AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Risk of Interest Rate Fluctuation Our cash equivalents and short-term deposits are exposed to market risk due to fluctuations in interest rates, which may affect our interest income. We manage this exposure by performing ongoing evaluations of our investments in these deposits. Due to the short maturities of our investments, their carrying value approximates their fair value. The 2024 JPY Loan (with an outstanding principal of approximately $92 million as of December 31, 2025) bears annual fixed interest of 2%. Additionally, approximately $29 million of our subsidiaries’ equipment capital leases bear annual fixed interest of approximately 2%. Therefore, we are not subject to cash flow exposure, financing expenses or interest rate fluctuations with respect to the 2024 JPY Loan or such equipment capital leases. However, in the event that market interest rates for similar debt decrease and are lower than the interest rate provided under our capital leases or loans, our actual financing costs would be higher than they otherwise would have been had our loans or capital leases provided for interest at a floating interest rate. Assuming a 10% change in market interest rates, the effective impact on our capital leases and loans would be immaterial. Foreign Exchange Risk We currently operate in four different regions: the United States, Japan, Israel and Italy. The functional currency of our entities in the United States, Israel and Italy is the USD. The functional currency of our operations in Japan is the JPY. Our expenses and costs are denominated mainly in USD, JPY, NIS and Euro; revenues are denominated mainly in USD and JPY; and cash from operations, investing and financing activities are denominated mainly in USD, JPY and NIS. Therefore, we are exposed to the risk of currency exchange rate fluctuations in Japan, Israel and Italy. The majority of TPSCo’s revenues are denominated in JPY and the majority of TPSCo’s expenses and costs are denominated in JPY, which limits the exposure to fluctuations of the USD-to-JPY exchange rate on TPSCo’s results of operations. In order to mitigate a portion of the net exposure to the USD-to-JPY exchange rate, we have engaged in cylinder hedging transactions to contain currency fluctuations within a predefined, fixed range. During the year ended December 31, 2025, the USD appreciated against the JPY by 0.01%, as compared to a 10.7% appreciation during the year ended December 31, 2024. The net effect of USD appreciation against the JPY on TPSCo’s assets and liabilities denominated in JPY is presented in the Cumulative Translation Adjustment (“CTA”) as part of Other Comprehensive Income (“OCI”) on the balance sheet. As of December 31, 2025, we are subject to currency exchange rate fluctuations of the JPY against the USD in connection with the following JPY-denominated debt financings: (i) the 2024 JPY Loan, in a principal amount of approximately $92 million, bearing a fixed interest rate of 2% per annum; and (ii) approximately $29 million of liabilities under equipment capital lease agreements with an annual interest rate of approximately 2%. However, as of December 31, 2025, we had approximately $57 million of cash and cash equivalents held in JPY currency accounts, partially mitigating the JPY debt exposure described above. Based on our cash and cash equivalents and the terms of our debt financings as of December 31, 2025, an assumed 10% appreciation of the JPY against the USD rate as of December 31, 2025 (from 156.6 JPY/$ to 142.4 JPY/$), would not have a material effect on our balance sheet as of December 31, 2025. Assuming a 10% appreciation of the JPY against the USD on December 31, 2025 (from 156.64 JPY/$ to 142.40 JPY/$), the effective impact on our quarterly operating results would be lower profitability (higher operating expenses, net of higher revenue) by approximately $5 million, which would be partially offset by the net impact of the hedging using the above-described cylinder transactions and our natural hedging. The USD cost of the Company’s operations in Israel is influenced by changes in the USD-to-NIS exchange rate, with respect to expenses and costs denominated in NIS. During the year ended December 31, 2025, the USD depreciated against the NIS by 12.5%, as compared to a 0.6% appreciation during the year ended December 31, 2024. Appreciation of the NIS may increase the costs, in USD terms, of our Israeli facility, such as utilities, taxes and labor costs that are denominated in NIS, which may lead to erosion of profit margins. We use foreign currency cylinder and forward transactions to hedge a portion of this currency exposure and maintain it within a predefined fixed range. 81 Assuming a 10% appreciation of the NIS against the USD on December 31, 2025 (from 3.19 NIS/$ to 2.90 NIS/$), the effective impact on our quarterly Israeli expenses would be higher operating expenses by approximately $4 million, which would be partially offset by the net impact of the hedging executed using the above-described cylinder transactions. The USD cost of our operations in Italy is influenced by changes in the USD-to-Euro exchange rate, with respect to expenses and costs denominated in Euro. During the year ended December 31, 2025, the USD appreciated against the Euro by 12.8%, as compared to a 5.9% depreciation during the year ended December 31, 2024. This exposure is partially mitigated and maintained within a predefined fixed range through foreign currency cylinder and forward transactions in which we engage. Assuming a 10% appreciation of the Euro against the USD on December 31, 2025 (from 1.174 Euro/$ to 1.292 Euro/$), the effective impact on our quarterly expenses would be higher operating expenses by approximately $1 million, which would be partially offset by the net impact of the hedging executed using the above-described cylinder transactions.