NOTE 8: - LEASES

Towards the termination of the previous facility operating lease agreement, the Company signed, in December 2021, an addendum to its facility operating lease agreement with the lessor, which extended the lease period to December 2026. In addition, the Company had the option to extend the term of the lease for an additional period of five years until December 2031. In January 2026, the Company entered into an addendum to its facility operating lease agreement with the lessor, or the Lease Addendum, pursuant to which the Company exercised its option to extend the lease term through December 2031. The Company exercised the option one year earlier than scheduled, while all other terms and conditions remained unchanged. In consideration for exercising the option, the Company received a waiver of lease payments for a three-month period that commenced on January 1, 2026, which waiver will remain effective on the condition that the Company will lease the facility until December 2031.

The Company determined that the Lease Addendum and the related waiver of lease payments qualified as a lease modification under ASC 842-10-25-8, effective January 1, 2026, or the Modification Date. Accordingly, the lease liability was remeasured as of the Modification Date based on the present value of the revised lease payments over the remaining lease term, discounted using the Company’s incremental borrowing rate based on the information available at the lease Modification Date. The total modification resulted in a reduction of $147 to the right-of-use asset and lease liability, with an additional reduction of $136 in the right-of-use asset recognized in other financial income (expenses), net, resulting from the remeasurement of the right-of-use asset based on the exchange rate as of the Modification Date.

The monthly lease payments following the modification are approximately NIS 335,000 (or $106), which are linked to the consumer price index and will increase by 10% during the additional lease term. In addition, the Company has operating leases for vehicles that expire through fiscal year 2028.

In addition, in October 2024, Ever After Foods signed a facility operating lease agreement with a lessor. The lease period began on March 1, 2025, for a term of five years until February 28, 2030. Ever After Foods has the option to terminate the lease after a period of 36 months or to extend the term of the lease for an additional period of five years. The average monthly lease payment, including the extension option, is approximately NIS 55,000 (or $17), which is linked to the consumer price index. The monthly lease payments will increase by 5% in the event that Ever After Foods exercises its extension option. In addition, Ever After Foods has operating leases for vehicles that expire through fiscal year 2029.

Below is a summary of the Company’s operating ROU assets and operating lease liabilities:

Maturities of operating lease liabilities as of June 30, 2026 are as follows:

All of the leased facilities are located in Israel.

The components of lease expense and supplemental cash flow information related to leases for the years ended June 30, 2026 and 2025 are as follows:

As of June 30, 2026, the weighted average remaining lease term is 5.3 years, and the weighted average discount rate is 13%. As of June 30, 2025, the weighted average remaining lease term is 6.4 years, and the weighted average discount rate is 9%. The discount rate was determined based on the estimated collateralized borrowing rate of the Company, adjusted to the specific lease term and location of each lease.

As of June 30, 2026, the weighted average remaining lease term for Ever After Foods was 8.1 years, and the discount rate was 14%. As of June 30, 2025, the remaining lease term for Ever After Foods was 9.7 years, and the discount rate was 14%. The discount rate was determined based on the estimated collateralized borrowing rate of Ever After Foods, adjusted to the specific lease term and location of each lease.

For vehicles, the lease period is usually 3 years.