Business Context and Reporting Period
Company: N2OFF, Inc. (Nasdaq: NITO)
Filing Type: Form 8-K (Current Report)
Date of Report: February 25, 2025
Event: Entry into a Material Agreement to acquire MitoCareX Bio Ltd., a next-generation computational drug discovery company targeting resistant cancers. The transaction will result in MitoCareX becoming a wholly-owned subsidiary of N2OFF.
Key Financial Metrics and Transaction Structure
This filing details a strategic acquisition rather than periodic financial results. Key financial terms include:
- Cash Consideration: $700,000 payable to SciSparc Ltd. for 6,622 Ordinary Shares of MitoCareX.
- Stock Consideration (Immediate): Issuance of N2OFF Common Stock representing approximately 40% of the company on a fully-diluted basis immediately post-closing:
- 15.50% to Dr. Alon Silberman
- 7.75% to Prof. Ciro Leonardo Pierri
- 16.75% to SciSparc Ltd.
- Milestone Consideration: Up to an additional 25% of N2OFF's fully-diluted capital stock issuable to Sellers upon achievement of specific milestones by December 31, 2028.
- Future Financing Commitment: N2OFF committed to an initial investment of $1,000,000 in MitoCareX (net of prior loans) and agreed to provide necessary funding for ongoing R&D subject to board approval and resource availability.
- Future Proceeds Participation: Sellers entitled to 30% of gross proceeds from N2OFF capital raises within five years of closing, capped at $1,600,000.
Financial Statements: The filing does not provide current revenue, profit, or cash flow data. Pro forma financial information is scheduled to be filed within 71 days.
Material Changes and Related Party Transactions
The transaction represents a material change in the Company's business scope and capital structure. Significant related party components include:
- Related Parties: Dr. Alon Silberman is the brother of Kfir Silberman (owner of Pure Capital, a 9.78% N2OFF stockholder and lender). Board members Amitay Weiss and Liat Sidi also serve on the SciSparc board.
- Employment: Dr. Alon Silberman will serve as CEO of MitoCareX and receive a grant of restricted stock representing 5% of N2OFF's fully-diluted capital, vesting over three years.
- Board Control: Upon closing, the MitoCareX board will be reconstituted with three directors appointed by N2OFF.
Guidance, Risks, and Contingencies
- Conditions Precedent: Closing is contingent upon stockholder approval by the requisite majority and customary obligations.
- Termination: Either party may terminate the agreement if closing does not occur within 90 days of February 25, 2025.
- Regulatory Status: The Total Common Stock to be issued has not been registered under the Securities Act of 1933 and cannot be sold in the U.S. absent registration or exemption.
- Future Funding Risk: Continued funding for MitoCareX is contingent on N2OFF possessing the necessary financial resources and board approval of operating plans.
Investor Verification Checklist
- Verify the outcome of the required stockholder vote for transaction approval.
- Review the specific milestones required to earn the additional 25% equity issuance.
- Monitor the filing of pro forma financial information (due within 71 days) to assess the dilution impact and combined financial health.
- Confirm the status of the $1,000,000 initial investment commitment and any outstanding loans from Pure Capital.
- Assess the potential dilution from future capital raises where 30% of proceeds (up to $1.6M) are payable to Sellers.