Company: SATT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001683168-25-002119
Chunk: 258

Company: SATIVUS TECH CORP.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 2
Chunk 258
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ASB established
Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02. The guidance establishes a right-of-use model (“ROU”)
that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.
The Group determines if an arrangement is or contains a lease at contract inception.

The Group is a lessee in an operating
lease for a research facility. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current
liabilities, and operating lease liabilities in our consolidated balance sheets.

     F-10 

SATIVUS TECH CORP.

NOTES TO FINANCIAL STATEMENTS

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

    NOTE 2:-
    SIGNIFICANT ACCOUNTING POLICIES (Cont.)

ROU assets represent Company’s
right to use an underlying asset for the lease term and lease liabilities represent Group’s obligation to make lease payments arising
from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments
over the lease term. As our lease does not provide an implicit rate, the Company generally uses the incremental borrowing rate based on
the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating
lease ROU asset also includes any lease payments made and excludes lease incentives. Company’s lease terms may include options to
extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized
on a straight-line basis over the lease term.

The Group monitors for events or changes
in circumstances that require a reassessment of one of its leases. When a reassessment results in the remeasurement of a lease liability,
a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount
of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance
is recorded in statement of comprehensive loss.

    h.
    Concentration of credit risks:

Financial instruments that potentially
subject the Company to credit risk consist of cash and cash equivalents and restricted bank deposit. Cash and cash equivalents and restricted
bank deposit are invested in major banks in Israel and the United States. Such funds in the Israel may be in