UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021March 31, 2022
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from To
Commission File No. 000-40403000-56100
| SAVE FOODS, INC. |
| (Exact name of registrant as specified in its charter) |
SAVE FOODS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | ||
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
(347)468 9583
(Registrant’s telephone number, including area code)
| (347)468 9583 |
| (Registrant’s telephone number, including area code) |
n/a
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||
| Common Stock, Par value $0.0001 per share | SVFD | The Nasdaq Capital Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☐ | Large accelerated filer | ☐ | Accelerated filer |
| ☒ | Non-accelerated filer | ☒ | Smaller reporting company |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The numberAs of March 31, 2022, the registrant had shares of the registrant’s common stock, $0.0001 par value outstanding as of August 11, 2021: .$0.0001 (the “Common Stock”) issued and outstanding.
As used in this Quarterly Report and unless otherwise indicated, the terms “Save Foods,” “we,” “us,” “our,” or “our Company” refer to Save Foods, Inc. and Save Foods Ltd., ourthe 98.48% owned subsidiary.subsidiary of Save Foods, Inc. Unless otherwise specified, all dollar amounts are expressed in United States dollars.
Save Foods, Inc.
Quarterly Report on Form 10-Q
TABLE OF CONTENTS
| 2 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein may address or relate to future events and expectations and as such constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and their interpretation of what is believed to be significant factors affecting our business, including many assumptions regarding future events. Such forward-looking statements include statements regarding, among other things:
| ● | our | |
| ● | our history of operating losses and expectation to incur additional losses in the future; | |
| ● | our ability to raise additional capital to meet our liquidity needs; | |
| ● | because of our limited operating history, we may not be able to successfully operate our business or execute our business plan; | |
| ● | our products and technology requiring additional trials; | |
| ● | commercial success of our new generation products, as well as any future products, depends upon the degree of market acceptance by the packing house community as well as by other prospect markets and industries | |
| ● | our ability to comply with the continued listing standards of the Nasdaq Capital Market; | |
| ● | sales of our products; | |
| ● | the size and growth of our product market; | |
| ● | our marketing plans; | |
| ● | our activity in the civilian market; | |
| ● | our | |
| ● | our | |
| ● | ||
| ● | our | |
| ● | ||
| ● | our reliance on a limited number of suppliers to produce certain key components of our products; | |
| ● | our | |
| ● | our ability to establish and maintain strategic partnerships with third parties, including for the |
| 3 |
| ● | our ability to establish sales, marketing and distribution capabilities or enter into successful relationships with third parties to perform these services; | |
| ● | our reliance on rapidly establishing global distributorship network in order to effectively market our products; | |
| ● | results of our early tests may not be indicative of results in future tests and we cannot assure you that any planned or future tests will lead to results sufficient for the necessary regulatory approvals; | |
| ● | inherent dangers in production and transportation of hydrogen peroxide and highly concentrated organic acids could cause disruptions and could expose us to potentially significant losses, costs or other liabilities; | |
| ● | our ability to attract and retain sufficient, qualified personnel; | |
| ● | our ability to obtain or maintain patents or other appropriate protection for the intellectual property; | |
| ● | our ability to grow both domestically and internationally; | |
| ● | our ability to adequately support future growth; | |
| ● | potential product liability or intellectual property infringement claims; | |
| ● | our business and operations may be affected by climate change conditions, which could materially harm our financial results; | |
| ● | risks relating to portfolio concentration; | |
| ● | risks relating to international expansion of our business and operations; | |
| ● | the effect of COVID-19 on our | |
| ● | information with respect to any other plans and strategies for our business. |
Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “would,” “could,” “scheduled,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project” or the negative of these words or other variations on these words or comparable terminology. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors. These statements may be found under the section of our Annual Report on Form 10-K for the year ended December 31, 20202021 (filed on March 29, 2021)31, 2022) (“20202021 Annual Report”) entitled “Risk Factors” as well as in our other public filings.
In light of these risks and uncertainties, and especially given the start-up nature of our business, there can be no assurance that the forward-looking statements contained herein will in fact occur. Readers should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
On February 23, 2021, we implemented a one-for-seven reverse stock split of our common stock, par value $0.0001 per share (the “Common Stock”)Common Stock pursuant to which holders of our Common Stock received one share of our Common Stock for every seven shares of Common Stock held. Unless the context expressly dictates otherwise, all references to share and per share amounts referred to herein reflect the reverse stock split.
PART I – FINANCIAL INFORMATION
ITEMItem 1. CONSOLIDATED FINANCIAL STATEMENTS.Condensed Consolidated Interim Financial Statements (unaudited).
SAVE FOODS, INC.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
AS OF JUNE 30, 2021
MARCH 31, 2022
IN U.S. DOLLARS
TABLE OF CONTENTS
SAVE FOODS, INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
(U.S. dollars except share and per share data)
| 2021 | 2020 | |||||||||||||||
| June 30, | December 31, | March 31, 2022 | December 31, 2021 | |||||||||||||
| 2021 | 2020 | March 31, 2022 | December 31, 2021 | |||||||||||||
| Assets | ||||||||||||||||
| Current Assets | ||||||||||||||||
| Cash and cash equivalents | 9,305,800 | 242,900 | 5,644,466 | 6,750,938 | ||||||||||||
| Restricted cash | 22,086 | 22,395 | 55,416 | 56,674 | ||||||||||||
| Accounts receivable, net | 54,403 | 147,941 | 201,853 | 172,630 | ||||||||||||
| Inventories | 15,236 | 16,356 | 26,568 | 22,603 | ||||||||||||
| Other current assets | 706,258 | 65,579 | 276,028 | 226,252 | ||||||||||||
| Total Current assets | 10,103,783 | 495,171 | 6,204,331 | 7,229,097 | ||||||||||||
| Right of use asset arising from operating lease | 6,963 | 14,700 | ||||||||||||||
| Right-of-use asset arising from operating lease | 168,244 | 129,613 | ||||||||||||||
| Property and equipment, net | 45,585 | 55,194 | 111,169 | 100,944 | ||||||||||||
| Funds in respect of employee rights upon retirement | 118,209 | 122,584 | 136,103 | 137,625 | ||||||||||||
| Total assets | 10,274,540 | 687,649 | 6,619,847 | 7,597,279 | ||||||||||||
| Liabilities and Shareholders’ Equity ( Deficit) | ||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||
| Current Liabilities | ||||||||||||||||
| Short-term loan from banking institution | 7,928 | 7,949 | ||||||||||||||
| Current maturities of convertible loans | - | 56,250 | ||||||||||||||
| Short-term loan from banking institutions | 6,197 | 8,390 | ||||||||||||||
| Accounts payable | 329,253 | 203,323 | 586,703 | 539,360 | ||||||||||||
| Other liabilities | 862,415 | 517,711 | 395,754 | 383,554 | ||||||||||||
| Total current liabilities | 1,199,596 | 785,233 | 988,654 | 931,304 | ||||||||||||
| Fair value of convertible component in convertible loans | - | 54,970 | ||||||||||||||
| Convertible loans | - | 146,929 | ||||||||||||||
| Long term loan from banking institution | 3,995 | 8,115 | ||||||||||||||
| Operating lease liabilities | 102,754 | 87,287 | ||||||||||||||
| Liability for employee rights upon retirement | 152,992 | 157,855 | 164,042 | 166,077 | ||||||||||||
| Total liabilities | 1,356,583 | 1,153,102 | 1,255,450 | 1,184,668 | ||||||||||||
| Stockholders’ Equity | ||||||||||||||||
Common stock, par value $ per share (“Common Stocks”): shares authorized as of June 30, 2021 and December 31, 2020; issued and outstanding shares as of June 30, 2021 and shares as of December 31, 2020. | 278 | 161 | ||||||||||||||
| Preferred stock, par value $ per share (“Preferred stock”): shares authorized as of June 30, 2021 and December 31, 2020; issued and outstanding shares as of June 30, 2021 and December 31, 2020. | - | - | ||||||||||||||
| Common Stock $ par value per share (“Common Stock”): shares authorized as of March 31, 2022 and December 31, 2021; issued and outstanding and shares as of March 31, 2022 and December 31, 2021, respectively. | 285 | 281 | ||||||||||||||
| Preferred Stock $ par value per share (“Preferred Stock”): shares authorized as of March 31, 2022 and December 31, 2021; issued and outstanding shares as of March 31, 2022 and December 31, 2021. | - | - | ||||||||||||||
| Additional paid-in capital | 23,244,172 | 11,867,585 | 23,898,284 | 23,607,503 | ||||||||||||
| Foreign currency translation adjustments | (26,275 | ) | (26,275 | ) | (26,275 | ) | (26,275 | ) | ||||||||
| Accumulated deficit | (14,251,490 | ) | (12,277,647 | ) | (18,427,977 | ) | (17,098,227 | ) | ||||||||
| Stockholders' Equity | 8,966,685 | (436,176 | ) | |||||||||||||
| Total | 5,444,317 | 6,483,282 | ||||||||||||||
| Non-controlling interests | (48,728 | ) | (29,277 | ) | (79,920 | ) | (70,671 | ) | ||||||||
| Total stockholders’ equity (deficit) | 8,917,957 | (465,453 | ) | |||||||||||||
| Total liabilities and stockholders’ equity (deficit) | 10,274,540 | 687,649 | ||||||||||||||
| Total stockholders’ equity | 5,364,397 | 6,412,611 | ||||||||||||||
| Total liabilities and stockholders’ equity | 6,619,847 | 7,597,279 | ||||||||||||||
The accompanying notes are an integral part of the condensed consolidated interim financial statements.
SAVE FOODS, INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
(U.S. dollars except share and per share data)
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Six months ended | Three months ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues from sales of products | 177,477 | 63,566 | 54,403 | - | ||||||||||||
| Cost of sales | (14,287 | ) | (25,686 | ) | (11,354 | ) | (4,911 | ) | ||||||||
| Gross profit (loss) | 163,190 | 37,880 | 43,049 | (4,911 | ) | |||||||||||
| Research and development expenses | (296,533 | ) | (253,343 | ) | (226,742 | ) | (95,707 | ) | ||||||||
| Selling and marketing expenses | (33,409 | ) | (36,748 | ) | (18,712 | ) | (7,811 | ) | ||||||||
| General and administrative expenses | (1,672,707 | ) | (513,376 | ) | (1,419,736 | ) | (295,297 | ) | ||||||||
| Operating loss | (1,839,459 | ) | (765,587 | ) | (1,622,141 | ) | (403,726 | ) | ||||||||
| Financing income (expenses), net | (156,061 | ) | (200,351 | ) | 120,916 | (193,149 | ) | |||||||||
| Gain on disposal of affiliated company | - | 15,690 | - | 15,690 | ||||||||||||
| Net loss | (1,995,520 | ) | (950,248 | ) | (1,501,225 | ) | (581,185 | ) | ||||||||
| Less: Net loss attributable to non-controlling interests | 21,677 | 7,556 | 19,784 | 4,140 | ||||||||||||
| Net loss attributable to the Company | (1,973,843 | ) | (942,692 | ) | (1,481,441 | ) | (577,045 | ) | ||||||||
| Loss per share (basic and diluted) | (1.05 | ) | (0.65 | ) | (0.69 | ) | (0.40 | ) | ||||||||
| Basic and diluted weighted average number of shares of Common Stock outstanding (1) | 1,884,365 | 1,458,598 | 2,158,915 | 1,458,598 | ||||||||||||
| 2022 | 2021 | |||||||
| Three months ended March 31 | ||||||||
| 2022 | 2021 | |||||||
| Revenues from sales of products | 87,630 | 123,074 | ||||||
| Cost of sales | (41,849 | ) | (2,933 | ) | ||||
| Gross profit (loss) | 45,781 | 120,141 | ||||||
| Research and development expenses | (209,362 | ) | (69,791 | ) | ||||
| Selling and marketing expenses | (178,136 | ) | (44,258 | ) | ||||
| General and administrative expenses | (1,003,957 | ) | (252,971 | ) | ||||
| Operating loss | (1,345,674 | ) | (246,879 | ) | ||||
| Financing income (expenses), net | 5,904 | (247,416 | ) | |||||
| Net loss | (1,339,770 | ) | (494,295 | ) | ||||
| Less: net loss attributable to non-controlling interests | 10,020 | 1,893 | ||||||
| Net loss attributable to the Company’s stockholders’ equity | (1,329,750 | ) | (492,402 | ) | ||||
| Loss per share (basic and diluted) | (0.47 | ) | (0.31 | ) | ||||
| Basic and diluted weighted average number of shares of Common Stock outstanding | 2,819,253 | 1,606,765 | ||||||
The accompanying notes are an integral part of the condensed consolidated interim financial statements.
SAVE FOODS, INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’
EQUITY (DEFICIT)
(U.S. dollars, except share and per share data)
| Share | Amt | Amt | Amt | Amt | Amt | Amt | Amt | Total | ||||||||||||||||||||||||||||
Number of Shares | Amount | Additional paid-in capital | Accumulated other comprehensive income (loss) | Proceeds on account of shares | Accumulated deficit | Total Company’s stockholders’ deficit | Non- controlling interests | Total stockholders’ deficit | ||||||||||||||||||||||||||||
| BALANCE AT JANUARY 1, 2020 | 1.458.598 | 146 | 10,329,571 | (26,275 | ) | - | (10,684,508 | ) | (381,066 | ) | (21,053 | ) | (402,119 | ) | ||||||||||||||||||||||
| Receipts on account of shares | ||||||||||||||||||||||||||||||||||||
| Stock based compensation | - | - | 35,028 | - | - | - | 35,028 | 375 | 35,403 | |||||||||||||||||||||||||||
| Value of warrant issued in convertible loans | - | - | 34,696 | - | - | - | 34,696 | - | 34,696 | |||||||||||||||||||||||||||
| Issuance of shares, net of issuance costs of $1,542,138 | ||||||||||||||||||||||||||||||||||||
| Conversion of convertible loans | ||||||||||||||||||||||||||||||||||||
| Share based compensation for services providers | ||||||||||||||||||||||||||||||||||||
| Comprehensive loss for three months ended March 31, 2020 | - | - | - | - | - | (365,647 | ) | (365,647 | ) | (3,416 | ) | (369,063 | ) | |||||||||||||||||||||||
| BALANCE AT JUNE 30, 2020 | 1,458,598 | 146 | 10,399,295 | (26,275 | ) | - | (11,050,155 | ) | (676,989 | ) | (24,094 | ) | (701,083 | ) | ||||||||||||||||||||||
| Receipts on account of shares | - | - | - | - | 100,000 | - | 100,000 | - | 100,000 | |||||||||||||||||||||||||||
| Stock based compensation | - | - | 182,313 | - | - | - | 182,313 | 1,951 | 184,264 | |||||||||||||||||||||||||||
| Conversion of convertible loans | - | - | 585,931 | - | - | - | 585,931 | - | 585,931 | |||||||||||||||||||||||||||
| Comprehensive loss for three months ended June 30, 2020 | - | - | - | - | - | (577,045 | ) | (577,045 | ) | (4,140 | ) | (581,185 | ) | |||||||||||||||||||||||
| BALANCE AT JUNE 30, 2020 | 1,458,598 | 146 | 11,167,539 | (26,275 | ) | 100,000 | (11,627,200 | ) | (385,790 | ) | (26,283 | ) | (412,073 | ) | ||||||||||||||||||||||
| Number of shares (*) | Amount | Additional paid-in capital | Foreign currency translation adjustments | Accumulated deficit | Total Company’s stockholders’ equity | Non- controlling interests | Total stockholders’ deficit | |||||||||||||||||||||||||
| Number of shares (*) | Amount | Additional paid-in capital | Foreign currency translation adjustments | Accumulated deficit | Total Company’s stockholders’ equity | Non- controlling interests | Total stockholders’ deficit | |||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2021 | 2,806,536 | 281 | 23,607,503 | (26,275 | ) | (17,098,227 | ) | 6,483,282 | (70,671 | ) | 6,412,611 | |||||||||||||||||||||
| Issuance of shares to employees and services providers | 35,500 | 4 | 279,139 | - | - | 279,143 | 591 | 279,734 | ||||||||||||||||||||||||
| Share based compensation to employees and directors | - | 11,642 | - | - | 11,642 | 180 | 11,822 | |||||||||||||||||||||||||
| Comprehensive loss for the period | - | - | - | - | (1,329,750 | ) | (1,329,750 | ) | (10,020 | ) | (1,339,770 | ) | ||||||||||||||||||||
| BALANCE AT MARCH 31, 2022 | 2,842,036 | 285 | 23,898,284 | (26,275 | ) | (18,427,977 | ) | 5,444,317 | (79,920 | ) | 5,364,397 | |||||||||||||||||||||
Number of shares | Amount | Additional paid-in capital | Accumulated other comprehensive income (loss) | Proceeds on account of shares | Accumulated deficit | Total Company’s stockholders’ equity | Non- controlling interests | Total stockholders’ equity | ||||||||||||||||||||||||||||
| BALANCE AT JANUARY 1, 2021 | 1,606,765 | 161 | 11,867,585 | (26,275 | ) | - | (12,277,647 | ) | (436,176 | ) | (29,277 | ) | (465,453 | ) | ||||||||||||||||||||||
| Stock based compensation | - | - | 83,605 | - | - | - | 83,605 | 895 | 84,500 | |||||||||||||||||||||||||||
| Comprehensive loss for three months ended March 31, 2021 | - | - | - | - | - | (492,402 | ) | (492,402 | ) | (1,893 | ) | (494,295 | ) | |||||||||||||||||||||||
| BALANCE AT MARCH 31, 2021 | 1,606,765 | 161 | 11,951,190 | (26,275 | ) | - | (12,770,049 | ) | (844,973 | ) | (30,275 | ) | (875,248 | ) | ||||||||||||||||||||||
| Issuance of shares, net of issuance costs of $1,542,138 | 1,090,909 | 109 | 10,457,753 | - | - | - | 10,457,862 | - | 10,457,862 | |||||||||||||||||||||||||||
| Conversion of convertible loans | 66,877 | 7 | 648,403 | - | - | - | 648,410 | - | 648,410 | |||||||||||||||||||||||||||
| Stock based compensation | - | - | 60,227 | - | - | - | 60,227 | 1,331 | 61,558 | |||||||||||||||||||||||||||
| Share based compensation for services providers | 12,000 | 1 | 126,599 | - | - | - | 126,600 | - | 126,600 | |||||||||||||||||||||||||||
| Comprehensive loss for three months ended June 30, 2021 | - | - | - | - | - | (1,481,441 | ) | (1,481,441 | ) | (19,784 | ) | (1,501,225 | ) | |||||||||||||||||||||||
| Comprehensive loss | - | - | - | - | - | (1,481,441 | ) | (1,481,441 | ) | (19,784 | ) | (1,501,225 | ) | |||||||||||||||||||||||
| BALANCE AT JUNE 30, 2021 (1) | 2,776,551 | 278 | 23,244,172 | (26,275 | ) | - | (14,251,490 | ) | 8,966,685 | (48,728 | ) | 8,917,957 | ||||||||||||||||||||||||
| Number of shares | Amount | Additional paid-in capital | Accumulated other comprehensive income (loss) | Accumulated deficit | Total Company’s stockholders’ equity | Non- controlling interests | Total stockholders’ deficit | |||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2020 | 1,606,765 | 161 | 11,867,585 | (26,275 | ) | (12,277,647 | ) | (436,176 | ) | (29,277 | ) | (465,453 | ) | |||||||||||||||||||
| Share based compensation to employees and directors | - | - | 83,605 | - | - | 83,605 | 895 | 84,500 | ||||||||||||||||||||||||
| Comprehensive loss for the period | - | - | - | - | (492,402 | ) | (492,402 | ) | (1,893 | ) | (494,295 | ) | ||||||||||||||||||||
| BALANCE AT MARCH 31, 2021 | 1,606,765 | 161 | 11,951,190 | (26,275 | ) | (12,770,049 | ) | (844,973 | ) | (30,275 | ) | (875,248 | ) | |||||||||||||||||||
(*) See note 3(5)
The accompanying notes are an integral part of the condensed consolidated interim financial statements.
SAVE FOODS, INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(U.S. dollars except share and per share data)
| 2021 | 2020 | |||||||
| Six months ended | ||||||||
| June 30, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Loss for the period | (1,995,520 | ) | (950,248 | ) | ||||
| Adjustments required to reconcile net loss for the period to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 17,346 | 25,934 | ||||||
| Gain on disposal of affiliated company | - | (15,690 | ) | |||||
| Increase (decrease) in liability for employee rights upon retirement | (4,863 | ) | 4,332 | |||||
| Stock based compensation | 272,658 | 219,667 | ||||||
| Expenses on convertible loans | 115,972 | 141,926 | ||||||
| Conversion of convertible loans | 57,793 | |||||||
| Decrease in accounts receivable | 93,538 | 64,003 | ||||||
| Decrease in inventory | 1,120 | 5,035 | ||||||
| Increase in other current assets | (680,679 | ) | (30,516 | ) | ||||
| Increase (decrease) in accounts payable | 117,786 | (55,428 | ) | |||||
| Increase in other accounts payable | 351,420 | 64,193 | ||||||
| Net cash used in operating activities | (1,711,222 | ) | (468,999 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Payments on investment in unconsolidated entity | - | 2,480 | ||||||
| Decrease (increase) in funds in respect of employee rights upon retirement | 4,375 | (3,054 | ) | |||||
| Net cash provided by investing activities | 4,375 | (574 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from secured promissory notes | 274,000 | 135,000 | ||||||
| Proceeds on account of shares | - | 100,000 | ||||||
| Repayments of right to use asset arising from operating lease | (6,407 | ) | (17,435 | ) | ||||
| Repayments of long-term banking institutes | (3,852 | ) | (3,556 | ) | ||||
| Proceeds from stock issued for cash, net of issuance costs of $1,502,138 | 10,497,862 | - | ||||||
| Net cash provided by financing activities | 10,761,603 | 214,009 | ||||||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | 8,144 | - | ||||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 9,062,900 | (255,564 | ) | |||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 242,900 | 290,815 | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 9,305,800 | 35,251 | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Non cash transactions: | ||||||||
| Disposal of affiliated company | - | 5,087 | ||||||
| Issuance of warrants in convertible loans | - | 34,696 | ||||||
| Conversion of convertible loans | 648,410 | 528,138 | ||||||
| Deferred issuance expenses | 40,000 | - | ||||||
| 2022 | 2021 | |||||||
| Three months ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Loss for the period | (1,339,770 | ) | (494,295 | ) | ||||
| Adjustments required to reconcile net loss for the period to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 7,638 | 4,821 | ||||||
| Decrease in liability for employee rights upon retirement | (2,035 | ) | (5,635 | ) | ||||
| Issuance of shares to employees and services providers | 182,094 | - | ||||||
| Share based compensation to employees and directors | 11,822 | 84,500 | ||||||
| Expenses on convertible loans | - | 251,696 | ||||||
| Interest expenses on loans | (174 | ) | - | |||||
| Operating lease ROU asset and liability, net | (3,779 | ) | (29 | ) | ||||
| Increase in accounts receivable | (29,223 | ) | (10,561 | ) | ||||
| Decrease (increase) in inventory | (3,965 | ) | 377 | |||||
| Decrease (increase) in other current assets | 47,863 | (5,167 | ) | |||||
| Increase in accounts payable | 49,247 | 37,268 | ||||||
| Increase (decrease) in other accounts payable | (7,181 | ) | 52,477 | |||||
| Net cash used in operating activities | (1,087,463 | ) | (84,548 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | (17,864 | ) | - | |||||
| Increase in funds in respect of employee rights upon retirement | 1,522 | 4,375 | ||||||
| Net cash provided by (used in) investing activities | (16,342 | ) | 4,375 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from convertible loans | - | 274,000 | ||||||
| Repayments of long-term loans from banking institutions | (2,019 | ) | (1,975 | ) | ||||
| Increase in prepaid issuance expenses | - | (64,680 | ) | |||||
| Net cash provided by (used in) financing activities | (2,019 | ) | 207,345 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (1,906 | ) | - | |||||
| INCREASE (DECREASE) IN CASH , CASH EQUIVALENTS AND RESTRICTED CASH | (1,107,730 | ) | 127,172 | |||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF YEAR | 6,807,612 | 242,900 | ||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 5,699,882 | 370,072 | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Non cash transactions: | ||||||||
| Issuance of shares for future services | 97,640 | - | ||||||
| Initial recognition of operating lease right-of-use assets | 56,671 | - | ||||||
| Initial recognition of operating lease liability | 56,671 | - | ||||||
The accompanying notes are an integral part of the condensed consolidated interim financial statementstatements
SAVE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)
NOTE 1 - GENERAL
Save Foods, Inc. (the “Company”) was incorporated on April 1, 2009, under the laws of the State of Delaware. On April 27, 2009, the Company acquired from its stockholders 98.48%of the issued and outstanding shares of Save Foods Ltd., an Israeli company, including preferred and Common Stock. Save Foods Ltd. was incorporated in 2004 and commenced its operations in 2005. Save Foods Ltd. develops, produces, and focuses on delivering innovative solutions for the food industry aimed at improving food safety and shelf life of fresh produce. The Company and Save Foods Ltd. (collectively, the “Group”).
Through May 13, 2021, the Company’s Common Stock was quoted on the OTC, Pink Tier, under the symbol “SAFO”. On May 13, 2021, the Company completed an underwritten public offering of shares of its Common Stock for net proceeds of the Company at a price to the public of $$11.00per share. The gross proceeds to the Company from this offering were $12,000,00010,457,862, before deducting underwriting discounts, commissions and other offering expenses, and excluding the exercise of the over-allotment option by the underwriter, which were not exercised. The Company granted the underwriter a 45-day option to purchase up to 163,636 additional shares of Common Stock of the Company to cover over-allotments at the public offering price, less the underwriting discounts and commissions, which was not exercised by the underwriter. In addition, the Company issued to the underwriter as compensation warrants to purchase up to 54,545 shares of Common Stock (5% of the aggregate number of shares of Common Stock sold in this offering exclusive of the over-allotment option, or the underwriter’s warrants). The underwriter’s warrants are exercisable at a per share exercise price equal to 125% of the public offering price per share in the offering, or $ per share.The underwriter’s warrants are exercisable at any time and from time to time, in whole or in part, during the four one half year period commencing 180 days from the effective date of the registration statement.
Commencing on May 14, 2021, the Company’s Common Stockcommon stock was initially listed on the Nasdaq Capital Market under the symbol “SVFD”.
In March 2020, the World Health Organization declared the coronavirus (COVID-19) outbreak a global pandemic. To date, the impact of the pandemic on the Company’s operations has been mainly limited to a temporary facility closure in the context of a government-mandated general lockdown, which temporary delayed certain development activities. Due to the effects of COVID-19, as of the date of this report, some of Company's employees are on temporary leave without pay (furlough), including Company's Chief Technology Officer, and we have postponed some of our planned field tests due to the current restriction on international travels. However, to date, the Company did not experience any material impact on our financial condition and results of operations due to COVID-19 However, the Company is unable to assess with certainty the extent of future impact, in part due to the uncertainty regarding the duration of the COVID-19 pandemic, its force and its effects on the markets in which the Company operates and the effects of possible government measures to prevent the spread of the virus.
Reverse Stock Split
On February 23, 2021, the Company amended its Certificate of Incorporation to effect a 7 to 1 reverse stock split of the Company’s outstanding Common Stock.
As a result of the reverse stock split, every 7 shares of the Company’s outstanding Common Stock prior to the effect of that amendment were combined and reclassified into one share of the Company’s Common Stock. No fractional shares were issued in connection with or following the reverse split. The number of authorized capital of the Company’s Common Stock and par value of the shares remained unchanged.
All share, stock option and per share information in these condensed consolidated financial statements have been restated to reflect the stock split on a retroactive basis.
SAVE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
Unaudited Interim Financial StatementsEffects of the spread of the coronavirus
The accompanying unaudited condensed consolidated financial statements includeCOVID-19 pandemic continues to create business and economic uncertainty and volatility in the accountsglobal markets. Many countries around the world are experiencing further outbreaks of the Company and its subsidiary, prepared in accordance with accounting principles generally acceptedpandemic, following which governments are once again imposing various restrictions. At the same time, there is a recovery trend in the United Statesvolume of America (“U.S. GAAP”). Ineconomic activity around the opinionworld that leads on one hand, to significant demand for certain products and services and on the other hand, disruptions to worldwide supply chain routes and some raw materials. The Group continues to take measures to ensure the health and safety of management,its employees, suppliers, other business partners and the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consistingcommunities in which it operates in order to ensure, among others, the operation level, the proper functioning of normal recurring adjustments) which are,its facilities and to minimize the pandemic’s potential impact on its business. Manufacturing continues at the Group’s sites without interruptions. However, there is still a difficulty in assessing the opinion of management, necessary for a fair statementfuture impacts of the financial condition, resultspandemic on the Group’s operations, inter alia, in light of operationsthe uncertainty of its duration, the extent of its intensity and cash flows for the threeeffects on global supply chains and six-months ended June 30, 2021global markets, and 2020. However, these results are not necessarily indicative of results for any other interim period or for the year ended December 31, 2021. The preparation of financial statements in conformity with U.S. GAAP requires the Company to make certain estimatesadditional countermeasures that may be taken by governments and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual amounts could differ from these estimates.
These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.central banks.
Principles of Consolidation
The consolidated financial statements are prepared in accordance with US GAAP. The consolidated financial statements of the Company include the Company and its majority-owned subsidiary. All inter-company balances and transactions have been eliminated.
| 10 |
SAVE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continue)
Use of Estimates
The preparation of unaudited condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, certain revenues and expenses, and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. As applicable to these financial statements, the most significant estimates and assumptions relate to share based compensation.
NOTE 3 – COMMON STOCK
| 1. | On January 31, 2022, following the Board of Directors of Save Foods Ltd.’s appointment of Mr. Joachim Fuchs as the Chairman of the Board of Directors of Save Foods Ltd, the Board of Directors of the Company (the “Board”) approved the nomination and his consulting agreement. Based on the consulting agreement Mr. Joachim Fuchs is entitled to a monthly fee of NIS5,000 (approximately $1,600) and subject to the approval of the Board, shares of common stock and in addition, subject to the terms of the equity incentive plan to be adopted by the Company, options to purchase 1.5% of the Company’s’ outstanding capital stock of which (1) 0.5% of such options shall have an exercise price of $1 and shall be vested in 4 equal quarters during the 12 months period commencing the Effective Date (January 1, 2022), (2) 0.5% of such options shall have an exercise price of $1.25 and shall be vested in 4 equal quarters during the 12 months period following the 12 month anniversary of the Effective Date, (3) 0.5% of such options shall have an exercise price of $1.5 and shall be vested in 4 equal quarters during the 12 months period following the 24 month anniversary of the Effective Date. On March 24, 2022 the Company issued to Mr. Joachim Fuchs shares of common stock. The Company determined the value of the shares at $38,790. | |
| 2. | On February 1, 2022, the Company entered into a Letter Agreement with a consultant according to which the Consultant will provide the Company with public relations, branding and other services as detailed in the Letter Agreement. As consideration for the services, the Company will issue the Consultant, a warrant to purchase up to an aggregate of 77,400 shares of Common Stock of the Company, at an exercise price of $each (the “February 2022 Warrant”). The February 2022 Warrant will be issuable in five equal tranches, warrant shares upon signing of the agreement or the approval of the agreement by the Board, whichever is later and four additional quarterly installments ending in February 2023. In addition, the Company has provided the Consultant anti-dilution rights if at any time after both the (a) the approval of the agreement and (b) the Company having exceeded 3,000,000 shares of common stock. In such event the Consultant shall receive for no consideration additional securities necessary to maintain a fully-diluted ownership percentage (as defined in the Letter Agreement).In addition, the consultant is entitled to convert the February 2022 Warrant into cash, except for the portion of the February 2022 Warrant issuable upon signing of the agreement, upon providing the Company with advance notice of at least 45 days prior to each exercise date, an amount not to exceed 33% of the Warrant Shares due to vest, based on the share price of the Company less the exercise price, with a maximum cash conversion amount of $20,000 for each tranche. |
The Company determined the value of the cash liability at $13,333 which was recorded as general and administrative expenses in the period of three months ended March 31, 2022.
SAVE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The guidance in ASU 2020-06 simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in the ASU 2020-06 also simplify the guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to classify a contract as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in cash or other assets. The amendments in ASU 2020-06 are effective for the Company for fiscal years beginning after December 15, 2021. Early adoption is permitted. The guidance must be adopted as of the beginning of the fiscal year of adoption. The Company is currently evaluating the impact of this new guidance, but does not expect it to have a material impact on its financial statements.
NOTE 3 – CONVERTIBLE LOANS
On September 21, 2020, the Company entered into a series of convertible loan agreements with certain lenders to sell convertible promissory notes with an aggregate principal amount of $125,000. The outstanding loan amount of these convertible promissory notes will mature on the earlier of (i) the third anniversary of each such convertible loan agreement or (ii) a deemed liquidation event, and the lenders may convert all or any portion of the convertible promissory notes into shares of Common Stock at any time prior to a mandatory conversion event at a conversion price of $7.63 per share (collectively the “September 2020 CLAs”).
During October 2020, the Company entered into a series of additional convertible loan agreements with additional lenders to sell notes with an aggregate principal amount of $100,000, pursuant to the same terms a set forth in the September 2020 CLAs.
During January 2021, the Company entered into a series of additional convertible loan agreements with additional lenders to sell notes with an aggregate principal amount of $274,000, pursuant to the same terms a set forth in the September 2020 CLAs.
As part of the foregoing convertible loan agreements, the Company entered into registration rights agreements with each of the lenders, whereby each lender received piggyback registration rights for the shares of Common Stock issuable upon conversion of the notes.
On May 11, 2021 and May 12, 2021, the lenders of the convertible loans agreements utilized their optional conversion, of the entire balance of the convertible promissory notes in the aggregate principal amount of $499,000 and of aggregated accrued interest amount of $11,211, at a conversion price of $7.63 per share and the Company issued to the lenders an aggregate amount of shares of Common Stock following the conversion.
SAVE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATEDINTERIM FINANCIAL STATEMENTS (unaudited)
NOTE 43 – COMMON STOCK (continue)
On May 13, 2021,The fair value of the February 2022 Warrant was determined based on the Company’s share price as of the date of the agreement using the Black-Scholes pricing model, assuming a risk-free rate of %, a volatility factor of %, dividend yields of % and an expected life of years and was calculated at $332,859 and net of the cash liability at $319,526.
During the three months ended March 31, 2022, the Company completed an underwritten public offering of recorded $ shares of Common Stockas share based compensation expenses in respect of the Company at a price to the public of per share – see note 1 above.above agreement.
On May 15, 2021, the Company signed consulting agreement with a third party according to which the Consultant will provide the Company with investor relations services for a period of 12 months following the commencement date. As consideration for the agreement, the Company will pay the consultant an annual fee of $40,000 and issue the consultant shares of Common Stock of the Company. On June 20, 2021, the Company issued shares of Common Stock of the Company to the consultant. The Company estimated the value of the shares issue at $126,600.
| 3. | On March 10, 2022, the Company entered into an Investor Relations Agreement (the “March IR Agreement”) with a consultant for a period of 12 months. According to the March IR Agreement, the Company will pay the Consultant for his services a monthly fee of $11,000 and in addition, shares of Common Stock of the Company, upon execution of the March IR Agreement. The shares were issued on March 10, 2022. The Company determined the value of the shares at $103,600. During the period of three months ended March 31, 2022, the Company recorded share based compensation expenses of $and the remaining was recorded as prepaid expenses under other current assets. | |
| 4. | On January 27, 2022, the Company issued shares under its October 1, 2021, consulting agreement. During the three months ended March 31, 2022, the Company recorded share based compensation expenses of $ in respect of the above agreement. | |
| 5. | On February 23, 2021, the Company amended its Certificate of Incorporation to effect a 7 to 1 reverse stock splitof the Company’s outstanding Common Stock. All share, stock option and per share information in these consolidated financial statements have been presented to reflect the stock split. |
SCHEDULE OF STOCK OPTION ACTIVITY
Number of Options | Weighted Average Exercise Price | Number of Options | Weighted Average Exercise Price | |||||||||||||
| Outstanding at December 31,2020 | 206,862 | 3.37 | ||||||||||||||
| Outstanding at December 31, 2021 | 192,576 | 3.38 | ||||||||||||||
| Granted | - | - | - | - | ||||||||||||
| Exercised | - | - | - | - | ||||||||||||
| Forfeited or expired | - | - | - | - | ||||||||||||
| Outstanding at June 30,2021 | 206,862 | 3.37 | ||||||||||||||
| Number of options exercisable at June 30, 2021 | 139,543 | 3.31 | ||||||||||||||
| Outstanding at March 31,2022 | 192,576 | 3.38 | ||||||||||||||
| Number of options exercisable at March 31, 2022 | 183,385 | 3.38 | ||||||||||||||
The aggregate intrinsic value of the awards outstanding as of June 30, 2021March 31, 2022 is $. These amounts represent the total intrinsic value, based on the Company’s stock price of $ as of June 30, 2021,March 31, 2022, less the weighted exercise price. This represents the potential amount received by the option holders had all option holders exercised their options as of that date.
Costs incurred in respect of stock-based compensation for employees and directors, for the sixthree months ended June 30,March 31, 2022 and 2021 were $and 2020 were $and , respectively
| 12 |
SAVE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)
NOTE 6 – COMMITMENT AND CONTINGENT LIABILITIES
NOTE 75 – RELATED PARTIES
A. Transactions and balances with related parties
SCHEDULE OF TRANSACTIONS AND BALANCES WITH RELATED PARTIES
Six months ended June 30 | ||||||||
| 2021 | 2020 | |||||||
| General and administrative expenses: | ||||||||
| Directors compensation (*) | 22,217 | 228,136 | ||||||
| Salaries and fees to officers (*) | 70,145 | 135,339 | ||||||
| General and administrative expenses, net | 92,362 | 363,475 | ||||||
| (*) share based compensation included in the above | 6,533 | 199,199 | ||||||
| Research and development expenses: | ||||||||
| Salaries and fees to officers | - | 25,272 | ||||||
| Share based compensation | - | - | ||||||
SAVE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
| 2022 | 2021 | |||||||
| Three months ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| General and administrative expenses: | ||||||||
| Directors compensation | 60,533 | 63,402 | ||||||
| Salaries and fees to officers | 173,779 | 106,161 | ||||||
| General and administrative expenses net | (*) 234,312 | (*) 169,563 | ||||||
| (*) of which share based compensation | ||||||||
| Research and development expenses: | ||||||||
| Salaries and fees to officers | (*) 49,063 | - | ||||||
| (*) of which share based compensation | 1,949 | - | ||||||
| Cost of sales: | ||||||||
| Salaries and fees to officers | (*) 17,012 | - | ||||||
| (*) of which share based compensation | 1,169 | - | ||||||
| Selling and marketing expenses: | ||||||||
| Salaries and fees to officers | (*) 76,833 | - | ||||||
| (*) of which share based compensation | 779 | - | ||||||
B. Balances with related parties and officers:
| As of June 30, | ||||||||
| 2021 | 2020 | |||||||
| Other accounts payables | 173,526 | 258,782 | ||||||
| Other current assets | 8,308 | - | ||||||
| Other accounts payables | 118,362 | 485,611 |
C. Other information:
| 1. | On | |
| On | ||
SAVE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)
NOTE 5 – RELATED PARTIES (continue)
| 2. | On January 18, 2022, the Board resolved to appoint Mr. Omri Kanterovich, the Company’s then financial controller, as the Company’s interim Chief Financial Officer, VP of Finance, Treasurer and Secretary, which appointments entered into effect on January 31, 2022. In connection with Mr. Kanterovich’s new positions with the Company, the Board resolved to increase his monthly base salary from NIS 18,000 (approximately $5,800) to NIS 25,000 (approximately $8,000). No additional changes were made to Mr. Kanterovich’s compensation. On April 18, 2022, Mr. Omri Kanterovich tendered his resignation as the Interim Chief Financial Officer, VP of Finance, Treasurer and Secretary of the Company (see also note 7 below). |
NOTE 6 – GEOGRAPHIC AREAS AND MAJOR CUSTOMERS
A. Information on sales by geographic distribution:
The Company has one operating segment. Sales are attributed to geographic distribution based on the location of the customer.
SCHEDULE OF INFORMATION ON SALES BY GEOGRAPHIC DISTRIBUTION
| 2022 | 2021 | |||||||
| Three months ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Israel | 11,213 | - | ||||||
| United States | 35,948 | 84,674 | ||||||
| Central-South America | 40,469 | 38,400 | ||||||
| Revenues from sales of products | 87,630 | 123,074 | ||||||
B. Sales to single customers exceeding 10% of sales (US$):
SCHEDULE OF SALES TO CUSTOMERS
| 2022 | 2021 | |||||||
| Three months ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Customer A | 40,469 | 38,400 | ||||||
| Customer B | 35,948 | 84,674 | ||||||
| Customer C | 11,213 | - | ||||||
| Revenues from sales of products | 87,630 | 123,074 | ||||||
C. Information on Long-Lived Assets - Property, Plant and Equipment and ROU assets by geographic areas:
The following table presents the locations of the Company’s long-lived assets as of March 31, 2022 and 2021:
SCHEDULE OF INFORMATION ON LONG LIVED ASSETS
| 2022 | 2021 | |||||||
| As of March 31, | ||||||||
| 2022 | 2021 | |||||||
| Israel | 249,306 | 61,004 | ||||||
| United States | 30,107 | - | ||||||
| Property, Plant and Equipment and ROU assets | 279,413 | 61,004 | ||||||
| 14 |
SAVE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)
NOTE 87 –SUBSEQUENT EVENTS
| 1. | On April 1, 2022, the Company entered into an Investor Relations Agreement (the “April IR Agreement”) with a Consultant for a period of 90 days. According to the April IR Agreement, the Company will pay the Consultant for his services a monthly fee of $15,000 and in addition, shares of Common Stock of the Company, upon execution of the April IR Agreement. The shares were issued on May 2, 2022. |
On July 1, 2021,
In addition, the Company and a digital communication consultant signed an Addendumwill issue warrants to a certain Service Agreement, previously executed on October 20, 2020 (the “Original Agreement”), according to which the Company agreed to pay the consultantpurchase $15,000 as compensation for services rendered pursuant to the Original Agreement and to issue the consultant shares of Common Stock of the Company. The Company, estimates the value of the shares of Common Stock issued to bewhich (a) $143,27920,000 . In addition,warrants shall vest upon the Company agreed to continuelapse of 12 months with an exercise price of $8.00, (b)20,000 warrants shall vest upon the Original Agreement for a periodlapse of 18 months with an additional sixexercise price of $9.50, and (c) 20,000 warrants shall vest upon the lapse of 24 months pursuant to which the consultant will receive a monthly feewith an exercise price of $$10,00011.
On July 12, 2021, the Company and the Chairman of the Board of Save Foods Ltd. entered into a Separation Agreement and Release according to which the consulting agreement previously executed with the former chairman was terminated effective as of July 8, 2021. According to the Separation Agreement and Release, the Company would pay the amounts accrued to the former chairman under his consulting agreement and in addition the Company compensated the former chairman for the amounts owed to him during the 90 days notice following the termination of the Separation Agreement and Release and accelerate the vesting of all unvested options granted to the former chairman.
On August 5, 2021, the Company signed consulting agreement with a third party according to which the Consultant will provide the Company with strategic consulting and digital marketing services for a period of six months commencing on September 1, 2021. As consideration for the agreement, the Company agreed to pay the consultant a total fee of $301,000 and shall issue the consultant shares of Common Stock of the Company.
| 2. | On April 17, 2022, the Board resolved to appoint Ms. Lital Barda, the Company’s current financial controller, as the Company’s CFO, Treasurer and Secretary, which appointment entered into effect on April 18, 2022. In connection with Ms. Barda’s appointment as the Company’s CFO, Treasurer and Secretary, the Board resolved to approve the following terms of compensation, effective immediately upon the effectiveness of Ms. Barda’s appointment: (a) a monthly base salary of NIS 25,000 and (b) a grant of options to purchase such number of shares of the Company’s common stock, par value $per share, as shall be agreed upon between Ms. Barda and the Board on a future date, and which shall be in accordance with the terms of the Company’s future equity incentive plan. | |
| 3. | On May 2, 2022, the Company issued shares to a consultant under its June 15, 2021 consulting agreement. In addition, on May 2, 2022, the Company issued shares to a consultant under its October 1, 2021 consulting agreement (see also note 3 above). |
| 15 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Readers are advised to review the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated interim financial statements (unaudited) and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the consolidated financial statements and related notes thereto in our 20202021 Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements”. You should review the “Risk Factors” section of our 20202021 Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Furthermore, certain disclosures and references made herein apply to Save Foods Ltd., the subsidiary of Save Foods, Inc. The primary business activities and operations discussed herein are performed by Save Foods Ltd., whereas Save Foods, Inc. operates as a holding company and is the Registrant for purposes of this Quarterly Report on Form 10-Q.
We develop eco-friendly “green” solutions for the food industry. Our solutions are developed to improve the food safety and shelf life of fresh produce. We do this by controlling human and plant pathogens, thereby reducing spoilage, and in turn, reducing food loss.
Our products are based on a proprietary blend of food acids which have a synergistic effect when combined with certain types of oxidizing agent-based sanitizers and fungicides at low concentrations. Our green products are capable of cleaning, sanitizing and controlling pathogens on fresh produce with the goal of making them safer for human consumption and extending their shelf life by reducing their decay. One of the main advantages of our products is that our active ingredients do not leave any toxicological residues on the fresh produce we treat. In contrary, by forming a temporary protective shield around the fresh produce we treat, our products make it difficult for pathogens to develop and potentially provide protection which also reduces cross-contamination.
Our shares of Common Stock areis listed on the Nasdaq Capital Market under the symbol “SVFD.”
Due to the effects of COVID-19, as of the date of this report, some of our employees are on temporary leave without pay (furlough), including our Chief Technology Officer, and we have postponed some of our planned field tests due to restrictions on international travels. However, to date, we did not experience any material impact on our financial condition and results of operations due to COVID-19, and we do not expect to experience any material impact on our overall liquidity positions and outlook as a result of the outbreak. Nevertheless, it is not possible at this time to estimate the full impact that the COVID-19 pandemic, the continued spread of COVID-19, and any additional measures taken by governments, health officials or by us in response to such spread, could have on our business results of operations and financial condition.
Results of Operations
Components of Results of Operation
Revenues and Cost of Revenues
Our total revenue consists of products and our cost of revenues consists of cost of products.
The following table discloses the breakdown of revenues and costs of revenues:
Six Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
| U.S. dollars in thousands, except share and per share data | 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Revenues | $ | 177,477 | $ | 63,566 | $ | 54,403 | $ | - | ||||||||
| Cost of revenues | (14,287 | ) | (25,686 | ) | (11,354 | ) | (4,911 | ) | ||||||||
| Gross (loss) profit | $ | 163,190 | $ | 37,880 | $ | 43,049 | $ | (4,911 | ) | |||||||
| Three Months Ended March 31 | ||||||||
| 2022 | 2021 | |||||||
| Revenues from sale of products | $ | 87,630 | $ | 123,074 | ||||
| Cost of sales | (41,849 | ) | (2,933 | ) | ||||
| Gross profit | $ | (45,781 | ) | $ | 120,141 | |||
Operating Expenses
Our current operating expenses consist of three components — research and development expenses, selling and marketing expenses and general and administrative expenses.
| 16 |
Research and Development Expenses net
Our research and development expenses consist primarily of salaries and related personnel expenses, share base compensation,laboratory and field tests, professional fees and other related research and development expenses such as field tests.expenses.
Six Months Ended June 30, | Three Months Ended June 30, | Three Months Ended March 31 | ||||||||||||||||||||||
| U.S. dollars in thousands | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Salaries and related expenses | $ | 17,927 | $ | 38,643 | $ | 15,841 | $ | - | $ | 114,815 | $ | 2,086 | ||||||||||||
| Share based compensation | 31,344 | 33,636 | 13,428 | 19,050 | 1,948 | 17,916 | ||||||||||||||||||
| Professional fees | 210,932 | 68,961 | 179,918 | 20,251 | 24,302 | 31,014 | ||||||||||||||||||
| Laboratory and field tests | 7,376 | 77,525 | 1,116 | 42,920 | 40,995 | 6,261 | ||||||||||||||||||
| Depreciation | 17,790 | 6,766 | ||||||||||||||||||||||
| Other expenses | 28,954 | 34,578 | 16,439 | 13,486 | 9,512 | 5,748 | ||||||||||||||||||
| Total | $ | 296,533 | $ | 253,343 | $ | 226,742 | $ | 95,707 | $ | 209,362 | $ | 69,791 | ||||||||||||
We expect that our research and development expenses will increase as we continue to develop our products and services, field trials and recruit additional research and development employees.
Selling and Marketing Expenses
Selling and marketing expenses consist primarily of salaries and related expenses, share based compensationprofessional fees and other expenses.
Six Months Ended June 30, | Three Months Ended June 30, | Three Months Ended March 31 | ||||||||||||||||||||||
| U.S. dollars in thousands | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Salaries and related expenses | $ | 3,414 | $ | 30,152 | $ | 2,637 | $ | - | $ | 82,260 | $ | 778 | ||||||||||||
| Share based compensation | 791 | (22,366 | ) | 329 | 983 | 779 | 462 | |||||||||||||||||
| Professional fees | 55,621 | - | ||||||||||||||||||||||
| Commissions | 5,466 | 4,800 | ||||||||||||||||||||||
| Transport and storage | 7,818 | 5,313 | ||||||||||||||||||||||
| Other expenses | 29,204 | 28,962 | 15,746 | 6,828 | 26,192 | 32,905 | ||||||||||||||||||
| Total | $ | 33,409 | $ | 36,748 | $ | 18,712 | $ | 7,811 | $ | 178,136 | $ | 44,258 | ||||||||||||
We expect that our selling and marketing expenses will increase as we continue to increase our selling and marketing efforts including commercial validation pilots and recruit additional employees or contractor to support our selling and marketing efforts in our targeted geographical areas.
General and Administrative Expenses
General and administrative expenses consist primarily of professional services, share based compensation, insurance and other non-personnel related expenses.
Six Months Ended June 30, | Three Months Ended June 30, | Three Months Ended March 31 | ||||||||||||||||||||||
| U.S. dollars in thousands | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Salaries and related expenses | $ | 32,056 | $ | - | $ | 32,056 | $ | - | ||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||||||
| Professional services | 1,277,693 | 208,439 | 1,123,805 | 88,935 | $ | 552,696 | $ | 163,954 | ||||||||||||||||
| Share based compensation | 112,738 | 205,087 | 47,309 | 162,756 | 190,019 | 65,429 | ||||||||||||||||||
| Legal expenses | 20,753 | 36,582 | 10,687 | 18,155 | ||||||||||||||||||||
| Salaries and related expenses | 90,779 | - | ||||||||||||||||||||||
| Insurance | 135,875 | 18,908 | ||||||||||||||||||||||
| Other expenses | 229,467 | 63,268 | 205,879 | 25,451 | 34,588 | 4,680 | ||||||||||||||||||
| Total | $ | 1,672,707 | $ | 513,376 | $ | 1,419,736 | $ | 295,297 | $ | 1,003,957 | $ | 252,971 | ||||||||||||
| 17 |
Three months ended June 30, 2021March 31, 2022 compared to three months ended June 30, 2020March 31, 2021
Revenues.
Revenues for the three months ended June 30, 2021March 31, 2022 were $54,403,$87,630, compared to $0$123,074 during the three months ended June 30, 2020.March 31, 2021. The increasedecrease is mainly a result of our sale of new products,a decrease in sales due to weather conditions which we commencedcaused a reduction in the fourth quarter of 2020.citrus production.
We do not have backlogs or firm commitments from our customers for our products. Our sales might deteriorate if we fail to achieve commercial success or obtain regulatory approval of any of our products.
Cost of Sales
Cost of sales consists primarily of salaries, materials, transportation and overhead costs of manufacturing our products. Cost of revenuessales for the three months ended June 30, 2021 was $11,354, an increase of $6,443, or 131%,March 31, 2022 were $41,849, compared to total cost of revenues of $4,911$2,933 for the three months ended June 30, 2020.March 31, 2021. The increase is mainly a result of ourthe increase in sales for the three months ended June 30, 2021.salaries and related expenses.
Gross Profit
Gross profit for the three months ended June 30, 2021March 31, 2022 was $43,049, an increase of $47,960,$45,781, compared to a gross lossprofit of $4,911$120,141 for the three months ended June 30, 2020.March 31, 2021. The increasedecrease is mainly a result of the decrease in revenues and increase in revenuescost of sales, as detailed above.
Research and Development
Research and development expenses consist of salaries and related expenses, share base compensation, consulting fees, service providers’ costs, related materials and overhead expenses. Research and development expenses for the three months ended June 30, 2021March 31, 2022 were $226,742,$209,362, an increase of $131,035,$139,571, or 137%200%, compared to total research and development expenses of $95,707$69,791 for the three months ended June 30, 2020.March 31, 2021. The increase is mainly attributable to an increase in professional fees and salarysalaries and related expenses and field tests, offset by a decrease in professional fees and share based compensation and in expenses associated with international travel and field trials which have been postponed due to COVID-19.expenses.
Selling and Marketing Expenses
Selling and marketing expenses consist primarily of salaries and related costsexpenses for selling and marketing personnel, travel related expenses and services providers.providers and commissions. Selling and marketing expenses for the three months ended June 30, 2021March 31, 2022 were $18,712,$178,136, an increase of $10,901,$133,878, or 139%302%, compared to total selling and marketing expenses of $7,811$44,258 for the three months ended June 30, 2020.March 31, 2021. The increase is mainly attributable to the increase in service providers’ deliverysalaries and related costs associated with our sales.and professional services.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related expenses including share based compensation and other professional services as well as other non-personnel related expenses such as legal expenses and directors and insurance costs. General and administrative expenses for the three months ended June 30, 2021March 31, 2022 were $1,419,736,$1,003,957, an increase of $1,124,439,$750,986, or 381%297%, compared to total general and administrative expenses of $295,297$252,971 for the three months ended June 30, 2020.March 31, 2021. The increase is mainly a result of the increase in salaries and related costs, professional services, insurance costs, and compensation payable to directors following the listing of our Common Stock on the Nasdaq Capital Market, which occurred during the second quarter of 2021, offset partially by a decrease share-based compensation to our employees and service providers.
Financing Expenses,Income (Expenses), Net
Financing income, net, for the three months ended June 30, 2021March 31, 2022 were $120,916, a change$5,904, an increase of $314,066,$253,320, or 102%, compared to total financing expenses of $193,149$247,416 for the three months ended June 30, 2020.March 31, 2021. The decreaseincrease is mainly a result of the decrease in compensation expenses related to the accrued interest and amortization expenses associated withand fair value of our convertible loans related to convertible notes which were fully converted during the three months ended June 30,in 2021.
| 18 |
Total Comprehensive Loss
As a result of the foregoing, our total comprehensive loss for the three months ended June 30, 2021March 31, 2022 was $1,481,580,$1,339,770, compared to $577,045$494,295 for the three months ended June 30, 2020,March 31, 2021, an increase of $904,535,$845,475, or 157%171%.
Six months ended June 30, 2021 compared to six months ended June 30, 2020
Revenues.
Revenues for the six months ended June 30, 2021 were $177,477, an increase of $113,911, or 179%, compared to total revenues of $63,566 for the six months ended June 30, 2020. The increase is mainly a result of our sales of new products, which we commenced in the fourth quarter of 2020.
We do not have backlogs or firm commitments from our customers for our products. Our sales might deteriorate if we fail to achieve commercial success or obtain regulatory approval of any of our products.
Cost of Sales
Cost of sales consists primarily of salaries, materials, transportation and overhead costs of manufacturing our products. Cost of revenues for the six months ended June 30, 2021 was $14,287, a decrease of $11,399, or 44%, compared to total cost of revenues of $25,686 for the six months ended June 30, 2020. The decrease is mainly a result of the decrease in the overall cost of materials, due to our efforts to outsource production of our new solutions.
Gross Profit
Gross profit for the six months ended June 30, 2021 was $163,190, an increase of $125,310, or 331%, compared to gross profit of $37,880 for the six months ended June 30, 2020. The increase is mainly a result of the increase in revenues and the decrease in cost of revenues, as detailed above.
Research and Development
Research and development expenses consist of salaries and related expenses, share base compensation, consulting fees, service providers’ costs, related materials and overhead expenses. Research and development expenses for the six months ended June 30, 2021 were $296,533, an increase of $43,190, or 17%, compared to total research and development expenses, of $253,343 for the six months ended June 30, 2020. The increase is mainly attributable to the increase in professional fees partially offset by a decrease in share based compensation and in payroll and decrease in expenses associated with international travel and field trials which have been postponed due to COVID-19.
Selling and Marketing Expenses
Selling and marketing expenses consist primarily of salaries and related costs for selling and marketing personnel, travel related expenses and services providers. Selling and marketing expenses for the six months ended June 30, 2021 were $33,409, a decrease of $3,339, or 9%, compared to total selling and marketing expenses of $36,748 for the six months ended June 30, 2020. The decrease is mainly attributable to the increaseand in payroll expenses and service providers used in relation to selling and marketing activities mainly associated with the termination of the employment of our former vice president of sales in February 2020 partially offset by an increase in share based compensation expenses.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries and related expenses including share based compensation, professional fees and other non-personnel related expenses such as legal expenses and directors and insurance costs. General and administrative expenses for the six months ended June 30, 2021 were $1,672,707, an increase of $1,159,331, or 226%, compared to total general and administrative expenses of $513,376 for the six months ended June 30, 2020. The increase is mainly a result of the increase in professional services and compensation payable to directors following the listing of our Common Stock on the Nasdaq Capital Market, which occurred during the second quarter of 2021, offset partially by a decrease share-based compensation to our employees and service providers.expenses.
Financing Expenses, Net
Financing expenses, net for the six months ended June 30, 2021 were $156,061, a decrease of $44,290, or 22%, compared to total financing expenses of $200,351 for the six months ended June 30, 2020. The decrease is mainly a result of the decrease in compensation expenses related to the accrued interest and amortization expenses associated with our convertible loans which were fully converted during the three months ended June 30, 2021.
Total Comprehensive Loss
As a result of the foregoing, our total comprehensive loss for the six months ended June 30, 2021 was $1,973,843, compared to $942,692 for the six months ended June 30, 2020, an increase of $1,031,151, or 109%.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. Since our inception through June 30, 2021,March 31, 2022, we have funded our operations, principally with approximately $23,244,172$16 million (net of issuance expenses), from the issuance of shares of our Common Stock, options and loans.
On May 13, 2021, we completed an underwritten public offering of 1,090,909 shares of Common Stock at a price to the public of $11.00 per share. The gross proceeds we received from this offering were $12,000,000 (net proceeds of $10,457,862) (the “Underwritten Offering”).
The table below presents our cash flows for the periods indicated:
Six Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Net cash used in operating activities | $ | (1,711,222 | ) | $ | (468,999 | ) | ||
| Net cash provided by investing activities | 4,375 | (574 | ) | |||||
| Net cash provided by financing activities | 10,761,603 | 214,009 | ||||||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | 8,144 | - | ||||||
| Increase (decrease) in cash and cash equivalents | $ | 9,062,900 | $ | (255,564 | ) | |||
| Three Months Ended March 31 | ||||||||
| 2022 | 2021 | |||||||
| Net cash used in operating activities | $ | (1,087,463 | ) | $ | (84,548 | ) | ||
| Net cash provided by (used in) investing activities | (16,342 | ) | 4,375 | |||||
| Net cash provided by (used in) financing activities | (2,019 | ) | 207,345 | |||||
| Increase (decrease) in cash and cash equivalents | $ | (1,107,730 | ) | $ | 127,172 | |||
As of June 30, 2021,March 31, 2022, we had cash and cash equivalents of $9,305,800,$5,644,466, as compared to $242,900$370,072 as of DecemberMarch 31, 2020.2021. As of June 30, 2021,March 31, 2022, we had a working capital of $8,904,187,$5,215,677, as compared to a negative working capital of $290,062$202,401 as of DecemberMarch 31, 2020.2021. The increase in our cash balance is mainly attributable to the Underwritten Offering described above and proceeds from convertible loans.
In view ofoffset by our cash balance following the above transactions, we anticipate that our cash balances will be sufficient to permit us to conduct our operations for at least a period of twelve months from the date of the issuance of these unaudited condensed consolidated financial statements. We may also satisfy its liquidity through the sale of its securities, eitherused in public or private transactions.operations.
If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned development, which could harm our business, financial condition and operating results. If we obtain additional funds by selling any of our equity securities or by issuing Common Stock to pay current or future obligations, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution, or the equity securities may have rights preferences or privileges senior to the Common Stock. If adequate funds are not available to us when needed on satisfactory terms, we may be required to cease operating or otherwise modify our business strategy.
Operating Activities
Net cash used in operating activities was $1,711,222$1,087,463 for the sixthree months ended June 30, 2021,March 31, 2022, as compared to $468,999$84,548 for the sixthree months ended June 30, 2020.March 31, 2021. The increase is mainly attributable to our net loss of $1,339,770, partially offset by increases in share based compensation and accounts payable and decrease in other current assets.
Investing Activities
Net cash provided byused in investing activities was $4,375$16,342 for the sixthree months ended June 30, 2021,March 31, 2022, as compared to net cash used inprovided by investing activities of $574$4,375 for the sixthree months ended June 30, 2020.March 31, 2021. The increasedecrease is mainly attributable to the increase in purchase of property and equipment offset by decrease in funds in respect of employee rights upon retirement.
Financing Activities
Net cash used in financing activities was $2,019 for the three months ended March 31, 2022, as compared to net cash provided by financing activities was $10,761,603of $207,345 for the sixthree months ended June 30, 2021, as compared to $214,009 for the six months ended June 30, 2020.March 31, 2021. The increasedecrease is mainly the result of decrease in proceeds from to the Underwritten Offering described above and convertible loans.
Financial Arrangements
Since our inception, we have financed our operation primarily through proceeds from sales of our shares of Common Stock, convertible loan agreements and grants from the Israeli Innovation Authority, formerly known as the Office of the Chief Scientist of the Ministry of Economy and Industry.
During January 2021, we entered into a series of convertible loan agreements with an aggregate principal amount of $274,000 that each bear interest at a rate of 5% per annum.
On May 11, 2021 and May 12, 2021, we issued an aggregate of 66,877 shares of Common Stock following the conversion of convertible promissory notes in the aggregate principal amount of $499,000 and of aggregated accrued interest amount of $11,211, at a conversion price of $7.63 per share.
On May 18, 2021, we closed the Underwritten Offering pursuant to which we issued a total of 1,090,909 shares of our Common Stock at a purchase price of $11.00 per share. In connection with the Underwritten Offering, we agreed to grant ThinkEquity, a division of Fordham Financial Management, Inc. (the “Underwriters”“Underwriter”), a 45-day option to purchase up to 163,636 additional shares of Common Stock at the public offering price of $11.00 per share, less the underwriting discounts and commissions solely to cover over-allotments, which was not exercised by the Underwriters, and to issue the UnderwritersUnderwriter a five-year warrantswarrant to purchase up to 54,545 shares of Common Stock, at a per share exercise price equal to 125% of the Underwritten Offering price per share of Common Stock, or $13.75.Stock. The gross proceeds from the Underwritten Offering were approximately $12,000,000.
Off-Balance Sheet Arrangements
As of June 30, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.
Changes to Critical Accounting Policies and Estimates
Our critical accounting policies and estimates are set forth in our 20202021 Annual Report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Our management, including our principal executive officerChief Executive Officer and principal financial officer,Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures pursuant to(as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange ActAct) as of June 30, 2021, the end of the period covered by this Quarterly Report on Form 10-Q.March 31, 2022. Based on such evaluation, our Chief Executive Officer and due to certain material weaknesses identified by management, our principal executive officer and principal financial officerChief Financial Officer have concluded that, as of March 31, 2022, our disclosure controls and procedures were not effective at a reasonable assurance level as of June 30, 2021.effective.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting or in other factors identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1A. RISK FACTORS.
Our business faces many risks, a number of which are described under the caption “Risk Factors” in our 20202021 Annual Report. Other than as set forth below, there have been no material changes from the risk factors previously disclosed in our 20202021 Annual Report. The risks described in our 20202021 Annual Report and below may not be the only risks we face. Other risks of which we are not yet aware, or that we currently believe are not material, may also materially and adversely impact our business operations or financial results. If any of the events or circumstances described in the risk factors contained in our 20202021 Annual Report or described below occurs, our business, financial condition or results of operations could be adversely impacted and the value of an investment in our securities could decline. Investors and prospective investors should consider the risks described in our 20202021 Annual Report and below, and the information contained under the caption “Forward-Looking Statements” and elsewhere in this Quarterly Report on Form 10-Q before deciding whether to invest in our securities.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Except as set forth below, there were no sales of equity securities sold during the period covered by this Quarterly Report on Form 10-Q that were not registered under the Securities Act and were not previously reported in a Current Report on Form 8-K filed by the Company.
On January 27, 2022, the Company issued 12,500 shares of Common Stock under the October 1, 2021 consulting agreement.
On March 10, 2022, the Company issued 14,000 shares of Common Stock under the March 10, 2022 investor relations agreement.
On March 24, 2022, the Company issued to Mr. Joachim Fuchs, a director of Save Foods Ltd., 9,000 shares Common Stock.
The foregoing shares were issued in reliance on the exemptions from registration provided by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder for transactions not involving a public offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 5. OTHER INFORMATION
None.
| 21 |
ITEM 6. EXHIBITS.
(a) The following documents are filed as exhibits to this Quarterly Report or incorporated by reference herein.
| * | Filed herewith. |
| ** | Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | SAVE FOODS INC. | |
| By: | /s/ David Palach | |
| Name: | David Palach | |
| Title: | Chief Executive Officer | |
| Save Foods, Inc. | ||
| By: | /s/ | |
| Name: | ||
| Title: | Chief Financial Officer | |
| Save Foods, Inc. |