A. [Reserved.] B. Capitalization and Indebtedness. Not applicable. C. Reasons for the Offer and Use of Proceeds. Not applicable. D. Risk Factors. Summary of Risk Factors Investing in our ordinary shares involves a degree of risk. These risks are discussed more fully below and include, but are not limited to, the following, any of which could have a material adverse effect on our financial condition, results of operations and cash flows: Risk Factors Related to Our Business, Markets, and Industry • A slowdown or contraction in AI-related semiconductor investment that may affect our business, results of operations and financial condition; • Disruption to our business by negative effects on the semiconductor industry, including as a result of economic, geopolitical, legal and other changes, in the global or local markets in which we operate; • The adverse effects of the competition in the markets we serve, that have significant market participants, some with greater resources than us; • The impact of changes in global trade policies beyond our control; • The concentration of substantial majority of our sales in the Asia Pacific region, with China being our largest territory; • The effects of global economic trends such as changing inflation, rising interest rates and economic slowdown; • The impact of regional instabilities and continued hostilities; • Supply chain constrains due to sharp increase in demand for electronic components, or disruptions to supply of components due to geopolitical or other reasons; • Introducing new products may adversely affect our revenue, profitability and competitive position; • The expansion of our business within and/or beyond our current served markets, through acquisition activity; • We are be exposed to fluctuations in currency exchange rates which may result in additional expenses being recorded or in the prices of our products becoming less competitive; • The impact of cybersecurity risks and events, and compliance with the related regulatory framework; 5 • The use or anticipated use of new and evolving technologies, such as AI, by us or third parties; • The effects of the sharp increase in demand for electronic components, while production capacity remains limited; • Risks associated with the levels of cash we maintain, which are higher than in the past; and • The effects of climate change or related legal or regulatory measures, and compliance with additional environmental, social, governance, health, export controls, and other laws, regulations, and disclosure rules. Risk Factors Related to Our Ordinary Shares • The risks associated with volatility of our share price, trading volumes, and price depressions; • The effects of the controlling interest of our principal shareholders, Priortech and Chroma, that may exercise their control in ways that may be adverse to the interests of our other shareholders; and • The impact of our ordinary shares being traded on more than one market. Risk Factors Related to Our Operations in Israel • Conditions in the Middle East and Israel, including the impact of the Israel-Iran conflict and continued hostilities along Israel’s borders; • The effects of Israeli governmental programs and tax benefits, as well as of governmental grants; and • Shareholders rights and responsibilities and the general corporate law framework in Israel, applicable to our shares and shareholders. Risk Factors There is a high degree of risk associated with our Company and business. If any of the following risks occur, our business, revenues, operating results and financial condition could be materially adversely affected and the trading price of our ordinary shares could decline. Below are some of the main risks factors and challenges that we have been facing and may further face, which could have an adverse effect on our business, results of operations and financial condition: Risk Factors Related to Our Business, Markets, and Industry A slowdown or contraction in AI-related semiconductor investment could materially and adversely affect our business, results of operations and financial condition. Approximately 50% of our revenues are generated from products supporting the production of artificial intelligence (“AI”) applications, and significant portion of our growth expected in the coming few years is derived from such products. We have experienced increased demand for inspection and metrology systems as customers invest in equipment supporting the production of AI related products, including high-bandwidth memory (HBM) and advanced packaging. As we continue to serve leading integrated device manufacturers, outsourced semiconductor assembly and test providers (OSATs), and foundries, our revenue profile has become meaningfully exposed to the pace and durability of AI-related capital spending patterns. Slower AI-driven investments would therefore have an adverse effect on our sales and operating results. To meet current volume of sales and expected demand, we maintain appropriate inventories and production capacity, and have expanded our workforce and made capital expenditures to support operations, engineering and information technology. In addition, to satisfy short customer lead-time expectations, we frequently pre-order components and subsystems based on internal forecasts rather than on firm purchase orders. If AI-related demand does not continue at anticipated levels, we may incur higher carrying costs, experience factory underutilization, and be unable to adjust our cost structure quickly. These conditions could require us to curtail production, restructure operations and record charges that negatively affect our operating results. 6 Forecasting the timing, duration and depth of any AI-related downcycle is inherently challenging. We typically operate with limited visibility and do not have long-term purchase commitments with many customers. While we rely on internal and customer-provided forecasts to plan inventory and capacity, abrupt changes in customer roadmaps, qualification timing, or funding priorities can render such forecasts unreliable. Any combination of these factors could materially and adversely affect our business, results of operations and financial condition. Our business could be materially disrupted by negative effects on the semiconductor industry, including as a result of economic, political, legal, and other changes, in the global or local markets in which we operate. The semiconductor industry, including the semiconductor equipment industry, relies on global end markets. Political, geopolitical, economic and financial crises and instabilities have in the past negatively affected the semiconductor industry and its end markets and could do so again in the future. Prolonged or increased use of trade barriers may result in a decrease in the growth of the global economy and semiconductor industry and could cause turmoil in global markets, which in turn often results in declines in our customers’ electronic products’ sales and could decrease demand for our products and services. Such circumstances could have a negative effect on our ability to sell to, ship products to, collect payments from, and support customers in certain regions. In addition, the semiconductor industry has been subject to significant downturns from time to time as a result of global economic conditions, as well as industry-specific factors such as over-ordering in recent years which in turn results in excess inventory within our customers, built-in excess capacity, fluctuations in product supply, product obsolescence and changes in end-customer preferences. Downturns, as those we have experienced in the past, may cause material reductions in the demand for the products and services that we offer, and may result in a decline in our revenues. In addition, our ability to significantly reduce expenses during such downturn may be limited because of our continuing need to invest in research and development; our continuing need to market our products, and our extensive ongoing customer service and support requirements worldwide. The above listed factors could adversely affect our global sales, and as a result our inventory and supply chain, which could have a material adverse impact on our results of operations and financial condition. The markets we serve are highly competitive and have significant global market participants, some with greater resources than us. Such competition could adversely affect the terms on which we sell our products and may negatively affect our financial results. The markets that we serve are highly competitive and have significant global market participants, some with greater resources than us. The continued growth of the markets in which we operate may attract and result in new market entrants and may also encourage existing competitors to expand their efforts and presence in these markets. Such competitors may be able to respond more quickly to new or emerging technologies or changes in customer requirements, develop additional or superior products, benefit from greater economies of scale, offer more aggressive pricing or devote greater resources to the promotion of their products. Other competitors are local smaller competitors in the markets we operate, which target the low-end market and may offer products at lower prices. Competition could result in lower prices for our products and a corresponding reduction in our gross margin, as well as more favorable payment terms to our customers and a corresponding decline in our cash flow. If we are unsuccessful in effectively responding to our competition, our financial results will be adversely affected by reduced revenues as well as lower margins, which may lead to financial losses. Changes in global trade policies beyond our control may adversely impact our business, financial condition and results of operations. Geopolitical tensions may result in export control restrictions, trade sanctions, and more generally international trade regulations which may impact our ability to sell and deliver our systems, technology, and services. Changes in applicable social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries, where our customers are located, could adversely affect our business, financial condition, operating results and cash flows. Among other things, such factors may affect our ability to sell our products and services in certain countries, such as China. Our business involves the sale of systems and services to customers in a number of countries, including U.S., Europe, Korea, Taiwan and China, and includes technologies that may be the subject of increased export regulations or policies. 7 For example, the U.S. government has enacted trade restrictions, reflecting national security concerns on conducting business with certain Chinese entities, active in the semiconductor industry. For example, over the course of 2025, the U.S. Department of Commerce has continued to add Chinese semiconductor manufacturers to list of entities that the sales thereto are forbidden or restricted. The abovementioned measures can create legal and/or contractual exposure not only for U.S. companies or U.S. people, but also for non-U.S. companies like us. In some cases, the abovementioned export restrictions might also be applicable to the products or services which we export from countries other than the United States, should there be a U.S. nexus to our activities, should the products contain certain U.S. origin items above the applicable threshold, or should they be produced using certain U.S.-controlled technology, software, or production equipment. Even where U.S. and other global export controls do not apply to our products, they may impact the demand for our products. For example, certain additional export administration regulations issued by the U.S. Department of Commerce since October 2022, and which have increased in 2025, may have an adverse effect on the entire semiconductor manufacturing sector in China and reduce the demand for semiconductors equipment and therefore indirectly affect our sales in China. Furthermore, the above regulatory requirements are subject to rapid change and governments around the world are adopting a growing number of compliance and enforcement initiatives. It has been and may continue to be increasingly difficult to keep up with the pace, complexity and scope of these changes. While we continue to carefully monitor new sanctions and trade restrictions that could arise and conduct ongoing detailed assessments of applicable law, any alleged or actual violations of such laws whether U.S. or other jurisdictions, whether or not directly applicable to us, could have an adverse impact on our reputation, business, results of operations and financials. A substantial majority of our sales have been to manufacturers in the Asia Pacific region. The concentration of our sales and other resources within a particular geographical region, subjects us to additional material risks. In 2025, our sales in the Asia Pacific region (mainly China, Taiwan and South Korea) accounted for approximately 91% of our total revenues with sales to China being 49% of our total revenues. A number of Asian countries have experienced or could experience political and economic instability. For instance, Taiwan and China encountered a number of continuous disputes, as have North and South Korea. Additionally, the Asia-Pacific region is susceptible to the occurrence of natural disasters, such as earthquakes, cyclones, tsunamis and flooding. Changes in local legislation, changes in governmental policies, controls and regulations, trade restrictions, a downturn in economic or financial conditions, an outbreak of hostilities or other political upheaval, as well as any further extraordinary events having an adverse effect on the economy or business environment in this region, would likely harm the operations of our customers in these countries, may cause a significant decline in our future revenues and may have an adverse effect on our results of operations and cash flow. These general risks are heightened in China, which is our largest territory, where the nature of the economy, local legislation, governmental policies and regulatory environment are rapidly evolving and where foreign companies may face the negative effects of changed governmental policies, regulatory, business and cultural obstacles. Additionally, Chinese policies with respect to trade, may present obstacles, such as regulatory restraints or significant increases in tariffs on goods imported into these markets. China’s economy differs from the economies of most developed countries in many respects, including with respect to the amount of government involvement, level of development, growth rate and control of foreign exchange, and allocation of resources and local preference of emerging local competitors. Our business is subject to the risks associated with doing business in China, including: trade protection measures, and import and export licensing and control requirements; potentially negative consequences from changes in tax laws; difficulties associated with the Chinese legal system, including increased costs and uncertainties associated with enforcing contractual obligations in China; historically, lower protection of intellectual property rights; changes and volatility in currency exchange rates; and unexpected or unfavorable changes in regulatory requirements. In addition, we could face increased competition as a result of China’s policies to promote a domestic semiconductor industry and supply chains. 8 We may be affected by global economic trends such as inflation, interest rates, and economic slowdown. Recent inflation, geopolitical issues, increase in energy costs, increases in interest rates, unstable global conditions and changes in currency exchange rates have led to global economic instability. In response to rising inflation in recent years, central banks in the markets in which we operate, including the United States Federal Reserve, have tightened their monetary policies and raised interest rates, and such measures may continue. While interest rates have begun to decline and inflation is lower than in past quarters in the U.S., costs of labor, capital, employee compensation, and other similar effects have increased in the recent past This has had, and may continue to have, an adverse effect on our business, financial condition and results of operations, as well as on our customers’ spending behavior. We manage our available cash through various bank institutions and invest large portions of our cash reserves in bank deposits in Israel and abroad. Our ability to access deposits at individual banking institutions can also be negatively affected by the bankruptcy of one or more of the banks in which or through which we hold or invest our cash reserves, liquidity, credit deterioration, financial results, economic risk, political risk, regulatory changes, sovereign risk, exchange control, or other factors. The impact of regional instabilities and continued hostilities could impede our ability to operate and develop, manufacture and deliver products and components and harm our business and financial results. As of the date hereof, the regional security environment in the Middle East remains unstable. In late February 2026, Israel and the United States preemptively attacked Iran, in order to eliminate Iran's nuclear and ballistic missile capabilities, and to target the Islamic fundamentalist regime governing Iran, which has threatened Israel's existence. As part of this conflict, Iran launched missile attacks throughout Israel. This war followed upon similar conflicts in June 2025, and April 2024 and October 2024, during which Iran launched ballistic missile attacks against Israel, and Israel conducted strikes against Iranian military and nuclear infrastructure. The direct conflicts with Iran ran parallel to, and followed upon, a two-year war (from October 2023 until October 2025) during which Israel was attacked by Hamas and Hezbollah, terrorist groups sponsored by Iran operating out of the Gaza Strip and Lebanon, respectively. and declared war in response, which included ground operations in the Gaza Strip and southern Lebanon. Other Iranian-sponsored terrorist organizations in the Middle East, including the Houthi terrorist group in Yemen, have also attacked Israel with various types of missiles and drones as part of these conflicts, and Israel has responded with air force attacks. Nearby in the region, the fall of the Assad regime in Syria led Israel to conduct limited military operations targeting Iranian military assets and infrastructure linked to Hezbollah and other Iran-supported groups. We may lose business due to the ongoing and revived hostilities, which could also prevent or delay shipments of our products, winning competitive procurement procedures, damage our facilities, harm our operations and product development and cause our sales to decrease. In the event that the hostilities and instabilities in our neighbor countries and/or territories disrupt the ongoing operation of our or our Israeli subcontractors' facilities or the airports and seaports on which we depend to import and export our supplies and products, our operations may be materially adversely affected. An inability to receive supplies and materials, shortages of materials or difficulties in procuring our materials, among others, may adversely impact our ability to commercialize and manufacture our product candidates and products in a timely manner. This could cause a number of delays and/or issues for our operations, including delay of the review of our product candidates by regulatory agencies, which in turn would have a material adverse impact on our ability to commercialize our product candidates. Although the related market disruptions are impossible to predict, they could be substantial, particularly if the current situation continues for an extended period of time or if geopolitical tensions result in expanded military operations on a global scale. See also “Risk Factors Related to Our Operations in Israel” below for more information. 9 We have expanded, and may further attempt to expand our activity within and/or beyond our current served markets, through acquisition activity. Such activity and the integration of acquired businesses may adversely affect our results of operations, financial condition and trading price of our shares. We continue to explore potential acquisition opportunities within our market or as a diversification effort in order to create a growth engine and implement a growth strategy. In addition, we also explore acquisition opportunities aimed at obtaining technological improvement of our products, adding new technologies to our products and to diversify our business. These strategic transactions involve numerous risks, which can jeopardize or even eliminate the benefits entailed in such transactions, such as: (i) we may not be able to discover, or the target company may fail to provide us with, all relevant information and documents in relation to the transaction, which could lead to a failure to achieve the objectives of acquisition and to a substantial loss; (ii) we may fail to reveal that the due diligence materials and documents provided contain untrue statements of material facts or omit to state a material fact necessary to make the statements therein not misleading, hence fail to achieve the objectives of acquisition and suffer a substantial loss; (iii) we may fail to correctly assess the due diligence investigation findings, establish a correct investment thesis or establish a correct post-acquisition integration plan; (iv) the process of integrating an acquired business including, for example, the operations, systems, technologies, products, and personnel of the combined companies, particularly companies with large and widespread operations and/or complex products, may be prolonged due to unforeseen difficulties; (v) the implementation of the transaction may distract and divert management’s attention from the normal daily operations of our business; (vi) we may sustain and record significant expenditure and costs associated with outstanding transactions that either did not or will not materialize or would fail to achieve its objectives; (vii) there will be increased expenses associated with the transaction, and we may need to use a substantial portion of our cash resources or incur debt in order to cover such expenses, which the combined companies may not be able to offset; (viii) we may incur unexpected accounting and other expenses associated with the transaction, such as tax expenses, write offs, amortization expenses related to intangible assets, restructuring costs, litigation costs or such other costs derived from the acquisition; (ix) the transaction may harm our business as currently conducted (for example, there may be a temporary loss of revenues, we may experience loss of current key employees, customers, resellers, vendors and other business partners or companies with whom we engage today or which relate to any acquired company); (x) we may be required to issue ordinary shares as part of the transaction, which would dilute our current shareholders; (xi) we may need to assume material liabilities of the acquired entity; (xii) in certain cases, acquisitions require special approvals, or are subject to scrutiny by the local authorities, and failing to comply with such requirements or to receive such approvals, may prevent or limit our ability to complete the acquisitions as well as expose us to legal proceedings prior or following the consummation of such acquisitions. In some cases, such proceedings, if initiated, may conclude in a requirement to divest portions of the acquired business; (xiii) the failure to successfully complete the integration associated with the transaction (including integrating any acquired technology into our products), which may cause new markets we were aiming for not to materialize or in which competitors may have a stronger market position; or (xiv) we may fail to effectively obtain the desired technological improvement. Furthermore, we compete for acquisition and investment opportunities with other well-established and well-capitalized entities. There can be no assurance that we will be able to identify acquisition or investment opportunities upon favorable terms. As a result, the anticipated benefits or cost savings of such acquisitions or other restructuring activities may not be fully realized, or at all, or may take longer to realize than expected. Acquisitions involve numerous risks, any of which could harm our business, results of operations cash flow and financial condition as well as the price of our ordinary shares. Technology in the markets in which we operate is rapidly evolving, and we may not be able to adequately predict these changes or keep pace with emerging industry standards, which could lead to a loss of revenues or adversely affect our profits. The markets for our products are characterized by changing technology, evolving industry standards, changes in end-user requirements and new product introductions. Our future success will depend on our ability to accurately predict new market needs and requirements and to enhance accordingly our existing products and develop and introduce new technologies for the markets in which we operate. These products must keep pace with technological developments and address the increasingly sophisticated needs of our customers. If we fail to anticipate correctly, or if we are unable to keep pace with, technological changes, products offered by our competitors or emerging industry standards, our ability to generate revenues may be negatively affected. Adopting new technologies may also result in material inventory write-offs which would adversely affect our results of operations. We cannot assure you that we will successfully forecast technology trends or that we will anticipate innovations made by other companies and respond with our own innovation in a timely manner, which could affect our competitiveness in the market. 10 Fluctuations in currency exchange rates may result in additional expenses being recorded or in the prices of our products becoming less competitive and thus may have negative impact on our profitability. We are a global company operating in a multi-currency environment. A substantial portion of our revenues is denominated in U.S. dollars, while a significant portion of our expenses, particularly the costs of our Israeli operations, such as personnel, subcontractors, materials and facility‑related costs, are incurred in NIS. Consequently, a decrease in the value of the U.S. dollar relative to the NIS, as has been recently experienced, directly increases our costs when expressed in U.S. dollars. This currency mismatch negatively affects our operating margins, profitability, and overall financial results. We may, from time to time, take various measures designed to reduce our exposure to these effects, but any such steps may be inadequate to protect us from currency rate fluctuations. In addition, although our sales are denominated in U.S. Dollars, in certain territories (currently, China, Europe and Japan) our products’ prices may be denominated in local currencies, and much of our service income in these territories is denominated in local currencies. If there is a significant devaluation in the relevant local currencies in which we operate compared to the U.S. Dollar, we may be required to increase those prices and as a result our products and services may become less competitive. Tariffs could have an adverse effect on economic conditions and financial markets. The international environment in which we operate is affected by inter-country trade agreements and tariffs. As a result of recent revisions in the U.S. administrative policy there are, and may be additional, changes to existing trade agreements, greater restrictions on free trade and significant increases in tariffs on goods imported into the United States. Over the course of 2025, the U.S. has continued to impose tariffs on imports from foreign countries, including China. These additional tariffs or any future tariffs or retaliation by another government against such tariffs or policies affects may affect global trade in our markets and have introduced significant uncertainty into our markets. The application of increased tariffs or continuing uncertainty also may result in an increase to our costs of operation or otherwise limit our commercial opportunities. Any of these events could adversely affect our business, results of operations and financial condition. Increased cyber-attacks, data breaches, risks and threats, along with changes in privacy and data protection laws could have an adverse effect on our business. Threats to network and data security are constantly evolving and becoming increasingly diverse and sophisticated. Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties upon which we rely. During times of war and other major conflicts, we or the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services. Given the substantial increase of cyber-attacks in recent years, we have implemented network security technological, operational and organizational measures and drafted an internal global information technology security policy. This policy, which follows industry best practices and focuses on Camtek’s network and information security, was reviewed by our audit committee and board of directors. It is also possible that our digital assets and business processes could be jeopardized, compromised or halted via cyber-attacks, without being noticed for some time. Although we have not yet experienced any cyber-attacks that have materially affected our operations, we have experienced several failed attempts to penetrate our systems and cannot fully provide assurance that any potential cyber incidents will not have a material impact on our company in the future. Even though we have invested in implementing various cyber security solutions in our networks and systems, in order to mitigate and reduce our exposure to these cyber risks, we can provide no assurance that our current digital assets are fully protected against all sorts of cyber-attacks by malicious third parties. We have purchased a cyber-liability insurance policy to cover certain security and privacy damages. However, we cannot be certain that our coverage will be adequate for liabilities actually incurred. As detailed above, due to the direct hostilities between Israel, Iran and other Iranian proxies, Israeli and Israeli associated companies have become more frequently the target of cyberattacks. Since the escalation of the heated relationship with Iran, attackers associated with Iran have led a wave of cyberattacks against Isareli public institutions as well as private companies. As such, the risk of a cyberattack against our information technology systems and data security has become heightened. 11 We are subject to various regulations and standards relating to data privacy and security. Failure to comply with any applicable privacy, security or data protection laws, regulations, standards or other requirements could have an adverse effect on our business prospects, results of operations, and financial condition. The regulatory framework for data and privacy protection issues is rapidly evolving worldwide. Comprehensive data protection laws, including the General Data Protection Regulation (“GDPR”), which imposes stricter obligations and provides for greater penalties for noncompliance. Additionally, laws in all 50 U.S. states require businesses to provide notice to parties whose personally identifiable information has been disclosed as a result of a data breach. The laws are not consistent, and compliance in the event of a widespread data breach is costly. Furthermore, California enacted the California Consumer Privacy Act, or the CCPA, which provides for civil penalties for violations, as well as a private right of action for data breaches. The California Privacy Rights Act, or the CPRA, significantly modifies the CCPA, potentially resulting in further uncertainty as the California Privacy Protection Agency is still working to promulgate final rules. In addition, failure to comply with the Israeli Privacy Protection Law 1981 (the “PPL”) and its regulations, as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrative fines, civil claims (including class actions) and, in certain cases, criminal liability. In August 2025, a comprehensive amendment to the PPL became effective. This amendment enhanced the enforcement powers of the Israeli Privacy Protection Authority, granting it significant authority to impose administrative fines for non-compliance. The amendment also introduced broader oversight capabilities and mechanisms for monitoring adherence to privacy guidelines, thereby increasing compliance requirements for organizations handling personal data in Israel. As a result, there has been a noticeable increase in enforcement activity by the Privacy Protection Authority in this area. Other pending legislation may result in a change to the current enforcement measures and sanctions. New privacy laws add additional complexity, requirements, restrictions and potential legal risk, require additional investment in resources to compliance programs, and could result in increased compliance costs and/or changes in business practices and policies. Any inability to adequately address privacy and security concerns or comply with applicable privacy and data security laws, rules and regulations could have an adverse effect on our business prospects, results of operations and/or financial position. The use or anticipated use of new and evolving technologies, such as AI, by us or third parties may increase or create new operational risks. We integrate, and expect to continue integrating, AI and other evolving technologies into our business operations to achieve potential benefits such as increased operational efficiencies. However, these technologies pose significant risks, including flawed or biased algorithms, insufficient or poor-quality data sets, and inappropriate data practices that could impair results. If AI-based analyses are or are perceived to be deficient, inaccurate, or biased, we could face competitive harm, legal liability, and reputational damage. The introduction and rapid evolution of AI may also result in enhanced compliance requirements, governmental or regulatory scrutiny, litigation, and confidentiality or security risks, requiring significant resources to ensure proper implementation in accordance with applicable laws and regulations. If improperly managed, increased reliance on AI could damage our reputation, result in the loss of valuable property and information, cause us to breach applicable laws and regulations, and adversely impact our business. Semiconductors and semiconductors equipment manufacturing is dependent on global supply chain of materials and components. Shortage in capacity of suppliers in face of growing demand or disruption to the global supply of electronic components, including integrated circuits, may have, an adverse effect on the lead-time for our components and increase in their prices. The global demand for electronic components has experienced a sharp increase, with a growing number of industries dramatically increasing their demand and consumption. If we are unable to obtain components in a timely manner to fulfill our customers’ demand on technology and production capacity, or at a reasonable cost, we may be unable to meet commitments under our contracts with customers, which could expose us to substantial liquidated damages and other claims and could materially and adversely affect our results of operations, financial condition, business and prospects. In the current highly competitive business environment, our customers require us to fill orders within a very short period of time. Our products are complex and require essential components and subsystems that are produced by a number of suppliers and subcontractors. In order to meet our customers’ needs in the timeframe they require, we usually need to pre-order components and subsystems based on our forecasts of future orders, rather than on actual orders. While we believe that we have sufficient inventory to fill our customers’ orders, our predictions may not correspond to our actual future needs and our suppliers and subcontractors cannot always supply such components and subsystems within a shorter than anticipated time frame; this concern is heightened due to the supply chain obstacles detailed above. Our inability to anticipate rapid market changes or the implications of the global components shortage may cause an increase of inventory which could result in material inventory write-offs, which we have incurred in the past, or may alternately limit our ability to satisfy customer orders, which could result in the loss of sales and could cause customers to seek products from our competitors. Additionally, since February 28, 2026, the war situation between Iran and Israel, the U.S., and other countries in the region has contributed to disruptions to regional air travel and to maritime traffic through critical routes, including increased risk and disruption around the Strait of Hormuz, and broader impacts on energy and freight markets. In addition, following the February 28, 2026 strikes, Houthi officials indicated an intent to resume missile and drone attacks against commercial shipping in and around the Red Sea and Gulf of Aden, which could lead to diversions, longer transit times, and higher shipping and insurance costs. To date, we have successfully managed our supply chain, but if these factors continue or become more severe, they may have an adverse effect on our supply chain and on our ability to fulfill customer orders in a timely manner, which could in turn have an adverse effect on our position in the market and on our business and operations. 12 We maintain high levels of cash, which subjects us to additional material risks. Our company maintains a significant amount of our assets in cash or cash equivalent instruments. Such assets are managed in accordance with the provisions our investment policy, which was adopted by our management and our Board’s Investment Committee (the “Investment Committee”) and approved by our Board. Maintaining a significant amount of our assets in cash exposes us to several risks, including the following: (i) The value of our cash holdings can be eroded by inflation. Over time, high inflation rates can significantly decrease the purchasing power of cash, potentially reducing the real value of our liquid assets. While our cash reserves are managed and invested by our finance team, with the assistance of external professional counsels, and under the supervision of our Investment Committee, we may not efficiently and effectively manage our funds to yield sufficient interest levels, and as a result may fail to protect our cash reserves against inflation influences; (ii) Concentration of our cash in few financial institutions or instruments may pose a risk if a banking counterparty faces liquidity or solvency issues; (iii) If our cash is held in different currencies, we face the risk of currency fluctuations, which can adversely affect the value of our cash holdings and our financial results when these amounts are repatriated or converted into our reporting currency; and (iv) The interest income generated from our high levels of cash may be subject to taxation at rates that may vary from our expectations. While we base our tax positions upon professional accountants’ opinions interpreting tax laws and guidance, tax authorities may challenge such interpretations and levy taxes greater than we anticipate. We continuously evaluate the most effective use of our cash, but there can be no assurance that our strategies will yield the best possible returns for our shareholders or safeguard the value of our cash reserves. We may face significant risks and uncertainties in developing and introducing new products that may adversely affect our revenue, profitability and competitive position. We operate in a highly competitive and rapidly evolving industry that requires us to continuously develop and introduce new products that meet the changing needs and expectations of our customers and the semiconductor device manufacturing technology. Developing and introducing new products involves significant technical, operational, regulatory and financial challenges and uncertainties, such as: - the ability to anticipate and respond to customer requirements and preferences; - the ability to obtain and maintain necessary intellectual property rights and licenses; - the ability to obtain and maintain necessary certifications and approvals from relevant authorities and standards bodies; 13 - the ability to source, manufacture and deliver high-quality components and systems in a timely and cost-effective manner; - the ability to achieve and maintain adequate levels of performance, reliability, functionality and compatibility of our products; - the ability to price our products competitively and profitably; - the ability to market and sell our products effectively and efficiently; - the ability to manage inventory levels and avoid obsolescence or excess inventory; - the ability to withstand and mitigate potential product liability claims, warranty claims, recalls, defects, errors, failures, breaches, cyberattacks or other disruptions; - the ability to cope with potential changes in trade policies, tariffs, sanctions, export controls or other regulatory or geopolitical factors that may affect our global operations and supply chain; and - the ability to protect our products and systems from unauthorized use, copying, modification or reverse engineering. If we fail to successfully develop and introduce new products that gain general market acceptance, or if we experience delays, difficulties, defects or disruptions in doing so, we may not be able to generate sufficient revenue and cash flow to recover our investments, which may result in a write down of inventory. We may also lose market share, customer loyalty, competitive advantage and reputation, and face pricing pressure and litigation risk. Any of these consequences could adversely affect our revenue, profitability and competitive position. We occasionally use Open Source codes during our development process and in our software products. An unintentional breach of Open Source licenses might compel us to publish certain confidential and proprietary codes, incur damages, and result with intellectual property infringement claims that could be expensive and could disrupt our business. We occasionally use open source software components under open source licenses. As certain open source copyright licenses may be categorized as “copyleft licenses” that place certain requirements and restrictions on users, we maintain a process to assure the use of permissive licenses that guarantee the freedom to use, modify and redistribute, and creating proprietary derivative works, in order to avoid any limitations on our IP and exposure of confidential proprietary software. Nonetheless, if we do not correctly monitor and manage those licenses, fail to maintain their terms (for example, to provide adequate copyright notices, or avoid modifications) or otherwise fail in identifying limited open source codes, we might be subject to third party copyright and to reciprocity obligation requiring us to make our code open for use by others as well. Such claims may harm our development efforts and competitive advantage and expose us to copyright infringement claims that could be expensive and could disrupt our business. Our operating results have varied and will likely continue to vary significantly from quarter to quarter and from our expectations for any specific period, making it difficult to predict future results. Our quarterly operating results have varied in the past and could continue to vary from quarter to quarter or from our expectations for any specific period in the future, as we cannot assure you that we will be able to maintain improving trends and convert our backlog into sales, profitability and positive operating cash flows. This complicates our planning processes, reduces the predictability of our earnings and subjects our stock to price and volume fluctuations. Period-to-period comparisons of our results of operations may not always provide indications of our future performance. Some of the factors that may influence our operating results include: global economic conditions and worldwide demand for electronic equipment; instability in the global markets and in the geopolitical environment that may lead to delays in shipments due to supply chain disruptions caused by geopolitical conflicts such as the changing security situation in the Middle East and past hostilities impacting maritime shipment in the Red Sea, and the ongoing conflict between Russia and Ukraine; changes in demand for our systems; changes made by customers to orders for our systems and/or installation schedules; product introductions and the market penetration period of new products; rapid shifts in industry capacity; the size, timing and shipment of substantial orders; timing of evaluation and qualification of our products by new customers; lack of visibility/low levels of backlog from the preceding quarter; product mixes; pricing of our products; timing of new product, upgrades or enhancements; level of operating expenses such as R&D expenses, agent commissions; fluctuations in interest rates; an outbreak of a contagious disease, which may cause us or our suppliers and/or customers to temporarily suspend our operations in the affected city or country; and our profitability may be seriously harmed by currency fluctuations because most of our revenues are generated in U.S. Dollars, but a significant portion of our expenses is incurred in currencies other than U.S. Dollars (mainly New Israeli Shekels). In light of these factors and the cyclical nature of the markets we target, we expect to continue to experience significant fluctuations in our quarterly operating results. 14 A longer sales process for new products may increase our costs and delay time to market of our products, both of which may negatively impact our revenues, results of operations, cash flow and may result in inventory write-offs. Our sales process to new and existing customers usually involves: demonstrations and testing against industry benchmarks in our sales centers; sales and technical presentations and presentations regarding our products’ competitive advantages; and installation of the systems at the customer’s site for side-by-side competitive evaluations for a period of approximately six months. More evaluation time is devoted during the initial market penetration period for new products such as new products under our Eagle product line, and for new customers in new markets, since these circumstances usually require qualification of the systems by the customers and engineering efforts to fix errors, customize tasks and add new features. This evaluation time may be further extended in sales involving multiple new products. Considering the above factors, the length of time until we recognize revenue can vary and affect our revenues, and results of operations. The long sales process may cause an increase in inventory levels and a risk for inventory write downs and write-offs; for more details regarding recent inventory write downs and write-offs see