N2OFF, Inc.

NOTE 1 –GENERAL

N2OFF, Inc. (the “Company”) was incorporated on April 1, 2009, under the laws of the State of Delaware.

On November 6, 2023, the Company (which at that time was known as Save Foods, Inc.) 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% of the issued and outstanding shares of Save Foods Ltd. including preferred and ordinary shares. 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.

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 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. On April 9, 2025, the Company entered into a share purchase agreement (the “SPA”), by and among the Company, Yaaran Investments Ltd., a company organized under the laws of the State of Israel (“Yaaran”), and NTWO OFF, which provides for the sale by the Company to Yaaran 100% of the Company’s shares of NTWO OFF. - see Note 9.

On February 10, 2025 the Company’s wholly owned subsidiary, NITO Renewable Energy, Inc. was formed under the laws of the State of Nevada.

On February 24, 2025, the Company entered into a shareholders agreement with Solterra Brand Services Italy SRL (“SB”) and SB Impact 4 LTD (which on April 14, 2025 changed its name to SB Storage 1 S.R.L), a wholly owned subsidiary of SB (“SBI4”) pursuant to which the Company will purchase 70% of SBI4 shares (on a fully diluted basis) from SB see Note 8 below.

The Company’s Common Stock is listed on The Nasdaq Capital Market under the symbol “NITO”.

NOTE 1 – GENERAL (continued)

Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $40 million. The Company has financed its operations mainly through financing by the issuance of the Company’s equity from various investors.

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 June 30, 2025, management currently is of the opinion that its existing cash will be sufficient to fund operations until the end of the first quarter of 2026. As a result, there is substantial doubt regarding the Company’s ability to continue as a going concern.

Management plans to continue securing 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.

Following the October 7th attacks by Hamas terrorists in Israel’s southern border, Israel declared war against Hamas and since then, Israel has been involved in military conflicts with Hamas, Hezbollah, a terrorist organization based in Lebanon, and Iran, both directly and through proxies like the Houthi movement in Yemen and armed groups in Iraq and other terrorist organizations. Additionally, following the fall of the Assad regime in Syria, Israel has conducted limited military operations targeting the Syrian army, Iranian military assets and infrastructure linked to Hezbollah and other Iran-supported groups. Although certain ceasefire agreements have been reached with Hamas and Lebanon (with respect to Hezbollah), and some Iranian proxies have declared a halt to their attacks, there is no assurance that these agreements will be upheld, military activity and hostilities continue to exist at varying levels of intensity, and the situation remains volatile, with the potential for escalation into a broader regional conflict involving additional terrorist organizations and possibly other countries. Also, the fall of the Assad regime in Syria may create geopolitical instability in the region.

On June 12, 2025, Israel launched Operation “Rising Lion”, a direct military campaign targeting Iranian nuclear and military infrastructure in response to escalating threats posed by Iran’s long-range missile deployment and intelligence reports indicating imminent coordinated attacks. This action resulted in increased regional instability and led to the temporary shutdown of our operations in Israel for several days.

As most of Company’s business activities are conducted in Israel and all members of Company’s board of directors, management, as well as a majority of Company’s employees and consultants, including employees of its service providers, are located in Israel, Company’s business and operations are directly affected by economic, political, geopolitical and military conditions affecting Israel. The factory of Plantify’s subsidiary, Piece of Bean, was located in Kibbutz Gonen in the Golan Heights, and its business operation was severely impacted by the war in Israel, which led Piece of Bean into voluntary insolvency proceedings. This, in turn, caused Plantify to essentially become a company with no business activity. Any escalation or expansion of the war could have a negative impact on both global and regional conditions and may adversely affect Company’s business, financial condition, and results of operations.

NOTE 1 – GENERAL (continued)

The Company is unable to predict how long the current conflict will last, as well as the repercussions these delays will have on its operations. If the Company is unable to renew its pilots or collaborations with packing houses its financial results may be affected.

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.

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

Basis of presentation

The condensed interim consolidated financial statements included in this Quarterly Report are unaudited. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“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, 2025, and its results of operations changes in stockholders’ equity, and cash flows for the six months ended June 30, 2025 and 2024. The results of operations for the six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 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 Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 31, 2025. The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2024 included in such Form 10-K. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies.

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 calculation of fair value of the financial instruments.

Credit facility

Under the Fair Value Option Subsection of ASC Subtopic 825-10, Financial Instruments – Overall (“ASC 825”), the Company has an irrevocable option to designate certain financial assets and financial liabilities at fair value on an instrument-by-instrument basis, with changes in fair value reported in the statement of operations. The loans drawn under the credit facility are measured at fair value at each reporting date, with changes in fair value recognized in earnings. Fair value changes exclude accrued interest, which is recorded separately in interest expense. In accordance with ASC 825-10-45-5, the portion of the change in fair value attributable to changes in the instrument-specific credit risk is recognized in other comprehensive income (loss). The Company estimates changes in instrument-specific credit risk by calculating the difference between the total fair value change of the instrument and the portion attributable to changes in a relevant risk-free interest rate benchmark.

The Company elected the fair value option for its credit facility which includes an embedded prepayment option, see Note 7.

Project assets

The Company develops commercial solar power projects (“project assets”) for sale. Project assets consist primarily of costs relating to solar power projects in various stages of development that are capitalized prior to entering into a definitive sales agreement for the solar power project. These costs include certain acquisition costs, land costs and costs for developing and constructing a solar power project. Development costs can include legal, consulting, permitting, and other similar costs. Construction costs can include execution of field construction, installation of solar equipment, and solar modules and related equipment. Any revenue generated from a solar power project connected to the grid would be considered incidental income and accounted for as a reduction of the capitalized project costs for development. In addition, the Company presents all expenditures related to the purchase, development and construction of project assets as a component of cash flows from investing activities.

During the development phase, these project assets are accounted for in accordance with the recognition, initial measurement and subsequent measurement subtopics of ASC 970-360, as they are considered in substance real estate. While the solar power projects are in the development phase, they are generally classified as non-current assets, unless it is anticipated that construction will be completed, and sale will occur within one year.

The Company reviews project assets and deferred project costs for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company considers a project commercially viable or recoverable if it is anticipated to be sold for a profit once it is either fully developed or fully constructed. The Company considers a partially developed or partially constructed project commercially viable or recoverable if the anticipated selling price is higher than the carrying value of the related project assets and the estimated costs to complete. The Company examines a number of factors to determine if the project will be recoverable, the most notable of which include whether there are any changes in environmental, ecological, permitting, market pricing or regulatory conditions that impact the project. Such changes could cause the costs of the project to increase or the selling price of the project to decrease. If a project is not considered recoverable, the Company impairs the respective project assets and adjusts the carrying value to the estimated recoverable amount, with the resulting impairment recorded within operations.

Discontinued operations

A component of an entity is identified as operations and cash flows that can be clearly distinguished, operationally and financially, from the rest of the entity. Under ASC 205-20, “Presentation of Financial Statements - Discontinued Operations” (“ASC 205-20”), a discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale and represents a strategic shift that has or will have a major effect on the entity’s operations and financial results, or a newly acquired business or nonprofit activity that upon acquisition is classified as held for sale. Discontinued operations are presented separately from continuing operations in the consolidated statements of Operations and the consolidated statements of cash flows (see Note 9).

Fair value

Fair value of certain of the Company’s financial instruments including cash, accounts payable, accrued expenses, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements” which defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements.

Fair value, as defined by ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise.

Valuation techniques are generally classified into three categories: (i) the market approach; (ii) the income approach; and (iii) the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

Fair value measurements are required to be disclosed by the level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), (ii) segregating those gains or losses included in earnings, and (iii) a description of where those gains or losses included in earning are reported in the statement of operations.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (continued)

Fair value (continued)

The Company’s financial assets that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

The following table presents the changes in fair value of the level 3 assets for the period from December 31, 2024 through June 30, 2025:

Fair value (continued)

The Company’s financial liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy are as follows:

The following table presents the changes in fair value of the level 3 liabilities for the period from December 31, 2024 through June 30, 2025:

Recently Issued Accounting Standards Not Yet Adopted**

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805): Identifying the Acquirer in a Business Combination Involving a Variable Interest Entity. This ASU modifies the guidance for identifying the accounting acquirer in transactions involving VIEs. The Company does not currently consolidate any VIEs and does not expect the ASU to have a material impact on its consolidated financial statements.

NOTE 3 –INVESTMENT IN NONCONSOLIDATED AFFILIATE

On March 31, 2023, the Company entered into a Securities Exchange Agreement (the “Securities Exchange”) with Plantify Ltd., pursuant to which each party agreed to issue to the other 19.99% of its issued and outstanding capital stock. The Securities Exchange closed on April 5, 2023.

In connection with the agreement, the Company executed a debenture in the amount of CAD 1,500 thousand (approximately $1,124), bearing interest at 8% per annum and secured by a pledge of the shares of a Plantify subsidiary.

On September 7, 2023, the Company increased its holdings in Plantify through participation in a rights offering. As of that date, the Company held approximately 23% of Plantify’s issued and outstanding common shares. The Company determined it had significant influence over Plantify and elected the fair value option for its equity method investment.

On April 2, 2024, the Company’s board of directors approved a Credit Facility of up to $250, bearing interest at 8% per annum, which was fully utilized by Plantify as of November 2024.

On December 5, 2024, the Company and Plantify completed a debt settlement agreement (the “Settlement Agreement”), whereby Plantify issued 2,420,848 of its common shares to the Company in full settlement of the outstanding Debenture and the utilized Credit Facility, increasing the Company’s ownership interest to approximately 65%.

NOTE 3 – INVESTMENT IN NONCONSOLIDATED AFFILIATE (continued)

Following additional share issuances by Plantify, including a private placement on December 20, 2024, and a debt settlement with another lender, on January 12, 2025, the Company’s ownership interest in Plantify was reduced to approximately 25%.

As of June 30, 2025, there is no Observable Active Market for Plantify’s common shares. Accordingly, the investment can no longer be measured based on Level 1 inputs in the fair value hierarchy. Given the lack of observable market data, and the deterioration in the financial condition of Plantify, including the insolvency of its operating subsidiary, the Company evaluated the fair value of Plantify for impairment. Based on such evaluation, the Company concluded that the investment should be fully impaired as of June 30, 2025. During the six and three months period ended June 30, 2025, the Company recorded impairment loss of $602 and $782, respectively. thousand, which is presented in the statement of comprehensive loss as part of Changes in fair value of investments measured under the fair value option.

NOTE 4 –MITOCAREX TRANSACTION

In December 2024, the Company entered into a loan agreement (the “First Loan”) with MitoCareX BioLtd. an Israeli private company (“MitoCareX”) in the principal amount of $250. The First Loan bears interest at an annual rate of 3% and is linked to the U.S. dollar exchange rate, and matures in June 2025. The First Loan is guaranteed by L.I.A. Pure Capital Ltd. (“Pure Capital”), owed by the brother of Dr. Alon Silberman, the Chief Executive Officer of MitoCareX.

On February 25, 2025, the Company, entered into a securities purchase and exchange agreement (the “Mito Agreement”) with MitoCareX , SciSparc Ltd., an Israeli public company (“SciSparc”), Dr. Alon Silberman (“Alon”) and Prof. Ciro Leonardo Pierri (“Ciro”) pursuant to which the Company will acquire from each of the Sellers their respective ordinary shares, nominal (par) value NIS 0.01 each, of MitoCareX (the “Ordinary Shares”), thereby resulting in MitoCareX becoming a wholly-owned subsidiary of the Company.

The closing of the Mito Agreement is contingent upon, among other customary closing conditions, obtaining approval of the Company’s stockholders by the requisite majority. This approval has not yet been obtained.

On the closing date, SciSparc shall transfer and sell 6,622 Ordinary Shares to the Company, (the “Purchased Shares”), in consideration for a cash payment of $700. The Company will issue and deliver shares of Common Stock to the Sellers equal to 40% of the capital stock of the Company on a fully diluted basis, calculated as of immediately following the closing date (collectively, the “Exchanged Common Stock”); and as consideration for the Exchanged Common Stock, (1) Alon will transfer 11,166 Ordinary Shares to the Company, which will represent 100% of the Ordinary Shares owned by Alon as of the closing date; (2) Ciro will transfer 5,584 Ordinary Shares to the Company, which will represent 100% of the Ordinary Shares owned by Ciro as of the closing date; and (3) SciSparc will transfer 12,066 Ordinary Shares to the Company (“SciSparc’s Exchanged Shares”) and together with Alon’s Shares and Ciro’s Shares, the “Exchanged Ordinary Shares”), which will represent 100% of the holdings in MitoCareX.

Following the closing, until December 31, 2028, the Sellers will have the right to receive such number of additional shares of Common Stock, for no additional consideration, in an aggregate amount of up to 25% of the issued and outstanding capital stock of the Company on a fully-diluted basis calculated as of immediately following the closing date in accordance with MitoCareX meeting certain milestones.

NOTE 4 – MITOCAREX TRANSACTION (continued)

Immediately prior to the closing date, Alon will enter into an amended employment agreement with the Company and MitoCareX in connection with his employment as the Chief Executive Officer of MitoCareX, which provides, among other things, for a grant of restricted stock representing 5% of the capital stock of the Company on a fully diluted basis (calculated as of immediately following the closing date), pursuant to the Company’s 2022 Share Incentive Plan. Such shares will vest in three equal installments on each of the first, second and third anniversary of the closing date, subject to Alon’s continued employment with MitoCareX.

As additional consideration for the Exchanged Ordinary Shares, each of SciSparc, Alon and Ciro will receive, collectively,30% of the gross proceeds of each financing transaction closed by the Company within five years of the closing, provided that the maximum amount payable to the foregoing parties will be $1,600.

Upon closing of the transactions contemplated by the Mito Agreement, the Company has committed to an initial investment of $1,000 in MitoCareX less any such amounts paid to MitoCareX pursuant to the loan agreement, dated December 22, 2024, among the Company, MitoCareX and Pure Capital.

On March 12, 2025, the Company, entered into an additional Loan Agreement (the “Second Loan”) with MitoCareX, and Pure Capital pursuant to which the Company agreed to lend $250 to MitoCareX under the same conditions as the Loan granted on December 22, 2024. Any loan made by the Company to MitoCareX will be deducted from any future amount allocated by the Company to MitoCareX during the first year following the closing of Mito Agreement.

On May 22, 2025, the Company, entered into an additional loan agreement in the amount of $250 to MitoCareX (the “Third Loan”), under the same terms and conditions as the First Loan and the Second Loan. On the same date, the Company and MitoCareX amended the terms of the First Loan and the Second Loan to extend their respective maturity dates to one year from the original loans’ dates. As with the previous loans, any amount loaned to MitoCareX will be deducted from any future amount allocated by the Company to MitoCareX during the first year following the closing of the Mito Agreement.

Company’s chairman of the board of directors and one of Company’s directors are also members of the board of directors of SciSparc.

The Company elected to account for the loans under the fair value option in accordance with ASC 825. The Company estimated the fair value of the First Loan, Second Loan and Third Loan using a third-party appraiser by discounting the Principal and interest at a discount rate of market interest for similar loans. The interest rate was determined, among other things, using the CAPM model, at 18.0% as of June 30, 2025. The Company calculated the fair value of the First Loan, Second Loan and Third Loan at $238, $229 and $237, respectively, as of June 30, 2025 and recorded during the six and three months period ended June 30, 2025 loss from changes in fair value in the amount of $30 and $23, respectively.

NOTE 5 –INVESTMENT AND LOAN TO SOLTERRA

The Company elected to account for the Loan Agreement under the fair value option in accordance with ASC 825. As of June 30, 2025, the Company estimated the fair value of the Loan Agreement at $451, based on a third-party valuation applying a 27.6% market discount rate for similar loans. For the six and three months ended on June 30, 2025, the Company recorded gain from changes in fair value in amount of $101 and $105, respectively.

The Company’s chairman of the board of directors also serves as a director of SE.

The Company calculated the investment at fair value accordance with ASC 321. The fair value of the investment as of June 30, 2025 was $271, based on quoted prices in active markets. For the six months ended June 30, 2025, the Company recorded loss from the decrease in the fair value of the shares in the amount of $36 and for the three months ended June 30, 2025, the Company recorded gain from the increase in the fair value of the shares in the amount of $41.

NOTE 6 –SOLAR PHOTOVOLAIC JOINT VENTURE PROJECT

In May 2025, the Company and the other lenders entered into an addendum to the original Loan and Partnership Agreement to provide an additional bridge loan of €25 thousand (approximately $27) to the Partnership, of which the Company contributed €19 thousand (approximately $20). The proceeds are intended to fund a feasibility study for a battery energy storage project near the PV Project in Germany. The additional loan bears interest at 7% annually and is subject to the same maturity and repayment terms as the original loan. All other provisions of the original agreement remain unchanged.

As of June 30, 2025, the Company has funded €1,129 thousand (approximately $1,216) which €424 (approximately $436) was invested in January and June 2025.

The Partnership was evaluated under ASC 810-10, and the Company determined it is not the primary beneficiary due to lack of power to direct significant activities and limited exposure to variable returns; accordingly, the Partnership is not consolidated.

NOTE 6 – SOLAR PHOTOVOLAIC JOINT VENTURE PROJECT (continued)

The Company elected to account for the Loan and Partnership Agreement under the fair value option in accordance with ASC 825. The Company estimated the fair value of the Loan and Partnership Agreement using a third-party appraiser and various assumptions such as, probability of completion of the project based on key milestones, scenarios for the expected project’s cash realization value (including expected power of the project, selling price per megawatt, and loan repayment dates). The projected net cash flows were discounted using an interest rate appropriate for similar projects. The result was adjusted to the probability for the completion of the project as of the valuation date. The interest rate was determined at 9.15% as of June 30, 2025. The Company calculated the Loan Agreement at €1,236 thousands (approximately $1,457) as of June 30, 2025. For the six and three months ended June 30, 2025 the Company recorded gain from changes in fair value of an investment in the amount $218 and $139, respectively.

In the event the project is sold to a third party not related to the Borrower during a 30 months term, the Company will be entitled to repayment of the principal plus a pro-rata share (15%) of 50% of the net profit from the sale, as defined in the agreement.

If the project is not sold by the end of the term of the loan, the loan will bear annual interest of 7%, and the total amount due (principal and interest) will be repaid at maturity. The agreement does not provide for early repayment.

The Company elected to account for the loan agreement under the fair value option in accordance with ASC 825. As of June 30, 2025, the loan is classified as a non-current financial asset. Management assessed the fair value of the loan and concluded that it approximates it carrying amount.

NOTE 7 –CREDIT FACILITY

On October 1, 2024, the Company entered into a facility agreement with L.I.A. Pure Capital Ltd. (the “Lender”) for financing of up to €6,000 thousand (the “Pure Capital Credit Facility”), of which €2,000 thousand may be used for the Loan and Partnership Agreement in Germany, and the remaining €4,000 thousand for other pre-approved projects. The facility bears annual interest of 7%, payable in advance and deducted from each drawdown, for a period of 24 months.

The facility will expire upon full drawdown orfive years from the agreement date, whichever occurs first. Borrowed amounts are to be repaid from project proceeds or 33% of proceeds from other Company financings during the drawdown period.

In connection with the facility, the Company issued afive-year warrant to the Lender to purchase 1,850,000 shares of common stock at an exercise price of $1.00 per share. The Warrant Shares will be exercisable immediately after the issuance.

NOTE 7 – CREDIT FACILITY (continued)

Furthermore, the exercise price and number of Warrant Shares are subject to adjustments upon the issuance of common stock, issuance of options, issuance of convertible securities and stock combination events, as detailed in the Warrant.

On December 5, 2024, the Lender agreed, pursuant to a waiver agreement, not to convert the warrants shares unless and until the stockholders of the Company approve the issuance of the warrants. Such approval had not been received as of June 30, 2025.

The Company determined that the warrant is not considered indexed to the Company’s own stock. The Company estimated the fair value of the Warrant Shares as of October 1, 2024, December 31, 2024 and June 30, 2025, using the Black-Scholes option pricing model.

The assumptions used to perform the calculations are detailed below:

On January 6, 2025, and February 12, 2025, the Company drew down gross amounts of €375 thousand (approximately $405) and €645 thousand (approximately $700), respectively. Financing expenses in the total amount of €72 thousand (approximately $77) was deducted from the gross drawdowns and was recorded in the statement of comprehensive loss.

On March 10, 2025 and during May 2025, the Company repaid €230 thousand (approximately $247) and €170 thousand (approximately $192), respectively.

The Company elected to account for the loans drawn under the credit facility under the fair value option in accordance with ASC 825. The Company estimated the fair value of the loans drawn under the credit facility using a third-party appraiser and the assumptions were based on repayments scenario analysis that considered various possible outcomes regarding the timing of sale of the project and estimations regarding Company’s future fundraising.

The interest rate was determined, among other things, using the Ba2 yield curve as of June 30, 2025, at 16.8% for the loan’s remaining term. The Company calculated the fair value of the loans drawn under the credit facility as of June 30, 2025, at €593 thousand (approximately $699). For the six and three months ended on June 30, 2025, the Company recorded financing expenses in the amount of $33 and $127, respectively.

NOTE 8 –A CONSOLIDATED ENTITY

On February 24, 2025, the Company entered into a shareholders agreement (the “Italy Agreement”) with Solterra Brand Services Italy SRL (“SB”) and SB Impact 4 LTD, a wholly owned subsidiary of SB (“SBI4”) pursuant to which the Company purchased 70% of SBI4 shares (on a fully diluted basis) from SB. As a result of such, SBI4 became a majority-owned subsidiary of the Company. At the time of the transaction SBI4 had not activity.

The Company will lend €2,300 thousand to SB14 for financing two battery storage projects in Sicily, Italy (the “Projects”) which loan accrues interest at 7% per annum. Additionally, the Italy Agreement provides for a right of repurchase of shares of SBI4 by SB in the event the Company does not furnish drawdown amounts in accordance with the terms of the Italy Agreement.

The net profit from sales of projects will be split between the parties as follows: if the selling price per megawatt (“MW”) (i) does not exceed € 30 thousand, each party will receive profits according to its pro-rata share ownership of SBI4; (ii) exceeds € 30 thousand up to € 60 thousand , per MW, SB will receive 40% of the profit (10% above its pro-rata share) and the Company will receive 60% of the profit; and (iii) exceeds € 60 thousand per MW, SB will receive 50% of the net profit (20% above its pro-rata share) and the Company will receive 50% of the net profit.

As of June 30, 2025, the Company has funded €1,043 thousand (approximately $1,229).

NOTE 9 –DISCONTINUED OPERATIONS

On April 9, 2025, the Company entered into a share purchase agreement (the “SPA”), by and among the Company, Yaaran Investments Ltd., a company organized under the laws of the State of Israel (“Yaaran”), and NTWO OFF. Pursuant to the SPA, the Company sold 4,200,000 ordinary shares of NTWO OFF, representing 100% of the Company’s shares of NTWO OFF, for total cash consideration of NIS 15 thousand (approximately $4).

The SPA provides customary representations, warranties and covenants by the Company, NTWO OFF and Yaaran, and further provides that all obligations arising under the Stock Exchange Agreement, dated July 11, 2023, between the Company, Yaaran and NTWO OFF, as amended on July 24, 2023 and on August 13, 2023, will be null and void and of no further force and effect.

The transaction was completed during the second quarter of 2025. As a result, the Company ceased consolidating NTWO OFF as of the closing date and has classified its operations as discontinued operations for all periods presented. As of June 30, 2025, no assets or liabilities of the discontinued operations remain on the Company’s consolidated balance sheet. Assets and liabilities of NTWO OFF as of December 31, 2024, were reclassified and presented on a single line under the captions “Assets of discontinued operations” and “Liabilities of discontinued operations”, based on their historical carrying amounts. No remeasurement to fair value was applied to these balances in prior periods, as the held-for-sale criteria was not met at that time.

The Company recognized a gain on disposal of approximately $44, which is presented in the consolidated statements of operations for the six and three months ended June 30, 2025, under the caption “Income from discontinued operations”.

NOTE 9 –DISCONTINUED OPERATIONS (continued)

In addition, the Company reported a net cash outflow of approximately $25 within investing activities related to the disposal of NTWO OFF, primarily reflecting the derecognition of approximately $29 of cash and cash equivalents held by NTWO OFF at the time of sale, partially offset by $4 in cash proceeds received.

NOTE 10 –COMMON STOCK AND WARRANTS

During February, March and April 2025, the Company issued 1,573,265,1,747,620 and 575,000 shares of common stock, respectively, following exercises of pre-funded warrants.

The Company considered the guidelines of ASC 815 and determined that the warrants issued in the Private Placement meet the definition of a liability and were therefore classified as warrant liabilities in the balance sheet. The pre-funded warrants were classified as equity.

Upon initial recognition, the Company calculated the warrant liabilities at their fair value at $9.6 million, resulting in a non-cash loss of approximately $8.1 million, which was recognized in the statement of comprehensive loss.

On March 14, 2025, holders of warrants to purchase 729,166 shares of common stock exercised their warrants at an exercise price of $0.24 for total consideration of $175. In connection with the exercise, the Company calculated the fair value of the exercised warrants as of the date of exercise and recognized a non-cash gain of approximately $534, reflecting the difference between the carrying amount of the warrant liabilities and their fair value at the time of exercise.

During May and June, 2025, holders of warrants to purchase 6,633,333 shares of common stock exercised their warrants at an exercise price of $0.24 for total consideration of $1,592. In connection with the exercise, the Company calculated the fair value of the exercised warrants as of the date of exercise and recognized a non-cash loss of approximately $1,025, reflecting the difference between the carrying amount of the warrant liabilities and their fair value at the time of exercise.

For the six months ended June 30, 2025, the Company recorded a non cash loss of approximately $7 million, which attributable to the change in fair value of the remaining warrant liabilities, as reflected in the statement of comprehensive loss.

As of June 30, 2025, the Company calculated the fair value of the remaining warrant liabilities in the amount of $429.

NOTE 10 – COMMON STOCK AND WARRANTS (continued)

The fair value of the warrant liabilities was determined using a Black-Scholes option pricing module. The assumptions used to perform the calculations are detailed below:

The Notes to be issued at each Closing will be issued at a purchase price equal to 100% of the amount advanced to the Company, bear interest at 8% per annum and mature 12 months from issuance. Sixty days after the issuance of each Note, the Company will pay the Investor in ten equal monthly installments $150 of principal and accrued and unpaid interest thereon. Such monthly installments can be made, at the option of the Company, in cash or by submitting an advance notice pursuant to the SEPA II, or any combination thereof. The Note provides for typical events of default, including the failure of the Company to remain on The Nasdaq Capital Market LLC or file with the SEC any periodic report; upon an event of default interest accrues at the rate of 18% per annum. The Company has the right to prepay all or a portion of the outstanding principal and accrued interest thereon by paying a $7,500 prepayment penalty on each monthly installment.

NOTE 10 – COMMON STOCK AND WARRANTS (continued)

The Company paid the Investor a structuring fee of $15 and on May 13, 2025 issued,675,675 shares to the Investor which represents $300 worth of shares based on the last closing price of the shares immediately before the execution and delivery of the Agreement. See also Note 14 below.

NOTE 11 –STOCK OPTIONS

The following table presents the Company’s stock option activity for employees and directors of the Company for the three months ended June 30, 2025:

The aggregate intrinsic value of the awards outstanding as of June 30, 2025 was $147. These amounts represent the total intrinsic value, based on the Company’s stock price of $0.23 as of June 30, 2025, 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-options compensation for employees and directors for the six months ended June 30, 2025 and 2024 were $1 and $0, respectively and less than $1 and $0, for the three months ended June 30, 2025 and 2024, respectively.

NOTE 12 –RELATED PARTIES

NOTE 13 –SEGMENT REPORTING

As of December 31, 2024, the Company hadtwo reportable segments: (i) Pathogen prevention and prolong shelf life, and (ii) the N2O emissions Global warming solutions. The Pathogen prevention operating segment consists of Save Food Ltd. and the Global warming solutions operating segment consist of NTWO OFF Ltd.

As of June 30, 2025, the Company no longer operates in the N₂O emissions Global warming solutions segment, following the sale of NTWO OFF Ltd. in April 2025. Accordingly, this activity has been classified as a discontinued operation and is no longer included in the Company’s segment reporting. As a result, the Company determined that it has two reportable segments as of June 30, 2025: (i) Pathogen prevention and prolong shelf life, and (ii) Renewable energy projects. The Pathogen prevention operating segment consists of Save Food Ltd. and the Renewable energy projects operating segment consist of NITO Renewable Energy, Inc. and Solar photovoltaic joint venture project.

The chief operating decision maker evaluates segment performance primarily based on segment operating loss.

NOTE 13 – SEGMENT REPORTING (continued)

The following table presents information about the Company’s reportable segments for the six and three months ended June 30, 2025 and 2024:

NOTE 14 –SUBSEQUENT EVENTS