Business context and reporting period
The supplied filing is Save Foods, Inc.’s unaudited Form 10-Q for the quarter and nine months ended September 30, 2021, not a filing identified as Nexentis Technologies Inc. Save Foods develops food-acid-based solutions intended to improve food safety and extend fresh-produce shelf life. Its common stock began trading on Nasdaq under SVFD in May 2021.
Financial results and condition
| Metric | Q3 2021 | Nine months 2021 |
|---|---|---|
| Revenue | $71,363 | $248,840 |
| Gross profit | $17,719 | $180,909 |
| Gross margin | 24.8% | 72.7% |
| Operating loss | $1,292,507 | $3,131,966 |
| Net loss | $1,300,283 | $3,295,803 |
| Net loss attributable to the Company | $1,287,081 | $3,260,924 |
For the nine months, operating cash used was $3,169,632; investing cash used was $23,760; and financing cash provided was $10,745,759. Cash and cash equivalents were $7,771,539 at September 30, 2021, versus $242,900 at December 31, 2020. Working capital was $7,652,779, compared with a deficit of $290,062. Total liabilities were $1,015,149 and total stockholders’ equity was $7,825,904. Convertible loans were fully converted in May; the balance sheet shows $10,074 in short- and long-term bank loans.
Material changes versus comparable periods
- Nine-month revenue increased 307% from $63,566; Q3 revenue was $71,363 versus none in Q3 2020, reflecting commercial sales that began in Q4 2020.
- Nine-month gross profit rose from $37,880 to $180,909, while gross margin was lower in Q3 (24.8%) than for the nine-month period (72.7%).
- Nine-month net loss increased 137% from $1,387,930. General and administrative expense rose 234% to $2,847,444, primarily due to professional services, listing-related director compensation, insurance, and payroll.
- Cash increased substantially following the May underwritten offering: 1,090,909 shares sold at $11 each for $12 million gross proceeds and approximately $10.46 million net proceeds. Common shares outstanding rose to 2,792,836 at period end from 1,606,765 at year-end 2020.
- Operating cash use increased from $619,397 in the first nine months of 2020 to $3,169,632 in 2021.
Outlook, risks, and unusual items
No quantified revenue or earnings guidance is provided. Management expects research and development and selling and marketing costs to increase as product development, field trials, commercial validation, and sales efforts expand. The company reported no customer backlog or firm commitments and warned that sales could deteriorate if it does not achieve commercial success or obtain required regulatory approvals. Management said it had not experienced a material COVID-19 impact to date, but could not estimate the pandemic’s full future effects.
The company reported disclosure controls were not effective at a reasonable assurance level because of material weaknesses involving limited accounting resources and segregation of duties, prior lack of full-time executive oversight, and lack of an independent audit committee. Remediation steps included hiring finance personnel, appointing full-time CEO and CFO leadership, and establishing an independent audit committee; the weakness had not yet been formally remediated.
Other notable commitments include new office and operational leases, consulting and marketing arrangements, and approved but not yet determined option grants for certain executives and directors. These may add costs or dilution. The filing’s financial statements are unaudited.
Important facts for investors to verify
- Confirm the issuer identity: the supplied document is Save Foods, Inc. (SVFD), despite the request metadata naming Nexentis Technologies Inc.
- Assess whether limited, uncommitted sales and required regulatory approvals support sustainable commercial growth.
- Track operating cash burn against available cash and management’s planned R&D, selling, marketing, and consulting expenditures.
- Monitor remediation and testing of the disclosed material weaknesses in financial reporting controls.
- Reconcile financing cash flow: the cash-flow statement reports $10,745,759 provided by financing activities, while MD&A separately cites $10,713,367.
- Review the terms and potential dilution from outstanding options, pending compensation grants, warrants, and share-based consulting agreements.