9, 2015 to replace Mr. Avner Kurz, as a Class B Director. Israel Baron has been serving as an external director of our company since 2003 and is the Chairman of our board’s committees. Mr. Baron served as a director in Poalim Trust Services Ltd., a fully owned subsidiary of Bank Hapoalim Ltd from 2009 until 2017. In addition, Mr. Baron has been serving as Chief Executive Officer of several public sector employee retirement and saving plans since 2003. Prior to 2003, Mr. Baron managed an organizational consulting firm, served as an investment manager in the Isaac Tshuva group during the years 1999 to 2001 and as Chief Executive Officer of Gmulot Investment Company Ltd.during the years 1994-1999. Mr. Baron serves as a director of Quality Baron Management Services Ltd. and since August 2022 he serves as a director of Brill Shoe Industries Ltd. Mr. Baron is a certified CPA and holds a BA degree in Economics and Accounting from the Bar-Ilan University in Ramat-Gan, Israel. Israel Baron was re-elected on Noveember 30, 2023 for additional 3-year term to serve as external director. Riki Segev is an external director of our company. She was nominated on December 16, 2025. Mrs. Riki Segev served from 1995-2019 as chief officer of client’s service at our company. Since 2020 she acts as independent consultant to various clients on clients’ service and internal management. Ms. Segev has B.A. from the Hebrew University in Jerusalem (Sociology, geography and anthropology) and M.A. from the College of Management Academic Studies, Rishon LeZion, Israel. Ms. Tal Sheratzki-Jaffa is the founder and CEO of VC Academy - an accelerator for female investors in venture capital funds. In addition, Ms. Sheratzki-Jaffa teaches economics and business management in high-school and acts as a member of the school management. Prior to her current roles, Ms. Sheratzki-Jaffa held various positions in Jerusalem Venture Partners Fund, including as the manager of JVP's Investor Relations department and as a Vice President of Business Development at Margalit Startup City, a related company creating centres of excellence for tech communities worldwide. Prior to joining JVP, Ms. Sheratzky-Jaffa acted as a Strategy and Development Manager at Reality Investment Funds, Israeli value-add real estate fund. Previously, Ms. Sheratzki-Jaffa was a Partner at the High-Tech and Venture Capital department at Amit, Pollak, Matalon and Co., an Israeli law firm and prior to that as an associate at the New York offices of the US law firm Akin Gump Strauss Hauer & Feld. Ms. Sheratzki-Jaffa holds an LL.M degree from Columbia University (New York), LL.B from Haifa University and B.A (economics) from Haifa University and is a member of the Israeli Bar Association and the New York State Bar. Ms. Sheratzki-Jaffa is the nephew of Izzy Sheratzki and the cousin of Eyal, Nir and Gil Sheratzki and the daughter of Efraim Sheratzki. Ms. Sheratzki – Jaffa was elected, on December 16, 2025, in annual general shareholders meeting, to serve as director in Class A for additional period until third succeeding Annual General meeting, thereafter. Ami Saranga has been serving as the Deputy Chief Executive Officer of our company since 2011. Prior to that Mr. Saranga served as our VP Marketing since 2008. Prior to 2008, Mr. Saranga managed the SME division of Pelephone Communications Ltd., one of Israel’s largest telecommunication network operators. Mr. Saranga holds a BA degree in Business Administration from Ruppin Academic Center, Israel. Eli Kamer has served as Executive Vice President, Finance and Chief Financial Officer of our company since 1999, after serving as its Finance Department Manager since 1997. Prior such date, Mr. Kamer worked as an accountant in Fahn Kanne & Co., our independent registered public accountant. Mr. Kamer is a CPA and holds a BA degree in Business Administration from the Israel College of Management and an MBA degree in business administration from Bar Ilan University. 36 Guy Aharonov has served as our in-house legal counsel since 1999. Prior to joining our company, he has worked as an attorney in Cohen Lahat & Co. Mr. Aharonov holds LLB and LLM degrees from Tel Aviv University. Udi Mizrahi has served as our VP Finance since 2000. On his current position Mr. Mizrahi serve as a Deputy Chief Executive Officer International Operation and VP of Finance. Mr. Mizrahi is a CPA and holds a BA degree in accounting and economics from Ruppin Academic Center, Israel. Shahar Sheratzky has served in different marketing roles in our company since 2007. In January 2022 Mr. Shahar Sheratzky was nominated to Vice president, head of our business division. Among his responsibilities are the marketing, selling and digital fields. Mr. Sheratzky holds a MBA degree in business administration with a specialization in global marketing from Reichman University, Israel. Mr. Shahar Sheratzky is the nephew of Izzy Sheratzky and the cousin of Eyal, Nir and Gil Sheratzky and the son of Efraim Sheratzky. Matan Omer has served as our in-house General Legal Counsel since 2021, as our Data Protection Officer and as a Compliance Officer in the field of anti-trust and competition. Prior to joining our company, he has worked as an in-house legal counsel in Electra and as a legal associate in Katzenell Dimant Law Offices. Adv. Omer holds L.L.B degree from the College of Management, he is a Certified Chief Information Security Officer and Data Protection Officer from Bar-Ilan University and a Certified Mediator. Our articles of association provide for staggered three-year terms for all our directors (except our external directors, who are elected in accordance with the provisions of the Israeli Companies Law). The directors on our board (excluding the external directors) are divided into three classes, and each class of directors serves for a term of three years, as follows: Izzy Sheratzky, Gil Sheratzky and Zeev Koren (class C), Nir Sheratzky, Yigal Shani and Yehuda Kahane (class B), and Eyal Sheratzky, Efraim Sheratzky, Tal Sheratzky-Jaffa and Yoav Kahane (class A). This classification of the board of directors may delay or prevent a change of control of our company. Diversity of the Board of Directors The table below provides certain information regarding the composition of our Board. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f) and related instructions. Board Diversity Matrix (As of April 19, 2026) Country of Principal Executive Offices Israel Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 12 Part I: Gender Identity Female Male Non-Binary Did Not Disclose Gender Directors 2 10 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 37 Shareholders Agreement and Articles of Association of Moked Ituran Ltd. Pursuant to Moked Ituran Ltd's articles of association and agreement (as amended) between its shareholders, there is a mechanism in place with regard to directors to be designated and voted for election by Moked Ituran Ltd in each of our annual shareholders meeting for the relevant class of directors (four directors in class A and B and three in class C). This arrangement for the election of directors is only effective for as long as Moked Ituran Ltd. holds at least 15% of our issued and outstanding share capital. B. COMPENSATION The aggregate direct compensation we paid to our directors who are not officers for their services as directors as a group for the year ended December 31, 2025 was approximately $240,000. Directors are reimbursed for expenses incurred in connection with their attendance of board or committee meetings. The compensation payable to external directors is determined in accordance with regulations promulgated under the Israeli Companies Law. See Item 6.C - Board Practices under the caption “External directors” below. Our audit committee and board of directors approved compensation for Mr. Ze’ev Koren, for serving as the Chairman of our board of directors, and for Mr. Yoav Kahane, for serving as a member of our board committees, such that they shall be compensated in the same manner as our external directors are compensated, annually and per meeting, in accordance with the Companies Regulations (Rules for the Compensation and Expenses of an External Director), 2000-5760. In 2025, we paid the sum of NIS 341,000 (approximately $99,000) to our external directors, NIS 206,000 (approximately $60,000) to Mr. Ze’ev Koren, NIS 161,000 (approximately $47,000) to Mr. Yoav Kahane, NIS 118,000 (approximately $34,000) to Ms. Tal Sheratzky-Jaffa. We do not have any agreements with directors providing for benefits upon termination of their respective services as such. The aggregate costs to the Company of the compensation to our Co-Chief Executive Officers in 2025 were $4,826,000. The aggregate compensation paid to all of our officers as a group during 2025 was approximately $15,691,000. In 2025 we paid an aggregate amount of $75,000 to one director who provided us with services. The above compensation amounts include amounts attributable to automobiles made available to our officers and other fringe benefits commonly reimbursed or paid by companies in Israel. Employee directors do not receive additional fees for their services as directors. The following table sets forth the breakdown of the compensation of our five highest paid officers in 2025: Management fees Wage Social components Car value Bonus (results based) Bonus (Share yield based) Total Compensation components (in thousand US Dollars) Izzy Sheratzky (President) 899 - - - 1,326 866 3,091 Eyal Sheratzky (Co-Chief Executive Officer 699 - - - 1,040 674 2,413 Nir Sheratzky (Co-Chief Executive Officer) 699 - - - 1,040 674 2,413 Gil Sheratzky (CEO of our Subsidiary. International Activity and Business Development Officer) 499 - - - 653 295 1,447 Shachar Sheratzky (Vice president, head of our business division) - 237 53 43 452 - 785 Total of our 5 highest paid officers $ 2,796 237 53 43 4,511 2,509 10,149 During 2025, we set aside $ 765,000 for the benefit of our officers for pension, retirement or similar benefits. We do not set aside any funds for the benefit of our directors who are not employees for any pension, retirement or similar benefits. All numbers in this section are rounded to the nearest thousand. During 2025, Messrs. Izzy Sheratzky, Eyal Sheratzky, Nir Sheratzky and Gil Sheratzky provided their services as President, Co-Chief Executive Officers and CEO of our Subsidiary & International Activity and Business Development Officer respectively, as independent contractors pursuant to services agreements, which were adopted by our shareholders meeting in January 2014, which terms correspond to our compensation policy as described below. 38 For further details concerning such terms of service, please see Item 7.B – Related Parties Transactions under the caption “Transactions with our directors and principal officers.” In 2006, our compensation committee has devised a bonus scheme pursuant to which some of our officers and employees received shares of our profit before tax on a consolidated basis, based on their seniority, level of global and domestic involvement, contribution to our operations and other criteria set by the compensation committee. In 2010, our compensation committee resolved that additional managers shall be entitled to receive bonuses under this bonus scheme and that some of the grantees should continue to receive a bonus based on our consolidated results and some should receive a bonus based only on our solo financial statements. During 2025, we paid a total of $ 1,657,000 to our officers and employees pursuant to the above bonus schemes. Our compensation policy for office holders In December 2012, amendment no. 20 to the Israeli Companies Law became effective. Among other things, this amendment requires Israeli public companies to set forth their policy regarding their office holders’ terms of office, including fixed compensation, target-based incentives, equity awards, severance and other benefits. The amendments also set forth the considerations that should be applied when devising a compensation policy for office holders. The term “office holder” is defined in the Israeli Companies Law, to mean the chief executive officer, chief business officer, deputy chief executive officer, vice chief executive officer, any other person fulfilling such position even if his title is different, as well as a director or a manager directly subordinate to the chief executive officer. The compensation policy must be approved every three years by the board of directors, after considering the recommendations of the compensation committee; and generally requires the approval of the company’s general meeting of shareholders by a special majority of shareholders who are not controlling shareholders and who do not have a personal interest in the approval of the policy; or, alternatively, that the non-controlling shareholders and shareholders who do not have a personal interest in the matter who are present and vote against the policy hold two percent or less of the voting power of the company. The compensation policy does not intend to amend any officer’s existing terms of office; nor to bestow any officer with a right to receive the compensation, or any element thereof set forth therein. However, generally, once the compensation policy is approved, all future terms of service of office holders should conform to its provisions. The specific terms of office of each officer shall be separately determined in accordance with the relevant provisions of the Israeli Companies Law and the regulations promulgated thereunder. Our general shareholders meeting approved our compensation policy for office holders on October 31, 2013, and on November 7, 2016, and recently on December 12, 2025 approved a renewal of the compensation policy with another amendment raising the the maximum annual cost of base pay and benefits for business unit managers approved on March 31, 2026. The policy applies to office holders of the Company (see definition above), who serve as the Company’s President, Chief Executive Officer(s) and other executives who are deemed office holders of the Company, as well as office holders of the Company’s Israeli wholly owned subsidiaries, provided they report to the chief executive officer. The policy also applies to directors of the Company. Our compensation policy for office holders was formulated in view of our belief that our business success is the result of the excellence of our human resources and their devotion to the achievement of our company’s goals. Therefore, it is aimed at offering our officers with a competitive compensation package that will align their incentives with those of our company and our shareholders, and at motivating them to achieve the goals of our company, while avoiding undue pressure to take excessive risks. Among other factors, our compensation committee and board of directors have considered, as required by amendment no. 20 to the Israeli Companies Law and as reflected in the policy: (a) the advancement of the company’s goals, its business plan and its policy with a long-term view; (b) the creation of appropriate incentives for office holders, considering the company’s risk management policy; (c) the size of the company and the nature of its business; (d) with respect to variable components of the terms of office – the contribution of the office holders to the achievement of the company’s goals and to the maximization of its profits, with a long-term view and in accordance with the position of the office holder. The compensation policy incorporates all matters required to be included in a compensation policy as mandated by amendment 20 to the Israeli Companies Law, including (without limitation): (a) the requirement to consider the office holders’ education, skills, professional experience, expertise, position and past compensation agreements; (b) consideration of the ratios between overall compensation of the officers and the average and median salary of the other employees of the Company; (c) the board’s right to reduce variable compensation; (d) the determination of a maximum period for advanced and transition periods upon termination of services; (e) basing variable components of compensation on key performance indicators and on measurable criteria; (f) determining the ratio between fixed and variable components of compensation and setting forth caps on the amount of variable compensation payable; and (g) a claw-back provision with respect to restatements of financial statements. 39 C. BOARD PRACTICES Board of Directors Pursuant to our articles of association as presently in effect, our board of directors generally consists of twelve directors, including at least three independent directors in accordance with the listing rules of Nasdaq concerning the composition of audit committees, of whom two directors are external directors as required by Israeli law. Our independent directors, as such term is defined under the Nasdaq listing rules, are Mr. Baron, Mrs. Riki Segev , Mr. Koren, Mr. Yoav Kahane and Ms. Tal Sheratzky - Jaffa, Pursuant to our articles of association, other than the external directors, for whom special election requirements apply (see “External directors” below), our directors are elected, by majority of our shareholders and may be removed by special majority. However, see Item 6.A – Directors and Senior Management for a description of our staggered board and the shareholders agreement and articles of association of Moked Ituran Ltd. Our board of directors may at any time and from time to time appoint any other person as a director to fill a vacancy until the general meeting of shareholders in which the term of service of the replaced director was scheduled to expire. Pursuant to the Israeli Companies Law, our chairman convenes and presides over the meetings of the board. In addition, any two directors may convene a meeting of the board of directors, as well as a director who becomes aware of a company’s matter that allegedly involves a breach of the law or an improper business conduct. A quorum consists of a majority of the members of the board, and decisions are taken by a vote of the majority of the members present. Our articles of association provide that such quorum will in no event be less than two directors. We are incorporated in Israel and are therefore subject to the provisions of the Israeli Companies Law, including certain corporate governance provisions. Our ordinary shares are listed on the Nasdaq Global Select Market (Our shares were delisted from the Tel Aviv stock exchange on May 25, 2016, for additional information see Item 9.A – Price History of Our Shares), and we are therefore subject to certain provisions of the Israeli securities laws, the U.S. securities laws and the Nasdaq listing rules. See also Item 16.G. – Corporate Governance below for additional information concerning our compliance with the Nasdaq listing rules and exemptions therefrom. According to our Articles of Association, some of our officers and employees (including the chairman of our board and at least one third member of the Board) should be citizens and residents of Israel and receive clearance approval from the Israeli General Security Service. All the members of our board comply with these requirements. On February 26, 2017 our board has adopted an Internal Compliance policy, which following review of our internal process included a comprehensive update of our internal regulations and codification of our internal regulations, all pursuant to the applicable Israeli laws. On August 28, 2022 our board adopted a revised internal compliance policy. External directors Under Israeli law, the board of directors of companies whose shares are publicly traded are required to include at least two members who qualify as external directors. External directors are to be elected by a majority vote at a shareholders’ meeting, provided that either: ■ Such majority includes at least the majority of the shares held by all non-controlling shareholders or those having personal interest in the nomination, except personal interest which is not resulting from connections with controlling shareholders, present and voting at such meeting; or ■ The total number of shares voted against the election of the external director and held by shareholders other than controlling shareholders or those having personal interest in the nomination, except personal interest which is not resulting from connections with controlling shareholders, must not exceed 2% of the shares whose holders are entitled to vote at any meeting of shareholders. External directors are generally elected to serve an initial term of three years and may be re-elected to serve in that capacity for two additional three-year terms; however, companies whose securities are listed on recognized foreign exchanges, such as Nasdaq, may extend the service terms of their external directors for additional unlimited terms, each of no more of than three years , subject to the approval of the audit committee and the board of directors that such extension is for the benefit of the company in view of the directors’ expertise and special contribution to the operation of the board and its committees and these reasons together with the term served by the external director were presented to the shareholders prior to their approval (see the Israeli Companies Regulations (Allowances for Companies with Securities Listed on an Exchange Outside Israel), 2000-5760). The appointment of an external director for additional terms may be brought for the approval of the shareholders either by the board of directors or by a shareholder that holds at least 1% of the company’s voting rights, provided that the nominee is not a related or competing shareholder (as defined below) or a relative thereof, at the time of the appointment, and does not have an affinity to such shareholder (as defined below) at the time of the appointment or the two years preceding such appointment. The term “related or competing shareholder” means the shareholder who proposed the appointment or a 5% shareholder of the company if, at the time of the appointment, his controlling person or a company controlled by either of them, has business relations with the company, or if he, his controlling person or a company controlled by either of them are competitors of the company. The term “affinity” means the on-going existence of work relationship, business or professional relationship or control and the service as an officer. 40 External directors may generally be removed from office by the same majority of shareholders required for their election or by a court, in each case, only under limited circumstances, including if they cease to meet the statutory qualification for their appointment or violate the duty of loyalty to the company. If at the time of the appointment of an external director, all directors who are not controlling persons or their relatives are of the same gender, then the elected external director must be of the other gender. Each committee of the board of directors that is vested with an authority of the board must include at least one external director, except that the audit committee and compensation committee must include all external directors then serving on the board of directors. The Israeli Companies Law prohibits external directors from receiving, directly or indirectly, any compensation other than for services as an external director pursuant to the provisions and limitations set forth in the applicable regulations promulgated under the Israeli Companies Law. Israeli law provides that a person is not qualified to serve as an external director if he is a relative (as defined in the Israeli Companies Law) of the company’s controlling person, or if, at the time of his/her appointment and/or at any time during the two years preceding his or her appointment, that person, a relative, partner or employer of that person, or any entity under that person’s control, has or has had an affinity (as defined above) to the company, its controlling person or its relative or to any entity that, as of the date of appointment, or at any time during the two years preceding that date, is controlled by the company or by its controlling person. In addition, no person may serve as an external director if that person’s professional activities create, or may create, a conflict of interest with that person’s responsibilities as a director or otherwise interfere with that person’s ability to serve as a director; and, a person already serving as a director of one company may not be appointed as an external director of the company if at that time a director of the company is serving as an external director of the first company. In addition, a company, controlling shareholder and any other entity controlled by the controlling shareholder may not grant to such external director, its spouse or child, any benefits, directly or indirectly, and the external director, its spouse or child may not be appointed to serve in any position, may not be employed by and may not, directly or indirectly, render any professional services to the company, such controlling shareholder or any other entity controlled by the controlling shareholder, during the first two years following such external director’s termination of tenure of office, and with respect to a relative who is not the external director’s spouse or child – during the first year following such termination. Mr. Israel Baron is now serving his seventh term as an external director of the Company, who was re-elected on of November 30, 2023 for a term of 3 years. Mrs. Riki Segev was elected on December 16, 2025 after the demise of Mr. Gideon Kotler, our former external director. Audit committee Under Israeli law, the board of directors of a public company must appoint an audit committee. The audit committee must comprise of at least three directors, including all of the external directors and the chairman of the audit committee must be an external director. In addition, the majority of the members of the audit committee must be independent directors. Under the Israeli Companies Law, a director is considered “independent” if he/she is an external director or if he/she meets the qualifications of an external director, has not served as a director of the company for over 9 consecutive years, and has been classified as such. Under Israeli regulations a director who serves more than 9 consecutive years as a director may still be deemed as "independent director" provided the Audit committee and thereafter the board of directors resolved that his-her tenure as a director for an extend term is for the benefit of the company based on his/her expertise and unique contribution to the board and its committees. Our Audit committee and board of directors so resolved with regard to Mr. Israel Baron. The audit committee may not include the chairman of the board, any director who is employed by the company or regularly provides services to the company (other than as a board member), a controlling shareholder or any relative of such person. All audit committee decisions must be approved by a majority of the committee members of which the majority of members present are independent directors. Furthermore, a person who is not eligible to serve on the audit committee is restricted from participating in its meetings and votes, unless the chairman of the audit committee determines that such person’s presence is necessary in order to present a certain matter, provided however, that the company employees who are not controlling shareholders or relatives of such shareholders may be present in the meetings but not in the actual votes and likewise, company counsel and secretary who are not controlling shareholders or relatives of such shareholders may be present in meetings and decisions of such present is requested by the audit committee. 41 Our audit committee must also meet the requirements of the Nasdaq listing rules concerning audit committees. Our board of directors has formed an audit committee that is empowered, among other things, to exercise the powers of the board of directors concerning our accounting, reporting and financial control practices. Our audit committee operates in accordance with a charter, which complies with the provisions of the Israeli Companies Law and the Nasdaq listing rules. The members of the audit committee are currently Messrs. Israel Baron, Mrs. Riki Segev and Yoav Kahane, all of whom are independent as required of members of the audit committee under the Nasdaq listing rules. Our board of directors has determined that Mr. Israel Baron possesses financial sophistication as required by Rule 5605(c)(2) under the Nasdaq listing rules, and that Mr. Baron possess accounting and financial expertise as defined by Israeli regulations. Pursuant to the Israeli Companies Regulations (Provisions and Conditions regarding the Financial Statements’ Authorization Process), 2010, a reporting entity, except for a reporting entity that is subject to Chapter E(3) of the Israeli Securities Act, is required to establish a committee of the board of directors for the examination of financial statements. Since we are a reporting entity under Chapter E(3), we are not obliged to constitute a committee for the examination of financial statements; and therefore, commencing with the financial statements for the first quarter of 2013, we ceased holding meetings of the examination of financial statements committee; and instead, our audit committee considers the financial statements prior to their approval by the board. Pursuant to the 22nd amendment in the Israeli Company law, which was set to define new rules to approve transaction of the public company with its controlling shareholders, or the transaction in which the controlling shareholder has interest. The law requires from our Audit committee to set up rules to define the criteria for classification of transactions, which are neither Insignificant Transactions nor extraordinary transactions, and their procedures of approval that will be determined per each year in advance. In addition, the law requires from the Audit Committee to set methods of examining transactions with the controlling shareholders, in order to enable their classification and their comparison to the conditions in the free market. The Audit Committee resolved on September 29, 2014 as follows: 1. Transaction that is neither extraordinary, nor insignificant. Definition: the relevant criteria that is calculated for the transaction is such transaction which is higher than 0.25% of the equity of the company according to its last combined financial reports, or higher than 1% of average net revenue of the past 3 years of the company in their absolute value, in the last 2 calendar years prior to the date of the transaction is being reported according the last financial report of the company. Methods of approval: approval by the senior management of the company (from vice chief executive officer and higher) and report to the Board. The following transactions will require also the approval of the Audit Committee: (1) Transaction which is higher than 4.5% of the equity of the company according to its last combined financial reports which were published prior to the approval of the transaction. (2) Transaction that involves risks or significant exposure beyond mere monetary liabilities or obligations. (3) Transaction in which the company enters a new activity field or exits from an existing activity field. 2. Insignificant transaction: Definition: such transaction which is not higher than 0.25% of the equity of the company according to its last combined financial reports or is not higher than 1% of average net revenue of the past 3 years of the company in their absolute value, in the last 2 calendar years prior to the date of the transaction is being reported according to the last financial report of the company. Methods of approval: Approval by the management of the company or by the officer in charge in the company (vice chief executive officer, other officer or other in charged body in the company according to the decisions of the company). 42 3. General rules: (1) Any transaction with a controlling shareholder or any transaction that a controlling shareholder has an interest in, will be brought before the Audit Committee, which will determine its type and decide on case by case basis on defining it as an insignificant transaction or other kind of transaction, and will decide on its review and on its approval. (2) According to the adopted criteria, transactions with Rinat Yogev Nadlan Ltd. shall be classified as insignificant transactions. If the extent of such transactions will remain similar during the following years, our management shall be deemed qualified to approve such transactions and to report them to the Audit Committee. (3) Every year the criteria for classifying transactions as set up above shall be brought for re-approval by the Audit Committee. Compensation committee The Israeli Companies Law mandates the appointment of a compensation committee comprising of at least three directors. The compensation committee must include all of the external directors, who shall constitute the majority of the members thereof, and its remaining members shall be directors whose terms of service comply with the provisions promulgated concerning the remuneration of external directors. The chairman of the committee must be an external director. The members of the Compensation committee are currently Israel Baron, Riki Segev and Yoav Kahane. All members of our compensation committee are independent directors as defined by the Nasdaq listing rules, and all of whom meet the composition requirements under the Israeli Companies Law. Since February 2016, the Israeli Companies Law permits that Audit Committee can serve also as a Compensation committee, provided that it will comply with requirements of the Compensation Committee as explained above. Under the Israeli Companies Law, the compensation committee is responsible for: (i) making recommendations to the board of directors with respect to the approval of the compensation policy for office holders and any extensions thereto; (ii) periodically reviewing the implementation of the compensation policy and providing the board of directors with recommendations with respect to any amendments or updates thereto; (iii) reviewing and resolving whether or not to approve arrangements with respect to the terms of office of office holders; and (iv) determining whether or not to exempt a transaction with a candidate for chief executive officer from shareholders' approval. Furthermore, our compensation committee oversees, on behalf of the Board, the management of Ituran’s compensation and other human resources-related issues and otherwise carries out on behalf of the Board its responsibilities relating to these issues. The committee is responsible for establishing annual and long-term performance goals and objectives for our executive officers. In addition, as required under the Nasdaq listing rules, our compensation committee is responsible for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel and other adviser retained by the committee; and may retain such advice only after taking into account the considerations set forth in the Nasdaq listing rules in this respect. Our compensation committee operates in accordance with a charter, which complies with the provisions of the Israeli Companies Law and the Nasdaq listing rules. According to our compensation committee charter, the compensation committee, among its other duties, is responsible on reviewing the disclosure in this form which concerns the Compensation Policy and the sections describing the Terms of Service of Officers, controlling persons and their relatives. Internal auditor Under the Israeli Companies Law, the board of directors of a public company must appoint an internal auditor nominated by the audit committee. An internal auditor may not be: ■ a person (or a relative of a person) who holds more than 5% of the company’s shares or voting rights; ■ a person (or a relative of a person) who has the power to appoint a director or the general manager of the company; ■ an executive officer, director or other affiliate of the company; or ■ a member of the company’s independent accounting firm. The role of the internal auditor is to examine, among other things, the compliance of the company’s conduct with applicable law and orderly business procedures. Our internal auditor in 2020 was Shimon Yarel, CPA, who has served as our internal auditor since January 1999. In March , 2026, the audit committee and subject to the approval of the board of directors approved the appointment of BDO-Ziv Haft instead of Mrs. Alexandra Meron Yarel as an internal auditor . 43 D. EMPLOYEES The following table sets forth the total number of our employees at the end of each of the past three years, and a breakdown of such employees by main category of activity and by geographic location: Year ended December 31, 2025 2024 2023 USD in thousands By area of activity: Control Center 547 402 380 Research and Development 127 163 167 Sales and Marketing 100 126 103 Technical support and IT 498 513 491 Finance, Administration and Management 357 327 321 Private enforcement and operations 1,143 1,191 1,196 Manufacturing 145 170 183 Total 2,917 2,892 2,841 By geographic location (out of total): Israel 970 961 906 Brazil 885 848 865 Others 1,062 1,083 1,070 Total 2,917 2,892 2,841 We consider our relations with our employees to be satisfactory and have no ongoing major labor disputes or material labor-related litigation. Our employees are subject to local labor laws and regulations, which in some countries are more stringent than others. Some of our senior executives also have employment agreements that may grant them rights in excess of those provided by the applicable laws. Israel Our employees in Israel are subject to Israeli labor laws and regulations and employment customs. The applicable labor laws and regulations principally concern matters such as paid annual vacation, paid sick days, length of the workday, payment for overtime and severance pay. Israeli law generally requires severance pay equal to one month’s salary for each year of employment upon retirement or death of an employee or termination of employment without cause. Furthermore, Israeli employees and employers are required to pay predetermined sums to the National Insurance Institute, which is similar to the United States Social Security Administration. Since January 1, 1995, these amounts also include payments for national health insurance. Israeli labor laws impose on employers increased liability, including monetary sanctions and criminal liability, in cases of violations of certain labor laws and certain violations by contractors providing maintenance, security and cleaning services. 44 Brazil Our employment agreements in Brazil are subject to Brazilian labor laws and regulations, to collective labor agreements or bargaining arrangements with unions and contract. The laws and regulations in Brazil govern almost all aspects of an employment relationship and do not leave much room to be negotiated with the employee. Still, employment contracts create obligations to the parties if they are in compliance with the law. The Labor Code mainly governs the employees’ right to paid annual vacation, paid sick days, the maximum length of a workday, minimum payment for overtime and statutory severance pay. Brazilian law generally requires severance pay equal to 40% of the balance of the employee’s FGTS account (a mandatory fund to guarantee severance and unemployment). The FGTS can also be withdrawn when the employee retires, dies or his employment is terminated without cause, among others. Brazilian employers are required to purchase health insurance for employees only in the event it is set forth by the applicable collective labor agreement, contract or company policy, and are required to cover employees’ food and travel costs whenever a business trip is required, and to make deposits into a Guarantee Severance Fund (the so-called “FGTS”). Furthermore, Brazilian employees and employers are required to make contributions to the National Insurance Institute (“INSS”), similar to the United States Social Security Administration. Our collections to the National Insurance Institute amount to 34.8% to 39.8% of the payrolls, out of which 8% to 11% (limited to R$7,087.22 of individual salary) corresponds to contributions by the employees deducted from salaries and 26.8% is the fixed part we pay. Our contribution of 26.8% includes mandatory contribution to the Public Insurance for Labor Accidents and Diseases (SAT). According to Decree Law 6957/2009 such portion, which varies from 1% to 3% of payroll, should be multiplied by another factor (FAP) from 0.5 to 2 in order to reduce or increase our burden to reflect statistics of occupational accidents and diseases in our business. All of our employees in Brazil, excluding the chief executive officer, some directors (VPs) and some IT providers are represented by a labor union and the employees’ mandatory contributions to their union are paid by us. The law no. 13.467/2017, which entered into force on November 11, 2017, made the labor union contribution optional (i.e., discounted only upon the employees’ consent). Argentina Our employees in Argentina are subject to Argentine labor laws and regulations and other special practices and employment customs. The laws and regulations in Argentina control all aspects of labor relations and designate a general Employment Contract with which all employees and employers must comply. This general Employment Contract adopts by reference the provisions of the Labor Law which principally concerns matters such as paid annual vacation, paid sick days, the length of the workday, and payment for overtime and severance pay. Argentine law generally requires severance pay equal to one month per year of service upon the termination of employment without a justified cause. Argentine employers are also required to contribute for the following items: (a) Pension funds 20.70 % (b) health insurance for employees 6% (c) occupational accident insurance 2.03% for January to February 2024 and 1,72% from March to December 2024; and (d) Retirement fund insurance 2.5% (only this item is for Union Employees). All the rates should be applied on the gross salary. Our employees in Argentina, excluding the chief executive officer and several other employees, are members of a labor union and the employee member fees are paid by them. United States We have no collective bargaining agreements with any of our employees in the United States and none of our employees are members of a union. Mexico The hiring of employees in Mexico is subject to the regulations of the Federal Labor Law, the Social Security Law, the Infonavit Law, the Income Tax Law, Afore, and Infonacot In these laws both workers and employers have obligations and rights; the percentage corresponding to the employer is 40% in Payroll and Employee Tax depending on their level of income. The working relationship between employer and employee is regulated by the Individual work contract In Mexico we have several modalities of types of Labor Contract, according to the permanence and type of contract, example: Contract for a Determined Time, Permanent Contract, and Contract for Determined Work. In these Contracts the conditions of the work are specified. Within our company we also have working relationships through outsourcing, where our employees have the same rights and obligations and adhere to the same internal and legal guidelines. Contract terminations without cause by the employer require the payment of 3 months' salary as a concept of damages. Ecuador Our employees in Ecuador are subject by the Ecuadorian Labor Code. The Labor Code provides for a 40-hour work week, 15 calendar days of annual paid vacation, restrictions and sanctions for those who employ child labor, general protection of worker health and safety, minimum wages and bonuses, maternity and paternity leave, and employer-provided benefits. The 2008 Constitution bans child labor, requires hiring workers with disabilities, and unpaid internships are not permitted in Ecuador. The law also mandates that employees’ thirteenth and fourteenth month bonuses, which are required by law, be paid in instalments throughout the year instead of in lump sums. Employees have the option to opt out of this change and continue to receive the payments in lump sums. The law eliminates fixed-term employee contracts and replaced them with indefinite contracts, which shortens the allowable trial period for employees to 90 days. The Law for Labor Justice and Recognition of Work in the Home, which included several changes related to labor and social security, took effect in April 2015. Workers in the private sector have the constitutional right to form trade unions and local law allows for unionization of any company with more than 30 employees. Private employers are required to engage in collective bargaining with recognized unions. The Labor Code provides for resolution of union´s conflicts through a tripartite arbitration and conciliation board process. The Code also prohibits discrimination against union members and requires that employers provide space for union activities. 45 Colombia Our employees in Colombia are subject to Colombian labor laws and regulations. All employees have an indefinite term employment contract and the law determines a minimum monthly salary (SMM), which is increased annually by the government and used to calculate labor obligations. 44 hours are the maximum hours for a week. All employees are affiliated with the Social Security System (Health, Pension and Occupational Risks), a percentage is paid by the company and the other by the employee, the calculation depends on the salary. The law determines additional benefits called social benefits payable by the company: Holidays: 15 working days for each year worked; Bonus premium corresponds to the payment of 15 days of salary per semester worked or fraction; Unemployment corresponds to the payment of 30 days of salary per year worked or fraction; Unemployment interest corresponds to 12% of severance pay; Employees who earn less than 2 SMM must be given 3 times a year clothing and footwear or equivalent in bonuses. Termination of employment relationship by the company without a justified reason, is coupled with compensation to the employee. Additionally, for every 20 employees, the company must hire an apprentice who will receive financial support from 1 SMM, and who will be employed for a period of 6 months. Currently the company doesn't have any unionized employee. For year 2025, Income Tax remains 35%, as a result of tax reform approved by Colombia congress on 2021 (2021 income tax rate was 31%). Chile Our employees in Chile are subject to Chilean labour laws and regulations. All employees have an indefinite-term employment contract. As of April 26, 2026, 42 hours are the maximum hours per week. All employees are affiliated with the Social Security System (Health, Pension, Unemployment Insurance and Labor Protection), a percentage is paid by the company and the other by the employee, the calculation depends on the salary. The law determines additional benefits called social benefits paid by the company: Vacations: 15 working days for each year worked; Progressive vacations are granted when the employee has 10 years of work, 3 of them in the current job, granting 1 additional day; Unemployment insurance is a sum of money that is granted to the worker who has lost his job, for reasons beyond his control, with a maximum limit of 360 days. The termination of the employment relationship by the company without justified cause is accompanied by compensation to the worker. Currently the company does not have any unionized employees. For the year 2025, the Income Tax was 25% for SMEs and 27% for big companies. 46 E. SHARE OWNERSHIP The following table sets forth share ownership information for our directors and executive officers listed in Item 6.A above as of April 19, 2026. All of the information with respect to beneficial ownership by our directors and executive officers has been furnished by the respective director or executive officer, as the case may be. Name of Director/Officer (1) Number of Ordinary Shares Beneficially Owned (2) Percentage of beneficial ownership (3) Izzy Sheratzky (4) 3,867,317 19.52 Professor Yehuda Kahane (5) 1,316,137 6.615 Zeev Koren - - Efraim Sheratzky (6) 131,442 0.73 Yigal Shani (7) 211,442 1.12 Eyal Sheratzky - - Nir Sheratzky - - Gil Sheratzky - - Yoav Kahane - - Tal Sheratzky-Jaffa 2,403 * 0.01 * Israel Baron - - Riki Segev - - Ami Saranga - - Eli Kamer - - Guy Aharonov - - Udi Mizrahi - - Shahar Sheratzky - - Matan Omer - - * Own less than one percent of our shares. (1) This table includes only current directors and officers that beneficially hold our shares. (2) Beneficial ownership’ is determined in accordance with the rules of the Securities and Exchange Commission (as defined in Rule 13d – 3 under the Exchange Act) and shares deemed beneficially owned by virtue of the right of any person or group to acquire such ordinary shares within 60 days are treated as outstanding only for the purposes of determining the percent owned by such person or group. To our knowledge, the persons and entities named in the table above are believed to have sole voting and investment power with respect to all ordinary shares shown as owned by them, except as described below. (3) Amounts in this column are based on 23,475,431 ordinary shares issued as of April 2, 2026, less 3,581,851 treasury shares held by us. (4) Shares beneficially owned include: (a) 3,865,952 shares owned by Moked Ituran Ltd., which Mr. Sheratzky is deemed to beneficially owns due to his shared voting and investment power over such shares in accordance with those certain shareholders agreement, dated May 18, 1998 as amended on September 6, 2005 and on September 17, 2014, among Moked Ituran and its shareholders, which we refer to as the Moked Shareholders Agreement. For further information concerning the Moked Shareholders Agreement see the discussion under Item 6.A. – Directors and Senior Management under the caption “Shareholders Agreement and Articles of Association of Moked Ituran Ltd.” above; (b) 1,365 shares that are directly held by Mr. Sheratzky’s wife, Maddie Sheratzky. (5) Shares beneficially owned include: (a) 13,264 shares directly owned by Professor Kahane jointly with his wife, Rivka Kahane;(b) 5,782 shares owned by Yehuda Kahane Ltd., which Professor Kahane may be considered to beneficially own by virtue of his shared voting and investment control of the company through his 50% shareholdings thereof, the other 50% being owned by his wife, Rivka Kahane; and (c) 1,297,091 shares owned by Moked Ituran Ltd., which Professor Kahane may be considered to beneficially own by virtue of his right to direct the disposition of such shares in accordance with Moked’s articles of association, following sale of 135,000 shares attributed to him during year 2025. Professor Kahane has shared voting and investment control over Yehuda Kahane Ltd., a holder of 35.13% of the shares of Moked Ituran. (6) Shares beneficially owned include: 131,4422 shares owned by Moked Ituran, which Mr. Sheratzky may be considered to beneficially own by virtue of his right to direct the disposition of such shares in accordance with Moked’s articles of association,following sale of 75,000 shares attributed to him during year 2025. Mr. Sheratzky may be considered to beneficially own such shares by virtue of his sole voting and investment control over his wholly owned G T.S.D. Holdings Ltd, the holder of 3.75% of Moked’s shares. (7) Shares beneficially owned include: (a) 5,000 shares directly owned by Yigal Shani, (b) 206,552 shares owned by Moked Ituran, which Mr. Shani may be considered to beneficially own by virtue of his right to direct the disposition of such shares in accordance with Moked’s articles of association. Mr. Shani may be considered to beneficially own such shares by virtue of his sole voting and investment control over his wholly owned G.N.S. Holdings, the holder of 3.75% of Moked’s shares. F. DISCLOSURE OF REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION. Not applicable. 47