Company: EVGN
Filing Date: 2025-03-27
Form Type: 20-F
Source: 0001178913-25-001092
Chunk: 10

Company: Evogene Ltd.
Filing Date: 2025-03-27
Form: 20-F
Item: Item 3
Chunk 10
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 expected from the projects that will result in royalty-bearing sales.

A liability for a grant is first measured at fair value using a
discount rate that reflects a market rate of interest. The difference between the amount of the grant received and the fair value of the
liability is accounted for as a government grant and recognized as a reduction of research and development expenses. After initial recognition,
the liability is measured at amortized cost using the effective interest method. Royalty payments we make to repay the grant are treated
as a reduction of the liability. If no economic benefits are expected from the research activity, the grant receipts are recognized as
a reduction of research and development expenses, in which case, the royalty obligation is treated as a contingent liability.

There is uncertainty regarding the estimates of future cash flows
and the estimate of the capitalization rate that is used for determining the amount of the liability recognized. At the end of each reporting
period, we evaluate whether there is reasonable assurance that the liability recognized, in whole or in part, will not be repaid (since
we will not be required to pay royalties) based on the best estimate of future sales, and if so, the appropriate amount of the liability
is recognized as a reduction of research and development expenses.

Leases

We cannot readily determine the interest rate implicit in our operating
lease for our principal facility in Rehovot, Israel. We therefore use our incremental borrowing rate, IBR, to measure lease liabilities.
The IBR is the rate of interest that we would have to pay to borrow over a similar term, and with a similar security, the funds necessary
to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what we
‘would have to pay’, which requires estimation when no observable rates are available or when they need to be adjusted to
reflect the terms and conditions of the lease.

We estimate the IBR using observable inputs (such as market interest
rates) when available and we are required to make certain entity-specific estimates (such as the Company's stand-alone credit rating).

Fair
value of convertible SAFE

In August 2022, ICL and Lavie Bio entered a multi-year collaboration
agreement for developing novel bio-stimulant products to enrich fertilizer efficiency. As part of the collaboration, ICL (through an affiliated
company) invested in Lavie Bio $10 million under a SAFE. Per IFRS guidance on financial instruments, as conversion upon an equity financing