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Next Vision Stabilized Systems Ltd. — Interim / Quarterly Report 2026
May 11, 2026
6945_rns_2026-05-11_8475fa8e-4a27-4e6f-b8f5-f4c88152bdbc.pdf
Interim / Quarterly Report
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This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
Board of Directors' Report on the State of the Corporation's Affairs
For the period of three months ended March 31, 2026
The Board of Directors of NextVision Stabilized Systems Ltd. (hereinafter: the "Company") is pleased to submit the Board of Directors' Report on the State of the Corporation's Affairs as of March 31, 2026 (hereinafter: the "Report Date" or "Date of the Report") and for the three-month period ended March 31, 2026 (hereinafter: the "Report Period"), prepared in accordance with the Securities Regulations (Periodic and Immediate Reports), 5730-1970 (hereinafter: the "Reports Regulations").
The scope of this report is limited and it is prepared under the assumption that the reader has the Company's annual reports for 2025 (Reference No.: 2026-01-021416), including the Board of Directors' Report on the State of the Company's Affairs for the year ended December 31, 2025 (hereinafter: the "Periodic report").
Chapter A - Board of Directors' Explanations on the State of the Company's Business
Concise Description of the Company and its Business Environment
1. General
The Company was incorporated and registered in Israel on April 1, 2009, as a private company limited by shares under the name NextVision Stabilized Systems Ltd. (its current name).
Since its inception, the Company has been a technology company that develops, manufactures, and markets stabilized day and night imaging solutions for ground and aerial vehicles, such as micro and mini UAVs and drones. The Company sells its products to customers who are systems providers that sell their products to end users.
The Company has several products (cameras and accessories) in the weight range between 2 kg and 115 grams.
The Company has developed a unique "image stabilization engine," based on a registered patent, which allows it to produce stabilized cameras with one of the best weight/size and performance ratios in the world.
Unlike some of its competitors, who attempt to produce small cameras by miniaturizing existing technology, the Company has chosen a unique solution through "out of the box" thinking, combining mechanical stabilization (small gimbals) and electronic stabilization (hardware "engine"), which enables it to produce the image in real time (Real Time) and thereby maintain uniqueness and a significant gap from its competitors. The requirement for image stabilization becomes more challenging as the camera becomes smaller and lighter and as the zoom requirements increase. The technology developed by the Company provides the ability to perform deep zoom from vehicles in motion and still allow the user to receive a stable image. The ratio between size and weight to performance and the competitive price are among the best in the market.
This is an unofficial AI generated translation of the official Hebrew version and has no binding force. The only binding version is the official Hebrew version. For more information, please review the legal disclaimer. .
The technology developed by the Company includes the development of day cameras, night cameras, miniaturized gimbals, communication, geographic pointing capability, trackers, and additional capabilities that complement the needs of
1
its customers and make it a One Stop Shop for companies producing ground and airborne vehicles requiring optical systems with stabilized zoom.
In addition to cameras, the company develops accompanying products that significantly reduce camera integration time into various platforms, thereby saving its customers significant money and enabling a fast time to market.
The company invests a great deal of time and resources in recruiting people, developing technology, capabilities, and new products in order to maintain its relative advantage in the market compared to its competitors and to provide an optimal response to its customers' needs.
Disclosure regarding the implications of the Swords of Iron War and Operations "Am KeLavi" and "Shaagat HaAri"
On October 7, 2023, following a surprise attack by the Hamas terrorist organization from the Gaza Strip, the Israeli government declared the "Swords of Iron" war. As of October 2025, a ceasefire agreement was reached. Following the attack from the Gaza Strip, an attack also began towards northern Israel by the Hezbollah terrorist organization from Lebanon, and tensions in other sectors increased. As part of dealing with the threats of the Swords of Iron War, the Israeli government ordered the evacuation of dozens of localities located in the south of the country, around the Gaza Strip, and in the north of the country, along the border with Lebanon, and also imposed restrictions on various gatherings, the conduct of activities in workplaces, and the conduct of educational activities in accordance with Home Front Command guidelines. In addition, many citizens were called to reserve duty for extended periods.
These factors led to a reduction and slowing of business activity in Israel, resulting from, among other things, business closures, manpower shortages, and disruptions in the supply chain. Potential fluctuations in commodity prices, foreign exchange rates, material availability, manpower availability, local services, and access to local resources may affect entities whose primary activity is with Israel or in Israel. On October 9, 2025, an additional ceasefire with Hamas was reached, and as of the date of the report, all hostages and the bodies of the fallen were returned. The arrangements brought a gradual calm to the north and south.
In March 2026, the Research Division of the Bank of Israel updated the macro-economic forecast. According to the said report, the forecast was formulated under the working assumption that Operation "Shaagat HaAri" and the fighting in Lebanon would end towards the end of April. The forecast is based on the assumption that the relative calm on the various fronts will continue. The GDP is expected to grow by $3.8\%$ in 2026, according to the Bank of Israel's estimate, and is expected to grow by $5.5\%$ in 2027. The inflation rate in the next four quarters (ending in the first quarter of 2027) is expected to be $2.3\%$ . During the years 2026 and 2027, the inflation rate is expected to be $2.2\%$ and $1.8\%$ , respectively. The average bank of Israel interest in the first quarter of 2027 is expected to be $3.75\% / 3.5\%$ .
According to the forecast, Operation "Shaagat HaAri" contributes to a reduction in the severity of the threat from Iran, and another round of fighting is not expected soon. However, the geo-political environment still requires preparedness and high defense expenditures for the year 2027 and onwards, defense expenditures for the purpose of preparing for the possibility of such a round. Additionally, prices
1 From "The Macro-Economic Forecast of the Research Division, March 2026" of the Bank of Israel. For more details, see the Bank of Israel website: www.boi.org.il
Global energy prices did decrease slightly at the end of the fighting, but they are expected to remain higher than their original level.
In the short term, the forecast reflects damage to economic activity due to restrictions on the home front and reserve mobilization affecting labor supply, alongside an increase in inflation resulting from rising oil prices and these restrictions. Alongside this, there is a high level of uncertainty regarding the duration of the fighting and the risks that will remain after it. These factors, including the risk premium, exchange rate, and security expenses, will continue to affect economic activity and the entire economy.
On January 30, 2026, the rating company Moody's updated Israel's credit rating to level Baa1 with a stable outlook. On November 7, 2025, the international credit rating company S&P updated Israel's credit rating to level A with a stable outlook. On August 12, 2024, the credit rating company Fitch lowered Israel's credit rating to level A with a "negative" outlook and reaffirmed it on March 31, 2026².
On June 13, 2025, the State of Israel launched a military operation against Iran, which was called "Im KeLavi". In response to the operation, Iran launched hundreds of ballistic missiles and unmanned aerial vehicles toward military and civilian targets in Israel. The attacks caused widespread infrastructure damage, significant property damage, approximately 30 deaths among Israeli and foreign civilians, and the injury of hundreds more. On June 24, 2025, following a US attack within Iranian territory, an agreement was reached on a ceasefire between the parties. During the "Im KeLavi" operation, the Israeli government closed the airspace of the State of Israel for a period of about two weeks. During that period, it was not possible to receive goods from suppliers and send goods to the company's customers abroad by air. With the end of the operation, there was a delay in air shipping companies which was resolved about a week later. With the end of the operation and after the return of air shipping companies to operation, most of the goods that had not yet been sent to the company's customers were released (during the last week of June and part of this even during July). Since the company has several customers with payment terms, the goods sent at the end of June were paid for during July.
On February 28, 2026, Israel together with the US launched an attack against the regime in Iran, which is called "Sha'agat HaAri". In response to the operation, Iran launched ballistic missiles and other means against Israel. In response, the Israeli government closed the airspace of the State of Israel. Additionally, the Home Front Command prohibited gatherings at workplaces and therefore most of the economy is in partial operation. On April 9, 2026, a temporary ceasefire between the parties came into effect, which brought some relief to the security situation and the possibility of a gradual return to routine in some areas of the country. Accordingly, the authorities began a gradual removal of the restrictions imposed on the country's citizens, including a gradual opening of the airspace and certain relaxations in economic activity. However, as of the date of this Periodic report, there is uncertainty regarding the duration of the ceasefire or its future implications on the company's activity and the economy in general.
² For further details see: The rating announcements of the rating companies on the websites: www.maalot.co.il; www.moodys.com; www.fitchratings.com
Since the beginning of the war, there has been an increase in orders for cameras and other company products from its customers. Additionally, last year the company increased its inventory to maintain flexibility, responsiveness, and to meet the increase in orders for the company's products from its customers. The company continuously increases its production capacity to meet the growth in demand while simultaneously continuing to provide its customers with their orders on time. Furthermore, due to global geopolitical tensions affecting, among other things, supply chains, and for cautionary reasons only, the company decided to stock up on various components it identified as potentially subject to shortage. It should be clarified that the company acts to execute long-term orders, maintain high inventory levels, increase the number of suppliers, and prevent as much as possible reliance on a single supplier and maintain continuous contact with suppliers.
Following Operation "Shaagat HaAri" and the closure of the State of Israel's borders, delays were created in shipping goods to the company's customers abroad and in receiving goods at the company from suppliers. As of the date of this Periodic report, following the removal of restrictions, shipping and receipt of goods have returned to normal.
As of this date, the "Iron Swords" war and/or Operation "Am KeLavi" did not have a material impact on the company's results or the company's ability to provide its customers with their orders on time. In light of the uncertainty regarding the ceasefire and the resumption of fighting, the company is unable to assess the possible effects of the said operation on the company and its results. The company continues at all times to examine the effects of the economic situation and the fighting on its business operations. However, and in light of the uncertainty regarding the continuation of the fighting, the continued supply of inventory from suppliers, market volatility, additional measures that the Israeli government may take, and the effects of other factors, among others, on the business activity of the company's customers, the company is unable at this time to accurately assess the scope and nature of further future effects of Operation "Shaagat HaAri" on its results.
The company's assessments detailed above regarding the future effects of the war in Israel and/or Operation "Am KeLavi" in Israel and/or the ceasefire and/or Operation "Shaagat HaAri", constitute forward-looking information, as defined in the Securities Law, based on company assessments as of the date of this report. The actual impact of the war and the aforementioned operations on the company's status and the macroeconomic situation and/or monetary policy in Israel may differ materially from the company's assessments and is not under the company's control alone. This is as a result of, among other things, an economic slowdown that may develop in the State of Israel, escalation of the war, one or more of the factors mentioned above in connection with the war, and macroeconomic changes, which may affect the company's operations.
Impact of the Russia-Ukraine War on the Company's Operations
The Russia-Ukraine war, which began during February 2022, as well as the "heating up" of the global defense market, have led a significant number of governments to declare their intention to significantly increase their defense budgets and military procurement. The war in Ukraine, like the "Iron Swords" war, highlighted the acceleration in the use of loitering munitions, UAVs, and small observation drones for use by forces in the field. In light of this trend, the company is actually experiencing an increase in demand for the solution it provides to its customers in all areas and even anticipates continued interest in its products.
Information regarding the Company's expectations in connection with the increase in demand for its products following the war in Ukraine constitutes forward-looking information, as defined in the Securities Law, which is not under the Company's sole control. Such information is based on information currently available to the Company and on publications written and published by professional entities in connection with the Company's field of activity as of the date of this Periodic report. The information is only an estimate that may not materialize or may materialize partially or differently, among other things, due to changes in the field of activity and the factors affecting it. In view of the above, actual results may differ from the estimation detailed above and even differ materially in connection with external factors affecting the Company's field of activity.
2. Developments in the Company's business during the reporting period
2.1 The Company is a technology company in growth. The Company continues to market its products worldwide, and every year new customers are added to its customer base. Following many technological and regulatory changes in the market, there is a growth trend in the quantity of small vehicles requiring a stabilized photography solution.
2.2 During the reporting period, the Company's sales grew by approximately 86.4% compared to the corresponding period last year. During the reporting period, the number of customers to whom the Company sells stood at a total of 112 customers, compared to a total of 111 customers in the corresponding period last year. As of the report date, the Company's order backlog stands at a total of approximately $288.6 million.
2.3 Further to the Company's immediate reports dated March 13, 2025, and November 20, 2025, in connection with an order received from an existing customer of the Company in a total amount of approximately $30 million, on December 31, 2025, regulatory approval for the transaction was received, and as a result, the suspensive condition mentioned in section 7 of the original report was met. For further details, see the Company's immediate report dated January 1, 2025 (Reference No.: 2025-01-106062), all of which is brought into this Board of Directors' report by way of reference.
2.4 On December 31, 2025, an order was received by the Company from a third party, who is not related to the Company and/or its interested parties, for the purchase of cameras and other products of the Company, in consideration for a total of approximately $22.1 million (excluding VAT). For further details, see the Company's immediate report dated January 1, 2026 (Reference No.: 2026-01-106066), all of which is brought into this Board of Directors' report by way of reference.
2.5 On January 5, 2026, the Company's Board of Directors decided to set the Company's annual growth target for 2026 such that the growth target will stand at a total of approximately $275 million (reflecting a growth rate of approximately 64% in the Company's revenues compared to the Company's unaudited revenues for 2025 and a growth rate of approximately 72% in the Company's revenues compared to the growth target for 2025). For further details, see the Company's immediate report dated January 5, 2026 (Reference No.: 2026-01-001664), all of which is brought into this Board of Directors' report by way of reference.
2.6 On February 10, 2026, the General Meeting of the Company's shareholders approved (after the Compensation Committee and the Company's Board of Directors approved this on January 5, 2026) the allocation of 10,700 warrants to Mr. Alex Lavi, the Company's CFO, and 19,400 warrants to Mr. Liran Reler, VP
The operations of the Company. On February 15, 2026, the aforementioned warrants were allocated to the officers. For further details, see the Company's immediate reports dated February 10, 2026 and February 15, 2026 (Reference Nos.: 2026-01-014042 and 2026-01-015056, respectively), all of which are incorporated into this Board of Directors' report by way of reference.
2.7 On January 11, 2026, the Company allocated without consideration a total of 324,900 non-marketable warrants, exercisable into 324,900 ordinary shares of NIS 0.00005 par value each of the Company, to 45 employees of the Company. For further details, see the Company's immediate report dated January 12, 2026 (Reference No.: 2026-01-005113), all of which is incorporated into this Board of Directors' report by way of reference.
2.8 On January 15, 2026, an order was received by the Company from a third party, which is not related to the Company and/or its interested parties, for the purchase of cameras and additional products of the Company, for a total consideration of approximately $4.9 million (excluding VAT). For further details, see the Company's immediate report dated January 16, 2026 (Reference No.: 2026-01-006818), all of which is incorporated into this Board of Directors' report by way of reference.
2.9 On January 18, 2026, an order was received by the Company from a third party, which is not related to the Company and/or its interested parties, for the purchase of cameras and additional products of the Company, for a total consideration of approximately $60 million (excluding VAT). For further details, see the Company's immediate report dated January 19, 2026 (Reference No.: 2026-01-007433), all of which is incorporated into this Board of Directors' report by way of reference.
2.10 On January 21, 2026, an order was received by the Company from a third party, which is not related to the Company and/or its interested parties, for the purchase of cameras and additional products of the Company, for a total consideration of approximately $20 million (excluding VAT). For further details, see the Company's immediate report dated January 22, 2026 (Reference No.: 2026-01-008619), all of which is incorporated into this Board of Directors' report by way of reference.
2.11 On February 25, 2026, an order was received by the Company from a third party, which is not related to the Company and/or its interested parties, for the purchase of cameras and additional products of the Company, for a total consideration of approximately $2.5 million (excluding VAT). For further details, see the Company's immediate report dated February 26, 2026 (Reference No.: 2026-01-017659), all of which is incorporated into this Board of Directors' report by way of reference.
2.12 On March 10, 2026, the Company's Board of Directors approved the allocation, without consideration, of 180,000 non-marketable warrants of the Company, exercisable into 180,000 ordinary shares of NIS 0.00005 par value each of the Company, to 22 employees of the Company. The warrants were allocated to the Company's employees on March 23, 2026. For further details, see the Company's immediate reports dated March 11, 2026 and March 24, 2026 (Reference Nos.: 2026-01-021413 and 2026-01-026165) all of which are incorporated into this Board of Directors' report by way of reference.
2.13 On March 10, 2026, the Company's Board of Directors approved a dividend distribution to the Company's shareholders in a total amount of approximately $51,832 thousand. For further details, see the Company's immediate reports dated March 11, 2026 and March 19, 2026 (Reference Nos.: 2026-01-021414 and 2026-01-024467, respectively), all of which are incorporated into this Board of Directors' report by way of reference.
2.14
On March 23, 2026, an order was received by the Company from a third party, which is not related to the Company and/or its interested parties, for the purchase of cameras and additional products of the Company, for a total consideration of approximately $6.1 million (excluding VAT). For further details, see the Company's immediate report dated March 24
In March 2026 (Reference No.: 2026-01-025926), all of which is included in this Board of Directors report by way of reference.
2.15.
On March 27, 2026, the company's Board of Directors approved the allocation, without consideration, of 27,500 non-marketable warrants of the company, exercisable into 27,500 ordinary shares of NIS 0.00005 par value of the company, to a company employee; on April 19, 2026, the warrants were allocated to the employee. For further details, see the company's immediate reports dated March 27, 2026 and April 19, 2026 (Reference Nos.: 2026-01-028475 and 2026-01-036117, respectively), all of which is included in this Board of Directors report by way of reference.
1. Board of Directors' explanations on the state of the company's affairs, results of operations, equity and cash flows
1.1. Financial position
The financial data detailed below are based on the data from the company's reviewed and audited financial statements, prepared in accordance with International Financial Reporting Standards (IFRS).
The following are the main developments that occurred in the items of the statement of financial position (in thousands of dollars):
| Item | Balance as of (in thousands of dollars) | The company's Board of Directors' explanations for the changes | ||
|---|---|---|---|---|
| March 31, 2026 | March 31, 2025 | December 31, 2025 | ||
| Cash | 27,968 | 40,976 | 85,440 | See cash flow analysis in section 1.3 below. |
| Short-term deposits | 514,399 | 61,509 | 476,857 | The company acts to maintain high liquidity and financial security, and therefore holds short-term deposits (up to one year), in accordance with the company's cash management policy. This investment is intended to ensure a solid return while maintaining the availability of funds for operational and business needs. |
| Accounts receivable | 26,056 | 7,639 | 12,087 | The increase in accounts receivable compared to the same period last year stems from an increase in sales volume during the period and the provision of credit terms to material customers. |
| Current taxes receivable | 953 | - | 4,746 | The decrease in current taxes receivable is due to a refund of overpaid advances for the 2024 tax year. |
| Other receivables and debit balances | 5,909 | 4,499 | 5,275 | The increase in other receivables and debit balances compared to the same period last year stems mainly from an increase in advances to suppliers for procurement purposes for 2026 and 2027. |
| Inventory | 61,979 | 29,258 | 53,588 | The increase compared to the same period last year stems from the company's procurement in accordance with the increase in the order backlog, as well as from the procurement of components in which the company identified a shortage in the market due to geopolitical tensions. |
| Item | Balance as of (in thousands of dollars) | The company's Board of Directors' explanations for the changes | ||
|---|---|---|---|---|
| March 31, 2026 | March 31, 2025 | December 31, 2025 | ||
| Total current assets | 637,264 | 143,881 | 637,993 | |
| Fixed assets | 1,111 | 810 | 906 | The increase in assets stems from the addition of another floor and its adaptation to the company's needs. |
| Right-of-use assets | 4,409 | 3,413 | 2,770 | The increase stems from the leasing of additional areas and the signing of a long-term lease agreement in order to support the growth rate of the company's activity. |
| Intangible assets | 6,178 | 4,394 | 4,896 | The increase stems from the capitalization of new developments of cameras and accessories during the period, net of current amortization. |
| Total non-current assets | 11,698 | 8,617 | 8,572 | |
| Trade payables and service providers | 10,030 | 7,098 | 8,679 | The increase in suppliers stems from an increase in the scope of production activity and procurement of components. |
| Current taxes payable | - | 1,023 | - | No change compared to the end of 2025. |
1.2. Results of the company's business operations
The following explains the main developments that occurred in the company's results of operations (in thousands of dollars):
| Item | For the three-month period ended March 31 (in thousands of dollars) | For the year ended December 31 (in thousands of dollars) | Explanations of the company's board of directors for the changes | |
|---|---|---|---|---|
| 2026 | 2025 | 2025 | ||
| Revenues from sales | 67,389 | 36,163 | 168,354 | The increase in revenues stems from a quantitative increase in the number of customers and units sold. |
| Cost of sales | (22,094) | (9,675) | (50,798) | The decrease in gross profitability originates from the volume discounts the company gives to its material customers and the increase in manpower on production lines. |
| Gross profit | 45,295 | 26,488 | 117,556 | |
| Research and development expenses | (1,793) | (952) | (5,491) | The increase compared to the corresponding period last year stems from the intensification of development efforts and improvements in the company's various products, mainly through additional positions in the development departments. |
| Selling and marketing expenses | (727) | (447) | (1,874) | The increase stems from the addition of positions and intensification of sales efforts. |
| General and administrative expenses | (4,427) | (2,887) | (8,667) | The increase compared to the corresponding period last year stems from an update of the management compensation agreements and an increase in share-based payment. |
| Operating profit | 38,348 | 22,202 | 101,524 | |
| Cost of operations | (1,793) | (952) | (5,491) | The increase compared to the corresponding period last year stems from the increase in the number of operations and the increase in manpower operations. |
| Cost of sales | (12,094) | (6,875) | (31,134) | The increase in the cost of sales of operations and the increase in manpower operations. |
| Other expenses | (1,793) | (952) | (5,491) | The increase in the cost of other expenses and the increase in manpower operations. |
| Item | For the three-month period ended March 31 (in thousands of dollars) | For the year ended December 31 (in thousands of dollars) | Explanations of the company's board of directors for the changes | |
|---|---|---|---|---|
| 2026 | 2025 | 2025 | ||
| Financing expenses | (120) | (32) | (313) | The increase stems mainly from exchange rate differences and financing expenses regarding the lease of new offices. |
| Financing income | 5,993 | 1,930 | 13,453 | The increase in financing income compared to the corresponding period last year stems from an increase in the volume of bank deposits. |
| Profit before tax | 44,221 | 24,100 | 114,664 | |
| Taxes on income | (5,958) | (3,527) | (11,000) | The increase in taxes on income stems from growth in the company's activities. |
| Net profit | 38,263 | 20,573 | 103,664 | |
| Loss from remeasurement regarding defined benefit plans | - | - | (10) | |
| Total comprehensive income | 38,263 | 20,573 | 103,654 |
1.3. Cash Flows and Liquidity
As of March 31, 2026, the Company has cash balances totaling approximately 27,968 thousand dollars. The following are the main components of the Company's cash flow:
| Item | For the three-month period ended March 31 | For the year ended December 31 | Company's Board of Directors explanations for the changes | |
|---|---|---|---|---|
| 2026 | 2025 | 2025 | ||
| Operating activities | 31,347 | 10,801 | 63,640 | The increase in cash flows from operating activities compared to the corresponding period last year results from the expansion of activities and growth in the Company's profits. |
| Investing activities | (42,965) | (13,943) | (424,216) | The increase in investing activities results from an increase in the volume of deposits held by the Company. |
| Financing activities | (45,708) | (31,045) | 368,489 | The increase in financing activities results from the increase in dividend distribution in 2026 compared to the dividend distributed in 2025. |
| Cash balance at the end of the period | 27,968 | 40,976 | 85,440 |
1.4. Sources of Funding
As of the date of the report, the Company funds its activities through its equity and does not use external funding sources.
In light of the Company's positive cash flow for years, the Company does not typically take credit for funding its current activities, and therefore the Company has no credit lines.
During the months of June and July 2021, the Company completed its initial public offering of the Company's shares on the stock exchange for a total of approximately 129 million NIS (which also includes an allocation to the Company's pricing underwriter as part of the offering).
During September 2025, the Company completed a capital raise via a non-uniform offer from institutional investors (mostly foreign investors) totaling approximately 1,387 million NIS. For further details, see the Company's immediate reports dated September 15, 2025, and September 16, 2026 (reference nos.: 2025-01-069605 and 2025-01-069694 respectively), all of which are included in this Board of Directors' report by way of reference.
Additionally, during the reporting period, 968,887 non-marketable warrants of the Company's employees were exercised for a total consideration of approximately 6,172 thousand dollars.
1.5. Working Capital
As of March 31, 2026, the Company has working capital in the amount of approximately 605,111 thousand dollars, compared to working capital of approximately 123,619 thousand dollars as of March 31, 2025.
Part C - Disclosure regarding the Corporation's Financial Reporting and Corporate Governance Aspects
2. Information regarding material events after the report date
2.1. On April 3, 2026, the company received an order from a third party, which is not related to the company and/or the interested parties therein, for the purchase of cameras and additional products of the company, for a total consideration of approximately $5.5 million (excluding VAT). For further details, see the company's immediate report dated April 6, 2026 (Reference No.: 2026-01-031855), the contents of which are included in this Board of Directors report by way of reference.
2.2. On April 16, 2026, the company received an order from a third party, which is not related to the company and/or the interested parties therein, for the purchase of cameras and additional products of the company, for a total consideration of approximately $2.3 million (excluding VAT). For further details, see the company's immediate report dated April 16, 2026 (Reference No.: 2026-01-035327), the contents of which are included in this Board of Directors report by way of reference.
2.3. On April 23, 2026, the company received an order from a third party, which is not related to the company and/or the interested parties therein, for the purchase of cameras and additional products of the company, for a total consideration of approximately $5.8 million (excluding VAT). For further details, see the company's immediate report dated April 24, 2026 (Reference No.: 2026-01-037809), the contents of which are included in this Board of Directors report by way of reference.
2.4. On May 10, 2026, the company's Board of Directors approved the allocation, without consideration, of 107,000 non-marketable warrants of the company, exercisable into 107,000 ordinary shares of NIS 0.00005 par value each of the company, to 14 company employees. For further details, see the immediate report published concurrently with this Board of Directors report.
2.5. On May 10, 2026, the Compensation Committee and the company's Board of Directors approved the allocation of 32,500 non-marketable warrants of the company, exercisable into 32,500 ordinary shares of NIS 0.00005 par value each of the company, to Ms. Danielle Alexandrov (hereinafter: "Alexandrov"), who will begin on June 1, 2026, to serve as VP Business Development, Mergers and Acquisitions, all subject to Alexandrov commencing her tenure and being employed by the company on the warrant grant date. It is clarified that the said allocation is subject to obtaining the approval of the general meeting of the company's shareholders. For further details, see the meeting summons report published concurrently with this Board of Directors report.
2.6. Further to the company's immediate report dated January 5, 2026³, in connection with the growth target set by the company's Board of Directors, such that the target for 2026 stands at approximately $275 million (reflecting a growth in company revenues of approximately 63.3% relative to the company's revenues for 2025), on May 10, 2026, the company's Board of Directors updated the company's growth target to stand at approximately $315 million in revenues in 2026 (reflecting a growth in company revenues of approximately 87.1% relative to the company's revenues for 2025). For further details, see the immediate report published concurrently with this Board of Directors report.
³ Reference No.: 2026-01-001664, the contents of which are included in this Board of Directors report by way of reference.
3. Status of liabilities by maturity dates
For data regarding the company's status of liabilities, see the company's immediate report dated May 11, 2026 (Reference No.: 2026-01-043093)
Chen Golan
Chairman of the Board of Directors
Michael Grossman
CEO
Date of approval of the report is May 10, 2026.
Next Vision Stabilized Systems Ltd.
Condensed Interim Financial Statements
As of March 31, 2026
(Unaudited)
Next Vision Stabilized Systems Ltd.
Interim Condensed Financial Statements
As of March 31, 2026
(Unaudited)
Table of Contents
| Page | |
|---|---|
| Review Report of the Independent Auditor | 2 |
| Condensed Reports of Financial Position | 3 |
| Condensed Reports of Comprehensive Income | 4 |
| Condensed Reports of Changes in Equity | 5 |
| Condensed Reports of Cash Flows | 6 |
| Notes to the Interim Condensed Financial Statements | 7-11 |
Review Report of the Independent Auditor
To the Shareholders of
Next Vision Stabilized Systems Ltd.
Introduction
We have reviewed the accompanying financial information of Next Vision Stabilized Systems Ltd. (hereinafter: "the Company"), which includes the condensed statement of financial position as of March 31, 2026 and the condensed statements of comprehensive income, changes in equity and cash flows for the three-month period then ended. The Board of Directors and Management are responsible for the preparation and presentation of financial information for this interim period in accordance with International Accounting Standard IAS 34 - "Interim Financial Reporting", and they are also responsible for the preparation of financial information for this interim period according to Chapter D of the Securities Regulations (Periodic and Immediate Reports), 5730-1970. Our responsibility is to express a conclusion on financial information for this interim period based on our review.
Scope of Review
We conducted our review in accordance with Review Standard (Israel) 2410 of the Institute of Certified Public Accountants in Israel - "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in Israel and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the aforementioned financial information is not prepared, in all material respects, in accordance with International Accounting Standard IAS 34.
In addition to the aforementioned in the previous paragraph, based on our review, nothing has come to our attention that causes us to believe that the aforementioned financial information does not comply, in all material respects, with the disclosure requirements of Chapter D of the Securities Regulations (Periodic and Immediate Reports), 5730-1970.
Tel-Aviv,
May 10, 2026
Ziv Haft
Accountants
Next Vision Stabilized Systems Ltd.
Condensed Reports of Financial Position
| As of March 31 | As of December 31, | ||
|---|---|---|---|
| 2026 | 2025 | 2025 | |
| Unaudited | Audited | ||
| USD thousands | |||
| Current assets | |||
| Cash | 27,968 | 40,976 | 85,440 |
| Short-term deposits | 514,399 | 61,509 | 476,857 |
| Trade receivables | 26,056 | 7,639 | 12,087 |
| Current taxes receivable | 953 | - | 4,746 |
| Other receivables and debit balances | 5,909 | 4,499 | 5,275 |
| Inventory | 61,979 | 29,258 | 53,588 |
| 637,264 | 143,881 | 637,993 | |
| Non-current assets | |||
| Property, plant and equipment | 1,111 | 810 | 906 |
| Right-of-use assets | 4,409 | 3,413 | 2,770 |
| Intangible assets | 6,178 | 4,394 | 4,896 |
| 11,698 | 8,617 | 8,572 | |
| 648,962 | 152,498 | 646,565 | |
| Current liabilities | |||
| Trade payables and service providers | 10,030 | 7,098 | 8,679 |
| Current taxes payable | - | 1,023 | - |
| Other payables and credit balances | 22,123 | 12,141 | 18,067 |
| 32,153 | 20,262 | 26,746 | |
| Non-current liabilities | |||
| Lease liabilities | 4,826 | 3,374 | 3,390 |
| Employee benefit liabilities, net | 151 | 114 | 151 |
| Deferred taxes | 722 | 454 | 588 |
| 5,699 | 3,942 | 4,129 |
| As of March 31 | As of December 31, | ||
|---|---|---|---|
| 2026 | 2025 | 2025 | |
| Unaudited | Audited | ||
| USD thousands | |||
| Equity | |||
| Share capital and premium | 454,464 | 46,083 | 446,328 |
| Share-based payment reserve | 9,308 | 4,385 | 8,455 |
| Retained earnings | 147,338 | 77,826 | 160,907 |
| Total equity | 611,110 | 128,294 | 615,690 |
| 648,962 | 152,498 | 646,565 |
The accompanying notes form an integral part of the condensed interim financial statements.
May 10, 2026
Date of approval of the financial statements
Michael Grossman
CEO
Chen Golan
Chairman of the Board of Directors
Alex Lavi
CFO
Condensed Statements of Comprehensive Income
| For the three-month period ended March 31 | For the year ended December 31 | ||
|---|---|---|---|
| 2026 | 2025 | 2025 | |
| Unaudited | Audited | ||
| USD thousands (except earnings per share data) | |||
| Revenues from sales | 67,389 | 36,163 | 168,354 |
| Cost of sales | (22,094) | (9,675) | (50,798) |
| Gross profit | 45,295 | 26,488 | 117,556 |
| Research and development expenses | (1,793) | (952) | (5,491) |
| Selling and marketing expenses | (727) | (447) | (1,874) |
| General and administrative expenses | (4,427) | (2,887) | (8,667) |
| (6,947) | (4,286) | (16,032) | |
| Operating profit | 38,348 | 22,202 | 101,524 |
| Financing expenses | (120) | (32) | (313) |
| Financing income | 5,993 | 1,930 | 13,453 |
| Profit before income taxes | 44,221 | 24,100 | 114,664 |
| Income taxes | (5,958) | (3,527) | (11,000) |
| Net profit | 38,263 | 20,573 | 103,664 |
| Other comprehensive income (after tax effect): | |||
| Items that will not be reclassified subsequently to profit or loss: | |||
| Gain from remeasurement of defined benefit plans | - | - | (10) |
| Total other comprehensive loss | - | - | (10) |
| Total comprehensive income | 38,263 | 20,573 | 103,654 |
| Net profit per share (USD) | |||
| Basic net profit | 0.4186 | 0.2556 | 1.2349 |
| Diluted net profit | 0.4034 | 0.2466 | 1.1064 |
The accompanying notes are an integral part of the condensed interim financial statements.
Next Vision Stabilized Systems Ltd.
Condensed Statements of Changes in Equity
For the three-month period ended March 31, 2026 (unaudited)
| Share capital and premium | Reserve for share-based payment | Retained earnings | Total equity | |
|---|---|---|---|---|
| US dollars in thousands | ||||
| Balance as of January 1, 2026 | 446,328 | 8,455 | 160,907 | 615,690 |
| Net profit | - | - | 38,263 | 38,263 |
| Proceeds from exercise of share warrants | 8,136 | (1,964) | - | 6,172 |
| Share-based payment cost | - | 2,817 | - | 2,817 |
| Dividend | - | - | (51,832) | (51,832) |
| Balance as of March 31, 2026 | 454,464 | 9,308 | 147,338 | 611,110 |
For the three-month period ended March 31, 2025 (unaudited)
| Share capital and premium | Reserve for share-based payment | Retained earnings | Total equity | |
|---|---|---|---|---|
| US dollars in thousands | ||||
| Balance as of January 1, 2025 | 43,194 | 4,047 | 90,451 | 137,692 |
| Net profit | - | - | 20,573 | 20,573 |
| Proceeds from exercise of share warrants | 2,889 | (638) | - | 2,251 |
| Share-based payment cost | - | 976 | - | 976 |
| Dividend | - | - | (33,198) | (33,198) |
| Balance as of March 31, 2025 | 46,083 | 4,385 | 77,826 | 128,294 |
For the year ended December 31, 2025 (audited)
The accompanying notes form an integral part of these condensed interim financial statements.
Condensed Statements of Cash Flows
| For the three-month period ended March 31 | For the year ended December 31 | ||
|---|---|---|---|
| 2026 | 2025 | 2025 | |
| Unaudited | Unaudited | Audited | |
| USD in thousands | |||
| Cash flows from operating activities | |||
| Net profit | 38,263 | 20,573 | 103,664 |
| Adjustments required to present cash flows from operating activities: | |||
| Adjustments to profit or loss items: | |||
| Depreciation and amortization | 542 | 469 | 2,317 |
| Taxes on income | 5,958 | 3,527 | 11,000 |
| Share-based payment cost | 2,817 | 976 | 5,441 |
| Change in liabilities for employee benefits, net | - | - | 27 |
| Financing income, net | (5,985) | (3,014) | (15,101) |
| Changes in asset and liability items: | |||
| Increase in trade receivables | (13,969) | (1,265) | (5,713) |
| Increase in other receivables and debit balances | (634) | (2,659) | (3,435) |
| Increase in inventory | (8,391) | (6,872) | (31,202) |
| Increase in trade payables | 1,351 | 1,256 | 2,837 |
| Increase (decrease) in other payables and credit balances | 3,618 | (2,643) | 2,813 |
| Cash generated from operations | 23,570 | 10,348 | 72,648 |
| Interest received | 9,917 | 1,891 | 5,754 |
| Interest paid | (109) | (69) | (285) |
| Income taxes received | 2,597 | - | 456 |
| Income taxes paid | (4,628) | (1,369) | (14,933) |
| Net cash generated from operating activities | 31,347 | 10,801 | 63,640 |
| Cash flows from investing activities | |||
| Investment in fixed assets | (268) | (103) | (341) |
| Investment in short-term deposits | (41,175) | (12,873) | (421,380) |
| Capitalized development costs | (1,522) | (967) | (2,495) |
The accompanying notes form an integral part of the condensed interim financial statements.
Notes to the Condensed Interim Financial Statements
Note 1: General
A. The Company
Next Vision Stabilized Systems Ltd. (hereinafter - "the Company"), was incorporated in Israel in April 2009 and began its business activity in September 2009. The Company is a resident of Israel and its address is 9 HaDafna, Ra'anana.
The Company is engaged in the development, production and marketing of stabilized day and night cameras for ground and aerial vehicles such as micro and mini drones and UAVs. In addition to cameras, the Company develops supplementary products that significantly reduce the integration time of the cameras into its customers' various platforms.
On June 14, 2021, the Company's securities began trading on the Tel Aviv Stock Exchange Ltd., after on June 10, 2021, the Company completed its first fundraising for the Company according to a prospectus.
On September 16, 2025, the Company completed fundraising by way of a non-uniform offer from institutional investors (mostly foreign investors) in a financial scope of approximately NIS 1,387 million (approximately $413.7 million).
B. Consequences of the "Iron Swords" War
On October 7, 2023, following a surprise attack by the Hamas terrorist organization from the Gaza Strip, the Israeli government declared the "Iron Swords" war. Following the attack from the Gaza Strip, an attack also began towards northern Israel by the Hezbollah terrorist organization from Lebanon and tensions in other sectors rose. As part of dealing with the threats of the Iron Swords war, the Israeli government ordered the evacuation of dozens of settlements located in the south of the country, around the Gaza Strip, and in the north of the country, along the border with Lebanon, and also imposed restrictions on various gatherings, activities in workplaces and educational activities in accordance with the Home Front Command directives. In addition, many citizens were called for reserve duty for extended periods. These factors led to a reduction and slowing of business activity in Israel, resulting from, among other things, business closures, labor shortages and supply chain disruptions.
On June 13, 2025, Israel launched Operation "With Like a Lion" (Im Kelavi) against nuclear and weapons infrastructure in Iran. In response, Iran launched hundreds of missiles and unmanned aerial vehicles toward Israel, and as a result, infrastructure damage and loss of life were caused. During the operation, Israel's airspace was closed, which caused delays in receiving goods and shipping to customers abroad. After the shipping companies resumed activities, most of the goods were released during the end of June and beginning of July.
On February 28, 2026, Israel, together with the USA, launched Operation "Lion's Roar" against the regime in Iran. In response, Iran launched missiles and other means toward Israel. On April 8, 2026, the United States and Iran accepted the Pakistani proposal, which establishes a bilateral ceasefire. As of the date of signing the reports, the ceasefire is generally maintained and the Israeli economy is in a process of gradual return to routine, while removing most of the restrictions imposed by the Home Front Command. However, geopolitical tensions in the area remain high, and there is uncertainty regarding the long-term stability of the ceasefire and the formulation of permanent political arrangements.
Since the beginning of the fighting, there has been an increase in orders for cameras and other products from the Company's customers in Israel. Even before the outbreak of the war, the Company increased its inventory and production capacity to meet growing demands and maintain operational continuity. The Company acts to diversify suppliers, perform long-term orders and hold an increased inventory of components that may be in short supply. As of the date of the report, the "Iron Swords" war or operations "With Like a Lion" and "Lion's Roar" had no material impact on the Company's results or on its ability to provide its customers with their orders on time.
The Company continues to examine the effects of the security and economic situation on its activities.
7
Notes to the Condensed Interim Financial Statements
Note 1: General (Continued)
C. Customs on goods imported to the USA
In April 2025, the US administration announced a plan to impose customs on goods imported to the United States, which may also affect the Israeli economy. According to the macroeconomic forecast of the Bank of Israel Research Department from April 2025, the increase in global customs will lead to a $4\%$ decrease in the global trade volume by the end of 2026 (relative to the situation without customs). The plan includes two main components:
a) A uniform customs rate of $10\%$ on all imports to the USA.
b) Additional customs at variable rates on imports from countries with a significant trade surplus against the USA.
Within the framework of this plan, from the beginning of its implementation, the customs imposed on Israeli goods stood at $10\%$ as part of the uniform customs on all imports to the USA. Starting from August 7, 2025, imports from Israel to the United States are subject to a total customs rate of $15\%$ (10% uniform + 5% variable by country). Furthermore, according to the customs policy, there is a customs exemption for goods that subcontractors purchase for the administration.
During February 2026, the US Supreme Court ruled that most of the global customs imposed in the last year should be disqualified. In response, President Trump signed an executive order imposing a uniform global customs rate of $10\%$ for a period of 150 days, which within a day rose to a rate of $15\%$ . Although some of the Company's revenues originate from exports to the USA, the Company estimates that the possible impact of the new customs policy on its business results is low.
Note 2: Significant Accounting Policies
Basis of Presentation of the Interim Financial Statements
These financial statements were prepared in a condensed format as of March 31, 2026, and for the three-month period ended on that date (hereinafter - interim financial statements). These reports should be read in conjunction with the Company's annual financial statements as of December 31, 2025, and for the year ended on that date, and the notes accompanying them (hereinafter - the annual financial statements).
The condensed interim financial statements comply with the provisions of International Accounting Standard 34 regarding interim financial reporting. Furthermore, the condensed interim reports comply with the disclosure requirements under Chapter D of the Securities Regulations (Periodic report and Immediate reports), 1970.
The condensed interim financial statements were prepared according to the same accounting policies and calculation methods applied in the annual financial statements.
Note 3: - Cash
| As of March 31 | For the year ended December 31, 2025 | ||
|---|---|---|---|
| The Composition: | 2026 | 2025 | 2025 |
| Unaudited | Audited | ||
| In thousands of US Dollars | |||
| In banks | 11,266 | 5,773 | 11,172 |
| Deposits * | 16,702 | 35,203 | 74,268 |
| 27,968 | 40,976 | 85,440 |
(*) Most of them are in USD deposits for three-month periods which include fixed interest ranging between 4.02%-4.5%.
Note 4: - Deposits
Composition:
| As of March 31 | For the year ended December 31, 2025 | ||
|---|---|---|---|
| 2026 | 2025 | 2025 | |
| Unaudited | Audited | ||
| USD thousands | |||
| Short-term deposits * | 514,399 | 61,509 | 476,857 |
| 514,399 | 61,509 | 476,857 |
(*) Most of them are in USD deposits whose original term exceeds three months from the date of deposit and does not exceed one year, including a fixed annual interest rate ranging between $4\% - 5\%$ .
Note 5: Revenues from sales
A. Composition:
| For the three-month period ended March 31 | For the year ended December 31, 2025 | ||
|---|---|---|---|
| 2026 | 2025 | 2025 | |
| Unaudited | Audited | ||
| USD thousands | |||
| Sales in Europe | 36,518 | 21,315 | 94,825 |
| Sales in Israel | 5,419 | 3,889 | 17,906 |
| Sales in North America | 21,496 | 8,195 | 49,099 |
| Sales in other countries | 3,956 | 2,764 | 6,524 |
| 67,389 | 36,163 | 168,354 |
B. Additional information on revenues
Revenues from major customers accounting for, each, $10\%$ or more of the total revenues reported in the financial statements:
| For the three-month period ended March 31 | For the year ended December 31, 2025 | ||
|---|---|---|---|
| 2026 | 2025 | 2025 | |
| Unaudited | Audited | ||
| Customer A | 13.9% | 17.2% | 19.5% |
| Customer B | 25.5% | 11.7% | 11.5% |
| Customer C | 22.3% | 3.7% | 15.5% |
Note 6: Significant Events During the Reporting Period
A. On January 5, 2026, the Company's Board of Directors approved the allocation of 30,100 non-tradable warrants of the Company to officers of the Company. The warrants are exercisable into ordinary shares of NIS 0.00005 par value of the Company. The warrants are exercisable in three tranches: the first tranche of 50% of the allocation is exercisable after two years from the allocation date, the second tranche of 25% of the allocation is exercisable after three years from the allocation date, and thereafter 25% in one tranche after four years from the allocation date, subject to the existence of employer-employee relations. The warrants will expire five years from the date of their allocation.
The exercise price of each allocated warrant is NIS 230 (approx. $72.1). The fair value of the grant at the time of the Board of Directors' approval was approximately NIS 90.95 per warrant (approx. $28.51).
The calculation is based on the following assumptions: standard deviation of 41.61%, risk-free interest of 3.55%, an exercise period of five years, and the closing price of the Company's share on the stock exchange on January 1, 2026 - NIS 230.
The grant of warrants to the officers was approved at the General Meeting held on February 12, 2026.
B. On March 10, 2026, the Company's Board of Directors approved a dividend distribution in the amount of approximately $51,832 thousand (approx. $0.563 per share) paid during March 2026.
C. On March 10, 2026, the Company's Board of Directors approved the allocation of 180,000 non-tradable warrants of the Company to employees of the Company. The warrants are exercisable into ordinary shares of NIS 0.00005 par value of the Company. The warrants are exercisable in three tranches: the first tranche of 50% of the allocation is exercisable after two years from the allocation date, the second tranche of 25% of the allocation is exercisable after three years from the allocation date, and thereafter 25% in one tranche after four years from the allocation date, subject to the existence of employer-employee relations. The warrants will expire five years from the date of their allocation.
The exercise price of each allocated warrant is NIS 328.4 (approx. $106.2). The fair value of the grant at the time of the Board of Directors' approval was approximately NIS 137.4 per warrant (approx. $44.45).
The calculation is based on the following assumptions: standard deviation of 44.65%, risk-free interest of 3.59%, an exercise period of five years, and the closing price of the Company's share on the stock exchange on January 10, 2026 - NIS 328.4.
D. On March 27, 2026, the Company's Board of Directors approved the allocation of 27,500 non-tradable warrants of the Company to an employee of the Company. The warrants are exercisable into ordinary shares of NIS 0.00005 par value of the Company. The warrants are exercisable in three tranches: the first tranche of 50% of the allocation is exercisable after two years from the allocation date, the second tranche of 25% of the allocation is exercisable after three years from the allocation date, and thereafter 25% in one tranche after four years from the allocation date, subject to the existence of employer-employee relations. The warrants will expire five years from the date of their allocation.
The exercise price of each allocated warrant is NIS 337.9 (approx. $108). The fair value of the grant at the time of the Board of Directors' approval was approximately NIS 142.67 per warrant (approx. $45.31).
The calculation is based on the following assumptions: standard deviation of 44.48%, risk-free interest of 3.88%, an exercise period of five years, and the closing price of the Company's share on the stock exchange on March 26, 2026 - NIS 337.9.
E. During the period, the Company's employees exercised 968,887 warrants into Company shares for a total consideration of approximately $6,172 thousand.
10
Note 6: Significant events during the reporting period (continued)
F. On January 1, 2026, the Company entered into a lease agreement for an additional floor in the Company's office building, located at 9 HaDafna Street in Ra'anana. The additional floor has a total area of approximately 1,850 square meters. The lease agreement for the additional floor is for a period of 5 years, and until December 31, 2030. The lease agreement includes an option for the Company to extend the lease period by an additional 36 months, under terms as specified in the lease agreement.
Following the addition of the floor, a right-of-use asset and a lease liability in an amount of approximately $1,878 thousand were added to the Company and the incremental borrowing rate was 8%. The option was not taken into account in determining the lease period, as the Company does not anticipate that it is reasonably certain that the option will be exercised.
Note 7: Events after the balance sheet date
A. On May 10, 2026, the Company's Board of Directors approved the allocation of 107,000 non-marketable warrants of the Company to a company employee. The warrants are exercisable into ordinary shares of par value NIS 0.00005 each of the Company. The warrants are exercisable in three tranches, the first tranche at a level of 50% of the allocation is exercisable after two years from the date of its allocation, the second tranche at a level of 25% of the allocation is exercisable after three years from the date of its allocation and thereafter 25% in one tranche after four years from the date of its allocation, subject to the existence of employer-employee relations. The warrants will expire after five years from the date of their allocation.
The exercise price of each allocated warrant is NIS 310 (approximately $106.6). The fair value of the grant at the date of the Board of Directors' approval was approximately NIS 134.76 per warrant (approximately $46.4).
The calculation is calculated and based on the following assumptions: standard deviation of 46.36%, risk-free interest rate of 3.97%, an exercise period of five years and the closing price of the Company's share on the stock exchange, on May 8, 2026, - NIS 310.
B. On May 10, 2026, the Company's Board of Directors approved the allocation of 32,500 non-marketable warrants of the Company to an officer in the Company. The warrants are exercisable into ordinary shares of par value NIS 0.00005 each of the Company. The warrants are exercisable in three tranches, the first tranche at a level of 50% of the allocation is exercisable after two years from the date of its allocation, the second tranche at a level of 25% of the allocation is exercisable after three years from the date of its allocation and thereafter 25% in one tranche after four years from the date of its allocation, subject to the existence of employer-employee relations. The warrants will expire after five years from the date of their allocation.
The exercise price of each allocated warrant is NIS 316.65 (approximately $108.9). The fair value of the grant at the date of the Board of Directors' approval was approximately NIS 132.81 per warrant (approximately $45.7).
The calculation is calculated and based on the following assumptions: standard deviation of 46.36%, risk-free interest rate of 3.97%, an exercise period of five years and the closing price of the Company's share on the stock exchange, on May 8, 2026, - NIS 310.
The grant of the warrants to the officer is subject to the officer beginning her tenure and being employed by the Company at the date of granting the warrants. In addition, the grant is subject to receiving approval from the General Meeting of the Company's shareholders.
Quarterly Report
As of March 31, 2026
Quarterly report on the effectiveness of internal control over financial reporting and disclosure according to Regulation 38C(a)
Quarterly Report on the Effectiveness of Internal Control over Financial Reporting and Disclosure pursuant to Regulation 38C(a) as of March 31, 2026
The Management, under the supervision of the Board of Directors of Next Vision Stabilized Systems Ltd. (hereinafter - the Corporation), is responsible for the determination and maintenance of adequate internal control over financial reporting and disclosure in the Corporation.
In this regard, the members of management are:
- Michael Grossman, General Manager;
- Alex Lavi, VP of Finance;
Internal control over financial reporting and disclosure includes controls and procedures existing in the Corporation, which were designed by the General Manager and the most senior officer in the field of finance or under their supervision, or by whoever actually performs the said functions, under the supervision of the Corporation's Board of Directors, which are intended to provide a reasonable degree of assurance regarding the reliability of financial reporting and the preparation of the reports in accordance with the provisions of the law, and to ensure that information that the Corporation is required to disclose in the reports it publishes according to the provisions of the law is collected, processed, summarized and reported on the date and in the format prescribed by law.
Internal control includes, among other things, controls and procedures designed to ensure that information that the Corporation is required to disclose as stated, is accumulated and transferred to the Corporation's management, including to the General Manager and the most senior officer in the field of finance or to whoever actually performs the said functions, in order to allow decision-making at the appropriate time, with reference to the disclosure requirement.
Due to its structural limitations, internal control over financial reporting and disclosure is not intended to provide absolute assurance that a misstatement or omission of information in the reports will be prevented or detected.
The Management, under the supervision of the Board of Directors, performed an examination and evaluation of the internal control over financial reporting and disclosure in the Corporation and its effectiveness;
The evaluation of the effectiveness of internal control over financial reporting and disclosure performed by the Management under the supervision of the Board of Directors included: assessment of reporting and disclosure risks, process mapping and determination of material processes for financial reporting and disclosure, examination and documentation of existing controls in the Company, overall assessment of the effectiveness of internal control including Entity Level Controls (ELC), the process of preparing financial statements and general controls over the Company's information systems (ITGC). The material processes for financial reporting include controls over the sales process and the inventory process.
Until the date of the report, no event or matter has been brought to the attention of the Board of Directors and Management that would change the evaluation of the effectiveness of the internal control as found in the last report on internal control.
Based on the effectiveness evaluation performed by Management under the supervision of the Board of Directors as detailed above, the Board of Directors and the Corporation's Management concluded that the internal control over financial reporting and disclosure in the Corporation as of March 31, 2026, is effective.
- 3 -
(a) CEO Statement according to Regulation 38C(d)(1)
Management Statement
CEO Statement
I, Michael Grossman, declare that:
- I have reviewed the quarterly report of Next Vision Stabilized Systems Ltd. (hereinafter - the Corporation) for the first quarter of 2026 (hereinafter - the Reports);
- To the best of my knowledge, the reports do not contain any misrepresentation of a material fact and do not lack a representation of a material fact necessary so that the representations included therein, in light of the circumstances in which those representations were included, will not be misleading with respect to the period of the reports;
- To the best of my knowledge, the financial statements and other financial information included in the reports fairly reflect, in all material respects, the financial position, results of operations, and cash flows of the Corporation for the dates and periods to which the reports relate;
- I have disclosed to the Corporation's auditing accountant, the Board of Directors, and the Audit and Financial Statements Committee of the Corporation, based on my most recent assessment of internal control over financial reporting and disclosure:
a. All significant deficiencies and material weaknesses in the determination or operation of the internal control over financial reporting and disclosure that are reasonably likely to adversely affect the Corporation's ability to collect, process, summarize, or report financial information in a manner that casts doubt on the reliability of financial reporting and the preparation of financial statements in accordance with the provisions of the law; and also -
b. Any fraud, whether material or immaterial, involving the CEO or those directly reporting to him or involving other employees who have a significant role in internal control over financial reporting and disclosure;
- I, alone or together with others in the Corporation:
a. Established controls and procedures, or ensured their establishment and existence under my supervision, designed to ensure that material information relating to the Corporation is brought to my attention by others in the Corporation, particularly during the period of preparation of the reports; and also -
b. Established controls and procedures, or ensured their establishment and existence under my supervision, designed to reasonably ensure the reliability of financial reporting and the preparation of financial statements in accordance with the provisions of the law, including in accordance with accepted accounting principles.
c. No event or matter has been brought to my attention that occurred during the period between the date of the last quarterly report and the date of this report, which would change the conclusion of the Board of Directors and management regarding the effectiveness of internal control over financial reporting and disclosure of the Corporation.
Nothing in the above shall detract from my responsibility or the responsibility of any other person, under any law.
May 10, 2026
Michael Grossman, CEO
- 4 -
(B) Declaration of the most senior officer in the field of finance according to Regulation 38C(D)(2)
Management Statement
Declaration of the most senior officer in the field of finance
I, Alex Lavi, declare that:
-
I have examined the interim financial statements and the other financial information included in the reports for the interim period of Next Vision Stabilized Systems Ltd. (hereinafter - the Corporation) for the first quarter of the year 2026 (hereinafter - "the Reports" or the "Interim Reports");
-
To my knowledge, the interim financial statements and the other financial information included in the interim reports do not include any misrepresentation of a material fact, and do not lack a representation of a material fact necessary so that the representations included therein, in light of the circumstances under which those representations were included, will not be misleading with respect to the reporting period;
-
To my knowledge, the interim financial statements and the other financial information included in the interim reports fairly reflect, in all material respects, the financial position, results of operations and cash flows of the Corporation for the dates and periods to which the reports refer;
-
I have disclosed to the Corporation's auditing accountant, to the Board of Directors and to the Audit and Financial Statements Committee of the Corporation, based on my most current assessment of the internal control over financial reporting and disclosure:
A. All significant deficiencies and material weaknesses in the determination or operation of the internal control over financial reporting and disclosure, as it relates to the interim financial statements and the other financial information included in the interim reports, which could reasonably adversely affect the Corporation's ability to collect, process, summarize or report financial information in a manner that casts doubt on the reliability of the financial reporting and the preparation of the financial statements in accordance with the provisions of law; and -
B. Any fraud, whether material or immaterial, in which the CEO or his direct subordinates are involved or other employees who have a significant role in the internal control over financial reporting and disclosure are involved.
- I, alone or together with others in the Corporation -
A. I have established controls and procedures, or ensured the establishment and existence under my supervision of controls and procedures, designed to ensure that material information relating to the Corporation is brought to my knowledge by others in the Corporation, particularly during the period of preparation of the reports; and -
B. I have established controls and procedures, or ensured the determination and existence under my supervision of controls and procedures, designed to reasonably ensure the reliability of financial reporting and the preparation of the financial statements in accordance with the provisions of law, including in accordance with generally accepted accounting principles;
C. No event or matter has come to my knowledge that occurred during the period between the date of the last quarterly report and the date of this report, relating to the interim financial statements and any other financial information included in the interim reports, which would change, in my assessment, the conclusion of the Board of Directors and management regarding the effectiveness of the internal control over financial reporting and disclosure of the Corporation.
Nothing in the above derogates from my responsibility or the responsibility of any other person, according to any law.
Alex Lavi, CFO
5/11/2026 | 9:23:08 AM