Business Context and Reporting Period
Company: N2OFF, Inc. (Ticker: NITO)
Filing Type: Form 10-Q (Unaudited)
Reporting Period: Quarter and nine months ended September 30, 2025
Business Overview: N2OFF operates in agri-food tech (Save Foods), renewable energy projects (NITO Renewable Energy), and recently acquired oncology biotechnology (MitoCareX). The company is a smaller reporting company and an emerging growth company.
Key Financial Metrics
| Metric (USD in thousands) | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 |
|---|---|---|---|---|
| Revenues | 68 | 69 | 2 | 9 |
| Gross Profit (Loss) | 49 | (41) | 0 | (68) |
| Operating Loss | (4,779) | (3,064) | (1,326) | (1,436) |
| Net Gain (Loss) from Continuing Ops | (5,439) | (3,684) | 370 | (2,200) |
| Net Gain (Loss) Attributable to Stockholders | (5,273) | (3,820) | 429 | (2,264) |
| Cash and Cash Equivalents (Sep 30, 2025) | 6,044 | - | - | - |
| Working Capital (Sep 30, 2025) | 6,598 | - | - | - |
| Accumulated Deficit (Sep 30, 2025) | (39,826) | - | - | - |
Note: Financial data is presented in thousands. The company reported a net gain for the three months ended September 30, 2025, driven primarily by non-cash changes in fair value of financial instruments, despite an operating loss.
Material Changes vs. Prior Period
- Revenue: Remained flat at $68,000 for the nine months ended September 30, 2025, compared to $69,000 in the prior year period. Q3 2025 revenue dropped to $2,000 from $9,000 in Q3 2024 due to decreased sales in Israel.
- Operating Expenses: General and Administrative (G&A) expenses increased significantly to $4.6 million for the nine months ended September 30, 2025, from $2.8 million in the prior year. This 65% increase was driven by higher share-based compensation ($2.1 million vs. $0.8 million) and professional/legal fees.
- Net Income Volatility: The company swung from a net loss of $3.9 million (9 months 2024) to a net loss of $5.4 million (9 months 2025). However, for the quarter ended September 30, 2025, the company reported a net gain of $370,000 compared to a loss of $2.2 million in the prior year quarter. This improvement is largely attributable to a $1.66 million non-cash gain from the Standby Equity Purchase Agreement (SEPA) and changes in the fair value of warrant liabilities.
- Discontinued Operations: The company sold its N2O emissions subsidiary (NTWO OFF) in April 2025, classifying it as discontinued operations. This resulted in a $44,000 gain on disposal.
Guidance, Outlook, Risks, and Unusual Items
Management Commentary and Outlook
- Going Concern: Management has raised substantial doubt about the company's ability to continue as a going concern. While cash balances improved to $6.0 million due to financing, the company expects to continue generating losses and negative operating cash flows. Management believes existing cash will fund operations until the end of Q3 2026.
- Strategic Acquisitions: On October 20, 2025 (subsequent to the reporting period), the company completed the acquisition of MitoCareX Bio Ltd., a wholly-owned subsidiary focused on oncology therapeutics. The deal involved $700,000 cash and approximately 40% of the company's fully diluted share capital.
- Capital Raising: The company relies heavily on external financing. It executed a 1-for-35 reverse stock split in September 2025 to maintain Nasdaq compliance. Proceeds from a PIPE agreement and SEPA II were significant contributors to liquidity.
Risks and Contingencies
- Geopolitical Risk: Operations are heavily concentrated in Israel. The ongoing conflict with Hamas and regional instability (including Operation "Rising Lion" in June 2025) caused temporary shutdowns and poses a risk to future operations and asset values.
- Investment Impairment: The company fully impaired its investment in Plantify Foods Inc. (approx. 25% ownership) as of September 30, 2025, due to the insolvency of Plantify's operating subsidiary and lack of market activity.
- Financing Dependency: Future growth and operations depend on securing additional equity or debt financing, which may not be available on favorable terms.
Unusual Items
- Fair Value Adjustments: Significant non-cash gains and losses were recorded due to the fair value option elected for various loans, credit facilities, and warrant liabilities. A $1.66 million gain from the SEPA II transaction was a primary driver of the Q3 net gain.
- Reverse Stock Split: A 1-for-35 reverse stock split was effective September 22, 2025. All share and per-share data in the filing have been retroactively adjusted.
Investor Verification Checklist
- Cash Runway: Verify the accuracy of the management's projection that cash will last until Q3 2026, given the high burn rate and reliance on future financing.
- MitoCareX Integration: Review the final purchase price allocation for the MitoCareX acquisition (completed Oct 2025) and assess the viability of its oncology pipeline.
- Plantify Impairment: Confirm the full impairment of the Plantify investment and the lack of recovery potential.
- Geopolitical Exposure: Assess the specific impact of the Israel-Hamas conflict on the Save Foods subsidiary's ability to execute pilots and generate revenue.
- Warrant Liabilities: Monitor the fair value of outstanding warrant liabilities, as fluctuations in the stock price can cause significant volatility in reported net income/loss.