Business Context and Reporting Period
Company: N2OFF, Inc. (formerly Save Foods, Inc.)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2024
Reporting Status: Smaller Reporting Company; Non-accelerated filer; Emerging Growth Company.
Business Overview: N2OFF operates through two primary segments: (1) Pathogen Prevention (Save Foods Ltd.), developing eco-friendly post-harvest solutions to reduce food waste and improve safety; and (2) Global Warming Solutions (NTWO OFF Ltd.), focusing on mitigating nitrous oxide (N2O) emissions. The company also holds investments in solar energy projects via Solterra and a minority stake in Plantify Foods Inc.
Key Financial Metrics
| Metric | 2024 | 2023 |
|---|---|---|
| Revenue | $210,000 | $263,000 |
| Gross Profit | $45,000 | $208,000 |
| Operating Loss | $(4,320,000) | $(7,578,000) |
| Net Loss | $(5,347,000) | $(7,260,000) |
| Net Loss Attributable to Stockholders | $(5,193,000) | $(6,522,000) |
| Cash and Cash Equivalents (Year End) | $2,185,000 | $4,447,000 |
| Working Capital | $2,512,000 | $4,687,000 |
| Accumulated Deficit | $(34,553,000) | $(29,360,000) |
Note: All figures in thousands except per share data. Loss per share (basic and diluted) was $(0.89) for 2024 compared to $(5.43) for 2023.
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased 20% to $210,000, primarily due to reduced sales in Mexico.
- Cost of Sales Surge: Cost of sales increased 200% to $165,000, driven by inventory write-offs in South Africa and Turkey and unexpected material consumption due to a US client malfunction.
- Expense Reductions:
- R&D Expenses: Decreased 81% to $369,000 as the company shifted focus from development to commercialization.
- General & Administrative (G&A): Decreased 33% to $3.76 million, largely due to lower share-based compensation and insurance costs.
- Investment Losses: The company recorded a $1.3 million loss on changes in fair value of investments (primarily Plantify Foods Inc.), compared to $714,000 in 2023.
Guidance, Outlook, Risks, and Unusual Items
Going Concern Uncertainty
Management has raised substantial doubt about the company's ability to continue as a going concern. With an accumulated deficit of $34.5 million and recurring operating losses, the company expects to incur losses for the foreseeable future. Management believes existing capital resources will support operations only through the beginning of the fourth quarter of 2025. Additional financing is required to continue operations.
Recent Developments and Outlook
- Private Placement: In January 2025, the company consummated a private placement raising $1.5 million gross proceeds.
- MitoCareX Acquisition: In February 2025, the company entered an agreement to acquire MitoCareX Bio Ltd. (subject to shareholder approval), involving cash payments and significant equity issuance (up to 40% of fully diluted capital).
- Solar Energy Expansion: The company is advancing battery storage projects in Sicily, Italy, via a joint venture with Solterra.
- Commercialization Focus: The company is prioritizing the conversion of pilots into paying customers in Peru, Brazil, the US, and Israel, focusing on high-value crops like berries, avocados, and citrus.
Key Risks
- Geopolitical Instability: Operations in Israel are directly affected by the ongoing conflict with Hamas and regional instability, causing delays in pilots and potential supply chain disruptions.
- Regulatory Approvals: Commercial success depends on obtaining regulatory approvals (EPA, CDPR, etc.) for products in key markets, which may be delayed.
- Delisting Risk: The company received notice from Nasdaq regarding non-compliance with the $1.00 minimum bid price requirement. It has 180 days to regain compliance or face delisting.
- Capital Requirements: The company may be unable to raise additional capital on favorable terms, which could force a reduction in operations.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $2.185 million cash balance against the stated burn rate and the timeline to Q4 2025.
- Delisting Status: Monitor the stock price to ensure it meets the $1.00 minimum bid price requirement for at least 10 consecutive trading days to avoid Nasdaq delisting.
- MitoCareX Transaction: Confirm shareholder approval status for the MitoCareX acquisition and the resulting dilution impact (potential issuance of 40% of equity).
- Revenue Concentration: Note that in 2024, a single customer (Customer A) accounted for approximately 81% of total revenue ($171,000).
- Plantify Investment: Review the status of the investment in Plantify Foods Inc., which has no business activity due to the war in Israel and is subject to fair value adjustments.
- Regulatory Milestones: Track progress on EPA and CDPR registrations for core products (SavePROTECT/PeroStar) in the US and other target markets.