Half-year Financial Report

Ethernity Networks Ltd

28 September 2026

 

28 September 2026

Ethernity Networks Ltd.

      ("Ethernity" or the "Company")

     Interim results for the six months ended 30 June 2026

Ethernity Networks Ltd (AIM: ENET.L; OTCMKTS: ENETF), a supplier of data processing and PON semiconductor technology for networking appliances, today announces its interim results for the six months ended 30 June 2026.

Key Highlights:

• Revenue of $416,569 (H1 2025: $598,599).
• Gross profit of $416,569 (H1 2025: $598,599).
• Gross margin of 100% (H1 2025: 100%)
• Net comprehensive loss for the period decreased by 41.6% to $1,240,396 (H1 2025: $2,124,278)
• EBITDA and Adjusted EBITDA losses decreased by 49.2% and 36.9% to $518,919 and $748,291 respectively (H1 2025: $1,021,118 and $1,186,414)
• Cash collections during the period were approximately $495,000

Chief Executive Officer’s statement

The majority of the revenue during H1 2026 was attributed to the deliveries of the extended order and the original contract signed with the Tier 1 U.S Aerospace vendor, at a total contract value of approximately $1.71m. The Company completed all deliveries under the original contract and the extended order by the end of April 2026. Ethernity may pursue further engagement with this customer, leveraging its domain expertise in the aerospace and aviation sectors, following completion of this latest integration phase. The Company also received recurring royalty revenue from previously deployed products.

The Company continues to pursue additional IP licensing and strategic opportunities with both existing and prospective industry players.

As part of its strategy to maximise the value of its intellectual property assets, the Company has engaged a leading intellectual property monetisation brokerage firm to evaluate licensing opportunities for its patent portfolio. The patent portfolio includes seven U.S. patents covering technologies applicable to AI infrastructure related to memory processing and networking, as well as 5G wireless backhaul. As part of this process, the Company will evaluate potential licensing opportunities with industry participants.

The Board believes that the combination of further expense reductions, recurring royalty revenue, engineering services, future licensing opportunities and the potential monetisation of the Company's intellectual property portfolio provide multiple avenues to strengthen the Company's balance sheet, to meet its financial obligations and, ultimately, create value for shareholders.

By order of the Board

David Levi

CEO

28 September 2026

For further information, please contact:

Ethernity Networks Ltd	Tel: [phone]
David Levi, Chief Executive Officer Tomer Assis, Chief Financial Officer
Allenby Capital Limited (Nominated Adviser and Joint Broker)	Tel: [phone]
James Reeve / David Asquith (Corporate Finance) Amrit Nahal (Sales and Broking)
CMC Markets UK plc (Joint Broker)	Tel: [phone]
Douglas Crippen
ALBR Capital Limited (Joint Broker)	Tel: [phone]
Lucy Williams / Duncan Vasey

About Ethernity (www.ethernitynet.com)

Ethernity Networks, headquartered in Israel, Ethernity Networks (AIM: ENET.L OTCMKTS: ENETF) provides innovative data processing and Passive Optical Network (“PON”) semiconductor technology for networking appliances. The Company’s comprehensive networking and security solutions deliver a Carrier Ethernet Switch Router data plane and control software, featuring a rich set of networking capabilities, robust security, and a wide array of virtual function accelerations to optimize telecommunications networks.

Ethernity's semiconductor technology has been deployed in both FPGA and ASIC form factors and has been integrated into over one million networking platforms worldwide. Its complete, flexible solutions adapt rapidly to customers' evolving needs, reducing time-to-market and enabling efficient deployment of 5G, edge computing, mobile backhaul, carrier Ethernet, broadband access networks, and various NFV appliances including 5G UPF, vRouter, and vBNG.

OPERATIONAL AND FINANCIAL REVIEW

Revenues

Revenues for the period were $416,569 (H1 2025: $598,599), with the majority attributed to the tier 1 U.S Aerospace contract.

Gross profit and margin

During the period, the Company focused on sales generating a 100% gross margin resulting from licensing fees or royalties. To minimise cash-flow risk, it did not enter into commitments requiring components to be purchased, or production to begin, in advance of future orders.

The gross profit of $416,569 decreased by 30.4% compared with the previous year (H1 2025: $598,599), and the gross margin remained at 100% (H1 2025: 100%).

EBITDA

Although EBITDA is not a recognised reportable accounting measure, it provides a meaningful insight into the operations of the Company when removing the non-cash or intangible asset elements from trading results along with recognising actual costs versus various IFRS adjustments, in this case being the amortisation and non-cash items charged in operating income and the effects of IFRS 16 treatment of operational leases.

The EBITDA for the six months ended 30 June 2026 is presented as follows:

EBITDA (US Dollars)	For the 6 months ended		For the 12 months ended	6 month change of 2026 vs 2025
	30-Jun-2026	30-Jun-2025	31-Dec-2025		%
Revenues	416,569	598,599	1,049,922	(182,030)	(30.4%)
Gross Profit	416,569	598,599	1,049,922	(182,030)	(30.4%)
Gross Margin %	100.00%	100.0%	100.0%		0.0%
Operating Loss	(1,023,090)	(1,796,978)	(5,444,325)	773,888	(43.1%)
Amortisation of Intangible Assets	186,411	480,690	961,380	(294,279)
Impairment of intangible assets	-	-	1,578,660	-
Depreciation charges on fixed assets	150,560	127,970	260,029	39,230
Depreciation in respect of IFRS16 lease assets	167,200	167,200	439,068	(16,640)
EBITDA	(518,919)	(1,021,118)	(2,205,188)	502,199	(49.2%)
Add back Share based compensation charges	22,478	57,494	90,844	(35,016)
Add back impairments	-	-	(32,207)	-
Add back vacation accrual charges	12,086	-	55,990	12,086
Adjust IFRS16 rent expense reversals	(263,936)	(222,790)	(464,971)	(41,146)
Adjusted EBITDA	(748,291)	(1,186,414)	(2,555,532)	438,123	(36.9%)

EBITDA loss for the first six-month period of the year decreased by 49.2% to $518,919 (H1 2025: $1,021,118). The Adjusted EBITDA loss in the first six months of the year decreased by 36.9% to $748,291 (H1 2025: $1,186,414).

Operating costs

Operating expenses (before amortisation, depreciation and IFRS adjustments) decreased by an overall 34.8% from $1,785,655 to $1,164,860 during the period against the same period in 2025.

Within the R&D division, the Company reduced its operating expenses (including headcount and other R&D expenses) by a total of 55.9%.

General and Administration costs (before amortisation, depreciation and IFRS adjustments) have decreased by 4%, also mainly attributed to headcount savings.

The decrease in Marketing expenses (net of share-based compensation and vacation accruals) of 24.1% is also mainly attributed to headcount savings.

After adjusting for the following non-cash items; amortisation costs of the development intangible asset, depreciation, share based compensation adjustments and IFRS adjustments, the resultant decreases in operating costs, as adjusted are:

Operating costs (US Dollars)				Increase (Decrease) June	%
	For the 6 months ended		31-Dec
	30-Jun
	2026	2025	2025
Research and Development Costs net of amortisation, Share Based Compensation, IFRS adjustments and Vacation accruals	429,592	974,673	1,711,377	(545,081)	(55.9%)
General and Administrative expenses, net of depreciation, Share Based Compensation, IFRS adjustments, Vacation accruals and impairments	572,285	596,287	1,001,767	(24,002)	(4.0%)
Marketing expenses, net of Share Based Compensation and Vacation accruals	162,983	214,695	427,981	(51,712)	(24.1%)
Total	1,164,860	1,785,655	3,141,125	(620,795)	(34.8%)

Summarised trading results

Summarised Trading Results (US Dollars)				Increase (Decrease) June	%
	For the 6 months ended		31-Dec
	30-Jun
	2026	2025	2025
Revenues	416,569	598,599	1,049,922	(182,030)	(30.4%)
Gross Profit	416,569	598,599	1,049,922	(182,030)	(30.4%)
Gross Margin %	100.00%	100.0%	100.0%		0.0%
Operating Loss	(1,023,090)	(1,796,978)	(5,444,325)	773,888	(43.1%)
Financing costs	(273,888)	(327,339)	(554,827)	53,451
Financing income	56,582	39	272,690	56,543
Net comprehensive loss for the period	(1,240,396)	(2,124,278)	(5,726,462)	883,882	(41.6%)
Basic and Diluted earnings per ordinary share	(0.00)	(0.00)	(0.00)	0.00	(90.3%)
Weighted average number of ordinary shares for basic earnings per share	22,429,896,364	3,731,471,356	4,179,048,317

Financing costs

The majority of the financing costs recognised during the period relate exchange rate differences and interest.

Going Concern

Management has determined that the balance of cash and cash equivalents as of 30 June 2026 (and as of the date of the approval of these financial statements), together with other current available resources, is not sufficient for the Company to fund its current obligations including arrears for payment of certain of its liabilities as specified in the Company’s annual financial statements as at 31 December 2025.

However, the Company has implemented plans to meet these and future obligations. 

The Company’s ongoing operations are dependent on Management’s plans for securing funds including through further design services and recurring royalty revenue from existing customers, monetizing its patent portfolio, including strategic options to maximize the value of its intellectual property assets.

However, the success of the Company’s plans to secure further design services, monetize its patent portfolio and close a strategic deal as outlined above is not assured and thus a material uncertainty exists that may cast a significant doubt on the Company’s ability to continue as a going concern and fulfil its obligations and liabilities in the normal course of business in the future. The financial statements do not include any adjustments relating to recoverability and classification of the recorded asset amounts, and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

FORWARD LOOKING STATEMENTS

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". By their nature, forward-looking statements involve risk and uncertainty since they relate to future events and circumstances. Actual results may, and often do, differ materially from any forward-looking statements. Any forward-looking statements in this announcement reflect Ethernity’s view with respect to future events as at the date of this announcement. Save as required by law or by the AIM Rules for Companies, Ethernity undertakes no obligation to publicly revise any forward-looking statements in this announcement, following any change in its expectations or to reflect events or circumstances after the date of this announcement.

By order of the Board

Tomer Assis 

Chief Financial Officer

28 September 2026

Interim Unaudited Financial Statements

as at 30 June 2026

STATEMENT OF FINANCIAL POSITION

			US dollars
			30 June		31 December
			2026	2025	2025
			Unaudited		Audited
ASSETS
Current
Cash and cash equivalents			32,399	37,749	31,817
Other short-term financial assets			-	2,938	-
Trade receivables			69,795	189,929	123,878
Inventories			-	218,168	-
Other current assets			62,793	127,250	104,494
Current assets			164,987	576,034	260,189
Non-Current
Property and equipment			413,221	477,670	563,781
Intangible asset			813,589	3,059,350	1,000,000
Right-of-use asset			235,282	674,350	402,482
Other long term assets			10,338	118,905	10,338
Non-current assets			1,472,430	4,330,275	1,976,601
Total assets			1,637,417	4,906,309	2,236,790
LIABILITIES AND EQUITY
Current					-
Trade payables			1,209,242	498,077	1,327,683
Warrants liability			18,900	173,907	2,711
Other current liabilities			2,302,996	1,827,780	2,395,149
Current liabilities			3,531,138	2,499,764	3,725,543
Non-Current
Lease liability			-	241,602	-
Other non current liabilities			50,830	457,630	50,830
Non-current liabilities			50,830	699,232	50,830
Total liabilities			3,581,968	3,198,996	3,776,373
Equity
Share capital			-	1,380,441	-
Share premium			52,203,673	49,499,287	51,390,723
Other components of equity			1,660,533	1,604,705	1,638,055
Accumulated deficit			(55,808,757)	(50,777,120)	(54,568,361)
Total equity			(1,944,551)	1,707,313	(1,539,583)
Total liabilities and equity			1,637,417	4,906,309	2,236,790

The accompanying notes are an integral part of the interim financial statements.

STATEMENT OF COMPREHENSIVE LOSS

			US dollars
			Six months ended 30 June		For the year ended 31 December
			2026	2025	2025
	Note		Unaudited		Audited
Revenue	7		416,569	598,599	1,049,922
Cost of sales			-	-	-
Gross profit			416,569	598,599	1,049,922
Research and development expenses			647,050	1,513,153	2,820,546
Impairment of intangible assets			-		1,578,660
General and administrative expenses			626,109	668,371	1,668,361
Marketing expenses			166,500	214,695	427,322
Other income			-	(642)	(642)
Operating loss			(1,023,090)	(1,796,978)	(5,444,325)
Financing costs	5		(273,888)	(327,339)	(554,856)
Financing income	6		56,582	39	272,719
Loss before tax			(1,240,396)	(2,124,278)	(5,726,462)
Tax expense			-	-	-
Net comprehensive loss for the period			(1,240,396)	(2,124,278)	(5,726,462)
Basic and diluted loss per ordinary share			(0.0001)	(0.001)	(0.001)
Weighted average number of ordinary shares for basic and diluted loss per share			22,429,896,364	3,731,471,356	4,179,048,317

The accompanying notes are an integral part of the interim financial statements.

 STATEMENT OF CHANGES IN EQUITY

									US dollars
	Number of shares			Share capital			Share premium			Shares to be allotted		Other components of equity		Accumulated deficit		Total equity
Balance at 1 January 2026 (Audited)	10,031,828,493			-			51,390,723			-		1,638,055		(54,568,361)		(1,539,583)
Employee share-based compensation	-			-			-			-		22,478		-		22,478
Net proceeds allocated to the issuance of ordinary shares	14,937,500,000			-			699,799			-		-		-		699,799
Expenses paid in shares and warrants	1,500,857,437			-			113,151			-		-				113,151
Net comprehensive loss for the period	-			-			-			-		-		(1,240,396)		(1,240,396)
Balance at 30 June 2026 (Unaudited)	26,470,185,930			-			52,203,673			-		1,660,533		(55,808,757)		(1,944,551)
Balance at 1 January 2025 (Audited)	1,000,000,000			271,255			49,255,030			323,725		1,547,211		(48,652,842)		2,744,379
Employee share-based compensation	-			-			-					57,494		-		57,494
Net proceeds allocated to the issuance of ordinary shares	3,813,863,633			1,048,177			(27,691)					-				1,020,486
Shares allotted	222,500,000			61,009			262,716			(323,725)		-		-		-
Expenses paid in shares and warrants							9,232					-				9,232
Net comprehensive loss for the period	-			-			-					-		(2,124,278)		(2,124,278)
Balance at 30 June 2025 (Unaudited)	5,036,363,633			1,380,441			49,499,287			-		1,604,705		(50,777,120)		1,707,313
Balance at 1 January 2025 (Audited)	1,000,000,000			271,255			49,255,030			323,725		1,547,211		(48,652,842)		2,744,379
Employee share-based compensation	-			-			-			-		90,844		-		90,844
Net proceeds allocated to the issuance of ordinary shares	8,809,328,493			1,270,497			260,984			-		-		(189,057)		1,342,424
Shares to be allotted	222,500,000			61,009			262,716			(323,725)		-		-		-
Expenses paid in shares and warrants	-			-			9,232			-		-		-		9,232
Conversion to non-par value	-			(1,602,761)			1,602,761			-		-		-		-
Net comprehensive loss for the year	-			-			-			-		-		(5,726,462)		(5,726,462)
Balance at 31 December 2025 (Audited)	10,031,828,493			-			51,390,723			-		1,638,055		(54,568,361)		(1,539,583)

STATEMENT OF CASH FLOWS

	US dollars
	Six months ended 30 June			Year ended 31 December
	2026	2025		2025
	Unaudited			Audited
Operating activities
Net comprehensive loss for the period	(1,240,396)		(2,124,278)		(5,726,462)
Non-cash adjustments
Depreciation of property and equipment	150,560		127,970		260,028
Depreciation of right of use asset	167,200		167,200		439,068
Share-based compensation	22,478		57,494		90,844
Amortisation of intangible assets	186,411		480,690		961,380
Impairment of intangible assets	-		-		1,578,660
Amortisation of liabilities	26,276		50,132		77,674
Lease liability Interest	18,812		36,418		65,134
Foreign exchange losses on cash balances	8,709		(4,045)		(24,196)
Capital Loss	-		255		254
Revaluation of financial instruments, net	(56,582)		96,308		(218,087)
Expenses paid in shares and options	113,151		9,232		9,232
Net changes in working capital
Decrease (Increase) in trade receivables	54,083		195,071		261,122
Decrease (Increase) in other current assets	41,701		5,586		28,342
Decrease (Increase) in other long-term assets	-		(8,227)		100,340
Increase (decrease) in trade payables	(118,441)		(863,035)		(33,429)
Increase (decrease) in other liabilities	126,695		441,586		1,007,903
Increase (decrease) in IIA royalty liability	-		-		(3,796)
Increase (decrease) in other non current liabilities	-		457,630		-
Net cash used in operating activities	(499,343)		(874,013)		(1,125,990)
Investing activities
Deposits to short-term financial assets	-		(2,938)		-
Net cash used in investing activities	-		(2,938)		-
Financing activities
Proceeds allocated to ordinary shares	743,111		1,118,293		1,434,248
Proceeds allocated to warrants	72,771		67,987		205,445
Issuance costs	(43,312)		(103,548)		(91,824)
Repayment of lease liability	(263,936)		(222,790)		(464,971)
Net cash provided by financing activities	508,634		859,942		1,082,898
Net change in cash and cash equivalents	9,291		(17,009)		(43,092)
Cash and cash equivalents, beginning of year	31,817		50,713		50,713
Exchange differences on cash and cash equivalents	(8,709)		4,045		24,196
Cash and cash equivalents, end of period	32,399		37,749		31,817
Supplementary information:
Interest paid during the period			-		25,455
Interest received during the period	-		39		1,270
Supplementary information on non-cash activities:
Shares issued pursuant to share subscription agreement	-		-		9,232
Expenses paid in shares and warrants	113,151		9,232		218,168

The accompanying notes are an integral part of the interim financial statements.

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 - NATURE OF OPERATIONS

ETHERNITY NETWORKS LTD. (hereinafter: the "Company"), was incorporated in Israel on the 15th of December 2003 as Neracore Ltd. The Company changed its name to ETHERNITY NETWORKS LTD. on the 10th of August 2004.

 The Company provides innovative, comprehensive networking and security solutions on programmable hardware for accelerating telco/cloud networks performance. Ethernity's FPGA logic offers complete Carrier Ethernet Switch Router data plane processing firmware, PON MAC firmware and control software with a rich set of networking features, robust security, and a wide range of virtual function accelerations to optimise telecommunications networks. Ethernity's complete solutions quickly adapt to customers' changing needs, improving time-to-market and facilitating the deployment of 5G, edge computing, and different NFV appliances including wireless backhaul with wireless link bonding, 5G UPF, 5G CU and vRouter offload with the current focus on 5G emerging appliances. The Company’s customers are situated worldwide.

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES

Basis of presentation of the financial statements and statement of compliance with IFRS

The interim condensed financial statements for the six months ended 30 June 2026 have been prepared in accordance with IAS 34, Interim Financial Reporting. The interim condensed financial statements do not include all the information and disclosures required in the annual financial statements in accordance with IFRS and should be read in conjunction with the Company's annual financial statements as at 31 December 2025. The accounting policies applied in the preparation of the interim condensed financial statements are consistent with those followed in the preparation of the Company’s annual financial statements for the year ended 31 December 2025.

The interim condensed financial statements for the half-year ended 30 June 2026 (including comparative amounts) were approved and authorized for issue by the board of directors on 28 September 2026.

NOTE 3 - GOING CONCERN

Management has determined that the balance of cash and cash equivalents as of June 30, 2026 (and as of the date of the approval of these financial statements), together with other current available resources, is not sufficient for the Company to fund its current obligations including arrears for payment of certain of its liabilities as specified in the Company’s annual financial statements as at 31 December 2025. However, the Company has implemented plans to meet these and future obligations.   

The Company’s ongoing operations are dependent on Management’s plans for securing funds including through further design services and recurring royalty revenue from existing customers, monetizing its patent portfolio, including strategic options to maximize the value of its intellectual property assets.

However, the success of the Company’s plans to secure further design services, monetize its patent portfolio and closing a strategic deal as outlined above is not assured and thus a material uncertainty exists that may cast a significant doubt on the Company’s ability to continue as a going concern and fulfil its obligations and liabilities in the normal course of business in the future. The financial statements do not include any adjustments relating to recoverability and classification of the recorded asset amounts, and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 4 - SIGNIFICANT EVENTS

  EQUITY RELATED TRANSACTIONS DURING THE ACCOUNTING PERIOD

During the 6 month period ended 30 June 2026, ordinary shares of the Company were issued, as follows:

	Note		Number of ordinary shares
Issuance of shares (issued together with warrants)	[1]		14,937,500,000
Issuance of shares to Directors	[2]		1,500,857,437
			16,438,357,437

[1] Issuance of shares, issued together with warrants

In February 2026, in two separate transactions with the same terms, the Company issued 14,937,500,000 shares attached to, a corresponding 14,937,500,000 warrants. Each share with its attached warrant was issued for 0.004 pence per share, realising gross proceeds of $0.82 million (£0.60 million) and net cash proceeds after issuance expenses of $0.77 million (£0.56 million).

Each warrant is exercisable at 0.004 pence per share expiring 12 months later, in February 2027. The warrants are not transferable, are not traded on an exchange and have an accelerator clause, whereby these warrants may be called by the Company if the closing mid-market share price of the Company equal or exceed 0.006 pence per share over a 5-consecutive day period. If such 5-consecutive day period condition is met, the Company may serve notice on the warrant holders to exercise their relevant warrants within 7 calendar days, failing which, such remaining unexercised warrants shall be cancelled.

As the exercise price of the warrants is denominated in GBP and not in the Company's functional currency, it was determined that the Company's obligation under such warrants cannot be considered as an obligation to issue a fixed number of equity instruments in exchange for a fixed amount of cash. Accordingly, it was determined that such warrants represent a derivative financial liability required to be accounted for at fair value through the profit or loss category. Upon initial recognition the Company allocated the gross proceeds as follows: an amount of $0.75 million was allocated to the share capital with the remainder of the proceeds of $0.07 million recorded as a derivative warrants liability. The issuance expenses of approximately $0.05 million were allocated in a consistent manner to the above allocation. The expenses related to the warrant component were carried to profit or loss as an immediate expense while the expenses related to the share capital component were netted against the amount carried to equity, thereby reducing the share premium. In subsequent periods the company measures the derivative financial liability at fair value and the periodic changes in fair value are carried to profit or loss under financing costs or financing income, as applicable. The fair value of the derivative warrant liability is categorized as level 3 of the fair value hierarchy.

The fair value valuation of the warrants was based on the Black-Scholes option pricing model, calculated in two stages. Initially, the fair value of these call warrants issued to investors were calculated, assuming no restrictions applied to such call warrants. As the Company, under certain circumstances, has a right to force the investors to either exercise their warrants or have them cancelled, the second calculation calculates the value of the warrants as call warrants that were issued by the investor to the company. The net fair value results from reducing the call investor warrants fair value from the call warrants fair value, as long as the intrinsic value of the call warrants (share price at the period end, less exercise price of the warrants) is not greater than such value. Should the intrinsic value of the warrants be higher than the Black-Scholes two stage method described above, then the intrinsic value of the warrants is considered to be a more accurate measure to use in determining the fair value. The following factors were used in calculating the fair value of the warrants at their issuance:

Risk free rate     3.5%

Volatility              162.5%

As at 30 June 2026, none of these warrants have been exercised. 

[2] Issuance of shares to Directors

In March 2026, as part of the agreed share element component of Mr. Albagli’s remuneration as non-Executive Chairman, the Company issued 6,936,578 shares to him for the period from 1 March 2024 to 28 February 2025 at an average issue price of 0.43p per share, and 143,920,859 shares in respect of the period from 1 March 2025 to 28 February 2026, at an average issue price of 0.02p per share.

In addition, during March 2026, the following directors agreed to convert unpaid salaries and fees owing to them, into shares of the Company, at the same price as the February 2026 capital raise (0.004 pence per share), however these directors did not receive any associated warrants.

Director	Amount converted (in thousands)		Shares received
	GBP	USD
David Levi	30	40	750,000,000
Shavit Baruch	12	16	300,000,000
Joseph (Yosi) Albagli	12	16	300,000,000
			1,350,000,000

NOTE 5 -  FINANCING COSTS

	US dollars
	Six months ended 30 June		Year ended 31 December
	2026	2025	2025
	Unaudited		Audited
Bank fees and interest	96,768	4,899	226,869
Lease liability financial expenses	18,812	36,418	65,134
Expenses allocated to issuing warrants	4,250	96,308	12,292
Exchange rate differences, net	154,058	189,714	250,532
Total financing costs	273,888	327,339	554,827

NOTE 6 - FINANCING INCOME

	US dollars
	Six months ended 30 June		Year ended 31 December
	2026	2025	2025
	Unaudited		Audited
Revaluation of warrant derivative liability	56,582	-	218,087
Revaluation of liability related to share subscription agreement and structured investment deed, measured at FVTPL	-	-	53,333
Interest received	-	39	-
Exchange rate differences, net	-	-	1,270
Total financing income	56,582	39	272,690

NOTE 7 -      SEGMENT REPORTING

The Company has implemented the principles of IFRS 8, in respect of reporting segmented activities. In terms of IFRS 8, the management has determined that the Company has a single area of business, being the development and delivery of high-end network processing technology.

The Company's revenues are divided into the following geographical areas:

	US dollars
	Six months ended 30 June		Year ended 31 December
	2026	2025	2025
	Unaudited		Audited
Israel	124,262	99,851	205,424
United States	292,305	498,748	844,498
	416,567	598,599	1,049,922

The Company's revenues are divided into the following geographical areas:

	%
	Six months ended 30 June		Year ended 31 December
	2026	2025	2025
	Unaudited		Audited
Israel	29.8%	16.7%	19.6%
United States	70.2%	83.3%	80.4%
	100.0%	100.0%	100.0%

Revenue from customers in the company's domicile, Israel, as well as its major market, the United States, have been identified on the basis of the customer's geographical locations.

 

END