This is an English translation of the information included in the approved financial statements. In the event of any discrepancy between the original Hebrew and the translation to English, the Hebrew version alone will prevail.

Board of Directors' Report on the State of the Corporation's Affairs

For the Nine-Month Period Ended on September 30, 2025

The Board of Directors of NextVision Stabilized Systems Ltd. (hereinafter: the "Company") is pleased to hereby submit the Board of Directors' Report on the state of the Corporation's affairs as of September 30, 2025 (hereinafter: the "Report Date" or the "Date of the Report") and for the nine-month period ended on September 30, 2025 (hereinafter: the "Report Period"), prepared in accordance with the Securities Regulations (Periodic and Immediate Reports), 5730-1970 (hereinafter: the "Reporting Regulations").

This Report is concise in scope and has been prepared based on the assumption that the reader has access to the Company's Annual Reports for 2024 (Reference No.: 2025-01-016228), including the Board of Directors' Report on the state of the Company's affairs for the year ended on December 31, 2024 (hereinafter: the "Periodic Report").

Chapter A – Explanations of the Board of Directors Regarding the State of the Company's Affairs

Brief Description of the Company and Its Business Environment

1. General

The Company was incorporated and registered in Israel on April 1, 2009 as a private limited liability company under the name NextVision Stabilized Systems Ltd. (its current name).

On September 16, 2025, the Company completed a fundraising round through a non-uniform offering to institutional investors (most of whom are foreign investors) in a gross amount of approximately NIS 1,387 million, in consideration for the allocation of 9,500,000 ordinary shares of the Company, each with a par value of NIS 0.00005, which at the time of their allocation constituted approximately 10.44% of the issued and paid-up share capital of the Company (approximately 9.99% on a fully diluted basis). In accordance with the Shelf Offering Report dated August 27, 2025, the net proceeds will be used by the Company to finance strategic growth initiatives, including the promotion of potential mergers and acquisitions aligned with its core business areas, for general working capital and corporate purposes, including additional development efforts, working capital and operating expenses, as well as investment in research and development programs to support its long-term innovation roadmap and growth strategies. As of the Date of the Report, the Company has no agreements or commitments to carry out any material acquisitions or investments.

The Company's expected use of the net proceeds from the offering represents its current intentions based on its existing plans and business condition, which may change as its plans and business condition evolve. The amounts and timing of the actual use of the net proceeds from the offering under the Shelf Offering Report will vary depending on numerous factors. Consequently, the Company's Board of Directors and management retain broad discretion in the application of the net proceeds from the offering.

Since its incorporation, the Company has been a technology company engaged in the development, manufacturing, and marketing of stabilized day and night imaging solutions for ground, aerial and maritime platforms, such as micro and mini UAVs and drones. The Company sells its products to customers who are systems providers that sell their products to the end user.

The Company has several products (cameras and accessories) within a weight range of approximately 2 kg to approximately 115 grams.

The Company has developed a unique image stabilization "engine," based on a registered patent, which enables it to produce stabilized cameras with world-leading size/weight-to-performance ratios, at competitive prices and with very high reliability.

In contrast to some of its competitors who attempt to miniaturize existing technology, the Company chose a unique solution by thinking "outside the box," combining mechanical stabilization (small gimbals) and electronic stabilization (hardware "engine") that allows it to stabilize the image in real time, thereby maintaining uniqueness and a significant gap from its competitors. The requirement for image stabilization becomes more challenging as the camera becomes smaller and lighter, and as zoom requirements increase. The Company's technology enables deep zoom from moving platforms while still providing the user with a stable image. The ratio of size and weight-to-performance and competitive pricing is among the best in the market. The cameras are operated by an integrated software package that enables the Company's customers to maximize economic utility.

The technology developed by the Company includes the development of day cameras, night cameras, miniaturized gimbals, communication, geo-pointing capabilities, trackers, and additional functionalities that meet the needs of its customers and position the Company as a one-stop shop for manufacturers of ground, aerial and maritime platforms that require stabilized zoom optical systems.

In addition to cameras, the Company develops complementary products that significantly reduce the integration time of the cameras into its customers' various platforms, thereby saving its customers considerable costs and enabling faster time to market.

The Company invests a great deal of time and resources in recruiting personnel, developing technology, capabilities, and new products in order to maintain its competitive advantage in the market and optimally meet its customers' needs.

Worldwide, there is growing use of unmanned systems in modern warfare, as global leaders take steps to replenish their weapons stockpiles. Global defense expenditures are reaching new heights; for example, to the best of the Company's knowledge, the U.S. Army has begun to emphasize low-cost drones in large quantities, supported by significant budgets. Accordingly, to the best of the Company's knowledge, total

U.S. defense expenditures in 2026 are expected to reach approximately USD 1 trillion¹ , and in addition, NATO defense expenditures increased significantly during 2024 and 2025. In this context, it should be noted that the U.S. government maintains a list of suppliers from which customers recognized by the U.S. government may purchase in an approved manner. The Company appears on this list as an approved supplier (within the Blue UAS Framework). In addition, to the best of the Company's knowledge, a recent presidential order was signed to strengthen drone dominance.

In the Company's assessment, its products are specifically designed to meet the needs of unmanned systems in the modern world, while leading the market with field-proven solutions that are relevant to a wide range of missions.

Disclosure Regarding the Effects of the Iron Swords War and Operation Rising Lion

On October 7, 2023, following a surprise attack by the Hamas terrorist organization from the Gaza Strip, the Government of Israel declared the Iron Swords War. As of October 2025, a ceasefire agreement is in place. Following the attack from the Gaza Strip, another attack began in northern Israel by the Hezbollah terrorist organization from Lebanon, and tensions rose in other arenas as well. As part of its response to the threats of the Iron Swords War, the Government of Israel ordered the evacuation of dozens of communities located in the south of the country, around the Gaza Strip, and in the north of the country along the border with Lebanon, and imposed restrictions on various gatherings, workplace activities, and educational activities in accordance with Home Front Command guidelines. In addition, many civilians were called up for extended periods of reserve duty. These factors led to a slowdown and reduction in business activity in Israel, due in part to business closures, workforce shortages, and disruptions to the supply chain. Potential fluctuations in commodity prices, foreign exchange rates, availability of materials, availability of labor, local services, and access to local resources may affect entities whose primary activity is with or in Israel.

In September 2025, the Research Department of the Bank of Israel updated its macroeconomic forecast.² According to the said report, in the scenario in which the fighting in Gaza will end during the first quarter of 2026, GDP is expected to grow by approximately 2.5% in 2025 and by 7.4% in 2026. The inflation rate for the coming four quarters (ending in the third quarter of 2026) is expected to be approximately 2.4%. During 2025, it is expected to be approximately 3.0%, and during 2026, approximately 2.2%. According to the macroeconomic forecast of the Bank of Israel's Research Department, the Bank of Israel interest rate is expected to average approximately 3.75% in the third quarter of 2026. The forecast under this scenario was prepared after extensive reserve recruitment and the commencement of a significant ground maneuver in the Gaza Strip, under the assumption that the fighting will end during the first quarter of 2026. At the same time, developments have led to upward revisions of forecasts for the state budget deficit, following the increase in government expenditures resulting from the prolongation of the war.

Uncertainty surrounding the forecast is high and includes, inter alia, risks arising from an escalation or prolongation of the fighting, which may materialize together or separately: supply constraints may continue to weigh on the recovery of activity, defense expenditures may rise, and demand for Israeli exports may

¹ From the website of the US Department of War.

² See on the website of Bank of Israel, at: https://www.boi.org.il

decline (following a deterioration in sentiment toward Israel). Likewise, the risk premium may increase and lead to a decline in domestic investment.

Conversely, and as stated in the forecast, if the war ends earlier than the first quarter of 2026, an earlier easing of supply constraints may be expected and, accordingly, an earlier recovery of activity; as stated in the forecast, the consequences of a prolongation of the war beyond one quarter are difficult to predict. In particular, there is a risk that each additional prolongation of the war will have an increasingly severe and lasting impact on economic activity.

It should be clarified that the above-mentioned forecast of the Research Department was published prior to the entry into force of the ceasefire agreement in the Gaza Strip in October 2025, and therefore the Company is unable to assess the effects of the cessation of hostilities on the economy in general and on the Company in particular.

On August 12, 2024, Fitch downgraded Israel's credit rating to A (with a negative outlook). On September 27, 2024, the international rating agency Moody's announced a two-notch downgrade of Israel's credit rating from A2 to Baa1 with a negative outlook. This came after the agency announced on February 9, 2024 a downgrade from A1 to A2 with a continued negative outlook. A few days after Moody's downgrade, the credit rating agency S&P also announced a one-notch downgrade of Israel's credit rating from A+ to A and added a negative outlook. This followed a previous downgrade by S&P earlier in 2024.

Additionally, on October 1, 2024, Moody's announced a one-notch downgrade of the credit ratings of Israel's five largest banks from A3 to Baa1 and added a negative outlook, following the downgrade of the State of Israel's credit rating. According to Moody's, the downgrades and the negative outlook reflect both the negative outlook on the credit rating of the Government of Israel, and the concern for deterioration in the condition of the banks themselves in the event of further damage to the economy, should the impacts of the war worsen.

On March 31, 2025, May 9, 2025, and October 17, 2025, Fitch, S&P, and Moody's, respectively, announced that the State of Israel's credit rating remained unchanged, each as applicable.

On June 13, 2025, the State of Israel launched a military operation against Iran, called "Rising Lion" aimed at striking and destroying Iranian nuclear and weapon infrastructure. During the 12 days of fighting, the IDF struck strategic targets across Iran, destroyed vital facilities related to the Iranian nuclear program and ballistic missile arrays, and eliminated senior figures in the Iranian defense establishment. In response to the operation, Iran launched hundreds of ballistic missiles and unmanned aerial vehicles at military and civilian targets in Israel. The attacks caused widespread infrastructure damage, significant property damage, approximately 30 fatalities among Israeli and foreign civilians, and hundreds of injuries. On June 24, 2025, following an American strike within Iranian territory, a ceasefire agreement was reached between the parties. During Operation Rising Lion, the Israeli government closed Israel's airspace for a period of approximately two weeks. During this period, it was not possible to receive goods from suppliers or to ship goods to the Company's customers abroad by air. At the end of the operation, a backlog formed with the air freight companies, which cleared about a week later. Following the conclusion of the operation and the resumption of activity by the air freight companies, most of the goods that had not yet been shipped to the Company's customers were released (during the last week of June, and some even during July). As the

Company has several customers with payment terms, goods shipped at the end of June were paid for during the month of July.

Since the beginning of the war, there has been an increase in orders for the Company's cameras and other products from its customers. In addition, last year, and before the war broke out, the Company increased its inventory in order to maintain flexibility, responsiveness, and the ability to meet the growing demand for the Company's products from its customers. The Company is continuously increasing its production capacity in order to meet the increase in demand and at the same time continue supplying its customers' orders on time. Furthermore, due to global geopolitical tensions that are affecting, inter alia, supply chains, and as a precautionary measure only, the Company has decided to stock up on various components which it identified as potentially facing shortages. It should be clarified that the Company is acting to execute long-term orders, maintain high inventory levels, increase the number of suppliers, avoid reliance on a single supplier to the extent possible, and maintain ongoing contact with its suppliers.

As of this date, the war and/or Operation Rising Lion have no material impact on the Company's results or on the Company's ability to supply its customers' orders on time. The Company continues to examine from time to time the effects of the economic situation and the warfare on its business operations. Nevertheless, in light of the uncertainty regarding the ceasefire agreement, the continued supply of inventory from suppliers, market volatility, further steps that may be taken by the Government of Israel, and the effects of other factors, including on the business activity of the Company's customers, the Company is currently unable to accurately assess the scope and nature of any additional future impacts of the war on its results.

The Company's assessments as detailed above regarding the future effects of the war and/or Operation Rising Lion in Israel and/or the ceasefire constitute forward-looking information, as defined in the Securities Law, based on the Company's estimations as of the date of this Report. The actual impact of the war on the Company's condition and the macroeconomic situation and/or monetary policy in Israel may differ materially from the Company's assessments and is not solely under the Company's control. This is due, inter alia, to a potential economic slowdown that may develop in the State of Israel, escalation of the war, or one or more of the above-mentioned factors related to the war, as well as macroeconomic changes that may affect the Company's operations.

Tariffs on Imported Goods to the United States

In April 2025, the U.S. administration announced a plan to impose tariffs on goods imported to the United States, which may also impact Israel's economy. According to the macroeconomic forecast of the Research Department of the Bank of Israel from April 2025, global tariff increases are expected to lead to a 4% decrease in global trade volume by the end of 2026 (compared to a no-tariff scenario). The plan includes two main components:

a. A uniform tariff of 10% on all imports to the U.S.;
b. Additional tariffs at varying rates on imports from countries with a significant trade surplus with the U.S.

Under this plan, as of the start of implementation, the tariff imposed on Israeli goods stood at 10% under the uniform tariff on all imports to the U.S. As of August 7, 2025, imports from Israel to the United States

are subject to a total tariff of 15% (10% uniform + 5% variable by country). Furthermore, under the tariff policy, there is a customs exemption for goods purchased by subcontractors for the U.S. government.

Although part of the Company's revenues derive from exports to the United States, the Company estimates that the potential impact of the new tariff policy on its business results is minor.

The information and data detailed in this section above, regarding the Company's assessment concerning the impact of the tariffs on the Company's results, constitute forward-looking information, as defined in the Securities Law, and are not solely under the Company's control. The information and data are based on information currently in the Company's possession and on publications written and released by professional entities in connection with the matters discussed in this paragraph above. The information and data are estimates only, which may not materialize or may materialize only partially or differently, even materially, due to external factors not under the Company's control, including changes in U.S. and Israeli policy and any of the risk factors detailed in the Company's 2024 Periodic Report. In light of the foregoing, actual results may differ from the above assessments and even differ materially due to external factors affecting the Company's area of operations.

Changes in Exchange Rates

Pursuant to the decision of the Monetary Committee for the first half of 2025, dated September 29, 2025, the Monetary Committee of the Bank of Israel (in this subsection: the "Report") left the interest rate unchanged at 4.5%.³

In accordance with the Report, the rate of inflation over the four quarters ending in the third quarter of 2026 is expected to amount to 2.4%. During 2025 it is expected to total 3.0%, and in 2026 – 2.2%. In addition, as stated in the Report, the Bank of Israel interest rate is expected to stand at an average of 3.75% in the third quarter of 2026.

During the half reviewed in the Report, trading in the financial markets continued to be characterized by volatility, which was influenced by both domestic and global uncertainty. In June, upon the conclusion of Operation Rising Lion, Israel's risk premium, as measured by CDS spreads and the spread between Israeli and U.S. dollar-denominated government bonds, declined significantly but remained elevated compared to its level prior to the Iron Swords War. Domestic stock indices rose sharply, yields on shekel-denominated government bonds declined significantly, and the shekel strengthened notably. During the reviewed halfyear, business credit continued to expand in line with the trend, with default rates remaining stable at low levels across all sectors.

The information and data detailed in this Section above, and the factors influencing the Company's operations, include analyses and forecasts that constitute forward-looking information, as defined in the Securities Law, which is not solely under the Company's control. Such information and data are based on information currently in the Company's possession and on publications written and released by professional parties in connection with the Company's area of operations as of the date of this Report. Such information and data are only estimates, which may not materialize or may materialize

³ See on the website of Bank of Israel at: https://www.boi.org.il .

partially or differently, inter alia due to changes in the field of activity and the factors influencing it. In light of the above, actual results may differ from the estimates detailed above and may differ materially in connection with the external factors influencing the Company's field of activity.

The Impact of the Russia–Ukraine War on the Company's Operations

The Russia–Ukraine war, which began during the month of February in the year 2022, the concern of European countries regarding aggressive conduct by Russia toward them, as well as the "heating up" of the global defense market, led a significant number of governments to declare their intention to significantly increase their defense and military procurement budgets. The war in Ukraine, like the Iron Swords War, underscored the acceleration in the use of UAVs and small observation drones for field use and suicide tools. In light of this trend, it appears that there is a global understanding that future wars are expected to involve increased use of aerial systems, and that countries must equip themselves with such tools. The Company is in fact experiencing an increase in demand for the solution it provides to its customers in all sectors and anticipates continued interest in its products.

The information regarding the Company's expectations in connection with the increase in demand for its products following the war in Ukraine constitutes forward-looking information, as defined in the Securities Law, which is not solely under the Company's control. Such information is based on information currently in the Company's possession and on publications written and released by professional parties in connection with the Company's field of operations as of the date of this Periodic Report. This information is only an estimate, which may not materialize or may materialize partially or differently, inter alia due to changes in the field of activity and the factors influencing it. In light of the above, actual results may differ from the estimate detailed above and may even differ materially in connection with the external factors influencing the Company's field of activity.

2. Development of the Company's Business During the Report Period

2.1. The Company is a growing technology company. The Company continues to market its products worldwide, and each year new customers are added to its customer base. Following many changes in the market, both technological and regulatory, there is a trend of growth in the number of small platforms requiring stabilized imaging solutions.
2.2. During the Report Period, the Company's sales grew by approximately 43% compared to the corresponding period last year. During the Report Period, the number of customers to whom the Company sells stood at a total of 189 customers, compared with 137 customers in the corresponding period last year. As of the Report Date, the Company's order backlog stands at approximately USD 124 million.
2.3. On January 7, 2025, the Company received an order from a third party, which is not related to the Company and/or to its Interested Parties, for the purchase of cameras and additional products of the Company for total consideration of approximately USD 12.1 million (excluding VAT). For more details, see the Company's Immediate Report dated January 7, 2025 (Reference No.: 2025-01- 001890), the contents of which are incorporated into this Board of Directors' Report by way of reference.

2.4. On January 16, 2025, the Company received two orders from two customers, which are not related to the Company and/or to its Interested Parties, for the purchase of cameras and additional products of the Company for total consideration of approximately USD 3 million (excluding VAT). For more details, see the Company's Immediate Report dated January 16, 2025 (Reference No.: 2025-01- 004754), the contents of which are incorporated into this Board of Directors' Report by way of reference.
2.5. On February 3, 2025, the Company received an order from a third party, which is not related to the Company and/or to its Interested Parties, for the purchase of cameras and additional products of the Company for total consideration of approximately USD 11.2 million (excluding VAT). For more details, see the Company's Immediate Report dated February 4, 2025 (Reference No.: 2025-01- 008503), the contents of which are incorporated into this Board of Directors' Report by way of reference.
2.6. On February 11, 2025, the Company received an order from a third party, which is not related to the Company and/or to its Interested Parties, for the purchase of the Company's cameras for total consideration of approximately USD 1 million (excluding VAT). For more details, see the Company's Immediate Report dated February 12, 2025 (Reference No.: 2025-01-010172), the contents of which are incorporated into this Board of Directors' Report by way of reference.
2.7. On February 13, 2025, the Company received an order from a third party, which is not related to the Company and/or to its Interested Parties, for the purchase of the Company's cameras for total consideration of approximately USD 3.2 million (excluding VAT). For more details, see the Company's Immediate Report dated February 16, 2025 (Reference No.: 2025-01-010758), the contents of which are incorporated into this Board of Directors' Report by way of reference.
2.8. On February 20, 2025, the Company received an order from a third party, which is not related to the Company and/or to its Interested Parties, for the purchase of the Company's cameras for total consideration of approximately USD 1.75 million (excluding VAT). For more details, see the Company's Immediate Report dated February 20, 2025 (Reference No.: 2025-01-011848), the contents of which are incorporated into this Board of Directors' Report by way of reference.
2.9. On March 4, 2025, the Company received a purchase order from a third party that is not related to the Company and/or its Interested Parties, for the purchase of the Company's cameras in exchange for a total amount of approximately USD 1.34 million (excluding VAT). For further details, see the Company's Immediate Report dated February 5, 2025 (Reference No.: 2025-01-014518), while the information therein is included in this Board of Directors' Report by way of reference.
2.10. On March 13, 2025, the Company received two orders from third parties, which are not related to the Company and/or its Interested Parties, for the purchase of the Company's cameras in exchange for a total amount of approximately USD 3.52 million (excluding VAT), the first in the amount of approximately USD 2.15 million, and the second in the amount of approximately USD 1.37 million. For further details, see the Company's Immediate Report dated March 13, 2025 (Reference No.: 2025- 01-016678), while the information therein is included in this Board of Directors' Report by way of reference.

2.11. On October 16, 2024, the Company entered into an agreement with an existing customer of the Company, and on December 27, 2024, a purchase order was received under said agreement, for the purchase of cameras and additional products of the Company, for a total amount of approximately USD 30 million (hereinafter: the "Consideration" and the "Agreement", respectively). It is clarified that the commencement of the supply of products to the customer is subject to receipt of regulatory approval for the transaction, which has not yet been received. Such approval also depends on third parties (the customer and its end customer) who are not under the control of the Company. To the extent that regulatory approval for the transaction is not received, the customer will have the option to cancel the Agreement without penalty. The Company's management made use of the authority granted to it under Article 36(b) of the Securities Regulations (Periodic and Immediate Reports), 5730–1970, to defer reporting regarding the Company's engagement in the Agreement, due to concerns that publication of an Immediate Report regarding the engagement may have thwarted the transaction in its entirety and/or worsened its terms and materially harmed the transaction terms, thereby causing significant harm to the Company. Once the reason for the reporting deferral was no longer applicable, the impediment to reporting the engagement in the Agreement was removed, as stated in this Immediate Report. For further details, see the Company's Immediate Report dated March 13, 2025 (Reference No.: 2025-01-016909), while the information therein is included in this Board of Directors' Report by way of reference.
2.12. On March 9, 2025, the Company's Board of Directors resolved that the Company's reporting threshold shall be set at orders of at least NIS 2 million, instead of the previous threshold of NIS 1 million.
2.13. On March 24, 2025, the Company allocated 273,000 options to employees and officers of the Company. For further details, see the Company's Immediate Reports dated March 24, 2025 (Reference No.: 2025-01-019785) and March 10, 2025 (Reference No.: 2025-01-015586), while the information therein is included in this Board of Directors' Report by way of reference.
2.14. On March 26, 2025, the Company distributed a dividend to its shareholders in the amount of approximately USD 33,198 thousand. For further details, see the Company's Immediate Reports dated March 10, 2025 and March 16, 2025 (Reference Nos.: 2025-01-015634 and 2025-01-017346, respectively), while the information therein is included in this Board of Directors' Report by way of reference.
2.15. On April 3, 2025, the Company received a purchase order from a third party that is not related to the Company and/or its Interested Parties, for the purchase of the Company's cameras in exchange for a total amount of approximately USD 6 million (excluding VAT). On June 15, 2025, the Company received an update from the customer regarding the order, stating that the customer increased the order by an additional amount of approximately USD 7.77 million, such that the total consideration for the order stands at approximately USD 13.77 million (excluding VAT). It is clarified that the other terms of the order remain unchanged, including the payment terms and the delivery dates. For further details, see the Company's Immediate Reports dated April 3, 2025 and June 16, 2025 (Reference Nos.: 2025- 01-024475 and 2025-01-042730, respectively), while the information therein is included in this Board of Directors' Report by way of reference.

2.16. On April 29, 2025, the General Meeting of the Company's shareholders approved the following matters:
a. Approval of the Company's Compensation Policy.
b. Allocation of non-tradable options to Mr. Chen Golan, Chairman of the Company's Board of Directors.
c. Allocation of non-tradable options to Mr. Boris Kipnis, Director and Chief Technology Officer.
d. Allocation of non-tradable options to Mr. Michael Grosman, Chief Executive Officer of the Company.
- On May 5, 2025, the Company allocated the options to the officers listed in this Section above. For further details, see the Company's Immediate Reports dated May 5, 2025, April 29, 2025, April 24, 2025, and March 9, 2025 (Reference Nos.: 2025-01-031210, 2025-01-030555, 2025-01- 029114, and 2025-01-015589, respectively), while the information therein is included in this Board of Directors' Report by way of reference.
2.17. On May 18, 2025, the Company's Compensation Committee and Board of Directors approved the following matters:
a. Allocation of 9,000 options to Mr. Alex Lavie, Chief Financial Officer of the Company, as well as an increase in his salary to NIS 48 thousand (instead of NIS 43.5 thousand).
b. Allocation of 9,000 options to Mr. Liran Reller, Vice President of Engineering, as well as an increase in his salary to NIS 55 thousand (instead of NIS 45 thousand).
c. Allocation of 13,000 options to Mr. Yuval Evron, Chief Operating Officer of the Company.
d. Allocation of 52,000 options to Company employees, exercisable into 52,000 ordinary shares of the Company.
- On June 5, 2025, the Company allocated the options listed in this Section above to the officers subordinate to the CEO.
2.18. On May 28, 2025, the Company received three purchase orders from a third party, which is not related to the Company and/or its Interested Parties, for the purchase of cameras and additional products of the Company, for an aggregate consideration of approximately USD 6.6 million (excluding VAT). For further details, see the Company's Immediate Report dated May 28, 2025 (Reference No.: 2025-01- 037986), the contents of which are incorporated herein by way of reference.
2.19. On June 12, 2025, the Company received a purchase order from a third party that is not related to the Company and/or its Interested Parties, for the purchase of the Company's cameras in exchange for a total amount of approximately USD 2 million (excluding VAT). For further details, see the Company's Immediate Report dated June 15, 2025 (Reference No.: 2025-01-042459), while the information therein is included in this Board of Directors' Report by way of reference.
2.20. On July 21, 2025, the Company allocated 100,000 options to four Company employees, exercisable into 100,000 ordinary shares of the Company, each with a par value of NIS 0.00005. For further details

regarding the terms of the options, see the Company's Immediate Reports dated July 8, 2025, and July 21, 2025 (Reference Nos.: 2025-01-050368 and 2025-01-054055, respectively), the contents of which are incorporated herein by way of reference.
2.21. On August 12, 2025, the Company received a purchase order from a third party, which is not related to the Company and/or its Interested Parties, for the purchase of cameras and additional products of the Company, for an aggregate consideration of approximately USD 2.5 million (excluding VAT). For further details, see the Company's Immediate Report dated August 13, 2025 (Reference No.: 2025-01- 060024), the contents of which are incorporated herein by way of reference.
2.22. On August 13, 2025, the Company received a purchase order from a third party, which is not related to the Company and/or its Interested Parties, for the purchase of cameras and additional products of the Company, for an aggregate consideration of approximately USD 4.1 million (excluding VAT). For further details, see the Company's Immediate Report dated August 14, 2025 (Reference No.: 2025-01- 060382), the contents of which are incorporated herein by way of reference.
2.23. On August 20, 2025, the Company's General Meeting of Shareholders approved, after approval by the Company's Compensation Committee and Board of Directors on July 8, 2025, inter alia, the following matters:
a. An update to the management fees of Mr. Chen Golan, Chairperson of the Company's Board of Directors, and Mr. Boris Kipnis, Director and Chief Technology Officer, such that each of them shall be entitled to monthly management fees of NIS 165 thousand, instead of NIS 144 thousand.
b. The grant of a performance-based bonus to Mr. Chen Golan (Chairperson of the Board), Mr. Boris Kipnis (Director and Chief Technology Officer), and Mr. Michael Grossman (Chief Executive Officer), subject to the satisfaction of a threshold condition whereby the Company's operating profit, as reflected in the Company's consolidated financial statements as approved by the Board of Directors for the year for which the bonus is payable, shall be at least NIS 40 million (the "Threshold Condition"). In addition to the bonus and subject to the satisfaction of the Threshold Condition, each of Messrs. Golan, Kipnis, and Grossman shall, in each year, be entitled to an additional performance-based bonus of up to six (6) times their respective monthly cost (so that each of them may be entitled, in total, to a cash bonus of up to 18 times their respective monthly cost, as applicable), depending on the level of achievement of the Company's sales target, in accordance with the table below (the "Performance-Based Bonus"):

Percentage of Target Achieved	Founders
100% or more	Six salary supplements
90%–100%	90% of six salary supplements
80%–90%	80% of six salary supplements
70%–80%	70% of six salary supplements
70% or less	No supplement

^"Sales target" shall mean the sales target for the following year, as determined by the Company's Board of Directors no later than the date of approval of the annual periodic financial statements for the preceding year.

For further details, see the Company's Immediate Reports regarding the notice of meeting and amended notice of meeting dated July 8, 2025 (Reference Nos.: 2025-01-050361 and 2025-01-050425, respectively); the supplemental report to the notice of meeting dated August 20, 2025 (Reference No.: 2025-01-062163); the Immediate Report dated August 21, 2025 (Reference No.: 2025-01-062654); and the amended report on the results of the General Meeting dated August 25, 2025 (Reference No.: 2025-01-063419), the contents of all of which are incorporated herein by way of reference.

2.24. On August 21, 2025, the Company received two purchase orders from two customers, each of whom is not related to the Company and/or its Interested Parties, for the purchase of cameras and additional products of the Company, for an aggregate consideration of approximately USD 5.1 million (excluding VAT). For further details, see the Company's Immediate Report dated August 24, 2025 (Reference No.: 2025-01-062679), the contents of which are incorporated herein by way of reference.
2.25. On September 15, 2025, the Company reported that it was considering a public offering and listing for trading of its ordinary shares pursuant to a Shelf Prospectus of the Company dated August 27, 2025, in an estimated gross amount of approximately USD 400 million. On September 16, 2025, the Company completed a fundraising by way of a non-uniform offering to institutional investors (most of whom are foreign investors) in a total amount of approximately NIS 1,387 million, in consideration for the allocation of approximately 9,500,000 ordinary shares of the Company.

For further details, see the Company's Immediate Reports dated September 15, 2025 (Reference No.: 2025-01-06960), September 16, 2025 (Reference No.: 2025-01-06969), the Shelf Offering Report dated September 15, 2025 (Reference No.: 2025-01-069605), and the Immediate Report regarding the results of the offering dated September 16, 2025 (Reference No.: 2025-01-069694). During September 2025, the Company completed a fundraising by way of a non-uniform offering to institutional investors (most of whom are foreign investors) in the total amount of approximately NIS 1,387 million. For further details, see Section 1 above.

3. Board of Directors' Explanations for State of the Company's Business, Results of Activity, Equity and Cash Flows

3.1. Financial Condition

The financial data detailed below is based on the reviewed and audited financial statements of the Company, prepared in accordance with International Financial Reporting Standards (IFRS).

Below are the main developments that occurred in the items of the Statement of Financial Position (in USD thousands):

	Balanc	e as of (USD th	Elanding from the Comments Decad
Section		nber 30	December	Explanations from the Company's Board
	2025	2024	31, 2024	of Directors regarding changes
Cash	27,533	102,377	74,708	See cash flow analysis in Section 3.3 below.
Short term deposits	502,102	-	47,903	After receiving the proceeds from the fundraising round, the Company acted to maintain high liquidity and financial security, and transferred the entire amount to investment in short term deposits (up to one year), in accordance with the Company's cash management policy. This investment is designed to ensure a solid return while maintaining the availability of funds for operational and business needs.
Trade receivables	14,052	10,065	6,374	The increase in trade receivables compared to the same period last year is due to an increase in sales volume during the period.
Current taxes receivable	2,256	170	1,054	The current taxes receivable arise from higher advance payments than the actual tax provision for 2025.
Other accounts receivable	6,268	2,857	1,840	The increase in receivables compared to the same period last year is primarily due to an increase in advances to suppliers for procurement needs for 2026.
Inventory	49,304	18,151	22,386	The increase compared to the same period last year is due to the Company's procurement in line with increased sales and procurement of components identified as in short supply due to geopolitical tensions. For more details, see above.
Total current assets	601,515	133,620	154,265
Fixed assets	853	593	749	The increase in fixed assets compared to the same period last year is due to the move to new offices and their adaptation to the Company's needs.
Right of use asset	2,962	542	514	The increase is due to the leasing of new offices and the signing of a long-term lease agreement in order to support the growth rate of the Company's activities.

Intangible assets	4,670	3,289	3,628	The increase is due to the capitalization of new developments of cameras and accessories during the period, net of current depreciation.
Total non- current assets	8,485	4,424	4,891
Trade payables	9,375	4,880	5,842	The increase in trade payables stems from an increase in the scope of production activity and component procurement.
Other accounts payable	14,593	13,619	15,024	The increase compared to receivables in the corresponding period last year is mainly due to an increase in advances from customers compared to the corresponding period last year.
Total current liabilities	23,968	18,499	20,866
Lease liabilities	3,432	161	111	The increase is due to moving to new offices and signing a long-term lease agreement.
Employee benefit liabilities, net	114	91	114	No material change.
Deferred taxes	487	335	373	The change is due to an increase in the intangible asset due to timing differences.
Total non- current liabilities	4,033	587	598

3.2. Results of the Company's Business Activities

Section	months	e nine ended on aber 30	For the thr ended on Se		For the year ended on December	Explanations from the Company's Board of Directors regarding
	2025	2024	2025	2024	31, 2024	changes
			USD t	housands
Income from sales	120,533	84,424	47,290	29,146	114,934	The increase in revenue stems from a quantitative increase in the number of customers and units sold.
Cost of sales	(34,971)	(24,166)	(14,773)	(8,233)	(32,044)	The slight decrease in gross profitability stems from the increase in the price of some components as well as the quantity discounts that the Company gives to its major customers.
Gross profit	85,562	60,258	32,517	20,913	82,890

Research and development expenses	(3,914)	(1,836)	(1,638)	(637)	(2,517)	The increase compared to the same period last year stems from increased development efforts and improvements to the Company's various products, mainly through standard additions in the development departments. The Company also completed a number of significant projects and launched new products. In light of the above, the Company has completed capitalizing R&D costs related to those projects.
Sales and marketing expenses	(1,505)	(1,266)	(628)	(365)	(1,639)	The increase compared to the same period last year is due to increased sales efforts, mainly through the addition of new standards.
General and administrative expenses	(6,645)	(4,363)	(1,963)	(1,178)	(5,730)	The increase compared to the same period last year is due to an update of management compensation agreements and an increase in share based payment.
Operating profit
	73,498	52,793	28,288	18,733	73,004
Financing expenses	(229)	(46)	(77)	-	(430)	The increase in financing expenses is mainly due to the recognition of financing expenses for the lease of new
Financing income	7,163	3,682	3,074	1,890	4,330	offices. The increase in financing income compared to the corresponding period last year stems from an increase in the volume of bank deposits.
Profit before tax	80,432	56,429	31,285	20,623	76,904
Income tax	(8,468)	(7,982)	(3,117)	(2,599)	(10,508)	The increase in income taxes stems from the increase in activity during the period.
Net profit	71,964	48,447	28,168	18,024	66,396

Total comprehensive	71,964	48,447	28,168	18,024	66,380
income	71,704	70,77	20,100	10,027	00,500

3.3. Cash Flows and Liquidity

As of September 30, 2025, the Company had cash balances totaling approximately USD 27,533 thousand. Below are the main components of the Company's cash flow:

Section	For the nine			ended on September 30 ended on Company's Boar		Explanations from the Company's Board of
Section	2025	2024	2025	2024	December 31, 2024	Directors regarding changes
			USD	thousands
Operating activities	35,152	46,643	18,838	13,356	68,413	The decrease in operating activities stems from significant purchases of inventory and deposits of advances to suppliers that the Company made during the period in order to support the Company's activities in 2025 and 2026.
Investing activities	(453,500)	(1,716)	(433,777)	(697)	(50,096)	The increase in activity stems from transferring the proceeds of the fundraising round to short term dollar deposits (up to one year).
Financing activities	368,443	(11,656)	398,765	(87)	(11,739)	The increase is due to the fundraising the Company carried out during the third quarter of 2025.
Cash balance at end of period	27,533	102,377	27,533	102,377	74,708

3.4. Funding Sources

As of the Report Date, the Company finances its operations through its equity and does not use external sources of financing.

In light of the Company's positive cash flow for years, the Company does not customarily take credit for the purpose of financing its ongoing operations, and accordingly, the Company does not have credit facilities.

During the months of June and July 2021, the Company completed its initial public offering of shares on the stock exchange in consideration of approximately NIS 129 million (this amount also includes the allocation to the Company's pricing underwriter within the framework of the offering).

During September 2025, the Company completed a fundraising round by way of a non-uniform offering to institutional investors (most of whom are foreign investors) in the total amount of approximately NIS 1,387 million. For further details, see Section 1 above.

In addition, during the Report Period, 1,404,128 non-tradable options of Company employees were exercised, for aggregate consideration of approximately USD 3,575 thousand.

3.5. Working Capital

As of September 30, 2025, the Company has working capital in the amount of approximately USD 577,547 thousand, compared to working capital of approximately USD 115,121 thousand as of September 30, 2024.

Part C – Disclosure Regarding the Corporation's Financial Reporting and Corporate Governance Aspects

4. Information Regarding Material Events After the Report Date

4.1. On October 20, 2025, the Company allocated 137,000 options to ten Company employees, exercisable into approximately 137,000 ordinary shares of the Company, each with a par value of NIS 0.00005.

For further details, see the Company's Immediate Report dated October 20, 2025 (Reference No.: 2025-01-077870), the contents of which are incorporated herein by way of reference.

4.2. On November 5, 2025, the Company's General Meeting of Shareholders approved, after approval by the Company's Compensation Committee and Board of Directors on September 28, 2025, the allocation of 250,000 unlisted Company options to Mr. Michael Grossman, the Company's Chief Executive Officer, exercisable into 250,000 ordinary shares of the Company, each with a par value of NIS 0.00005.

For further details, see the Company's Immediate Reports dated November 5, 2025 and September 28, 2025 (Reference Nos.: 2025-01-084287 and 2025-01-072420, respectively), the contents of which are incorporated herein by way of reference.

5. Breakdown of Liabilities by Maturity Dates

For data regarding the Company's liability breakdown, see the Company's Immediate Report dated November 10, 2025 (Reference No.: 2025-01-085406).

Chen Golan	Michael Grosman
Chairman of the Board of Directors	Chief Executive Officer

Date of approval of the Report: November 9, 2025

NextVision Stabilized Systems Ltd.

Condensed Interim Financial Statements as of September 30, 2025

(Unaudited)

NextVision Stabilized Systems Ltd.

Condensed Interim Financial Statements as of September 30, 2025

(Unaudited)

	Page
Review Report of the Independent Auditor	2
Condensed Statements of Financial Position	3
Condensed Statements of Comprehensive Income	4
Condensed Statements of Changes in Equity	5
Condensed Statements of Cash Flows	7
Notes to the Condensed Interim Financial Statements	8-13

This is an English translation of the information included in the Condensed Interim financial statements. In the event of any discrepancy between the original Hebrew and the translation to English, the Hebrew version alone will prevail.

Independent Auditors' Review Report to the Shareholders of NextVision Stabilized Systems Ltd.

Introduction

We have reviewed the accompanying interim financial information of NextVision Stabilized Systems Ltd. ("The Company"), which includes the condensed interim statement of financial position as of September 30, 2025, and the condensed interim statements of comprehensive income, changes in equity and cash flows for the nine-month 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 34 (IAS 34) "Interim Financial Reporting," and they are also responsible for the preparation of this interim financial information in accordance with Chapter D of the Israeli Securities Regulations (Periodic and Immediate Reports), 5730–1970. 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 entity's auditor". A review of interim financial information consists of inquiries, mainly with the individuals responsible for financial and accounting matters, and of the application of analytical and other review procedures. A review is substantially less in scope than an audit, which is 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 abovementioned financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 (IAS 34).

In addition to the statements in the previous paragraph, based on our review, nothing has come to our attention, that causes us to believe that the abovementioned financial information does not comply, in all material respects, with the disclosure requirements of Chapter D of the Israeli Securities Regulations (Periodic and Immediate Reports), 5730–1970.

Tel Aviv, Ziv Haft November 9, 2025 Certified Public Accountants (Isr.)- BDO Member Firm

Condensed Statements of Financial Position

		As of September 30
	2025	2024	2024
	Unaudited		Audited
		USD thousands
Current assets
Cash	27,533	102,377	74,708
Short term deposits	502,102	-	47,903
Trade receivables	14,052	10,065	6,374
Other accounts receivable	6,268	2,857	1,840
Current taxes receivable	2,256	170	1,054
Inventory	49,304	18,151	22,386
	601,515	133,620	154,265
Non-current assets
Fixed assets	853	593	749
Right of use assets	2,962	542	514
Intangible assets	4,670	3,289	3,628
	8,485	4,424	4,891
	610,000	138,044	159,156
Current liabilities
Trade payables	9,375	4,880	5,842
Other accounts payable	14,593	13,619	15,024
	23,968	18,499	20,866
Non-current liabilities
Employee benefit liabilities, net	114	91	114
Deferred taxes	487	335	373
Lease liabilities	3,432	161	111
	4,033	587	598
Equity
Share capital and premium	446,120	43,184	43,194
Reserve for share-based payment	6,662	3,256	4,047
Retained earnings	129,217	72,518	90,451
Total equity	581,999	118,958	137,692
	610,000	138,044	159,156

The accompanying notes constitute an integral part of these Condensed Interim Financial Statements.

November 9, 2025
Approval Date of the Financial	Chen Golan	Michael Grosman	Alex Lavie
Statements	Chairman of the Board	CEO	CFO

Condensed Statements of Comprehensive Income

	For the nine months ended on September 30		For the three months ended on September 30	For the year ended on December 31,
	2025	2024	2025	2024	2024
			Unaudited USD thousands (excl. share profit data)		Audited
Income from sales	120,533	84,424	47,290	29,146	114,934
Cost of sales	(34,971)	(24,166)	(14,773)	(8,233)	(32,044)
Gross profit	85,562	60,258	32,517	20,913	82,890
Research and development expenses	(3,914)	(1,836)	(1,638)	(637)	(2,517)
Sales and marketing expenses	(1,505)	(1,266)	(628)	(365)	(1,639)
General and administrative expenses	(6,645)	(4,363)	(1,963)	(1,178)	(5,730)
	(12,064)	(7,465)	(4,229)	(2,180)	(9,886)
Profit from ordinary activity	73,498	52,793	28,288	18,733	73,004

Financing expenses	(229)	(46)	(77)	-	(430)
Financing income	7,163	3,682	3,074	1,890	4,330
Operating profit	80,432	56,429	31,285	20,623	76,904
Income taxes	(8,468)	(7,982)	(3,117)	(2,599)	(10,508)
Net profit	71,964	48,447	28,168	18,024	66,396
Other comprehensive profit (net of tax effects):
Amounts that will not be subsequently reclassified to profit or loss:
Loss from re-measurement for defined benefit plans	-	-	-	-	(16)
Total other comprehensive loss	-	-	-	-	(16)
Total comprehensive income	71,964	48,447	28,168	18,024	66,380
Net profit per share (in US dollars)
Base net profit	0.8825	0.6090	0.3409	0.2253	0.8332
Diluted net profit The accompanying notes constitute an integral part of these Condensed Interim Financial Statements.	0.8498	0.5827	0.3280	0.2182	0.8024

Condensed Statements of Changes in Equity

For the nine month period ended on September 30, 2025 (unaudited)

	Share capital and premium	Reserve for share-based payment	Retained earnings	Total equity
		USD thousands
Balance as of January 1, 2025	43,194	4,047	90,451	137,692
Net profit Consideration from exercise of options	- 4,559	- (984)	71,964 -	71,964 3,575
Cost of share-based payment Capital raised, net of issuance costs (*) Dividend	- 398,367 -	3,599 - -	- - (33,198)	3,599 398,367 (33,198)
Balance as of September 30, 2025 (*) See Note 1(a)	446,120	6,662	129,217	581,999
For the nine month period ended on September 30, 2024 (unaudited)
	Share capital and premium	Reserve for share-based payment	Retained earnings	Total equity
		USD thousands
Balance as of January 1, 2024	40,303	1,774	37,857	79,934
Net profit Consideration from exercise of options Cost of share-based payment Dividend	- 2,881 - -	- (499) 1,981 -	48,447 - - (13,786)	48,447 2,382 1,981 (13,786)
Balance as of September 30, 2024	43,184	3,256	72,518	118,958
For the three-month period ended on September 30, 2025 (unaudited)		Reserve for
	Share capital	share-based	Retained	Total
	and premium	payment USD thousands	earnings	equity

Balance as of July 1, 2025 47,112 5,402 101,049 153,563

Net profit - - 28,168 28,168 Consideration from exercise of options 641 (140) - 501 Cost of share-based payment - 1,400 - 1,400 Capital raising, less issuance costs 398,367 - - 398,367 Balance as of September 30, 2025 446,120 6,662 129,217 581,999

Condensed Statements of Changes in Equity

For the three-month period ended on September 30, 2024 (unaudited)

	Share capital and premium	Reserve for share-based payment	Retained earnings	Total equity
		USD thousands
Balance as of July 1, 2024	43,184	2,465	54,494	100,143
Net profit Cost of share-based payment	- -	- 791	18,024 -	18,024 791
Balance as of September 30, 2024	43,184	3,256	72,518	118,958

For the year ended on December 31, 2024 (audited)

	Share capital and premium	Reserve for share-based payment USD thousands	Retained earnings	Total equity
Balance as of January 1, 2024	40,303	1,774	37,857	79,934
Net profit Other comprehensive income	- -	- -	66,396 (16)	66,396 (16)
Total comprehensive income	-	-	104,237	146,314
Dividend	-	-	(13,786)	(13,786)
Consideration from exercise of options	2,891	(502)	-	2,389
Cost of share-based payment	-	2,775	-	2,775
Balance as of December 31, 2024	43,194	4,047	90,451	137,692

The accompanying notes constitute an integral part of these Condensed Interim Financial Statements.

Condensed Statements of Cash Flows

	For the nine month For the three month period ended on period ended on September 30 September 30			For the year ended on December 31





























					(50,096)




					-
					(11,739)



Cash at the end of period	27,533	102,377	27,533	102,377	74,708

The accompanying notes constitute an integral part of these Condensed Interim Financial Statements.

Note 1: General

A. The Company

NextVision Stabilized Systems Ltd. (the "Company") was incorporated in Israel in April 2009 and commenced its business activity in September 2009. The Company is an Israeli resident and its address is 9 HaDafna Street, Ra'anana.

The Company is engaged in the development, manufacturing, and marketing of stabilized day and night cameras for ground and aerial vehicles, such as micro and mini UAVs and drones. In addition to the cameras, the Company develops auxiliary products that significantly reduce the integration time of the cameras into the various platforms of its customers.

On June 14, 2021, the Company's securities began trading on the Tel Aviv Stock Exchange Ltd., following the completion of its first public offering under a prospectus on June 10, 2021.

On September 16, 2025, the Company completed a non-uniform offering to institutional investors (most of whom were foreign investors) in the total amount of approximately NIS 1,387 million (approximately USD 413.7 million). The total direct issuance costs incurred by the Company in connection with the offering amounted to approximately USD 15.3 million and were charged directly to equity. In consideration for the allocation of 9,500,000 ordinary shares of the Company, with a par value of NIS 0.00005 each, at a price of NIS 146.7 (approximately USD 43.75) per share, which, at the time of their allocation, constituted approximately 10.44% of the Company's issued and paidup share capital (approximately 9.99% on a fully diluted basis). According to the Shelf Offering Report dated August 27, 2025, the net proceeds will be used by the Company to finance strategic growth initiatives, including the advancement of potential mergers and acquisitions consistent with its core business areas, for general working capital and corporate purposes, including further development efforts, working capital, and operating expenses, as well as investment in research and development programs to support its long-term innovation roadmap and growth strategies. As of the date of the Report, the Company has no agreements or commitments for any material acquisitions or investments.

B. Impact of the Iron Swords War

On October 7, 2023, following a surprise attack by the terrorist organization Hamas from the Gaza Strip, the Government of Israel declared the Iron Swords War. As of October 2025, a ceasefire agreement has been reached. Following the attack from the Gaza Strip, an attack also commenced on northern Israel by the terrorist organization Hezbollah from Lebanon, and tensions increased in additional areas. As part of its response to the threats of the Iron Swords War, the Government of Israel ordered the evacuation of dozens of communities located in the south of the country, around the Gaza Strip, and in the north, along the border with Lebanon, and also imposed restrictions on gatherings, the operation of workplaces, and educational activities in accordance with the instructions of the Home Front Command. In addition, many civilians were called up for reserve duty for extended periods. These factors led to a reduction and slowdown in business activity in Israel, resulting, inter alia, from the closure of businesses, manpower shortages, and disruptions in the supply chain.

Potential fluctuations in commodity prices, foreign currency exchange rates, availability of materials, availability of manpower, local services, and access to local resources may affect entities whose main operations are with Israel or in Israel.

On August 12, 2024, Fitch downgraded the credit rating of the State of Israel to a rating of A (with a negative outlook). On September 27, 2024, the international credit rating agency Moody's announced a two-notch downgrade of Israel's credit rating from A2 to Baa1 with a negative outlook. This followed the agency's earlier announcement on February 9, 2024, of a downgrade from A1 to A2, also with a continued negative outlook. A few days after Moody's downgrade, the credit rating agency S&P also announced a one-notch downgrade of Israel's credit rating from A+ to A and added a negative outlook, after it had already issued a previous downgrade during 2024.

Note 1: General (cont.)

According to Moody's, the downgrades and negative outlook reflect both the negative outlook on Israel's credit rating and concerns regarding deterioration in the banks' own condition in the event of further economic harm should the effects of the war worsen.

On March 31, 2025, May 9, 2025, and October 17, 2025, Fitch, S&P, and Moody's, respectively, announced that the credit rating of the State of Israel remained unchanged, each as applicable.

On June 13, 2025, the State of Israel launched a military operation against Iran, called "Rising Lion", with the objective of striking and destroying Iranian nuclear and weapons infrastructure. During 12 days of fighting, the IDF attacked strategic targets throughout Iran, destroying key facilities related to the Iranian nuclear program, ballistic missile arrays, and eliminating senior figures in Iran's security establishment. In response to the operation, Iran launched hundreds of ballistic missiles and unmanned aerial vehicles at military and civilian targets in Israel. The attacks caused extensive infrastructure damage, significant property loss, approximately 30 fatalities among Israeli and foreign civilians, and injuries to hundreds more. On June 24, 2025, following an American strike on Iranian territory, a ceasefire agreement was reached between the parties. Upon the conclusion of the operation, a delay occurred in the activity of air freight companies, which was resolved approximately one week later.

Following the end of the operation and the resumption of air freight services, most of the goods that had not yet been shipped to the Company's customers were released (during the last week of June and some also during July). Since the Company has several customers with payment terms, the goods shipped at the end of June were paid for during July.

Since the outbreak of the war, there has been an increase in orders for the Company's cameras and other products from its Israeli customers. In addition, last year, prior to the outbreak of the war, the Company increased its inventory in order to meet the growing demand for its products from customers. The Company also expanded its production capacity to meet the increased demand while continuing to supply customers' orders on time. As of this date, the war has had no material impact on the Company's results or its ability to deliver orders to customers on time.

The Company continues to review, from time to time, the impact of the economic and wartime situation on its business operations. However, due to the uncertainty regarding the scope and duration of the war, the extent of reserve duty mobilization, the continued availability of adequate inventory, market volatility, potential additional actions by the Israeli government, and the impact of other factors, including on the business activities of the Company's customers, the Company is currently unable to accurately assess the extent and nature of any further future impact of the war on its results.

C. Tariffs on Goods Imported to the U.S.

In April 2025, the U.S. administration announced a plan to impose tariffs on goods imported to the United States, which may also affect Israel's economy. According to the macroeconomic forecast of the Bank of Israel's Research Department from April 2025, the imposition of global tariffs will lead to a 4% decrease in global trade volume by the end of 2026 (compared to a scenario without tariffs). The plan includes two main components:

a) A uniform tariff of 10% on all imports into the United States.
b) Additional varying tariffs on imports from countries with a significant trade surplus with the U.S.

Note 1: General (cont.)

As part of this plan, upon the start of its implementation, goods imported from Israel were subject to a 10% tariff under the uniform import tariff. As of August 7, 2025, imports from Israel to the United States are subject to a total tariff rate of 15% (10% uniform + 5% variable based on country). Additionally, under the tariff policy, there is an exemption for goods purchased by subcontractors on behalf of the U.S. government.

Although part of the Company's revenue is derived from exports to the U.S., the Company estimates that the potential impact of the new tariff policy on its business results is minimal.

Note 2: Summary of Significant Accounting Policies

Format of the Interim Financial Statements

These financial statements have been prepared in condensed format as of September 30, 2025, and for the nine month and three month periods ended on that date (hereinafter: the "Interim Financial Statements"). These statements should be read in conjunction with the Company's annual financial statements as of December 31, 2024, and for the year then ended, including the accompanying notes (hereinafter: the "Annual Financial Statements").

The condensed interim financial statements comply with the provisions of International Accounting Standard 34, Interim Financial Reporting. Additionally, the condensed interim financial statements comply with the disclosure requirements of Chapter D of the Securities Regulations (Periodic and Immediate Reports), 5730–1970.

The condensed interim financial statements were prepared using the same accounting policies and calculation methods applied in the Annual Financial Statements.

Note 3: - Cash

	For the nine-month period ended September	30	For the year ended December 31, 2024
Composition:	2025	2024
	Unaudited		Audited
		USD thousand
In banks	7,517	4,140	4,439
Deposits *	20,016	98,237	70,269
	27,533	102,377	74,708

(*) Most of which are in dollar deposits for periods of three months including fixed interest ranging between 4.75%- 5.35%.

Note 4: Deposits

	For the nine-month period ended September 30	For the year ended December 31, 2024
Composition	2025 2024
	Unaudited	Audited
		USD thousands
Short term deposits*	502,102	- 47,903
	502,102	- 47,903

(*) Most of which are in dollar deposits whose original term exceeds three months from the deposit date and do not exceed one year, including fixed annual interest ranging between 4.89%-4.94%.

Note 5: Revenue from sales

		For the nine-month period ended on September 30 2024
A. Composition:	2025
	Unaudited		Audited
	USD thousands
Sales in Israel	14,710	15,240	17,880
Sales in Europe	69,283	44,582	66,467
Sales in North America	31,703	12,851	17,975
Sales in other countries	4,837	11,751	12,612
	120,533	84,424	114,934

B. Additional information on revenues

	For the nine months ended on September 30		For the year ended on December 31,
	2025	2024	2024
		Unaudited	Audited
Revenue from main customers, each responsible for 10% or more
of the total revenue reported in the financial statements:
Customer A	19.1%	16.0%	15.9%
Customer B	11.6%	13.4%	19.0%

Note 6: Significant Events During the Report Period

A. On March 9, 2025, the Company's Board of Directors approved the distribution of a dividend in the amount of approximately USD 33,198 thousand, paid during the month of March 2025.
B. On March 9, 2025, the Company's Compensation Committee and Board of Directors approved the grant of 273,000 options, exercisable into 273,000 ordinary shares with a nominal value of NIS 0.00005 each of the Company, to Company employees. The options are exercisable in three tranches: the first tranche, 50% of the grant, is exercisable two years after the date of the grant; the second tranche, 25% of the grant, is exercisable three years after the date of the grant; and the remaining 25% is exercisable in a single tranche four years after the date of the grant, subject to the continued existence of employment relations. The options expire five years after being granted. The exercise price of each option is NIS 84.15 (approximately USD 23.3). The fair value of the grant on the date of Board approval was approximately NIS 32.34 per option (approximately USD 8.95). The calculation was based on the following assumptions: standard deviation of 36.13%, risk-free interest rate of 4.01%, exercise period of five years, and the Company's share closing price on the Tel Aviv Stock Exchange on March 6, 2025 – NIS 84.15.
C. On March 9, 2025, the Compensation Committee and Board of Directors approved the grant of 65,000 nonmarketable options to the Company's CEO, 52,000 non-marketable options to the Chairman of the Board, and 52,000 non-marketable options to the Company's CTO, who also serves as a Director. The options are exercisable into ordinary shares of the Company with a nominal value of NIS 0.00005 each. The options are exercisable in three equal annual tranches, subject to the continued existence of employer-employee relations between the Company and the CEO, and continued service of the Chairman and CTO at the Company. The options will expire about four years from being granted. The grant was approved at the General Meeting held on April 29, 2025. The exercise price of each option is NIS 72.81 (approximately USD 20.2). The fair value of the grant on the approval date by the Board of Directors was approximately NIS 33.4 for each option (approximately USD 9.25).

The calculation was made and based on the following assumptions: standard deviation of 36.13%, a riskfree interest rate of 4.01%, an exercise period of four years, and the Company's share closing price on the Stock Exchange on March 6, 2025 – NIS 84.15.

Note 6: Significant Events During the Report Period (cont.)

D. During the period, employees of the Company exercised 1,404,128 options for shares of the Company, for total proceeds of approximately USD 3,575 thousand.
E. Until December 31, 2024, the Company operated primarily from its offices located at 17 Tidhar Street, Ra'anana, with a total area of approximately 1,600 square meters and 17 parking spaces. As of January 1, 2025, the Company's offices are located at 9 HaDafna Street, Ra'anana, with a total area of approximately 3,300 square meters, spread across two floors, and approximately 100 parking spaces.
The lease agreement (hereinafter: the "Lease Agreement") is for a term of six years, through December 31, 2030. The Lease Agreement includes an option for the Company to extend the lease period by an additional 36 months, under terms detailed in the Lease Agreement.
A lease asset and liability in the amount of USD 3,088 thousand was recognized by the Company, and the incremental borrowing rate was 8%. The option to extend was not taken into account in determining the lease term, as the Company does not reasonably expect the option to be exercised.
F. On April 29, 2025, the Company's General Meeting of Shareholders approved a new compensation policy for the Company. Several changes were made in the new compensation policy compared to the previous policy, including, among others, the following provisions:
1. The cap on fixed compensation for the Chairman of the Board of Directors and the Company's CTO was updated to NIS 2,200 thousand per year (instead of NIS 1,500 thousand per year), and for the CEO of the Company, it was updated to NIS 2,700 thousand per year (instead of NIS 1,500 thousand per year). The cap on fixed compensation for officers subordinate to the CEO was updated to NIS 1,500 thousand per year (instead of NIS 700 thousand per year).
1. The cap on the Company's variable compensation was changed to 18 times the monthly salary (instead of 12 monthly salaries), based on employer cost. In addition, a threshold condition was added stipulating that officers of the Company will be eligible for variable compensation only if the Company's operating profit, as stated in its financial statements as approved by the Board of Directors, amounts to at least NIS 40 million. Each of the Chairman of the Board and the CTO shall be entitled to a cash bonus of 2.5% of the Company's pre-tax net profit, up to a ceiling of 12 times each of their respective monthly costs. Additionally, they shall be entitled to an additional cash bonus of up to six times their respective monthly costs, contingent upon achieving targets as specified in the compensation policy.
1. The cap on variable compensation that may be granted to an officer subordinate to the CEO shall be up to six times the monthly salary cost. In addition, the cap on the value of equity compensation was amended such that for the Chairman of the Board and the Company's CTO, the fair value shall not exceed ten times their respective monthly fixed compensation during a calendar year, and for the CEO, the fair value shall not exceed 5.5 times the CEO's monthly fixed compensation during a calendar year.
G. On May 18, 2025, the Company's Board of Directors approved the grant of 52,000 options of the Company to Company employees who are not officers, and 31,000 options to officers, with all options exercisable into a total of 83,000 ordinary shares of the Company with a nominal value of NIS 0.00005 each. The options are exercisable in three tranches: the first tranche, constituting 50% of the grant, is exercisable two years after the date of grant; the second tranche, constituting 25% of the grant, is exercisable three years after the date of grant; and the remaining 25% is exercisable in a single tranche four years after the date of grant, subject to the continued existence of employer-employee relations. The options will expire five year from being granted.

The exercise price of each option granted to officers and employees of the Company is NIS 93.69 (approximately USD 26.46). The fair value of the grant on the date of Board approval was approximately NIS 37.14 per option (approximately USD 10.49).

The calculation was based on the following assumptions: standard deviation of 37.9%, risk-free interest rate of 3.97%, exercise period of five years, and the Company's share closing price on the Tel Aviv Stock Exchange on May 15, 2025 – NIS 93.69.

Note 6: Significant Events During the Report Period (cont.)

H. On August 20, 2025, the Company's General Meeting of Shareholders approved after the Company's Compensation Committee and Board of Directors had approved on July 8, 2025 - the update of the Company's engagement with the Chairperson of the Board, the Chief Executive Officer, and the Chief Technology Officer (hereinafter: the "Officers") under new management and employment agreements, as well as the payment structure, as follows:
1) The employment cost of the Chairperson of the Board and the Chief Technology Officer increased from NIS 144 thousand each to a monthly employment cost of NIS 165 thousand.
2) A performance-based variable compensation was added for the Chairperson of the Board, the Chief Technology Officer, and the Chief Executive Officer, in an amount of up to six salaries, depending on the Company's sales targets being met.
I. On July 8, 2025, the Company's Board of Directors approved the grant of 100,000 Company options to employees who are not officers. The options are exercisable into ordinary shares of the Company with a nominal value of NIS 0.00005 each. The options are exercisable in three tranches: the first tranche, constituting 50% of the grant, is exercisable two years after the date of grant; the second tranche, constituting 25% of the grant, is exercisable three years after the date of grant; and the remaining 25% is exercisable in a single tranche four years after the date of grant, subject to the continued existence of employer-employee relations.
The exercise price of each option granted to the Company's employees is NIS 126.4 (approximately USD 37.93). The fair value of the grant on the date of Board approval was approximately NIS 50.17 per option (approximately USD 15.05).
The calculation was based on the following assumptions: standard deviation of 38.29%, risk-free interest rate of 3.84%, exercise period of five years, and the Company's share closing price on the Tel Aviv Stock Exchange on July 8, 2025 – NIS 126.4.
J. On September 16, 2025, the Company completed a non-uniform offering to institutional investors (most of whom were foreign investors) in the total amount of approximately USD 413.7 million (gross), in consideration for the allocation of approximately 9,500,000 ordinary shares of the Company (see Note 1A).
K. On September 28, 2025, the Company's Board of Directors approved the allocation of 137,000 nonmarketable options of the Company to Company employees who are not Officers, and 250,000 nonmarketable options to the Company's Chief Executive Officer, exercisable into ordinary shares of the Company with a par value of NIS 0.00005 each. The options are exercisable in three tranches: the first tranche, constituting 50% of the allocation, becomes exercisable two years from the date of grant; the second tranche, constituting 25% of the allocation, becomes exercisable three years from the date of grant; and the remaining 25% becomes exercisable four years from the date of grant, all subject to the existence of employer-employee relations. The options will expire five years from the date of grant.
The exercise price of each option granted to the Company's employees is NIS 146.7 (approximately USD 43.58). The fair value of the grant on the date of approval by the Board of Directors was approximately NIS 58.96 per option (approximately USD 17.52).

The calculation is computed and based on the following assumptions: a standard deviation of 39.55%, a risk-free interest rate of 3.6%, an exercise period of five years, and the Company's share closing price on the Stock Exchange on September 28, 2025 – NIS 146.7.

The grant of options to the Company's Chief Executive Officer was approved at the General Meeting held on November 5, 2025.

NextVision Stabilized Systems Ltd.

Quarterly Report As of September 30, 2025

Quarterly Report Regarding the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Article 38C(a)

Quarterly Report Regarding the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Article 38C(a) As of September 30, 2025

Management, under the supervision of the Board of Directors of NextVision Stabilized Systems Ltd. (hereinafter: the "Company"), is responsible for the establishment and maintenance of adequate internal control over financial reporting and disclosure in the Company.

In this context, the members of Management are:

1. Michael Grosman, Chief Executive Officer;
1. Alex Lavie, Chief Financial Officer;

Internal control over financial reporting and disclosure includes controls and procedures existing in the Company, which were designed by the Chief Executive Officer and the most senior officer in the finance function or under their supervision, or by those actually performing said functions, under the supervision of the Company's Board of Directors. These controls and procedures are intended to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with legal requirements, and to ensure that information the Company is required to disclose in its reports pursuant to legal provisions is collected, processed, summarized, and reported in a timely manner and in the format prescribed by law.

Internal control includes, inter alia, controls and procedures designed to ensure that the information the Company is required to disclose as stated above is accumulated and conveyed to the Company's Management, including the Chief Executive Officer and the most senior officer in the finance function or those actually performing said functions, in order to allow for timely decision-making with respect to the disclosure requirement.

Due to its inherent limitations, internal control over financial reporting and disclosure is not intended to provide absolute assurance that misstatements or omissions in the reports will be prevented or detected.

Management, under the supervision of the Board of Directors, conducted a review and evaluation of the internal control over financial reporting and disclosure in the Company and its effectiveness.

The evaluation of the effectiveness of internal control over financial reporting and disclosure conducted by Management under the supervision of the Board of Directors included: an assessment of reporting and disclosure risks, process mapping and identification of material processes for financial reporting and disclosure, examination and documentation of the existing controls in the Company, and an overall evaluation of the effectiveness of internal control, including entity-level controls (ELC), the financial reporting process, and general IT controls (ITGC) of the Company's information systems. The material processes for financial reporting include controls over the sales process and inventory process.

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 could change the assessment of the effectiveness of internal control as found in the most recent internal control report.

Based on the evaluation of effectiveness conducted by Management under the supervision of the Board of Directors as detailed above, the Board of Directors and Management of the Company have concluded that the internal control over financial reporting and disclosure in the Company as of September 30, 2025 is effective.

(a) Statement of the Chief Executive Officer pursuant to Article 38C(d)(1)

Officers' Statement Statement of the Chief Executive Officer

I, Michael Grosman, declare that:

1. I have reviewed the Quarterly Report of NextVision Stabilized Systems Ltd. (hereinafter: the "Company") for the Third quarter of 2025 (hereinafter: the "Reports");
1. To the best of my knowledge, the Reports do not contain any untrue statement of a material fact or omit a material fact required such that, in light of the circumstances under which such statements were made, the statements included therein would not be misleading with respect to the Report Period;
1. To the best of my knowledge, the financial statements and other financial information included in the Reports fairly present in all material respects the financial condition, results of operations, and cash flows of the Company as of the dates and for the periods to which the Reports relate;
1. I have disclosed to the Company's independent auditor, the Board of Directors, and the Audit Committee and Financial Statements Committee of the Company, based on my most recent evaluation of internal control over financial reporting and disclosure:
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting and disclosure which are reasonably likely to adversely affect the Company's ability to record, process, summarize, or report financial information in a manner that would raise doubt as to the reliability of the financial reporting and the preparation of the financial statements in accordance with legal requirements; and
(b) Any fraud, whether material or not, involving the Chief Executive Officer or any person directly subordinate to him, or any other employees with a significant role in internal control over financial reporting and disclosure;
1. I, alone or together with others in the Company:
(a) Established controls and procedures, or ensured the establishment and maintenance of controls and procedures under my supervision, designed to ensure that material information relating to the Company is made known to me by others within the Company, particularly during the period in which the Reports were being prepared; and
(b) Established controls and procedures, or ensured the establishment and maintenance of controls and procedures under my supervision, designed to reasonably ensure the reliability of financial reporting and the preparation of the financial statements in accordance with legal requirements, including generally accepted accounting principles.
(c) No event or matter has been brought to my attention that occurred during the period between the last quarterly report date and this Report date that would change the conclusions of the Board of Directors and Management regarding the effectiveness of the internal control over the Company's financial reporting and disclosure.

Nothing in the above shall derogate from my responsibility or the responsibility of any other person under any law.

November 9, 2025
Date	Michael Grosman
	CEO

(b) Statement of the Most Senior Officer in the Finance Function pursuant to Article 38C(d)(2)

Officers' Statement Statement of the Most Senior Officer in the Finance Function

I, Alex Lavie, declare that:

1. I have reviewed the interim financial statements and other financial information included in the interim reports of NextVision Stabilized Systems Ltd. (hereinafter: the "Company") for the Third quarter of 2025 (hereinafter: the "Reports" or "Interim Reports");
1. To the best of my knowledge, the interim financial statements and other financial information included in the Interim Reports do not contain any untrue statement of a material fact or omit a material fact required such that, in light of the circumstances under which such statements were made, the statements included therein would not be misleading with respect to the Report Period;
1. To the best of my knowledge, the interim financial statements and other financial information included in the Interim Reports fairly present in all material respects the financial condition, results of operations, and cash flows of the Company as of the dates and for the periods to which the Reports relate;
1. I have disclosed to the Company's independent auditor, the Board of Directors, and the Audit Committee and Financial Statements Committee of the Company, based on my most recent evaluation of internal control over financial reporting and disclosure:
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting and disclosure, to the extent it relates to the interim financial statements and other financial information included in the Interim Reports, which are reasonably likely to adversely affect the Company's ability to record, process, summarize, or report financial information in a manner that would raise doubt as to the reliability of the financial reporting and the preparation of the financial statements in accordance with legal requirements; and
(b) Any fraud, whether material or not, involving the Chief Executive Officer or any person directly subordinate to him, or any other employees with a significant role in internal control over financial reporting and disclosure;
1. I, alone or together with others in the Company:
(a) Established controls and procedures, or ensured the establishment and maintenance of controls and procedures under my supervision, designed to ensure that material information relating to the Company, is made known to me by others within the Company, particularly during the period in which the Reports were being prepared; and
(b) Established controls and procedures, or ensured the establishment and maintenance of controls and procedures under our supervision, designed to reasonably ensure the reliability of financial reporting and the preparation of the financial statements in accordance with legal requirements, including generally accepted accounting principles;
(c) No event or matter has been brought to my attention that occurred during the period between the last quarterly report date and this Report date, regarding the interim financial statements and any other financial information included in the Interim Reports, which, in my opinion, would change the conclusions of the Board of Directors and Management regarding the effectiveness of the internal control over the Company's financial reporting and disclosure.

Nothing in the above shall derogate from my responsibility or the responsibility of any other person under any law.

November 9, 2025
Date	Alex Lavie
	CFO

AI Terminal

Next Vision Stabilized Systems Ltd.

6945_rns_2025-11-10_9b5d1762-5dce-49d0-b07d-5cfdb99beea3.pdf

Board of Directors' Report on the State of the Corporation's Affairs

For the Nine-Month Period Ended on September 30, 2025

Chapter A – Explanations of the Board of Directors Regarding the State of the Company's Affairs

Brief Description of the Company and Its Business Environment

1. General

Disclosure Regarding the Effects of the Iron Swords War and Operation Rising Lion

Tariffs on Imported Goods to the United States

Changes in Exchange Rates

The Impact of the Russia–Ukraine War on the Company's Operations

2. Development of the Company's Business During the Report Period

3. Board of Directors' Explanations for State of the Company's Business, Results of Activity, Equity and Cash Flows

3.1. Financial Condition

3.2. Results of the Company's Business Activities

3.3. Cash Flows and Liquidity

3.4. Funding Sources

3.5. Working Capital

Part C – Disclosure Regarding the Corporation's Financial Reporting and Corporate Governance Aspects

4. Information Regarding Material Events After the Report Date

5. Breakdown of Liabilities by Maturity Dates

NextVision Stabilized Systems Ltd.

NextVision Stabilized Systems Ltd.

Condensed Interim Financial Statements as of September 30, 2025

(Unaudited)

Table of Contents

Independent Auditors' Review Report to the Shareholders of NextVision Stabilized Systems Ltd.

Introduction

Scope of Review

Conclusion

Condensed Statements of Financial Position

Condensed Statements of Comprehensive Income

Condensed Statements of Changes in Equity

Condensed Statements of Changes in Equity

For the year ended on December 31, 2024 (audited)

Condensed Statements of Cash Flows

Note 1: General

A. The Company

B. Impact of the Iron Swords War

C. Tariffs on Goods Imported to the U.S.

Note 1: General (cont.)

Note 2: Summary of Significant Accounting Policies

Format of the Interim Financial Statements

Note 5: Revenue from sales

B. Additional information on revenues

Note 6: Significant Events During the Report Period

NextVision Stabilized Systems Ltd.

Quarterly Report As of September 30, 2025

Quarterly Report Regarding the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Article 38C(a) As of September 30, 2025

(a) Statement of the Chief Executive Officer pursuant to Article 38C(d)(1)

Officers' Statement Statement of the Chief Executive Officer

I, Michael Grosman, declare that:

(b) Statement of the Most Senior Officer in the Finance Function pursuant to Article 38C(d)(2)

Officers' Statement Statement of the Most Senior Officer in the Finance Function

I, Alex Lavie, declare that:

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