Company: SATT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001683168-25-002119
Chunk: 316

Company: SATIVUS TECH CORP.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 3
Chunk 316
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 in other jurisdictions. Management believes that the financial institutions that hold the Company and its subsidiary’
cash and cash equivalents have high credit ratings.

The Company, have no off-balance-sheet
concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

    i.
    Research and development expenses:

Research and development costs are charged
to the consolidated statement of operations as incurred.

    j.
    Royalty-bearing grants:

Royalty-bearing grants from the Israeli
Innovation Authority (the “IIA”) for funding approved research and development projects are recognized at the time Saffron
Tech is entitled to such grants (i.e. at the time that there is reasonable assurance that the Company will comply with the conditions
attached to the grant and that there is reasonable assurance that the grant will be received), on the basis of the costs incurred and
reduce research and development costs. The cumulative research and development grants received by the Company from inception through December
2024 amounted to $452.

As of December 31, 2024, the Company
did not accrue for or pay any royalties to the IIA since no revenues were recognized in respect of the funded projects.

     F-11 

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

U.S. dollars in thousands, except per share
data

    NOTE 2:-
    SIGNIFICANT ACCOUNTING POLICIES (Cont.)

    k.
    Liability for employee rights upon retirement pay:

Saffron Tech’s liability for severance
pay is pursuant to Section 14 of the Severance Compensation Act, 1963 (“Section 14”), pursuant to which all the Company’s
employees are included under Section 14, and are entitled only to monthly deposits. Under Israeli employment law, payments in accordance
with Section 14 release the Company from any future severance payments in respect of those employees. The fund is made available to the
employee at the time the employer-employee relationship is terminated, regardless of cause of termination. The severance pay liabilities
and deposits under Section 14 are not reflected in the consolidated balance sheets as the severance pay risks have been irrevocably transferred
to the severance funds.

    l.
    Fair value of financial instruments:

ASC Topic 820, “Fair Value Measurements
and Disclosures” (“ASC 820”), defines fair value as the price that would be received to sell an asset or paid to transfer
a liability (i