Information of accounting policy

Inventory is measured at the lower of cost or net realizable value. The cost of inventory is determined using the “First in First Out” (FIFO) method, and includes design costs, raw materials, direct labor, other direct costs and manufacturing overhead costs, allocated based on normal capacity.

Net realizable value is the estimated selling price of the inventory in the ordinary course of business, less the estimated costs necessary to make the sale.

Inventory is written down for estimated obsolescence based upon management assumptions about future demand, expiration due date and market conditions.

In 2025, the Company reassessed the expected realization period of certain “raw materials” and “finished goods” inventory items. Accordingly, NIS 11,753 thousand (approximately $3,684 thousand) of raw materials and NIS 1,584 thousand (approximately $497 thousand) of finished goods, respectively, were reclassified from current to non-current inventories, in the statement of financial position.