N2OFF, Inc(US:NITO)2025-08-14 20:21Forward-Looking Statements This section outlines forward-looking statements regarding future events, financial performance, liquidity, and business opportunities, based on current information and management's interpretations - This section contains forward-looking statements regarding future events, expectations, results, performance, liquidity, financial condition, prospects, and opportunities; these statements are predictions based on current information and management's interpretation of significant factors affecting the business8 - Key risks and uncertainties include efforts to complete and integrate acquisitions/joint ventures, international expansion risks, potential need for additional financing, operational costs, conditions in Israel (conflicts, instability), dangers in production/transportation of chemicals, ability to attract/retain personnel, intellectual property protection, support for future growth, potential product liability/IP infringement claims, climate change effects, and portfolio concentration911 PART I - FINANCIAL INFORMATION This part presents the unaudited condensed consolidated interim financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Condensed Consolidated Interim Financial Statements (unaudited) This section presents the unaudited condensed consolidated interim financial statements of N2OFF, Inc. for the periods ended June 30, 2025, including the balance sheets, statements of comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with their accompanying notes Condensed Consolidated Interim Balance Sheets (unaudited) The unaudited condensed consolidated interim balance sheets provide a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Interim Balance Sheets (USD in thousands) | Metric (USD in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Assets | | | | Cash and cash equivalents | 3,138 | 2,154 | | Total Current assets | 5,016 | 3,404 | | Solar photovoltaic joint venture project | 1,634 | 808 | | Total assets | 7,752 | 5,465 | | Liabilities | | | | Total current liabilities | 1,060 | 892 | | Total liabilities | 2,201 | 892 | | Stockholders' Equity | | | | Total stockholders' equity| 5,551 | 4,573 | | Total liabilities and stockholders' equity | 7,752 | 5,465 | Condensed Consolidated Interim Statements of Comprehensive Loss (unaudited) The unaudited condensed consolidated interim statements of comprehensive loss present the company's financial performance for the three and six months ended June 30, 2025, and 2024, highlighting revenues, cost of sales, operating expenses, and net loss Condensed Consolidated Interim Statements of Comprehensive Loss (USD in thousands) | Metric (USD in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :------------------------ | :----------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | | Revenues from sales of products | 66 | 61 | - | 17 | | Cost of sales | (17) | (34) | (2) | (6) | | Gross profit (loss) | 49 | 27 | (2) | 11 | | Operating loss | (3,452) | (1,628) | (2,832) | (847) | | Net loss from continuing operations | (5,809) | (1,483) | (4,552) | (779) | | Net loss | (5,765) | (1,622) | (4,508) | (800) | | Net loss attributable to the Company's stockholders' equity | (5,702) | (1,556) | (4,509) | (787) | | Total loss per share (basic) | (0.28) | (0.49) | (0.18) | (0.23) | | Comprehensive loss | (5,778) | (1,622) | (4,516) | (800) | Condensed Consolidated Interim Statements of Stockholders' Equity (unaudited) The unaudited condensed consolidated interim statements of changes in stockholders' equity detail the movements in equity components for the six months ended June 30, 2025, and 2024, including share issuances, warrant exercises, and the impact of comprehensive loss Condensed Consolidated Interim Statements of Stockholders' Equity (USD in thousands) | Metric (USD in thousands) | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :------------------------ | :---------------- | :------------- | :------------ | | Total equity | 4,573 | 3,698 | 5,551 | | Common Stock Shares Outstanding | 12,058,237 | 17,812,404 | 30,096,412 | | Additional paid-in capital | 39,327 | 39,714 | 46,053 | | Accumulated deficit | (34,553) | (35,746) | (40,255) | Key Changes (December 31, 2024 to June 30, 2025): * Issuance of shares for PIPE agreement: 5,025,001 shares * Warrant exercises: 7,937,499 shares * Issuance of shares for services: 4,400,000 shares * Issuance of shares for purchase agreement: 675,675 shares * Comprehensive loss for the period: $(5,702) thousand Condensed Consolidated Interim Statements of Cash Flows (unaudited) The unaudited condensed consolidated interim statements of cash flows provide a summary of cash inflows and outflows categorized into operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 Condensed Consolidated Interim Statements of Cash Flows (USD in thousands) | Metric (USD in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | (1,337) | (2,036) | | Net cash used in investing activities | (1,625) | (162) | | Net cash provided by financing activities | 3,934 | 2,208 | | Effect of exchange rate changes on cash and cash equivalents | (18) | 2 | | INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 954 | 12 | | CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 3,163 | 4,490 | Notes to Condensed Consolidated Interim Financial Statements These notes provide detailed explanations and additional information pertinent to the condensed consolidated interim financial statements, covering the company's operations, significant accounting policies, financial instruments, investments, credit facilities, and recent corporate transactions - NOTE 1 – GENERAL: N2OFF, Inc. (formerly Save Foods, Inc.) reincorporated in Nevada and changed its name; it operates through Save Foods Ltd. (agri-food tech) and NITO Renewable Energy, Inc. (solar energy); the company sold its NTWO OFF Ltd. subsidiary (N2O emissions solutions) on April 9, 2025; the company has an accumulated deficit of $40 million and expects continued losses, raising substantial doubt about its ability to continue as a going concern beyond Q1 2026 without additional financing; operations in Israel are affected by the Israel-Hamas war, including temporary shutdowns and impacts on affiliates like Plantify3132333536394041434445 - NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The company applies U.S. GAAP and SEC rules for interim reporting; significant estimates relate to fair value calculations; the company elected the fair value option for its credit facility and measures project assets (solar power projects) in accordance with ASC 970-360; discontinued operations are reported separately, as seen with the sale of NTWO OFF; fair value measurements are categorized into Level 1, 2, and 3 inputs4950515457596162 Fair Value of Financial Assets (USD in thousands) | Asset Category | June 30, 2025 (Total) | December 31, 2024 (Total) | | :--------------- | :-------------------- | :------------------------ | | Investment in Plantify | - | 603 | | Investment in Solterra | 271 | 307 | | Solar photovoltaic joint venture project | 1,634 | 808 | | Loan granted to MitoCareX | 704 | 234 | | Convertible loan to Solterra | 451 | 350 | | Total assets | 3,060 | 2,302 | Fair Value of Financial Liabilities (USD in thousands) | Liability Category | June 30, 2025 (Total) | December 31, 2024 (Total) | | :----------------- | :-------------------- | :------------------------ | | Stock purchase warrants liability | 429 | - | | Warrant liabilities to Pure Capital | 406 | 312 | | Credit facility | 699 | - | | Total liabilities | 1,534 | 312 | - NOTE 3 – INVESTMENT IN NONCONSOLIDATED AFFILIATE (Plantify): The company's ownership in Plantify Foods Inc. was reduced to approximately 25% as of January 12, 2025; due to the lack of an observable active market and deterioration of Plantify's financial condition (including its subsidiary's insolvency), the investment was fully impaired as of June 30, 2025, resulting in an impairment loss of $602 thousand for the six months ended June 30, 2025737576 - NOTE 4 – MITOCAREX TRANSACTION: The company entered into an agreement to acquire MitoCareX BioLtd., contingent on stockholder approval; consideration includes cash, common stock (40% fully diluted), and potential additional shares based on milestones; the company also provided three loans totaling $750 thousand to MitoCareX, accounted for at fair value, with a recorded loss from changes in fair value of $30 thousand for the six months ended June 30, 20257880818586878890 - NOTE 6 – SOLAR PHOTOVOLAIC JOINT VENTURE PROJECT: The company committed €1,560 thousand (approx. $1,716 thousand) to a loan and partnership agreement for solar energy projects in Germany, funding €1,129 thousand (approx. $1,216 thousand) as of June 30, 2025; it also provided a €150 thousand (approx. $177 thousand) loan for a battery storage project in Poland; these investments are accounted for at fair value, with a gain from changes in fair value of $218 thousand for the six months ended June 30, 2025, for the German project959698100 - NOTE 7 – CREDIT FACILITY: The company entered into a €6,000 thousand credit facility with L.I.A. Pure Capital Ltd., bearing 7% annual interest; in connection, a five-year warrant to purchase 1,850,000 shares at $1.00 (adjusted to $0.10) was issued; the fair value of the warrant liability was $406 thousand as of June 30, 2025; loans drawn under the facility are accounted for at fair value, with financing expenses of $33 thousand for the six months ended June 30, 2025101102107108109111 - NOTE 9 – DISCONTINUED OPERATIONS (NTWO OFF): On April 9, 2025, the company sold 100% of its shares in NTWO OFF Ltd. for NIS 15 thousand (approx. $4 thousand); this operation is classified as discontinued, resulting in a gain on disposal of approximately $44 thousand and a net cash outflow of $25 thousand from investing activities118120121124 - NOTE 10 – COMMON STOCK AND WARRANTS: The company completed a Private Placement on January 2, 2025, issuing shares, pre-funded warrants, and warrants, receiving $1,500 thousand; warrants were classified as liabilities, initially valued at $9.6 million; warrant exercises during the period led to significant non-cash gains/losses; as of June 30, 2025, the fair value of remaining warrant liabilities was $429 thousand; the company also issued shares for services and as commitment for a purchase agreement125126127128129134136 - NOTE 13 – SEGMENT REPORTING: As of June 30, 2025, the company has two reportable segments: (i) Pathogen prevention and prolong shelf life (Save Foods Ltd.) and (ii) Renewable energy projects (NITO Renewable Energy, Inc. and Solar photovoltaic joint venture project); the N2O emissions Global warming solutions segment (NTWO OFF Ltd.) was discontinued143144 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, results of operations, and liquidity, including an overview of its business, recent developments, and a detailed analysis of financial performance for the reported periods Overview N2OFF, Inc. focuses on sustainable operations in agri-food tech (Save Foods) and solar projects (NITO Renewable Energy); the company recently sold its NTWO OFF subsidiary and holds a 25% interest in Plantify Foods Inc., which has minimal business activity due to the war in Israel - The company's core businesses are agri-food tech (Save Foods, focusing on eco crop protection) and solar energy projects (through NITO Renewable Energy, Inc. and collaborations with Solterra Renewable Energy Ltd.)152154 - NTWO OFF, which focused on N2O emissions mitigation, was sold on April 9, 2025, and is no longer part of the company's operations153 - The company owns approximately 25% of Plantify Foods Inc., whose primary operating subsidiary, Piece of Bean Ltd., was severely impacted by the war in Israel and is undergoing insolvency proceedings, leaving Plantify with minimal business activity and liquidity155 Recent Developments Recent developments include an amendment to the Purchase Agreement with YA II PN, Ltd., extending terms and issuing additional shares; the acquisition of MitoCareX BioLtd. is ongoing, with the exclusivity period extended and stockholder approval pending; additionally, the company provided a third loan to MitoCareX and extended the maturity dates of previous loans - On July 25, 2025, an amendment to the Purchase Agreement with YA II PN, Ltd. was executed, extending certain terms and conditions, and resulting in the issuance of an additional 574,325 shares (or pre-funded warrants) to the Investor; revised promissory notes reflect extended payment terms157158 - The Securities Purchase and Exchange Agreement for the acquisition of MitoCareX BioLtd. was amended twice, extending the exclusivity period and updating consideration allocation; the closing is contingent on stockholder approval at a special meeting on September 25, 2025160161162163 - On May 22, 2025, the company entered into a third loan agreement with MitoCareX for $250,000 and amended the first and second loan agreements to extend their maturity dates164166 Results of Operations The company experienced a significant increase in comprehensive loss for both the three and six months ended June 30, 2025, primarily driven by higher general and administrative expenses (due to share-based compensation) and financing expenses (related to warrant liabilities and credit facility fair value changes); revenues decreased in the three-month period but slightly increased over six months, while cost of sales decreased Financial Performance (Three Months Ended June 30, USD in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :--- | :--- | :--------- | :--------- | | Revenues from sales of products | - | 17 | (17) | (100)% | | Cost of sales | (2) | (6) | 4 | (67)% | | Gross profit (loss) | (2) | 11 | (13) | (118)% | | Research and Development Expenses | 9 | 6 | 3 | 50% | | Selling and Marketing Expenses | 49 | 57 | (8) | (14)% | | General and Administrative Expenses | 2,772 | 795 | 1,977 | 249% | | Financing expenses, Net | 1,203 | 79 | 1,124 | 1,423% | | Total Comprehensive Loss | 4,516 | 800 | 3,716 | 465% | Financial Performance (Six Months Ended June 30, USD in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------- | :--- | :--- | :--------- | :--------- | | Revenues from sales of products | 66 | 61 | 5 | 8% | | Cost of sales | (17) | (34) | 17 | (50)% | | Gross profit | 49 | 27 | 22 | 81% | | Research and Development Expenses | 29 | 19 | 10 | 53% | | Selling and Marketing Expenses | 95 | 114 | (19) | (17)% | | General and Administrative Expenses | 3,377 | 1,522 | 1,855 | 122% | | Financing expenses, Net | 2,011 | 74 | 1,937 | 2,618% | | Total Comprehensive Loss | 5,778 | 1,622 | 4,156 | 256% | Liquidity and Capital Resources The company's liquidity is primarily managed through equity and debt issuances, as it continues to incur significant losses and negative cash flows from operations; there is substantial doubt about its ability to continue as a going concern beyond Q1 2026 without securing additional financing - As of June 30, 2025, cash and cash equivalents were $3,138,000, a decrease from $4,468,000 as of June 30, 2024; working capital increased slightly to $3,956,000 from $3,873,000193 - The company has an accumulated deficit of $40,255,000 as of June 30, 2025, and expects to incur further losses, leading to substantial doubt about its ability to continue as a going concern through at least Q1 2026199200 - Operations are financed mainly through equity and debt issuances; a standby equity purchase agreement with an investor provides up to $20 million, with approximately $16 million remaining available as of August 14, 2025192195197 Cash Flows (Six Months Ended June 30, USD in thousands) | Activity | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Net cash used in operating activities | (1,337) | (2,036) | | Net cash used in investing activities | (1,625) | (162) | | Net cash provided by financing activities | 3,934 | 2,208 | | Increase (decrease) in cash and cash equivalents | 954 | 12 | Item 3. Quantitative And Qualitative Disclosures About Market Risk As a smaller reporting company, N2OFF, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide information on quantitative and qualitative disclosures about market risk205 Item 4. Control and Procedures Management, including the Principal Executive Officer and Principal Financial Officer, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025; there were no material changes in internal control over financial reporting during the period - Management evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and concluded they were effective206 - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the period208 PART II - OTHER INFORMATION This part provides additional information including legal proceedings, risk factors, unregistered sales of equity securities, defaults, and exhibits Item 1. Legal Proceedings There are no pending legal proceedings involving N2OFF, Inc. or any related parties with a material adverse interest to the company - No pending legal proceedings to which the Company is a party or in which any director, officer, affiliate, or significant security holder is a party adverse to the Company or has a material interest adverse to the Company210 Item 1A. Risk Factors As a smaller reporting company, N2OFF, Inc. is not required to provide risk factor disclosures under this item - The company is a smaller reporting company and is not required to provide risk factor information211 Item 2. Unregistered Sales Of Equity Securities And Use Of Proceeds This section details several unregistered sales of equity securities during the period, including issuances to consultants, executive officers, and an investor for services rendered and commitment fees, all deemed exempt from registration under Section 4(2) of the Securities Act of 1933 - On May 12, 2025, the company issued 300,000 shares to a consultant, 600,000 shares to CEO David Palach, and 300,000 shares to CFO Lital Barda under the 2022 Share Incentive Plan; additionally, 3,200,000 shares were issued to ten consultants outside the Plan for various financial, investor relations, and business development services213 - On May 13, 2025, 675,675 shares, valued at $300,000, were issued to YA II PN, Ltd. as a commitment for entering into a purchase agreement214 - On July 25, 2025, an additional 574,325 shares (or a pre-funded warrant for the same number of shares) were issued to YA II PN, Ltd. in consideration for an amendment to the Purchase Agreement215 - On July 31, 2025, 3,000,000 shares of common stock were issued to three consultants for investor relations and business development services216 Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities218 Item 4. Mine Safety Disclosures This item is not applicable to N2OFF, Inc. - Mine Safety Disclosures are not applicable to the company219 Item 5. Other Information During the three months ended June 30, 2025, no directors or officers of the company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements - None of the Company's directors or officers adopted or terminated any Rule 10b5-1(c) trading arrangements or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025220 Item 6. Exhibits This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including various certifications and XBRL documents - Exhibits include certifications of the Principal Executive Officer and Principal Financial Officer (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act) and various Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents, and Cover Page Interactive Data File)221 SIGNATURES This section confirms the official signing of the report by the company's Principal Executive Officer and Principal Financial Officer - The report was duly signed on August 14, 2025, by David Palach, Chief Executive Officer (Principal Executive Officer), and Lital Barda, Chief Financial Officer (Principal Financial and Accounting Officer)223224