Company: SATT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001683168-25-002119
Chunk: 581

Company: SATIVUS TECH CORP.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7A
Chunk 581
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    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 excess of insured limits
and are not insured 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