Save Foods, Inc. — FY2020 Form 10-K
Entity and period: The supplied filing identifies the registrant as Save Foods, Inc., not Nexentis Technologies Inc. It reports the fiscal year ended December 31, 2020, with 2019 comparative figures; it does not provide standalone fourth-quarter results.
Business context
Save Foods develops produce-treatment products intended to improve food safety and extend fresh-produce shelf life using proprietary food-acid blends. Its strategy is focused on research, trials, regulatory approvals and commercialization through distribution and industry partners. The company reported that sales of its newer products began in Q4 2020.
Financial results and liquidity
| Metric (US$ unless stated) | 2020 | 2019 |
|---|---|---|
| Revenue | $232,274 | $175,823 |
| Gross profit | $188,869 | $31,275 |
| Gross margin | 81.3% | 17.8% |
| Operating loss | $(1,349,345) | $(1,931,305) |
| Net loss attributable to the company | $(1,593,139) | $(1,971,417) |
| Loss per share | $(1.05) | $(1.38) |
| Cash used in operating activities | $(798,740) | $(1,244,772) |
Revenue increased 32%, while gross profit rose substantially as revenue grew and cost of sales fell 70% to $43,405. The company attributed the lower costs partly to furloughs and reduced materials costs. Operating expenses included $417,000 in R&D, $51,105 in selling and marketing, and $1,070,109 in general and administrative expenses. Financing expense increased to $270,393 from $43,408, principally reflecting convertible-loan-related costs. The 2020 net loss was $1,606,580 before the non-controlling-interest allocation.
At year-end, cash and cash equivalents were $242,900 (2019: $290,815), and working capital was negative $290,062 (2019: negative $199,212). Current assets were $495,171 versus current liabilities of $785,233. Total liabilities were $1,153,102, and shareholders’ deficit was $465,453. Liabilities included $203,179 in carrying value of convertible loans, plus a $54,970 fair-value liability for their conversion feature; the company also reported $16,064 in bank loans, of which $7,949 was current. Cash decreased by $47,915 during 2020. Financing cash inflows were $741,760.
Changes, outlook and risks
- Management said lower R&D and marketing spending reflected reduced payroll and COVID-related postponements of travel and field trials. G&A rose 6%, largely due to share-based compensation.
- Management estimated year-end cash would fund current operations only until June 2021. The company depends on additional financing and warned it may have to delay or reduce development or commercialization if capital is unavailable. The auditor’s report highlights substantial doubt about the company’s ability to continue as a going concern.
- After year-end, the company reported $274,000 of additional convertible notes issued in January 2021. It had filed an S-1 for a proposed public offering and applied to list on Nasdaq; completion, proceeds and listing were not assured in the filing.
- Commercial evidence remains early-stage: product trials and pilots are not a substitute for broad market adoption or required approvals. SavePROTECT registration in California was anticipated in the second half of 2021; EPA efficacy work and a sanitizer dossier were planned for 2021, with first SF3H/SF3HS commercialization expected no earlier than the second half of 2022.
- COVID-19 caused remote work, furloughs and delayed tests; management reported no material financial impact to date but could not estimate the pandemic’s full effects. Other stated risks include regulatory delays, limited customer commitments, competition, reliance on contract manufacturers and distribution partners, foreign-exchange exposure, and operations in Israel.
- Management concluded disclosure controls were not effective at year-end because of limited personnel and segregation of duties, lack of full-time executive oversight, and no independent audit committee. The filing says there were no material legal proceedings.
Key facts for investors to verify
- Confirm the issuer identity: the filing is for Save Foods, Inc., despite the request metadata naming Nexentis Technologies Inc.
- Review the full audited statements and notes, especially the going-concern qualification, negative working capital, convertible-loan accounting and related-party balances.
- Check subsequent filings for the status, terms and net proceeds of the proposed offering and Nasdaq listing, and for the company’s actual cash runway.
- Verify regulatory milestones, trial results and commercial orders; the filing reports no backlog or firm customer commitments.
- Assess dilution and debt-conversion terms, including the January 2021 notes, warrants and outstanding options.