Israel Canada (T.R) Ltd. — M&A Activity 2026

Feb 19, 2026

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Israel-Canada (T.R) Ltd.

("the Company" or "Israel Canada")

To Israel Securities Authority www.isa.gov.il

The Tel Aviv Stock Exchange Ltd. ("the TASE")

www.tase.co.il

To

February 19, 2026

Subject: Engagement in a transaction for the merger of Acro Group Ltd. into Israel Canada in exchange for cash and shares

The Company is pleased to report that on February 18, 2026, Israel Canada entered into a statutory merger agreement with Acro Group Ltd. ("Acro") according to the provisions of the First Chapter of the Eighth Part of the Companies Law, 5759-1999 ("the Merger Agreement" and "the Companies Law", respectively), according to which, subject to the fulfillment of the suspending conditions detailed below, Acro will merge into Israel Canada, such that all of its assets and liabilities [including Acro's liabilities towards the holders of BONDS (Series 1) and (Series 2) of Acro ("the Existing Series")] will be transferred to Israel Canada, in their As-Is condition ("the Merger" or "the Merger Transaction"). 1 2

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

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

Conversely, the exercise of other convertible securities previously allocated by Acro to employees and officers in Acro (or the allocation of shares that will be made to them until the closing date of the merger transaction , instead of the warrants 4

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

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

³ Israel Canada's value on the TASE, as of that date, totaled approximately NIS 7 billion. Acro's value on the TASE, as of February 18, 2026, totaled approximately NIS 2.8 billion.

⁴ A date that will occur up to 14 business days after the fulfillment of the suspending conditions detailed below and in any case not before September 10, 2026, or a later date as determined with the TASE ("Closing Date"). Notwithstanding the above, Israel Canada shall be entitled, at its sole discretion, to move forward the closing date provided it occurs after August 15, 2026.

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in their possession), will not result in a change in the value of Acro for the purpose of the merger transaction, and will therefore result in a decrease in the consideration to which each Acro shareholder will be entitled as part of the determination of the merger ratios . 5

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

• 1. Approval by the board of directors of each of the companies participating in the merger (Israel Canada and Acro) (which was received on February 18, 2026) as well as approval by the general meeting of each of the companies participating in the merger in accordance with the provisions of Sections 314 and 320 of the Companies Law by an ordinary majority. 7
• 1. Receipt of approval from the Tax Authority for a tax ruling on the agreement (pre-ruling) under Section 103 of the Income Tax Ordinance [New Version], 5721-1961, whereby the allocated shares to be allocated by Israel Canada to the Acro shareholders will be taxed only at the time of their sale and not at the time of their allocation.
• 1. Completion of all procedures necessary for the merger transaction in accordance with the first chapter of the eighth part of the Companies Law and the regulations enacted thereunder, including receipt of a merger certificate from the Registrar of Companies.
• 1. Receipt of TASE approval for the listing for trading of the shares and new series of BONDS of Israel Canada which will be allocated (in lieu of the existing series) according to a shelf offering report to be published by Israel Canada, as well as receipt of the Securities Authority's permit for the shelf offering report.
• 1. Receipt of approval from financing parties of Israel Canada and Acro for the merger transaction, insofar as such approval is required under the terms of the engagement with them.
• 1. Receipt of approval from the Competition Commissioner.

In addition, it was agreed that during the interim period (i.e., until the completion date), Acro will not perform any action outside the ordinary course of business and will not make any distribution, as the term is defined in the Companies Law. In addition, Acro will not perform an allocation of shares or convertible securities except in connection with Acro's non-tradable warrants. BOND raising by Acro will also be possible in an amount not exceeding the amount set in the agreement. Israel Canada will not take any action outside its ordinary course of business and will not make any distribution, as the term is defined in the Companies Law, except for a permitted distribution in a financial amount not exceeding NIS 25 million.

On the completion date (as defined above), the terms of office of the directors serving in Acro will end, and in addition, Mr. Itzhak Arbov, Chairman of the Board, and Ziv Yaakobi, Director and CEO of Acro, will resign from their positions in the group and will sign letters of waiver of claims and a non-compete undertaking for the period agreed upon in the agreement, and Acro's non-tradable warrants that were not exercised by the completion date will expire, such that in Israel Canada there will be no convertible securities on the completion date.

⁵ Regarding this matter, it should be noted that Acro has undertaken that on the record date for the execution of the merger transaction, there will be no convertible securities in Acro, for which purpose, among other things, Acro will act to allocate shares to officers and employees as stated instead of the warrants in their possession.

⁶ In accordance with the provisions of the agreement, the final date for the fulfillment of the conditions precedent was set for September 10, 2026. However, each of the parties to the agreement shall be entitled to extend the final date until December 31, 2026 (the "Extending Party") by notice to the other party for the purpose of the fulfillment of condition(s) precedent that have not yet been fulfilled and for which a final rejection notice has not yet been received, or until 60 days from the date of the end of a state of emergency in the country (as defined in the agreement), whichever is later and in any case no later than February 28, 2027.

⁷ In this regard, it should be noted that the controlling shareholders of Israel Canada and the controlling shareholders of Acro (Mr. Itzhak Arbov, including by virtue of a power of attorney granted to him by shareholders of Acro, and Ms. Raya Strauss Ben-Dror (the "Acro controlling shareholders")) have undertaken in an irrevocable undertaking that each of them will vote at the general meeting of shareholders of Israel Canada or Acro, as the case may be, in favor of the merger transaction, and in addition, the Acro controlling shareholders have undertaken not to sell their shares until the record date.

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Israel Canada and Acro will act in the near future, in accordance with the provisions of the law, to convene shareholder meetings for each of the companies for the purpose of approving the merger transaction and to perform all necessary actions to fulfill the conditions precedent.

Financing of the Consideration

The Company intends to pay the consideration in cash from its own resources and/or from external financing and/or realization of assets and/or capital raising and/or debt (the Company has a valid shelf prospectus).

The Company's plans regarding Acro including an estimate of expected investments after the merger

The merger of Acro with and into the Company constitutes a significant strategic and synergistic move for the Company's operations and constitutes a force multiplier for its continued intensification and a significant expansion of the Company's operations.

It is not possible to estimate at this stage the Company's expected investments in Acro.

Details about Acro

For details regarding Acro and its financial data as required by the Fifth Schedule to the Securities Regulations (Periodic and Immediate Reports), 1970, see Acro's Periodic report for 2024 which was published by it on March 26, 2025 , as well as Acro's interim reports for the first, second, and third quarters of 2025 which were published on May 21, 2025 , August 20, 2025 and November 24, 2025 and the immediate reports published by Acro after the financial reports for the third quarter of 2025, which are included in this report by way of reference. 8 9 10 11

Sincerely,

Israel-Canada (T.R) Ltd.

Signed by: Guy Canada

Deputy CEO

Reference No.: 2025-01-020475.

8

9 Reference No.: 2025-01-035561.

10 Reference No.: 2025-01-061831.

11 Reference No.: 2025-01-090708.