Interim report
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Qualitau Ltd. Quarterly Report For the period ended June 30, 2026 Table of Contents Page A - N Board of Directors Report on the State of the Company's Affairs 1 - 16 Condensed Consolidated Financial Statements A - C Report on the effectiveness of internal control over financial reporting and disclosure as of June 30, 2026 Board of Directors Report on the State of the Company's Affairs as of June 30, 2026 Presented herewith is the Board of Directors Report of Qualitau Ltd. (hereinafter: the "Company") for the first half of 2026, which ended on June 30, 2026. This report is presented under the assumption that the reader also possesses the Company's Periodic report for 2025 (hereinafter: the "Periodic report"), as published on March 27, 2026 (Reference Number: 2026-01-028452). Part A – Board of Directors' Explanations on the Corporation's Business Position 1. Concise description of material changes and innovations in the Company's business during the first half of 2026 In the first half of 2026, the Company's revenues totaled 33,976 thousand dollars, compared to 28,104 thousand dollars in the corresponding period last year. Below is a summary of the backlog as of June 30, 2026, and June 30, 2025, and as of the publication dates of the periodic financial reports for the first half of 2026 and 2025, in thousands of dollars: 2026 2025 As of June 30 47,530 49,293 As of the publication date of the financial statements 54,019 60,940 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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It should also be noted that during the first quarter of 2026, the Company changed the method of accounting recognition for expenses related to annual performance grants paid to employees and officers, including employees of the US subsidiary Qualitau Inc., so that instead of performing a concentrated annual provision in the last quarter of the year, the Company now performs a relative provision on a quarterly basis starting from the first quarter, based on the expected annual expense. Accordingly, the provision recorded in the second quarter and the first half of 2026 totaled approximately 867 and 1,598 thousand US dollars, respectively. For further details and its impact during the report period, see Section 4 in this part below – Results of operations. 2. Investments in the Corporation's Capital On March 5, 2026, the Company allocated, by way of a material private placement, 368,852 ordinary shares of the Company, as well as 184,426 non-marketable warrants exercisable into one ordinary share of the Company each, for a total consideration of approximately 225 million NIS for the allocated shares (whereas the warrants were granted for no consideration), to institutional entities and classified investors (listed in the First Schedule of the Securities Law). For details regarding the offer, see the immediate report regarding a material private placement dated February 26, 2026 (Reference: 2026-01-018219) and an amended report dated March 10, 2026 (Reference: 2026-01- 021005). On August 26, 2026, the Company's Board of Directors approved the extension of the exercise period for the said warrants until April 30, 2027. For details regarding the extension of the warrant exercise period, see the immediate report dated August 27, 2026 (Reference 2026-01-080594). - A - 3. Fixed Assets and Facilities The Company does not own real estate, and its offices and plant in the USA are located in a leased property in Santa Clara, California. During the report period, the Company expanded its offices and plant in the USA, and as of April 1, 2026, it leases additional space adjacent to the current area, with the aim of expanding its operations/manufacturing and research and development activities. The monthly rent for the additional property was set at approximately 36 thousand dollars (plus services and management fees), for a lease period of 3.75 years, with the Company granted an option to extend the period by an additional 3 years. 4. Discussion of Risk Factors: During the report period, no material changes occurred in the market risks to which the Company is exposed (for further details, see the Board of Directors Report and Chapter A – Description of the Corporation's Business – in the Periodic report), except as specified below: A.In recent years, the US government has been working to expand export restrictions and supervision in the field of advanced technologies, and specifically in the field of chips and artificial intelligence, alongside updating and expanding tariffs on products and raw materials from various countries, including China. With the entry of the current US administration at the beginning of 2025, the US government simultaneously began implementing economic measures as part of its policy to change the US trade balance, including the imposition of global customs tariffs and the promotion of additional legislative initiatives in the trade and customs field. As a result of these actions, during the report period, the trend of volatility in raw material prices used by the Company continued, alongside the update of US customs tariffs which currently stand at a rate of 10%-12%, where in some cases these changes led to an update in the sales prices of the Company's products which offset part of their impact. As of the date of the report, the continuation of these trends, their scope, and their possible impact on the Company's activity are uncertain, and therefore the Company cannot assess that they will not have an impact on its gross profitability rate during 2026. Additionally, the continuation of the military conflict with Iran (as detailed in section C below) and its possible consequences on international supply chains, shipping costs, and availability of raw materials, may have an additional impact on the Company's raw material costs. B. This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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The ongoing economic conflict between the USA and China, as well as the tension between China and Taiwan, continue to be identified by the Company's management as central potential risk factors, constituting a threat to the entire semiconductor industry. All orders that the Company received from companies registered in China for supply in 2026 and 2027 were received from companies in China which, as of this date, are not included in the list of companies restricted for shipment and trade published by the US government; therefore, to the best of the Company's assessment, all orders from the Company's customers in China which the Company reported will be supplied as planned. However, should there be an escalation in the aforementioned conflicts, it could materially affect the Company's activity in these markets. C.During the reporting period, Operation "Lion's Roar" ended, within which the US government and the State of Israel managed an integrated attack against the regime in Iran. However, the fighting continues as a regional military conflict led by the USA alone, at varying levels of intensity, with the fighting affecting additional countries in the Persian Gulf region. As a result, volatility in oil prices continues, which gradually affects international shipping costs and in some cases even the availability of certain goods, which could lead to further price increases in the global supply chain. The Company does not anticipate, as of the report date, that the state of fighting in its current format will have a material impact on its operations, beyond the expected costs in shipping and additional lateral effects on the global market. However, the Company is unable to assess the possible consequences of the continuation or expansion of the fighting, including possible effects on international supply chains, shipping costs, availability of raw materials, and the Company's raw material costs. - B - Summary Changes in US trade policy and the continuation of the military conflict with Iran led to an increase in raw material costs and an increase in shipping costs, partly due to the rise in oil prices, as well as the update of protective customs tariffs in the USA. In some cases, the Company acted to update sales prices, which partially offset the impact of the price increases. As of the report date, the Company assesses that these will continue to create pressure on the value chain for price adjustments; however, the scope and total impact of these risk factors on the Company's profitability are uncertain, and therefore it cannot be assessed that they will not have an impact on the gross profitability rate in 2026. Furthermore, the continuation of the economic conflict between China and the USA, as well as the continued tension between China and Taiwan, constitute material risk factors for the Company's business operations, as well as for the global semiconductor industry as a whole, but these are not under the Company's control, and the Company has no possibility of performing active operations that could reduce the risk. The aforementioned information regarding the tariffs and customs policy of the US administration and the trade crisis between the USA and China and its resulting consequences on the Company's activity is forward-looking information and is protected under Section 32A of the Securities Law, 5728-1968, and is based on what is known to the Company as of this date and on the assessments of the Company's management. The Company's assessments as stated may not materialize or may materialize differently from the way the Company anticipates they will materialize, including that disruptions resulting from the consequences of the trade war between the USA and China will materially adversely affect the Company's operations and results, inter alia due to factors that are unknown to the Company as of the date of this report and/or are not under its control. This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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- C - 8/27/2026 | 7:57:04 AM | v1.2.5 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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5. Financial Position Below is an analysis of Qualitau's financial position items as of June 30, 2026, compared to December 31, 2025: Item June 30, 2026 December 31, 2025 Change Growth (Decrease) Company Explanations USD thousands % Current assets152,155 71,543 113% The increase stems mainly from an increase in cash and cash equivalents following funds received from a private placement in the amount of 72,488 thousand USD and an increase in inventory in the amount of 166 thousand USD, which was offset by a decrease in the customers balance in the amount of approximately 4,461 thousand USD and a decrease in debtors and debit balances in the amount of approximately 1,836 thousand USD. Long-term investments and debtors 140 99 The increase is a result of a lease agreement for additional space in the amount of 41 thousand USD. Fixed assets, net 1,779 1,187 50% The increase in fixed assets stems mainly from a transfer of inventory to fixed assets in the amount of 586 thousand USD. Right-of-use assets 3,257 2,723 20% The increase is a result of a lease agreement for additional space in the amount of 944 thousand USD, offset by depreciation of right-of-use assets in the amount of 410 thousand USD. Deferred tax assets 2,186 1,627 34% The increase in the tax asset stems from deferred tax due to timing differences in benefits for employees and officers. Current liabilities 10,317 8,903 16% The increase stems from an increase in suppliers and service providers in the amount of 1,543 thousand USD, offset by a decrease in payables and credit balances in the amount of 374 thousand NIS. Non-current liabilities 2,841 2,461 15% The increase stems from an increase in the balance of lease liabilities as a result of the additional space. Equity 146,359 65,815 122% The increase stems from the increase in equity as a result of the private placement in the amount of 72,488, from company profits in the first half of 2026, in the amount of 13,688 thousand USD, which were offset by a dividend payment to the company's shareholders in the amount of 3,944 thousand USD and from the cost of share-based payment in the amount of 2,978 thousand USD. - D - 6. Results of Operations Consolidated results data This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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For the six-month period ended June 30 For the three-month period ended June 30 For the year ended December 31 2026 2025 2026 2025 2025 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) USD thousands USD thousands USD thousands USD thousands USD thousands Revenues from sale of systems and services 33,976 28,104 17,946 14,136 61,258 Cost of sales and services 10,334 8,167 5,588 4,050 17,622 Gross profit 23,642 19,937 12,358 10,086 43,636 Research and development costs, net 3,426 2,152 1,899 1,011 5,009 Selling and marketing expenses 2,486 1,958 1,170 877 4,524 General and administrative expenses 5,894 2,728 2,722 1,456 9,760 Other expenses -- -- -- -- -- Profit (loss) from ordinary operations 11,836 13,099 6,567 6,742 24,343 Financing income, net 3,765 750 5,356 514 1,127 Profit (loss) after financing 15,601 13,849 11,923 7,256 25,470 Taxes on income 1,913 1,761 1,162 819 3,896 Net profit (loss) for the period 13,688 12,088 10,761 6,437 21,574 Other comprehensive profit (loss) -- -- -- -- -- Total comprehensive profit (loss) 13,688 12,088 10,761 6,437 21,574 Attributable to: Equity holders of the company 13,688 12,088 10,761 6,437 21,574 Net profit (loss) per share in USD: Basic 2.859 2.738 2.191 1.442 4.809 Diluted 2.780 2.624 2.135 1.398 4.676 - E - 6. Results of Operations (continued) Below is an analysis of Qualitau's results of operations for the first half of 2026 compared to the results of operations in the first half of 2025: This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Item For the six-month period ended June 30 Company Explanations 2026 2025 USD thousands Revenues from sale of systems and services 33,976 28,104 The change in total sales relative to the same period last year stems from an increase in revenues from growth in demand in various sectors. Cost of sales and services (10,334) (8,167) In the first six months of 2026, obsolete inventory in the amount of 223 thousand USD was written off (compared to 202 thousand USD in the same period last year). The increase in expenses stems from an increase in sales turnover and from recording a bonus provision and share-based payment. Gross profit 23,642 19,937 The gross profit rate in the first six months of 2026 and 2025 represents approximately 70%. Research and development costs, net (3,426) (2,152) The increase in R&D expenses compared to the same period last year stems mainly from recording a bonus provision and share- based payment. Selling and marketing expenses (2,486) (1,958) The increase in selling and marketing expenses compared to the same period last year stems mainly from an increase in sales turnover and from recording a bonus provision and share-based payment. General and administrative expenses (5,894) (2,728) The increase in general and administrative expenses compared to the same period last year stems mainly from expenses for share- based payment and from recording a bonus provision. Operating profit 11,836 13,099 The decrease in operating profit stems from share-based payment in the amount of 2,978 thousand USD and from a quarterly provision for bonuses in the amount of 1,598 thousand USD (see Note 2 to the financial statements), which were offset by an increase in profit as a result of an increase in activity. Financing income, net 3,765 750 See section 6.1 - 1 - 6. Results of Operations (continued) Analysis of Qualitau's results of operations for the first half of 2026 compared to the results of operations in the first half of 2025 (continued): Item For the six-month period ended June 30Company Explanations 2026 2025 USD thousands Taxes on income (tax benefit) (1,913) (1,761) The increase in taxes on income stems from the increase in profit before tax offset by the increase in the tax asset. Net profit 13,688 12,088 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Item For the six-month period ended June 30Company Explanations 2026 2025 USD thousands Basic profit per share 2.859 2.738 The increase in net profit stems from an increase in the scope of activity, in financing income from exchange rate differences, offset by share-based payment and provision for bonuses. Diluted profit per share 2.780 2.624 6.1 Financing income, net Item For the six-month period ended June 30Company Explanations 2026 2025 USD thousands Interest income 1,573 625 The increase in interest income stems from the increase in cash balances as a result of the private placement and from an increase in interest rates on deposits. Exchange rate differences and erosion of monetary items 2,361 292 The increase in exchange rate differences on shekel cash balances, in light of the decrease in the dollar rate from the date of the private placement until the day the funds were deposited into a dollar deposit. Regarding short-term credit (56) (41) Interest expenses regarding lease liabilities (113) (126) Total financing income, net 3,765 750 - G - 8/27/2026 | 7:57:05 AM | v1.2.5 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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6. Results of Operations (Continued) The following is an analysis of Qualitau's results of operations for the second quarter of 2026 compared to the results of operations in the second quarter of 2025: For the three- month period ended June 30 2026 2025 Item USD thousands Company's Explanations Revenues from sale of systems and services 17,946 14,136The change in total sales relative to the corresponding period last year stems from an increase in revenues due to growing demand in various sectors. Cost of sales and services (5,588) (4,050) In the second quarter of 2026, dead inventory in the amount of $119 thousand was written down (compared to $141 thousand in the corresponding period last year). The growth in the volume of expenses stems from an increase in sales turnover and the recording of a provision for bonus and share-based payment. Gross profit 12,358 10,086The gross profit margin in the second quarter of 2026 and 2025 constitutes approximately 69% and 71%, respectively. Research and development costs, net (1,899) (1,011) The increase in research and development expenses compared to the corresponding period last year stems primarily from the recording of a provision for bonus and share-based payment. Selling and marketing expenses (1,170) (877) The increase in selling and marketing expenses compared to the corresponding period last year stems mainly from an increase in sales turnover and the recording of a provision for bonus and share-based payment. General and administrative expenses (2,722) (1,456) The increase in general and administrative expenses compared to the corresponding period last year stems mainly from expenses regarding share-based payment and the recording of a provision for bonus. Operating profit 6,567 6,742 The decrease in operating profit stems from share-based payment and the quarterly provision for bonuses in the amount of $867 thousand (see Note 2 to the financial statements). Financing income, net 5,356 514 See section 6.1. - 8 - 6. Results of Operations (Continued) Analysis of Qualitau's results of operations for the second quarter of 2026 compared to the results of operations in the second quarter of 2025 (Continued): This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Item For the three- month period ended June 30 Company's Explanations 2026 2025 USD thousands Taxes on income (tax benefit) (1,162) (819) The increase in taxes on income stems from the increase in profit before tax offset by the increase in the tax asset. Net profit 10,761 6,437 The increase in net profit stems from an increase in the volume of activity, financing income from exchange rate differences offset by share-based payment and provision for bonuses. Basic earnings per share 2.191 1.442 Diluted earnings per share 2.135 1.398 6.1 Financing income, net Item For the three- month period ended June 30 Company's Explanations 2026 2025 USD thousands Interest income 1,045 305 The increase in interest income stems from the rise in cash balances as a result of the private placement and from an increase in the interest rates on the deposits. Exchange rate differences and erosion of monetary items 4,411 287 The increase in exchange rate differences on cash balances in NIS, in light of the decrease in the dollar rate from the date of the private placement until the day on which the funds were deposited into a dollar deposit. Regarding short-term credit (40) (16) Interest expenses on lease liabilities (60) (62) Total financing income, net 5,356 514 - 9 - 7. Liquidity and Capital Resources The following is an analysis of Qualitau's statement of cash flows for the first half of 2026: This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Activity Type For the six-month period ended June 30 Company's Explanations 2026 2025 USD thousands Operating activity 23,261 1,828 In the first six months of 2026: The change stems from the company's profits and a decrease in customer and debtor balances and debit balances, and from an increase in suppliers and share-based payment, which were offset by a growth in inventory, deferred tax balances and payables and credit balances. Investing activity 1,035 (241) In the first six months of 2026: The change stems as a result of a decrease in restricted cash as a result of the approval of a new self-purchase plan and from the purchase of fixed assets. Financing activity 63,559 (4,238) In the first six months of 2026: Stems from a private placement of a share and warrants package offset by dividend payment, repayment of lease liabilities and from self-purchase of shares. As of the publication date of the financial statements, the financing of the company's activities is carried out by its own independent means. The company receives credit from its suppliers in Israel for periods of 30 to 90 days and from its suppliers in the USA credit of 30 days. The company grants its customers an average credit of 60 days, starting from the date of shipment of a product to the customer. - 1 - 8. Economic Environment and its Impact on the Company Changes in economic policy in the USA and the continuation of the military conflict with Iran led to an increase in the costs of raw materials and shipping (among other things due to the increase in oil prices), as well as to an update of customs rates in the USA. The company updated the sale prices in some cases, which partially offset the impact of the price increases. As of the date of the report, the company estimates that these factors will continue to create pressure on the value chain and require price adjustments. However, the uncertainty regarding the continued materialization of the economic policy and the military situation, and their consequences on the global supply chain, could lead to a material impact on the company's business results later in the year, although at this stage it is not possible to estimate its scope. For further detail regarding the expected impact, see section 4 of part A above. Interest rate: In June 2026, the bank of Israel decided to lower the interest rate to 3.5%, while the European Central Bank decided to raise the interest rate to a rate of 2.25%. Furthermore, in July 2026, the Federal Bank in the USA decided to leave the interest rate at 3.75%. For further details regarding the impacts of the interest rate, see section 2.7 in chapter 1 of the Periodic report for the year 2025. As of the date of approval of the report, the company does not expect a material impact from changes in the interest rate on the financial position of the company, its results of operations and its cash flows. This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Exchange rate: During the first half of 2026, a devaluation occurred in the average exchange rates of the NIS and the Euro against the Dollar, compared to the average rates in the first half of 2025. This devaluation led to an increase in financing income which stems mainly from exchange rate differences as a result of the decrease in the dollar rate from the date of the private placement until the day on which the funds were deposited in a dollar deposit (see explanation above in chapter 5 in the financing expenses section). It should be noted that what is stated in this section regarding the impacts of economic policy in the USA, the changes in the interest rate and/or the exchange rate on the company, after the date of the report, constitutes forward-looking information as defined in the Securities Law, 1968, which is based, among other things, on information existing in the company as of the date of this report. Therefore, there is no certainty that the above will indeed materialize, or that it will materialize in a similar manner to that described above, and the actual results may be materially different from the results estimated or implied by this information. - 11 - 8/27/2026 | 7:57:07 AM | v1.2.5 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Part B – Corporate Governance Aspects and Updates regarding the Company's Activity 9.Disclosure regarding the Internal Auditor in the Corporation The Company's internal auditor conducts an internal audit in the corporation in accordance with the Company's ongoing and multi-annual audit plan based on the Company's risk assessment. No material changes occurred compared to the Board of Directors report on the state of the corporation's affairs for the year 2025. Part C – Disclosure Instructions in connection with the Corporation's Financial Reporting 10.Material events in the Company's activity during the report period and after the balance sheet date For details regarding material events in the report period, until the publication date of the Periodic report, see Board of Directors report second part – material events after the balance sheet date – in the Periodic report. a. In the Board of Directors meeting held on March 26, 2026, the Company's Board of Directors declared a dividend distribution to the Company's shareholders, in the amount of 12,516,000 NIS (approx. 4,000 thousand US dollars according to the representative rate on the decision date). The dividend was paid during April 2026 (actually a total of 3,944 thousand dollars was distributed). b. In addition to the dividend declaration above, on March 26, 2026, the Company's Board of Directors approved a new self-purchase plan for the Company's shares in an amount of up to 6,258,000 NIS (2,000 thousand US dollars according to the representative rate on the decision date). Subsequently, on March 29, 2026, the Company's Board of Directors approved an update to the purchase plan, increasing its scope to a total of 14,170,500 NIS (4,500 thousand US dollars according to the representative rate on the decision date). For further details regarding the purchase plan, see the immediate report dated March 27, 2025 (Reference 2026-01-028484) and a supplementary immediate report regarding the increase in the scope of the purchase plan dated March 29, 2026 (Reference 2026-01-028682). c. On May 28, 2026, the Company's Board of Directors approved a new self-purchase plan for the Company's shares in an amount of up to 626,000 NIS (approx. 221 thousand US dollars according to the representative rate on the decision date). For further details regarding the purchase plan, see the immediate report dated May 29, 2026 (Reference 2026-01-050968). As of the report's publication date, out of the total issued and paid-up share capital, the Company holds 45,140 shares. A quantity of 23,320 shares were purchased during the report period within the framework of the aforementioned purchase plans. d. In the Board of Directors meeting held on August 26, 2026, the Company's Board of Directors declared a dividend distribution to the Company's shareholders, in the amount of 3,000 thousand US dollars. The record date will be September 4, 2026, and the payment date will be September 15, 2026. e. In addition to the dividend declaration above, on August 26, 2026, the Company's Board of Directors approved a new self-purchase plan for the Company's shares in an amount of up to 35,664,000 NIS (12,000 thousand US dollars according to the representative rate on the decision date). For further details regarding the purchase plan, see the immediate report dated August 27, 2026 (Reference 2026-01-080608). f. During April 2026, the Company received an order from a semiconductor customer in the USA, in a total amount of 4.2 million US dollars. The order is expected to be supplied during the fourth quarter of 2026 and the first quarter of 2027. For details regarding the order, see report dated 3.4.2026 (Reference 2026- 031590). This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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- 12 - 10. Material events in the Company's activity during the report period and after the balance sheet date (Continued) g. During April 2026, the Company received an order from a semiconductor customer in Asia, in a total amount of 2.28 million US dollars. The order is expected to be supplied during the fourth quarter of 2026 and the first quarter of 2027. For details regarding the order, see report dated 20.4.2026 (Reference 2026-01- 036366). h. During May 2026, the Company received an order from a semiconductor customer in Asia, in a total amount of 3.9 million US dollars. The order is expected to be supplied during the first quarter of 2027. For details regarding the order, see report dated 13.5.2026 (Reference 2026-01-044110). i. During August 2026, the Company received an order from a semiconductor customer in Asia, in a total amount of 1.3 million US dollars. The order is expected to be supplied during the second quarter of 2027. For details regarding the order, see report dated 12.8.2026 (Reference 2026-01-075462). j. During August 2026, the Company received an order from a semiconductor customer in Europe, in a total amount of 1.3 million US dollars. The order is expected to be supplied during the second quarter of 2027. For details regarding the order, see report dated 18.8.2026 (Reference 2026-01-077095). k. On May 11, 2026, the Company's Board of Directors approved an allocation of a total of 55,500 non-tradable warrants to a number of employees of the Company and the subsidiary, Qualitau Inc., by way of a private placement that is not material and not irregular, in accordance with the provisions of the Company's warrants plan which was approved by a special general meeting of the shareholders on October 10, 2019 (for details of the warrants plan see the Company's immediate report dated 3.9.2019 Reference 2019-01- 292302), and subject to receiving the Stock Exchange's approval for the listing of the shares that will result from the exercise of warrants. For details regarding the execution of the grant, see immediate report regarding a private placement that is not material and not irregular dated May 13, 2026 (Reference 2026- 01-044105). l. Starting from April 2026, the Company is leasing additional space adjacent to the current area, with the aim of expanding its operations/manufacturing and research and development activities. The monthly rent for the additional property stands at a total of 36 thousand dollars (plus services and management fees), while the lease period was set for 3.75 years with an option to extend for an additional 3 years. m. In the Annual and Special General Meeting of the Company's shareholders, which took place on July 14, 2026, the following decisions were reached, among others: (1) to approve the reappointment of Mr. Sharon Dror for a third term as an External Director in the Company, and to approve the compensation to which Mr. Dror will be entitled; (2) to approve an equity grant of 891 non-tradable warrants, exercisable into 891 ordinary shares of 1 NIS par value each, in accordance with the compensation policy, according to which they will be allocated to each of the external directors - Mr. Sharon Dror, who is being reappointed, and Ms. Dvora Porat, the serving External Director, which will be allocated by way of a material private placement; and (3) to approve a discretionary grant to the Company's CEO, Mr. Yaakov Hershman, in a total amount of 120 thousand US dollars gross, in accordance with the compensation policy, for his work in the year 2025. This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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For details regarding the decisions of the shareholders' meeting, see immediate report regarding the summoning of the meeting dated June 8, 2026 and the corrective report dated 30.6.2026 (References 2026- 01-054488, and 2026-01-061685 respectively), as well as a report regarding the results of the meeting dated July 14, 2026 (Reference 2026-01-066965). - 13 - 10. Material events in the Company's activity during the report period and after the balance sheet date (Continued) n.On August 26, 2026, the Company's Board of Directors approved the extension of the exercise period of 184,426 non-tradable warrants, each exercisable into one ordinary share of the Company, which were allocated to institutional entities and classified investors, by way of a material private placement in March of this year, until April 30, 2027. For further details regarding expected impact see Section 2 of Part A above. 11. Critical accounting estimates There is no change in the accounting estimates compared to what was stated in the Company's Periodic report for the year 2025. August 26, 2026 Yaakov Hershman CEO Eran Rom Chairman of the Board - 14 - This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Qualitau Ltd Condensed Consolidated Financial Statements As of June 30, 2026 (Unaudited) 8/27/2026 | 7:57:08 AM | v1.2.5 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Qualitau Ltd. Condensed Consolidated Financial Statements As of June 30, 2026 (Unaudited) Table of Contents Page 1 Accountant's Review Report Condensed Consolidated Interim Financial Statements (Unaudited): 2-3 Condensed Consolidated Statements of Financial Position 4 Condensed Consolidated Statements of Comprehensive Income 5 Condensed Consolidated Statements of Changes in Equity 6-7 Condensed Consolidated Statements of Cash Flows 8-16 Notes to the Condensed Consolidated Financial Statements ANDERSON, KEDAR & CO. Certified Public Accountants (ISR). Anderson, Kedar & Co. Accountants Review Report of the Independent Auditor to the Shareholders of Qualitau Ltd. Introduction This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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We have reviewed the accompanying financial information of Qualitau Ltd. and its subsidiaries (hereinafter: "the Company"), which includes the condensed consolidated statement of financial position as of June 30, 2026, and the condensed consolidated statements of comprehensive income, changes in equity, and cash flows for the six and three-month periods then ended. The Board of Directors and management are responsible for the preparation and presentation of this interim financial information in accordance with International Accounting Standard IAS 34 "Interim Financial Reporting", and they are also responsible for the preparation of this interim financial information according to Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970. Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of Review We conducted our review in accordance with Review Standard (Israel) 2410 of the Institute of Certified Public Accountants in Israel – "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the aforementioned financial information is not prepared, in all material respects, in accordance with International Accounting Standard IAS 34. In addition to what is stated in the previous paragraph, based on our review, nothing has come to our attention that causes us to believe that the aforementioned financial information does not comply, in all material respects, with the disclosure requirements under Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970. Sincerely yours, Anderson, Kedar & Co. Accountants Netanya, August 26, 2026 - 1 - 7 Hayedidut, Netanya 42728, Tel: 09-8658771, Fax: 09-8658772 Mailing address: P.O.B. 98 Kfar Yedidya 42940 Qualitau Ltd. Condensed Consolidated Statements of Financial Position This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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As of June 30 2026 (Unaudited) USD in thousands As of June 30 2025 (Unaudited) USD in thousands As of December 31 2025 (Audited) USD in thousands Current Assets Cash and cash equivalents 122,723 32,657 34,868 Restricted cash 2 1,053 1,114 Trade receivables 12,308 7,010 16,769 Other receivables and prepaid expenses 241 1,318 2,077 Inventory 16,881 15,273 16,715 152,155 57,311 71,543 Non-current Assets Long-term receivables 140 99 99 Property, plant and equipment, net 1,779 1,280 1,187 Right-of-use assets 3,257 3,069 2,723 Deferred tax assets 2,186 3,247 1,627 7,362 7,695 5,636 159,517 65,006 77,179 The accompanying notes to the condensed consolidated financial statements are an integral part thereof. - 2 - Qualitau Ltd. Condensed Consolidated Statements of Financial Position This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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As of June 30 2026 (Unaudited) USD in thousands As of June 30 2025 (Unaudited) USD in thousands As of December 31 2025 (Audited) USD in thousands Current Liabilities Current maturities – lease liabilities 900 633 655 Trade payables 1,839 1,119 296 Other payables and accrued expenses 7,578 4,407 7,952 10,317 6,159 8,903 Non-current Liabilities Lease liabilities 2,841 2,793 2,461 Equity 146,359 56,054 65,815 159,517 65,006 77,179 August 26, 2026 Date of approval of financial statements Yaacov Hershman CEO Eran Rom Chairman of the Board of Directors Nava Ben Yehuda CFO The accompanying notes to the condensed consolidated financial statements are an integral part thereof. - 3 - 8/27/2026 | 7:57:09 AM | v1.2.5 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Qualitau Ltd. Condensed Consolidated Interim Statements of Comprehensive Income For the six-month period ended June 30 For the three-month period ended June 30 For the year ended December 31 2026 2025 2026 2025 2025 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands Revenues from sale of systems and services 33,976 28,104 17,946 14,136 61,258 Cost of sales and services 10,334 8,167 5,588 4,050 17,622 Gross profit 23,642 19,937 12,358 10,086 43,636 Research and development costs, net 3,426 2,152 1,899 1,011 5,009 Selling and marketing expenses 2,486 1,958 1,170 877 4,524 General and administrative expenses 5,894 2,728 2,722 1,456 9,760 Other expenses -- -- -- -- -- Operating profit (loss) 11,836 13,099 6,567 6,742 24,343 Finance income, net 3,765 750 5,356 514 1,127 Profit (loss) after financing 15,601 13,849 11,923 7,256 25,470 Income taxes 1,913 1,761 1,162 819 3,896 Net profit (loss) for the period 13,688 12,088 10,761 6,437 21,574 Other comprehensive income (loss) -- -- -- -- -- Total comprehensive income (loss) 13,688 12,088 10,761 6,437 21,574 Attributable to: Owners of the Company 13,688 12,088 10,761 6,437 21,574 Net earnings (loss) per share in USD: Basic 2.859 2.738 2.191 1.442 4.809 Diluted 2.780 2.624 2.135 1.398 4.676 The accompanying notes are an integral part of these condensed consolidated interim financial statements. - 4 - This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Qualitau Ltd. Condensed Consolidated Interim Statements of Changes in Equity Share capital USD in thousands Share premium USD in thousands Treasury shares USD in thousands Capital reserve for transactions with interested parties USD in thousands Receipts on account of warrants USD in thousands Other capital reserves USD in thousands Retained earnings USD in thousands Total USD in thousands Balance as of January 1, 2026 1,393 8,401 (680) 22 -- 18 56,661 65,815 Changes during the six-month period ended June 30, 2026 (Unaudited): Net profit for the period -- -- -- -- -- -- 13,688 13,688 Share-based payment cost -- -- -- -- -- -- 2,978 2,978 Private placement (net of issuance expenses) 119 68,197 -- -- 4,172 -- -- 72,488 Exercise of warrants into shares 1 6 -- -- -- -- (3) 4 Purchase of treasury shares -- -- (4,670) -- -- -- -- (4,670) Dividend distribution -- -- -- -- -- -- (3,944) (3,944) Balance as of June 30, 2026 1,513 76,604 (5,350) 22 4,172 18 69,380 146,359 Balance as of January 1, 2025 1,336 6,984 (166) 22 -- 18 39,719 47,913 Changes during the six-month period ended June 30, 2025 (Unaudited): Net profit for the period -- -- -- -- -- -- 12,088 12,088 Share-based payment cost -- -- -- -- -- -- 2 2 Purchase of treasury shares -- -- (514) -- -- -- -- (514) Exercise of warrants into shares 55 1,395 -- -- -- -- (885) 565 Dividend distribution -- -- -- -- -- -- (4,000) (4,000) This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Share capital USD in thousands Share premium USD in thousands Treasury shares USD in thousands Capital reserve for transactions with interested parties USD in thousands Receipts on account of warrants USD in thousands Other capital reserves USD in thousands Retained earnings USD in thousands Total USD in thousands Balance as of June 30, 2025 1,391 8,379 (680) 22 -- 18 46,924 56,054 The accompanying notes are an integral part of these condensed consolidated interim financial statements. - 5 - Qualitau Ltd. Condensed Consolidated Interim Statements of Changes in Equity Share capital Share premium Treasury shares Capital reserve for transactions with interested parties Receipts on account of warrants Other capital reserves Retained earnings Total USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands Balance as of April 1, 2026 1,513 76,597 (975) 22 4,172 18 57,129 138,476 Changes during the three-month period ended June 30, 2026 (Unaudited): Net profit for the period -- -- -- -- -- -- 10,761 10,761 Share-based payment cost -- -- -- -- -- -- 1,482 1,482 Exercise of warrants into shares -- 7 -- -- -- -- (3) 4 Purchase of treasury shares -- -- (4,375) -- -- -- -- (4,375) Dividend adjustments due to purchase of treasury shares -- -- -- -- -- -- 11 11 Balance as of June 30, 2026 1,513 76,604 (5,350) 22 4,172 18 69,380 146,359 Balance as of April 1, 2025 1,337 6,985 (166) 22 -- 18 41,372 49,568 Changes during the three-month period ended June 30, 2025 (Unaudited): Net profit for the period -- -- -- -- -- -- 6,437 6,437 Purchase of treasury shares -- -- (514) -- -- -- -- (514) Exercise of warrants into shares 54 1,394 -- -- -- -- (885) 563 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Share capital Share premium Treasury shares Capital reserve for transactions with interested parties Receipts on account of warrants Other capital reserves Retained earnings Total USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands Balance as of June 30, 2025 1,391 8,379 (680) 22 -- 18 46,924 56,054 Balance as of January 1, 2025 1,336 6,984 (166) 22 -- 18 39,719 47,913 Changes for the 12-month period ended December 31, 2025 (Audited): Net profit for the year -- -- -- -- -- -- 21,574 21,574 Share-based payment cost -- -- -- -- -- -- 2,982 2,982 Exercise of warrants into shares 57 1,417 -- -- -- -- (876) 598 Purchase of treasury shares -- -- (514) -- -- -- -- (514) Dividend distribution -- -- -- -- -- -- (6,738) (6,738) Balance as of December 31, 2025 1,393 8,401 (680) 22 -- 18 56,661 65,815 The accompanying notes are an integral part of these condensed consolidated interim financial statements. - 6 - Qualitau Ltd. Condensed Consolidated Interim Statements of Cash Flows For the six-month period ended June 30 For the three-month period ended June 30 For the year ended December 31 2026 2025 2026 2025 2025 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) Cash flows from operating activities USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands Net profit (loss) for the period 13,688 12,088 10,761 6,437 21,574 Adjustments required to reflect cash flows from operating activities: Adjustments to profit or loss items: Depreciation and amortization of property, plant and equipment and right-of-use assets 638 564 360 283 1,134 Exchange rate differences regarding restricted cash (197) (44) (184) (60) (106) Deferred taxes, net (559) -- (198) -- 1,620 Share-based payment cost 2,978 2 1,482 -- 2,982 Income taxes, net (658) 2,675 69 2,672 3,362 Finance expenses (income), net 85 (617) (336) (300) (1,112) This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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For the six-month period ended June 30 For the three-month period ended June 30 For the year ended December 31 2026 2025 2026 2025 2025 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) Cash flows from operating activities USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands 2,287 2,580 1,193 2,595 7,880 Changes in asset and liability items: Decrease (increase) in trade receivables 4,461 (3,695) 564 (2,560) (13,454) Decrease (increase) in other receivables and debit balances 1,836 (1,039) 714 (989) (1,798) Decrease (increase) in inventory (753) (1,616) (965) (1,019) (3,173) Increase (decrease) in trade payables and service providers 1,543 (421) 612 (886) (1,245) Increase (decrease) in other payables and credit balances (374) (4,011) 1,046 (239) (466) 6,713 (10,782) 1,971 (5,693) (20,136) Cash paid and received during the period for: Interest paid (5) -- (5) -- (14) Interest received 663 617 341 300 1,126 Taxes paid (85) (2,675) (69) (2,672) (3,362) Taxes received -- -- -- -- -- 573 (2,058) 267 (2,372) (2,250) Net cash provided by (used in) operating activities 23,261 1,828 14,192 967 7,068 - 7 - 8/27/2026 | 7:57:10 AM | v1.2.5 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Qualitau Ltd. Condensed Consolidated Statements of Cash Flows For the six-month period ended June 30 For the three-month period ended June 30 For the year ended December 31 2026 2025 2026 2025 2025 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) US Dollars in thousands US Dollars in thousands US Dollars in thousands US Dollars in thousands US Dollars in thousands Cash flows from investing activities Restricted cash, net 1,309 (173) 4,375 (173) (173) Purchase of property, plant and equipment (233) (68) (171) (21) (83) Long-term receivables (41) -- (41) -- -- Net cash used in investing activities 1,035 (241) 4,163 (194) (256) Cash flows from financing activities Proceeds from exercise of share options 4 565 4 563 598 Repayment of lease liabilities (319) (289) (156) (146) (598) Purchase of treasury shares (4,670) (514) (4,375) (514) (514) Private placement 72,488 -- -- -- -- Dividend paid (3,944) (4,000) (3,944) (4,000) (6,738) Net cash used in financing activities 63,559 (4,238) (8,471) (4,097) (7,252) Increase (decrease) in cash and cash equivalents 87,855 (2,651) 9,884 (3,324) (440) Balance of cash and cash equivalents at the beginning of the period 34,868 35,308 112,839 35,981 35,308 Balance of cash and cash equivalents at the end of the period 122,723 32,657 122,723 32,657 34,868 Appendix A - Non-cash activities Transfer of inventory to property, plant and equipment 586 65 431 -- 181 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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For the six-month period ended June 30 For the three-month period ended June 30 For the year ended December 31 2026 2025 2026 2025 2025 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) US Dollars in thousands US Dollars in thousands US Dollars in thousands US Dollars in thousands US Dollars in thousands Transfer from property, plant and equipment to inventory -- -- -- -- -- Recognition of right-of-use assets against liabilities 944 28 944 -- 28 The accompanying notes to the condensed consolidated financial statements are an integral part thereof. - 8 - Qualitau Ltd. Notes to the Condensed Consolidated Financial Statements (Unaudited) Note 1 – Reporting Principles and Accounting Policy The Company is an Israeli resident company incorporated in Israel, and its official address is Science Park Kiryat Weizmann, Golda Meir 3, Ness Ziona 7403648, Israel. The consolidated financial statements of the Company as of June 30, 2026, include those of the Company and its subsidiaries (hereinafter together: "the Group"). The Group operates in Israel and abroad and is engaged in the development, manufacture, and marketing of dedicated testing products for the semiconductor industry. The Company's securities are listed for trading on the Tel Aviv Stock Exchange. Note 2 – Summary of Significant Accounting Policies A. Basis of preparation of the financial statements The condensed consolidated financial statements (hereinafter: "interim financial statements") were prepared in accordance with International Accounting Standard 34 IAS, "Interim Financial Reporting" and do not include all the information required in full annual reports. Furthermore, these reports were prepared in accordance with the disclosure requirements of Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970. This summary of reports should be read in conjunction with the financial statements for the year ended December 31, 2025 (hereinafter: "the Annual Reports"). The condensed consolidated financial statements were approved for publication by the Company's Board of Directors on August 26, 2026. B. Exclusion of separate financial information within the financial statements: The Company did not include separate financial information within the condensed consolidated financial statements as of June 30, 2026 (hereinafter - "the date of the financial statements") in accordance with the provisions of Regulation 9C or 38D of the Securities Regulations (Periodic and Immediate Reports), 1970, because such information is negligible and the additional information that would be provided to the investor in the separate financial report compared to the information included in the consolidated financial statements is negligible for the following reasons: This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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1. As of the date of the financial statements, the Company has no outstanding balance of bonds issued to the public, nor does it have material liabilities to banking corporations and/or other financial institutions. 2. In the Company's assessment, its cash position, financial stability, and profitability as reflected in its consolidated reports more accurately describe its business and financial situation, as the Group operates as a single business unit and there are no significant restrictions under any agreement and/or law on the transfer of funds between Group companies. 3. As of the date of the financial statements, the Company has no material assets except for cash and cash equivalents and holdings in subsidiaries. Furthermore, the Company has no liabilities (except for non-material liabilities in the ordinary course of business) or financial covenants it is required to meet under agreements to which the Company is a party. C. Functional Currency and Presentation Currency The US Dollar is the currency that represents the primary economic environment in which the Company and its subsidiaries operate. Accordingly, the US Dollar constitutes the functional and presentation currency in these financial statements. - 9 - Qualitau Ltd. Notes to the Condensed Consolidated Financial Statements (Unaudited) Note 2 – Basis of preparation of the financial statements (Cont.) D. Use of estimates and judgment The preparation of interim financial statements requires Company management to exercise judgment and requires the use of accounting estimates and assumptions that affect the application of the Company's accounting policy and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgments exercised by management in applying the Company's accounting policies and the uncertainty involved in the key sources of estimates were identical to those in the Company's annual financial statements for the year ended December 31, 2025. E. Provision for bonuses - In the first quarter of 2026, the Company's Board of Directors approved a bonus procedure for employees. The procedure establishes a formula for recording the bonus, in accordance with the Company's past performance patterns, and its approval prior to the publication of the financial statements. Therefore, starting from the first quarter of 2026, the Company records a quarterly bonus provision for annual performance grants paid to employees and officers, including employees of the US subsidiary Qualitau Inc. Until the end of 2025, a centralized annual provision was recorded in the last quarter of the year. Note 3 – New Financial Reporting Standards and Interpretations Issued The significant accounting policies and calculation methods in the summary of consolidated interim financial statements are consistent with those applied in the 2025 consolidated annual financial statements except as stated below: New International Financial Reporting Standards, amendments to standards, and new interpretations This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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As part of the Company's annual financial statements for 2025, information was provided regarding new International Financial Reporting Standards and amendments to existing International Financial Reporting Standards which are not yet in mandatory effect and which the Company has not chosen to adopt early. As of the date of approval of these financial statements, there are no new standards or amendments to existing standards relevant to the Company that were not mentioned in the Company's 2025 annual financial statements. - 10 - Qualitau Ltd. Notes to the Condensed Consolidated Financial Statements (Unaudited) Note 4 – Significant Events During and After the Reporting Period A.On March 5, 2026, the Company allocated, by way of a material private placement, 368,852 ordinary shares of the Company, as well as 184,426 non-tradable warrants each exercisable into one ordinary share of the Company, for a total consideration of approximately 225 million NIS for the allocated shares (where the warrants were granted without consideration), to institutional entities and classified investors (as listed in the First Appendix to the Securities Law). On August 26, 2026, after the balance sheet date, the Company's Board of Directors approved the extension of the exercise period for the said warrants until April 30, 2027. For further details see Section A, Item 2 of the Board of Directors Report. B.Dividend Distribution - At the Board meeting held on March 26, 2026, the Company's Board of Directors declared a dividend distribution to the Company's shareholders in the amount of 12,516,000 NIS (approximately 4,000 US Dollars in thousands based on the representative rate on the decision date). The dividend was paid during April 2026 (actually, a total of 3,944 thousand dollars was distributed, stemming from exchange rate differences and the purchase of treasury shares which do not entitle the Company to a dividend). In addition to the dividend declaration above, on March 26, 2026, the Company's Board of Directors approved a new self-buyback plan for the Company's shares in an amount of up to 6,258,000 NIS (2,000 US Dollars in thousands based on the representative rate on the decision date). Subsequently, on March 29, 2026, the Board of Directors approved an update to the buyback plan, increasing its scope to a total of 14,170,500 NIS (4,500 US Dollars in thousands based on the representative rate on the decision date). For further details regarding the buyback plan, see the immediate report dated March 27, 2025 (reference 2026- 01-028484) as well as a supplementary immediate report regarding the increase in the buyback plan scope dated March 29, 2026 (reference 2026-01-028682). C.On May 28, 2026, the Company's Board of Directors approved a new self-buyback plan for the Company's shares in an amount of up to 626,000 NIS (approximately 221 US Dollars in thousands based on the representative rate on the decision date). For further details regarding the buyback plan, see the immediate report dated May 29, 2026 (reference 2026-01-050968). As of the date of publication of the report, the Company holds 45,140 shares out of the total issued and paid- up share capital. A quantity of 23,320 shares was purchased during the report period under the said buyback plans. D.At the Board meeting held on August 26, 2026, the Company's Board of Directors declared a dividend distribution to the Company's shareholders in the amount of 3,000 US Dollars in thousands. The record date will be September 4, 2026, and the payment date will be September 15, 2026. This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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E.In addition to the dividend declaration above, on August 26, 2026, the Company's Board of Directors approved a new self-buyback plan for the Company's shares in an amount of up to 35,664,000 NIS (12,000 US Dollars in thousands based on the representative rate on the decision date). For further details regarding the buyback plan, see the immediate report dated August 27, 2026 (reference 2026-01-080608). - 11 - 8/27/2026 | 7:57:11 AM | v1.2.5 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Qualitau Ltd. Notes to the Condensed Consolidated Financial Statements (Unaudited) Note 4 – Material events during and after the reporting period (Continued) f.Disclosure regarding the implications of the campaign against Iran - During the reporting period, the regional conflict with Iran continued, which began as part of Operation "Lion's Roar," and continues as a military conflict by the USA only at varying levels of intensity. The conflict has led to an increase and volatility in oil prices, higher shipping costs, and has affected the availability of goods and raw materials. As of the date of the report, the company's management does not expect that the fighting in its current format will have a material effect on its operations, beyond the aforementioned effect that broadly impacts the global market; however, it cannot estimate the consequences of the continuation or expansion of the fighting on its operations and profitability. For further detail regarding the expected impact, see Part A Section 4 of the Board of Directors Report. g.The ongoing economic conflict between the USA and China - The conflict, which is also affected by changes in the US economic environment and which in certain scenarios could escalate significantly in the foreseeable future, is identified by the company's management as a significant potential risk factor. To the best of management's assessment, any significant worsening of said trade war could materially impact the company's operations in this central market. For further detail regarding the expected impact, see Part A Section 4 of the Board of Directors Report. h.Information regarding the tension between China and Taiwan - The ongoing tension between the two countries constitutes a significant risk factor for the entire global chip industry. For further detail regarding the expected impact, see Part A Section 4 of the Board of Directors Report. i.Changes in the economic environment in the USA - In recent years, the US administration has been working to expand export restrictions and oversight in the field of advanced technologies, particularly in the fields of chips and Artificial Intelligence, alongside updating and expanding tariffs on products and raw materials from various countries, and simultaneously implementing economic measures as part of its policy to change the US trade balance, including updating US tariff rates for certain goods which currently stand at 10%-12%. As of the date of the report, the company estimates that these factors will continue to affect the macro-economic environment in which the company operates, including changes in global inflation trends. The uncertainty regarding the implementation of the tariffs and their implications for the global supply chain could lead to an impact on the company's results, although at this stage the scope cannot be estimated. For further detail regarding the expected impact, see Part A Section 4 of the Board of Directors Report. j.During the first half of 2026, there was a depreciation in the average exchange rates of the Shekel and the Euro against the Dollar compared to the average rates in the first half of 2025. This depreciation resulted in an increase in finance income mainly arising from exchange rate differences due to the decrease in the Dollar rate from the date of the private placement until the day the funds were deposited into a Dollar deposit (see explanation above in Chapter 5 in the finance expense section). k.On May 11, 2026, the company's Board of Directors approved an allocation of a total of 55,500 non-marketable warrants to several employees of the company and the subsidiary, Qualitau Inc., by way of a private offering. The benefit inherent in granting the total equity grants is 6.7 million dollars, which will be recognized over the vesting period of the warrants. For further detail regarding the decision of the company's Board of Directors, see Part C Section 10 k above. - 12 - This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Qualitau Ltd. Notes to the Condensed Consolidated Financial Statements (Unaudited) Note 4 – Material events during and after the reporting period (Continued) l.Starting from April 2026, the company is renting additional space adjacent to the current area, with the aim of expanding its operations/manufacturing and research and development activities. The monthly rent for the additional property stands at 36 thousand dollars (plus services and management fees), with the lease period set for 3.75 years with an option for an extension of an additional 3 years. m.At the Annual and Special General Meeting of the company's shareholders, held on July 14, 2026, the following resolutions, among others, were adopted: (1) To approve the re-appointment of Mr. Sharon Dror for a third term as an external director of the company, and to approve the compensation to which Mr. Dror will be entitled; (2) To approve an equity grant of 891 non-marketable warrants, exercisable into 891 ordinary shares of 1 NIS par value each, in accordance with the compensation policy, whereby they will be allocated to each of the external directors - Mr. Sharon Dror, who is being re-appointed, and Ms. Devorah Porat, the serving external director, which will be allocated by way of a material private offering; and (3) To approve a discretionary bonus to the company's CEO, Mr. Yaakov Hershman, in the amount of 120 thousand USD gross, in accordance with the compensation policy, for his work in the year 2025. For details regarding the resolutions of the shareholders' meeting, see the immediate report regarding the summoning of the meeting dated June 8, 2026 and the amended report dated June 30, 2026 (references 2026-01-054488 and 2026-01-061685 respectively), as well as the report regarding the results of the meeting dated July 14, 2026 (reference 2026-01-066965). - 13 - Qualitau Ltd. Notes to the Condensed Consolidated Financial Statements (Unaudited) Note 5 - Geographical Segments Breakdown by Geographic Destinations For the six months ended June 30, 2026 North America Far East Europe and others Total Reportable Segments Unallocated Expenses Adjustments Total USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands Revenues from sales and services 5,784 25,170 3,022 33,976 -- -- (*)33,976 Material consumption (924) (4,021) (483) (5,428) -- -- (5,428) This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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North America Far East Europe and others Total Reportable Segments Unallocated Expenses Adjustments Total USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands Installation (36) (158) (19) (213) -- -- (213) Selling expenses (2) (7) (--) (9) -- -- (9) Sales commissions (67) (925) (35) (1,027) -- -- (1,027) Exhibitions (80) (--) (--) (80) -- -- (80) Cost of sales (87) (--) (46) (133) (4,559) -- (4,692) R&D, selling and G&A (--) (--) (--) (--) (10,691) -- (10,691) Profit (loss) from regular operations 4,588 20,059 2,439 27,086 (15,250) -- 11,836 Finance income (expenses), net -- -- -- -- 3,765 -- 3,765 Profit before tax 4,588 20,059 2,439 27,086 (11,485) -- 15,601 (*) Breakdown of sales percentage to major countries: China 41% USA 17% Breakdown by Geographic Destinations For the three months ended June 30, 2026 North America Far East Europe and others Total Reportable Segments Unallocated Expenses Adjustments Total USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands Revenues from sales and services 3,648 13,013 1,285 17,946 -- -- (*)17,946 Material consumption (594) (2,143) (214) (2,951) -- -- (2,951) Installation (23) (80) (8) (111) -- -- (111) Selling expenses (1) (4) (--) (5) -- -- (5) Sales commissions (0) (442) (11) (453) -- -- (453) Exhibitions (16) (--) (--) (16) -- -- (16) Cost of sales (54) (--) (18) (72) (2,454) -- (2,526) R&D, selling and G&A (--) (--) (--) (--) (5,317) -- (5,317) This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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North America Far East Europe and others Total Reportable Segments Unallocated Expenses Adjustments Total USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands Profit (loss) from regular operations 2,960 10,344 1,034 14,338 (7,771) -- (6,567) Finance income (expenses), net -- -- -- -- 5,356 -- 5,356 Profit before tax 2,960 10,344 1,034 14,338 (2,416) -- 11,923 (*) Breakdown of sales percentage to major countries: China 53% USA 21% India 12% Balances as of June 30, 2026 3,4207,99189712,308--147,209159,517 Segment assets - foreign currency customers(**) 3,4207,99189712,308-- 147,209 159,517 Segment liabilities - commissions payable(***) 39 859 56 954 -- 12,204 13,158 (**) The amounts attributed by segments are those of the Group's customers. (***) The amounts attributed by segments are those of commissions payable. -14- Qualitau Ltd. Notes to the Condensed Consolidated Financial Statements (Unaudited) Note 5 - Geographical Segments (Continued) Breakdown by Geographic Destinations For the six months ended June 30, 2025 North America USD in thousands Far East USD in thousands Europe and Others USD in thousands Total Reportable Segments USD in thousands Unallocated Expenses USD in thousands Adjustments USD in thousands Total USD in thousands Revenues from sales and services 4,355 21,723 2,026 28,104 -- -- (*) 28,104 Material consumption (710) (3,543) (330) (4,584) -- -- (4,584) Installation (31) (139) (29) (199) -- -- (199) This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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North America USD in thousands Far East USD in thousands Europe and Others USD in thousands Total Reportable Segments USD in thousands Unallocated Expenses USD in thousands Adjustments USD in thousands Total USD in thousands Selling expenses (3) (16) (2) (21) -- -- (21) Sales commissions (52) (936) (20) (1,008) -- -- (1,008) Exhibitions (75) (--) (--) (75) -- -- (75) Cost of sales (93) (--) (43) (136) (3,248) -- (3,384) R&D, selling and G&A (--) (--) (--) (--) (5,734) -- (5,734) Profit (loss) from regular operations 3,391 17,089 1,602 22,081 (8,982) -- 13,099 Finance income (expenses), net -- -- -- -- 750 -- 750 Profit before tax 3,391 17,089 1,602 22,081 (8,232) -- 13,849 (*) Breakdown of sales percentage to major countries: China 57% Japan 13% Breakdown by Geographic Destinations For the three months ended June 30, 2025 North America USD in thousands Far East USD in thousands Europe and Others USD in thousands Total Reportable Segments USD in thousands Unallocated Expenses USD in thousands Adjustments USD in thousands Total USD in thousands Revenues from sales and services 2,032 10,365 1,739 14,136 -- -- (*) 14,136 Material consumption (327) (1,670) (283) (2,280) -- -- (2,280) Installation (18) (82) (19) (119) -- -- (119) Selling expenses (3) (14) (1) (18) -- -- (18) Sales commissions (19) (378) (17) (414) -- -- (414) Exhibitions (38) (--) (--) (38) -- -- (38) Cost of sales (33) (--) (36) (69) (1,582) -- (1,651) R&D, selling and G&A -- -- -- -- (2,874) -- (2,874) Profit (loss) from regular operations 1,594 8,221 1,383 11,198 (4,456) (--) 6,742 Finance income (expenses), net -- -- -- -- 514 -- 514 Profit before tax 1,594 8,221 1,383 11,198 (3,942) (--) 7,256 (*) Breakdown of sales percentage to major countries: China 34% Japan 25% Taiwan 11% Balances as of June 30, 2025 Segment assets - foreign currency customers(**) 372 6,089 549 7,010 -- 57,996 65,006 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Segment liabilities - commissions payable(***) 9 225 12 246 -- 8,706 8,952 (**) The amounts attributed by segments are those of the Group's customers. (***) The amounts attributed by segments are those of commissions payable. -15- 8/27/2026 | 7:57:12 AM | v1.2.5 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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Qualitau Ltd. Notes to the Condensed Consolidated Financial Statements (Unaudited) Note 5 - Geographical Segments (Continued) North America Far East Europe and Others Total Reportable Segments Unallocated Expenses AdjustmentsTotal USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands USD in thousands Details by Geographical Destinations For the year ended December 31, 2025 Revenue from sales and services 6,805 47,279 7,174 61,258 -- -- (*)61,258 Material consumption (1,052) (7,308) (1,109) (9,469) -- -- (9,469) Installation (44) (303) (45) (392) -- -- (392) Selling expenses (3) (22) (4) (29) -- -- (29) Sales commissions (94) (1,881) (65) (2,040) -- -- (2,040) Exhibitions (120) -- (8) (128) -- -- (128) Cost of sales (129) -- (137) (266) (7,494) -- (7,760) R&D, selling and G&A -- -- -- -- (17,097) -- (17,097) Profit (loss) from ordinary operations 5,363 37,765 5,806 48,934 (24,591) (--) 24,343 Finance income (expenses), net -- -- -- -- 1,127 -- 1,127 Profit (loss) before tax 5,363 37,765 5,806 48,934 (23,464) (--) 25,470 (*) Details of sales rates to major countries China 40% Taiwan 13% Singapore 11% Balances as of December 31, 2025 Segment assets (**) 276 12,346 4,147 16,769 -- 59,340 77,179 Segment liabilities (***) 14 825 39 878 -- 10,486 11,364 (**) The amounts allocated by segment are of the Group's customers (***) The amounts allocated by segment are of commissions payable This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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- 16 - Report on Internal Control over Financial Reporting and Disclosure Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure, pursuant to Regulation 38C(a) Attached hereto is a quarterly report regarding the effectiveness of internal control over financial reporting and disclosure according to Regulation 38C(a) of the Securities Regulations (Periodic and Immediate Reports), 1970: The Management, under the supervision of the Board of Directors of Qualitau Ltd. (hereinafter: the "Corporation"), is responsible for the establishment and maintenance of adequate internal control over financial reporting and disclosure in the Corporation. In this regard, the members of management are: 1. Yaakov Hershman, General Manager; 2. Nava Ben Yehuda, VP Finance; Internal control over financial reporting and disclosure includes controls and procedures existing in the Corporation, which were designed by the General Manager and the most senior officer in the field of finance or under their supervision, or by whoever actually performs the said roles, under the supervision of the Corporation's Board of Directors and which are intended to provide reasonable assurance regarding the reliability of the financial reporting and the preparation of the reports in accordance with the provisions of the law, and to ensure that information that the Corporation is required to disclose in the reports it publishes according to the provisions of the law is collected, processed, summarized and reported on the date and in the format prescribed by law. Internal control includes, among other things, controls and procedures designed to ensure that information that the Corporation is required to disclose as stated, is accumulated and transferred to the Corporation's management, including the General Manager and the most senior officer in the finance field or whoever actually performs the said roles, in order to allow decision-making at the appropriate time, with reference to the disclosure requirements. Due to its structural limitations, internal control over financial reporting and disclosure is not intended to provide absolute assurance that a misstatement or omission of information in the reports will be prevented or discovered. In the Annual Report on the effectiveness of internal control over financial reporting and disclosure which was attached to the Periodic report for the period ended December 31, 2025 (hereinafter: the "Last Periodic Internal Control Report"), the Board of Directors and Management evaluated the internal control in the Corporation; based on this evaluation, the Board of Directors and the Management of the Corporation concluded that the internal control as of June 30, 2026, is effective. As of the date of the report, no event or matter has been brought to the attention of the Board of Directors and Management that would change the evaluation of the effectiveness of the internal control, as brought within the framework of the last quarterly internal control report. As of the date of the report, based on the evaluation of the effectiveness of the internal control in the last quarterly internal control report, and based on information brought to the attention of Management and the Board of Directors as stated above, the internal control is effective. - A - Management Certifications Statement by the General Manager according to Regulation 38C(d)(1) This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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I, Yaakov Hershman, declare that: 1. I have examined the quarterly report of Qualitau Ltd. (hereinafter: the "Corporation") for June 30, 2026 (hereinafter: the "Reports"); 2. To my knowledge, the reports do not include any misrepresentation of a material fact and do not lack a representation of a material fact necessary so that the representations included in them, in light of the circumstances in which those representations were included, will not be misleading with reference to the period of the reports; 3. To my knowledge, the interim financial statements and other financial information included in the reports fairly reflect, in all material respects, the financial position, results of operations and cash flows of the Corporation for the dates and periods to which the reports refer; 4. I have disclosed to the Corporation's auditing accountant, the Board of Directors and the Audit Committee of the Corporation's Board of Directors, based on my most recent evaluation of the internal control over financial reporting and disclosure: a. All significant deficiencies and material weaknesses in the establishment or operation of the internal control over financial reporting and disclosure which could reasonably adversely affect the Corporation's ability to collect, process, summarize or report financial information in a manner that casts doubt on the reliability of the financial reporting and the preparation of the financial statements in accordance with the provisions of the law; as well as - b. Any fraud, whether material or not, in which the General Manager or those directly subordinate to him or other employees who have a significant role in the internal control over financial reporting and disclosure are involved; 5. I, alone or together with others in the Corporation: a. Determined controls and procedures, or ensured the determination and existence of controls and procedures under my supervision, intended to ensure that material information relating to the Corporation, including its consolidated companies as defined in the Securities Regulations (Annual Financial Statements), 2010, is brought to my knowledge by others in the Corporation and in the consolidated companies, particularly during the preparation period of the reports; as well as - b. Determined controls and procedures, or ensured the determination and existence of controls and procedures under my supervision, intended to provide reasonable assurance as to the reliability of financial reporting and the preparation of the financial statements in accordance with the provisions of the law, including in accordance with generally accepted accounting principles; c. No event or matter has been brought to my attention that occurred during the period between the date of the last periodic report and the date of this report, which would change the conclusion of the Board of Directors and Management regarding the effectiveness of the internal control over financial reporting and disclosure of the Corporation. Nothing in the above derogates from my responsibility or the responsibility of any other person, according to any law. This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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August 26, 2026 Date - B - Yaakov Hershman, CEO Management Certifications Statement by the most senior officer in the field of finance according to Regulation 38C(d)(2) I, Nava Ben Yehuda, declare that: 1.I have examined the financial statements and other financial information included in the interim reports of Qualitau Ltd. (hereinafter: the "Corporation") for June 30, 2026 (hereinafter: the "Reports" or "Interim Reports"); 2.To my knowledge, the interim financial statements and other financial information included in the interim reports do not include any misrepresentation of a material fact and do not lack a representation of a material fact necessary so that the representations included in them, in light of the circumstances in which those representations were included, will not be misleading with reference to the period of the reports; 3.To my knowledge, the interim financial statements and other financial information included in the interim reports fairly reflect, in all material respects, the financial position, results of operations and cash flows of the Corporation for the dates and periods to which the reports refer; 4.I have disclosed to the Corporation's auditing accountant, the Board of Directors and the Audit Committee of the Corporation's Board of Directors, based on my most recent evaluation of the internal control over financial reporting and disclosure: a.All significant deficiencies and material weaknesses in the establishment or operation of the internal control over financial reporting and disclosure as it relates to the interim financial statements and other financial information included in the interim reports, which could reasonably adversely affect the Corporation's ability to collect, process, summarize or report financial information in a manner that casts doubt on the reliability of the financial reporting and the preparation of the financial statements in accordance with the provisions of the law; as well as - b.Any fraud, whether material or not, in which the General Manager or those directly subordinate to him or other employees who have a significant role in the internal control over financial reporting and disclosure are involved; 5.I, alone or together with others in the Corporation: a.Determined controls and procedures, or ensured the determination and existence of controls and procedures under my supervision, intended to ensure that material information relating to the Corporation, including its consolidated companies as defined in the Securities Regulations (Annual Financial Statements), 2010, insofar as it is relevant to the financial statements and other financial information included in the reports, is brought to my knowledge by others in the Corporation and in the consolidated companies, particularly during the preparation period of the reports; as well as - This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
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b.Determined controls and procedures, or ensured the determination and existence of controls and procedures under my supervision, intended to provide reasonable assurance as to the reliability of financial reporting and the preparation of the financial statements in accordance with the provisions of the law, including in accordance with generally accepted accounting principles; c.No event or matter has been brought to my attention that occurred during the period between the date of the last periodic report and the date of this report, relating to the interim financial statements and any other financial information included in the interim reports, which would change the conclusion of the Board of Directors and Management regarding the effectiveness of the internal control over financial reporting and disclosure of the Corporation. Nothing in the above derogates from my responsibility or the responsibility of any other person, according to any law. August 26, 2026 Date - C - Nava Ben Yehuda VP Finance 8/27/2026 | 7:57:13 AM | v1.2.5 This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .