Pursuant to the exercise of the put option, the Company acquired from the Counterparties their rights and obligations under the joint venture agreement for a total consideration of NIS 2,000,000 ($639,000).

Management determined that the consideration represented an intangible asset related to distribution rights and customer relationships. The useful life of the acquired intangible asset was estimated to be three years.

The Company operates in three reportable segments: Intelligent Robotics, RFID and Supply Chain Solutions. The Company’s goodwill was originally allocated to two reporting units, the RFID reporting unit and the Intelligent Robotics reporting unit. As of June 30, 2026 and December 31, 2025, all remaining goodwill related only to the RFID reporting unit. 

The RFID segment includes one reporting unit with an allocated goodwill balance of approximately $2,988 as of June 30, 2026. The Company performed an impairment analysis as of December 31, 2024, using the income approach and concluded that the carrying value of the reporting unit exceeded its fair value. Accordingly, the Company recognized a goodwill impairment loss of $707.

As a result of negative factors, including decreases in revenue and profit, the Company performed an interim impairment analysis as of June 30, 2025. The Company concluded that the carrying value of the RFID reporting unit exceeded its fair value and recognized a goodwill impairment loss of $700. The interim impairment test was based on a valuation performed internally by management.

The annual impairment analysis as of December 31, 2025 resulted in an additional goodwill impairment loss of $500 for the RFID reporting unit. Accordingly, the Company recognized aggregate goodwill impairment losses of $1,200 for the year ended December 31, 2025. The annual impairment test was based on a valuation performed by management with the assistance of a third-party independent appraiser.

The most significant assumptions and judgments used in the discounted cash flow model under the income approach for the 2025 impairment test were projected cash flows for four years, including projected revenues, expenses and capital expenditures, the estimated weighted-average cost of capital, short-term and long-term growth rates, and market conditions. The measurement of the fair value of reporting units as part of the goodwill impairment analysis is classified as Level 3 within the fair value hierarchy.