BATM Advanced Communications Ltd. - Annual Report 2025

BATM Advanced Communications Limited

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Annual Report & Accounts

for the year ended

31 December 2025

Annual Report & Accounts 2025

Revenue

(1)

Adj. EBITDA

(1)(2)

(2024: $117.3m)

(2024: $8.1m)

(2024: 31.4%)

123.2

18.9

32.5

A pivotal year of

transformation

Gross margin

(1)

Accelerating transition

to become a

focused

provider

of highly secure,

software-defined

network connectivity

Four

businesses sold

during the year and a

fifth

post year end for a total

consideration of

$24.4m

Core activities now

comprise

BATM Networks

and

BATM Cyber

Significant growth and

upscaling of

pipeline

core activities

(1)

Results for the Group’s continuing operations (see note

20 to the ﬁnancial statements)

(2)

Adjusted to exclude amoisation of intangible

assets, share-based payments and expenses related to

corporate activity. The ﬁgures include capital gains and an

exceptional expense from a theft of inventory

Contents

Strategic Repo

Chairman’s Statement

Business Model

Strategy

Chief Executive Oﬃcer’s Review

Stakeholder Engagement

Chief Financial Oﬃcer’s Review

Key Peormance Indicators

Environment & People

TCFD Repo

Risk Management

Corporate Governance

Directors’ Biographies

Corporate Governance Repo

Audit Commiee Repo

Directors’ Remuneration Repo

Directors’ Repo

Financial Statements

Independent Auditor’s Repo

Consolidated Financial Statements

Notes to the Consolidated Financial Statements

Other Alternative Measures

112

Company Information

113

Annual Report & Accounts 2025

I am pleased to present my first statement as Chairman

of BATM – and to have joined the Board at such a pivotal

moment. During 2025, significant progress was made

towards transforming BATM into a business focused on

providing highly-secure managed network connectivity

and cybersecurity. We streamlined our operations through

targeted disposals, strengthened our core activities and

laid firmer foundations for sustainable value creation,

notwithstanding the impact of non cash write offs associated

with reshaping the business.

Strategy

In 2025, we made decisive progress in reshaping BATM

around our core strengths of networking and cybersecurity.

We completed the disposals of Celitron in Hungary, Zer

Laboratories and Progenetics in Israel, and A.M.S 2000

Trading Impex SRL (“AMS”) and, post year end, Laborator

A.M.S 2000 SRL in Romania. Together, these transactions

generated total consideration of $24.4m and significantly

reduced the complexity of the Group.

Following a review of capital allocation priorities, the Board

determined that further material investment in our ADOR

Diagnostics (“ADOR”) associate company is not aligned with

our risk appetite or strategic focus and therefore decided

to significantly curtail funding into ADOR and wrote-off

our $18.7m investment and related balances accumulated

over the last nine years. ADOR continues to seek a strategic

investor or other route to monetise its intellectual property

and, if successful, BATM would expect to recognise a

corresponding gain in the future.

With the successful turnaround of the proprietary

diagnostics business in 2025, combined with the sale of AMS

and decision to step back from ADOR, we have decided that,

going forward, our diagnostics activities will be classified as

Non-core, alongside our pharmaceutical distribution and

environmental monitoring activities. Our strategic focus is

therefore firmly on BATM Networks and BATM Cyber, where

we believe the combination of advanced networking and

cybersecurity capabilities offers the greatest opportunity to

create long term shareholder value through the provision of

highly-secure network connectivity.

Chairman’s

Statement

Gil Sharon

Chairman

Strategic Report

In an ever-more digitised society, demand for secure

network infrastructure through which sensitive data can

travel safely is on the rise. At the same time, organisations

are increasingly preparing themselves for the post-quantum

era that is rapidly approaching. At BATM, we have decades

of experience of providing cutting-edge, next-generation

networking and cybersecurity technologies to enable entities,

from enterprises to government, to operate securely and

efficiently. Our best-in-class encryption platform is quantum-

era ready and is differentiated by its significant computer

processing power and advanced, high-speed encryption

that is suitable for critical organisations such as defence and

financial institutions for which information security is of vital

importance to their businesses. We are now fully focused

on leveraging this experience and expertise to deliver highly

secure, software-defined managed connectivity with built-in

protection against emerging threats, including those posed

by quantum computing, to provide customers with solutions

to their challenges of today as well as tomorrow.

Group performance

Revenue rose to $123.2m for 2025 – representing year-on-

year growth of 5% on a reported basis (2024: $117.3m) and

9% on a comparable basis (to exclude the contribution to H2

2024 of the businesses sold during H1 2025).

Across our core activities, we saw encouraging operational

and commercial progress in 2025, with BATM Networks

returning to growth and exiting the year with a significantly

larger pipeline following the refocusing of its go to

market strategy. BATM Cyber delivered results in line with

expectations after an exceptionally strong 2024, improved

gross margin and achieved a key milestone with the first

commercial deployment of a customised version of our

advanced encryption platform under a strategic partner’s

brand. BATM Diagnostics, which was classified as core

for the period under review, delivered strong revenue and

margin growth and crystallised substantial value through

the AMS disposal while achieving breakeven at the level of

the underlying proprietary business following the successful

transition to a reagent-led model.

Governance, people and culture

The Board, led by my predecessor, Dr. Gideon Chitayat,

played an instrumental role throughout this period of

significant change, overseeing the execution of our strategy,

the reshaping of the business and the associated capital

allocation decisions. We are very grateful to Dr. Chitayat for

his ten years as Chairman, and a further five before that as

a Non-executive Director, and wish him all the best in his

retirement. We would also like to extend our thanks to Dr. Zvi

Marom, Ran Noy and Harel Locker who stepped down during

the year and to welcome Lior Miles and Ayala Hakim who

joined the Board in 2025.

In my tenure as the Chairman, we will remain committed to

maintaining high standards of governance, risk management

and financial discipline as the Group transitions towards a

more focused business model. We also continue to invest

in our people and organisational capabilities, including

strengthening teams in our core businesses.

On behalf of the Board, I would like to thank Moti Nagar, our

Chief Executive Officer, the rest of the executive team as

well as all our employees for their dedication and resilience

during a year of intense activity and transition. Their

expertise, adaptability and commitment to our customers

have been central to the progress we have made and to the

opportunities that now lie ahead, and I would also like to

thank our shareholders, partners and other stakeholders for

their continued support.

Gil Sharon

Chairman

20 April 2026

Annual Report & Accounts 2025

Business Model

Our business model leverages our strengths and our values to execute on our strategic

priorities to achieve our vision and generate value for our stakeholders

Strengths

Stakeholders

Strategic

Priorities

Culture

•

Transforming IP

into cutting-edge market-ready products

•

Operating in

large, growing

markets

•

International footprint

from extensive global partnerships and relationships

•

Extensive networking experience

from 30+ years of providing high-quality solutions

•

Strategic encryption provider

for large government customers

•

Strong balance sheet

to support strategic execution

•

Building a unified business

•

Maximising resource allocation

•

Investing in R&D

•

Accelerating sustainable growth

Page 7

Our vision is a future where technology is used to connect, protect and advance our world,

which we will achieve by building frontier technologies and adhering to our values:

•

Transformation through evolution

- We encourage learning from the past and

transforming over time by accepting and embracing change.

•

Technology rooted in purpose

- Our goal goes beyond creating cutting-edge

technology. It’s about improving the lives of the people using it, now and in the future.

•

Excellence defined by innovation

- We achieve excellence by breaking new ground and

facing challenges head-on.

We aim to create value for our stakeholders by:

•

Growing total shareholder returns

•

Exceeding our customers’ expectations

•

Motivating our people

•

Making a positive contribution to our communities

Page 12

Strategic Report

Strategy

Significantly advanced strategy towards becoming a unified, streamlined business

focused on the high-growth, high-margin markets of networking and cybersecurity

Strategic Priorities

FY 2025 Progress

Building a unified

business

• Leveraging synergies and

strengths across the Group

•

Building the infrastructure to

deliver sustainable growth

•

Launched new unified brand identity

•

Advanced joint marketing activities between

BATM Networks and BATM Cyber

•

R&D investment into joint product offering of

networking-cybersecurity and unified platform

Maximising resource

allocation

• Prioritising investment to

maximise top assets

•

Reduced the complexity of the Group and

enabling resources to be focused on BATM

Networks and BATM Cyber:

•

Sold four businesses during the year and

a fifth post year end

•

Sale of AMS and successful turnaround of

proprietary diagnostics business enabled

diagnostics to be classified as non-core

from 2026

•

Strategic decision to increase investment in

R&D in 2026

Investing in R&D

• Maintaining technological

lead

•

Building a business of

the future

•

Slight growth in R&D spend in 2025 and strategic

decision taken for a meaningful increase in 2026

•

Progressed R&D into joint

networking-cybersecurity product offering

•

Commenced R&D into building a unified platform

across carrier ethernet, Edgility and cybersecurity

– one platform for all BATM activities

Accelerating

sustainable growth

• Strengthening our

commercial execution

• Driving gross margin

improvement

•

Increased sales personnel in BATM Networks and

BATM Cyber

•

Launch of full X-series portfolio – expected to

be the key driver of new customer acquisition in

BATM Networks

•

Key milestone with launch, via strategic partner,

of encryption product in the commercial markets

•

Divested multiple lower-margin businesses

•

Significant increase in size and scale of BATM

Networks pipeline

•

Explored potential M&A to strengthen

core activities

Annual Report & Accounts 2025

The year to 31 December 2025 was transformational

for BATM as we executed on our strategy to become a

unified, streamlined business focused on the high-growth,

high-margin markets of networking and cybersecurity.

A key element of this was the divestment of non-core

businesses, which will enable additional resources to be

invested in activities that the Board believes offer the

greatest opportunities for delivering sustainable growth and

generating shareholder value. At the same time, strategic

initiatives implemented in our core activities in 2024 delivered

meaningful results in 2025, in turn laying the foundation for a

stronger performance in 2026.

Divestment of non-core activities

We sold four non-core businesses during the year and a fifth

post year end, for a total consideration of $24.4m, namely:

•

Celitron, an eco-med business in Hungary;

•

Zer Laboratories, an administrator of third-party pre-natal

diagnostic tests in Israel;

•

Progenetics, an administrator of third-party oncological

diagnostic tests in Israel;

•

A.M.S 2000 Trading Impex SRL (“AMS”)*, a distributor of

diagnostic laboratory equipment in Romania; and

•

post year end, Laborator A.M.S 2000 SRL*, which

provides analysis for third parties in Romania.

(* For the purposes of the Group’s reporting, these

businesses are presented within BATM Diagnostics)

These disposals have already significantly reduced the

complexity of BATM and will allow additional resource to be

focused on our core activities of BATM Networks and

BATM Cyber.

Alongside this, the Board has taken the strategic decision

to no longer invest material resources to support ADOR

Diagnostics (“ADOR”), a molecular diagnostics IP-company

in which BATM has a significant shareholding. To bring the

IP to the point of potential commercialisation would require

significant further funding. Further investment by BATM in

ADOR is not aligned with the Board’s risk appetite and is not

considered the best use of our resources. Accordingly, in the

absence of ADOR securing other funding and to help solidify

Chief Executive

Officer’s Review

Moti Nagar

Chief Executive Officer

Strategic Report

the foundations on which we are building the future business,

the investment that we have made in ADOR has been written

off. However, ADOR continues to seek a strategic investor

or other opportunity to monetise its know-how and, if

successful, we would recognise a corresponding gain.

As a result of the success of the strategic actions that we

implemented in 2024, our business that provides proprietary

diagnostic instruments and reagents was significantly

strengthened and achieved breakeven for the year. This,

combined with the sale of AMS and exit from ADOR, led the

Board to take the strategic decision to accelerate plans to

focus on BATM Networks and BATM Cyber. Accordingly, for

future reporting periods, the diagnostics business will be

presented within our Non-core activities, which comprises

the following businesses, which the Board would consider

selling should there be an appropriate opportunity:

•

Diagnostics business in Italy

•

Pharmaceutical distribution business in Moldova

•

Environmental monitoring business in Hungary

Our core activities now comprise networking and

cybersecurity which the Board believes offer substantial

potential for creating long-term shareholder value.

Return to growth of BATM Networks

The strong performance of BATM Networks during the year

reflects the decisive action taken during 2024 to return the

division to growth, including a management reorganisation,

expansion of the sales & marketing team and refocused

go-to-market strategy. This resulted in increased sales of

our Carrier Ethernet products as well as our Edgility edge

virtualisation and management platform, with BATM

Networks revenue of $11.6m compared with $8.5m for the

previous year.

A key element of our new go-to-market approach was

the establishment of a team to focus on expanding our

global channel partners, including value-added resellers,

systems integrators and distributors – and we successfully

onboarded new channel partners in all our target markets

globally. We also made a strategic investment in targeting the

Latin American and, later in the year, Asia-Pacific markets,

including hiring additional sales resources. These actions

resulted in further orders during the year, as well as the

establishment of a strong pipeline, with the weighted pipeline

being approximately double the size of recent years and

which includes an upscaling in the size of potential orders.

In particular, our X-series portfolio of Carrier Ethernet

products – with the first product being launched towards

the end of 2024 and the full portfolio being launched by

the end of 2025 offering speeds of 1G, 10G and 100G – is

proving popular and is expected to be an important driver

of new customer acquisition during 2026 as well as being

used for cross-selling. By way of example, in December 2024,

we signed a multi-million dollar three-year agreement for

Edgility with a Tier 1 telecommunications company in Mexico;

it is currently finalising a proof-of-concept with the X-series

product alongside the rollout of Edgility.

During the year, Edgility was selected by Telecomunicações

Brasileiras S.A. (“Telebras”), a leading Brazilian

telecommunications company that implements the federal

government’s communication network and supports public

broadband policies as well as serving the enterprise market.

Telebras has established a strong pipeline of opportunities

with proof-of-concepts underway with a number of these.

We also continued to expand our partnership with a leading

global provider of emergency connectivity services that is

headquartered in the US, with the partner expanding its

use of Edgility internationally with active deployments in

the Philippines.

A leading internet services provider to homes and businesses

across the US that is owned by one of the world’s largest

technology conglomerates ordered our 10G carrier

ethernet and aggregation solutions as part of their network

modernisation programme. Similarly, as service providers

globally increasingly upgrade their networks to handle the

high-bandwidth demands from artificial intelligence, cloud

computing and internet of things, we are receiving growing

interest in our 100G solutions. In the Asia-Pacific market, we

won a competitive tender with a national electricity company

for a phased 100G network upgrade across the country and

have secured a number of other potential opportunities in

the region, as well as in North America.

Annual Report & Accounts 2025

Key milestones achieved in BATM Cyber

The performance of BATM Cyber for 2025 was in line with our

expectations, with revenue of $8.3m (2024: $13.1m) following

the exceptional orders delivered in the prior year to our

long-standing customer.

A key milestone was achieved during the year with the

delivery of the first units of our cyber solution for the

commercial markets. This is a customised version of our

advanced encryption platform that our strategic partner is

selling under their brand, replacing their current product. A

proof-of-concept was conducted with a potential customer

in the second half of the year and, post year end, the partner

has commercially launched the platform. We have appointed

new sales personnel to support this activity.

During 2025, we received orders from our long-standing

customer under several projects to develop next-generation

cyber capabilities, including encryption for ultra-high-speed

networks and tactical encryption. This development work

remains ongoing, and we expect that, as with previous

projects, once complete, it will transition to a supply

agreement with the customer. We will also be able to

utilise similar functionality for our encryption solution for

commercial markets – which will be a key differentiator.

Post year end, we were selected as a partner in cybersecurity

by FPT Israel, which is a company of FPT Corporation (HOSE:

FPT), a leading Vietnam-based technology group providing

digital transformation services and solutions in over 30

countries. This initiative represents delivery on our strategy

to bolster our capabilities and expand our cybersecurity

activities through entering partnerships.

Successful turnaround of BATM Diagnostics

proprietary business

The key developments in BATM Diagnostics during the

year were the sale of the AMS distribution business, which

generated a capital gain of $14.1m, and the successful

turnaround of our business for our proprietary diagnostic

products. Revenue from our proprietary diagnostic products

increased by 71% to $7.7m (2024: $4.5m). This growth

reflects the benefits from the management reorganisation

and refocused go-to-market approach adopted in 2024

to prioritise reagent sales, which are a higher margin and

consumable product. We are providing our instruments on

a lease basis, or as a lower-margin sale, alongside a reagent

Chief Executive

Officer’s Review

(cont.)

“We are confident

of delivering

strong

underlying growth

for

2026 and significant,

sustainable growth in

the medium-term as we

increasingly progress the

execution of our strategy

to become a business

focused on providing

highly secure network

connectivity

.”

Moti Nagar

Chief Executive Officer

Strategic Report

agreement to secure long-term, repeatable orders. As a

result, gross margin for the proprietary diagnostics business

improved significantly which, combined with the increased

sales and a relatively stable cost base, resulted in it reaching

profitability with an adjusted operating profit of $0.1m (2024:

$1.8m loss). As noted above, this has enabled us to accelerate

our strategy to focus on networking and cybersecurity, and

our diagnostics activities will be classified as Non-core for

future reporting periods.

Accelerating focus on highly-secure

network provision

Our core activities now comprise networking and

cybersecurity. While both markets offer significant

opportunities, we believe that the greater value lies in their

combination – in the provision of highly secure networks.

During the year, we enhanced collaboration between BATM

Networks and BATM Cyber, including commencing joint sales

activities and joint development work. Certain sales team

members of the BATM Networks division began to promote

our cyber solution with their commercial customers and

partners. Additionally, we have made significant progress in

integrating our networking and cybersecurity capabilities

into a unified platform – one that delivers highly secure,

software-defined connectivity with built-in protection

against emerging threats, including those posed by

quantum computing.

On track for strong underlying growth

for 2026

We entered the new financial year with increasing momentum

across the business. We are accelerating execution on

our strategy to focus on the high-growth, high-margin

networking and cybersecurity markets where substantial

opportunities exist driven by increasing global demand

for secure connectivity. Accordingly, we intend to invest

in progressing the work being undertaken to enhance the

collaboration and integration between BATM Networks and

BATM Cyber and their growth.

BATM Networks and BATM Cyber are expected to deliver

significant growth for 2026 based on orders received to date

and the current pipeline, which is the largest the pipeline

has been for these core activities in recent years and with a

more-than doubling of average order size. The performance

of the Non-core activities is expected to remain stable.

Accordingly, we are confident of delivering strong underlying

growth for 2026 and significant, sustainable growth in the

medium-term as we increasingly progress the execution of

our strategy to become a business focused on providing

highly secure network connectivity. The Board remains highly

optimistic about the unique opportunities ahead for BATM

and is fully committed to executing our strategy to deliver

enhanced value to our shareholders.

Moti Nagar

Chief Executive Officer

20 April 2026

Annual Report & Accounts 2025

Stakeholder Engagement

BATM seeks to deliver value to, and build strong, long-term

relationships with, its stakeholders

The Board of BATM is committed to acting in a way that would most likely promote

the long-term success of the Company for the benefit of its members as a whole.

Customers

Our customers rely on our technology solutions and

equipment to operate and continue to grow. We seek

to understand their evolving needs, enabling both

BATM and our customers to share in the value creation.

How we engage

•

Client relationship managers dedicated to key

customers and key regions

•

Annual customer surveys as part of the ISO

audit and focused on all aspects of our

customer relationships

•

Training programmes on our solutions and products

for our customers

•

Attendance at trade shows, conferences, seminars

and webinars

•

Working to understand growth drivers in our

customers’ markets

Financial Investors

The Board has a fiduciary duty to promote the

long-term sustainable success of the Group for its

shareholders. Certain companies within the Group

also have external investors, who are often key to the

continued success of the relevant projects.

How we engage

•

Regular dialogue and interaction

•

Investor communications, including reports,

presentations and website

•

Meetings with institutional investors and webinars

for all shareholders – participated in over 70

shareholder meetings or scheduled calls in 2025

•

NEDs available to meet with shareholders

on request

•

Establishment of clear timelines, milestones and

strategic goals

Employees

Our people are our greatest asset. In order to recruit

and retain the best talent, we must ensure that we

are an employer of choice and that our employment

policies are sensitive to our employees’ priorities

and requirements.

How we engage

•

A dedicated Human Resources function

•

Open and transparent communication with

our workforce

•

Annual employee satisfaction surveys

•

Personal and career development

•

Recognition and rewards

•

Team building events

Communities

We strive to be a responsible corporate citizen within

the local and wider communities in which we operate,

by aiming to behave in a sustainable and socially-

responsible manner and supporting local businesses

and charities.

How we engage

•

Local initiatives that support community and

charitable organisations

•

Encouragement of employees to work to further

charitable goals

Strategic Report

Chief Financial

Officer’s Review

Lior Miles, CPA

Chief Financial Officer

I am pleased to report that total Group revenue increased to

$123.2m (2024: $117.3m), reflecting growth in BATM Networks

and BATM Diagnostics. On a like-for-like basis, excluding

the contribution to H2 2024 revenue from Progenetics and

Zer Laboratories that were sold during H1 2025, revenue for

2024 was $113.1m and therefore on an adjusted basis 2025

revenues increased 9% year-on-year.

Gross profit increased to $40.1m (2024: $36.8m) with a

gross margin of 32.5% (2024: 31.4%), with the improvement

reflecting increased gross margin in BATM Cyber and BATM

Diagnostics. As noted below, the gross margin in BATM

Networks was impacted by a write-off of slow-moving

inventory of older products and we expect it to grow

going forward.

Sales & marketing expenses increased to $20.5m (2024:

$19.6m) reflecting the investment in go-to-market strategy,

general and administrative expenses rose to $13.5m (2024:

$12.8m) and R&D expenses slightly increased to $4.8m (2024:

$4.6m). We recognised net other operating income of $12.3m

(2024: $4.5m expenses), which is primarily attributable to

the capital gain on our disposals, including a capital gain of

$14.1m on the sale of A.M.S 2000 Trading Impex SRL (“AMS”),

partly offset by an exceptional expense from a theft of

inventory, comprising networking components, at one of our

warehouses in December 2025. While we are hopeful that the

inventory might still be recovered or that compensation will

be received, an expense of $2.3m has been recognised in the

financial statements.

The sale of AMS was a non-cash transaction with the

consideration paid by the purchaser being 96,794,500

ordinary shares of NIS 0.01 each in the capital of the Company

(see note 33 to the financial statements for further details).

Adjusted EBITDA, excluding amortisation of intangible assets,

share-based payments and exceptional expenses related to

corporate activity, was $18.9m for 2025 compared with $8.1m

for the prior year. Adjusted operating profit was $14.7m (2024:

$3.8m). On a reported basis, operating profit was $13.5m

(2024: $4.7m loss). This significant growth in adjusted EBITDA

and operating profit was primarily driven by the $14.1m capital

gain related to the sale of AMS.

Annual Report & Accounts 2025

Profit before tax was $12.4m (2024: $5.4m loss).

On an adjusted basis, we generated a profit of $13.6m

(2024: $3.0m profit).

We recorded a tax expense of $6.2m (2024: $1.7m), which

primarily relates to the tax treatment of the disposal of AMS.

Our share of loss of a joint venture and associated companies

and share of loss of financial balances of a joint venture and

associated companies was $18.9m (2024: $0.3m), which, as

discussed in the Chief Executive Officer’s Review, is due to

the strategic decision to write-off our investment in

ADOR Diagnostics (see note 28 to the consolidated financial

statements).

Accordingly, net loss from continuing operations was

$12.8m (2024: $7.5m loss) and loss per share was 2.79¢

(2024: 1.72¢ loss).

We recorded a loss from discontinued operations of $6.2m

(2024: $14.8m loss), primarily attributable to Celitron, which

we sold during the year.

Net cash used in continuing operations (before tax and

interest) was $1.9m compared with $1.7m of cash generated

by continuing operations in 2024. This primarily reflects

changes in working capital.

As at 31 December 2025, we had cash and short-term

investments of $23.4m (31 December 2024: $31.6m). The

reduction is primarily due to movement in working capital.

Since year end, we have received $3.7m in cash that had

been held by AMS, with a further $0.3m still to be received.

Group Results

Adjusted*

Reported

$m (for continuing

operations**)

2025

2024

2025

2024

Revenue

123.2

117.3

123.2

117.3

Gross margin

32.8%

31.7%

32.5%

31.4%

Operating

profit/(loss)

14.7

3.8

13.5

(4.7)

EBITDA

18.9

8.1

18.1

7.1

* Adjusted to exclude amortisation of intangible assets, share-based

payments and exceptional expenses related to corporate activity (see

‘EBITDA measurement’ in Other Alternative Measures on page 112)

** See note 20 to the consolidated financial statements

Chief Financial

Officer’s Review

(cont.)

“I am pleased to report

that total Group revenue

increased to

$123.2m

(2024: $117.3m), reflecting

growth in BATM Networks

and BATM Diagnostics

On a like-for-like basis,

[…] revenue for 2024 was

$113.1m and therefore on

an adjusted basis 2025

revenues increased 9%

year-on-year.”

Lior Miles, CPA

Chief Financial Officer

Strategic Report

Divisional Performance

BATM Networks

2025

2024

Revenue

11.6

8.5

Gross margin*

45.7%

52.5%

Adj. operating loss*

(2.7)

(4.0)

* Adjusted to exclude amortisation of intangible assets, share-based

payments and an exceptional expense from a theft of inventory

Revenue in BATM Networks increased 36% to $11.6m,

representing growth in revenue from sales of our Carrier

Ethernet products as well as Edgility edge virtualisation

and management platform. The reduction in gross margin

reflects a write-off of slow-moving inventory of older

products offsetting the benefits of an exercise undertaken

to reduce production costs as well as the lower costs of

sales associated with the division’s new products. We expect

the BATM Networks gross margin to grow going forward,

particularly as sales of Edgility account for an increasing

proportion of division revenue. BATM Networks also achieved

a 33% reduction in adjusted operating loss as a result of the

strong revenue growth.

BATM Cyber

2025

2024

Revenue

8.3

13.1

Gross margin*

51.1%

41.0%

Adj. operating profit*

0.7

3.1

* Adjusted to exclude amortisation of intangible assets and

share-based payments

Revenue for BATM Cyber in 2025 was in line with our

expectations and compares with exceptional orders delivered

in the prior year to our long-standing customer. Revenue

is derived from products and services delivered to, and

development projects with, our long-standing customer

as well as initial revenue from the commercial markets. The

improvement in gross margin reflects increased efficiencies in

the manufacturing process.

BATM Diagnostics

2025

2024

Revenue

47.5

38.6

Gross margin*

30.0%

28.0%

Adj. operating profit*

17.1

1.3

* Adjusted to exclude amortisation of intangible assets and

share-based payments

BATM Diagnostics delivered growth in revenue from both our

proprietary diagnostic products and distributed diagnostic

products provided by AMS. As noted, AMS was sold during

the year for which we recognised a capital gain of $14.1m,

which was the main contributor to the significant increase in

adjusted operating profit. As explained in the Chief Executive

Officer’s Review, excluding AMS, revenue in the BATM

Diagnostics increased to $7.7m (2024: $4.5m), gross margin

improved to 42.0% (2024: 29.3%) and there was an adjusted

operating profit of $0.1m (2024: $1.8m loss).

Non-core Activities

$m (for continuing operations)

2025

2024

Revenue

55.8

57.0

Gross margin*

29.8%

29.0%

Adj. operating profit*

1.8

3.4

* Adjusted to exclude amortisation of intangible assets and

share-based payments

Non-core revenue in 2024 included a 12-month contribution

from Progenetics and Zer Laboratories, which were both

sold during the first half of 2025. If the contribution of these

businesses is excluded from the second half of 2024, there

was an increase in revenue in 2025 compared with the prior

year. Progenetics was sold for a total consideration of $2m

for our 51% shareholding and we received a total of $383k

in cash in consideration for the disposals of Celitron (which

had been reclassified as a discontinued operation) and Zer

Laboratories.

Lior Miles, CPA

Chief Financial Officer

20 April 2026

Annual Report & Accounts 2025

Key Performance

Indicators

Strategic Report

Description

Revenue reflects the

element of billings generated

and recognised during the

period from all operations.

Why it is a KPI

Measures our overall

performance at the

sales level.

Performance

The increase in total revenue

represents growth in BATM

Networks, BATM Diagnostics

and, on a comparable

basis*, the Group’s Non-

core activities. This offset

a reduction in BATM Cyber,

with revenue in line with

management expectations

and compares with

exceptional orders delivered

in 2024. On a reported basis,

revenue increased from

$117.3m in 2024 to $123.2m

in 2025, reflecting growth in

BATM Networks and BATM

Diagnostics.

(* Revenue for 2024 adjusted to exclude

the contribution to H2 2024 of the

Progenetics and Zer Laboratories

operations that were sold during H1 2025)

The Group reviews its key performance indicators (“KPIs”) on an ongoing basis to

ensure they remain relevant. As the Group continues to execute and embed its new

strategy, further KPIs will be selected as the most appropriate measures of business

performance. The measures below are for continuing operations (see note 20 to the

financial statements for details on the discontinued operations).

Revenue

Adj. EBITDA

(2024: $113.1m*)

(2024: $8.1m)

(2024: $1.7m)

123.2

18.9

(1.9)

Cash (used in)/

from operations

Description

Group earnings before

interest, tax, depreciation

and amortisation and

adjusted to exclude

amortisation of intangible

assets, share-based

payments (which are non-

cash) and expenses related

to corporate activity.

Why it is a KPI

Measure of our

effectiveness in turning

revenue into earnings.

Performance

The significant increase is

primarily driven by a $14.1m

capital gain related to the

sale of the Group’s A.M.S

2000 Trading Impex SRL

subsidiary during the year.

Description

Amount of money the Group

brings in from, or uses in,

its operating activities

before the impact of tax

and interest payments.

Why it is a KPI

Reflects how much cash is

generated by our primary

activities that can be used

to maintain or invest in the

growth of our business.

Performance

The movement primarily

reflects changes in

working capital.

Annual Report & Accounts 2025

Environment & People

The Directors recognise the significant impact a company can have on its

environment and its social responsibilities. While the Group continues to

execute on its strategy and transform its business, the Board is committed to

proactively taking environmental and social considerations into account and,

increasingly, to understand and measure its performance in this regard.

People

BATM’s people are vital to sustaining success. In order to

recruit and retain the best talent, the Group must ensure

that, across its businesses, it is an employer of choice and

that its employment policies and practices are sensitive to

employees’ priorities and requirements.

BATM has employees in six countries, including scientists,

engineers, sales & marketing personnel and those in

corporate functions, and aims to adhere to certain principles

in terms of employee engagement and employment practices

across the Group. During 2025, efforts were focused on

ensuring greater communication, fostering better synergy,

strengthening team connections and celebrating successes.

In particular, the Group undertook a significant exercise to

launch a new brand identity founded on the commonality

between the Group’s core businesses and to bring them

under a unified brand identity. It also included a redefining of

the Group’s purpose in a way to unite BATM’s people across

the business.

Engagement

BATM understands the importance of maintaining open and

transparent communication with its workforce, and listening

to its people and taking into account their feedback. To

support employee engagement, the Group has a dedicated

human resources function comprising a network of human

resources departments at subsidiary level each headed up

by a VP-level executive who are overseen by the Global VP

Human Resources.

The senior management within the Group’s businesses

regularly communicate with employees on areas including

Group strategy and progress. The Group holds periodic

roundtable discussions for employees to meet with

management to share their views, raise any concerns and

make suggestions on how the workflow in their departments

could be improved. The Group also holds off-site team

building events and company celebrations. In 2025, this

included a significant event to celebrate the launch of the

Group’s new brand, which brought together employees from

around the world.

BATM prioritises training and development for its workforce,

which was continued during 2025. The Group has training

schemes focused on product training, skills enhancement

and the achievement of additional career-enhancing

qualifications, and often supplies in excess of two weeks

training per year for individual employees. In 2025, this

included two comprehensive training workshops on artificial

intelligence for all of the Group’s employees worldwide, which

the Group intends to continue to invest in.

Diversity, equality & inclusion

BATM recognises the benefits to its business of supporting

diversity, equality and inclusion for long-term sustainable

success. The Group is committed to providing a working

environment in which all employees feel valued and respected

and are able to contribute to the success of the business.

The Group promotes equal opportunities within all of its

businesses and aligns its approach with international human

rights standards. BATM believes its employees should be

able to work in an environment free from discrimination,

harassment and bullying, and that employees, job applicants,

customers and suppliers should be treated fairly regardless of:

•

race, colour, nationality, ethnic or national origins;

•

gender, sexual orientation, marital or family status;

•

religious or political beliefs or affiliations;

•

disability, impairment or age.

Strategic Report

As detailed further on page 34 of the Corporate Governance

Report, as a company incorporated in Israel, BATM is subject

to the Israeli Law of Equal Opportunity at Work (1988), which

forbids discrimination on the basis of (among others) race,

nationality, state of origin and gender, including in hiring

job candidates. The law states that if an employer asks an

employee or candidate for such details, it will be assumed

that the employer has violated the non-discrimination

provision. The Group operates in compliance with this law.

Health, safety & wellbeing

BATM prides itself on providing high levels of standards on

the health and safety of its employees. The Group has, and

adheres to, health and safety guidelines across the Group,

and has welfare programmes. The Group provides clothing

for employees working in manufacturing areas. In the Group’s

corporate headquarters, employees have access to a gym.

There were no health and safety incidents reported and the

Group did not receive any regulatory fines or penalties in

relation to health and safety matters during the year.

Anti-bribery & corruption

BATM promotes responsible business behaviour. The

Group has an anti-bribery and corruption policy that

provides guidance, details prohibited activities and outlines

responsibilities and whistleblowing mechanisms.

The whistleblowing procedure is managed by an independent

administrator who is a partner at an Israeli professional

services firm, Chaikin, Cohen and Rubin. Employees are

encouraged to approach the administrator if they have

concerns about possible wrongdoing including potential or

actual breaches of applicable laws and regulations and fair

business conduct. The approach can be anonymous, if the

employee chooses. The Group has undertaken not to take

subsequent disciplinary action against a complainant unless

the report was subsequently judged to have been made in

bad faith or to be malicious.

During 2025, there were no instances of whistleblowing

reports, bribery, corruption or business interruptions as a

result of regulatory activity.

Communities

BATM strives to be a responsible corporate citizen within

the local and wider communities in which it operates by

behaving in a socially responsible manner and supporting

local businesses and charities. While it does not have a

formal Group-wide approach, a notable initiative during

2025 was the Group’s collaboration with iSchool, a non-

profit organisation that seeks to reduce social gaps and

provide equal education for all regardless of socio-economic

background or geographical limitation. Employees who

volunteer for the six-month programme receive guidance and

training from iSchool and then provide weekly online tutoring

to students.

Environment

The Group has continued to take steps towards assessing

and managing its impact on the environment, incorporating

climate-related risks and opportunities into its business

planning and reporting thereon, as detailed in the TCFD

Report that follows. Developing awareness of environmental

guidelines at operating facilities, upgrading energy and

lighting systems and developing waste management

procedures are examples of some of the initiatives to

improve the Group’s environmental impact that have already

been made.

Annual Report & Accounts 2025

TCFD Report

The disclosure framework of the former Task Force on Climate-related Financial

Disclosures (“TCFD”)

is structured around four thematic areas that are core to how

organisations operate – namely, governance, strategy, risk management and metrics

and targets – with 11 recommended disclosures under these four themes.

This TCFD Report follows the structure of the TCFD 11 recommended climate-related

disclosures, setting out those in which the Company is making full disclosures and

those for which full disclosures are not being made for 2025, the reasons for not

including them and the plans in place to make these disclosures going forward.

The table below shows the TCFD recommended climate-related disclosures and the status of each disclosure:

TCFD Recommendation

Status

Listing

Governance

a) Describe the board’s oversight of climate-related risks and opportunities.

Full disclosure

See page 21

b) Describe management’s role in assessing and managing climate-related risks

and opportunities.

Full disclosure

See page 21

Strategy

a) Describe the climate-related risks and opportunities the organisation has

identified over the short, medium, and long term.

Full disclosure

See page 22

b) Describe the impact of climate-related risks and opportunities on the

organisation’s businesses, strategy, and financial planning.

Full disclosure

See page 23

c) Describe the resilience of the organisation’s strategy, taking into consideration

different climate-related scenarios, including a 2°C or lower scenario.

In progress

Risk Management

a) Describe the organisation’s processes for identifying and assessing

climate-related risks.

Full disclosure

See page 23 & 25

b) Describe the organisation’s processes for managing climate-related risks.

Full disclosure

See page 23 & 25

c) Describe how processes for identifying, assessing, and managing climate-

related risks are integrated into the organisation’s overall risk management.

Full disclosure

See page 23

Metrics and Targets

a) Disclose the metrics used by the organisation to assess climate-related risks

and opportunities in line with its strategy and risk management process.

Full disclosure

See page 24

b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG)

emissions, and the related risks.

Full disclosure

See page 24

c) Describe the targets used by the organisation to manage climate-related risks

and opportunities and performance against targets.

In progress

During the year, Adv. Livneh, the senior manager leading

the planning, delivery and reporting on the climate-related

financial disclosures, provided the Committee with an

update on the process of managing climate-related risks

and opportunities.

Management’s role

Managers within the Group’s divisions oversee and report

climate-related risks and opportunities at division level.

BATM’s Executive Directors serve as directors in Group

subsidiaries, giving them greater insight across the business

divisions and optimising information flow and operational

decision-making.

Adv. Livneh and Lior Miles, CFO and the Group Risk and

Opportunity Manager (“GROM”), between them consult with

managers within the Group’s divisions to discuss climate

risks and opportunities identification, management and

reporting. The outcomes of these meetings contribute to the

maintenance of the Group’s R&O Register, which integrates

climate-related transitional and physical risks and business

opportunities, following the guidance provided by the

TCFD framework.

Adv. Livneh oversees the Group’s adherence to the

recommendations of the TCFD and the Group’s

corresponding disclosures.

Governance

The organisation’s governance around climate-related

risks & opportunities.

The following should be read in conjunction with the

Corporate Governance section of this annual report, which

can be found on pages 28 to 63, and which is incorporated

into this TCFD Report by reference. The governance structure

around climate-related risks & opportunities is part of the

Group’s overall risk & opportunities governance structure.

Board oversight

The overall responsibility for the detection and management

of climate-related risks and opportunities lies with the Board

of Directors. The Responsible Business Committee of the

Board (the “Committee”) oversees the management of the

various responsible business activities of the Group, including

the management of climate-related risks and opportunities.

During 2025, the Committee met on four occasions. In

addition, climate-related issues were discussed in full

Board meetings. Prior to their meetings, the Directors are

furnished with information in a form and quality appropriate

for them to discharge their duties concerning the state

of the business and performance. In its meetings during

2025, the Committee’s discussions included, inter alia, the

TCFD disclosure recommendations, the Group’s Risks and

Opportunities Management (“ROM”) Framework and the

Group’s Risks and Opportunities (“R&O”) Register.

The Board has delegated the daily operational management

of the business to the CEO and CFO. With this, the CEO

communicates material matters arising, including climate

matters, to the Board. The Board also receives a Group-

wide overview of the Group’s activities, including risks and

opportunities, in the CEO’s overview in the quarterly meetings

of the Board.

Strategic Report

Annual Report & Accounts 2025

TCFD Report

(cont.)

Strategy

The actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy,

and financial planning.

The Group’s assessment of its climate-related risks and opportunities are provided in the following TCFD Risks &

Opportunities Table:

Risk Category

Category Overview

Subcategories

Description (including timeframe)

Transition Risk

Risks related to

the transition to a

low-carbon economy

Policy and Legal

•

Potential fines related to level of GHG emissions

(M)

•

Potential increase of tax liabilities in certain

jurisdictions

(M)

•

Potential of limiting success in tenders due to

insufficient rating in environment certification

(M)

•

Potential of increased energy consumption due

to increased temperatures across various

jurisdictions

(L)

•

Potential increase in insurance premiums or inability

to insure assets

(M)

•

Costs of complying with climate-related

regulation

(S)

Technology

Market

Reputation

Physical Risk

Physical risks driven by

extreme weather events

(e.g. heatwaves, floods,

wildfires)

extended periods of

increased temperatures

leading to the development

of chronic climate events

(e.g. desertification)

Acute

•

Potential damage to infrastructure, closure of

production plant and business activity interruption

due to wildfires in certain jurisdictions

(L)

•

Increase in costs due to higher energy consumption

due to alterations in global temperature patterns

(L)

Chronic

Opportunity

Opportunities arising as

the business landscape

transitions to a low-carbon

economy

Resource

Efficiency

•

Increased consumer preference due to

potential reduction in energy consumption/GHG

emissions

(S)

•

Analysis of alternative energy source provision to

improve costs and reduce environmental impact at

facilities in certain jurisdictions

(S)

•

Enhanced resilience compared with competitors

due to earlier adoption of climate-related risks and

opportunities management

(S)

Energy Source

Products/

Service

Markets

Resilience

KEY:

– short term;

– medium term;

– long term

The Group considers the short-term time horizon to be

up to two years; medium-term to be between two and five

years; and long-term to be over five years. In defining such

timeframes, the Group took into account the nature of

climate-related issues, which often manifest themselves over

the medium and longer terms; the useful life of the Group’s

assets and infrastructure; and the timeframe that is relevant

and realistic to identify and analyse transitional changes

and to make the necessary adjustments in the strategy and

operations of the Group, such as developing new product

lines or making changes in existing ones.

To determine which risks and opportunities could have

a material financial impact, the Group applies a ROM

Framework, as described in the Risk Management section

of this report. This Framework incorporates the detection,

evaluation and management of climate-related risks and

opportunities into the Group’s general risk management,

and in its application during 2025 climate-related risks

and opportunities were discussed with unit managers and

considered in the process of maintaining and updating the

Group’s R&O Register.

The risks and opportunities detection, analysis and evaluation

performed by the Group in 2025 did not reveal any

climate-related issues that, in the opinion of the Group,

taking into account the probability, impact and timeframe of

the risks and opportunities, could have a material financial

impact on the Group. Accordingly, climate-related risks

and opportunities had no significant impact on the Group’s

business model, strategy or financial planning. The Group will

continue to track and review the risks and opportunities as

they evolve.

Next steps

The Board has decided that the Group will perform two

scenario analyses – including a ‘2°C or lower’ scenario

– based on qualitative assessment of the impact on the

Group’s activities, supply chain, energy costs and geographic

exposure. This analysis of the Group’s resilience to

climate-related scenarios will begin over the coming two

years as the Group continues the rollout of its new strategy to

become a business focused on networking and cybersecurity.

Risk Management

The processes used by the organisation to identify, assess,

and manage climate-related risks.

The Group’s processes to identify, assess and manage

climate-related risks are described in the Risk Management

section on pages 25 to 27, which is incorporated into this

TCFD Report by reference. The processes regarding climate-

related risks are fully integrated into, and form part of, the

processes for all business risks.

As noted in the Risk Management section, the management

of the Group’s business risks, including climate-related risks,

is the responsibility of the Board. The GROM – in conjunction

with the Board, General Counsel, business unit managers and

external advisers – identifies and assesses business risks, and

develops proposed actions for the management thereof.

Risk management is conducted in accordance with the

Group’s ROM Framework, which incorporates the following

four key steps, as discussed further in the Risk Management

section: detection and list, assessment, action and monitor

and report. The Group has also progressed its climate-related

risks and opportunities assessment procedure to include

the impact on the metrics that it has adopted to assess

climate-related risks and opportunities as described overleaf.

Strategic Report

Annual Report & Accounts 2025

TCFD Report

(cont.)

Metrics and Targets

Disclose the metrics and targets used to assess and manage

relevant climate-related risks and opportunities where such

information is material.

The metrics BATM has adopted to assess climate-related

risks and opportunities are CO

emissions across Scope 1,

Scope 2 and category 6 of Scope 3 standards in line with the

Greenhouse Gas (GHG) Protocol.

A comprehensive assessment of BATM’s GHG emissions

was undertaken, in accordance with the GHG Protocol.

In summary, there was a reduction in total CO

emissions

in 2025 to 1,831 tons (2024

(1)

: 1,988), which reflects lower

emissions in BATM Diagnostics and the Group’s non-core

activities. The following table shows the Group’s 2025 GHG

emissions broken down by scope and division, including the

Group’s corporate headquarters and its non-core activities:

Division

(tons)

Scope 1&2

Business

Travel

e (tons)

Scope 3

Cat.6

Total

(tons)

Distribution

Ratio

of CO

Corporate

70.43

15.33

85.76

BATM

Networks

131.54

64.16

195.71

11%

BATM Cyber

30.76

2.51

33.27

BATM

Diagnostics

513.39

27.02

540.41

30%

Non-core

(1)

973.06

3.14

976.20

53%

Total Group

1,719

112

1,831

In preparation for establishing performance metrics to assess

the environmental impact and progress within each division,

the Group has analysed carbon intensity ratio per US$ million

in revenue in 2025:

Next steps

Division

(2)

Revenue

($m)

Total

e (tons)

tCO

e/$m

Distribution

Ratio

of CO

BATM

Networks

11.6

205.3

17.7

11%

BATM Cyber

8.3

34.9

4.2

BATM

Diagnostics

47.5

567.0

11.9

31%

Non-core

(1)

55.8

1,024.2

18.4

56%

Total Group

123.2

1,831.4

14.9

To enable the Group to better monitor its emissions,

determine trends, establish reduction targets, analyse

potential areas of risk and identify the opportunities available,

the Group intends to progress:

•

Propose to the Board the targets that should be used

to assess and manage relevant climate-related risks and

opportunities, with 2027 forming the base year.

•

System integration for collecting data throughout the

year.

•

Using emission data to inform decision making through

regular internal reporting and support the management

and eventual reduction of emissions from Scope 1 & 2.

•

Continue the expansion of Scope 3 categories

measurement.

(1) The figures are for continuing operations only

(2) The emissions for the corporate headquarters have been allocated

to the divisions on a proportionate basis

Strategic Report

Risk Management

Risk Management Process

The management of the Group’s business risks is the responsibility of the Board.

Opportunities and risks to the future success of the business have been considered

and addressed in accordance with BATM’s corporate Risk and Opportunity

Management (“ROM”) Framework. The process for the identification of emerging risks

and for the assessment, management and mitigation of business risks is as follows:

Viability Statement

The Directors have assessed the Company and the Group’s

viability over a period of three years. The Directors have

determined that a three-year period is an appropriate

timeframe for assessment because it is aligned to the Group’s

strategic planning process and therefore reflects the Board’s

best estimate of the future viability of the business.

In making their assessment, the Directors took account

of the Company and the Group’s current financial and

operational positions and contracted capital expenditure.

They also assessed the potential financial and operational

impacts, in severe but plausible scenarios, of the principal

risks and uncertainties set out below and the likely degree

of effectiveness of current and available mitigating actions.

Based on this assessment, the Directors have a reasonable

expectation that the Company and the Group will be able to

continue in operation and meet all their liabilities as they fall

due for the three years to 31 December 2028.

In making this statement, the Directors have also made key

assumptions (see note 4 to the financial statements).

Detection and listing

The Group Risk and Opportunity Manager (“GROM”) – in

conjunction with the Board, General Counsel, managers in

the Group’s divisions and external advisers – identifies risks

and opportunities (“R&O”) that are material to BATM, and

which includes the consideration of climate-related risks. The

process includes meetings with unit managers and the use

of key relevant information sources. The maintenance of the

resulting R&O list is undertaken by the GROM and approved

by the Board. Mr. Lior Miles, the Group’s CFO and an Executive

Director, is the GROM of BATM.

Assessment

An assessment of each R&O is undertaken by the GROM, in

conjunction with the parties listed above. This assessment

is based on impact, probability and timeframe – producing

a risk assessment ranking – and determines those risks and

opportunities that require the development of appropriate

actions. This is then reviewed by the CEO before being

presented to the Board. During 2025, the Board carried out a

review of the effectiveness of the Group’s risk management

and internal control systems.

Action

The GROM, with the appropriate unit managers, develops

proposed actions that are then finalised in conjunction

with the CEO. The GROM and unit managers ensure the

completion of the actions in the agreed timeframe.

Monitor and report

The Company’s internal auditor (as defined under Israeli law)

monitors the completion of the agreed actions and the CEO

and GROM report regularly to the Board, who monitor and

approve the decisions and actions.

The process is repeated periodically, with dynamic

adjustments to the process itself, if required, and

based on any significant changes in any significant risk

and/or opportunity.

Principal Risks and Uncertainties

The risks outlined below are those that the Board considers to be material to the Group. The Board routinely monitors risks that

could materially adversely affect the ability of the Group to achieve its strategic goals and to maintain financial stability, assisted

by the senior management team.

Risk

How we manage the risk

Risk assessment

in 2025*

Political and

economic

There is a risk of harm to the business

from political unrest or disruption,

particularly in emerging markets, and

from a deterioration of economic

conditions.

The Group’s operations are dispersed over a

number of locations so that should a material

adverse political or economic event arise in

one location, the Group can continue with

its operations elsewhere, thereby helping to

mitigate the impact on its overall business.

↓

Legal and

compliance

There is a risk that legal and/or

regulatory requirements are not

met, leading to the loss of licence

to operate, reputational damage or

financial loss.

The Group retains experienced high calibre

legal advisers for the Company and the

Group’s divisions who provide ongoing advice

and updates on relevant legal compliance

requirements. The Group monitors the

regulations relevant to its activities and, when

needed, makes the necessary adjustments to

maintain compliance.

↑

Business

continuity

There are risks to business continuity

from specific events, such as natural

disasters and pandemics.

The Group operates in numerous locations

and its manufacturing contractors are also

located in multiple locations, which would help

to mitigate the impact of a business disaster. In

addition, the key employees in the workforce

have been positioned such that they are able to

work without interruption by working remotely

from their homes. The Group also keeps a cash

cushion to ensure that unexpected events

don't cause unnecessary indirect adverse

effects beyond the direct outcomes.

–

Supply chain

A disruption in the supply of key

raw materials or services to a

manufacturing site could affect the

Group’s ability to make and deliver

products to customers, leading to

interruption in supply, lost revenue

and damage to its reputation as a

reliable supply partner. This could

be resulting from market shortages,

disruption due to global events and

physical climate-related disruption of

upstream supply chains.

The Group has established strong supplier

relationships and collaborates with multiple

vendors globally to broaden the geographical

coverage of its access to available components.

The Group requests that customers provide

long-term committed forecasts and itself

provides multi-year forecasts to its contract

manufacturers. Where appropriate, it

reengineers products to enable them to have

replaceable component alternatives. At times

when availability of components is constrained,

the Group seeks alternative sources and to

increase inventory levels of both components

and finished goods. In addition, the Group’s

management of supply chain risk has been

strengthened with the creation of the

Group-wide Chief Operating Officer role in

2024 and the roll-out of new operational

processes in 2025.

↓

Competition

There is a risk that BATM is unable

to build and maintain competitive

advantage in its focus markets.

In particular, there is a risk that

competitors with greater financial

resources may develop technology

that is superior to that of the

Group and they may also adopt

more aggressive pricing models or

undertake more extensive advertising

and marketing campaigns.

The Group operates in large markets, but

with a focus on areas where it can establish

a leadership position through technological

expertise and innovation. The Group ensures

that its products remain world-leading

through investment in R&D. It maximises its

resources and enhances its routes-to-market

by establishing partnerships, collaborations

and joint ventures. In 2025, the Group also

expanded its sales personnel for its networking

and cybersecurity activities.

–

Low

Annual Report & Accounts 2025

Risk Management

(cont.)

Mild

Low

Strategic Report

Customers

and partners

There is a risk of harm to the Group’s

revenues as a result of termination of

business relationships with material

customers or partners and sales

agents. This risk is increased by the

challenging global macroeconomic

conditions and the impact that this

could have on the business and

viability of customers and partners.

The Group maintains ongoing dialogue with its

customers and business partners in order to

identify ahead of time any potential problems

arising on the part of the customer and in

order to maintain a close relationship with its

customers. The Group also does not have a

significant reliance on one or few customers or

partners.

↑

Research &

Development

(R&D)

There is a risk that R&D programmes

overrun or do not deliver the

expected benefits.

With respect to R&D, the Group’s strategy has

been to diversify its R&D operations among a

variety of teams and by using different R&D

funding sources – thus reducing the R&D risk.

Any significant new R&D projects are brought

to the Board for consideration. In addition, the

Group intends to increase its R&D investment

in 2026.

↑

Information

security

(including

cybersecurity)

There is a risk of information security,

data loss and corruption, and physical

damage to IT infrastructure.

The Group routinely carries out proactive

measures, such as IT evaluations, to ensure

that its IT systems have the latest cybersecurity

tools and security procedures in place. These

procedures include, inter alia, implementing

security controls, staff training, routing

backups and regular rehearsals of the

Groups disaster recovery plan. The Group has

established an IT committee, led by the Chief

Operating Officer and consisting of managers

with professional knowledge and experience

in networking and cyber risk, which closely

monitor IT and cyber risks. During 2025, the

Group’s internal auditor performed an audit on

the Group’s IT and cyber resilience, including

conducting penetration tests – which is also

monitored by external experts. The Group has a

cybersecurity insurance policy.

↓

Market risk

There is a risk that changes in market

prices, such as foreign exchange,

inflation and interest rates, will lead to

financial loss.

The Group’s finance department at the

corporate level manages and monitors market

conditions and exposure. Most of the cash,

income and expenses in each company or

subsidiary is held in a way to reduce the Group’s

exposure to currency fluctuations. When

this is not possible, the Group uses hedging

transactions when needed to protect itself

against potential currency risk. However, this

is only done to a certain extent as the Board

believes it is very difficult to hedge against

currency fluctuations arising from translation in

consolidation in a cost-effective manner. The

Group also monitors the impact of inflation and

adjusts sales prices to maintain its margins. The

Group’s exposure to interest rate risk is low as

it has relatively low bank debt. However, due to

the impact of changes in interest rates on the

financial markets, the Group closely monitors

possible indirect impacts.

–

* Risk assessment in 2025 compared with 2024. It shows 1) whether the risk was assessed to have increased, decreased or stayed the same

compared with the prior year and 2) the risk level, which is calculated based on the scores assigned for each risk for impact, probability and

timeframe and ranked as follows:

low

(0-5),

mild

(6-10),

medium

(11-15) and

high

(>15) .

All of the risk categories have elements related to climate change. For further information on the Group’s climate-related risk

management, please see the ‘Strategy’ and ‘Risk Management’ sections of the TCFD Report on pages 22 to 23.

Medium

Mild

Low

Annual Report & Accounts 2025

Moti Nagar

Executive Director & CEO

Moti Nagar has been the CEO of BATM since 1 January 2023,

having been the CFO since 2015. During his time at BATM,

Mr. Nagar has been instrumental in driving the business’

development, including leading several M&A transactions,

the Group’s IPO on TASE and, since his appointment as CEO,

delivering a renewed strategy. Prior to BATM, Mr. Nagar held

several senior positions at Deloitte, which he joined in 2005. As

a Senior Manager, Mr. Nagar was responsible for handling the

accounts of leading corporate clients in Israel and overseas,

with companies traded on the LSE, NASDAQ and TASE as well

as private businesses operating in a range of sectors. Mr. Nagar

is a member of the Managing Board of the Israeli Association

of Publicly Traded Companies, a non-profit organisation

representing hundreds of companies listed on the Tel Aviv Stock

Exchange and other stock exchanges throughout the world. Mr.

Nagar graduated in Business Management and Accounting and

qualified as an Israeli Certified Public Accountant (CPA, Israel) in

2008. He also holds an MBA in Financial Management from Tel

Aviv University. He was re-elected as a Director of the Board in

December 2024.

Relevant skills and experience

Mr. Nagar brings to the role of CEO business management

and accounting skills and experience he gathered from his

years as CFO at BATM and as an audit manager to international

companies. As CEO of BATM his core skills include:

•

Business leadership and management

•

International business operations and strategy

•

Business finance

•

M&A experience

•

Stakeholder and shareholder management

•

Forward thinking and calculated risk management

Gil Sharon

Non-executive Chairman

Gil Sharon has over 30 years’ experience in the

telecommunications industry. He is currently Chairman

of IBC, an Israeli fibre optic telecom company. Prior to

IBC, he was Executive Chairman of Bezeq The Israeli

Telecommunications Corporation Ltd (TASE: BEZQ), the

largest telecommunications group in Israel, and Chairman

of its subsidiaries: Pelephone, a mobile network operator;

Yes, a television and internet service provider; and Bezeq

International, a business internet services, international

communication, integration and IT solutions company. Other

roles have included Chairman, CEO and co-investor of Golan

Telecom, and CEO of Pelephone.

Relevant skills and experience

Mr. Sharon has extensive experience in providing strategic

business consulting to boards and executives, particularly

within the telecommunication and technology sectors.

Directors’ Biographies

Committee

membership

Corporate Governance

Varda Shalev

Non-executive Director

Prof. Varda Shalev is a specialist in epidemiology, medical

informatics and predictive analytics in community healthcare.

She was a founder and director of the Morris Kahn &

Maccabi Institute for Health Research and Innovation and

is an active primary care physician. She has pioneered the

development of multiple disease registries to support chronic

disease management, and has authored or co-authored

over 200 publications in peer-reviewed medical journals.

She is a Managing Partner of Team8 Health, a medtech

focused venture capital company, and a director of Teva

Pharmaceutical Industries Ltd. In addition, she is a Professor

at the Tel Aviv University School of Public Health and sits on

the advisory board of several med-tech businesses.

Relevant skills and experience

Prof. Shalev brings over 30 years’ experience in medicine,

including clinical research, healthcare information technology

and epidemiology. Her industry and clinical knowledge is

complemented by business acumen, having established

and grown a number of organisations, making Prof. Shalev a

valuable addition to the Group as it develops its bio-medical

product offering and markets.

Lior Miles

Executive Director & CFO

Lior Miles was appointed CFO of BATM on 22 June 2025,

bringing over 15 years’ experience in financial management

for public and private companies operating globally primarily

in the technology industry, including serving as VP Finance

of BATM from 2015-2021. Mr. Miles joined BATM from Kenes

Group where, as Group CFO, he oversaw financial operations,

including investments, cash management, risk management,

insurance, M&A, taxation and financial strategy, for the

global operations across 18 locations on four continents.

Other experience includes being Director of Finance for Abra

Information Technologies Ltd., a TASE-listed provider of IT

services and solutions, and its subsidiaries in the US and

Israel. Mr. Miles is an Israeli Certified Public Accountant who

commenced his career as an accountant at PwC, where he

performed company audits in accordance with US GAAP and

IFRS standards. He holds a BA in Accounting and Economics

and an MA in Accounting from Bar Ilan University.

Relevant skills and experience

•

Mr. Miles has senior finance experience at businesses with

global operations and with public company obligations.

He also has familiarity with BATM due to his previous

employment.

Committee

membership

Annual Report & Accounts 2025

Shmuel Ben Zvi

Non-executive Director

Dr. Shmuel (Muli) Ben Zvi was elected as a Director of BATM

in December 2024. He has extensive executive and board

experience across multiple industries, including nine years as

a director of Bank Leumi, the largest banking corporation in

Israel, and being elected Chairman of the board in October

2023 for the final year of his tenure. At Bank Leumi, he was

a member of the board’s audit, risk management, credit,

technology and strategy committees. Dr. Ben Zvi is currently

Chairman of Revolut Israel, a digital bank and an entity of the

global Revolut Group Holdings Ltd, and a director of Protalix

Biotherapeutics (NYSE American: PLX). He was previously a

director of Sol-Gel Technologies (NASDAQ: SLGL) and VBL

Therapeutics (NASDAQ: VBLT). From 2004 to 2014, he held

a number of managerial positions at Teva Pharmaceuticals

(NASDAQ and TASE: TEVA), including Vice President of

Strategy and Vice President of Finance.

Relevant skills and experience

Dr. Ben Zvi brings to the Board extensive experience in

finance and strategy management as well as a deep

understanding of corporate governance, including for

international public companies.

Avigdor Shafferman

Non-executive Director

Dr. Avigdor Shafferman had an established career at the Israel

Institute for Biological Research, a leading governmental

applied research institute specialising in the fields of biology,

medicinal chemistry and environmental sciences, where

he worked for almost 40 years. He is a recipient of several

prestigious scientific awards and author of over 200 scientific

papers. Most recently, from 1995 until his retirement in 2013,

he was General Director of the organisation. Other roles have

included serving as a visiting professor in the University of

California, San Diego at the biology department as well as a

visiting senior research scientist at various leading research

institutions in the United States in various medical areas,

including vaccines. Dr. Shafferman holds a Ph.D. in physical

chemistry from the Hebrew University of Jerusalem.

Relevant skills and experience

Dr. Shafferman is an influential scientist with experience in

top-management and international cooperation. His skills

span applied medical research, vaccine development and

environmental science, which is highly relevant for supporting

BATM’s developmental diagnostic activities.

Directors’ Biographies

(cont.)

Committee

membership

Committee

membership

Corporate Governance

Ayala Hakim

Non-executive Director

Ayala Hakim is a director of Bank Yahav, which is a retail bank

in Israel that was established in 1954. She served as the Chief

Information Officer of Mizrahi-Tefahot Bank Ltd., one of

Israel’s largest financial institutions, and CEO of its technology

division from 2013 until 2025. During her tenure, she led

large-scale digital transformations, enterprise IT strategy -

including harnessing and leveraging technology to implement

the bank’s business strategy and create new business

opportunities - and complex system integrations. Prior to

joining Mizrahi-Tefahot Bank, Ayala spent over 30 years in

leadership roles focusing on technology and IT for the Israeli

government. Mrs. Hakim is currently a non-executive director

of Space-Communication Ltd (TASE: SCC).

Relevant skills and experience

Mrs. Hakim brings ample leadership experience across the

financial and technology sectors, with a particular focus on

business transformation utilising novel technology.

Committee Key

Audit Committee

Remuneration Committee

Nomination Committee

Responsible Business Committee

Committee Chair

Committee

membership

Annual Report & Accounts 2025

Corporate Governance Report

The Company is committed to high standards of corporate

governance and the Board is accountable to the Company’s

shareholders for such governance. The Board carefully reviews

all new regulations relating to the principles of good corporate

governance and practice and endeavours to apply them where

applicable. It also carefully reviews any comments received

from independent reviewing agencies and shareholders and

communicates with them directly. The Company believes that

the combination of the experience of its Chairman, Gil Sharon,

with the experience and expertise of its Executive and Non-

executive Directors, provides the Company with the relevant

leadership to address its position as an Israeli company

that is traded on the London Stock Exchange and which is

also traded on the Tel Aviv Stock Exchange. The Company’s

governance contributes to the delivery of its strategy through

the combination of the ongoing leadership of the Executive

Directors in the Company’s day-to-day efforts to deliver its

strategy and the monitoring and guidance of the Chairman

and the Board in periodical meetings as well as ad-hoc

meetings when a specific issue requires the attention and

guidance of the Board.

Corporate Governance Framework

The Board has delegated the daily operational management

of the business to the CEO, and holds him to account for

his responsibilities. Business risks and opportunities are

assessed primarily through the leadership of the Executive

Directors (one of whom currently serves as the Group Risk

and Opportunity Manager) in consultation with managers

within the Group’s divisions. The Board also operates through

several committees: Audit, Remuneration, Nomination

and Responsible Business. Executive Directors serve as

directors in Group subsidiaries. The Board receives a Group-

wide overview of the Group’s activities, including risks and

opportunities, in the CEO’s overview in the quarterly meetings

of the Board. The Board of the Group is able to validate the

information that it receives from the Executive Directors via

the internal auditor (as defined under Israeli law) and the

external auditors’ audit of the annual and interim reports.

BATM’s corporate governance structure is shown in the

diagram below.

Appointment

and review

Repoing &

accountability

Repoing

Executive Directors of the Group

(CEO & CFO)

Internal

Auditor

Shareholders

Repoing &

accountability

Appointment,

review and

approval

Board of Directors

of the Group

•

Chairman

•

Non-executive Directors

•

External Directors*

•

Executive Directors

Audit

Commiee

Remuneration

Commiee

Responsible

Business

Commiee

Nomination

Commiee

* As defined under Israeli law

Corporate Governance

senior management; major investments; risk management;

corporate governance; engagement of professional advisers;

political donations; internal control arrangements; and

additional responsibilities and duties as defined in the Israeli

Companies Law and the Company’s Articles of Association.

The ultimate responsibility for reviewing and approving the

annual report and financial statements, and for ensuring

that they present a balanced assessment of the Company’s

position, lies with the Board. These provisions have been fully

complied with.

Board and Committee meetings

In compliance with Israeli company legislation, the Board

meets at least four times a year in formal session. Prior to

each meeting, the Board is furnished with information in a

form and quality appropriate for it to discharge its duties

concerning the state of the business and performance. The

Chairman met with Non-executive Directors, without the

Executive Directors present, during the year.

The Board

The Board consists of the Non-executive Chairman, two

Executive Directors (CEO and CFO) and four Non-executive

Directors. Two of the Non-executive Directors are defined

as ‘external directors’ under Israeli law. All the Directors bring

a broad and valuable range of skills and experience to the

Group (their biographical details are set out on pages 28 to

31). The division of responsibilities between the Chairman,

CEO and other Directors is clearly established, and no

individual has unrestricted powers of decision.

Matters reserved for the Board

The Israeli Companies Law, which applies to the Company,

sets out and defines the responsibilities and duties of, and

areas of decision for, the Board. These include preparation

and approval of financial statements; distributions (dividends

and share buy-backs); long-term objectives and commercial

strategy; appointment, removal and compensation of

Meeting Attendance

Director

Board

Audit

Committee

Remuneration

Committee

Nomination

Committee

Responsible

Business

Committee

Current Directors

Gil Sharon, Chairman

(1) (2)

2/2

0/0

Moti Nagar, CEO

(2)

15/15

3/3

Lior Miles, CFO

(2) (3)

2/2

Prof. Varda Shalev, SID

15/15

10/10

5/5

2/2

3/3

Dr. Avigdor Shafferman, NED

15/15

9/9

5/5

2/2

4/4

Dr. Shmuel Ben Zvi, NED

14/15

2/2

1/1

Ayala Hakim, NED

(4)

2/2

1/1

Former Directors

Dr. Gideon Chitayat, Chairman

(2) (5)

15/15

2/2

3/3

Ran Noy, CFO

(2) (6)

5/6

Harel Locker, SID

(7)

10/10

8/8

3/3

2/2

3/3

Dr. Zvi Marom, NED

(8)

10/10

(1) Gil Sharon was appointed a Non-executive Director on 10 December 2025 and assumed the role of Chairman on 25 December 2025

(2) The Chairman and/or Executive Directors attend parts of certain meetings of the Audit and Remuneration Committees at the request of the

Committee or when the Committee Chair decides that they are required for the presentation of certain subjects

(3) Lior Miles was appointed as CFO on 22 June 2025 and became an Executive Director on 10 December 2025 following shareholder approval

of his nomination as a Director in accordance with Israeli law

(4) Ayala Hakim was appointed as an External Director on 10 December 2025

(5) Dr. Gideon Chitayat stepped down as Chairman on 25 December 2025 and retired from the Board on 1 January 2026

(6) Ran Noy stepped down as CFO and as a Director on 21 June 2025

(7) Harel Locker finished his final three-year term as an External Director on 25 September 2025

(8) Dr. Zvi Marom stepped down from the Board on 10 December 2025. There were three Board meetings that occurred during the year that Dr.

Marom was not eligible to attend owing to his personal involvement in the A.M.S 2000 Trading Impex SRL (“AMS”) transaction

Annual Report & Accounts 2025

Division of Responsibilities

The responsibilities of the Chairman, CEO and other Directors

are clearly set out and defined under Israeli Companies Law

and the Company’s Articles of Association, with no individual

having unrestricted powers of decision.

The Chairman is responsible for the leadership of the Board,

while the responsibility for the day-to-day management of the

Group has been delegated to the CEO. The CEO is supported

by the executive management team, which is responsible

for making and implementing operational decisions and for

making recommendations to the Board.

Independence

Prof. Shalev, Dr. Shafferman, Dr. Ben Zvi and Ayala Hakim qualify

as “Independent Directors” as this term is defined in the Israeli

Companies Law. The Board considers that the aforementioned

directors in addition to Gil Sharon are independent in

accordance with the UK Corporate Governance Code.

The interests of the Directors in the Company and their

shareholdings are set out on page 57.

All Directors are subject to annual re-election by shareholders

at the Annual General Meeting, except the external directors –

being Prof. Varda Shalev and Ayala Hakim – who, in accordance

with Israeli law, cannot be subject to annual re-election (but

the law does allow for their removal from office if certain

conditions are met). External directors under Israeli law are

appointed for a minimum of one three-year term, which may

be extended by the Company (subject to shareholder approval)

for no more than two additional terms of three years each.

Diversity

The Group operates open and inclusive hiring and staff

management practices, and encourages employment of people

drawn from a wide range of socioeconomic backgrounds. At

present, it does not have a formal diversity policy due to the

requirements of the Israeli Law of Equal Opportunity at Work

(1988) (see ‘Diversity, Equality & Inclusion’ on pages 18 to 19).

However, it appreciates its importance and intends to explore

the ability to produce a policy that complies with Israeli law. The

Board evaluates and reviews its structure, size and composition

on a continual basis, including its balance of skills, knowledge,

experience and diversity, while factoring in the Group’s strategy,

risk appetite and future development.

Regarding Board composition, the Company is subject to the

mandatory provisions of the Israeli Corporation Law, which sets

rules regarding board diversity. According to section 239(d)

of the law, if at the time of appointing an external director all

the current directors are of the same gender, the appointed

director should be of the other gender. The Company complies

with this provision. Regarding a senior position being held by

a woman, Prof. Varda Shalev is Senior Independent Director.

Regarding a member of the Board being from a minority ethnic

background, inquiries regarding a person’s ethnic background

or references thereto are considered inappropriate in the

Israeli culture and may also be considered inconsistent with

law or regulation. As a company incorporated in Israel, BATM is

subject to the Israeli Law of Equal Opportunity at Work (1988),

which forbids discrimination on the basis of (among others)

race, nationality, state of origin and gender, including in hiring

job candidates. The law states that if an employer asks an

employee or candidate for such details, it will be assumed that

the employer has violated the non-discrimination provision. The

Group operates in compliance with this law.

As at 31 December 2025, gender representation on BATM’s

board and executive management team was as shown in the

table below.

Number of Board

members

Percentage of the

Board

Number in

executive

management

Percentage

of executive

management

Male

Female

Corporate Governance Report

(cont.)

Corporate Governance

by the Board for the following year. All Directors are properly

briefed on issues arising at Board meetings and any further

information requested by a director is always made available.

The Company Secretary, Yair Livneh, is present at every Board

meeting and Board committee meeting. All of the Directors

have access to Mr. Livneh’s services. In accordance with the

Israeli Companies Law, in special cases the Directors may take

independent professional advice at the Company’s expense

in furtherance of their duties, if the Company’s cover of the

costs is approved by the Board or by a court of law.

Board Committees

The Board has appointed an Audit Committee, a

Remuneration Committee and a Nomination Committee

to deal with specific aspects of the Company’s affairs and

ensures that each such committee is fully constituted and

operates as required under the Israeli Companies Law. In

addition, the Board has appointed a Responsible Business

Committee to deal with social, environmental, health and

safety practices, diversity and similar matters with respect

to the way the Company conducts itself. The composition

of the aforementioned committees and an overview of their

activities are detailed below.

Audit Committee

Members: Prof. Varda Shalev (Chair), Ayala Hakim

and Dr. Shmuel Ben Zvi

The Audit Committee meets at least four times a year. The

membership of the Audit Committee consists of independent

Non-executive Directors. During the year under review, Harel

Locker stepped down from the Audit Committee when he

retired from the Board after completing his third three-year

term as an External Director, which is the maximum time that

can be served under Israeli Companies Law.

Mr. Locker was

succeeded as Chair of the Audit Committee by Prof. Varda

Shalev. Mrs. Hakim and Dr. Ben Zvi joined the Audit Committee

during the year. The Board has considered the requirements

of the UK Corporate Governance Code with respect to the

composition of audit committees and is satisfied that all

members of the Audit Committee have recent and relevant

financial experience and that the Committee as a whole

has competence relevant to the sectors in which the

Group operates.

The Audit Committee has been delegated responsibility

for ensuring the financial performance of the Company is

properly reported on and reviewed and for the monitoring

of the external auditor, the internal auditor and oversight of

internal controls. Further details on the Audit Committee’s

responsibilities and main activities are set out in the Audit

Committee Report on pages 40 to 43.

Effectiveness and Evaluation

The Board’s members have a wide breadth of experience

in areas relating to the Company’s activities, including in

leadership, management, business development, technology,

finance, entrepreneurship and risk management. All of the

Directors are of a high calibre and standing. The Board

is of the opinion that each of its members has the skills,

knowledge, aptitude and experience to perform the functions

required of a director of a listed company and that the Board

is comprised of a good balance of Executive and Non-

executive Directors to ensure it performs its duties effectively.

Further biographical details can be found on pages 28 to 31.

The Nomination Committee is responsible for succession

planning and conducting the process to appoint new Board

members. However, ultimately, the appointment of any new

Director is a matter for the shareholders at a general meeting.

Non-executive Directors are advised on appointment of the

time required to fulfil their role. The Company’s two External

Directors, as defined under Israeli law, being Prof. Varda Shalev

and Ayala Hakim, have significant additional appointments,

which is customary in Israel owing to the fixed nature of

remuneration and tenure of External Directors. In addition,

the Board considers their broader involvement in the business

community to be of benefit to BATM and it is satisfied that the

Chairman and each of the Non-executive Directors, including

the External Directors, are able to devote sufficient time to the

Company’s business.

During the year, the Board undertook an internal evaluation of

its own performance and that of its committees and individual

Directors. Individual evaluation aims to show whether

each Director continues to contribute effectively and to

demonstrate commitment to the role (including commitment

of time for Board and committee meetings and other duties).

Induction

The induction of newly elected Directors into office is the

responsibility of the Chairman of the Board. The new Directors

meet with senior members of management who present the

Company and its activities, and receive a guided tour of the

Company’s corporate headquarters.

Information And Support

Prior to each Board meeting, the Directors are furnished with

information in a form and quality appropriate for them to

discharge their duties concerning the state of the business

and performance. The Directors periodically receive a detailed

operating report on the performance of the Company in

the relevant period, including a consolidated statement of

financial position. A fuller report on the trading and quarterly

results of the Company is provided at every quarterly Board

meeting. Once per year, a budget is discussed and approved

Annual Report & Accounts 2025

Remuneration Committee

Members: Ayala Hakim (Chair), Prof. Varda Shalev

and Dr. Avigdor Shafferman

The Remuneration Committee has responsibility for making

recommendations to the Board on the Company’s policy

on staff remuneration and is authorised to decide whether

to approve remuneration of Office Holders (as designated

under Israeli Companies Law), including the Chairman of

the Company and Executive Directors (including pension

rights and any compensation payments). The membership

of the Remuneration Committee consists of independent

Non-executive Directors. During the year under review, Harel

Locker stepped down from the Remuneration Committee

when he retired from the Board and Ayala Hakim joined

the committee and succeeded Prof. Shalev as Chair of

the committee.

Further details on the Remuneration Committee’s

responsibilities and activities can be found in the

Remuneration Committee Report on pages 44 to 45

(within the Directors’ Remuneration Report). Information

on the Company’s policy regarding the setting of Directors’

remuneration, together with the remuneration of Directors,

is set out in the Directors’ Remuneration Report on pages

44 to 59. The Company’s current remuneration policy

as recommended by the Remuneration Committee was

approved at the Annual General Meeting of the Company

on 19 December 2024. The remuneration policy is more fully

explained in the Directors’ Remuneration Report.

Nomination Committee

Members: Gil Sharon (Chair), Prof. Varda Shalev

and Dr. Avigdor Shafferman

The membership of the Nomination Committee consists

of independent Non-executive Directors. In line with the

Committee’s terms of reference, the Chairman of the Board

acts as Chair of the Committee. Accordingly, Gil Sharon

succeeded Dr. Gideon Chitayat as Chair of the Nomination

Committee when he assumed the role of Chairman of the

Company. In addition, Harel Locker stepped down from the

Remuneration Committee following his retirement from the

Board. During the year, the Nomination Committee met on

two occasions where it discussed, and recommended to the

Board, the appointment of new Non-executive Directors.

The Nomination Committee is specifically tasked with

assessing the process utilised by the Company in relation

to Board appointments and in monitoring diversity during

the recruitment process and in the context of the resulting

appointment made. During the process, the Nomination

Committee considers the role and capabilities required for

a particular appointment, with consideration given to the

balance of skills, experience, independence and knowledge

on the Board. Board appointments are made on merit, having

due regard, amongst other things, to the benefits of diversity

on the Board. The Nomination Committee considers the skills,

experience and expertise of a potential candidate against the

needs of the Company, and presents its recommendations to

the Board.

Responsible Business Committee

Members: Dr. Shmuel Ben Zvi (Chair), Ayala Hakim

and Dr. Avigdor Shafferman

During the year, Dr. Ben Zvi and Ayala Hakim joined the

Responsible Business Committee and Dr. Ben Zvi succeeded

Dr. Gideon Chitayat as Chair, with the latter stepping down

from the committee along with Moti Nagar and Prof. Varda

Shalev. Harel Locker also stepped down from the Responsible

Business Committee following his retirement from the Board.

The primary role of the Responsible Business Committee is to

assist the Board in:

•

understanding the views of key stakeholders in

the Company;

•

understanding the Company’s impact on community and

environment;

•

assessing and monitoring climate-related risks and

opportunities; and

•

ensuring that the Board is aware of the processes used by

the Company in engaging with its key stakeholders.

The interests of the Company’s key stakeholders, as well as

the likely consequences of any decisions in the long term, the

interests of the Company’s employees, the need to foster the

Company’s business relationships with suppliers, customers

and others, the impact of the Company’s operations on

the community and the environment, the desirability of

the Company maintaining a reputation for high standards

of business conduct, and the need to act fairly between

members of the Company, have been considered in Board

Corporate Governance Report

(cont.)

Corporate Governance

Relations with Shareholders and

Significant Shareholders

Communication with shareholders is given high priority.

The half-yearly and annual results are intended to give a

detailed review of the business and developments, and are

available on the Company’s website to all shareholders.

Printed copies of the full Annual Report are made available

on request. The Company solicits regular dialogue with

institutional shareholders (other than during closed periods)

to understand shareholders views. The Board also uses the

Annual General Meeting to communicate with all shareholders

and welcomes their participation. Directors are available to

meet with shareholders at appropriate times. The Company

is committed to having a constructive engagement with its

shareholders. During 2025, the CEO and CFO attended

over 70 scheduled meetings with investors (including

group meetings).

The Chairman of the Board (as well as the CEO and CFO)

attended the Annual General Meeting. He also

communicated

with certain significant shareholders during the year.

As of 31 December 2025 and 24 February 2026 (being the

date of the Company’s latest shareholder analysis report), to

the best of the Company’s knowledge, the following persons

or entities had a significant holding of BATM ordinary shares:

discussions and decision-making through discussions in the

Responsible Business Committee; through the participation

of external and independent directors who bring external

perspectives to the Board discussions; through the

incorporation of environmental aspects into the Group’s Risks

and Opportunities Management Framework; and through

the Company’s general risk management system, which

includes management of risks related to employees, suppliers,

customers and reputation.

The duties of the Responsible Business Committee pursuant

to its terms of reference are:

•

to assess and monitor culture to ensure alignment with

the Company’s purpose, values and strategy;

•

to be responsible for interaction and engagement with the

workforce on behalf of the Board, as and when relevant;

•

to oversee, monitor and help generate the Company’s

health and safety systems and practices; and

•

to help the Board understand the impact of

the Company’s operations on the community

and environment.

The Responsible Business Committee met on four

occasions during the year where it discussed the disclosure

recommendations of the former Taskforce on Climate-related

Financial Disclosures, the corporate governance of the

Company, and the management of climate-related risks and

opportunities, and recommended that Prof. Shalev’s tenure as

‘Voice of the Workforce’ be extended for a further year, which

was approved by the Board.

Percentage of total voting rights

31 December 2025

(1)

24 February 2026

(2)

Lombard Odier Investment Managers

29.72%

27.10%

Dr. Zvi Marom

22.16%

(3)

Premier Miton Investors

7.91%

Canaccord Genuity Wealth Management

3.72%

4.68%

Herald Investment Management

3.64%

4.11%

Wirral BC

2.86%

3.68%

1) As at 31 December 2025, the Company’s issued share capital consisted of 441,369,184 ordinary shares, including 4,495,000 ordinary shares

held in treasury. Therefore, the total number of voting rights in the Company was 436,874,184

2) As at 24 February 2026, the Company’s issued share capital consisted of 441,369,184 ordinary shares, including 96,794,500 ordinary shares

held by a subsidiary of the Company (pursuant to the AMS sale agreement), which, in accordance with Israeli Companies Law, do not have any

voting rights, and 4,495,000 ordinary shares held in treasury. Therefore, the total number of voting rights in the Company was 340,079,684

3) The Group sold AMS to Dr. Marom in exchange for his entire shareholding in the Company and Dr. Marom ceased to be a shareholder of

BATM following the closing of the transaction, which occurred on 31 December 2025

Annual Report & Accounts 2025

Corporate Governance Report

(cont.)

Culture and Conflicts

The Board also works to ensure that within the Group

there exists a culture that is free from discrimination and

harassment in any form. The Board ensures that the Company

complies with Israeli legislation known as the Israeli Equal

Rights for People with Disabilities Law, 5748-1988 to ensure

that appropriate consideration is given to employees with

disabilities. The Company is also in full compliance with

Israeli legislation known as the Law of Equal Opportunity at

Work, 1988, which requires an employer not to discriminate

amongst employees on account of sex, sexual tendencies,

personal status and various other forms of discrimination.

Throughout 2025, the Company complied with procedures

in place for ensuring that the Board’s powers to authorise

conflict situations operated effectively. During 2025, no

conflicts arose that required the Board to exercise authority

or discretion in relation to such conflicts.

Annual General Meeting

The 2025 Annual General Meeting (“AGM”) was held on

Wednesday 10 December 2025. The results of voting were

published via the Regulatory News Service and on the

Company’s website at www.batm.com. The Chairman, CEO

and CFO attended the AGM in person.

Compliance with the UK Corporate

Governance Code

Shareholders can find information on how the Company has

applied the principles of the 2024 UK Corporate Governance

Code (the “Code”) as follows:

Board leadership and company purpose

Chairman’s Statement

Pages 4 to 5

Business Model

Page 6

Strategy

Page 7

Chief Executive Officer’s Review

Pages 8 to 11

Corporate Governance Report

Pages 32 to 39

Stakeholder Engagement

Page 12

Division of responsibilities

Matters reserved for the Board and Board and Committee Meetings

Page 33

Division of Responsibilities

Page 34

Board Committees

Pages 35 to 37

Composition, succession and evaluation

Directors’ Biographies

Pages 28 to 31

The Board

Page 33

Effectiveness & Evaluation

Page 35

Nomination Committee

Page 36

Audit, risk and internal control

Audit Committee Report

Pages 40 to 43

Risk Management

Pages 25 to 27

Remuneration

Directors’ Remuneration Report

Pages 44 to 59

The Board considers that, during 2025, the Company complied with the provisions set out in the Code with the exception

of the matters referred to below:

Provision

Exception and Explanation

All directors should be

subject to annual re-election.

In accordance with Israeli law, the Company is required to appoint at least two

independent non-executive directors (defined as ‘external directors’ within Israeli law),

who must be appointed for a minimum of one three-year term. Prof. Varda Shalev and

Ayala Hakim are classified as external directors and cannot be subject to annual

re-election (however, the Israeli Companies Law does provide grounds for removing

an external director from office). All other members of the Board are subject to annual

re-election. Ayala Hakim was appointed at the annual general meeting in 2025 and Prof.

Shalev was not subject to re-election for the reasons outlined above.

The chair should not remain

in post beyond nine years

from the date of their first

appointment to the board.

During 2025, Dr. Gideon Chitayat was Chairman of the Board until 25 December 2025.

As of June 2025, he had served on the Board for 15 years - ten of these as Chairman.

Dr. Chitayat was appointed to the Board as an independent Non-executive Director and

the Board considered him as independent in character and judgement during his tenure.

His knowledge of the business and the understanding of its various components, which

is built on his experience, combined with his independence of mind, enabled a critical

review of strategy and operations. In addition, his vast business experience, expertise

and knowledge of directing large business organisations within Israel was a valuable

resource for the Board and the Company as a whole.

On 25 December 2025, Gil Sharon, who was appointed as a Non-executive Director

on 10 December 2025, succeeded Dr. Chitayat as Chairman. Accordingly, since 25

December 2025, the Company has been in compliance with this provision.

Open advertising and/or an

external search consultancy

should generally be used for

the appointment of the chair

and non-executive directors.

This is not customary practice in Israel. The great reputation, extensive experience

and broad business network of Dr. Chitayat, the former Chairman, enabled him to

bring top-level candidates for the positions of Chairman and Non-executive Director.

Their appointment received unanimous support from the members of the Nomination

Committee and the Board.

A regular externally

facilitated board evaluation

Externally facilitated Board evaluation is not common practice in the Israeli corporate

business environment. The Company performed an internal Board evaluation.

Before appointment as

chair of the remuneration

committee, the appointee

should have served on a

remuneration committee for

at least 12 months.

In accordance with Israeli Companies Law, the Chairs of the Audit Committee and

Remuneration Committee must be External Directors (as this term is defined in the

Israeli Companies Law). There are two External Directors in the Company (Prof. Shalev

and Mrs. Hakim) and the Board believes it would be better not to have the same person

chair both committees. The Board decided that Prof. Shalev, who has more experience

in BATM's Board, should serve as Chair of the Audit committee and Mrs. Hakim will Chair

the Remuneration committee. While Mrs. Hakim has not served in the Remuneration

Committee for 12 months prior to her appointment as Chair, the other two members

have served in the Remuneration Committee for several years, including as Chair

(Prof. Shalev), so the required experience exists in the Remuneration Committee and is

being used in its discussions and decisions.

Corporate Governance

Annual Report & Accounts 2025

Dear Shareholder,

I am pleased to present the

Audit Committee report

for

2025

. I trust that this report

will provide you with an insight

into our work, the matters

handled and the focus of

the Audit Committee’s

deliberations during the year.

Audit

Committee

Report

Membership and attendance

The members of the Audit Committee are:

•

Prof. Varda Shalev (Chair), Senior Independent

(Non-executive) Director (“external director” as this

term is defined in the Israeli Companies Law)

•

Dr. Shmuel Ben Zvi, Non-executive Director (“independent

director” as this term is defined in Israeli Companies Law)

•

Ayala Hakim, Non-executive Director (“external director”)

The Audit Committee members are independent

Non-executive Directors of the Company, with diverse

skills and financial and/or related business experience gained

in senior positions in a range of organisations relevant to the

sectors in which BATM operates. The Board is satisfied that

I, as Chair, have recent and relevant financial experience,

including having been a member of the Audit Committee

since joining the Board in 2018 ahead of being appointed

Chair in 2025.

During the year under review, Harel Locker was a member

and Chair of the Audit Committee until he retired from the

Board on 26 September 2025 following the completion of

his third three-year term as an external director. Dr. Avigdor

Shafferman was a member of the Audit Committee until

14 December 2025. Dr. Shmuel Ben Zvi became a member

of the Committee on 28 September 2025 and Ayala Hakim

became a member on 14 December 2025.

The Audit Committee meets at least twice a year, and always

prior to the announcement of interim or annual results. The

external auditors and internal auditor are invited to attend

all meetings to ensure that all the information required by

the Audit Committee is available for it to operate effectively

and the Audit Committee reports back to the Board. The

Audit Committee also meets with representatives of the

Company’s external auditors at least twice per year (with

executive officers present) and raises any issues it has with

the review and/or audit carried out by the external auditors

and comments on specific issues it believes the auditors

should be focusing on when required. The Chairman and/or

Executive Directors attend parts of certain meetings of the

Audit Committee at the request of the Committee or when

the Committee Chair decides that they are required for the

presentation of certain subjects.

The Company Secretary is secretary to the Audit Committee.

Corporate Governance

During the year, there were 10 meetings of the Audit

Committee, which were attended by all members.

Governance and compliance

The Audit Committee adheres to the functions and

requirements prescribed to it by the Israeli Companies Law

and Israeli Regulations as well as to the specific Terms of

Reference adopted by the Board for this committee and

takes account of the relevant provisions of the Disclosure

Guidance and Transparency Rules of the Financial Conduct

Authority (“FCA”) and the UK Corporate Governance Code.

The Chair of the Audit Committee maintains close contact

on a regular basis with the key people involved in the

Company’s governance.

Responsibilities and activities

The Audit Committee’s responsibility is to, among other

things, ensure that the financial information published by

the Group properly presents its activities to stakeholders

in a way that is fair, balanced and understandable; monitor

the scope and results of the external and internal audit;

review whistleblowing procedures; consider compliance with

legal requirements, accounting standards and the Listing

Rules of the FCA; and advise the Board on the requirement

to maintain an effective system of internal controls. The

Committee also keeps under review the independence and

objectivity of the Group’s external auditors, value for money

of the audit and the nature, extent and cost-effectiveness

of the non-audit services provided by the auditors. Pursuant

to section 117 (6) of the Israeli Companies Law, the Audit

Committee is responsible to fix procedures and policy for

whistleblowing and to oversee these procedures.

In 2025, the Audit Committee’s activities included:

•

Reviewing, and approving, annual results for the year

to 31 December 2024, the Annual Report for the year

to 31 December 2024 and the Half-year Report for the

six months to 30 June 2025 and discussing them with

management and the external auditor to assess whether

the reports, taken as a whole, were fair, balanced and

understandable prior to recommending these to the

Board for approval.

•

Reviewing and challenging areas of significant risk and

judgement and the level of disclosure.

•

Challenging the assumptions and analysis produced by

management in relation to the Company’s going concern

basis of preparation, the long-term viability statement

and associated risk assumptions, the accounting policies

and disclosures, the financial reporting issues and the

assumptions and adjustments made.

•

Reviewing and approving the financial results for the first

and third quarters of 2025.

•

Recommending to the Board the appointment of a new

internal auditor.

•

Reviewing the work plans of the internal auditor for 2025

and 2026.

•

Reviewing the findings of the internal audit work and

the follow-ups of reviews done in the previous year

and considering the internal audit work plan for the

following year.

•

Reviewing the effectiveness of the Group’s internal

controls and disclosures made in the Annual Report and

Financial Statements.

•

Monitoring, reviewing and approving the negotiation

process and sale of A.M.S 2000 Trading Impex SRL.

•

Validating that the resignation of the Chief Financial

Officer was not caused by factors that would be of

concern to the Committee.

Internal audit, internal control and risk

management

During 2025, the Company continued to follow the processes

for identifying, evaluating and managing the significant

risks faced by the Group in accordance with its Risk and

Opportunity Management Framework as described in the

Risk Management section on page 25. Principal controls are

ultimately managed by the Executive Directors, including

alongside regular review by management and the Board of

the operations and the financial statements of the Company.

The Executive Directors, as part of the Board, have overall

responsibility for ensuring that the Company maintains

adequate systems of internal control and for determining

the nature and extent of principal risks. The Board confirms

that it has carried out, during 2025, a robust assessment of

such risks accordingly, including those that would impact the

Company’s business model, future performance, solvency or

liquidity, and have considered how they are to be mitigated.

Annual Report & Accounts 2025

Audit

Committee

Report

(cont.)

In accordance with the Israeli Companies Law, the Company

retains the services of an independent qualified internal

auditor. Each year, the Audit Committee reviews with the

internal auditor potential risks and a proposed plan for

their scope of work. Each year the Audit Committee usually

selects at least two areas of the Company’s operations on

which it requests the internal auditor to focus and prepare

an internal audit report with recommendations. Following

the completion of each report, the internal auditor sends

it to all the Directors and presents their findings to the

Audit Committee. The Audit Committee then reports to

the Board on any major findings together with the internal

auditor’s recommendations for improving controls and

corporate responsibility and the Board instructs management

to implement the recommendations. During the year

under review, the internal auditor reviewed IT controls and

cybersecurity (penetration testing) and presented reports to

the Audit Committee post year end.

The key features of the financial controls of the Company

include a comprehensive system of financial reporting,

budgeting and forecasting, and clearly laid down accounting

policies and procedures. The main elements of internal

control currently include:

•

Operating Controls: The identification and mitigation of

major business risks on a daily basis is the responsibility

of the Executive Directors and senior management. Each

business function within the Group maintains controls

and procedures, as directed by senior management,

appropriate to its own business environment while

conforming to the Company’s standards and guidelines.

These include procedures and guidelines to identify,

evaluate the likelihood and mitigate all types of risks on an

ongoing basis.

•

Information and Communication: The Group’s operating

procedures include a comprehensive system for reporting

financial and non-financial information to the Directors.

Financial projections, including revenue and profit

forecasts, are typically reported on a monthly basis to

senior management compared with corresponding results

for previous periods. The central process for evaluating

and managing non-financial risk is primarily through

meetings of Executive Directors and/or the Group Risk

and Opportunity Manager with the business unit leaders.

Prof. Varda Shalev

Audit Committee Chair

Corporate Governance

•

Finance Management: The finance department operates

within procedures approved by the Directors and the

Chief Financial Officer. Expenditures are tightly controlled

with stringent approvals required based on amount.

Duties such as legal, finance, sales and operations are

also segregated to minimise risk.

•

Insurance: Insurance coverage is provided externally

and depends on the scale of the risk in question and the

availability of coverage in the external market.

The process by which the Audit Committee has monitored

and reviewed the effectiveness of the system of internal

controls and risk management during the year has included:

•

reviewing the Company’s Risk and Opportunity

Management Framework and the way it was activated

during the year, the risks that were identified, quantitative

assessment of the risks, details of the risks and mitigation

measures;

•

reviewing any control matters identified by Brightman

Almagor Zohar & Co. and challenging management on

the application of controls to gain assurance on their

effectiveness; and

•

reporting to, and updating, the Board on the risk and

control within the Group.

The Audit Committee is satisfied that the Group’s framework

of internal control systems has continued to operate

effectively throughout 2025.

External auditor and independence

Brightman Almagor Zohar & Co., a Firm in the Deloitte

Global Network, serves as the Group’s auditor. The Audit

Committee as well as the Directors review and assess on

an annual basis, the performance of the external auditors,

their independence and the reasonableness of their audit

fees as compared with peer tier 1 accountancy offices in

Israel, and make recommendations to be brought forward

to the shareholders’ meeting as to the appointment, or

reappointment, or replacement of the external auditors of

the Group. While the Audit Committee as part of its activity

reviews and monitors the external auditor’s independence

and objectivity, there is no requirement under Israeli law and

regulations to have maximum terms for auditors. Rotation of

external auditors is not accepted practice in the Israeli market

and the Company is not subject to EU audit regulations

that relate to rotation of the external auditors. However, to

facilitate auditor independence, based on the IESBA Code,

the audit engagement partner must be rotated after no more

than seven years of service in that role. The most recent audit

partner rotation occurred in 2022. The Audit Committee has

discussed with the external auditors their independence,

and has received and reviewed written disclosures from the

external auditors regarding independence.

Non-audit services

Non-audit work is generally put out to tender. In cases that

are significant, the Company engages another independent

firm of accountants to provide consulting work to avoid

the possibility that the external auditors’ objectivity and

independence could be compromised; work is only carried

out by the external auditors in cases where they are best

suited to perform the work, for example, tax compliance.

However, from time to time, the Company will engage

the external auditors on matters relating to acquisition

accounting and due diligence (the scope of which is limited),

thus ensuring the continued objectivity and independence of

the external auditors.

In order to safeguard the independence and objectivity of

the external auditor, the Audit Committee reviews the nature

and extent of the non-audit services supplied, and receives

reports on the balance of audit to non-audit fees. For 2025,

the external auditor provided $91k of non-audit work (2024:

$34k). Fees paid to Brightman Almagor Zohar & Co. are set

out in note 9 to the financial statements.

Prof. Varda Shalev

Audit Committee Chair

20 April 2026

Annual Report & Accounts 2025

Directors’

Remuneration

Report

Remuneration Committee Report

Dear Shareholder

The Board is pleased to present the Directors’ Remuneration

Report for the year ended 31 December 2025, which sets out

BATM’s executive remuneration policy and details Directors’

remuneration and benefits for the financial year under review.

The main purpose of the Remuneration Committee (the

“Committee”) is to design appropriate remuneration

packages to attract, retain and motivate senior executives

and managers of the experience and expertise required to

run the Company successfully. The Committee reviews and

considers the remuneration of, amongst others, the

CEO, CFO, Executive and Non-Executive Directors and

senior management.

The Committee ensures that a remuneration framework is

established and implemented that addresses the need of the

Company to attract, retain and motivate such executives and

managers, while considering and managing business risks

and ensuring the Company’s remuneration policy facilitates,

so far as possible, the Company’s long-term strategy and

performance and ensures its sustainable financial health.

The Committee ensures that the overall remuneration

strategy adopted by the Company remains aligned with the

interests of its shareholders. The Committee, when necessary,

engages external executive remuneration advisers to give it

guidance regarding the accepted levels of salary, bonuses

and long-term incentives (“LTIs”) payable by similar sized

companies listed on the London Stock Exchange and the

Tel Aviv Stock Exchange to its CEO, CFO and other senior

executives and ensures that the level of remuneration offered

to its senior executives is both fair and reasonable.

The Remuneration Committee’s responsibilities

The Committee was established by the Board of Directors

of the Company and operates in accordance with the

functions set forth in the Israeli Companies Law, 1999 (“Israeli

Companies Law”) and UK corporate governance expectations.

This is a separate independent Committee comprised of

external independent directors who are appointed by the

shareholders’ meeting.

Ayala Hakim

Remuneration Committee Chair

Corporate Governance

The Committee’s responsibilities and duties are:

(1)

Recommending for approval to the Board the framework

or broad policy for the remuneration of the Company’s

Chairman of the Board, CEO, Executive Directors,

Non-executive Directors and other senior management

and Office Holders (as defined in the Israeli Companies

Law) (“Remuneration Policy”);

(2) Recommending appropriate remuneration packages and

service contracts of the Executive Directors and Officers,

reviewing the ongoing appropriateness and relevance of

the Remuneration Policy, recommending to the Board

updates of the Remuneration Policy, and monitoring

its application;

(3) Determining whether to approve remuneration of

Office Holders;

(4) Exempting the remuneration of a candidate for the role

of CEO from the approval of the general meeting if the

remuneration is according to the Remuneration Policy,

the candidate is not related to a controlling shareholder

(and if there is no controlling shareholder, to a substantial

shareholder, the Chairman of the Board, the CEO or

the CFO) and the Committee found that bringing the

remuneration for the approval of the general meeting

will result in failure of the attempted recruitment of the

CEO candidate;

(5) Recommending and determining the goals for all

performance-related remuneration offered by the

Company and approving the total annual payments made

under such schemes;

(6) Reviewing the design of all long-term incentive schemes,

such as options and equity awards, and recommending

these for approval by the Board and, if and when required

by law, by the shareholders; and

(7) Reviewing the CEO’s compensation policies for

Office Holders.

The Committee’s terms of reference are available on the

Company’s website and are available in hard copy on request

from the Company Secretary.

Key activities during the year

There were five meetings of the Committee during the

year to 31 December 2025. The Committee undertook the

following activities in this period:

•

Determining the outcome of the 2024 annual bonus

•

Setting the targets and measures for the 2025

annual bonus

•

Approving and granting LTI awards to employees

•

Approving the remuneration of a new Office Holder

•

Approving vesting percentage, and allocation of shares

following vesting, of Restricted Share Units

•

Discussing the grant of an LTI to an Office Holder

•

Approving updated remuneration of an Office Holder

•

Setting the targets and measures for the 2026

annual bonus

Stakeholder views & engagement

At the Annual General Meeting (“AGM”) in 2025, we proposed

one remuneration-related resolution that passed with an

approval rating of 98.02% (further detail is provided in the

Annual Report on Remuneration section below). On behalf

of the Committee, I thank shareholders for their support and

look forward to receiving further support at this year’s Annual

General Meeting.

Ayala Hakim

Remuneration Committee Chair

20 April 2026

Annual Report & Accounts 2025

Directors’

Remuneration

Report

(cont.)

This Remuneration Policy sets out the remuneration policy

of BATM Advanced Communications Ltd (hereinafter – the

“Company”) for its Executive and Non-Executive Directors,

and Office Holders (as that term is defined in section 1 of the

Israeli Companies Law), which includes the Directors, CEO and

other senior executives in the Company that report directly to

the CEO of BATM.

The current Directors’ and Officers’ Remuneration Policy was

approved by shareholders at the December 2024 Annual

General Meeting and took effect from the date of approval. In

accordance with Israeli law, a policy for a period of over three

years requires approval by the Company’s shareholders at a

general meeting every three years.

This section summarises the key elements of the

Remuneration Policy. The full Remuneration Policy was

provided in full in the Company’s annual report for the year

ended 31 December 2024.

Directors’ & Officers’ Remuneration Policy table

The following table sets out the main components of the

Remuneration Policy, together with further information on

how these aspects of remuneration operate. The Committee

has discretion to amend remuneration and benefits to the

extent described in the table and the written sections that

follow it.

Remuneration Policy

Corporate Governance

Base Salary

Purpose and link to

strategy

To provide competitive fixed remuneration.

To attract and retain Executive Directors and Officers of superior calibre in order to deliver long-

term business success.

Reflects individual experience, achievements, expertise, education, skills, role and responsibility.

The Committee’s aim is to position salaries around the mid-market level of companies of a

similar size, scale and complexity.

Operation

Normally reviewed annually by the Committee with increases typically effective from 1 January.

Increases take into account:

•

The executive’s skills, experience, education, qualifications, achievements, expertise, role and

responsibilities

•

Affordability

•

Pay increases for the workforce

•

Performance

•

External market trends

•

Internal differentials/relativities

•

The value of total remuneration

•

The Committee’s judgement

Significant adjustments are infrequent and normally reserved for material changes in role,

a significant increase in the size/complexity of the Group, or where an individual has been

appointed on a low salary with an intention to bring them to market levels over time and subject

to performance.

Other factors which will be taken into account will include pay and conditions elsewhere in the

Group, progression within the role, and competitive salary levels in UK premium-listed and Israeli

publicly-listed companies of a broadly similar size and complexity.

Maximum potential

value

Basic salary of Office Holders that report directly to the CEO will be capped at 80% of the CEO’s

basic salary.

The normal approach will be to limit increases to the average level across the wider workforce,

though increases above this level may be awarded subject to Committee discretion to take

account of certain circumstances, such as those stated under ‘Operation’.

On recruitment or promotion, the Committee will consider previous remuneration and pay levels

for comparable companies (for example, companies of a similar size and complexity, industry

sector or location), when setting salary levels.

This may lead to salary being set at a lower or

higher level than for the previous incumbent.

The Committee also takes into account the ratio between the total remuneration of the

applicable Executive Director and/or Officer and the salary of all other employees in the

Company, especially the ratio between the total remuneration and the median and average

salary of all such other employees in the Company - this analysis and ratio will be calculated or

evaluated on a per division basis and on a per country basis so as to ensure that the comparison

is made on the same underlying parameters.

Performance targets

Although there are no formal performance conditions, any increase in base salary is only

implemented after careful consideration of individual contribution and performance and having

due regard to the factors set out in the ‘Operation’ row of this table.

Benefits

Purpose and link to

strategy

To provide competitive fixed remuneration.

To attract and retain Executive Directors and Officers of superior calibre in order to deliver long-

term business success.

Operation

Executive Directors, Officers and all employees in Israel may be entitled to benefits such as a

study fund / Further Education funds, expansion of mandatory benefits (pension and end-of-

work compensation) beyond the salary levels on which they are mandatory or carry tax benefits,

travel-related benefits including a car or car allowance, use of mobile phone and newspaper.

Executives will be eligible for any other benefits which are introduced for the wider workforce on

broadly similar terms.

Any reasonable business-related expenses (and any tax thereon) can be reimbursed if

determined to be a taxable benefit. The Company may also

arrange for reasonable insurance

cover for Executive Directors.

Executive Directors and Officers may be eligible to participate in future all-employee share plan

operated by the Company, on the same terms as other eligible employees.

For external and internal appointments or relocations, the Company may pay certain relocation

and/or incidental expenses as appropriate.

Maximum potential

value

Study fund contributions are common in Israel and under this arrangement the employer

deposits 7.5% of base salary to a study fund (payable to the employee with no tax after 6 years),

and deducts 2.5% from the employee’s base salary to be also deposited to this fund.

It is not possible to calculate in advance the cost of some benefits, and therefore a maximum

potential value is not pre-determined.

Performance targets

Not applicable.

Pension

Purpose and link to

strategy

To reward sustained contributions by providing retirement benefits.

Operation

The Company funds contributions to an Executive Director or Officer’s pension as appropriate

through contribution to a pension fund.

Maximum potential

value

In line with all employees and in line with mandatory requirements in Israel, BATM contributes

6.5% of base salary towards pension and is obliged to deduct 6% of salary from the employee’s

base salary and deposit it into the pension fund.

In addition, at the end of employment all Israeli employees (including Executive Directors and

Officers) are entitled to end-of-employment compensation of 1 basic salary per every year of

employment (1 month for every 12 months, or 8.333%). Israeli employers are bound to make

on-going deposits of at least 6% of the employee’s (including Executive Directors and Officers)

salary to the pension fund for end-of-employment compensation.

Performance targets

Not applicable.

Directors’ Remuneration

Report

(cont.)

Annual Report & Accounts 2025

Corporate Governance

Annual Bonus

Purpose and link to

strategy

Rewards the achievement of annual financial and business targets aligned with the Group’s KPIs.

Deferred element encourages long-term considerations and discourages excessive risk taking.

Operation

Bonus is based on performance in the relevant financial year. Any payment is discretionary and

will be subject to the achievement of performance targets.

Bonus is normally paid in cash, except one-third of any bonus above 70% of annual base salary

which is deferred into an award over Company shares for two years. In case of immediate tax

obligations due to award of such shares, and subject to the provisions of the Company’s Share

Incentive Plan, the receiver of the shares will be allowed to exercise shares immediately to the

extent needed to finance coverage of tax obligations.

Bonuses are not contractual and are not eligible for inclusion in the calculation of pension

arrangements.

Recovery and withholding provisions apply in cases of specific circumstances.

Dividends or dividend equivalents may accrue on deferred shares.

Maximum potential

value

Capped at 125% of annual base salary.

In the first full financial year of the policy only (being the year ending 31 December 2025), the

bonus opportunity will be set at 100% of salary for the CEO and CFO.

Performance targets

The Committee sets performance measures and targets that are appropriately stretching

each year, taking into account key strategic and financial priorities and ensuring there is an

appropriate balance between incentivising Executive Directors and Officers to meet targets,

while ensuring they do not drive unacceptable levels of risk or inappropriate behaviours.

The Remuneration Committee will set bonus criteria at the start of the year which reflect the

short term financial and strategic objectives of the Group.

For directors and the CEO, the bonus will be based on performance and on measurable criteria;

but bonus of up to 25% of annual salary can be based on strategic, non-measurable criteria and

considering the director’s / CEO’s contribution to the Company.

A graduated scale of targets is normally set for each financial measure, with no pay-out for

performance below a threshold level of performance.

The Committee has discretion to amend the overall bonus pay-out should the outcome not

reflect the Committee’s assessment of overall business and/or individual performance.

Long-Term Incentive Plan (LTIP)

Purpose and link to

strategy

Designed to align Executive Directors’ and Officers’ interests with those of shareholders and to

incentivise the delivery of sustainable earnings growth and superior shareholder returns.

Operation

Awards of conditional shares or option awards which normally vest over three years subject to

the achievement of performance targets and/or continued service.

For Executive Directors, an additional two-year holding period will apply after the end of the

three-year vesting period, if so decided by the Committee. Sufficient awards may be sold during

the holding period to satisfy any tax liabilities owed.

Recovery and withholding provisions apply in cases of specific circumstances.

Dividend equivalents may be paid for awards to the extent they vest.

The Committee retains discretion to adjust vesting levels in exceptional circumstances, including

but not limited to regard of the overall performance of the Company or the grantee’s personal

performance.

The Committee also retains discretion to adjust provisions of LTIP regarding acceleration,

change of ownership, restructuring and any other circumstances that justify adjustment of

provisions, considering also the provisions of the Share Incentive Plan.

Any options shall not be exercisable more than ten years after the date of grant.

Maximum potential

value

Executive Directors and Officers may receive an award with a face value of up to 125% of basic

salary per annum in any financial year.

For the first award to be granted in 2025, awards to Executive Directors will be limited to 100%

of salary.

The Committee will consider the prevailing share price when deciding on the number of shares

to be awarded as part of any LTIP grant.

A 10% in 10 years’ dilution limit governing the issue of new shares to satisfy all share scheme

operated by the Company will apply.

Performance targets

Performance measures may include, and are not limited to, EPS, absolute or relative total

shareholder return, other financial measures, strategic measures and/or ESG-related objectives.

The Committee retains discretion to set alternative weightings or performance measures for

awards over the life of the policy.

For directors and the CEO, the LTIP will be based on performance in long-term view and on

measurable criteria; but LTIP of up to 25% of annual salary can be based on strategic, non-

measurable criteria and considering the director’s / CEO’s contribution to the Company.

100% of awards vest for stretch performance, up to 25% of an award vests for threshold

performance and no awards vest below this.

Underpins may apply.

Directors’ Remuneration

Report

(cont.)

Annual Report & Accounts 2025

Corporate Governance

Share Ownership Guidelines

Purpose and link to

strategy

To increase alignment between Executive Directors and shareholders.

Operation

Nil or nominal cost options which have vested but are yet to be exercised and deferred bonus

awards subject to a time condition only may be considered to count towards the in-employment

shareholding on a notional post-tax basis.

Maximum potential

value

Executive Directors are expected to build up and maintain an in-employment shareholding worth

200% of salary.

Executive Directors are normally expected to hold shares at a level equal to the lower of their

shareholding at cessation and 200% of annual base salary for two years post-employment

(excluding shares purchased with own funds and any shares from share plan awards made

before the approval of the policy).

Performance targets

Not applicable.

Non-executive and Non-External Directors’ Salary and Benefits

Purpose and link to

strategy

Israeli publicly listed companies often have Directors that are both Non-executive and Non-

External, such as the current Chairman. Due to their status and relationship to the Company,

such Directors are distinguished from independent External Directors (see table below).

Non-executive and Non-External Directors should be paid in line with the demands of the roles

at a level that attracts high calibre individuals and reflects their experience and knowledge.

Operation

Non-executive and Non-External Directors may receive salary in cash or ordinary shares for their

contribution and efforts for the Company. Salary is typically set by reference to a proportion of

the salary for a full-time Executive Director role (reflecting the part-time nature of the role).

In addition, the Non-executive and Non-External Director may receive modest benefits on the

same basis as an Executive Director (as set out in the policy table above).

There are currently no plans for Non-executive and Non-External Directors to participate in the

variable remuneration plans offered by the Company to its Executive Directors and Officers.

Any future participation by Non-executive and Non-External Directors in the Company’s variable

remuneration plans would be subject to prior approval by the Company’s shareholders.

Maximum potential

value

No prescribed maximum or maximum increase.

Salary is normally reviewed annually taking into account factors such as the time commitment

and contribution of the role and market levels in companies of comparable size and complexity.

Any increases will be informed by taking into account internal benchmarks such as the salary

increase for the general workforce and will have due regard to the same factors that apply to

Executive Directors.

Performance targets

Not applicable.

External Directors’ Fees and Benefits

Purpose and link to

strategy

As an Israeli publicly listed company, BATM’s Board must include at all times at least two External

Directors (as defined in the Israeli Companies Law).

Fee of External Directors in Israel is set by regulation.

In addition to External Directors, the Israeli Companies Law defines an Independent Director,

which receives the same remuneration as an External Director. Currently there are two such

Independent Directors in the Company.

Operation

External Directors remuneration is prescribed in the Israeli Companies Regulations (Rules

Regarding Compensation and Expense Reimbursement of External Directors) 2000 (the “Israeli

Compensation Regulations”), which includes an annual fixed pay and a per-meeting participation

fee, both set according to the size of the Company and the expertise of the director.

In addition, the Company may reimburse said directors for their reasonable expenses incurred

in connection with attending meetings of the Board of Directors and of any Committees of the

Board, all in accordance with the Israeli Compensation Regulations.

The External Directors are not eligible to participate in the variable remuneration plans offered

by the Company to its Executive Directors and Officers.

The Israeli Companies Law states that a director defined as Independent Director will receive

remuneration according to the same rules as an External Director.

Maximum potential

value

Fees are paid according to strict rules set by the Israeli authorities.

Performance targets

Not applicable.

Selection of Performance Measures

and Targets

Annual bonus

The annual bonus arrangements are focused on the

achievement of the Company’s short- and medium-term

financial objectives, with financial measures selected to

closely align the performance of the Executive Director or

Officer with the strategy of the business and with shareholder

value creation. Where non-financial objectives are set, these

are chosen to support the delivery of strategic milestones

and which link to those KPIs of most relevance to each

Director or Officer’s individual responsibilities.

Details of the measures to be used for the annual bonus will

be determined at the start of the financial year and will be

disclosed in the next year’s remuneration report.

Long-Term Incentive Plan

The aim of the LTIP is to motivate Executive Directors and

other senior executives to achieve performance superior to

the Company’s peers and to maintain and increase earnings

levels whilst at the same time ensuring that it is not at the

expense of longer-term shareholder returns.

The Committee will review the choice of performance

measures and the appropriateness of the performance

targets prior to each LTIP grant.

Measurable targets

Measurable targets / performance metrics for the annual

bonus and / or for LTIP schemes can involve a number of

BATM’s KPIs and may include any number of the following:

•

Work plan targets

•

Budget targets

•

Accomplishment of specific projects

Directors’ Remuneration

Report

(cont.)

Annual Report & Accounts 2025

Corporate Governance

•

Meeting pre-defined goals of -

•

EBITDA

•

Revenue

•

Profit

•

Operating profit

•

Cash from operating activities

•

Cash flow

•

Share price

•

Earnings per share

•

Return on invested capital

•

Return on capital employed

•

Total shareholder return

•

Absolute total shareholder return

•

Relative total shareholder return

Flexibility, Discretion and Judgement

The Committee operates the annual bonus and LTIP

according to the rules of each respective plan which,

consistent with market practice, include discretion in a

number of respects in relation to the operation of each plan.

Discretions include:

•

who participates in the plan, the quantum of an

award and/or payment and the timing of awards

and/or payments

•

determining the extent of vesting

•

treatment of awards and/or payments on a change of

control or restructuring of the Group

•

whether an Executive Director or an Officer is a good/

bad leaver for incentive plan purposes and whether the

proportion of awards that vest do so at the time of leaving

or at the normal vesting date(s)

•

how and whether an award may be adjusted in certain

circumstances (e.g. for a rights issue, a corporate

restructuring or for special dividends)

•

what the weighting, measures and targets should be for

the annual bonus plan and LTIP awards from year to year

•

the Committee also retains the ability, within the policy,

if events occur that cause it to determine that the

conditions set in relation to an annual bonus plan or a

granted LTIP award are no longer appropriate or unable

to fulfil their original intended purpose, to adjust targets

and/or set different measures or weightings for the

applicable annual bonus plan and LTIP awards with, in the

case of LTIP awards held by Executive Directors, adjusted

performance conditions being not materially less difficult

to satisfy than the original conditions would have been but

for the relevant event(s)

•

the ability to override formulaic outcomes in line with

this Policy

All assessments of performance are ultimately subject to the

Committee’s judgement and discretion is retained to adjust

payments in appropriate circumstances as outlined in this

Policy.

Any discretion exercised (and the rationale) will be

disclosed in the relevant Directors’ & Officers’ remuneration

report detailing the payment outcome.

With regards to section 1B3 of the Israeli Companies

Regulations (Reliefs in Related Party Transactions), 2000,

immaterial changes to the remuneration of Office Holders

(defined as up to 10% of the total annual cost of the

remuneration of that Office Holder) that report directly to the

CEO, as stated in section 272(c) to the Israeli Companies Law,

will be approved by the CEO within the boundaries set in the

Remuneration Policy.

Directors’ Remuneration

Report

(cont.)

Annual Report on Remuneration

Annual Report & Accounts 2025

This section of the Directors’ Remuneration Report provides

details of the remuneration earned by the Directors in the

year ended 31 December 2025 and how the Remuneration

Policy will operate for the year ending 31 December 2026.

Remuneration Committee

Roles and responsibilities

The Remuneration Committee works within its terms of

reference, and in accordance with the functions set forth

in Israeli Companies Law, to make recommendations to the

Board of Directors of the Company and to decide whether to

approve certain transactions and whether to exempt certain

transactions from approval. The Remuneration Committee’s

full terms of reference are available on the Company’s

website.

Remuneration Committee members and

meetings

The Remuneration Committee consists of all the External

Directors and one Independent Director (as these terms are

defined in the Israeli Companies Law), being:

•

Ayala Hakim (Chair) (appointed as an External Director

on 10 December 2025 and became Remuneration

Committee Chair on 25 December 2025)

•

Prof. Varda Shalev (External Director)

•

Dr. Avigdor Shafferman (Independent Director)

During the year under review, Harel Locker was also a member

of the Remuneration Committee until his retirement from the

Board on 25 September 2025. Prof. Varda Shalev was Chair of

the Remuneration Committee for the year under review until

the role was assumed by Ayala Hakim.

The Remuneration Committee receives advice from several

sources, namely:

•

The other Directors of the Board, who attend the

Remuneration Committee meetings when specifically

invited by the Chair of the Committee in order to provide

relevant information to the Committee.

•

As and when the Committee deems it necessary,

the Committee is provided advice from independent

consultants.

Key activities during the year

The Committee held five meetings during the year to 31

December 2025.

As noted in the Remuneration Committee Report, the key

activities undertaken during the year included determining

the outcomes and setting the targets for annual bonus;

approving the remuneration of Office Holders; and approving

the granting and allocation of LTIs and RSUs to employees

and Office Holders.

Single total figure of remuneration

The following table sets out the single total remuneration

figures for each director for 2025 and the prior year. The

figures are translated into US dollar, being the presentation

currency of the Group’s consolidated financial statements

and therefore also reflect movement in the NIS:USD

exchange rate.

Corporate Governance

Year

Salary/Fees

$’000

Performance Bonus

$’000

Total Remuneration

$’000

Executive Directors

Moti Nagar, CEO

(1)

2025

730

376

1,106

2024

677

Lior Miles, CFO

(2)

2025

137

193

2024

Ran Noy

(3)

2025

207

2024

219

Non-executive Directors

Gil Sharon

(4)

2025

2024

Gideon Chitayat

(5)

2025

2024

100

Varda Shalev

2025

2024

Avigdor Shafferman

2025

2024

Shmuel Ben Zvi

(6)

2025

2024

Ayala Hakim

(7)

2025

2024

Zvi Marom

(8)

2025

2024

Harel Locker

(9)

2025

2024

1. Moti Nagar’s salary includes social and pension benefits as required by Israeli law for all employees. His salary is paid in New Israeli Shekels

(NIS) and was unchanged in 2025 at NIS 1.8m (2024: NIS 1.8m): the reported difference reflects movement in the NIS:USD exchange rate.

2. Lior Miles became CFO on 22 June 2025 and was appointed to the Board on 10 December 2025. His salary includes social and pension

benefits as required by Israeli law for all employees.

3. Ran Noy resigned as CFO and an Executive Director on 21 June 2025. His salary included social and pension benefits as required by Israeli law

for all employees.

4. Appointed to the Board on 10 December 2025 and assumed the role of Chairman on 25 December 2025.

5. Retired from the Board, post year end, on 1 January 2026 having stepped down as Chairman on 25 December 2025.

6. Appointed to the Board on 19 December 2024.

7. Appointed to the Board on 10 December 2025.

8. Resigned from the Board on 10 December 2025.

9. Retired from the Board on 25 September 2025.

As at 31 December 2025, the total liability for payment related to salary/fees for the Executive Directors was $91 thousand

(31 December 2024: $72 thousand), which was paid in January 2026 (2024 liability was paid in January 2025).

Non-executive Directors

In determining the remuneration to its “external directors”

and “independent directors” (as defined under Israeli law),

which during 2025 included Prof. Varda Shalev, Dr. Avigdor

Shafferman, Ayala Hakim and Harel Locker, the Group was

required to comply with Israeli law that formulates the kind

and amounts of remuneration and expenses that an Israeli

public company may pay its external and independent

directors. The applicable Israeli statute is the Israeli

Companies Regulations (Rules Regarding Compensation

and Expense Reimbursement of External Directors) 2000

(the “Compensation Regulations”), which prescribes the level

of remuneration that a publicly listed company may pay its

external directors, and section 249C of the Israeli Companies

Law, which states that the rules regarding remuneration of

external directors will apply also for independent directors.

Cash remuneration payable to these directors is comprised

of two fees: (i) an annual fixed fee; and (ii) a per-meeting

participation fee. The figures set forth in the Compensation

Regulations for these elements are based on the size of

the company calculated by the equity of the relevant listed

company as recorded in its last audited financial statements.

In compliance with the Compensation Regulations, the

Company does not pay any additional amounts to the external

directors. The Compensation Regulations did not apply to

the Chairman, Dr. Shmuel Ben Zvi, Gil Sharon or Dr. Zvi Marom

who are not external directors or independent directors in

terms of Israeli law, however the Board resolved that Dr. Ben

Zvi, Dr. Marom and Mr. Sharon (prior to his appointment as

Chairman) would be remunerated on the same basis as the

directors to whom the regulations apply.

2025 annual bonus outcome

The maximum annual bonus opportunity for Mr. Moti Nagar,

CEO, and Mr. Lior Miles, CFO, for 2025 was 67% and 25% of

annual base salary, respectively. The annual bonus is based on

a mix of quantitative financial criteria (75% of maximum bonus

opportunity) and qualitative personal and operational criteria

(25% of maximum bonus opportunity) as described below.

Moti Nagar, CEO

The measurable targets that the Board considered relevant

to annual bonus are EBITDA and revenue. For 2025, the

non-measurable criteria for Mr. Nagar included strategic

execution, implementing effective sales strategies and

focusing on customer retention, and strategic optimisation

of resources, particularly personnel. Mr. Nagar was awarded a

bonus of $376k for 2025, representing 100% of his maximum

bonus opportunity.

Lior Miles, CFO

The measurable targets that the Board considered relevant to

annual bonus are EBITDA and revenue. For 2025, the non-

measurable criteria for Mr. Miles included ensuring a smooth

transition of the CFO role and executing the divestment of

the subsidiaries, including structuring the sale of A.M.S 2000

Trading Impex SRL in a tax-efficient manner and to maximise

net proceeds for the Group. Mr. Miles was awarded a bonus of

$56k for 2025, representing 100% of his maximum

bonus opportunity.

Long-term incentive awards granted in 2025

No long-term incentive awards were granted to directors

during 2025.

Directors’ Remuneration

Report

(cont.)

Annual Report & Accounts 2025

Corporate Governance

Share interests

owned

outright

(31/12/25)

owned

outright

(31/12/24)

Awards

unvested and

subject to

performance

conditions as

at 31/12/25

Options

unvested and

not subject to

performance

conditions as

at 31/12/25

Options

vested but

not exercised

as at 31/12/25

Shareholding

as a

percentage

of salary/

service fee*

Executive Directors

Moti Nagar

5,477,979

10,955,958

Lior Miles

2,080,441**

Non-executive Directors

Gil Sharon

Gideon

Chitayat***

3,159,000

1,229,369

692%

Varda Shalev

Avigdor

Shafferman

Shmuel Ben Zvi

Ayala Hakim

* According to the share price on the LSE on 31 December 2025 of £0.16125 and the currency rate on 31 December 2025 of £0.743467

per $1.00

** Granted prior to his appointment as a Director

*** Dr. Gideon Chitayat retired as a Director on 1 January 2026. His options expired on 1 April 2026

Moti Nagar’s vested options have an exercise price of £0.2549.

Directors’ Remuneration

Report

(cont.)

Ratio of CEO pay to average full-time employee

The ratio of CEO base pay to average full-time employee

base pay during 2025 for continuing operations was 7:1

(2024: 7:1) for employees of Israeli companies in the Group

and 21:1 (2024: 22:1) for the whole Group. The details of CEO

pay can be found on page 55. Average full-time employee

pay (excluding share-based payments) for the whole Group,

including employees being paid under service contracts,

in 2025 was $35.0k (2024: $31.5k). (Note 11 to the financial

statements – ‘Staff costs’ – does not include employees

paid under service contract: this payment is reflected within

general & administrative, research & development and sales &

marketing expenses and cost of goods.)

Percentage change in directors’ remuneration

The table below shows the percentage change in each

directors’ remuneration (on an actual currency basis) over a

rolling five-year period.

Salary / Fee

Benefits

Annual Bonus

2025

2024

2023

2022

2021

2025

2024

2023

2022

2021

2025

2024

2023

2022

2021

Executive Directors

Moti

Nagar

150%

(1)

106%

(1)

(100)

(2)

(100)%

(2)

Lior

Miles

(3)

Non-executive Directors

(4)

Gil

Sharon

(5)

Gideon

Chitayat

(6)

(1)%

85%

(7)

Varda

Shalev

22%

(1)%

(7)%

(10)%

(4)%

Avigdor

Shafferman

24%

(1)%

34%

(8)

Shmuel

Ben Zvi

2,037%

(9)

Ayala

Hakim

(5)

1. Moti Nagar became CEO on 1 January 2023, having previously been CFO since 2015. His remuneration as CEO was as approved by

shareholders at the 2022 AGM.

2. Moti Nagar waived his bonus payment for 2022.

3. Lior Miles became CFO on 22 June 2025 and was appointed to the Board on 10 December 2025.

4. The number of meetings attended by each director may change from one year to another.

5. Appointed to the Board on 10 December 2025.

6. Dr. Gideon Chitayat retired from the Board, post year end, on 1 January 2026 having stepped down as Chairman on 25 December 2025.

7. Dr. Gideon Chitayat’s fee was increased from 1 January 2023 as approved by shareholders at the AGM 2022.

8. Appointed to the Board on 12 April 2022.

9. Appointed to the Board on 19 December 2024.

Annual Report & Accounts 2025

Corporate Governance

Resolution

Votes for

(including

discretionary)

% for*

Votes against

(excluding

withheld)

% against*

Withheld

Total votes

cast

Approval of the

report of the

Remuneration

Committee

275,518,350

98.02

5,563,197

1.98

281,081,547

* Excludes withheld votes

Payments for loss of office and/or payments to

former directors

In accordance with his employment contract, Ran Noy

received a payment equal to two months’ base salaries at the

end of his employment. No other payments were made for

loss of office or to former directors during the year.

Statement of shareholder voting

At the AGM that took place on 10 December 2025, there was

one remuneration-related resolution:

Implementation of Policy for FY26

Component of Pay

Implementation for FY26

Base salaries

CEO: NIS 1,800,000

CFO: NIS 720,000

Benefits and pension

In line with the Directors’ Remuneration Policy and past practice, the Company

contributes towards pension in line with mandatory requirements in Israel.

No changes to benefit provisions.

Annual bonus

The CEO’s and CFO’s bonus opportunity will be 67% and 25% of base salary respectively.

The targets are currently commercially sensitive and will be reported in next year’s

annual report.

LTIP

None

NED fees

The Chairman and NED fees for FY26 are as follows:

•

Chairman fee: $100,000

•

Non-executive and External Director base fee*: NIS 95,730 ($30,009**)

•

Non-executive and External Director per-meeting fee*: NIS 5,035 ($1,578**)

* Linked to the consumer price index in Israel

** According to the 31 December 2025 currency rate of NIS 3.19 per $1.00

On behalf of the Board.

Ayala Hakim

Remuneration Committee Chair

20 April 2026

Annual Report & Accounts 2025

Principal activities

BATM’s focus is on the development, production and

marketing of networking and cybersecurity technologies,

products and associated services. Networking comprises

data communication products, namely high-performance

connectivity solutions for the network edge, including the

innovative Edgility open edge software platform that enables

the deployment and lifecycle management of apps, network

functions and compute devices at the edge of the network,

and a broad portfolio of carrier grade switching and

routing hardware and software products. Cybersecurity

includes integrated hardware and software solutions for

network encryption.

The Group’s non-core activities comprise the development

and sale of in vitro medical diagnostic reagents and

instruments (this activity was classified as core during the

year under review and has been reclassified as non-core post

year-end) and the distribution of third-party pharmaceutical

and environmental monitoring products.

In addition, in 2025, the Group’s activities in continuing

operations included the distribution of medical diagnostics

products and the administering of diagnostic tests. These

activities were disposed of during the year.

Financial performance

The financial performance of the Group for the year

ended 31 December 2025 is detailed in the Chief Financial

Officer’s Review on pages 13 to 15 and in the consolidated

financial statements and notes to the consolidated financial

statements on pages 69 to 112, which are incorporated in this

Directors’ Report by reference.

Returns to shareholders

While recognising the importance of returns to shareholders,

the Board believes it is in the best interests of the Company

and of shareholders as a whole not to declare a dividend

for 2025 in order to maximise the resources available to the

Group to execute on its growth strategy. In particular, and

as previously stated, the Group may add capability to its

core businesses through M&A. The Board continues to keep

its dividend policy under constant review and to assess all

options for generating returns for shareholders.

Gil Sharon

Chairman

Directors’

Report

Corporate Governance

Business and strategic review

The review of the Group’s business operations, including its

strategy, key performance indicators and principal risks and

uncertainties, are set out in the Strategic Report section on

pages 4 to 27 and are incorporated in this Directors’ Report

by reference.

Directors

The Directors who served for the year ended 31 December

2025 and are currently serving (unless otherwise stated) are

as follows:

•

Gil Sharon, Non-executive Chairman

(appointed as a Director

on 10 December 2025 and assumed the role of Chairman on 25

December 2025)

•

Moti Nagar, CPA, Executive Director and Chief Executive

Officer

•

Lior Miles, CPA, Executive Director and Chief Financial

Officer

(appointed as CFO on 22 June 2025 and as a Director on

10 December 2025)

•

Prof. Varda Shalev, Non-executive External Director and

Senior Independent Director

•

Dr. Avigdor Shafferman, Non-executive Director

•

Dr. Shmuel Ben Zvi, Non-executive Director

•

Ayala Hakim, Non-executive External Director

(appointed

10 December 2025)

•

Dr. Gideon Chitayat, Non-executive Chairman

(retired

as Chairman on 25 December 2025 and as a Director on

1 January 2026)

•

Dr. Zvi Marom, Non-executive Director

(resigned effective

10 December 2025)

•

Ran Noy, Executive Director and Chief Financial Officer

(resigned effective 21 June 2025)

•

Harel Locker, Non-executive External Director

(completed

his final three-year term as an External Director on 25

September 2025)

Corporate governance statement

The information that fulfils the requirement of the corporate

governance statement in accordance with Rule 7.2 of the

Financial Conduct Authority’s Disclosure and Transparency

Rules can be found in this Directors’ Report and in the

Corporate Governance information on pages 28 to 63,

which is incorporated in this Directors’ Report by reference.

Directors’ remuneration and interests

The Directors’ remuneration and interests are set out in the

Directors’ Remuneration Report on pages 44 to 63.

Rules about appointment and replacement

of Directors

Pursuant to the Company’s articles of association and Israeli

Companies Law, Directors are elected at an annual general

meeting by the vote of the holders of a majority of the voting

power represented at such meeting in person or by proxy

and voting on the election of Directors. Appointments to

the Board are subject to a formal, rigorous and transparent

procedure after the Company’s Nomination Committee has

considered each nominee and the Company gives full and

transparent information and background to the shareholders

on each candidate that it wishes to propose for election

and/or re-election to the Board. Each Director (except

for the External Directors) shall serve until the next annual

general meeting following the annual general meeting at

which such Director was appointed, or their earlier removal.

The holders of a majority of the voting power represented

at a general meeting and voting thereon shall be entitled

to remove any Director(s) from office, to elect Directors

in place of the Directors so removed or to fill any vacancy,

however created, in the Board of Directors by way of ordinary

resolution. Such vacancy may also be temporarily filled by the

continuing Directors, and any Director so appointed shall hold

office until the next annual general meeting and is eligible

for reappointment at that meeting. “External” Directors,

as defined by Israeli Companies Law, are Non-executive

Directors that are appointed and elected for a mandatory

term of three years, which is renewable for no more than two

further terms of three years each. The appointment of the

External Directors must be approved by the shareholders

in general meeting. The Israeli Companies Law defines the

procedures and conditions for election and re-election of

External Non-executive Directors.

Annual Report & Accounts 2025

Apart from the authority of the general meeting to remove

a Director from office, subject to giving such Director a

reasonable opportunity to present their position to the

general meeting, under the Company’s articles, the office of

a Director shall be vacated ipso facto, upon their death, or

if the Director is found to be of unsound mind, or becomes

bankrupt or if they become prohibited by law from being a

Director in a public company.

The Chairman of the Board, Mr. Gil Sharon, and the CFO,

Mr. Lior Miles, were elected and the CEO, Mr. Moti Nagar,

and Non-executive Directors Dr. Avigdor Shafferman and

Dr. Shmuel Ben Zvi, were re-elected at the Annual General

Meeting (“AGM”) of 10 December 2025 until the following

AGM. In addition, Mrs. Ayala Hakim was elected at the AGM

as a Non-executive External Director for her first three-

year term. Prof. Varda Shalev is currently serving her third

three-year term as a Non-executive External Director. Their

biographies appear on pages 28 to 31 above.

Amendment of articles

Under the Israeli Companies Law, a company may amend its

articles by a simple majority of the shareholders at a general

meeting. According to the Company’s articles of association,

any proposed amendments to the articles regarding

modification of rights attached to shares of the Company

and/or dividing the share capital into various classes of shares

requires the approval of 75% of the votes cast at a general

meeting of shareholders.

Going concern

After making enquiries, the Directors have a reasonable

expectation that the Company and the Group will be able

to operate within the level of available facilities and cash for

the foreseeable future. Accordingly, the Company continues

to prepare its financial statements according to the going

concern basis.

Statement of Directors’ responsibilities

The Directors are responsible for preparing the Annual

Report, the Directors’ Remuneration Report and the

financial statements in accordance with applicable laws and

regulations. The Directors are required to prepare financial

statements for the Company in accordance with International

Financial Reporting Standards as issued by the International

Accounting Standards Board. Israeli company law holds the

Directors responsible for preparing such financial statements

and requires the Directors to approve them.

Directors’

Report

(cont.)

Corporate Governance

International Accounting Standard 1 requires that financial

statements present fairly for each financial year the

Company’s financial position, financial performance and

cash flows. This requires the faithful representation of the

effects of transactions, other events and conditions in

accordance with the definitions and recognition criteria

for assets, liabilities, income and expenses set out in the

International Accounting Standards Board’s ‘Framework for

the Preparation and Presentation of Financial Statements’.

In virtually all circumstances, a true and fair presentation will

be achieved by compliance with all applicable International

Financial Reporting Standards.

Directors are also required to:

•

properly select and apply accounting policies;

•

present information, including accounting policies, in a

manner that provides relevant, reliable, comparable and

understandable information;

•

make an assessment of the Company’s ability to continue

as a going concern and disclose where they consider it

appropriate; and

•

provide additional disclosures when compliance with the

specific requirements in IFRS is insufficient to enable

users to understand the impact of particular transactions,

other events and conditions on the entity’s financial

position and financial performance.

The Directors are responsible for keeping proper accounting

records that disclose with reasonable accuracy at any time

the financial position of the Company, for safeguarding

the assets, for taking reasonable steps for the prevention

and detection of fraud and other irregularities and for

the preparation of a Directors’ Report and Directors’

Remuneration Report that comply with the U.K. Listing Rules

and the Disclosure and Transparency rules.

Legislation in Israel governing the preparation and

dissemination of financial statements may differ from

legislation in other jurisdictions.

Each of the Directors confirms to the best of his or her

knowledge:

the financial statements, prepared in accordance with

International Financial Reporting Standards, give a true

and fair view of the assets, liabilities, financial position

and profit or loss of the Company and the undertakings

included in the consolidation taken as a whole;

the strategic report includes a fair review of the

development and performance of the business and the

position of the Company and the undertakings included

in the consolidation taken as a whole, together with a

description of the principal risks and uncertainties they

face; and

the annual report and financial statements, taken as

a whole, are fair, balanced, and understandable, and

provide the information necessary for shareholders to

assess the Company’s position, performance, business

model and strategy.

The Directors’ Report has been brought for review to the

Board and has been approved in its present form.

The Directors’ Report is signed on behalf of the Board by:

Gil Sharon

Chairman

20 April 2026

Consolidated

Financial

Statements

for the year ended

31 December 2025

Annual Report & Accounts 2025

Financial Statements

Independent Auditor’s Report to the Shareholders

of BATM Advanced Communications Ltd.

Neve Ne’eman Ind. Area

4, Ha’harash Street, P.O.B. 7318

4524075 Hod Hasharon, Israel

Opinion

We have audited the consolidated financial statements of

BATM Advanced Communications Ltd. and its subsidiaries

(the Group), set out on pages 69 to 111, which comprise

the consolidated statement of financial position as at

December 31, 2025, and the consolidated statement of

profit or loss, consolidated statement of comprehensive

income, consolidated statement of changes in equity and

consolidated statement of cash flows for the year then

ended, and notes to the consolidated financial statements,

including material accounting policy information.

In our opinion, the accompanying consolidated financial

statements present fairly, in all material respects, the

consolidated financial position of the Group as at December

31, 2025, and its consolidated financial performance and

its consolidated cash flows for the year then ended in

accordance with IFRS Accounting Standards as issued by the

International Accounting Standards Board (IASB).

Basis for opinion

We conducted our audit in accordance with International

Standards on Auditing (ISAs). Our responsibilities under

those standards are further described in the Auditor’s

Responsibilities for the Audit of the Consolidated Financial

Statements section of our report. We are independent

of the Group in accordance with the International Ethics

Standards Board for Accountants’ International Code of

Ethics for Professional Accountants (including International

Independence Standards) (IESBA Code), and we have fulfilled

our other ethical responsibilities in accordance with the

IESBA Code. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for

our opinion.

Key audit matters

Key audit matters are those matters that, in our professional

judgment, were of most significance in our audit of the

consolidated financial statements of the current period.

These matters were addressed in the context of our audit

of the consolidated financial statements as a whole, and

in forming our opinion thereon, and we do not provide a

separate opinion on these matters.

Tel Aviv - Main Office

1 Azrieli Center Tel Aviv, 6701101 P.O.B. 16593 Tel Aviv, 6116402

Tel: +972 (3) 608 555 | [email protected]

Jerusalem

3 Kiryat Ha’Mada

Har Hotzion Tower

Jerusalem, 914510

Tel: +972 (2) 501 8888

Fax: +972 (2) 537 4173

[email protected]

Haifa

5 Ma’alah Hashichrur

P.O.B. 5648

Haifa, 3105502

Tel: +972 (4) 860 7333

Fax: +972 (2) 867 2528

[email protected]

Eilat

Habalan 2 ST

P.O.B. 583

Eilat, 8850135

Tel: +972 (8) 637 5676

Fax: +972 (2) 637 1628

[email protected]

Nazareth

9 Marj lbn Amer St.

Nazareth, 16100

Tel: +972 (73) 399 4455

Fax: +972 (73) 637 4455

[email protected]

Raanana,

Infinity Park,

HaPnina 8

Raanana

Rishon LeZion

Millennia Center

Sderot HaRishonin 23,

Rishon LeZion

Beit Shemesh

Yigal Alon 1 St.

Beit Shemesh, 9906201

Annual Report & Accounts 2025

Independent Auditors’ Report

(cont.)

Key audit matter

How our audit addressed the key audit matter

Disposal of subsidiary

As detailed in Notes 33 and 37,on 5 October 2025

the Group signed an agreement to sell its entire

shareholding in the Romanian company A.M.S. 2000

Trading Impex SRL (“AMS”) to Dr. Zvi Marom, a director,

former CEO, and shareholder who held

22.2% of

the issued share capital of BATM, in exchange for Dr.

Marom’s entire shareholding in BATM, which consisted

of 96,794,500 shares of BATM. Dr. Marom stepped

down from the Board on 10 December 2025 and

ceased to be a shareholder of BATM following the

closing of the transaction which occurred on

31 December 2025. The Group recognized a gain of

$14.1m from the sale of AMS.

We considered the disposal of AMS to be a key audit

matter due to the nature of the transaction, under

which the Group transferred its entire shareholding

in AMS in exchange for Dr. Zvi Marom’s entire

shareholding in BATM. The transaction was with a

related party, Dr. Zvi Marom, who was a director,

former Chief Executive Officer and significant

shareholder of the Company, and accordingly required

heightened audit attention.

In addition, the Group recognized a gain on disposal

of $14.1 million, which was material to the financial

statements. The accounting for the transaction

required significant judgment, particularly in respect

of the timing of recognition, the consideration

received, the calculation of the gain recognized on

disposal and evaluating the appropriateness of the

related party disclosures in the financial statements.

We performed the following audit procedures on the

disposal of AMS and on management’s calculation

of the transaction and the gain recognized from this

disposal. Our audit procedures included:

•

Obtaining an understanding of the design and

implementation of controls over the approval of

the related party transaction;

•

Reviewing the minutes of shareholders’

meetings, Board of Directors’ meetings and Audit

Committee meetings;

•

Evaluating the underlying transaction agreement

and related documentation to assess the date

on which control over AMS was lost and the

consideration received;

•

Involving Deloitte’s professional practice

specialists to assist in evaluating the

appropriateness of the accounting treatment

applied to the transaction;

•

Using our internal tax specialists to assess the

reasonableness of management’s determination

of the related current tax effects, including the

application of relevant tax laws and regulations,

and testing the key data and assumptions used

in determining the amount recognised in the

financial statements;

•

Recalculating the gain recognised on loss of

control;

•

Evaluating whether the related disclosures in

the financial statements were adequate and

appropriate.

Financial Statements

Independent Auditors’ Report

(cont.)

Other information

Management is responsible for the other information. The

other information comprises the information included in the

annual report but does not include the financial statements

and our auditor’s report thereon.

Our opinion on the consolidated financial statements does

not cover the other information and we do not express any

form of assurance conclusion thereon.

In connection with our audit of the consolidated financial

statements, our responsibility is to read the other information

and, in doing so, consider whether the other information

is materially inconsistent with the consolidated financial

statements or our knowledge obtained in the audit or

otherwise appears to be materially misstated. If, based on the

work we have performed, we conclude that there is a material

misstatement of this other information, we are required to

report that fact. We have nothing to report in this regard.

Responsibilities of management and those

charged with governance for the Consolidated

Financial Statements

Management is responsible for the preparation and fair

presentation of the consolidated financial statements in

accordance with IFRS Accounting Standards as issued by

the IASB, and for such internal control as management

determines is necessary to enable the preparation of

consolidated financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the consolidated financial statements,

management is responsible for assessing the Group’s ability

to continue as a going concern, disclosing, as applicable,

matters related to going concern and using the going

concern basis of accounting unless management either

intends to liquidate the Group or to cease operations, or has

no realistic alternative but to do so.

Those charged with governance are responsible for

overseeing the Group’s financial reporting process.

Auditor’s responsibilities for the audit of the

Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about

whether the consolidated financial statements as a whole

are free from material misstatement, whether due to fraud

or error, and to issue an auditor’s report that includes our

opinion. Reasonable assurance is a high level of assurance

but is not a guarantee that an audit conducted in accordance

with ISAs will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they

could reasonably be expected to influence the economic

decisions of users taken on the basis of these consolidated

financial statements.

As part of an audit in accordance with ISAs, we exercise

professional judgment and maintain professional skepticism

throughout the audit. We also:

•

Identify and assess the risks of material misstatement

of the consolidated financial statements, whether due

to fraud or error, design and perform audit procedures

responsive to those risks and obtain audit evidence that

is sufficient and appropriate to provide a basis for our

opinion. The risk of not detecting a material misstatement

resulting from fraud is higher than for one resulting from

error, as fraud may involve collusion, forgery, intentional

omissions, misrepresentations, or the override of internal

control.

•

Obtain an understanding of internal control relevant to

the audit in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose

of expressing an opinion on the effectiveness of the

Group’s internal control.

•

Evaluate the appropriateness of accounting policies used

and the reasonableness of accounting estimates and

related disclosures made by management.

•

Conclude on the appropriateness of management’s use

of the going concern basis of accounting and, based

on the audit evidence obtained, whether a material

uncertainty exists related to events or conditions that may

cast significant doubt on the Group’s ability to continue

as a going concern. If we conclude that a material

uncertainty exists, we are required to draw attention

in our auditor’s report to the related disclosures in the

consolidated financial statements or, if such disclosures

are inadequate, to modify our opinion. Our conclusions

are based on the audit evidence obtained up to the

date of our auditor’s report. However, future events or

conditions may cause the Group to cease to continue as

a going concern.

Annual Report & Accounts 2025

Independent Auditors’ Report

(cont.)

•

Evaluate the overall presentation, structure, and content

of the consolidated financial statements, including the

disclosures, and whether the consolidated financial

statements represent the underlying transactions and

events in a manner that achieves fair presentation.

•

Plan and perform the group audit to Obtain sufficient

appropriate audit evidence regarding the financial

information of the entities or business activities within

the Group to express an opinion on the consolidated

financial statements. We are responsible for the direction,

supervision, and review of the audit work performed for

purposes of the Group audit. We remain solely responsible

for our audit opinion.

We communicate with those charged with governance

regarding, among other matters, the planned scope and

timing of the audit and significant audit findings, including

any significant deficiencies in internal control that we identify

during our audit.

We also provide those charged with governance with a

statement that we have complied with relevant ethical

requirements regarding independence, and to communicate

with them all relationships and other matters that may

reasonably be thought to bear on our independence, and

where applicable, actions taken to eliminate threats or

safeguards applied.

From the matters communicated with those charged with

governance, we determine those matters that were of

most significance in the audit of the consolidated financial

statements of the current period and are therefore the key

audit matters. We describe these matters in our auditor’s

report unless law or regulation precludes public disclosure

about the matter or when, in extremely rare circumstances,

we determine that a matter should not be communicated in

our report because the adverse consequences of doing so

would reasonably be expected to outweigh the public interest

benefits of such communication.

As required by the Financial Conduct Authority (FCA)

Disclosure Guidance and Transparency Rule (DTR) 4.1.15R

– DTR 4.1.18R, these financial statements form part of the

Electronic Format Annual Financial Report filed on the

National Storage Mechanism of the FCA in accordance

with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report provides

no assurance over whether the Electronic Format Annual

Financial Report has been prepared in compliance with DTR

4.1.15R – DTR 4.1.18R.

The engagement partner on the audit resulting in this

independent auditor’s report is Elad Cazaz.

Brightman Almagor Zohar and Co.,

Certified Public Accountants

A Firm in the Deloitte Global Network

1 Azrieli Center, Tel Aviv

Israel

20 April 2026

Financial Statements

for the year ended 31 December 2025

Note

2025

2024

US$’000

Revenues

5, 6

123,198

117,336

Cost of revenues

83,134

80,536

Gross profit

40,064

36,800

Operating expenses

Sales and marketing expenses

20,510

19,582

General and administrative expenses

13,539

12,790

Research and development expenses

4,836

4,636

Other operating (income)/expenses

(12,298)

4,453

Total operating expenses

26,587

41,461

Operating profit/(loss)

13,477

(4,661)

Finance income

757

665

Finance expenses

(1,866)

(1,387)

Profit/(loss) before tax

12,368

(5,383)

Income tax expenses

(6,192)

(1,728)

Profit/(loss) for the year before share of loss of

a joint venture and associated companies

6,176

(7,111)

Share of loss of a joint venture and associated companies

17,223

345

Share of loss of financial balances of a joint venture

and associated companies

1,704

Loss for the year from continuing operations

(12,751)

(7,456)

Loss for the year from discontinued operations

(6,150)

(14,798)

Loss for the year

(18,901)

(22,254)

Attributable to:

Non-controlling interests

(566)

Owners of the Company

(18,335)

(22,296)

Earnings/(loss) per share (in cents):

Basic and diluted from continuing operations

(2.79)

(1.72)

Basic and diluted from discontinued operations

(1.41)

(3.39)

Basic and diluted

(4.20)

(5.11)

The accompanying notes are an integral part of these financial statements.

Consolidated Statements of Profit or Loss

Continuing operations

Annual Report & Accounts 2025

for the year ended 31 December 2025

Consolidated Statements of Comprehensive Income

2025

2024

US$’000

Loss for the year

(18,901)

(22,254)

Items that may be reclassified subsequently to profit or loss:

Exchange differences on translating foreign operations

5,603

(5,043)

Disposal of a foreign operation

5,321

Items that will not be reclassified subsequently to profit or loss:

Re-measurement of defined benefit obligation

Total other comprehensive income/(loss) for the year

10,949

(5,024)

Total comprehensive loss for the year

(7,952)

(27,278)

Attributable to:

Owners of the Company from continuing operations

(5,417)

(11,366)

Owners of the Company from discontinued operations

(2,161)

(15,739)

Non-controlling interests

(374)

(173)

(7,952)

(27,278)

The accompanying notes are an integral part of these financial statements.

Financial Statements

for the year ended 31 December 2025

Note

2025

2024

Assets

US$’000

Current assets

Cash and cash equivalents

22,859

25,898

Trade and other receivables

28,836

29,614

Short-term investment in deposits and other securities

532

5,672

Inventories

28,567

32,710

Disposal groups Held for Sale

4,660

80,794

98,554

Non-current assets

Property, plant and equipment

8,423

12,016

Investment property

604

548

Right-of-use assets

1,461

4,178

Goodwill

3,059

3,344

Intangible assets

10,176

8,004

Investment in joint venture and associate companies

4,032

17,802

Investments carried at fair value

1,585

1,220

Deferred tax assets

3,694

3,498

33,034

50,610

Total assets

113,828

149,164

Equity and liabilities

Current liabilities

Short-term bank credit

8,514

4,261

Trade and other payables

28,842

36,691

Current maturities of lease liabilities

999

2,032

Tax liabilities

5,285

619

Liabilities associated with disposal groups Held for Sale

2,978

43,640

46,581

Non-concurrent liabilities

Long-term bank credit

182

Long-term liabilities

4,408

6,588

Long-term lease liabilities

662

2,358

Retirement benefit obligation

824

655

6,076

9,601

Total liabilities

49,716

56,182

Equity

Share capital

1,320

Share premium account

430,206

429,598

Reserves

(24,250)

(31,073)

Company’s shares held by a subsidiary of the Group

(20,994)

Reserves associated with disposal groups Held for Sale

(3,620)

Accumulated deficit

(320,715)

(302,162)

Equity attributable to the:

Owners of the Company

65,567

94,063

Non-controlling interests

(1,455)

(1,081)

Total equity

64,112

92,982

Total equity and liabilities

113,828

149,164

The financial statements were approved by the board of directors and authorised on 20 April 2026. They were signed on its

behalf by:

M. Nagar, CEO

L. Miles, CFO

The accompanying notes are an integral part of these financial statements.

Consolidated Statements of Financial Position

Annual Report & Accounts 2025

for the year ended 31 December 2025

Consolidated Statement of Changes in Equity

The accompanying notes are an integral part of these financial statements.

Capital

Premium

Account

Translation

Reserve

Other

Reserve

Company’s

Shares held

by a

Subsidiary

of the

Group

Other

Comprehensive

Income

attributable

to Disposal

Groups

Accumulated

Deficit

Attributable

to Owners

of the

Company

Non-

Controlling

Interests

Total

Equity

US$ in thousands

Balance as at

1 January 2024

1,320

428,656

(23,092)

(6,773)

–

(279,767)

120,344

(908)

119,436

Loss for the year

–

(22,296)

(22,254)

Re-measurement

of defined benefit

obligation

–

Exchange

differences on

translating foreign

operations

–

(4,828)

–

(4,828)

(215)

(5,043)

Total

comprehensive

loss for the year

–

(4,828)

–

(22,277)

(27,105)

(173)

(27,278)

Dividend to non-

controlling interests

holding put option

–

(118)

–

(118)

Recognition of

share-based

payments

–

942

–

942

–

942

Other

comprehensive

income attributable

to disposal groups

–

3,620

–

(3,620)

–

Balance as at

31 December 2024

1,320

429,598

(24,300)

(6,773)

–

(3,620)

(302,162)

94,063

(1,081)

92,982

Balance as at

1 January 2025

1,320

429,598

(24,300)

(6,773)

–

(3,620)

(302,162)

94,063

(1,081)

92,982

Loss for the year

–

(18,335)

(566)

(18,901)

Re-measurement

of defined benefit

obligation

–

Exchange

differences on

translating foreign

operations

–

7,112

–

3,620

–

10,732

192

10,924

Total

comprehensive

loss for the year

–

7,112

–

3,620

(18,310)

(7,578)

(374)

(7,952)

Dividend to

non-controlling

interests holding

put option

–

(243)

–

(243)

Recognition of

share-based

payments

–

608

–

608

–

608

Company’s shares

held by a subsidiary

of the Group

–

(20,994)

–

(20,994)

–

(20,994)

Capital reserve

transactions with

non-controlling

interests

–

(289)

–

(289)

947

658

Disposal of

subsidiary

–

(947)

Balance as at 31

December 2025

1,320

430,206

(17,188)

(7,062)

(20,994)

–

(320,715)

65,567

(1,455)

64,112

The accompanying notes are an integral part of these financial statements.

Financial Statements

for the year ended 31 December 2025

Consolidated Statements of Cash Flow

Note

2025

2024

US$’000

Net cash (used in)/from continuing operating activities

(3,122)

153

Net cash used in discontinued operating activities

(3,843)

(1,806)

Investing activities

Purchases of property, plant and equipment

(1,868)

(700)

Increase of intangible assets

(2,414)

(2,707)

Investment in joint venture and associated companies

(1,072)

(1,378)

Purchases of deposits and financial assets

(5,132)

(8,744)

Proceeds on disposal of property, plant and equipment

200

791

Proceeds on disposal of operation, net (see note 33)

532

Proceeds on disposal of deposits and securities

10,587

11,526

Net cash from/(used in) investing activities – Continuing Operations

833

(1,212)

Net cash from/(used in) investing activities – Discontinued Operations

240

(4)

Financing activities

Lease payment

(2,154)

(2,098)

Bank loan repayment

(2,895)

(2,458)

Bank loan received

6,928

2,359

Dividend paid to non-controlling interests holding put option

(243)

(118)

Net cash from/(used in) financing activities –

Continuing Operations

1,636

(2,315)

Net cash used in financing activities – Discontinued Operations

(81)

(297)

Net decrease in cash and cash equivalents

(4,337)

(5,480)

Cash and cash equivalents at the beginning of the year

25,898

32,339

Effects of exchange rate changes on the balance of cash

held in foreign currencies

1,298

(961)

Cash and cash equivalents at the end of the year

22,859

25,898

The accompanying notes are an integral part of these financial statements.

Annual Report & Accounts 2025

Notes to the Consolidated Financial Statements

for the year ended 31 December 2025

General information

BATM Advanced Communications Ltd. (“the Company”) is a company incorporated in Israel under the Israeli Companies

Law. The address of the registered office is POB 7318, Nave Ne’eman Ind. Area 4, Ha’harash Street, 4524075 Hod

Hasharon, Israel. The Company and its subsidiaries (“the Group”) is engaged in the development, production and supply

of real-time technologies and associated services in three core application areas: Networks, Cyber and Diagnostics.

In addition, the Group’s non-core activities comprised the production and supply of pharmaceutical applications and

the distribution of third-party pharmaceutical and environmental monitoring products*. BATM has offices in the United

States, Israel and Europe.

* See note 21 in respect of disposal groups held for sale

New and revised International Financial Reporting Standards

(IFRS Accounting Standards)

IFRS 18 Presentation and Disclosures in Financial Statements

IFRS 18 replaces IAS 1, carrying forward many of the requirements in IAS 1 unchanged and complementing them with new

requirements. In addition, some IAS 1 paragraphs have been moved to IAS 8 and IFRS 7. Furthermore, the IASB has made

minor amendments to IAS 7 and IAS 33 Earnings per Share.

IFRS 18 introduces new requirements to:

•

Present specified categories and defined subtotals in the statement of profit or loss.

•

Provide disclosures on management-defined performance measures (MPMs) in the notes to the financial statements.

•

Improve aggregation and disaggregation.

An entity is required to apply IFRS 18 for annual reporting periods beginning on or after 1 January 2027, with earlier

application permitted. The amendments to IAS 7 and IAS 33, as well as the revised IAS 8 and IFRS 7, become effective

when an entity applies IFRS 18. IFRS 18 requires retrospective application with specific transition provisions.

The directors of the Company anticipate that the application of these amendments may have an impact on the Group’s

consolidated financial statements in future periods.

Significant accounting policies

IFRS

Accounting Standards

The consolidated financial statements have been prepared in accordance with International Financial Reporting

Standards (IFRS Accounting Standards) as issued by the International Accounting Standards Board (IASB).

Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis except for certain properties and

financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as

explained in the accounting policies below.

Regional conflict

Since October 2023, Israel has been involved in an ongoing armed conflict and continued rocket fire following a large-

scale attack by Hamas, and which evolved into a broader regional confrontation, with additional hostilities involving

Hezbollah in Lebanon, armed groups operating from Syria and Houthi forces in Yemen.

During 2025, tensions further escalated, including a period of direct confrontation between Israel and Iran involving

missile launches, cyber incidents and disruptions to air traffic. On 28 February 2026, coordinated military actions by the

United States and Israel targeted certain Iranian military infrastructure. Iran subsequently responded with missile and

drone attacks directed at Israel, U.S. assets in the region and additional locations across the Middle East.

Since then, hostilities have continued, characterised by recurring missile and drone activity, cyber-related threats and

an elevated risk of further escalation. In parallel, Hezbollah has intensified its activity along Israel’s northern border,

contributing to ongoing regional instability and heightened geopolitical uncertainty.

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

The Company continues to monitor developments closely. As of the date of approval of these financial statements, the

Company does not anticipate a material impact on its financial position or results of operations arising from these events.

However, the situation remains highly uncertain and difficult to predict, and the potential future impact on the Company’s

operations, financial condition and results cannot be reasonably estimated at this stage, particularly if the current

situation persists for a prolonged period or escalates into broader geopolitical or military conflict.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by

the Company and its subsidiaries. Control is achieved when the Company has power over the investee, is exposed, or has

rights, to variable returns from its involvement with the investee and has the ability to use its power to affect its returns.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the

Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during

the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the

Company gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to

the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and

to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When the Group loses control of a subsidiary, the gain or loss on disposal recognised in profit or loss is calculated as

the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained

interest and (ii) the previous carrying amount of the assets (including goodwill), less liabilities of the subsidiary and any

non-controlling interests.

Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in

the financial and operating policy decisions of the investee but without control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the

net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which

exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

An investment in an associate or a joint venture is accounted for using the equity method from the date on which the

investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture, any

excess of the cost of the investment over the Group’s share of the net fair value of the identifiable assets and liabilities of

the investee is recognised as goodwill, which is included within the carrying amount of the investment.

The requirements of IAS 36 are applied to determine whether it is necessary to recognise any impairment loss with

respect to the Group’s investment in an associate or a joint venture. When necessary, the entire carrying amount of

the investment (including goodwill) is tested for impairment in accordance with IAS 36 Impairment of Assets as a single

asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying

amount. Any impairment loss recognised forms part of the carrying amount of the investment. The carrying value of the

investment in associates and joint ventures considering the requirement of IAS 36 are presented in note 28.

The Group applies IFRS 9, including the impairment requirements, to long-term interests in an associate or joint venture

to which the equity method is not applied and which form part of the net investment in the investee. Furthermore, in

applying IFRS 9 to long-term interests, the Group does not take into account adjustments to their carrying amount

required by IAS 28 Investments in Associates and Joint Ventures (i.e. adjustments to the carrying amount of long-term

interests arising from the allocation of losses of the investee or assessment of impairment in accordance with IAS 28).

Disposal groups held for sale

Disposal groups classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.

Disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather

than through continuing use. This condition is regarded as met only when the sale is highly probable and the disposal

group is available for immediate sale in its present condition. Management must be committed to the sale which should

be expected to qualify for recognition as a completed sale within one year from the date of classification.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that

subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will

retain a non-controlling interest in its former subsidiary after the sale.

Discontinued operation

A discontinued operation is a component of the Group that has been disposed of or is classified as held for sale and

represents a separate major line of business or geographical area of operations. The results of discontinued operations

are presented separately in the statement of profit or loss.

The results of discontinued operations are presented in a single amount in the statement of profit or loss, comprising the

post-tax profit or loss of discontinued operations and the post-tax gain or loss recognised on the measurement to fair

value less costs to sell or on the disposal of the assets or disposal group(s) constituting the discontinued operation. Cash

flows from discontinued operations are presented in the cash flow statement, classified according to operating activities,

investing activities, and financing activities.

Comparative information for prior periods is restated to reflect the disclosures related to all operations that have been

discontinued by the end of the reporting period.

Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business

less accumulated impairment losses, if any. Goodwill is not amortised but is reviewed for impairment at least annually.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups

of cash-generating units) that is expected to benefit from the synergies of the combination. A cash-generating unit to

which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that

the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the

impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other

assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is

recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

On disposal of a cash-generating unit, the attributable goodwill is included in the determination of the profit or loss

on disposal.

Revenue recognition

The Group recognises revenue from the following major sources:

•

Sale of goods (point in time) – networking products, network encryption products, medical diagnostics reagents

and instruments, and pathogenic waste treatment and sterilisation products

•

Rendering of services – related mainly to software services such as training and technical support, laboratory

services and maintenance related to products sold

•

Construction contracts (over time)

Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer

and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a

product or service to a customer.

Sale of goods

For sales of goods, revenue is recognised when control of the goods has transferred generally, being when the goods

have been shipped to the customer’s specific location (delivery). Following delivery, the customer has full discretion over

the manner of distribution and price to sell the goods, has the primary responsibility when onselling the goods and bears

the risks of obsolescence and loss in relation to the goods.

A receivable is generally recognised by the Group when the goods are delivered to the customer as this represents the

point in time at which the right to consideration becomes unconditional, as only the passage of time is required before

payment is due.

Annual Report & Accounts 2025

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Rendering of services

Services provided by the Group are recognised as a performance obligation satisfied over time. Revenue is recognised

based on the stage of completion of the contract. The management have assessed that the stage of completion

determined as the proportion of the total time expected to install that has elapsed at the end of the reporting period is an

appropriate measure of progress towards complete satisfaction of these performance obligations under IFRS 15.

Construction contracts

Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised over time

by reference to the stage of completion of the contract activity at the date of the consolidated statements of financial

position. This is normally measured by the proportion that contract costs incurred for work performed to date compare

to the estimated total contract costs except where this would not be representative of the stage of completion or

engineering completion. The management consider that this input method is an appropriate measure of the progress

towards complete satisfaction of these performance obligations under IFRS 15. Variations in contract work, claims and

incentive payments are included to the extent that they have been agreed with the customer.

Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent

of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period

in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an

expense immediately.

Leases

The Group as a lessee

At inception of the contract, the Group assesses whether an arrangement is a lease or contains a lease. The Group

recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the

lessee, except for assets leased for a period of less than 12 months, and also to lease of assets with low economic value.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement

date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the lessee uses its

incremental borrowing rate.

The lease liability is subsequently measured at amortised cost using the effective interest method.

Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses, and are

depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of

the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option,

the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the

commencement date of the lease.

The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified

impairment loss.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any

lease and associated non-lease components as a single arrangement. The Group has used this practical expedient.

Foreign currencies

The individual financial statements of each Group company are prepared in the currency of the primary economic

environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the

results and financial position of each Group company are expressed in the US dollar, which is the presentation currency

for the consolidated financial statements.

Annual Report & Accounts 2025

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s

functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.

At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are

retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign

currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that

are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are

included in profit or loss for the period.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign

operations (operations in foreign currencies) are translated at exchange rates prevailing at the end of each reporting

period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates

fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used. Exchange

differences arising, if any, are recognised in other comprehensive income and accumulated in equity (attributed to non-

controlling interests as appropriate) within the Group’s translation reserve. Such translation reserves are reclassified from

equity to profit or loss in the period in which the foreign operation is disposed.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities

of the foreign operation and translated at the closing rate. Exchange differences arising are recognised in other

comprehensive income and accumulated in equity.

Government grants

Government grants are assistance from government in the form of transfers of resources to an entity in return for past or

future compliance with certain conditions relating to the operating activities of the entity.

Forgivable loans are loans where the lender (Israeli Chief Scientist Officer (ISO)) undertakes to waive repayment under

certain prescribed conditions. In a case where a government grant takes the form of a forgivable loan, a liability is

recognised in regards to this loan at fair value, based on estimations of future cash flows related to the relevant grant.

The Group’s policy is to designate such loans as financial liabilities measured at amortised cost according to IFRS 9. The

difference between the liability and proceeds are recognised in the research and development expenses.

Share-based payments arrangements

Share-based payment transactions of the Company

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value

of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-

based transactions are set out in note 35.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-

line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a

corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of

equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit

or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the share

premium reserve.

Taxation

The income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. The Group’s liability for current tax is calculated using tax

rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the

consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred

tax liabilities are generally recognised for all taxable temporary differences.

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that

taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax

assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition

(other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit

nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries

and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary

difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets

arising from deductible temporary differences associated with such investments and interests are only recognised to the

extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary

differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent

that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the

liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted

by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences

that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the

carrying amount of its assets and liabilities.

Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in

other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in

other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial

accounting for a business combination, the tax effect is included in the accounting for the business combination.

Property, plant and equipment

Land and buildings held for use in the Group’s operations are stated in the consolidated statements of financial

position on a historical cost basis, being the historical cost at the date of acquisition, less any subsequent accumulated

depreciation and subsequent accumulated impairment losses.

Properties in the course of construction are carried at cost, less any recognised impairment loss. Cost includes

professional fees. Depreciation of these assets, on the same basis as other property assets, commences when the assets

are ready for their intended use.

Freehold land is not depreciated. Fixtures and equipment are stated at cost less accumulated depreciation and any

recognised impairment loss.

Depreciation is charged so as to write off the cost of assets, other than land over their estimated useful lives, using the

straight-line method, on the following bases:



Buildings	2%-6%
Plant and equipment	10%-33%
Motor vehicles	15%-33%
Furniture and fittings	6%-15%
Leasehold improvements	6%-20%

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales

proceeds and the carrying amount of the asset and is recognised in other income or expense.

Annual Report & Accounts 2025

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Intangible assets

Internally-generated intangible assets - research and development expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an internal project)

is recognised if, and only if, all of the following have been demonstrated:

•

the technical feasibility of completing the intangible asset so that it will be available for use or sale;

•

the intention to complete the intangible asset and use or sell it;

•

the ability to use or sell the intangible asset;

•

how the intangible asset will generate probable future economic benefits;

•

the availability of adequate technical, financial and other resources to complete the development

and to use or sell the intangible asset; and

•

the ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the

date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible

asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.

Acquired intangible assets are measured initially at purchase cost and are amortised on a straight-line basis over their

estimated useful lives.

Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at

their fair value at the acquisition date (which is regarded as their cost).

Amortisation is charged so as to write off the cost of assets over their estimated useful lives, using the straight-line

method, on the following bases:



Customer relationships and backlog 10%-12.5%
Technology	10%-20%
Other	10%

Subsequent to initial recognition, intangible assets are reported at cost less accumulated amortisation and accumulated

impairment losses.

Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to

determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,

the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When

it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount

of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be

identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the

smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication

that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated

future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows

have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the

carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is

recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the

impairment loss is treated as a revaluation decrease.

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Inventory

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where

applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present

location and condition. Cost is determined on the “first-in-first-out” basis. Net realisable value represents the estimated

selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

Financial instruments

Financial assets and financial liabilities are recognised on the Group’s consolidated statements of financial position

when the Group becomes a party to the contractual provisions of the instrument.

Trade and other receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost

using the effective interest rate method. Appropriate allowances to recognise expected lifetime credit losses are

recognised in profit or loss at the end of the reporting period. The allowance recognised is measured as the difference

between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective

interest rate computed at initial recognition.

Financial assets at FVTPL

Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or

losses recognised in profit or loss. The net gain or loss recognised in profit or loss is included in the ‘other gains and

losses’, or financial income or expenses line item as appropriate. Fair value is determined in the manner described in

note 38.

Impairment of financial assets

The Group recognises a loss allowance for expected credit losses on trade receivables. The amount of expected credit

losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective

financial instrument.

The Group recognises lifetime ECL for trade receivables. The expected credit losses on these financial assets are

estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are

specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast

direction of conditions at the reporting date, including time value of money where appropriate.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life

of a financial instrument.

Financial liabilities measured subsequently at amortised cost

Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held-for-trading,

or (iii) designated as at FVTPL, are measured subsequently at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating

interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated

future cash flows (including all fees and points paid or received that form an integral part of the effective interest

rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where

appropriate) a shorter period, to the amortised cost of a financial liability.

The accompanying notes are an integral part of these financial statements.

Annual Report & Accounts 2025

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Critical accounting judgments and key sources of estimation uncertainty

Critical judgments in applying the Group’s accounting policies

In the process of applying the Group’s accounting policies, which are described in note 3, management has made the

following judgments that have the most significant effect on the amounts recognised in the financial statements (apart

from those involving estimations, which are dealt with below):

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the consolidated

statements of financial position date, that have a significant risk of causing a material adjustment to the carrying amounts

of assets and liabilities within the next financial year, are discussed below.

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value-in-use or the fair value less cost of sale of

the cash-generating units (CGU) to which goodwill has been allocated. The value-in-use calculation requires the entity to

estimate the future cash flows of the CGU and a suitable discount rate in order to calculate present value. For additional

information in respect of goodwill see note 25.

Judgments with respect to deferred tax assets

For the purposes of measuring deferred tax assets arising from loss carry-forwards in different territories, management is

required to use considerable judgment in estimation of the carried forward losses in which it expects to be able to utilise

in the foreseeable future. For additional information in respect of deferred tax assets see note 15.

Judgments with respect to construction contracts

The Group accounts for its revenue in accordance with IFRS 15 revenue from contracts with customers, which requires

estimates to be made for contract costs and revenues. Revenue is recognised using the percentage of completion

method based on the ratio of contract costs incurred to total estimated contract costs or engineering completion

percentage. Estimating total costs is subjective and requires the use of management’s best judgments based on the

information available at that time.

Judgments with respect to recognition of internally generated intangible assets

The Group recognises costs related to development of software and diagnostic products in accordance with the

conditions for recognising internally generated intangible assets. Estimation of meeting the conditions specified for

recognition of intangible assets requires the use of management’s best judgments. For additional information in respect

of intangible assets see note 26.

Revenues

The Group derives its revenue from contracts with customers for the transfer of goods at a point in time and services and

construction contracts over time. An analysis of the Group’s revenues is as follows:


	Year ended 31 December
	2025	2024
	$’000s	$’000s
Sales of goods (point in time)	103,900	91,998
Services	11,572	16,073
Construction contracts (over time)	7,726	9,265
	123,198	117,336

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Business and geographical segments

Business segments

Operational segments are identified on the basis of internal reports about the Group’s components that are reviewed

by the chief operational decision maker of the Group (“CODM”), the CEO of the Group, for the purpose of allocating

resources and evaluating the performance of the operational segments. Information reported to the CODM for the

purpose of resource allocation and assessment of segment performance focuses on the types of goods or services

delivered or provided and the operating profit.

The principal products and services of each of these segments were as follows: Networks – marketing, research and

development of data communication products, which includes high-performance connectivity solutions for the network

edge, including the Edgility open edge software platform that enables the deployment and life-cycle management

of apps, network functions and compute devices at the edge of the network, and a broad portfolio of carrier grade

switching and routing hardware and software products. Cyber – provision of integrated hardware and software solutions

for network encryption, including hardware security modules (HSMs). Diagnostics – mainly engaged in sales and

distribution of in vitro diagnostics reagents and instruments, including the development and production of proprietary

products. Its proprietary products are focused on molecular diagnostics by test type and infectious disease by application

area. Non-core – mainly the distribution of pharmaceutical and environmental monitoring products and diagnostic tests.

A. Segment revenues and segment results

Year ended 31 December 2025



	Networks	Cyber	Diagnostics	Non-core	Total
	$’000s	$’000s	$’000s	$’000s	$’000s
Revenues from external customers	11,626	8,263	47,485	55,824	123,198
Gross profit	4,991	4,219	14,238	16,616	40,064
Operating profit/(loss)	(5,584)	488	16,927	1,646	13,477
Net finance expenses					(1,109)
Profit before tax					12,368

Year ended 31 December 2024



	Networks	Cyber	Diagnostics	Non-core	Total
	$’000s	$’000s	$’000s	$’000s	$’000s
Revenues from external customers	8,550	13,131	38,617	57,038	117,336
Gross profit	4,139	5,387	10,733	16,541	36,800
Operating profit/(loss)	(4,693)	2,898	(1,721)	(1,145)	(4,661)
Net finance income					(722)
Loss before tax					(5,383)

Information about a major customer

Included in revenues from the Cyber division are revenues of approximately $8.1 million (2024: $12.9 million) from sales

to a single customer. No customer contributed 10% or more to the Group’s revenue in 2025, and no other customer

contributed 10% or more in 2024.

Annual Report & Accounts 2025

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Segment assets, liabilities and other information

As at 31 December 2025


	Networks	Cyber	Diagnostics	Non-core	Total
	$’000s	$’000s	$’000s	$’000s	$’000s
Assets excluding cash & cash
equivalents	30,137	3,894	32,019	24,387	90,437
Liabilities	17,712	4,307	12,175	15,522	49,716
Depreciation and amortisation	891	221	1,973	1,539	4,624
Additions to non-current assets	2,073	551	206	1,792	4,622

As at 31 December 2024


	Networks	Cyber	Diagnostics	Non-core	Total
	$’000s	$’000s	$’000s	$’000s	$’000s
Assets excluding cash & cash
equivalents	26,316	4,257	60,931	26,090	117,594
Liabilities	7,502	4,785	23,598	20,297	56,182
Depreciation and amortisation	1,013	203	2,157	1,595	4,968
Additions to non-current assets	2,489	311	1,742	2,604	7,146

C. Revenue from major products and services

The following is an analysis of the Group’s revenue from operations from its major products and services.


Year ended 31 December	2025	2024
	$’000s	$’000s
Networking and cyber products	15,565	17,009
Software services	4,324	4,672
Diagnostic medical products and services	47,485	38,617
Non-core	55,824	57,038
	123,198	117,336

D. Revenue from major sources

Year ended 31 December 2025


	Networks	Cyber	Diagnostics	Non-core	Total
	$’000s	$’000s	$’000s	$’000s	$’000s
Sales of goods (point in time)	8,961	537	42,865	51,537	103,900
Services (over time)	2,665	-	-	-	2,665
Services (point in time)	-	-	4,620	4,287	8,907
Construction contracts (over time)	-	7,726	-	-	7,726
	11,626	8,263	47,485	55,824	123,198

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Year ended 31 December 2024


	Networks	Cyber	Diagnostics	Non-core	Total
	$’000s	$’000s	$’000s	$’000s	$’000s
Sales of goods (point in time)	5,568	3,866	34,275	48,289	91,998
Services (over time)	2,982	-	-	-	2,982
Services (point in time)	-	-	4,342	8,749	13,091
Construction contracts (over time)	-	9,265	-	-	9,265
	8,550	13,131	38,617	57,038	117,336

The cumulative revenue related to construction contracts, which has not yet been recognised, totals $9.3 million.

E. Geographical information

The Group operates in three principal geographical areas: the United States of America, Israel and Europe. The Group’s

revenue from external customers and information about its segment assets by geographical location are presented by the

location of operations and are detailed below:


$’000s	Revenue from external
	customers		Non-current assets
	2025	2024	2025	2024
Area A	99,785	87,554	14,185	32,529
Area B	15,354	22,654	11,372	11,061
Area C	8,059	7,128	2,198	2,302
Total	123,198	117,336	27,755	45,892

Cost of revenues


	Year ended 31 December
	2025	2024
	$’000s	$’000s
Direct costs – components and subcontractors	77,841	75,368
Changes in inventory	391	(435)
Salaries and related benefits	2,322	2,552
Overheads and depreciation	2,155	2,493
Other expenses	425	558
	83,134	80,536

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Annual Report & Accounts 2025

Sales and marketing expenses


	Year ended 31 December
	2025	2024
	$’000s	$’000s
Salaries and related benefits	13,431	12,750
Commissions	640	612
Outside services	685	494
Advertising and sales promotion	877	972
Overheads and depreciation	3,138	3,055
Travelling and other expenses	1,739	1,699
	20,510	19,582

General and administrative expenses


	Year ended 31 December
	2025	2024
	$’000s	$’000s
Salaries and related benefits	7,711	7,347
Professional services(*)	1,961	1,896
Overheads and depreciation	1,935	1,637
Other expenses	1,932	1,910
	13,539	12,790
(*) Including auditors’ remuneration for
audit services	372	327

Amounts payable to the auditors by the Group undertakings in respect of non-audit services in 2025 were $91 thousand

(2024: $34 thousand). In addition, payables in respect of non-audit services to other than the Company’s auditors, for tax

and internal audit services in 2025, were $92 thousand and $27 thousand respectively (2024: for tax and internal audit

services $19 thousand and $25 thousand, respectively).

Research and development expenses


	Year ended 31 December
	2025	2024
	$’000s	$’000s
Salaries and related benefits	2,964	2,704
Components and subcontractors	1,387	1,655
Overheads and depreciation	479	623
Other expenses	191	194
Government grants	(185)	(540)
	4,836	4,636

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Staff costs

The average monthly number of employees in 2025 (including executive directors) was 806 (2024: 867).


	Year ended 31 December
	2025	2024
	$’000s	$’000s
Wages and salaries	25,820	24,411
Share-based payments	608	942
	26,428	25,353

Other operating expenses/(income)


	Year ended 31 December
	2025	2024
	$’000s	$’000s
Impairment of goodwill (1) and intangible assets	-	6,809
Loss/(gain) from disposal of property	1,042	(263)
Change in liabilities	-	(2,074)
Gain from disposal of operation and subsidiaries (2)	(14,968)	-
Amortisation of intangible assets	27	84
Other expenses/(income) (3)	1,601	(103)
	(12,298)	4,453

(1)

See note 25 in relation to impairment of goodwill

(2) See note 33 in relation to disposal of subsidiaries and operation

(3) See note 19 in relation to exceptional expense due to a theft of inventory

Finance income


	Year ended 31 December
	2025	2024
	$’000s	$’000s
Interest on bank deposits and other	599	421
Gain on financial assets at FVTPL	158	244
	757	665

Annual Report & Accounts 2025

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Finance expenses



	Year ended 31 December
	2025	2024
	$’000s	$’000s
Interest on loans and bank fees
and other	(1,183)	(643)
Interest expense on liabilities	(683)	(744)
	(1,866)	(1,387)

Income tax expenses



	Year ended 31 December
	2025	2024
	$’000s	$’000s
Current tax	(6,398)	(1,307)
Tax on previous years	57	(474)
Deferred tax (note 29)	149	53
	(6,192)	(1,728)

Taxation under various laws:

Israel

The Company is an “industrial company” as defined in the Israeli Law for the Encouragement of Industry (Taxes) 1969.

The corporate income tax rate for the years 2024 and 2025 is 23%.

Encouragement of Capital Investments Law:

a. The corporate tax rate for each company with Preferred Enterprise status for the years 2024 and 2025 is 7.5%.

b. Including additional tax tracks for Preferred Technological Enterprise (tax rate of 7.5% in Area “A” and tax rate of 12%

in Area “Other”) and for special Preferred Technological Enterprise (tax rate of 6%).

c. Determining relief of the threshold conditions to enter the track of “Special Preferred Enterprise” relevant for huge

companies (tax rates of 5% in Area “A” or 8% in the Area “Other”).

The Company has Preferred Enterprise status in Area A and its Israeli subsidiaries are being assessed according to the

corporate income tax rate.

The Company and its Israeli subsidiaries have tax loss carry-forwards of $152.7 million for which the Group did not create

deferred tax assets. According to the Israeli tax law there is no expiry date to use such losses.

The Company tax assessments for the years up to and including the 2020 tax year are considered as final.

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

The United States of America

Telco Systems incurred losses for tax purposes. In addition, in accordance with U.S. tax law, Telco Systems elected to

amortise a substantial part of the excess cost paid by the Company in its acquisition over a period of 15 years, which has

resulted in tax loss carry-forwards. According to U.S. law, losses created until 2017 can be carried forward for 20 years. As

of 31 December 2025, the total carry-forward losses of Telco Systems amounted to $172.6 million of which deferred tax

assets of $3.1 million have been recognised in respect of such losses to the extent that a sufficient taxable profit will be

available in the foreseeable future.

The corporate income tax for the years 2024 and 2025 is 21%.

Other jurisdictions

Taxation for other jurisdictions than those mentioned above is calculated at the rates prevailing in the respective

jurisdictions. The corporate income tax rate for subsidiaries with significant sales are: Moldova is 12%, Romania is 16%, Italy

is 28.8% and Hungary is 9%.

The Group has tax loss carry-forwards of $7.0 million in European subsidiaries and the Group did not recognise deferred

tax assets in respect of $5.9 million of such losses.

The income tax expenses for the year can be reconciled to the profit per the consolidated statement of profit or loss

as follows:

| | | |
| --- | --- | --- |
| | Year ended 31 December | |
| | 2025 | 2024 |
| | $’000s | $’000s |
| Profit/(loss) before tax | 12,368 | (5,383) |
| Tax expense at the Israeli statutory corporate income tax rate of 23% | 2,845 | (1,238) |
| Current year losses for which no deferred tax assets were recognised | 2,149 | 1,653 |
| Differences between statutory tax in Israel (23%) and subsidiaries tax rate | 1,673 | 699 |
| Impairment of goodwill and intangible assets | - | 479 |
| Tax losses utilised in current period for which no deferred tax assets have | (129) | (123) |
| been recognised |
| Deferred tax assets recognised | 10 | - |
| Tax on previous years | (57) | 474 |
| Other | (299) | (216) |
| Tax expenses for the year | 6,192 | 1,728 |

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Annual Report & Accounts 2025

Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:


	Year ended 31 December
	2025	2024
Earnings/(loss) from continuing operations for the purposes of basic and	(12,185)	(7,498)
diluted earnings per share ($’000s) attributable to Owners of the Company
Loss from discontinued operations for the purposes of basic and diluted	(6,150)	(14,798)
earnings per share ($’000s) attributable to Owners of the Company
Number of shares
Weighted average number of ordinary shares for the purposes of basic	436,624,076	436,259,446
earnings per share
Effect of dilutive potential ordinary shares	-	1,192,389
Weighted average number of ordinary shares for the purposes of
calculation of diluted earnings per share	436,624,076	437,451,835

The number of dilutive instruments that could potentially dilute basic earnings per share in the future, but were not

included in the calculation of diluted earnings per share because they are antidilutive for the year is 25,053,356

(2024: 29,020,965).

Short-term investment in deposits and other securities



	Year ended 31 December
	2025	2024
	$’000s	$’000s
Interest-bearing deposits	333	174
Financial assets at FVTPL	199	5,498
	532	5,672

The average interest rate of deposits and other securities as of 31 December 2025 and 2024 was 2.6% and

4.0% respectively.

Trade and other receivables



	31 December
	2025	2024
Trade and other receivables	$’000s	$’000s
Trade receivable account	17,249	19,384
Prepaid expenses and deposits	1,243	3,438
Construction contracts (see following table)	1,594	1,298
Government authorities	1,655	1,478
Other debtors	7,095	4,016
	28,836	29,614

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

| | | |
| --- | --- | --- |
| | |
| | 31 December | |
| | 2025 | 2024 |
| Construction contracts | $’000s | $’000s |
| Composition: | | |
| Cumulative costs incurred | 22,266 | 18,212 |
| In addition - recognised profits | 8,424 | 1,111 |
| Less accounts submitted to project customers | (29,096) | (18,025) |
| | 1,594 | 1,298 |

No interest is charged on the receivables. A net reversal of allowance has been made at 31 December 2025 for estimated

irrecoverable amounts from the sale of goods of $3,002 thousand (2024: allowance of $2,997 thousand), including a loss

allowance for expected credit losses according to IFRS 9. The directors consider that the carrying amount of trade and

other receivables approximates their fair value.

As of 31 December 2025, trade receivable account includes amounts of $9.4 million for which the maturity date has

expired (including a receivable in the amount of $2.8 million that is overdue by more than a year), but the Group, based on

past experience and on the credit quality of the debtors and given that a substantial part of the debts have been collected

by the date of the approval of this annual report, has not made an allowance for doubtful debts since the Group expects

that those debts are collectible.

Credit risk

The Group’s principal financial assets are cash and cash equivalents, trade and other receivables, deposits and

investments at fair value. The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in

the consolidated statements of financial position are net of allowances for credit loss.

Inventories



	31 December
	2025	2024
	$’000s	$’000s
Raw materials	1,988	5,132
Work-in-progress	2,650	2,373
Finished goods	23,929	25,205
	28,567	32,710

During 2025, $0.4 million of slow-moving inventory was impaired and expensed to the profit or loss account (2024: $0.1

million). In addition, an exceptional expense of $2.3 million has been recorded due to a theft of inventory, comprising

networking components, at one of the Group’s warehouses in December 2025.

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Annual Report & Accounts 2025

20 Discontinued operations

During 2024, the Board resolved to dispose of the Eco-med operation, which constituted part of the Group’s non-

core activity. The operation, which was expected to be sold within 12 months and had been classified as a discontinued

operation, was sold on 30 June 2025 (see note 3). The comparative consolidated statement of profit or loss and the cash

flow have been re-presented to show the discontinued operation separately from the continuing operations.

A claim that had been filed in 2019 alleging breach of contract by the discontinued operation for the supply of products

and associated damages was decided, in 2025, in favour of the claimant. This resulted in the Group making a cash

payment of $3.6 million and recognising a $1.6 million expense charge for the discontinued operation, with the expense

charge being the difference (primarily due to interest charges) between the provision made in the 2024 financial

statements and the final settlement amount.

The results of the discontinued operation are as follows:



	2025	2024
	$’000s	$’000s
Revenues	519	3,238
Expenses from operation and settlement amount*	3,531	13,962
Loss from discontinued operation	(3,012)	(10,724)
Loss from valuation of fair value less costs to sell	-	4,065
Gain from disposal of discontinued operation	852	-
Disposal of capital reserves related to currency translation of a foreign operation	(3,990)	-
Tax expenses	-	9
Loss for the year attributable to discontinued operations	(6,150)	(14,798)
Other comprehensive income/(expenses) for the year	3,989	(941)
Total comprehensive loss for the year	(2,161)	(15,739)

* During 2024, the Company recorded impairments of inventory and other receivables from this operation totalling $5.6 million.

Held for sale

For the year ended 31 December 2024 and as a part of the Group’s strategy to divest its non-core businesses, the Group’s

Eco-med business and Provider of genetic test operations, which were part of the Group’s non-core business, are

presented as held for sale as the Group expected these operations to be disposed within 12 months.

In 2025, the Group entered into an agreement to sell its entire shareholding in Progenetics. The transaction valued

Progenetics at NIS 14 million (c.$4 million), of which BATM received approximately $2 million in cash for its 51%

shareholding (see note 33).

Impairment losses relating to the disposal groups

Impairment losses of $5.1 million for write-downs of the disposal group held for sale operations to the lower of its carrying

amount and its fair value less costs to sell were recognised in 2024.

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Assets and liabilities associated with the disposal group held for sale at 31 December 2024:


		Provider of	Total
($’000s)	Eco-med	genetic tests	$’000s
Trade and other receivables	1,136	705	1,841
Property, plant and equipment	-	17	17
Right-of-use assets	1,209	-	1,209
Goodwill	-	1,593	1,593
Total assets classified as held for sale	2,345	2,315	4,660
Trade and other payables	835	902	1,737
Current maturities of lease liabilities	286	-	286
Long-term liabilities	36	-	36
Long-term lease liabilities	919	-	919
Total liabilities associated with assets classified as held for sale	2,076	902	2,978

Property, plant and equipment


	Land and	Plant and	Motor	Furniture	Leasehold
($’000s)	buildings	equipment	vehicles	and fittings	improvements	Total
Cost
At 1 January 2024	7,225	23,071	2,448	4,346	4,118	41,208
Additions	-	330	320	128	89	867
Disposals	(460)	(114)	(380)	(37)	-	(991)
Classified as Held for Sale	(384)	(2,131)	(67)	(764)	(307)	(3,653)
Effect of translation adjustment	(371)	(683)	(200)	(172)	(90)	(1,516)
At 1 January 2025	6,010	20,473	2,121	3,501	3,810	35,915
Additions	284	1,086	460	41	89	1,960
Disposal	5	(6,724)	(741)	(142)	(1,012)	(8,614)
Effect of translation
adjustment	625	862	307	139	208	2,141
At 31 December 2025	6,924	15,697	2,147	3,539	3,095	31,402

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Annual Report & Accounts 2025

The accompanying notes are an integral part of these financial statements.


	Land and	Plant and	Motor	Furniture	Leasehold
($’000s)	buildings	equipment	vehicles	and fittings	improvements	Total
Accumulated depreciation
At 1 January 2024	2,421	15,223	1,480	4,111	1,922	25,157
Depreciation expense	424	1,146	267	217	404	2,458
Disposals	(133)	(38)	(191)	(26)	-	(388)
Impairment*	23	1,203	3	-	-	1,229
Classified as Held for Sale	(384)	(2,116)	(66)	(761)	(307)	(3,634)
Effect of translation adjustment	(192)	(403)	(130)	(137)	(61)	(923)
At 1 January 2025	2,159	15,015	1,363	3,404	1,958	23,899
Depreciation expense	222	1,115	266	140	413	2,156
Disposals	(49)	(3,879)	(623)	(127)	(561)	(5,239)
Impairment**	-	785	-	-	-	785
Effect of translation
adjustment	336	661	176	97	108	1,378
At 31 December 2025	2,668	13,697	1,182	3,514	1,918	22,979
Carrying amount
At 31 December 2025	4,256	2,000	965	25	1,177	8,423
At 31 December 2024	3,851	5,458	758	97	1,852	12,016

* Impairment related to assets which are part of disposal groups which were classified to held for sale

** Impairment of laboratory equipment

23 Investment property

Additional Information

Fair value disclosures for investment properties measured using the cost model

Details of the Group’s freehold land and buildings and information about the fair value hierarchy as at year end are

as follows:


	31 December 2025		31 December 2024
	At amortised cost	Fair value	At amortised cost	Fair value
	$’000s	$’000s	$’000s	$’000s
Italy	604	1,076	548	953

The fair value of the asset was determined based on the market comparable approach that reflects recent transaction

prices for similar properties, where the market rentals of all lettable units of the properties are assessed by reference

to the rentals achieved in the lettable units as well as other lettings of similar properties in the neighbourhood. The

capitalisation rate adopted is made by reference to the yield rates observed by the valuers for similar properties in the

locality and adjusted based on the valuers’ knowledge of the factors specific to the respective properties.

Average market price, taking into account the differences in location and individual factors, such as frontage and size,

between the comparables and the property, was $1,112 per square metre for the property in Italy.

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

24 Right-of-use assets

| | | | | |
| --- | --- | --- | --- | --- |
| | Plant and | | Motor | |
| ($’000s) | equipment | Buildings | vehicles | Total |
| Cost | | | | |
| At 1 January 2024 | 1,288 | 9,362 | 1,503 | 12,153 |
| Additions | 954 | 2,076 | 542 | 3,572 |
| Disposals | - | (2,011) | (98) | (2,109) |
| Effect of translation adjustment | (114) | (64) | (139) | (317) |
| Classified as Held for Sale | - | (1,395) | - | (1,395) |
| At 31 December 2024 | 2,128 | 7,968 | 1,808 | 11,904 |
| Additions | 344 | 1,247 | 144 | 1,735 |
| Disposals | (2,699) | (1,982) | (1,499) | (6,180) |
| Effect of translation adjustment | 227 | 203 | 106 | 536 |
| At 31 December 2025 | - | 7,436 | 559 | 7,995 |

| | | | | |
| --- | --- | --- | --- | --- |
| | Plant and | | Motor | |
| ($’000s) | equipment | Buildings | vehicles | Total |
| Accumulated depreciation | | | | |
| At 1 January 2024 | 571 | 6,216 | 1,015 | 7,802 |
| Charge for the year | 384 | 1,597 | 335 | 2,316 |
| Disposals | - | (1,901) | (98) | (1,999) |
| Effect of translation adjustment | (53) | (17) | (137) | (207) |
| Classified as held for sale | - | (186) | - | (186) |
| At 31 December 2024 | 902 | 5,709 | 1,115 | 7,726 |
| Charge for the year | 464 | 1,399 | 258 | 2,121 |
| Disposals | (1,474) | (1,182) | (918) | (3,574) |
| Effect of translation adjustment | 108 | 93 | 60 | 261 |
| At 31 December 2025 | - | 6,019 | 515 | 6,534 |
| Carrying amount | | | | |
| At 31 December 2025 | - | 1,417 | 44 | 1,461 |
| At 31 December 2024 | 1,226 | 2,259 | 693 | 4,178 |

The Group leases several assets including buildings and motor vehicles. The average lease term of buildings and motor

vehicles is approximately 5 and 3 years, respectively.

The maturity analysis of lease liabilities is presented in note 30.

Annual Report & Accounts 2025

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Amounts recognised in profit or loss


	2025	2024
	$’000s	$’000s
Interest expense on lease liabilities	294	296
Expense relating to short-term leases	899	926

At 31 December 2025, the Group was committed to $1.4 million for short-term leases (2024: $1.3 million). The total cash

outflow for leases amounted to $2,154 thousand (2024: $2,098 thousand).

25 Goodwill

The Group annually tests goodwill for impairment or more frequently if there are indications that goodwill might be

impaired. Management conducted their annual impairment testing, using an external valuation specialist as necessary, to

assess the recoverability of goodwill while considering the Group’s execution on its business strategy and whether there

were also indicators of impairment with respect to intangible assets.

The Group has four reportable business segments and goodwill is allocated to CGUs as follows: Networks Segment: an

amount of $1,984 thousand (2024: $1,984 thousand). Diagnostics Segment: $0 thousand (2024: $285 thousand), which is

allocated to Distribution of diagnostics: $0 thousand (2024: $285 thousand). Non-core Segment: $1,075 thousand (2024:

$1,075 thousand), which is allocated to Analytical instruments distribution: $1,075 thousand (2024: $1,075 thousand).

The recoverable amounts of the CGUs are determined from value-in-use calculations or fair value. The key assumptions

for the value-in-use calculations are those regarding the discount rates, growth rates and expected related expenses

during the period. Pre-tax discount rates of between 14.5% - 15.9% have been used. Changes in expenses are based on

recent history and expectations of future changes in the market.

For the purpose of the goodwill impairment test on value-in-use, the Group prepares cash flow forecasts derived from

the most recent financial budget approved by management and extrapolates indefinite cash flows based on estimated

growth rates. For the purposes of this calculation management have used revenue growth rates for the Networks CGU of

27% average growth per year for 1-5 years and 1% thereafter and for the Analytical instruments distribution CGU of 10%

average growth per year for 1-5 and 1% thereafter.

The average operating expenses have been assumed to grow for the Networks CGU at 6% average growth per year for

1-5 and 4% thereafter; and for the Analytical instruments distribution CGU at 12% average growth per year for 1-5 and 0%

thereafter. The average cost of goods sold has been assumed to grow for the Networks CGU at 24% average growth per

year for 1-5 and 1% thereafter and for the Analytical instruments distribution CGU at 10% average growth per year for 1-5

and 1% thereafter.

During the financial year, the Group sold its AMS subsidiary (Distribution of diagnostics) resulting in the disposal of $0.3

million of goodwill.

During 2024, the Group recognised an impairment loss from continuing operations of $5.2 million related to goodwill, out

of which $0.9 million is related to an operation that was classified as held for sale, and an additional $2.5 million is related

to an operation that was classified as discontinued operations.


	2025	2024
	$’000s	$’000s
Balance at 1 January	3,344	12,763
Impairment losses for the year	-	(7,726)
Classified as held for sale (1)	-	(1,593)
Foreign exchange difference	-	(100)
Disposal of subsidiary	(285)	-
Balance at 31 December	3,059	3,344

(1)

See note 21 in respect of held for sale

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

26 Intangible assets

| | | | | |
| --- | --- | --- | --- | --- |
| | Customer Relationships | | | |
| | and Backlog | Technology | Other | Total |
| | $’000s | $’000s | $’000s | $’000s |
| Cost | | | | |
| As at 1 January 2024 | 11,747 | 21,236 | 1,610 | 34,593 |
| Additions from internal development | - | 2,707 | - | 2,707 |
| Classified as held for sale | (1,400) | (2,041) | (312) | (3,753) |
| Effect of translation adjustments | (283) | (347) | (5) | (635) |
| At 1 January 2025 | 10,064 | 21,555 | 1,293 | 32,912 |
| Additions from internal development | - | 2,414 | - | 2,414 |
| Disposals | (1,390) | - | - | (1,390) |
| Effect of translation adjustments | 205 | 193 | (10) | 388 |
| At 31 December 2025 | 8,879 | 24,162 | 1,283 | 34,324 |
| Accumulated amortisation | | | | |
| At 1 January 2024 | 11,706 | 13,269 | 1,599 | 26,574 |
| Amortisation expense | 10 | 597 | 73 | 680 |
| Impairment losses for the year | - | 1,802 | 116 | 1,918 |
| Effect of translation adjustments | (292) | (214) | (5) | (511) |
| Classified as held for sale | (1,400) | (1,837) | (516) | (3,753) |
| At 1 January 2025 | 10,024 | 13,617 | 1,267 | 24,908 |
| Amortisation expense | 10 | 320 | 17 | 347 |
| Disposals | (1,390) | - | - | (1,390) |
| Effect of translation adjustments | 235 | 49 | (1) | 283 |
| At 31 December 2025 | 8,879 | 13,986 | 1,283 | 24,148 |
| Carrying amount | | | | |
| At 31 December 2025 | - | 10,176 | - | 10,176 |
| At 31 December 2024 | 40 | 7,938 | 26 | 8,004 |

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Annual Report & Accounts 2025

27 Subsidiaries

A list of the significant direct and indirect investments in subsidiaries, including the country of incorporation, and percent

of ownership interest as at 31 December 2025 is presented below.



Subsidiary	Principal activity	Country of incorporation	Ownership interest
Entity A	Telecommunication	United States of America	100%
Entity B	Distribution	Moldova	51%
Entity C	Diagnostics	Italy	96%
Entity D	Diagnostics	Italy	96%
Entity E	Cyber	Israel	67%
Entity F	Distribution	Hungary	100%

The most significant non-controlling interests (49%) are related to entity B, which the profit for 2025 amounts to $289

thousand (2024: profit of $621 thousand).

Investment in joint venture and associate



	2025	2024
	$’000s	$’000s
As at 1 January	17,802	17,894
Additions	1,072	1,378
Equity loss and write off of investment	(16,422)	(345)
Effect of translation adjustments	1,580	(1,125)
At 31 December	4,032	17,802

The Group’s total investments in ADOR Diagnostics Ltd (“ADOR”) result in a shareholding of 43.4%. During the reporting

period, ADOR discontinued its development activities. ADOR continues to seek a strategic investor or other opportunity

to monetise its know-how and, if successful, the Group would recognise a corresponding gain.

In light of the Board’s assessment that there is significant uncertainty regarding the potential sale of ADOR or the

identification of a strategic investor, the Group has written off its entire investment in ADOR, together with all related

financial balances.

29 Deferred tax

Deferred tax assets

The following are deferred tax assets recognised by the Group and movements thereon during the current and prior

reporting period (see also note 15).

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

| | | | |
| --- | --- | --- | --- |
| | |
| | Losses carried forward | Other | Total |
| | $’000s | $’000s | $’000s |
| At 1 January 2024 | 3,372 | 135 | 3,507 |
| Change for the period | – | 14 | 14 |
| Effect of translation adjustments | (15) | (8) | (23) |
| At 1 January 2025 | 3,357 | 141 | 3,498 |
| Change for the period | – | 149 | 149 |
| Effect of translation adjustments | 28 | 19 | 47 |
| At 31 December 2025 | 3,385 | 309 | 3,694 |

The Group incurred tax losses in certain jurisdictions, to which deferred tax assets relate, to the extent that it is expected

that future taxable profit will be available and can be utilised against them. The deferred tax assets were analysed based

on forecasted operations and existing agreements and backlog. The Group expects that taxable profits will be available,

as a result of an increasing demand, new products and expansion to new markets.

Deferred tax liabilities



	Intangible assets	Total
	$’000s	$’000s
At 1 January 2024	39	39
Change for the period	(39)	(39)
Effect of translation adjustments	-	-
At 1 January 2025	-	-
Change for the period	-	-
Effect of translation adjustments	-	-
At 31 December 2025	-	-

The following are unrecognised taxable temporary differences associated with investments and interests:

Taxable temporary differences in relation to investments in subsidiaries for which deferred tax liabilities have not been

recognised amount to $6,056 thousand as of 31 December 2025 (31 December 2024: $14,773 thousand).

Financial and other liabilities

Trade and other payables

| | | |
| --- | --- | --- |
| | |
| | 31 December | |
| | 2025 | 2024 |
| | $’000s | $’000s |
| Trade creditors | 12,905 | 20,896 |
| Salary accruals | 6,703 | 5,431 |
| VAT and other tax | 1,719 | 2,136 |
| Provision | 78 | 123 |
| Liability for acquisition | - | 658 |
| Other creditors and accruals | 7,437 | 7,447 |
| | 28,842 | 36,691 |

100

Annual Report & Accounts 2025

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The

directors consider that the carrying amount of trade payables approximates to their fair value.

Long-term bank credit


	31 December
	2025	2024
	$’000s	$’000s
Long-term bank credit	182	-
	182	-

Long-term liabilities

| | | |
| --- | --- | --- |
| | 31 December | |
| | 2025 | 2024 |
| | $’000s | $’000s |
| Liability to the office of the chief scientist | 2,127 | 2,088 |
| Government institutions, contingencies and others | 2,281 | 4,500 |
| | 4,408 | 6,588 |

Changes in financial liabilities where the cash flows in respect thereof are classified to financing activities


	Open balance	Cash flow from finance	Foreign exchange	Close balance
		activities, net	differences
2025	$’000s	$’000s	$’000s	$’000s
Short term	4,261	3,851	402	8,514
Long term	-	182	-	182
	4,261	4,033	402	8,696


	Open balance	Cash flow from/(used	Foreign exchange	Close balance
2024		in) finance activities, net	differences
	$’000s	$’000s	$’000s	$’000s
Short term	3,276	1,098	(113)	4,261
Long term	1,328	(1,197)	(131)	-
	4,604	(99)	(244)	4,261

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

101

Lease liabilities


	2025	2024
	$’000s	$’000s
Balance as at 1 January	4,390	4,480
Cash payments	(2,110)	(2,395)
Other (mainly additions)	1,986	3,640
Classified to held for sale	-	(1,204)
Disposal	(2,800)	-
Foreign exchange impact	195	(131)
Balance as at 31 December	1,661	4,390



	31 December
	2025	2024
	$’000s	$’000s
Maturity analysis
Year 1	999	2,032
Year 2	471	1,161
Year 3	110	663
Year 4	22	377
Onwards	59	157
	1,661	4,390

Share capital

| | | |
| --- | --- | --- |
| | Ordinary shares of NIS 0.01 each (number of shares) | |
| | 2025 | 2024 |
| Authorised: | 1,000,000,000 | 1,000,000,000 |
| Issued and fully paid: | 441,369,184 | 441,026,659 |
| Held in treasury | (4,495,000) | (4,495,000) |
| Held by a subsidiary (transferred in a transaction | (96,794,500) | - |
| that completed on 31 December 2025) | | |
| Net | 340,079,684 | 436,531,659 |

The Company has one class of ordinary shares which carry no right to fixed income.

During 2025 and 2024, 342,525 and 342,525 restricted share units were exercised respectively by grantees (see

note 35 - share-based payments).

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

102

Annual Report & Accounts 2025

Note to the cash flow statement


	Year ended 31 December
	2025	2024
	$’000s	$’000s
Operating profit/(loss) from continuing operations	13,477	(4,661)
Adjustments for:
Amortisation of intangible assets	347	680
Depreciation of property, plant and equipment and investment property	4,277	4,288
Capital loss/(gain) of property, plant and equipment	1,042	(263)
Impairment of goodwill and other assets	-	6,809
Share-based payments	608	942
Investment carried at fair value	(365)	-
Capital gain from disposal of operations and subsidiaries (see note 33)	(14,968)	-
Increase in retirement benefit obligation	35	16
Operating cash flow before movements in working capital	4,453	7,811
Increase in inventories	(489)	(521)
Increase in receivables	(13,221)	(1,197)
Decrease/(increase) in payables	5,533	(2,630)
Effects of exchange rate changes on the balance sheet	1,822	(1,777)
Cash (used in)/from operations	(1,902)	1,686
Income taxes paid	(1,337)	(1,291)
Interest paid	(482)	(663)
Interest received	599	421
Net cash (used in)/from continuing operating activities	(3,122)	153
Net cash used in discontinued operating activities	(3,843)	(1,806)

Disposal of subsidiaries and operation

A. Disposal of Progenetics

On 15 May 2025, the Group completed the divestiture of its interest in Progenetics resulting in the disposal of the assets

and liabilities from the consolidated balance sheet, and a gain on the disposal was recognised in the consolidated

statement of income, reflecting the difference between the consideration received and the carrying amount of the net

assets and non-controlling interest (“NCI”) disposed.

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

103


	15 May
	2025
	$’000s
Net assets disposed
Assets associated with disposal group Held for Sale	2,015
Liabilities associated with disposal group Held for Sale	(948)
Non-controlling interest	(947)
Net assets disposed	120
Disposal of capital reserves related to currency translation of a foreign operation	15
Gain on disposal	760
Net consideration	895
Net cash inflow arising from disposal
Consideration received in cash, net	1,619
Cash held in escrow	143
Cash and cash equivalents disposed	(867)
Net consideration	895

B. Disposal of Celitron

On 30 June 2025, the Group completed the divestiture of its interest in Celitron resulting in the disposal of the assets

and liabilities from the consolidated balance sheet, and a gain on the disposal was recognised in the consolidated

statement of income, reflecting the difference between the consideration received and the carrying amount of the net

assets disposed.


	30 June
	2025
	$’000s
Net assets disposed
Assets associated with disposal group Held for Sale	1,235
Liabilities associated with disposal group Held for Sale	(1,847)
Net assets disposed	(612)
Disposal of capital reserves related to currency translation of a foreign operation	3,990
Loss on disposal	(3,138)
Total consideration	240
Net cash inflow arising from disposal
Consideration received in cash and cash equivalents, net	250
Cash and cash equivalents disposed	(10)
Total consideration	240

104

Annual Report & Accounts 2025

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

On 30 June 2025, the Group completed the divestiture of the Zer Laboratories operation for a total consideration

amounting to $0.1 million.

D. Disposal of AMS

On 31 December 2025, the Group completed the divestiture of its interest in AMS resulting in the disposal of the assets

and liabilities from the consolidated balance sheet, and a gain on the disposal was recognised in the consolidated

statement of income, reflecting the difference between the consideration received and the carrying amount of the

net assets disposed. The sale of AMS was a non-cash transaction with the consideration paid by the purchaser being

96,794,500 ordinary shares of NIS 0.01 each in the Company.


	31 December
	2025
	$’000s
Net assets disposed
Assets associated with disposal	25,465
Liabilities associated with disposal	(20,182)
Net assets disposed	5,283
Disposal of capital reserves related to currency translation of a foreign operation	1,316
Expenses related to acquisition	321
Gain on disposal	14,074
Net consideration	20,994
Net cash inflow arising from disposal	-
Net cash outflow arising from disposal	353

34 Guarantees and liens

The Group provided from time-to-time bank guarantees due to advances from customers. The Group registered several

liens in favour of banks.

35 Share-based payments

Equity-settled share option scheme

In November 2021, the Company approved a Global Share Incentive Plan (hereinafter: “the 2021 Plan”), under which

the Company can grant options or restricted share units or allot shares (including restricted shares), according to the

procedures, terms and conditions specified in the 2021 Plan. Options granted prior to the 2021 Plan are subject to the

terms and conditions under which they were granted.

Details of the share options outstanding during the year are as follows:


	2025		2024
	Number	Weighted average	Number	Weighted average
	of share	exercise price	of share	exercise price
	options	(in GBP)	options	(in GBP)
Outstanding at beginning of year	29,927,166	0.2517	25,655,400	0.2619
Granted during the year	3,730,892	0.1649	5,125,397	0.1973
Forfeited during the year	(8,604,702)	0.2331	(853,631)	0.2327
Exercised during the year	-	-	-	-
Outstanding at the end of the year	25,053,356	0.2451	29,927,166	0.2517
Exercisable at the end of the year	13,688,380	0.2696	11,511,600	0.2742

The outstanding options at 31 December 2025 had a weighted average exercise price of GBP 0.2451, and a weighted average

remaining contractual life of 4 years. During the year, the Company granted a total of 3,730,892 options over ordinary shares

of 0.01 NIS each in the capital of the Company (“Ordinary Shares”) to four grantees for a total fair value of $450 thousand

which were calculated according to the Black-Scholes model. The options were granted under the 2021 Plan.

The inputs into the Black-Scholes model for the options granted are as follows:


	2025	2025
	1st grant	2nd grant
Share price (GBP)	0.1645	0.1658
Weighted average exercise price (GBP)	0.1677	0.1613
Expected volatility*	52%	52%
Expected life	6	6
Risk-free rate	4.17%	4.17%
Expected dividends	0%	0%
Fair value of the grant	$250k	$200k

On 22 June 2025, the Company granted a total of 2,080,441 options over ordinary shares of 0.01 NIS each in the capital

of the Company to the CFO of the Company. The options were granted under the 2021 Plan and granted prior to his

appointment as a director.

The inputs into the Black-Scholes model for the options granted are as follows:


	2024	2024	2024
	1st grant	2nd grant	3rd grant
Weighted average share price (GBP)	0.2060	0.2040	0.1645
Weighted average exercise price (GBP)	0.2033	0.2053	0.1858
Expected volatility*	51%	51%	52%
Expected life	6	6	6
Risk-free rate	3.6%	3.8%	4.0%
Expected dividends	0%	0%	0%
Fair value of the grant	$281k	$180k	$200k

*Expected volatility was determined by calculating the historical volatility of the Company’s share price over the previous 3 years. The

expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise

restrictions and behavioural considerations.

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

105

106

Annual Report & Accounts 2025

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

Details of the restricted share units (“RSUs”) outstanding during the year are as follows:



	Number of RSUs	Number of RSUs
	2025	2024
Outstanding at beginning of year	1,168,407	1,799,705
Granted during the year	-	-
Forfeited during the year	(825,882)	(288,773)
Exercised during the year	(342,525)	(342,525)
Outstanding at the end of the year	-	1,168,407

The Group recognised total expenses of $608 thousand and $942 thousand related to equity-settled share-based

payment transactions in 2025 and 2024, respectively.

36 Retirement benefit obligation

Defined contribution plans

The Group operates defined contribution retirement benefit schemes for all qualifying employees in Israel. The assets

of the schemes are held separately from those of the Group in funds under the control of trustees. Where there are

employees who leave the schemes prior to vesting fully in the contributions, the contributions payable by the Group are

reduced by the amount of forfeited contributions.

The employees of the Group’s subsidiaries in the United States are members of a state-managed retirement benefit

scheme operated by the government of the United States. The subsidiary contributes a specified percentage of payroll

costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the

retirement benefit scheme is to make the specified contributions.

Defined benefit plans

The Group operates defined benefit schemes for qualifying employees of the Company and its subsidiaries in Israel and

in Italy.

In Israel, this scheme provides severance pay provision as required by Israeli law. In Italy, each employee is entitled to

severance payment at the end of employment.

Actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out by an external

appraisal regarding the employees in Israel. The present value of the defined benefit obligation, the related current

service cost and past service cost were measured using the projected unit credit method. The discount rate was based

on high quality corporate bonds.

The principal assumptions used for the purposes of the actuarial valuations were as follows:



	2025	2024
Discount rate(s)	5.48%	5.42%
Expected rate(s) of salary increase	3-4%	3-4%
Expected inflation rate	2.05%	2.52%
Employee turnover rate	7.50%	7.50%

Amounts recognised in comprehensive income in respect of these defined benefit plans are as follows:

Service cost:



	2025	2024
	$’000s	$’000s
Current service cost	151	204
Net interest expenses	27	24
Components of defined benefit costs recognised in profit or loss	178	228

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

107

Re-measurement on the net defined benefit liability:



	2025	2024
	$’000s	$’000s
Return on plan assets (excluding amounts included in net interest expense)	(40)	103
Actuarial gains and losses arising from changes in financial assumptions	(6)	0
Actuarial gains and losses arising from other	71	(89)
Components of defined benefit costs recognised in other comprehensive income	25	14

The amount included in the consolidated statements of financial position arising from the entity’s obligation in respect of

its defined benefit plans is as follows:



	2025	2024
	$’000s	$’000s
Present value of funded defined benefit obligation	1,908	1,668
Fair value of plan assets	(1,084)	(1,013)
Net liability	824	655

Movements in the present value of the defined benefit obligation in the current period were as follows:



	2025	2024
	$’000s	$’000s
Opening defined benefit obligation	1,668	1,581
Current service cost	151	204
Interest cost	63	58
Remeasurement (losses)/gains arising from changes in financial assumptions	(10)	89
Benefits paid	(191)	(242)
Exchange rate differences	227	(22)
Closing defined benefit obligation	1,908	1,668

Movements in the present value of the plan assets in the current period were as follows:



	2025	2024
	$’000s	$’000s
Opening fair value of plan assets	1,013	983
Interest income	36	34
Remeasurements (losses)/gains return on plan assets (excluding amounts	(40)	103
included in net interest expense)
Contributions from the employer	29	34
Benefits paid	(106)	(135)
Exchange rate differences	152	(6)
Closing fair value of plan assets	1,084	1,013

The accompanying notes are an integral part of these financial statements.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

108

Annual Report & Accounts 2025

Related party transactions

Remuneration of directors and key management

| | | |
| --- | --- | --- |
| | |
| | 2025 | 2024 |
| | $’000s | $’000s |
| Short- and long-term employee benefits | 1,887 | 1,179 |
| Share-based payments | 329 | 841 |
| | 2,216 | 2,020 |

At the end of the year, the Group had a liability to a related party in the amount of $625 thousand.

Transactions and balances with associated companies and related party

During the year, the Group provided various services (mostly lab services) to an associated company for an amount of

$553 thousand. At the end of the year, the Group’s assets and liabilities related to associated companies amounted to

$45 thousand and $0 thousand, respectively (see also note 28).

On 5 October 2025, the Group signed an agreement to sell its entire shareholding in the Romanian company A.M.S.

2000 Trading Impex SRL (“AMS”) to Dr. Zvi Marom, a director, former CEO, and shareholder who held c. 22.2% of the

issued share capital of BATM, in exchange for Dr. Marom’s entire shareholding in BATM, which consisted of 96,794,500

shares of BATM. Dr. Marom stepped down from the Board on 10 December 2025 and ceased to be a shareholder

of BATM following the closing of the transaction which occurred on 31 December 2025 and the transfer of the

96,794,500 shares from Dr. Marom to a subsidiary of the Group.

The Group recognised a gain of $14.1 million from the sale of AMS. Since year end, the Group has received $3.7 million

in cash that had been held by AMS and distributed to the Group as dividend, with a further $0.3 million still to be

received (see note 33).

38 Financial instruments

(a) Capital risk management

Management’s policy is to maintain a strong capital base in order to preserve the ability of the Group to continue

operating so that it may provide a return on capital to its shareholders, benefits to other holders of interests in the Group

such as credit providers and employees of the Group, and sustain future development of the business. Management of

the Group monitors return on capital defined as the total amount of equity attributable to the shareholders of the Group

and also the amount of dividends distributed to the ordinary shareholders.

The Group’s management reviews the capital structure on a periodic basis. As a part of this review the management

considers the cost of capital and the risks associated with each class of capital. Based on management’s

recommendations, the Group will balance its overall capital structure through the payment of dividends. The Group’s

overall strategy remains unchanged from 2006.

(b) Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of

measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,

financial liability and equity instrument are disclosed in note 3 to the financial statements.



	2025
	$’000
Financial assets
Cash and cash equivalents*	22,859
Fair value through profit or loss	2,117
Fair value through OCI	-
Receivables	25,937
Financial liabilities
At amortised cost	39,529

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

109

| | |
| --- | --- |
| | |
| | 2024 |
| | $’000s |
| Financial assets | |
| Cash and cash equivalents* | 25,898 |
| Fair value through profit or loss | 6,376 |
| Fair value through OCI | 524 |
| Receivables | 24,017 |
| Financial liabilities | |
| At amortised cost | 46,375 |

* Cash and cash equivalents comprises $13.8 million deposits up to three months and $9.1 million cash (2024: $15.1 million deposits up to

three months and $10.8 million cash).

The majority of the assets included in fair value through profit or loss section measurements are level 1 fair value

measurements, defined as those derived from quoted prices (unadjusted) in active markets for identical assets.

(d) Financial risk management objectives

The Group’s finance function provides services to the business, coordinates access to domestic and international financial

markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports that

analyse exposure by degree and magnitude of risks. These risks include market risk (including currency, interest rate and

inflation risk), credit risk, liquidity risk and cash flow interest rate risk.

The Group seeks to minimise the effects of these risks by using derivatives only for economic hedging and does not

apply hedge accounting. The use of financial derivatives is governed by the Group’s policies approved by the board of

directors, which provide principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives

and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure

limits is reviewed by the internal auditors on a continuous basis.

(e) Market risk

The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (refer to

section f) and interest rates (refer to section g). The Group enters into a variety of derivative financial instruments to

manage its exposure to interest rate and foreign currency risk, including structured deposits, call options and forward

foreign exchange contracts to hedge the exchange rate risk, which derive mostly from existing monetary assets

and liabilities.

There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures

the risk. However, due to recent changes and market volatility, the Group is monitoring closely its exposure and possible

indirect impacts.

(f) Foreign currency risk management

The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate

fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign

exchange contracts.

The Company does not implement hedge accounting.

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

110

Annual Report & Accounts 2025

The accompanying notes are an integral part of these financial statements.

The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the

reporting date is as follows:


	Liabilities		Assets
	2025	2024	2025	2024
	$’000s	$’000s	$’000s	$’000s
EUR	18,461	22,975	23,479	16,583
NIS	14,603	8,837	4,871	9,210
RON	462	4,356	545	15,469
MDL	5,110	7,878	7,227	6,241
GBP	64	459	18	53
Other	1,923	1,663	2,622	1,371

Foreign currency sensitivity

The Group is mainly exposed to EUR, NIS, MDL, RON and GBP.

The following table details the Group’s sensitivity to a 10% change in USD against the respective foreign currencies

in 2025. The rate of 10% is used when reporting foreign currency risk internally to key management personnel and

represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis of the

Group’s exposure to foreign currency risk at the reporting date has been determined based on the change taking place

at the beginning of the financial year and held constant throughout the reporting period. A positive number indicates

an increase in profit or loss and other equity where the USD weakens against the respective currency. If the USD were to

strengthen by the same percentage against the respective currency there would be a similar but reverse impact on the

profit or loss and equity as presented in the tables below.

Profit or loss


	2025	2024
	$’000s	$’000s
NIS Impact	(946)	(9)
EUR Impact	1,118	50
GBP Impact	(4)	(4)

Equity


	2025	2024
	$’000s	$’000s
NIS Impact	(28)	46
EUR Impact	(616)	(690)
MDL Impact	212	(164)
GBP Impact	1	(37)
RON Impact	8	1,111
Other Currencies Impact	70	(29)

The Group’s main exposure derives from its cash, receivables and payables at year end.

Financial Statements

Notes to the Consolidated Financial Statements

(cont.)

for the year ended 31 December 2025

111

The Company engages in financial instruments contracts such as forward contracts, call and put options and structured

instruments in order to manage foreign currencies exposure as needed.

(g) Interest rate risk management

The Group is exposed to interest rate risk because entities in the Group may borrow funds at both fixed and floating

interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate

borrowings. The Group’s exposure to interest rate on financial assets and financial liabilities are detailed in the following

table (refer to section h). The exposure to floating rate loans is not material.

(h) Liquidity risk management

The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities,

by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets

and liabilities.

Financial liabilities


	Weighted average
	effective interest		3 months to
	rate	0-3 months	1 year	1-5 years	Total
	%	$’000s	$’000s	$’000s	$’000s
31 December 2025
Non-interest bearing loans	-	26,473	380	3,959	30,812
Bank loans bearing interest(*)	6.98	4,019	4,495	182	8,696
Lease liabilities	5.94	300	699	662	1,661
		30,792	5,574	4,803	41,169
31 December 2024
Non-interest bearing loans	-	33,863	351	4,125	38,339
Bank loans bearing interest(*)	7.71	99	4,162	-	4,261
Lease liabilities	6.60	508	1,524	2,358	4,390
		34,470	6,037	6,483	46,990

(*) Part of the bank loans are fixed rate plus Euribor.

The future bank loan interest to be paid is $319 thousand.

(i) Finance liabilities

Loans from banks are measured at amortised cost using the effective interest method. The difference between the fair

value of the loans and their book value is not significant.

(j)

Fair value of financial instruments carried at amortised cost

The fair value of the financial instruments of the Group carried at amortised cost is not considered to be materially

different from the stated amortised cost.

39 Subsequent events

On 10 February 2026, the Group sold Laborator A.M.S 2000 SRL, for a consideration of $1 million in cash, to a laboratory

group headquartered in Germany that provides agricultural, environmental, water, food and feed analysis.

The accompanying notes are an integral part of these financial statements.

112

Annual Report & Accounts 2025

for the year ended 31 December 2025

Other Alternative Measures

Income statement adjustments

The Group has made reference in the annual report to a number of adjustments related to the amortisation of intangible assets

and share-based payments. These adjustments are outlined below:

Year ended 31 December 2025

(Unaudited)

Reported results

$’000s

Adjustments(*)

$’000s

Adjusted results

$’000s

Gross profit

40,064

320

40,384

Gross margin (%)

32.5%

32.8%

Operating profit

13,477

1,186

14,663

EBITDA

18,101

839

18,940

Year ended 31 December 2024

(Unaudited)

Reported results

$’000s

Adjustments(*)

$’000s

Adjusted results

$’000s

Gross profit

36,800

432

37,232

Gross margin (%)

31.4%

31.7%

Operating profit/(loss)

(4,661)

8,430

3,769

EBITDA

7,116

942

8,058

(*) Adjusted to exclude amortisation, share-based payments, expenses related to corporate activity and, in 2024, a one-time impairment of

intangible assets.

The above does not form part of the audited financial statements.

EBITDA measurement

The Group uses EBITDA as a performance measure, which is calculated as follows:

Year ended 31 December

2025

(Unaudited)

$’000s

2024

(Unaudited)

$’000s

Operating profit/(loss)

13,477

(4,661)

Amortisation of intangible assets

347

680

Depreciation

4,277

4,288

Impairment

6,809

EBITDA

18,101

7,116

Share-based payments

608

942

Expenses related to corporate activity(*)

231

Adj. EBITDA

18,940

8,058

(*) Related to due diligence expenses

The above does not form part of the audited financial statements.

113

Financial Statements

for the year ended 31 December 2025

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