Nexentis Technologies Inc.

NOTE 1 –GENERAL

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 (which at that time was under the name 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 6 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”) - see Note 9 below for further information.

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

On October 4, 2023, following the 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 aone for seven reverse stock split of the Company’s outstanding Common Stock (the “Reverse Stock Split”). The Amendment became effective on October 5, 2023.

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.

NOTE 1 – GENERAL (continued)

Since inception, the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit of $35 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 December 31, 2024, management currently is of the opinion that its existing cash will be sufficient to fund operations until the beginning of the fourth quarter of 2025. 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.

As most of Company’s operations 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 it’s 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.

The Company have experienced delays in it’s pilots and packaging activities due to the war, as certain packing houses, such as Mehadrin, have halted operations for the time being. Additionally, the Company anticipated engaging additional packing houses to conduct pilots on strawberries and citruses with it’s product, but, due to the war, the Company were 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 are unable to predict how long the current conflict will last, as well as the repercussions these delays will have on it’s operations. If the Company are unable to renew it’s pilots or collaborations with local packing houses it’s 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–SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

A. Use of Estimates in the preparation of financial statements

The preparation of consolidated 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 (see note 8).

B. Functional currency

A majority of the Group’s revenues is generated in U.S. dollars. In addition, most of the Group’s costs are denominated and determined in U.S. dollars. Management believes that the dollar is the currency in the primary economic environment in which the Group operates. Thus, the functional and reporting currency of the Group is the U.S. dollar. Transactions and monetary balances in other currencies are translated into the functional currency using the current exchange rate.

Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into dollars in accordance with Accounting Standards Codification (“ASC”) 830, “Foreign Currency Matters”. All transaction gains and losses of the remeasured monetary balance sheet items are reflected in the statements of operations as financial income or expenses, as appropriate.

C. Principles of consolidation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated on consolidation.

D. Cash and cash equivalents, and restricted cash

Cash equivalents are short-term highly liquid investments which include short term bank deposits (up to three months from date of deposit), that are not restricted as to withdrawals or use that are readily convertible to cash with maturities of three months or less as of the date acquired.

Restricted cash as of December 31, 2024 and 2023 include $24 and $31, respectively, collateral account for the Group’s corporate credit cards and a lease liability and is classified in current assets.

E. Investment in Marketable Securities

We account for our investments in equity securities in accordance with ASB ASC 321, Investments— Equity Securities (FASB ASC 321). We measure equity investments at fair value with the related realized and unrealized gains and losses recognized in our Consolidated Statements of Income. For equity investments without a readily determinable fair value, we measure these at cost less impairment and adjusting for observable price changes in orderly transactions. We will apply this measurement method to the investment until or if it becomes eligible to be measured at fair value, which is reassessed at each reporting period. Investments in equity securities that we do not intend to hold for more than a year are presented in “Marketable Securities” in our Consolidated Balance Sheets. Investments in equity securities that we intend to hold for more than one year are included in “Investments in unconsolidated affiliate” in our Consolidated Balance Sheets.

F. Accounts receivables

The Group maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and its customers ‘financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns. As of December 31, 2024, and 2023, an allowance for doubtful debts in the amount of $42 and $64, respectively, is reflected in net accounts receivable. The Group does not have any off-balance-sheet credit exposure related to its customers.

G. Property, plant and equipment, net

H. 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.

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 1 assets for the period December 31, 2023 through December 31, 2024:

The following table presents the changes in fair value of the Level 3 assets for the period December 31, 2023 through December 31, 2024:

I. Asset acquisitions

The Company’s consolidated financial statements include the operations of acquired subsidiaries from the date the Company gains control over them.

When the screening test of ASU 2017-01 Business Combinations (Topic 805) Clarifying the Definition of a Business, suggests that substantially all of the fair value of the gross assets of a subsidiary acquired is concentrated in a single asset or a group of similar assets, such as a single IPR&D asset, the acquired net assets do not meet the definition of a business. Noncontrolling interests of a subsidiary that does not meet the definition of a business are initially measured at fair value. For more details see note 9.

J. Variable Interest Entities

The Company accounts for variable interest entities in accordance with ASC Topic 810, Consolidation (“ASC 810”). Under ASC 810, a variable interest entity (“VIE”) is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. The primary beneficiary of a VIE is the party with both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE.

To assess whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company considers all the facts and circumstances including its ongoing rights and responsibilities. This assessment includes identifying the activities that most significantly impact the VIE’s economic performance and identifying which party, if any, has power over those activities. In general, the party that makes the most significant decisions affecting the VIE is determined to have the power to direct the activities of the VIE. To assess whether the Company has the obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity interests, and any other variable interests in the VIE. If the Company determines that it is the party with the power to make the most significant decisions affecting the VIE, and the Company has an obligation to absorb the losses or the right to receive benefits that could potentially be significant to the VIE, then the Company consolidates the VIE.

K. Impairment of long-lived assets

The Group’s long-lived assets are reviewed for impairment in accordance with ASC Topic 360, “Property, Plant and Equipment”, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. No impairment expenses were recorded during the years ended December 31, 2024 or 2023.

L. Income taxes

The Group accounts for income taxes in accordance with ASC Topic 740, “Income Taxes”. Accordingly, deferred taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between the financial statement carrying amount and the tax bases of assets and liabilities under the applicable tax law. Deferred tax balances are computed using the enacted tax rates expected to be in effect when these differences reverse. Valuation allowances in respect of deferred tax assets are provided for, if necessary, to reduce deferred tax assets to amounts more likely than not to be realized.

The Group accounts for unrecognized tax benefits in accordance with ASC Topic 740, which prescribes detailed guidance for the financial statement recognition, measurement and disclosure of unrecognized tax benefits recorded in a Company’s financial statements. According to ASC Topic 740, tax positions must meet a more-likely-than-not recognition threshold to be recognized. Recognized tax positions are measured as the largest amount that is greater than 50 percent likely of being realized. The Company’s accounting policy is to present interest and penalties relating to income taxes within income taxes; however, the Company did not recognize such items in its fiscal years 2024 and 2023 financial statements and did not recognize any amount with respect to an unrecognized tax benefit in its balance sheets.

M. Revenue recognition

The Group has revenue from customers. The Group recognizes revenue when it satisfies performance obligations under the terms of its contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Group expects to receive from its customers in exchange for those products. This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and (b) is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the product.

The Company’s primary source of revenues is from sales of eco-friendly “green” products for the food industry. The Company does not act as an agent in any of its revenue arrangements. Contracts with customers generally state the terms of the sale, including the quantity and price of each product purchased. Payment terms and conditions may vary by contract, although terms generally include a requirement of payment within a range of 30 to 90 days after the performance obligation has been satisfied. As a result, the contracts do not include a significant financing component. In addition, contracts typically do not contain variable consideration as the contracts include stated prices.

N. Research and development expenses

Research and development expenses are charged to comprehensive loss as incurred.

O. Royalty-bearing grants

Royalty-bearing grants from the Israeli Innovation Authority (the “IIA”) for funding approved research and development projects are recognized at the time Save Foods Ltd. is entitled to such grants (i.e. at the time that there is reasonable assurance that the Save Foods Ltd will comply with the conditions attached to the grant and that there is reasonable assurance that the grant will be received), on the basis of the costs incurred and reduce research and development costs. The cumulative research and development grants received by Save Foods Ltd. from inception through December 31, 2024 and 2023, amounted to $156.

As of December 31, 2024, and 2023, the Group did not accrue or pay any royalties to the IIA since no revenues were recognized in respect of the funded projects. In addition, the Group does not anticipate future sales related to these grants.

P. Inventories

Inventories are valued at the lower of cost or net realizable value. Cost of raw and packaging materials, purchased products, manufactured finished products and products in process are determined on the average cost basis. The Group regularly reviews its inventories for impairment and reserves are established when necessary. During the year ended December 31, 2024 the Company wrote-off inventory at a cost of $61.

Q. Basic and diluted loss per Common Stock

Basic loss per Common Stock is computed by dividing the loss for the period applicable to stockholders, by the weighted average number of shares of Common Stock outstanding during the period. In computing diluted loss per share, basic loss per share is adjusted to reflect the potential dilution that could occur upon the exercise of potential shares. Accordingly, in 2024 and 2023, no potential shares are considered.

R. Stock-based compensation

The Group measures and recognizes the compensation expense for all equity-based payments to employees and nonemployees based on their estimated fair values in accordance with ASC 718, “Compensation- Stock Compensation”. Share-based payments including grants of stock options are recognized in the statement of comprehensive loss as a compensation expense based on the fair value of the award at the date of grant. The fair value of stock options granted is estimated using the Black-Scholes option-pricing model. The Group has expensed compensation costs, net of forfeitures as they occur, applying the accelerated vesting method, over the requisite service period or over the implicit service period when a performance condition affects the vesting, and it is considered probable that the performance condition will be achieved.

S. Concentrations of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents as well as certain other current assets that do not amount to a significant amount. Cash and cash equivalents, which are primarily held in Dollars and New Israeli Shekels, are deposited with major banks in Israel and United States. The Group considers that its cash and cash equivalents have low credit risk based on the credit ratings of the counterparties. The Company does not have any significant off-balance-sheet concentration of credit risk, such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

T. Commitments and Contingencies

The Group records accruals for loss contingencies arising from claims, litigation and other sources when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available. Legal costs incurred in connection with loss contingencies are expensed as incurred.

U. Leases

The Group determines if an arrangement is or contains a lease at contract inception.

The Group is a lessee in certain operating leases primarily for office space and vehicles. 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 Group’s right to use an underlying asset for the lease term and lease liabilities represent Group’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. The 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.

The Group monitors for events or changes in circumstances that require a reassessment of one of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in statement of comprehensive loss.

V. **New Accounting Pronouncements **

Recently Adopted Accounting Standards

Segment Reporting: In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures requires incremental disclosures related to an entity’s reportable segments, including (i) significant segment expense categories and amounts for each reportable segment that are provided to the chief operating decision maker (“CODM”), (ii) an aggregate amount and description of other segment items included in each reported measure, (iii) all annual disclosures about a reportable segment’s profit or loss and assets required by Topic 280 to be disclosed in interim periods, (iv) the title and position of the individual or the name of the group identified as the CODM and (v) an explanation of how the CODM uses the reported measures of segment profit or loss to assess performance and allocate resources to the segment. The standard improves transparency by providing disaggregated expense information about an entity’s reportable segments. The standard does not change the definition of a segment, the method for determining segments or the criteria for aggregating operating segments into reportable segments. This guidance is effective for annual reporting periods beginning after December 15, 2023, and interim reporting periods beginning after December 15, 2024. The Company adopted this guidance retrospectively, providing the additional disclosures as required. See note 23, for more information.

Accounting Standards Not Yet Adopted

Income Taxes: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this ASU add specific requirements for income tax disclosures to improve transparency and decision usefulness. The guidance in ASU 2023-09 requires that public business entities disclose specific categories in the income tax rate reconciliation and provide additional qualitative information for reconciling items that meet a quantitative threshold. In addition, the amendments in ASU 2023-09 require that all entities disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes and disaggregated by individual jurisdictions. The ASU also includes other disclosure amendments related to the disaggregation of income tax expense between federal, state and foreign taxes. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis and retrospective application is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

In November 2024, the FASB issued ASU No. 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The ASU improves the disclosures about a public business entity’s expense and provides more detailed information about the types of expenses in commonly presented expense captions. The amendments require that at each interim and annual reporting period an entity will, inter alia, disclose amounts of purchases of inventory, employee compensation, depreciation and amortization included in each relevant expense caption (such as cost of sales, SG&A and research and development). Amounts remaining in relevant expense captions that are not separately disclosed will be described qualitatively. Certain amounts that are already required to be disclosed under currently effective U.S GAAP will be included in the same disclosure as the other disaggregation requirements. The amendments also require disclosing the total amount of selling expenses and, in annual reporting periods, the definition of selling expenses. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

**NOTE 3 –OTHER CURRENT ASSETS **

NOTE 4 –MITOCAREX TRANSACTION

On September 26, 2024, the Company entered into a non-binding letter of intent with MitoCareX Bio Ltd (“MitoCareX”) and SciSparc Ltd. (“SciSparc”) and all other shareholders of MitoCareX (“Sellers”) pursuant to which the Company will acquire all outstanding securities of MitoCareX, from SciSparc and the Sellers thereby making it a wholly-owned subsidiary of the Company. After the balance sheet date, the Company, entered into a securities purchase and exchange Agreement with the Sellers. The closing of the agreement is contingent upon obtaining approval of the Company’s stockholders by the requisite majority. See also note 24 below.

On December 22, 2024, the Company, entered into a Loan Agreement (the “Loan”) with MitoCareX, and L.I.A. Pure Capital Ltd., an Israeli company (“Pure Capital”), and a consultant to the Company, pursuant to which the Company agreed to lend $250 (the “Principal”) to MitoCareX. Interest accrues on the Principal at an annual rate pursuant to Section 3(j) of the Income Tax Ordinance, published by the Israel Tax Authority for loans in US dollars, which is currently the USD exchange rate fluctuation plus 3%, as may be adjusted from time to time. The term of the Loan is six months with repayment of Principal and accrued interest due at maturity. In the event of a transaction whereby MitoCareX becomes a subsidiary of the Company, any amount outstanding under the Loan will be deducted from any future amount allocated by the Company to MitoCareX during the first year following a transaction. Pure Capital has agreed to guarantee the repayment of the Loan by MitoCareX. The Chief Executive Officer of MitoCareX is Dr. Alon Silberman, the brother of the owner of Pure Capital, Kfir Silberman. In addition, 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 estimated the fair value of the 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% as of December 31, 2024. The Company calculated the loan at $234 as of December 31, 2024 and recorded interest expense in the amount of $16.

See also note 24 below.

NOTE 5 –PROPERTY AND EQUIPMENT, NET

For the years ended December 31, 2024 and 2023, depreciation expenses were $18 and $21 respectively. During 2024, the Company sold fixed assets with a cost of $3 and with accumulated depreciation in the amount of $3.

NOTE 6 –INVESTMENT IN NONCONSOLIDATED AFFILIATE

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

Upon the closing of the Securities Exchange on April 5, 2023, the Company issued 166,340 shares of its Common Stock to Plantify, which amount represented 19.99% of its outstanding capital stock as of immediately prior to the closing (and 16.66% of the Company’s outstanding capital stock as of immediately following the closing), and Plantify issued 150,022 of its common shares to the Company representing 19.99% of Plantify’s outstanding capital stock as of immediately prior to the closing (and 16.66% of Plantify’s outstanding capital stock as of immediately following the closing).

In connection with the Securities Exchange Agreement, the Company and Plantify executed a debenture (the “Debenture”), whereby the Company agreed to lend CAD 1,500 thousands (approximately US$1,124) to Plantify. The Debenture accrued interest at a rate of 8% annually and was due to be repayable by Plantify on October 4, 2024. Outstanding principal under the Debenture was converted, at the Company’s sole discretion, into common shares of Plantify at a price of CAD 0.05 per share for the first 12 months of the Debenture issuance date and CAD 0.10 per share thereafter. Accrued interest was converted at the market price of Plantify’s common shares, subject to TSX Venture Exchange approval at the time of conversion. Plantify executed a general security agreement in the Company’s favor and pledged to the Company the shares of Plantify’ subsidiary, Peas of Bean Ltd.

On September 7, 2023, the Company purchased an additional 275,022 common shares of Plantify at a price of CAD 0.01 per common share (CAD 405 thousands), in a rights offering, resulting in an increase of approximately 7% of the Company’s ownership of the issued and outstanding common shares of Plantify. Following the additional acquisition, the Company Owned at that time 425,044 common shares of Plantify, representing approximately 23% of its issued and outstanding common shares.

NOTE 6 – INVESTMENT IN NONCONSOLIDATED AFFILIATE (continued)

The Company determined that it has a significant influence over Plantify and such investment is accounted for under the equity method of accounting. At the initial recognition of the equity investment, the Company elected the fair value option where subsequent changes in fair value are recognized in earnings. If the fair value option is applied to an investment that would otherwise be accounted for under the equity method, the Company applies it to all its financial interests in the same entity (equity and debt, including guarantees) that are eligible items.

The equity investment in common shares of Plantify is classified within Level 1 in the fair value hierarchy as the valuation can be obtained from real time quotes in active markets, and is measured based on Plantify’s closing stock price and prevailing foreign exchange rate at each balance sheet date and the changes in fair value are reflected in gain (loss) on equity investments, net in the consolidated statement of income.

As of December 31, 2023, the Company estimated the fair value of the conversion feature loan using the Black-Scholes option pricing model with assistance of a third-party appraiser. The assumptions used to perform the calculations are detailed below:

The significant observable inputs used in the fair value measurement of the conversion feature are mainly the expected volatility and risk free interest rate. Significant changes in any of those inputs in isolation would have resulted in a change in the fair value measurement.

The fair value of the debt component as of December 31, 2023, of the Debenture was estimated with the assistance of 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, based on the potential risk factor of the debt investment in Plantify, at 25.4%.

On April 2, 2024, the Company’s board of directors approved a binding term sheet for a credit facility of up to $250 and bearing interest at a rate of 8% per annum (the “Credit Facility”) to Plantify. Each drawdown was due to be repaid by Plantify within twelve months provided any outstanding amounts as of the end of the term must be repaid within ninety days. The Credit Facility was utilized in full by Plantify as of November 2024.

The factory of Plantify’s subsidiary, Peas 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 Peas of Bean into voluntary insolvency proceedings. This, in turn, caused Plantify to essentially become a company with no business activity.

NOTE 6 – INVESTMENT IN NONCONSOLIDATED AFFILIATE (continued)

On November 15, 2024, the Company entered into a debt settlement agreement (the “Settlement Agreement”) with Plantify pursuant to which Plantify issued 2,420,848 of its common shares (the “Settlement Shares”) to the Company at CAD 0.848 per share in full payment of debt owed to the Company in aggregate amount of CAD 2,053 thousands (approximately $1,437) (the “Debt”). The Debt consisted of (i) CAD 1,691 thousands (approximately $1,179), representing the principal and accrued interest on the Debenture and (ii) US$258 representing the principal and accrued interest on the Credit Facility. The closing of the Settlement Agreement occurred on December 5, 2024 upon the approval by the TSX Venture Exchange of the issuance (the “Closing Date”). On the Closing Date, Plantify issued the Settlement Shares to the Company.

As a result of such Settlement Agreement and the issuance the Settlement Shares, the Company’s holding in Plantify increase to approximately 65% of the outstanding shares of Plantify. On December 20, 2024 and following additional, issuance by Plantify of shares as part of a private placement, the Company’s holding in Plantify decreased to approximately 27% of the outstanding shares of Plantify.

On January 12, 2025, Plantify informed the Company that it issued shares to an additional lender as debt settlement. As a result of the issuance of shares, the ownership by the Company in Plantify was reduced to approximately 25%.

Since the increase in holdings was for a limited period of time and Plantify did not have continuity of operations at the time of the Settlement Agreement, the Company did not consolidated the financial statements of Plantify for the said period, except for the treasury stock transaction due to changes in control, which was estimated by the Company at $3.

For the year ended December 31, 2024 and for the period between April 5, 2023 through December 31, 2023, an unrealized loss of $1,299 and $714, respectively, was recorded in loss on investment in nonconsolidated affiliate in the Company’s consolidated statements of comprehensive loss.

The following tables present Plantify’s summarized financial information. The period presented in the table below commenced on April 5, 2023 when the Company retained an equity investment in Plantify:

NOTE 7 –INVESTMENT AND LOAN TO SOLTERRA

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

As of December 31, 2024, the Company recorded gain from the increase in the fair value of the shares in the amount of $88.

NOTE 8 –SOLAR PHOTOVOLAIC JOINT VENTURE PROJECT

On July 31, 2024, the Company entered into a Loan and Partnership Agreement (the “Loan and Partnership Agreement”), with Horizons RES PE1 UG (haftungsbeschränkt) & Co. KG (the “Partnership”), Solterra, and the Lenders (as defined in section 7(1) above), pursuant to which the Lenders committed to loan the Partnership (the “Loan”) an aggregate principal amount of €2,080 thousands (approximately $2,288) (€1,560 thousands (approximately $1,716) of which was committed by the Company) for projects in the solar energy sector. Interest accrues on the loan at the rate of 7% per annum. The Loan matures on the earlier of (i) the sale of the Partnership or (ii) five years from the date of the Loan and Partnership Agreement.

All loans to the Partnership from Solterra will be subordinate to the Loan.

Pursuant to the Loan and Partnership Agreement, the Lenders are entitled to participation rights of 50% (of which the Company will be entitled to receive 50% thereof) of the Partnership’s profits (the “Profits”), whether directly or by way of 50% membership or ownership in the Partnership, or through legal rights for the distribution of 50% of the Partnership’s Profits where Solterra acts as a trustee on behalf of the Lenders (the “Profit Rights Alternatives”). The Lenders will decide within three months from the date of the Loan and Partnership Agreement on the chosen Profit Right Alternative.

Proceeds from the sale of a Partnership asset must first be used to repay the Lenders, pro rata with each Lender’s respective portion of the Loan.

Repayment of the Loan is secured by a lien on Solterra’s interests in the Partnership.

If a Lender defaults on a payment schedule as scheduled in the Loan and Partnership Agreement, such Lender’s rights to Profits will be proportionately decreased, based on the amount of the Loan that was actually provided by such Lender to the Partnership out of its Loan commitment amount.

As of December 31, 2024 the Company made payments in the amount of €705 thousands (approximately $764) and was committed to pay of €353 thousands (approximately $365) for the third milestone in connection with the Loan and Partnership Agreement.

NOTE 8 – SOLAR PHOTOVOLAIC JOINT VENTURE PROJECT (continued)

The Company considered the Loan to the Partnership under ASC 810-10, Variable Interest Entities (VIE) and evaluated whether it is the primary beneficiary. Primary beneficiary requiring both (i) power to direct significant activities and (ii) exposure to significant financial benefits or losses. The Company has provided 75% of Loan and is entitled to receive only 25% of the Profits and does not have the power to direct the most significant activities of the Partnership and, therefore, it is not considered the primary beneficiary. As of December 31, 2024, the Company did not consolidated the Partnership.

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 9.18% as of December 31, 2024. The Company calculated the Loan Agreement at €1,133 thousands (approximately $1,173) as of December 31, 2024. Changes in fair value of an investment calculated at $44 were recorded in changes in fair value of investments measured under the fair value in the comprehensive loss. The Loan Agreement is presented in the balance sheet net of the commitment to pay €353 thousands (approximately $365).

NOTE 9 –A CONSOLIDATED ENTITY

On August 29, 2023, the Company closed exchange transactions (the “Exchange”), pursuant to the terms of a stock exchange agreement, entered on July 11, 2023, as amended on July 24, 2023 and August 13, 2023, by and among the Company, Save Foods Ltd., Yaaran Investments Ltd., an Israeli company (“Yaaran”), and a yet-to-be formed Israeli company (“NewCo”), (the “Exchange Agreement”). The closing conditions for the consummation of the Exchange, required, among other things, the incorporation of NewCo in the State of Israel. On August 29, 2023, NewCo was incorporated under the name of “Nitrousink, Ltd.” and issued the Company 4,200,000 shares, representing 60% of its share capital on a fully diluted pre-closing basis in exchange for 223,008 shares of Common Stock of the Company, issued to Yaaran on July 27, 2023, which amount represented 19.99% of the Company’s outstanding capital stock as of immediately prior to the Exchange (and 16.66% of the Company’s outstanding capital stock as of immediately following the Exchange). As a result of such, N2OFF became a majority-owned subsidiary of the Company. On February 21, 2024, Nitrousink, Ltd. changed its name to NTWO OFF. As of December 31, 2023, the Company owns 60% of the share capital of NTWO OFF, Yaaran owns 30% and the Agricultural Research Organization - Volcani Institute owns 10%. See also note 13(15) below.

As part of the Exchange Agreement, the Company committed to support NTWO OFF’s commercialization efforts of certain technologies researched and developed (the “License”) together with the Government of Israel on behalf of the State of Israel, represented by the Head of Agricultural Research Organization and the Treasurer of A.R.O., by making available up to $1.2 million in three conditional installments. As of December 31, 2023 the Company paid the first installment in the amount of $400, of which $160 were recorded as transaction with non-controlling interests. The Company is currently assessing the business potential of NTWO OFF. As of December 31, 2024, the Company has not yet made the second payment of $400.

At the Exchange date, NTWO OFF was determined to be excluding substantive process as required under the definition of business in accordance with the provisions of ASC Topic 805 “Business Combination”. In addition, it was determined that the License representing IPR&D had no alternative future use and therefore the entire purchase price allocated to the acquired IPR&D in the amount of $1,662 was charged to expense at the acquisition date as part of “Research and Development expenses” in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2023.

NOTE 10 –OTHER LIABILITIES

NOTE 11 –COMMITMENT AND CONTINGENT LIABILITIES

NOTE 11 – COMMITMENT AND CONTINGENT LIABILITIES (continued)

Interest under the Pure Capital Credit Facility will accrue at the rate of 7% per annum and is payable in advance by the Company and deducted from each drawdown for a period of twenty-four months.

The Pure Capital Credit Facility will terminate on the earlier of the drawdown of all of the EUR 6,000 thousands orfive years from the date of the facility agreement (the “Drawdown Period”). The Company must repay amounts borrowed under the Pure Capital Credit Facility from the proceeds derived from the pre-approved projects or 33% of the proceeds from other Company financing transactions during the Drawdown Period. Thereafter, any unpaid amount may be paid from any other sources.

In addition, under the facility agreement, the Company agreed to issue the Lender afive-year warrant (the “Warrant”) to purchase 1,850,000 shares of its common stock (the “Warrant Shares”), with an exercise price of $1.00 per share.

The Warrant Shares will be exercisable immediately after the issuance. 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.

In the event of a fundamental transaction, as detailed in the Warrant, the successor entity will be required to assume the Company’s obligations under the Warrant. The Lender may also request the Company to buy back the Warrant for its Black Scholes Value in cash. The Warrants included certain price adjustments based on separate actions that caused it not to be indexed to the Company’s own stock.

On December 5, 2024, the Lender has agreed, pursuant to a waiver agreement with the Company, not to exercise the Warrant until the Company has obtained stockholder approval. Such approval has not yet been obtained.

The Company estimated the fair value of the Warrant Shares as of October 1, 2024 and December 31, 2024, using the Black-Scholes option pricing model. The assumptions used to perform the calculations are detailed below:

As of December 31, 2024, no drawdowns were made under the Facility Agreement. See note 24 (2) below.

NOTE 12 –LEASES

NOTE 12 – LEASES (continued)

In September 2021, the Company signed a lease agreement for an office and operational space in Neve Yarak, Israel for a period of 1 year with monthly payments of $2 and an option to extend the agreement for an additional 2 years with monthly payment of $2.5 in the first option period and $2.75 in the second option period. The Company exercised its option to extend the lease agreement for an additional 2 years. On August 5, 2024, the lease agreement was extended for an additional one-year period, until August 31, 2025 with monthly payments of $2.4.

In December 2021, the Company signed a car rental lease agreement for a period of 3 years with monthly payments of $1. During August 2023, the Company terminated the lease agreement.

On December 15, 2021, the Company entered into a lease agreement for office space in Miami (the “Miami Lease”). The Miami Lease is for a period of 1 year with monthly payments of $0.6 and an option to extend the agreement for an additional 1 year with monthly payments of $0.63. A lease right-of-use asset and a related liability in the amount of $15 have been recognized in the balance sheet in respect of this lease. The Company exercised its option to extend the lease agreement for an additional year. On December 15, 2023, the Company entered into a new lease agreement for office space in Miami for a period of 1 year with monthly payments of $0.67 and an option to extend the agreement for an additional 1 year with monthly payments of $0.7. The Company exercised the option. A lease right-of-use asset and a related liability in the amount of $16 have been recognized in the balance sheet in respect of this lease.

In January 2022, the Company signed a car rental lease agreement for a period of 3 years with monthly payments of $1.

NOTE 13 –STOCKHOLDERS’ EQUITY

Description of the rights attached to the Shares in the Company:

Common Stock:

Each share of Common Stock entitles the holder to one vote, either in person or by proxy, at meetings of stockholders. The holders are not permitted to vote their shares cumulatively. Accordingly, the stockholders of the Company’s Common Stock who hold, in the aggregate, more than fifty percent of the total voting rights can elect all of the directors and, in such event, the holders of the remaining minority shares will not be able to elect any of such directors. The vote of the holders of a majority of the issued and outstanding shares of Common Stock entitled to vote thereon is sufficient to authorize, affirm, ratify or consent to such act or action, except as otherwise provided by law.

Transactions:

On March 29, 2023, the Board approved an amendment to the consulting agreement pursuant to which Mr. Fuchs will receive monthly compensation of $1 and 7,143 restricted shares of Common Stock under the Company’s 2022 Share Incentive Plan in lieu of the above-described options. These shares are subject to a twenty four month lockup period. See paragraph 8 below.

On August 21, 2024 the Company issued a one-time bonus of 10,000 shares of common stock in connection with Mr. Fuchs departure from Save Foods Ltd. The shares were estimated at $3 based on the share price of the common stock on date of termination agreement.

NOTE 13 – STOCKHOLDERS’ EQUITY (continued)

On August 3, 2023, the Board approved the issuance of a one-time bonus of 21,428 shares of Common Stock to each of the two consultants. On August 7, 2023, the Company issued 21,428 shares of Common Stock to each of the consultants. In addition, on December 20, 2023, the Board approved the issuance of 100,000 shares of Common Stock to each of the two consultants. On December 21, 2023, the Company issued 100,000 shares of Common Stock for each of the consultants. The Company determined the value of the shares issued based on the share price of the date of the board approval. As of December 31, 2023, the Company recorded share-based compensation expenses of $533.

On February 13, 2023, the Company issued 3,572 shares of Common Stock.

On April 27, 2023, the Company issued 2,143 shares of Common Stock. The Company determined the value of the shares issued based on the share price of the date of board approval. The Company recorded share-based compensation expenses of $48 for the year ended December 31, 2023.

On June 14, 2023, the Company entered into a consulting agreement with a consultant for a period of 30 months pursuant to which the Company will issue, subject to the approval of the board,32,143 restricted shares of the Company’s Common Stock. These shares will be subject to a lockup period pursuant to the following schedule: (a)10,715 shares of Common Stock upon the six month anniversary of the agreement date, (b)10,714 shares of Common Stock upon the nine month anniversary of the agreement date, and (c)10,714 shares of Common Stock upon the twelve month anniversary of the agreement date.

On June 21, 2023, the Company issued 32,143 restricted shares of Common Stock. The Company determined the value of the shares issued at $147 based on the share price on the agreement date, of which $59 and $32 was recorded as share based compensation expenses during the year ended December 31, 2024 and 2023, respectively and the remaining was classified as prepaid expenses in other current assets.

On November 15, 2023, the consulting agreement dated June 14, 2023, was amended pursuant to which the consultant will receive additional 20,000 restricted shares of Common Stock. On November 20, 2023, the Company issued 20,000 restricted shares of Common Stock. The Company determined the value of the shares issued at $44 based on the share price on the amendment to the agreement date, of which $14 and $10 was recorded as share based compensation expenses during the year ended December 31, 2024 and 2023, respectively and the remaining was classified as prepaid expenses in other current assets.

NOTE 13 – STOCKHOLDERS’ EQUITY (continued)

On May 8, 2024 the Company issued 30,000 shares of common stock to the consultant, for services provided to the Company pursuant to an amendment of a consulting agreement, dated November 15, 2023. The shares were estimated at $31 based on the share price of the common stock on May 8, 2024.

On June 21, 2023, the Company issued 25,715 restricted shares of Common Stock. The Company determined the value of the shares issued at $122 based on the share price on the agreement date, of which $75 and $47 was recorded as share based compensation expenses during the year ended December 31, 2024 and 2023, respectively.

On June 21, 2023, the Company issued 35,715 restricted shares of Common Stock. The Company determined the value of the shares issued at $170 based on the share price on the agreement date, of which $85 and $51 was recorded as share based compensation expenses during the year ended December 31, 2024 and 2023, respectively and the remaining was classified as prepaid expenses in other current assets.

The Company issued an aggregate of 16,485 shares of Common Stock and recorded $75 as share based compensation expenses during the year ended December 31, 2023.

On September 6, 2023, the Company issued 6,123 shares of Common Stock to legal counsel pursuant to the August 7, 2023 retainer legal services agreement. The Company determined the value of the shares issued at $67 based on the share price on the agreement date, of which $40 and $27 was recorded as share based compensation expenses during the year ended December 31, 2024 and 2023, respectively.

On December 11, 2023, the Company entered into an additional consulting agreement pursuant to which the legal advisors will provide the Company with certain legal services in consideration for total of $25 in cash and 12,500 restricted Common Stock of the Company. Cash payment of $10 shall be paid upon execution of the agreement and the remaining after the completion of the legal services. On December 26, 2023, the Company issued 12,500 shares of restricted Common Stock. The Company determined the value of the shares issued at $39 based on the share price on the agreement date, which recorded as share based compensation expenses during the year ended December 31, 2024.

On November 3, 2024, the Company’s board of directors approved (i) the payment of an aggregate of $25 to legal counsel in connection with the preparation of a registration statement (half of which was immediately payable and half of which is payable upon the filing of such registration statement) and (ii) the issuance of 50,000 shares of its common stock. If within 18 months of issuance, the aggregate value of such stock is less than $13, the Company will pay to such legal counsel the difference in cash between the value of the sale of the shares and $13. The Company determined the value of the shares issued at $12 based on the share price on November 3, 2024, which recorded as prepaid expenses in other current assets.

The Advances are subject to certain limitations, including that the Investor cannot purchase any shares that would result in it beneficially owning more than 4.99% of the Company’s outstanding shares of Common Stock at the time of an Advance notice or acquiring more than 19.99% of the Company’s outstanding shares of Common Stock as of the date of the SEPA I (the “Exchange Cap”). The Exchange Cap will not apply under certain circumstances, including, where the Company has obtained stockholder approval to issue in excess of the Exchange Cap in accordance with the rules of Nasdaq or such issuances do not require stockholder approval under Nasdaq’s “minimum price rule.”

The SEPA I will terminate automatically on the earlier of December 1, 2026 or when the Investor has purchased an aggregate of $3.5 million shares of the Company’s Common Stock. The Company has the right to terminate the Purchase Agreement upon five trading days’ prior written notice to the Investor.

The SEPA I provided that, subject to the satisfaction of certain conditions set forth in the SEPA I, upon the request of the Company, the Investor will advance to the Company up to $700 of the $3,500 commitment amount, with such Advances to be evidenced by a promissory note (the “Note”). The request by the Company for such Advances may only be made after the approval of the stockholders of the transactions contemplated by the SEPA I, and the Company cannot request any Advances after January 31, 2024. There is a 3% discount to the amount equal to each Note. Each Note accrues interest on the outstanding principal balance at the rate of 8% per annum. The Company is required to pay, on a monthly basis, a one tenth of the outstanding principal of each Note and accrued interest thereon either (i) in cash or (ii) by submitting an advance notice pursuant to the purchaser and selling the Investor shares, or any combination of (i) or (ii) as determined by the Company. The first payment is due 60 days after the issuance of a Note, with each subsequent payment due 30 days after the prior payment. Unless otherwise agreed by the Investor, the funds received by the Company pursuant to the SEPA I for the sale of shares will first be used to satisfy any payments due under the Note.

The conditions that must be satisfied prior to the Investor advancing the Company funds pursuant to the terms of the Note include obtaining stockholder approval of the transactions contemplated by the SEPA I(on October 2, 2023, at the annual meeting of stockholders, the stockholders approved the issuance of more than 20% of our issued and outstanding Common Stock, permitting us to request Advances from the Investor under the SEPA I that will result in the issuance of more than 20% of our issued and outstanding shares of Common Stock as of the date of the SEPA I without being subject to the Exchange Cap), the delivery by the Company to the Investor of a request to lend funds pursuant to the Note prior to January 31, 2024, no events which could have a material adverse on the Company and other conditions customary of financings of this nature.

On September 27, 2023, the Company issued 26,224 shares of Common Stock as a commitment fee to a subsidiary of the Investor. The Company determined the value of the shares issued at $123 based on the share price on the agreement date.

On October 11, 2023, the Company filed a registration statement on Form S-1 with the SEC, which was declared effective by the SEC on October 30, 2023 for the resale of up to 1,000,000 shares of Common Stock that may be offered and sold by the Investor. On October 31, 2023, the Company received a gross amount of $700 and issued the Note to the Investor pursuant to the SEPA I. The first payment under the Note was due December 31, 2023.

The Company considered the guidelines of ASC 815 and determined that the SEPA I contains both purchased put option element and a forward share issuance element, neither element qualifies for equity classification. Accordingly, the Company recognized an asset or liability with changes in fair value recoded to the statements of operations. All costs associated with the SEPA I were expensed in the statements of operations.

On each of November 6, 2023, November 20, 2023, and December 5, 2023, the Company issued 20,000 shares of Common Stock pursuant to a settlement document with respect to Advance notices delivered to the Investor. On December 7, 2023, the Company issued additional 691,000 shares of Common Stock to the Investor pursuant to settlement document with respect to Advance notices delivered to the Investor.

Total aggregated net amount received as consideration for the sale of the shares amounted to $3,499. Total expenses associated with the SEPA I amounted to $359 and were recorded in the Company’s statement of comprehensive loss under general and administrative expenses.

On December 22, 2023, the Company entered into an additional Standby Equity Purchase Agreement (the “SEPA II”) with the Investor, pursuant to which the Investor has agreed to purchase up to $20 million shares of Common Stock over the course of 36 months after the date of the SEPA II. The price of shares to be issued under the SEPA II is the same as the determination of the price under SEPA I.

The SEPA II will terminate automatically on the earlier of December 22, 2027 or when the Investor has purchased an aggregate of $20 million of the Company’s shares of Common Stock. The Company has the right to terminate the SEPA II upon five trading days’ prior written notice to the Investor.

In connection with and subject to the satisfaction of certain conditions set forth in the SEPA II, upon the request of the Company, the Investor will pre-advance to the Company up to $3,000 of the $20,000 commitment amount.

The Company paid a subsidiary of the Investor a structuring fee in the amount of $10 and on December 28, 2023, the Company issued 110,554 shares of Common Stock as a commitment fee to a subsidiary of the Investor. The Company determined the value of the shares issued at $254 based on the share price on the agreement date, which was recorded as prepaid expenses in other current assets during the year ended December 31, 2023. The Company was recorded $79 in the statement of comprehensive loss under financing expenses and $175 was recorded as prepaid expenses in other current assets for the year ended December 31, 2024.

On April 4, 2024, the Company, sold a $1,500 promissory note (the “Note”) to the Investor pursuant to the terms of SEPA II in exchange for proceeds of $1,455, reflecting an original issue discount of 3% to face value of the Note.

The Note bears interest at a rate of 8% per annum and matures April 4, 2025. Commencing June 3, 2024, and every 30 days thereafter, the Company is required to pay $150, together with accrued and unpaid interest on the then outstanding principal. Payments under the Note can be made either (i) in cash or (ii) by submitting notice of an advance of shares to be issued and sold to the Investor pursuant to the SEPA II, or any combination of (i) or (ii) as determined by the Company. The entire remaining principal balance and unpaid interest amount of the Note becomes due and payable in full at maturity. The Company determined that the Note is accounted for as a liability in accordance with ASC 470 “Debt”.

The Note sets forth certain events of default, including a breach by the Company of another agreement with the Investor, the failure of the securities of the Company to remain listed on the Nasdaq and the failure of the Company to timely file periodic reports with the SEC. Upon the occurrence of an event of default, interest will accrue at a default rate of 18% per annum and the Note will become immediately due and payable, together with all costs, legal fees and expenses of collection through the date of full repayment.

As of December 31, 2024 the Company repaid all payments under the Note.

During the year ended December 31, 2024, the Company issued 6,666,667 shares of common stock, to the Investor pursuant to the terms of SEPA II valued at $2,706 for gross consideration of $3,135. Following such issuances, the Company issued the Investor the maximum shares allowed to be issued under the Company’s resale registration statement on Form S-1/A effective February 6, 2024.

On March 18, 2024, the Company issued 3,508 shares of common stock. The Company determined the value of the shares and the services provided at $6 and recorded share based compensation expenses during the year ended December 31, 2024.

The Pre-Funded Warrants are immediately exercisable at an exercise price of $0.00001 per share of Common Stock and will not expire until exercised in full. The Common Warrants have afive-year term, are immediately exercisable and have an exercise price of $0.24, subject to certain anti-dilution and stock combination event protections. As of December 31, 2024, no balances have been recorded under this Agreement. See also note 24 (1).

NOTE 14 –STOCK OPTIONS

On October 18, 2018, the Company adopted the 2018 Share Incentive Plan (the “2018 Equity Incentive Plan”), pursuant to which the Company’s Board of Directors is authorized to grant options to purchase an aggregate of 27,211 shares of Common Stock of the Company. The purpose of the 2018 Equity Incentive Plan is to offer attract and retain the best available personnel, provide incentive to individuals who perform services for the Company and promote the success of the Company’s business.

On July 1, 2020, the Board approved an increase to the share option pool under the 2018 Equity Incentive Plan by 14,210 shares of Common Stock, such that after the increase the total number of shares of Common Stock issuable under the Plan is 41,421 shares of Common Stock.

On August 29, 2022, the Company adopted the 2022 Share Incentive Plan (the “2022 Share Incentive Plan”), pursuant to which the Company’s board of directors is authorized to grant options to purchase up to 142,858 shares of Common Stock. The purpose of the 2022 Share Incentive Plan is (1) to afford an incentive to service providers of the Company or any affiliate of the Company, which now exists or is hereafter is organized or acquired by the Company or its affiliates, to continue as service providers, (2) to increase their efforts on behalf of the Company or its affiliates and (3) to promote the success of the Company’s business, by providing such service providers with opportunities to acquire a proprietary interest in the Company through the issuance of shares or restricted shares of Common Stock, and by the grant of options to purchase shares, restricted share units and other share-based awards.

On March 29, 2023, the board approved an amendment to a consulting agreement pursuant to which the consultant will receive 7,143 restricted shares of Common Stock under the Company’s 2022 Share Incentive Plan instead of options to purchase 6,015 shares of Common Stock.

On July 31, 2023, the board of directors approved and on October 2, 2023, the Company’s stockholders approved an amendment to the Company’s 2022 Share Incentive Plan to increase the number of shares of Common Stock authorized for issuance under the 2022 Share Incentive Plan by an additional 928,572 shares of Common Stock.

On December 20, 2023, the board of directors of the Company approved the issuance of an equity grant to executive officers, directors and consultants under the 2022 Share Incentive Plan of aggregate of 286,784 shares of Common Stock. See note13(17) above).

On September 9, 2024, the board of directors of the Company approved the issuance of an equity grant to executive officers and a consultant under the 2022 Share Incentive Plan of an aggregate of 640,000 shares of Common Stock. See note13(18) above).

On September 9, 2024, the board of directors approved and on November 3, 2024, the Company’s stockholders approved an amendment to the Company’s 2022 Share Incentive Plan to increase the number of shares of Common Stock authorized for issuance under the 2022 Share Incentive Plan by an additional 11,000,000 shares of Common Stock.

On December 23, 2024, the board of directors of the Company approved the issuance of an equity grant to directors under the 2022 Share Incentive Plan of aggregate of 650,000 shares of Common Stock. See note13(19) above).

On December 23, 2024, the board of directors of the Company approved the issuance of an equity grant to employee under the 2022 Share Incentive Plan of an option to purchase 10,000 shares of Common Stock at an exercise price of $0.2153 per share. One-third of the shares subject to the options vest and become exercisable on the first anniversary of the vesting commencement date determined by the Board, and on each subsequent one year anniversary thereafter, over two years provided the Employee remains employed by the Company on each such vesting date, in compliance with this Employment Agreement.

NOTE 14 – STOCK OPTIONS (continued)

The fair value of options granted during 2024 was estimated at the dates of grant using the Black-Scholes option pricing model. The following are the data and assumptions used:

The following table presents the Company’s stock option activity for employees and directors of the Company for the year ended December 31, 2024 and 2023:

The aggregate intrinsic value of the awards outstanding as of December 31, 2024 and 2023 is less than $1 and $0, respectively. These amounts represent the total intrinsic value, based on the Company’s stock price of $0.25 and $2.00 as of December 31, 2024 and 2023, respectively, 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.

The total fair value estimation of the non-cash compensation of the 2024 grant was approximately $2. Expenses incurred in respect of stock-based compensation for employees and directors, for the year ended December 31, 2024 and 2023 were $1 and $23, respectively. The Group did not recognize an income tax benefit related to stock-based compensation as it is not recognized for tax purposes in Israel and a full valuation allowance was recorded as it relates to the deferred tax asset of the Company.

As of December 31, 2024, there were options to purchase 21,296 shares available for future grants under the 2018 Equity Incentive Plan and options to purchase 10,341,787 shares available for future grants under the 2022 Share Incentive Plan

NOTE 15 –COST OF SALES

NOTE 16 –RESEARCH AND DEVELOPMENT EXPENSES

NOTE 17 –SELLING AND MARKETING EXPENSES

NOTE 18 –GENERAL AND ADMINISTRATIVE EXPENSES

NOTE 19 –FINANCING EXPENSES (INCOME), NET

NOTE 20 –INCOME TAX

Income of the Israeli company is taxable at enacted tax rate of 23%.

The Company, Save Foods Ltd. and NTWO OFF Ltd. have not received final tax assessments since their inception although the tax reports of the Company for the years through December 31, 2015 and of Save Foods Ltd for the years through December 31, 2017 are deemed to be final.

As of December 31, 2024 and 2023, the Company and subsidiaries have estimated carry forward losses for tax purposes of approximately $31,202 and $24,689, respectively, of which $771 can be offset against taxable income generated until 2027 and $30,495 can be offset against future taxable income, if any.

NOTE 20 – INCOME TAX (continued)

The net change during the year ended December 31, 2024 in the total valuation allowance amounted to $1,404

NOTE 21 –LOSS PER SHARE

Basic loss per share is computed by dividing net loss by the weighted average number of shares outstanding during the year. The weighted average number of shares of Common Stock used in computing basic and diluted loss per Common Stock for the years ended December 31, 2024 and 2023, are as follows:

NOTE 22 –RELATED PARTIES

On June 23, 2021, the board of directors approved updated compensation for Mr. Palach pursuant to which Mr. Palach is entitled to a monthly fee of $14 plus value added tax; reimbursement of expenses not exceeding $1 per month; a grant of an option to purchase shares of Common Stock representing 4.5% of the Company’s outstanding capital stock as of June 23, 2021; the immediate repayment of $8, representing debt payable to Mr. Palach that accrued from November 2020 until April 2021.

NOTE 22 – RELATED PARTIES (continued)

In lieu of such option, the board of directors approved the issuance of 42,858 shares of Common Stock to Mr. Palach in March 2023.

On August 29, 2022, the monthly fee of Mr. Palach was reduced to $6.

Following the compensation committee’s recommendation of December 19, 2023, the board of directors approved a monthly fee increase of $1, starting January 1, 2024. On January 8, 2024 and September 9, 2024, the Board approved bonuses of $15.

Following the compensation committee’s recommendation of November 12, 2024, the board of directors approved a monthly fee increase to $8.

On August 29, 2022, the Board approved an increase of the monthly fee from $6 to $8 and a one-time bonus of $25.

Following the compensation committee’s recommendation of December 19, 2023, the board of directors approved a monthly fee increase of $1, starting January 1, 2024. On January 8, 2024 and September 9, 2024, the Board approved bonuses of $15.

On November 12, 2023, upon the recommendation of the nominating and corporate governance committee of the Board, Liat Sidi was appointed as a Class II Director to serve until the Company’s 2026 annual meeting of stockholders.

On December 20, 2023, Asaf Itzhaik was appointed to the board of directors of the Company to serve as a Class II director until the Company’s 2026 annual meeting of stockholders. Mr. Itzhaik was designated by Plantify as its representative on the board in accordance with the Securities Exchange Agreement, dated March 31, 2023, between the Company and Plantify, to replace Dr. Roy Borochov who resigned from the board on December 15, 2023. Dr. Borochov’s resignation was not the result of a disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Following the compensation committee’s recommendation of December 22, 2024, the board of directors approved, a total quarterly fee payable to each member of the Board (excluding the Chairman of the Board), shall be $10, (plus VAT) starting January 1, 2025.

On November 10, 2024 following the compensation committee’s recommendation, the board of directors approved an amendment to the consulting agreement exclusively for the purpose of increasing the cash compensation to Ms. Barda in exchange for her services by 15%.

NOTE 23 –SEGMENT REPORTING

This segment’s structure reflects the financial information and reports used by the Company’s management, specifically its CODM, to make decisions regarding the Company’s business, including resource allocations and performance assessments, as well as the current operating focus in compliance with ASC 280, Segment Reporting. The Company’s reportable segments are not aggregated.

The Company reports segment information based on the management approach, which designates the internal reporting used by the Chief Operating Decision Maker (“CODM”), the Company’s Chief Executive Officer and the Chairman of the Board, for making decisions and assessing performance as the source of the Company’s reportable segments. The CODM allocate resources and assesses the performance of each operating segment based on potential business opportunities, historical and potential future sales and operating expenses.

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

The Company’s method for measuring profitability on a reportable segment basis isoperating loss. The Company adopted ASU 2023-07 in December 2024. The most significant provision was for the Company to disclose significant segment expenses that are regularly provided to the CODM. The Company’s CODM periodically reviews operating loss by segment and treats it as a significant segment expense.

The following table presents information about the Company’s reportable segments for the year ended December 31, 2024 and 2023:

Operating loss related to the Company’s reportable segments and the reconciliation of the total net loss attributable to common stockholders is as follows:

NOTE 23 – SEGMENT REPORTING (continued)

Sales are attributed to geographic distribution based on the location of the customer.

The following table presents the locations of the Company’s long-lived assets as of December 31, 2024 and 2023:

NOTE 24 –SUBSEQUENT EVENTS

During February and March 2025, the Company issued 1,573,265 and 1,747,620 shares of common stock, respectively, following exercises of pre-funded warrants. On March 14, 2025, the Company issued 729,166 shares of common stock following exercises of 729,166 warrants at an exercise price of $0.24 for total consideration of $175. See note 13(20),

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 Euro 30,000, each party will receive profits according to its pro-rata share ownership of SBI4; (ii) exceeds Euro 30,000 up to Euro 60,000, 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 Euro 60,000 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.

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 13,727 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 73% of the Ordinary Shares owned by SciSparc as of the closing date, such that, together with the Purchased Shares, the Company will receive 100% of SciSparc’s 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.

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 L.I.A. Capital Ltd.

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. See also note 4 above.