| GENERAL | NOTE
1 – GENERAL
A. Operations N2OFF,
Inc. (formerly Save Foods, Inc) (the “Company”) was incorporated on April 1, 2009, under the laws of the State of Delaware. On
November 6, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with N2OFF, Inc., a newly
formed Nevada corporation and its wholly owned subsidiary (the “Surviving Corporation”), pursuant to which, on the same date,
the Company, as parent in this transaction, merged with and into the Surviving Corporation (the “Reincorporation Merger”).
The Reincorporation Merger was approved by the Company’s stockholders on October 2, 2023 and became effective on The Nasdaq Capital
Market on November 10, 2023. Upon the consummation of the Reincorporation Merger, the Company ceased its legal existence as a Delaware
corporation, and the Surviving Corporation continued Company’s business as the surviving corporation. On February 8, 2024, the
Company’s stockholders approved the Company’s name change to “N2OFF, Inc.” which became effective on The Nasdaq
Capital Market on March 19, 2024. On
April 27, 2009, the Company acquired from its stockholders 98.48 On
March 31, 2023, the Company entered into a securities exchange agreement with Plantify Foods, Inc. (“Plantify”), a Canadian
corporation traded on the TSX Venture Exchange (“TSXV”), which focuses on the development and production of “clean-label”
plant-based products - see Note 1D and 3 below for further information. On
August 29, 2023, the Company entered into an exchange agreement with Yaaran Investments Ltd. and formed an Israeli subsidiary, NTWO OFF
Ltd. (“NTWO OFF”) which focus on nitrous oxide (“N2O”), a potent greenhouse gas with significant global warming
ramifications (the Company, Save Foods Ltd. and NTWO OFF Ltd collectively, the “Group”) The
Company’s Common Stock is listed on The Nasdaq Capital Market under the symbol “NITO”.
B. Reverse
stock split On
October 4, 2023, following the Company’s 2023 annual meeting of stockholders, the Company filed a Certificate of Amendment (the
“Amendment”) to its Amended and Restated Certificate of Incorporation in Delaware to effect a one for seven reverse stock
split As
a result of the Reverse Stock Split, every seven 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 and the shares were rounded to the nearest whole number. The authorized capital and par value of the Common
Stock remained unchanged. All
shares, stock option and per share information in these consolidated financial statements have been restated to reflect the Reverse Stock
Split on a retroactive basis. N2OFF,
INC. NOTES
TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) NOTE
1 – GENERAL (continued)
C. Going
concern uncertainty Since
inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $ 33 The
Company’s management expects that the Company will continue to generate losses and negative cash flows from operations for the
foreseeable future. Based on the projected cash flows and cash balances as of September 30, 2024, management currently is of the opinion
that its existing cash will be sufficient to fund operations until the end of the third quarter of 2025. As a result, there is substantial
doubt regarding the Company’s ability to continue as a going concern. Management
endeavors to secure sufficient financing through the sale of additional equity securities or capital inflows from strategic partnerships.
Additional funds may not be available when the Company needs them, on favorable terms, or at all. If the Company is unsuccessful in securing
sufficient financing, it may need to cease operations. The
financial statements do not include adjustments for measurement or presentation of assets and liabilities, which may be required should
the Company fail to operate as a going concern.
D. Israel
– Hamas war Because
most of the Company’s operations are conducted in Israel and all members of its board of directors, management, as well as a majority
of its employees and consultants, including employees of its service providers, are located in Israel, its business and operations are
directly affected by economic, political, geopolitical and military conditions affecting Israel. In
October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on
civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located
along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in extensive
deaths, injuries and kidnapping of civilians and soldiers in the southern part of the country. Following the attack, Israel’s
security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to
their continued rocket and terror attacks. Following the attack by Hamas on Israel’s southern border, Hezbollah in Lebanon
also launched missile, rocket, drone and shooting attacks against Israeli military sites, troops and Israeli towns in northern
Israel. In October 2024, Israel began limited ground operations against Hezbollah in Lebanon. In addition, Iran recently
launched direct attacks on Israel and has threatened to continue to attack Israel. Iran is also believed to have a strong influence among
extremist groups in the region, such as Hamas in Gaza, Hezbollah in Lebanon, the Houthis in Yemen and various rebel militia groups in
Syria and Iraq. While currently no damages were registered in
Israel from such attacks, the situation is developing and could lead to additional wars and hostilities in the Middle East. It is
possible that the hostilities with Hezbollah and Iran will escalate, and that other terrorist organizations, including Palestinian
military organizations in the West Bank, as well as other hostile countries, will join the hostilities. Such hostilities may include
terror and missile attacks. In the event that the Company’s facilities are damaged as a result of hostile actions, or
hostilities otherwise disrupt its ongoing operations, its ability to deliver or provide products and services in a timely manner
to meet its contractual obligations to customers and vendors could be materially and adversely affected. N2OFF,
INC. NOTES
TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited) NOTE
1 – GENERAL (continued) Following
the brutal attacks on Israel, the mobilization of army reserves and the government declaring a state of war in October 2023, there was
a decrease in Israel’s economic and business activity. The security situation has led, among other things, to a disruption in the
supply chain and production, a decrease in the volume of national transportation, and a shortage in manpower due to employees being called
for active reserve duty as well as a rise in the exchange rate of foreign currencies in relation to the New Israel Shekel. These events
may imply wider macroeconomic indications of a deterioration of Israel’s economic standing, which may have a material adverse effect
on the Company and its ability to effectively conduct its business, operations and affairs. Although many of such military reservists
have since been released, they may be called up for additional reserve duty, depending on developments in the war in Gaza and along Israel’s
other borders. Certain of its employees and consultants in Israel, in addition to employees of its service providers located in Israel,
have been called, and additional employees may be called, for service in the current or future wars or other armed conflicts with Hamas
as well as the other pending or future armed conflicts in which Israel is or may become engaged, and such persons may be absent for an
extended period of time. Save
Foods Ltd. has experienced delays in pilots and packaging activities due to the war, as certain packing houses, have halted operations
for the time being. Additionally, the Company anticipated engaging additional packing houses to conduct pilots with the Company’s
product, but, due to the war, the Company was unable to continue pursuing new collaborations for these pilots, and the Company may not
be able to resume any potential collaborations if the current war persists for an extended duration. The Company is unable to predict
how long the current conflict will last, as well as the repercussions these delays will have on operations. If the Company is unable
to renew pilots or collaborations with local packing houses, the Company’s financial results may be affected. Plantify
has facilities in Kibbutz Gonen, which is located in an area in northern Israel that has been affected by ongoing hostilities with Hezbollah
in Lebanon. Due to the continuous drone attacks, missile strikes and shootings in the
region, the area has been almost completely evacuated of civilians. All employees were put on unpaid leave until further notice and Plantify
has ceased its operations, and may not be able to resume its regular activities, including its ability to deliver products to customers
in a timely manner, if the hostilities persist for an extended period. The
Company is continuing to regularly follow developments on the matter and is examining the effects on its operations and the value of
its assets. |
