NOTE 9 - COMMITMENTS AND CONTINGENCIES:

The Company is obligated to repay certain research and development grants received from the Government of Israel in the form of a royalty rate on future sales of products derived from the funded research and development activities. The aggregate amount of royalties to be paid is determined based on 100% of the total grants received for qualified projects plus interest. The Company may be required to pay royalties based on previous years funding in periods after December 31, 2024, for the future sale of product that includes technology developed and funded with these research and development grants received to date.

In October 2024, the company entered into a payment plan with the Israel Innovation Authority (“IIA”) to settle the outstanding amount as of the previous year. According to the agreement, the IIA agreed to offset a delayed payment of approximately $50 from the total outstanding amount. The company committed to making an immediate payment of $190 and to spread the remaining balance over two years, with quarterly installments of approximately $106 starting from October 2024. The outstanding debt will continue to accrue interest and linkage differences in accordance with legal requirements until fully settled. By December 31, 2024, the company had paid approximately $400 which include one-time payment and two quarter installments. Additionally, the company is required to report and pay ongoing royalties starting from the first half of 2024

As of December 31, 2024, the Company had received approximately $14,300 (approximately $15,830 including interest) and repaid approximately $10,621 in such grants.

During the years 2024 and 2023, the Company repaid amounts of $400 and $73, respectively.

As of December 31, 2024, and 2023, the Company had a liability to repay royalties in approximately $839 and $1062, respectively.

Royalties payable: