Kvutzat Acro Ltd. — M&A Activity 2026

Feb 19, 2026

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Acro Group Ltd. ("the Company" or "Acro")

To To February 19, 2026

Securities Authority The Tel Aviv Stock Exchange Ltd.

www.isa.gov.il www.tase.co.il

Subject: Engagement in a merger transaction with Israel Canada (T.R) Ltd.

The Company is honored to report that on February 18, 2026, Acro entered into a statutory merger agreement with Israel Canada (T.R) Ltd. ("Israel Canada") according to the provisions of the first chapter of the eighth part of the Companies Law, 5759-1999 ("Merger Agreement" and "Companies Law", respectively), whereby subject to the fulfillment of the conditions precedent detailed below, Acro will merge into Israel Canada, such that all of Acro's assets and liabilities [including Acro's liabilities to the holders of BONDS (series 1) and (series 2) of Acro ("Existing Series")] will be transferred to Israel Canada, in their As-Is condition ("Merger" or "Merger Transaction"). 1 2

The merger transaction, if performed, will be executed in a cash transaction (40%) and shares (60%), according to agreed value ratios for the purpose of determining merger ratios only of NIS 6.9 billion for Israel Canada and NIS 3.1 billion for Acro (reflecting an exchange ratio of 1: 2.2258). In light of said merger ratios, each shareholder who holds on the record date to be determined for the transaction, one share of Acro, will be entitled to considerations as follows (together: "Consideration"): (1) a total of NIS 19.66 (such that the total cash consideration to be paid to all Acro shareholders within the merger transaction will total approximately NIS 1.24 billion) and (2) approximately 1.458 shares of Israel Canada [such that the total shares to be allocated to Acro shareholders within the merger transaction will be 91,947,958 shares and they will constitute 21.23% of the issued and paid-up share capital of Israel Canada and the voting rights therein (given Israel Canada's capital data today)]. 3

Notwithstanding the above paragraph, if 517,242 warrants for Acro shares, previously allocated by Acro to institutional investors, are exercised (in exchange for an exercise price of NIS 70 per warrant) until the final date for their exercise, which is August 5, 2026, Acro's value for the purpose of determining the merger ratios will increase by the full amount of the exercise proceeds of said warrants received by Acro ("Institutional warrants"), and accordingly, the consideration to which each Acro shareholder will be entitled under the merger transaction will increase.

Conversely, the exercise of other convertible securities previously allocated by Acro to employees and officers in Acro (or the allocation of shares to be performed for them until the completion date of the merger transaction , instead of the warrants in their possession), will not lead to a change in Acro's value for the purpose of determining the merger ratios, and therefore will lead to a decrease in the consideration to which each Acro shareholder will be entitled under the merger transaction . 4 5

The entry of the agreement into force is subject to the fulfillment of conditions precedent until September 10, 2026, with the possibility of postponing said date until February 28, 2027 ("Final Date"), the main ones being as follows: 6

1. Approval of the Board of Directors of each of the companies participating in the merger (Acro and Israel Canada) (received on February 18, 2026) as well as approval of the General Meeting of each of the companies participating in the merger according to the provisions of sections 314 and 320 of the Companies Law by an ordinary majority. 7

¹ A public company whose shares are traded on the Tel Aviv Stock Exchange Ltd. ("the Stock Exchange").

² By way of allocating new series of BONDS of Israel Canada which will be allocated according to a shelf offering report to the holders of Acro's BONDS under the same conditions as each of Acro's existing series and in a way that the trust deed of each of the series will continue to be in force and will be assigned to Israel Canada.

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This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .

Acro's value on the stock exchange, as of February 18, 2026, totaled approximately NIS 2.8 billion. Israel Canada's value on the stock exchange, as of the same date, totaled approximately NIS 7 billion.

• 4 A date that will occur up to 14 business days after the fulfillment of the conditions precedent detailed below and in any case not before September 10, 2026, or a later date as will be determined with the Stock Exchange ("Completion Date"). Notwithstanding the above, Israel Canada will be entitled, at its sole discretion, to advance the completion date provided that it occurs after August 15, 2026.
• 5 In this regard, it should be noted that Acro committed that on the record date for performing the merger transaction there will be no convertible securities in Acro, where for this purpose, among other things, Acro will act to allocate shares to officers and employees as stated instead of the warrants in their possession.
• 6 According to the provisions of the agreement, the final date for the fulfillment of the conditions precedent was set for September 10, 2026. However, each of the parties to the agreement will be entitled to extend the final date until December 31, 2026 ("the extending party") by notice to the other party for the purpose of fulfilling condition(s) precedent that have not yet been fulfilled and no final rejection notice has yet been received regarding them or up to 60 days from the end date of an emergency state in the country (as defined in the agreement), whichever is later and in any case no later than February 28, 2027.
• 7 In this regard, it should be noted, that the controlling shareholders in the absorbing Acro and the controlling shareholders in Acro (being Itzhak Arvov, including by virtue of a power of attorney granted to him by shareholders in Acro, and Ms. Raya Strauss Ben-Dror ("controlling shareholders in Acro")) committed in an irrevocable commitment that each of them will vote in the General Meeting of the shareholders of Israel Canada or Acro, as the case may be, in favor of the merger transaction and additionally the controlling shareholders in Acro committed not to sell their shares until the record date.

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• 1. Receiving Tax Authority approval for a tax ruling in an agreement (pre-ruling) according to Section 103 of the Income Tax Ordinance [New Version], 1961, according to which the allocated shares that will be allocated by Israel Canada to the shareholders in Acro will be charged with tax only at the time of their sale and not at the time of their allocation.
• 1. Completion of all procedures required for the merger transaction in accordance with the First Chapter of the Eighth Part of the Companies Law and the regulations established thereunder, including receiving a merger certificate from the Registrar of Companies.
• 1. Receiving the Stock Exchange's approval for the registration for trade of the shares and new series of BONDS of Israel Canada which will be allocated (instead of existing series) according to a shelf offering report to be published by Israel Canada as well as receiving the Securities Authority permit for the shelf offering report.
• 1. Receiving approval from financing parties of Israel Canada and Acro for the merger transaction, as far as such approval is required according to the terms of engagement with them.
• 1. Receiving approval from the Commissioner of Competition.

In addition, it was agreed that in the interim period (meaning, until the completion date), Acro will not perform any action that deviates from the ordinary course of business and will not perform any distribution, as the term is defined in the Companies Law. In addition, Acro will not perform an allocation of shares or convertible securities except in connection with the non-tradable warrants of Acro. It will also be possible to raise BONDS by Acro in a scope not exceeding the scope determined in the agreement. Israel Canada will not do any action that deviates from its ordinary course of business and will not perform any distribution, as the term is defined in the Companies Law, except for a permitted distribution in a financial scope that will not exceed NIS 25 million.

At the completion date (as defined above), the term of office of the directors serving in Acro will end and in addition Messrs. Itzhak Arbib, Chairman of the Board and Ziv Yaakobi, Director and CEO of Acro will resign from their position in the group and sign letters of absence of claims and an undertaking for non-competition in the period agreed upon in the agreement, and non-tradable warrants of Acro that were not exercised by the completion date will expire, in a way that in Acro there will be no convertible securities at the completion date.

Acro and Israel Canada will act in the near period, according to the provisions of the law, to convene shareholder meetings of each of the companies for the purpose of approving the merger transaction and to perform all the actions required for the fulfillment of the closing conditions.

Sincerely,

Acro Group Ltd.

Signed by: Itzhak Arbib, Chairman of the Board

Ziv Yaakobi, CEO and Director

2/19/2026 | 7:15:08 AM