NOTE 12: SUBSEQUENT EVENTS

(*) The exercise price of all options is denominated in NIS and was translated to USD in the table above using the exchange rate as of June 30, 2026.

NOTE 1: GENERAL

BrainsWay Ltd. (the “Company”) is a leader in advanced non-invasive neurostimulation treatments for mental health disorders. The Company is advancing neuroscience with its proprietary Deep Transcranial Magnetic Stimulation (Deep TMS™) platform technology to improve health and transform lives. The Company has obtained from the U.S. Food and Drug Administration (FDA) three cleared indications backed by pivotal studies demonstrating clinically proven efficacy. Current indications include MDD (Major Depressive Disorder), obsessive-compulsive disorder (OCD), and smoking addiction.

The Company received its first commercial Deep TMS product clearance from the FDA in 2013, for the treatment of MDD in adult patients who have failed to achieve satisfactory improvement from anti-depressant medication. In April 2021, the Company received FDA clearance for a shorter innovative MDD treatment and in August 2021, the Company received an additional clearance from the FDA for expansion of the existing MDD clearance to include the non-invasive treatment of anxiety symptoms. In 2022, the Company extended its FDA clearance for MDD (including anxious depression) to the Company’s H7 Coil, also via the 510(k) process. In May 2024, the FDA cleared an expansion of the Company’s MDD clearance allowing for the treatment of patients with late life depression. The expanded clearance covers MDD patients ages 22 to 86, changing the previous upper age limit of 68. In November 2025 the FDA cleared an expanded labeling of the Company’s system to treat adolescent (ages 15-21) MDD indications as an adjunct therapy. Also in 2025, the Company obtained an expansion of its clearance to cover an accelerated treatment protocol for MDD. The Company’s Deep TMS system for MDD is currently marketed to and installed at psychiatrists’ offices and other facilities principally in the United States and in certain other countries throughout the world.

The Company received de novo clearance from the FDA in August 2018 for use of its Deep TMS as an adjunct therapy for adult patients suffering from OCD, and a clearance from the FDA in August 2020 for use of its Deep TMS system as an aid in short-term smoking cessation in adults.

The Company conducts activities through various wholly owned subsidiaries, including BrainsWay, Inc. (“Inc”), Brain R&D Services Ltd. (“Brain R&D”), BrainsWay USA Inc (“USA Inc”) and Tikva LLC (“Tikva”), (collectively the “Group”). Brain R&D and USA Inc. derive revenues from the sale and lease of Deep TMS systems and from related services. Tikva, a wholly owned subsidiary of Inc. formed in Delaware in 2025, makes and holds strategic investments, including in mental health services companies located in the United States and Canada.

In April 2025, the Trump Administration announced a government plan which imposes reciprocal tariffs on the import of goods from numerous countries into the U.S. The overall tariff on the import of goods from Israel to the U.S. is 15%, effective August 2025. The tariff applies solely to the import of goods and not to the import of services. While the Company does not believe that its first half 2026 financial results were materially affected by these developments, economic uncertainty may have an impact on the Company’s market and sales in the USA. If substantial tariffs remain in place, the Company may experience a reduction in US sales and in US revenues. Although the impact of the tariffs is difficult to predict with any certainty, the Company is actively evaluating its options and potential steps that may mitigate the impact of such trade-related circumstances and the impact of trade policy changes on future results remains uncertain.

On February 28, 2026, Israel and the United States launched a joint military operation against strategic targets of the Iranian regime with the objective of eradicating Iran's nuclear and ballistic missile capabilities. The military operation escalated into a war in the entire region, followed by renewed armed conflict between Israel and Hizballah in Israel's northern border. During April 2026, a temporary ceasefire was agreed between Iran and Israel and the United States and thereafter (on April 17, 2026) a 10-day ceasefire between Israel and Lebanon, since then fighting has continued in southern Lebanon and Iran, involving the United States and several countries in the region. The war caused major fluctuations in energy and oil prices and in foreign exchange rates. The fluctuations in energy and oil prices and in foreign exchange rates as well as the shortage of raw materials and personnel and the inaccessibility of local services and resources are all likely to affect numerous enterprises.

NOTE 4: SYSTEM COMPONENTS AND LEASED SYSTEMS, NET

During the six-month periods ended June 30, 2026 and 2025, the Company acquired system components, net, totaling $1,528 and $2,100, respectively, and transferred system components to leased systems in the carrying amounts of $1,039 and $1,166, respectively.

NOTE 9: ADDITIONAL INFORMATION TO THE STATEMENTS OF COMPREHENSIVE INCOME

Geographic information:

Revenues reported in the financial statements based on the location of the customers are as follows:

NOTE 7: EQUITY

NOTE 3: INVENTORY

Provision for impairment of inventory and system components decreased during the first half of 2026, compared with an increase during the corresponding period in 2025, primarily due to the Company’s ongoing process of identifying and disposing of obsolete inventory and the related inventory disposals carried out during the period.

NOTE 5: FINANCIAL INSTRUMENTS

The following table presents the fair value measurement hierarchy for the Group's assets and liabilities. Quantitative disclosures of the fair value measurement hierarchy of the Group's assets and liabilities:

The Company entered into several foreign currency forward contracts to protect against changes in the value of forecasted cash flow relating to salaries and related payments, service providers, and office rent expenses denominated in NIS. These contracts are designated as derivative financial instruments measured at fair value through profit or loss, in accordance with IFRS 9.

During the six months periods ended June 30, 2026, and 2025, the Company recognized a gain of $646, and a loss of $1,443, respectively, on the financial investments denominated in New Israeli Shekels (NIS), due to the appreciation of ILS relative to the U.S. Dollar. The gain was recorded in profit or loss, consistent with the instrument’s classification under IFRS 9.

The fair value of the financial instruments is determined using a combination of valuation techniques, including Monte Carlo simulations (applied, among others, to Neurolief), including a Least Squares Monte Carlo framework applied to multi-date contractual exercise rights (applied, among others, to Neurolief), option pricing models based on a binomial framework and on a closed-form model, a market approach based on revenue or EBITDA multiples (the revenue multiple approach being applied, among others, to Neurolief, in deriving the enterprise value used in its Monte Carlo simulation), and, for investments completed shortly before the reporting date, calibration to the price of the recent transaction.

The Monte Carlo simulations incorporate significant unobservable inputs such as a weighted average cost of capital (WACC) with a weighted average rate of 21.61% (primarily attributable to Neurolief, for which a WACC of 20.83% was applied), expected enterprise-value volatility assumptions ranging up to 77.85% (the upper end of the range being attributable to Neurolief, for which volatility of 77.41%-77.85% was applied) with a weighted average of 64.93% (primarily attributable to Neurolief, for which volatility of approximately 77.6% was applied, and to Stella), and a risk-free interest rate with a weighted average of 4.08% (primarily attributable to Neurolief, for which rates of 3.98%–4.15% were applied, and to Stella). The option pricing models rely on significant unobservable inputs including expected enterprise-value volatility of 46.65% and a risk-free interest rate with a weighted average of 4.24%. In addition, the market approach applies revenue multiples as a significant unobservable input, which were determined based on comparable market data and resulted in a weighted average multiple of 2.13 (primarily attributable to Neurolief, for which a multiple of 2.57x was applied, and to Stella), as well as an EV/EBITDA multiple of 6.5 applied to one investment. For that investment, a probability-weighted scenario analysis was applied, using probabilities of 59%, 40% and 1% assigned to the low, base and ideal scenarios, respectively. Changes in these assumptions could result in material changes to the fair value measurements.