Filing Summary
Entity and period: The supplied filing is Save Foods, Inc.’s Form 10-K for the fiscal year ended December 31, 2021—not a filing identified as Nexentis Technologies Inc. The financial statements are audited under U.S. GAAP; the auditor issued an unqualified opinion. The company develops produce treatments intended to improve food safety and shelf life.
Financial Performance and Position
| Metric (USD unless stated) | 2021 | 2020 |
|---|---|---|
| Revenue | $438,141 | $232,274 |
| Gross profit | $302,198 | $188,869 |
| Gross margin | 69.0% | 81.3% |
| Operating loss | $4,703,639 | $1,349,345 |
| Net loss attributable to company shareholders | $4,820,580 | $1,593,139 |
| Loss per share | $2.06 | $1.05 |
| Operating cash used | $4,098,266 | $798,740 |
- Revenue grew 89%, while cost of sales rose 213%; gross margin declined about 12 percentage points.
- General and administrative expense increased 299% to $4.27 million, largely reflecting professional services, insurance, registration costs and compensation associated with the Nasdaq listing. Selling and marketing expense rose 292% to $200,299; R&D expense increased 29% to $538,684.
- At year-end, cash and cash equivalents were $6.75 million, working capital was $6.30 million, total assets were $7.60 million and shareholders’ equity was $6.41 million. Year-end 2020 working capital was negative $290,062.
- Bank borrowings were $8,390, all current, with no convertible loans outstanding at year-end. The $499,000 principal of convertible notes, plus accrued interest, converted into shares in May 2021. Operating lease liabilities were $130,034.
- Financing activities provided $10.73 million, principally from the May 2021 public offering, which raised $12.0 million gross. Shares issued increased from 1.61 million at year-end 2020 to 2.81 million at year-end 2021.
Business Developments, Outlook and Risks
- Products include SavePROTECT/PeroStar processing aids and SF3H/SF3HS sanitizers. The company reported 2021 commercial sales across produce applications, but stated it had no backlog or firm customer commitments. Two customers accounted for $422,480, about 96% of 2021 revenue.
- SavePROTECT was registered as an adjuvant in California in October 2021. The company reported that sanitizer EPA registration studies and dossier submission remained pending; it anticipated first SF3H/SF3HS commercialization no earlier than mid-2024. It also reported a Peru sales approval in January 2022. Several customer, trial and registration developments described in the filing occurred after the 2021 year-end.
- Management expected year-end cash to fund current operations until at least August 2023, while warning that plans could change and additional funds might be needed sooner. Management expected ongoing losses and negative operating cash flow; it also expected R&D and selling and marketing expenses to rise.
- Material risks include limited operating history, continued losses and potential need for capital; customer and product concentration; uncertain market adoption and trial results; regulatory delays; competition; reliance on a limited number of contract manufacturers; international, currency and geopolitical exposure; and COVID-19 and supply-chain disruption.
- The company reported $155,765 of cumulative Israeli Innovation Authority grants subject to future sales-based royalties, plus interest. It reported no pending material legal proceedings.
- Management concluded disclosure controls and internal control over financial reporting were effective at December 31, 2021, and said previously identified material weaknesses had been remediated. The auditor did not provide an internal-control attestation. Prior-year audit reports had cited substantial doubt about going concern; the 2021 report does not state such doubt.
Key Facts for Investors to Verify
- Confirm the issuer identity: the filing is for Save Foods, Inc., whereas the request metadata names Nexentis Technologies Inc.
- Check the audited statements and subsequent filings for cash burn, financing needs, and whether the stated August 2023 funding horizon remained achievable.
- Verify customer concentration, repeat orders, realized product margins and whether reported trial outcomes translate into sustained commercial revenue.
- Track the status and timing of EPA, FDA, state and international approvals, particularly for the sanitizer and pre-harvest products.
- Review dilution from equity issuance, options, consultant compensation and other securities, and assess the terms of any future financing.