Recipharm Israel Ltd. Audited Financial Statements as of

Financial Statements as of December 31, 2025

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of Certified Public Accounting Firm

the board of directors and shareholder of Recipharm Israel Ltd.

on Financial Statements

have audited the accompanying financial statements of Recipharm Israel Ltd. (the "Company"), which comprise the statements

of financial position as of December 31, 2025, and 2024, and the related statements of comprehensive loss, changes in deficit in equity,

and cash flows for each of the years then ended, and the related notes to the financial statements.

our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as

of December 31, 2025, and 2024, and the results of its operations, changes in deficit in equity, and cash flows for each of the years

then ended, in accordance with IFRS Accounting Standards.

conducted our audits in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities

under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section

of our report. We are independent of the Company in accordance with the ethical requirements relevant to our audits of the financial

statements, and we have fulfilled our other ethical responsibilities in accordance with those requirements.

believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Doubt About the Company's Ability to Continue as a Going Concern

1A to the financial statements indicates that the Company incurred a loss of NIS 9,395 thousand for the year ended December 31, 2025,

had a working capital deficit of NIS 22,819 thousand, and a deficit in equity of NIS 51,382 thousand as of that date. These conditions,

together with the Company's dependence on continued financial support from its Parent Company RECIPHARM OT AB, raise substantial

doubt about the Company's ability to continue as a going concern for a reasonable period.

described in Note 1A, management's plans regarding these matters are based primarily on continued financial support from the Parent

Company. The financial statements have been prepared on a going concern basis and do not include any adjustments that might result from

the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

of Management and Those Charged with Governance for the Financial Statements

is responsible for the preparation and fair presentation of these financial statements in accordance with IFRS Accounting Standards,

and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial

statements that are free from material misstatement, whether due to fraud or error.

preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern,

evaluating whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's

ability to continue as a going concern, and using the going concern basis of accounting unless management either intends to liquidate

the Company or to cease operations, or has no realistic alternative but to do so.

charged with governance are responsible for overseeing the Company's financial reporting process.

Responsibilities for the Audit of the Financial Statements

objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level

of assurance, but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will

always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if there

is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based

on the financial statements.

performing an audit in accordance with US GAAS, we exercise professional judgment and maintain professional skepticism throughout the

audit. We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and perform

procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements. We also obtain an understanding of internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's

internal control. Accordingly, no such opinion is expressed. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of significant accounting estimates made by management, evaluating the overall presentation of the financial

statements, and concluding whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial

doubt about the Company's ability to continue as a going concern for a reasonable period of time.

of Financial Position

accompanying notes constitute an integral part of the financial statements

of Comprehensive Loss

accompanying notes constitute an integral part of the financial statements

of Changes in Deficit in Equity

accompanying notes constitute an integral part of the financial statements

these financial statements

significant accounting policies described below have been applied consistently in the financial statements for all periods presented,

except where otherwise indicated.

financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards

Company's functional currency and the presentation currency of the financial statements are NIS.

functional currency is the currency that most accurately reflects the economic environment in which the Company operates and conducts

its transactions, and in which its financial position and results of operations are measured.

denominated in a foreign currency (a currency different from the functional currency) are recorded at the exchange rate prevailing on

the transaction date upon initial recognition. After initial recognition, financial assets and liabilities denominated in foreign currency

are translated at each reporting date into the functional currency using the exchange rate at that date. Exchange differences are recognized

in the statement of profit or loss. Non-financial assets and liabilities denominated in foreign currency, presented at cost, are translated

using the exchange rate at the transaction date. Non-monetary assets and liabilities denominated in foreign currency and presented at

fair value are translated into the functional currency at the exchange rate prevailing on the date the fair value was determined.

and cash equivalents are defined by the Company as cash and highly liquid short-term deposits with banking corporations that are not

restricted or pledged, with original maturity of up to three months from the date of investment.

provision for doubtful debts is specifically determined with respect to debts that, based on the Company's management's estimate,

are considered doubtful of collection. Customer balances for which an impairment loss has occurred are written off when it is determined

that such balances are uncollectible.

is recognized in accordance with IFRS 15 when control of the promised services is transferred to the customer in an amount that reflects

the consideration to which the Company expects to be entitled. For service arrangements, revenue is recognized over time when the customer

simultaneously receives and consumes the service benefits. Progress is measured based on actual hours incurred relative to total estimated

hours when that input method faithfully depicts performance.

from rendering services

the outcome of a service arrangement cannot be measured reliably, revenue is recognized only to the extent of recoverable costs incurred.

The Company discloses significant judgments, performance obligations, contract assets and contract liabilities when material.

and equipment are presented at cost plus directly attributable acquisition costs, less accumulated depreciation and impairment losses,

and excluding ongoing maintenance expenses. Cost includes spare parts and auxiliary equipment that are usable solely in relation to machinery

is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:

improvements are depreciated on a straight-line basis over the lease term (including any extension option period that the Company is

reasonably certain to exercise) or over the assets' useful life, whichever is shorter. For impairment of property and equipment,

see Section G below.

Company evaluates the need for impairment of non-financial assets when indicators arising from events or changes in circumstances suggest