{"url_path":"/sec/plx/10-k/2026/item-7a","section_key":"item-7a","section_title":"Item 7A Quantitative and Qualitative Disclosures about Market Risk","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-03-18","source_url":"https://www.sec.gov/Archives/edgar/data/1006281/0001104659-26-029858-index.html","accession_number":"0001104659-26-029858","cik":"0001006281","ticker":"PLX","issuer_name":"Protalix BioTherapeutics, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1006281/0001104659-26-029858-index.html","primary_entity_key":"0001006281","primary_entity_name":"Protalix BioTherapeutics, Inc."},"word_count":502,"has_tables":true,"body_markdown":"Item 7A.         Quantitative and Qualitative Disclosures about Market Risk\n\nCurrency Exchange Risk\n\nThe currency of the primary economic environment in which our operations are conducted is the U.S. dollar. Most of our revenues and above 50% of our expenses and capital expenditures are incurred in dollars, and a significant source of our financing has been provided in U.S. dollars. Since the dollar is the functional currency, monetary items maintained in currencies other than the dollar are remeasured using the rate of exchange in effect at the balance sheet dates and non-monetary items are remeasured at historical exchange rates. Revenue and expense items are remeasured at the average rate of exchange in effect during the period in which they occur. Foreign currency translation gains or losses are recognized in the statement of operations.\n\nApproximately 41% of our costs, including salaries, expenses and office expenses, are incurred in NIS. Inflation in Israel may have the effect of increasing the U.S. dollar cost of our operations in Israel. If the U.S. dollar declines in value in relation to the NIS, it will become more expensive for us to fund our operations in Israel. A revaluation of 1% of the NIS will affect our loss before tax by less than 1%. The exchange rate of the U.S. dollar to the NIS, based on exchange rates published by the Bank of Israel, was as follows:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Year Ended December 31, **\n\n​\n\n​\n\n​\n\n**2023**\n\n​\n\n**2024**\n\n​\n\n**2025**\n\n​\n\nAverage rate for period\n\n​\n\n3.687\n\n​\n\n3.700\n\n​\n\n3.452\n\n​\n\nRate at period-end\n\n​\n\n3.627\n\n​\n\n3.647\n\n​\n\n3.190\n\n​\n\nAs of December 31, 2025, we have not engaged in hedging transactions. In 2026, we entered into certain currency hedging transactions, and we expect to continue to enter into currency hedging transactions, to decrease the risk of financial exposure from fluctuations in the exchange rate of the U.S. dollar against the NIS. These measures, however, may not adequately protect us from material adverse effects due to the impact of inflation in Israel.\n\nInterest Rate Risk\n\nOur exposure to market risk is confined to our cash and cash equivalents. We consider all short term, highly liquid investments, which include short-term deposits with original maturities of three months or less from the date of purchase, that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash, to be cash equivalents. The primary objective of our investment activities is to preserve principal while maximizing the interest income we receive from our investments, without increasing risk. We invest any cash balances primarily in bank deposits and investment grade interest-bearing instruments. We are exposed to market risks resulting from changes in interest rates. We do not use derivative financial instruments to limit exposure to interest rate risk. Our interest gains may decline in the future as a result of changes in the financial markets.\n\n70\n\n[Table of Contents](#TOC)"}