UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F/A

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES

EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number 001-41544

SatixFy Communications Ltd.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Israel

(Jurisdiction of incorporation or organization)

12 Hamada St., Rehovot 670315, Israel

(Address of principal executive offices)

Oren Harari, Interim Chief Financial Officer

12 Hamada St., Rehovot 670315, Israel

Tel: +(972) 8-939-3200

(Name, Telephone, E-Mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, no par value	SATX	NYSE American LLC

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Warrants to purchase Ordinary Shares

(Title of Class)

Securities registered or to be registered pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 85,672,474 Ordinary Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act 1934.

Yes ☐ No ☒

Note-Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards^† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐ International Financial Reporting
Standards as issued by the
International Accounting Standards Board ☒  Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

EXPLANATORY NOTE

Due to an administrative error, we are filing this Amendment No. 1 (“Amendment No. 1”) to our Annual Report on Form 20-F (the “Original Filing”) to include Exhibit 2.4, Description of Securities, which was inadvertently omitted in the Original Filing, and amending Item 18 of the Original Filing to include the Report of our Independent Registered Public Accounting Firm dated as April 1, 2025. The Report of our Independent Registered Public Accounting Firm that was included in the Original Filing was not dated. For clarity, the audited consolidated financial statements as of and for the three fiscal years ended December 31, 2024 included in this Amendment No. 1 are otherwise unchanged from the audited consolidated financial statements included in the Original Filing.

In addition, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 have been re-executed as of the date of, and are re-filed as part of, this Amendment No. 1 as Exhibits 12.1, 12.2, 13.1 and 13.2.

Other than expressly set forth herein, this Amendment No. 1 does not, and does not purport to, amend or restate any other information contained in the Original Filing nor does this Amendment No. 1 reflect any events that have occurred after the Original Filing was filed.

TABLE OF CONTENTS

		Page
EXPLANATORY NOTE
	PART III	1
ITEM 17.	FINANCIAL STATEMENTS	1
ITEM 18.	FINANCIAL STATEMENTS	1
ITEM 19.	EXHIBITS	1
SIGNATURES		4

PART III

ITEM 17.  FINANCIAL STATEMENTS

Not applicable.

ITEM 18.  FINANCIAL STATEMENTS

The financial statements required by this item are found at the end of this Annual Report, beginning on page F-1.

ITEM 19.  EXHIBITS

See Exhibit Index below.

EXHIBIT INDEX

1.1	Second Amended and Restated Articles of Association of SatixFy (incorporated by reference to Annex B to SatixFy Communication Ltd.'s Form F-4/A filed with the SEC on September 21, 2022).
2.1	Specimen Ordinary Share Certificate of SatixFy (incorporated by reference to Exhibit 4.7 to SatixFy Communications Ltd.’s Form F-4/A filed with the SEC on September 16, 2022, as amended).
2.2	Specimen Warrant Certificate of SatixFy (incorporated by reference to Exhibit 4.8 to SatixFy Communications Ltd.’s Form F-4/A filed with the SEC on September 16, 2022, as amended).
2.3	Amended and Restated Warrant Agreement, dated as of January 12, 2023, by and among SatixFy, Endurance Acquisition Corp. and Continental (incorporated by reference to Exhibit 2.3 to SatixFy Communication Ltd.’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on May 1, 2023).
2.4*	Description of Securities
4.1†	Business Combination Agreement, dated as of March 8, 2022, by and among SatixFy, Endurance Acquisition Corp. and SatixFy MS (incorporated by reference to Exhibit 2.1 to SatixFy Communications Ltd.’s Form F-4 filed with the SEC on September 21, 2022, as amended).
4.2	Amendment No. 1 to Business Combination Agreement, dated as of June 13, 2022, by and among SatixFy, Endurance Acquisition Corp. and SatixFy MS (incorporated by reference to Exhibit 2.2 to SatixFy Communications Ltd.’s Form F-4 filed with the SEC on September 21, 2022, as amended).
4.3	Amendment No. 2 to Business Combination Agreement, dated as of August 23, 2022, by and among SatixFy, Endurance Acquisition Corp. and SatixFy MS (incorporated by reference to Exhibit 2.3 to SatixFy Communications Ltd.’s Form F-4 filed with the SEC on September 21, 2022, as amended).
4.4†	Common Equity Purchase Agreement, dated as of March 8, 2022, by and among SatixFy and CF Principal Investments LLC (incorporated by reference to Exhibit 10.6 to SatixFy Communications Ltd.’s Form F-4 filed with the SEC on September 21, 2022, as amended).
4.6†	Credit Agreement, dated as of February 1, 2022, by and among SatixFy, Wilmington Savings Fund Society, FSB, as administrative agent and the lenders thereunder (incorporated by reference to Exhibit 10.10 to SatixFy Communications Ltd.’s Form F-4 filed with the SEC on September 21, 2022, as amended).

1

 

4.7	First Amendment to Credit Agreement, dated as of September 13, 2022, by and among SatixFy, Wilmington Savings Fund Society, FSB, as administrative agent and the lenders thereunder (incorporated by reference to Exhibit 4.13 to SatixFy Communication Ltd.’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on May 1, 2023).
4.8	Waiver and Second Amendment to the Credit Agreement, dated as of April 23, 2023, by and among SatixFy, Wilmington Savings Fund Society, FSB, as administrative agent and the lenders thereunder (incorporated by reference to Exhibit 99.1 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on April 27, 2023).
4.9	Consent, Waiver and Third Amendment to the Credit Agreement, dated as of June 2, 2023, by and among SatixFy, Wilmington Savings Fund Society, FSB, as administrative agent and the lenders thereunder (incorporated by reference to Exhibit 99.4 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on September 5, 2023).
4.10	Consent, Waiver and Fourth Amendment to the Credit Agreement, dated as of October 31, 2023, by and among SatixFy, Wilmington Savings Fund Society, FSB, as administrative agent and the lenders thereunder (incorporated by reference to Exhibit 4.7 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on November 1, 2023).
4.11	Consent, Waiver and Fifth Amendment to the Credit Agreement, dated as of October 31, 2023, by and among SatixFy, Wilmington Savings Fund Society, FSB, as administrative agent and the lenders thereunder (incorporated by reference to Exhibit 4.1 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on November 1, 2023).
4.12	Consent, Waiver and Sixth Amendment to the Credit Agreement, dated as of April 1, 2025, by and among SatixFy, Wilmington Savings Fund Society, FSB, as administrative agent and the lenders thereunder (incorporated by reference to Exhibit 99.3 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on April 1, 2025).
4.13†	Security Agreement, dated as of February 1, 2022, by and among SatixFy, the grantors party thereto and Wilmington Savings Fund Society, FSB, as collateral agent (incorporated by reference to Exhibit 10.11 to SatixFy Communications Ltd.’s Form F-4 filed with the SEC on September 21, 2022, as amended).
4.14	Warrant Letter Agreement, dated as of January 12, 2023, by and among SatixFy, Endurance Antarctica Partners, LLC and Cantor Fitzgerald and Co (incorporated by reference to Exhibit 10.18 to SatixFy Communications Ltd.’s Form F-1/A filed with the SEC on January 19, 2023).
4.15	Share Purchase Agreement, dated August 30, 2023, by and among SatixFy Space Systems UK Ltd., a wholly-owned subsidiary of SatixFy Communications Ltd., and MDA Space and Robotics Limited, an affiliate of MDA Ltd. (incorporated by reference to Exhibit 4.1 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on August 31, 2023).
4.16	Non-Competition Agreement, dated October 31, 2023, by and among SatixFy Space Systems UK Ltd., a wholly-owned subsidiary of SatixFy Communications Ltd., and MDA Space and Robotics Limited, an affiliate of MDA Ltd. (incorporated by reference to Exhibit 4.1 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on November 1, 2023).
4.17	Master Purchase Agreement, dated October 31, 2023, between Macdonald, Dettwiler and Associates Corporation and SatixFy Communications Ltd. (incorporated by reference to Exhibit 4.2 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on November 1, 2023).
4.18	First Amendment to Master Purchase Agreement, dated October 17, 2024, between Macdonald, Dettwiler and Associates Corporation and SatixFy Communications Ltd. (incorporated by reference to Exhibit 10.1 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on October 23, 2024).

2

 

4.19	Second Amendment to Master Purchase Agreement, dated March 13, 2025, between Macdonald, Dettwiler and Associates Corporation and SatixFy Communications Ltd. (incorporated by reference to Exhibit 4.19 to SatixFy Communication Ltd.’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 1, 2025).
4.20%	Third Amendment to Master Purchase Agreement, dated April 1, 2025, between Macdonald, Dettwiler and Associates Corporation and SatixFy Communications Ltd. (incorporated by reference to Exhibit 99.4 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on April 1, 2025)

4.21	License Agreement, dated October 31, 2023, among MacDonald Dettwiler and Associates Corporation, Satixfy UK Limited and Satixfy Israel Ltd. (incorporated by reference to Exhibit 4.3 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on November 1, 2023).
4.22	Investor Rights Agreement, dated October 31, 2023, between SatixFy Communications Ltd. and MDA Ltd. (incorporated by reference to Exhibit 4.4 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on November 1, 2023).
4.23	Three-Party Escrow Service Agreement, dated October 31, 2023, by and among SatixFy UK Limited, MacDonald Dettwiler and Associates Corporation and ESOP Trust Management and Company Ltd. (incorporated by reference to Exhibit 4.5 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on November 1, 2023).
4.24	Three-Party Escrow Service Agreement, dated October 31, 2023 by and among SatixFy UK Limited, MacDonald Dettwiler and Associates Corporation and ESOP Trust Management and Company Ltd. (with respect to different intellectual property than the agreement in Exhibit 4.5) (incorporated by reference to Exhibit 4.6 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on November 1, 2023).
4.25	Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.8 to SatixFy Communications Ltd.’s Form F-4 filed with the SEC on September 21, 2022, as amended).
4.26	SatixFy Communications Ltd. Compensation Policy (incorporated by reference to Exhibit 10.9 to SatixFy Communications Ltd.’s Form F-4 filed with the SEC on September 16, 2022, as amended).
4.27	2020 Share Award Plan (incorporated by reference to Exhibit 10.12 to SatixFy Communications Ltd.’s Form F-4 filed with the SEC on September 16, 2022, as amended).
4.28	Sales Agreement, dated July 29, 2024, by and between SatixFy Communications Ltd., and A.G.P./Alliance Global Partners (incorporated by reference to Exhibit 10.1 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on July 29, 2024).
4.29	Employment Contract, dated June 1, 2023, by and between SatixFy UK Limited and Nir Barkan (incorporated by reference to Exhibit 4.24 to SatixFy Communication Ltd.’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 29, 2024).
4.30%	Agreement and Plan of Merger, date April 1, 20025, by and among the Company, MDA Space Ltd., MANTISRAEL OPERATIONS 1 Ltd. and MANTISRAEL OPERATIONS 2 Ltd. (incorporated by reference to Exhibit 99.1 to SatixFy Communications Ltd.’s Report on Form 6-K filed with the SEC on April 1, 2025).
8.1	List of Subsidiaries of Satixfy (incorporated by reference to Exhibit 8.1 to SatixFy Communication Ltd.’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 29, 2024).
11.1	Insider Trading Policy (incorporated by reference to Exhibit 11.1 to SatixFy Communication Ltd.’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 1, 2025).
12.1*	Certification by the Acting Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
12.2*	Certification by the Interim Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
13.1**	Certification by the Acting Chief Executive Officer and the Interim Chief Financial Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2**	Certification by the Interim Chief Financial Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
15.1	Consent of Independent Registered Public Accounting Firm Insider Trading Policy (incorporated by reference to Exhibit 15.1 to SatixFy Communication Ltd.’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 1, 2025).
97.1	NYSE Compensation Recoupment Policy (incorporated by reference to Exhibit 97.1 to SatixFy Communication Ltd.’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 29, 2024).
101	The following financial statements from the Company’s 20-F for the fiscal year ended December 31, 2024, formatted in Inline XBRL: (i) Consolidated Statements of Financial Position, (ii) Consolidated Statements of Comprehensive Loss, (iii) Consolidated Statements of Shareholders’ Deficit, (iv) Consolidated Statements of Cash Flows and (v) Notes to the Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

†  Certain schedules and/or exhibits to this Exhibit have been omitted in accordance with the instructions to Item 19 of Form 20-F. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the Securities and Exchange Commission or its staff upon request.

% Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. An unredacted copy of the exhibit will be furnished supplementally to the Securities and Exchange Commission or its staff upon request.

* Filed herewith.

** Furnished herewith.

3

SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing this Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

	SATIXFY COMMUNICATIONS LTD
	By:	/s/ Nir Barkan
		Name: Nir Barkan
		Title: Chief Executive Officer
	By:	/s/ Oren Harari
		Name: Oren Harari
		Title: Interim Chief Financial Officer
Date: April 14, 2025

4

SATIXFY COMMUNICATIONS LTD.

CONSOLIDATED FINANCIAL STATEMENTS

 AS OF DECEMBER 31, 2024

SATIXFY COMMUNICATIONS LTD.

TABLE OF CONTENTS

Report of Independent registered public accounting firm (Ziv Haft; Tel-Aviv, Israel; PCAOB ID#1185)	F-2
Consolidated statements of financial position	F-3 - F-4
Consolidated statements of comprehensive loss	F-5
Consolidated statements of changes in shareholders’ deficit	F-6 - F-8
Consolidated statements of cash flows	F-9 - F-11
Notes to the consolidated financial statements	F-12 - F-77

The amounts are stated in thousands of USD, except for earning per share (“EPS”) data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and stockholders of SatixFy Communications Ltd.

Rehovot, Israel

Opinion on the Consolidated Financial Statements 

We have audited the accompanying consolidated statements of financial position of Satixfy Communications Ltd. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive loss, changes in shareholders' deficit, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board and Interpretations (collectively “IFRS”).

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

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 1d to the consolidated financial statements, the Company incurred losses from operations since its inception, and as of December 31, 2024, the Company has an accumulated deficit of $557 million of which $45.7 million was derived during 2024. In addition, a working capital deficit of $32 million, a negative operational cash flow of $17.7 million and have a net debt of $68 million due within twelve months from the date of signing these financial statements which the Company, under current circumstances, does not have the resources to repay. These factors raise a substantial doubt about the Company’s ability to continue as a going concern. The management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1d. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ziv Haft

Certified Public Accountants (Isr.)

BDO Member Firm

We have served as the Company’s auditor since August 2019.

April 1, 2025

Tel Aviv, Israel

F - 2

SATIXFY COMMUNICATIONS LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands of USD)

		As of December 31,
		2024		2023
	Note	In USD thousands
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	14		14,433		13,979
Trade accounts receivable			3,905		2,260
Contract assets	4		1,486		4,091
Prepaid expenses and other			2,570		2,332
Government departments and agencies receivables			5,888		3,076
Related parties	13		46		75
Promissory notes	3		-		20,000
Inventory	5		1,279		1,475
Total current assets			29,607		47,288
NON-CURRENT ASSETS:
Right-of-use assets, net	6		1,679		2,235
Property, plant and equipment, net	8		2,284		1,420
Investment in Jet Talk Limited (“Jet Talk”)	7		1,518		1,551
Long term deposits			186		208
Other long-term receivables	3		-		2,000
Total non-current assets			5,667		7,414
TOTAL ASSETS			35,274		54,702

April 1, 2025
Date of approval of the financial statements	Nir Barkan Acting CEO	Oren Harari Interim CFO	Yoav Leibovitch Chairman of Board

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

F - 3

SATIXFY COMMUNICATIONS LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands of USD)

		As of December 31,
		2024			2023
	Note	In USD thousands
LIABILITIES AND SHAREHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Trade payables			3,121			1,378
Contract liabilities	9		186			1,720
European Space Agency (“ESA”) advance payments	18(a)		1,264			3,842
Prepayment from Customer			8,381			3,858
Advanced payments from MDA Ltd. (“MDA”) against future orders	3		39,296			28,138
Lease liabilities	6		786			639
Other accounts payable and accrued expenses	10		8,340			9,704
Related parties	13		616			740
Total current liabilities			61,990			50,019
NON-CURRENT LIABILITIES:
Long term loans from financial institutions, net	12		67,691			59,792
Lease liabilities	6		1,392			2,067
Derivatives instruments liabilities	14		5,719			114
Other long-term liabilities	15		774			1,496
Total non-current liabilities			75,576			63,469
SHAREHOLDERS’ DEFICIT:	17
Share capital			-			-
Share premium			453,252			451, 093
Capital reserves			1,444			1,444
Accumulated deficit			(556,988	)		(511,323	)
Total shareholders’ deficit			(102,292	)		(58,786	)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT			35,274			54,702

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

F - 4

SATIXFY COMMUNICATIONS LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands of USD)

		For the year ended December 31,
		2024			2023			2022
	Note	In USD thousands except for EPS data
Revenues:	19
Development services and preproduction			13,107			8,249			10,081
Sale of products			7,541			2,481			545
Total revenues			20,648			10,730			10,626
Cost of sales and services:	20
Development services and preproduction			6,153			4,930			4,166
Sale of products			2,168			1,008			332
Total cost of sales and services			8,321			5,938			4,498
Gross profit			12,327			4,792			6,128
Research and development expenses, net	21		22,221			29,126			16,842
Selling and marketing expenses	22		2,070			2,866			2,335
General and administrative expenses	23		10,825			14,561			9,249
Loss from operations			(22,789	)		(41,761	)		(22,298	)
Finance income			266			83			17
Finance expenses			(17,504	)		(12,129	)		(9,919	)
Derivatives revaluation	14		(5,605	)		(17,217	)		(37,377	)
Other income	3		-			41,657			5,474
Listing expenses			-			-			(333,326	)
Company's share in the loss of a company accounted by equity method, net	7		(33	)		(226	)		(360	)
Loss before income taxes			(45,665	)		(29,593	)		(397,789	)
Tax expenses	24		-			(122	)		-
Loss for the period			(45,665	)		(29,715	)		(397,789	)
Other comprehensive income (loss) net of tax:
Items that will or may be reclassified to profit or loss:
Exchange gain (loss) arising on translation of foreign operations			-			(609	)		3,272
Total comprehensive loss for the period			(45,665	)		(30,324	)		(394,517	)
Basic and diluted loss per share (in dollars)	25		(0.54	)		(0.37	)		(13.25	)
Basic and diluted weighted average common shares outstanding (quantity)			83,777			80,975			30,031

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

F - 5

SATIXFY COMMUNICATIONS LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

(in thousands of USD)

For the year ended December 31, 2024

	Ordinary shares		Preferred shares A		Preferred shares B		Preferred shares C		Share capital		Share premium		Accumulated deficit			Capital reserves		Total
	Number of shares								In USD thousand
Balance as of January 1, 2024		83,114,193		-		-		-		-		451,093		(511,323	)		1,444		(58,786	)
Shares issued to employees		2,558,281		-		-		-		-		-		-			-		-
Share based payments		-		-		-		-		-		2,159		-			-		2,159
Comprehensive loss for the year		-		-		-		-		-		-		(45,665	)		-		(45,665	)
Balance as of December 31, 2024		85,672,474		-		-		-		-		453,252		(556,988	)		1,444		(102,292	)

F - 6

SATIXFY COMMUNICATIONS LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

(in thousands of USD)

For the year ended December 31, 2023

	Ordinary shares		Preferred shares A		Preferred shares B		Preferred shares C		Share capital		Share premium		Accumulated deficit			Capital reserves			Total
	Number of shares								In USD thousand
Balance as of January 1, 2023		80,672,674		-		-		-		-		446,488		(481,608	)		3,498			(31,622	)
Shares issued to employees		940,953		-		-		-		-		27		-			-			27
Shares issued to financial institutions		1,500,566		-		-		-		-		1,628		-			-			1,628
Share based payments		-		-		-		-		-		2,950		-			-			2,950
Comprehensive loss for the year		-		-		-		-		-		-		(29,715	)		(609	)		(30,324	)
Currency translation reserve realization due the sale of Satixfy Space Systems UK Ltd.		-		-		-		-		-		-		-			(1,445	)		(1,445	)
Balance as of December 31, 2023		83,114,193		-		-		-		-		451,093		(511,323	)		1,444			(58,786	)

F - 7

SATIXFY COMMUNICATIONS LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

(in thousands of USD)

For the year ended December 31, 2022

	Ordinary shares		Preferred shares A			Preferred shares B			Preferred shares C			Share capital			Share premium		Accumulated deficit			Capital reserves		Total
	Number of shares											In USD thousand
Balance as of January 1, 2022		18,783,168		7,638,647			4,999,651			895,710			4			46,203		(83,819	)		226		(37,386	)
Exercise of employee's options		236,446		-			-			-			-			101		-			-		101
Shares issued to financial institutions		846,432		-			-			-			-			1,978		-			-		1,978
Warrant exercised		-		-			57,660			860,802			-			5,399		-			-		5,399
Share based payments		-		-			-			-			-			570		-			-		570
Issuance of shares following SPAC transaction- (see Note 1)		56,647,836		(7,638,647	)		(5,057,311	)		(1,756,512	)		(4	)		339,858		-			-		339,854
SPAC exercise of warrants		2,553,692		-			-			-			-			2,381		-			-		2,381
Issuing shares as part of the OTC Equity Prepaid Forward Transaction (“FPA”)		1,605,100		-			-			-			-			49,998		-			-		49,998
Comprehensive loss for the year		-		-			-			-			-			-		(397,789	)		3,272		(394,517	)
Balance as of December 31, 2022		80,672,674		-			-			-			-			446,488		(481,608	)		3,498		(31,622	)

F - 8

SATIXFY COMMUNICATIONS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of USD)

	For the year ended December 31
	2024			2023			2022
Cash flows from operating activities:
Loss for the year		(45,665	)		(29,715	)		(397,789	)
Adjustments to reconcile net profit to net cash provided by operating activities:
Depreciation and amortization		1,050			1,245			1,162
Company's share in the loss of a company accounted by equity method, net		33			226			360
Finance expenses on loans		7,919			6,613			5,211
Change in the fair value of derivatives		5,605			17,227			37,374
Share based payments		2,159			2,950			570
Adjustment to Loss due to SPAC transaction		-			-			332,272
Increase in trade accounts receivable		(1,645	)		(885	)		(587	)
Decrease in contract assets		2,605			1,220			537
Decrease (increase) in inventory		196			(644	)		(146	)
Decrease (increase) in other current assets		(1,025	)		3,508			(7,007	)
Increase (decrease) in trade payables		1,743			(75	)		(6,236	)
Decrease  in ESA prepayments		(2,578	)		(1,268	)		(7,609	)
Decrease in other accounts payable and accrued expenses		(3,023	)		(2,601	)		(1,571	)
Increase in prepayments from customers		4,523			682			2,936
Increase in prepayments from MDA (see Note 3)		11,158			18,139			8,875
Increase (Decrease) in liability for royalties payable		(722	)		100			168
Agreement with MDA (see Note 3)		-			(41,657	)		-
Increase in other long-term liabilities		-			300			-
Net cash used in operating activities		(17,667	)		(24,635	)		(31,480	)
Cash flows from investing activities
Decrease (increase) in long-term bank deposit		23			(7	)		(11	)
Proceeds from selling a subsidiary (see Appendix C)		-			17,583			-
Proceeds from promissory notes		20,000			-			-
Purchase of property, plant and equipment		(1,258	)		(235	)		(571	)
Net cash provided (used in) investing activities		18,765			17,341			(582	)
Cash flows from financing activities
Receipt of long-term loans from a financial institution		-			-			52,837
Repayment of loan to shareholder		-			-			(5,000	)
Repayment of loans from banks		-			-			(13,818	)
Repayment of royalty liability		-			(11	)		(429	)
Payments of lease liabilities		(597	)		(927	)		(1,029	)
Issuance of shares- SPAC transactions		-			-			1,362
Option exercises to shares by employees		2			26			100
Exercise of warrants, net		-			-			6,500
Issuance of shares to FPA (see Note 16)		-			10,026			-
Net cash provided by financing activities		(595	)		9,114			40,523
Increase in cash and cash equivalents		503			1,820			8,461
Cash and cash equivalents balance at the beginning of the year		13,979			11,934			3,854
Effect of changes in foreign exchange rates on cash and cash equivalents		(49	)		225			(381	)
Cash and cash equivalents balance at the end of the year		14,433			13,979			11,934

F - 9

SATIXFY COMMUNICATIONS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of USD)

	For the year ended December 31
	2024		2023		2022
Appendix A – Cash paid and received during the year for:
Interest paid		2,307		1,241		921
Appendix B – Non Cash transactions during the year for:
Purchase of fixed Assets in credit		-		-		319
Issuance of shares against liability		-		-		49,998
Issuance of shares against loan		-		1,628		1,978
Issuance of shares against warrants		-		-		1,280

The accompanying notes are an integral part of the financial statements

F - 10

SATIXFY COMMUNICATIONS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of USD)

	For the year ended December 31
	2023
Appendix C – Proceeds from selling a subsidiary
Cash that was sold		417
Prepaid expenses and other		218
Short term deposits		85
Other accounts receivables		932
Property, plant and equipment, net		150
Trade accounts payable		(175	)
Contract liabilities		(96	)
Other accounts payable		(585	)
ESA Prepayments		(994	)
Related party		(164	)
Capital gain		41,657
Capital reserve		(1,445	)
Net assets and liabilities		40,000
Less assets received
Promissory notes		20,000
Other long-term receivables		2,000
Cash received		18,000
Cash sold		(417	)
Net cash inflows		17,583

The accompanying notes are an integral part of the financial statements

F - 11

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 1 - GENERAL:

a. Satixfy Communications Ltd. (hereinafter: the "Company") was originally incorporated in Hong Kong as Satixfy Limited in 2012 and in 2020 was reorganized and re-incorporated in Israel as a private limited company with registered address at 12 Hamada St. Rehovot, Israel, in accordance with the provisions of the Israeli Companies Law 5759-1999, as amended with the approval from the Israeli Tax Authorities for tax exemption in accordance with the provisions of section 104B (f) of the Income Tax Ordinance (New Version), 5721-1961.

b. On April 1, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”)  with MDA Space and Robotics Limited (“MDA Space”), and its two wholly owned subsidiaries, pursuant to which the company will undergo a two-step merger transaction, which upon completion, the company will be the surviving entity and become an indirect wholly owned subsidiary of MDA Space (the “Merger”). The Merger consideration will consist of cash in the amount of $2.10 representing an equity value of approximately $192 million for each ordinary share, no par value (“Ordinary Shares”) held (see Note 26(a)).

c. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

d. As of December 31, 2024, the Company had accumulated losses of $557 million, of which $45.7 million was derived during 2024, a working capital deficit of $32 million a negative operational cash flow of $17.7 million and has a net debt of $68 million due within 12 months from the date of signing these financial statements which the Company, under current circumstances, does not have the resources to repay, unless restructured, and will require additional funding to maintain the Company’s ongoing operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

e. On July 29, 2024, the Company entered into a Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners (the “Sales Agent”), pursuant to which the Company may offer and sell, from time to time, Ordinary Shares in an “at-the-market” offering, for an aggregate offering price of up to $7,145. The Company will pay the Sales Agent a commission equal to 3.0% of the gross sales price per share sold pursuant to the terms of the Sales Agreement. The Company is not obligated to sell any Ordinary Shares under the Sales Agreement and no assurance can be given that the Company will sell any Ordinary Shares under such agreement, or, if it does, as to the price or number of such shares that the Company sell or the dates on which any such sales will take place.

F - 12

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 1 - GENERAL (CONT.):

f. In October 2023, the Company announced the completion of the sale of one of its UK subsidiaries (SatixFy Space Systems UK Ltd) to MDA Ltd (see Note 3) for a total consideration of $40 million combined with additional $20 million in advanced payments against delivery of future products.

g. The Business Combination:   On March 8, 2022, the Company and one of its subsidiaries, SatixFy MS, which was incorporated in 2022 for that purpose, entered into the Business Combination Agreement with Endurance Acquisition Corp. (“Endurance”). Under the Business Combination Agreement, SatixFy MS merged into Endurance, with Endurance continuing as the surviving company and becoming the Company’s direct, subsidiary. The Business Combination Agreement, as amended, and the related transactions (the "Business Combination") were completed on October 27, 2022 (the “Closing”).   As a result of the Business Combination, the Company recorded a gross increase in cash of $20 million and had $18.7 million expenses in cash related to the Business Combination.   The Business Combination was accounted for as a capital reorganization, with no goodwill or other intangible assets recorded, in accordance with IFRS 3, Business Combination. The Company is the accounting acquirer and the Ordinary Shares were registered under the U.S. Securities Exchange Act of 1934, as amended, and listed on the NYSE American, LLC (“NYSE”). Concurrently with the execution of the Business Combination Agreement, the Company entered into the Equity Line of Credit with CF Principal Investments LLC, an affiliate of Cantor Fitzgerald & Co. (“CF”), pursuant to which the Company may issue and sell to CF, from time to time and subject to the conditions in the related purchase agreement, up to an aggregate amount of $77.25 million of the Ordinary Shares for aggregate gross proceeds to the Company of up to $75 million after deducting the applicable purchase price discount on sales to CF thereunder.   In addition, the Company entered into the Forward Purchase Transaction ("FPA")  with Vellar Opportunity Fund SPV LLC – Series 7 (“Vellar”) and ACM ARRT G LLC (“ACM”), which was terminated on October 31, 2023 (“Vellar”, and together with ACM, the “Seller”) (see Note 16).   As part of the Business Combination Agreement, the Company has also issued different derivatives (see Note 14).

F - 13

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 1 - GENERAL (CONT.):

h. The Company and its subsidiaries are engaged in the development and marketing of integrated circuit products for specific applications, antennas and terminals used for satellite communications. The Company has developed a new generation of integrated silicon chips for modems and antennas based on its own proprietary technology and provides end-to-end solutions for the satellite communications industry, including terminals, payload subsystems and hubs.  The Company develops its advanced chips (application specific integrated circuit chips and radio frequency integrated circuit) based on technology designed to meet a variety of applications and services, such as broadband aviation, internet of things (IOT), mobility and maritime, and operating on geostationary, low earth orbit and medium earth orbit satellites. The Company’s technology includes electronically steered antenna arrays, forming and design of digital beams, beam hopping, on-board processing payload chips and software-defined radio modem chips. Jet Talk is engaged in the development and marketing of a unique antenna for in-flight-connectivity passenger aircraft and computers that receive broadband video transmissions from satellites.

i. The Company operates primarily through four wholly owned subsidiaries: SatixFy Israel Ltd., SatixFy UK Limited (“SatixFy UK”), SatixFy Bulgaria Eood (“SatixFy Bulgaria”) and SatixFy US LLC and until October 2023 SatixFy Space Systems UK Ltd. (hereinafter: “SSS”) (which was sold in October 2023 to MDA, see Note 3) (collectively together with Company, the "Group"), all of which have been consolidated in these consolidated financial statements.

F - 14

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 1 - GENERAL (CONT.):

Name	Holding percentage as of December 31,						Held By	Country of incorporation
	2024			2023
SatixFy Israel Ltd.		100	%		100	%	the Company	Israel
SatixFy UK		100	%		100	%	the Company	England and Wales
SatixFy Bulgaria		100	%		100	%	SatixFy UK	Bulgaria
SatixFy US LLC		100	%		100	%	the Company	USA
Endurance		100	%		100	%	the Company	Cayman Islands

In addition, the Company's holds 51% of the shares of the following entity (see also Note 7):

Name	Holding percentage as of December 31,						Held By	Country of incorporation
	2024			2023
Jet Talk		51	%		51	%	SatixFy UK	UK

j. Russia- Ukraine war:   The Russia-Ukraine war poses indirect but unpredictable risks of disruption to the Company’s business mostly associated with its current and prospective customers which have experienced delays in deploying their satellites. Additionally, the Russia-Ukraine conflict has an adverse impact on the supply of certain commodities used in the fabrication of silicon chips (such as neon gas), of which Ukraine and Russia were significant producers. The Company's ability to mitigate the potential adverse impacts is limited, as the impacts on it are largely indirect. The effects of sanctions implemented by certain governments in response to the conflict may also adversely affect the Company’s industry, including chip supply chains, to the extent that they lead to higher energy and manufacturing costs, lower economic growth, or deferrals of investment in satellite communications technology. As of the date of approval of this report, the Company's management has not identified any difficulties in the Company's liquidity due to the Russia-Ukraine war or a material impact on the availability of financing sources.

F - 15

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 1 - GENERAL (CONT.):

k. Israel - Hamas War:   The Company is incorporated under the laws of the State of Israel, and the principal offices are located in Israel. Accordingly, political, economic, and geo-political instability in Israel may affect the Company’s business. Any armed conflicts, political instability, terrorism, cyberattacks or any other hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners could affect adversely the Company’s operations. Ongoing and revived hostilities in the Middle East or other Israeli political or economic factors, could harm the Company’s operations and solution development and cause any future sales to decrease.   On October 7, 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Since the commencement of these events, there have been additional active hostilities, including with Hezbollah in Lebanon, the Houthis terrorist group which controls parts of Yemen, and Iran. While none of the Company’s supply chains have been impacted since the war broke out on October 7, 2023, the ongoing war may create supply and demand irregularities in Israel’s economy in general or lead to macroeconomic indications of a deterioration of Israel’s economic standing, which may have a material adverse effect on the Company and its ability to effectively conduct the Company’s operations. Moreover, the Company cannot predict how this war will ultimately affect Israel’s economy in general, which may involve a downgrade in Israel’s credit rating by rating agencies (such as the recent downgrade by Moody’s of its credit rating of Israel from A1 to A2, as well as the downgrade of its outlook rating from “stable” to “negative”).   In connection with the Israeli security cabinet’s declaration of war against Hamas and currently occurring hostilities with other organizations, several hundred thousand Israeli military reservists were drafted to perform immediate military service. Five of the Company’s employees, none of whom are members of management, have been called to active military duty since October 7, 2023.   Some of these employees have since returned, but there can be no assurance that they will not be called to military service again. In addition, the Company relies on service providers located in Israel and its employees or employees of such service providers may be called for service in the current or future wars or other armed conflicts with Hamas and such persons may be absent from their positions for a period of time.

F - 16

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 1 - GENERAL (CONT.):

k. Israel - Hamas War (cont):   As of April 1, 2025, any impact as a result of the number of absences of the Company’s personnel and personnel at the Company’s service providers or counterparties located in Israel has been manageable. However, military service call ups that result in absences of personnel from the Company’s service providers or contractual counterparties in Israel may disrupt the Company’s operations and absences for an extended period of time may materially and adversely affect the Company’s business, prospects, financial condition and results of operations.   Following the attack by Hamas on Israel’s southern border, Hezbollah in Lebanon has also launched missile, rocket, and shooting attacks against Israeli military sites, troops, and Israeli towns in northern Israel. In response to these attacks, the Israeli army has carried out a number of targeted strikes on sites belonging to Hezbollah in southern Lebanon. It is possible that other terrorist organizations, including Palestinian military organizations in the West Bank or the Houthis in Yemen, as well as other hostile countries, such as Iran, will join the hostilities. Such hostilities may include terror and missile attacks. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect the Company’s operations and results of operations. The Company’s commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover the Company’s potential damages. Any losses or damages incurred by the Company could have a material adverse effect on its business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm the Company’s results of operations.

F - 17

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

The significant accounting policies used in the preparation of the financial statements, on a consistent basis, are:

A. Basis of preparation:   These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and Interpretations. The financial statements have been prepared under the historical cost convention except for certain financial liabilities which are measured at fair value until conversion. The Company has elected to present the consolidated statements of comprehensive loss using the function of expense method.

B. Basis of consolidation:   Subsidiaries:   Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control. The consolidated financial statements present the results of the Company and its subsidiaries as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.   In addition, the financial statements of the subsidiaries were prepared using a consistent accounting policy with the Company regarding similar transactions and events in similar circumstances.   Investments in affiliated companies and joint ventures:   When the Company has the ability to influence the business operation of another entity, but the influence does not constitute control, then the Company has a significant influence which will be presented as an affiliate company and accounted for based on the equity method. Potential voting rights which can be exercised on an immediate basis also taking into account as part of the above influence.

F - 18

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

B. Basis of consolidation (cont.):  

Investments in affiliated companies and joint ventures (cont.):

The holding in an affiliate company is presented based on the equity method unless the investment is held for sale. The financial statements of the affiliated company have been prepared using the same accounting policy of the Company. Any goodwill arising from the affiliated company purchase is part of the investment and is not amortized unless there is objective evidence for impairment.

If the Company's share in the losses of an affiliated company or joint venture is equal to or exceeds its rights in the affiliated company or in the joint venture, the Company ceases to recognize its share in additional losses. Once the Company's rights have been reduced to zero, the Company recognizes additional losses only to the extent that it has incurred legal or implied liabilities or to the extent that payments have been made for the affiliated company or for the joint venture. The Company recognizes the gains that arise thereafter only when the Company's share in the profits equals the share in unrecognized losses.

The Company performs an impairment test (see Note 2.T below) for a net investment in an affiliated company or in a joint venture as a whole when there is objective evidence of impairment of the investment. An impairment loss is allocated to an investment as a whole.

The Company ceases to use the equity method as of the date on which an investment ceases to be an affiliated company or joint venture. Any investment remaining in the former affiliate or former joint venture is measured at fair value. The difference between the fair value of the remaining investment and any consideration from the realization of part of the investment and the book value of the investment at the time the use of the equity method is discontinued is recognized in profit or loss. Amounts previously recognized in other comprehensive income with respect to the same investment are treated in the same manner that would have been required if the invested entity had itself realized the related assets or related liabilities.

Transactions eliminated on consolidation:

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with associates and joint ventures are eliminated to the extent of the Group’s interest in these investments. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

F - 19

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

C. Use of critical estimates and assumptions in the preparation of the financial statements:   The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. By their nature, these estimates are subject to measurement uncertainty and are reviewed periodically and adjustments, if necessary, are made in the year which they are identified. Actual results could differ from those estimates.   The following is a description of assumptions about the future and other factors for uncertainty in estimates at the end of the reporting period, which results in a significant risk that will result in material correlation to book values ​​of assets and liabilities during the next reporting period:   Revenue recognition from Development of Services – Revenue from development services is recognized using the percentage of completion method by comparing project expenses to its budgeted amounts to determine the percentage of work completed. The progress towards the fulfilment of the Company's performance obligations is calculated using methods based on outputs such as a performance survey completed as of any given date. Revenue is then recognized based on this completion percentage.   Fair value of financial instruments – The fair value of financial instruments that are not quoted in an active market is measured in accordance with model-based valuation techniques. These techniques are significantly influenced by assumptions that serve as a basis for calculation, such as capitalization rates and estimates of future cash flows.

F - 20

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

D. Foreign currency:   The consolidated financial statements are prepared in U.S. dollars (which is the functional and reporting currency of the Company). Transactions and balances in foreign currencies are converted into U.S. dollars in accordance with the principles set forth by International Accounting Standard (IAS) 21 "The Effects of Changes in Foreign Exchange Rates". Accordingly, transactions and balances have been converted as follows:

• Monetary assets and liabilities – at the rate of exchange applicable at the consolidated statements of financial position date.

• Exchange gains and losses from the aforementioned conversion are recognized in the statement of comprehensive loss.

• Expense items – at exchange rates applicable as of the date of recognition of those items.

• Non-monetary items are converted at the rate of exchange used to convert the related consolidated statements of financial position items (i.e., converted at the time of the transaction).

 

Foreign operations:

On consolidation, the results of foreign operations are translated into U.S. dollars at exchange rates ruling when the transactions took place. All assets and liabilities of foreign operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the reporting date.  Exchange rate differences arising on translating the opening net assets at opening rate and the results of foreign operations at actual rate of exchange are recognized in other comprehensive income and accumulated in the foreign exchange reserve. Exchange differences recognized in profit or loss in the Group entities' separate financial statements on the translation of long-term monetary items forming part of the Group's net investment in the foreign operation concerned are reclassified to other comprehensive income and accumulated in the foreign exchange reserve on consolidation.

On disposal of a foreign operation, the cumulative exchange differences recognized in the foreign exchange reserve relating to that operation up to the date of disposal are classified to profit or loss as part of the profit or loss on disposal.

F - 21

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

D. Foreign currency (Cont.):  

Change in Subsidiary’s functional currency

In 2024, the Company noted that following the sale of SSS, the weight of Satixfy UK’s U.S. dollars revenues and expenses is expected to significantly increase. Also, the volume of intra-group transactions with SatixFy UK is expected to increase, and SatixFy UK started retaining most of its cash in U.S. dollars bank accounts. As a result, the Company re-evaluated the functional currency of SatixFy UK and determined that a change in its functional currency from British Pound (“GBP”) to U.S. dollars was appropriate. The change in functional currency for SatixFy UK has been applied prospectively, and exchange differences arising from the translation of a foreign operation in other comprehensive income were not reclassified from equity to profit or loss. From January 1, 2024, the Company ceased translating SatixFy UK’s assets and liabilities to its own functional currency. Accordingly, all transactions in GBP were accounted as foreign currency transactions. There Company examined the impact of that change and found that there was no material impact on both consolidated net loss and other comprehensive income (loss) utilizing U.S. dollars as the functional currency of SatixFy UK as of December 31, 2024, compared to the related impact if the functional currency of SatixFy UK would have remained GBP.

E. Cash and cash equivalents:   Cash equivalents are considered by the Company to be highly liquid investments, including, inter alia, short-term deposits with banks where the maturity of which does not exceed three months at the time of deposit and which are not restricted.   Overdrafts, which are due on demand and form an integral part of the Company's cash management, were included as a component of cash and cash equivalents for the purposes of presenting the statement of cash flows.

F. Linkage:   Assets and liabilities linked to the consumer price index were included according to the appropriate index for each asset or liability.   CPI-linked loans are measured at reduced cost when the balance at the end of the reporting period is CPI-linked.

F - 22

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

G. Provisions:   Provisions are recognized when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result, and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period. The effect of the time value is material, the amount of the provision is measured according to the present value of the projected expenses that will be required to settle the obligation. The reduction of a provision is recognized in profit or loss as the reduction of the appropriate consequential item when the Company actually bears it or at the date of its termination, whichever is later.

H. Research and development costs:   Expenditure on research activities is recognized in profit or loss as incurred. Expenditure incurred on development activities including the Company’s development is capitalized where the expenditure will lead to new or substantially improved products and only if all the following can be demonstrated:

• the product is technically and commercially feasible;

• the Company intends to complete the product so that it will be available for use or sale;

• the Company has the ability to use the product or sell it;

• the Company has the technical, financial and other resources to complete the development and to use or sell the product;

• the Company can demonstrate the probability that the product will generate future economic benefits; and.

• the Company is able to measure the expenditure attributable to the product during the development.

 

Recognition of costs in the carrying amount of an intangible asset, ceases, when the asset is in the condition necessary for it to be capable of operating in the manner intended by management. Capitalized development costs are amortized on a straight-line basis over their estimated useful lives once the development is completed and the assets are in use.

F - 23

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

H. Research and development costs (Cont):  

Subsequent expenditure on capitalized intangible assets is capitalized only where such expenditure  clearly increases the economic benefits to be derived from the asset to which it relates. All other expenditure, including that incurred in order to maintain an intangible assets current level of performance, is expensed as incurred. The Company did not meet the requirements for capitalization of research and development expenses during the periods covered by this report.

I. Leases:   The Company applied the following practical expedients when applying IFRS 16 to leases previously classified as operating leases:

• Applied a single discount rate to a portfolio of leases with reasonably similar characteristics.

• Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term remaining as of the date of initial application and do not contain a purchase option.

• Applied the practical expedient provided by the standard to recognize right-of-use assets equal to the lease liability upon initial application.

Under IFRS 16, the Company recognizes right-of-use assets and lease liabilities for most leases. The Company adopted IFRS 16 using the modified retrospective approach, with recognition of transitional adjustments on the date of initial application (January 1, 2019), without restatement of comparative figures.

On initial application of IFRS 16, the Company recognized right-of-use assets and lease liabilities in relation to leases of office facilities and motor vehicles, which had previously been classified as operating leases. The lease liabilities were measured at the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate as at January 1, 2019. The Company’s incremental borrowing rate is the rate at which a similar borrowing could be obtained from an independent creditor under comparable terms and conditions. The weighted-average rate applied was 4.5%. Right-of-use assets are measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments.

Right-of-use assets:

The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use).

F - 24

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

I. Leases (Cont.):  

Right-of-use assets are measured at cost, less any accumulated depreciation and any accumulated impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets comprises the amount of the initial measurement of the lease liability; lease payments made at or before the commencement date less any lease incentives received; and initial direct costs incurred. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.

Lease liabilities:

At the commencement date of the lease, the Company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option that is reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognized as expense in the period during which the event or condition that triggers the payment occurs.

Lease term:

The term of a lease is determined as the non-cancellable period for which a lessee has the right to use an underlying asset, together with both periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option.

J. Share-based payment:   The Company has recognized share-based payment transactions, inter alia, for the purchase of goods or services. These transactions include transactions with employees and non-employee parties that will be settled in the Company's equity instruments, such as shares or stock options, or that will be settled in cash based on the price or value of the Company's equity instruments, and transactions that allow the Company to choose between cash in cash and disposal in the company's equity instruments.

F - 25

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

J. Share-based payment (Cont.):  

In the case of share-based payment transactions for employees disposed of in equity instruments, the value of the benefit is measured at the time of grant with respect to the fair value of the equity instruments granted.

With respect to share-based payment transactions for non-employee parties settled in equity instruments, the value of the transaction is measured with respect to the fair value of the goods and/ or services received. If the Company is unable to reliably measure the fair value of the goods or services received, their fair value is measured with respect to the fair value of the equity instruments granted.

In the case of share-based payment transactions that are settled in cash, the value of the benefit is presented as a liability, which is measured at fair value at the end of each reporting period and at the date of settlement.

The benefit value of share-based payment transactions is recognized in profit or loss, unless the expense is included in the cost of an asset, against a capital fund over the vesting period based on the best estimate obtainable of the number of equity instruments expected to mature. When the Company received services in exchange for a payment granted based on the Company's equity instruments, it is a share-based payment transaction that is settled on equity instruments, so that an expense is recognized in profit or loss. When changes are made to a share-based payment plan, the Company recognizes the effects of changes that increase the total fair value of the plan during the remaining vesting period.

K. Transactions with related parties:   An asset transferred to the Company by its related parties is presented in the Company's financial statements at its fair value at the date of the transfer. Any difference between the amount of consideration determined for the property and its fair value was recognized in equity.   An asset transferred from the Company to its related parties is deducted from the Company's financial statements at its fair value at the date of the transfer. The difference between the fair value of the property and the book value at the date of transfer is recognized in profit or loss and the difference between the amount of consideration determined for the property at the time of transfer and its fair value is recognized in equity.

F - 26

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

K. Transactions with related parties (Cont.):  

When the Company's liability to a third party, in whole or in part, is taken by a related party, the liability is deducted from the Company's financial statements at fair value at the date of settlement when the difference between the book value of the liability and the fair value at the date of disposal is recognized in profit or loss. The obligation at the time of settlement and the amount of consideration is determined by a capital seller.

L. Loss per share:   Loss per share is calculated by dividing the net loss attributed to the Company's shareholders by the number of weighted ordinary shares that exist during the period. The basic loss per share includes only shares that actually exist during the period. Potential ordinary shares (convertible securities such as convertible bonds, warrants and employee stock options) are included only in the calculation of diluted earnings per share to the extent that their effect dilutes loss per share by converting them to decreases earnings per share or increases losses per share. In addition, potential ordinary shares converted during the period are included in the diluted earnings per share only up to the date of conversion, and from that date are included in the basic loss per share.

M. Israel Innovation Authority grants:   A grant from the “Israel Innovation Authority” (or “IIA”) received for research and development activities, for which the Company undertook making royalties’ payments to the government contingent on making future sales resulting from such grant financing, was treated as a loan that could be forgiven and recognized as a reimbursement of related research expenses or development costs.   The grant was recognized as a liability in the financial statements. Unless there is reasonable assurance that the Company will meet the conditions for the forgiveness of the loan, then it has been recognized as a government grant. When the liability to the government does not bear market interest, the liability was recognized at its fair value in accordance with the market interest rate at the time the grant was received. The difference between the consideration received and the liability recognized in the statement of financial position at the time of receiving the grant was treated as a government grant and recognized as a reimbursement of research expenses or as a reduction of development costs capitalized as the case maybe. Repayment of the liability to the government is reviewed every reporting period, with changes in the liability resulting from a change in the expected royalties recognized in profit or loss.

F - 27

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

N. Credit costs:   The Company recognized credit costs as an expense in the period of formation, except in cases where they can be directly attributed to the acquisition, construction or production of eligible assets, and in such cases these costs were capitalized as part of the cost of those assets. The Company capitalized credit costs when exits were formed in respect of the property, credit costs were formed, and the activities required to prepare the property for its intended use or sale were carried out. The Company stops capitalizing credit costs when substantially all the activities required to prepare the eligible asset for its intended use or sale have been completed. During prolonged periods in which the active development of a qualifying asset has stopped, the Company delayed the capitalization of credit costs.

O. Capital instrument:   Any contract that classifies a residual right in a company's assets after deducting all its liabilities is classified as an equity instrument. Costs directly related to the issuance of an equity instrument are presented in equity less the issue.   Rights, options, or warrants offered in proportion to all existing owners of the same type of shares for the purchase of a fixed number of shares for a fixed amount in any currency have been classified as an equity instrument.

P. Warrants:   Equity warrants: Receipts in respect of warrants for the purchase of shares of the company/ subsidiary, which give the holder the right to purchase a fixed number of equity instrument (e.g., ordinary shares) in exchange for a fixed amount of cash, are classified as equity.   Financial liability: Receipts in respect of warrants for the purchase of shares of the Company, which give the holder the right to purchase a fixed number of ordinary shares in exchange for a variable amount, including when the exercise of the warrants is linked to any index or foreign currency, are classified as liabilities (see also Note 14).

F - 28

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Q. Fair value measurement:   Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

1. In the principal market for the asset or liability, or

2. In the absence of a principal market, in the most advantageous market for the asset or liability.

 

The principal or the most advantageous market must be accessible to the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

The Company measures the following balances according to Fair value: financial lability warrants.

Classification of fair value hierarchy

The financial instruments presented in the statement of financial position at fair value are grouped into classes with similar characteristics using the following fair value hierarchy which is determined based on the source of input used in measuring fair value. The classification of an item into the below levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognized in the period they occur:

Level 1	-	Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2	-	Inputs other than quoted prices included within Level 1 that are observable either directly or indirectly.
Level 3	-	Inputs that are not based on observable market data (valuation techniques which use inputs that are not based on observable market data).

F - 29

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

R. Financial instruments (Cont.):

Financial assets:

The Company classifies its financial assets into the following categories, based on the business model for managing the financial asset and its contractual cash flow characteristics. The Company's accounting policy for the relevant category is as follows:

Amortized cost: These assets arise principally from the services rendered to customers (e.g. trade receivables), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest.

They are initially recognized at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortized cost using the effective interest rate method, less provision for impairment. Impairment provisions for trade receivables are recognized based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables.

For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognized within general and administrative expenses in the consolidated statements of comprehensive income. On assessment that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

For this purpose, the Company relied on historical data that includes debt settlement, failure rate of lost debt to each company in the group in the period of the last 5 years up to the date of measurement. The Company updates the impairment provision at the end of each reporting period, and the change in the provision as it exists is recognized as a gain or loss from an impairment loss or loss.

At the end of each reporting period the Company assesses whether an asset has been impaired due to credit risk (i.e. if an event has occurred that has a detrimental effect on the future cash flows of the estimated asset). Evidence that a property is defective includes for example a significant financial difficulty of the debtor. The Company writes off  the value in the gross books of a financial asset, in whole or in part, when the Company has no reasonable expectation of the return of the asset, for example when the debtor enters into a foreclosure or bankruptcy proceeding.

F - 30

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Q. Financial instruments (Cont.):  

Fair value: All other financial assets, including debt instruments when first recognized at fair value through profit or loss to eliminate or significantly reduce inconsistency in measurement or recognition, were first measured at fair value, and changes in fair value after initial recognition were recognized in profit or loss. Transaction costs that were directly attributed to these assets were recognized in profit or loss at the time they were incurred.

Reclassification of measurement groups after initial recognition is not possible unless the Company changes its business model for managing financial assets.

R. Financial instruments:   Financial liabilities:   The Company's accounting policy for its financial liabilities is as follows:

• Fair value: This category comprises convertible securities and warrants which are carried in the consolidated statement of financial position at fair value with changes in fair value recognized in the consolidated statement of comprehensive loss.

• Amortized cost: other financial liabilities, including bank borrowings, loans from bank, trade payables, loan from major shareholder, leases and financial liability from government grants, are initially recognized at fair value less any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortized cost using the effective interest method, which ensures that any interest expense over the period is at a constant interest rate on the balance of the liability carried in the statement of financial position. Interest expense in this context includes initial transaction costs, as well as any interest or coupon payable while the liability is outstanding.

De-recognition:

● Financial assets - the Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows.

● Financial Liabilities - the Company derecognizes financial liability when its contractual obligations are discharged or cancelled or expire.

F - 31

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

R. Financial instruments (Cont.):  

Impairment of financial assets:

The Company assesses at the end of each reporting period whether there is any objective evidence of impairment of a financial asset as follows. Financial assets carried at amortized cost: there is objective evidence of impairment of other accounts receivable if one or more events have occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows. Evidence of impairment may include indications that the debtor is experiencing financial difficulties, including liquidity difficulty and default in interest or principal payments.

Write-off policy:

The Company writes off its financial assets if any of the following occur:

1. Inability to locate the debtor.

2. Discharge of the debt in a bankruptcy.

3. It is determined that the efforts to collect the debt are no longer cost effective given the size of receivable.

S. Issue of a unit of financial instruments:   The issue of a unit of financial instruments like financial liability (e.g., a loan) and free-standing derivative (e.g. warrants) involves the allocation of the proceeds received (before issue expenses) to the instruments issued in the unit based on the following order: financial derivatives and other financial instruments measured at fair value in each period. Then fair value is determined by financial liabilities that are measured at amortized cost. The proceeds allocated to equity instruments are determined to be the residual amount. Issue costs are allocated to each component pro rata to the amounts determined for each component in the unit.

T. Impairment of non-financial assets:   Other intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount.

F - 32

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

U. Impairment of non-financial assets (Cont):  

Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit. A cash-generating unit is the smallest group of assets that independently generates cash flow and whose cash flow is largely independent of the cash flows generated by other assets.

V. Assets and liabilities arising from engagements with customers:

• Customers -   The Company presents an unconditional right to receive consideration as debtors in respect of contracts (customers). The right to compensation is not conditional if only a lapse of time is required until the due date, even if it may be subject to repayment in the future. Upon first recognition of customers, any difference between the measurement of customers in accordance with IFRS 9 and the corresponding amount of recognized revenue will be presented as an expense. The Company treats debtors in respect of contracts as financial assets.

• Assets in respect of contracts –   The Company presents a right to receive consideration for goods or services transferred to the customer as an asset in respect of a contract, when this right is conditional on a factor other than the passage of time. The Company handles the impairment of an asset in respect of a contract on the same basis as a financial asset at a reduced cost.

• Liabilities in respect of contracts –   The Company presents an obligation to transfer goods or services to the customer, for which the company has received consideration from the customer (or unconditional consideration that has matured), as an obligation in respect of a contract (advances from customers).

F - 33

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

W. Inventories:   Inventories are recognized at the lower of cost and net realizable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The Company measures cost of raw materials on a First In First Out ("FIFO") basis and finished goods according to costs based on direct costs of materials and labor.

X. Property, plant and equipment:   Items of property, plant and equipment are initially recognized at cost. Cost includes directly attributable costs and the estimated present value of any future costs of dismantling and removing items. Depreciation is computed by the straight-line method, based on the estimated useful lives of the assets, as follows:

	%
Leasehold Improvement	25-33 (*)
Machinery and Equipment	7-14
Computers	33.3
Furniture	15

 

(*) In case that the duration of the lease contract is less than the lease improvement, the depreciation is being made over the contract’s period.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

The assets’ residual values, depreciation rates, and depreciation methods are reviewed, and adjusted if appropriate, at the end of the reporting period year. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is higher than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the profit or loss.

F - 34

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Y. Employee benefits:   The Group has several employee benefit plans:

1. Short-term employee benefits: Short-term employee benefits include salaries, paid annual leave, paid sick leave, recreation and social security contributions and are recognized as expenses as the services are rendered. A liability in respect of a cash bonus or a profit-sharing plan is recognized when the Company has a legal or constructive obligation to make such payment as a result of past service rendered by an employee and a reliable estimate of the amount can be made.

2. Post-employment benefits: The plans are normally financed by contributions to insurance companies and classified as defined contribution plans or as defined benefit plans. In Israel, the Group funds its employee’s contribution plans pursuant to Section 14 to the Severance Pay Law since 2004 under which the Group pays fixed contributions and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient amounts to pay all employee benefits relating to employee service in the current and prior periods. There are no post-employment benefits in the UK.

Z. Revenue recognition:   Revenue is recognized based on the five-step model outlined in IFRS 15, Revenue from Contracts with Customers. IFRS 15 sets out a single revenue recognition model, according to which the entity shall recognize revenue in accordance with the said core principle by implementing a five-step model framework:

1. Identify the contracts with a customer.

2. Identify the performance obligations in the contract.

3. Determine the transaction price.

4. Allocate the transaction price to the performance obligations in the contract.

5. Recognize revenue when the entity satisfies a performance obligation.

The Company's revenue consists mostly of revenue from the sale of chip development services and the sale of modems for satellite communications and related products.

F - 35

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Z. Revenue recognition (cont.):

The Company recognizes revenue from chip development services, at the time the service is rendered to the customer and measures the revenue in an amount that represents the consideration that the Company expects to be entitled to for the service.

The Company recognizes revenue from the sale of satellite communications modems and related products when control is transferred to its customers (i.e., once the products have been physically delivered at the agreed location, the Company no longer has a physical holding, and usually has a present right to receive payment and does not retain any significant risks from the products). In most of the Company's product sales, control is transferred when the products are shipped.

The Company presents revenues from products and revenues from development and pre-production services in separate line items on its consolidated statement of comprehensive loss.

The Company evaluates the products and services committed in each contract in order to determine whether the contract includes a commitment or performance obligation. The Company treats goods or services as a separate performance obligation if they can be distinguished and the commitment to deliver the same goods or services is identifiable separately from other commitments in the contract. One of the Company's contracts includes a commitment to license the Company's intellectual property together with ancillary specialized services that are generally indistinguishable from each other because they are interdependent and closely related.

The Company determines the transaction price for each contract based on the consideration that the Company expects to be entitled to for the products or services provided subject to the contract. Sales tax, value added tax and other taxes which are levied by the Company from income-generating activities are not included in the Company’s revenues. For contracts where part of the price may vary, the Company estimates a variable consideration in the most reasonable amount, which is included in the transaction price if and only when it is unlikely that there will be a significant cancellation of the recognized cumulative revenue. When the transaction price includes non-cash consideration, the Company has measured its fair value at the time of the engagement, with subsequent changes in the fair value that are not due to the form of consideration being treated in accordance with the guidelines regarding variable consideration. The Company has chosen, as a practical relief, not to adjust the amount of consideration promised to the effects of a significant financing component in contracts when the period between execution by the Company and payment by the customer is one year or less. When the Company receives an upfront payment for a multi-period supply agreement (see Master Purchase Agreement on Note 3), the Company adjusts the transaction price in the contract for the time value of money in order to reflect the financing provided by customer.

F - 36

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

Z. Revenue recognition (Cont.):  

Ancillary items that are not material to the contract are recognized as an expense.

When a contract includes a license to use the Company's intellectual property, together with other goods or services, the Company assesses the nature of the combined performance obligation to determine whether it is met over time or at a point in time.

When the commitment to the customer is to provide a right of access to the Company's intellectual property, the Company recognizes revenue over time. The Company measures progress towards the fulfillment of the Company's performance obligations in methods based on outputs such as a performance survey completed as of any given date.

The Company presents a contract liability (deferred income) when cash payments are received or are due for payment before the Company's performance subject to the contract, including amounts that are repayable. A right to consideration is presented as an asset only when it is not conditional (i.e., when only a lapse of time is required before the due date of the consideration arrives). When the Company delivers goods or services before the customer pays any consideration or before payment’s due date, the Company records it as a contractual asset, which is presented as part of other receivables.

AA. Reverse Merger:   The Business Combination has been accounted for as a capital reorganization. Under this method of accounting, Endurance was treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of the Company issuing shares in the Business Combination for the net assets of Endurance as of the Closing, accompanied by a recapitalization. The net assets of Endurance are stated at historical cost, with no goodwill or other intangible assets recorded.

F - 37

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

AA. Reverse Merger (cont.):  

The Company determined that it was the accounting acquirer based on evaluation of the following facts and circumstances:

• the Company’s existing shareholders have the greatest voting interest in the combined entity.

• the Company’s directors represent the majority of the board of directors of the combined company following the consummation of the Business Combination.

• the Company’s senior management were the senior management of the combined company following the consummation of the Business Combination.

• the Company’s is the larger entity based on historical operating activity and its employee base.

 

The Business Combination, which is not within the scope of  IFRS 3 since Endurance does not meet the definition of a business in accordance with IFRS 3, was accounted for within the scope of IFRS 2. Any excess of fair value of the Ordinary Shares issued over the fair value of Endurance’s identifiable net assets acquired represented compensation for the service of a stock exchange listing for its shares and was expensed as incurred.

According to the International Financial Reporting Interpretations Committee’s (“IFRIC”) final agenda decision from October 2022, an accounting policy that results in allocating all the warrants issued to the acquisition of the stock exchange listing service solely to avoid the warrants being classified as financial liabilities applying IAS 32 would not give rise to a relevant and reliable accounting policy, it was suggested that an entity could allocate the shares and warrants to the acquisition of cash and other financial assets and the stock exchange listing service on the basis of the relative fair values of the instruments issued. Under this allocation method:

• Warrants and Price Adjustments Shares ("PAS") in the scope of IFRS 2 will be classified as equity, as they are considered equity-settled share-based payment.

• Warrants and PAS in the scope of IAS 32 will be classified as financial liabilities, as they fail the fixed-for-fixed requirement.

F - 38

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.):

AB. Changes in accounting policies:   Several amended standards became applicable for the current reporting period. The Company did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards:   New IFRS adopted in the period   The following amendments are effective for the period beginning January 1, 2024:

a. Supplier Finance Arrangements (Amendments to IAS 7 & IFRS 7): These amendments have no effect on the measurement or presentation of any items in the Interim Condensed Consolidated Financial Statements of the Company but affect the disclosure of accounting policies of the Company.

 

b. Lease Liability in a Sale and Leaseback (Amendments to IFRS 16): These amendments had no material effect on the Interim Condensed Consolidated Financial Statements of the Company.

 

c. Classification of Liabilities as Current or Non-Current (Amendments to IAS 1): These amendments had no material effect on the Interim Condensed Consolidated Financial Statements of the Company.

New IFRS not yet effective

On April 9, 2024, the International Accounting Standards Board published IFRS 18, “Presentation and Disclosure in Financial Statements,” which replaces IAS 1, “Presentation of Financial Statements” and is mandatorily effective for annual reporting periods beginning on or after January 1, 2027; the main changes are aggregation and disaggregation of information including the introduction of overall principles for how information should be aggregated and disaggregated in financial statements. Aggregation and disaggregation of information including the introduction of overall principles for how information should be aggregated and disaggregated in financial statements. disclosures related to management defined performance measures.

The Company is currently assessing the impact of IFRS 18 on the financial statements, but at this stage it is unable to estimate such an impact. The effect of the new standard, however it may be, will only affect matters of presentation and disclosure.

F - 39

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 3 – MDA AGREEMENT:

In August 2023, the Company announced a $60 million transaction with MDA, a leading provider of advanced technology and services to the rapidly expanding global space industry (the “MDA Agreement”). The MDA Agreement establishes cooperation between the Company and MDA to utilize the Company’s digital payload chip-based technology to advanced digital satellite payloads. The Company has decided to focus its space business on being a technology provider to satellite payload design companies offering its unique digital multi beam forming and beam-hopping on-board-processing radiation hardening chipsets (see also Note 1(e)).
 

The MDA Agreement is a combination of a $40 million share purchase agreement selling the Company’s holdings in  SSS to MDA, as well as an additional $20 million in advanced payments under new commercial agreements which includes the previous $10 million advanced payment made in June 2023 to be applied to future orders of space grade chips. SSS was the Company’s satellite payload subsidiary expert in the development of digital satellite payloads systems and subsystems, including digital beam forming antennas and on-board processing digital payloads. In October 2023, the Company announced the completion of the MDA Agreement.
 

In connection with the closing of the MDA Agreement, the Company and/ or certain of its affiliates, entered into certain agreements with MDA and/ or certain of its affiliates as contemplated by the MDA Agreement and described including but not limited to a Non-Compete Agreement, Master Purchase Agreement, Investor Rights Agreement, License Agreement and Escrow Service Agreements.

The $40 million consideration as part of the Share Purchase Agreement is comprised of $37 million Promissory Notes which were paid to the Company in consideration for the shares of SSS, of which, $1 million was paid at closing while the remaining $2 million to be received after eighteen month from closing upon satisfaction of the provided reps and warranties by the Company.
 

The Promissory Notes are settled as follows: $17 million were paid at closing in October 2023 and the remaining $20 million were paid over seven monthly instalments during the year 2024 of $2.85 million each, with the last payment made in July 2024.

F - 40

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 3 - MDA AGREEMENT (CONT.):

As part of the MDA Agreements, SatixFy UK and MDA entered into a Master Purchase Agreement (the “Master Purchase Agreement”) at the closing, providing for the terms of orders of the Company’s space grade chips, including certain prepayment, exclusivity and preferred pricing terms in respect of such chips for MDA.

The Master Purchase Agreement is a continuation of a Pricing and Pre-Purchase Agreement entered into on January 27, 2022 between the Company and MDA (“the Pre-Purchase Agreement”), under which MDA has already paid $10 million as was amended in June and September 2023 according to which MDA paid an additional $15 million and the remaining $5 million were paid during 2024 (“Pre-Purchase Amount”).

Under the Master Purchase Agreement, in the event that MDA determines that it no longer requires the Company's product, or that it does not purchase product having an aggregate purchase price equal to the Pre-Purchase Amount by the date that is 48 months from the date that the Pre-Purchase Agreement was originally executed by the Parties, or that MDA terminates the agreement – the Company will pay MDA any positive difference between the Pre-Purchase Amount and the aggregate purchase price of the products purchased and accepted by MDA, together with 12% interest per annum, applied from the date of the  receipt by the company of each respective installments of funds comprising the refunded amount. As the Company does not have an unconditional right to avoid delivering cash to MDA, the Pre-Purchase Amount was accounted for as a financial liability and accumulated interest.

On October 17, 2024, the Master Purchase agreement was amended Amendment No. 1 to add $3 million to the outstanding amount of the advanced payments under the Master Purchase Agreement.

On March 15, 2025 and April 1, 2025 the Master Purchase Agreement was further amended by Amendment No. 2 and Amendment No. 3 respectively (see Note 26)

F - 41

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 4 - CONTRACT ASSETS:

	December 31, 2024			December 31, 2023
Balance at the beginning of the year		4,091			5,035
Revenue recognition in the period, net		-			643
Fulfilment through invoices issuance		(2,605	)		(1,876	)
Currency translation adjustments		-			289
Balance at the end of the year	$	1,486		$	4,091

NOTE 5 - INVENTORY:

Inventories are stated at the lower of cost or market, computed using the FIFO method.

Following is a breakdown of the Company’s inventory:
 

	December 31, 2024		December 31, 2023
Raw materials	$	675	$	1,397
Finished goods inventory		604		78
	$	1,279	$	1,475

NOTE 6 - LEASE LIABILITIES AND RIGHT OF USE ASSETS, NET:

The Company has lease agreements that include leases of buildings and vehicles that are used for the purpose of carrying out the Company's ongoing activities.

The lease agreements of the buildings are for a period of up to five years. While the lease agreements of the vehicles are up to three years.

The Company leases the offices of its corporate headquarters located in Rehovot, Israel. The lease for this office expires in May 2028. The Company also leases an office in the UK in Farnborough. The office in the UK serves as a research and development and operations centers. The lease agreement for the office of Farnborough expires in October 2026. The Company also leases an office in Sofia Bulgaria, where it employs its antenna development team. The lease agreement for the office in Bulgaria included two agreements which will expire in August 2026. The Company also leases an office in Pennsylvania USA that serves as a research and development center. The lease agreement for the office in Pennsylvania expires in September 2025.

F - 42

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 6 - LEASE LIABILITIES AND RIGHT OF USE ASSETS (CONT.):

a. Extension and cancellation options:   The Company has lease agreements that include extension options. These options give the Company flexibility in managing the lease transactions and adjustment to the Company's business needs. The Company exercises significant discretion in examining whether it is reasonably certain that the extension options will be exercised.   The Company included as part of the lease period the exercise of the extension options existing in the agreements, for assets in which the Company expects to exercise the option.   There are no extension options in vehicle lease agreements. The Company also has certain leases of office facilities with lease terms of 12 months or less. The Company applies the exemption to the recognition of 'short-term leases' to these leases.

b. The following is a list of the carried values of the lease assets recognized and the transactions during the period:

	Buildings			Cars			Total
Cost
January 1, 2024		3,839			184			4,023
Value adjustment		48			4			52
December 31, 2024		3,887			188			4,075
Accumulated Depreciation
January 1, 2024		(1,718	)		(70	)		(1,788	)
Additions		(545	)		(63	)		(608	)
December 31, 2024		(2,263	)		(133	)		(2,396	)
Net Book value December 31, 2024		1,624			55			1,679

F - 43

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 6 - LEASE LIABILITIES AND RIGHT OF USE ASSETS (CONT.):

	Buildings			Cars			Total
Cost
January 1, 2023		4,918			155			5,073
Additions		662			103			765
Disposals- Sale of SSS		(1,741	)		(74	)		(1,815	)
December 31, 2023		3,839			184			4,023
Accumulated Depreciation
January 1, 2023		(2,256	)		(23	)		(2,279	)
Additions		(916	)		(83	)		(999	)
Disposals- Sale of SSS		1,454			36			1,490
December 31, 2023		(1,718	)		(70	)		(1,788	)
Net Book value December 31, 2023		2,121			114			2,235

c. Details regarding lease transactions:

	For the year ended
	December 31, 2024		December 31, 2023
Interest expenses in respect of lease liabilities		282		337
Lease principal payments during the year		597		927

NOTE 7 - INVESTMENT IN JET-TALK:

In March 2018 Satixfy UK entered into a Joint Venture Agreement with ST Electronics (Satcom & Sensor Systems) Pte LTD ("STE") according to which STE invested $20 million in the joint venture while the SatixFy UK had committed to provide to Jet Talk  with future development services of a an electronically steerable Panel Antenna Array (“PAA”) and supporting modem, exclusive marketing rights for the commercial aviation market, technical skills, staff expertise, research and development (“R&D”) facilities and exclusive, royalty-free, world-wide, perpetual, non-transferable, irrevocable license to use and commercially exploit the Company's intellectual property for the purposes of development, production, sales and marketing of satellite antenna systems.

F - 44

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 7 - INVESTMENT IN JET-TALK (CONT.):

As part of the Company’s commitment to the future development services to Jet Talk, the Company signed two development agreements to provide an electronically steerable PAA and supporting modem for a total consideration of $13 million to be provided during 2018 through 2023.

Accordingly, the joint venture company, Jet Talk, was incorporated in England and Wale and is 51% held by the SatixFy UK and 49% held by STE. Jet Talk developed the industry’s first Aero in- flight-connectivity solution, delivering simultaneous high bit rate Internet and TV channels over current satellites.

Although the Company holds the majority of voting rights (51%), STE in fact participates in significant financial and operational decisions of Jet Talk made during the ordinary course of business including appointing a chief executive officer, directing R&D activities, directing marketing activities while utilizing its East Asia business connections and its control over the Company’s financing activity. In view of the analysis of the relevant activities of the investee and the examination of the Company's ability to direct these operations, the Company concluded that it has no influence over all of the investee’s most relevant operations and hence the Company has no control over the investee. Consequently, the investment in Jet Talk is accounted for in accordance with the equity method and assessed under IFRS 28, Investments in Associates and Joint Ventures.

	December 31, 2024		December 31, 2023		December 31, 2022
Net loss  in Company share		65		442		705
Company's share in the loss of a company accounted by equity method, net		33		226		360

F - 45

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 8 - PROPERTY, PLANT AND EQUIPMENT, NET:

Property, plant and equipment consist of the following as of December 31, 2024, and 2023:

	Computers			Leasehold improvements			Furniture			Machinery and Equipment			Total
Cost
January 1, 2024		1,192			533			352			1,055			3,132
Additions		1,074			106			-			78			1,258
December 31, 2024		2,266			639			352			1,133			4,390
Accumulated Depreciation
January 1, 2024		(987	)		(290	)		(191	)		(244	)		(1,712	)
Additions		(141	)		(95	)		(35	)		(123	)		(394	)
December 31, 2024		(1,128	)		(385	)		(226	)		(367	)		(2,106	)
Net Book value December 31, 2024		1,138			254			126			766			2,284

F - 46

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 8 - PROPERTY, PLANT AND EQUIPMENT, NET (CONT.):

	Computers			Leasehold improvements			Furniture			Machinery and Equipment			Total
Cost
January 1, 2023		1,092			600			347			1,043			3,082
Additions		113			52			5			65			235
Disposal -SSS sale		(13	)		(119	)		-			(53	)		(185	)
December 31, 2023		1,192			533			352			1,055			3,132
Accumulated Depreciation
January 1, 2023		(832	)		(262	)		(162	)		(183	)		(1,439	)
Additions		(156	)		(62	)		(29	)		(61	)		(308	)
Disposal -SSS sale		1			34			-			-			35
December 31, 2023		(987	)		(290	)		(191	)		(244	)		(1,712	)
Net Book value December 31, 2023		205			243			161			811			1,420

Depreciation expenses totaled $394 and $308 the year ended December 31, 2024 and December 31, 2023, respectively.

F - 47

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 9 - CONTRACT LIABILITIES:

Contract liabilities fully reflect the remaining amount to be recognized for each cut-off period in respect of certain contracts with customers.

	December 31, 2024			December 31, 2023
Balance at the beginning of the year		1,720			622
Expenses (revenues) recognition in the period, net		(1,534	)		819
Currency translation adjustments		-			279
Balance at the end of the year	$	186		$	1,720

NOTE 10 - OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

	December 31, 2024		December 31, 2023
Liabilities in respect of employees, wages and institutions in respect of wages		3,846		2,584
Accrued expenses		1,241		6,862
Accrued interest of long-term bank loans (Note 12)		2,823		-
Liabilities to government institutions due to grants received		308		136
Tax accrual		122		122
		8,340		9,704

NOTE 11 - LIABILITIES FOR EMPLOYEE SEVERANCE PAY, NET:

On May 7, 2006, an extension order in Israel came into force in the manufacturing industry (hereinafter - the “Extension Order”) which applied Section 14 of the Severance Pay Law. Thus, Israeli employees who began their work after May 7, 2006, will receive comprehensive pension insurance. The section also grants employees the right to receive, both in the event of dismissal and in the event of resignation, the component of severance pay, which has been accrued in the funds the Company has created for him/ her. On the other hand, the arrangement in Section 14 of the Israeli Severance Pay Law releases the company from the obligation to complement fund contributions if the amount accumulated in the funds does not reflect the amount of severance pay due to the employee under law. The Company applies Section 14 of the Severance Pay Law to its Israeli employees.

F - 48

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 12 - LONG TERM LOANS FROM FINANCIAL INSTITUTIONS, NET:

On February 1, 2022, the Company entered into a $55 million Credit Agreement (the “2022 Credit Agreement" with affiliates of FP, with a repayment period of between 2.5 to 4 years depending on the Company completing a qualified public offering within 12 months of closing. The loan beard a yearly interest of 9.5% on the outstanding balance. In the event the Company will not complete a qualified public offering during the first year, then the interest rate shall increase by 100 basis points per year beginning in year 2 up to a maximum rate of 11.5% total. As long as the Company was private, there was an ability to Pay In Kind (“PIK”) 100% of interest in year 1, 75% of interest in year 2, and 50% of interest thereafter. Once the Company completes a qualified public offering, then 100% of interest is paid in cash thereafter. Until October 27, 2022 the PIK interest of $3,988 was added to the loan balance.

As consideration for the loan, the Company also issued to the lenders under the 2022 Credit Agreement 808,907 of its ordinary shares. Following the receipt of the proceeds from the loan, The Company repaid all of its existing borrowings in an amount of $19.1 million, including a $5.3 million loan from a shareholder and $13.8 million of loans from financial institutions. The Company attributed $50,073 (net of transaction costs) to the loan, based on its fair value. The remaining proceeds of $1.978 million (net of transaction costs) were attributed to the ordinary shares issued.  The fair value of the loan was estimated using a stochastic model incorporating the fair value of the Company and its ability to merge with a SPAC or enter into additional financing transactions given the timely value of the Company under different scenarios (a level 3 fair value measurement). The inputs used in determining the fair value are: a risk-free interest rate of 1.16%, expected volatility of approximately 50%.

F - 49

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 12 - LONG TERM LOANS FROM FINANCIAL INSTITUTIONS, NET (CONT.):

On April 23, 2023, the Company and FP. entered into a Waiver and Amendment to the 2022 Credit Agreement whereby FP, (i) provided a waiver of certain defaults or potential defaults, (ii) permitted the Company to make its interest payments for 2023 on a PIK basis if its cash balance is less than $12.5 million, (iii) temporarily reduced the Company’s minimum cash requirement from $10 million to $8 million and $7 million for the months of April and May 2023, respectively, and thereafter to $10 million, in each case plus an amount sufficient to cover its and its subsidiaries’ accounts payable that are past 60 days due, (iv) increased the interest rate of the loan to Secured Overnight Financing Rate (“SOFR”) + 9.50% (with a 3% SOFR floor) and (v) provided for certain additional reporting obligations by the Company.

In June 2023 the Company and FP entered into an amendment which provides, among other things, upon the Company’s receipt of a $10 million prepayment as part of the MDA Agreement (see Note 3), interest payable thereunder will be added to the principal of the term loan on a “pay in kind” basis through June 28, 2024, the payments made in connection with the pre-purchase agreement will not be applied to repay debt under the 2022 Credit Agreement, a limited waiver, subject to certain conditions, of the $10 million minimum cash requirement liquidity covenant therein, and following closing of the MDA Agreement, a reduced interest rate of SOFR + 8.5% provided that the interest rate shall not exceed a rate per annum equal to 12.5%, and the issuance by the Company of 5,100,000 ordinary shares, of which 1,000,000 ordinary shares were issued in a private placement within 30 days, which shares will be subject to substantially the same terms governing the PAS (see Note 14(g)) previously issued in connection with the business combination with Endurance.

On October 31, 2023, the Company entered into another Waiver and Amendment to the 2022 Credit Agreement, whereby the lenders provided their consent to the MDA Agreement and to wave financial covenants which were associated with the 2022 Credit Agreement. This amendment was accounted for as an extinguishment of the loan. In reaching this conclusion, the Company considered the impact of consecutive modifications of the loan throughout 2023; also, the Company noted that the issuance of ordinary shares in terms similar to the ones governing the PAS gives rise to a substantial qualitative change in the 2022 Credit Agreement. As such, the Company accounted for the modified loan as a derecognition of the existing loan and recognition of the modified loan at fair value with any differences as finance expenses.

F - 50

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 12 - LONG TERM LOANS FROM FINANCIAL INSTITUTIONS, NET (CONT.):

The finance incomes resulted from the modification amounted to $2.5 million. On April 1, 2025, the Company entered into the Sixth Amendment to the 2022 Credit Agreement (see Note 26 b)

	For the year ended December 31
	2024		2023
Long term loans from financial institutions		67,691		59,792
Accrued interest (see Note 10)		2,823		-

Financial covenants:

According to the 2022 Credit Agreement, as amended, the Company’s cash must be held in deposit accounts subject to a security interest in favor of the Agent for the benefit of the lenders. In addition, the Company must meet affirmative and negative covenants customary for a financing of this type, including but not limited to, limitations on indebtedness, restricted payments, dividends, transactions with affiliates, investments, lines, acquisitions, and asset sales. The FP loan is guaranteed on a senior secured basis by the Company and its subsidiaries, subject to customary exceptions.

As of the date of these audited financial statements, the Company is in compliance with the covenants.

NOTE 13 - RELATED PARTIES:

The Company’s policy is to enter into transactions with related parties on terms that are on the whole no less favorable to it than those that would be available from unaffiliated parties at arm’s length. Based on its experience in the business sectors in which it operates and the terms of the transactions with unaffiliated third parties, the Company believes that all of the transactions described below met this policy standard at the time they occurred.

On April 30, 2023, the Company and Ilan Gat Ltd. entered into a Separation Agreement pursuant to which Ms. Gat resigned from all positions at the Company and its subsidiaries, including serving as the President of the Company. Effective May 1, 2023, she instead began serving as an observer on the board of directors of the Company. The Company agreed to pay Ms. Gat compensation consisting of (i) five monthly payments in the gross sum of $55,000 plus VAT from May through September 2023; (ii) one monthly payment of $110,000 plus VAT in October 2023, totaling in the aggregate, $385,000 plus VAT; and (iii) other customary terms and conditions.

F - 51

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 13 - RELATED PARTIES (CONT.):

The Company and RaySat Ltd. (“RaySat”), an entity organized under the laws of the State of Israel and controlled by Mr. Yoav Leibovitch, the Company’s Chairman of the board of directors and one of the Company’s significant shareholders, are parties to a Services Agreement effective as of January 1, 2013 (as amended as of June 27, 2017, September 6, 2020, January 4, 2021, February 24, 2022, October 27, 2022 and February 25, 2024 ). Pursuant to this agreement, Mr. Yoav Leibovitch provides financial management, business development, presidential and management services to the Company and its subsidiaries.

On September 15, 2022, the Company’s board approved an amendment, which was approved by The Company’s shareholders on September 28, 2022, to Mr. Leibovitch’s compensation under this agreement to (i) grant Mr. Leibovitch a $2 million success bonus payable upon the Closing of the Business Combination, (ii) increase Mr. Leibovitch’s monthly fee for services provided to $100,000 per month, effective as of October 1, 2022, increase Mr. Leibovitch’s yearly bonus such that the yearly bonus shall be 2% of the incremental year-over-year growth of the shareholders’ equity in the consolidated financial statements of the Company and increase Mr. Leibovitch’s annual bonus such that the annual bonus shall be 2% of the incremental year- over-year growth of revenues in the consolidated financial statements of the Company.

On October 19, 2023, upon recommendation of the Company’s board and compensation committee, the Company’s shareholders approved a one-time special success bonus of up to $1 million in the aggregate to the Company’s Executive Chairman of the Board, Mr. Yoav Leibovitch, in connection with the MDA Agreement (see Note 3). The MDA bonus is to be paid in nine installments. Each of the special success bonus amounts relates to proceeds the Company has received and expect to receive with respect to the MDA Agreement during the relevant month. The MDA bonus shall not be paid if for any reason whatsoever, whether due to default by the Company or otherwise, we do not actually receive the relevant proceeds with respect to the MDA Agreement.

F - 52

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 13 - RELATED PARTIES (CONT.):

For the year ended December 31, 2024:

Name	Position	Scope of Position	Holding Rate	Salary, bonuses and related expenses	Expected Bonus	Share- Based Payments
Nir Barkan	Acting Chief Executive Officer	Full Time	0.91%	660	281	594
Raysat (Yoav Leibovitch)	Chairman	Full Time	25.56%	1,200	235	-

For the year ended December 31, 2023:

Name	Position	Scope of Position	Holding Rate	Salary, bonuses and related expenses	Expected Bonus	Share- Based Payments
Nir Barkan	Acting CEO	Full Time	0.25%	303	160	129
Ilan Gat (Simona Gat)	Former president and COO	Full Time	19.47%	605	-	39
Raysat (Yoav Leibovitch)	Chairman	Full Time	26.35%	1,750	450	39

Outstanding balances with related parties:

	For the year ended December 31
	2024		2023
Assets
Jet Talk		46		75
Total Assets		46		75
Labilities
Raysat		335		550
Current Chief Executive Officer		281		190
Total Liabilities		616		740

F - 53

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 14 - FINANCIAL INSTRUMENTS – RISK MANAGEMENT:

The Company’s activities expose it to various financial risks, such as market risk, including currency risk, credit risk and liquidity risk. The Company’s overall risk management plan focuses on minimizing possible adverse effects on the Company’s financial performance.

Risk management is performed by the Company’s Chief Financial Officer, which includes examining certain exposures to risks, such as exchange rate risk, credit risk. In 2024 and 2023, the Company did not use derivative financial instruments to hedge its operations.

Credit risk:

Credit risk is created when the failure of parties against the fulfillment of their obligations may reduce the amount of future cash flows from the financial assets held by the Company to the balance sheet date. The Company’s main financial assets are cash and cash equivalents, customers and other receivables, and represent the Company’s maximum exposure to credit risks in connection with its financial assets. The Company holds cash in large financial institutions.

The par value of financial assets represents the maximum credit exposure.

The maximum exposure to credit risk at the time of reporting was:

	December 31, 2024		December 31, 2023
Cash		14,433		13,979
Trade accounts receivables		3,905		2,260
Other accounts receivable		2,570		2,053
Promissory Notes		-		20,000
Other long-term receivables		-		2,000
Contract assets		1,486		4,091
Total		22,394		44,383

F - 54

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 14 - FINANCIAL INSTRUMENTS – RISK MANAGEMENT:

Credit risk (cont.):

a. Currency risk:   Currency risk is the risk that the value of financial instruments will be affected by changes in exchange rates. Currency risk is created when future commercial transactions and recognized assets and liabilities are denominated in a currency other than the Company’s operating currency. The company is exposed to foreign currency risk resulting from exposures to various currencies, mainly in relation to the New Israeli Shekel ("NIS”), the Euro (“EUR”) and the British Pound (“GBP”).   The Company's policy is not to execute currency hedging transactions.   As of the balance sheet date, the Group’s exposure to currencies as follows:

	December 31, 2024
	NIS			EUR			GBP			USD			Total
Assets:
Cash and cash equivalents		1,320			401			284			12,428			14,433
Trade receivables		2			-			13			3,890			3,905
Prepaid expenses and other account receivables		145			60			251			2,114			2,570
Contract assets		-			-			20			1,466			1,486
		1,467			461			568			19,898			22,394
Liabilities:
Current liabilities:
Current maturities long-term loans		-			-			-			(2,312	)		(2,312	)
Liabilities in respect of leases- short term		(480	)		(71	)		(216	)		(19	)		(786	)
Advanced payments from MDA against future orders		-			-			-			(39,296	)		(39,296	)
Trade payables		(976	)		(339	)		(459	)		(1,347	)		(3,121	)
Payables and credit balances		(5,112	)		(36	)		(1,061	)		(2,331	)		(8,540	)
		(6,568	)		(446	)		(1,736	)		(45,305	)		(54,055	)
Non-current liabilities:
Liability for IIA royalties		(774	)		-			-			-			(774	)
Derivatives liabilities		-			-			-			(5,719	)		(5,719	)
Long term loans from banks		-			-			-			(67,691	)		(67,691	)
Liabilities in respect of leases- long term		(1,165	)		(51	)		(176	)		-			(1,392	)
Net balances		(7,040	)		(36	)		(1,344	)		(98,817	)		(107,237	)

F - 55

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 14 - FINANCIAL INSTRUMENTS – RISK MANAGEMENT (CONT.):

a. Currency risk (cont.):

	December 31, 2023
	NIS			EUR			GBP			USD			Total
Assets:
Cash and cash equivalents		1,120			1,372			235			11,252			13,979
Trade receivables		-			55			-			2,205			2,260
Prepaid expenses and other account receivables					2,036						17			2,053
Promissory notes		-			-			-			20,000			20,000
Other long-term receivables		-			-			-			2,000			2,000
Contract assets		-			-			128			3,963			4,091
		1,120			3,463			363			39,437			44,383
Liabilities:
Current liabilities:
Current maturities long-term loans		-			-			-			-			-
Liabilities in respect of leases- short term		(469	)		-			(144	)		(26	)		(639	)
Advanced payments from MDA against future orders		-			-			-			(28,138	)		(28,138	)
Trade payables		(479	)		(368	)		(284	)		(247	)		(1,378	)
Payables and credit balances		(896	)		(618	)		(415	)		(5,942	)		(7,871	)
		(1,844	)		(986	)		(843	)		(34,353	)		(38,026	)
Non-current liabilities:
Liability for IIA Royalties		(1,196	)		-			-			-			(1,196	)
Liabilities in respect of leases- long term		(1,558	)		-			(495	)		(14	)		(2,067	)
Long term loans from banks		-			-			-			(59,792	)		(59,792	)
Net balances		(3,478	)		2,477			(975	)		(54,722	)		(56,698	)

F - 56

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 14 - FINANCIAL INSTRUMENTS – RISK MANAGEMENT (CONT.):

b. Sensitivity analysis:   A 10% strengthening of the dollar against the following currencies would have resulted in an increase (decrease) in the equity and profit and loss in the amounts presented below. This analysis assumes that all other variables, and especially interest rates, remain constant. A 10% weakening of the currency against the relevant currencies will have the same effect in the opposite direction on equity and profit and loss.  

	December 31, 2024			December 31, 2023
Linked to NIS		(7,040	)		(3,478	)
		10	%		10	%
		(704	)		(348	)
Linked to EUR		(36	)		2,477
		10	%		10	%
		(4	)		248
Linked to GBP		(1,344	)		(975	)
		10	%		10	%
		(134	)		(97	)

c. Liquidity risks:   Liquidity risks arise from the management of the Group’s working capital as well as from the financing expenses and principal repayments of the Group’s debt instruments. Liquidity risk is the risk that the Group will find it difficult to meet obligations related to financial liabilities.

F - 57

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 14 - FINANCIAL INSTRUMENTS – RISK MANAGEMENT (CONT.):

c. Liquidity risks (cont.):

The following is an analysis of the contractual maturities of financial liabilities in accordance with nominal values for settlement.

Based on the earliest time the company will be required to pay:

December 31, 2024	Within 30 days			1-12 Months			1-3 Years			Total
Liabilities in respect of leases- short term		(164	)		(622	)		-			(786	)
Trade payables		(1,264	)		(1,857	)		-			(3,121	)
Payables to related parties		(100	)		(516	)		-			(616	)
Other Accounts Payable		(2,008	)		(6,532	)		-			(8,540	)
Long term loans from banks, net		-			-			(67,691	)		(67,691	)
Liabilities in respect of leases- long term		-			-			(1,392	)		(1,392	)
Advanced payments from MDA against future orders		-			(39,296	)		-			(39,296	)
Liability for IIA royalties		-			-			(774	)		(774	)
Derivatives liabilities		-			-			(5,719	)		(5,719	)
Total		(3,536	)		(48,823	)		(75,576	)		(127,935	)

F - 58

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 14 - FINANCIAL INSTRUMENTS – RISK MANAGEMENT (CONT.):

c. Liquidity risks (cont.):

December 31, 2023	Within 30 days			1-12 Months			1-3 Years			Total
Liabilities in respect of leases- short term		(172	)		(467	)		-			(639	)
Trade payables		(258	)		(1,120	)		-			(1,378	)
Payables to related parties		-			(740	)		-			(740	)
Other accounts payable		(1,581	)		(6,290	)		-			(7,871	)
Long term loans from banks, net		-			-			(68,020	)		(68,020	)
Liabilities in respect of leases- long term		-			-			(2,067	)		(2,067	)
Advanced payments from MDA against future orders		-			-			(28,138	)		(28,138	)
Liability for IIA royalties		-			-			(1,107	)		(1,107	)
Derivatives liabilities		-			-			(114	)		(114	)
Total		(2,011	)		(8,617	)		(99,446	)		(110,074	)

d. Fair value of financial instruments measured at fair value on a periodic basis:  

	Level		December 31, 2024		December 31, 2023
Financial Liabilities:
Advanced payments from MDA against future orders		3		39,296		28,138
PAS		3		5,719		114
Total				45,015		28,252

F - 59

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 14 - FINANCIAL INSTRUMENTS – RISK MANAGEMENT (CONT.):

e. Classification of financial instruments by fair value hierarchy:   The financial instruments measured in the balance sheet at fair value are classified, according to groups with similar characteristics, into a fair value ranking as follows, determined in accordance with the data source used to determine the fair value:   Level 1: Quoted prices (without adjustments) in an active market of identical assets and liabilities.   Level 2: Non-quoted prices data included in Level 1 which can be viewed directly or indirectly.   Level 3: Data that are not based on viewable market information (assessment techniques without the use of viewable market data).

f. SPAC warrants:   As part of the Business Combination Agreement (see Note 1) the company has issued new warrants: 7.63 million SPAC Private warrants, 10 million SPAC Public Warrants and 1 miliion Pipe warrants (together with the PAS called "Derivatives"). The Company is required to allocate the Warrants transferred between the identifiable assets received and the listing expense in accordance with IFRIC agenda decision from October 2022. The portion of the Warrants in the scope of IAS 32/ IFRS 9 would be recognized as a liability on initial recognition and re-measured through P&L until settlement.   The total value of the new SPAC warrants was $3,906 thousand and was divided between equity and liability as follow: $3,490 thousand for equity and $416  thousand for liability under derivatives. The value of the warrants derivatives on October 27, 2022 was based on the market price of the closing date of the Business Combination of $0.22.   On December 8, 2022, 3.364 million SPAC private warrants were exercised on a cashless basis into 553,692 Ordinary Shares. On December 11, 2022, 0.935 million PIPE warrants were exercised into 2 million Ordinary Shares resulting in gross proceeds to the Company of $1.5 million.  

	SPAC Warrants
Balance at December 31, 2022		407
Issuance of warrant (SPAC transactions)		-
Changes in fair value recognized in finance expenses		(407	)
Exercise of warrants		-
Balance at December 31, 2023		-
Changes in fair value recognized in finance expenses		-
Balance at December 31, 2024		-

F - 60

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 14 - FINANCIAL INSTRUMENTS – RISK MANAGEMENT (CONT.):

f. Price Adjustment Shares:   Immediately following the closing of the SPAC transaction, the Company issued a total of 27,500,000 PAS with the Company’s founders receiving 27,000,000 PAS (18,000,000 to Yoav Leibovitch and 9,000,000 to Simona Gat) and the Sponsor receiving 500,000 PAS. In November 2023, the Company issued to FP, 1,000,000 PAS as part of an amendment signed between the parties (see Note 12e).   The PAS vest upon three price adjustment achievement dates: (i) one-third of the PAS will vest if at any time forty-five (45) days after the date of effectiveness of the applicable registration statement and within the 10-year period following the closing, the volume weighted average price (“VWAP”) of the Company’s Ordinary Shares is greater than or equal to $12.50 for any seven (7) trading days within a period of 30 consecutive trading days, (ii) one-third of the PAS will vest if at any time forty-five (45) days after the date of effectiveness of the applicable registration statement and within the 10-year period following the closing, the VWAP of the Company’s Ordinary Shares is greater than or equal to $14.00 for any seven (7) trading days within a period of 30 consecutive trading days and one-third of the PAS will vest if at any time forty-five (45) days after the date of effectiveness of the applicable registration statement and within the 10-year period following the closing, the VWAP of the Ordinary Shares is greater than or equal to $15.50 for any seven (7) trading days within a period of 30 consecutive trading days.   The share price targets shall be equitably adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalization, reclassifications, combinations, exchanges of shares and other similar changes or transactions to the Company’s Ordinary Shares occurring on or after the Closing. In the event of a SatixFy change in control transaction within ten (10) years following the closing of the Business Combination, all of the unvested PAS not earlier vested will vest immediately prior to the closing of such change in control. If the PAS do not vest according to the achievement dates in the Business Combination Agreement, or if a change of control has not occurred after the Closing and prior to the date that is ten (10) years following the Closing Date, then any unvested PAS shall automatically be forfeited back to the Company’s for no consideration.  

F - 61

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 14 - FINANCIAL INSTRUMENTS – RISK MANAGEMENT (CONT.):

f. Price Adjustment Shares (cont.):

The Company allocated the PAS between the identifiable assets received and the listing expense Following the logic of the tentative agenda decision, the portion in the scope of IAS 32/ IFRS 9 would be recognized as a liability on initial recognition and re-measured through the Company’s income statement until settlement.

For the purpose of measuring the fair value of the PAS derivatives on December 31, 2023, a binomial model was used. The inputs used in determining the fair value are: price per share: 0.3631 a risk-free interest rate of 3.88%, an expected exercise period of 9.8712 years and an expected volatility of approximately 50%.

For the purpose of measuring the fair value of the PAS derivatives on December 31, 2024 a probability weighted average value was calculated given the Merger Agreement occurs, or does not occur due to the triggered acceleration under a change of control event. The inputs used in determining the fair value are price per share of $1.53, a risk-free interest rate of 4.54% and 4.51% and an expected exercise period of 8.8685 years and 8.0603 years, with an expected volatility of approximately 65%.

	PAS
Balance on December 31, 2022		19,898
Changes in fair value recognized in finance expenses		(19,784	)
Balance on December 31, 2023		114
Changes in fair value recognized in finance expenses		5,605
Balance on December 31, 2024		5,719

NOTE 15 - OTHER LONG-TERM LIABILITIES:

a. Breakdown of other long-term liabilities:

	December 31, 2024		December 31, 2023
Liability for IIA Royalties (see Note 15(b) below)		774		1,196
Alta settlement (see note 18)		-		300
		774		1,496

F - 62

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 15 - OTHER LONG-TERM LIABILITIES (Cont.):

b. Liability for royalties payable:   The Company received the approval of the IIA for its participation in certain development expenses carried out by the Company, within the framework of determined budgets and time periods.   In accordance with its commitment, the Company is required to pay the IIA royalties of 3% to 4% of total sales of products resulting from R&D funded by such grants, up to a maximum amount of 100% of total grants received, plus interest. Until October 25, 2023, the interest was calculated at a rate based on 12-month LIBOR applicable to U.S. dollar deposits. However, on October 25, 2023, the IIA published a directive concerning changes in royalties to address the expiration of the LIBOR. Under such directive, regarding IIA grants approved by the IIA prior to January 1, 2024 but which are outstanding thereafter, as of January 1, 2024 the annual interest is calculated at a rate based on 12-month SOFR, or at an alternative rate published by the Bank of Israel plus 0.71513%; and, for grants approved on or following January 1, 2024 the annual interest shall be the higher of (i) the 12 months SOFR interest rate, plus 1%, or (ii) a fixed annual interest rate of 4%. Therefore, the total amount of the grants that will be repaid through royalties and will increase until repayments begin.   The difference between the consideration received and the liability recognized at inception (present value) was treated as a government grant according to IAS 20 and recognized as a reimbursement of research expenses or a reduction in capitalized development costs.

	December 31, 2024			December 31, 2023
As of January 1		1,196			1,107
Principal Payments		-			(11	)
Amounts recognized as an offset from research and development expenses		-			(113	)
Revaluation of the liability		(422	)		213
As of December 31,		774			1,196

F - 63

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 16 - FORWARD PURCHASE AGREEMENT:

On October 24, 2022, the Company entered into the Forward Purchase Transaction with the Seller. Pursuant to the Forward Purchase Agreement, the Seller thereunder purchased, through a broker in the open market Ordinary Shares and will sell the Ordinary Shares under certain conditions. Pursuant to the Forward Purchase Agreement, the Sellar were paid directly, out of the funds held in Endurance’s trust account, approximately $86.5 million. Accordingly, there was no net increase in cash as a result of the Forward Purchase Agreement at the time of the closing of the Business Combination occurred on October 27, 2023. On January 23, 2023, Upon the effective date of the applicable registration statement, the Seller paid to the Company approximately $10.0 million (including $8.4 million with respect to the Ordinary Shares purchased by the Seller prior to the closing of the Business Combination and $1.6 million with respect to the additional Ordinary Shares issued to the Seller following the closing of the Business Combination).

The difference between the fair value of the shares deemed to be issued to the SPAC holders, including the Seller's and the net financial instruments held by the SPAC (including the fair value of the FPA) are

recognized as listing expenses. The financial instrument was measured at fair value initially and subsequently, with changes in fair value recognized in profit or loss.

For the purpose of measuring the price of FPA assets a Monte Carlo simulation model was used. The inputs used in determining the fair value are: risk-free rate of 4.30%, volatility of 50% and contractual time of 3 years. The FPA liability value for October 27, 2022 is based on public share price of $8.29.

On October 31, 2023, the Company entered into a Termination Agreement with the Seller. Pursuant to the Termination Agreements, the parties agreed (i) to terminate the Forward Purchase Agreement, (ii) that Vellar and ACM relinquish their rights to an aggregate of 3,599,444 Ordinary Shares (which includes all remaining Ordinary Shares held by ACM and Vellar), which are to be transferred to FP in connection with their consent to the transactions contemplated by the MDA Agreement (see also Note 12(d)). Further, the Company agreed to pay Vellar and ACM an aggregate amount of approximately $6.5 million in installments until May 31, 2024, in the case of Vellar and March 31, 2024, in the case of ACM.

F - 64

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 16 - FORWARED PURCHASE AGREEMENT (CONT.):

At January 1, 2022	-
FPA (SPAC transactions)- assets	42,502
FPA (SPAC transactions)- liability	(13,306	)
FPA (SPAC transactions) net	29,196
Revaluation as of November 21, 2022	(36,692	)
Issuance of Ordinary Shares on November 21, 2022	49,998
Revaluation as of  December 31, 2022	(1,650	)
As of December 31, 2022	40,852
Cash received	(10,026	)
Revaluation as of October 2023	(37,408	)
Termination	6,582
As of December 31, 2023	-

NOTE 17 - EQUITY:

a. Ordinary Share:   Ordinary Share confer upon its holders the rights to receive notice to participate and vote in general meetings of the Company, and the right to receive dividends if declared.

b. SPAC merger:   Prior to the SPAC transaction (see Note 1), in addition to the Ordinary Shares, the Company held three classes of preferred shares (A, B and C) which beard different rights and preferences and which were issued at early stages of the Company.  Following the Business Combination Transaction, all preferred shares were converted into Ordinary Shares and the Company has canceled the par value of the Ordinary Shares. In addition, the Company conducted a forward share split of one-for-  1.046.

c. Share Option Plan:   On September 4, 2013, the Company’s board directors adopted time the 2013 Share Incentive Plan pursuant to which the board of directors is authorized to issue share options, restricted shares and other awards to officers, directors, employees, consultants and other service providers of SatixFy Israel Ltd. Each option is exercisable for one Ordinary Share for a period of ten years from the grant date.  

F - 65

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 17 - EQUITY (CONT.):

c. Share Option Plan (Cont.):   On May 12, 2020, the Company’s board of directors adopted the 2020 Share Award Plan replacing the 2013 Share Incentive Plan and all the grants to Israeli employees were replaced with grants issued pursuant to the 2020 Share Award Plan after receiving an approval from the Israeli Tax Authorities for tax exemption in accordance with the provisions of section 104B (f) of the Income Tax Ordinance.   The Options granted under the 2013 Share Incentive Plan and under 2020 Share Award Plan are subject to Section 102 of the Israeli Tax Ordinance, the minimum period in which the options granted to a participant or, upon exercise or vesting thereof the underlying Ordinary Shares, are to be held by a trustee on behalf of the participant, in accordance with Section 102, and pursuant to the tax track which the Company selects subject to the provisions of Section 102(g) of the Israeli Tax Ordinance.   During the year ended December 31, 2024, the Company granted options to purchase up to 377,767 Ordinary Shares to certain employees. The Company didn’t grant options in 2023. In 2024 and 2023, options to purchase 127,596 Ordinary Shares and 229,760 Ordinary Shares, respectively were exercised by employees. As of December 31, 2024 and 2023, options to purchase 5,525,883 Ordinary Shares and 6,214,912 Ordinary Shares, respectively, were outstanding, respectively, of which 4,943,452 Ordinary Shares were exercisable as of December 31, 2024.   In 2023, the Company granted for the first time 7,808,280 Restricted Share Units (“RSUs”) to employees and subcontractors. The RSUs represent the right to receive Ordinary Shares at a future time and vest over a period of four years with a one year cliff and thereafter vest on a quarterly basis over the remaining three years. The RSUs that were granted to the Israeli employees were granted under Section 102 of the Israeli Tax Ordinance. As of December 31, 2024, and 2023 4,890,652 and  5,219,101 RSUs, respectively  were outstanding.   On May 4, 2017, the Company’s board of directors approved EMI share option scheme pursuant to which the board of directors is authorized to issue share options, restricted share and other awards to officers, directors, employees, consultants and other service providers of the Company’s UK subsidiaries. Each option can be exercised for one ordinary stock with a par value of $0.008. Options granted vest in equal tranches over three years from the grant date. Each option is exercisable up to ten years from the grant date.  

F - 66

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 17 - EQUITY (CONT.):

c. Share Option Plan (Cont.):   On May 12, 2020 following the board of directors adopted the 2020 EMI Share Option Plan replacing the EMI Share Option Scheme and all of the grants held by the Company’s employees in the UK under the EMI Share Option Scheme were replaced with  grants under the 2020 EMI Share Option Plan.   Pursuant to the EMI Share Option Scheme, options only become exercisable upon an exit event. An exit event is defined as the sale or transfer of the whole of the undertaking or assets of the Company and its subsidiaries or a successful listing on a recognized share exchange. If the options remain unexercised after a period of ten years from the date of grant the share options will automatically lapse and cease to be exercisable. If an employee terminates its employment with the Group, for whatever reason (including death), all options are forfeited immediately. All options granted are non-assignable under the rules of the EMI Share Option Scheme and any Ordinary Shares ultimately acquired upon the exercise of an option are subject to certain restrictions as stipulated in the Company’s articles of association.

F - 67

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 17 - EQUITY (CONT.):

c. Share Option Plan (cont.):   The following table summarizes information about options outstanding and exercisable as of December 31, 2024 and 2023:

	2024				2023
			Weighted				Weighted
	Number		Average		Number		Average
	of		Exercise		of		Exercise
	Options		Price		Options		Price
	USD				USD
Options outstanding at the beginning of year:		6,215		1.67		7,297		1.76
Changes during the year:
Granted		378		0.71		-		-
Exercised		299		-		38		0.68
Forfeited		971		0.71		1,044		2.38
Options outstanding at end of year		5,323		1.86		6,215		1.67
Options exercisable at year-end		4,808		1.93		3,171		0.9

The fair value of each option granted is estimated on the date of grant, using the Black-Scholes framework with the following assumptions: dividend yield of 0% for all years; expected volatility:– 40%-60%; risk-free interest rate: 0.1%-2.5%-; and expected life: 2-4 years.

The Company is required to assume a dividend yield as an input in the Black-Scholes model. The dividend yield assumption is based on the Company’s historical experience and expectation of future dividends payouts and may be subject to change in the future.

F - 68

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 17 - EQUITY (CONT.):

d. Share Option Plan (cont.):   The RSUs to employees and services providers outstanding as of December 31, 2024 and 2023 as follows:

	Number of RSUs
	2024			2023
Outstanding at beginning of year		5,219,101			-
Granted		2,450,583			7,808,280
Vested		(2,466,858	)		(902,753	)
Forfeited		(300,353	)		(1,686,426	)
Unvested as of December 31		4,902,473			5,219,101

NOTE 18 - MATERIAL COMMITMENTS:

a. The Company’s UK subsidiaries had signed several agreements with the European Space Agency (the “ESA” or the “Agency”) as part of the Agency’s Advanced Research in Telecommunication Systems (“ARTES”) programs. The objectives of the ARTES programs are to ensure the readiness of the industry to respond to commercial opportunities by focusing the activities on technological innovation in equipment, systems, and applications for satellite communication, resulting in products ready for future exploitation within either the commercial or institutional market. Accordingly, the Agency had agreed to participate in the funding of the development of an integrated chip sets for several industries, which includes both hardware and software. The Agency’s participation varies between 50%-75% of the cost, depending on the nature of the engagement.   The grants are recognized in the statement of operations as a reduction of research and development expenses and are recognized when the Company is entitled, on the basis of the accumulation of expenses for which the grants are received.
 

F - 69

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 18 - MATERIAL COMMITMENTS (CONT.):

The Agency does not require any future royalties nor any ownership of the Intellectual Property (“IP”) resulting from the development which is owned by the Company’s UK subsidiaries, however, the agreement do stipulates that the IP will be available to the Agency on a free, worldwide license for its own requirements, The Agency can require the Company to license the IP to certain bodies that are part of specified Agency programs, for the Agency’s own requirements on acceptable commercial terms and can also require the Company to license the IP to any other third party for purposes other than the Agency’s requirements subject to the approval of the Company that those other purposes do not contradict its commercial interests.

Grants received from ESA are recognized in the statement of operations as a reduction of the research and development expenses and are recognized when the Company is entitled, on the basis of the accumulation of expenses for which the grants are received.

SatixFy Israel Ltd. also participated in programs that were financed by the Government of Israel for supporting research and development activities. As of December 31, 2024, SatixFy Israel Ltd. had obtained grants from the IIA to finance its research and development programs in the aggregate amount of $6,334 thousand, of which $3,289 thousand bear royalties.

b. In return for financing these programs, SatixFy Israel Ltd.committed to pay the IIA royalties of 3%-4% of total sales of products from revenues related to these programs. The royalties will be paid up to a maximum amount representing 100% of total grants received and are linked to the U.S. dollar exchange rate with the addition of an annual dollar interest rate. As of December 31, 2024, and December 31, 2023 SatixFy Israel Ltd. has accumulated liability in respect of royalties to the IIA in the amount of $169 and $136 thousand, respectively, representing 3%- 4% of revenues.   As of December 31, 2024, and December 31, 2023, SatixFy Israel Ltd. had a contingent liability to IIA in the amount of $774 thousand and $1,197 thousand, respectively, based on discounted future royalties at an interest rate of 20%, respectively.

F - 70

SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 18 - MATERIAL COMMITMENTS (CONT.):

Legal proceedings:

The Company, SatixFy Limited, and certain shareholders and directors of the Company (the “Defendants”) were served with two lawsuits filed in the district court in Tel Aviv on March 22, 2022, by certain plaintiffs purporting to be stockholders of the Company (the “Plaintiffs”). Based on their prior stakes in Satixfy Limited, a company incorporated in Hong Kong, whose business was assigned to the Company in exchange for the issuance of equivalent holdings in the Company, except for certain shares placed in trust for the benefit of certain service providers, the Plaintiffs claim they are entitled to an aggregate of 2,000,000 Ordinary Shares of the Company and that the said trust mechanism does not pertain to them. The Plaintiffs ask for the amendment of the Company’s shareholders register accordingly, (ii) an order enjoining the defendants from executing any transaction or taking any other action that could adversely and disproportionally affect the Plaintiffs’ rights as shareholders, and (iii) the Defendants to notify the relevant regulatory authorities of the plaintiffs’ claim. The Company issued and placed in trust sufficient shares to provide for the Plaintiffs’ alleged stakes in the Company should the Plaintiffs prevail on the merits.

In May 2022, the court rejected Plaintiffs request for specific injunctive relief while ordering the appointment of a former judge, Mr. Yossi Shapira, as the new trustee to exercise fiduciary authority over such shares. In January 2025, the court replaced Mr. Shapira with a new trustee. The Plaintiffs claim on the merits remains pending, and statements of defense were filed by the respondents in July 2022. After the preliminary stage of the proceeding, the Plaintiffs filed their evidence during the months of April and May 2024, followed by the Company’s evidence, which were filed in September 2024 and December 2024. Evidentiary hearings are scheduled to be held between January and March 2025. The Company believes that these proceedings will not have a material impact on the Company.

On October 27, 2022, Sensegain Prodigy Cayman Fund SP3 (“Sensegain”) defaulted on its commitment to purchase units it had subscribed for in connection with a private placement financing pursuant to its Subscription Agreement with the Company and Endurance. As a result of the default, out of the $29,100 thousand previously committed by subscribers pursuant to the Subscription Agreements, the Company received $20 million in proceeds from the private placement financing. On December 12, 2022, the Company filed a complaint against Sensegain in the New York Supreme Court, County of New York, seeking specific performance by Sensegain under the Subscription Agreement or, in the alternative, damages in the amount Sensegain owes pursuant to the Subscription Agreement (plus applicable interest and fees). Due to lack of ability to locate any U.S. based representative of the plaintiff, the Company withdrew its complaint in June 2024.
 

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SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 18 - MATERIAL COMMITMENTS (CONT.):

Legal proceedings (cont.):

In June 2023, Alta Partners, LLC (“Alta”) filed a complaint against the Company in the U.S. District Court for the Southern District of New York claiming unspecified damages for an alleged breach by the Company of the warrant agreement in relation to certain of its public warrants allegedly held by Alta.

In December 2023, the Company and Alta reached a settlement agreement according to which, the Company shall pay to Alta the sum of $2.3 million as follows:  (i) $1 million no later than five (5) business days after the effective date; and (ii). $1.3 million in thirteen (13) monthly installments of one hundred thousand ($100,000) each with the first instalment no later than March 1, 2024. Following receipt of the first installment on January 24, 2024, Alta dismissed the matter. All settlement payments have been completed.

Covenants:

The FP loan has several covenants (see Note 12).

Royalty commitments:

The Company receives research and development grants from the IIA. In consideration for the research and development grants received from the IIA, the Company has undertaken to pay royalties as a percentage of revenues from products developed from research and development projects financed. If the Company does not generate sales of products developed with funds provided by the IIA, the Company is not obligated to pay royalties or repay the grants.

Royalties are payable at the rate of 3%-4% from the time of commencement of sales of all of the Company’s products until the cumulative amount of the royalties paid equals 100% of the dollar-linked amounts of the grants received, plus interest at LIBOR

Until October 25, 2023, the interest was calculated at a rate based on 12-month London Interbank Offered Rate, (“LIBOR”) applicable to U.S. dollar deposits. However, on October 25, 2023, the IIA published a directive concerning changes in royalties to address the expiration of the LIBOR. Under such directive, regarding IIA grants approved by the IIA prior to January 1, 2024 but which are outstanding thereafter, as of January 1, 2024 the annual interest will be calculated at a rate based on 12-month Secured Overnight Financing Rate, the SOFR, or at an alternative rate published by the Bank of Israel plus 0.71513%; and, for grants approved on or following January 1, 2024 the annual interest will be the higher of (i) the 12 months SOFR interest rate, plus 1%, or (ii) a fixed annual interest rate of 4%.

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SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 19 - REVENUES:

The Company splits its revenues from contracts with customers in accordance with contracts for provision of R&D services and products as presented in the statement of comprehensive loss.

The Company is organized as one operating segment.

Main customers:

1. Transactions with main customers:   The company has four main customers: MDA, for which revenues were reported as revenues from provision of development services, a confidential customer, for which revenues were reported as revenues from provision of development services, Telesat, for which revenues were reported as revenues from provision of development services and iDirect, for which revenues were reported as revenues from sale of products.

	For the year ended December 31,
	2024					2023					2022
	USD thousands		%			USD thousands		%			USD thousands		%
Airbus		-		0	%		188		2	%		318		3	%
Telesat		350		2	%		4,250		40	%		5,326		50	%
iDirect		4,260		21	%		2,605		24	%		489		5	%
Trustcom		-		0	%		-		0	%		1,108		10	%
MDA		4,639		22	%		1,497		14	%		1,907		18	%
Confidential Customer		10,635		52	%		1,309		12	%		1,162		11	%

2. Geographical areas:   The following table splits the Company’s revenues by main geographical areas:

U.S. & Canada						UK						Other						Consolidated
Revenues						Revenues						Revenues						Revenues
2024		2023		2022		2024		2023		2022		2024		2023		2022		2024		2023		2022
	19,884		8,446		9,310		-		732		1,070		764		1,552		246		20,648		10,730		10,626

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SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 20 - COST OF SALES AND SERVICES:

	December 31, 2024		December 31, 2023		December 31, 2022
Salaries and related expenses		4,900		2,861		3,556
Materials and models		2,701		2,276		707
Depriciation		31		34		21
Chip development tools and subcontractors		689		767		214
Total		8,321		5,938		4,498

NOTE 21 - RESEARCH AND DEVELOPMENT EXPENSES, NET:

	For the year ended
	December 31, 2024			December 31, 2023			December 31, 2022
Salaries and related expenses, including stock based compensation		17,574			23,450			21,923
Chip pre-production and development tools		9,930			9,917			7214
Government support and grants		(5,283	)		(4,241	)		(12,295	)
Total		22,221			29,126			16,842

NOTE 22 - SELLING AND MARKETING EXPENSES:

	For the year ended
	December 31, 2024		December 31, 2023		December 31, 2022
Salaries and related expenses		2,070		2,866		2,335
Total		2,070		2,866		2,335

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SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 23 - ADMINISTRATIVE AND GENERAL EXPENSES:

	For the year ended
	December 31, 2024		December 31, 2023		December 31, 2022
Salaries and related expenses		4,928		5,925		8,175
Depreciation and overheads		160		93		132
Expected credit loss (a)		-		1,876		-
Other expenses (b)		5,737		6,667		942
Total		10,825		14,561		9,249

(a) Write off of a contract asset relating to Jet Talk contract asset balance, as the Company does not believe it can benefit from the remaining asset due to certain disagreement between the parties, which are under discussion and expected to be resolved in the near future.

(b) In 2023 expenses occurred following the Alta settlement of $2.3 million (see Note 18) and expenses associated with a new directors’ and officers’ insurance policy.

NOTE 24 - TAX EXPENSES:

A. Tax base:   UK:   The corporate tax rate in the UK was between 19% to 25% depending on total taxable profits in the years 2024 and 2023.   The tax payable is based on the taxable profit for the year. The taxable profit is different than the net profit as reported in the profit and loss account since it does not include items of income or expense that are taxable or tax deductible carried forward from other years and does not include items that are not taxable or not tax deductible at all. The Group's current tax liability is calculated according to tax rates that have been acted or that their enactment has actually been completed by the end of the reporting period.   Israel:   The Company's Israeli subsidiaries are subject to the tax laws of the State of Israel, whose overall tax rate was 23% in 2024 and in 2023.

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SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 24 - TAX EXPENSES (Cont.):

B. Uncertain tax position:   The Company did not record any liability in respect of income taxes related to deferred tax benefits at the date of adoption and did not record any liability in respect of deferred tax benefits during 2024 and 2023. Accordingly, the Company has not recorded any interest or penalty for any unrecognized benefit. The Company recorded a tax liability following the MDA Agreement (see Note 3).

C. Tax losses:   As of December 31, 2024, the Company has a carry-forward loss of approximately $103 million, according to the 2024 tax return, which may be utilized to offset taxable income in the future.   The Company did not create deferred taxes due to the uncertainty in their future utilization.

D. Tax assessments:   The Company has not yet received final tax assessments in any of its subsidiaries.

NOTE 25 - LOSS PER SHARE:

Below are the net loss data attributed to capital rights owners. The loss per share is calculated according to the weighted average number of the shares issued in the relevant financial periods, the weighted average number of the ordinary shares issued and the loss for the period as follows:

	For the year ended December 31
	2024			2023			2022
Calculation of basic earnings per share:
Net loss		(45,665	)		(29,715	)		(397,789	)
Loss attributed to shareholders in USD		(45,665	)		(29,715	)		(397,789	)
Weighted average number of Ordinary Shares		83,777,164			80,974,653			30,030,805
Basic and diluted loss per share attributed in USD		(0.54	)		(0.37	)		(13.25	)

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SATIXFY COMMUNICATIONS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(in thousands of USD)

NOTE 26 – SUBSEQUENT EVENTS:

A. On April 1, 2025, the Company entered into an Agreement and Plan of Merger with MDA Space, and its two wholly owned subsidiaries, pursuant to which the Company will undergo a two-step merger transaction, which upon completion, the company is the surviving entity and becoming an indirect wholly owned subsidiary of MDA Space (“the Merger”).   Upon completion of the Merger, the Company’s shareholders will be entitled to receive the Merger Consideration consisting of cash in the amount of $2.10 (without interest) for each Ordinary Share held, subject to the withholding of any applicable taxes and the terms of the Merger Agreement. The Merger Agreement also provides for the treatment of the Company’s outstanding equity awards and warrants.   The Merger Agreement provides for a 45-calendar day Go-Shop Period beginning on the date of the Merger Agreement, during which the Company may, subject to compliance with the terms of the Merger Agreement, solicit, encourage, entertain, discuss and negotiate inquiries, proposals or offers in respect of potential alternative transactions.   If the Company receives a definitive agreement with respect to a Superior Proposal during the Go-Shop Period and enters into such definitive agreement, the Company will be required to pay MDA Space a termination fee of $5 million. In all other circumstances described in the Merger Agreement, including if MDA Space terminates the Merger Agreement due to the Company’s breach of its non-solicit obligations or, in certain cases, if the Company enters into an alternative transaction after termination of the Merger Agreement, the Company will be required to pay to MDA Space a termination fee of $10 million.

B. On April 1, 2025, concurrently and contingent upon signing on the Merger Agreement, the Company entered into a Sixth Amendment to the 2022 Credit Agreement, whereby the lenders provided their consent to the Merger and provides that the interests payable on March 31, 2025 and on June 30, 2025  will be added to the principal of the term loan on a “pay in kind” basis.

C. On March 13, 2025 the Master Purchase Agreement was amended (by Amendment No. 2),  to add $1.8 million to the outstanding amount and provided for an additional $2.7 million upon the Company meeting certain milestones

D. On April 1, 2025, the Master Purchase Agreement was further amended (by Amendment No. 3) to provide for additional $5.5 million in three installments associated with the completion of the Merger and contingent upon  execution of the Merger Agreement.

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