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OPERATING LEASES

9 Months Ended

Sep. 30, 2025

NOTE 4 – OPERATING LEASES

The Company is a party to several lease agreements for its facilities that included varying lease periods and options for extensions. The Company is currently in the second option period for each of the three leases, which periods are not uniform. In the three months ended September 30, 2025, the Company amended all of the facility leases, collectively, to provide that the third option period for each lease will end on December 31, 2031 and will be associated with a unform rent increase equal to 7.5%. Thereafter, each lease will extend automatically, on an individual basis, for up to four additional five-year periods unless the Company provides the lessor with six months’ advance notice that it does not intend that any individual option extension become effective. Each option to renew a lease in each of the four option periods shall include a rent increase equal to 5% of the rent payable for the applicable previous option period. Prior to the amendment, the options to extend the leases were associated with increases of either 7.5% or 10%. The Company expects to exercise the options in future periods. As of September 30, 2025, the Company provided bank guarantees of approximately $0.6 million, in the aggregate, to secure the fulfillment of its obligations under the lease agreements.

The Company adjusted the operating lease right of use assets by $3.1 million reflecting the amount of remeasurement of the lease liability using a new discount rate at the amendment date.

The Company is a party to several three-year leases for vehicles which are regularly amended as new vehicles are leased.

The following table sets forth data regarding the Company’s operating leases for the three and nine months ended September 30, 2024 and 2025:


	Nine Months Ended September 30,						Three Months Ended September 30,
(U.S. dollars in thousands)	2025			2024			2025			2024
Operating lease costs	$	1,395		$	1,195		$	476		$	420
Cash paid for amounts included in the measurement of lease liabilities		1,338			1,207			457			413
Weighted average remaining lease term (in years)		22.6			6.2			22.6			6.2
Weighted average discount rate		13.4	%		12.8	%		13.4	%		12.8	%

The following table sets forth a maturity analysis of the Company’s operating lease liabilities as of September 30, 2025:


(U.S. dollars in thousands)	September 30, 2025
First year	$	1,397
Second year	$	1,141
Third year	$	1,074
Fourth year	$	1,040
Fifth year and thereafter	$	22,273
Total undiscounted cash flows	$	26,925
Less: imputed interest	$	18,748
Present value of operating lease liabilities	$	8,177