N2OFF, Inc(US:NITO)2024-05-15 20:05PART I - FINANCIAL INFORMATION Condensed Consolidated Interim Financial Statements (unaudited) The unaudited interim statements show a Q1 net loss of $822,358, decreased total assets, and a going concern uncertainty - On March 19, 2024, the company changed its name from "Save Foods, Inc" to "N2OFF, Inc" and its trading symbol from "SVFD" to "NITO"9 - The company's operations are primarily conducted in Israel and are affected by the ongoing war with Hamas, which has caused delays in pilots and packaging activities333437 - Management has expressed substantial doubt about the company's ability to continue as a going concern, with cash projected to be sufficient only until the end of Q2 20253031121 Condensed Consolidated Interim Balance Sheets Total assets decreased to $6.27 million as of March 31, 2024, primarily due to a reduction in cash and cash equivalents Condensed Consolidated Balance Sheet Data (in U.S. dollars) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $3,490,095 | $4,447,003 | | Total Current assets | $4,422,146 | $5,465,621 | | Total assets | $6,265,748 | $7,244,231 | | Liabilities & Equity | | | | Total current liabilities | $560,585 | $778,472 | | Total liabilities | $565,840 | $785,653 | | Total stockholders' equity | $5,699,908 | $6,458,578 | | Total liabilities and stockholders' equity | $6,265,748 | $7,244,231 | Condensed Consolidated Interim Statements of Comprehensive Loss The company's net loss improved to $822,358 in Q1 2024 from $1.72 million in Q1 2023, despite a significant revenue decline Statement of Comprehensive Loss Highlights (Three months ended March 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Revenues from sales of products | $43,831 | $121,010 | | Gross profit | $15,851 | $78,264 | | Operating loss | ($899,066) | ($1,743,653) | | Net loss | ($822,358) | ($1,721,549) | | Loss per share (basic and diluted) | ($0.26) | ($2.46) | Condensed Consolidated Interim Statements of Cash Flows Net cash used in operations was $1.01 million, and the quarter-end cash balance stood at $3.51 million Cash Flow Summary (Three months ended March 31) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,007,516) | ($1,105,789) | | Net cash provided by financing activities | $39,950 | $0 | | Decrease in cash, cash equivalents and restricted cash | ($964,965) | ($1,106,171) | | Cash, cash equivalents and restricted cash at end of period | $3,513,209 | $4,644,600 | Notes to Condensed Consolidated Interim Financial Statements Key notes detail the company's name change, a reverse stock split, and significant financing agreements and subsequent events - The company has two reportable segments: Pathogen prevention (Save Foods Ltd), which generated all $43,831 in revenue for Q1 2024, and N2O emissions solutions (NTWO OFF Ltd), which is pre-revenue7475 - On December 22, 2023, the company entered into a Standby Equity Purchase Agreement (SEPA II) with YA II PN, Ltd for up to $20 million in common stock purchases63 - Subsequent to the quarter end, on April 4, 2024, the company sold a $1.5 million promissory note under the SEPA II agreement, receiving proceeds of $1.455 million82 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 64% revenue decrease, significantly reduced operating expenses, and substantial doubt about its going concern status Results of Operations Revenues fell 64% while a 55% reduction in G&A expenses led to a 52% smaller total comprehensive loss Financial Performance Comparison (Three months ended March 31) | Metric | 2024 | 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $43,831 | $121,010 | -64% | | Gross Profit | $15,851 | $78,264 | -80% | | R&D Expenses | $115,866 | $118,908 | -3% | | S&M Expenses | $57,248 | $69,146 | -17% | | G&A Expenses | $741,803 | $1,633,863 | -55% | | Total Comprehensive Loss | ($822,358) | ($1,721,549) | -52% | - The decrease in General and Administrative expenses was mainly due to a reduction in share-based compensation, professional services, insurance costs, and franchise tax110 Liquidity and Capital Resources The company has $3.49 million in cash, a working capital of $3.86 million, and relies on external financing for survival - The company had cash and cash equivalents of $3,490,095 as of March 31, 2024, down from $4,595,838 as of March 31, 2023114 - The company is relying on a Standby Equity Purchase Agreement (SEPA II) with an investor to purchase up to $20 million of common stock, which is a key source of potential liquidity118119 - Management states there is substantial doubt about the company's ability to continue as a going concern, with existing capital sufficient only to support operations through Q2 2025121122 Quantitative and Qualitative Disclosures about Market Risk The company is a smaller reporting company and is not required to provide the information for this item - As a smaller reporting company, N2OFF, Inc is not required to provide quantitative and qualitative disclosures about market risk127 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2024 - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2024128 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls129 PART II - OTHER INFORMATION Legal Proceedings The company reports no pending legal proceedings to which it is a party - There are no pending legal proceedings to which the Company is a party130 Risk Factors As a smaller reporting company, N2OFF, Inc is not required to provide risk factor information - The company is a smaller reporting company and is not required to provide information on risk factors in its Form 10-Q131 Unregistered Sales of Equity Securities and Use of Proceeds The company issued 4,794 unregistered shares of common stock to two consultants for services rendered - On March 18, 2024, the company issued 1,286 shares of common stock to a consultant for investor relations services134 - On March 18, 2024, the company issued 3,508 shares of common stock to another consultant for services provided134 Defaults Upon Senior Securities The company reports no defaults upon senior securities during the period - None135 Mine Safety Disclosures This item is not applicable to the company's operations - Not applicable135 Other Information No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the quarter - No directors or officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of the company's securities under Rule 10b5-1(c) during the quarter136 Exhibits This section lists all exhibits filed with the quarterly report, including certifications and XBRL data