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 SeptemberJune 30, 20212022

☐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. 000-56100

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:

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.

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 ☒

As of November 15, 2021,June 30, 2022, the registrant had 2,806,5362,876,136 shares of common stock, par value $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., the 98.48% owned 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

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:

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 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 SEPTEMBERJUNE 30, 20212022

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)

The accompanying notes are an integral part of the condensed consolidated financial statements.

SAVE FOODS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(U.S. dollars except share and per share data)

The accompanying notes are an integral part of the condensed consolidatedinterim financial statements.

SAVE FOODS, INC.

UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)COMPREHENSIVE LOSS

(U.S. dollars except share and per share data)

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)

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)

The accompanying notes are an integral part of the condensed consolidated interim financial statementstatements

SAVE FOODS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

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., 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 Markets, Pink Tier, under the symbol “SAFO”. On May 13, 2021, the Company completed an underwritten public offering of 1,090,909shares of its Common Stock at a price to the publicfor net proceeds of $11.0010,457,862per share. The gross proceeds to the Company from this offering were $12,000,000, 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. The over-allotment option 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). The underwriter’s warrants are exercisable at a per share exercise price equal to 125% of the public offering price per share in this offering. The underwriter’s warrants are exercisable at any time and from time to time, in whole or in part, during the four and a half year period commencing 180 days from the effective date of the registration statement.

Commencing on May 14, 2021, The Company’s common stock began to bewas listed on the Nasdaq Capital under the symbol “SVFD”.

In March 2020,Effects of the World Health Organization declaredspread of the coronavirus (COVID-19) outbreak

The COVID-19 pandemic continues to create business and economic uncertainty and volatility in the global markets. Many countries around the world are experiencing further outbreaks of the pandemic, following which governments are once again imposing various restrictions. At the same time, there is a global pandemic. To date,recovery trend in the volume of economic activity around the world 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 its employees, suppliers, other business partners and the communities in which it operates in order to ensure, among others, the operation level, the proper functioning of 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 future impacts of the pandemic on the Company’sGroup’s operations, has been mainly limited to a temporary facility closureinter alia, in the context of a government-mandated general lockdown, which temporary delayed certain development activities. The Company estimates that aslight of the dateuncertainty of approval of the financial statements, the COVID-19 pandemic is not expected to affect the Company’s operations. However, the Company is unable to assess with certaintyits duration, the extent of future impact, in part due to the uncertainty regarding the duration of the COVID-19 pandemic, its forceintensity and its effects on theglobal supply chains and global markets, in which the Company operates and the effects of possible government measures to prevent the spread of the virus.

Reverse Stock Splitadditional countermeasures that may be taken by governments and central banks.

On February 23, 2021, the Company amended its Certificate of Incorporation to effect aNOTE 2 - 7 to 1 reverse stock splitSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION of the Company’s outstanding Common Stock.

As a resultBasis 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.presentation

All share, stock option and per share informationThe condensed interim consolidated financial statements included in these condensed consolidatedthis quarterly report are unaudited. These financial statements have been restatedprepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for a fair statement of the Company’s financial position as of June 30, 2022, and its results of operations for the three and six months ended June 30, 2022, and 2021, changes in shareholders’ equity for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results to reflectbe expected for the stock split on a retroactive basis.year ending December 31, 2022 or for any other future annual or interim period. These financial statements should be read in conjunction with the audited financial statements included in the Company’s Form 10--K for the year ended December 31, 2021 as filed with the SEC. The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2021 included in the Company’s Form 10-K. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies.

SAVE FOODS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Unaudited Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary, prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the financial statements presented herein have not been audited by an independent registered public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the financial condition, results of operations for the three and nine-months ended September 30, 2021 and 2020, and cash flows for the nine-months ended September 30, 2021 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 estimates 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.

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.

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 –LeasesCOMMON STOCK

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets.

ROU assets represent Company’s right to use an underlying asset for the lease term and lease liabilities represent Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, the Company generally uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

SAVE FOODS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Recent Accounting Pronouncements

In August 2020,As of June 30, 2022, 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 simplifiesconsultant did not elect to utilize 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.exercise option

NOTE 3 –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 CONVERTIBLE LOANS1.35%, a volatility factor of 52.14%, dividend yields of 0% and an expected life of 0.75 years and was calculated at $332,859.

During the six months ended June 30, 2022, the Company recorded $105,358 as share based compensation expenses in respect of the February 2022 Warrant and share based compensation in the amount of $33,334, related to the cash exercise option.

On September 21, 2020,July 28, 2022 the Company and the Consultant entered into a series of convertible loan agreements (“September 2020 CLA”) with certain lenders (“September 2020 Lenders”)an Amendment to sell convertible promissory notes (“September 2020 Notes”) with an aggregate principal amount of $125,000. Whereby, the outstanding loanLetter Agreement – see note 7 below.

In addition, the Company will mature on the earlier of (i) the third anniversary of each September 2020 CLA or (ii) a deemed liquidation event, and the September 2020 Lenders may convert all or any portion of the September 2020 Notes intoissue warrants to purchase 60,000 shares of Common Stock at any time prior to a mandatory conversion event at a conversionof the Company, of which (a) 20,000 warrants shall vest upon the laps of 12 months with an exercise price of $7.63 8, (b) 20,000 warrants shall vest upon the laps of 18 months with an exercise price of $per share.9.50, and (c) 20,000 warrants shall vest upon the laps of 24 months with an exercise price of $11.

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 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 in the September 2020 CLAs.

As partThe fair value of the convertible loan agreements,April Warrant was determined based on the Company entered into a registration rights agreement with eachCompany’s share price as of the lenders, whereby each lender received piggyback registration rights for the shares issuable upon conversiondate of the notesagreement using the Black-Scholes pricing model, assuming a risk-free rate between 1.72% to shares2.44%, a volatility factor between 52.14% to 63.36%, dividend yields of Common Stock.0

On May 11, 2021% and May 12, 2021, the lenders of the convertible loans utilized their optional conversion, of the entire balance of the convertible promissory notes in the aggregate principal amount ofan expected life between 1 to 2 years and was calculated at $499,000 40,350and 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 66,877 shares of Common Stock following the conversion.

.

SAVE FOODS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 4 – COMMON STOCK

On May 13, 2021,June 26, 2022, the Company completedentered into an underwritten public offeringamendment to the April IR Agreement, according to which the Company shall engage the Consultant for additional period of 90 days commencing July 1, 2022. According to the amendment to the April IR Agreement, the Company will pay the Consultant for his services a monthly fee of $1,090,9093,333 and in addition, issued 12,000 shares of Common Stock of the Company, at a price toupon execution of the public of $11.00 per share – see note 1 above.amendment.

On May 15, 2021, the Company signed a 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 shall issue the consultant 12,000 shares of Common Stock of the Company. On June 20, 2021, the Company issued 12,000 shares of Common Stock of the Company to the consultant. The Company estimated the value of the shares issue at $126,600.

On July 1, 2021, the Company and a consultant signed an Addendum to the October 20, 2020 Service Agreement (the “Original Agreement”) according to which the Company agreed to pay the consultant $15,000 for digital communication services as per the Original Agreement and to issue the consultant 14,285 shares of Common Stock of the Company. The Company estimates the value of the shares issued at $127,622. In addition, the Company agreedwill issue warrants to continue the Original Agreement for an additional six months for a monthly fee of $purchase 10,000.

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 coordination of digital marketing campaigns for a period of 6 months commencing September 1, 2021. As consideration for the agreement the Company will pay the consultant a total fee of $301,000 and shall issue the consultant 12,00040,000 shares of Common Stock of the Company, of which (a) 2,00020,000 shares were issued aswarrants shall vest upon the laps of September 30, 2021. The Company estimates6 months with an exercise price of $4.50, (b) 20,000 warrants shall vest upon the valuelaps of the shares issued at12 months with an exercise price of $17,9526. After the balance sheet date the Company issued the Consultant an additional

4,000 shares.

SAVE FOODS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 5 4 – STOCK OPTIONS

The following table presents the Company’s stock option activity for employees directors and consultantsdirectors of the Company for the ninethree and six months ended SeptemberJune 30, 2021:2022:

SCHEDULE OF STOCK OPTION ACTIVITY

The aggregate intrinsic value of the awards outstanding as of SeptemberJune 30, 20212022 is $628,86127,863. These amounts represent the total intrinsic value, based on the Company’s stock price of $6.413.38 as of SeptemberJune 30, 2021,2022, 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 ninesix months ended SeptemberJune 30, 20212022 and 20202021 were $480,89116,999 and $388,492146,057, respectivelyrespectively.

SAVE FOODS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 65 – COMMITMENT AND CONTINGENT LIABILITIES

SAVE FOODS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 – RELATED PARTIES

A.Transactions and balances with related parties