QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Exchange Rate Risk. A portion of our revenue and expenses are denominated in foreign currencies. As a result, numerous balances are denominated or linked to these currencies. Foreign currency related fluctuations resulted in $0.6 million net losses in 2023, $1.0 million net losses in 2024 and $2.0 million net losses in 2025. These losses are included in financial income, net, as presented in our statements of income (loss). As of December 31, 2025, balance sheet financial items in U.S. dollars, our functional currency, and those currencies other than the U.S. dollars were as follows: U.S. dollars NIS Canadian dollars Other Currencies Total In thousands of U.S. dollars Current assets 396,578 40,179 45,096 37,928 519,781 Long-term assets 1,297 7,869 476 244 9,886 Current liabilities (116,586 ) (12,207 ) (33,839 ) (24,744 ) (187,375 ) Long-term liabilities (28,063 ) (20,965 ) (142 ) - (49,171 ) Total 253,226 14,876 11,591 13,428 293,121 In addition, in territories where our prices are based on local currencies, fluctuations in the dollar exchange rate could affect our gross profit margin. We may compensate for such fluctuations by changing product prices accordingly. We also hold a small part of our financial investments in other currencies, mainly NIS and Euro. The dollar value of those investments may decline. A revaluation of 1% of the foreign currencies (i.e. other than U.S. dollar) would not have a material effect on our income before taxes possibly reducing it by $0.5 million. A significant portion of our costs, including salaries and office expenses are incurred in NIS. Inflation in Israel may have the effect of increasing the U.S. dollar cost of our operations in Israel. If the U.S. dollar declines in value in relation to the New Israeli Shekel, it will become more expensive for us to fund our operations in Israel. A revaluation of 1% of the New Israeli Shekel will affect our income before tax by approximately $0.4 million. The exchange rate of the U.S. dollar to the New Israeli Shekel, based on exchange rates published by the Bank of Israel, was as follows: Year Ended December 31, 2023 2024 2025 Average rate for period 3.688 3.701 3.452 Rate at year-end 3.627 3.647 3.190